-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KibsRDXJsV102d+kwbZb10zEQkIaPHn0fukeAz4QrS7cvp9Tcy1xEp+PPRpqTnV4 72YaYxnSVpaxyT1Kc9aWFw== 0000828803-05-000008.txt : 20050429 0000828803-05-000008.hdr.sgml : 20050429 20050429122628 ACCESSION NUMBER: 0000828803-05-000008 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050228 FILED AS OF DATE: 20050429 DATE AS OF CHANGE: 20050429 EFFECTIVENESS DATE: 20050429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON GLOBAL INCOME FUND CENTRAL INDEX KEY: 0000828803 IRS NUMBER: 222864496 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05459 FILM NUMBER: 05783806 BUSINESS ADDRESS: STREET 1: BROWARD FINANCIAL CENTRE STREET 2: 500 EAST BROWARD BLVD., SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 BUSINESS PHONE: 9545277500 MAIL ADDRESS: STREET 1: BROWARD FINANCIAL CENTRE STREET 2: 500 EAST BROWARD BLVD., SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 FORMER COMPANY: FORMER CONFORMED NAME: TEMPLETON GLOBAL INCOME FUND INC DATE OF NAME CHANGE: 19920703 N-CSRS 1 gimsemiannualrpt05.txt GIM SEMIANNUAL REPORT DTD 2/28/05 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 ---------- TEMPLETON GLOBAL INCOME FUND -------------------------------------- (Exact name of registrant as specified in charter) 500 EAST BROWARD BLVD., FORT LAUDERDALE, FL 33394-3091 -------------------------------------------------------- (Address of principal executive offices) (Zip code) MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 ----------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (954) 527-7500 -------------- Date of fiscal year end: 8/31 ---- Date of reporting period: 2/28/05 ------- ITEM 1. REPORTS TO STOCKHOLDERS [GRAPHIC OMITTED] FEBRUARY 28, 2005 SEMIANNUAL REPORT INCOME [GRAPHIC OMITTED] TEMPLETON GLOBAL INCOME FUND [LOGO OMITTED] FRANKLIN[R] TEMPLETON[R] INVESTMENTS Franklin o TEMPLETON o Mutual Series Franklin Templeton Investments GAIN FROM OUR PERSPECTIVE 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 research offices in over 25 countries, they offer investors the broadest global reach in the industry. MUTUAL SERIES. Founded in 1949, Mutual Series is dedicated to a unique style of value investing, searching aggressively for opportunity among undervalued stocks, arbitrage situations and distressed companies. TRUE DIVERSIFICATION Because our management groups work independently and adhere to distinctly different investment approaches, Franklin, Templeton and Mutual Series funds typically have a low overlap of securities. That's why our funds can be used to build truly diversified portfolios 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 account services that have helped us become one of the most trusted names in financial services. MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS [GRAPHIC OMITTED] Not part of the semiannual report Contents SEMIANNUAL REPORT Templeton Global Income Fund ....................... 1 Performance Summary ............... 8 Important Notice to Shareholders ...................... 9 Financial Highlights and Statement of Investments .......... 10 Financial Statements .............. 16 Notes to Financial Statements ........................ 19 Annual Meeting of Shareholders ...................... 28 Dividend Reinvestment and Cash Purchase Plan ................ 29 Shareholder Information ........... 31 - -------------------------------------------------------------------------------- Semiannual Report Templeton Global Income Fund YOUR FUND'S GOAL 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. - -------------------------------------------------------------------------------- [PIE GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: Portfolio Breakdown Based on Total Net Assets as of 2/28/05 Government Bonds ................ 96.4% Short-Term Investments & Other Net Assets ................ 3.6% - -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to bring you Templeton Global Income Fund's semiannual report for the period ended February 28, 2005. 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 11. Semiannual Report | 1 [SIDEBARS] - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WHAT IS A CURRENT ACCOUNT? - -------------------------------------------------------------------------------- A current account is that part of the balance of payments where all of one country's international transactions in goods and services are recorded. - -------------------------------------------------------------------------------- [END SIDEBARS] PERFORMANCE OVERVIEW For the six months under review, Templeton Global Income Fund posted cumulative total returns of 21.41% based on market price and 13.87% based on net asset value. The Fund outperformed the J.P. Morgan (JPM) Government Bond Index (GBI) Global, which posted cumulative total returns of 2.42% in local currency terms and 8.32% 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 8. ECONOMIC AND MARKET OVERVIEW During the six months under review, overall global growth conditions remained robust, particularly in the U.S. and Asia. Although there was some increase in inflationary pressures regionally, inflation generally remained historically low, and global treasury yield curves flattened over the period. The U.S. economy experienced improved growth amid employment gains and strong investment spending. The core Consumer Price Index moved higher, rising to 2.4% at period-end from 1.7% at the beginning of the reporting period. In an effort to ease inflationary pressures, the Federal Reserve Board raised the federal funds target rate 100 basis points (100 basis points equal one percent) from 1.50% to 2.50%. Economic growth indicators were generally quite positive; however, measures of the U.S. balance of payment position sharply deteriorated. The U.S. trade deficit reached record levels, hitting a $61 billion monthly deficit level in February 2005 and a current account deficit of 6.3% of gross domestic product (GDP) in fourth quarter 2004. 2 Although financing of the current account deficit through foreign purchases of U.S. securities continued to rise over the reporting period, the increase was not enough to prevent a decline in the U.S. dollar's value against the euro and other major trading partners' currencies. Economic growth in Europe generally moderated in the second half of 2004, with the slowdown most apparent in the euro zone. During fourth quarter 2004, real GDP growth in the euro zone slowed to 1.6% annualized. Soft 1. Source: J.P. Morgan. The JPM GBI Global tracks total returns of government bonds in developed countries globally. The bonds included in the index are weighted according to their market capitalization. The index is unhedged and expressed in terms of $US. Local bond market returns are from country subindexes of the JPM GBI Global. The index is unmanaged and includes reinvested interest. One cannot invest directly in an index, nor is an index representative of the Fund's portfolio. 2. Sources: U.S. Census Bureau; The Financial Times Limited. 2 | Semiannual Report labor markets contributed to weak domestic demand conditions. Additionally, the export sector's contributions to growth eased largely due to the euro's sustained strength, which weighed on exports. Because of the weaker growth conditions, underlying inflationary pressures were limited, and the European Central Bank left interest rates unchanged at 2.00%. Elsewhere in Europe, Norway and Sweden experienced extremely low inflationary pressures, despite relatively robust economic activity, particularly in regard to consumption. In central Europe, favorable inflationary developments facilitated interest rate cuts in Hungary and Slovakia and prompted Poland's central bank to move to an easing bias. Hungary cut its interest rate 275 basis points to 8.25%, Slovakia cut its rate 150 basis points to 3.00%, and Poland's policy rate was unchanged at 6.50%. 3 In addition to interest rate cuts contributing to bond performance, higher interest rates relative to those in the euro zone, as well as attractive investment prospects, supported the region's currency performance, and central European currencies were among the world's top performing for the period. Asia's economic performance was divided between mixed developments in Japan, which experienced weakening growth indicators and continued deflationary concerns, and generally strong economic performance elsewhere in Asia. In fourth quarter 2004, Japan's GDP growth slowed to 0.5% compared with a year earlier, while GDP grew 9.5% in China, 5.1% in Thailand and 3.3% in South Korea. 4 Asia generally continued to produce current account surpluses, facilitating further buildup of foreign currency reserves in the region. While Japan's foreign currency accumulation slowed relative to prior periods given less government intervention in currency markets, China's reserve accumulation accelerated. For the six months under review, Japan's reserves rose $12 billion. From September through December 2004, China's increased $114 billion. Despite moderating growth rates in Australia and New Zealand, tight labor market conditions boosted inflation expectations in those countries over the period. While Australia kept its key interest rate at 5.25%, New Zealand's central bank raised interest rates 50 basis points to 6.50%. 3. Sources: Hungarian Central Bank; National Bank of Slovakia; National Bank of Poland. 4. Sources: Economic and Social Research Institute (Japan); National Bureau of Statistics (China); National Economic and Social Development Board (Thailand); Bank of Korea (South Korea). Semiannual Report | 3 [SIDEBAR] [BAR GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: GEOGRAPHIC DISTRIBUTION Based on Total Net Assets as of 2/28/05 Other Europe 31.4% Asia 27.8% EMU Members* 16.0% Australia & New Zealand 9.9% Latin America 5.8% Canada 5.3% Middle East & Africa 0.2% Short-Term Investments & Other Net Assets 3.6% *The Fund's EMU investments were in Austria, Belgium, Finland, France, Germany, Greece, Irish Republic, Netherlands and Spain. [END SIDEBAR] 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 rates and credit risk. MANAGER'S DISCUSSION During the reporting period, the Fund benefited from its strategy of diversifying into peripheral Europe (non-euro zone) and non-Japan Asia, areas we viewed as having attractive opportunities for favorable interest rate and currency developments. The Fund's relative performance also benefited from having no holdings in the U.S. or Japan. The U.S. was the clear underperformer during the period on bond return and currency return bases, with the U.S. portion of the JPM GBI Global rising only 0.66% and the U.S. dollar depreciating 6.96% against the country's major trading partners. 