<PAGE>
Templeton
Global Income Fund
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Your Fund's Objective:
Seeks current income, with capital appreciation and growth of income, by
investing primarily in a portfolio of debt securities of companies, governments
and government agencies of various nations throughout the world.
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July 21, 1995
Dear shareholder:
This update for the quarter ended May 31, 1995, includes your Fund's long-term
performance, a listing of its investments, and a brief update regarding the
global investment environment.
This update is one of four reports you will receive during the Fund's fiscal
year. Next quarter, you will receive the annual report covering the 12-months
ended August 31, 1995. The annual provides a more comprehensive discussion of
the financial markets that impact the Fund, a summary of the Fund's performance,
and insight into the manager's investment decisions and outlook. Also included
are the Fund's audited financial statements and investment portfolio.
If you have any questions about this quarterly update, you may call the Franklin
Templeton Fund Information Department at 1-800/342-5236.
1
<PAGE>
Manager's Discussion
A slower rate of U.S. gross domestic product (GDP) growth in the first calendar
quarter of 1995 than posted in the second half of 1994 and signs that the
economy may be slowing further in the second quarter resulted in a strong surge
in prices in the global bond markets. Longer-term interest rates in the U.S.
declined from over 8% in November last year to under 7% this month. Rates in
most of the other industrialized countries followed suit and declined by similar
amounts.
While the global economy continues to expand, inflation remains subdued. Some
upward pressure on inflation is likely the longer the expansion continues.
Indeed, as in the U.S., consumer prices are increasing moderately in other
industrialized countries. However, that upward movement is muted compared with
the experience in recent business cycles. It is for that reason that signs of
slower economic growth in the U.S. in the last two months have resulted in a
surge in prices in global bond markets. This may foreshadow a potential global
trend for 1996.
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Templeton Global Income Fund
Cumulative Total Returns*
Periods Ended 5/31/95
<TABLE>
<CAPTION>
Since
Inception
One-Year Five-Year (11/22/88)
-------- --------- ----------
<S> <C> <C> <C>
Based on change 9.60% 54.89% 70.64%
in net asset value
Based on change 7.82% 52.57% 39.66%
in market price
</TABLE>
*Total return calculations assume reinvestment of all distributions at net asset
value or at market price in accordance with the dividend reinvestment plan.
Past performance is not predictive of future results.
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Since our last report on February 28, 1995, we have taken advantage of higher
bond values in the U.S. and reduced the fund's weighting there slightly, from
29.6% to 19.1% of total net assets as of May 31, 1995. We also increased the
fund's exposure to Asian securities from 6.9% to 13.4% as of May 31, 1995.
Specifically, we increased the fund's exposure to Japan, as we believe the
growth prospects there appear favorable, given sustained low interest rates and
good GDP
2
<PAGE>
growth thus far in 1995. While the Kobe earthquake has certainly disrupted
economic activity in the short-term, it could also stimulate rapid growth as
rebuilding gets underway. Furthermore, the Bank of Japan has indicated that its
monetary policy will take in to account the effects of the earthquake --meaning
that the current low level of interest rates is likely to be maintained despite
the prospects of somewhat stronger growth this year.
As a result of the better performance of the global bond markets, the net asset
value per share of the Templeton Global Income Fund increased in the three
months ended May 31, 1995 to $8.00 from $7.68 on February 28, 1995. Over the
same time period, the market price per share on the New York Stock Exchange
remained the same at $6.88.
/s/ Neil S. Devlin
Neil S. Devlin
Portfolio Manager,
Templeton Global Income Fund
3
<PAGE>
Templeton Global Income Fund, Inc.
