<PAGE>
Templeton Global
Income Fund
Your Fund's Objective:
The Templeton Global Income Fund 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.
April 16, 1996
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Global
Income Fund for the period ended February 29, 1996.
The six months under review were marked by slow global economic growth, as
central banks eased monetary policy and cut benchmark interest rates.
Consequently, global bond prices rose, although the pace and magnitude of the
increases were different in each country.
In Europe, slower economic growth and lower interest rates were most beneficial
to the higher-yielding bond markets such as Italy, Spain and Sweden. Declining
interest rates reduced pressure on these countries' currencies and diminished
the carrying costs of their large debt burdens. Perhaps the most important
factor affecting the performance of their bonds was the countries' efforts to
meet fiscal deficit and inflation standards required by the European Monetary
Union (EMU). Targeted to take effect in 1999, the EMU will result in a common
currency for all qualifying nations.
1
<PAGE>
In North America, the decline in short-term interest rates was particularly
pronounced in the United States. Believing that U.S. interest rates, which had
risen dramatically in 1994 and the early part of 1995, were too high, the
Federal Reserve Board lowered short-term rates twice during 1995 and again in
January 1996. Long-term yields followed suit, and bond prices increased during
the period.
In Canada, however, the bond market rally was not as significant due to the
September referendum on the possible secession of Quebec. Although the province
did not secede, this referendum alerted international investors to the country's
political uncertainty.
Underlying economic conditions in Pacific Rim countries were different from
conditions in the rest of the world. Despite the fact that Japan's short-term
interest rates declined during the period, its economic growth continued to
falter. In Australia and New Zealand, economic growth was among the highest of
any developed markets during the period, which led to modest currency
appreciation and tended to dampen any reduction in interest rates.
Even though interest rates were the most volatile factor in global bond markets
during the period, currency markets
- --------------------------------------------------------------------------------
Templeton Global
Income Fund
Geographic Distribution of Issuer of Securities
Based on Total Net Assets
2/29/96
[PIE GRAPH APPEARS HERE]
<TABLE>
<S> <C>
Europe 33.8%
United States 26.4%
Australia & New Zealand 16.4%
Latin America 12.3%
Canada 7.3%
Asia 3.8%
</TABLE>
were also important, especially in January when the U.S. dollar began to
appreciate against most European currencies. This lessened the benefit of rising
European bond prices to U.S. investors. The main factor behind the dollar's
strength was the belief of international investors that European economic growth
would remain low because governments were cutting budget deficits in an effort
to meet EMU entry requirements.
Within this environment, we stressed two different strategies. First, we
positioned the Fund's average maturity for
2
<PAGE>
lower interest rates. Because bonds with longer maturities tend to appreciate
more than short-term bonds when interest rates decline, we maintained an average
portfolio maturity of approximately 7.5 years during the period, an average
maturity which the Fund manager believed was warranted. Second, we emphasized
investments in Sweden, Ireland, Spain, and the United Kingdom, which were well-
positioned to profit from reform in domestic finance. As of February 29, 1996,
the Fund had established positions in Sweden (3% of total net assets) and
Ireland (1%). We also added 4.7% to the Fund's Spanish position and 7.7% to its
position in the United Kingdom. In markets where domestic conditions became
less attractive over the six-month period, including Germany and France, we
reduced our holdings. At the end of the period, our position in Germany had
declined from 13.8% to zero; in France from 4.7% to zero; and in the U.S. from
28.4% to 26.4%.
Credit quality remains an important factor in selecting the Fund's investments,
which on February 29, 1996, consisted primarily of investment-grade securities
as rated by one of the nationally recognized rating services, or of non-rated
securities we judged to be of
Templeton Global
Income Fund
Portfolio Breakdown on 2/29/96
Based on Total Net Assets
Government Bonds 85.1%
Corporate Bonds 6.4%
Common Stock 0.9%
Preferred Stock 0.3%
Short-Term Obligations &
Other Net Assets 7.3%
For a complete list of portfolio holdings, please see page 7 of this report.
equal quality. At the end of the period, about 75% of the debt securities in
the Fund's portfolio were rated AA or higher, 11% were rated A or BBB, and 14%
were rated below investment grade. The lower-rated bonds represented
obligations of Argentina, Columbia, Russia, Hungary, the Philippines, Mexico,
Brazil and Venezuela. Approximately 91.5% of the Fund's portfolio was held in
bonds, 1.2% in equities, and the remaining 7.3% in short-term obligations and
other net assets.
