ANNUAL
REPORT
AUGUST 31, 1998
TEMPLETON GLOBAL
INCOME FUND, INC.
[LOGO] FRANKLIN TEMPLETON(R)
PAGE
[Franklin Templeton 50 year logo]
[PHOTO OF NEIL S. DEVLIN]
NEIL S. DEVLIN
Portfolio Manager
Templeton Global Income Fund, Inc.
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently he devotes all of his time and efforts to the John
Templeton Foundation. A major portion of his assets remain invested in the
Templeton funds which are managed by many of the investment professionals he
selected and trained.
PAGE
SHAREHOLDER LETTER
Your Fund's Objective: Templeton Global Income Fund seeks high current income,
with a secondary objective of capital appreciation, by investing primarily in a
portfolio of debt securities of U.S. and foreign issuers.
Dear Shareholder:
This annual report of Templeton Global Income Fund covers the fiscal year ended
August 31, 1998. For global bond investors, the period was marked by three
trends: one, the continued decline in prices of raw materials and commodities,
which contributed to a favorable global inflation environment; two, the
emergence of periodic but persistent crises in developing countries; and three,
increasing bond prices in the world's major developed markets.
During the period, much of the world experienced relatively healthy economic
growth. In the U.S., for example, expansion continued for the sixth consecutive
year, and unemployment fell to levels not seen since the early 1970s. European
economies began to emerge from a sluggish growth environment. Those of Finland,
Spain and the Netherlands grew quite rapidly during the fiscal year, as the
delayed impact of low long-term interest
CONTENTS
Shareholder Letter................... 1
Performance Summary.................. 7
Financial Highlights &
Statement of Investments............. 9
Financial Statements................. 14
Notes to Financial
Statements........................... 17
Independent Auditor's Report......... 21
Tax Designation...................... 24
FUND CATEGORY
[PYRAMID GRAPHIC]
You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 10 of
this report.
PAGE
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
8/31/98
<TABLE>
<S> <C>
Europe 42.1%
Latin America 18.1%
United States 20.0%
Canada 8.5%
Australia &
New Zealand 5.5%
Asia 2.2%
Short-Term Investments &
Other Net Assets 3.6%
</TABLE>
rates began to stimulate economic activity. By the end of the reporting period,
accelerating growth had spread to Germany, France, and Italy. Many continental
European markets also benefited from a convergence in interest rates in
countries seeking membership in the European Economic Union.
Inflation in Europe and the U.S. was tame during the period, which surprised
many economists because growth in the two regions was relatively rapid. This
benign inflation environment was largely responsible for the decline in global
interest rates and corresponding rise in bond prices. For example, 10-year U.S.
Treasury bond yields declined from 6.30% to 5.05% during the reporting period,
while yields on similar government bonds in Germany declined from 5.69% to
4.22%.(1)
Japan, where banks were hamstrung by an enormous load of bad debt, presented a
different picture. Japanese government policy makers struggled throughout the
reporting period to restructure their economy, but they failed and Japan
remained in a recession. Its poor demand for products from other Asian markets
and the yen's persistent weakness put enormous pressure on the economies of
developing Asian countries.
Toward the end of the reporting period, Russia also came under tremendous
pressure because of its precarious debt financing. In order to establish at
least a semblance of stability, it devalued the ruble and declared a moratorium
on debt service. These conditions influenced debt instruments of other emerging
markets, including those of Latin America. These crises also affected developed
economies that were highly dependent on commodity exports or
1. Source: Bloomberg.
2
PAGE
trade with emerging economies. Canada, Australia and New Zealand were influenced
in this manner and, by the end of the period, experienced rising interest rates
and moderate declines in their currencies relative to the U.S. dollar.
Responding to these conditions, global bond investors progressively reduced
their holdings of emerging market debt securities and looked for a "safe haven"
in higher quality, developed market government bonds. Within this environment,
Templeton Global Income Fund produced a one-year cumulative total return of
- -7.69% in market-price terms and a -0.46% one-year cumulative total return in
net asset value terms for the fiscal year ended August 31, 1998, as discussed in
the Performance Summary on page 7.
During the period, we attempted to maximize the Fund's return by allocating
about 80% of total net assets to intermediate- and long-term bonds in developed
markets, and less than 20% to what we believed to be the highest quality and
most liquid bonds available in emerging markets. In our view, this combination
appeared to offer the possibility of higher long-term returns with modestly
higher short-term volatility. However, our allocation to emerging market bonds
did hamper the Fund's performance modestly as these bonds generally
underperformed higher-quality bonds from developed markets.
The Fund's geographic distribution was relatively stable throughout the
reporting period. Our allocations to North American and European regions were
28.5% and 42.1%, respectively, on August 31, 1998. Within Europe, the Fund's
allocation in Italy was reduced by almost 2% to 7.8% of total net assets and in
the United Kingdom was increased by over 3% to 9.5%. We also initiated a
position of 1.7% of total net assets in New Zealand.