1 Japan also underperformed the index, although not to the magnitude of the U.S. Our overall European position benefited relative Fund performance, as peripheral European holdings generally outperformed the euro zone. However, the Fund's underweighted U.K. position detracted from performance relative to the index given the U.K. bond market's outperformance in U.S. dollar terms. During the reporting period, we found what we believed were attractive opportunities globally through our interest rate, currency and sovereign bond strategies. By period-end, approximately 15% of the Fund's total net assets were in below investment grade holdings. INTEREST RATE STRATEGY While the U.S. began raising interest rates in 2004, economic conditions in other countries contributed to maintaining low interest rates or facilitated interest rate reductions, which provided support to bond markets in local currency terms. For instance, the Fund benefited from earning higher interest rates in Poland relative to the euro zone, as well as from building market expectations for interest rate reductions following easing inflationary pressures during the period. The JPM GBI Global's Polish subindex rose 11.53% in local currency terms for the six months ended February 28, 2005. 1 Although 4 | Semiannual Report the Fund's euro zone position was underweighted relative to the JPM GBI Global, it represented one of the Fund's longer duration positions and benefited from low inflation and unchanged interest rates. In Asia, local Indonesian bond markets outperformed the index, rising 11.06% over the six-month period, supported by favorable macroeconomic conditions in Indonesia, such as slowing inflation and robust growth, as well as political stability and attractive yields. 1 Additionally, the country's economy benefited from greater investment spending, which rose 18.3% in fourth quarter 2004 compared with a year earlier. CURRENCY STRATEGY During the reporting period, currency gains against the U.S. dollar benefited global bond market performance, with the JPM GBI Global rising 8.32% in U.S. dollar terms compared with 2.42% in local currency terms. 1 Central to our currency strategy during the period was our negative outlook for the U.S. dollar given structural weakness in the U.S. balance of payment position. Although the euro generated positive returns, rising 8.97% against the U.S. dollar during the period, we saw better value in other European (non-euro zone) and Asian currencies. Many currencies appreciated against the U.S. dollar, with a couple of notable performers within each region. In central Europe, the Polish zloty and Slovakian koruna appreciated 24.46% and 15.86% against the U.S. dollar. Among Scandinavian currencies, the Norwegian krone and Swedish krona rose 11.24% and 9.82%. In the Asia-Pacific region, the South Korean won gained 14.67%, while the Australian dollar increased 12.23%. [SIDEBAR] [BAR GRAPHIC OMITTED] EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS: CURRENCY BREAKDOWN Based on Total Portfolio Value as of 2/28/05 Euro 16.5% South Korean Won 13.8% U.S. Dollar 10.3% Swedish Krona 9.5% New Zealand Dollar 7.1% Polish Zloty 6.8% Thai Baht 5.9% Indonesian Rupiah 5.8% Australian Dollar 5.7% Canadian Dollar 5.4% Slovakian Koruna 5.0% Norwegian Krone 3.9% Danish Krone 1.7% Hungarian Forint 1.6% Singapore Dollar 0.6% Malaysian Ringgit 0.3% British Pound 0.1% [END SIDEBAR] Semiannual Report | 5 GLOBAL SOVEREIGN DEBT STRATEGY Despite rising U.S. interest rates, U.S. dollar-denominated sovereign debt generated positive returns, with the JPM Emerging Markets Bond Index Global (EMBIG) rising 8.01% in U.S. dollar terms during the reporting period. 5 Sovereign interest rate spreads declined from 425 basis points greater than U.S. Treasuries at the beginning of the reporting period to 333 basis points at period-end. Given tightening spreads, we de-emphasized sovereign debt in our overall strategy while maintaining selective exposure to sovereign credits with what we believed were improving credit fundamentals. For example, Ukrainian sovereign bonds returned 8.71% during the period, following the landmark election of the presidential candidate many perceived as market friendly. 5 In addition to a strong economic environment with 12% GDP growth in 2004, such political developments seemed to provide a positive backdrop for progress on previously stalled structural reform initiatives, which has the potential to enhance Ukraine's credit standing. 6 Russian sovereign bonds rose 11.58%, benefiting from an investment grade sovereign credit rating from Standard & Poor's and Moody's Investors Service, two independent credit rating agencies. 5 5. Source: J.P. Morgan. 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. Local bond market returns are from country subindexes of the JPM EMBIG. 6. Source: Reuters. 6 | Semiannual Report Thank you for your continued participation in Templeton Global Income Fund. We look forward to serving your future investment needs. Sincerely, [PHOTO OMITTED] /s/Alex C. Calvo - ---------------- Alex C. Calvo [PHOTO OMITTED] /s/Michael Hasenstab - -------------------- Michael Hasenstab, Ph.D. Portfolio Managers Templeton Global Income Fund THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS AS OF FEBRUARY 28, 2005, 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. Semiannual Report | 7 Performance Summary as of 2/28/05 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. All total returns include reinvested distributions according to the terms specified in the Fund's dividend reinvestment and cash purchase plan and 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 due on Fund dividends, capital gains distributions, if any, or any realized gains on the sale of Fund shares. PRICE AND DISTRIBUTION INFORMATION
- ----------------------------------------------------------------------------------------------------------------- CHANGE 2/28/05 8/31/04 - ----------------------------------------------------------------------------------------------------------------- Net Asset Value (NAV) +$0.82 $9.59 $8.77 - ----------------------------------------------------------------------------------------------------------------- Market Price (NYSE) +$1.42 $9.98 $8.56 - ----------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS (9/1/04-2/28/05) - ----------------------------------------------------------------------------------------------------------------- Dividend Income $0.3852 - ----------------------------------------------------------------------------------------------------------------- PERFORMANCE - ----------------------------------------------------------------------------------------------------------------- 6-MONTH 1-YEAR 5-YEAR 10-YEAR - ----------------------------------------------------------------------------------------------------------------- Cumulative Total Return 1 - ----------------------------------------------------------------------------------------------------------------- Based on change in NAV 13.87% 14.31% 91.96% 179.59% - ----------------------------------------------------------------------------------------------------------------- Based on change in market price 21.41% 19.62% 141.20% 225.03% - ----------------------------------------------------------------------------------------------------------------- Average Annual Total Return 1 - ----------------------------------------------------------------------------------------------------------------- Based on change in NAV 13.87% 14.31% 13.93% 10.83% - ----------------------------------------------------------------------------------------------------------------- Based on change in market price 21.41% 19.62% 19.26% 12.51% - -----------------------------------------------------------------------------------------------------------------
PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM FIGURES SHOWN. FOR MORE CURRENT PERFORMANCE, CALL FRANKLIN TEMPLETON INVESTMENTS AT 1-800/342-5236. ENDNOTES SPECIAL RISKS ARE ASSOCIATED WITH FOREIGN INVESTING, INCLUDING CURRENCY VOLATILITY, ECONOMIC INSTABILITY AND SOCIAL AND POLITICAL DEVELOPMENTS OF COUNTRIES WHERE THE FUND INVESTS. EMERGING MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THEIR RELATIVELY SMALL SIZE AND LESSER LIQUIDITY. 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. 8 | Semiannual Report 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. Semiannual Report | 9 Templeton Global Income Fund FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------------- SIX MONTHS ENDED FEBRUARY 28, 2005 YEAR ENDED AUGUST 31, (UNAUDITED) 2004 2003 2002 2001 2000 ----------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE (for a share outstanding throughout the period) Net asset value, beginning of period ............ $8.77 $8.18 $7.29 $6.99 $7.06 $7.50 ----------------------------------------------------------------------------- Income from investment operations: Net investment income a ........................ .20 .41 .41 .45 e .56 .60 Net realized and unrealized gains (losses) ..... 1.01 .72 .98 .39 e (.11) (.46) ----------------------------------------------------------------------------- Total from investment operations ................ 1.21 1.13 1.39 .84 .45 .14 ----------------------------------------------------------------------------- Capital share repurchases ....................... -- -- -- -- .03 .02 ----------------------------------------------------------------------------- Less distributions from: Net investment income .......................... (.39) (.54) (.50) (.34) (.31) (.60) Tax return of capital .......................... -- -- -- (.20) (.24) -- ----------------------------------------------------------------------------- Total distributions ............................. (.39) (.54) (.50) (.54) (.55) (.60) ----------------------------------------------------------------------------- Net asset value, end of period .................. $9.59 $8.77 $8.18 $7.29 $6.99 $7.06 ============================================================================= Market value, end of period b ................... $9.98 $8.56 $7.95 $7.35 $6.55 $6.1875 ============================================================================= Total return (based on market value per share) c ...................................... 21.41% 14.69% 15.37% 21.32% 15.44% 3.97% RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's) ............... $1,245,829 $1,136,976 $1,058,791 $944,602 $763,696 $797,122 Ratios to average net assets: Expenses ....................................... .75% d .77% .72% .75% .75% .75% Net investment income .......................... 4.33% d 4.66% 5.16% 6.28% e 8.11% 8.12% Portfolio turnover rate ......................... 21.31% 48.85% 69.77% 82.31% 66.27% 110.36%
