-----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, EuvY4os7buFvb9e+HwlEsI2peAOGMprBbQGkrhNUxOXzthHrDVv7+sf3tMh3sS3z 5AzlMT/uH6IGx8qN0QG9Dw== 0000828803-10-000008.txt : 20100429 0000828803-10-000008.hdr.sgml : 20100429 20100429095026 ACCESSION NUMBER: 0000828803-10-000008 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20100228 FILED AS OF DATE: 20100429 DATE AS OF CHANGE: 20100429 EFFECTIVENESS DATE: 20100429 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: 10779115 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 gim_ncsrs022810.txt GIM NCSRS 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., SUITE 2100, FORT LAUDERDALE, FL 33394-3091 ------------------------------------------------------------------- (Address of principal executive offices) (Zip code) CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 -------------------------------------------------------------- (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: 2/28/10 -------- ITEM 1. REPORTS TO STOCKHOLDERS. FEBRUARY 28, 2010 SEMIANNUAL REPORT (GRAPHIC) FIXED INCOME TEMPLETON GLOBAL INCOME FUND (FRANKLIN TEMPLETON INVESTMENTS(R) LOGO) Franklin - TEMPLETON - Mutual Series Franklin Templeton Investments GAIN FROM OUR PERSPECTIVE(R) Franklin Templeton's distinct multi-manager structure combines the specialized expertise of three world-class investment management groups-- Franklin, Templeton and Mutual Series. SPECIALIZED EXPERTISE Each of our portfolio management groups operates autonomously, relying on its own research and staying true to the unique investment disciplines that underlie its success. FRANKLIN. Founded in 1947, Franklin is a recognized leader in fixed income investing and also brings expertise in growth- and value-style U.S. equity investing. TEMPLETON. Founded in 1940, Templeton pioneered international investing and, in 1954, launched what has become the industry's oldest global fund. Today, with offices in over 25 countries, Templeton offers investors a truly global perspective. MUTUAL SERIES. Founded in 1949, Mutual Series is dedicated to a unique style of value investing, searching aggressively for opportunity among what it believes are undervalued stocks, as well as arbitrage situations and distressed securities. TRUE DIVERSIFICATION Because our management groups work independently and adhere to different investment approaches, Franklin, Templeton and Mutual Series funds typically have distinct portfolios. That's why our funds can be used to build truly diversified allocation plans covering every major asset class. RELIABILITY YOU CAN TRUST At Franklin Templeton Investments, we seek to consistently provide investors with exceptional risk-adjusted returns over the long term, as well as the reliable, accurate and personal service that has helped us become one of the most trusted names in financial services. MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS (GRAPHIC) Not part of the semiannual report Contents SEMIANNUAL REPORT Templeton Global Income Fund............................................... 1 Performance Summary........................................................ 7 Important Notice to Shareholders........................................... 8 Financial Highlights and Statement of Investments.......................... 9 Financial Statements....................................................... 24 Notes to Financial Statements.............................................. 27 Annual Meeting of Shareholders............................................. 37 Dividend Reinvestment and Cash Purchase Plan............................... 38 Shareholder Information.................................................... 41
Semiannual Report Templeton Global Income Fund YOUR FUND'S GOALS AND MAIN INVESTMENTS: Templeton Global Income Fund seeks high, current income, with a secondary goal of capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in income-producing securities, including debt securities of U.S. and foreign issuers, including emerging markets. PORTFOLIO BREAKDOWN Based on Total Net Assets as of 2/28/10 (PIE CHART) Government Bonds............................ 90.5% Municipal Bonds............................. 3.7% Short-Term Investments & Other Net Assets... 5.8%
Dear Shareholder: We are pleased to bring you Templeton Global Income Fund's semiannual report for the period ended February 28, 2010. THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE SOI BEGINS ON PAGE 10. Semiannual Report | 1 GEOGRAPHIC BREAKDOWN Based on Total Net Assets as of 2/28/10 Asia Pacific 36.3% Americas 26.1% Other Europe 23.4% Middle East & Africa 6.3% Supranational* 4.3% Other Net Assets 3.6%
* The Fund's supranational investments were denominated in the Mexican peso, New Zealand dollar, Norwegian krone and U.S. dollar. PERFORMANCE OVERVIEW For the six months under review, Templeton Global Income Fund delivered cumulative total returns in U.S. dollar terms of +10.40% based on market price and +9.73% based on net asset value. The Fund outperformed the J.P. Morgan (JPM) Global Government Bond Index (GGBI), which posted cumulative total returns of +1.59% in local currency terms and +1.07% in U.S. dollar terms for the same period.(1) You can find the Fund's long-term performance data in the Performance Summary on page 7. ECONOMIC AND MARKET OVERVIEW During the six months under review, the global economic recovery took hold and strengthened. For most countries, economic growth reached its low point in 2009's second quarter, and the subsequent rebound in activity benefited many bond and currency markets. Improved economic growth in the U.S., eurozone and Japan was accompanied by contained inflationary pressures, which allowed major central banks to leave interest rates at very low levels and maintain ample liquidity. Although the U.S. Federal Reserve Board and the European Central Bank began preparing for eventual tightening, Japan increased its level of monetary accommodation. Outside of the G-3 (U.S., eurozone and Japan), other central banks such as those of Australia and Norway began to normalize their interest rate policies given stronger growth dynamics and pricing pressures. During the period, differentiation in recovery strength increased across regions and countries. For example, U.S. gross domestic product (GDP) rose 0.1% year-over-year in 2009's fourth quarter, while Japan's contracted 0.4% and the eurozone's shrank 2.1%.(2) However, the positive figure recorded in the U.S. was meager compared with growth rates outside developed economies. Real GDP in fourth quarter 2009 rose 10.7% in China year-over-year, in India and South Korea, 6.0%, in Brazil, 4.3%, and in Poland, 3.1%.(3) Although increased government spending and financial sector bailouts helped mitigate the recession's severity in developed economies like those of the U.S. and Europe, the fiscal deterioration led to upward pressure on public debt (1.) Source: (C) 2010 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The JPM GGBI tracks total returns for liquid, fixed-rate, domestic government bonds with maturities greater than one year issued by developed countries globally. The index is unmanaged and includes reinvested interest. One cannot invest directly in an index, and an index is not representative of the Fund's portfolio. (2.) Sources: Economic and Social Research Institute (Japan); Eurostat (eurozone). (3.) Sources: National Bureau of Statistics (China); India Central Statistical Organization; Bank of Korea (South Korea); IBGE (Brazil); Polish Statistical Office. 2 | Semiannual Report ratios. The International Monetary Fund estimated in its October 2009 World Economic Outlook that the debt-to-GDP ratio of developed G-20 countries would rise from 78% in 2007 to nearly 107% by 2010, while the corresponding debt ratio of emerging G-20 countries would rise from 37% to nearly 40% over the same time.(4) Increased investor and institutional scrutiny of sovereign debt sustainability in several eurozone economies led to euro weakness and rising interest rate spreads for those governments. Concerns about developed economies' sovereign credit fundamentals had limited spillover into emerging markets. Additionally, ample liquidity supported by low interest rates maintained by many major central banks underpinned capital flows to emerging markets given comparatively better economic growth dynamics, interest rate prospects and credit fundamentals. INVESTMENT STRATEGY We invest selectively in bonds around the world to generate income for the Fund, seeking opportunities while monitoring changes in interest rates, currency exchange rates and credit risks. MANAGER'S DISCUSSION The Fund's total return was influenced by various factors, including interest rate developments, currency movements and exposure to sovereign debt markets. INTEREST RATE STRATEGY Relative to the JPM GGBI, the Fund benefited from its interest rate strategy during the six-month reporting period. Given historically low interest rates in the world's largest economies, we maintained a lower duration than that of the index. We held no U.S. Treasury securities and had limited duration exposure in other developed bond markets. Although U.S. inflationary pressures remained subdued by slack in the economy, characterized by a relatively high 9.7% unemployment rate as of February 2010 and increased labor productivity, we avoided exposure to U.S. government bonds given a large fiscal deficit (9.9% of GDP in 2009) and what we believed were more attractive yield opportunities elsewhere.(5) During the reporting period, the Fund's relative performance benefited from a lack of exposure to U.S. Treasuries as long-term government bond yields rose 21 basis points (bps) from 3.40% to 3.61%. WHAT IS DURATION? Duration is a measure of a bond's price sensitivity to interest rate changes. In general, a portfolio of securities with a lower duration can be expected to be less sensitive to interest rate changes than a portfolio with a higher duration. (4.) The G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging market countries on key issues related to global economic stability. It is made up of the finance ministers and central bank governors of 19 countries and the European Union. (5.) Sources: Bureau of Labor Statistics; Congressional Budget Office. Semiannual Report | 3 CURRENCY BREAKDOWN 2/28/10
% OF TOTAL NET ASSETS ---------- AMERICAS 58.2% U.S. Dollar 34.0% Brazilian Real 9.1% Chilean Peso 7.3% Mexican Peso 4.4% Peruvian Nuevo Sol 3.4% ASIA PACIFIC 36.2% South Korean Won 15.2% Malaysian Ringgit 14.7% Australian Dollar 10.5% Indonesian Rupiah 8.4% Indian Rupee 6.4% Philippine Peso 5.0% Chinese Yuan 4.9% Sri Lankan Rupee 2.0% New Zealand Dollar* -10.7% Japanese Yen* -20.2% MIDDLE EAST & AFRICA 5.2% Israeli New Shekel 4.4% Egyptian Pound 0.8% EUROPE 0.4% Swedish Krona 11.9% Polish Zloty 8.0% Norwegian Krone 6.6% Euro* -26.1%
* Holding is a negative percentage because of the Fund's holdings of forward currency exchange contracts. Conversely, the Fund's underweighted eurozone position and lack of exposure to Japanese government bonds detracted from relative performance. We maintained duration exposure in select cases where we viewed significant slack in an economy, such as Mexico's, or prospects for a drop in risk premium, such as in Indonesia. The Fund benefited from duration exposure in Mexico where long-term bond yields fell 56 bps from 8.16% to 7.60%. Mexico's economic recovery was relatively weak, with fourth quarter 2009 GDP contracting an annualized 2.3%, supporting disinflation, or a slowdown in the rate of price increases.(6) Additionally, Mexico passed fiscal reform legislation to increase budget revenues and help secure fiscal stability. The Fund also benefited from duration exposure in Indonesia, where long-term bond yields fell 66 bps from 10.51% to 9.85%. CURRENCY STRATEGY The Fund's currency strategy benefited relative performance. Fund positioning during the reporting period reflected growing divergence in economic performance among the G-3 and between developed and emerging market economies. The Fund benefited from its large net negative position in the euro, which fell 4.90% against the U.S. dollar during the period.(7) We viewed the euro-zone's economic growth prospects versus the U.S. as hampered by Europe's relatively more constrained credit conditions, lower productivity, less flexible labor market, and concerns involving the fiscal creditworthiness of Greece. Conversely, the Fund's net negative Japanese yen position detracted from performance given the yen's 4.39% appreciation against the U.S. dollar.(7) We continued to view Japan as a significant economic underperformer among major industrial countries. While the U.S. and eurozone discussed strategies for scaling back unconventional monetary stimulus, Japan increased liquidity injections into its commercial banking system to counter increased risks to growth and greater deflation pressure. January 2010 consumer prices rose an annualized 2.6% in the U.S. and 1.0% in the eurozone but fell an annualized 1.3% in Japan.(8) We also held net negative yen exposure to protect against rising U.S. Treasury yields given our analysis of a strong correlation between the value of the Japanese yen versus the U.S. dollar and the differential between interest rates in the U.S. and Japan. (6.) Source: National Institute of Statistics and Geography. (7.) Source: IDC/Exshare. (8.) Sources: Bureau of Labor Statistics (U.S.); Eurostat (eurozone); Economic and Social Research Institute (Japan). 