3
PAGE
PORTFOLIO BREAKDOWN
Based on Total Net Assets
8/31/98
<TABLE>
<S> <C>
Government Bonds 92.5%
Corporate Bonds 3.9%
Short-Term Investments &
Other Net Assets 3.6%
</TABLE>
Near the end of the reporting period, we increased our use of foreign currency
hedging because we believed that the U.S. dollar would rise in value against
other currencies as investors sought a "safe haven" during Russia's and Japan's
economic crises. Our hedging activities were undertaken in an effort to minimize
the loss of value arising from changes in currency exchange rates for the Fund's
European currency-denominated bonds. At the end of the period, the Fund's net
U.S. dollar exposure was 83.7%, up from 60% at the end of the previous fiscal
year. The net exposure to European currencies stood at only 8.1% on August 31,
1998, down from 37% on August 31, 1997.
From our vantage point, the crisis in the emerging markets is not over. We
believe that there is likely to be continued volatility in both emerging and
developed markets until the impact of the crisis is better understood. But
increased volatility in lower-rated bond issues may present an opportunity for
investors with medium- to long-term investment horizons and the willingness to
tolerate moderately higher risk. In our opinion, another critical issue for
global interest rates will be the balance between global growth and inflation.
We believe global economic growth is likely to decline modestly and global
inflation may be quite tame in the near future. In our opinion, this would be an
excellent environment for high quality bonds and contributes to our positive
long-term outlook for the Fund.
Please remember this discussion reflects our views, opinions and portfolio
holdings as of August 31, 1998, the end of the reporting period. However, market
and economic conditions are changing constantly, which can be expected to affect
our strategies and the Fund's portfolio composition. Although historical
performance is no guarantee of future results, these insights may help you
better understand our investment and management philosophy.
4
PAGE
As always, we remind you that there are special risks involved with global
investing related to market, currency, economic, social, political, and other
factors, in addition to the heightened risks associated with the relatively
small size and lesser liquidity of emerging markets.
We thank you for your participation in Templeton Global Income Fund and welcome
any comments or suggestions you may have.
Sincerely,
/s/ Neil S. Devlin
Neil S. Devlin, CFA
Portfolio Manager
Templeton Global Income Fund, Inc.
5
PAGE
IMPORTANT NOTICE TO SHAREHOLDERS
INTRODUCTION OF THE EURO. On January 1, 1999, the European Monetary Union (EMU)
plans to introduce a new single currency, the Euro, which will replace the
national currency for participating member countries. If the Trust holds
investments in countries with currencies replaced by the Euro, the investment
process, including trading, foreign exchange, payments, settlements, cash
accounts, custody and accounting will be impacted.
The process to establish the Euro may result in market volatility. It is not
possible to predict the impact of the Euro on the business or financial
condition of European issuers or on the Trust. The transition and the
elimination of currency risk among EMU countries may change the economic
environment and behavior of investors, particularly in European markets. To the
extent the Trust holds non-U.S. dollar (Euro or other) denominated securities,
it will still be exposed to currency risk due to fluctuations in those
currencies versus the U.S. dollar.
Franklin Resources, Inc. has created an interdepartmental team to handle all
Euro-related changes to enable the Franklin Templeton Funds to process
transactions accurately and completely with minimal disruption to business
activities. While there can be no assurance that the Trust will not be adversely
affected, the manager and its affiliated service providers are taking steps that
they believe are reasonably designed to address the Euro issue.
YEAR 2000. The Fund's business operations use a worldwide network of computer
systems. Many of them have date fields that use two digits to represent the date
and these systems must be replaced or modified, so that they can distinguish the
year 1900 from the year 2000 (commonly referred to as the Year 2000 bug).
When the year 2000 arrives, the Fund's operations could be affected if the
computer system used by the manager, its service providers and other third
parties it does business with are not Year 2000 ready. For example, the Fund's
portfolio and operational areas could be impacted, including securities trade
processing, interest and dividend payments, securities pricing, shareholder
account services, reporting, custody functions and others. The Fund could
experience difficulties in effecting transactions if any of its foreign
subcustodians, or if foreign broker/dealers or foreign markets are not ready for
the year 2000.
The Fund's manager and its affiliate service providers are making a concerted
effort to take steps they believe are reasonably designed to get ready for Year
2000. Of course, the Fund's ability to reduce the effects of Year 2000 issues is
also very dependent upon the efforts of third parties.
In evaluating current and potential portfolio positions, Year 2000 is one of the
factors that the Fund's manager takes into consideration. It will rely upon
public filings and other statements made by companies regarding their Year 2000
readiness. Issuers in countries outside the U.S., and in particular in emerging
markets, may not be required to make the level of disclosure regarding Year 2000
readiness that is required in the U.S. Like with many other matters, the
manager, of course, cannot audit each portfolio company and its major suppliers,
and so cannot verify their Year 2000 readiness. If the value of a Fund
investment is adversely affected by a Year 2000 problem, the net asset value of
the Fund will be affected as well.