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 Annualized. e Effective September 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing all premium and discount on fixed-income securities, as required. The effect of this change was as follows: Net investment income per share .............................. $(0.09) Net realized and unrealized gains (losses) per share ......... 0.09 Ratio of net investment income to average net assets ......... (1.32)% Per share data and ratios for prior periods have not been restated to reflect this change in accounting policy. 10 | See notes to financial statements. | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT A VALUE - ---------------------------------------------------------------------------------------------------------------------------- LONG TERM INVESTMENTS 96.4% AUSTRALIA 5.6% New South Wales Treasury Corp., 6.50%, 5/01/06 ............................................................... 8,681,000 AUD $ 6,937,576 8.00%, 3/01/08 ............................................................... 6,200,000 AUD 5,196,718 6.00%, 5/01/12 ............................................................... 10,200,000 AUD 8,166,306 Queensland Treasury Corp., 6.00%, 7/14/09 ............................................................... 4,100,000 AUD 3,280,133 6.00%, 8/14/13 ............................................................... 56,500,000 AUD 45,520,170 --------------- 69,100,903 --------------- AUSTRIA 2.3% Republic of Austria, 5.50%, 10/20/07 .............................................................. 15,900,000 EUR 22,535,914 5.00%, 7/15/12 ............................................................... 4,580,000 EUR 6,666,358 --------------- 29,202,272 --------------- BELGIUM 2.8% Kingdom of Belgium, 8.50%, 10/01/07 .............................................................. 19,718,000 EUR 29,850,912 5.00%, 9/28/12 ............................................................... 3,840,000 EUR 5,580,698 --------------- 35,431,610 --------------- BRAZIL .6% Republic of Brazil, DCB, L, FRN, 3.125%, 4/15/12 ............................... 8,147,712 7,880,386 --------------- CANADA 5.3% Government of Canada, 8.75%, 12/01/05 .............................................................. 5,290,000 CAD 4,482,825 6.00%, 6/01/11 ............................................................... 26,263,000 CAD 23,679,831 Province of Alberta, 7.50%, 12/01/05 .............................................................. 9,470,000 CAD 7,952,327 5.00%, 12/16/08 .............................................................. 28,530,000 CAD 24,312,220 Province of British Columbia, 6.00%, 6/09/08 ................................... 7,000,000 CAD 6,121,828 --------------- 66,549,031 --------------- COLOMBIA .5% Republic of Colombia, 11.75%, 2/25/20 .......................................... 4,735,000 6,032,627 --------------- DENMARK 1.7% Kingdom of Denmark, 6.00%, 11/15/11 .............................................................. 15,500,000 DKK 3,181,092 5.00%, 11/15/13 .............................................................. 92,320,000 DKK 18,068,375 --------------- 21,249,467 --------------- FINLAND 2.0% Government of Finland, 5.00%, 7/04/07 .......................................... 17,600,000 EUR 24,570,289 --------------- Semiannual Report | 11 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT A VALUE - ---------------------------------------------------------------------------------------------------------------------------- LONG TERM INVESTMENTS (CONT.) FRANCE 1.5% Government of France, 4.00%, 4/25/09 ............................................................... 9,750,000 EUR $ 13,425,146 4.25%, 4/25/19 ............................................................... 4,000,000 EUR 5,481,182 --------------- 18,906,328 --------------- GERMANY 3.0% Federal Republic of Germany, 4.00%, 2/16/07 .................................... 3,470,000 EUR 4,723,844 Kreditanstalt Fuer Wiederaufbau KFW, senior note, 6.375%, 2/17/15 .............. 45,550,000 NZD 32,588,483 --------------- 37,312,327 --------------- GREECE .5% Hellenic Republic, 4.60%, 5/20/13 .............................................. 4,560,000 EUR 6,416,331 --------------- HUNGARY 1.6% Government of Hungary, 9.25%, 5/12/05 ............................................................... 127,000,000 HUF 696,991 8.50%, 10/12/05 .............................................................. 3,342,000,000 HUF 18,405,414 7.00%, 4/12/06 ............................................................... 110,000,000 HUF 600,335 --------------- 19,702,740 --------------- INDONESIA 5.6% Government of Indonesia, 11.00%, 10/15/14 ...................................... 24,400,000,000 IDR 2,756,519 Indonesia Recapital Bonds, 14.00%, 6/15/09 .............................................................. 49,141,000,000 IDR 6,157,014 13.15%, 3/15/10 .............................................................. 188,975,000,000 IDR 23,457,410 14.25%, 6/15/13 .............................................................. 50,150,000,000 IDR 6,585,081 14.275%, 12/15/13 ............................................................ 237,966,000,000 IDR 31,388,025 --------------- 70,344,049 --------------- IRISH REPUBLIC 1.3% Republic of Ireland, 4.25%, 10/18/07 ........................................... 11,500,000 EUR 15,845,189 --------------- MALAYSIA .3% Government of Malaysia, 4.305%, 2/27/09 .............................................................. 2,900,000 MYR 786,358 4.032%, 9/15/09 .............................................................. 8,600,000 MYR 2,308,421 --------------- 3,094,779 --------------- MEXICO 1.1% United Mexican States, 144A, 7.50%, 3/08/10 .................................... 8,800,000 EUR 13,589,692 --------------- NETHERLANDS .5% Government of Netherlands, 5.75%, 2/15/07 ...................................... 4,800,000 EUR 6,742,909 --------------- NEW ZEALAND 4.3% Government of New Zealand, 7.00%, 7/15/09 ............................................................... 41,630,000 NZD 31,200,927 6.00%, 11/15/11 .............................................................. 31,373,000 NZD 22,651,514 --------------- 53,852,441 --------------- 12 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT A VALUE - ---------------------------------------------------------------------------------------------------------------------------- LONG TERM INVESTMENTS (CONT.) NORWAY 2.0% Kingdom of Norway, 6.75%, 1/15/07 .............................................. 142,000,000 NOK $ 24,635,551 --------------- PERU .2% Republic of Peru, 9.875%, 2/06/15 .............................................................. 1,800,000 2,189,250 FRN, 4.50%, 3/07/17 .......................................................... 300,000 282,000 --------------- 2,471,250 --------------- PHILIPPINES 1.9% Republic of Philippines, 9.00%, 2/15/13 ............................................................... 5,500,000 5,811,025 Reg S, 9.125%, 2/22/10 ....................................................... 12,170,000 EUR 17,822,650 --------------- 23,633,675 --------------- POLAND 6.7% Republic of Poland, 8.50%, 11/12/06 .............................................................. 100,860,000 PLN 36,016,281 8.50%, 5/12/07 ............................................................... 68,700,000 PLN 24,905,895 6.00%, 5/24/09 ............................................................... 65,250,000 PLN 22,756,362 --------------- 83,678,538 --------------- RUSSIA 2.1% Russian Federation, Reg S, 11.00%, 7/24/18 ..................................... 17,771,000 25,701,024 --------------- SINGAPORE .6% Republic of Singapore, 4.00%, 3/01/07 ............................................................... 8,500,000 SGD 5,442,861 2.625%, 10/01/07 ............................................................. 3,220,000 SGD 2,011,880 --------------- 7,454,741 --------------- SLOVAK REPUBLIC 4.9% Republic of Slovakia, 4.95%, 3/05/08 ............................................................... 66,600,000 SKK 2,458,599 4.80%, 4/14/09 ............................................................... 333,500,000 SKK 12,514,899 7.50%, 3/13/12 ............................................................... 84,000,000 SKK 3,671,690 Strip, 1/14/07 ............................................................... 1,264,000,000 SKK 42,129,574 --------------- 60,774,762 --------------- SOUTH AFRICA .2% Republic of South Africa, 5.25%, 5/16/13 ....................................... 2,000,000 EUR 2,815,107 --------------- SOUTH KOREA 13.6% Korea Treasury Bond, 4.50%, 3/05/06 ............................................................... 19,500,000,000 KRW 19,553,366 4.50%, 9/03/06 ............................................................... 29,790,000,000 KRW 29,887,601 6.90%, 1/16/07 ............................................................... 41,010,000,000 KRW 42,960,394 5.77%, 10/09/07 .............................................................. 39,640,000,000 KRW 41,048,255 4.75%, 3/12/08 ............................................................... 8,075,000,000 KRW 8,155,163 4.50%, 9/09/08 ............................................................... 12,000,000,000 KRW 12,097,733 5.00%, 3/26/13 ............................................................... 5,000,000,000 KRW 5,063,220 Republic of Korea, 6.15%, 7/10/07 .............................................. 10,000,000,000 KRW 10,429,348 --------------- 169,195,080 --------------- Semiannual Report | 13 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT A VALUE - ---------------------------------------------------------------------------------------------------------------------------- LONG TERM INVESTMENTS (CONT.) SPAIN 2.1% Government of Spain, 8.80%, 4/30/06 ............................................................... 13,342,000 EUR $ 18,969,566 5.00%, 7/30/12 ............................................................... 4,850,000 EUR 7,047,253 --------------- 26,016,819 --------------- SWEDEN 9.4% Kingdom of Sweden, 3.50%, 4/20/06 ............................................................... 85,955,000 SEK 12,753,305 8.00%, 8/15/07 ............................................................... 59,250,000 SEK 9,764,921 6.50%, 5/05/08 ............................................................... 100,400,000 SEK 16,308,535 5.25%, 3/15/11 ............................................................... 273,300,000 SEK 43,904,181 5.50%, 10/08/12 .............................................................. 62,060,000 SEK 10,191,266 3.50%, 12/01/15 .............................................................. 129,800,000 SEK 23,764,158 --------------- 116,686,366 --------------- THAILAND 5.8% Government of Thailand, 8.50%, 10/14/05 .............................................................. 396,215,000 THB 10,755,507 8.00%, 12/08/06 .............................................................. 1,453,680,000 THB 41,400,419 5.60%, 7/07/07 ............................................................... 499,730,000 THB 13,801,996 4.125%, 2/12/08 .............................................................. 178,700,000 THB 4,783,239 8.50%, 12/08/08 .............................................................. 31,000,000 THB 950,713 --------------- 71,691,874 --------------- UKRAINE 2.9% Republic of Ukraine, 144A, 6.875%, 3/04/11 ........................................................ 6,020,000 6,322,806 144A, 7.65%, 6/11/13 ......................................................... 21,700,000 23,902,550 FRN, 6.365%, 8/05/09 ......................................................... 5,300,000 5,716,580 --------------- 35,941,936 --------------- UNITED KINGDOM .1% United Kingdom, 8.50%, 7/16/07 ................................................. 811,000 GBP 1,688,934 --------------- VENEZUELA 3.4% Republic of Venezuela, 9.25%, 9/15/27 ............................................................... 36,005,000 37,164,001 FRN, 3.6925%, 4/20/11 ........................................................ 5,550,000 5,071,312 --------------- 42,235,313 --------------- TOTAL LONG TERM INVESTMENTS (COST $999,118,697) ................................. 1,200,444,340 --------------- 14 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2005 (UNAUDITED) (CONTINUED) - ---------------------------------------------------------------------------------------------------------------------------- PRINCIPAL AMOUNT A VALUE - ---------------------------------------------------------------------------------------------------------------------------- SHORT TERM INVESTMENTS (COST $22,597,784) 1.9% NORWAY 1.9% b Norwegian Treasury Bill, 6/15/05 - 9/21/05 ...................................... 147,800,000 NOK $ 23,615,189 --------------- TOTAL INVESTMENTS (COST $1,021,716,481) 98.3% ................................... 1,224,059,529 OTHER ASSETS, LESS LIABILITIES 1.7% ............................................. 21,769,156 --------------- NET ASSETS 100.0% ............................................................... $1,245,828,685 ===============