Investment Portfolio, May 31, 1995 (unaudited)
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<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY* VALUE
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<C> <C> <S> <C>
BONDS--CORPORATE: 10.0%
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3,500,000 U.S. AXA SA, 8.50%, 10/01/98 $ 2,432,500
5,700,000 U.S. Bombril SA, 8.00%, 8/26/98 4,788,000
10,000,000 Can. British Petroleum Co. PLC, 10.875%,
8/01/01 8,177,869
5,750,000 U.S. Companhia Suzano Papel, 10.25%, 10/06/01 5,290,000
5,174,661 U.S. Electricidad de Caracas, FRN, 9/30/03 2,250,978
4,750,000 U.S. Empresa Colombiana de Petroleos, 7.25%,
7/08/98 4,631,250
7,700,000 U.S. Essar Gujarat Ltd., 9.40%, 7/15/99 7,700,000
2,500,000 U.S. Henderson Capital International Ltd.,
4.25%, 10/27/96 2,500,000
2,000,000 U.S. Hidroelectrica Alicura SA, 8.375%,
3/15/99 1,750,000
4,750,000 U.S. Klabin Fabricadora de Paprl Celulose SA,
11.00%, 4/15/98 4,666,875
10,700,000 Aus. News America Holdings Inc., 8.625%,
2/07/14 6,373,244
4,000,000 U.S. Petroliam Nasional Bhd., 6.875%, 7/01/03 3,966,960
5,000,000 U.S. Pohang Iron & Steel, 6.625%, 7/01/03 4,843,150
5,000,000 U.S. Quantas Airways Ltd., 7.50%, 6/30/03 5,031,900
8,000,000 U.S. Telecom Argentina Stet-France SA, 8.375%,
10/18/00 7,100,000
3,000,000 U.S. Telecom Brasileiras, 10.375%, 9/09/97 3,000,000
7,500,000 U.S. Telefonica de Argentina SA, 8.375%,
10/01/00 6,637,500
Thailand Military Bank:
100,000,000 Thai. 8.50%, 9/22/95 3,977,310
125,000,000 Thai. 7.50%, 10/02/95 4,991,137
90,000,000 Thai. 11.125%, 6/03/96 3,646,677
------------
TOTAL BONDS--CORPORATE 96,105,431
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BONDS--GOVERNMENT & GOVERNMENT AGENCIES: 83.6%
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9,000,000 Ger. Bank Foreign Economic Affairs, 7.50%,
9/27/96 6,124,722
3,000,000 U.S. Bocon Previsionales II, FRN, 4/01/01 2,482,500
23,790,000 Ger. Deutsche Bundespost, 7.75%, 10/01/04 17,806,126
14,300,000 Aus. Eurofima, 9.875%, 1/17/07 10,735,832
European Investment Bank:
1,032,000,000 Jpn. 5.875%, 11/26/99 14,244,894
1,331,000,000 Jpn. 6.625%, 3/15/00 18,930,564
460,000 U.S. Federal Farm Credit Bank, 5.87%, 6/02/95 459,926
Federal Home Loan Mortgage Corp.:
535,000 U.S. 5.90%, 6/26/95 532,807
1,830,000 U.S. 5.85%, 7/07/95 1,819,240
6,300,000 U.S. Federal National Mortgage Association,
5.88%, 6/26/95 6,274,170
20,480,000 Ger. Federal Republic of Germany, Bundes,
8.00%, 1/21/02 15,732,683
61,750,000 Ger. Federal Republic Germany, Bundeschatweis,
6.875%, 12/02/98 45,633,047
17,260,000 Ger. Federal Republic Germany, Bundesobl,
5.375%, 2/22/99 12,194,943
26,000,000 Aus. Government of Australia, 7.50%, 7/15/05 16,906,086
</TABLE>
4
<PAGE>
Templeton Global Income Fund, Inc.
Investment Portfolio, May 31, 1995 (unaudited) (cont.)
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<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY* VALUE
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<C> <C> <S> <C>
BONDS--GOVERNMENT & GOVERNMENT AGENCIES (CONT.)