SHARE REPURCHASE PROGRAM. On February 21, 1997, the Board of Trustees of the
Trust authorized management to implement an open-market share repurchase program
pursuant to which the Trust from time to time at the discretion of management
may purchase up to an aggregate of 2 million shares of the Trust's shares of
beneficial interest (approximately 10% of the shares outstanding on February 18,
1997) in open-market transactions. This authorization remains in effect.
6
PAGE
PERFORMANCE SUMMARY
In market-price terms, Templeton Global Income Fund produced a -7.69% cumulative
total return for the one-year period ended August 31, 1998. Based on the change
in net asset value (in contrast to market price), the Fund delivered a -0.46%
cumulative total return for the same period. Both total return figures assume
reinvestment of distributions in accordance with the dividend reinvestment and
cash purchase plan.
During the reporting period, the Fund's closing price on the New York Stock
Exchange decreased $1.1250 per share, from $7.5625 on August 31, 1997, to
$6.4375 on August 31, 1998, while the net asset value decreased 68 cents
($0.68), from $8.35 to $7.67.
Templeton Global Income Fund shareholders received per-share distributions of
60.0 cents ($0.6000) in income dividends during the period. Distributions will
vary depending on income earned by the Fund and any profits realized from the
sale of securities in the portfolio, as well as the level of the Fund's
operating expenses.
Past performance is not predictive of future results.
7
PAGE
TEMPLETON GLOBAL INCOME FUND
Periods ended 8/31/98
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR 10-YEAR (3/17/88)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1)
Based on change in net asset value -0.46% 36.07% 117.50% 115.40%
Based on change in market price -7.69% 22.49% 70.90% 70.82%
Average Annual Total Return(2)
Based on change in net asset value -0.46% 6.35% 8.08% 7.61%
Based on change in market price -7.69% 4.14% 5.50% 5.25%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated.
All calculations assume reinvestment of distributions at either net asset value
or at market price on the reinvestment date, in accordance with the dividend
reinvestment and cash purchase plan, and do not reflect any sales charges paid
at inception or brokerage commissions paid on secondary market purchases. Since
markets can go down as well as up, investment return and principal value will
fluctuate with market conditions, currency volatility, and the economic, social
and political climates of countries where the Fund invests. Emerging markets
involve heightened risks related to the same factors, in addition to those
associated with their relatively small size and lesser liquidity. Also, as a
non-diversified investment company, the Fund may invest in a relatively small
number of issuers and, as a result, be subject to greater risk of loss with
respect to its portfolio securities. You may have a gain or loss when you sell
your shares.
Past performance is not predictive of future results.
8
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Financial Highlights
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------------
1998 1997 1996 1995 1994+
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net asset value, beginning of year...................... $8.35 $8.34 $8.00 $7.89 $8.57
------------------------------------------------------------
Income from investment operations:
Net investment income.................................. .60 .60 .63 .64 .67
Net realized and unrealized gains (losses)............. (.68) .01 .31 .11 (.75)
------------------------------------------------------------
Total from investment operations........................ (.08) .61 .94 .75 (.08)
------------------------------------------------------------
Less distributions from:
Net investment income.................................. (.60) (.60) (.41) (.64) (.06)
Net realized gains..................................... -- -- -- -- (.12)
Tax return of capital.................................. -- -- (.19) -- (.42)
------------------------------------------------------------
Total distributions..................................... (.60) (.60) (.60) (.64) (.60)
------------------------------------------------------------
Net asset value, end of year............................ $7.67 $8.35 $8.34 $8.00 $7.89
------------------------------------------------------------
------------------------------------------------------------
Total Return
Based on market value per share........................ (7.69)% 17.12% 12.75% 8.80% (7.64)%
Based on net asset value per share..................... (.46)% 8.53% 13.34% 11.30% (.15)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)......................... $891,785 $1,002,756 $1,004,606 $964,013 $949,850
Ratios to average net assets:
Expenses............................................... .74% .75% .72% .78% .79%
Net investment income.................................. 7.26% 7.05% 7.67% 8.19% 8.17%
Portfolio turnover rate................................. 74.55% 191.83% 112.59% 104.37% 138.34%
</TABLE>
+Based on weighted average shares outstanding.
See Notes to Financial Statements.