4 | Semiannual Report The Fund also benefited from exposure to Asian currencies. Relative to the U.S. dollar, the Indonesian rupiah rose 7.98%, the South Korean won, 7.67%, the Australian dollar, 6.22%, and the Indian rupee, 5.90%, during the six months under review.(7) Asia's positive economic growth momentum led policymakers to begin tightening monetary policy. Australia was one of the first developed economy to increase interest rates, and China and India also tightened policy during the period. While the region's positive growth differential and rising interest rates attracted capital inflows, its overall balance of payment positions remained supportive as evidenced by the region's reserve accumulation. Exposure to Latin American currencies also contributed to relative performance. For example, the Chilean peso rose 4.88% and the Brazilian real, 3.37%, against the U.S. dollar over the period.(7) GLOBAL SOVEREIGN DEBT AND CREDIT STRATEGY The Fund invested in hard currency-denominated sovereign debt. As an asset class, these securities typically compensate for greater credit risk by offering higher yields relative to comparable maturity U.S. and European benchmark treasury yields. U.S. dollar-denominated emerging market debt generated a six-month total return of +8.42% as measured by the J.P. Morgan (JPM) Emerging Markets Bond Index Global (EMBIG).(9) Sovereign interest rate spreads fell from 389 bps at the beginning of the reporting period to 311 bps at period-end as emerging market credit yields declined and the U.S. Treasury yield curve steepened.(10) Exposure to sovereign credits helped the Fund's performance relative to the JPM GGBI. WHAT IS BALANCE OF PAYMENTS? Balance of payments is a record of all of a country's exports and imports of goods and services, borrowing and lending with the rest of the world during a particular time period. It helps a country evaluate its competitive strengths and weaknesses and forecast the strength of its currency. (9.) Source: (C) 2010 Morningstar. The JPM EMBIG tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans and Eurobonds. (10.) Source: J.P. Morgan. Semiannual Report | 5 Thank you for your continued participation in Templeton Global Income Fund. We look forward to serving your future investment needs. Sincerely, (PHOTO OF MICHAEL HASENSTAB) /s/ Michael Hasenstab Michael Hasenstab, Ph.D. Portfolio Manager Templeton Global Income Fund THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS AS OF FEBRUARY 28, 2010, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT OUR MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY. THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET, COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES CONSIDERED RELIABLE, BUT THE INVESTMENT MANAGER MAKES NO REPRESENTATION OR WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR INVESTMENT MANAGEMENT PHILOSOPHY. 6 | Semiannual Report Performance Summary as of 2/28/10 Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not reflect any sales charges paid at inception or brokerage commissions paid on secondary market purchases. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gains distributions, if any, or any realized gains on the sale of Fund shares. PRICE AND DISTRIBUTION INFORMATION
SYMBOL: GIM CHANGE 2/28/10 8/31/09 - ----------- ------ ------- ------- Net Asset Value (NAV) +$0.60 $9.44 $8.84 Market Price (NYSE) +$0.68 $9.83 $9.15 DISTRIBUTIONS (9/1/09-2/28/10) Dividend Income $0.2520
PERFORMANCE
6-MONTH 1-YEAR 5-YEAR 10-YEAR ------- ------- ------- -------- Cumulative Total Return(1) Based on change in NAV(2) +9.73% +31.80% +65.28% +211.04% Based on change in market price(3) +10.40% +52.21% +67.87% +305.92% Average Annual Total Return(1) Based on change in NAV(2) +9.73% +31.80% +10.57% +12.02% Based on change in market price(3) +10.40% +52.21% +10.92% +15.04%
PERFORMANCE DATA REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT PERFORMANCE MAY DIFFER FROM FIGURES SHOWN. ENDNOTES CHANGES IN INTEREST RATES WILL AFFECT THE VALUE OF THE FUND'S PORTFOLIO AND ITS SHARE PRICE AND YIELD. BOND PRICES GENERALLY MOVE IN THE OPPOSITE DIRECTION OF INTEREST RATES. THUS, AS PRICES OF BONDS IN THE FUND ADJUST TO A RISE IN INTEREST RATES, THE FUND'S SHARE PRICE MAY DECLINE. SPECIAL RISKS ARE ASSOCIATED WITH FOREIGN INVESTING, INCLUDING CURRENCY FLUCTUATIONS, ECONOMIC INSTABILITY AND POLITICAL DEVELOPMENTS. INVESTMENTS IN DEVELOPING MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN ADDITION TO THOSE ASSOCIATED WITH THEIR RELATIVELY SMALL SIZE AND LESSER LIQUIDITY. THE FUND'S USE OF FOREIGN CURRENCY TECHNIQUES INVOLVES SPECIAL RISKS AS SUCH TECHNIQUES MAY NOT ACHIEVE THE ANTICIPATED BENEFITS AND/OR MAY RESULT IN LOSSES TO THE FUND. ALSO, AS A NONDIVERSIFIED INVESTMENT COMPANY, THE FUND MAY INVEST IN A RELATIVELY SMALL NUMBER OF ISSUERS AND, AS A RESULT, BE SUBJECT TO A GREATER RISK OF LOSS WITH RESPECT TO ITS PORTFOLIO SECURITIES. (1.) Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Six-month return has not been annualized. (2.) Assumes reinvestment of distributions based on net asset value. (3.) Assumes reinvestment of distributions based on the dividend reinvestment and cash purchase plan. Semiannual Report | 7 Important Notice to Shareholders SHARE REPURCHASE PROGRAM The Fund's Board previously authorized management to implement an open-market share repurchase program pursuant to which the Fund may purchase Fund shares, from time to time, in open-market transactions, at the discretion of management. This authorization remains in effect. EXCHANGE-TRADED PUT AND CALL OPTIONS ON INTEREST RATE/BOND FUTURES The Fund may purchase options on interest rate/bond futures to help hedge the Fund's risk of potentially rising interest rates. An option on an interest rate or bond futures contract is an exchange-traded contract in which a seller grants to a buyer the right (but not the obligation) to buy or sell a futures contract. The buyer pays the seller a premium for the option. Contract standardization, together with the clearing corporation guarantee, facilitates options trading. A buyer or seller of an exchange-traded option can liquidate an open position in an option before expiration by making an offsetting transaction. For example, the holder of a put option can liquidate his position by selling a put with the same strike price and expiration date. As with futures contracts, most positions in standardized options are liquidated with an offsetting transaction before the expiration date rather than being held for the purpose of selling or buying the underlying instrument. The net profit or loss in an option transaction is determined by the difference between the premium originally paid and the price received when it is sold. Similar to futures, options on futures trade on exchanges designated as contract markets. They provide transparent pricing/valuation and the elimination of counterparty risk. Unlike futures contracts, buyers of options are not required to deposit funds in a margin account because their risk of loss is limited to the premium paid for the option. If the Investment Manager's judgment regarding the general direction of market prices or interest rates is incorrect, the Fund's overall performance would be negatively impacted. When options on futures contracts are used for hedging, there may be an imperfect correlation between movements in the prices of the underlying asset(s) on which the options on futures contract is based and movements in the prices of the assets sought to be hedged. Adverse market movements could cause the Fund to experience substantial losses. Futures contracts that are traded on foreign exchanges, as well as options on such contracts, may not be as liquid as those purchased on Commodity Futures Trading Commission designated contract markets. 8 | Semiannual Report Templeton Global Income Fund FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED AUGUST 31, FEBRUARY 28, 2010 ---------------------------------------------------------- (UNAUDITED) 2009 2008 2007 2006 2005 ----------------- ---------- ---------- ---------- ---------- ---------- PER SHARE OPERATING PERFORMANCE (for a share outstanding throughout the period) Net asset value, beginning of period ................ $ 8.84 $ 8.81 $ 8.95 $ 8.93 $ 9.02 $ 8.77 ---------- ---------- ---------- ---------- ---------- ---------- Income from investment operations: Net investment income(a) ......................... 0.28 0.46 0.44 0.40 0.37 0.39 Net realized and unrealized gains ................ 0.57 0.91 0.49 0.52 0.33 0.49 ---------- ---------- ---------- ---------- ---------- ---------- Total from investment operations .................... 0.85 1.37 0.93 0.92 0.70 0.88 ---------- ---------- ---------- ---------- ---------- ---------- Less distributions from net investment income and net foreign currency gains ................... (0.25) (1.34) (1.07) (0.90) (0.79) (0.63) ---------- ---------- ---------- ---------- ---------- ---------- Net asset value, end of period ...................... $ 9.44 $ 8.84 $ 8.81 $ 8.95 $ 8.93 $ 9.02 ========== ========== ========== ========== ========== ========== Market value, end of period(b) ...................... $ 9.83 $ 9.15 $ 8.97 $ 9.01 $ 9.15 $ 8.85 ========== ========== ========== ========== ========== ========== Total return (based on market value per share)(c) ... 10.40% 20.48% 12.25% 8.63% 13.39% 10.61% RATIOS TO AVERAGE NET ASSETS(d) Expenses(e) ......................................... 0.74% 0.74% 0.74% 0.75% 0.80% 0.76% Net investment income ............................... 6.08% 5.52% 4.82% 4.45% 4.16% 4.22% SUPPLEMENTAL DATA Net assets, end of period (000's) ................... $1,240,181 $1,160,282 $1,155,981 $1,170,414 $1,161,850 $1,172,240 Portfolio turnover rate ............................. 11.70% 57.11% 64.44% 49.24% 49.20% 41.81%
(a) Based on average daily shares outstanding. (b) Based on the last sale on the New York Stock Exchange. (c) Total return is not annualized for periods less than one year. (d) Ratios are annualized for periods less than one year. (e) Benefit of expense reduction rounds to less than 0.01%. The accompanying notes are an integral part of these financial statements. Semiannual Report | 9 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED)
PRINCIPAL AMOUNT(a) VALUE --------------------- ---------------- BONDS 90.5% ARGENTINA 2.6% (b, c) Government of Argentina, senior bond, FRN, 0.389%, 8/03/12 ............ 98,977,000 $ 32,167,525 ---------------- AUSTRALIA 7.9% New South Wales Treasury Corp., 6.00%, 5/01/12 ..................................................... 10,565,000 AUD 9,681,897 senior note, 5.50%, 3/01/17 ........................................ 36,971,000 AUD 32,906,913 Queensland Treasury Corp., 13, 6.00%, 8/14/13 ................................................. 41,536,000 AUD 38,210,096 17, 6.00%, 9/14/17 ................................................. 12,395,000 AUD 11,321,980 (d) 144A, 7.125%, 9/18/17 .............................................. 7,480,000 NZD 5,589,590 ---------------- 97,710,476 ---------------- BRAZIL 7.4% Nota Do Tesouro Nacional, 10.00%, 1/01/12 .................................................... 23,075(e) BRL 12,436,045 10.00%, 1/01/14 .................................................... 15,000(e) BRL 7,732,261 10.00%, 1/01/17 .................................................... 54,900(e) BRL 26,747,048 (f) Index Linked, 6.00%, 5/15/15 ....................................... 20,140(e) BRL 20,585,469 (f) Index Linked, 6.00%, 5/15/45 ....................................... 23,625(e) BRL 23,840,360 ---------------- 91,341,183 ---------------- CANADA 1.4% Province of Manitoba, 6.375%, 9/01/15 ................................. 14,800,000 NZD 10,707,609 Province of Ontario, 6.25%, 6/16/15 ................................... 8,460,000 NZD 6,108,641 ---------------- 16,816,250 ---------------- HUNGARY 2.3% Government of Hungary, 3.50%, 7/18/16 ..................................................... 905,000 EUR 1,161,437 4.375%, 7/04/17 .................................................... 4,435,000 EUR 5,897,822 5.75%, 6/11/18 ..................................................... 12,690,000 EUR 17,871,766 senior note, 3.875%, 2/24/20 ....................................... 2,700,000 EUR 3,335,366 ---------------- 28,266,391 ---------------- INDONESIA 10.3% Government of Indonesia, FR19, 14.25%, 6/15/13 .............................................. 84,050,000,000 IDR 10,563,564 FR20, 14.275%, 12/15/13 ............................................ 81,836,000,000 IDR 10,445,072 FR26, 11.00%, 10/15/14 ............................................. 3,500,000,000 IDR 412,375 FR27, 9.50%, 6/15/15 ............................................... 34,890,000,000 IDR 3,898,113 FR30, 10.75%, 5/15/16 .............................................. 87,035,000,000 IDR 10,226,491 FR31, 11.00%, 11/15/20 ............................................. 335,739,000,000 IDR 38,749,518 FR34, 12.80%, 6/15/21 .............................................. 59,666,000,000 IDR 7,633,632 FR35, 12.90%, 6/15/22 .............................................. 32,530,000,000 IDR 4,161,976 FR36, 11.50%, 9/15/19 .............................................. 23,000,000,000 IDR 2,755,658 FR42, 10.25%, 7/15/27 .............................................. 25,430,000,000 IDR 2,658,127 FR43, 10.25%, 7/15/22 .............................................. 8,450,000,000 IDR 910,384 FR46, 9.50%, 7/15/23 ............................................... 41,250,000,000 IDR 4,161,972