PORTFOLIO ABBREVIATIONS: FRN -Floating Rate Notes CURRENCY ABBREVIATIONS: AUD - Australian Dollar CAD - Canadian Dollar DKK - Danish Krone EUR - Euro GBP - British Pound HUF - Hungarian Forint IDR - Indonesian Rupiah KRW - Korean Won MYR - Malaysian Ringgit NOK - Norwegian Krone NZD - New Zealand Dollar PLN - Polish Zloty SEK - Swedish Krona SGD - Singapore Dollar SKK - Slovak Koruna THB - Thai Baht a The principal amount is stated in U.S. dollars unless otherwise indicated. b Security is traded on a discount basis with no stated coupon rate. Semiannual Report | See notes to financial statements. | 15 Templeton Global Income Fund FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES February 28, 2005 (unaudited)
Assets: Investments in securities: Cost ................................................................................................ $1,021,716,481 --------------- Value ............................................................................................... $1,224,059,529 Foreign currency, at value (cost $95,874) ............................................................ 45,152 Receivables: Investment securities sold .......................................................................... 4,097,077 Interest ............................................................................................ 25,988,195 --------------- Total assets .................................................................................... 1,254,189,953 --------------- Liabilities: Payables: Investment securities purchased ..................................................................... 40,024 Affiliates .......................................................................................... 590,426 Funds advanced by custodian .......................................................................... 7,343,638 Other liabilities .................................................................................... 387,180 --------------- Total liabilities ............................................................................... 8,361,268 --------------- Net assets, at value .......................................................................... $1,245,828,685 =============== Net assets consist of: Distributions in excess of net investment income ..................................................... $ (18,232,586) Net unrealized appreciation (depreciation) ........................................................... 203,246,192 Accumulated net realized gain (loss) ................................................................. (14,833,498) Capital shares ....................................................................................... 1,075,648,577 --------------- Net assets, at value .......................................................................... $1,245,828,685 =============== Shares outstanding .................................................................................... 129,976,015 =============== Net asset value per share ............................................................................. $9.59 =============== 16 | See notes to financial statements. | Semiannual Report Templeton Global Income Fund FINANCIAL STATEMENTS (CONTINUED) STATEMENT OF OPERATIONS for the six months ended February 28, 2005 (unaudited) Investment income: Dividends - Sweep Money Fund (Note 8) ................................................................ $ 80,311 Interest (net of foreign taxes of $883,281) .......................................................... 30,312,093 ------------- Total investment income ......................................................................... 30,392,404 ------------- Expenses: Management fees (Note 3) ............................................................................. 3,004,057 Administrative fees (Note 3) ......................................................................... 732,762 Transfer agent fees .................................................................................. 110,200 Custodian fees (Note 4) .............................................................................. 470,348 Reports to shareholders .............................................................................. 37,400 Registration and filing fees ......................................................................... 52,900 Professional fees .................................................................................... 8,500 Trustees' fees and expenses .......................................................................... 32,100 Other ................................................................................................ 11,600 ------------- Total expenses .................................................................................. 4,459,867 Expense reductions (Note 4) ..................................................................... (858) ------------- Net expenses .................................................................................. 4,459,009 ------------- Net investment income ....................................................................... 25,933,395 ------------- Realized and unrealized gains (losses): Net realized gain (loss) from: Investments ......................................................................................... 39,797,073 Foreign currency transactions ....................................................................... 1,770,767 ------------- Net realized gain (loss) ...................................................................... 41,567,840 ------------- Net change in unrealized appreciation (depreciation) on: Investments ......................................................................................... 87,966,236 Translation of assets and liabilities denominated in foreign currencies ............................. 857,471 ------------- Net change in unrealized appreciation (depreciation) .......................................... 88,823,707 ------------- Net realized and unrealized gain (loss) ............................................................... 130,391,547 ------------- Net increase (decrease) in net assets resulting from operations ....................................... $156,324,942 =============
Semiannual Report | See notes to financial statements. | 17 Templeton Global Income Fund FINANCIAL STATEMENTS (CONTINUED) STATEMENTS OF CHANGES IN NET ASSETS for the six months ended February 28, 2005 (unaudited) and the year ended August 31, 2004
-------------------------------------- SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2005 AUGUST 31, 2004 -------------------------------------- Increase (decrease) in net assets: Operations: Net investment income ................................................................... $ 25,933,395 $ 52,721,929 Net realized gain (loss) from investments and foreign currency transactions ............. 41,567,840 39,479,907 Net change in unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies ................................. 88,823,707 54,688,070 -------------------------------------- Net increase (decrease) in net assets resulting from operations ..................... 156,324,942 146,889,906 Distributions to shareholders from net investment income ................................. (49,995,287) (70,472,145) Capital share transactions (Note 2) ...................................................... 2,522,656 1,767,365 -------------------------------------- Net increase (decrease) in net assets ............................................... 108,852,311 78,185,126 Net assets: Beginning of period ...................................................................... 1,136,976,374 1,058,791,248 -------------------------------------- End of period ............................................................................ $1,245,828,685 $1,136,976,374 ====================================== Distributions in excess of net investment income (undistributed net investment income) included in net assets: End of period ............................................................................ $ (18,232,586) $ 5,829,306 ======================================
