N-CSRS 1 primary-document.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM N-CSRS
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
 
Investment Company Act file number 811-04706
 
Templeton Income Trust
(Exact name of registrant as specified in charter)
 
300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923

(Address of principal executive offices) (Zip code)
 
Alison Baur, One Franklin Parkway, San Mateo, CA  94403-1906
(Name and address of agent for service)
 
Registrant's telephone number, including area code:(954)527-7500
 
Date of fiscal year end: 12/31
 
Date of reporting period: 6/30/22
 
Item 1. Reports to Stockholders.
 
a.)
 
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)


b.)
 
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
 
SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
International
Bond
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2022
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Semiannual
Report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
The
six
months
ended
June
30,
2022,
were
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impacts
of
COVID-19
and
the
start
of
Russia’s
war
on
Ukraine.
Global
economies
faced
commodity
price
inflation,
tightening
financial
conditions,
weakening
global
growth,
and
supply
chain
disruptions
in
China.
Risk
assets
faced
strong
headwinds,
and
central
bankers
across
many
countries
faced
the
difficult
choice
of
supporting
growth
or
controlling
rising
price
pressures.
Sovereign
bond
yields
rose
across
much
of
the
world
following
higher
headline
inflation
data
and
central
bank
policy
rate
hikes,
and
the
U.S.
dollar
strengthened.
Simultaneously,
the
Russia-Ukraine
war
disrupted
the
flow
of
energy,
food,
commodities
and
goods,
particularly
throughout
Europe,
while
increasing
both
broad
geopolitical
instability
and
the
social
and
economic
strains
of
refugee
flight.
We
expect
broader
economic
strains
as
a
fallout
from
the
war.
Emerging
market
countries
that
are
net
importers
of
food
and
energy
will
be
more
vulnerable
to
trade
shocks
and
political
turmoil
stemming
from
elevated
commodity
prices.
Despite
the
challenging
macroeconomic
environment,
divergences
among
countries
offer
opportunities
for
outperformance
in
duration,
local-currency
sovereign
bonds
and
currencies,
and
we
remain
committed
to
pursuing
our
investment
objectives.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
their
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
International
Bond
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2022,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
International
Bond
Fund
3
Performance
Summary
6
Your
Fund’s
Expenses
8
Financial
Highlights
and
Schedule
of
Investments
9
Financial
Statements
17
Notes
to
Financial
Statements
21
Shareholder
Information
33
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
International
Bond
Fund
This
semiannual
report
for
Templeton
International
Bond
Fund
covers
the
period
ended
June
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
current
income
with
capital
appreciation
and
growth
of
income.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
bonds.
For
purposes
of
the
Fund’s
80%
policy,
bonds
include
derivative
instruments
or
other
investments
that
have
economic
characteristics
similar
to
bonds.
Bonds
include
debt
obligations
of
any
maturity,
such
as
bonds,
notes,
bills
and
debentures.
The
Fund
invests
predominantly
in
bonds
issued
by
governments,
government-related
entities
and
government
agencies
located
outside
of
the
U.S.
*Includes
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-7.07%
cumulative
total
return.
In
comparison,
the
Fund’s
benchmark,
the
FTSE
Non-USD
World
Government
Bond
Index
(WGBI),
which
measures
performance
of
investment-grade,
non-U.S.
world
government
bond
markets,
posted
a
cumulative
total
return
of
-18.74%
in
U.S.
dollar
terms
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
6
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Economic
and
Market
Overview
The
six-month
period
ended
June
30,
2022,
was
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impact
of
COVID-19,
the
start
of
Russia’s
war
on
Ukraine,
commodity-price
inflation,
rising
global
interest
rates,
weakening
global
gross
domestic
product
growth,
and
supply
chain
disruptions.
Risk
assets
faced
strong
headwinds
resulting
from
tighter
financial
conditions.
Sovereign
bond
yields
rose
across
most
of
the
world
as
many
major
central
banks
embarked
on
policy
rate
hikes
to
curb
inflation.
Inflation
reached
multi-decade
highs
during
the
period,
with
added
supply-side
pressures
coming
from
disruptions
to
the
flow
of
energy,
food,
commodities
and
goods
due
to
the
war
in
Ukraine
and
the
West’s
economic
isolation
of
Russia.
Supply
chain
disruptions
were
compounded
by
China’s
implementation
of
its
zero-COVID
policy.
Simultaneously,
global
economic
growth
was
projected
to
decelerate,
driven
by
the
disruption
of
economic
activity
and
trade
following
Russia’s
invasion
of
Ukraine,
including
a
reduction
in
Russia’s
exports
of
natural
gas
to
Germany,
the
economic
strains
of
refugee
flight
in
Europe,
volatile
and
elevated
commodity
prices,
continued
supply
chain
disruptions,
the
effect
of
COVID-19-related
lockdowns
in
China,
and
the
reduction
of
policy
support
post-COVID-19.
The
combination
of
above-average
inflation
and
below-
average
growth
raised
the
spectre
of
stagflation
reminiscent
of
the
1970s
and
created
a
policy
dilemma
for
many
central
bankers.
Over
the
period,
developed
market
sovereign
bond
yields
trended
higher
concurrently
with
falling
equity
prices
and
strength
in
the
U.S.
dollar.
On
the
monetary
front,
the
first
half
of
2022
marked
the
end
of
pandemic-era
monetary
accommodation
by
the
U.S.
Federal
Reserve.
Investment
Strategy
We
invest
selectively
in
non-U.S.
bonds
around
the
world
based
upon
our
assessment
of
changing
market,
political
and
economic
conditions.
While
seeking
opportunities,
we
Portfolio
Composition
6/30/22
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
67.2%
Short-Term
Investments
&
Other
Net
Assets*
32.8%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
14
.
Templeton
International
Bond
Fund
4
franklintempleton.com
Semiannual
Report
monitor
various
factors
including
changes
in
interest
rates,
currency
exchange
rates
and
credit
risks.
For
purposes
of
pursuing
its
investment
goals,
the
Fund
regularly
enters
into
various
currency-related
transactions
involving
derivative
instruments,
principally
currency
and
cross
currency
forwards,
but
it
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
The
Fund
may
also
enter
into
various
other
transactions
involving
derivatives,
including
interest-rate/bond
futures
and
swap
agreements
(which
may
include
interest
rate
and
credit
default
swaps).
Manager’s
Discussion
In
bonds,
we
continued
to
maintain
low
portfolio
duration,
while
aiming
at
a
high
overall
portfolio
yield
by
holding
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets,
specifically
in
countries
with
resilient
economies
and
strong
trade
dynamics.
We
were
significantly
underweight
developed
market
duration
in
the
euro
area,
with
a
preference
for
the
higher
yields
available
in
select
emerging
market
local-currency
bonds,
notably
including
Indonesia,
India,
Thailand,
Brazil,
and
Colombia.
At
the
beginning
of
the
period,
the
Fund
was
overweight
in
specific
currencies
against
the
U.S.
dollar
(USD)
and
the
euro.
In
Asia,
we
held
notable
exposures
to
the
South
Korean
won,
the
Chinese
yuan,
the
Indonesian
rupiah,
the
Indian
rupee
and
the
Singapore
dollar,
while
holding
an
underweight
in
the
Japanese
yen.
We
closed
our
exposure
to
the
Japanese
yen
in
March
2022,
thereby
going
further
underweight,
primarily
due
to
expected
depreciation
pressures
on
the
currency
from
widening
rate
differentials
with
the
U.S.
In
April,
we
exited
our
underweight
position
in
the
Australian
dollar,
which
had
been
used
to
hedge
against
emerging
market
beta
risks,
as
we
anticipated
rising
commodity
prices
to
boost
Australia’s
terms
of
trade
and
support
its
currency.
In
EMEA
(Europe,
Middle
East
and
Africa),
the
Fund
held
overweight
positions
in
the
Norwegian
krone,
the
Swedish
krona
and
the
British
pound
against
the
euro.
We
added
a
position
in
the
British
pound
against
the
euro
in
April
due
to
expected
monetary
policy
divergences
between
the
Bank
of
England
and
the
European
Central
Bank.
In
the
Americas,
we
held
long
exposures
to
the
Brazilian
real
and
the
Colombian
peso
against
the
USD,
and
long
exposure
to
the
Canadian
dollar
against
the
euro.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions,
followed
by
interest-
rate
strategies.
Sovereign
credit
exposures
had
a
neutral
effect.
Among
currencies,
positions
in
the
South
Korean
won,
Ghanaian
cedi,
Argentine
peso,
Chinese
yuan,
Indonesian
rupiah
and
Indian
rupee
detracted
from
absolute
performance.
However,
the
Fund’s
position
in
the
Brazilian
real
contributed
to
absolute
results.
Its
position
in
the
Canadian
dollar
against
the
euro
also
contributed
to
absolute
performance,
as
did
its
net-negative
exposure
to
the
euro.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
The
Fund’s
duration
exposure
in
South
Korea
detracted
from
absolute
results,
while
its
duration
exposure
in
Argentina
contributed.
On
a
relative
basis,
the
Fund’s
performance
fared
better
than
that
of
its
benchmark
index
primarily
due
to
interest-rate
strategies,
followed
by
currency
positions.
Sovereign
credit
exposures
had
a
largely
neutral
effect
on
relative
results.
Underweighted
duration
exposures
in
the
U.K.
and
Japan
contributed
to
relative
performance,
as
did
lack
of
duration
exposures
in
the
euro
area
and
overweighted
duration
exposure
in
Argentina.
However,
overweighted
duration
exposure
in
South
Korea
detracted
from
relative
results.
Among
currencies,
the
Fund’s
underweighted
positions
in
the
Japanese
yen
and
euro
contributed
to
relative
results,
as
did
its
overweighted
position
in
the
Brazilian
real.
However,
its
overweighted
positions
in
the
South
Korean
won,
Ghanaian
cedi,
Argentine
peso
and
Indonesian
rupiah
detracted
from
relative
return.
Thank
you
for
your
continued
participation
in
Templeton
International
Bond
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho,
Ph.D.
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
Geographic
Composition
6/30/22
%
of
Total
Net
Assets
Asia
39.8%
Latin
America
&
Caribbean
18.7%
Australia
&
New
Zealand
4.3%
Middle East & Africa
3.0%
Europe
1.4%
Short-Term
Investments
&
Other
Net
Assets
32.8%
Templeton
International
Bond
Fund
5
franklintempleton.com
Semiannual
Report
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
June
30,
2022
Templeton
International
Bond
Fund
6
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
6/30/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
6-Month
-7.07%
-10.57%
1-Year
-10.45%
-13.86%
5-Year
-15.86%
-4.13%
10-Year
-8.15%
-1.23%
Advisor
6-Month
-6.96%
-6.96%
1-Year
-10.33%
-10.33%
5-Year
-14.88%
-3.17%
10-Year
-5.83%
-0.60%
See
page
7
for
Performance
Summary
footnotes.
Templeton
International
Bond
Fund
Performance
Summary
7
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio,
which
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
on
an
amount
that
exceeds
the
Fund’s
initial
investment.
The
Fund
may
not
achieve
the
anticipated
benefits,
and
may
realize
losses
when
a
counterparty
fails
to
perform
as
promised.
The
markets
for
particular
securities
or
types
of
securities
are
or
may
become
relatively
illiquid.
Reduced
liquidity
will
have
an
adverse
impact
on
the
security’s
value
and
on
the
Fund’s
ability
to
sell
such
securities
when
necessary
to
meet
the
Fund’s
liquidity
needs
or
in
response
to
a
specific
market
event.
Foreign
securities
involve
special
risks,
including
currency
fluctuations
(which
may
be
significant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
emerging
markets
involve
heightened
risks
related
to
the
same
factors.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
relating
to
debt
securities
and
foreign
securities
generally,
including,
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Investments
in
lower
rated
bonds
include
higher
risk
of
default
and
loss
of
principal.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
the
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
Fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
imposed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
Fund
has
an
expense
reduction
contractually
guaranteed
through
4/30/23.
Fund
investment
results
reflect
the
expense
reduction;
without
this
reduction,
the
results
would
have
been
lower.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
3.75%.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(1/1/22–6/30/22)
Share
Class
Net
Investment
Income
A
$0.2021
C
$0.1857
R
$0.1927
R6
$0.2177
Advisor
$0.2118
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.01%
1.39%
Advisor
0.76%
1.01%
Your
Fund’s
Expenses
Templeton
International
Bond
Fund
8
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
1/1/22
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$929.30
$4.00
$1,020.65
$4.19
0.84%
C
$1,000
$927.60
$5.93
$1,018.64
$6.21
1.24%
R
$1,000
$928.20
$5.21
$1,019.39
$5.46
1.09%
R6
$1,000
$931.10
$2.87
$1,021.82
$3.01
0.60%
Advisor
$1,000
$930.40
$2.82
$1,021.87
$2.96
0.59%
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
9
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.17
$9.01
$9.77
$10.14
$10.57
$10.61
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.17
0.23
0.20
0.42
0.40
0.42
Net
realized
and
unrealized
gains
(losses)
(0.74)
(0.82)
(0.75)
(0.23)
(0.22)
(0.18)
Total
from
investment
operations
........
(0.57)
(0.59)
(0.55)
0.19
0.18
0.24
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.20)
—
(—)
c
(0.56)
(0.59)
(0.28)
Net
realized
gains
.................
—
—
—
—
(0.01)
—
Tax
return
of
capital
................
—
(0.25)
(0.21)
—
(0.01)
—
Total
distributions
...................
(0.20)
(0.25)
(0.21)
(0.56)
(0.61)
(0.28)
Net
asset
value,
end
of
period
..........
$7.40
$8.17
$9.01
$9.77
$10.14
$10.57
Total
return
d
.......................