10 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE --------------------- ---------------- BONDS (CONTINUED) INDONESIA (CONTINUED) Government of Indonesia, (continued) FR47, 10.00%, 2/15/28 .............................................. 52,895,000,000 IDR $ 5,404,171 FR48, 9.00%, 9/15/18 ............................................... 18,520,000,000 IDR 1,934,251 (d) senior bond, 144A, 8.50%, 10/12/35 ................................. 2,952,000 3,568,968 (d) senior bond, 144A, 6.625%, 2/17/37 ................................. 2,090,000 2,110,247 (d) senior bond, 144A, 7.75%, 1/17/38 .................................. 7,050,000 7,885,929 (g) senior bond, Reg S, 8.50%, 10/12/35 ................................ 5,510,000 6,661,590 (g) senior bond, Reg S, 7.75%, 1/17/38 ................................. 3,310,000 3,702,471 ---------------- 127,844,509 ---------------- LITHUANIA 2.0% (d) Government of Lithuania, 144A, 6.75%, 1/15/15 ..................................................... 15,000,000 15,862,500 7.375%, 2/11/20 .................................................... 8,825,000 9,166,969 ---------------- 25,029,469 ---------------- MEXICO 4.7% Government of Mexico, M 20, 8.00%, 12/07/23 .............................................. 2,727,000(h) MXN 21,382,904 M 20, 10.00%, 12/05/24 ............................................. 15,000(h) MXN 138,392 M 20, 7.50%, 6/03/27 ............................................... 3,058,000(h) MXN 22,608,262 senior bond, 5.95%, 3/19/19 ........................................ 13,260,000 14,243,892 ---------------- 58,373,450 ---------------- NORWAY 1.4% Government of Norway, 6.00%, 5/16/11 .................................. 96,190,000 NOK 17,035,656 ---------------- PERU 3.4% Government of Peru, 9.91%, 5/05/15 ..................................................... 6,500,000 PEN 2,870,170 7.84%, 8/12/20 ..................................................... 32,200,000 PEN 12,757,577 Series 7, 8.60%, 8/12/17 ........................................... 61,545,000 PEN 26,252,162 ---------------- 41,879,909 ---------------- POLAND 8.6% Government of Poland, 4.75%, 4/25/12 ..................................................... 27,930,000 PLN 9,660,135 5.75%, 4/25/14 ..................................................... 147,355,000 PLN 51,807,962 6.25%, 10/24/15 .................................................... 19,335,000 PLN 6,929,867 5.75%, 9/23/22 ..................................................... 60,500,000 PLN 20,300,170 senior note, 6.375%, 7/15/19 ....................................... 17,000,000 18,478,473 ---------------- 107,176,607 ---------------- QATAR 0.9% (d) Government of Qatar, senior note, 144A, 6.55%, 4/09/19 ................ 10,450,000 11,638,687 ---------------- RUSSIA 4.7% (d) Government of Russia, 144A, 7.50%, 3/31/30 ............................ 51,543,020 58,570,911 ----------------
Semiannual Report | 11 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE --------------------- ---------------- BONDS (CONTINUED) SOUTH AFRICA 2.6% Government of South Africa, 5.25%, 5/16/13 ..................................................... 3,330,000 EUR $ 4,794,664 4.50%, 4/05/16 ..................................................... 1,829,000 EUR 2,505,570 6.875%, 5/27/19 .................................................... 18,620,000 20,807,850 senior note, 6.50%, 6/02/14 ........................................ 775,000 857,367 senior note, 5.875%, 5/30/22 ....................................... 3,355,000 3,369,678 ---------------- 32,335,129 ---------------- SOUTH KOREA 15.3% The Export-Import Bank of Korea, 4.625%, 2/20/17 ...................... 205,000 EUR 281,084 Government of Korea, senior bond, 5.625%, 11/03/25 .................... 620,000 626,911 Korea Deposit Insurance Corp., 07-1, 5.57%, 9/14/12 ............................................... 7,200,000,000 KRW 6,387,440 08-1, 5.28%, 2/15/13 ............................................... 1,232,000,000 KRW 1,084,166 Korea Treasury Bond, 0400-1206, 4.00%, 6/10/12 .......................................... 76,268,710,000 KRW 65,728,267 0475-1112, 4.75%, 12/10/11 ......................................... 69,639,880,000 KRW 61,008,616 0475-1203, 4.75%, 3/10/12 .......................................... 15,946,000,000 KRW 13,966,047 0525-1303, 5.25%, 3/10/13 .......................................... 1,866,530,000 KRW 1,656,529 0525-1509, 5.25%, 9/10/15 .......................................... 4,000,000,000 KRW 3,531,077 0550-1106, 5.50%, 6/10/11 .......................................... 19,068,600,000 KRW 16,868,164 senior note, 7.125%, 4/16/19 ....................................... 15,880,000 18,622,127 ---------------- 189,760,428 ---------------- SRI LANKA 2.0% Government of Sri Lanka, A, 12.00%, 7/15/11 .................................................... 94,150,000 LKR 843,270 8.50%, 1/15/13 ..................................................... 567,300,000 LKR 4,688,375 13.50%, 2/01/13 .................................................... 550,800,000 LKR 5,099,183 11.25%, 7/15/14 .................................................... 585,500,000 LKR 5,032,128 11.00%, 8/01/15 .................................................... 1,103,400,000 LKR 9,547,748 ---------------- 25,210,704 ---------------- (i) SUPRANATIONAL 4.3% Corporacion Andina De Fomento, 8.125%, 6/04/19 ........................ 8,640,000 10,052,948 European Investment Bank, senior note, 4.50%, 5/15/13 ................. 113,650,000 NOK 19,930,309 Inter-American Development Bank, 7.50%, 4/15/15 ..................................................... 8,000,000 NZD 6,112,547 6.00%, 12/15/17 .................................................... 6,000,000 NZD 4,240,572 senior note, 7.50%, 12/05/24 ....................................... 185,000,000 MXN 12,742,549 ---------------- 53,078,925 ---------------- SWEDEN 4.4% Government of Sweden, 5.25%, 3/15/11 .................................. 372,575,000 SEK 54,906,285 ----------------
12 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE --------------------- ---------------- BONDS (CONTINUED) UNITED ARAB EMIRATES 0.9% (d) Emirate of Abu Dhabi, 144A, 6.75%, 4/08/19 ............................ 10,260,000 $ 11,569,330 ---------------- VENEZUELA 2.6% Government of Venezuela, 10.75%, 9/19/13 .................................................... 6,155,000 5,775,236 (g) senior bond, Reg S, 5.375%, 8/07/10 ................................ 19,905,000 19,758,002 Petroleos de Venezuela SA, senior bond, zero cpn., 7/10/11 ............ 7,600,000 6,593,000 ---------------- 32,126,238 ---------------- VIETNAM 0.8% (d) Government of Vietnam, 144A, 6.75%, 1/29/20 ........................... 9,270,000 9,339,525 ---------------- TOTAL BONDS (COST $981,379,705) ....................................... 1,122,177,587 ---------------- MUNICIPAL BONDS 3.7% UNITED STATES AND U.S. TERRITORIES 3.7% Alabama Public Housing Authorities Capital Program Revenue, Series B, FSA Insured, 4.45%, 1/01/24 ........................................ 55,000 54,997 Alabama State University Revenue, General Tuition and Fee, Assured Guaranty, 5.00%, 9/01/29 ..................................................... 5,000 5,231 5.75%, 9/01/39 ..................................................... 5,000 5,430 Bay Area Toll Authority Toll Bridge Revenue, San Francisco Bay Area, Refunding, Series F-1, 5.00%, 4/01/39 ..................................................... 605,000 612,193 5.50%, 4/01/43 ..................................................... 295,000 307,676 Bexar County Hospital District GO, Certificates of Obligation, 5.00%, 2/15/32 ............................................................ 805,000 817,647 Bexar County Revenue, Venue Project, Refunding, Series A, BHAC Insured, 5.25%, 8/15/47 ............................................ 730,000 748,498 California State GO, Refunding, 5.125%, 4/01/33 ......................................... 500,000 465,905 Refunding, 5.00%, 4/01/38 .......................................... 205,000 183,174 Various Purpose, 6.00%, 4/01/38 .................................... 20,130,000 20,753,627 District of Columbia University Revenue, Georgetown University, Refunding, Series D, BHAC Insured, 5.50%, 4/01/36 .................. 1,545,000 1,641,454 Hamilton County Sales Tax Revenue, sub. bond, Refunding, Series A, FSA Insured, 5.00%, 12/01/32 ........................................... 1,825,000 1,869,986 Illinois Municipal Electricity Agency Power Supply Revenue, Series A, BHAC Insured, 5.00%, 2/01/35 ....................................... 1,085,000 1,105,257 Kentucky State Municipal Power Agency Power System Revenue, Prairie State Project, Series A, BHAC Insured, 5.25%, 9/01/42 .............. 2,395,000 2,471,281 Las Vegas Valley Water District GO, Refunding, Series A, NATL Insured, 5.00%, 6/01/26 ..................................................... 395,000 406,897 Lewisville ISD, GO, School Building, 5.00%, 8/15/26 ................... 545,000 594,649 (j) Los Angeles USD, GO, Series KRY, 5.25%, 7/01/26 ....................... 350,000 379,907 Minneapolis Health Care System Revenue, Fairview Health Services, Series B, Assured Guaranty, 6.50%, 11/15/38 ........................ 1,670,000 1,864,789 MTA Revenue, Series B, Assured Guaranty, 5.25%, 11/15/20 ........................ 430,000 490,467 Transportation, Series A, FSA Insured, 5.50%, 11/15/21 ............. 410,000 480,827
Semiannual Report | 13 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE --------------------- ---------------- MUNICIPAL BONDS (CONTINUED) UNITED STATES AND U.S. TERRITORIES (CONTINUED) North Carolina Eastern Municipal Power Agency Power System Revenue, Refunding, Series A, Assured Guaranty, 5.25%, 1/01/19 .............. 250,000 $ 276,293 Palomar Pomerado Health GO, Election of 2004, Series A, NATL Insured, 5.125%, 8/01/37 .................................................... 2,080,000 1,950,582 Philadelphia GO, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/24 ..................................................... 50,000 52,447 Placentia-Yorba Linda USD, GO, 2008 Election, Series A, 5.25%, 8/01/32 ..................................................... 2,400,000 2,467,224 Poway USD, GO, Election of 2008, ID 07-1-A, zero cpn., 8/01/27 ............................................................ 705,000 254,435 8/01/30 ............................................................ 705,000 202,744 8/01/32 ............................................................ 885,000 217,551 8/01/33 ............................................................ 470,000 107,545 Puerto Rico Commonwealth GO, Public Improvement, Refunding, Series A, NATL Insured, 5.50%, 7/01/21 ....................................... 100,000 103,926 Regional Transportation District Sales Tax Revenue, Fastracks Project, Series A, AMBAC Insured, 5.00%, 11/01/27 ........................... 590,000 623,111 San Bernardino Community College District GO, Election of 2002, Series A, 6.375%, 8/01/26 .................................................... 400,000 467,892 6.50%, 8/01/27 ..................................................... 580,000 681,314 6.50%, 8/01/28 ..................................................... 240,000 280,246 San Mateo County Community College District GO, Election of 2001, Series C, NATL Insured, zero cpn., 9/01/30 ............................................................ 1,705,000 506,914 3/01/31 ............................................................ 465,000 131,674 Tarrant County Cultural Education Facilities Finance Corp. Revenue, Christus Health, Refunding, Series A, Assured Guaranty, 6.25%, 7/01/28 ..................................................... 1,400,000 1,554,140 ---------------- TOTAL MUNICIPAL BONDS (COST $42,580,282) .............................. 45,137,930 ---------------- TOTAL INVESTMENTS BEFORE SHORT TERM INVESTMENTS (COST $1,023,959,987) .............................................. 1,167,315,517 ---------------- SHORT TERM INVESTMENTS 2.2% FOREIGN GOVERNMENT AND AGENCY SECURITIES 1.9% EGYPT 0.8% (j, k) Egypt Treasury Bill, 8/03/10 - 2/08/11 ................................ 62,325,000 EGP 10,418,264 ---------------- ISRAEL 1.1% (k) Israel Treasury Bill, 1/05/11 ......................................... 50,000,000 ILS 13,016,009 ---------------- TOTAL FOREIGN GOVERNMENT AND AGENCY SECURITIES (COST $23,540,741) ..... 23,434,273 ---------------- TOTAL INVESTMENTS BEFORE MONEY MARKET FUND (COST $1,047,500,728) ...... 1,190,749,790 ----------------
SHARES --------------------- MONEY MARKET FUNDS (COST $4,445,542) 0.3% UNITED STATES 0.3% (l) Institutional Fiduciary Trust Money Market Portfolio, 0.00% ........... 4,445,542 4,445,542 ----------------
14 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED) TOTAL INVESTMENTS (COST $1,051,946,270) 96.4% ......................... $ 1,195,195,332 OTHER ASSETS, LESS LIABILITIES 3.6% ................................... 44,985,320 ---------------- NET ASSETS 100.0% ..................................................... $ 1,240,180,652 ================