9
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM SECURITIES 96.4%
ARGENTINA 5.6%
Republic of Argentina:
10.95%, 11/01/99.......................................... $ 7,030,000 $ 6,616,988
8.75%, 5/09/02............................................ 5,050,000 3,565,931
8.375%, 12/20/03.......................................... 10,510,000 7,777,400
11.00%, 10/09/06.......................................... 11,680,000 8,541,000
11.375%, 1/30/17.......................................... 3,035,000 2,215,550
9.75%, 9/19/27............................................ 9,575,000 6,235,719
Telecom Argentina Stet-France SA (Teco), 144A, 8.375%,
10/18/00.................................................. 8,000,000 7,560,000
Telefonica de Argentina SA (Tear), 144A, 8.375%, 10/01/00... 7,500,000 6,975,000
------------
49,487,588
------------
AUSTRALIA 3.8%
Government of Australia, 7.50%, 7/15/05..................... 53,435,000AUD 33,383,994
------------
BRAZIL 3.9%
Cia Suzano de Papel E Celulose Suz, 144A, 10.25%,
10/06/01.................................................. 5,750,000 5,376,250
Government of Brazil:
FRN, 6.688%, 4/15/09...................................... 14,690,000 7,143,013
Reg D, FRN, 6.688%, 4/15/12............................... 1,000,000 461,250
Series L, cvt., FRN, 6.688%, 4/15/12...................... 19,475,000 8,982,844
8.00%, 4/15/14............................................ 12,356,300 6,550,758
10.125%, 5/15/27.......................................... 11,550,000 6,496,875
------------
35,010,990
------------
BULGARIA .7%
Republic of Bulgaria:
FRN, 6.688%, 7/28/11...................................... 11,940,000 5,402,850
Reg D, FRN, 6.688%, 7/28/11............................... 995,000 450,238
------------
5,853,088
------------
CANADA 8.5%
Government of Canada:
10.50%, 7/01/00........................................... 39,858,000CAD 27,511,741
10.50%, 3/01/01........................................... 39,793,000CAD 28,191,553
10.00%, 5/01/02........................................... 25,710,000CAD 18,712,094
10.25%, 2/01/04........................................... 1,130,000CAD 873,159
NHA Manulife Pool:
#96405089, 9.125%, 6/01/02................................ 686,439CAD 455,302
#96405378, 9.25%, 8/01/02................................. 115,362CAD 76,608
#96405386, 9.25%, 8/01/02................................. 326,370CAD 216,892
------------
76,037,349
------------
</TABLE>
10
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1998 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM SECURITIES (CONT.)
DENMARK 1.9%
Kingdom of Denmark:
9.00%, 11/15/00........................................... 23,811,000DKK $ 3,867,643
8.00%, 5/15/03............................................ 78,725,000DKK 13,390,997
------------
17,258,640
------------
GERMANY 9.9%
Federal Republic of Germany:
7.75%, 2/21/00, Bundesrep................................. 117,045,000DEM 70,319,919
8.00%, 7/22/02............................................ 26,685,000DEM 17,460,630
------------
87,780,549
------------
INDIA .1%
Essar Steel Ltd., 144A, FRN, 8.40%, 7/20/99................. 1,240,000 1,047,800
------------
ITALY 7.8%
Buoni Poliennali del Tesoro:
12.00%, 1/17/99........................................... 14,535,000,000ITL 8,512,421
10.50%, 11/01/00.......................................... 17,020,000,000ITL 11,024,402
10.50%, 9/01/05........................................... 64,010,000,000ITL 49,677,207
------------
69,214,030
------------
MEXICO 5.5%
Nacional Financiera SNC, 10.625%, 11/22/01.................. 2,500,000 2,490,815
United Mexican States:
9.75%, 2/06/01............................................ 18,120,000 16,308,000
9.875%, 1/15/07........................................... 14,735,000 12,672,100
11.375%, 9/15/16.......................................... 8,355,000 7,122,638
Series A, 6.25%, 12/31/19................................. 14,925,000 10,680,703
------------
49,274,256
------------
NEW ZEALAND 1.7%
Government of New Zealand, 6.50%, 2/15/00................... 31,340,000NZD 15,528,801
------------
PANAMA .5%
Republic of Panama, 8.875%, 9/30/27......................... 6,070,000 4,484,213
------------
PERU .4%
Republic of Peru, FRN, 3/07/17.............................. 7,530,000 3,708,525
------------
SPAIN 8.3%
Government of Spain:
12.25%, 3/25/00........................................... 4,657,890,000ESP 34,992,102
10.10%, 2/28/01........................................... 2,500,600,000ESP 19,139,572
10.90%, 8/30/03........................................... 2,290,680,000ESP 19,853,121
------------
73,984,795
------------
</TABLE>
11
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1998 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM SECURITIES (CONT.)