Looking forward, we believe that the major fundamental trends in the global
macroeconomic environment are subdued economic activity and low inflation. In
our opinion, interest rates in this environment may decline over the long term.
Although relative economic weakness in
3
<PAGE>
Europe may cause the U.S. dollar to rise in the short term, we continue to
believe that the underlying fundamentals in the U.S. economy (inadequate savings
and dependence on foreign capital) may lead to a lower value for the currency
relative to the currencies of its major partners. As always, we remind you that
there are special risks involved with global investing related to market,
currency, economic, political, and other factors, in addition to the heightened
risks associated with the relatively small size and lesser liquidity of
developing markets.
We thank you for your participation in the Templeton Global Income Fund and
welcome any comments or suggestions you may have.
Sincerely,
/s/ Neil S. Devlin
Neil S. Devlin
Portfolio Manager
Templeton Global Income Fund, Inc.
4
<PAGE>
Performance Summary
During the reporting period, Templeton Global Income Fund shareholders received
income distributions of 30 cents ($0.30) per share. The Fund's closing price on
the New York Stock Exchange (NYSE) increased from $6.75 on August 31, 1995 to
$7.25 on February 29, 1996, and the Fund produced a total return of 11.95% in
market-price terms for this six-month period. The Fund's net asset value per
share increased from $8.00 on August 31, 1995 to $8.23 on February 29, 1996.
Based on the change in net asset value (in contrast to market price), the Fund
delivered a total return of 7.22% for this same period.
Both total return figures assume reinvestment of dividends and capital gains in
accordance with the dividend reinvestment plan. Of course, past performance is
not indicative of future results, and distributions will vary depending on
income earned by the Fund.
Templeton Global Income Fund
Cumulative Total Returns*
Periods Ended February 29, 1996
<TABLE>
<CAPTION>
Since
Inception
One-Year Five-Year (3/17/88)
<S> <C> <C> <C>
Based on change
in net asset value 15.45% 44.78% 85.51%
Based on change
in market price 14.84% 33.29% 56.82%
</TABLE>
*Total return calculations assume reinvestment of distributions at net asset
value or at market price in accordance with the dividend reinvestment plan.
Past performance is not predictive of future results.
5
<PAGE>
Templeton Global Income Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 29, 1996 ----------------------------------------------------
(UNAUDITED) 1995 1994+ 1993 1992 1991
----------------- -------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 8.00 $ 7.89 $ 8.57 $ 8.86 $ 8.48 $ 8.51
-------- -------- -------- ---------- ---------- --------
Income from investment
operations:
Net investment income .31 .64 .67 .79 .84 .86
Net realized and
unrealized gain (loss) .22 .11 (.75) (.36) .38 .06
-------- -------- -------- ---------- ---------- --------
Total from investment
operations .53 .75 (.08) .43 1.22 .92
-------- -------- -------- ---------- ---------- --------
Distributions:
Dividends from net in-
vestment income (.30) (.64) (.06) (.64) (.84) (.86)
Distributions from net
realized gains -- -- (.12) (.06) -- (.09)
Tax basis return of
capital -- -- (.42) (.02) -- --
-------- -------- -------- ---------- ---------- --------
Total distributions (.30) (.64) (.60) (.72) (.84) (.95)
-------- -------- -------- ---------- ---------- --------
Change in net asset
value .23 .11 (.68) (.29) .38 (.03)
-------- -------- -------- ---------- ---------- --------
Net asset value, end of
period $ 8.23 $ 8.00 $ 7.89 $ 8.57 $ 8.86 $ 8.48
======== ======== ======== ========== ========== ========
TOTAL RETURN *
Based on market value
per share 11.95% 8.80% (7.64)% (7.07)% 21.30% 24.96%
Based on net asset
value per share 7.22% 11.30% (.15)% 5.34% 14.90% 11.70%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end of pe-
