<PAGE>
Templeton
Money Fund
Your Fund's Objective:
The Templeton Money Fund seeks current income, stability of principal, and
liquidity by investing in high-quality money market instruments with maturities
not exceeding 379 days, consisting primarily of short-term U.S. government
securities, bank certificates of deposit, time deposits, banker's acceptances,
commercial paper and repurchase agreements.*
April 14, 1995
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Money
Fund for the period ended February 28, 1995.
During the six-month period, the U.S. economy continued to grow at a rapid pace,
with Gross Domestic Product (GDP) increasing at an annualized rate of 5.1% in
the fourth quarter of 1994.** This is considerably higher than the Federal
Reserve Board's long-term target growth rate of 2.5%. Although inflationary
pressures remained relatively subdued, the Federal Reserve resumed its pre-
emptive attack on inflation by raising short-term interest rates on two more
occasions. It raised the federal funds rate (the interest rate banks charge each
other for overnight loans) from 4.75% to 5.50% in November, and again to 6.0% in
February.
Recent economic indicators have shown some signs of a possible slowdown in
economic activity, but solid evidence is certainly lacking. Federal Reserve
Board Chairman Alan Greenspan recently indicated that monetary policy will
probably remain neutral for the next several months. This has led many investors
to believe that any additional moves by the Federal Reserve will be put on hold
at least until the next Federal Open Market Committee meeting in May 1995.
Due to rising interest rates, the Fund's yield increased significantly during
the past six months. The seven-day effective yield, which assumes compounding of
dividends daily, increased from 3.11% on August 31, 1994 to 5.06% on February
28, 1995. In addition, the Fund's total net assets increased over this same
period, from $144.4 mil-
*An investment in the Fund is neither insured nor guaranteed by the U.S.
government. While the Fund seeks to maintain a stable net asset value of $1.00
per share, there can be no assurance that it will be able to do so.
**Source: U.S. Commerce Dept.
1
<PAGE>
lion to $228.0 million. At the end of the period, the average maturity of the
portfolio was 18.5 days. The Fund continued to diversify, with 24% of its assets
invested in repurchase agreements backed by U.S. government collateral, 70% in
U.S. government bills and agency securities, and the remaining 6% in other net
assets.
Lower unemployment rates and stronger business activity should work together to
keep the economy moving forward. If economic growth continues at its current
pace, however, the Federal Reserve may raise short-term interest rates further
as it seeks to prevent inflation from getting out of control. By maintaining a
portfolio of high-quality securities with relatively short average maturities,
we feel that the Fund is well-positioned to respond quickly to any future
changes in interest rates.
Templeton Money Fund shareholders continue to benefit from convenience, easy
access to their money and a high degree of credit safety. They also enjoy a
variety of services, including free, unlimited check writing for amounts of $500
or more, unlimited transactions, automatic dividend reinvestment and daily
dividend compounding. In addition, shares of the Fund are bought and sold at net
asset value, which means there is absolutely no sales charge on investments in
the Fund.
We thank you for your participation in the Templeton Money Fund and welcome any
comments or suggestions you may have.
Sincerely,
/s/ Thomas Latta
Thomas Latta
Portfolio Manager
Templeton Money Fund
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Templeton Money Fund
Yield for February 28, 1995
<TABLE>
<S> <C>
Seven-day effective yield................. 5.06%
Seven-day annualized yield................ 4.93%
</TABLE>
Yield reflects fluctuations in interest rates on portfolio investments, as
well as fund expenses. The seven-day effective yield assumes the compounding
of daily dividends. Past performance is not indicative of future results.
