UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05459
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TEMPLETON GLOBAL INCOME FUND
--------------------------------
(Exact name of registrant as specified in charter)
500 EAST BROWARD BLVD., SUITE 2100, FORT LAUDERDALE, FL 33394-3091
-------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)
Registrant's telephone number, including area code: (954) 527-7500
--------------
Date of fiscal year end: 8/31
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Date of reporting period: 2/28/10
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ITEM 1. REPORTS TO STOCKHOLDERS.
FEBRUARY 28, 2010
SEMIANNUAL REPORT
(GRAPHIC)
FIXED INCOME
TEMPLETON GLOBAL INCOME FUND
(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)
Franklin - TEMPLETON - Mutual Series
Franklin Templeton Investments
GAIN FROM OUR PERSPECTIVE(R)
Franklin Templeton's distinct multi-manager
structure combines the specialized expertise of
three world-class investment management groups--
Franklin, Templeton and Mutual Series.
SPECIALIZED EXPERTISE Each of our portfolio management groups operates
autonomously, relying on its own research and
staying true to the unique investment disciplines
that underlie its success.
FRANKLIN. Founded in 1947, Franklin is a recognized
leader in fixed income investing and also brings
expertise in growth- and value-style U.S. equity
investing.
TEMPLETON. Founded in 1940, Templeton pioneered
international investing and, in 1954, launched what
has become the industry's oldest global fund. Today,
with offices in over 25 countries, Templeton offers
investors a truly global perspective.
MUTUAL SERIES. Founded in 1949, Mutual Series is
dedicated to a unique style of value investing,
searching aggressively for opportunity among what it
believes are undervalued stocks, as well as
arbitrage situations and distressed securities.
TRUE DIVERSIFICATION Because our management groups work independently and
adhere to different investment approaches, Franklin,
Templeton and Mutual Series funds typically have
distinct portfolios. That's why our funds can be
used to build truly diversified allocation plans
covering every major asset class.
RELIABILITY YOU CAN TRUST At Franklin Templeton Investments, we seek to
consistently provide investors with exceptional
risk-adjusted returns over the long term, as well as
the reliable, accurate and personal service that has
helped us become one of the most trusted names in
financial services.
MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS
(GRAPHIC)
Not part of the semiannual report
Contents
SEMIANNUAL REPORT
Templeton Global Income Fund............................................... 1
Performance Summary........................................................ 7
Important Notice to Shareholders........................................... 8
Financial Highlights and Statement of Investments.......................... 9
Financial Statements....................................................... 24
Notes to Financial Statements.............................................. 27
Annual Meeting of Shareholders............................................. 37
Dividend Reinvestment and Cash Purchase Plan............................... 38
Shareholder Information.................................................... 41
Semiannual Report
Templeton Global Income Fund
YOUR FUND'S GOALS AND MAIN INVESTMENTS: Templeton Global Income Fund seeks high,
current income, with a secondary goal of capital appreciation. Under normal
market conditions, the Fund invests at least 80% of its net assets in
income-producing securities, including debt securities of U.S. and foreign
issuers, including emerging markets.
PORTFOLIO BREAKDOWN
Based on Total Net Assets as of 2/28/10
(PIE CHART)
Government Bonds............................ 90.5%
Municipal Bonds............................. 3.7%
Short-Term Investments & Other Net Assets... 5.8%
Dear Shareholder:
We are pleased to bring you Templeton Global Income Fund's semiannual report for
the period ended February 28, 2010.
THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 10.
Semiannual Report | 1
GEOGRAPHIC BREAKDOWN
Based on Total Net Assets as of 2/28/10
Asia Pacific 36.3%
Americas 26.1%
Other Europe 23.4%
Middle East & Africa 6.3%
Supranational* 4.3%
Other Net Assets 3.6%
* The Fund's supranational investments were denominated in the Mexican peso,
New Zealand dollar, Norwegian krone and U.S. dollar.
PERFORMANCE OVERVIEW
For the six months under review, Templeton Global Income Fund delivered
cumulative total returns in U.S. dollar terms of +10.40% based on market price
and +9.73% based on net asset value. The Fund outperformed the J.P. Morgan (JPM)
Global Government Bond Index (GGBI), which posted cumulative total returns of
+1.59% in local currency terms and +1.07% in U.S. dollar terms for the same
period.(1) You can find the Fund's long-term performance data in the Performance
Summary on page 7.
ECONOMIC AND MARKET OVERVIEW
During the six months under review, the global economic recovery took hold and
strengthened. For most countries, economic growth reached its low point in
2009's second quarter, and the subsequent rebound in activity benefited many
bond and currency markets. Improved economic growth in the U.S., eurozone and
Japan was accompanied by contained inflationary pressures, which allowed major
central banks to leave interest rates at very low levels and maintain ample
liquidity. Although the U.S. Federal Reserve Board and the European Central Bank
began preparing for eventual tightening, Japan increased its level of monetary
accommodation. Outside of the G-3 (U.S., eurozone and Japan), other central
banks such as those of Australia and Norway began to normalize their interest
rate policies given stronger growth dynamics and pricing pressures.
During the period, differentiation in recovery strength increased across regions
and countries. For example, U.S. gross domestic product (GDP) rose 0.1%
year-over-year in 2009's fourth quarter, while Japan's contracted 0.4% and the
eurozone's shrank 2.1%.(2) However, the positive figure recorded in the U.S. was
meager compared with growth rates outside developed economies. Real GDP in
fourth quarter 2009 rose 10.7% in China year-over-year, in India and South
Korea, 6.0%, in Brazil, 4.3%, and in Poland, 3.1%.(3)
Although increased government spending and financial sector bailouts helped
mitigate the recession's severity in developed economies like those of the U.S.
and Europe, the fiscal deterioration led to upward pressure on public debt
(1.) Source: (C) 2010 Morningstar. All Rights Reserved. The information
contained herein: (1) is proprietary to Morningstar and/or its content
providers; (2) may not be copied or distributed; and (3) is not warranted
to be accurate, complete or timely. Neither Morningstar nor its content
providers are responsible for any damages or losses arising from any use of
this information. Past performance is no guarantee of future results. The
JPM GGBI tracks total returns for liquid, fixed-rate, domestic government
bonds with maturities greater than one year issued by developed countries
globally. The index is unmanaged and includes reinvested interest. One
cannot invest directly in an index, and an index is not representative of
the Fund's portfolio.
(2.) Sources: Economic and Social Research Institute (Japan); Eurostat
(eurozone).
(3.) Sources: National Bureau of Statistics (China); India Central Statistical
Organization; Bank of Korea (South Korea); IBGE (Brazil); Polish
Statistical Office.
2 | Semiannual Report
ratios. The International Monetary Fund estimated in its October 2009 World
Economic Outlook that the debt-to-GDP ratio of developed G-20 countries would
rise from 78% in 2007 to nearly 107% by 2010, while the corresponding debt ratio
of emerging G-20 countries would rise from 37% to nearly 40% over the same
time.(4) Increased investor and institutional scrutiny of sovereign debt
sustainability in several eurozone economies led to euro weakness and rising
interest rate spreads for those governments.
Concerns about developed economies' sovereign credit fundamentals had limited
spillover into emerging markets. Additionally, ample liquidity supported by low
interest rates maintained by many major central banks underpinned capital flows
to emerging markets given comparatively better economic growth dynamics,
interest rate prospects and credit fundamentals.
INVESTMENT STRATEGY
We invest selectively in bonds around the world to generate income for the Fund,
seeking opportunities while monitoring changes in interest rates, currency
exchange rates and credit risks.
MANAGER'S DISCUSSION
The Fund's total return was influenced by various factors, including interest
rate developments, currency movements and exposure to sovereign debt markets.
INTEREST RATE STRATEGY
Relative to the JPM GGBI, the Fund benefited from its interest rate strategy
during the six-month reporting period. Given historically low interest rates in
the world's largest economies, we maintained a lower duration than that of the
index. We held no U.S. Treasury securities and had limited duration exposure in
other developed bond markets. Although U.S. inflationary pressures remained
subdued by slack in the economy, characterized by a relatively high 9.7%
unemployment rate as of February 2010 and increased labor productivity, we
avoided exposure to U.S. government bonds given a large fiscal deficit (9.9% of
GDP in 2009) and what we believed were more attractive yield opportunities
elsewhere.(5) During the reporting period, the Fund's relative performance
benefited from a lack of exposure to U.S. Treasuries as long-term government
bond yields rose 21 basis points (bps) from 3.40% to 3.61%.
WHAT IS DURATION?
Duration is a measure of a bond's price sensitivity to interest rate changes. In
general, a portfolio of securities with a lower duration can be expected to be
less sensitive to interest rate changes than a portfolio with a higher duration.
(4.) The G-20 is an informal forum that promotes open and constructive
discussion between industrial and emerging market countries on key issues
related to global economic stability. It is made up of the finance
ministers and central bank governors of 19 countries and the European
Union.
(5.) Sources: Bureau of Labor Statistics; Congressional Budget Office.
Semiannual Report | 3
CURRENCY BREAKDOWN
2/28/10
% OF TOTAL
NET ASSETS
----------
AMERICAS 58.2%
U.S. Dollar 34.0%
Brazilian Real 9.1%
Chilean Peso 7.3%
Mexican Peso 4.4%
Peruvian Nuevo Sol 3.4%
ASIA PACIFIC 36.2%
South Korean Won 15.2%
Malaysian Ringgit 14.7%
Australian Dollar 10.5%
Indonesian Rupiah 8.4%
Indian Rupee 6.4%
Philippine Peso 5.0%
Chinese Yuan 4.9%
Sri Lankan Rupee 2.0%
New Zealand Dollar* -10.7%
Japanese Yen* -20.2%
MIDDLE EAST & AFRICA 5.2%
Israeli New Shekel 4.4%
Egyptian Pound 0.8%
EUROPE 0.4%
Swedish Krona 11.9%
Polish Zloty 8.0%
Norwegian Krone 6.6%
Euro* -26.1%
* Holding is a negative percentage because of the Fund's holdings of forward
currency exchange contracts.
Conversely, the Fund's underweighted eurozone position and lack of exposure to
Japanese government bonds detracted from relative performance.
We maintained duration exposure in select cases where we viewed significant
slack in an economy, such as Mexico's, or prospects for a drop in risk premium,
such as in Indonesia. The Fund benefited from duration exposure in Mexico where
long-term bond yields fell 56 bps from 8.16% to 7.60%. Mexico's economic
recovery was relatively weak, with fourth quarter 2009 GDP contracting an
annualized 2.3%, supporting disinflation, or a slowdown in the rate of price
increases.(6) Additionally, Mexico passed fiscal reform legislation to increase
budget revenues and help secure fiscal stability. The Fund also benefited from
duration exposure in Indonesia, where long-term bond yields fell 66 bps from
10.51% to 9.85%.
CURRENCY STRATEGY
The Fund's currency strategy benefited relative performance. Fund positioning
during the reporting period reflected growing divergence in economic performance
among the G-3 and between developed and emerging market economies.
The Fund benefited from its large net negative position in the euro, which fell
4.90% against the U.S. dollar during the period.(7) We viewed the euro-zone's
economic growth prospects versus the U.S. as hampered by Europe's relatively
more constrained credit conditions, lower productivity, less flexible labor
market, and concerns involving the fiscal creditworthiness of Greece.
Conversely, the Fund's net negative Japanese yen position detracted from
performance given the yen's 4.39% appreciation against the U.S. dollar.(7) We
continued to view Japan as a significant economic underperformer among major
industrial countries. While the U.S. and eurozone discussed strategies for
scaling back unconventional monetary stimulus, Japan increased liquidity
injections into its commercial banking system to counter increased risks to
growth and greater deflation pressure. January 2010 consumer prices rose an
annualized 2.6% in the U.S. and 1.0% in the eurozone but fell an annualized 1.3%
in Japan.(8) We also held net negative yen exposure to protect against rising
U.S. Treasury yields given our analysis of a strong correlation between the
value of the Japanese yen versus the U.S. dollar and the differential between
interest rates in the U.S. and Japan.
(6.) Source: National Institute of Statistics and Geography.
(7.) Source: IDC/Exshare.
(8.) Sources: Bureau of Labor Statistics (U.S.); Eurostat (eurozone); Economic
and Social Research Institute (Japan).
4 | Semiannual Report
The Fund also benefited from exposure to Asian currencies. Relative to the U.S.
dollar, the Indonesian rupiah rose 7.98%, the South Korean won, 7.67%, the
Australian dollar, 6.22%, and the Indian rupee, 5.90%, during the six months
under review.(7) Asia's positive economic growth momentum led policymakers to
begin tightening monetary policy. Australia was one of the first developed
economy to increase interest rates, and China and India also tightened policy
during the period. While the region's positive growth differential and rising
interest rates attracted capital inflows, its overall balance of payment
positions remained supportive as evidenced by the region's reserve accumulation.
Exposure to Latin American currencies also contributed to relative performance.
For example, the Chilean peso rose 4.88% and the Brazilian real, 3.37%, against
the U.S. dollar over the period.(7)
GLOBAL SOVEREIGN DEBT AND CREDIT STRATEGY
The Fund invested in hard currency-denominated sovereign debt. As an asset
class, these securities typically compensate for greater credit risk by offering
higher yields relative to comparable maturity U.S. and European benchmark
treasury yields. U.S. dollar-denominated emerging market debt generated a
six-month total return of +8.42% as measured by the J.P. Morgan (JPM) Emerging
Markets Bond Index Global (EMBIG).(9) Sovereign interest rate spreads fell from
389 bps at the beginning of the reporting period to 311 bps at period-end as
emerging market credit yields declined and the U.S. Treasury yield curve
steepened.(10) Exposure to sovereign credits helped the Fund's performance
relative to the JPM GGBI.
WHAT IS BALANCE OF PAYMENTS?
Balance of payments is a record of all of a country's exports and imports of
goods and services, borrowing and lending with the rest of the world during a
particular time period. It helps a country evaluate its competitive strengths
and weaknesses and forecast the strength of its currency.
(9.) Source: (C) 2010 Morningstar. The JPM EMBIG tracks total returns for U.S.
dollar-denominated debt instruments issued by emerging market sovereign and
quasi-sovereign entities: Brady bonds, loans and Eurobonds.
(10.) Source: J.P. Morgan.
Semiannual Report | 5
Thank you for your continued participation in Templeton Global Income Fund. We
look forward to serving your future investment needs.
Sincerely,
(PHOTO OF MICHAEL HASENSTAB)
/s/ Michael Hasenstab
Michael Hasenstab, Ph.D.
Portfolio Manager
Templeton Global Income Fund
THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF FEBRUARY 28, 2010, 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.
6 | Semiannual Report
Performance Summary as of 2/28/10
Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses. Capital
gain distributions are net profits realized from the sale of portfolio
securities. Total return reflects reinvestment of the Fund's dividends and
capital gain distributions, if any, and any unrealized gains or losses. Total
returns do not reflect any sales charges paid at inception or brokerage
commissions paid on secondary market purchases. The performance table does not
reflect any taxes that a shareholder would pay on Fund dividends, capital gains
distributions, if any, or any realized gains on the sale of Fund shares.