18 | See notes to financial statements. | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Templeton Global Income Fund (the Fund) is registered under the Investment Company Act of 1940 as a non-diversified, closed-end investment company. Effective June 1, 2004, the Fund was reorganized from a Maryland corporation into a Delaware statutory trust. The 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. The following summarizes the Fund's significant accounting policies. A. SECURITY VALUATION Securities listed on a securities exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Over-the-counter securities and listed securities for which there is no reported sale are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Corporate debt 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. Foreign securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded, or the NYSE, whichever is earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the close of the NYSE on the day that the value of the foreign security is determined. If no sale is reported at that time, the foreign security will be valued within the range of the most recent quoted bid and ask prices. 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. Some methods for valuing these securities may include: fundamental analysis, 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. 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. Semiannual Report | 19 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. FOREIGN CURRENCY TRANSLATION Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, 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 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. FOREIGN CURRENCY CONTRACTS When the Fund purchases or sells foreign securities it may enter into foreign exchange contracts to minimize foreign exchange risk from the trade date to the settlement date of the transactions. A foreign exchange contract is an agreement between two parties to exchange different currencies at an agreed upon exchange rate on a specified date. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations. The risks of these contracts include movement in the values of the foreign currencies relative to the U.S. dollar and the possible inability of the counterparties to fulfill their obligations under the contracts. D. INCOME TAXES No provision has been made for U.S. income taxes because the Fund's policy is to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and to distribute substantially all of its taxable income. Fund distributions to shareholders are determined on an income tax basis and may differ from net investment income and realized gains for financial reporting purposes. 20 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. 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. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Dividend income and distributions to shareholders are recorded on the ex-dividend date. F. 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 expense during the reporting period. Actual results could differ from those estimates. G. GUARANTEES AND INDEMNIFICATIONS Under the Fund's organizational documents, its officers and trustees are indemnified by the Fund against certain liability 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. However, based on experience, the Fund expects the risk of loss to be remote. 2. SHARES OF BENEFICIAL INTEREST The Board of the Fund 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, 2005, the Fund had repurchased a total of 11,210,400 shares. At February 28, 2005, there were an unlimited number of shares authorized (without par value). During the period ended February 28, 2005, 263,789 shares were issued for $2,522,656 from reinvested distributions. During the year ended August 31, 2004, 199,459 shares were issued for $1,767,365 from reinvested distributions. 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: Semiannual Report | 21 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 3. TRANSACTIONS WITH AFFILIATES (CONTINUED) - -------------------------------------------------------------------------------- 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 Fund's average daily net assets 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% Over $20 billion B. ADMINISTRATIVE FEES The Fund 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% Over $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, 2005, the custodian fees were reduced as noted in the Statement of Operations. 22 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 5. INCOME TAXES At August 31, 2004, the Fund had tax basis capital losses, which may be carried over to offset future capital gains. Such losses expire as follows: Capital loss carryovers expiring in: 2008 ..................................................... $ 2,252,961 2009 ..................................................... 22,567,406 2010 ..................................................... 27,371,582 2011 ..................................................... 4,209,282 ------------ $56,401,231 ============ Net investment income (loss) differs for financial statement and tax purposes primarily due to differing treatments of foreign currency transactions and bond discounts and premiums. Net realized gains differ for financial statement and tax purposes primarily due to differing treatments of wash sales, foreign currency transactions, and bond discounts and premiums. At February 28, 2005, the net unrealized appreciation (depreciation) based on the cost of investments for income tax purposes were as follows: Cost of investments .................................... $1,038,066,959 --------------- Unrealized appreciation ................................ $ 187,278,610 Unrealized depreciation ................................ (1,286,040) --------------- Net unrealized appreciation (depreciation) ............. $ 185,992,570 =============== 6. INVESTMENT TRANSACTIONS Purchases and sales of investments (excluding short-term securities) for the period ended February 28, 2005 aggregated $248,337,284 and $260,956,675, respectively. 7. CREDIT RISK The Fund has 15.40% of its portfolio invested in below investment grade and comparable quality unrated high yield securities, which tend to be more sensitive to economic conditions than higher rated securities. The risk of loss due to default by the issuer may be significantly greater for the holders of high yielding securities because such securities are generally unsecured and are often subordinated to other creditors of the issuer. 8. INVESTMENTS IN FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO The Fund may invest in the Franklin Institutional Fiduciary Trust Money Market Portfolio (the Sweep Money Fund), an open-end investment company managed by Advisers. Management fees paid by the Fund are reduced on assets invested in the Sweep Money Fund, in an amount not to exceed the management fees paid by the Sweep Money Fund. Semiannual Report | 23 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 9. REGULATORY MATTERS INVESTIGATIONS As part of various investigations by a number of federal, state, and foreign regulators and governmental entities, including the Securities and Exchange Commission ("SEC"), the California Attorney General's Office ("CAGO"), and the National Association of Securities Dealers, Inc. ("NASD"), relating to certain practices in the mutual fund industry, including late trading, market timing and marketing support payments to securities dealers who sell fund shares, Franklin Resources, Inc. and certain of its subsidiaries (as used in this section, together, the "Company"), as well as certain current or former executives and employees of the Company, received subpoenas and/or requests for documents, information and/or testimony. The Company and its current employees provided documents and information in response to those requests and subpoenas. SETTLEMENTS Beginning in August 2004, the Company entered into settlements with certain regulators investigating the mutual fund industry practices noted above. The Company believes that settlement of each of the matters described in this section is in the best interest of the Company and shareholders of the Franklin, Templeton, and Mutual Series mutual funds (the "funds"). On August 2, 2004, Franklin Resources, Inc. announced that its subsidiary, Franklin Advisers, Inc., reached an agreement with the SEC that resolved the issues resulting from the SEC investigation into market timing activity. In connection with that agreement, the SEC issued an "Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the Investment Company Act of 1940, Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order" (the "Order"). The SEC's Order concerned the activities of a limited number of third parties that ended in 2000 and those that were the subject of the first Massachusetts administrative complaint described below. Under the terms of the SEC's Order, pursuant to which Franklin Advisers, Inc. neither admitted nor denied any of the findings contained therein, Franklin Advisers, Inc. agreed to pay $50 million, of which $20 million is a civil penalty, to be distributed to shareholders of certain funds in accordance with a plan to be developed by an independent distribution consultant. At this time, it is unclear which funds or which shareholders of any particular fund will receive distributions. The Order also required Franklin Advisers, Inc. to, among other things, enhance and periodically review compliance policies and procedures. On September 20, 2004, Franklin Resources, Inc. announced that two of its subsidiaries, Franklin Advisers, Inc. and Franklin Templeton Alternative Strategies, Inc. ("FTAS"), reached an agreement with the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts (the "State of Massachusetts") related to its administrative complaint filed on February 4, 2004, concerning one instance of market timing that was also a subject of the August 2, 2004 settlement that Franklin Advisers, Inc. reached with the SEC, as described above. 24 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 9. REGULATORY MATTERS (CONTINUED) SETTLEMENTS (CONTINUED) Under the terms of the settlement consent order issued by the State of Massachusetts, Franklin Advisers, Inc. and FTAS consented to the entry of a cease-and-desist order and agreed to pay a $5 million administrative fine to the State of Massachusetts (the "Massachusetts Consent Order"). The Massachusetts Consent Order included two different sections: "Statements of Fact" and "Violations of Massachusetts Securities Laws." Franklin Advisers, Inc. and FTAS admitted the facts in the Statements of Fact. On October 25, 2004, the State of Massachusetts filed a second administrative complaint, alleging that Franklin Resources, Inc.'s Form 8-K filing (in which it described the Massachusetts Consent Order and stated that "Franklin did not admit or deny engaging in any wrongdoing") failed to state that Franklin Advisers, Inc. and FTAS admitted the Statements of Fact portion of the Massachusetts Consent Order (the "Second Complaint"). Franklin Resources, Inc. reached a second agreement with the State of Massachusetts on November 19, 2004, resolving the Second Complaint. As a result of the November 19, 2004 settlement, Franklin Resources, Inc. filed a new Form 8-K. The terms of the Massachusetts Consent Order did not change and there was no monetary fine associated with this second settlement. On November 17, 2004, Franklin Resources, Inc. announced that Franklin Templeton Distributors, Inc. ("FTDI") reached an agreement with the CAGO, resolving the issues resulting from the CAGO's investigation concerning sales and marketing support payments. Under the terms of the settlement, FTDI neither admitted nor denied the allegations in the CAGO's complaint and agreed to pay $2 million to the State of California as a civil penalty, $14 million to the funds, to be allocated by an independent distribution consultant to be paid for by FTDI, and $2 million to the CAGO for its investigative costs. On December 13, 2004, Franklin Resources, Inc. announced that its subsidiaries FTDI and Franklin Advisers, Inc. reached an agreement with the SEC, resolving the issues resulting from the SEC's investigation concerning marketing support payments to securities dealers who sell fund shares. In connection