(7.07)%
(6.65)%
(5.66)%
1.86%
1.82%
2.25%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.78%
1.37%
1.21%
1.20%
1.26%
1.44%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.87%
0.99%
1.00%
1.00%
0.99%
0.99%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.84%
0.99%
f
0.99%
0.98%
0.98%
0.99%
f
Net
investment
income
...............
4.40%
2.69%
2.12%
4.18%
3.93%
3.87%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$14,514
$17,129
$22,455
$39,532
$38,856
$71,262
Portfolio
turnover
rate
................
5.39%
60.68%
86.26%
24.26%
43.13%
88.62%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.19
$9.02
$9.78
$10.16
$10.58
$10.62
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.16
0.19
0.16
0.39
0.36
0.38
Net
realized
and
unrealized
gains
(losses)
(0.74)
(0.81)
(0.75)
(0.25)
(0.21)
(0.18)
Total
from
investment
operations
........
(0.58)
(0.62)
(0.59)
0.14
0.15
0.20
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.19)
—
(—)
c
(0.52)
(0.55)
(0.24)
Net
realized
gains
.................
—
—
—
—
(0.01)
—
Tax
return
of
capital
................
—
(0.21)
(0.17)
—
(0.01)
—
Total
distributions
...................
(0.19)
(0.21)
(0.17)
(0.52)
(0.57)
(0.24)
Net
asset
value,
end
of
period
..........
$7.42
$8.19
$9.02
$9.78
$10.16
$10.58
Total
return
d
.......................
(7.24)%
(6.96)%
(6.03)%
1.35%
1.52%
1.84%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
2.19%
1.71%
1.61%
1.60%
1.66%
1.84%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.27%
1.39%
1.40%
1.40%
1.39%
1.39%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.24%
1.39%
f
1.39%
1.38%
1.38%
1.39%
f
Net
investment
income
...............
3.98%
2.22%
1.70%
3.78%
3.53%
3.47%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$1,042
$1,365
$3,541
$6,694
$8,654
$9,733
Portfolio
turnover
rate
................
5.39%
60.68%
86.26%
24.26%
43.13%
88.62%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.17
$9.01
$9.76
$10.14
$10.56
$10.61
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.17
0.21
0.17
0.41
0.39
0.40
Net
realized
and
unrealized
gains
(losses)
(0.75)
(0.82)
(0.73)
(0.25)
(0.22)
(0.19)
Total
from
investment
operations
........
(0.58)
(0.61)
(0.56)
0.16
0.17
0.21
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.19)
—
(—)
c
(0.54)
(0.57)
(0.26)
Net
realized
gains
.................
—
—
—
—
(0.01)
—
Tax
return
of
capital
................
—
(0.23)
(0.19)
—
(0.01)
—
Total
distributions
...................
(0.19)
(0.23)
(0.19)
(0.54)
(0.59)
(0.26)
Net
asset
value,
end
of
period
..........
$7.40
$8.17
$9.01
$9.76
$10.14
$10.56
Total
return
d
.......................
(7.18)%
(6.90)%
(5.83)%
1.52%
1.67%
1.92%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
2.04%
1.63%
1.46%
1.45%
1.51%
1.69%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.12%
1.24%
1.25%
1.25%
1.24%
1.24%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.09%
1.24%
f
1.24%
1.23%
1.23%
1.24%
f
Net
investment
income
...............
4.19%
2.41%
1.82%
3.93%
3.68%
3.62%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$109
$107
$138
$254
$300
$286
Portfolio
turnover
rate
................
5.39%
60.68%
86.26%
24.26%
43.13%
88.62%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
Year
Ended
December
31,
2017
a
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.17
$9.01
$9.77
$10.15
$10.57
$10.78
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.18
0.22
0.19
0.45
0.45
0.18
Net
realized
and
unrealized
gains
(losses)
(0.73)
(0.78)
(0.70)
(0.23)
(0.22)
(0.24)
Total
from
investment
operations
........
(0.55)
(0.56)
(0.51)
0.22
0.23
(0.06)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.22)
—
(—)
d
(0.60)
(0.63)
(0.15)
Net
realized
gains
.................
—
—
—
—
(0.01)
—
Tax
return
of
capital
................
—
(0.28)
(0.25)
—
(0.01)
—
Total
distributions
...................
(0.22)
(0.28)
(0.25)
(0.60)
(0.65)
(0.15)
Net
asset
value,
end
of
period
..........
$7.40
$8.17
$9.01
$9.77
$10.15
$10.57
Total
return
e
.......................
(6.89)%
(6.29)%
(5.29)%
2.14%
2.28%
(0.61)%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.73%
0.94%
0.80%
1.24%
1.09%
0.99%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.63%
0.60%
0.61%
0.62%
0.66%
0.68%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.60%
0.60%
g
0.60%
0.60%
0.65%
0.68%
g
Net
investment
income
...............
4.62%
2.55%
2.14%
4.56%
4.26%
4.39%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$6,532
$8,242
$47,663
$3,878
$904
$414
Portfolio
turnover
rate
................
5.39%
60.68%
86.26%
24.26%
43.13%
88.62%
a
For
the
period
August
1,
2017
(effective
date)
to
December
31,
2017.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Amount
rounds
to
less
than
$0.01
per
share.
e
Total
return
is
not
annualized
for
periods
less
than
one
year.
f
Ratios
are
annualized
for
periods
less
than
one
year.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.17
$9.02
$9.78
$10.15
$10.58
$10.62
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.18
0.25
0.21
0.45
0.44
0.45
Net
realized
and
unrealized
gains
(losses)
(0.73)
(0.83)
(0.73)
(0.23)
(0.23)
(0.18)
Total
from
investment
operations
........
(0.55)
(0.58)
(0.52)
0.22
0.21
0.27
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.21)
—
(—)
c
(0.59)
(0.62)
(0.31)
Net
realized
gains
.................
—
—
—
—
(0.01)
—
Tax
return
of
capital
................
—
(0.27)
(0.24)
—
(0.01)
—
Total
distributions
...................
(0.21)
(0.27)
(0.24)
(0.59)
(0.64)
(0.31)
Net
asset
value,
end
of
period
..........
$7.41
$8.17
$9.02
$9.78
$10.15
$10.58
Total
return
d
.......................
(6.96)%
(6.52)%
(5.41)%
2.12%
2.07%
2.51%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.53%
0.99%
0.96%
0.95%
1.01%
1.19%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.62%
0.74%
0.75%
0.75%
0.74%
0.74%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.59%
0.74%
f
0.74%
0.73%
0.73%
0.74%
f
Net
investment
income
...............
4.65%
2.88%
2.30%
4.43%
4.18%
4.12%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$18,741
$24,744
$284,611
$393,873
$346,303
$276,074
Portfolio
turnover
rate
................
5.39%
60.68%
86.26%
24.26%
43.13%
88.62%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Schedule
of
Investments
(unaudited),
June
30,
2022
Templeton
International
Bond
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
67.2%
Argentina
3.0%
a
Argentina
BONCER
,
Index
Linked,
1.4%,
3/25/23
.......
178,451,457
ARS
$
667,312
Index
Linked,
1.5%,
3/25/24
.......
184,090,753
ARS
578,052
1,245,364
Australia
4.3%
b
Australia
Government
Bond,
Reg
S,
5.75%,
7/15/22
................
2,545,000
AUD
1,759,314
Brazil
10.2%
Brazil
Notas
do
Tesouro
Nacional
,
10%,
1/01/27
..................
21,060,000
BRL
3,664,482
10%,
1/01/29
..................
2,040,000
BRL
342,815
10%,
1/01/31
..................
940,000
BRL
153,774
4,161,071
Colombia
5.5%
Colombia
Titulos
de
Tesoreria
,
B,
6.25%,
11/26/25
..............
100,000,000
COP
21,167
B,
7.5%,
8/26/26
...............
9,729,000,000
COP
2,094,516
B,
5.75%,
11/03/27
..............
68,000,000
COP
12,974
B,
7.75%,
9/18/30
..............
212,000,000
COP
41,527
B,
7%,
6/30/32
.................
528,000,000
COP
94,414
2,264,598
Ghana
3.0%
Ghana
Government
Bond
,
18.25%,
7/25/22
................
50,000
GHS
6,237
20.75%,
1/16/23
................
50,000
GHS
6,083
19%,
9/18/23
..................
50,000
GHS
5,684
19.25%,
11/27/23
...............
280,000
GHS
31,456
21.7%,
3/17/25
................
2,980,000
GHS
319,223
19.25%,
6/23/25
................
3,560,000
GHS
355,952
Senior
Note,
18.3%,
3/02/26
......
5,530,000
GHS
515,078
1,239,713
India
4.4%
India
Government
Bond
,
8.2%,
9/24/25
.................
104,400,000
INR
1,364,478
7.27%,
4/08/26
................
33,000,000
INR
419,411
1,783,889
Indonesia
9.0%
Indonesia
Government
Bond
,
FR81,
6.5%,
6/15/25
............
20,264,000,000
IDR
1,396,274
FR86,
5.5%,
4/15/26
............
34,800,000,000
IDR
2,295,083
3,691,357
Singapore
2.0%
Singapore
Government
Bond,
2.375%,
6/01/25
......................
1,157,000
SGD
824,514
South
Korea
21.3%
Korea
Treasury
Bond,
1.875%,
6/10/26
11,957,220,000
KRW
8,710,899
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Thailand
3.1%
Thailand
Government
Bond
,
0.75%,
9/17/24
................
19,320,000
THB
$
534,802
1%,
6/17/27
...................
14,770,000
THB
390,075
Senior
Note,
0.66%,
11/22/23
......
12,470,000
THB
349,744
1,274,621
United
Kingdom
1.4%
b
United
Kingdom
Gilt,
Reg
S,
0.125%,
1/31/23
......................
458,000
GBP
552,707
Total
Foreign
Government
and
Agency
Securities
(Cost
$32,896,041)
..............
27,508,047
Short
Term
Investments
32.2%
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
3.1%
United
Kingdom
3.1%
c
United
Kingdom
Treasury
Bills
,
7/11/22
......................
280,000
GBP
340,681
7/25/22
......................
150,000
GBP
182,435
8/01/22
......................
240,000
GBP
291,838
10/24/22
.....................
356,000
GBP
431,178
1,246,132
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,327,714)
...............
1,246,132
Shares
Money
Market
Funds
29.1%
United
States
29.1%
d,e
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
.........
11,929,875
11,929,875
Total
Money
Market
Funds
(Cost
$11,929,875)
..................................
11,929,875
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$13,257,589
)
................................
13,176,007
a
a
a
Total
Investments
(Cost
$46,153,630)
99.4%
....................................
$40,684,054
Other
Assets,
less
Liabilities
0.6%
.............................................
252,043
Net
Assets
100.0%
...........................................................
$40,936,097
a
a
a
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
June
30,
2022,
the
aggregate
value
of
these
securities
was
$2,312,021,
representing
5.6%
of
net
assets.
c
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
d
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
e
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
At
June
30,
2022,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
See
Note 11 regarding
other
derivative
information.
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Indian
Rupee
......
HSBK
Buy
53,040,300
692,324
7/11/22
$
—
$
(21,026)
Indian
Rupee
......
HSBK
Sell
53,040,300
676,448
7/11/22
5,150
—
Chinese
Yuan
......
CITI
Buy
1,423,140
220,820
7/12/22
—
(8,196)
Chinese
Yuan
......
HSBK
Buy
20,781,470
3,232,608
7/18/22
—
(128,020)
Euro
.............
DBAB
Sell
1,457,625
14,653,500
SEK
7/19/22
—
(95,828)
Japanese
Yen
......
CITI
Buy
545,052,000
4,814,671
7/20/22
—
(794,512)
Japanese
Yen
......
CITI
Sell
545,052,000
4,691,809
7/20/22
671,650
—
South
Korean
Won
..
CITI
Buy
110,000,000
89,726
7/21/22
—
(4,361)
Euro
.............
CITI
Buy
3,275,000
3,581,900
7/26/22
—
(145,133)
Euro
.............
CITI
Sell
3,275,000
3,835,811
7/26/22
399,044
—
Chilean
Peso
......
GSCO
Buy
260,850,000
302,593
7/29/22
—
(19,677)
Canadian
Dollar
....
BOFA
Sell
1,640,000
1,137,958
EUR
8/02/22
—
(79,253)
Canadian
Dollar
....
HSBK
Sell
1,871,500
1,298,656
EUR
8/02/22
—
(90,371)
Euro
.............
BOFA
Sell
3,417,075
4,951,000
CAD
8/02/22
258,478
—
Euro
.............
HSBK
Sell
1,293,620
1,871,500
CAD
8/02/22
95,658
—
Euro
.............
HSBK
Sell
307,834
444,832
CAD
8/03/22
22,340
—
Chilean
Peso
......
GSCO
Buy
459,371,617
547,327
8/08/22
—
(50,145)
Euro
.............
DBAB
Sell
706,019
7,405,998
SEK
8/17/22
—
(16,947)
Chilean
Peso
......
GSCO
Buy
257,672,455
297,200
8/19/22
—
(19,025)
Chinese
Yuan
......
JPHQ
Buy
14,438,800
2,258,116
8/22/22
—
(101,781)
Euro
.............
DBAB
Sell
759,483
7,541,500
NOK
9/15/22
913
(34,049)
Euro
.............
JPHQ
Sell
1,270,965
12,640,000
NOK
9/19/22
—
(53,733)
Australian
Dollar
....
CITI
Buy
370,000
255,463
9/21/22
96
—
Australian
Dollar
....
CITI
Sell
2,914,000
2,114,873
9/21/22
102,171
—
Chinese
Yuan
......
BOFA
Buy
3,535,710
525,834
9/21/22
2,135
—
Euro
.............