PRICE AND DISTRIBUTION INFORMATION
SYMBOL: GIM CHANGE 2/28/10 8/31/09
----------- ------ ------- -------
Net Asset Value (NAV) +$0.60 $9.44 $8.84
Market Price (NYSE) +$0.68 $9.83 $9.15
DISTRIBUTIONS (9/1/09-2/28/10)
Dividend Income $0.2520
PERFORMANCE
6-MONTH 1-YEAR 5-YEAR 10-YEAR
------- ------- ------- --------
Cumulative Total Return(1)
Based on change in NAV(2) +9.73% +31.80% +65.28% +211.04%
Based on change in market price(3) +10.40% +52.21% +67.87% +305.92%
Average Annual Total Return(1)
Based on change in NAV(2) +9.73% +31.80% +10.57% +12.02%
Based on change in market price(3) +10.40% +52.21% +10.92% +15.04%
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.
ENDNOTES
CHANGES IN INTEREST RATES WILL AFFECT THE VALUE OF THE FUND'S PORTFOLIO AND ITS
SHARE PRICE AND YIELD. 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. SPECIAL RISKS ARE ASSOCIATED
WITH FOREIGN INVESTING, INCLUDING CURRENCY FLUCTUATIONS, ECONOMIC INSTABILITY
AND POLITICAL DEVELOPMENTS. INVESTMENTS IN DEVELOPING MARKETS INVOLVE HEIGHTENED
RISKS RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THEIR
RELATIVELY SMALL SIZE AND LESSER LIQUIDITY. THE FUND'S USE OF FOREIGN CURRENCY
TECHNIQUES INVOLVES SPECIAL RISKS AS SUCH TECHNIQUES MAY NOT ACHIEVE THE
ANTICIPATED BENEFITS AND/OR MAY RESULT IN LOSSES TO THE FUND. ALSO, AS A
NONDIVERSIFIED INVESTMENT COMPANY, THE FUND MAY INVEST IN A RELATIVELY SMALL
NUMBER OF ISSUERS AND, AS A RESULT, BE SUBJECT TO A GREATER RISK OF LOSS WITH
RESPECT TO ITS PORTFOLIO SECURITIES.
(1.) Total return calculations represent the cumulative and average annual
changes in value of an investment over the periods indicated. Six-month
return has not been annualized.
(2.) Assumes reinvestment of distributions based on net asset value.
(3.) Assumes reinvestment of distributions based on the dividend reinvestment
and cash purchase plan.
Semiannual Report | 7
Important Notice to Shareholders
SHARE REPURCHASE PROGRAM
The Fund's Board previously authorized management to implement an open-market
share repurchase program pursuant to which the Fund may purchase Fund shares,
from time to time, in open-market transactions, at the discretion of management.
This authorization remains in effect.
EXCHANGE-TRADED PUT AND CALL OPTIONS ON INTEREST RATE/BOND FUTURES
The Fund may purchase options on interest rate/bond futures to help hedge the
Fund's risk of potentially rising interest rates. An option on an interest rate
or bond futures contract is an exchange-traded contract in which a seller grants
to a buyer the right (but not the obligation) to buy or sell a futures contract.
The buyer pays the seller a premium for the option. Contract standardization,
together with the clearing corporation guarantee, facilitates options trading. A
buyer or seller of an exchange-traded option can liquidate an open position in
an option before expiration by making an offsetting transaction. For example,
the holder of a put option can liquidate his position by selling a put with the
same strike price and expiration date. As with futures contracts, most positions
in standardized options are liquidated with an offsetting transaction before the
expiration date rather than being held for the purpose of selling or buying the
underlying instrument. The net profit or loss in an option transaction is
determined by the difference between the premium originally paid and the price
received when it is sold.
Similar to futures, options on futures trade on exchanges designated as contract
markets. They provide transparent pricing/valuation and the elimination of
counterparty risk. Unlike futures contracts, buyers of options are not required
to deposit funds in a margin account because their risk of loss is limited to
the premium paid for the option.
If the Investment Manager's judgment regarding the general direction of market
prices or interest rates is incorrect, the Fund's overall performance would be
negatively impacted. When options on futures contracts are used for hedging,
there may be an imperfect correlation between movements in the prices of the
underlying asset(s) on which the options on futures contract is based and
movements in the prices of the assets sought to be hedged. Adverse market
movements could cause the Fund to experience substantial losses. Futures
contracts that are traded on foreign exchanges, as well as options on such
contracts, may not be as liquid as those purchased on Commodity Futures Trading
Commission designated contract markets.
8 | Semiannual Report
Templeton Global Income Fund
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 2010 ----------------------------------------------------------
(UNAUDITED) 2009 2008 2007 2006 2005
----------------- ---------- ---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ................ $ 8.84 $ 8.81 $ 8.95 $ 8.93 $ 9.02 $ 8.77
---------- ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income(a) ......................... 0.28 0.46 0.44 0.40 0.37 0.39
Net realized and unrealized gains ................ 0.57 0.91 0.49 0.52 0.33 0.49
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations .................... 0.85 1.37 0.93 0.92 0.70 0.88
---------- ---------- ---------- ---------- ---------- ----------
Less distributions from net investment income
and net foreign currency gains ................... (0.25) (1.34) (1.07) (0.90) (0.79) (0.63)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period ...................... $ 9.44 $ 8.84 $ 8.81 $ 8.95 $ 8.93 $ 9.02
========== ========== ========== ========== ========== ==========
Market value, end of period(b) ...................... $ 9.83 $ 9.15 $ 8.97 $ 9.01 $ 9.15 $ 8.85
========== ========== ========== ========== ========== ==========
Total return (based on market value per share)(c) ... 10.40% 20.48% 12.25% 8.63% 13.39% 10.61%
RATIOS TO AVERAGE NET ASSETS(d)
Expenses(e) ......................................... 0.74% 0.74% 0.74% 0.75% 0.80% 0.76%
Net investment income ............................... 6.08% 5.52% 4.82% 4.45% 4.16% 4.22%
SUPPLEMENTAL DATA
Net assets, end of period (000's) ................... $1,240,181 $1,160,282 $1,155,981 $1,170,414 $1,161,850 $1,172,240
Portfolio turnover rate ............................. 11.70% 57.11% 64.44% 49.24% 49.20% 41.81%
(a) Based on average daily shares outstanding.
(b) Based on the last sale on the New York Stock Exchange.
(c) Total return is not annualized for periods less than one year.
(d) Ratios are annualized for periods less than one year.
(e) Benefit of expense reduction rounds to less than 0.01%.
The accompanying notes are an integral part of these financial statements.
Semiannual Report | 9
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED)
PRINCIPAL AMOUNT(a) VALUE
--------------------- ----------------
BONDS 90.5%
ARGENTINA 2.6%
(b, c) Government of Argentina, senior bond, FRN, 0.389%, 8/03/12 ............ 98,977,000 $ 32,167,525
----------------
AUSTRALIA 7.9%
New South Wales Treasury Corp.,
6.00%, 5/01/12 ..................................................... 10,565,000 AUD 9,681,897
senior note, 5.50%, 3/01/17 ........................................ 36,971,000 AUD 32,906,913
Queensland Treasury Corp.,
13, 6.00%, 8/14/13 ................................................. 41,536,000 AUD 38,210,096
17, 6.00%, 9/14/17 ................................................. 12,395,000 AUD 11,321,980
(d) 144A, 7.125%, 9/18/17 .............................................. 7,480,000 NZD 5,589,590
----------------
97,710,476
----------------
BRAZIL 7.4%
Nota Do Tesouro Nacional,
10.00%, 1/01/12 .................................................... 23,075(e) BRL 12,436,045
10.00%, 1/01/14 .................................................... 15,000(e) BRL 7,732,261
10.00%, 1/01/17 .................................................... 54,900(e) BRL 26,747,048
(f) Index Linked, 6.00%, 5/15/15 ....................................... 20,140(e) BRL 20,585,469
(f) Index Linked, 6.00%, 5/15/45 ....................................... 23,625(e) BRL 23,840,360
----------------
91,341,183
----------------
CANADA 1.4%
Province of Manitoba, 6.375%, 9/01/15 ................................. 14,800,000 NZD 10,707,609
Province of Ontario, 6.25%, 6/16/15 ................................... 8,460,000 NZD 6,108,641
----------------
16,816,250
----------------
HUNGARY 2.3%
Government of Hungary,
3.50%, 7/18/16 ..................................................... 905,000 EUR 1,161,437
4.375%, 7/04/17 .................................................... 4,435,000 EUR 5,897,822
5.75%, 6/11/18 ..................................................... 12,690,000 EUR 17,871,766
senior note, 3.875%, 2/24/20 ....................................... 2,700,000 EUR 3,335,366
----------------
28,266,391
----------------
INDONESIA 10.3%
Government of Indonesia,
FR19, 14.25%, 6/15/13 .............................................. 84,050,000,000 IDR 10,563,564
FR20, 14.275%, 12/15/13 ............................................ 81,836,000,000 IDR 10,445,072
FR26, 11.00%, 10/15/14 ............................................. 3,500,000,000 IDR 412,375
FR27, 9.50%, 6/15/15 ............................................... 34,890,000,000 IDR 3,898,113
FR30, 10.75%, 5/15/16 .............................................. 87,035,000,000 IDR 10,226,491
FR31, 11.00%, 11/15/20 ............................................. 335,739,000,000 IDR 38,749,518
FR34, 12.80%, 6/15/21 .............................................. 59,666,000,000 IDR 7,633,632
FR35, 12.90%, 6/15/22 .............................................. 32,530,000,000 IDR 4,161,976
FR36, 11.50%, 9/15/19 .............................................. 23,000,000,000 IDR 2,755,658
FR42, 10.25%, 7/15/27 .............................................. 25,430,000,000 IDR 2,658,127
FR43, 10.25%, 7/15/22 .............................................. 8,450,000,000 IDR 910,384
FR46, 9.50%, 7/15/23 ............................................... 41,250,000,000 IDR 4,161,972
10 | Semiannual Report
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE
--------------------- ----------------
BONDS (CONTINUED)
INDONESIA (CONTINUED)
Government of Indonesia, (continued)
FR47, 10.00%, 2/15/28 .............................................. 52,895,000,000 IDR $ 5,404,171
FR48, 9.00%, 9/15/18 ............................................... 18,520,000,000 IDR 1,934,251
(d) senior bond, 144A, 8.50%, 10/12/35 ................................. 2,952,000 3,568,968
(d) senior bond, 144A, 6.625%, 2/17/37 ................................. 2,090,000 2,110,247
(d) senior bond, 144A, 7.75%, 1/17/38 .................................. 7,050,000 7,885,929
(g) senior bond, Reg S, 8.50%, 10/12/35 ................................ 5,510,000 6,661,590
(g) senior bond, Reg S, 7.75%, 1/17/38 ................................. 3,310,000 3,702,471
----------------
127,844,509
----------------
LITHUANIA 2.0%
(d) Government of Lithuania, 144A,
6.75%, 1/15/15 ..................................................... 15,000,000 15,862,500
7.375%, 2/11/20 .................................................... 8,825,000 9,166,969
----------------
25,029,469
----------------
MEXICO 4.7%
Government of Mexico,
M 20, 8.00%, 12/07/23 .............................................. 2,727,000(h) MXN 21,382,904
M 20, 10.00%, 12/05/24 ............................................. 15,000(h) MXN 138,392
M 20, 7.50%, 6/03/27 ............................................... 3,058,000(h) MXN 22,608,262
senior bond, 5.95%, 3/19/19 ........................................ 13,260,000 14,243,892
----------------
58,373,450
----------------
NORWAY 1.4%
Government of Norway, 6.00%, 5/16/11 .................................. 96,190,000 NOK 17,035,656
----------------
PERU 3.4%
Government of Peru,
9.91%, 5/05/15 ..................................................... 6,500,000 PEN 2,870,170
7.84%, 8/12/20 ..................................................... 32,200,000 PEN 12,757,577
Series 7, 8.60%, 8/12/17 ........................................... 61,545,000 PEN 26,252,162
----------------
41,879,909
----------------
POLAND 8.6%
Government of Poland,
4.75%, 4/25/12 ..................................................... 27,930,000 PLN 9,660,135
5.75%, 4/25/14 ..................................................... 147,355,000 PLN 51,807,962
6.25%, 10/24/15 .................................................... 19,335,000 PLN 6,929,867
5.75%, 9/23/22 ..................................................... 60,500,000 PLN 20,300,170
senior note, 6.375%, 7/15/19 ....................................... 17,000,000 18,478,473
----------------
107,176,607
----------------
QATAR 0.9%
(d) Government of Qatar, senior note, 144A, 6.55%, 4/09/19 ................ 10,450,000 11,638,687
----------------
RUSSIA 4.7%
(d) Government of Russia, 144A, 7.50%, 3/31/30 ............................ 51,543,020 58,570,911
----------------
Semiannual Report | 11
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE
--------------------- ----------------
BONDS (CONTINUED)
SOUTH AFRICA 2.6%
Government of South Africa,
5.25%, 5/16/13 ..................................................... 3,330,000 EUR $ 4,794,664
4.50%, 4/05/16 ..................................................... 1,829,000 EUR 2,505,570
6.875%, 5/27/19 .................................................... 18,620,000 20,807,850
senior note, 6.50%, 6/02/14 ........................................ 775,000 857,367
senior note, 5.875%, 5/30/22 ....................................... 3,355,000 3,369,678