SWEDEN 4.0%
Kingdom of Sweden, 10.25%, 5/05/03.......................... 234,800,000SEK $ 35,881,317
------------
TURKEY 2.1%
Cellco Finance NV, 144A, 15.00%, 8/01/05.................... 9,375,000 7,054,688
Republic of Turkey:
Reg S, 9.875%, 2/23/05.................................... 7,430,000 5,349,600
Reg S, 10.00%, 9/19/07.................................... 8,140,000 6,445,863
------------
18,850,151
------------
UNITED KINGDOM 9.5%
BP America, 10.875%, 8/01/01................................ 10,000,000CAD 7,135,281
United Kingdom:
8.00%, 12/07/00........................................... 27,645,000GBP 48,027,742
7.00%, 11/06/01........................................... 3,010,000GBP 5,178,879
cvt. stk., 9.50%, 4/18/05................................. 12,160,000GBP 24,733,502
------------
85,075,404
------------
UNITED STATES 20.0%
U.S. Treasury Bonds:
6.375%, 8/15/02........................................... 1,005,000 1,053,052
6.375%, 8/15/27........................................... 18,400,000 20,958,759
U.S. Treasury Notes:
5.625%, 4/30/00........................................... 10,000 10,100
6.62%, 3/31/02............................................ 34,895,000 36,661,559
6.25%, 2/15/03............................................ 19,320,000 20,255,822
7.875%, 11/15/04.......................................... 36,629,000 42,157,690
6.625%, 5/15/07........................................... 51,870,000 57,332,559
------------
178,429,541
------------
VENEZUELA 2.2%
Republic of Venezuela, 9.25%, 9/15/27....................... 36,200,000 14,570,500
Venezuela Front Load Interest Reduction Bond, A, 3/31/07.... 12,428,544 5,142,310
------------
19,712,810
------------
TOTAL LONG TERM SECURITIES (COST $964,542,967).............. 860,003,841
------------
</TABLE>
12
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1998 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENTS 1.6%
Den Danske Bank, 5.81%, 9/01/98, Time deposit............... $ 3,745,000 $ 3,745,000
Fannie Mae, 5.53%, 3/11/99.................................. 1,000,000 1,001,105
U.S. Treasury Bills, 4.90% to 4.91% with maturities to
11/12/98.................................................. 9,626,000 9,533,975
------------
TOTAL SHORT TERM INVESTMENTS (COST $14,273,996)............. 14,280,080
------------
TOTAL INVESTMENTS (COST $978,816,963) 98.0%................. 874,283,921
NET EQUITY IN FORWARD CONTRACTS (.4%)....................... (3,630,281)
OTHER ASSETS, LESS LIABILITIES 2.4%......................... 21,131,350
------------
TOTAL NET ASSETS 100.0%..................................... $891,784,990
------------
------------
</TABLE>
CURRENCY ABBREVIATIONS:
<TABLE>
<S> <C>
AUD -- Australian Dollar
CAD -- Canadian Dollar
DEM -- German Mark
DKK -- Danish Krone
ESP -- Spanish Peseta
GBP -- British Pound
ITL -- Italian Lira
NZD -- New Zealand Dollar
SEK -- Swedish Krona
</TABLE>
*Securities traded in U.S. dollars unless otherwise indicated.
See Notes to Financial Statements.
13
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1998
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost $978,816,963).... $ 874,283,921
Cash....................................................... 417
Receivables:
Investment securities sold................................ 180,436,374
Dividends and interest.................................... 26,987,269
Unrealized gain on forward exchange contracts (Note 6)..... 2,580,771
--------------
Total assets.......................................... 1,084,288,752
--------------
Liabilities:
Payables:
Investment securities purchased........................... 184,860,986
To affiliates............................................. 503,434
Distributions to shareholders.............................. 634,596
Unrealized loss on forward exchange contracts (Note 6)..... 6,211,052
Accrued liabilities........................................ 293,694
--------------
Total liabilities..................................... 192,503,762
--------------
Net assets, at value........................................ $ 891,784,990
--------------
--------------
Net assets consist of:
Net unrealized depreciation................................ (108,160,588)
Accumulated net realized gain.............................. 1,168,922
Capital shares............................................. 998,776,656
--------------
Net assets, at value........................................ $ 891,784,990
--------------
--------------
Net asset value per share ($891,784,990 / 116,332,800 shares
outstanding).............................................. $7.67
--------------
--------------
</TABLE>
See Notes to Financial Statements.
14
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<S> <C> <C>
Investment Income:
Dividends.................................................. $ 151,795
Interest................................................... 78,871,466
------------
Total investment income............................... $ 79,023,261
Expenses:
Management fees (Note 3)................................... 5,030,901
Administrative fees (Note 3)............................... 1,261,180
Transfer agent fees........................................ 150,000
Custodian fees............................................. 158,674
Reports to shareholders.................................... 389,800
Registration and filing fees............................... 103,000
Professional fees.......................................... 177,828
Directors' fees and expenses............................... 49,000
Other...................................................... 15,139
------------
Total expenses........................................ 7,335,522
------------
Net investment income........................... 71,687,739
------------
Realized and unrealized gains (losses):
Net realized gain from:
Investments............................................... 3,237,981
Foreign currency transactions............................. 4,012,164
------------
Net realized gain..................................... 7,250,145
Net unrealized depreciation on:
Investments............................................... (84,170,795)
Translation of assets and liabilities denominated in
foreign currencies...................................... (6,740,090)
------------
Net unrealized depreciation........................... (90,910,885)
------------
Net realized and unrealized loss............................ (83,660,740)
------------
Net decrease in net assets resulting from operations........ $(11,973,001)
------------
------------
</TABLE>
See Notes to Financial Statements.