with that agreement, the SEC issued an "Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Sections 9(b) and 9(f) of the Investment Company Act of 1940, and Section 15(b) of the Securities Exchange Act of 1934" (the "Second Order"). Under the terms of the Second Order, in which FTDI and Franklin Advisers, Inc. neither admitted nor denied the findings contained therein, they agreed to pay the funds a penalty of $20 million and disgorgement of $1 (one dollar). FTDI and Franklin Advisers, Inc. also agreed to implement certain measures and undertakings relating to marketing support payments to broker-dealers for the promotion or sale of fund shares, including making additional disclosures in the funds' Prospectuses and Statements of Additional Information. The Second Order further requires the appointment of an independent distribution consultant, at the Company's expense, who shall develop a plan for the distribution of the penalty and disgorgement to the funds. Semiannual Report | 25 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 9. REGULATORY MATTERS (CONTINUED) SETTLEMENTS (CONTINUED) The SEC's Second Order and the CAGO settlement agreement concerning marketing support payments provide that the distribution of settlement monies are to be made to the relevant funds, not to individual shareholders. The independent distribution consultant has substantially completed preparation of these distribution plans. The CAGO has approved the distribution plan pertaining to the distribution of the monies owed under the CAGO settlement agreement and, in accordance with the terms and conditions of that settlement, the monies were disbursed to the participating funds. The Fund did not participate in the CAGO settlement. The SEC has not yet approved the distribution plan pertaining to the Second Order. When approved, disbursements of settlement monies under the SEC's Second Order will be made promptly in accordance with the terms and conditions of that order. OTHER LEGAL PROCEEDINGS The Company, and other funds, and certain current and former officers, employees, and directors have been named in multiple lawsuits in different federal courts in Nevada, California, Illinois, New York and Florida, alleging violations of various federal securities laws and seeking, among other relief, monetary damages, restitution, removal of fund trustees, directors, advisers, administrators, and distributors, rescission of management contracts and 12b-1 Plans, and/or attorneys' fees and costs. Specifically, the lawsuits claim breach of duty with respect to alleged arrangements to permit market timing and/or late trading activity, or breach of duty with respect to the valuation of the portfolio securities of certain Templeton funds managed by Franklin Resources, Inc. subsidiaries, resulting in alleged market timing activity. The majority of these lawsuits duplicate, in whole or in part, the allegations asserted in the February 4, 2004 Massachusetts administrative complaint and the findings in the SEC's August 2, 2004 Order, as described above. The lawsuits are styled as class actions or derivative actions on behalf of either the named funds or Franklin Resources, Inc. In addition, the Company, as well as certain current and former officers, employees, and directors, have been named in multiple lawsuits alleging violations of various securities laws and pendent state law claims relating to the disclosure of directed brokerage payments and/or payment of allegedly excessive advisory, commission, and distribution fees, and seeking, among other relief, monetary damages, restitution, rescission of advisory contracts, including recovery of all fees paid pursuant to those contracts, an accounting of all monies paid to the named advisers, declaratory relief, injunctive relief, and/or attorneys' fees and costs. These lawsuits are styled as class actions or derivative actions brought on behalf of certain funds. 26 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 9. REGULATORY MATTERS (CONTINUED) OTHER LEGAL PROCEEDINGS (CONTINUED) The Company and fund management strongly believe that the claims made in each of the lawsuits identified above are without merit and intend to vigorously defend against them. The Company cannot predict with certainty, however, the eventual outcome of the remaining governmental investigations or private lawsuits, nor whether they will have a material negative impact on the Company. Public trust and confidence are critical to the Company's business and any material loss of investor and/or client confidence could result in a significant decline in assets under management by the Company, which would have an adverse effect on the Company's future financial results. If the Company finds that it bears responsibility for any unlawful or inappropriate conduct that caused losses to the Fund, it is committed to making the Fund or its shareholders whole, as appropriate. The Company is committed to taking all appropriate actions to protect the interests of its funds' shareholders. Semiannual Report | 27 Templeton Global Income Fund ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 25, 2005 The Annual Meeting of Shareholders of the Fund was held at the Fund's offices, 500 E. Broward Blvd., Fort Lauderdale, Florida, on February 25, 2005. The purpose of the meeting was to elect four Trustees of the Fund. At the meeting, the following persons were elected by the shareholders to serve as Trustees of the Fund: Edith E. Holiday, Gordon S. Macklin, Frank A. Olson and Constantine D. Tseretopoulos.* No other business was transacted at the meeting. The results of the voting at the Annual Meeting are as follows: The election of four (4) Trustees:
- ------------------------------------------------------------------------------------------------------------------- % OF % OF SHARES SHARES % OF PRESENT % OF PRESENT OUTSTANDING AND OUTSTANDING AND TERM EXPIRING 2008 FOR SHARES VOTING WITHHELD SHARES VOTING - ------------------------------------------------------------------------------------------------------------------- Edith E. Holiday ....... 105,907,962.9438 81.61% 97.82% 2,362,648.3755 1.82% 2.18% Gordon S. Macklin ...... 105,642,736.9438 81.41% 97.57% 2,627,874.3755 2.02% 2.43% Frank A. Olson ......... 105,856,684.9438 81.57% 97.77% 2,413,926.3755 1.86% 2.23% Constantine D. Tseretopoulos .......... 106,001,895.9438 81.68% 97.90% 2,268,715.3755 1.75% 2.09%
* Harris J. Ashton, Frank J. Crothers, S. Joseph Fortunato, Charles B. Johnson and Fred R. Millsaps are Trustees of the Fund who are currently serving and whose terms of office continued after the Annual Meeting of Shareholders. 28 | Semiannual Report 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; share dividends and capital gains distributions will be reinvested automatically; Mellon Investor Services, P.O. Box 3338, South Hackensack, NJ 07606-1938, 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 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 Mellon Bank, N.A. (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 shall be made by check or money order payable to "Mellon Bank, N.A." and sent to Mellon Investor Services, P.O. Box 382009, Pittsburgh, PA 15250-8009, Attention: Templeton Global Income Fund. The Plan Administrator shall 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 fees for a sale of shares through the Plan are $15.00 per transaction plus a $0.12 per share trading fee. The participant may withdraw from the Plan without penalty at any time by written notice to the Plan Administrator sent to Mellon Investor Services, P.O. Box 3338, South Hackensack, NJ 07606-1938. 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, less a service charge of $15.00 and less trading fees of $0.12 per share, to the participant. Semiannual Report | 29 Templeton Global Income Fund TRANSFER AGENT Mellon Investor Services LLC 85 Challenger Road Ridgefield Park, NJ 07660 1-800-416-5585 www.melloninvestor.com SHAREHOLDER INFORMATION Shares of Templeton Global Income Fund are traded on the New York Stock Exchange under the symbol "GIM." The Fund's shares are also listed and traded on the Pacific Exchange. 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 Mellon Investor Services' web site at https://vault.melloninvestor.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. 30 | Semiannual Report Templeton Global Income Fund SHAREHOLDER INFORMATION PROXY VOTING POLICIES AND PROCEDURES The Fund 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 1-954/847-2268 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 1-800/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 he 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 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 semiannually with the Commission. The Fund has filed such certifications with its Form N-CSR for the year ended August 31, 2004. Additionally, the Fund expects to file, on or about April 30, 2005, such certifications with its Form N-CSRS for the six months ended February 28, 2005. Semiannual Report | 31 This page intentionally left blank. Literature Request LITERATURE REQUEST. TO RECEIVE A BROCHURE AND PROSPECTUS, PLEASE CALL US AT 1-800/DIAL BEN[R] (1-800/342-5236) 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. FRANKLIN TEMPLETON INVESTMENTS INTERNATIONAL Mutual European Fund Templeton China World Fund Templeton Developing Markets Trust Templeton Foreign Fund Templeton Foreign Smaller Companies Fund Templeton International (Ex EM) Fund GLOBAL Mutual Discovery Fund Templeton Global Long-Short Fund Templeton Global Opportunities Trust Templeton Global Smaller Companies Fund Templeton Growth Fund Templeton World Fund GROWTH Franklin Aggressive Growth Fund Franklin Capital Growth Fund Franklin Flex Cap Growth Fund Franklin Small-Mid Cap Growth Fund Franklin Small Cap Growth Fund II 1 VALUE Franklin Balance Sheet Investment Fund 2 Franklin Equity Income Fund Franklin Large Cap Value Fund Franklin MicroCap Value Fund 2 Franklin Small Cap Value Fund Mutual Beacon Fund Mutual Qualified Fund Mutual Recovery Fund 3 Mutual Shares Fund BLEND Franklin Blue Chip Fund Franklin Convertible Securities Fund Franklin Growth Fund Franklin Rising Dividends Fund Franklin U.S. Long-Short Fund SECTOR Franklin Biotechnology Discovery Fund Franklin DynaTech Fund Franklin Global Communications Fund Franklin Global Health Care Fund Franklin Gold and Precious Metals Fund Franklin Natural Resources Fund Franklin Real Estate Securities Fund Franklin Technology Fund Franklin Utilities Fund Mutual Financial Services Fund ASSET ALLOCATION Franklin Templeton Corefolio Allocation Fund Franklin Templeton Founding Funds Allocation Fund Franklin Templeton Perspectives Allocation Fund TARGET FUNDS Franklin Templeton Conservative Target Fund Franklin Templeton Growth Target Fund Franklin Templeton Moderate Target Fund INCOME Franklin Adjustable U.S. Government Securities Fund 4 Franklin's AGE High Income Fund Franklin Floating Rate Daily Access Fund Franklin Income Fund Franklin Limited Maturity U.S. Government Securities Fund 4,5 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 4 Templeton Global Bond Fund TAX-FREE INCOME 6 NATIONAL FUNDS Double Tax-Free Income Fund Federal Tax-Free Income Fund High Yield Tax-Free Income Fund Insured Tax-Free Income Fund 7 LIMITED-TERM FUNDS California Limited-Term Tax-Free Income Fund Federal Limited-Term Tax-Free Income Fund New York Limited-Term Tax-Free Income Fund INTERMEDIATE-TERM FUNDS California Intermediate-Term Tax-Free Income Fund Federal Intermediate-Term Tax-Free Income Fund New York Intermediate-Term Tax-Free Income Fund STATE-SPECIFIC Alabama Arizona California 8 Colorado Connecticut Florida 8 Georgia Kentucky Louisiana Maryland Massachusetts 7 Michigan 7 Minnesota 7 Missouri New Jersey New York 8 North Carolina Ohio 7 Oregon Pennsylvania Tennessee Virginia INSURANCE FUNDS Franklin Templeton Variable Insurance Products Trust 9 1.The fund is closed to new investors. Existing shareholders can continue adding to their accounts. 