----------------
32,335,129
----------------
SOUTH KOREA 15.3%
The Export-Import Bank of Korea, 4.625%, 2/20/17 ...................... 205,000 EUR 281,084
Government of Korea, senior bond, 5.625%, 11/03/25 .................... 620,000 626,911
Korea Deposit Insurance Corp.,
07-1, 5.57%, 9/14/12 ............................................... 7,200,000,000 KRW 6,387,440
08-1, 5.28%, 2/15/13 ............................................... 1,232,000,000 KRW 1,084,166
Korea Treasury Bond,
0400-1206, 4.00%, 6/10/12 .......................................... 76,268,710,000 KRW 65,728,267
0475-1112, 4.75%, 12/10/11 ......................................... 69,639,880,000 KRW 61,008,616
0475-1203, 4.75%, 3/10/12 .......................................... 15,946,000,000 KRW 13,966,047
0525-1303, 5.25%, 3/10/13 .......................................... 1,866,530,000 KRW 1,656,529
0525-1509, 5.25%, 9/10/15 .......................................... 4,000,000,000 KRW 3,531,077
0550-1106, 5.50%, 6/10/11 .......................................... 19,068,600,000 KRW 16,868,164
senior note, 7.125%, 4/16/19 ....................................... 15,880,000 18,622,127
----------------
189,760,428
----------------
SRI LANKA 2.0%
Government of Sri Lanka, A,
12.00%, 7/15/11 .................................................... 94,150,000 LKR 843,270
8.50%, 1/15/13 ..................................................... 567,300,000 LKR 4,688,375
13.50%, 2/01/13 .................................................... 550,800,000 LKR 5,099,183
11.25%, 7/15/14 .................................................... 585,500,000 LKR 5,032,128
11.00%, 8/01/15 .................................................... 1,103,400,000 LKR 9,547,748
----------------
25,210,704
----------------
(i) SUPRANATIONAL 4.3%
Corporacion Andina De Fomento, 8.125%, 6/04/19 ........................ 8,640,000 10,052,948
European Investment Bank, senior note, 4.50%, 5/15/13 ................. 113,650,000 NOK 19,930,309
Inter-American Development Bank,
7.50%, 4/15/15 ..................................................... 8,000,000 NZD 6,112,547
6.00%, 12/15/17 .................................................... 6,000,000 NZD 4,240,572
senior note, 7.50%, 12/05/24 ....................................... 185,000,000 MXN 12,742,549
----------------
53,078,925
----------------
SWEDEN 4.4%
Government of Sweden, 5.25%, 3/15/11 .................................. 372,575,000 SEK 54,906,285
----------------
12 | Semiannual Report
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE
--------------------- ----------------
BONDS (CONTINUED)
UNITED ARAB EMIRATES 0.9%
(d) Emirate of Abu Dhabi, 144A, 6.75%, 4/08/19 ............................ 10,260,000 $ 11,569,330
----------------
VENEZUELA 2.6%
Government of Venezuela,
10.75%, 9/19/13 .................................................... 6,155,000 5,775,236
(g) senior bond, Reg S, 5.375%, 8/07/10 ................................ 19,905,000 19,758,002
Petroleos de Venezuela SA, senior bond, zero cpn., 7/10/11 ............ 7,600,000 6,593,000
----------------
32,126,238
----------------
VIETNAM 0.8%
(d) Government of Vietnam, 144A, 6.75%, 1/29/20 ........................... 9,270,000 9,339,525
----------------
TOTAL BONDS (COST $981,379,705) ....................................... 1,122,177,587
----------------
MUNICIPAL BONDS 3.7%
UNITED STATES AND U.S. TERRITORIES 3.7%
Alabama Public Housing Authorities Capital Program Revenue, Series B,
FSA Insured, 4.45%, 1/01/24 ........................................ 55,000 54,997
Alabama State University Revenue, General Tuition and Fee, Assured
Guaranty,
5.00%, 9/01/29 ..................................................... 5,000 5,231
5.75%, 9/01/39 ..................................................... 5,000 5,430
Bay Area Toll Authority Toll Bridge Revenue, San Francisco Bay Area,
Refunding, Series F-1,
5.00%, 4/01/39 ..................................................... 605,000 612,193
5.50%, 4/01/43 ..................................................... 295,000 307,676
Bexar County Hospital District GO, Certificates of Obligation, 5.00%,
2/15/32 ............................................................ 805,000 817,647
Bexar County Revenue, Venue Project, Refunding, Series A, BHAC
Insured, 5.25%, 8/15/47 ............................................ 730,000 748,498
California State GO,
Refunding, 5.125%, 4/01/33 ......................................... 500,000 465,905
Refunding, 5.00%, 4/01/38 .......................................... 205,000 183,174
Various Purpose, 6.00%, 4/01/38 .................................... 20,130,000 20,753,627
District of Columbia University Revenue, Georgetown University,
Refunding, Series D, BHAC Insured, 5.50%, 4/01/36 .................. 1,545,000 1,641,454
Hamilton County Sales Tax Revenue, sub. bond, Refunding, Series A, FSA
Insured, 5.00%, 12/01/32 ........................................... 1,825,000 1,869,986
Illinois Municipal Electricity Agency Power Supply Revenue, Series A,
BHAC Insured, 5.00%, 2/01/35 ....................................... 1,085,000 1,105,257
Kentucky State Municipal Power Agency Power System Revenue, Prairie
State Project, Series A, BHAC Insured, 5.25%, 9/01/42 .............. 2,395,000 2,471,281
Las Vegas Valley Water District GO, Refunding, Series A, NATL Insured,
5.00%, 6/01/26 ..................................................... 395,000 406,897
Lewisville ISD, GO, School Building, 5.00%, 8/15/26 ................... 545,000 594,649
(j) Los Angeles USD, GO, Series KRY, 5.25%, 7/01/26 ....................... 350,000 379,907
Minneapolis Health Care System Revenue, Fairview Health Services,
Series B, Assured Guaranty, 6.50%, 11/15/38 ........................ 1,670,000 1,864,789
MTA Revenue,
Series B, Assured Guaranty, 5.25%, 11/15/20 ........................ 430,000 490,467
Transportation, Series A, FSA Insured, 5.50%, 11/15/21 ............. 410,000 480,827
Semiannual Report | 13
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE
--------------------- ----------------
MUNICIPAL BONDS (CONTINUED)
UNITED STATES AND U.S. TERRITORIES (CONTINUED)
North Carolina Eastern Municipal Power Agency Power System Revenue,
Refunding, Series A, Assured Guaranty, 5.25%, 1/01/19 .............. 250,000 $ 276,293
Palomar Pomerado Health GO, Election of 2004, Series A, NATL Insured,
5.125%, 8/01/37 .................................................... 2,080,000 1,950,582
Philadelphia GO, Refunding, Series A, Assured Guaranty,
5.00%, 8/01/24 ..................................................... 50,000 52,447
Placentia-Yorba Linda USD, GO, 2008 Election, Series A,
5.25%, 8/01/32 ..................................................... 2,400,000 2,467,224
Poway USD, GO, Election of 2008, ID 07-1-A, zero cpn.,
8/01/27 ............................................................ 705,000 254,435
8/01/30 ............................................................ 705,000 202,744
8/01/32 ............................................................ 885,000 217,551
8/01/33 ............................................................ 470,000 107,545
Puerto Rico Commonwealth GO, Public Improvement, Refunding, Series A,
NATL Insured, 5.50%, 7/01/21 ....................................... 100,000 103,926
Regional Transportation District Sales Tax Revenue, Fastracks Project,
Series A, AMBAC Insured, 5.00%, 11/01/27 ........................... 590,000 623,111
San Bernardino Community College District GO, Election of 2002, Series
A,
6.375%, 8/01/26 .................................................... 400,000 467,892
6.50%, 8/01/27 ..................................................... 580,000 681,314
6.50%, 8/01/28 ..................................................... 240,000 280,246
San Mateo County Community College District GO, Election of 2001,
Series C, NATL Insured, zero cpn.,
9/01/30 ............................................................ 1,705,000 506,914
3/01/31 ............................................................ 465,000 131,674
Tarrant County Cultural Education Facilities Finance Corp. Revenue,
Christus Health, Refunding, Series A, Assured Guaranty,
6.25%, 7/01/28 ..................................................... 1,400,000 1,554,140
----------------
TOTAL MUNICIPAL BONDS (COST $42,580,282) .............................. 45,137,930
----------------
TOTAL INVESTMENTS BEFORE SHORT TERM INVESTMENTS
(COST $1,023,959,987) .............................................. 1,167,315,517
----------------
SHORT TERM INVESTMENTS 2.2%
FOREIGN GOVERNMENT AND AGENCY SECURITIES 1.9%
EGYPT 0.8%
(j, k) Egypt Treasury Bill, 8/03/10 - 2/08/11 ................................ 62,325,000 EGP 10,418,264
----------------
ISRAEL 1.1%
(k) Israel Treasury Bill, 1/05/11 ......................................... 50,000,000 ILS 13,016,009
----------------
TOTAL FOREIGN GOVERNMENT AND AGENCY SECURITIES (COST $23,540,741) ..... 23,434,273
----------------
TOTAL INVESTMENTS BEFORE MONEY MARKET FUND (COST $1,047,500,728) ...... 1,190,749,790
----------------
SHARES
---------------------
MONEY MARKET FUNDS (COST $4,445,542) 0.3%
UNITED STATES 0.3%
(l) Institutional Fiduciary Trust Money Market Portfolio, 0.00% ........... 4,445,542 4,445,542
----------------
14 | Semiannual Report
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
TOTAL INVESTMENTS (COST $1,051,946,270) 96.4% ......................... $ 1,195,195,332
OTHER ASSETS, LESS LIABILITIES 3.6% ................................... 44,985,320
----------------
NET ASSETS 100.0% ..................................................... $ 1,240,180,652
================
(a) The principal amount is stated in U.S. dollars unless otherwise indicated.
(b) The coupon rate shown represents the rate at period end.
(c) The principal amount is stated in original face, and scheduled paydowns are
reflected in the market price on ex-date.
(d) Security was purchased pursuant to Rule 144A under the Securities Act of
1933 and 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. These securities have been deemed liquid under
guidelines approved by the Fund's Board of Trustees. At February 28, 2010,
the aggregate value of these securities was $135,302,656, representing
10.91% of net assets.
(e) Principal amount is stated in 1,000 Brazilian Real Units.
(f) Redemption price at maturity is adjusted for inflation. See Note 1(f).
(g) Security was purchased pursuant to Regulation S under the Securities Act of
1933, which exempts from registration securities offered and sold outside
of the United States. Such a security 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.
These securities have been deemed liquid under guidelines approved by the
Fund's Board of Trustees. At February 28, 2010, the aggregate value of
these securities was $30,122,063, representing 2.43% of net assets.
(h) Principal amount is stated in 100 Mexican Peso Units.
(i) A supranational organization is an entity formed by two or more central
governments through international treaties.
(j) A portion or all of the security purchased on a delayed delivery basis. See
Note 1(c).
(k) The security is traded on a discount basis with no stated coupon rate.
(l) See Note 7 regarding investments in the Institutional Fiduciary Trust Money
Market Portfolio. The rate shown is the annualized seven-day yield at
period end.
At February 28, 2010, the Fund had the following forward exchange contracts
outstanding. See Note 1(d).
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
Chilean Peso ............. DBAB Sell 1,153,220,000 2,184,129 3/03/10 $ -- $ (14,156)
Chilean Peso ............. DBAB Buy 1,153,220,000 1,911,837 3/03/10 286,448 --
Chilean Peso ............. DBAB Sell 1,873,290,000 3,547,898 3/04/10 -- (23,199)
Chilean Peso ............. DBAB Buy 1,873,290,000 3,058,932 3/04/10 512,164 --
Chilean Peso ............. DBAB Sell 1,173,870,000 2,223,239 3/05/10 -- (14,665)
Chilean Peso ............. DBAB Buy 1,173,870,000 1,911,840 3/05/10 326,063 --
Chilean Peso ............. DBAB Buy 1,107,150,000 1,799,571 3/08/10 311,498 --
Chilean Peso ............. DBAB Buy 1,176,260,000 1,911,841 3/09/10 331,132 --
Chilean Peso ............. MLCO Sell 366,300,000 691,785 3/10/10 -- (6,741)
Chilean Peso ............. MLCO Buy 366,300,000 677,079 3/10/10 21,446 --
Chilean Peso ............. DBAB Buy 2,301,970,000 4,308,788 3/12/10 81,520 --
Chilean Peso ............. DBAB Buy 2,298,030,000 4,326,925 3/16/10 56,871 --
Singapore Dollar ......... JPHQ Sell 7,659,000 4,977,255 3/17/10 -- (469,723)
Singapore Dollar ......... JPHQ Buy 7,659,000 5,506,111 3/17/10 -- (59,133)
Singapore Dollar ......... DBAB Sell 9,714,000 6,316,405 3/18/10 -- (591,983)
Singapore Dollar ......... DBAB Buy 9,714,000 6,993,369 3/18/10 -- (84,981)
Chilean Peso ............. JPHQ Buy 670,400,000 1,268,376 3/19/10 10,721 --
Singapore Dollar ......... DBAB Sell 14,546,000 9,475,193 3/19/10 -- (869,494)
Singapore Dollar ......... DBAB Buy 14,546,000 10,373,698 3/19/10 -- (29,012)
Singapore Dollar ......... DBAB Sell 19,370,000 12,633,089 3/22/10 -- (1,141,819)
Singapore Dollar ......... DBAB Buy 19,370,000 13,944,682 3/22/10 -- (169,774)
Singapore Dollar ......... UBSW Sell 17,593,000 11,583,106 3/23/10 -- (927,954)
Singapore Dollar ......... UBSW Buy 17,593,000 12,676,899 3/23/10 -- (165,839)
Semiannual Report | 15
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
Australian Dollar ........ BZWS Sell 4,102,790 2,790,513 3/24/10 $ -- $ (873,048)