(a) The principal amount is stated in U.S. dollars unless otherwise indicated. (b) The coupon rate shown represents the rate at period end. (c) The principal amount is stated in original face, and scheduled paydowns are reflected in the market price on ex-date. (d) Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. At February 28, 2010, the aggregate value of these securities was $135,302,656, representing 10.91% of net assets. (e) Principal amount is stated in 1,000 Brazilian Real Units. (f) Redemption price at maturity is adjusted for inflation. See Note 1(f). (g) Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Fund's Board of Trustees. At February 28, 2010, the aggregate value of these securities was $30,122,063, representing 2.43% of net assets. (h) Principal amount is stated in 100 Mexican Peso Units. (i) A supranational organization is an entity formed by two or more central governments through international treaties. (j) A portion or all of the security purchased on a delayed delivery basis. See Note 1(c). (k) The security is traded on a discount basis with no stated coupon rate. (l) See Note 7 regarding investments in the Institutional Fiduciary Trust Money Market Portfolio. The rate shown is the annualized seven-day yield at period end. At February 28, 2010, the Fund had the following forward exchange contracts outstanding. See Note 1(d).
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- Chilean Peso ............. DBAB Sell 1,153,220,000 2,184,129 3/03/10 $ -- $ (14,156) Chilean Peso ............. DBAB Buy 1,153,220,000 1,911,837 3/03/10 286,448 -- Chilean Peso ............. DBAB Sell 1,873,290,000 3,547,898 3/04/10 -- (23,199) Chilean Peso ............. DBAB Buy 1,873,290,000 3,058,932 3/04/10 512,164 -- Chilean Peso ............. DBAB Sell 1,173,870,000 2,223,239 3/05/10 -- (14,665) Chilean Peso ............. DBAB Buy 1,173,870,000 1,911,840 3/05/10 326,063 -- Chilean Peso ............. DBAB Buy 1,107,150,000 1,799,571 3/08/10 311,498 -- Chilean Peso ............. DBAB Buy 1,176,260,000 1,911,841 3/09/10 331,132 -- Chilean Peso ............. MLCO Sell 366,300,000 691,785 3/10/10 -- (6,741) Chilean Peso ............. MLCO Buy 366,300,000 677,079 3/10/10 21,446 -- Chilean Peso ............. DBAB Buy 2,301,970,000 4,308,788 3/12/10 81,520 -- Chilean Peso ............. DBAB Buy 2,298,030,000 4,326,925 3/16/10 56,871 -- Singapore Dollar ......... JPHQ Sell 7,659,000 4,977,255 3/17/10 -- (469,723) Singapore Dollar ......... JPHQ Buy 7,659,000 5,506,111 3/17/10 -- (59,133) Singapore Dollar ......... DBAB Sell 9,714,000 6,316,405 3/18/10 -- (591,983) Singapore Dollar ......... DBAB Buy 9,714,000 6,993,369 3/18/10 -- (84,981) Chilean Peso ............. JPHQ Buy 670,400,000 1,268,376 3/19/10 10,721 -- Singapore Dollar ......... DBAB Sell 14,546,000 9,475,193 3/19/10 -- (869,494) Singapore Dollar ......... DBAB Buy 14,546,000 10,373,698 3/19/10 -- (29,012) Singapore Dollar ......... DBAB Sell 19,370,000 12,633,089 3/22/10 -- (1,141,819) Singapore Dollar ......... DBAB Buy 19,370,000 13,944,682 3/22/10 -- (169,774) Singapore Dollar ......... UBSW Sell 17,593,000 11,583,106 3/23/10 -- (927,954) Singapore Dollar ......... UBSW Buy 17,593,000 12,676,899 3/23/10 -- (165,839)
Semiannual Report | 15 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- Australian Dollar ........ BZWS Sell 4,102,790 2,790,513 3/24/10 $ -- $ (873,048) Singapore Dollar ......... JPHQ Sell 4,766,000 3,158,592 3/31/10 -- (230,413) Singapore Dollar ......... JPHQ Buy 4,766,000 3,416,977 3/31/10 -- (27,972) Indian Rupee ............. DBAB Buy 110,524,000 2,135,977 4/09/10 252,595 -- Indian Rupee ............. DBAB Buy 237,003,000 4,577,115 4/12/10 543,399 -- Indian Rupee ............. JPHQ Buy 159,192,000 3,051,409 4/13/10 387,656 -- Indian Rupee ............. JPHQ Buy 156,262,000 3,051,396 4/15/10 323,739 -- Indian Rupee ............. DBAB Buy 54,789,000 1,068,012 4/19/10 114,944 -- Indian Rupee ............. JPHQ Buy 78,058,000 1,529,949 4/19/10 155,411 -- Malaysian Ringgit ........ JPHQ Buy 5,072,841 1,401,221 4/19/10 85,724 -- Malaysian Ringgit ........ JPHQ Buy 14,535,000 4,047,957 4/20/10 212,303 -- Indian Rupee ............. DBAB Buy 110,998,000 2,141,934 4/26/10 253,069 -- Indian Rupee ............. JPHQ Buy 15,835,000 305,990 4/27/10 35,649 -- Indian Rupee ............. DBAB Buy 507,510,181 9,912,308 4/28/10 1,036,423 -- Indian Rupee ............. JPHQ Buy 78,563,000 1,529,951 4/28/10 164,921 -- New Zealand Dollar ....... DBAB Sell 16,563,648 9,065,285 4/28/10 -- (2,448,732) Swedish Krona ............ BOFA Buy 29,978,900 2,820,747 EUR 4/29/10 369,068 -- Indian Rupee ............. JPHQ Buy 78,640,000 1,529,961 4/30/10 166,329 -- Chilean Peso ............. DBAB Buy 730,900,000 1,354,271 5/10/10 43,014 -- Chilean Peso ............. DBAB Buy 2,278,980,000 3,974,919 5/18/10 380,414 -- Chilean Peso ............. CITI Buy 103,407,000 185,317 5/26/10 12,236 -- Chilean Peso ............. DBAB Buy 362,056,000 648,613 5/26/10 43,075 -- Chilean Peso ............. DBAB Buy 466,410,000 825,504 5/28/10 65,560 -- Chilean Peso ............. CITI Buy 466,580,000 825,513 5/28/10 65,877 -- Chilean Peso ............. CITI Buy 186,070,000 330,204 6/01/10 25,360 -- Indian Rupee ............. DBAB Buy 150,389,000 3,064,223 6/01/10 172,279 -- New Zealand Dollar ....... CITI Sell 6,044,416 4,215,255 6/01/10 23,516 -- New Zealand Dollar ....... DBAB Sell 10,620,020 7,417,978 6/01/10 53,107 -- New Zealand Dollar ....... UBSW Sell 10,684,383 7,463,896 6/01/10 54,390 -- Indian Rupee ............. HSBC Buy 4,458,000 91,918 6/02/10 4,016 -- New Zealand Dollar ....... FBCO Sell 1,511,663 1,065,722 6/02/10 17,481 -- New Zealand Dollar ....... DBAB Sell 4,580,779 3,232,427 6/02/10 55,949 -- New Zealand Dollar ....... BZWS Sell 8,856,368 6,237,363 6/02/10 96,038 -- Indian Rupee ............. HSBC Buy 22,062,000 459,625 6/03/10 15,101 -- Indian Rupee ............. HSBC Buy 147,266,000 3,064,211 6/04/10 104,404 -- Poland Zloty ............. DBAB Buy 13,705,000 3,012,684 EUR 6/04/10 594,013 -- Indian Rupee ............. DBAB Buy 73,633,000 1,532,106 6/07/10 51,864 -- Poland Zloty ............. DBAB Buy 12,965,000 2,824,434 EUR 6/07/10 595,772 -- Indian Rupee ............. HSBC Buy 29,570,000 612,850 6/08/10 23,206 -- Indian Rupee ............. DBAB Buy 37,141,000 770,560 6/08/10 28,349 -- Poland Zloty ............. CITI Buy 5,203,000 1,129,672 EUR 6/08/10 244,137 -- New Zealand Dollar ....... BZWS Sell 8,856,368 6,233,643 6/09/10 95,621 -- Indian Rupee ............. DBAB Buy 29,990,000 616,444 6/10/10 28,554 -- Indian Rupee ............. HSBC Buy 30,052,000 616,451 6/11/10 29,834 -- Indian Rupee ............. BZWS Buy 44,847,000 924,680 6/11/10 39,780 -- Indian Rupee ............. DBAB Buy 75,068,000 1,541,121 6/16/10 72,686 -- Indian Rupee ............. DBAB Buy 68,380,000 1,387,018 6/21/10 82,488 -- Swedish Krona ............ UBSW Buy 50,589,000 4,548,225 EUR 6/28/10 912,374 -- Swedish Krona ............ UBSW Buy 36,736,000 3,315,224 EUR 6/29/10 645,592 --
16 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- Swedish Krona ............ UBSW Buy 45,098,000 4,100,526 EUR 7/15/10 $ 751,108 $ -- Malaysian Ringgit ........ DBAB Buy 61,396,000 17,063,924 7/16/10 854,213 -- Malaysian Ringgit ........ DBAB Buy 9,759,000 1,943,056 EUR 7/16/10 203,419 -- Indian Rupee ............. CITI Buy 16,598,000 331,960 7/19/10 24,028 -- Indian Rupee ............. JPHQ Buy 16,598,000 331,960 7/20/10 24,003 -- Malaysian Ringgit ........ DBAB Buy 96,842,000 27,120,533 7/20/10 1,136,765 -- Malaysian Ringgit ........ DBAB Buy 11,019,000 2,189,655 EUR 7/20/10 234,908 -- Malaysian Ringgit ........ DBAB Buy 14,167,000 2,815,158 EUR 7/23/10 301,527 -- Malaysian Ringgit ........ DBAB Buy 117,760,000 33,256,142 7/23/10 1,099,674 -- Malaysian Ringgit ........ JPHQ Buy 123,816,000 34,877,746 7/27/10 1,237,732 -- Malaysian Ringgit ........ JPHQ Buy 14,167,000 2,806,402 EUR 7/27/10 312,686 -- Swedish Krona ............ DBAB Buy 45,098,000 4,230,780 EUR 7/27/10 574,068 -- Malaysian Ringgit ........ HSBC Buy 1,687,000 478,405 7/30/10 13,597 -- New Zealand Dollar ....... DBAB Sell 17,733,735 11,411,658 7/30/10 -- (830,973) New Zealand Dollar ....... DBAB Sell 17,666,270 11,347,929 8/03/10 -- (844,396) New Zealand Dollar ....... BZWS Sell 6,915,607 4,439,820 8/03/10 -- (332,966) New Zealand Dollar ....... DBAB Sell 6,999,201 4,471,789 8/04/10 -- (358,319) New Zealand Dollar ....... BZWS Sell 3,484,510 2,237,056 8/04/10 -- (167,585) New Zealand Dollar ....... CITI Sell 17,544,053 11,456,705 8/05/10 -- (649,420) New Zealand Dollar ....... DBAB Sell 5,204,459 3,392,267 8/05/10 -- (199,026) Malaysian Ringgit ........ HSBC Buy 3,400,000 971,984 8/06/10 19,261 -- New Zealand Dollar ....... CITI Sell 6,870,623 4,490,055 8/06/10 -- (250,597) New Zealand Dollar ....... FBCO Sell 3,428,957 2,233,108 8/06/10 -- (132,833) New Zealand Dollar ....... FBCO Sell 15,302,017 10,059,786 8/09/10 -- (496,011) New Zealand Dollar ....... CITI Sell 6,779,343 4,457,147 8/09/10 -- (219,450) New Zealand Dollar ....... DBAB Sell 6,809,934 4,479,575 8/09/10 -- (218,125) New Zealand Dollar ....... FBCO Sell 6,713,771 4,458,817 8/11/10 -- (171,839) New Zealand Dollar ....... DBAB Sell 15,333,885 9,990,809 8/12/10 -- (584,546) New Zealand Dollar ....... DBAB Sell 4,178,000 2,711,940 8/13/10 -- (169,291) New Zealand Dollar ....... DBAB Sell 4,407,000 2,909,061 8/16/10 -- (129,396) Brazilian Real ........... DBAB Buy 4,460,000 216,608,820 JPY 8/17/10 -- (63,709) Japanese Yen ............. UBSW Sell 619,237,000 6,528,180 8/17/10 -- (447,593) New Israeli Shekel ....... CITI Buy 12,073,000 3,185,993 8/17/10 -- (2,082) Brazilian Real ........... DBAB Buy 3,295,000 158,654,250 JPY 8/18/10 -- (32,002) Japanese Yen ............. JPHQ Sell 307,706,000 3,264,093 8/18/10 -- (202,275) Brazilian Real ........... DBAB Buy 4,942,000 232,303,652 JPY 8/19/10 15,072 -- Japanese Yen ............. HSBC Sell 306,279,000 3,255,517 8/19/10 -- (194,800) New Israeli Shekel ....... CITI Buy 6,038,000 1,592,930 8/19/10 -- (644) New Israeli Shekel ....... DBAB Buy 1,209,000 318,493 8/19/10 333 -- New Israeli Shekel ....... CITI Buy 6,041,000 1,589,319 8/19/10 3,758 -- Indian Rupee ............. DBAB Buy 115,936,000 2,321,506 8/20/10 159,418 -- Japanese Yen ............. DBAB Sell 307,444,000 3,255,512 8/20/10 -- (207,954) Japanese Yen ............. BZWS Sell 307,053,000 3,260,347 8/20/10 -- (198,714) New Israeli Shekel ....... CITI Buy 4,634,100 1,212,449 8/20/10 9,588 -- Norwegian Krone .......... UBSW Buy 44,332,000 5,049,318 EUR 8/20/10 562,845 -- Indian Rupee ............. DBAB Buy 100,473,000 2,011,967 8/23/10 137,607 -- Japanese Yen ............. CITI Sell 613,483,000 6,520,692 8/23/10 -- (390,563) Japanese Yen ............. FBCO Sell 608,984,000 6,520,695 8/23/10 -- (339,876)
Semiannual Report | 17 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- New Israeli Shekel ....... CITI Buy 7,908,300 2,073,927 8/23/10 $ 11,405 $ -- Norwegian Krone .......... UBSW Buy 44,332,000 5,054,557 EUR 8/23/10 554,624 -- Japanese Yen ............. JPHQ Sell 612,179,000 6,520,693 8/24/10 -- (375,921) Japanese Yen ............. BZWS Sell 610,141,000 6,520,690 8/24/10 -- (352,965) New Zealand Dollar ....... FBCO Sell 6,159,450 4,061,418 8/24/10 -- (182,690) Japanese Yen ............. DBAB Sell 303,441,000 3,260,352 8/25/10 -- (158,143) New Zealand Dollar ....... DBAB Sell 6,130,000 4,097,905 8/27/10 -- (124,841) Brazilian Real ........... DBAB Buy 3,300,000 154,185,900 JPY 8/31/10 15,432 -- Indian Rupee ............. DBAB Buy 71,050,000 1,423,848 9/01/10 95,280 -- Japanese Yen ............. JPHQ Sell 304,127,000 3,260,349 9/01/10 -- (166,153) Brazilian Real ........... DBAB Buy 4,949,000 228,826,913 JPY 9/02/10 48,906 -- Japanese Yen ............. HSBC Sell 300,940,000 3,260,349 9/02/10 -- (130,286) Norwegian Krone .......... BZWS Buy 44,332,000 5,045,123 EUR 9/07/10 562,002 -- New Israeli Shekel ....... DBAB Buy 35,742,000 9,430,607 9/08/10 -- (8,729) Japanese Yen ............. HSBC Sell 453,244,000 4,890,524 9/09/10 -- (216,508) Japanese Yen ............. HSBC Sell 451,689,000 4,890,526 9/10/10 -- (199,044) Japanese Yen ............. DBAB Sell 383,650,000 4,179,376 9/10/10 -- (143,540) Japanese Yen ............. UBSW Sell 318,692,000 3,482,820 9/13/10 -- (108,283) Brazilian Real ........... DBAB Buy 7,424,000 346,161,075 JPY 9/15/10 27,732 -- Japanese Yen ............. UBSW Sell 377,653,000 4,179,380 9/15/10 -- (76,210) Japanese Yen ............. HSBC Sell 253,555,000 2,786,257 9/15/10 -- (70,932) Japanese Yen ............. BZWS Sell 250,749,000 2,786,255 9/15/10 -- (39,315) Japanese Yen ............. HSBC Sell 376,102,000 4,179,375 9/16/10 -- (58,787) Japanese Yen ............. DBAB Sell 126,078,000 1,393,127 9/16/10 -- (27,602) Euro ..................... BZWS Sell 1,331,300 1,960,140 9/20/10 148,559 -- Japanese Yen ............. JPHQ Sell 252,156,000 2,786,254 9/21/10 -- (55,369) Japanese Yen ............. HSBC Sell 125,019,000 1,393,125 9/21/10 -- (15,753) Euro ..................... UBSW Sell 8,685,912 12,735,545 9/23/10 916,229 -- Swedish Krona ............ DBAB Buy 28,384,373 2,799,248 EUR 9/23/10 175,559 -- Swedish Krona ............ UBSW Buy 91,000,000 8,950,438 EUR 9/23/10 595,389 -- Euro ..................... JPHQ Sell 3,821,732 5,658,456 9/24/10 458,071 -- Japanese Yen ............. JPHQ Sell 109,322,000 1,208,045 9/24/10 -- (23,982) Indian Rupee ............. DBAB Buy 225,000,000 6,533,101 NZD 9/27/10 313,962 -- Japanese Yen ............. JPHQ Sell 10,871,000 120,802 9/27/10 -- (1,715) Japanese Yen ............. JPHQ Sell 78,559,000 872,975 9/28/10 -- (12,403) Japanese Yen ............. JPHQ Sell 130,931,000 1,454,951 9/29/10 -- (20,689) Philippine Peso .......... HSBC Buy 120,792,000 2,496,992 10/04/10 61,859 -- Philippine Peso .......... DBAB Buy 150,587,000 3,121,233 10/04/10 68,794 -- New Israeli Shekel ....... DBAB Buy 35,422,000 9,408,234 10/05/10 -- (75,507) Philippine Peso .......... DBAB Buy 180,042,000 3,745,491 10/05/10 68,183 -- Philippine Peso .......... HSBC Buy 180,085,000 3,745,477 10/05/10 69,108 -- Philippine Peso .......... JPHQ Buy 47,563,000 998,803 10/06/10 8,597 -- Philippine Peso .......... DBAB Buy 147,797,000 3,121,241 10/07/10 8,880 -- Philippine Peso .......... CITI Buy 59,159,000 1,248,502 10/08/10 4,291 -- Philippine Peso .......... HSBC Buy 118,491,000 2,496,992 10/08/10 12,257 -- Philippine Peso .......... JPHQ Buy 59,005,000 1,248,492 10/08/10 1,039 -- Philippine Peso .......... DBAB Buy 118,267,000 2,496,981 10/08/10 7,524 -- Philippine Peso .......... DBAB Buy 35,215,000 749,096 10/12/10 -- (3,614)