riod (000) $990,870 $964,013 $949,850 $1,032,770 $1,055,456 $991,402
Ratio of expenses to
average net assets .72%** .78% .79% .79% .81% .82%
Ratio of net investment
income to average net
assets 7.47%** 8.19% 8.17% 9.40% 9.68% 10.12%
Portfolio turnover rate 37.58% 104.37% 138.34% 264.61% 189.94% 257.11%
</TABLE>
*NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
**ANNUALIZED.
+BASED ON WEIGHTED AVERAGE SHARES OUTSTANDING.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Templeton Global Income Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY* VALUE
<C> <C> <S> <C>
- ------------------------------------------------------------------------------
BONDS--CORPORATE: 6.4%
- ------------------------------------------------------------------------------
British Petroleum Co. PLC, 10.875%,
10,000,000 Can. 8/01/01 $ 8,444,801
5,750,000 U.S. Companhia Suzano Papel, 10.25%, 10/06/01 5,548,750
5,101,180 U.S. Electricidad de Caracas, FRN, 9/30/03 2,563,343
Empresa Colombiana de Petroleos, 7.25%,
4,750,000 U.S. 7/08/98 4,803,438
7,700,000 U.S. Essar Gujarat Ltd., 8.40%, 7/15/99, 144A 7,574,875
Hidroelectrica Alicura SA, 8.375%,
2,000,000 U.S. 3/15/99, 144A 1,890,000
Klabin Fabricadora de Papel Celulose SA,
4,750,000 U.S. 11.00%, 4/15/98, 144A 4,809,375
5,000,000 U.S. Pohang Iron & Steel, 6.625%, 7/01/03 4,915,050
5,000,000 U.S. Quantas Airways Ltd., 7.50%, 6/30/03 5,077,050
Telecom Argentina Stet-France SA, 8.375%,
8,000,000 U.S. 10/18/00, 144A 7,972,000
3,000,000 U.S. Telecom Brasileiras, 10.375%, 9/09/97 3,082,500
Telefonica de Argentina SA, 8.375%,
7,500,000 U.S. 10/01/00, 144A 6,975,000
------------
TOTAL BONDS--CORPORATE (cost $66,331,547) 63,656,182
- ------------------------------------------------------------------------------
BONDS--GOVERNMENT & GOVERNMENT AGENCIES: 85.1%
- ------------------------------------------------------------------------------
Bank Foreign Economic Affairs Russia,
9,000,000 Ger. 7.50%, 9/27/96 6,105,328
3,000,000 U.S. Bocon Previsionales II, FRN, 4/01/01 3,019,500
Buoni Poliennali del Tes:
19,775,000,000 Itl. 8.50%, 8/01/99 12,289,577
12,730,000,000 Itl. 10.50%, 9/01/05 8,255,644
14,300,000 Aus. Eurofima, 9.875%, 1/17/07 11,423,559
1,078,800 U.S. Government of Brazil, 6.375, FRN, 1/01/01 941,927
Government of Denmark:
49,000,000 Den. 9.00%, 11/15/98 9,351,978
100,150,000 Den. 8.00%, 5/15/03 18,500,891
Government of Italy:
13,990,000,000 Itl. 12.00%, 1/01/97 9,108,731
20,750,000,000 Itl. 12.00%, 1/20/98 13,811,381
12,860,000,000 Itl. FRN, 8/01/99 8,371,348
31,460,000,000 Itl. 10.50%, 7/15/00 20,784,415
16,630,000 N.Z. Government of New Zealand, 6.50%, 2/15/00 10,652,693
Government of Spain:
3,342,000,000 Sp. 11.90%, 7/15/96 27,254,910
2,156,680,000 Sp. 12.25%, 3/25/00 19,250,440
1,872,700,000 Sp. 11.30%, 1/15/02 16,452,407
1,358,400,000 Sp. 10.00%, 2/28/05 11,196,635
94,078,000 Den. Kingdom of Denmark, 8.00%, 11/15/01 17,534,844
Kingdom of Sweden:
80,800,000 Swe. 10.25%, 5/05/03 13,092,784
37,200,000 Swe. 9.00%, 4/20/09 5,516,292
10,000,000 U.S. Korea Development Bank, 7.90%, 2/01/02 10,655,500
</TABLE>
7
<PAGE>
Templeton Global Income Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY* VALUE
<C> <C> <S> <C>
- -------------------------------------------------------------------------------
BONDS--GOVERNMENT & GOVERNMENT AGENCIES (CONT.)