Singapore Dollar ......... JPHQ Sell 4,766,000 3,158,592 3/31/10 -- (230,413)
Singapore Dollar ......... JPHQ Buy 4,766,000 3,416,977 3/31/10 -- (27,972)
Indian Rupee ............. DBAB Buy 110,524,000 2,135,977 4/09/10 252,595 --
Indian Rupee ............. DBAB Buy 237,003,000 4,577,115 4/12/10 543,399 --
Indian Rupee ............. JPHQ Buy 159,192,000 3,051,409 4/13/10 387,656 --
Indian Rupee ............. JPHQ Buy 156,262,000 3,051,396 4/15/10 323,739 --
Indian Rupee ............. DBAB Buy 54,789,000 1,068,012 4/19/10 114,944 --
Indian Rupee ............. JPHQ Buy 78,058,000 1,529,949 4/19/10 155,411 --
Malaysian Ringgit ........ JPHQ Buy 5,072,841 1,401,221 4/19/10 85,724 --
Malaysian Ringgit ........ JPHQ Buy 14,535,000 4,047,957 4/20/10 212,303 --
Indian Rupee ............. DBAB Buy 110,998,000 2,141,934 4/26/10 253,069 --
Indian Rupee ............. JPHQ Buy 15,835,000 305,990 4/27/10 35,649 --
Indian Rupee ............. DBAB Buy 507,510,181 9,912,308 4/28/10 1,036,423 --
Indian Rupee ............. JPHQ Buy 78,563,000 1,529,951 4/28/10 164,921 --
New Zealand Dollar ....... DBAB Sell 16,563,648 9,065,285 4/28/10 -- (2,448,732)
Swedish Krona ............ BOFA Buy 29,978,900 2,820,747 EUR 4/29/10 369,068 --
Indian Rupee ............. JPHQ Buy 78,640,000 1,529,961 4/30/10 166,329 --
Chilean Peso ............. DBAB Buy 730,900,000 1,354,271 5/10/10 43,014 --
Chilean Peso ............. DBAB Buy 2,278,980,000 3,974,919 5/18/10 380,414 --
Chilean Peso ............. CITI Buy 103,407,000 185,317 5/26/10 12,236 --
Chilean Peso ............. DBAB Buy 362,056,000 648,613 5/26/10 43,075 --
Chilean Peso ............. DBAB Buy 466,410,000 825,504 5/28/10 65,560 --
Chilean Peso ............. CITI Buy 466,580,000 825,513 5/28/10 65,877 --
Chilean Peso ............. CITI Buy 186,070,000 330,204 6/01/10 25,360 --
Indian Rupee ............. DBAB Buy 150,389,000 3,064,223 6/01/10 172,279 --
New Zealand Dollar ....... CITI Sell 6,044,416 4,215,255 6/01/10 23,516 --
New Zealand Dollar ....... DBAB Sell 10,620,020 7,417,978 6/01/10 53,107 --
New Zealand Dollar ....... UBSW Sell 10,684,383 7,463,896 6/01/10 54,390 --
Indian Rupee ............. HSBC Buy 4,458,000 91,918 6/02/10 4,016 --
New Zealand Dollar ....... FBCO Sell 1,511,663 1,065,722 6/02/10 17,481 --
New Zealand Dollar ....... DBAB Sell 4,580,779 3,232,427 6/02/10 55,949 --
New Zealand Dollar ....... BZWS Sell 8,856,368 6,237,363 6/02/10 96,038 --
Indian Rupee ............. HSBC Buy 22,062,000 459,625 6/03/10 15,101 --
Indian Rupee ............. HSBC Buy 147,266,000 3,064,211 6/04/10 104,404 --
Poland Zloty ............. DBAB Buy 13,705,000 3,012,684 EUR 6/04/10 594,013 --
Indian Rupee ............. DBAB Buy 73,633,000 1,532,106 6/07/10 51,864 --
Poland Zloty ............. DBAB Buy 12,965,000 2,824,434 EUR 6/07/10 595,772 --
Indian Rupee ............. HSBC Buy 29,570,000 612,850 6/08/10 23,206 --
Indian Rupee ............. DBAB Buy 37,141,000 770,560 6/08/10 28,349 --
Poland Zloty ............. CITI Buy 5,203,000 1,129,672 EUR 6/08/10 244,137 --
New Zealand Dollar ....... BZWS Sell 8,856,368 6,233,643 6/09/10 95,621 --
Indian Rupee ............. DBAB Buy 29,990,000 616,444 6/10/10 28,554 --
Indian Rupee ............. HSBC Buy 30,052,000 616,451 6/11/10 29,834 --
Indian Rupee ............. BZWS Buy 44,847,000 924,680 6/11/10 39,780 --
Indian Rupee ............. DBAB Buy 75,068,000 1,541,121 6/16/10 72,686 --
Indian Rupee ............. DBAB Buy 68,380,000 1,387,018 6/21/10 82,488 --
Swedish Krona ............ UBSW Buy 50,589,000 4,548,225 EUR 6/28/10 912,374 --
Swedish Krona ............ UBSW Buy 36,736,000 3,315,224 EUR 6/29/10 645,592 --
16 | Semiannual Report
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
Swedish Krona ............ UBSW Buy 45,098,000 4,100,526 EUR 7/15/10 $ 751,108 $ --
Malaysian Ringgit ........ DBAB Buy 61,396,000 17,063,924 7/16/10 854,213 --
Malaysian Ringgit ........ DBAB Buy 9,759,000 1,943,056 EUR 7/16/10 203,419 --
Indian Rupee ............. CITI Buy 16,598,000 331,960 7/19/10 24,028 --
Indian Rupee ............. JPHQ Buy 16,598,000 331,960 7/20/10 24,003 --
Malaysian Ringgit ........ DBAB Buy 96,842,000 27,120,533 7/20/10 1,136,765 --
Malaysian Ringgit ........ DBAB Buy 11,019,000 2,189,655 EUR 7/20/10 234,908 --
Malaysian Ringgit ........ DBAB Buy 14,167,000 2,815,158 EUR 7/23/10 301,527 --
Malaysian Ringgit ........ DBAB Buy 117,760,000 33,256,142 7/23/10 1,099,674 --
Malaysian Ringgit ........ JPHQ Buy 123,816,000 34,877,746 7/27/10 1,237,732 --
Malaysian Ringgit ........ JPHQ Buy 14,167,000 2,806,402 EUR 7/27/10 312,686 --
Swedish Krona ............ DBAB Buy 45,098,000 4,230,780 EUR 7/27/10 574,068 --
Malaysian Ringgit ........ HSBC Buy 1,687,000 478,405 7/30/10 13,597 --
New Zealand Dollar ....... DBAB Sell 17,733,735 11,411,658 7/30/10 -- (830,973)
New Zealand Dollar ....... DBAB Sell 17,666,270 11,347,929 8/03/10 -- (844,396)
New Zealand Dollar ....... BZWS Sell 6,915,607 4,439,820 8/03/10 -- (332,966)
New Zealand Dollar ....... DBAB Sell 6,999,201 4,471,789 8/04/10 -- (358,319)
New Zealand Dollar ....... BZWS Sell 3,484,510 2,237,056 8/04/10 -- (167,585)
New Zealand Dollar ....... CITI Sell 17,544,053 11,456,705 8/05/10 -- (649,420)
New Zealand Dollar ....... DBAB Sell 5,204,459 3,392,267 8/05/10 -- (199,026)
Malaysian Ringgit ........ HSBC Buy 3,400,000 971,984 8/06/10 19,261 --
New Zealand Dollar ....... CITI Sell 6,870,623 4,490,055 8/06/10 -- (250,597)
New Zealand Dollar ....... FBCO Sell 3,428,957 2,233,108 8/06/10 -- (132,833)
New Zealand Dollar ....... FBCO Sell 15,302,017 10,059,786 8/09/10 -- (496,011)
New Zealand Dollar ....... CITI Sell 6,779,343 4,457,147 8/09/10 -- (219,450)
New Zealand Dollar ....... DBAB Sell 6,809,934 4,479,575 8/09/10 -- (218,125)
New Zealand Dollar ....... FBCO Sell 6,713,771 4,458,817 8/11/10 -- (171,839)
New Zealand Dollar ....... DBAB Sell 15,333,885 9,990,809 8/12/10 -- (584,546)
New Zealand Dollar ....... DBAB Sell 4,178,000 2,711,940 8/13/10 -- (169,291)
New Zealand Dollar ....... DBAB Sell 4,407,000 2,909,061 8/16/10 -- (129,396)
Brazilian Real ........... DBAB Buy 4,460,000 216,608,820 JPY 8/17/10 -- (63,709)
Japanese Yen ............. UBSW Sell 619,237,000 6,528,180 8/17/10 -- (447,593)
New Israeli Shekel ....... CITI Buy 12,073,000 3,185,993 8/17/10 -- (2,082)
Brazilian Real ........... DBAB Buy 3,295,000 158,654,250 JPY 8/18/10 -- (32,002)
Japanese Yen ............. JPHQ Sell 307,706,000 3,264,093 8/18/10 -- (202,275)
Brazilian Real ........... DBAB Buy 4,942,000 232,303,652 JPY 8/19/10 15,072 --
Japanese Yen ............. HSBC Sell 306,279,000 3,255,517 8/19/10 -- (194,800)
New Israeli Shekel ....... CITI Buy 6,038,000 1,592,930 8/19/10 -- (644)
New Israeli Shekel ....... DBAB Buy 1,209,000 318,493 8/19/10 333 --
New Israeli Shekel ....... CITI Buy 6,041,000 1,589,319 8/19/10 3,758 --
Indian Rupee ............. DBAB Buy 115,936,000 2,321,506 8/20/10 159,418 --
Japanese Yen ............. DBAB Sell 307,444,000 3,255,512 8/20/10 -- (207,954)
Japanese Yen ............. BZWS Sell 307,053,000 3,260,347 8/20/10 -- (198,714)
New Israeli Shekel ....... CITI Buy 4,634,100 1,212,449 8/20/10 9,588 --
Norwegian Krone .......... UBSW Buy 44,332,000 5,049,318 EUR 8/20/10 562,845 --
Indian Rupee ............. DBAB Buy 100,473,000 2,011,967 8/23/10 137,607 --
Japanese Yen ............. CITI Sell 613,483,000 6,520,692 8/23/10 -- (390,563)
Japanese Yen ............. FBCO Sell 608,984,000 6,520,695 8/23/10 -- (339,876)
Semiannual Report | 17
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
New Israeli Shekel ....... CITI Buy 7,908,300 2,073,927 8/23/10 $ 11,405 $ --
Norwegian Krone .......... UBSW Buy 44,332,000 5,054,557 EUR 8/23/10 554,624 --
Japanese Yen ............. JPHQ Sell 612,179,000 6,520,693 8/24/10 -- (375,921)
Japanese Yen ............. BZWS Sell 610,141,000 6,520,690 8/24/10 -- (352,965)
New Zealand Dollar ....... FBCO Sell 6,159,450 4,061,418 8/24/10 -- (182,690)
Japanese Yen ............. DBAB Sell 303,441,000 3,260,352 8/25/10 -- (158,143)
New Zealand Dollar ....... DBAB Sell 6,130,000 4,097,905 8/27/10 -- (124,841)
Brazilian Real ........... DBAB Buy 3,300,000 154,185,900 JPY 8/31/10 15,432 --
Indian Rupee ............. DBAB Buy 71,050,000 1,423,848 9/01/10 95,280 --
Japanese Yen ............. JPHQ Sell 304,127,000 3,260,349 9/01/10 -- (166,153)
Brazilian Real ........... DBAB Buy 4,949,000 228,826,913 JPY 9/02/10 48,906 --
Japanese Yen ............. HSBC Sell 300,940,000 3,260,349 9/02/10 -- (130,286)
Norwegian Krone .......... BZWS Buy 44,332,000 5,045,123 EUR 9/07/10 562,002 --
New Israeli Shekel ....... DBAB Buy 35,742,000 9,430,607 9/08/10 -- (8,729)
Japanese Yen ............. HSBC Sell 453,244,000 4,890,524 9/09/10 -- (216,508)
Japanese Yen ............. HSBC Sell 451,689,000 4,890,526 9/10/10 -- (199,044)
Japanese Yen ............. DBAB Sell 383,650,000 4,179,376 9/10/10 -- (143,540)
Japanese Yen ............. UBSW Sell 318,692,000 3,482,820 9/13/10 -- (108,283)
Brazilian Real ........... DBAB Buy 7,424,000 346,161,075 JPY 9/15/10 27,732 --
Japanese Yen ............. UBSW Sell 377,653,000 4,179,380 9/15/10 -- (76,210)
Japanese Yen ............. HSBC Sell 253,555,000 2,786,257 9/15/10 -- (70,932)
Japanese Yen ............. BZWS Sell 250,749,000 2,786,255 9/15/10 -- (39,315)
Japanese Yen ............. HSBC Sell 376,102,000 4,179,375 9/16/10 -- (58,787)
Japanese Yen ............. DBAB Sell 126,078,000 1,393,127 9/16/10 -- (27,602)
Euro ..................... BZWS Sell 1,331,300 1,960,140 9/20/10 148,559 --
Japanese Yen ............. JPHQ Sell 252,156,000 2,786,254 9/21/10 -- (55,369)
Japanese Yen ............. HSBC Sell 125,019,000 1,393,125 9/21/10 -- (15,753)
Euro ..................... UBSW Sell 8,685,912 12,735,545 9/23/10 916,229 --
Swedish Krona ............ DBAB Buy 28,384,373 2,799,248 EUR 9/23/10 175,559 --
Swedish Krona ............ UBSW Buy 91,000,000 8,950,438 EUR 9/23/10 595,389 --
Euro ..................... JPHQ Sell 3,821,732 5,658,456 9/24/10 458,071 --
Japanese Yen ............. JPHQ Sell 109,322,000 1,208,045 9/24/10 -- (23,982)
Indian Rupee ............. DBAB Buy 225,000,000 6,533,101 NZD 9/27/10 313,962 --
Japanese Yen ............. JPHQ Sell 10,871,000 120,802 9/27/10 -- (1,715)
Japanese Yen ............. JPHQ Sell 78,559,000 872,975 9/28/10 -- (12,403)
Japanese Yen ............. JPHQ Sell 130,931,000 1,454,951 9/29/10 -- (20,689)
Philippine Peso .......... HSBC Buy 120,792,000 2,496,992 10/04/10 61,859 --
Philippine Peso .......... DBAB Buy 150,587,000 3,121,233 10/04/10 68,794 --
New Israeli Shekel ....... DBAB Buy 35,422,000 9,408,234 10/05/10 -- (75,507)
Philippine Peso .......... DBAB Buy 180,042,000 3,745,491 10/05/10 68,183 --
Philippine Peso .......... HSBC Buy 180,085,000 3,745,477 10/05/10 69,108 --
Philippine Peso .......... JPHQ Buy 47,563,000 998,803 10/06/10 8,597 --
Philippine Peso .......... DBAB Buy 147,797,000 3,121,241 10/07/10 8,880 --
Philippine Peso .......... CITI Buy 59,159,000 1,248,502 10/08/10 4,291 --
Philippine Peso .......... HSBC Buy 118,491,000 2,496,992 10/08/10 12,257 --
Philippine Peso .......... JPHQ Buy 59,005,000 1,248,492 10/08/10 1,039 --
Philippine Peso .......... DBAB Buy 118,267,000 2,496,981 10/08/10 7,524 --
Philippine Peso .......... DBAB Buy 35,215,000 749,096 10/12/10 -- (3,614)
18 | Semiannual Report
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
Philippine Peso .......... JPHQ Buy 145,824,000 3,114,592 10/13/10 $ -- $ (27,841)
Philippine Peso .......... HSBC Buy 58,717,000 1,248,501 10/13/10 -- (5,600)
Chinese Yuan ............. HSBC Buy 32,663,916 3,316,969 EUR 10/15/10 279,004 --
Philippine Peso .......... JPHQ Buy 19,133,000 407,953 10/15/10 -- (3,022)
Chinese Yuan ............. HSBC Buy 32,823,215 3,323,035 EUR 10/18/10 294,648 --
Philippine Peso .......... JPHQ Buy 63,534,000 1,359,860 10/18/10 -- (15,569)
Chinese Yuan ............. HSBC Buy 43,995,179 4,441,373 EUR 10/19/10 412,474 --
Philippine Peso .......... DBAB Buy 32,011,000 679,928 10/19/10 -- (2,678)
Chinese Yuan ............. HSBC Buy 27,185,000 4,119,876 10/21/10 -- (130,720)
Philippine Peso .......... DBAB Buy 127,962,000 2,719,702 10/21/10 -- (12,899)
Philippine Peso .......... JPHQ Buy 64,253,000 1,359,852 10/21/10 -- (697)
Philippine Peso .......... HSBC Buy 185,677,000 3,896,684 10/25/10 29,633 --
Philippine Peso .......... DBAB Buy 123,655,000 2,597,794 10/25/10 17,009 --
Philippine Peso .......... JPHQ Buy 61,866,000 1,298,887 10/25/10 9,328 --
Chilean Peso ............. CITI Buy 219,208,545 415,364 10/26/10 5,372 --
Indian Rupee ............. HSBC Buy 159,768,000 3,360,707 10/26/10 42,305 --
Indian Rupee ............. DBAB Buy 478,778,000 10,082,084 10/26/10 115,748 --
Norwegian Krone .......... BZWS Buy 68,284,000 8,076,168 EUR 10/26/10 422,973 --
Philippine Peso .......... HSBC Buy 160,559,000 3,377,125 10/26/10 17,758 --
Indian Rupee ............. HSBC Buy 237,998,000 5,041,049 10/27/10 27,888 --
Chilean Peso ............. JPHQ Buy 142,245,000 270,814 10/28/10 2,199 --
Philippine Peso .......... DBAB Buy 49,630,000 1,039,154 10/28/10 10,051 --
Japanese Yen ............. CITI Sell 104,080,747 1,150,288 11/08/10 -- (23,285)
Japanese Yen ............. BZWS Sell 102,242,000 1,141,635 11/10/10 -- (11,233)
Japanese Yen ............. BZWS Sell 183,499,000 2,047,866 11/12/10 -- (21,294)
Japanese Yen ............. UBSW Sell 103,657,300 1,157,807 11/12/10 -- (11,047)
Japanese Yen ............. DBAB Sell 592,373,000 6,613,151 11/15/10 -- (66,761)
Japanese Yen ............. JPHQ Sell 295,806,000 3,306,573 11/16/10 -- (29,131)