18 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- Philippine Peso .......... JPHQ Buy 145,824,000 3,114,592 10/13/10 $ -- $ (27,841) Philippine Peso .......... HSBC Buy 58,717,000 1,248,501 10/13/10 -- (5,600) Chinese Yuan ............. HSBC Buy 32,663,916 3,316,969 EUR 10/15/10 279,004 -- Philippine Peso .......... JPHQ Buy 19,133,000 407,953 10/15/10 -- (3,022) Chinese Yuan ............. HSBC Buy 32,823,215 3,323,035 EUR 10/18/10 294,648 -- Philippine Peso .......... JPHQ Buy 63,534,000 1,359,860 10/18/10 -- (15,569) Chinese Yuan ............. HSBC Buy 43,995,179 4,441,373 EUR 10/19/10 412,474 -- Philippine Peso .......... DBAB Buy 32,011,000 679,928 10/19/10 -- (2,678) Chinese Yuan ............. HSBC Buy 27,185,000 4,119,876 10/21/10 -- (130,720) Philippine Peso .......... DBAB Buy 127,962,000 2,719,702 10/21/10 -- (12,899) Philippine Peso .......... JPHQ Buy 64,253,000 1,359,852 10/21/10 -- (697) Philippine Peso .......... HSBC Buy 185,677,000 3,896,684 10/25/10 29,633 -- Philippine Peso .......... DBAB Buy 123,655,000 2,597,794 10/25/10 17,009 -- Philippine Peso .......... JPHQ Buy 61,866,000 1,298,887 10/25/10 9,328 -- Chilean Peso ............. CITI Buy 219,208,545 415,364 10/26/10 5,372 -- Indian Rupee ............. HSBC Buy 159,768,000 3,360,707 10/26/10 42,305 -- Indian Rupee ............. DBAB Buy 478,778,000 10,082,084 10/26/10 115,748 -- Norwegian Krone .......... BZWS Buy 68,284,000 8,076,168 EUR 10/26/10 422,973 -- Philippine Peso .......... HSBC Buy 160,559,000 3,377,125 10/26/10 17,758 -- Indian Rupee ............. HSBC Buy 237,998,000 5,041,049 10/27/10 27,888 -- Chilean Peso ............. JPHQ Buy 142,245,000 270,814 10/28/10 2,199 -- Philippine Peso .......... DBAB Buy 49,630,000 1,039,154 10/28/10 10,051 -- Japanese Yen ............. CITI Sell 104,080,747 1,150,288 11/08/10 -- (23,285) Japanese Yen ............. BZWS Sell 102,242,000 1,141,635 11/10/10 -- (11,233) Japanese Yen ............. BZWS Sell 183,499,000 2,047,866 11/12/10 -- (21,294) Japanese Yen ............. UBSW Sell 103,657,300 1,157,807 11/12/10 -- (11,047) Japanese Yen ............. DBAB Sell 592,373,000 6,613,151 11/15/10 -- (66,761) Japanese Yen ............. JPHQ Sell 295,806,000 3,306,573 11/16/10 -- (29,131) Japanese Yen ............. BZWS Sell 142,600,000 1,587,178 11/16/10 -- (20,874) Japanese Yen ............. BZWS Sell 590,640,000 6,613,147 11/17/10 -- (47,378) Japanese Yen ............. HSBC Sell 154,574,000 1,719,418 11/17/10 -- (23,680) Japanese Yen ............. UBSW Sell 236,300,000 2,645,248 11/17/10 -- (19,458) Euro ..................... UBSW Sell 4,666,969 6,971,519 11/18/10 622,271 -- Euro ..................... DBAB Sell 913,279 1,357,133 11/18/10 114,649 -- Japanese Yen ............. BZWS Sell 823,639,000 9,258,407 11/18/10 -- (29,707) Malaysian Ringgit ........ JPHQ Buy 26,285,176 7,818,315 11/18/10 -- (192,670) Euro ..................... DBAB Sell 1,274,797 1,910,284 11/29/10 176,014 -- Japanese Yen ............. BZWS Sell 930,663,000 10,581,037 11/29/10 84,174 -- Japanese Yen ............. BOFA Sell 638,748,000 7,208,328 11/29/10 3,949 -- Japanese Yen ............. CITI Sell 230,997,000 2,645,256 11/29/10 39,862 -- Norwegian Krone .......... UBSW Buy 51,846,000 6,063,647 EUR 11/29/10 399,887 -- Swedish Krona ............ BZWS Buy 150,288,486 14,529,752 EUR 11/30/10 1,319,447 -- Australian Dollar ........ DBAB Buy 13,946,000 12,160,927 12/01/10 -- (62,148) Japanese Yen ............. DBAB Sell 572,745,000 6,613,149 12/01/10 152,958 -- Norwegian Krone .......... UBSW Buy 16,770,000 1,944,348 EUR 12/01/10 152,192 -- Mexican Peso ............. CITI Sell 39,049,000 2,875,267 12/02/10 -- (73,574) Chinese Yuan ............. HSBC Buy 24,661,000 3,723,539 12/06/10 -- (98,137) Chinese Yuan ............. HSBC Buy 31,071,000 3,122,174 EUR 12/06/10 320,287 --
Semiannual Report | 19 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- Euro ..................... UBSW Sell 1,325,806 1,994,635 12/07/10 $ 190,994 $ -- Australian Dollar ........ DBAB Buy 5,578,000 4,891,906 12/09/10 -- (57,364) Australian Dollar ........ DBAB Buy 6,958,000 6,071,551 12/10/10 -- (41,661) Australian Dollar ........ BZWS Buy 6,958,000 6,068,768 12/10/10 -- (38,877) Chinese Yuan ............. JPHQ Buy 16,342,344 2,457,495 12/13/10 -- (54,060) Chinese Yuan ............. HSBC Buy 32,777,418 4,929,676 12/14/10 -- (108,895) Chinese Yuan ............. HSBC Buy 32,904,211 4,951,352 12/15/10 -- (111,648) Malaysian Ringgit ........ JPHQ Buy 16,656,368 4,883,133 12/16/10 -- (56,164) Swedish Krona ............ DBAB Buy 93,370,021 9,026,316 EUR 12/16/10 818,445 -- Malaysian Ringgit ........ JPHQ Buy 5,137,469 1,506,633 12/17/10 -- (17,864) Malaysian Ringgit ........ JPHQ Buy 6,147,742 1,794,961 12/21/10 -- (13,693) Malaysian Ringgit ........ HSBC Buy 8,175,565 2,378,339 12/22/10 -- (9,610) Malaysian Ringgit ........ HSBC Buy 3,991,727 1,160,521 12/23/10 -- (4,029) Malaysian Ringgit ........ HSBC Buy 4,516,266 1,311,191 12/28/10 -- (2,971) Japanese Yen ............. BZWS Sell 189,880,000 2,084,017 1/07/11 -- (59,261) Japanese Yen ............. CITI Sell 94,950,000 1,042,010 1/07/11 -- (29,742) Japanese Yen ............. UBSW Sell 94,930,000 1,041,985 1/07/11 -- (29,542) New Israeli Shekel ....... DBAB Buy 48,521,000 12,999,250 1/07/11 -- (238,122) Euro ..................... CITI Sell 3,597,000 5,173,205 1/10/11 280,058 -- Euro ..................... UBSW Sell 6,354,000 9,085,267 1/11/11 441,672 -- Euro ..................... DBAB Sell 12,240,000 17,494,754 1/11/11 844,203 -- Japanese Yen ............. HSBC Sell 95,340,000 1,041,967 1/11/11 -- (34,272) Japanese Yen ............. DBAB Sell 95,240,000 1,041,979 1/11/11 -- (33,131) Euro ..................... UBSW Sell 5,675,942 8,236,814 1/13/11 515,631 -- Euro ..................... JPHQ Sell 3,792,783 5,490,157 1/13/11 330,701 -- Euro ..................... CITI Sell 2,459,575 3,560,419 1/13/11 214,573 -- Japanese Yen ............. HSBC Sell 277,440,000 3,024,990 1/13/11 -- (106,994) Philippine Peso .......... JPHQ Buy 282,044,000 6,064,579 1/13/11 -- (137,012) Euro ..................... BZWS Sell 3,027,169 4,392,422 1/14/11 274,464 -- Japanese Yen ............. BZWS Sell 275,350,000 3,024,943 1/14/11 -- (83,508) Japanese Yen ............. UBSW Sell 219,020,000 2,419,966 1/14/11 -- (52,571) Philippine Peso .......... HSBC Buy 45,260,000 967,714 1/14/11 -- (16,578) Philippine Peso .......... HSBC Buy 88,621,000 1,898,438 1/18/11 -- (36,607) Philippine Peso .......... DBAB Buy 50,543,000 1,085,779 1/18/11 -- (23,925) Euro ..................... BZWS Sell 2,459,575 3,527,891 1/19/11 182,076 -- Philippine Peso .......... JPHQ Buy 126,210,000 2,708,079 1/19/11 -- (56,734) Philippine Peso .......... DBAB Buy 31,623,000 676,717 1/19/11 -- (12,400) Euro ..................... UBSW Sell 4,351,556 6,122,639 1/25/11 203,172 -- Brazilian Real ........... DBAB Buy 8,966,000 408,299,984 JPY 1/26/11 -- (10,479) Japanese Yen ............. BZWS Sell 758,940,000 8,450,290 1/26/11 -- (119,473) Japanese Yen ............. UBSW Sell 664,000,000 7,394,045 1/26/11 -- (103,679) Japanese Yen ............. DBAB Sell 189,220,000 2,112,538 1/26/11 -- (24,088) Brazilian Real ........... HSBC Buy 3,346,000 152,871,244 JPY 1/27/11 -- (9,959) Chilean Peso ............. DBAB Buy 1,968,980,000 3,916,809 1/27/11 -- (131,280) Japanese Yen ............. HSBC Sell 652,664,000 7,266,921 1/27/11 -- (102,944) Chilean Peso ............. DBAB Buy 4,531,910,000 8,946,619 1/28/11 -- (233,385) Chilean Peso ............. JPHQ Buy 596,880,000 1,173,229 1/28/11 -- (25,643) Malaysian Ringgit ........ JPHQ Buy 48,000,000 14,081,615 1/28/11 -- (193,463)
20 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- New Zealand Dollar ....... UBSW Sell 7,150,005 4,889,674 1/28/11 $ 32,569 $ -- Chilean Peso ............. DBAB Buy 2,733,940,000 5,273,472 1/31/11 -- (16,623) Euro ..................... UBSW Sell 338,000 473,301 1/31/11 13,521 -- Swedish Krona ............ DBAB Buy 89,650,000 8,756,422 EUR 1/31/11 657,928 -- Chinese Yuan ............. DBAB Buy 135,288,000 20,373,165 2/01/11 -- (419,984) Australian Dollar ........ MSCO Buy 3,675,596 3,061,000 2/08/11 101,663 -- Australian Dollar ........ UBSW Buy 3,674,582 3,061,000 2/08/11 100,790 -- Euro ..................... HSBC Sell 675,000 923,096 2/08/11 4,906 -- Euro ..................... UBSW Sell 6,294,000 8,640,718 2/08/11 79,105 -- Euro ..................... CITI Sell 8,393,000 11,518,092 2/08/11 101,248 -- Australian Dollar ........ CITI Buy 2,328,000 172,302,264 JPY 2/09/11 56,758 -- Australian Dollar ........ BZWS Buy 2,328,000 171,876,240 JPY 2/09/11 61,570 -- Australian Dollar ........ DBAB Buy 2,328,000 172,653,792 JPY 2/09/11 52,788 -- Euro ..................... BZWS Sell 9,316,000 12,713,312 2/09/11 40,948 -- Euro ..................... HSBC Sell 6,987,000 9,555,421 2/09/11 51,148 -- South Korean Won ......... HSBC Buy 7,294,254,000 6,180,000 2/09/11 50,216 -- Chilean Peso ............. MLCO Buy 727,600,000 1,354,304 2/10/11 45,145 -- Chilean Peso ............. DBAB Buy 727,600,000 1,354,304 2/10/11 45,145 -- Euro ..................... DBAB Sell 2,336,000 3,194,013 2/10/11 16,404 -- Euro ..................... BZWS Sell 7,943,000 10,854,110 2/10/11 49,425 -- Japanese Yen ............. MSCO Sell 110,363,000 1,240,554 2/10/11 -- (6,005) South Korean Won ......... HSBC Buy 3,868,000,000 291,002,106 JPY 2/10/11 16,584 -- Chilean Peso ............. BZWS Buy 726,200,000 1,354,156 2/11/11 42,642 -- Chilean Peso ............. DBAB Buy 935,230,000 1,746,135 2/11/11 52,718 -- Euro ..................... UBSW Sell 6,873,000 9,451,200 2/11/11 102,026 -- Chilean Peso ............. DBAB Buy 718,400,000 1,354,194 2/14/11 27,723 -- Malaysian Ringgit ........ DBAB Buy 24,260,103 7,026,822 2/14/11 -- (11,898) New Zealand Dollar ....... HSBC Sell 1,456,071 979,790 2/14/11 -- (7,768) South Korean Won ......... HSBC Buy 7,084,000,000 6,069,746 2/14/11 -- (21,725) South Korean Won ......... DBAB Buy 1,149,000,000 87,296,763 JPY 2/14/11 -- (5,134) South Korean Won ......... JPHQ Buy 1,326,000,000 100,454,545 JPY 2/14/11 -- (2,649) Chilean Peso ............. MSCO Buy 1,432,600,000 2,708,385 2/16/11 47,534 -- Euro ..................... UBSW Sell 6,214,000 8,450,419 2/16/11 -- (2,270) Euro ..................... JPHQ Sell 6,214,000 8,454,768 2/16/11 2,080 -- South Korean Won ......... JPHQ Buy 774,000,000 59,251,320 JPY 2/16/11 -- (8,633) Malaysian Ringgit ........ HSBC Buy 6,108,000 1,775,478 2/17/11 -- (9,517) Chilean Peso ............. DBAB Buy 331,700,000 634,226 2/18/11 3,909 -- Chilean Peso ............. JPHQ Buy 664,600,000 1,268,321 2/18/11 10,258 -- Euro ..................... UBSW Sell 6,210,000 8,531,360 2/18/11 84,139 -- Euro ..................... DBAB Sell 6,210,000 8,532,167 2/18/11 84,946 -- Chilean Peso ............. JPHQ Buy 1,128,000,000 2,156,169 2/22/11 14,169 -- Chilean Peso ............. MSCO Buy 3,473,400,000 6,620,768 2/22/11 62,258 -- Chilean Peso ............. DBAB Buy 1,821,550,000 3,475,569 2/22/11 29,200 -- Japanese Yen ............. JPHQ Sell 187,900,000 2,088,242 2/22/11 -- (34,604) Japanese Yen ............. HSBK Sell 187,760,000 2,088,241 2/22/11 -- (33,023) Chilean Peso ............. MLCO Buy 669,000,000 1,268,367 2/23/11 18,867 -- Chilean Peso ............. MSCO Buy 664,200,000 1,268,283 2/24/11 9,752 -- Chilean Peso ............. DBAB Buy 994,600,000 1,902,448 2/25/11 11,390 --
Semiannual Report | 21 Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
SETTLEMENT UNREALIZED UNREALIZED CURRENCY COUNTERPARTY TYPE QUANTITY CONTRACT AMOUNT(a) DATE APPRECIATION DEPRECIATION - -------- ------------ ---- ------------- ------------------ ---------- ------------- ------------- Chilean Peso ............. CITI Buy 2,019,520,000 3,850,372 2/25/11 $ 35,647 $ -- Chilean Peso ............. MSCO Buy 1,419,160,000 2,714,226 2/25/11 16,563 -- Chilean Peso ............. JPHQ Buy 364,500,000 692,966 2/28/11 8,478 -- Chilean Peso ............. DBAB Buy 1,153,220,000 2,205,431 2/28/11 13,825 -- Chilean Peso ............. MSCO Buy 1,174,700,000 2,239,657 3/01/11 21,002 -- Chilean Peso ............. MLCO Buy 366,300,000 698,646 3/01/11 6,282 -- Chilean Peso ............. DBAB Buy 1,873,290,000 3,581,816 3/01/11 23,248 -- Japanese Yen ............. JPHQ Sell 197,000,000 2,204,862 3/01/11 -- (21,100) Japanese Yen ............. HSBK Sell 196,900,000 2,205,001 3/01/11 -- (19,830) Japanese Yen ............. UBSW Sell 219,700,000 2,469,705 3/01/11 -- (12,751) Chilean Peso ............. DBAB Buy 292,600,000 560,000 3/02/11 4,670 -- Chilean Peso ............. DBAB Buy 1,173,870,000 2,244,493 3/04/11 14,768 -- ------------- ------------- Unrealized appreciation (depreciation) ........................................................ 34,318,496 (22,617,149) ------------- ------------- Net unrealized appreciation (depreciation) ................................................. $ 11,701,347 =============
(a) In U.S. dollars unless otherwise indicated. At February 28, 2010, the Fund had the following interest rate swap contracts outstanding. See Note 1(d).