CITI
Sell
1,345,100
14,183,000
NOK
9/21/22
24,938
—
New
Zealand
Dollar
.
CITI
Buy
1,670,000
1,136,422
9/21/22
—
(94,472)
Singapore
Dollar
....
CITI
Buy
3,100,000
2,225,812
9/21/22
6,662
—
Singapore
Dollar
....
CITI
Sell
1,000,000
719,854
9/21/22
—
(299)
Chilean
Peso
......
GSCO
Buy
182,060,000
219,418
10/11/22
—
(25,019)
Indian
Rupee
......
CITI
Buy
23,960,600
310,049
10/11/22
—
(9,397)
Indian
Rupee
......
CITI
Sell
18,060,000
228,926
10/11/22
2,314
—
Indian
Rupee
......
JPHQ
Buy
58,526,500
760,727
10/11/22
—
(26,351)
Euro
.............
DBAB
Sell
1,521,453
15,880,400
SEK
10/12/22
—
(46,978)
Indian
Rupee
......
CITI
Buy
52,990,400
688,366
10/12/22
—
(23,517)
Euro
.............
BZWS
Sell
433,000
474,330
10/25/22
16,657
—
Euro
.............
DBAB
Sell
567,000
620,294
10/25/22
20,987
—
Chilean
Peso
......
JPHQ
Buy
182,999,365
220,800
10/26/22
—
(25,914)
Euro
.............
DBAB
Sell
570,000
628,139
1/25/23
20,850
—
Euro
.............
BZWS
Sell
203,000
225,471
4/25/23
7,789
—
Total
Forward
Exchange
Contracts
...................................................
$1,657,832
$(1,914,004)
Net
unrealized
appreciation
(depreciation)
............................................
$(256,172)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
See
Abbreviations
on
page
32
.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2022
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
Templeton
International
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$34,223,755
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
11,929,875
Value
-
Unaffiliated
issuers
..................................................................
$28,754,179
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
11,929,875
Restricted
cash
for
OTC
derivative
contracts
(Note
1d)
...............................................
310,000
Foreign
currency,
at
value
(cost
$55,612)
.........................................................
55,095
Receivables:
Capital
shares
sold
........................................................................
5,058
Interest
.................................................................................
628,580
Foreign
tax
refund
.........................................................................
1,565
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
140,000
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
1,657,832
Total
assets
..........................................................................
43,482,184
Liabilities:
Payables:
Capital
shares
redeemed
...................................................................
16,415
Management
fees
.........................................................................
25,714
Distribution
fees
..........................................................................
3,682
Transfer
agent
fees
........................................................................
43,601
Trustees'
fees
and
expenses
.................................................................
6,314
Deposits
from
brokers
for:
OTC
derivative
contracts
..................................................................
310,000
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
1,914,004
Accrued
expenses
and
other
liabilities
...........................................................
226,357
Total
liabilities
.........................................................................
2,546,087
Net
assets,
at
value
.................................................................
$40,936,097
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$95,712,926
Total
distributable
earnings
(losses)
.............................................................
(54,776,829)
Net
assets,
at
value
.................................................................
$40,936,097
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2022
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Templeton
International
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$14,513,551
Shares
outstanding
........................................................................
1,960,770
Net
asset
value
per
share
a
..................................................................
$7.40
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$7.69
Class
C:
Net
assets,
at
value
.......................................................................
$1,041,858
Shares
outstanding
........................................................................
140,391
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$7.42
Class
R:
Net
assets,
at
value
.......................................................................
$108,641
Shares
outstanding
........................................................................
14,689
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.40
Class
R6:
Net
assets,
at
value
.......................................................................
$6,531,541
Shares
outstanding
........................................................................
882,895
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.40
Advisor
Class:
Net
assets,
at
value
.......................................................................
$18,740,506
Shares
outstanding
........................................................................
2,530,139
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.41
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2022
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
Templeton
International
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$11,461
Interest:
(net
of
foreign
taxes
of
$29,067)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
409,063
Paid
in
cash
a
...........................................................................
847,088
Total
investment
income
...................................................................
1,267,612
Expenses:
Management
fees
(Note
3
a
)
...................................................................
169,590
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
19,731
    Class
C
................................................................................
3,883
    Class
R
................................................................................
272
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
1,586
    Class
C
................................................................................
119
    Class
R
................................................................................
10
    Class
R6
...............................................................................
7,921
    Advisor
Class
............................................................................
2,401
Custodian
fees
(Note
4
)
......................................................................
44,758
Reports
to
shareholders
fees
..................................................................
23,561
Registration
and
filing
fees
....................................................................
38,392
Professional
fees
...........................................................................
48,716
Trustees'
fees
and
expenses
..................................................................
12,344
Other
....................................................................................
29,827
Total
expenses
.........................................................................
403,111
Expense
reductions
(Note
4
)
...............................................................
(7,417)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(228,467)
Net
expenses
.........................................................................
167,227
Net
investment
income
................................................................
1,100,385
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$40)
Unaffiliated
issuers
......................................................................
(231,360)
Foreign
currency
transactions
................................................................
(60,278)
Forward
exchange
contracts
.................................................................
1,258,167
Net
realized
gain
(loss)
..................................................................
966,529
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(3,765,041)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(25,500)
Forward
exchange
contracts
.................................................................
(1,616,567)
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
10,002
Net
change
in
unrealized
appreciation
(depreciation)
............................................
(5,397,106)
Net
realized
and
unrealized
gain
(loss)
............................................................
(4,430,577)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(3,330,192)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
Templeton
International
Bond
Fund
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$1,100,385
$8,246,569
Net
realized
gain
(loss)
.................................................
966,529
(50,654,210)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(5,397,106)
23,754,743
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(3,330,192)
(18,652,898)
Distributions
to
shareholders:
Class
A
.............................................................
(406,028)
—
Class
C
.............................................................
(27,422)
—
Class
R
.............................................................
(2,686)
—
Class
R6
............................................................
(204,487)
—
Advisor
Class
........................................................
(616,098)
—
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(578,991)
Class
C
.............................................................
—
(61,065)
Class
R
.............................................................
—
(2,897)
Class
R6
............................................................
—
(540,507)
Advisor
Class
........................................................
—
(8,663,500)
Total
distributions
to
shareholders
..........................................
(1,256,721)
(9,846,960)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(1,084,117)
(3,379,488)
Class
C
.............................................................
(210,299)
(1,935,439)
Class
R
.............................................................
12,341
(19,647)
Class
R6
............................................................
(996,460)
(37,414,170)
Advisor
Class
........................................................
(3,785,695)
(235,572,264)
Total
capital
share
transactions
............................................
(6,064,230)
(278,321,008)
Net
increase
(decrease)
in
net
assets
...................................
(10,651,143)
(306,820,866)
Net
assets:
Beginning
of
period
.....................................................
51,587,240
358,408,106
End
of
period
..........................................................
$40,936,097
$51,587,240
Templeton
Income
Trust
21
franklintempleton.com
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
Templeton
International
Bond
Fund
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds,
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
International
Bond
Fund
(Fund)
is
included
in
this
report.
The
Fund
offers five
classes
of
shares:
Class
A,
Class
C,
Class
R,
Class
R6
and
Advisor
Class. Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees.
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust's Board
of
Trustees
(the
Board),
the Fund's
administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Debt
securities
generally
trade
in
the over-the-counter
(OTC)
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
22
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
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
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Derivative
Financial
Instruments
The
Fund invested
in
derivative
financial
instruments
in
order
to
manage
risk
or
gain
exposure
to
various
other
investments
or
markets.
Derivatives
are
financial
contracts
based
on
an
underlying
or
notional
amount,
require
no
initial
investment
or
an
initial
net
investment
that
is
smaller
than
would
normally
be
required
to
have
a
similar
response
to
changes
in
market
factors,
and
require
or
permit
net
settlement.
Derivatives
contain
various
risks
including
the
potential
inability
of
the
counterparty
to
fulfill
their
obligations
under
the
terms
of
the
contract,
the
potential
for
an
illiquid
secondary
market,
and/or
the
potential
for
market
movements
which
expose
the
Fund
to
gains
or
losses
in
excess
of
the
amounts
shown
in
the
Statement
of
Assets
and
Liabilities.
Realized
gain
and
loss
and
unrealized
appreciation
and
depreciation
on
these
contracts
for
the
period
are
included
in
the
Statement
of
Operations.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
terms
are
contract
specific
for
OTC
derivatives.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of
agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund,
if
any,
is
held
in
segregated
accounts
with
the
Fund’s
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
1.
Organization
and
Significant
Accounting
Policies
(continued)
b.
Foreign
Currency
Translation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
23
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
See
Note
11
regarding
other
derivative
information.
d.
Restricted
Cash
At
June
30,
2022, the
Fund
held
restricted
cash
in
connection
with
investments
in
certain
derivative
securities.
Restricted
cash
is
held
in
a
segregated
account
with
the
Fund’s
custodian
and
is
reflected
in
the
Statement
of
Assets
and
Liabilities.
e.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
June
30,
2022,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
g.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
24
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
h.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Fund,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
June
30,
2022,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Six
Months
Ended
June
30,
2022
Year
Ended
December
31,
2021
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
73,939
$592,716
563,671
$4,822,417
Shares
issued
in
reinvestment
of
distributions
..........
49,166
386,747
64,142
551,459
Shares
redeemed
...............................
(258,424)
(2,063,580)
(1,023,797)
(8,753,364)
Net
increase
(decrease)
..........................
(135,319)
$(1,084,117)
(395,984)
$(3,379,488)
Class
C
Shares:
Shares
sold
...................................
8,554
$69,488
21,151
$179,863
Shares
issued
in
reinvestment
of
distributions
..........
3,274
25,823
6,686
57,886
Shares
redeemed
a
..............................
(38,043)
(305,610)
(253,705)
(2,173,188)
Net
increase
(decrease)
..........................
(26,215)
$(210,299)
(225,868)
$(1,935,439)
Class
R
Shares:
Shares
sold
...................................
1,378
$10,980
2,803
$24,024
Shares
issued
in
reinvestment
of
distributions
..........
342
2,686
337
2,897
Shares
redeemed
...............................
(163)
(1,325)
(5,359)
(46,568)
Net
increase
(decrease)
..........................
1,557
$12,341
(2,219)
$(19,647)
Class
R6
Shares:
Shares
sold
...................................
45,689
$367,725
1,393,741
$11,826,154
Shares
issued
in
reinvestment
of
distributions
..........
25,529
200,963
61,097
533,936
Shares
redeemed
...............................
(196,885)
(1,565,148)
(5,734,293)
(49,774,260)
Net
increase
(decrease)
..........................
(125,667)
$(996,460)
(4,279,455)
$(37,414,170)
Advisor
Class
Shares:
Shares
sold
...................................
1,082,970
$8,584,080
5,047,083
$43,716,266
Shares
issued
in
reinvestment
of
distributions
..........
73,860
581,339
996,551
8,574,865
Shares
redeemed
...............................
(1,654,814)
(12,951,114)
(34,571,498)
(287,863,395)
Net
increase
(decrease)
..........................
(497,984)
$(3,785,695)
(28,527,864)
$(235,572,264)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
1.
Organization
and
Significant
Accounting
Policies
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
25
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
June
30,
2022,
the
annualized
gross
effective
investment
management
fee
rate
was
0.700%
of
the
Fund’s
average
daily
net
assets. 
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
and
R
compensation
distribution
plans,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
The
Board
has
set
the
current
rate
at
0.25%
per
year
for
Class
A
shares
until
further
notice
and
approval
by
the
Board.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.700%
Up
to
and
including
$200
million
0.650%
Over
$200
million,
up
to
and
including
$1.3
billion
0.600%
In
excess
of
$1.3
billion
Class
A
....................................................................................
0.35%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
June
30,
2022,
the
Fund
paid
transfer
agent
fees
of
$12,307,
which were
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
June
30,
2022,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Advisers
and
Investor
Services
have
contractually
agreed
in
advance
to
waive
or
limit
their
respective
fees
and
to
assume
as
their
own
expense
certain
expenses
otherwise
payable
by
the
Fund
so
that
the
operating expenses
(excluding
distribution
fees,
and
acquired
fund
fees
and
expenses
and
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations) for
each
class
of
the
Fund
do not
exceed
0.74%
and
for
Class
R6
do
not
exceed
0.60%
based
on
the
average
net
assets
of
each
class
until
April
30,
2023.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Fund's
fiscal
year
end.
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$169
CDSC
retained
..............................................................................
$76
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
International
Bond
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
$
14,191,046
$
12,687,223
$
(14,948,394)
$
—
$
—
$
11,929,875
11,929,875
$
11,461
Total
Affiliated
Securities
...
$14,191,046
$12,687,223
$(14,948,394)
$—
$—
$11,929,875
$11,461
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
April
30,
2023.
4.
Expense
Offset
Arrangement
The Fund has
entered
into
an
arrangement
with
its
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Fund's
custodian
expenses.
During
the
period
ended
June
30,
2022,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations. 
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2021,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2021,
the
Fund
deferred
late-year
ordinary
losses
of
$26,980,468.
At
June
30,
2022,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments of foreign
currency
transactions,
foreign
capital
gains
tax,
bond
discounts
and
premiums
and
inflation
related
adjustments
on
foreign
securities.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2022,
aggregated
$1,589,416
and
$4,333,248,
respectively.
7.
Credit
Risk
At
June
30,
2022,
the
Fund
had
16.4%
of
its
portfolio
invested
in
high
yield
or
other
securities
rated
below
investment
grade
and
unrated
securities,
if
any.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$4,246,977
Long
term
................................................................................
17,873,543
Total
capital
loss
carryforwards
...............................................................
$22,120,520
Cost
of
investments
..........................................................................
$46,996,554
Unrealized
appreciation
........................................................................