- --------------------------------------------------------------------------------
2
<PAGE>
Templeton Money Fund
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 1995 -----------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
----------------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- ------- -------- -------- --------
Net investment income .022 .026 .021 .036 .061 .078
Dividends from net investment income (.022) (.026) (.021) (.036) (.061) (.078)
-------- -------- ------- -------- -------- --------
Change in net asset value -- -- -- -- -- --
-------- -------- ------- -------- -------- --------
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======= ======== ======== ========
TOTAL RETURN* 2.15% 2.66% 2.10% 3.62% 6.23% 8.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $228,028 $144,415 $81,874 $125,445 $174,265 $256,965
Ratio of expenses to average net assets 0.90%** 0.90% 1.39% 1.04% 0.89% 0.83%
Ratio of net investment income to average
net assets 4.38%** 2.77% 2.50% 3.65% 6.18% 7.71%
</TABLE>
* NOT ANNUALIZED IN PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
Templeton Money Fund
Investment Portfolio, February 28, 1995 (unaudited)
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<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL MATURITY YIELD AT DATE VALUE
AMOUNT DATE OF PURCHASE (NOTE 1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BONDS--GOVERNMENT AND GOVERNMENT AGENCIES: 69.6%
- -------------------------------------------------------------------------------
Federal Farm Credit Bank: $10,000,000 3/09/95 5.83% $ 9,985,425
4,000,000 3/22/95 5.87 3,985,651
10,000,000 3/23/95 5.85 9,962,625
Federal Home Loan Bank: 16,020,000 3/20/95 5.83 15,968,113
9,400,000 3/23/95 5.85 9,364,868
21,100,000 3/24/95 5.90 21,017,007
Federal Home Loan Mortgage
Corp.: 1,300,000 3/16/95 5.89 1,296,597
14,500,000 3/21/95 5.88 14,450,265
4,000,000 4/03/95 5.85 3,977,250
10,000,000 4/24/95 5.87 9,910,319
Federal National Mortgage
Assn.: 8,700,000 3/06/95 5.74 8,691,677
10,000,000 3/17/95 5.71 9,973,036
15,000,000 3/27/95 5.86 14,934,075
12,150,000 2/16/96 6.01 12,150,000
U.S. Treasury Bill: 2,090,000 3/02/95 5.20 2,089,396
10,865,000 3/09/95 5.35 10,850,539
TOTAL BONDS--GOVERNMENT AND GOVERNMENT AGENCIES
(cost $158,606,843*) 158,606,843
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REPURCHASE AGREEMENT: 24.1% (cost $55,000,000)
- -------------------------------------------------------------------------------
MERRILL LYNCH:
Collateralized by $57,165,000
U.S. Treasury Bills,
due 3/1/95 55,000,000 6.00 55,000,000
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TOTAL INVESTMENTS: 93.7% (COST
$213,606,843*) 213,606,843
OTHER ASSETS, LESS LIABILI-
TIES: 6.3% 14,420,897
------------
TOTAL NET ASSETS: 100.0% $228,027,740
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
Templeton Money Fund
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
and cost $213,606,843
Cash 735,183
Receivables:
Fund shares sold 1,273,026
Investment securities sold 15,000,000
Interest 64,278
------------
Total assets 230,679,330
------------
Liabilities:
Payables:
Fund shares redeemed 1,215,477
Dividends 1,245,963
Accrued expenses 190,150
------------
Total liabilities 2,651,590
------------
Net assets (equivalent to $1.00 per
share based on outstanding
shares 228,027,740) $228,027,740
============
</TABLE>
STATEMENT OF OPERATIONS
for the six months ended February 28, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Interest income: $6,277,847
Expenses:
Management fees (Note 3) $413,011
Administrative fees (Note 3) 169,649
Distribution fees (Note 3) 178,821
Transfer agent fees (Note 3) 223,500
Reports to shareholders 46,205
Registration and filing fees 10,000
Audit fees 7,000
Legal fees 14,000
Trustees' fees and expenses 6,000
Other 3,164
--------
Total expenses 1,071,350
----------
Net investment income 5,206,497
Net realized loss
on investments (3,048)
----------
Net increase in net assets resulting from operations $5,203,449
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
Templeton Money Fund
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, 1995 YEAR ENDED
(UNAUDITED) AUGUST 31, 1994
----------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 5,206,497 $ 3,854,335
Net realized loss on investments (3,048) (94,751)
------------ ------------
Net increase in assets resulting from op-
erations 5,203,449 3,759,584
Distributions to shareholders
from net investment income (5,203,449) (3,759,584)
Fund share transactions (Note 2) 83,612,839 62,540,553
------------ ------------
Net increase in net assets 83,612,839 62,540,553
Net assets:
Beginning of period 144,414,901 81,874,348
------------ ------------
End of period $228,027,740 $144,414,901
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Templeton Money Fund
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Money Fund (the Fund) is a separate series of Templeton Income Trust
(the Trust), a Massachusetts Business Trust, which is an open-end, diversified
management investment company registered under the Investment Company Act of
1940. The following summarizes the Fund's significant accounting policies.
A. Securities Valuations:
The Fund values securities utilizing the amortized cost valuation method, which
involves valuing a portfolio security at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium.
B. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
C. Dividends to shareholders:
Dividends to shareholders are declared daily from investment income (including
realized capital gains and losses) and are paid monthly.