PAY/RECEIVE FIXED EXPIRATION UNREALIZED UNREALIZED COUNTERPARTY FLOATING RATE RATE FLOATING RATE NOTIONAL AMOUNT(a) DATE APPRECIATION DEPRECIATION - ------------ ------------- ------ ------------------------- ------------------ ---------- ------------ ------------ JPHQ ....... Pay 7.16% NZD Bank Bill Rate 5,740,000 NZD 7/31/13 $ 316,145 $ -- JPHQ ....... Pay 7.12% NZD Bank Bill Rate 5,750,000 NZD 8/01/13 309,795 -- JPHQ ....... Pay 7.055% NZD Bank Bill Rate 5,750,000 NZD 8/04/13 300,736 -- JPHQ ....... Pay 7.035% NZD Bank Bill Rate 11,500,000 NZD 8/05/13 595,249 -- JPHQ ....... Pay 7.05% NZD Bank Bill Rate 2,875,000 NZD 8/06/13 149,172 -- JPHQ ....... Pay 7.05% NZD Bank Bill Rate 2,875,000 NZD 8/07/13 149,218 -- JPHQ ....... Pay 7.00% NZD Bank Bill Rate 3,045,600 NZD 8/14/13 153,433 -- JPHQ ....... Pay 5.23% NZD Bank Bill Rate 7,000,000 NZD 12/05/13 89,624 -- MLCO ....... Pay 9.03% MXN Interbank Equilibrium Interest Rate 723,000,000 MXN 8/17/18 4,552,132 -- JPHQ ....... Pay 8.6748% MXN Interbank Equilibrium Interest Rate 37,800,000 MXN 11/29/18 171,071 -- JPHQ ....... Pay 5.59% NZD Bank Bill Rate 8,500,000 NZD 12/05/18 993 -- CITI ....... Pay 7.6973% MXN Interbank Equilibrium Interest Rate 51,400,000 MXN 1/11/19 -- (35,495) CITI ....... Pay 7.666% MXN Interbank Equilibrium Interest Rate 67,000,000 MXN 1/12/19 -- (57,149) CITI ....... Pay 7.835% MXN Interbank Equilibrium Interest Rate 44,700,000 MXN 1/15/19 602 -- CITI ....... Pay 7.869% MXN Interbank Equilibrium Interest Rate 58,100,000 MXN 1/16/19 10,441 -- CITI ....... Pay 8.00% MXN Interbank Equilibrium Interest Rate 35,060,000 MXN 1/18/19 29,475 -- JPHQ ....... Pay 8.06% MXN Interbank Equilibrium Interest Rate 55,780,000 MXN 1/22/19 73,059 -- CITI ....... Pay 8.07% MXN Interbank Equilibrium Interest Rate 175,300,000 MXN 1/22/19 238,742 --
22 | Semiannual Report Templeton Global Income Fund STATEMENT OF INVESTMENTS, FEBRUARY 28, 2010 (UNAUDITED) (CONTINUED)
PAY/RECEIVE FIXED EXPIRATION UNREALIZED UNREALIZED COUNTERPARTY FLOATING RATE RATE FLOATING RATE NOTIONAL AMOUNT(a) DATE APPRECIATION DEPRECIATION - ------------ ------------- ------ ------------------------- ------------------ ---------- ------------ ------------ MLCO ....... Pay 9.10% MXN Interbank Equilibrium Interest Rate 240,000,000 MXN 8/04/28 $ 1,343,187 $ -- JPHQ ....... Pay 8.3167% MXN Interbank Equilibrium Interest Rate 83,670,000 MXN 1/09/29 -- (32,821) ------------ ------------ Unrealized appreciation (depreciation) ......................................................... 8,483,074 (125,465) ------------ ------------ Net unrealized appreciation (depreciation) .................................................. $ 8,357,609 ============
(a) In U.S. dollars unless otherwise indicated. See Abbreviations on page 36. The accompanying notes are an integral part of these financial statements. Semiannual Report | 23 Templeton Global Income Fund FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES February 28, 2010 (unaudited) Assets: Investments in securities: Cost - Unaffiliated issuers .............................. $1,047,500,728 Cost - Sweep Money Fund (Note 7) ......................... 4,445,542 -------------- Total cost of investments ................................ $1,051,946,270 ============== Value - Unaffiliated issuers ............................. $1,190,749,790 Value - Sweep Money Fund (Note 7) ........................ 4,445,542 -------------- Total value of investments ............................... 1,195,195,332 Foreign currency, at value (cost $3,358,867) ................ 3,386,365 Cash ........................................................ 1,850,000 Receivables: Investment securities sold ............................... 400,858 Capital shares issued for reinvestment of distributions .. 336,498 Interest ................................................. 23,873,973 Unrealized appreciation on forward exchange contracts ....... 34,318,496 Unrealized appreciation on swap contracts ................... 8,483,074 -------------- Total assets .......................................... 1,267,844,596 -------------- Liabilities: Payables: Investment securities purchased .......................... 1,490,171 Affiliates ............................................... 587,551 Due to brokers .............................................. 2,330,000 Unrealized depreciation on forward exchange contracts ....... 22,617,149 Unrealized depreciation on swap contracts ................... 125,465 Accrued expenses and other liabilities ...................... 513,608 -------------- Total liabilities ..................................... 27,663,944 -------------- Net assets, at value ............................... $1,240,180,652 ============== Net assets consist of: Paid-in capital ............................................. $1,088,583,526 Undistributed net investment income ......................... 18,860,567 Net unrealized appreciation (depreciation) .................. 163,223,997 Accumulated net realized gain (loss) ........................ (30,487,438) -------------- Net assets, at value ............................... $1,240,180,652 ============== Shares outstanding .......................................... 131,405,058 ============== Net asset value per share ................................... $ 9.44 ==============
The accompanying notes are an integral part of these financial statements. 24 | Semiannual Report Templeton Global Income Fund FINANCIAL STATEMENTS (CONTINUED) STATEMENT OF OPERATIONS for the six months ended February 28, 2010 (unaudited) Investment income: Interest (net of foreign taxes of $665,431) ....................................... $ 41,030,696 ------------ Expenses: Management fees (Note 3a) ......................................................... 3,016,603 Administrative fees (Note 3b) ..................................................... 737,827 Transfer agent fees ............................................................... 129,071 Custodian fees (Note 4) ........................................................... 345,703 Reports to shareholders ........................................................... 57,091 Registration and filing fees ...................................................... 60,320 Professional fees ................................................................. 38,417 Trustees' fees and expenses ....................................................... 49,736 Other ............................................................................. 21,951 ------------ Total expenses .............................................................. 4,456,719 Expense reductions (Note 4) ................................................. (1,878) ------------ Net expenses ............................................................. 4,454,841 ------------ Net investment income ................................................. 36,575,855 ------------ Realized and unrealized gains (losses): Net realized gain (loss) from: Investments .................................................................... 16,660,016 Foreign currency transactions .................................................. (15,475,597) Swap contracts ................................................................. 8,839,144 ------------ Net realized gain (loss) ................................................. 10,023,563 ------------ Net change in unrealized appreciation (depreciation) on: Investments .................................................................... 40,326,799 Translation of other assets and liabilities denominated in foreign currencies .. 24,368,434 ------------ Net change in unrealized appreciation (depreciation) ..................... 64,695,233 ------------ Net realized and unrealized gain (loss) ........................................ 74,718,796 ------------ Net increase (decrease) in net assets resulting from operations ................ $111,294,651 ============
The accompanying notes are an integral part of these financial statements. Semiannual Report | 25 Templeton Global Income Fund FINANCIAL STATEMENTS (CONTINUED) STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED FEBRUARY 28, 2010 YEAR ENDED (UNAUDITED) AUGUST 31, 2009 ----------------- --------------- Increase (decrease) in net assets: Operations: Net investment income ................................................ $ 36,575,855 $ 60,859,159 Net realized gain (loss) from investments, foreign currency transactions, and swap contracts .................................. 10,023,563 58,384,633 Net change in unrealized appreciation (depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies ................................................ 64,695,233 60,463,651 -------------- -------------- Net increase (decrease) in net assets resulting from operations ... 111,294,651 179,707,443 -------------- -------------- Distributions to shareholders from net investment income and net foreign currency gains ............................................... (33,086,794) (176,089,256) Capital share transactions: (Note 2) .................................... 1,690,728 683,052 -------------- -------------- Net increase (decrease) in net assets ............................. 79,898,585 4,301,239 Net assets: Beginning of period ..................................................... 1,160,282,067 1,155,980,828 -------------- -------------- End of period ........................................................... $1,240,180,652 $1,160,282,067 -------------- -------------- Undistributed net investment income included in net assets: End of period ........................................................... $ 18,860,567 $ 15,371,506 ============== ==============
The accompanying notes are an integral part of these financial statements. 26 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Templeton Global Income Fund (Fund) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as a closed-end investment company. The following summarizes the Fund's significant accounting policies. A. SECURITY VALUATION Corporate debt securities, government securities and municipal securities generally trade in the over-the-counter market rather than on a securities exchange. The Fund may utilize independent pricing services, quotations from bond dealers, and information with respect to bond and note transactions, to assist in determining a current market value for each security. The Fund's pricing services may use valuation models or matrix pricing which considers information with respect to comparable bond and note transactions, quotations from bond dealers, or by reference to other securities that are considered comparable in such characteristics as rating, interest rate and maturity date, option adjusted spread models, prepayment projections, interest rate spreads and yield curves, to determine current value. Debt securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at the close of the NYSE on the date that the values of the foreign debt securities are determined. Investments in open-end mutual funds are valued at the closing net asset value. The Fund has procedures to determine the fair value of individual securities and other assets for which market prices are not readily available or which may not be reliably priced. Methods for valuing these securities may include: fundamental analysis based upon the underlying investment book value, anticipated future cash flows, market changes in comparable or similar securities, matrix pricing, discounts from market prices of similar securities, or discounts applied due to the nature and duration of restrictions on the disposition of the securities. Due to the inherent uncertainty of valuations of such securities, the fair values may differ significantly from the values that would have been used had a ready market for such investments existed. Occasionally, events occur between the time at which trading in a security is completed and the close of the NYSE that might call into question the availability (including the reliability) of the value of a portfolio security held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services. All security valuation procedures are approved by the Fund's Board of Trustees. B. FOREIGN CURRENCY TRANSLATION Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event Semiannual Report | 27 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. FOREIGN CURRENCY TRANSLATION (CONTINUED) occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Fund's Board of Trustees. The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments on the Statement of Operations. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. C. SECURITIES PURCHASED ON A DELAYED DELIVERY BASIS The Fund may purchase securities on a delayed delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities. D. DERIVATIVE FINANCIAL INSTRUMENTS The Fund may invest in derivative financial instruments (derivatives) in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives may contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and the potential for market movements which may expose the Fund to gains or losses in excess of the amounts shown on the Statement of Assets and Liabilities. Derivatives are marked to market daily based upon quotations from market makers or the Fund's independent pricing services and the Fund's net benefit or obligation under the contract, as measured by the fair market value of the contract, is included in net assets. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations. 28 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) The Fund generally enters into forward exchange contracts in order to hedge against fluctuations in foreign exchange rates or to gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency for a specific exchange rate on a future date. Pursuant to the terms of the forward exchange contracts, cash or securities may be required to be deposited as collateral. The Fund generally enters into interest rate swap contracts in order to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional principal amount. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized. Pursuant to the terms of the interest rate swap contract, cash or securities may be required to be deposited as collateral. At February 28, 2010, the fund holds $6,191,787 in U.S. Treasury securities and $2,330,000 in cash collateral for derivatives. Unrestricted cash received may be invested according to the Fund's investment objectives. See Note 10 regarding other derivative information. E. INCOME TAXES No provision has been made for U.S. income taxes because it is the Fund's policy to qualify as a regulated investment company under the Internal Revenue Code and to distribute to shareholders substantially all of its taxable income and net realized gains. The Fund has reviewed the tax positions, taken on federal income tax returns, for each of the three open tax years as of February 28, 2010, and has determined that no provision for income tax is required in the Fund's financial statements. Foreign securities held by the Fund may be subject to foreign taxation on interest income received. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. F. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with accounting principles generally accepted in the United States of America. These differences may be permanent or temporary. Semiannual Report | 29 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS (CONTINUED) Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods. Inflation-indexed bonds provide an inflation hedge through periodic increases or decreases in the security's interest accruals and principal redemption value, by amounts corresponding to the current rate of inflation. Any such adjustments, including adjustments to principal redemption value, are recorded as interest income. G. ACCOUNTING ESTIMATES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates. H. GUARANTEES AND INDEMNIFICATIONS Under the Fund's organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote. 2. SHARES OF BENEFICIAL INTEREST At February 28, 2010, there were an unlimited number of shares authorized (without par value). Transactions in the Fund's shares were as follows:
SIX MONTHS ENDED YEAR ENDED FEBRUARY 28, 2010 AUGUST 31, 2009 -------------------- ----------------- SHARES AMOUNT SHARES AMOUNT ------- ---------- ------ -------- Shares issued in reinvestment of distributions ............... 182,179 $1,690,728 78,530 $683,052
The Fund's Board of Trustees previously authorized an open-market share repurchase program pursuant to which the Fund may purchase, from time to time, Fund shares in open-market transactions, at the discretion of management. This authorization remains in effect. Through February 28, 2010, the Fund had repurchased a total of 11,210,400 shares. During the periods ended February 28, 2010 and August 31, 2009, there were no shares repurchased. 30 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 3. TRANSACTIONS WITH AFFILIATES Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:
SUBSIDIARY AFFILIATION - ---------- --------------------- Franklin Advisers, Inc. (Advisers) Investment manager Franklin Templeton Services, LLC (FT Services) Administrative manager
A. MANAGEMENT FEES The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:
ANNUALIZED FEE RATE NET ASSETS - ------------------- ---------- 0.550% Up to and including $200 million 0.500% Over $200 million, up to and including $1 billion 0.480% Over $1 billion, up to and including $5 billion 0.460% Over $5 billion, up to and including $10 billion 0.440% Over $10 billion, up to and including $15 billion 0.420% Over $15 billion, up to and including $20 billion 0.400% In excess of $20 billion
B. ADMINISTRATIVE FEES The Funds pays an administrative fee to FT Services based on the Fund's average daily net assets as follows:
ANNUALIZED FEE RATE NET ASSETS - ------------------- ---------- 0.150% Up to and including $200 million 0.135% Over $200 million, up to and including $700 million 0.100% In excess of $700 million
4. EXPENSE OFFSET ARRANGEMENT The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund's custodian expenses. During the period ended February 28, 2010, the custodian fees were reduced as noted in the Statement of Operations. Semiannual Report | 31 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 5. INCOME TAXES For tax purposes, capital losses may be carried over to offset future capital gains, if any. At August 31, 2009, the capital loss carryforwards were as follows: Capital loss carryforwards expiring in: 2010 ... $17,156,631 2011 ... 4,209,282 2017 ... 1,836,347 ----------- $23,202,260 ===========
For tax purposes, realized capital losses and realized currency losses occurring subsequent to October 31, may be deferred and treated as occurring on the first day of the following fiscal year. At August 31, 2009, the Fund deferred realized capital losses and realized currency losses of $275,661 and $10,734,746, respectively. At February 28, 2010, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: Cost of investments.......................... $1,058,978,922 ============== Unrealized appreciation...................... $ 147,447,867 Unrealized depreciation...................... (11,231,457) -------------- Net unrealized appreciation (depreciation)... $ 136,216,410 ==============