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Government of Denmark:
49,000,000 Den. 9.00%, 11/15/98 $ 9,332,361
100,150,000 Den. 8.00%, 5/15/03 18,127,476
Government of Italy:
39,500,000,000 Itl. 12.00%, 10/01/95 23,915,334
9,500,000,000 Itl. 12.00%, 1/01/96 5,791,138
13,990,000,000 Itl. 12.00%, 1/01/97 8,559,741
20,750,000,000 Itl. 12.00%, 1/20/98 12,733,744
12,860,000,000 Itl. FRN, 8/01/99 7,847,205
88,000,000 Neth. Government of Netherlands, zero, 1/15/23 7,248,957
3,342,000,000 Sp. Government of Spain, 11.90%, 7/15/96 27,582,422
194,000,000 Swe. Government of Sweden, 6.00%, 2/09/05 19,221,679
International Bank Recon/Dev.:
1,383,000,000 Jpn. 6.75%, 3/15/00 19,776,410
26,330,000 Ger. 7.125%, 4/12/05 18,974,690
93,960,000 Den. Kingdom of Denmark, 8.00%, 11/15/01 17,219,761
10,000,000 U.S. Korea Development Bank, 7.90%, 2/01/02 10,530,700
2,500,000 U.S. Nacional Financiera S N C, 10.625%,
11/22/01 2,137,500
10,000,000 U.S. National Bank of Hungary, 7.95%, 11/01/03 7,775,000
18,900,000 Aus. New South Wales Treasury Corp., 7.00%,
4/01/04 11,823,560
NHA Manulife Pool:
4,200,758 Can. #96405089, 9.125%, 6/01/02 3,149,180
2,351,749 Can. #96405378, 9.25%, 8/01/02 1,774,780
5,261,628 Can. #96405386, 9.25%, 8/01/02 3,924,928
5,000,000 U.S. Philippines Development Bank, 8.00%,
7/22/98 4,975,000
8,000,000 Can. Province of British Columbia, 10.60%,
9/05/20 7,085,539
77,000,000 Can. Province of Ontario, 7.75%, 12/08/03 53,934,577
10,000,000 Aus. Province of Quebec, 9.50%, 10/02/02 7,141,941
46,700,000 Aus. Queensland Treasury Corp., 8.00%, 5/14/03 31,617,626
18,300,000 U.S. Republic of Argentina, 8.375%, 12/20/03 14,182,500
4,000,000 U.S. Republic of Venezuela, 9.00%, 5/27/96 3,840,000
57,000,000 Aus. Treasury Corp. of Victoria, 8.25%,
10/15/03 39,223,413
U.K. Treasury Bonds:
19,263,000 U.K. 7.00%, 8/06/97 30,446,065
20,305,000 U.K. 7.75%, 9/08/06 31,680,255
17,800,000 U.K. 9.00%, 8/06/12 30,940,038
U.S. Treasury Bonds:
5,425,000 U.S. 6.25%, 8/15/23 5,089,301
16,332,000 U.S. 7.625%, 2/15/25 18,358,148
U.S. Treasury Notes:
10,000 U.S. 5.125%, 4/30/98 9,783
21,800,000 U.S. 9.125%, 5/15/99 24,150,258
18,700,000 U.S. 7.75%, 11/30/99 19,924,285
</TABLE>
5
<PAGE>
Templeton Global Income Fund, Inc.
Investment Portfolio, May 31, 1995 (unaudited) (cont.)
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<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY* VALUE
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<C> <C> <S> <C>
BONDS--GOVERNMENT & GOVERNMENT AGENCIES (CONT.)
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U.S. Treasury Notes (cont.):
1,757,000 U.S. 7.50%, 11/15/01 $ 1,880,535
6,048,000 U.S. 5.75%, 8/15/03 5,842,912
16,500,000 U.S. 7.25%, 5/15/04 17,523,495
17,950,000 U.S. 11.625%, 11/15/04 24,597,065
18,360,000 U.S. 6.50%, 5/15/05 18,641,092
14,500,000 U.S. Venezuela Front Load Interest Reduction
Bond, 6.00%, 3/31/07 7,150,313
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TOTAL BONDS--GOVERNMENT & GOVERNMENT AGENCIES 805,558,247
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INDEXED SECURITIES: 3.1%
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16,700,000 U.S. Caisse Nationale de Credit Agricole,
(principal is linked to the difference
in the one year Deutschemark swap rate
and the one year Sterling swap rate
plus 85 basis points times 15), 6.65%,
CD, 10/06/95 11,897,080
18,850,000 U.S. Goldman Sachs Group LP, (principal and
interest is linked to the change in the
Indonesian Rupiah to U.S. Dollar
foreign exchange rate between issue
date (2,179.25 Rupiah/U.S. Dollar) and
maturity date), 14.00%, 6/15/95 18,373,095
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TOTAL INDEXED SECURITIES 30,270,175
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<CAPTION>
NUMBER OF
SHARES**
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<C> <C> <S> <C>
COMMON STOCK: 0.8%
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355,000 U.S. American Health Properties Inc. 7,632,500
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PREFERRED STOCK: 0.2%