D. Repurchase Agreements:
The Fund, through its custodian, receives delivery of the underlying securi-
ties, whose market is required to be at least 102% of the resale price at the
time of purchase. The Fund's investment manager, Templeton Investment Counsel,
Inc., is responsible for determining that the value of these underlying securi-
ties remains at least equal to the resale price.
E. Other:
Investment transactions are accounted for on a trade date basis. Interest in-
come and estimated expenses are accrued daily.
2. TRANSACTION IN SHARES OF BENEFICIAL INTEREST
At February 28, 1995 there were an unlimited number of shares of beneficial in-
terest authorized ($.01 par value). Transactions in the Fund shares at net as-
set value of $1.00 per share are as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, 1995 AUGUST 31, 1994
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Shares sold 337,496,041 $337,496,041 761,269,070 $ 761,269,070
Shares issued on
reinvestment of
distributions 3,968,748 3,968,748 3,303,708 3,303,708
Shares redeemed (257,851,950) (257,851,950) (702,032,225) (702,032,225)
------------ ------------ ------------ -------------
Net increase 83,612,839 $ 83,612,839 62,540,553 $ 62,540,553
============ ============ ============ =============
</TABLE>
7
<PAGE>
Templeton Money Fund
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Counsel, Inc. (TICI), Templeton Global Investors, Inc. (TGII), Frank-
lin Templeton Distributors, Inc. (FTD), and Franklin Templeton Investor Servic-
es, Inc. (FTIS), the Fund's investment manager, administrative manager, princi-
pal underwriter and transfer agent, respectively. The Fund pays monthly an in-
vestment management fee to TICI equal, on an annual basis, of 0.35% per annum
on the first $200 million of its average daily net assets, 0.30% of the next
1.1 billion and 0.25% per annum of such average daily net assets in excess of
$1.3 billion. The fee is subject to reduction in any year to the extent that
expenses (excluding certain expenses) of the Fund exceed 2 1/2% of the first
$30 million of net assets, 2% of the next $70 million of net assets and 1 1/2%
of the remainder. During the year ended August 31, 1994, no reduction in fee
was required as a result of this limitation. The Fund pays TGII monthly its al-
located share of an administrative fee of 0.15% per annum on the first $200 of
the Trust's aggregate average daily net assets, 0.135% of the next $500 mil-
lion, 0.10% of the next $500 million and 0.075% per annum of such average net
assets in excess of $1.2 billion. For the six months ended February 28, 1995,
FTIS received fees of $223,500.
Pursuant to a Distribution Plan, the Fund reimburses FTD monthly (subject to a
limit of 0.15% per annum of the Fund's average daily net assets) for FTD's
costs and expenses in connection with any activity that is primarily intended
to result in sales of Fund shares. Such distribution fees are set forth in the
Statement of Operations.
An officer of the Fund is a partner of Dechert Price and Rhoads, legal counsel
for the Fund, which firm received fees of $14,000 for the six months ended Feb-
ruary 28, 1995.
8
<PAGE>
NOTES
-----
<PAGE>
NOTES
-----
<PAGE>
The Franklin Templeton Group
- --------------------------------------------------------------------------------
To receive a free brochure and prospectus, which contain more complete informa-
tion, including charges and expenses on each of the funds listed below, call
Franklin Fund Information, toll free, at 1-800-DIAL-BEN (1-800-342-5236) or
Templeton Fund Information at 1-800-292-9293. Please read the prospectus care-
fully before you invest or send money.