Net investment income differs for financial statement and tax purposes primarily due to differing treatments of foreign currency transactions, bond discounts and premiums, swaps, tax straddles and inflation related adjustments on foreign securities. Net realized gains (losses) differ for financial statement and tax purposes primarily due to differing treatments of wash sales, foreign currency transactions, bond discounts and premiums, swaps and tax straddles. 6. INVESTMENT TRANSACTIONS Purchases and sales of investments (excluding short term securities) for the period ended February 28, 2010, aggregated $137,608,479 and $144,362,667, respectively. 7. INVESTMENTS IN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO The Fund may invest in the Institutional Fiduciary Trust Money Market Portfolio (Sweep Money Fund), an open-end investment company managed by Advisers. Pursuant to a SEC exemptive order specific to the Fund's investment in the Sweep Money Fund, management fees paid by the Fund are reduced on assets invested in the Sweep Money Fund, in an amount not to exceed the management and administrative fees paid by the Sweep Money Fund. 32 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 8. CREDIT RISK At February 28, 2010, the Fund had 18.86% of its portfolio invested in high yield or other securities rated below investment grade. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities. 9. CONCENTRATION OF RISK Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities. 10. OTHER DERIVATIVE INFORMATION At February 28, 2010, the Fund has invested in derivative contracts which are reflected on the Statement of Assets and Liabilities as follows:
ASSET DERIVATIVES LIABILITY DERIVATIVES ---------------------------------------- -------------------------------------- DERIVATIVE CONTRACTS NOT ACCOUNTED FOR AS STATEMENT OF ASSETS AND FAIR VALUE STATEMENT OF ASSETS AND FAIR VALUE HEDGING INSTRUMENTS LIABILITIES LOCATION AMOUNT LIABILITIES LOCATION AMOUNT - -------------------- -------------------------- ----------- ------------------------ ----------- Interest rate contracts ..... Unrealized appreciation on Unrealized depreciation swap contracts $ 8,483,074 on swap contracts $ 125,465 Foreign exchange contracts .. Unrealized appreciation on Unrealized depreciation forward exchange contracts 34,318,496 on forward exchange contracts 22,617,149
Semiannual Report | 33 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 10. OTHER DERIVATIVE INFORMATION (CONTINUED) For the period ended February 28, 2010, the effect of derivative contracts on the Fund's Statement of Operations was as follows:
CHANGE IN UNREALIZED AVERAGE REALIZED GAIN APPRECIATION AMOUNT DERIVATIVE CONTRACTS (LOSS) (DEPRECIATION) OUTSTANDING NOT ACCOUNTED FOR AS STATEMENT OF FOR THE FOR THE DURING THE HEDGING INSTRUMENTS OPERATIONS LOCATIONS PERIOD PERIOD PERIOD(a) - --------------------- -------------------------------------- ------------- -------------- ------------- Interest rate contracts ..... Net realized gain (loss) from swap contracts / Net change in unrealized appreciation (depreciation) on investments $ 8,839,144 $(2,457,269) 181,444,598 Foreign exchange contracts ................ Net realized gain (loss) from foreign currency transactions / Net change in unrealized appreciation (depreciation) on on translation of other assets and liabilities denominated in foreign currencies (10,560,771) 25,138,621 1,533,384,205
(a) Represents the average notional amount outstanding during the period. For derivative contracts denominated in foreign currencies, notional amounts are converted to U.S. dollars. See Note 1(d) regarding derivative financial instruments. 11. FAIR VALUE MEASUREMENTS The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund's own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund's investments and are summarized in the following fair value hierarchy: - Level 1 - quoted prices in active markets for identical securities - Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speed, credit risk, etc.) - Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. 34 | Semiannual Report Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 11. FAIR VALUE MEASUREMENTS (CONTINUED) The following is a summary of the inputs used as of February 28, 2010, in valuing the Fund's assets and liabilities carried at fair value:
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL ---------- -------------- ------- -------------- ASSETS: Investments in Securities: Bonds ........................ $ -- $1,122,177,587 $-- $1,122,177,587 Municipal Bonds .............. -- 45,137,930 -- 45,137,930 Short Term Investments ....... 4,445,542 23,434,273 -- 27,879,815 ---------- -------------- --- -------------- Total Investments in Securities ............. $4,445,542 $1,190,749,790 $-- $1,195,195,332 ========== ============== === ============== Swaps ........................ -- 8,483,074 -- 8,483,074 Forward Exchange Contracts ... -- 34,318,496 -- 34,318,496 LIABILITIES: Swaps ........................ -- 125,465 -- 125,465 Forward Exchange Contracts ................. -- 22,617,149 -- 22,617,149
12. NEW ACCOUNTING PRONOUNCEMENTS In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-6, FAIR VALUE MEASUREMENTS AND DISCLOSURES (TOPIC 820): IMPROVING DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS, which enhances and clarifies existing fair value measurement disclosure requirements and is effective for interim and annual periods beginning after December 15, 2009. The Fund is currently evaluating the impact, if any, of applying this provision. In March 2010, the FASB issued ASU No. 2010-11, DERIVATIVES AND HEDGING (TOPIC 815): SCOPE EXCEPTION RELATED TO EMBEDDED CREDIT DERIVATIVES, which clarifies existing derivatives and hedging disclosure requirements and is effective for fiscal quarters beginning after June 15, 2010. The Fund is currently evaluating the impact, if any, of applying this provision. 13. SUBSEQUENT EVENTS The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure. Semiannual Report | 35 Templeton Global Income Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) ABBREVIATIONS CURRENCY AUD - Australian Dollar BRL - Brazilian Real EGP - Egyptian Pound EUR - Euro JPY - Japanese Yen IDR - Indonesian Rupiah ILS - New Israeli Shekel KRW - South Korean Won LKR - Sri Lankan Rupee MXN - Mexican Peso NOK - Norwegian Krone NZD - New Zealand Dollar PEN - Peruvian Nuevo Sol PLN - Polish Zloty SEK - Swedish Krona SELECTED PORTFOLIO AMBAC - American Municipal Bond Assurance Corp. BHAC - Berkshire Hathaway Assurance Corp. FRN - Floating Rate Note FSA - Financial Security Assurance Inc. GO - General Obligation ID - Improvement District ISD - Independent School District MTA - Metropolitan Transit Authority USD - Unified/Union School District COUNTERPARTY BOFA - Bank of America N.A. BZWS - Barclays Bank PLC CITI - Citibank N.A. DBAB - Deutsche Bank AG FBCO - Credit Suisse International HSBC - HSBC Bank USA HSBK - HSBC Bank PLC JPHQ - JPMorgan Chase Bank, N.A. MLCO - Merrill Lynch Capital Services, Inc. MSCO - Morgan Stanley and Co., Inc. UBSW - UBS AG 36 | Semiannual Report Templeton Global Income Fund ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 26, 2010 The Annual Meeting of Shareholders of the Fund was held at the Fund's offices, 500 E. Broward Boulevard, Fort Lauderdale, Florida, on February 26, 2010. The purpose of the meeting was to elect five Trustees of the Fund and to ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Fund for the fiscal year ending August 31, 2010. At the meeting, the following persons were elected by the shareholders to serve as Trustees of the Fund: Frank J. Crothers, Larry D. Thompson, Charles B. Johnson, Gregory E. Johnson and J. Michael Luttig.* Shareholders also ratified the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Fund for the fiscal year ending August 31, 2010. No other business was transacted at the meeting. The results of the voting at the Annual Meeting are as follows: 1. The election of five Trustees:
% OF % OF SHARES SHARES % OF PRESENT % OF PRESENT OUTSTANDING AND OUTSTANDING AND FOR SHARES VOTING WITHHELD SHARES VOTING ----------- ----------- ------- --------- ----------- ------- TERM EXPIRING 2013 Frank J. Crothers ........ 115,441,986 87.92% 97.73% 2,676,835 2.04% 2.27% Larry D. Thompson ........ 115,482,650 87.96% 97.77% 2,636,171 2.01% 2.23% Charles B. Johnson ....... 114,845,143 87.47% 97.23% 3,273,678 2.49% 2.77% Gregory E. Johnson ....... 115,118,562 87.68% 97.46% 3,000,259 2.29% 2.54% Term Expiring 2011 J. Michael Luttig ........ 115,520,119 87.98% 97.80% 2,598,702 1.98% 2.20%
2. The ratification of the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Fund for the fiscal year ending August 31, 2010:
% OF % OF OUTSTANDING VOTED SHARES VOTED SHARES SHARES ------------ ----------- ------ For....................... 115,917,746 88.29% 98.14% Against................... 1,091,817 0.83% 0.92% Abstain................... 1,109,257 0.84% 0.94% ----------- ----- ------ Total..................... 118,118,820 89.96% 100.00%
* Harris J. Ashton, Ann Torre Bates, David W. Niemiec, Robert E. Wade, Edith E. Holiday, Frank A. Olson and Constantine D. Tseretopoulos are Trustees of the Fund who are currently serving and whose terms of office continued after the Annual Meeting of Shareholders. Semiannual Report | 37 Templeton Global Income Fund DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN The Fund offers a Dividend Reinvestment and Cash Purchase Plan (the "Plan") with the following features: Shareholders must affirmatively elect to participate in the Plan. If you decide to use this service, share dividends and capital gains distributions will be reinvested automatically in shares of the Fund for your account. BNY Mellon Shareowner Services, P.O. Box 358015, Pittsburgh, PA, 15252-8015, will provide additional Plan information upon request. Whenever the Fund declares dividends in either cash or shares of the Fund, if the market price is equal to or exceeds net asset value at the valuation date, the participant will receive the dividends entirely in new shares at a price equal to the net asset value, but not less than 95% of the then current market price of the Fund's shares. If the market price is lower than net asset value or if dividends and/or capital gains distributions are payable only in cash, the participant will receive shares purchased on the New York Stock Exchange or otherwise on the open market. A participant has the option of submitting additional cash payments to the Plan Administrator, in any amounts of at least $100, up to a maximum of $5,000 per month, for the purchase of Fund shares for his or her account. These payments can be made by check or money order payable to The Bank of New York Mellon (the "Plan Administrator") and sent to BNY Mellon Shareowner Services, P.O. Box 382009, Pittsburgh, PA, 15252-8009, Attention: Templeton Global Income Fund. The Plan Administrator will apply such payments (less a $5.00 service charge and less a pro rata share of trading fees) to purchases of Fund shares on the open market. The automatic reinvestment of dividends and/or capital gains does not relieve the participant of any income tax that may be payable on dividends or distributions. Whenever shares are purchased on the New York Stock Exchange or otherwise on the open market, each participant will pay a pro rata portion of trading fees. Trading fees will be deducted from amounts to be invested. The Plan Administrator's fee for a sale of shares through the Plan is $15.00 per transaction plus a $0.12 per share trading fee. A participant may withdraw from the Plan without penalty at any time by written notice to the Plan Administrator sent to BNY Mellon Shareowner Services, P. O. Box 358015, Pittsburgh, PA, 15252-8015. Upon withdrawal, the participant will receive, without charge, share certificates issued in the participant's name for all full shares held by the Plan Administrator; or, if the participant wishes, the Plan Administrator will sell the shares and send the proceeds to the participant, less a service charge of $15.00 and less trading fees of $0.12 per share. The Plan Administrator will convert any fractional shares held at the time of withdrawal to cash at current market price and send a check to the participant for the net proceeds. 38 | Semiannual Report Templeton Global Income Fund DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED) DIRECT DEPOSIT SERVICE FOR REGISTERED SHAREHOLDERS Cash distributions can now be electronically credited to a checking or savings account at any financial institution that participates in the Automated Clearing House ("ACH") system. The Direct Deposit service is provided for registered shareholders at no charge. To enroll in the service, access your account online by going to http://vault.bnymellon.com/isd or dial 1-800-416-5585 (toll free) and follow the instructions. Direct Deposit will begin with the next scheduled distribution payment date following enrollment in the service. Semiannual Report | 39 Templeton Global Income Fund TRANSFER AGENT BNY Mellon Shareowner Services P.O. Box 358015 Pittsburgh, PA 15252-8015 1-800-416-5585 www.bnymellon.com DIRECT REGISTRATION If you are a registered shareholder of the Fund, purchases of shares of the Fund can be electronically credited to your Fund account at BNY Mellon Shareowner Services through Direct Registration. This service provides shareholders with a convenient way to keep track of shares through book-entry transactions, electronically move book-entry shares between broker-dealers, transfer agents and DRS eligible issuers, and eliminate the possibility of lost certificates. For additional information, please contact BNY Mellon Shareowner Services at 1-800-416-5585. SHAREHOLDER INFORMATION Shares of Templeton Global Income Fund are traded on the New York Stock Exchange under the symbol "GIM." Information about the net asset value and the market price is published each Monday in the WALL STREET JOURNAL, weekly in BARRON'S and each Saturday in THE NEW YORK TIMES and other newspapers. Daily market prices for the Fund's shares are published in the "New York Stock Exchange Composite Transactions" section of newspapers. For current information about distributions and shareholder accounts, call 1-800-416-5585. Registered shareholders can access their Fund account on-line with INVESTOR SERVICEDIRECT(R). For information go to BNY Mellon Shareowner Services' web site at https://vault.bnymellon.com/isd and follow the instructions. The daily closing net asset value as of the previous business day may be obtained when available by calling Franklin Templeton Fund Information after 7 a.m. Pacific time any business day at 1-800/DIAL BEN(R) (1-800/342-5236). The Fund's net asset value and dividends are also listed on the NASDAQ Stock Market, Inc.'s Mutual Fund Quotation Service ("NASDAQ MFQS"). Shareholders not receiving copies of reports to shareholders because their shares are registered in the name of a broker or a custodian can request that they be added to the Fund's mailing list by writing Templeton Global Income Fund, 100 Fountain Parkway, P.O. Box 33030, St. Petersburg, FL 33733-8030. 40 | Semiannual Report Templeton Global Income Fund SHAREHOLDER INFORMATION PROXY VOTING POLICIES AND PROCEDURES The Fund's investment manager has established Proxy Voting Policies and Procedures (Policies) that the Fund uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Fund's complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy Group. Copies of the Fund's proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission's website at sec.gov and reflect the most recent 12-month period ended June 30. QUARTERLY STATEMENT OF INVESTMENTS The Fund files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's website at sec.gov. The filed form may also be viewed and copied at the Commission's Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330. CERTIFICATIONS The Fund's Chief Executive Officer - Finance and Administration is required by the New York Stock Exchange's Listing Standards to file annually with the Exchange a certification that she is not aware of any violation by the Fund of the Exchange's Corporate Governance Standards applicable to the Fund. The Fund has filed such certification. In addition, the Fund's Chief Executive Officer - Finance and Administration and Chief Financial Officer and Chief Accounting Officer are required by the rules of the U.S. Securities and Exchange Commission to provide certain certifications with respect to the Fund's Form N-CSR and Form N-CSRS (which include the Fund's annual and semiannual reports to shareholders) that are filed annually with the Commission. The Fund has filed such certifications with its Form N-CSR for the year ended August 31, 2009. Additionally, the Fund expects to file, on or about April 30, 2010, such certifications with its Form N-CSRS for the six months ended February 28, 2010. Semiannual Report | 41 This page intentionally left blank. This page intentionally left blank. This page intentionally left blank. Franklin Templeton Funds LITERATURE REQUEST. TO RECEIVE A PROSPECTUS, PLEASE CALL US AT (800) DIAL BEN/(800) 342-5236 OR VISIT franklintempleton.com. INVESTORS SHOULD CAREFULLY CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE CAREFULLY READ THE PROSPECTUS BEFORE INVESTING. TO ENSURE THE HIGHEST QUALITY OF SERVICE, WE MAY MONITOR, RECORD AND ACCESS TELEPHONE CALLS TO OR FROM OUR SERVICE DEPARTMENTS. THESE CALLS CAN BE IDENTIFIED BY THE PRESENCE OF A REGULAR BEEPING TONE. VALUE Franklin All Cap Value Fund Franklin Balance Sheet Investment Fund Franklin Large Cap Value Fund Franklin MicroCap Value Fund(1) Franklin MidCap Value Fund Franklin Small Cap Value Fund Mutual Beacon Fund Mutual Quest Fund(2) Mutual Recovery Fund(3) Mutual Shares Fund BLEND Franklin Focused Core Equity Fund Franklin Large Cap Equity Fund Franklin Rising Dividends Fund GROWTH Franklin DynaTech Fund Franklin Flex Cap Growth Fund Franklin Growth Fund Franklin Growth Opportunities Fund Franklin Small Cap Growth Fund Franklin Small-Mid Cap Growth Fund SECTOR Franklin Biotechnology Discovery Fund Franklin Global Real Estate Fund Franklin Gold & Precious Metals Fund Franklin Natural Resources Fund Franklin Real Estate Securities Fund Franklin Utilities Fund Mutual Financial Services Fund GLOBAL Mutual Global Discovery Fund(4) Templeton Global Long-Short Fund(5) Templeton Global Opportunities Trust Templeton Global Smaller Companies Fund Templeton Growth Fund Templeton World Fund INTERNATIONAL Franklin India Growth Fund Franklin International Growth Fund Franklin International Small Cap Growth Fund Mutual European Fund Mutual International Fund Templeton BRIC Fund Templeton China World Fund Templeton Developing Markets Trust Templeton Emerging Markets Small Cap Fund Templeton Foreign Fund Templeton Foreign Smaller Companies Fund Templeton Frontier Markets Fund HYBRID Franklin Balanced Fund Franklin Convertible Securities Fund Franklin Equity Income Fund Franklin Income Fund Templeton Income Fund ASSET ALLOCATION Franklin Templeton Corefolio(R) Allocation Fund Franklin Templeton Founding Funds Allocation Fund Franklin Templeton Perspectives Allocation Fund Franklin Templeton Conservative Target Fund Franklin Templeton Growth Target Fund Franklin Templeton Moderate Target Fund Franklin Templeton 2015 Retirement Target Fund Franklin Templeton 2025 Retirement Target Fund Franklin Templeton 2035 Retirement Target Fund Franklin Templeton 2045 Retirement Target Fund FIXED INCOME Franklin Adjustable U.S. Government Securities Fund(6) Franklin Floating Rate Daily Access Fund Franklin High Income Fund Franklin Limited Maturity U.S. Government Securities Fund(6) Franklin Low Duration Total Return Fund Franklin Real Return Fund Franklin Strategic Income Fund Franklin Strategic Mortgage Portfolio Franklin Templeton Hard Currency Fund Franklin Total Return Fund Franklin U.S. Government Securities Fund(6) Templeton Global Bond Fund Templeton Global Total Return Fund Templeton International Bond Fund TAX-FREE INCOME(7) NATIONAL Double Tax-Free Income Fund Federal Tax-Free Income Fund High Yield Tax-Free Income Fund Insured Tax-Free Income Fund(8) LIMITED-/INTERMEDIATE-TERM California Intermediate-Term Tax-Free Income Fund Federal Intermediate-Term Tax-Free Income Fund Federal Limited-Term Tax-Free Income Fund New York Intermediate-Term Tax-Free Income Fund STATE-SPECIFIC Alabama Arizona California(9) Colorado Connecticut Florida Georgia Kentucky Louisiana Maryland Massachusetts(10) Michigan(10) Minnesota(10) Missouri New Jersey New York(9) North Carolina Ohio(10) Oregon Pennsylvania Tennessee Virginia INSURANCE FUNDS Franklin Templeton Variable Insurance Products Trust(11) (1.) The fund is closed to new investors. Existing shareholders and select retirement plans can continue adding to their accounts. (2.) Effective 5/1/09, Mutual Qualified Fund changed its name to Mutual Quest Fund. The fund's investment goal and strategy remained unchanged. (3.) The fund is a continuously offered, closed-end fund. Shares may be purchased daily; there is no daily redemption. However, each quarter, pending board approval, the fund will authorize the repurchase of 5%-25% of the outstanding number of shares. Investors may tender all or a portion of their shares during the tender period. (4.) Effective 5/1/09, Mutual Discovery Fund changed its name to Mutual Global Discovery Fund. The fund's investment goal and strategy remained unchanged. (5.) Effective 12/18/09, this fund is closed to new investors, pending a proposal to merge the fund into Templeton World Fund. Existing shareholders may continue to make additional investments until shortly before the completion of the transaction, expected in April 2010. (6.) An investment in the fund is neither insured nor guaranteed by the U.S. government or by any other entity or institution. (7.) For investors subject to the alternative minimum tax, a small portion of fund dividends may be taxable. Distributions of capital gains are generally taxable. (8.) The fund invests primarily in insured municipal securities. (9.) These funds are available in three or more variations, including long-term portfolios, intermediate-term portfolios, portfolios of insured securities, a high-yield portfolio (CA only) and a money market portfolio (CA only). (10.) The Board of Trustees approved the elimination of the non-fundamental policy requiring the fund to invest at least 80% of net assets in insured municipal securities and the removal of the word "Insured" from the fund name. The changes became effective 2/15/09. (11.) The funds of the Franklin Templeton Variable Insurance Products Trust are generally available only through insurance company variable contracts. 