Japanese Yen ............. BZWS Sell 142,600,000 1,587,178 11/16/10 -- (20,874)
Japanese Yen ............. BZWS Sell 590,640,000 6,613,147 11/17/10 -- (47,378)
Japanese Yen ............. HSBC Sell 154,574,000 1,719,418 11/17/10 -- (23,680)
Japanese Yen ............. UBSW Sell 236,300,000 2,645,248 11/17/10 -- (19,458)
Euro ..................... UBSW Sell 4,666,969 6,971,519 11/18/10 622,271 --
Euro ..................... DBAB Sell 913,279 1,357,133 11/18/10 114,649 --
Japanese Yen ............. BZWS Sell 823,639,000 9,258,407 11/18/10 -- (29,707)
Malaysian Ringgit ........ JPHQ Buy 26,285,176 7,818,315 11/18/10 -- (192,670)
Euro ..................... DBAB Sell 1,274,797 1,910,284 11/29/10 176,014 --
Japanese Yen ............. BZWS Sell 930,663,000 10,581,037 11/29/10 84,174 --
Japanese Yen ............. BOFA Sell 638,748,000 7,208,328 11/29/10 3,949 --
Japanese Yen ............. CITI Sell 230,997,000 2,645,256 11/29/10 39,862 --
Norwegian Krone .......... UBSW Buy 51,846,000 6,063,647 EUR 11/29/10 399,887 --
Swedish Krona ............ BZWS Buy 150,288,486 14,529,752 EUR 11/30/10 1,319,447 --
Australian Dollar ........ DBAB Buy 13,946,000 12,160,927 12/01/10 -- (62,148)
Japanese Yen ............. DBAB Sell 572,745,000 6,613,149 12/01/10 152,958 --
Norwegian Krone .......... UBSW Buy 16,770,000 1,944,348 EUR 12/01/10 152,192 --
Mexican Peso ............. CITI Sell 39,049,000 2,875,267 12/02/10 -- (73,574)
Chinese Yuan ............. HSBC Buy 24,661,000 3,723,539 12/06/10 -- (98,137)
Chinese Yuan ............. HSBC Buy 31,071,000 3,122,174 EUR 12/06/10 320,287 --
Semiannual Report | 19
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
Euro ..................... UBSW Sell 1,325,806 1,994,635 12/07/10 $ 190,994 $ --
Australian Dollar ........ DBAB Buy 5,578,000 4,891,906 12/09/10 -- (57,364)
Australian Dollar ........ DBAB Buy 6,958,000 6,071,551 12/10/10 -- (41,661)
Australian Dollar ........ BZWS Buy 6,958,000 6,068,768 12/10/10 -- (38,877)
Chinese Yuan ............. JPHQ Buy 16,342,344 2,457,495 12/13/10 -- (54,060)
Chinese Yuan ............. HSBC Buy 32,777,418 4,929,676 12/14/10 -- (108,895)
Chinese Yuan ............. HSBC Buy 32,904,211 4,951,352 12/15/10 -- (111,648)
Malaysian Ringgit ........ JPHQ Buy 16,656,368 4,883,133 12/16/10 -- (56,164)
Swedish Krona ............ DBAB Buy 93,370,021 9,026,316 EUR 12/16/10 818,445 --
Malaysian Ringgit ........ JPHQ Buy 5,137,469 1,506,633 12/17/10 -- (17,864)
Malaysian Ringgit ........ JPHQ Buy 6,147,742 1,794,961 12/21/10 -- (13,693)
Malaysian Ringgit ........ HSBC Buy 8,175,565 2,378,339 12/22/10 -- (9,610)
Malaysian Ringgit ........ HSBC Buy 3,991,727 1,160,521 12/23/10 -- (4,029)
Malaysian Ringgit ........ HSBC Buy 4,516,266 1,311,191 12/28/10 -- (2,971)
Japanese Yen ............. BZWS Sell 189,880,000 2,084,017 1/07/11 -- (59,261)
Japanese Yen ............. CITI Sell 94,950,000 1,042,010 1/07/11 -- (29,742)
Japanese Yen ............. UBSW Sell 94,930,000 1,041,985 1/07/11 -- (29,542)
New Israeli Shekel ....... DBAB Buy 48,521,000 12,999,250 1/07/11 -- (238,122)
Euro ..................... CITI Sell 3,597,000 5,173,205 1/10/11 280,058 --
Euro ..................... UBSW Sell 6,354,000 9,085,267 1/11/11 441,672 --
Euro ..................... DBAB Sell 12,240,000 17,494,754 1/11/11 844,203 --
Japanese Yen ............. HSBC Sell 95,340,000 1,041,967 1/11/11 -- (34,272)
Japanese Yen ............. DBAB Sell 95,240,000 1,041,979 1/11/11 -- (33,131)
Euro ..................... UBSW Sell 5,675,942 8,236,814 1/13/11 515,631 --
Euro ..................... JPHQ Sell 3,792,783 5,490,157 1/13/11 330,701 --
Euro ..................... CITI Sell 2,459,575 3,560,419 1/13/11 214,573 --
Japanese Yen ............. HSBC Sell 277,440,000 3,024,990 1/13/11 -- (106,994)
Philippine Peso .......... JPHQ Buy 282,044,000 6,064,579 1/13/11 -- (137,012)
Euro ..................... BZWS Sell 3,027,169 4,392,422 1/14/11 274,464 --
Japanese Yen ............. BZWS Sell 275,350,000 3,024,943 1/14/11 -- (83,508)
Japanese Yen ............. UBSW Sell 219,020,000 2,419,966 1/14/11 -- (52,571)
Philippine Peso .......... HSBC Buy 45,260,000 967,714 1/14/11 -- (16,578)
Philippine Peso .......... HSBC Buy 88,621,000 1,898,438 1/18/11 -- (36,607)
Philippine Peso .......... DBAB Buy 50,543,000 1,085,779 1/18/11 -- (23,925)
Euro ..................... BZWS Sell 2,459,575 3,527,891 1/19/11 182,076 --
Philippine Peso .......... JPHQ Buy 126,210,000 2,708,079 1/19/11 -- (56,734)
Philippine Peso .......... DBAB Buy 31,623,000 676,717 1/19/11 -- (12,400)
Euro ..................... UBSW Sell 4,351,556 6,122,639 1/25/11 203,172 --
Brazilian Real ........... DBAB Buy 8,966,000 408,299,984 JPY 1/26/11 -- (10,479)
Japanese Yen ............. BZWS Sell 758,940,000 8,450,290 1/26/11 -- (119,473)
Japanese Yen ............. UBSW Sell 664,000,000 7,394,045 1/26/11 -- (103,679)
Japanese Yen ............. DBAB Sell 189,220,000 2,112,538 1/26/11 -- (24,088)
Brazilian Real ........... HSBC Buy 3,346,000 152,871,244 JPY 1/27/11 -- (9,959)
Chilean Peso ............. DBAB Buy 1,968,980,000 3,916,809 1/27/11 -- (131,280)
Japanese Yen ............. HSBC Sell 652,664,000 7,266,921 1/27/11 -- (102,944)
Chilean Peso ............. DBAB Buy 4,531,910,000 8,946,619 1/28/11 -- (233,385)
Chilean Peso ............. JPHQ Buy 596,880,000 1,173,229 1/28/11 -- (25,643)
Malaysian Ringgit ........ JPHQ Buy 48,000,000 14,081,615 1/28/11 -- (193,463)
20 | Semiannual Report
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
New Zealand Dollar ....... UBSW Sell 7,150,005 4,889,674 1/28/11 $ 32,569 $ --
Chilean Peso ............. DBAB Buy 2,733,940,000 5,273,472 1/31/11 -- (16,623)
Euro ..................... UBSW Sell 338,000 473,301 1/31/11 13,521 --
Swedish Krona ............ DBAB Buy 89,650,000 8,756,422 EUR 1/31/11 657,928 --
Chinese Yuan ............. DBAB Buy 135,288,000 20,373,165 2/01/11 -- (419,984)
Australian Dollar ........ MSCO Buy 3,675,596 3,061,000 2/08/11 101,663 --
Australian Dollar ........ UBSW Buy 3,674,582 3,061,000 2/08/11 100,790 --
Euro ..................... HSBC Sell 675,000 923,096 2/08/11 4,906 --
Euro ..................... UBSW Sell 6,294,000 8,640,718 2/08/11 79,105 --
Euro ..................... CITI Sell 8,393,000 11,518,092 2/08/11 101,248 --
Australian Dollar ........ CITI Buy 2,328,000 172,302,264 JPY 2/09/11 56,758 --
Australian Dollar ........ BZWS Buy 2,328,000 171,876,240 JPY 2/09/11 61,570 --
Australian Dollar ........ DBAB Buy 2,328,000 172,653,792 JPY 2/09/11 52,788 --
Euro ..................... BZWS Sell 9,316,000 12,713,312 2/09/11 40,948 --
Euro ..................... HSBC Sell 6,987,000 9,555,421 2/09/11 51,148 --
South Korean Won ......... HSBC Buy 7,294,254,000 6,180,000 2/09/11 50,216 --
Chilean Peso ............. MLCO Buy 727,600,000 1,354,304 2/10/11 45,145 --
Chilean Peso ............. DBAB Buy 727,600,000 1,354,304 2/10/11 45,145 --
Euro ..................... DBAB Sell 2,336,000 3,194,013 2/10/11 16,404 --
Euro ..................... BZWS Sell 7,943,000 10,854,110 2/10/11 49,425 --
Japanese Yen ............. MSCO Sell 110,363,000 1,240,554 2/10/11 -- (6,005)
South Korean Won ......... HSBC Buy 3,868,000,000 291,002,106 JPY 2/10/11 16,584 --
Chilean Peso ............. BZWS Buy 726,200,000 1,354,156 2/11/11 42,642 --
Chilean Peso ............. DBAB Buy 935,230,000 1,746,135 2/11/11 52,718 --
Euro ..................... UBSW Sell 6,873,000 9,451,200 2/11/11 102,026 --
Chilean Peso ............. DBAB Buy 718,400,000 1,354,194 2/14/11 27,723 --
Malaysian Ringgit ........ DBAB Buy 24,260,103 7,026,822 2/14/11 -- (11,898)
New Zealand Dollar ....... HSBC Sell 1,456,071 979,790 2/14/11 -- (7,768)
South Korean Won ......... HSBC Buy 7,084,000,000 6,069,746 2/14/11 -- (21,725)
South Korean Won ......... DBAB Buy 1,149,000,000 87,296,763 JPY 2/14/11 -- (5,134)
South Korean Won ......... JPHQ Buy 1,326,000,000 100,454,545 JPY 2/14/11 -- (2,649)
Chilean Peso ............. MSCO Buy 1,432,600,000 2,708,385 2/16/11 47,534 --
Euro ..................... UBSW Sell 6,214,000 8,450,419 2/16/11 -- (2,270)
Euro ..................... JPHQ Sell 6,214,000 8,454,768 2/16/11 2,080 --
South Korean Won ......... JPHQ Buy 774,000,000 59,251,320 JPY 2/16/11 -- (8,633)
Malaysian Ringgit ........ HSBC Buy 6,108,000 1,775,478 2/17/11 -- (9,517)
Chilean Peso ............. DBAB Buy 331,700,000 634,226 2/18/11 3,909 --
Chilean Peso ............. JPHQ Buy 664,600,000 1,268,321 2/18/11 10,258 --
Euro ..................... UBSW Sell 6,210,000 8,531,360 2/18/11 84,139 --
Euro ..................... DBAB Sell 6,210,000 8,532,167 2/18/11 84,946 --
Chilean Peso ............. JPHQ Buy 1,128,000,000 2,156,169 2/22/11 14,169 --
Chilean Peso ............. MSCO Buy 3,473,400,000 6,620,768 2/22/11 62,258 --
Chilean Peso ............. DBAB Buy 1,821,550,000 3,475,569 2/22/11 29,200 --
Japanese Yen ............. JPHQ Sell 187,900,000 2,088,242 2/22/11 -- (34,604)
Japanese Yen ............. HSBK Sell 187,760,000 2,088,241 2/22/11 -- (33,023)
Chilean Peso ............. MLCO Buy 669,000,000 1,268,367 2/23/11 18,867 --
Chilean Peso ............. MSCO Buy 664,200,000 1,268,283 2/24/11 9,752 --
Chilean Peso ............. DBAB Buy 994,600,000 1,902,448 2/25/11 11,390 --
Semiannual Report | 21
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED
CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION
-------- ------------ ---- ------------- ------------------ ---------- ------------- -------------
Chilean Peso ............. CITI Buy 2,019,520,000 3,850,372 2/25/11 $ 35,647 $ --
Chilean Peso ............. MSCO Buy 1,419,160,000 2,714,226 2/25/11 16,563 --
Chilean Peso ............. JPHQ Buy 364,500,000 692,966 2/28/11 8,478 --
Chilean Peso ............. DBAB Buy 1,153,220,000 2,205,431 2/28/11 13,825 --
Chilean Peso ............. MSCO Buy 1,174,700,000 2,239,657 3/01/11 21,002 --
Chilean Peso ............. MLCO Buy 366,300,000 698,646 3/01/11 6,282 --
Chilean Peso ............. DBAB Buy 1,873,290,000 3,581,816 3/01/11 23,248 --
Japanese Yen ............. JPHQ Sell 197,000,000 2,204,862 3/01/11 -- (21,100)
Japanese Yen ............. HSBK Sell 196,900,000 2,205,001 3/01/11 -- (19,830)
Japanese Yen ............. UBSW Sell 219,700,000 2,469,705 3/01/11 -- (12,751)
Chilean Peso ............. DBAB Buy 292,600,000 560,000 3/02/11 4,670 --
Chilean Peso ............. DBAB Buy 1,173,870,000 2,244,493 3/04/11 14,768 --
------------- -------------
Unrealized appreciation (depreciation) ........................................................ 34,318,496 (22,617,149)
------------- -------------
Net unrealized appreciation (depreciation) ................................................. $ 11,701,347
=============
(a) In U.S. dollars unless otherwise indicated.
At February 28, 2010, the Fund had the following interest rate swap contracts
outstanding. See Note 1(d).
PAY/RECEIVE FIXED EXPIRATION UNREALIZED UNREALIZED
COUNTERPARTY FLOATING RATE RATE FLOATING RATE NOTIONAL AMOUNT(a) DATE APPRECIATION DEPRECIATION
------------ ------------- ------ ------------------------- ------------------ ---------- ------------ ------------
JPHQ ....... Pay 7.16% NZD Bank Bill Rate 5,740,000 NZD 7/31/13 $ 316,145 $ --
JPHQ ....... Pay 7.12% NZD Bank Bill Rate 5,750,000 NZD 8/01/13 309,795 --
JPHQ ....... Pay 7.055% NZD Bank Bill Rate 5,750,000 NZD 8/04/13 300,736 --
JPHQ ....... Pay 7.035% NZD Bank Bill Rate 11,500,000 NZD 8/05/13 595,249 --
JPHQ ....... Pay 7.05% NZD Bank Bill Rate 2,875,000 NZD 8/06/13 149,172 --
JPHQ ....... Pay 7.05% NZD Bank Bill Rate 2,875,000 NZD 8/07/13 149,218 --
JPHQ ....... Pay 7.00% NZD Bank Bill Rate 3,045,600 NZD 8/14/13 153,433 --
JPHQ ....... Pay 5.23% NZD Bank Bill Rate 7,000,000 NZD 12/05/13 89,624 --
MLCO ....... Pay 9.03% MXN Interbank Equilibrium
Interest Rate 723,000,000 MXN 8/17/18 4,552,132 --
JPHQ ....... Pay 8.6748% MXN Interbank Equilibrium
Interest Rate 37,800,000 MXN 11/29/18 171,071 --
JPHQ ....... Pay 5.59% NZD Bank Bill Rate 8,500,000 NZD 12/05/18 993 --
CITI ....... Pay 7.6973% MXN Interbank Equilibrium
Interest Rate 51,400,000 MXN 1/11/19 -- (35,495)
CITI ....... Pay 7.666% MXN Interbank Equilibrium
Interest Rate 67,000,000 MXN 1/12/19 -- (57,149)
CITI ....... Pay 7.835% MXN Interbank Equilibrium
Interest Rate 44,700,000 MXN 1/15/19 602 --
CITI ....... Pay 7.869% MXN Interbank Equilibrium
Interest Rate 58,100,000 MXN 1/16/19 10,441 --
CITI ....... Pay 8.00% MXN Interbank Equilibrium
Interest Rate 35,060,000 MXN 1/18/19 29,475 --
JPHQ ....... Pay 8.06% MXN Interbank Equilibrium
Interest Rate 55,780,000 MXN 1/22/19 73,059 --
CITI ....... Pay 8.07% MXN Interbank Equilibrium
Interest Rate 175,300,000 MXN 1/22/19 238,742 --
22 | Semiannual Report
Templeton Global Income Fund
STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PAY/RECEIVE FIXED EXPIRATION UNREALIZED UNREALIZED
COUNTERPARTY FLOATING RATE RATE FLOATING RATE NOTIONAL AMOUNT(a) DATE APPRECIATION DEPRECIATION
------------ ------------- ------ ------------------------- ------------------ ---------- ------------ ------------
MLCO ....... Pay 9.10% MXN Interbank Equilibrium
Interest Rate 240,000,000 MXN 8/04/28 $ 1,343,187 $ --
JPHQ ....... Pay 8.3167% MXN Interbank Equilibrium
Interest Rate 83,670,000 MXN 1/09/29 -- (32,821)
------------ ------------
Unrealized appreciation (depreciation) ......................................................... 8,483,074 (125,465)
------------ ------------
Net unrealized appreciation (depreciation) .................................................. $ 8,357,609
============
(a) In U.S. dollars unless otherwise indicated.