15
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED AUGUST 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
-----------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 71,687,739 $ 71,910,332
Net realized gain from investments and foreign currency
transactions............................................ 7,250,145 16,362,324
Net unrealized depreciation on investments and translation
of assets and liabilities denominated in foreign
currencies............................................... (90,910,885) (15,185,633)
-----------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (11,973,001) 73,087,023
Distributions to shareholders from:
Net investment income..................................... (71,533,235) (71,910,332)
In excess of net investment income........................ -- (312,828)
Capital share transactions (Note 2)........................ (27,464,396) (2,714,270)
-----------------------------------
Net decrease in net assets.............................. (110,970,632) (1,850,407)
Net assets:
Beginning of year.......................................... 1,002,755,622 1,004,606,029
-----------------------------------
End of year................................................ $ 891,784,990 $1,002,755,622
-----------------------------------
-----------------------------------
Distributions in excess of net investment income included in
net assets:
End of year................................................ $ -- $ (312,828)
-----------------------------------
-----------------------------------
</TABLE>
See Notes to Financial Statements.
16
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Global Income Fund, Inc. (the Fund) is registered under the Investment
Company Act of 1940 as a closed-end, non-diversified investment company. The
Fund seeks high current income, with a secondary objective of capital
appreciation, by investing primarily in a portfolio of debt securities of U.S.
and foreign issuers. The following summarizes the Fund's significant accounting
policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Directors.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
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.
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 currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. 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.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
17
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Notes to Financial Statements (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
e. FORWARD EXCHANGE CONTRACTS:
The Fund may enter into forward exchange contracts to hedge against foreign
exchange risks. These contracts are valued daily and the Fund's equity therein
is included in the Statement of Assets and Liabilities. Realized and unrealized
gains and losses are included in the Statement of Operations.
f. 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. CAPITAL STOCK
On February 21, 1997, the Board of Directors of the Fund authorized management
to implement an open-market share repurchase program pursuant to which the Fund
from time to time at the discretion of management may purchase up to an
aggregate of 12 million shares of the Fund's Common Stock.
At August 31, 1998, there were 200,000,000 shares authorized ($0.01 par value).
During the years ended August 31, 1998 and 1997, 3,759,800 and 360,800 shares
were repurchased for $27,464,396 and $2,714,270, respectively.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also officers or directors of Templeton
Investment Counsel, Inc. (TICI) and Franklin Templeton Services, Inc. (FT
Services), the Fund's investment manager and administrative manager,
respectively.
The Fund pays an investment management fee to TICI based on the average daily
net assets of the Fund as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.55% First $200 million
0.50% Over $200 million
</TABLE>
The Fund pays an administrative fee to FT Services based on the average daily
net assets of the Fund as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million
</TABLE>
Legal fees of $138,684 were paid to a law firm in which a partner is an officer
of the Fund.
18
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Notes to Financial Statements (continued)
4. INCOME TAXES
The cost of securities for income tax purposes is the same as that shown in the
Statement of Investments. At August 31, 1998, the net unrealized depreciation
based on the cost of investments for income tax purposes was as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 5,205,789
Unrealized depreciation..................................... (109,738,831)
-------------
Net unrealized depreciation................................. $(104,533,042)
=============
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the year
ended August 31, 1998 aggregated $703,548,546 and $692,921,753, respectively.
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Fund has been a party to financial instruments with off-balance-sheet risk,
primarily forward exchange contracts, in order to minimize the impact on the
Fund 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 contract positions
that are not exact offsets. The contract amount indicates the extent of the
Fund's involvement in such contracts.
A forward exchange contract is an agreement between two parties to exchange
different currencies at a specific rate at an agreed future date. The contracts
are reported 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.
19
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Notes to Financial Statements (continued)
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (CONT.)