- -------------------------------------------------------------------------------
Nacional Financiera SNC, 10.625%,
2,500,000 U.S. 11/22/01 $ 2,462,500
10,000,000 U.S. National Bank of Hungary, 7.95%, 11/01/03 9,875,000
New South Wales Treasury Corp:
10,100,000 Aus. 12.00%, 12/01/01, 144A 8,924,722
30,100,000 Aus. 7.00%, 4/01/04 20,640,183
NHA Manulife:
3,643,798 Can. #96405089, 9.125%, 6/01/02 2,783,587
2,037,309 Can. #96405378, 9.25%, 8/01/02 1,548,717
4,615,380 Can. #96405386, 9.25%, 8/01/02 3,502,958
Philippines Development Bank, 8.00%,
5,000,000 U.S. 7/22/98 5,162,500
77,000,000 Can. Providence of Ontario, 7.75%, 12/08/03 56,818,967
Province of British Columbia, 10.60%,
8,000,000 Can. 9/05/20 7,244,524
46,700,000 Aus. Queensland Treasury Corp., 8.00%, 5/14/03 34,441,040
Republic of Argentina:
7,030,000 U.S. 10.95%, 11/01/99 7,399,075
30,485,000 U.S. 8.375%, 12/20/03 26,064,705
6,710,000 Irl. Republic of Ireland, 6.25%, 10/18/04 9,590,100
Thailand Military Bank:
90,000,000 Thai. 11.125%, 6/03/96 3,570,012
58,000,000 Thai. 11.00%, 6/05/96 2,289,171
Treasury Corp. of Victoria, 8.25%,
66,600,000 Aus. 10/15/03 49,675,200
United Kingdom:
11,815,000 U.K. 9.50%, 1/15/99 19,297,984
27,090,000 U.K. 6.75%, 11/26/04 38,422,919
12,015,000 U.K. 8.50%, 7/16/07 18,963,010
U.S. Treasury Bonds:
21,030,000 U.S. 10.75%, 5/15/03 26,783,598
5,425,000 U.S. 6.25%, 8/15/23 5,163,081
12,374,000 U.S. 7.625%, 2/15/25 14,007,739
U.S. Treasury Notes:
10,000 U.S. 5.125%, 4/30/98 9,936
16,800,000 U.S. 9.125%, 5/15/99 18,501,000
19,265,000 U.S. 8.00%, 8/15/99 20,667,685
3,827,000 U.S. 7.75%, 12/31/99 4,093,704
17,948,000 U.S. 5.75%, 8/15/03 17,650,781
11,500,000 U.S. 7.25%, 5/15/04 12,337,315
17,950,000 U.S. 11.625%, 11/15/04 24,555,062
29,980,000 U.S. 6.50%, 5/15/05 30,682,731
22,300,000 U.S. 6.50%, 8/15/05 22,812,231
19,900,000 U.S. 5.875%, 11/15/05 19,492,647
</TABLE>
8
<PAGE>
Templeton Global Income Fund, Inc.
Investment Portfolio, February 29, 1996 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY* VALUE
<C> <C> <S> <C>
- -------------------------------------------------------------------------------
BONDS--GOVERNMENT & GOVERNMENT AGENCIES (CONT.)