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91,500 Sp. Santander Finance Ltd., B, pfd. 2,150,250
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<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY*
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<C> <C> <S> <C>
SHORT TERM OBLIGATIONS: 1.3%
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100,000,000 Thai. Bangkok Bank, 11.50%, 5/16/96 4,059,830
107,000,000 Thai. Thailand Military Bank, 6.875%, 6/01/95 4,335,494
3,770,000 U.S. U.S. Treasury Bills, 5.56% to 5.74% with
maturities to 9/21/95 3,731,358
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TOTAL SHORT TERM OBLIGATIONS 12,126,682
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TOTAL INVESTMENTS: 99.0% 953,843,285
UNREALIZED LOSS IN FORWARD EXCHANGE CONTRACTS: (0.5)% (5,341,485)
OTHER ASSETS, LESS LIABILITIES: 1.5% 14,782,776
------------
TOTAL NET ASSETS: 100.0% $963,284,576
============
</TABLE>
*CURRENCY OF COUNTRIES INDICATED.
**COUNTRY OF ORIGIN.
6
<PAGE>
Templeton Global Income Fund, Inc.
Financial Highlights, May 31, 1995 (unaudited)
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<TABLE>
<CAPTION>
NET ASSET VALUE
TOTAL NET ASSETS PER SHARE
-------------------------- -----------------
<S> <C> <C> <C> <C>
Net Asset Value:
Beginning of period, March 1,
1995 $924,601,083 $ 7.68
Net investment income $ 19,109,215 $ 0.16
Distribution from net investment
income (18,068,010) (0.15)
Net realized and unrealized gain
from security transactions 37,642,288 0.31
------------ --------
Net increase in net asset value 38,683,493 0.32
------------ -------
End of period, May 31, 1995 $963,284,576 $ 8.00
============ =======
</TABLE>
- ---
This report is sent to the shareholders of Templeton Global Income Fund, Inc.
for their information. It is not a prospectus, circular, or representation in-
tended for use in the purchase or sale of shares of the Fund or of any securi-
ties mentioned in the report.
7
<PAGE>
Templeton Global Income Fund, Inc.
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TRANSFER AGENT
Chemical Mellon Shareholder Services Securities Transfer Services 450 West 33rd
Street New York, NY 10001 800-526-0801
SHAREHOLDER INFORMATION
Weekly comparative net asset value and market price information about Templeton
Global Income Fund shares is published each Monday in The Wall Street Journal,
weekly in Barron's and each Saturday in The New York Times and other newspapers
in a table called "Closed-End Bond Funds." Daily market prices for the Fund's
shares are published in the New York Stock Exchange Composite Transactions
section of newspapers under the designation "TemplGlob." The Fund's New York
Stock Exchange trading symbol is GIM. The Fund's shares are also listed and
traded on the Pacific Stock Exchange.
For current information about the net asset value or copies of reports,
call 1-800-292-9293.
For information about dividends and shareholder accounts, call 1-800-526-0801.
8
<PAGE>
Notes
-----
<PAGE>
Notes
-----
<PAGE>
Notes
-----
<PAGE>
- -------------------------------------------
TEMPLETON GLOBAL INCOME FUND, INC.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Investors should be aware that the value
of investments made for the Fund may go
up as well as down and that the
Investment Manager may make errors in
selecting securities for the Fund's
portfolio. Like any investment in
securities, the Fund's portfolio will be
subject to the risk of loss from market,
currency, economic, political, and other
factors. The Fund and Fund investors are
not protected from such losses by the
Investment Manager. Therefore, investors
who cannot accept the risk of such losses
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 determined by the presence of a
regular beeping tone.
- -------------------------------------------
(RECYCLED PAPER LOGO APPEARS HERE) TLGIM Q95 5/95
TEMPLETON
GLOBAL
INCOME
FUND, INC.
Third Quarter Report
May 31, 1995
(LOGO OF FRANKLIN TEMPLETON APPEARS HERE)