As of August 31, 1998, the Fund had the following forward exchange contracts
outstanding:
<TABLE>
<CAPTION>
IN SETTLEMENT UNREALIZED
CONTRACTS TO SELL: EXCHANGE FOR DATE GAIN/(LOSS)
- -------------- ----------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
6,677,200 Australian Dollars....................................... U.S. $ 4,054,796 9/8/98 U.S. $ 233,365
4,500,000 Australian Dollars....................................... 2,721,600 9/9/98 146,168
9,939,000 Australian Dollars....................................... 6,015,580 9/10/98 327,234
13,354,400 Australian Dollars....................................... 7,948,539 9/15/98 304,961
6,677,200 Australian Dollars....................................... 3,967,926 9/18/98 145,984
2,150,000 New Zealand Dollars...................................... 1,103,810 9/3/98 38,198
17,475,000 New Zealand Dollars...................................... 8,772,450 9/14/98 112,337
------------- -----------
U.S. $ 34,584,701 1,308,247
-------------
-------------
Net unrealized gain on offsetting forward exchange contracts...... 1,272,524
-----------
Unrealized gain on forward exchange contracts................... 2,580,771
-----------
CONTRACTS TO BUY:
- --------------
2,339,100 Australian Dollars....................................... U.S. $ 1,378,198 9/15/98 (39,381)
------------- -----------
-------------
CONTRACTS TO SELL:
- --------------
13,110,000 British Pounds........................................... U.S. $ 21,192,446 11/24/98 (663,322)
4,160,000 British Pounds........................................... 6,731,546 11/27/98 (202,590)
50,520,000 Canadian Dollars......................................... 32,195,262 9/30/98 (96,205)
134,685,000 Deutschemarks............................................ 75,580,808 9/17/98 (871,739)
230,000,000 Deutschemarks............................................ 127,300,699 9/21/98 (3,288,148)
94,665,000 Deutschemarks............................................ 52,708,797 9/24/98 (1,049,667)
------------- -----------
U.S. $ 315,709,558 (6,171,671)
------------- -----------
-------------
Unrealized loss on forward exchange contracts................... (6,211,052)
-----------
Net unrealized loss on forward exchange contracts............. U.S. $(3,630,281)
-----------
-----------
</TABLE>
20
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Independent Auditor's Report
THE BOARD OF DIRECTORS AND SHAREHOLDERS
TEMPLETON GLOBAL INCOME FUND, INC.
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Templeton Global Income Fund, Inc. as of August
31, 1998, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the financial highlights for the periods indicated in the
accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1998, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Templeton Global Income Fund, Inc. as of August 31, 1998, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
[McGladrey & Pullen, LLP]
New York, New York
September 29, 1998
21
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Annual Meeting of Shareholders, February 17, 1998
An Annual Meeting of Shareholders of the Fund was held at the Fund's offices,
500 East Broward Boulevard, Ft. Lauderdale, Florida, on February 17, 1998. The
purpose of the meeting was to elect three Directors of the Fund, to ratify the
selection of McGladrey & Pullen, LLP, as the Fund's independent auditors for the
fiscal year ending August 31, 1998, and in their discretion, to authorize the
proxyholders to vote upon other such matters that may legally come before the
meeting or any adjournment of the meeting. At the meeting, the following persons
were elected by the shareholders to serve as Directors of the Fund: Betty P.
Krahmer, Charles B. Johnson and Fred R. Millsaps.* The shareholders ratified the
selection of McGladrey & Pullen, LLP, to serve as the Fund's independent
auditors for the fiscal year ending August 31, 1998. No other business was
transacted at the meeting.
The results of the voting at the Annual Meeting are as follows:
1. The election of three (3) Directors for the term set forth below:
<TABLE>
<CAPTION>
% OF % OF
OUTSTANDING OUTSTANDING
TERM EXPIRING 2001: FOR SHARES WITHHELD SHARES
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Betty P. Krahmer............................................ 97,045,114 81.12% 2,025,273 1.69%
Charles B. Johnson.......................................... 97,195,690 81.25% 1,874,697 1.57%
Fred R. Millsaps............................................ 97,054,478 81.13% 2,015,909 1.68%
</TABLE>
2. The ratification or rejection of the selection of McGladrey & Pullen, LLP, as
independent auditors for the Fund for the fiscal year ending August 31, 1998:
<TABLE>
<CAPTION>
% OF % OF % OF
OUTSTANDING OUTSTANDING OUTSTANDING
FOR SHARES AGAINST SHARES ABSTAIN SHARES
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
97,150,937 81.21% 563,048 0.47% 1,356,402 1.13%
</TABLE>
*Harris J. Ashton, Nicholas F. Brady, S. Joseph Fortunato, John Wm. Galbraith,
Andrew H. Hines, Jr., Edith E. Holiday and Gordon S. Macklin are Directors of
the Fund who are currently serving and whose terms of office continued after the
Annual Meeting of Shareholders.
22
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
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; Stock dividends and capital gains distributions will be reinvested
automatically; ChaseMellon Shareholder Services, Investor Services, P.O. Box
3338, South Hackensack, NJ 07606-1938, will provide additional Plan information
upon request. -- Whenever the Fund declares dividends in either cash or common
stock 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 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 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 payments to Mellon Securities Trust Company (the "Plan
Agent"), in any amounts of at least $100, up to a maximum of $5,000 per month,
for the purchase of Fund shares for his or her account. These payments shall be
made by check or money order payable to "Mellon Securities Trust Co." and sent
to ChaseMellon Shareholder Services, Investor Services, P.O. Box 382009,
Pittsburgh, PA 15250-8009, Attn: Templeton Global Income Fund, Inc. The Plan
Agent shall apply such payments (less a $5.00 service charge and less a pro rata
share of trading fees) to purchases of Fund shares in the open market. -- The
automatic reinvestment of dividends and/or capital gains does not relieve the
participant of any income tax which may be payable on dividends or
distributions. -- The participant may withdraw from the Plan without penalty at
any time by written notice to the Plan Agent sent to ChaseMellon Shareholder
Services, Investor Services, P.O. Box 3338, South Hackensack, NJ 07606-1938.