$2,557,109
Unrealized
depreciation
........................................................................
(9,125,780)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(6,568,671)
3.
Transactions
with
Affiliates
(continued)
g.
Waiver
and
Expense
Reimbursements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
8.
Concentration
of
Risk
Investments
in
issuers
domiciled
or
with
significant
operations
in
developing
or
emerging
market
countries
may
be
subject
to
higher
risks
than
investments
in
developed
countries.
These
risks
include
fluctuating
currency
values,
underdeveloped
legal
or
business
systems,
and
changing
local
and
regional
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Currencies
of
developing
or
emerging
market
countries
may
be
subject
to
significantly
greater
risks
than
currencies
of
developed
countries,
including
the
potential
inability
to
repatriate
those
currencies
into
U.S.
dollars.
At
June
30,
2022,
the
Fund
had
3.1%
of
its
net
assets
denominated
in
Argentine
Pesos. Argentina
has
restricted
currency
repatriation
since
September
2019,
and
had
restructured
certain
issues
of
its
debt.
Political
and
economic
conditions
in
Argentina
could
continue
to
affect
the
value
of
the
Fund's
holdings.
9.
Geopolitical
Risk
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
10.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
11.
Other
Derivative
Information
At
June
30,
2022,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
International
Bond
Fund
Foreign
exchange
contracts
..
Unrealized
appreciation
on
OTC
forward
exchange
contracts
$
1,657,832
Unrealized
depreciation
on
OTC
forward
exchange
contracts
$
1,914,004
Total
....................
$1,657,832
$1,914,004
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
29
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
For
the
period
ended
June
30,
2022,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
June
30,
2022,
the
average
month
end
contract
value
of
forward
exchange
contracts
was
$140,798,719.
At
June
30,
2022,
the
Fund's
OTC
derivative
assets
and
liabilities
are
as
follows:
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Period
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Period
Templeton
International
Bond
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Foreign
exchange
contracts
.....
Forward
exchange
contracts
$1,258,167
Forward
exchange
contracts
$(1,616,567)
Total
.......................
$1,258,167
$(1,616,567)
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
International
Bond
Fund
Derivatives
Forward
exchange
contracts
.............................
$
1,657,832
$
1,914,004
Total
.............................................
$1,657,832
$1,914,004
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
30
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
At
June
30,
2022,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
At
June
30,
2022,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
See
Note
1(c)
regarding
derivative
financial
instruments. 
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
Cash
Collateral
Received
a
Net
Amount
(Not
less
than
zero)
Templeton
International
Bond
Fund
Counterparty
BOFA
....................
$260,613
$(79,253)
$—
$(120,000)
$61,360
BZWS
...................
24,446
—
—
—
24,446
CITI
.....................
1,206,875
(1,079,887)
—
(126,988)
—
DBAB
...................
42,750
(42,750)
—
—
—
GSCO
...................
—
—
—
—
—
HSBK
...................
123,148
(123,148)
—
—
—
JPHQ
...................
—
—
—
—
—
Total
...................
$1,657,832
$(1,325,038)
$
—
$(246,988)
$85,806
$
1
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
Cash
Collateral
Pledged
Net
Amount
(Not
less
than
zero)
Templeton
International
Bond
Fund
Counterparty
BOFA
....................
$79,253
$(79,253)
$—
$—
$—
BZWS
...................
—
—
—
—
—
CITI
.....................
1,079,887
(1,079,887)
—
—
—
DBAB
...................
193,802
(42,750)
—
(140,000)
11,052
GSCO
...................
113,866
—
—
—
113,866
HSBK
...................
239,417
(123,148)
—
—
116,269
JPHQ
...................
207,779
—
—
—
207,779
Total
...................
$1,914,004
$(1,325,038)
$—
$(140,000)
$448,966
a
In
some
instances,
the
collateral
amounts
disclosed
in
the
table
above
were
adjusted
due
to
the
requirement
to
limit
collateral
amounts
to
avoid
the
effect
of
overcollateralization.
Actual
collateral
received
and/or
pledged
may
be
more
than
the
amounts
disclosed
herein.
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
See
Abbreviations
on
page
32
.
12.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
3,
2023.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
period
ended
June
30,
2022,
the Fund
did
not
use
the
Global
Credit
Facility.
13.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
June
30,
2022,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
International
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
....
$
—
$
27,508,047
$
—
$
27,508,047
Short
Term
Investments
...................
11,929,875
1,246,132
—
13,176,007
Total
Investments
in
Securities
...........
$11,929,875
$28,754,179
$—
$40,684,054
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
1,657,832
$
—
$
1,657,832
Total
Other
Financial
Instruments
.........
$—
$1,657,832
$—
$1,657,832
Receivables:
Interest
(ARS)
...........................
$—
$5,528
$—
$5,528
Liabilities:
Other
Financial
Instruments:
Forward
exchange
contracts
................
$
—
$
1,914,004
$
—
$
1,914,004
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
International
Bond
Fund
(continued)
14.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Counterparty
BOFA
Bank
of
America
Corp.
BZWS
Barclays
Bank
plc
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
Cu
r
rency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
CAD
Canadian
Dollar
COP
Colombian
Peso
EUR
Euro
GBP
British
Pound
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
KRW
South
Korean
Won
NOK
Norwegian
Krone
SEK
Swedish
Krona
SGD
Singapore
Dollar
THB
Thai
Baht
Templeton
Income
Trust
Shareholder
Information
33
franklintempleton.com
Semiannual
Report
BOARD
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENTS
TEMPLETON
INCOME
TRUST
Templeton
International
Bond
Fund
(Fund)
At
an
in-person
meeting
held
on
February
28,
2022
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Trust,
on
behalf
of
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
virtual
contract
renewal
meeting
at
which
the
Independent
Trustees
first
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters.
At
that
meeting,
they
met
with
senior
leadership
of
the
global
macro
funds
regarding
the
performance
of
the
funds;
and
met
with
management
to
request
additional
information
that
the
Independent
Trustees
reviewed
and
considered
at
the
Meeting.
The
Board
later
had
an
opportunity
for
an
expanded
discussion
with
the
leadership
of
the
global
macro
funds
to
hear
about
strategies
to
deliver
improved
investment
returns
to
shareholders.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continued
commitment
to
providing
the
resources
important
to
enhancing
the
investment
process
of
the
global
macro
funds
for
the
benefit
of
the
funds
and
their
shareholders.
The
Board
also
acknowledged
the
ongoing
integration
of
the
Legg
Mason
family
of
funds
into
the
FT
family
of
funds
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
including
various
regulatory
initiatives
and
recent
geopolitical
concerns.
Templeton
Income
Trust
Shareholder
Information
34
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The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
being
a
global
leader
in
stewardship
and
sustainability
and
the
recent
addition
of
a
senior
executive
focused
on
environmental,
social
and
governance
and
climate
control
initiatives.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2021.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
international
income
funds.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-,
five-
and
10-year
periods
was
above
the
median
of
its
Performance
Universe.
The
Board
further
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
median
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
Fund’s
relative
underperformance
in
comparison
to
its
Performance
Universe
over
the
reporting
periods
was
largely
due
to
the
Fund’s
performance
in
2019
and
2020.
Management
further
explained
that
the
underperformance
was
driven
by
the
Fund’s
defensive
positioning
amid
the
pandemic,
which
restrained
the
Fund’s
participation
in
the
risk
asset
rallies
in
the
second
half
of
2020.
Management
also
explained
that
the
Fund’s
long
exposure
to
emerging
market
local
currency
assets
and
short
exposure
to
US
Treasury
duration
during
the
three-
and
five-year
reporting
periods
detracted
from
the
Fund’s
relative
performance
versus
the
Performance
Universe.
Management
further
explained
that
after
vaccines
were
approved
toward
the
end
of
2020
management
significantly
repositioned
the
Fund’s
strategies
back
towards
risk
allocations
and
expanded
on
that
risk
positioning
throughout
2021,
emphasizing
specific
currencies
against
the
US
dollar
and
the
euro,
as
well
as
local
currency
bonds
in
a
select
set
of
emerging
markets.
Management
reported
that
this
resulted
in
notable
improvement
in
the
Fund’s
performance
for
the
one-year
period
ended
January
31,
2022.
Management
further
explained
the
steps
the
portfolio
management
team
is
taking
in
an
effort
to
improve
the
Fund’s
peer
rankings
across
all
reporting
periods
and
reduce
the
impact
of
the
Fund’s
relative
underperformance
in
2019
and
2020.
The
Board
noted
management’s
continued
confidence
in
the
Fund’s
portfolio
management
team,
commitment
to
an
enhanced
investment
process
for
the
benefit
of
Fund
shareholders
and
commitment
to
have
ongoing
conversations
with
the
Board
regarding
management’s
strategies
for
addressing
the
performance
of
the
global
macro
funds
as
a
whole.
Based
on
the
foregoing,
the
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
that
management’s
efforts
and
the
recent
improved
performance
of
the
Fund
should
continue
to
be
closely
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
or
semi-annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
Templeton
Income
Trust
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35
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analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
six
other
international
income
funds.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
the
Fund
were
below
the
medians
and
in
the
first
quintile
(least
expensive)
of
its
Expense
Group.
The
Board
also
noted
that
the
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2021,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
noted
that
the
Fund
had
experienced
a
decrease
in
assets
and
would
not
be
expected
to
demonstrate
additional
economies
of
scale
in
the
near
term,
but
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
the
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
Templeton
Income
Trust
Shareholder
Information
36
franklintempleton.com
Semiannual
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manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
Franklin
Templeton
and
Legg
Mason
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Legal,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2022,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2021.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Templeton
Income
Trust
Shareholder
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37
franklintempleton.com
Semiannual
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Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
as
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
447
S
08/22
©
2022
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Semiannual
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Advisers,
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AND
SHAREHOLDER
LETTER
TEMPLETON
SUSTAINABLE
EMERGING
MARKETS
BOND
FUND
Formerly,
Templeton
Emerging
Markets
Bond
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2022
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up
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franklintempleton.com
Semiannual
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1
SHAREHOLDER
LETTER
Dear
Shareholder:
The
six
months
ended
June
30,
2022,
were
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impacts
of
COVID-19
and
the
start
of
Russia’s
war
on
Ukraine.
Global
economies
faced
commodity
price
inflation,
tightening
financial
conditions,
weakening
global
growth,
and
supply
chain
disruptions
in
China.
Risk
assets
faced
strong
headwinds,
and
central
bankers
across
many
countries
faced
the
difficult
choice
of
supporting
growth
or
controlling
rising
price
pressures.
Sovereign
bond
yields
rose
across
much
of
the
world
following
higher
headline
inflation
data
and
central
bank
policy
rate
hikes,
and
the
U.S.
dollar
strengthened.
Simultaneously,
the
Russia-Ukraine
war
disrupted
the
flow
of
energy,
food,
commodities
and
goods,
particularly
throughout
Europe,
while
increasing
both
broad
geopolitical
instability
and
the
social
and
economic
strains
of
refugee
flight.
We
expect
broader
economic
strains
as
a
fallout
from
the
war.
Emerging
market
countries
that
are
net
importers
of
food
and
energy
will
be
more
vulnerable
to
trade
shocks
and
political
turmoil
stemming
from
elevated
commodity
prices.
Despite
the
challenging
macroeconomic
environment,
divergences
among
countries
offer
opportunities
for
outperformance
in
duration,
local-currency
sovereign
bonds
and
currencies,
and
we
remain
committed
to
pursuing
our
investment
objectives.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
their
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
Sustainable
Emerging
Markets
Bond
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2022,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
3
Performance
Summary
5
Your
Fund’s
Expenses
7
Financial
Highlights
and
Schedule
of
Investments
8
Financial
Statements
18
Notes
to
Financial
Statements
22
Shareholder
Information
37
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Formerly,
Templeton
Emerging
Markets
Bond
Fund
This
semiannual
report
for
Templeton
Sustainable
Emerging
Markets
Bond
Fund
covers
the
period
ended
June
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
current
income
with
capital
appreciation
as
a
secondary
goal.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
a
non-diversified
portfolio
of
bonds
issued
by
emerging
market
countries.
The
Fund’s
investment
strategy
emphasizes
the
current
and
projected
sustainability
efforts
of
emerging
market
countries
in
certain
environmental,
social
and
governance
(ESG)
categories.
For
purposes
of
the
Fund’s
80%
policy,
bonds
issued
by
entities
located
in
emerging
markets
countries
include
derivative
instruments
and
other
investments
that
have
economic
characteristics
similar
to
such
securities.
*Includes
securities
determined
to
have
no
value
at
6/30/2022.
**Includes
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-11.14%
cumulative
total
return.
In
comparison,
U.S.
dollar-denominated
emerging
market
bonds,
as
measured
by
the
Fund’s
benchmark,
the
J.P.
Morgan
(JPM)
Emerging
Markets
Bond
Index
(EMBI)
Global
Index,
posted
a
-18.83%
cumulative
total
return
in
U.S.
dollar
terms
for
the
same
period.
1
You
can
find
more
of
the
Fund’s
performance
data
in
the
Performance
Summary
beginning
on
page
5
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Economic
and
Market
Overview
The
six-month
period
ended
June
30,
2022,
was
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impact
of
COVID-19,
the
start
of
Russia’s
war
on
Ukraine,
commodity-price
inflation,
rising
global
interest
rates,
weakening
global
gross
domestic
product
growth,
and
supply
chain
disruptions.
Risk
assets
faced
strong
headwinds
resulting
from
tighter
financial
conditions.
Major
central
banks
embarked
on
policy
rate
hikes
to
curb
inflation,
which
reached
multi-decade
highs
during
the
period,
with
supply-side
pressures
coming
from
disruptions
to
the
flow
of
energy,
food,
commodities
and
goods
due
to
the
war
in
Ukraine
and
the
West’s
economic
isolation
of
Russia.