2.The fund is only open to existing shareholders and select retirement plans. 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.An investment in the fund is neither insured nor guaranteed by the U.S. government or by any other entity or institution. 5.Formerly Franklin Short-Intermediate U.S. Government Securities Fund. Effective 9/1/04, the fund's name changed; its investment goal and strategy remained the same. 6.For investors subject to the alternative minimum tax, a small portion of fund dividends may be taxable. Distributions of capital gains are generally taxable. 7.Portfolio of insured municipal securities. 8.These funds are available in two or more variations, including long-term portfolios, portfolios of insured securities, a high-yield portfolio (CA) and limited-term, intermediate-term and money market portfolios (CA and NY). 9.The funds of the Franklin Templeton Variable Insurance Products Trust are generally available only through insurance company variable contracts. 01/05 Not part of the semiannual report [LOGO OMITTED] FRANKLIN[R] TEMPLETON[R] INVESTMENTS 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 Mellon Investor Services LLC P.O. Box 3315 South Hackensack, NJ 07606-1915 Toll free number: 1-800/416-5585 Hearing Impaired phone number: 1-800/231-5469 Foreign Shareholders phone number: 201/329-8660 www.melloninvestor.com FUND INFORMATION 1-800/342-5236 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 S2005 04/05 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 11(a), the registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers 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 experts are Fred R. Millsaps and Frank A. Olson, they are "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: Fred R. Millsaps, Frank J. Crothers, Frank A. Olson 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. N/A ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASES. N/A ITEM 9. SUBMISSION OF MATTERS OF 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 10. 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 11. EXHIBITS (a) Code of Ethics (b)(1) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and Galen G. Vetter, Chief Financial Officer (b)(2) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and Galen G. Vetter, Chief Financial 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/JIMMY D. GAMBILL Chief Executive Officer - Finance and Administration Date April 25, 2005 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/JIMMY D. GAMBILL Chief Executive Officer - Finance and Administration Date April 25, 2005 By /s/GALEN G. VETTER Chief Financial Officer Date April 25, 2005 EX-99.CODE ETH 2 ncsr-code704.txt PRINCIPAL EXECUTIVE & SENIOR FINANCIAL OFFICERS CODE CODE OF ETHICS FOR PRINCIPAL EXECUTIVES & SENIOR FINANCIAL OFFICERS - ------------------------------------------------------------------------------ PROCEDURES Dated July 2004 - ------------------------------------------------------------------------------- FRANKLIN TEMPLETON FUNDS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS I. Covered Officers and Purpose of the Code This code of ethics (the "Code") applies to the Principal Executive Officers, Principal Financial Officer and Principal Accounting Officer (the "Covered Officers," each of whom is set forth in Exhibit A) of each investment company advised by a Franklin Resources subsidiary and that is registered with the United States Securities & Exchange Commission ("SEC") (collectively, "FT Funds") for the purpose of promoting: o Honest and ethical conduct, including the ethical resolution of actual or apparent conflicts of interest between personal and professional relationships; o Full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by or on behalf of the FT Funds; o Compliance with applicable laws and governmental rules and regulations; o The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o Accountability for adherence to the Code. Each Covered Officer will be expected to adhere to a high standard of business ethics and must be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Franklin Resources, Inc. has separately adopted the CODE OF ETHICS AND BUSINESS CONDUCT ("Business Conduct"), which is applicable to all officers, directors and employees of Franklin Resources, Inc., including Covered Officers. It summarizes the values, principles and business practices that guide the employee's business conduct and also provides a set of basic principles to guide officers, directors and employees regarding the minimum ethical requirements expected of them. It supplements the values, principles and business conduct identified in the Code and other existing employee policies. Additionally, the Franklin Templeton Funds have separately adopted the CODE OF ETHICS AND POLICY STATEMENT ON INSIDER TRADING governing personal securities trading and other related matters. The Code for Insider Trading provides for separate requirements that apply to the Covered Officers and others, and therefore is not part of this Code. Insofar as other policies or procedures of Franklin Resources, Inc., the Funds, the Funds' adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superceded by this Code to the extent that they overlap or conflict with the provisions of this Code. Please review these other documents or consult with the Legal Department if have questions regarding the applicability of these policies to you. III. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, the FT Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of apposition with the FT Funds. Certain conflicts of interest arise out of the relationships between Covered Officers and the FT Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the FT Funds because of their status as "affiliated persons" of the FT Funds. The FT Funds' and the investment advisers' compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the FT Funds, the investment advisers and the fund administrator of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the FT Funds, for the adviser, the administrator, or for all three), be involved in establishing policies and implementing decisions that will have different effects on the adviser, administrator and the FT Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the FT Funds, the adviser, and the administrator and is consistent with the performance by the Covered Officers of their duties as officers of the FT Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the FT Funds' Boards of Directors ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the FT Funds. Each Covered Officer must: o Not use his or her personal influence or personal relationships improperly to influence investment decisions orfinancial reporting by the FT Funds whereby the Covered Officer would benefit personally to the detriment of the FT Funds; o Not cause the FT Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the FT Funds; o Not retaliate against any other Covered Officer or any employee of the FT Funds or their affiliated persons for reports of potential violations that are made in good faith; o Report at least annually the following affiliations or other relationships:/ 1 o all directorships for public companies and all companies that are required to file reports with the SEC; o any direct or indirect business relationship with any independent directors of the FT Funds; o any direct or indirect business relationship with any independent public accounting firm (which are not related to the routine issues related to the firm's service as the Covered Persons accountant); and o any direct or indirect interest in any transaction with any FT Fund that will benefit the officer (not including benefits derived from the advisory, sub-advisory, distribution or service agreements with affiliates of Franklin Resources). These reports will be reviewed by the Legal Department for compliance with the Code. There are some conflict of interest situations that should always be approved in writing by Franklin Resources General Counsel or Deputy General Counsel, if material. Examples of these include/2: o Service as a director on the board of any public or private Company; o The receipt of any gifts in excess of $100 from any person, from any corporation or association o The receipt of any entertainment from any Company with which the FT Funds has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety. Notwithstanding the foregoing, the Covered Officers must obtain prior approval from the Franklin Resources General Counsel for any entertainment with a value in excess of $1000. o Any ownership interest in, or any consulting or employment relationship with, any of the FT Fund's service providers, other than an investment adviser, principal underwriter, administrator or any affiliated person thereof; - ----------------------------- 1 Reporting of these affiliations or other relationships shall be made by completing the annual Directors and Officers Questionnaire and returning the questionnaire to Franklin Resources Inc, General Counsel or Deputy General Counsel. 