Upon withdrawal, the participant will receive, without charge, stock
certificates issued in the participant's name for all full shares held by the
Plan Agent; or, if the participant wishes, the Plan Agent will sell the
participant's shares and send the proceeds, less a service charge of $5.00 and
less trading fees. -- 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.
SHAREHOLDER INFORMATION
Shares of Templeton Global Income Fund, Inc. are traded daily on the New York
Stock Exchange under the symbol "GIM". The Fund's shares are also listed and
traded on the Pacific Exchange. Information about the net asset value and the
market price is published each Monday in the Wall Street Journal, weekly in
Barron's and each Saturday in The New York Times and other newspapers. Daily
market prices for the Fund's shares are published in the New York Stock Exchange
Composite Transactions section of newspapers.
For current information about dividends and shareholder accounts, call
1-800-416-5585.
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).
If any shareholder is not receiving copies of the Reports to Shareholders
because shares are registered in a broker's name or in a custodian's name, he or
she can request that his or her name be added to the Fund's mailing list, by
writing Templeton Global Income Fund, Inc., 100 Fountain Parkway, P.O. Box
33030, St. Petersburg, FL 33733-8030.
23
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
Tax Designation
Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby
designates the following amount as a capital gain dividend for the fiscal year
ended August 31, 1998:
<TABLE>
<S> <C>
20% Rate Gain............................................... $8,623,395
----------
----------
</TABLE>
24
PAGE
LITERATURE REQUEST
For a free brochure and prospectus, which contain more complete information,
including charges and expenses, call Franklin Templeton Fund Information at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. 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.
FRANKLIN TEMPLETON GROUP
GLOBAL GROWTH
Franklin Global Health Care Fund
Mutual Discovery Fund
Templeton Developing
Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller
Companies Fund
Templeton Global
Infrastructure Fund
Templeton Global
Opportunities Trust
Templeton Global Real Estate Fund
Templeton Global
Smaller Companies Fund
Templeton Greater European Fund
Templeton Growth Fund
Templeton Latin America Fund
Templeton Pacific Growth Fund
Templeton World Fund
GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and
Income Fund
GLOBAL INCOME
Franklin Global Government
Income Fund
Franklin Templeton Global
Currency Fund
Franklin Templeton Hard
Currency Fund
Templeton Americas Government
Securities Fund
GROWTH
Franklin Biotechnology
Discovery Fund
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap
Growth Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet
Investment Fund*
Franklin Convertible
Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund*
Franklin Natural Resources Fund
Franklin Real Estate
Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund
FUND ALLOCATOR SERIES
Franklin Templeton Conservative
Target Fund
Franklin Templeton Moderate
Target Fund
Franklin Templeton Growth
Target Fund
INCOME
Franklin Adjustable Rate
Securities Fund
Franklin Adjustable U.S.
Government Securities Fund
Franklin's AGE High Income Fund
Franklin Bond Fund
Franklin Floating Rate Trust
Franklin Investment Grade
Income Fund
Franklin Short-Intermediate
U.S. Government Securities Fund
Franklin U.S. Government
Securities Fund
Franklin Money Fund
Franklin Federal Money Fund
FRANKLIN FUNDS SEEKING
TAX-FREE INCOME
Federal Intermediate-Term
Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free
Income Fund
Tax-Exempt Money 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***
VARIABLE ANNUITIES++
Franklin Valuemark(R)
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
*These funds are now closed to new accounts, with the exception of retirement
plan accounts.
**Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
***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.
++Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC. The Franklin Valuemark Funds are managed by Franklin
Advisers, Inc. and its Templeton and Franklin affiliates.
09/98
PAGE
TEMPLETON GLOBAL INCOME FUND, INC.
100 Fountain Parkway
P.O. Box 33030
St. Petersburg, Florida 33733-8030
TRANSFER AGENT
Chase Mellon Shareholder Services
450 West 33rd Street
New York, New York 10001
1-800/416-5585
FUND INFORMATION
1-800/342-5236
Investors should be aware that the value of investments made for the Fund may go
down as well as up, and that the Investment Manager may make errors in selecting
securities for the Fund's portfolio. Like any investment in securities, the
value of 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
determined by the presence of a regular beeping tone.
TLGIM A98 10/98 [LOGO] Printed on recycled paper