Supply
chain
disruptions
were
compounded
by
China’s
implementation
of
its
zero-COVID
policy.
Simultaneously,
global
economic
growth
was
projected
to
decelerate,
driven
by
the
disruption
of
economic
activity
and
trade
following
Russia’s
invasion
of
Ukraine,
including
a
reduction
in
Russia’s
exports
of
natural
gas
to
Europe,
the
economic
strains
of
refugee
flight
in
Europe,
volatile
and
elevated
commodity
prices,
continued
supply
chain
disruptions,
the
effect
of
COVID-19-related
lockdowns
in
China,
and
the
reduction
of
policy
support
post-COVID-19.
The
combination
of
above-average
inflation
and
below-
average
growth
raised
the
spectre
of
stagflation
reminiscent
of
the
1970s
and
created
a
policy
dilemma
for
many
central
bankers.
Emerging
markets
that
have
faced
persistent
inflationary
pressures
over
the
last
three
quarters
have
been
compelled
to
pursue
aggressive
tightening
responses
to
stay
ahead
of
the
curve,
notably
in
Latin
America
and
eastern
Europe.
In
Asia,
some
central
banks
have
adjusted
Portfolio
Composition
6/30/22
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
85.3%
Corporate
Bonds
3.0%
Other
0.0%
*
Short-Term
Investments
&
Other
Net
Assets**
11.7%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
13
.
Templeton
Sustainable
Emerging
Markets
Bond
Fund
4
franklintempleton.com
Semiannual
Report
their
policy
rates
higher
as
energy
prices
and
reopening
economies
put
upwards
pressure
on
inflation.
Investment
Strategy
We
invest
selectively
in
bonds
from
emerging
markets
around
the
world
to
seek
to
generate
income
for
the
Fund,
pursuing
opportunities
while
monitoring
changes
in
interest
rates,
currency
exchange
rates
and
credit
risks.
At
least
80%
of
the
Fund’s
net
assets
are
invested
in
or
exposed
to
government
bonds
of
emerging
market
countries
based
on
such
countries’
scores
related
to
environmental,
social
and
governance
considerations.
We
manage
the
Fund’s
exposure
to
derivative
instruments
and
regularly
use
currency
and
contracts
and
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
We
may
also
use
other
derivative
instruments,
such
as
interest
rate/bond
futures
contracts
and
swap
agreements.
Manager’s
Discussion
In
bonds,
we
continued
to
maintain
low
portfolio
duration,
while
aiming
at
a
high
overall
portfolio
yield
by
holding
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets.
We
specifically
prefer
countries
with
resilient
economies
and
strong
trade
dynamics
and
have
a
preference
for
the
higher
yields
available
in
select
local-
currency
bonds,
notably
including
Indonesia,
India,
Thailand,
Brazil,
Colombia,
and
Chile.
We
exited
our
Argentina
local
bond
position
in
March
2022
and
added
exposure
to
Uruguay.
We
also
found
value
in
certain
hard
currency
denominated
emerging
market
bonds
and
have
added
exposure
in
Africa,
Asia
and
Latin
America.
We
closed
out
local
currency
exposure
to
Egypt
but
remain
invested
in
its
hard
currency
bonds.
At
the
beginning
of
the
period,
the
Fund
was
overweight
in
specific
currencies
against
the
U.S.
dollar
(USD).
In
Asia,
we
held
notable
exposures
to
the
South
Korean
won,
the
Chinese
yuan,
the
Indonesian
rupiah,
the
Indian
rupee
and
the
Thai
baht.
In
March
2022,
we
added
exposure
to
the
Singapore
dollar.
In
April,
we
exited
our
underweight
position
in
the
Australian
dollar,
which
had
been
used
to
hedge
against
emerging
market
beta
risks,
as
we
anticipated
rising
commodity
prices
to
boost
Australia’s
terms
of
trade
and
support
its
currency.
In
EMEA
(Europe,
Middle
East
and
Africa),
the
Fund
exited
Russian
ruble
exposure
in
the
first
half
of
the
period
and
added
exposure
to
the
Czech
koruna.
In
the
Americas,
we
continued
to
hold
long
exposures
to
the
Brazilian
real,
the
Chilean
peso
and
the
Colombian
peso.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
At
period-end,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions,
followed
by
overall
credit
exposures.
Interest-rate
strategies
had
a
largely
neutral
effect
on
absolute
results.
Among
currencies,
the
Fund’s
position
in
the
Russian
ruble
for
part
of
the
period
detracted
from
absolute
performance,
as
did
positions
in
the
Ghanaian
cedi,
Chilean
peso,
Indonesian
rupiah
and
Indian
rupee.
The
Fund’s
position
in
the
Brazilian
real
contributed
to
absolute
results.
Among
credit
exposures,
positions
in
Latin
America
detracted
from
absolute
return.
The
Fund
maintained
low
overall
portfolio
duration,
while
holding
duration
exposures
in
select
emerging
markets.
Duration
exposure
in
Colombia
detracted
from
absolute
performance,
while
duration
exposure
in
Argentina
contributed.
Thank
you
for
your
participation
in
Templeton
Sustainable
Emerging
Markets
Bond
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho,
Ph.D.
Vivian
Guo
Jaap
Willems
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Geographic
Composition
6/30/22
%
of
Total
Net
Assets
Americas
36.3%
Asia
Pacific
29.2%
Supranational
12.0%
Middle
East
&
Africa
8.2%
Europe
2.6%
Short-Term
Investments
&
Other
Net
Assets
11.7%
Performance
Summary
as
of
June
30,
2022
Templeton
Sustainable
Emerging
Markets
Bond
Fund
5
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
6/30/2
2
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
maximum
initial
sales
charge;
Advisor
Class
:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
6-Month
-11.14%
-14.51%
1-Year
-15.50%
-18.68%
5-Year
-21.59%
-5.47%
Since
Inception
(4/1/13)
-12.41%
-1.83%
Advisor
6-Month
-11.16%
-11.16%
1-Year
-15.40%
-15.40%
5-Year
-20.61%
-4.51%
Since
Inception
(4/1/13)
-10.59%
-1.20%
See
page
6
for
Performance
Summary
footnotes.
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Performance
Summary
6
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Foreign
securities
involve
special
risks,
including
currency
rate
fluctuations
(which
may
be
significant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
emerging
markets
involve
heightened
risks
related
to
the
same
factors,
in
addition
to
those
associated
with
their
relatively
small
size
and
lesser
liquidity.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
re-
lating
to
debt
securities
and
foreign
securities
generally,
including,
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio
that
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
on
an
amount
that
exceeds
the
Fund’s
initial
investment.
The
Fund
may
not
achieve
the
anticipated
benefits
and
may
realize
losses
when
a
counterparty
fails
to
perform
as
promised.
The
man-
ager’s
environmental
social
and
governance
(ESG)
investment
strategies
may
limit
the
types
and
number
of
investment
opportunities
available
and,
as
a
result,
may
underperform
strategies
that
are
not
subject
to
such
criteria.
ESG
factors
or
criteria
are
subjective
and
qualitative,
and
the
analysis
by
the
manager
may
not
always
accurately
assess
ESG
practices
of
a
security
or
issuer,
or
reflect
the
opinions
of
the
other
investors
or
advisors.
Bonds
are
subject
to
liquidity
risk,
which
may
have
an
adverse
impact
on
the
security’s
value
or
a
fund’s
ability
to
sell
such
securities.
Changes
in
interest
rates
will
affect
the
value
of
the
Fund’s
portfolio,
share
price
and
yield.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
Investments
in
lower
rated
securities
include
higher
risks
of
default
and
loss
of
principal.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
Fund
has
an
expense
reduction
and
a
fee
waiver
associated
with
any
investments
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
4/30/23.
Fund
investment
results
reflect
the
expense
reduction
and
fee
waiver;
without
these
reductions,
the
results
would
have
been
lower.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
3.75%.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Consolidated
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(1/1/22–6/30/22)
Share
Class
Net
Investment
Income
A
$0.1740
C
$0.1597
R
$0.1657
R6
$0.1827
Advisor
$0.1793
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.15%
2.77%
Advisor
0.90%
2.52%
Your
Fund’s
Expenses
Templeton
Sustainable
Emerging
Markets
Bond
Fund
7
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
1/1/22
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$888.60
$5.09
$1,019.41
$5.44
1.09%
C
$1,000
$886.10
$7.17
$1,017.19
$7.67
1.54%
R
$1,000
$887.50
$6.52
$1,017.89
$6.97
1.38
%
R6
$1,000
$888.50
$4.02
$1,020.54
$4.30
0.86%
Advisor
$1,000
$888.40
$4.11
$1,020.44
$4.40
0.89%
Templeton
Income
Trust
Financial
Highlights
Templeton
Sustainable
Emerging
Markets
Bond
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
8
cal
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$5.82
$6.70
$7.73
$8.13
$9.16
$8.84
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.14
0.48
0.48
0.62
0.68
0.70
Net
realized
and
unrealized
gains
(losses)
(0.78)
(0.83)
(1.00)
(0.51)
(0.99)
0.20
Total
from
investment
operations
........
(0.64)
(0.35)
(0.52)
0.11
(0.31)
0.90
Less
distributions
from:
Net
investment
income
..............
(0.17)
—
(0.01)
(0.51)
(0.52)
(0.57)
Net
realized
gains
.................
—
—
—
—
(0.01)
(0.01)
Tax
return
of
capital
................
—
(0.53)
(0.50)
—
(0.19)
—
Total
distributions
...................
(0.17)
(0.53)
(0.51)
(0.51)
(0.72)
(0.58)
Net
asset
value,
end
of
period
..........
$5.01
$5.82
$6.70
$7.73
$8.13
$9.16
Total
return
c
.......................
(11.14)%
(5.54)%
(6.80)%
1.33%
(3.30)%
10.21%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
3.21%
2.77%
2.10%
2.16%
2.15%
2.46%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.09%
1.13%
1.07%
1.13%
1.14%
1.22%
Net
investment
income
...............
4.91%
7.58%
6.84%
7.75%
8.03%
7.51%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$12,407
$14,821
$16,004
$21,984
$20,728
$19,042
Portfolio
turnover
rate
................
40.94%
40.55%
56.59%
23.82%
18.82%
77.90%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Financial
Highlights
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
9
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$5.81
$6.69
$7.72
$8.12
$9.15
$8.84
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.13
0.45
0.44
0.59
0.65
0.67
Net
realized
and
unrealized
gains
(losses)
(0.77)
(0.83)
(0.99)
(0.52)
(1.00)
0.19
Total
from
investment
operations
........
(0.64)
(0.38)
(0.55)
0.07
(0.35)
0.86
Less
distributions
from:
Net
investment
income
..............
(0.16)
—
(0.01)
(0.47)
(0.49)
(0.54)
Net
realized
gains
.................
—
—
—
—
(0.01)
(0.01)
Tax
return
of
capital
................
—
(0.50)
(0.47)
—
(0.18)
—
Total
distributions
...................
(0.16)
(0.50)
(0.48)
(0.47)
(0.68)
(0.55)
Net
asset
value,
end
of
period
..........
$5.01
$5.81
$6.69
$7.72
$8.12
$9.15
Total
return
c
.......................
(11.39)%
(5.96)%
(7.22)%
0.89%
(3.69)%
9.75%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
3.59%
3.13%
2.54%
2.56%
2.54%
2.89%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.54%
1.54%
1.51%
1.53%
1.53%
1.65%
Net
investment
income
...............
4.57%
7.18%
6.33%
7.35%
7.64%
7.08%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$862
$1,310
$1,821
$2,276
$2,799
$2,553
Portfolio
turnover
rate
................
40.94%
40.55%
56.59%
23.82%
18.82%
77.90%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Financial
Highlights
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$5.83
$6.71
$7.73
$8.14
$9.17
$8.85
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.13
0.48
0.47
0.62
0.68
0.70
Net
realized
and
unrealized
gains
(losses)
(0.77)
(0.83)
(0.98)
(0.52)
(1.00)
0.20
Total
from
investment
operations
........
(0.64)
(0.35)
(0.51)
0.10
(0.32)
0.90
Less
distributions
from:
Net
investment
income
..............
(0.17)
—
(0.01)
(0.51)
(0.51)
(0.57)
Net
realized
gains
.................
—
—
—
—
(0.01)
(0.01)
Tax
return
of
capital
................
—
(0.53)
(0.50)
—
(0.19)
—
Total
distributions
...................
(0.17)
(0.53)
(0.51)
(0.51)
(0.71)
(0.58)
Net
asset
value,
end
of
period
..........
$5.02
$5.83
$6.71
$7.73
$8.14
$9.17
Total
return
c
.......................
(11.25)%
(5.56)%
(6.81)%
1.32%
(3.40)%
10.13%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
3.54%
2.81%
2.13%
2.18%
2.18%
2.50%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.38
%
1.16%
1.10%
1.15%
1.22%
1.26%
Net
investment
income
...............
4.58%
7.55%
6.67%
7.73%
7.95%
7.47%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$10
$12
$12
$13
$12
$14
Portfolio
turnover
rate
................
40.94%
40.55%
56.59%
23.82%
18.82%
77.90%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Financial
Highlights
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$5.83
$6.71
$7.74
$8.14
$9.17
$8.85
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.14
0.51
0.52
0.66
0.74
0.74
Net
realized
and
unrealized
gains
(losses)
(0.77)
(0.84)
(1.02)
(0.52)
(1.02)
0.19
Total
from
investment
operations
........
(0.63)
(0.33)
(0.50)
0.14
(0.28)
0.93
Less
distributions
from:
Net
investment
income
..............