See Abbreviations on page 36.
The accompanying notes are an integral part of these financial statements.
Semiannual Report | 23
Templeton Global Income Fund
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2010 (unaudited)
Assets:
Investments in securities:
Cost - Unaffiliated issuers .............................. $1,047,500,728
Cost - Sweep Money Fund (Note 7) ......................... 4,445,542
--------------
Total cost of investments ................................ $1,051,946,270
==============
Value - Unaffiliated issuers ............................. $1,190,749,790
Value - Sweep Money Fund (Note 7) ........................ 4,445,542
--------------
Total value of investments ............................... 1,195,195,332
Foreign currency, at value (cost $3,358,867) ................ 3,386,365
Cash ........................................................ 1,850,000
Receivables:
Investment securities sold ............................... 400,858
Capital shares issued for reinvestment of distributions .. 336,498
Interest ................................................. 23,873,973
Unrealized appreciation on forward exchange contracts ....... 34,318,496
Unrealized appreciation on swap contracts ................... 8,483,074
--------------
Total assets .......................................... 1,267,844,596
--------------
Liabilities:
Payables:
Investment securities purchased .......................... 1,490,171
Affiliates ............................................... 587,551
Due to brokers .............................................. 2,330,000
Unrealized depreciation on forward exchange contracts ....... 22,617,149
Unrealized depreciation on swap contracts ................... 125,465
Accrued expenses and other liabilities ...................... 513,608
--------------
Total liabilities ..................................... 27,663,944
--------------
Net assets, at value ............................... $1,240,180,652
==============
Net assets consist of:
Paid-in capital ............................................. $1,088,583,526
Undistributed net investment income ......................... 18,860,567
Net unrealized appreciation (depreciation) .................. 163,223,997
Accumulated net realized gain (loss) ........................ (30,487,438)
--------------
Net assets, at value ............................... $1,240,180,652
==============
Shares outstanding .......................................... 131,405,058
==============
Net asset value per share ................................... $ 9.44
==============
The accompanying notes are an integral part of these financial statements.
24 | Semiannual Report
Templeton Global Income Fund
FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF OPERATIONS
for the six months ended February 28, 2010 (unaudited)
Investment income:
Interest (net of foreign taxes of $665,431) ....................................... $ 41,030,696
------------
Expenses:
Management fees (Note 3a) ......................................................... 3,016,603
Administrative fees (Note 3b) ..................................................... 737,827
Transfer agent fees ............................................................... 129,071
Custodian fees (Note 4) ........................................................... 345,703
Reports to shareholders ........................................................... 57,091
Registration and filing fees ...................................................... 60,320
Professional fees ................................................................. 38,417
Trustees' fees and expenses ....................................................... 49,736
Other ............................................................................. 21,951
------------
Total expenses .............................................................. 4,456,719
Expense reductions (Note 4) ................................................. (1,878)
------------
Net expenses ............................................................. 4,454,841
------------
Net investment income ................................................. 36,575,855
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments .................................................................... 16,660,016
Foreign currency transactions .................................................. (15,475,597)
Swap contracts ................................................................. 8,839,144
------------
Net realized gain (loss) ................................................. 10,023,563
------------
Net change in unrealized appreciation (depreciation) on:
Investments .................................................................... 40,326,799
Translation of other assets and liabilities denominated in foreign currencies .. 24,368,434
------------
Net change in unrealized appreciation (depreciation) ..................... 64,695,233
------------
Net realized and unrealized gain (loss) ........................................ 74,718,796
------------
Net increase (decrease) in net assets resulting from operations ................ $111,294,651
============
The accompanying notes are an integral part of these financial statements.
Semiannual Report | 25
Templeton Global Income Fund
FINANCIAL STATEMENTS (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
FEBRUARY 28, 2010 YEAR ENDED
(UNAUDITED) AUGUST 31, 2009
----------------- ---------------
Increase (decrease) in net assets:
Operations:
Net investment income ................................................ $ 36,575,855 $ 60,859,159
Net realized gain (loss) from investments, foreign currency
transactions, and swap contracts .................................. 10,023,563 58,384,633
Net change in unrealized appreciation (depreciation) on investments
and translation of other assets and liabilities denominated in
foreign currencies ................................................ 64,695,233 60,463,651
-------------- --------------
Net increase (decrease) in net assets resulting from operations ... 111,294,651 179,707,443
-------------- --------------
Distributions to shareholders from net investment income and net
foreign currency gains ............................................... (33,086,794) (176,089,256)
Capital share transactions: (Note 2) .................................... 1,690,728 683,052
-------------- --------------
Net increase (decrease) in net assets ............................. 79,898,585 4,301,239
Net assets:
Beginning of period ..................................................... 1,160,282,067 1,155,980,828
-------------- --------------
End of period ........................................................... $1,240,180,652 $1,160,282,067
-------------- --------------
Undistributed net investment income included in net assets:
End of period ........................................................... $ 18,860,567 $ 15,371,506
============== ==============
The accompanying notes are an integral part of these financial statements.
26 | Semiannual Report
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Global Income Fund (Fund) is registered under the Investment Company
Act of 1940, as amended, (1940 Act) as a closed-end investment company.
The following summarizes the Fund's significant accounting policies.
A. SECURITY VALUATION
Corporate debt securities, government securities and municipal securities
generally trade in the over-the-counter market rather than on a securities
exchange. The Fund may utilize independent pricing services, quotations from
bond dealers, and information with respect to bond and note transactions, to
assist in determining a current market value for each security. The Fund's
pricing services may use valuation models or matrix pricing which considers
information with respect to comparable bond and note transactions, quotations
from bond dealers, or by reference to other securities that are considered
comparable in such characteristics as rating, interest rate and maturity date,
option adjusted spread models, prepayment projections, interest rate spreads and
yield curves, to determine current value. Debt securities denominated in a
foreign currency are converted into their U.S. dollar equivalent at the foreign
exchange rate in effect at the close of the NYSE on the date that the values of
the foreign debt securities are determined. Investments in open-end mutual funds
are valued at the closing net asset value.
The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Methods for valuing these securities may include:
fundamental analysis based upon the underlying investment book value,
anticipated future cash flows, market changes in comparable or similar
securities, matrix pricing, discounts from market prices of similar securities,
or discounts applied due to the nature and duration of restrictions on the
disposition of the securities. Due to the inherent uncertainty of valuations of
such securities, the fair values may differ significantly from the values that
would have been used had a ready market for such investments existed.
Occasionally, events occur between the time at which trading in a security is
completed and the close of the NYSE that might call into question the
availability (including the reliability) of the value of a portfolio security
held by the Fund. If such an event occurs, the securities may be valued using
fair value procedures, which may include the use of independent pricing
services. All security valuation procedures are approved by the Fund's Board of
Trustees.
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 Fund 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. 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
Semiannual Report | 27
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. FOREIGN CURRENCY TRANSLATION (CONTINUED)
occurs, the foreign exchange rate will be valued at fair value using procedures
established and approved by the Fund's Board of Trustees.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments on the
Statement 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. SECURITIES PURCHASED ON A DELAYED DELIVERY BASIS
The Fund may 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 Fund will generally
purchase these securities with the intention of holding the securities, it may
sell the securities before the settlement date. Sufficient assets have been
segregated for these securities.
D. DERIVATIVE FINANCIAL INSTRUMENTS
The Fund may invest in derivative financial instruments (derivatives) 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 may 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 the potential for market movements which may expose the
Fund to gains or losses in excess of the amounts shown on the Statement of
Assets and Liabilities.
Derivatives are marked to market daily based upon quotations from market makers
or the Fund's independent pricing services and the Fund's net benefit or
obligation under the contract, as measured by the fair market value of the
contract, is included in net assets. Realized gain and loss and unrealized
appreciation and depreciation on these contracts for the period are included in
the Statement of Operations.
28 | Semiannual Report
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
The Fund generally enters into forward exchange contracts in order to hedge
against fluctuations in foreign exchange rates or to gain exposure to certain
foreign currencies. A forward exchange contract is an agreement between the Fund
and a counterparty to buy or sell a foreign currency for a specific exchange
rate on a future date. Pursuant to the terms of the forward exchange contracts,
cash or securities may be required to be deposited as collateral.
The Fund generally enters into interest rate swap contracts in order to manage
interest rate risk. An interest rate swap is an agreement between the Fund and a
counterparty to exchange cash flows based on the difference between two interest
rates, applied to a notional principal amount. Over the term of the contract,
contractually required payments to be paid and to be received are accrued daily
and recorded as unrealized depreciation and appreciation until the payments are
made, at which time they are realized. Pursuant to the terms of the interest
rate swap contract, cash or securities may be required to be deposited as
collateral.
At February 28, 2010, the fund holds $6,191,787 in U.S. Treasury securities and
$2,330,000 in cash collateral for derivatives. Unrestricted cash received may be
invested according to the Fund's investment objectives.
See Note 10 regarding other derivative information.
E. INCOME TAXES
No provision has been made for U.S. income taxes because it is the Fund's policy
to qualify as a regulated investment company under the Internal Revenue Code and
to distribute to shareholders substantially all of its taxable income and net
realized gains.
The Fund has reviewed the tax positions, taken on federal income tax returns,
for each of the three open tax years as of February 28, 2010, and has determined
that no provision for income tax is required in the Fund's financial statements.
Foreign securities held by the Fund may be subject to foreign taxation on
interest income received. Foreign taxes, if any, are recorded based on the tax
regulations and rates that exist in the foreign markets in which the Fund
invests.
F. 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. Distributions to shareholders are recorded on the ex-dividend date and
are determined according to income tax regulations (tax basis). Distributable
earnings determined on a tax basis may differ from earnings recorded in
accordance with accounting principles generally accepted in the United States of
America. These differences may be permanent or temporary.
Semiannual Report | 29
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
F. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
(CONTINUED)
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.
Inflation-indexed bonds provide an inflation hedge through periodic increases or
decreases in the security's interest accruals and principal redemption value, by
amounts corresponding to the current rate of inflation. Any such adjustments,
including adjustments to principal redemption value, are recorded as interest
income.
G. ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America 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.
H. GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and trustees are
indemnified by the Fund against certain liabilities arising out of the
performance of their duties to the Fund. Additionally, in the normal course of
business, the Fund enters into contracts with service providers that contain
general indemnification clauses. The Fund's maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Fund that have not yet occurred. Currently, the Fund expects the
risk of loss to be remote.
2. SHARES OF BENEFICIAL INTEREST
At February 28, 2010, there were an unlimited number of shares authorized
(without par value). Transactions in the Fund's shares were as follows:
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2010 AUGUST 31, 2009
-------------------- -----------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------ --------
Shares issued in reinvestment of
distributions ............... 182,179 $1,690,728 78,530 $683,052
The Fund's Board of Trustees previously authorized an open-market share
repurchase program pursuant to which the Fund may purchase, from time to time,
Fund shares in open-market transactions, at the discretion of management. This
authorization remains in effect. Through February 28, 2010, the Fund had
repurchased a total of 11,210,400 shares. During the periods ended February 28,
2010 and August 31, 2009, there were no shares repurchased.
30 | Semiannual Report
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. TRANSACTIONS WITH AFFILIATES
Franklin Resources, Inc. is the holding company for various subsidiaries that
together are referred to as Franklin Templeton Investments. Certain officers and
trustees of the Fund are also officers and/or directors of the following
subsidiaries:
SUBSIDIARY AFFILIATION
---------- ---------------------
Franklin Advisers, Inc. (Advisers) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager
A. MANAGEMENT FEES
The Fund pays an investment management fee to Advisers based on the average
daily net assets of the Fund as follows:
ANNUALIZED FEE RATE NET ASSETS
------------------- ----------
0.550% Up to and including $200 million
0.500% Over $200 million, up to and including $1 billion
0.480% Over $1 billion, up to and including $5 billion
0.460% Over $5 billion, up to and including $10 billion
0.440% Over $10 billion, up to and including $15 billion
0.420% Over $15 billion, up to and including $20 billion
0.400% In excess of $20 billion
B. ADMINISTRATIVE FEES
The Funds pays an administrative fee to FT Services based on the Fund's average
daily net assets as follows:
ANNUALIZED FEE RATE NET ASSETS
------------------- ----------
0.150% Up to and including $200 million
0.135% Over $200 million, up to and including $700 million
0.100% In excess of $700 million
4. EXPENSE OFFSET ARRANGEMENT
The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the period ended February 28, 2010, the
custodian fees were reduced as noted in the Statement of Operations.
Semiannual Report | 31
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. INCOME TAXES
For tax purposes, capital losses may be carried over to offset future capital
gains, if any. At August 31, 2009, the capital loss carryforwards were as
follows:
Capital loss carryforwards expiring in:
2010 ... $17,156,631
2011 ... 4,209,282
2017 ... 1,836,347
-----------
$23,202,260
===========
For tax purposes, realized capital losses and realized currency losses occurring
subsequent to October 31, may be deferred and treated as occurring on the first
day of the following fiscal year. At August 31, 2009, the Fund deferred realized
capital losses and realized currency losses of $275,661 and $10,734,746,
respectively.
At February 28, 2010, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments.......................... $1,058,978,922
==============
Unrealized appreciation...................... $ 147,447,867
Unrealized depreciation...................... (11,231,457)
--------------
Net unrealized appreciation (depreciation)... $ 136,216,410
==============
Net investment income differs for financial statement and tax purposes primarily
due to differing treatments of foreign currency transactions, bond discounts and
premiums, swaps, tax straddles and inflation related adjustments on foreign
securities.
Net realized gains (losses) differ for financial statement and tax purposes
primarily due to differing treatments of wash sales, foreign currency
transactions, bond discounts and premiums, swaps and tax straddles.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding short term securities) for the
period ended February 28, 2010, aggregated $137,608,479 and $144,362,667,
respectively.
7. INVESTMENTS IN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO
The Fund may invest in the Institutional Fiduciary Trust Money Market Portfolio
(Sweep Money Fund), an open-end investment company managed by Advisers. Pursuant
to a SEC exemptive order specific to the Fund's investment in the Sweep Money
Fund, management fees paid by the Fund are reduced on assets invested in the
Sweep Money Fund, in an amount not to exceed the management and administrative
fees paid by the Sweep Money Fund.