2 Any activity or relationship that would present a conflict for a Covered Officer may also present a conflict for the Covered Officer if a member of the Covered Officer's immediate family engages in such an activity or has such a relationship. The Cover Person should also obtain written approval by FT's General Counsel in such situations. o A direct or indirect financial interest in commissions, transaction charges or spreads paid by the FT Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. Franklin Resources General Counsel or Deputy General Counsel will provide a report to the FT Funds Audit Committee of any approvals granted at the next regularly scheduled meeting. IV. Disclosure and Compliance o Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the FT Funds; o Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the FT Funds to others, whether within or outside the FT Funds, including to the FT Funds' directors and auditors, and to governmental regulators and self-regulatory organizations; o Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the FT Funds, the FT Fund's adviser and the administrator with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the FT Funds file with, or submit to, the SEC and in other public communications made by the FT Funds; and o It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. V. Reporting and Accountability Each Covered Officer must: o Upon becoming a covered officer affirm in writing to the Board that he or she has received, read, and understands the Code (see Exhibit B); o Annually thereafter affirm to the Board that he has complied with the requirements of the Code; and o Notify Franklin Resources' General Counsel or Deputy General Counsel promptly if he or she knows of any violation of this Code. Failure to do so is itself is a violation of this Code. Franklin Resources' General Counsel and Deputy General Counsel are responsible for applying this Code to specific situations in which questions are presented under it and have the authority to interpret this Code in any particular situation./3 However, the Independent Directors of the respective FT Funds will consider any approvals or waivers/4 sought by any Chief Executive Officers of the Funds. - ----------------- 3 Franklin Resources General Counsel and Deputy General Counsel are authorized to consult, as appropriate, with members of the Audit Committee, counsel to the FT Funds and counsel to the Independent Directors, and are encouraged to do so. 4 Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of a material departure from a provision of the code of ethics" and "implicit waiver," which must also be disclosed, as "the registrant's failure to take action within a reasonable period of time regarding a material departure from a provision of the code of ethics that has been made known to an executive officer" of the registrant. See Part X. The FT Funds will follow these procedures in investigating and enforcing this Code: o Franklin Resources General Counsel or Deputy General Counsel will take all appropriate action to investigate any potential violations reported to the Legal Department; o If, after such investigation, the General Counsel or Deputy General Counsel believes that no violation has occurred, The General Counsel is not required to take any further action; o Any matter that the General Counsel or Deputy General Counsel believes is a violation will be reported to the Independent Directors of the appropriate FT Fund; o If the Independent Directors concur that a violation has occurred, it will inform and make a recommendation to the Board of the appropriate FT Fund or Funds, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; o The Independent Directors will be responsible for granting waivers, as appropriate; and o Any changes to or waivers of this Code will, to the extent required, are disclosed as provided by SEC rules./5 VI. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the FT Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the FT Funds, the FT Funds' advisers, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The FT Code of Ethics and Policy Statement On Insider Trading, adopted by the FT Funds, FT investment advisers and FT Fund's principal underwriter pursuant to Rule 17j-1 under the Investment Company Act, the Code of Ethics and Business Conduct and more detailed policies and procedures set forth in FT's Employee Handbook are separate requirements applying to the Covered Officers and others, and are not part of this Code. VII. Amendments Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the FT Funds' Board including a majority of independent directors. VIII. Confidentiality All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the FT Funds' Board and their counsel. - --------------------- 5 See Part X. IX. Internal Use The Code is intended solely for the internal use by the FT Funds and does not constitute an admission, by or on behalf of any FT Funds, as to any fact, circumstance, or legal conclusion. X. Disclosure on Form N-CSR Item 2 of Form N-CSR requires a registered management investment company to disclose annually whether, as of the end of the period covered by the report, it has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these officers are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, it must explain why it has not done so. The registrant must also: (1) file with the SEC a copy of the code as an exhibit to its annual report; (2) post the text of the code on its Internet website and disclose, in its most recent report on Form N-CSR, its Internet address and the fact that it has posted the code on its Internet website; or (3) undertake in its most recent report on Form N-CSR to provide to any person without charge, upon request, a copy of the code and explain the manner in which such request may be made. Disclosure is also required of amendments to, or waivers (including implicit waivers) from, a provision of the code in the registrant's annual report on Form N-CSR or on its website. If the registrant intends to satisfy the requirement to disclose amendments and waivers by posting such information on its website, it will be required to disclose its Internet address and this intention. The Legal Department shall be responsible for ensuring that: o a copy of the Code is filed with the SEC as an exhibit to each Fund's annual report; and o any amendments to, or waivers (including implicit waivers) from, a provision of the Code is disclosed in the registrant's annual report on Form N-CSR. In the event that the foregoing disclosure is omitted or is determined to be incorrect, the Legal Department shall promptly file such information with the SEC as an amendment to Form N-CSR. In such an event, the Fund Chief Compliance Officer shall review the Code and propose such changes to the Code as are necessary or appropriate to prevent reoccurrences. EXHIBIT A Persons Covered by the Franklin Templeton Funds Code of Ethics August 2004 FRANKLIN GROUP OF FUNDS Edward B. Jamieson, President and Chief Executive Officer - Investment Management Charles B. Johnson, President and Chief Executive Officer - Investment Management Gregory E. Johnson, President and Chief Executive Officer - Investment Management Rupert H. Johnson, Jr. President and Chief Executive Officer - Investment Management William J. Lippman, President and Chief Executive Officer - Investment Management Christopher Molumphy President and Chief Executive Officer - Investment Management Jimmy D. Gambill, Senior Vice President and Chief Executive Officer - Finance and Administration Galen G. Vetter Chief Financial Officer FRANKLIN MUTUAL SERIES FUNDS David Winters Chairman of the Board, President, Chief Executive Officer-Investment Management Jimmy D. Gambill Senior Vice President and Chief Executive Officer- Finance and Administration Galen G. Vetter Chief Financial Officer TEMPLETON GROUP OF FUNDS Jeffrey A. Everett President and Chief Executive Officer - Investment Management Martin L. Flanagan President and Chief Executive Officer - Investment Management Mark Mobius President and Chief Executive Officer - Investment Management Christopher J. Molumphy President and Chief Executive Officer - Investment Management Gary P. Motyl President and Chief Executive Officer - Investment Management Donald F. Reed President and Chief Executive Officer - Investment Management Jimmy D. Gambill, Senior Vice President and Chief Executive Officer - Finance and Administration Galen G. Vetter Chief Financial Officer EXHIBIT B ACKNOWLEDGMENT FORM JULY 2004 FRANKLIN TEMPLETON FUNDS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS. INSTRUCTIONS: 1. Complete all sections of this form. 2. Print the completed form, sign, and date. 3. Submit completed form to FT's General Counsel within 10 days of becoming a Covered Officer and by January 30th of each subsequent year. INTER-OFFICE MAIL: Murray Simpson, General Counsel, Legal SM-920/2 TELEPHONE: (650) 312-7331 Fax: (650) 312-2221 E-MAIL: Simpson, Murray (internal address); mlsimpson@frk.com (external address) - ---------------------------------------------------------------------------- COVERED OFFICER'S NAME: - ---------------------------------------------------------------------------- TITLE: - ---------------------------------------------------------------------------- DEPARTMENT: - ---------------------------------------------------------------------------- LOCATION: - ---------------------------------------------------------------------------- CERTIFICATION FOR YEAR ENDING: - ---------------------------------------------------------------------------- TO: Franklin Resources General Counsel, Legal Department I hereby acknowledge receipt of a copy of Franklin Templeton Fund's code of ethics for Principal Executive Officers and Senior Financial Officers (the "Code") that I have read and understand. I will comply fully with all provisions of the Code to the extent they apply to me during the period of my employment. I further understand and acknowledge that any violation of the Code may subject me to disciplinary action, including termination of employment - ---------------------------- ---------------------- Signature Date signed EX-99.CERT 3 d15184_ex99cert.txt CERTIFCATIONS PURSUANT TO SECTION 302 I, Jimmy D. Gambill, certify that: 1. I have reviewed this report on Form N-CSR of Templeton Global Income Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. April 25, 2005 S\JIMMY D. GAMBILL Jimmy D. Gambill Chief Executive Officer - Finance and Administration I, Galen G. Vetter, certify that: 1. I have reviewed this report on Form N-CSR of Templeton Global Income Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. April 25, 2005 S\GALEN G. VETTER Galen G. Vetter Chief Financial Officer EX-99.906 CERT 4 d15184_ex99-906cert.txt CERTIFCATIONS PURSUANT TO SECTION 302 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Galen G. Vetter, Chief Financial Officer of the TEMPLETON GLOBAL INCOME FUND (the "Registrant"), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. The periodic report on Form N-CSR of the Registrant for the period ended 2/28/05 (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: April 25, 2005 S\GALEN G. VETTER Galen G. Vetter Chief Financial Officer A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO REGISTRANT AND WILL BE RETAINED BY REGISTRANT AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Jimmy D. Gambill, Chief Executive Officer of the TEMPLETON GLOBAL INCOME FUND (the "Registrant"), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. The periodic report on Form N-CSR of the Registrant for the period ended 2/28/05 (the "Form N-CSR") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: April 25, 2005 S\JIMMY D. GAMBILL Jimmy D. Gambill Chief Executive Officer - Finance and Administration A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO REGISTRANT AND WILL BE RETAINED BY REGISTRANT AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. -----END PRIVACY-ENHANCED MESSAGE-----