(0.18)
—
(0.01)
(0.54)
(0.54)
(0.60)
Net
realized
gains
.................
—
—
—
—
(0.01)
(0.01)
Tax
return
of
capital
................
—
(0.55)
(0.52)
—
(0.20)
—
Total
distributions
...................
(0.18)
(0.55)
(0.53)
(0.54)
(0.75)
(0.61)
Net
asset
value,
end
of
period
..........
$5.02
$5.83
$6.71
$7.74
$8.14
$9.17
Total
return
c
.......................
(11.15)%
(5.19)%
(6.47)%
1.69%
(2.95)%
10.50%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
3.25%
2.56%
2.04%
1.94%
1.91%
2.87%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.86%
0.77%
0.75%
0.75%
0.78%
0.92%
Net
investment
income
...............
5.09%
8.00%
7.37%
8.13%
8.39%
7.81%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$679
$663
$598
$1,057
$831
$281
Portfolio
turnover
rate
................
40.94%
40.55%
56.59%
23.82%
18.82%
77.90%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Financial
Highlights
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$5.85
$6.73
$7.75
$8.16
$9.19
$8.86
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.15
0.50
0.51
0.63
0.76
0.74
Net
realized
and
unrealized
gains
(losses)
(0.78)
(0.84)
(1.01)
(0.51)
(1.05)
0.19
Total
from
investment
operations
........
(0.63)
(0.34)
(0.50)
0.12
(0.29)
0.93
Less
distributions
from:
Net
investment
income
..............
(0.18)
—
(0.01)
(0.53)
(0.53)
(0.59)
Net
realized
gains
.................
—
—
—
—
(0.01)
(0.01)
Tax
return
of
capital
................
—
(0.54)
(0.51)
—
(0.20)
—
Total
distributions
...................
(0.18)
(0.54)
(0.52)
(0.53)
(0.74)
(0.60)
Net
asset
value,
end
of
period
..........
$5.04
$5.85
$6.73
$7.75
$8.16
$9.19
Total
return
c
.......................
(11.16)%
(5.28)%
(6.46)%
1.45%
(3.01)%
10.53%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
2.92%
2.51%
1.91%
1.91%
1.89%
2.24%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.89%
0.89%
0.86%
0.88%
0.88%
1.00%
Net
investment
income
...............
5.19%
7.83%
7.20%
8.00%
8.29%
7.73%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$2,107
$3,063
$3,950
$14,504
$10,797
$1,585
Portfolio
turnover
rate
................
40.94%
40.55%
56.59%
23.82%
18.82%
77.90%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Schedule
of
Investments
(unaudited),
June
30,
2022
Templeton
Sustainable
Emerging
Markets
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
a
Industry
Shares
a
Value
a
Common
Stocks
0.0%
South
Africa
0.0%
a,b,c
K2016470219
South
Africa
Ltd.,
A
....
Multiline
Retail
2,171,539
$
—
a,b,c
K2016470219
South
Africa
Ltd.,
B
....
Multiline
Retail
619,903
—
—
Total
Common
Stocks
(Cost
$14,998)
..........................................
—
Principal
Amount
*
a
a
a
a
a
Corporate
Bonds
3.0%
Costa
Rica
3.0%
a,c
Reventazon
Finance
Trust
,
Senior
Secured
Bond
,
144A,
8
%
,
11/15/33
.
Diversified
Financial
Services
490,680
491,597
South
Africa
0.0%
a,d,e
K2016470219
South
Africa
Ltd.
,
Senior
Secured
Note,
144A,
PIK,
3%,
12/31/22
.....................
Multiline
Retail
185,408
—
Senior
Secured
Note,
144A,
PIK,
8%,
12/31/22
.....................
Multiline
Retail
53,284
EUR
—
a,d,e
K2016470260
South
Africa
Ltd.
,
Senior
Secured
Note
,
144A,
PIK,
25
%
,
12/31/22
.....................
Multiline
Retail
211,381
—
—
Total
Corporate
Bonds
(Cost
$791,715)
........................................
491,597
a
a
Industry
Principal
Amount
*
a
Value
Foreign
Government
and
Agency
Securities
85.3%
Brazil
1.7%
Brazil
Notas
do
Tesouro
Nacional
,
10%,
1/01/25
..................
590,000
BRL
106,432
10%,
1/01/27
..................
270,000
BRL
46,980
10%,
1/01/29
..................
280,000
BRL
47,053
10%,
1/01/31
..................
430,000
BRL
70,344
270,809
Chile
9.2%
Chile
Bonos
Tesoreria
Pesos
,
e
144A,
Reg
S,
4%,
3/01/23
........
1,090,000,000
CLP
1,146,026
2.5%,
3/01/25
.................
335,000,000
CLP
329,808
1,475,834
Colombia
9.3%
Colombia
Government
Bond,
Senior
Bond,
9.85%,
6/28/27
............
13,000,000
COP
3,086
Colombia
Titulos
de
Tesoreria
,
B,
10%,
7/24/24
................
3,219,000,000
COP
774,198
B,
6.25%,
11/26/25
..............
50,000,000
COP
10,584
B,
7.5%,
8/26/26
...............
1,682,800,000
COP
362,283
B,
6%,
4/28/28
.................
428,400,000
COP
81,153
B,
7.75%,
9/18/30
..............
1,267,800,000
COP
248,338
B,
7%,
6/30/32
.................
107,000,000
COP
19,133
1,498,775
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Czech
Republic
2.6%
e
Czech
Republic
Government
Bond,
Reg
S,
1%,
6/26/26
.................
12,000,000
CZK
$
426,284
Dominican
Republic
0.9%
e
Dominican
Republic
Government
Bond,
Senior
Bond,
144A,
5.875%,
1/30/60
220,000
151,089
Ecuador
5.6%
e
Ecuador
Government
Bond
,
Senior
Bond,
144A,
1%,
7/31/35
....
1,199,500
580,536
Senior
Bond,
144A,
0.5%,
7/31/40
..
534,000
219,410
Senior
Note,
144A,
5%,
7/31/30
....
146,000
94,854
894,800
Egypt
2.0%
e
Egypt
Government
Bond,
Senior
Note,
144A,
5.25%,
10/06/25
...........
390,000
320,107
Ghana
4.1%
Ghana
Government
Bond
,
18.25%,
7/25/22
................
297,000
GHS
37,046
17.6%,
11/28/22
................
150,000
GHS
18,184
20.75%,
1/16/23
................
50,000
GHS
6,083
16.5%,
2/06/23
................
1,060,000
GHS
125,514
18.85%,
9/28/23
................
1,363,000
GHS
154,353
19.25%,
11/27/23
...............
260,000
GHS
29,209
19.25%,
12/18/23
...............
243,000
GHS
27,192
19.75%,
3/25/24
................
270,000
GHS
29,757
Senior
Note,
18.5%,
1/02/23
......
50,000
GHS
6,039
Senior
Note,
17.6%,
2/20/23
......
1,560,000
GHS
185,082
Senior
Note,
17.25%,
7/31/23
......
70,000
GHS
7,918
Senior
Note,
17.7%,
3/18/24
......
170,000
GHS
18,212
Senior
Note,
18.3%,
3/02/26
......
100,000
GHS
9,314
653,903
Indonesia
15.6%
Indonesia
Government
Bond
,
FR70,
8.375%,
3/15/24
..........
2,544,000,000
IDR
179,988
FR77,
8.125%,
5/15/24
..........
7,528,000,000
IDR
532,607
FR81,
6.5%,
6/15/25
............
13,129,000,000
IDR
904,643
FR86,
5.5%,
4/15/26
............
13,560,000,000
IDR
894,291
2,511,529
Oman
2.1%
e
Oman
Government
Bond,
Senior
Bond,
144A,
4.75%,
6/15/26
............
350,000
334,388
Peru
3.3%
Peru
Bonos
de
la
Tesoreria
,
5.2%,
9/12/23
......................
2,050,000
PEN
531,000
Singapore
4.5%
Singapore
Government
Bond,
3%,
9/01/24
......................
1,000,000
SGD
724,907
South
Korea
4.6%
Korea
Monetary
Stabilization
Bond,
Senior
Note,
0.905%,
4/02/23
......
509,000,000
KRW
390,200
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
South
Korea
(continued)
Korea
Treasury
Bond
,
0.875%,
12/10/23
...............
370,000,000
KRW
$
277,439
1.875%,
6/10/26
................
96,500,000
KRW
70,301
737,940
Supranational
12.0%
f
Asian
Development
Bank,
Senior
Note,
3%,
3/22/24
...................
5,000,000
CNY
744,985
f
European
Bank
for
Reconstruction
&
Development,
Senior
Note,
4.95%,
1/22/26
......................
63,000,000
INR
732,273
f
International
Bank
for
Reconstruction
&
Development,
Senior
Note,
3.05%,
3/16/24
......................
3,000,000
CNY
446,576
1,923,834
Thailand
4.5%
Thailand
Government
Bond
,
2%,
12/17/22
..................
1,080,000
THB
30,763
0.92%,
3/23/23
................
60,000
THB
1,699
0.51%,
5/24/23
................
100,000
THB
2,817
Senior
Note,
0.66%,
11/22/23
......
24,380,000
THB
683,782
719,061
Uruguay
3.3%
Uruguay
Government
Bond,
Senior
Bond,
8.25%,
5/21/31
............
24,200,000
UYU
529,558
Total
Foreign
Government
and
Agency
Securities
(Cost
$15,999,191)
..............
13,703,818
Shares
Escrows
and
Litigation
Trusts
0.0%
a,b
K2016470219
South
Africa
Ltd.,
Escrow
Account
......................
12,498
—
Total
Escrows
and
Litigation
Trusts
(Cost
$–)
...................................
—
Total
Long
Term
Investments
(Cost
$16,805,904)
................................
14,195,415
Short
Term
Investments
10.1%
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
3.1%
Brazil
2.9%
g
Brazil
Letras
do
Tesouro
Nacional
,
1/01/24
......................
150,000
BRL
23,709
7/01/24
......................
2,070,000
BRL
309,062
1/01/25
......................
960,000
BRL
135,665
468,436
Thailand
0.2%
g
Thailand
Treasury
Bills
,
8/04/22
......................
250,000
THB
7,079
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
At
June
30,
2022,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
Short
Term
Investments
(continued)
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Thailand
(continued)
g
Thailand
Treasury
Bills,
(continued)
9/01/22
......................
250,000
THB
$
7,076
12/08/22
.....................
250,000
THB
7,060
21,215
Total
Foreign
Government
and
Agency
Securities
(Cost
$528,415)
................
489,651
Shares
Money
Market
Funds
7.0%
United
States
7.0%
h,i
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
.........
1,129,254
1,129,254
Total
Money
Market
Funds
(Cost
$1,129,254)
...................................
1,129,254
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$1,657,669
)
.................................
1,618,905
a
a
a
Total
Investments
(Cost
$18,463,573)
98.4%
....................................
$15,814,320
Other
Assets,
less
Liabilities
1.6%
.............................................
253,011
Net
Assets
100.0%
...........................................................
$16,067,331
a
a
a
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
Fair
valued
using
significant
unobservable
inputs.
See
Note
13
regarding
fair
value
measurements.
b
Non-income
producing.
c
See
Note
10
regarding
restricted
securities.
d
Income
may
be
received
in
additional
securities
and/or
cash.
e
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
June
30,
2022,
the
aggregate
value
of
these
securities
was
$3,272,694,
representing
20.4%
of
net
assets.
f
A
supranational
organization
is
an
entity
formed
by
two
or
more
central
governments
through
international
treaties.
g
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
h
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
i
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Indian
Rupee
......
HSBK
Buy
12,826,900
167,427
7/11/22
$
—
$
(5,085)
Chinese
Yuan
......
CITI
Buy
1,612,760
250,242
7/12/22
—
(9,289)
Chinese
Yuan
......
CITI
Sell
1,612,760
251,789
7/12/22
10,836
—
Indian
Rupee
......
HSBK
Buy
19,973,000
260,492
7/12/22
—
(7,732)
Chinese
Yuan
......
HSBK
Buy
4,746,240
738,289
7/18/22
—
(29,238)
Chinese
Yuan
......
HSBK
Sell
4,746,240
744,771
7/18/22
35,720
—
Indian
Rupee
......
JPHQ
Buy
10,911,100
143,284
7/27/22
—
(5,407)
Chilean
Peso
......
GSCO
Buy
207,746,840
240,992
7/29/22
—
(15,671)
Columbian
Peso
....
MSCO
Buy
4,126,000,000
1,024,470
8/03/22
—
(36,161)
Chilean
Peso
......
GSCO
Buy
137,072,267
163,317
8/08/22
—
(14,963)
Chilean
Peso
......
JPHQ
Buy
19,130,000
23,189
8/08/22
—
(2,485)
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
At
June
30,
2022,
the
Fund
had
the
following
interest
rate
swap
contracts
outstanding.
See
Note
1(c). 
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
Euro
.............
JPHQ
Sell
435,000
460,730
8/11/22
$
3,709
$
—
Chilean
Peso
......
GSCO
Buy
6,420,000
7,333
8/16/22
—
(397)
Chilean
Peso
......
GSCO
Buy
110,904,772
127,918
8/19/22
—
(8,189)
Chinese
Yuan
......
JPHQ
Buy
1,213,270
189,746
8/22/22
—
(8,553)
Chinese
Yuan
......
JPHQ
Sell
1,213,270
189,232
8/22/22
8,039
—
Russian
Ruble
.....
JPHQ
Buy
8,629,300
108,008
8/24/22
35,436
—
Russian
Ruble
.....
JPHQ
Sell
8,629,300
68,111
8/24/22
—
(75,333)
Russian
Ruble
.....
MSCO
Buy
25,819,800
298,667
8/24/22
130,532
—
Russian
Ruble
.....