32 | Semiannual Report
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
8. CREDIT RISK
At February 28, 2010, the Fund had 18.86% of its portfolio invested in high
yield or other securities rated below investment grade. 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.
9. CONCENTRATION OF RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities.
10. OTHER DERIVATIVE INFORMATION
At February 28, 2010, the Fund has invested in derivative contracts which are
reflected on the Statement of Assets and Liabilities as follows:
ASSET DERIVATIVES LIABILITY DERIVATIVES
---------------------------------------- --------------------------------------
DERIVATIVE CONTRACTS
NOT ACCOUNTED FOR AS STATEMENT OF ASSETS AND FAIR VALUE STATEMENT OF ASSETS AND FAIR VALUE
HEDGING INSTRUMENTS LIABILITIES LOCATION AMOUNT LIABILITIES LOCATION AMOUNT
-------------------- -------------------------- ----------- ------------------------ -----------
Interest rate contracts ..... Unrealized appreciation on Unrealized depreciation
swap contracts $ 8,483,074 on swap contracts $ 125,465
Foreign exchange contracts .. Unrealized appreciation on Unrealized depreciation
forward exchange contracts 34,318,496 on forward exchange
contracts 22,617,149
Semiannual Report | 33
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
10. OTHER DERIVATIVE INFORMATION (CONTINUED)
For the period ended February 28, 2010, the effect of derivative contracts on
the Fund's Statement of Operations was as follows:
CHANGE IN
UNREALIZED AVERAGE
REALIZED GAIN APPRECIATION AMOUNT
DERIVATIVE CONTRACTS (LOSS) (DEPRECIATION) OUTSTANDING
NOT ACCOUNTED FOR AS STATEMENT OF FOR THE FOR THE DURING THE
HEDGING INSTRUMENTS OPERATIONS LOCATIONS PERIOD PERIOD PERIOD(a)
--------------------- -------------------------------------- ------------- -------------- -------------
Interest rate contracts ..... Net realized gain (loss) from swap
contracts / Net change in unrealized
appreciation (depreciation)
on investments $ 8,839,144 $(2,457,269) 181,444,598
Foreign exchange
contracts ................ Net realized gain (loss) from foreign
currency transactions / Net change in
unrealized appreciation (depreciation)
on on translation of other assets and
liabilities denominated in foreign
currencies (10,560,771) 25,138,621 1,533,384,205
(a) Represents the average notional amount outstanding during the period. For
derivative contracts denominated in foreign currencies, notional amounts
are converted to U.S. dollars.
See Note 1(d) regarding derivative financial instruments.
11. FAIR VALUE MEASUREMENTS
The Fund follows a fair value hierarchy that distinguishes between market data
obtained from independent sources (observable inputs) and the Fund's own market
assumptions (unobservable inputs). These inputs are used in determining the
value of the Fund's investments and are summarized in the following fair value
hierarchy:
- Level 1 - quoted prices in active markets for identical securities
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speed, credit risk,
etc.)
- Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities.
34 | Semiannual Report
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
11. FAIR VALUE MEASUREMENTS (CONTINUED)
The following is a summary of the inputs used as of February 28, 2010, in
valuing the Fund's assets and liabilities carried at fair value:
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
---------- -------------- ------- --------------
ASSETS:
Investments in Securities:
Bonds ........................ $ -- $1,122,177,587 $-- $1,122,177,587
Municipal Bonds .............. -- 45,137,930 -- 45,137,930
Short Term Investments ....... 4,445,542 23,434,273 -- 27,879,815
---------- -------------- --- --------------
Total Investments in
Securities ............. $4,445,542 $1,190,749,790 $-- $1,195,195,332
========== ============== === ==============
Swaps ........................ -- 8,483,074 -- 8,483,074
Forward Exchange Contracts ... -- 34,318,496 -- 34,318,496
LIABILITIES:
Swaps ........................ -- 125,465 -- 125,465
Forward Exchange
Contracts ................. -- 22,617,149 -- 22,617,149
12. NEW ACCOUNTING PRONOUNCEMENTS
In January 2010, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) No. 2010-6, FAIR VALUE MEASUREMENTS AND
DISCLOSURES (TOPIC 820): IMPROVING DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS,
which enhances and clarifies existing fair value measurement disclosure
requirements and is effective for interim and annual periods beginning after
December 15, 2009. The Fund is currently evaluating the impact, if any, of
applying this provision.
In March 2010, the FASB issued ASU No. 2010-11, DERIVATIVES AND HEDGING (TOPIC
815): SCOPE EXCEPTION RELATED TO EMBEDDED CREDIT DERIVATIVES, which clarifies
existing derivatives and hedging disclosure requirements and is effective for
fiscal quarters beginning after June 15, 2010. The Fund is currently evaluating
the impact, if any, of applying this provision.
13. SUBSEQUENT EVENTS
The Fund has evaluated subsequent events through the issuance of the financial
statements and determined that no events have occurred that require disclosure.
Semiannual Report | 35
Templeton Global Income Fund
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
ABBREVIATIONS
CURRENCY
AUD - Australian Dollar
BRL - Brazilian Real
EGP - Egyptian Pound
EUR - Euro
JPY - Japanese Yen
IDR - Indonesian Rupiah
ILS - New Israeli Shekel
KRW - South Korean Won
LKR - Sri Lankan Rupee
MXN - Mexican Peso
NOK - Norwegian Krone
NZD - New Zealand Dollar
PEN - Peruvian Nuevo Sol
PLN - Polish Zloty
SEK - Swedish Krona
SELECTED PORTFOLIO
AMBAC - American Municipal Bond Assurance Corp.
BHAC - Berkshire Hathaway Assurance Corp.
FRN - Floating Rate Note
FSA - Financial Security Assurance Inc.
GO - General Obligation
ID - Improvement District
ISD - Independent School District
MTA - Metropolitan Transit Authority
USD - Unified/Union School District
COUNTERPARTY
BOFA - Bank of America N.A.
BZWS - Barclays Bank PLC
CITI - Citibank N.A.
DBAB - Deutsche Bank AG
FBCO - Credit Suisse International
HSBC - HSBC Bank USA
HSBK - HSBC Bank PLC
JPHQ - JPMorgan Chase Bank, N.A.
MLCO - Merrill Lynch Capital Services, Inc.
MSCO - Morgan Stanley and Co., Inc.
UBSW - UBS AG
36 | Semiannual Report
Templeton Global Income Fund
ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 26, 2010
The Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
500 E. Broward Boulevard, Fort Lauderdale, Florida, on February 26, 2010. The
purpose of the meeting was to elect five Trustees of the Fund and to ratify the
selection of PricewaterhouseCoopers LLP as the independent registered public
accounting firm of the Fund for the fiscal year ending August 31, 2010. At the
meeting, the following persons were elected by the shareholders to serve as
Trustees of the Fund: Frank J. Crothers, Larry D. Thompson, Charles B. Johnson,
Gregory E. Johnson and J. Michael Luttig.* Shareholders also ratified the
selection of PricewaterhouseCoopers LLP as the independent registered public
accounting firm for the Fund for the fiscal year ending August 31, 2010. No
other business was transacted at the meeting.
The results of the voting at the Annual Meeting are as follows:
1. The election of five Trustees:
% OF % OF
SHARES SHARES
% OF PRESENT % OF PRESENT
OUTSTANDING AND OUTSTANDING AND
FOR SHARES VOTING WITHHELD SHARES VOTING
----------- ----------- ------- --------- ----------- -------
TERM EXPIRING 2013
Frank J. Crothers ........ 115,441,986 87.92% 97.73% 2,676,835 2.04% 2.27%
Larry D. Thompson ........ 115,482,650 87.96% 97.77% 2,636,171 2.01% 2.23%
Charles B. Johnson ....... 114,845,143 87.47% 97.23% 3,273,678 2.49% 2.77%
Gregory E. Johnson ....... 115,118,562 87.68% 97.46% 3,000,259 2.29% 2.54%
Term Expiring 2011
J. Michael Luttig ........ 115,520,119 87.98% 97.80% 2,598,702 1.98% 2.20%
2. The ratification of the selection of PricewaterhouseCoopers LLP as the
independent registered public accounting firm of the Fund for the fiscal year
ending August 31, 2010:
% OF % OF
OUTSTANDING VOTED
SHARES VOTED SHARES SHARES
------------ ----------- ------
For....................... 115,917,746 88.29% 98.14%
Against................... 1,091,817 0.83% 0.92%
Abstain................... 1,109,257 0.84% 0.94%
----------- ----- ------
Total..................... 118,118,820 89.96% 100.00%
* Harris J. Ashton, Ann Torre Bates, David W. Niemiec, Robert E. Wade, Edith
E. Holiday, Frank A. Olson and Constantine D. Tseretopoulos are Trustees of
the Fund who are currently serving and whose terms of office continued
after the Annual Meeting of Shareholders.
Semiannual Report | 37
Templeton Global Income Fund
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund offers a Dividend Reinvestment and Cash Purchase Plan (the "Plan") with
the following features:
Shareholders must affirmatively elect to participate in the Plan. If you decide
to use this service, share dividends and capital gains distributions will be
reinvested automatically in shares of the Fund for your account. BNY Mellon
Shareowner Services, P.O. Box 358015, Pittsburgh, PA, 15252-8015, will provide
additional Plan information upon request.
Whenever the Fund declares dividends in either cash or shares of the Fund, if
the market price is equal to or exceeds net asset value at the valuation date,
the participant will receive the dividends entirely in new shares at a price
equal to the net asset value, but not less than 95% of the then current market
price of the Fund's shares. If the market price is lower than net asset value or
if dividends and/or capital gains distributions are payable only in cash, the
participant will receive shares purchased on the New York Stock Exchange or
otherwise on the open market.
A participant has the option of submitting additional cash payments to the Plan
Administrator, in any amounts of at least $100, up to a maximum of $5,000 per
month, for the purchase of Fund shares for his or her account. These payments
can be made by check or money order payable to The Bank of New York Mellon (the
"Plan Administrator") and sent to BNY Mellon Shareowner Services, P.O. Box
382009, Pittsburgh, PA, 15252-8009, Attention: Templeton Global Income Fund. The
Plan Administrator will apply such payments (less a $5.00 service charge and
less a pro rata share of trading fees) to purchases of Fund shares on the open
market.
The automatic reinvestment of dividends and/or capital gains does not relieve
the participant of any income tax that may be payable on dividends or
distributions.
Whenever shares are purchased on the New York Stock Exchange or otherwise on the
open market, each participant will pay a pro rata portion of trading fees.
Trading fees will be deducted from amounts to be invested. The Plan
Administrator's fee for a sale of shares through the Plan is $15.00 per
transaction plus a $0.12 per share trading fee.
A participant may withdraw from the Plan without penalty at any time by written
notice to the Plan Administrator sent to BNY Mellon Shareowner Services, P. O.
Box 358015, Pittsburgh, PA, 15252-8015. Upon withdrawal, the participant will
receive, without charge, share certificates issued in the participant's name for
all full shares held by the Plan Administrator; or, if the participant wishes,
the Plan Administrator will sell the shares and send the proceeds to the
participant, less a service charge of $15.00 and less trading fees of $0.12 per
share. The Plan Administrator will convert any fractional shares held at the
time of withdrawal to cash at current market price and send a check to the
participant for the net proceeds.
38 | Semiannual Report
Templeton Global Income Fund
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)
DIRECT DEPOSIT SERVICE FOR REGISTERED SHAREHOLDERS
Cash distributions can now be electronically credited to a checking or savings
account at any financial institution that participates in the Automated Clearing
House ("ACH") system. The Direct Deposit service is provided for registered
shareholders at no charge. To enroll in the service, access your account online
by going to http://vault.bnymellon.com/isd or dial 1-800-416-5585 (toll free)
and follow the instructions. Direct Deposit will begin with the next scheduled
distribution payment date following enrollment in the service.
Semiannual Report | 39
Templeton Global Income Fund
TRANSFER AGENT
BNY Mellon Shareowner Services
P.O. Box 358015
Pittsburgh, PA 15252-8015
1-800-416-5585
www.bnymellon.com
DIRECT REGISTRATION
If you are a registered shareholder of the Fund, purchases of shares of the Fund
can be electronically credited to your Fund account at BNY Mellon Shareowner
Services through Direct Registration. This service provides shareholders with a
convenient way to keep track of shares through book-entry transactions,
electronically move book-entry shares between broker-dealers, transfer agents
and DRS eligible issuers, and eliminate the possibility of lost certificates.
For additional information, please contact BNY Mellon Shareowner Services at
1-800-416-5585.
SHAREHOLDER INFORMATION
Shares of Templeton Global Income Fund are traded on the New York Stock Exchange
under the symbol "GIM." Information about the net asset value and the market
price is published each Monday in the WALL STREET JOURNAL, weekly in BARRON'S
and each Saturday in THE NEW YORK TIMES and other newspapers. Daily market
prices for the Fund's shares are published in the "New York Stock Exchange
Composite Transactions" section of newspapers.
For current information about distributions and shareholder accounts, call
1-800-416-5585. Registered shareholders can access their Fund account on-line
with INVESTOR SERVICEDIRECT(R). For information go to BNY Mellon Shareowner
Services' web site at https://vault.bnymellon.com/isd and follow the
instructions.
The daily closing net asset value as of the previous business day may be
obtained when available by calling Franklin Templeton Fund Information after 7
a.m. Pacific time any business day at 1-800/DIAL BEN(R) (1-800/342-5236). The
Fund's net asset value and dividends are also listed on the NASDAQ Stock Market,
Inc.'s Mutual Fund Quotation Service ("NASDAQ MFQS").
Shareholders not receiving copies of reports to shareholders because their
shares are registered in the name of a broker or a custodian can request that
they be added to the Fund's mailing list by writing Templeton Global Income
Fund, 100 Fountain Parkway, P.O. Box 33030, St. Petersburg, FL 33733-8030.
40 | Semiannual Report
Templeton Global Income Fund
SHAREHOLDER INFORMATION
PROXY VOTING POLICIES AND PROCEDURES
The Fund's investment manager has established Proxy Voting Policies and
Procedures (Policies) that the Fund uses to determine how to vote proxies
relating to portfolio securities. Shareholders may view the Fund'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, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL
33394, Attention: Proxy Group. Copies of the Fund'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.
QUARTERLY STATEMENT OF INVESTMENTS
The Fund files a complete statement of investments with the U.S. Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q 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.
CERTIFICATIONS
The Fund's Chief Executive Officer - Finance and Administration is required by
the New York Stock Exchange's Listing Standards to file annually with the
Exchange a certification that she is not aware of any violation by the Fund of
the Exchange's Corporate Governance Standards applicable to the Fund. The Fund
has filed such certification.
In addition, the Fund's Chief Executive Officer - Finance and Administration and
Chief Financial Officer and Chief Accounting Officer are required by the rules
of the U.S. Securities and Exchange Commission to provide certain certifications
with respect to the Fund's Form N-CSR and Form N-CSRS (which include the Fund's
annual and semiannual reports to shareholders) that are filed annually with the
Commission. The Fund has filed such certifications with its Form N-CSR for the
year ended August 31, 2009. Additionally, the Fund expects to file, on or about
April 30, 2010, such certifications with its Form N-CSRS for the six months
ended February 28, 2010.