02/10 Not part of the semiannual report (FRANKLIN TEMPLETON INVESTMENTS(R) LOGO) 100 Fountain Parkway P.O. Box 33030 St. Petersburg, FL 33733-8030 SEMIANNUAL REPORT TEMPLETON GLOBAL INCOME FUND INVESTMENT MANAGER Franklin Advisers, Inc. TRANSFER AGENT BNY Mellon Shareowner Services P.O. Box 358015 Pittsburgh, PA 15252-8015 Toll free number: (800) 416-5585 Hearing Impaired phone number: (800) 231-5469 Foreign Shareholders phone number: (201) 680-6578 www.melloninvestor.com/isd FUND INFORMATION (800) 342-5236 Investors should be aware that the value of investments made for the Fund may go down as well as up. Like any investment in securities, the value of the Fund's portfolio will be subject to the risk of loss from market, currency, economic, political and other factors. The Fund and its investors are not protected from such losses by the investment manager. Therefore, investors who cannot accept this risk should not invest in shares of the Fund. To ensure the highest quality of service, telephone calls to or from our service departments may be monitored, recorded and accessed. These calls can be identified by the presence of a regular beeping tone. TLGIM S 04/10 ITEM 2. CODE OF ETHICS. (a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer. (c) N/A (d) N/A (f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a)(1) The Registrant has an audit committee financial expert serving on its audit committee. (2) The audit committee financial expert is David W. Niemiec and he is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Members of the Audit Committee are: Frank J. Crothers, David W. Niemiec, Ann Torre Bates and Constantine D. Tseretopoulos. ITEM 6. SCHEDULE OF INVESTMENTS. N/A ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. The board of trustees of the Fund has delegated the authority to vote proxies related to the portfolio securities held by the Fund to the Fund's manager Franklin Advisers, Inc. in accordance with the Proxy Voting Policies and Procedures (Policies) adopted by the manager. The manager has delegated its administrative duties with respect to the voting of proxies to the Proxy Group within Franklin Templeton Companies, LLC (Proxy Group), an affiliate and wholly owned subsidiary of Franklin Resources, Inc. All proxies received by the Proxy Group will be voted based upon the manager's instructions and/or policies. To assist it in analyzing proxies, the manager subscribes to RiskMetrics Group (RiskMetrics), an unaffiliated third-party corporate governance research service that provides in-depth analyses of shareholder meeting agendas, vote recommendations, recordkeeping and vote disclosure services. In addition, the manager subscribes to Glass, Lewis & Co., LLC (Glass Lewis), an unaffiliated third-party analytical research firm, to receive analyses and vote recommendations on the shareholder meetings of publicly held U.S. companies. Although RiskMetrics' and/or Glass Lewis' analyses are thoroughly reviewed and considered in making a final voting decision, the manager does not consider recommendations from RiskMetrics, Glass Lewis or any other third party to be determinative of the manager's ultimate decision. As a matter of policy, the officers, directors/trustees and employees of the manager and the Proxy Group will not be influenced by outside sources whose interests conflict with the interests of the Fund and its shareholders. Efforts are made to resolve all conflicts in the interests of the manager's clients. Material conflicts of interest are identified by the Proxy Group based upon analyses of client, distributor, broker dealer and vendor lists, information periodically gathered from directors and officers, and information derived from other sources, including public filings. In situations where a material conflict of interest is identified, the Proxy Group may defer to the voting recommendation of RiskMetrics, Glass Lewis or those of another independent third-party provider of proxy services; or send the proxy directly to the Fund with the manager's recommendation regarding the vote for approval. If the conflict is not resolved by the Fund, the Proxy Group may refer the matter, along with the recommended course of action by the manager, if any, to an interdepartmental Proxy Review Committee (which may include portfolio managers and/or research analysts employed by the manager), for evaluation and voting instructions. The Proxy Review Committee may defer to the voting recommendation of RiskMetrics, Glass Lewis or those of another independent third-party provider of proxy services; or send the proxy directly to the Fund. Where the Proxy Group or the Proxy Review Committee refers a matter to the Fund, it may rely upon the instructions of a representative of the Fund, such as the board or a committee of the board. Where a material conflict of interest has been identified, but the items on which the manager's vote recommendations differ from Glass Lewis, RiskMetrics, or another independent third-party provider of proxy services relate specifically to (1) shareholder proposals regarding social or environmental issues or political contributions, (2) "Other Business" without describing the matters that might be considered, or (3) items the manager wishes to vote in opposition to the recommendations of an issuer's management, the Proxy Group may defer to the vote recommendations of the manager rather than sending the proxy directly to the Fund for approval. To avoid certain potential conflicts of interest, the manager will employ echo voting, if possible, in the following instances: (1) when the Fund invests in an underlying fund in reliance on any one of Sections 12(d)(1)(E), (F), or (G) of the 1940 Act, or pursuant to an SEC exemptive order; (2) when the Fund invests uninvested cash in affiliated money market funds pursuant to an SEC exemptive order ("cash sweep arrangement"); or (3) when required pursuant to the Fund's governing documents or applicable law. Echo voting means that the investment manager will vote the shares in the same proportion as the vote of all of the other holders of the Fund's shares. The recommendation of management on any issue is a factor that the manager considers in determining how proxies should be voted. However, the manager does not consider recommendations from management to be determinative of the manager's ultimate decision. As a matter of practice, the votes with respect to most issues are cast in accordance with the position of the company's management. Each issue, however, is considered on its own merits, and the manager will not support the position of the company's management in any situation where it deems that the ratification of management's position would adversely affect the investment merits of owning that company's shares. MANAGER'S PROXY VOTING POLICIES AND PRINCIPLES The manager has adopted general proxy voting guidelines, which are summarized below. These guidelines are not an exhaustive list of all the issues that may arise and the manager cannot anticipate all future situations. In all cases, each proxy will be considered based on the relevant facts and circumstances. BOARD OF DIRECTORS. The manager supports an independent board of directors, and prefers that key committees such as audit, nominating, and compensation committees be comprised of independent directors. The manager will generally vote against management efforts to classify a board and will generally support proposals to declassify the board of directors. The manager may withhold votes from directors who have attended less than 75% of meetings without a valid reason. While generally in favor of separating Chairman and CEO positions, the manager will review this issue as well as proposals to restore or provide for cumulative voting on a case-by-case basis, taking into consideration factors such as the company's corporate governance guidelines or provisions and performance. RATIFICATION OF AUDITORS OF PORTFOLIO COMPANIES. The manager will closely scrutinize the role and performance of auditors. On a case-by-case basis, the manager will examine proposals relating to non-audit relationships and non-audit fees. The manager will also consider, on a case-by-case basis, proposals to rotate auditors, and will vote against the ratification of auditors when there is clear and compelling evidence of accounting irregularities or negligence. MANAGEMENT AND DIRECTOR COMPENSATION. A company's equity-based compensation plan should be in alignment with the shareholders' long-term interests. The manager believes that executive compensation should be directly linked to the performance of the company. The manager evaluates plans on a case-by-case basis by considering several factors to determine whether the plan is fair and reasonable, including the RiskMetrics quantitative model utilized to assess such plans and/or the Glass Lewis evaluation of the plans. The manager will generally oppose plans that have the potential to be excessively dilutive, and will almost always oppose plans that are structured to allow the repricing of underwater options, or plans that have an automatic share replenishment "evergreen" feature. The manager will generally support employee stock option plans in which the purchase price is at least 85% of fair market value, and when potential dilution is 10% or less. Severance compensation arrangements will be reviewed on a case-by-case basis, although the manager will generally oppose "golden parachutes" that are considered to be excessive. The manager will normally support proposals that require a percentage of directors' compensation to be in the form of common stock, as it aligns their interests with those of shareholders. ANTI-TAKEOVER MECHANISMS AND RELATED ISSUES. The manager generally opposes anti-takeover measures since they tend to reduce shareholder rights. However, as with all proxy issues, the manager conducts an independent review of each anti-takeover proposal. On occasion, the manager may vote with management when the research analyst has concluded that the proposal is not onerous and would not harm the Fund or its shareholders' interests. The manager generally supports proposals that require shareholder rights' plans ("poison pills") to be subject to a shareholder vote and will closely evaluate such plans on a case-by-case basis to determine whether or not they warrant support. In addition, the manager will generally vote against any proposal to issue stock that has unequal or subordinate voting rights. The manager generally opposes any supermajority voting requirements as well as the payment of "greenmail." The manager generally supports "fair price" provisions and confidential voting. CHANGES TO CAPITAL STRUCTURE. The manager realizes that a company's financing decisions have a significant impact on its shareholders, particularly when they involve the issuance of additional shares of common or preferred stock or the assumption of additional debt. The manager will review, on a case-by-case basis, proposals by companies to increase authorized shares and the purpose for the increase. The manager will generally not vote in favor of dual-class capital structures to increase the number of authorized shares where that class of stock would have superior voting rights. The manager will generally vote in favor of the issuance of preferred stock in cases where the company specifies the voting, dividend, conversion and other rights of such stock and the terms of the preferred stock issuance are deemed reasonable. MERGERS AND CORPORATE RESTRUCTURING. Mergers and acquisitions will be subject to careful review by the research analyst to determine whether they would be beneficial to shareholders. The manager will analyze various economic and strategic factors in making the final decision on a merger or acquisition. Corporate restructuring proposals are also subject to a thorough examination on a case-by-case basis. SOCIAL AND CORPORATE POLICY ISSUES. The manager will generally give management discretion with regard to social, environmental and ethical issues, although the manager may vote in favor of those that are believed to have significant economic benefits or implications for the Fund and its shareholders. GLOBAL CORPORATE GOVERNANCE. Many of the tenets discussed above are applied to the manager's proxy voting decisions for international investments. However, the manager must be flexible in these instances and must be mindful of the varied market practices of each region. The manager will attempt to process every proxy it receives for all domestic and foreign issuers. However, there may be situations in which the manager cannot process proxies, for example, where a meeting notice was received too late, or sell orders preclude the ability to vote. If a security is on loan, the manager may determine that it is not in the best interests of the Fund to recall the security for voting purposes. Also, the manager may abstain from voting under certain circumstances or vote against items such as "Other Business" when the manager is not given adequate information from the company. Shareholders may view the complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954)527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy Group. Copies of the Fund's proxy voting records are available online at franklintempleton.com and posted on the SEC website at www.sec.gov. The proxy voting records are updated each year by August 31 to reflect the most recent 12-month period ended June 30. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. N/A ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. N/A ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein. ITEM 11. CONTROLS AND PROCEDURES. (A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective. (B) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR. ITEM 12. EXHIBITS. (a)(1) Code of Ethics (a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Mark H. Otani, Chief Financial Officer and Chief Accounting Officer (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Mark H. Otani, Chief Financial Officer and Chief Accounting Officer SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEMPLETON GLOBAL INCOME FUND By /s/LAURA F. FERGERSON ----------------------------- Laura F. Fergerson Chief Executive Officer - Finance and Administration Date: April 27, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/LAURA F. FERGERSON ----------------------------- Laura F. Fergerson Chief Executive Officer - Finance and Administration Date: April 27, 2010 By /s/MARK H. OTANI ------------------------------ Mark H. Otani Chief Financial Officer and Chief Accounting Officer Date: April 27, 2010 EX-99.CODE ETH 2 ncsr_code1208.txt CODE OF ETHICS Exhibit 12(a)(1) CODE OF ETHICS FOR PRINCIPAL EXECUTIVES & SENIOR FINANCIAL OFFICERS - ------------------------------------------------------------------------------ PROCEDURES Revised December 22, 2008 - ------------------------------------------------------------------------------- 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; 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. 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. 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 December 2008 FRANKLIN GROUP OF FUNDS Edward B. Jamieson President and Chief Executive Officer - Investment Management Charles B. 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 Jennifer J. Bolt Chief Executive Officer - Finance and Administration Laura Fergerson Chief Financial Officer and Chief Accounting Officer FRANKLIN MUTUAL SERIES FUNDS Peter Langerman Chief Executive Officer-Investment Management Jennifer J. Bolt Chief Executive Officer - Finance and Administration Laura Fergerson Chief Financial Officer and Chief Accounting Officer TEMPLETON GROUP OF FUNDS 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 Jennifer J. Bolt Chief Executive Officer - Finance and Administration Laura Fergerson Chief Financial Officer and Chief Accounting Officer EXHIBIT B ACKNOWLEDGMENT FORM DECEMBER 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 c/o Code of Ethics Administration within 10 days of becoming a Covered Officer and by January 30th of each subsequent year. INTER-OFFICE MAIL: Code of Ethics Administration, Global Compliance SM-920/2 TELEPHONE: (650) 312-5698 Fax: (650) 312-5646 E-MAIL: Preclear-Code of Ethics (internal address); lpreclear@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 - ----------------------------- 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. 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. 5. See Part X. EX-99.CERT 3 gim302certs0210.txt 302 CERTS Exhibit 12(a)(2) I, Laura F. Fergerson, 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. 4/27/2010 S\ LAURA F. FERGERSON Laura F. Fergerson Chief Executive Officer - Finance and Administration I, Mark H. Otani, 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. 4/27/2010 S\ MARK H. OTANI Mark H. Otani Chief Financial Officer and Chief Accounting Officer EX-99.906CERT 4 gim906certs0210.txt 906 CERTS Exhibit 12(b) CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Laura F. Fergerson, 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 2/28/2010 (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: 4/27/2010 S\ LAURA F. FERGERSON Laura F. Fergerson Chief Executive Officer - Finance and Administration CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Mark H. Otani, 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 2/28/2010 (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: 4/27/2010 S\ MARK H. OTANI Mark H. Otani Chief Financial Officer and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----