MSCO
Sell
25,819,800
171,162
8/24/22
—
(258,037)
Chilean
Peso
......
GSCO
Buy
126,480,000
152,294
9/02/22
—
(16,191)
Columbian
Peso
....
GSCO
Buy
370,000,000
96,426
9/02/22
—
(8,245)
Chilean
Peso
......
GSCO
Buy
126,477,453
150,327
9/06/22
—
(14,342)
Russian
Ruble
.....
DBAB
Buy
12,061,300
150,184
9/15/22
42,455
—
Russian
Ruble
.....
DBAB
Sell
12,061,300
93,876
9/15/22
—
(98,763)
Chilean
Peso
......
GSCO
Buy
221,333,090
264,832
9/21/22
—
(27,585)
Indian
Rupee
......
JPHQ
Buy
56,300,000
715,193
9/21/22
—
(7,468)
Chilean
Peso
......
GSCO
Buy
54,330,000
65,478
10/11/22
—
(7,466)
Indian
Rupee
......
JPHQ
Buy
12,453,500
161,870
10/11/22
—
(5,607)
Indian
Rupee
......
CITI
Buy
12,814,700
166,468
10/12/22
—
(5,687)
Indian
Rupee
......
CITI
Buy
7,952,700
101,840
11/10/22
—
(2,331)
Chilean
Peso
......
GSCO
Buy
6,900,000
8,170
3/07/23
—
(976)
Brazilian
Real
......
MSCO
Buy
3,700,000
676,071
5/04/23
—
(21,671)
Total
Forward
Exchange
Contracts
...................................................
$266,727
$(692,872)
Net
unrealized
appreciation
(depreciation)
............................................
$(426,145)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
Interest
Rate
Swap
Contracts
Description
Payment
Frequency
Counter-
party
Maturity
Date
Notional
Amount
Value
Unamortized
Upfront
Payments
(Receipts)
Unrealized
Appreciation
(Depreciation)
aa
aa
aa
aa
Centrally
Cleared
Swap
Contracts
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.989%
...
Annual
6/30/32
$282,000
$
(3,797)
$
—
$
(3,797)
Total
Interest
Rate
Swap
Contracts
...............................
$(3,797)
$
—
$(3,797)
See
Abbreviations
on
page
36
.
See
Note 
11
regarding
other
derivative
information.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2022
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$17,334,319
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
1,129,254
Value
-
Unaffiliated
issuers
..................................................................
$14,685,066
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
1,129,254
Cash
....................................................................................
152,283
Foreign
currency,
at
value
(cost
$24,222)
.........................................................
40,660
Receivables:
Capital
shares
sold
........................................................................
598
Interest
.................................................................................
279,865
Affiliates
................................................................................
60,912
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
60,000
Centrally
cleared
swap
contracts
............................................................
15,759
Due
from
Broker
..........................................................................
350,000
Unrealized
app
reciation
on
OTC
forward
exchange
contracts
..........................................
266,727
Total
assets
..........................................................................
17,041,124
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
155,541
Capital
shares
redeemed
...................................................................
47,381
Distribution
fees
..........................................................................
3,180
Transfer
agent
fees
........................................................................
3,720
Professional
fees
.........................................................................
52,125
Trustees'
fees
and
expenses
.................................................................
2,041
Variation
margin
on
centrally
cleared
swap
contracts
...............................................
3,342
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
692,872
Deferred
tax
...............................................................................
72
Accrued
expenses
and
other
liabilities
...........................................................
13,519
Total
liabilities
.........................................................................
973,793
Net
assets,
at
value
.................................................................
$16,067,331
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$23,747,362
Total
distributable
earnings
(losses)
.............................................................
(7,680,031)
Net
assets,
at
value
.................................................................
$16,067,331
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2022
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$12,407,430
Shares
outstanding
........................................................................
2,475,222
Net
asset
value
per
share
a
..................................................................
$5.01
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$5.21
Class
C:
Net
assets,
at
value
.......................................................................
$862,447
Shares
outstanding
........................................................................
172,210
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$5.01
Class
R:
Net
assets,
at
value
.......................................................................
$10,467
Shares
outstanding
........................................................................
2,084
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$5.02
Class
R6:
Net
assets,
at
value
.......................................................................
$679,525
Shares
outstanding
........................................................................
135,441
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$5.02
Advisor
Class:
Net
assets,
at
value
.......................................................................
$2,107,462
Shares
outstanding
........................................................................
418,290
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$5.04
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2022
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$921
Interest:
(net
of
foreign
taxes
of
$12,988)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
76,833
Paid
in
cash
a
...........................................................................
474,883
Total
investment
income
...................................................................
552,637
Expenses:
Management
fees
(Note
3
a
)
...................................................................
78,160
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
13,606
    Class
C
................................................................................
3,496
    Class
R
................................................................................
28
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
12,845
    Class
C
................................................................................
996
    Class
R
................................................................................
11
    Class
R6
...............................................................................
1,366
    Advisor
Class
............................................................................
2,510
Custodian
fees
............................................................................
6,123
Reports
to
shareholders
fees
..................................................................
4,286
Registration
and
filing
fees
....................................................................
39,753
Professional
fees
...........................................................................
110,879
Trustees'
fees
and
expenses
..................................................................
1,061
Other
....................................................................................
18,291
Total
expenses
.........................................................................
293,411
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(194,734)
Net
expenses
.........................................................................
98,677
Net
investment
income
................................................................
453,960
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$4,009)
Unaffiliated
issuers
......................................................................
(1,289,090)
Foreign
currency
transactions
................................................................
(39,877)
Forward
exchange
contracts
.................................................................
(412,339)
Net
realized
gain
(loss)
..................................................................
(1,741,306)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(404,584)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
36,056
Forward
exchange
contracts
.................................................................
(420,398)
Swap
contracts
...........................................................................
(3,797)
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
5,959
Net
change
in
unrealized
appreciation
(depreciation)
............................................
(786,764)
Net
realized
and
unrealized
gain
(loss)
............................................................
(2,528,070)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(2,074,110)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$453,960
$1,701,818
Net
realized
gain
(loss)
.................................................
(1,741,306)
(1,765,411)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(786,764)
(1,198,645)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(2,074,110)
(1,262,238)
Distributions
to
shareholders:
Class
A
.............................................................
(434,524)
—
Class
C
.............................................................
(29,395)
—
Class
R
.............................................................
(339)
—
Class
R6
............................................................
(24,033)
—
Advisor
Class
........................................................
(85,617)
—
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(1,357,541)
Class
C
.............................................................
—
(127,173)
Class
R
.............................................................
—
(1,022)
Class
R6
............................................................
—
(102,534)
Advisor
Class
........................................................
—
(291,844)
Total
distributions
to
shareholders
..........................................
(573,908)
(1,880,114)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(395,165)
1,096,130
Class
C
.............................................................
(305,057)
(287,395)
Class
R
.............................................................
299
1,073
Class
R6
............................................................
125,212
225,841
Advisor
Class
........................................................
(579,592)
(408,822)
Total
capital
share
transactions
............................................
(1,154,303)
626,827
Net
increase
(decrease)
in
net
assets
...................................
(3,802,321)
(2,515,525)
Net
assets:
Beginning
of
period
.....................................................
19,869,652
22,385,177
End
of
period
..........................................................
$16,067,331
$19,869,652
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
Templeton
Sustainable
Emerging
Markets
Bond
Fund
22
franklintempleton.com
Semiannual
Report
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(Fund)
is
included
in
this
report.
The
Fund
offers five
classes
of
shares:
Class
A,
Class
C,
Class
R,
Class
R6
and
Advisor
Class. Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees.
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Board,
the Fund's
administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Debt
securities
generally
trade
in
the OTC
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
are
centrally
cleared
or
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
23
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day.
Events
can
occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund's
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
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
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Derivative
Financial
Instruments
The
Fund invested
in
derivative
financial
instruments
in
order
to
manage
risk
or
gain
exposure
to
various
other
investments
or
markets.
Derivatives
are
financial
contracts
based
on
an
underlying
or
notional
amount,
require
no
initial
investment
or
an
initial
net
investment
that
is
smaller
than
would
normally
be
required
to
have
a
similar
response
to
changes
in
market
factors,
and
require
or
permit
net
settlement.
Derivatives
contain
various
risks
including
the
potential
inability
of
the
counterparty
to
fulfill
their
obligations
under
the
terms
of
the
contract,
the
potential
for
an
illiquid
secondary
market,
and/or
the
potential
for
market
movements
which
expose
the
Fund
to
gains
or
losses
in
excess
of
the
amounts
shown
in
the
Statement
of
Assets
and
Liabilities.
Realized
gain
and
loss
and
unrealized
appreciation
and
depreciation
on
these
contracts
for
the
period
are
included
in
the
Statement
of
Operations.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
24
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
or
initial
margin
requirements
are
set
by
the
broker
or
exchange
clearing
house
for
exchange
traded
and
centrally
cleared
derivatives.
Initial
margin
deposited
is
held
at
the
exchange
and
can
be
in
the
form
of
cash
and/or
securities.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund
for
OTC
derivatives,
if
any,
is
held
in
segregated
accounts
with
the
Fund's
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
The
Fund
entered
into
interest
rate
swap
contracts
primarily
to
manage
interest
rate
risk.
An
interest
rate
swap
is
an
agreement
between
the
Fund
and
a
counterparty
to
exchange
cash
flows
based
on
the
difference
between
two
interest
rates,
applied
to
a
notional
amount.
These
agreements
may
be
privately
negotiated
in
the
over-the-
counter
market
(OTC
interest
rate
swaps)
or
may
be
executed
on
a
registered
exchange
(centrally
cleared
interest
rate
swaps).
For
centrally
cleared
interest
rate
swaps,
required
initial
margins
are
pledged
by
the
Fund,
and
the
daily
change
in
fair
value
is
accounted
for
as
a
variation
margin
payable
or
receivable
in
the
Statement
of
Assets
and
Liabilities.
Over
the
term
of
the
contract,
contractually
required
payments
to
be
paid
and
to
be
received
are
accrued
daily
and
recorded
as
unrealized
depreciation
and
appreciation
until
the
payments
are
made,
at
which
time
they
are
realized.
See
Note
11 regarding
other
derivative
information.
d.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
25
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
based
on
its
technical
merits.
As
of
June
30,
2022,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
e.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
f.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
g.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Fund,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
June
30,
2022,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Income
and
Deferred
Taxes
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
Six
Months
Ended
June
30,
2022
Year
Ended
December
31,
2021
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
123,493
$692,740
683,172
$4,403,469
Shares
issued
in
reinvestment
of
distributions
..........
53,413
289,608
146,438
913,031
Shares
redeemed
...............................
(247,713)
(1,377,513)
(671,241)
(4,220,370)
Net
increase
(decrease)
..........................
(70,807)
$(395,165)
158,369
$1,096,130
Class
C
Shares:
Shares
sold
...................................
6,213
$36,110
45,798
$288,307
Shares
issued
in
reinvestment
of
distributions
..........
4,952
26,867
19,642
122,692
Shares
redeemed
a
..............................
(64,231)
(368,034)
(112,212)
(698,394)
Net
increase
(decrease)
..........................
(53,066)
$(305,057)
(46,772)
$(287,395)
Class
R
Shares:
Shares
sold
...................................
22
$125
97
$612
Shares
issued
in
reinvestment
of
distributions
..........
32
174
79
496
Shares
redeemed
...............................
—
—
(6)
(35)
Net
increase
(decrease)
..........................
54
$299
170
$1,073
Class
R6
Shares:
Shares
sold
...................................
63,729
$362,186
240,016
$1,553,190
Shares
issued
in
reinvestment
of
distributions
..........
4,438
24,033
16,313
102,534
Shares
redeemed
...............................
(46,486)
(261,007)
(231,593)
(1,429,883)
Net
increase
(decrease)
..........................
21,681
$125,212
24,736
$225,841
Advisor
Class
Shares:
Shares
sold
...................................
33,206
$192,458
171,112
$1,101,536
Shares
issued
in
reinvestment
of
distributions
..........
15,237
83,215
45,445
284,873
Shares
redeemed
...............................
(153,835)
(855,265)
(279,547)
(1,795,231)
Net
increase
(decrease)
..........................
(105,392)
$(579,592)
(62,990)
$(408,822)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Templeton
Asset
Management
Ltd
(Asset
Management)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
2.
Shares
of
Beneficial
Interest
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
based
on
the
average
daily
net
assets of
the
Fund
as
follows:
For
the
period
ended
June
30,
2022,
the
annualized
gross
effective
management
fee
rate
was
0.850%
of
the
Fund’s
average
daily
net
assets.
Under
a
subadvisory
agreement,
Asset
Management,
an
affiliate
of
Advisers,
provides
subadvisory
services
to
the
Fund.
The
subadvisory
fee
is
paid
by
Advisers,
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
and
R
compensation
distribution
plans,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
Annualized
Fee
Rate
Net
Assets
0.850%
Up
to
and
including
$500
million
0.800%
Over
$500
million,
up
to
and
including
$1
billion
0.750%
Over
$1
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$145
CDSC
retained
..............................................................................
$266
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
June
30,
2022,
the
Fund
paid
transfer
agent
fees
of
$17,728,
of
which $9,368
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
June
30,
2022,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Advisers
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
and
to
assume
as
its
own
expense
certain
expenses
otherwise
payable
by
the
Fund
so
that
the
operating
expenses
(excluding
distribution
fees,
acquired
fund
fees
and
expenses
and
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations)
for
each
class
of
the
Fund
do
not
exceed
0.89%
based
on
the
average
net
assets
of
each
class
until
April
30,
2023.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Fund’s
fiscal
year
end. 
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
April
30,
2023. 
h.