Semiannual Report | 41
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Franklin Templeton Funds
LITERATURE REQUEST. TO RECEIVE A PROSPECTUS, PLEASE CALL US AT (800) DIAL
BEN/(800) 342-5236 OR VISIT franklintempleton.com. INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES BEFORE
INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE CAREFULLY
READ THE PROSPECTUS BEFORE INVESTING. TO ENSURE THE HIGHEST QUALITY OF SERVICE,
WE MAY MONITOR, RECORD AND ACCESS TELEPHONE CALLS TO OR FROM OUR SERVICE
DEPARTMENTS. THESE CALLS CAN BE IDENTIFIED BY THE PRESENCE OF A REGULAR BEEPING
TONE.
VALUE
Franklin All Cap Value Fund
Franklin Balance Sheet Investment Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund(1)
Franklin MidCap Value Fund
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Quest Fund(2)
Mutual Recovery Fund(3)
Mutual Shares Fund
BLEND
Franklin Focused Core Equity Fund
Franklin Large Cap Equity Fund
Franklin Rising Dividends Fund
GROWTH
Franklin DynaTech Fund
Franklin Flex Cap Growth Fund
Franklin Growth Fund
Franklin Growth Opportunities Fund
Franklin Small Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
SECTOR
Franklin Biotechnology Discovery Fund
Franklin Global Real Estate Fund
Franklin Gold & Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Mutual Financial Services Fund
GLOBAL
Mutual Global Discovery Fund(4)
Templeton Global Long-Short Fund(5)
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund
INTERNATIONAL
Franklin India Growth Fund
Franklin International Growth Fund
Franklin International Small Cap Growth Fund
Mutual European Fund
Mutual International Fund
Templeton BRIC Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Emerging Markets Small Cap Fund
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton Frontier Markets Fund
HYBRID
Franklin Balanced Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Templeton Income Fund
ASSET ALLOCATION
Franklin Templeton Corefolio(R) Allocation Fund
Franklin Templeton Founding Funds Allocation Fund
Franklin Templeton Perspectives Allocation Fund
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund
FIXED INCOME
Franklin Adjustable U.S. Government Securities Fund(6)
Franklin Floating Rate Daily Access Fund
Franklin High Income Fund
Franklin Limited Maturity U.S. Government Securities Fund(6)
Franklin Low Duration Total Return Fund
Franklin Real Return Fund
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund(6)
Templeton Global Bond Fund
Templeton Global Total Return Fund
Templeton International Bond Fund
TAX-FREE INCOME(7)
NATIONAL
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund(8)
LIMITED-/INTERMEDIATE-TERM
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund
STATE-SPECIFIC
Alabama
Arizona
California(9)
Colorado
Connecticut
Florida
Georgia
Kentucky
Louisiana
Maryland
Massachusetts(10)
Michigan(10)
Minnesota(10)
Missouri
New Jersey
New York(9)
North Carolina
Ohio(10)
Oregon
Pennsylvania
Tennessee
Virginia
INSURANCE FUNDS
Franklin Templeton Variable Insurance Products Trust(11)
(1.) The fund is closed to new investors. Existing shareholders and select
retirement plans can continue adding to their accounts.
(2.) Effective 5/1/09, Mutual Qualified Fund changed its name to Mutual Quest
Fund. The fund's investment goal and strategy remained unchanged.
(3.) The fund is a continuously offered, closed-end fund. Shares may be
purchased daily; there is no daily redemption. However, each quarter,
pending board approval, the fund will authorize the repurchase of 5%-25% of
the outstanding number of shares. Investors may tender all or a portion of
their shares during the tender period.
(4.) Effective 5/1/09, Mutual Discovery Fund changed its name to Mutual Global
Discovery Fund. The fund's investment goal and strategy remained unchanged.
(5.) Effective 12/18/09, this fund is closed to new investors, pending a
proposal to merge the fund into Templeton World Fund. Existing shareholders
may continue to make additional investments until shortly before the
completion of the transaction, expected in April 2010.
(6.) An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
(7.) For investors subject to the alternative minimum tax, a small portion of
fund dividends may be taxable. Distributions of capital gains are generally
taxable.
(8.) The fund invests primarily in insured municipal securities.
(9.) These funds are available in three or more variations, including long-term
portfolios, intermediate-term portfolios, portfolios of insured securities,
a high-yield portfolio (CA only) and a money market portfolio (CA only).
(10.) The Board of Trustees approved the elimination of the non-fundamental
policy requiring the fund to invest at least 80% of net assets in insured
municipal securities and the removal of the word "Insured" from the fund
name. The changes became effective 2/15/09.
(11.) The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.
02/10 Not part of the semiannual report
(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO) 100 Fountain Parkway
P.O. Box 33030
St. Petersburg, FL 33733-8030
SEMIANNUAL REPORT
TEMPLETON GLOBAL INCOME FUND
INVESTMENT MANAGER
Franklin Advisers, Inc.
TRANSFER AGENT
BNY Mellon Shareowner Services
P.O. Box 358015
Pittsburgh, PA 15252-8015
Toll free number: (800) 416-5585
Hearing Impaired phone number: (800) 231-5469
Foreign Shareholders phone number: (201) 680-6578
www.melloninvestor.com/isd
FUND INFORMATION
(800) 342-5236
Investors should be aware that the value of investments made for the Fund may go
down as well as up. Like any investment in securities, the value of the Fund's
portfolio will be subject to the risk of loss from market, currency, economic,
political and other factors. The Fund and its investors are not protected from
such losses by the investment manager. Therefore, investors who cannot accept
this risk should not invest in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.
TLGIM S 04/10
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 12(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 David W. Niemiec and he is
"independent" as defined under the relevant Securities and Exchange
Commission Rules and Releases.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Members of the Audit Committee are: Frank J. Crothers, David W. Niemiec, Ann
Torre Bates and Constantine D. Tseretopoulos.
ITEM 6. SCHEDULE OF INVESTMENTS. N/A
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The board of trustees of the Fund has delegated the authority to vote proxies
related to the portfolio securities held by the Fund to the Fund's manager
Franklin Advisers, Inc. in accordance with the Proxy Voting Policies and
Procedures (Policies) adopted by the manager.
The manager has delegated its administrative duties with respect to the voting
of proxies to the Proxy Group within Franklin Templeton Companies, LLC (Proxy
Group), an affiliate and wholly owned subsidiary of Franklin Resources, Inc. All
proxies received by the Proxy Group will be voted based upon the manager's
instructions and/or policies.
To assist it in analyzing proxies, the manager subscribes to RiskMetrics Group
(RiskMetrics), an unaffiliated third-party corporate governance research service
that provides in-depth analyses of shareholder meeting agendas, vote
recommendations, recordkeeping and vote disclosure services. In addition, the
manager subscribes to Glass, Lewis & Co., LLC (Glass Lewis), an unaffiliated
third-party analytical research firm, to receive analyses and vote
recommendations on the shareholder meetings of publicly held U.S. companies.
Although RiskMetrics' and/or Glass Lewis' analyses are thoroughly reviewed and
considered in making a final voting decision, the manager does not consider
recommendations from RiskMetrics, Glass Lewis or any other third party to be
determinative of the manager's ultimate decision. As a matter of policy, the
officers, directors/trustees and employees of the manager and the Proxy Group
will not be influenced by outside sources whose interests conflict with the
interests of the Fund and its shareholders. Efforts are made to resolve all
conflicts in the interests of the manager's clients. Material conflicts of
interest are identified by the Proxy Group based upon analyses of client,
distributor, broker dealer and vendor lists, information periodically gathered
from directors and officers, and information derived from other sources,
including public filings. In situations where a material conflict of interest is
identified, the Proxy Group may defer to the voting recommendation of
RiskMetrics, Glass Lewis or those of another independent third-party provider of
proxy services; or send the proxy directly to the Fund with the manager's
recommendation regarding the vote for approval. If the conflict is not resolved
by the Fund, the Proxy Group may refer the matter, along with the recommended
course of action by the manager, if any, to an interdepartmental Proxy Review
Committee (which may include portfolio managers and/or research analysts
employed by the manager), for evaluation and voting instructions. The Proxy
Review Committee may defer to the voting recommendation of RiskMetrics, Glass
Lewis or those of another independent third-party provider of proxy services; or
send the proxy directly to the Fund. Where the Proxy Group or the Proxy Review
Committee refers a matter to the Fund, it may rely upon the instructions of a
representative of the Fund, such as the board or a committee of the board.
Where a material conflict of interest has been identified, but the items on
which the manager's vote recommendations differ from Glass Lewis, RiskMetrics,
or another independent third-party provider of proxy services relate
specifically to (1) shareholder proposals regarding social or environmental
issues or political contributions, (2) "Other Business" without describing the
matters that might be considered, or (3) items the manager wishes to vote in
opposition to the recommendations of an issuer's management, the Proxy Group may
defer to the vote recommendations of the manager rather than sending the proxy
directly to the Fund for approval.
To avoid certain potential conflicts of interest, the manager will employ echo
voting, if possible, in the following instances: (1) when the Fund invests in an
underlying fund in reliance on any one of Sections 12(d)(1)(E), (F), or (G) of
the 1940 Act, or pursuant to an SEC exemptive order; (2) when the Fund invests
uninvested cash in affiliated money market funds pursuant to an SEC exemptive
order ("cash sweep arrangement"); or (3) when required pursuant to the Fund's
governing documents or applicable law. Echo voting means that the investment
manager will vote the shares in the same proportion as the vote of all of the
other holders of the Fund's shares.
The recommendation of management on any issue is a factor that the manager
considers in determining how proxies should be voted. However, the manager does
not consider recommendations from management to be determinative of the
manager's ultimate decision. As a matter of practice, the votes with respect to
most issues are cast in accordance with the position of the company's
management. Each issue, however, is considered on its own merits, and the
manager will not support the position of the company's management in any
situation where it deems that the ratification of management's position would
adversely affect the investment merits of owning that company's shares.
MANAGER'S PROXY VOTING POLICIES AND PRINCIPLES The manager has adopted general
proxy voting guidelines, which are summarized below. These guidelines are not an
exhaustive list of all the issues that may arise and the manager cannot
anticipate all future situations. In all cases, each proxy will be considered
based on the relevant facts and circumstances.
BOARD OF DIRECTORS. The manager supports an independent board of directors, and
prefers that key committees such as audit, nominating, and compensation
committees be comprised of independent directors. The manager will generally
vote against management efforts to classify a board and will generally support
proposals to declassify the board of directors. The manager may withhold votes
from directors who have attended less than 75% of meetings without a valid
reason. While generally in favor of separating Chairman and CEO positions, the
manager will review this issue as well as proposals to restore or provide for
cumulative voting on a case-by-case basis, taking into consideration factors
such as the company's corporate governance guidelines or provisions and
performance.
RATIFICATION OF AUDITORS OF PORTFOLIO COMPANIES. The manager will closely
scrutinize the role and performance of auditors. On a case-by-case basis, the
manager will examine proposals relating to non-audit relationships and non-audit
fees. The manager will also consider, on a case-by-case basis, proposals to
rotate auditors, and will vote against the ratification of auditors when there
is clear and compelling evidence of accounting irregularities or negligence.
MANAGEMENT AND DIRECTOR COMPENSATION. A company's equity-based compensation plan
should be in alignment with the shareholders' long-term interests. The manager
believes that executive compensation should be directly linked to the
performance of the company. The manager evaluates plans on a case-by-case basis
by considering several factors to determine whether the plan is fair and
reasonable, including the RiskMetrics quantitative model utilized to assess such
plans and/or the Glass Lewis evaluation of the plans. The manager will generally
oppose plans that have the potential to be excessively dilutive, and will almost
always oppose plans that are structured to allow the repricing of underwater
options, or plans that have an automatic share replenishment "evergreen"
feature. The manager will generally support employee stock option plans in which
the purchase price is at least 85% of fair market value, and when potential
dilution is 10% or less.
Severance compensation arrangements will be reviewed on a case-by-case basis,
although the manager will generally oppose "golden parachutes" that are
considered to be excessive. The manager will normally support proposals that
require a percentage of directors' compensation to be in the form of common
stock, as it aligns their interests with those of shareholders.
ANTI-TAKEOVER MECHANISMS AND RELATED ISSUES. The manager generally opposes
anti-takeover measures since they tend to reduce shareholder rights. However, as
with all proxy issues, the manager conducts an independent review of each
anti-takeover proposal. On occasion, the manager may vote with management when
the research analyst has concluded that the proposal is not onerous and would
not harm the Fund or its shareholders' interests. The manager generally supports
proposals that require shareholder rights' plans ("poison pills") to be subject
to a shareholder vote and will closely evaluate such plans on a case-by-case
basis to determine whether or not they warrant support. In addition, the manager
will generally vote against any proposal to issue stock that has unequal or
subordinate voting rights. The manager generally opposes any supermajority
voting requirements as well as the payment of "greenmail." The manager generally
supports "fair price" provisions and confidential voting.
CHANGES TO CAPITAL STRUCTURE. The manager realizes that a company's financing
decisions have a significant impact on its shareholders, particularly when they
involve the issuance of additional shares of common or preferred stock or the
assumption of additional debt. The manager will review, on a case-by-case basis,
proposals by companies to increase authorized shares and the purpose for the
increase. The manager will generally not vote in favor of dual-class capital
structures to increase the number of authorized shares where that class of stock
would have superior voting rights. The manager will generally vote in favor of
the issuance of preferred stock in cases where the company specifies the voting,
dividend, conversion and other rights of such stock and the terms of the
preferred stock issuance are deemed reasonable.
MERGERS AND CORPORATE RESTRUCTURING. Mergers and acquisitions will be subject to
careful review by the research analyst to determine whether they would be
beneficial to shareholders. The manager will analyze various economic and
strategic factors in making the final decision on a merger or acquisition.
Corporate restructuring proposals are also subject to a thorough examination on
a case-by-case basis.
SOCIAL AND CORPORATE POLICY ISSUES. The manager will generally give management
discretion with regard to social, environmental and ethical issues, although the
manager may vote in favor of those that are believed to have significant
economic benefits or implications for the Fund and its shareholders.
GLOBAL CORPORATE GOVERNANCE. Many of the tenets discussed above are applied to
the manager's proxy voting decisions for international investments. However, the
manager must be flexible in these instances and must be mindful of the varied
market practices of each region.
The manager will attempt to process every proxy it receives for all domestic and
foreign issuers. However, there may be situations in which the manager cannot
process proxies, for example, where a meeting notice was received too late, or
sell orders preclude the ability to vote. If a security is on loan, the manager
may determine that it is not in the best interests of the Fund to recall the
security for voting purposes. Also, the manager may abstain from voting under
certain circumstances or vote against items such as "Other Business" when the
manager is not given adequate information from the company.
Shareholders may view the 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, 500 East Broward Boulevard, Suite 1500,
Fort Lauderdale, FL 33394, Attention: Proxy Group. Copies of the Fund's proxy
voting records are available online at franklintempleton.com and posted on the
SEC website at www.sec.gov. The proxy voting records are updated each year by
August 31 to reflect the most recent 12-month period ended June 30.
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 ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 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 significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and
Mark H. Otani, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of
Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and
Mark H. Otani, Chief Financial Officer and Chief Accounting Officer
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.
TEMPLETON GLOBAL INCOME FUND
By /s/LAURA F. FERGERSON
-----------------------------
Laura F. Fergerson
Chief Executive Officer -
Finance and Administration
Date: April 27, 2010
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/LAURA F. FERGERSON
-----------------------------
Laura F. Fergerson
Chief Executive Officer -
Finance and Administration
Date: April 27, 2010
By /s/MARK H. OTANI
------------------------------
Mark H. Otani
Chief Financial Officer and
Chief Accounting Officer
Date: April 27, 2010