TEMPLETON
FAMILY OF FUNDS
Franklin Templeton Japan Fund
Templeton American Trust
Templeton Americas
Government Securities Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global Rising
Dividends Fund
Templeton Growth Fund
Templeton Income Fund
Templeton Money Fund
Templeton Real Estate
Securities Fund
Templeton Smaller
Companies Growth Fund
Templeton World Fund
FRANKLIN GROUP OF FUNDS(R)
FRANKLIN GLOBAL/
INTERNATIONAL FUNDS
Franklin Global Health Care
Fund
Franklin Global Government
Income Fund
Franklin Global Utilities Fund
Franklin International Equity
Fund
Franklin Pacific Growth Fund
FUNDS SEEKING CAPITAL GROWTH
Franklin California Growth
Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin Small Cap Growth
Fund
FUNDS SEEKING GROWTH AND
INCOME
Franklin Balance Sheet
Investment Fund
Franklin Convertible
Securities Fund
Franklin Income Fund
Franklin Equity Income Fund
Franklin Utilities Fund
FUNDS SEEKING HIGH CURRENT
INCOME
Franklin's AGE High Income
Fund
Franklin Investment Grade Income
Fund
Franklin Premier Return Fund
Franklin U.S. Government
Securities Fund
FUNDS SEEKING TAX-FREE
INCOME
Franklin Federal Tax-Free
Income Fund
Franklin High Yield Tax-Free
Income Fund
Franklin California High Yield
Municipal Fund
Franklin Alabama Tax-Free
Income Fund
Franklin Arizona Tax-Free
Income Fund
Franklin California Tax-Free
Income Fund
Franklin Colorado Tax-Free
Income Fund
Franklin Connecticut Tax-Free
Income Fund
Franklin Florida Tax-Free
Income Fund
Franklin Georgia Tax-Free
Income Fund
Franklin Hawaii Municipal
Bond Fund
Franklin Indiana Tax-Free
Income Fund
Franklin Kentucky Tax-Free
Income Fund
Franklin Louisiana Tax-
Free Income Fund
Franklin Maryland Tax-
Free Income Fund
Franklin Missouri Tax-Free
Income Fund
Franklin New Jersey Tax-
Free Income Fund
Franklin New York Tax-
Free Income Fund
Franklin North Carolina
Tax-Free Income Fund
Franklin Oregon Tax-Free
Income Fund
Franklin Pennsylvania Tax-
Free Income Fund
Franklin Puerto Rico Tax-
Free Income Fund
Franklin Texas Tax-Free
Income Fund
Franklin Virginia Tax-Free
Income Fund
Franklin Washington
Municipal Bond Fund
FUNDS SEEKING TAX-FREE
INCOME THROUGH INSURED
PORTFOLIOS
Franklin Insured Tax-Free
Income Fund
Franklin Arizona Insured
Tax-Free Income Fund
Franklin California Insured
Tax-Free Income Fund
Franklin Florida Insured
Tax-Free Income Fund
Franklin Massachusetts
Insured Tax-Free Income
Fund
Franklin Michigan Insured
Tax-Free Income Fund
Franklin Minnesota Insured
Tax-Free Income Fund
Franklin New York Insured
Tax-Free Income Fund
Franklin Ohio Insured Tax-
Free Income Fund
FUNDS SEEKING HIGH CURRENT
INCOME AND STABILITY OF
PRINCIPAL
Franklin Adjustable Rate
Securities Fund
Franklin Adjustable U.S.
Government Securities
Fund
Franklin Short-
Intermediate U.S.
Government Securities
Fund
FUND SEEKING HIGH AFTER-TAX
INCOME FOR CORPORATIONS
Franklin Corporate
Qualified Dividend Fund
MONEY MARKET FUNDS SEEKING
SAFETY OF PRINCIPAL AND
INCOME
Franklin Money Fund
Franklin Federal Money
Fund
Franklin Tax-Exempt
Money Fund
Franklin California Tax-
Exempt Money Fund
Franklin New York Tax-
Exempt Money Fund
IFT Franklin U.S. Treasury
Money Market Portfolio
FUNDS FOR
NON-U.S. INVESTORS
FRANKLIN PARTNERS FUNDS(R)
Franklin Tax-Advantaged
High Yield Securities Fund
Franklin Tax-Advantaged
International Bond Fund
Franklin Tax-Advantaged
U.S. Government
Securities Fund
<PAGE>
- --------------------------
TEMPLETON MONEY FUND
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Account Services
1-800-354-9191
Sales Information
1-800-292-9293
This report must be
preceded or accompanied
by the prospectus of
Templeton Money Fund.
Like any investment in
securities, the value
of the Fund's portfolio
will be subject to the
risk of loss from
market, currency,
economic, political and
other factors, as well
as investment decisions
by the investment
manager which will not
always be profitable or
wise. The Fund and its
investors are not
protected from such
losses by the
investment manager.
Therefore, investors
who cannot accept this
risk should not invest
in shares of the Fund.
To ensure the highest
quality of service,
telephone calls to or
from our service de-
partments may be moni-
tored, recorded and ac-
cessed. These calls can
be determined by the
presence of a regular
beeping tone.
- --------------------------
TL07 S95 04/95
[RECYCLING LOGO APPEARS HERE]
TEMPLETON
MONEY
FUND
Semi-Annual Report
February 28, 1995
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