- -------------------------------------------------------------------------------
United Mexican States:
21,000,000 U.S. 10.805%, FRN, 7/21/97, 144A $ 21,525,000
14,936,000 U.S. 9.75%, 2/06/01 14,375,900
Venezuela Front Load Interest Reduction
14,500,000 U.S. Bond, 6.00%, 3/31/07 8,101,875
------------
TOTAL BONDS--GOVERNMENT & GOVERNMENT AGENCIES (cost
$864,624,421) 843,007,943
- -------------------------------------------------------------------------------
<CAPTION>
NUMBER OF
SHARES**
- -------------------------------------------------------------------------------
<C> <C> <S> <C>
COMMON STOCK: 0.9% (cost $8,267,959)
- -------------------------------------------------------------------------------
355,000 U.S. American Health Properties Inc. 8,253,750
- -------------------------------------------------------------------------------
PREFERRED STOCKS: 0.3%
- -------------------------------------------------------------------------------
American Health Properties Psychiatric
35,500 U.S. Group, pfd. 541,375
91,500 Sp. Santander Finance Ltd., B, pfd. 2,207,438
------------
TOTAL PREFERRED STOCK (cost $2,837,903) 2,748,813
- -------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY*
- -------------------------------------------------------------------------------
<C> <C> <S> <C>
SHORT TERM OBLIGATIONS: 4.7%
- -------------------------------------------------------------------------------
100,000,000 Thai. Bangkok Bank, 11.50%, 5/16/96 3,972,959
2,780,000 U.S. Federal Home Loan Bank, 5.26%, 4/10/96 2,764,154
Federal Home Loan Mortgage Corp., 5.14%,
2,750,000 U.S. 3/04/96 2,748,818
New Zealand Treasury Bills, 8.05% to
34,382,000 N.Z. 8.36% with maturities to 12/18/96 21,970,250
77,000,000 Swe. Sweden Treasury Bill, 8.68%, 11/20/96 10,810,515
U.S. Treasury Bills, 4.70% to 5.04% with
4,441,000 U.S. maturities to 5/02/96 4,415,469
------------
TOTAL SHORT TERM OBLIGATIONS (cost $46,768,100) 46,682,165
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS: 97.4% (cost $988,829,930) 964,348,853
UNREALIZED GAIN IN FORWARD EXCHANGE CONTRACTS: (0.1)% (45,158)
OTHER ASSETS, LESS LIABILITIES: 2.7% 26,566,115
------------
TOTAL NET ASSETS: 100.0% $990,869,810
============
</TABLE>
*CURRENCY OF COUNTRIES INDICATED.
**COUNTRY OF ORIGIN.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
Templeton Global Income Fund, Inc.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost
$988,829,930) $ 964,348,853
Cash 25,913
Receivables:
Investment securities sold 46,382,204
Interest 24,195,721
Unrealized gains on forward exchange contracts (Note 6) 369,799
--------------
Total assets 1,035,322,490
--------------
Liabilities:
Payable for investment
securities purchased 43,154,294
Unrealized loss on forward exchange contracts (Note 6) 414,957
Accrued expenses 883,429
--------------
Total liabilities 44,452,680
--------------
Net assets, at value $ 990,869,810
==============
Net assets consist of:
Undistributed net investment income $ 678,435
Net unrealized depreciation (24,517,768)
Accumulated net realized loss (37,649,802)
Net capital paid in on shares of capital stock 1,052,358,945
--------------
Net assets, at value $ 990,869,810
==============
Shares outstanding 120,453,400
==============
Net asset value per share ($990,869,810 / 120,453,400) $ 8.23
==============
</TABLE>
STATEMENT OF OPERATIONS
for the six months ended February 29, 1996 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $897,646 foreign taxes withheld)
Dividends $ 274,328
Interest 40,071,647
-----------
Total income $40,345,975
Expenses:
Management fees (Note 3) 2,513,682
Administrative fees (Note 3) 629,491
Transfer agent fees 87,000
Custodian fees 5,000
Reports to shareholders 158,000
Audit fees 22,000
Registration and filing fees 88,000
Directors' fees and expenses 26,500
Other 1,847
-----------
Total expenses 3,531,520
-----------
Net investment income 36,814,455
Realized and unrealized gain (loss):
Net realized loss on:
Investments (371,684)
Foreign currency transactions (2,208,205)
-----------
(2,579,889)
-----------
Net unrealized appreciation on:
Investments 28,739,637
Foreign currency translation of other assets and
liabilities 18,872
-----------
28,758,509
-----------
Net realized and unrealized gain 26,178,620
-----------
Net increase in net assets resulting from operations $62,993,075
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
Templeton Global Income Fund, Inc.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 29, 1996 YEAR ENDED
(UNAUDITED) AUGUST 31, 1995
----------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 36,814,455 $ 77,160,130
Net realized loss on investment and for-
eign currency transactions (2,579,889) (34,583,736)
Net unrealized appreciation 28,758,509 48,074,128
------------ ------------
Net increase in net assets resulting from
operations 62,993,075 90,650,522
Distributions to shareholders
from net investment income (36,136,020) (76,487,909)
------------ ------------
Net increase in net assets 26,857,055 14,162,613
Net assets:
Beginning of period 964,012,755 949,850,142
------------ ------------
End of period $990,869,810 $964,012,755
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Templeton Global Income Fund, Inc.
Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Global Income Fund, Inc. (the Fund) is a closed-end, non-diversified
management investment company registered under the Investment Company Act of
1940. The Fund 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.
The following summarizes the Fund's significant accounting policies.
a. Securities Valuations:
Securities, including options, listed or traded on a recognized national or
foreign exchange or NASDAQ are valued at the last reported sales prices on the
principal exchange on which the securities are traded. Over-the-counter securi-
ties and listed securities for which no sale is reported are valued at the mean
between the last current bid and asked prices. Securities for which market quo-
tations are not readily available are valued at fair value as determined by
management and approved in good faith by the Board of Directors.
b. Foreign Exchange Contracts:
The Fund enters into forward exchange contracts and currency option contracts
in order to hedge against foreign exchange risks.
(i) Forward Exchange Contracts: These contracts are valued daily and the Fund's
equity therein, representing unrealized gain or loss on the contracts, is in-
cluded in the Statement of Assets and Liabilities. Realized and unrealized
gains and losses are included in the Statement of Operations.
(ii) Currency Option Contracts: Options purchased are recorded as investments;
options written (sold) are accounted for as liabilities. When an option ex-
pires, the premium (original option value) is realized as a gain if the option
was written or realized as a loss if the option was purchased. When the exer-
cise of an option results in a cash settlement, the difference between the pre-
mium and the settlement proceeds is realized as a gain or loss. When securities
are acquired or delivered upon exercise of an option, the acquisition cost or
sale proceeds are adjusted by the amount of the premium. When an option is
closed, the difference between the premium and the cost to close the position
is realized as a gain or loss.
c. Indexed Securities:
The Fund may invest in debt instruments in which the principal and/or interest
is dependent on another factor such as a yield curve, currency exchange rates
or commodity prices. The Fund's objective in holding these securities, commonly
called structured notes, is to tailor the Fund's investments to the specific
risk and returns it wishes to assume while avoiding unwanted risk or change the
Fund's exposure to a particular foreign exchange rate or the spread between two
foreign exchange rates.
d. Foreign Currency Transactions:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign curren-
cies are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customar-
ily enters into a foreign exchange contract to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of for-
eign currencies, currency gains or losses realized between the trade and set-
tlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at the end
of the fiscal period, resulting from changes in the exchange rates.
12
<PAGE>
Templeton Global Income Fund, Inc.
Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
e. Futures Contracts:
The Fund may enter into futures contracts and options written on futures con-
tracts in order to hedge against risks from changes in currency exchange rates
or interest rates. These futures contracts and options written on futures con-
tracts are valued daily and the Fund's equity therein, representing unrealized
gain or loss on the contract, is included in the Statement of Assets and Lia-
bilities. Realized and unrealized gains and losses are included in the State-
ment of Operations. Margin deposits of cash or securities required with respect
to contracts traded on exchanges are maintained by the Fund's custodian in seg-
regated accounts. Variation margin payments are made or received on futures on
a weekly basis as appreciation or depreciation in the contracts occurs.
f. 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.
g. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income on foreign securi-
ties is recorded as soon as information is available to the Fund. Interest in-
come and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
h. Accounting Estimates:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
As of February 29, 1996, there were 200,000,000 shares of capital stock autho-
rized ($0.01 par value). During the six months ended February 29, 1996 and the
year ended August 31, 1995, there were no share transactions.
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) and Templeton Global Investors, Inc. (TGII), the
Fund's investment manager and administrative manager, respectively. The Fund
pays monthly an investment management fee to TICI equal, on an annual basis, to
0.55% of the average daily net assets of the Fund up to $200 million and 0.50%
of the average daily net assets in excess of $200 million. The Fund pays TGII
monthly a fee of 0.15% per annum on the first $200 million of the Fund's aver-
age daily net assets, 0.135% of the next $500 million, and 0.10% per annum of
average net assets in excess of $700 million.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended February 29, 1996 aggregated $350,101,134 and $377,704,065, re-
spectively. The cost of securities for federal income tax purposes is
$988,795,910. Realized gains and losses are reported on an identified cost ba-
sis.
At February 29, 1996, the aggregate gross unrealized appreciation and deprecia-
tion of portfolio securities, based on cost for federal income tax purposes,
was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 12,296,800
Unrealized depreciation (36,777,877)
------------
Net unrealized depreciation $(24,481,077)
============
</TABLE>
13
<PAGE>
Templeton Global Income Fund, Inc.
Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
5. TAX LOSS CARRYOVERS
At August 31, 1995, the Fund had tax basis losses of $19,800,000 which may be
carried over to offset future capital gains. Such losses expire in 2003. In ad-
dition, as required by the tax rules, the Fund has deferred currency losses oc-
curring subsequent to October 31, 1994 of $14,400,000 to the year ending August
31, 1996.
6. FINANCIAL INSTRUMENTS
During the six months ended February 29, 1996, the Fund has been a party to fi-
nancial instruments with off-balance-sheet risks, primarily forward exchange
contracts, in order to minimize the risk to the Fund, with respect to its port-
folio transactions, from adverse changes in the relationship between the U.S.
dollar and foreign currencies and interest rates. These instruments involve
market risk in excess of the amount recognized on the Statement of Assets and
Liabilities; some of these risks have been minimized by offsetting contracts.
Risks arise from the possible inability of counterparties to meet the terms of
their contracts, future movement in currency values and interest rates and con-
tract positions that are not exact offsets. The contract amount indicates the
extent of the Fund's involvement in such contracts.
Forwards: A forward exchange contract is an agreement between two parties to
exchange different currencies at a specific rate at an agreed future date.
At February 29, 1996, the Fund had outstanding forward exchange contracts for
the purchase and sale of currencies as set out below. These contracts are re-
ported in the financial statements at the Fund's net equity, as measured by the
difference between the forward exchange rates at the reporting date and the
forward exchange rates at the date of entry into the contract:
Contracts to sell:
<TABLE>
<S> <C>
30,000,000,000 Italian lira for 18,891,926 U.S. dollars,
March 18, 1996 $(414,957)
57,081,875 Deutchemarks for 39,366,810 U.S. dollars, March
25, 1996 369,799
---------
Net unrealized loss in forward exchange contracts $ (45,158)
=========
</TABLE>
14
<PAGE>
Templeton Global Income Fund, Inc.
Annual Meeting of Shareholders, February 20, 1996
- --------------------------------------------------------------------------------
An Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
700 Central Avenue, St. Petersburg, Florida, on February 20, 1996. The purpose
of the meeting was to elect two directors of the Fund and to ratify selection
of McGladrey & Pullen, LLP, as the Fund's independent public accountants for
the fiscal year ending August 31, 1996. At the meeting, the following persons
were elected by the shareholders to serve as directors of the Fund: John Wm.
Galbraith and Gordon S. Macklin. In addition, the shareholders ratified the se-
lection of McGladrey & Pullen, LLP, to serve as the Fund's independent public
accountants for the fiscal year ending August 31, 1996. No other business was
transacted at the Annual meeting.
The results of the voting at the Annual Meeting are as follows:
1. Election of two (2) Directors:
<TABLE>
<CAPTION>
% OF % OF % OF
OUTSTANDING SHARES OUTSTANDING
FOR SHARES VOTED WITHHELD SHARES
---------- ----------- ------ --------- -----------
<S> <C> <C> <C> <C> <C>
Term expiring 1999:
John Wm. Galbraith 92,201,224 76.55% 97.57% 2,294,325 1.90%
Gordon S. Macklin 92,545,211 76.83% 97.94% 1,950,338 1.62%
</TABLE>
2. Ratification of the selection of McGladrey & Pullen, LLP as independent
public accountants of the Fund for the fiscal year ending August 31, 1996:
<TABLE>
<CAPTION>
% OF % OF % OF % OF
OUTSTANDING SHARES OUTSTANDING OUTSTANDING
FOR SHARES VOTED AGAINST SHARES ABSTAIN SHARES
---------- ----------- ------ ------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
92,314,263 76.64% 97.69% 806,243 .67% 1,375,043 1.14%
</TABLE>
15
<PAGE>
Templeton Global Income Fund, Inc.
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
The Fund offers a Dividend Reinvestment Plan (the "Plan") with the following
features: .To participate in the Plan, contact Chemical Mellon Shareholder
Services, Shareholder Investment Services, P.O. Box 750, Pittsburgh, PA 15230,
for a Plan brochure and enrollment information. .As a participant, all divi-
dends and capital gains distributions will be reinvested in shares of the Fund.
.Whenever the Fund declares dividends in either cash or common stock of the
Fund, if the market price is equal to or exceeds net asset value at the valua-
tion date (payable date), participants will receive the dividends entirely in
stock 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 and if dividends and/or capital gains distributions are payable
only in cash, the participant will receive shares purchased on the New York
Stock Exchange. .The automatic reinvestment of dividends and/or capital gains
does not relieve the participant of any income tax which may be payable on div-
idends or distributions. .The participant may withdraw from the Plan without
penalty at any time by written notice to Mellon Securities Trust Company. Upon
withdrawal, the participant will receive, without charge, stock certificates
issued in the participant's name for all full shares; or, if the participant's
wishes, Mellon Securities Trust Company will sell the participant's shares and
send the proceeds, less a service fee of $2.50 and less brokerage commissions.
.Whenever shares are purchased on the New York Stock Exchange, each participant
will pay a pro rata portion of brokerage commissions. Brokerage commissions
will be deducted from amounts to be invested.
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.
16
<PAGE>
Notes
-----
<PAGE>
Notes
-----
<PAGE>
THE FRANKLIN TEMPLETON GROUP
Literature Request - Call today for a free descriptive brochure and prospectus
on any of the funds listed below. The prospectus contains more complete
information, including fees, charges and expenses, and should be read carefully
before investing or sending money.
Templeton Funds
Americas Government
Securities Fund
Developing Markets Trust
Foreign Fund
Global Infrastructure Fund
Global Opportunities Trust
Greater European Fund
Growth Fund
Growth and Income Fund
Income Fund
Latin America Fund
Real Estate
Securities Fund
Smaller Companies
Growth Fund
World Fund
Franklin Funds Seeking
Tax-Free Income
Federal Tax-Free
Income Fund
Federal Intermediate-Term
Tax-Free Income Fund
High Yield Tax-Free
Income Fund
Insured Tax-Free
Income Fund***
Puerto Rico Tax-Free
Income Fund
Franklin State-Specific
Funds Seeking Tax-Free
Income
Alabama
Arizona*
Arkansas**
California*
Colorado
Connecticut
Florida*
Georgia
Hawaii**
Indiana
Kentucky
Louisiana
Maryland
Massachusetts***
Michigan***
Minnesota***
Missouri
New Jersey
New York*
North Carolina
Ohio***
Oregon
Pennsylvania
Tennessee
Texas
Virginia
Washington**
Franklin Funds
Seeking Capital Growth
California Growth Fund
DynaTech Fund
Equity Fund
Global Health
Care Fund
Gold Fund
Growth Fund
International
Equity Fund
Japan Fund
Pacific Growth Fund
Small Cap Growth Fund
Franklin Funds Seeking
Growth and Income
Balance Sheet
Investment Fund
Convertible Securities Fund
Equity Income Fund
Global Utilities Fund
Income Fund
Natural Resources Fund
Premier Return Fund
Real Estate Securities Fund
Rising Dividends Fund
Strategic Income Fund
Utilities Fund
Franklin Funds Seeking
High Current Income
AGE High Income Fund
Global Government
Income Fund
Investment Grade
Income Fund
U.S. Government
Securities Fund
Franklin Funds Seeking
High Current Income and
Stability of Principal
Adjustable Rate
Securities Fund
Adjustable U.S. Government
Securities Fund
Short-Intermediate U.S.
Government
Securities Fund
Franklin Funds for
Non-U.S. Investors
Tax-Advantaged High Yield
Securities Fund
Tax-Advantaged International
Bond Fund
Tax-Advantaged U.S.
Government Securities Fund
Franklin Templeton Global
Currency Funds
German Government
Bond Fund
Global Currency Fund
High Income Currency Fund
Hard Currency Fund
Franklin Money
Market Funds
Money Fund
Federal Money Fund
Tax-Exempt Money
Fund
California Tax-Exempt
Money Fund
New York Tax-Exempt
Money Fund
IFT U.S. Treasury Money
Market Portfolio
Franklin Fund for
Corporations
Corporate Qualified
Dividend Fund
Franklin Tax-Deferred
Annuity
Franklin Valuemark
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
Fund Information: 1-800/342-5236
Shareholder Services: 1-800/632-2301
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.
*Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and a high yield
portfolio (CA).
**The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
***Portfolio of insured municipal securities.
<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.
- --------------------------
TLGIM S96 04/96
[RECYCLED PAPER LOGO APPEARS HERE]
TEMPLETON
GLOBAL
INCOME
FUND, INC.
Semi-Annual Report
February 29, 1996
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