Other
Affiliated
Transactions
At
June
30,
2022,
Advisers
owned
24.6%
of
the
Fund's
outstanding
shares.
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
$
1,351,150
$
6,263,342
$
(6,485,238)
$
—
$
—
$
1,129,254
1,129,254
$
921
Total
Affiliated
Securities
...
$1,351,150
$6,263,342
$(6,485,238)
$—
$—
$1,129,254
$921
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
29
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2021,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2021,
the
Fund
deferred
late-year
ordinary
losses
of
$119,684.
At
June
30,
2022,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of foreign
currency
transactions,
payments-in-kind,
bond
discounts
and
premiums,
tax
straddles,
inflation
related
adjustments
on
foreign
securities
and
wash
sales.
5.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2022,
aggregated
$6,633,258
and
$7,378,417,
respectively.
6.
Credit
Risk
At
June
30,
2022,
the
Fund
had
22.6%
of
its
portfolio
invested
in
high
yield
or
other
securities
rated
below
investment
grade
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
7.
Concentration
of
Risk
Investing
in
foreign
securities
may
include
certain
risks
and
considerations
not
typically
associated
with
investing
in
U.S.
securities,
such
as
fluctuating
currency
values
and
changing
local,
regional
and
global
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
Political
and
financial
uncertainty
in
many
foreign
regions
may
increase
market
volatility
and
the
economic
risk
of
investing
in
foreign
securities.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$719,562
Long
term
................................................................................
1,709,494
Total
capital
loss
carryforwards
...............................................................
$2,429,056
Cost
of
investments
..........................................................................
$18,653,798
Unrealized
appreciation
........................................................................
$641,678
Unrealized
depreciation
........................................................................
(3,911,097)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(3,269,419)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
30
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
8.
Geopolitical
Risk
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
9.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
10.
Restricted
Securities
The
Fund
invests
in
securities
that
are
restricted
under
the
Securities
Act
of
1933
(1933
Act).
Restricted
securities
are
often
purchased
in
private
placement
transactions,
and
cannot
be
sold
without
prior
registration
unless
the
sale
is
pursuant
to
an
exemption
under
the
1933
Act.
Disposal
of
these
securities
may
require
greater
effort
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult.
The Fund
may
have
registration
rights
for
restricted
securities.
The
issuer
generally
incurs
all
registration
costs.
At
June
30,
2022,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
Principal
Amount
*
/
Shares
Issuer
Acquisition
Date
Cost
Value
Templeton
Sustainable
Emerging
Markets
Bond
Fund
2,171,539
a
K2016470219
South
Africa
Ltd.,
A
...............
5/16/13
-
2/01/17
$
14,538
$
—
619,903
a
K2016470219
South
Africa
Ltd.,
B
...............
2/01/17
460
—
490,680
Reventazon
Finance
Trust,
Senior
Secured
Bond,
144A,
8%,
11/15/33
..............................
12/18/13
490,680
491,597
Total
Restricted
Securities
(Value
is
3.1%
of
Net
Assets)
..............
$505,678
$491,597
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
a
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$
—
as
of
June
30,
2022.
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
11.
Other
Derivative
Information
At
June
3
0
,
202
2
,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
For
the
period
ended
June
30,
2022,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Interest
rate
contracts
.......
Variation
margin
on
centrally
cleared
swap
contracts
$
—
Variation
margin
on
centrally
cleared
swap
contracts
$
3,797
a
Foreign
exchange
contracts
..
Unrealized
appreciation
on
OTC
forward
exchange
contracts
266,727
Unrealized
depreciation
on
OTC
forward
exchange
contracts
692,872
Total
....................
$266,727
$696,669
a
This
amount
reflects
the
cumulative
appreciation
(depreciation)
of
centrally
cleared
swap
contracts
as
reported
in
the
Schedule
of
Investments.
Only
the
variation
margin
receivable/payable
at
period
end
is
separately
reported
within
the
Statement
of
Assets
and
Liabilities.
Prior
variation
margin
movements
were
recorded
to
cash
upon
receipt
or
payment.
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Period
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Period
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Interest
rate
contracts
..........
Swap
contracts
$—
Swap
contracts
$(3,797)
Foreign
exchange
contracts
.....
Forward
exchange
contracts
(412,339)
Forward
exchange
contracts
(420,398)
Total
.......................
$(412,339)
$(424,195)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
For
the
period
ended
June
30,
2022,
the
average
month
end
notional
amount
of
swap
contracts
represented
$40,286.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$13,277,989.
At
June
30,
2022,
OTC
derivative
assets
and
liabilities
are
as
follows:
At
June
30,
2022,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Derivatives
Forward
exchange
contracts
.............................
$
266,727
$
692,872
Total
.............................................
$266,727
$692,872
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
Cash
Collateral
Received
Net
Amount
(Not
less
than
zero)
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Counterparty
CITI
.....................
$10,836
$(10,836)
$—
$—
$—
DBAB
...................
42,455
(42,455)
—
—
—
GSCO
...................
—
—
—
—
—
HSBK
...................
35,720
(35,720)
—
—
—
JPHQ
...................
47,184
(47,184)
—
—
—
MSCO
...................
130,532
(130,532)
—
—
—
Total
...................
$266,727
$(266,727)
$
—
$—
$—
$
1
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
33
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
At
June
30,
2022,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
36
.
12.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
3,
2023.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
period
ended
June
30,
2022,
the Fund
did
not
use
the
Global
Credit
Facility.
13.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
a
Cash
Collateral
Pledged
a
Net
Amount
(Not
less
than
zero)
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Counterparty
CITI
.....................
$17,307
$(10,836)
$—
$—
$6,471
DBAB
...................
98,763
(42,455)
—
(56,308)
—
GSCO
...................
114,025
—
—
—
114,025
HSBK
...................
42,055
(35,720)
—
—
6,335
JPHQ
...................
104,852
(47,184)
—
—
57,668
MSCO
...................
315,870
(130,532)
—
—
185,338
Total
...................
$692,872
$(266,727)
$—
$(56,308)
$369,837
a
In
some
instances,
the
collateral
amounts
disclosed
in
the
table
above
were
adjusted
due
to
the
requirement
to
limit
collateral
amounts
to
avoid
the
effect
of
over
collateralization.
Actual
collateral
received
and/or
pledged
may
be
more
than
the
amounts
disclosed
herein.
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
34
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
June
30,
2022,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Common
Stocks
........................
$
—
$
—
$
—
a
$
—
Corporate
Bonds
........................
—
—
491,597
a
491,597
Foreign
Government
and
Agency
Securities
....
—
13,703,818
—
13,703,818
Escrows
and
Litigation
Trusts
...............
—
—
—
a
—
Short
Term
Investments
...................
1,129,254
489,651
—
1,618,905
Total
Investments
in
Securities
...........
$1,129,254
$14,193,469
$491,597
$15,814,320
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
266,727
$
—
$
266,727
Swap
contracts
.........................
—
—
—
—
Total
Other
Financial
Instruments
.........
$—
$266,727
$—
$266,727
Liabilities:
Other
Financial
Instruments:
Forward
exchange
contracts
................
$
—
$
692,872
$
—
$
692,872
Swap
contracts
..........................
—
3,797
—
3,797
Total
Other
Financial
Instruments
.........
$—
$696,669
$—
$696,669
a
Includes
securities
determined
to
have
no
value
at
June
30,
2022.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
35
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
period.
At
June
30,
2022,
the
reconciliation
is
as
follows:
Significant
unobservable
valuation
inputs
for
material
Level
3 assets
and/or
liabilities and
impact
to
fair
value
as
a
result
of
changes
in
unobservable
valuation
inputs
as
of
June
30,
2022,
are
as
follows:
Balance
at
Beginning
of
Period
Purchases
Sales
a
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Net
Accretion
(Amortiza-
tion)
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Period
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Period
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
South
Africa
..
$
—
b
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
b
$
—
Corporate
Bonds
:
Costa
Rica
...
539,971
—
(12,240)
—
—
—
—
(36,134)
491,597
(35,232)
South
Africa
..
—
b
—
—
—
—
—
—
—
—
b
—
Escrows
and
Litigation
Trusts
—
b
—
—
—
—
—
—
—
—
b
—
Total
Investments
in
Securities
.......
$539,971
$—
$(12,240)
$—
$—
$—
$—
$(36,134)
$491,597
$(35,232)
a
Sales
include
all
sales
of
securities,
maturities,
paydowns
and
securities
tendered
in
corporate
actions.
b
Includes
securities
determined
to
have
no
value.
Description
Fair
Value
at
End
of
Period
Valuation
Technique
Unobservable
Inputs
Amount/Range
(Weighted
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
Sustainable
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Corporate
Bonds:
Costa
Rica
..........
$491,597
Discounted
cash
flow
Discount
rate
(
b
)
8.0%
Decrease
c
All
Other
............
—
d
Total
...............
$491,597
a
Represents
the
directional
change
in
the
fair
value
of
the
Level
3
financial
instruments
that
would
result
from
a
significant
and
reasonable
increase
in
the
corresponding
input.
A
significant
and
reasonable
decrease
in
the
input
would
have
the
opposite
effect.
Significant
impacts,
if
any,
to
fair
value
and/or
net
assets
have
been
indicated.
b
The
discount
rate
is
comprised
of
the
risk-free
rate,
the
10-year
Costa
Rican
CDS
curve,
and
an
incremental
credit
spread
that
combines
with
the
first
two
components
to
arrive
at
an
8%
yield
on
issue
date
for
an
8%
coupon
bond
issued
at
par.
c
Represents
a
significant
impact
to
fair
value
and
net
assets.
d
Includes
securities
determined
to
have
no
value
at
June
30,
2022.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
36
franklintempleton.com
Semiannual
Report
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(continued)
14.
New
Accounting
Pronouncements
In June
2022,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
is
currently
evaluating
the
impact,
if
any,
of
applying
this
ASU.
15.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the
financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Counterparty
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
Cu
r
rency
BRL
Brazilian
Real
CLP
Chilean
Peso
CNY
Chinese
Yuan
COP
Colombian
Peso
CZK
Czech
Koruna
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
KRW
South
Korean
Won
PEN
Peruvian
Nuevo
Sol
SGD
Singapore
Dollar
THB
Thai
Baht
UYU
Uruguayan
Peso
Selected
Portfolio
PIK
Payment-In-Kind
SOFR
Secured
Overnight
Financing
Rate
Templeton
Income
Trust
Shareholder
Information
37
franklintempleton.com
Semiannual
Report
Board
Approval
of
Investment
Management
Agreements
TEMPLETON
INCOME
TRUST
Templeton
Sustainable
Emerging
Markets
Bond
Fund
(formerly,
Templeton
Emerging
Markets
Bond
Fund)
(Fund)
At
a
meeting
held
on
December
9,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(1940
Act))
of
the
Trust
(Independent
Trustees),
reviewed
and
approved
a
new
investment
sub-advisory
agreement
between
Franklin
Advisers,
Inc.
(Manager),
the
Fund’s
investment
manager,
and
Templeton
Asset
Management,
Ltd.
(Sub-Adviser),
an
affiliate
of
the
Manager,
on
behalf
of
the
Fund
(Sub-Advisory
Agreement),
for
an
initial
two
year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
Sub-Advisory
Agreement.
The
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
with
respect
to
the
Sub-
Advisory
Agreement.
The
Board
also
reviewed
and
considered
the
factors
it
deemed
relevant
in
approving
the
Sub-Advisory
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent,
and
quality
of
the
services
to
be
provided
by
the
Sub-Adviser;
and
(ii)
the
costs
of
the
services
to
be
provided
by
the
Sub-Adviser.
The
Board
further
reviewed
and
considered
information
provided
by
management
showing
the
expected
impact
of
hiring
the
Sub-Adviser
on
the
Manager’s
profitability
consistent
with
the
Order
(as
defined
below).
The
Board
also
considered
that
management
proposed
that
the
Board
approve
the
Sub-Advisory
Agreement
in
order
to
facilitate
a
portfolio
management
team
change,
effective
December
15,
2021.
The
Board
reviewed
and
further
considered
the
form
of
Sub-Advisory
Agreement
and
the
terms
of
the
Sub-Advisory
Agreement,
which
were
discussed
at
the
Meeting,
noting
that
the
terms
and
conditions
of
the
Sub-Advisory
Agreement
were
substantially
similar
to
the
terms
and
conditions
of
sub-advisory
agreements
for
other
Franklin
Templeton
(“FT”)
mutual
funds.
In
approving
the
Sub-Advisory
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
hiring
of
the
Sub-Adviser
is
in
the
best
interests
of
the
Fund
and
its
shareholders
and
does
not
involve
a
conflict
of
interest
from
which
the
Manager
or
Sub-Adviser
derives
an
inappropriate
advantage.
The
Board
also
determined
that
the
terms
of
the
Sub-Advisory
Agreement
are
fair
and
reasonable.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
to
be
provided
by
the
Sub-Adviser
and
currently
being
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
In
doing
so,
the
Board
noted
that
the
Fund
employs
a
“manager
of
managers”
structure
pursuant
to
an
exemptive
order
(Order)
granted
to
the
Manager
by
the
U.S.
Securities
and
Exchange
Commission,
whereby
the
Manager
and
the
Fund
may,
without
shareholder
approval,
enter
into
sub-advisory
agreements
with
sub-advisers
that
are
indirect
or
direct
wholly
owned
subsidiaries
of
Franklin
Resources,
Inc.
(FRI).
In
particular,
with
respect
to
the
Sub-Adviser,
the
Board
took
into
account
that
one
of
two
new
portfolio
managers
proposed
to
serve
as
a
portfolio
manager
for
the
Fund
is
an
employee
of
the
Sub-Adviser
and
helped
develop
the
proprietary
ESG
scoring
system
that
is
utilized
by
the
Fund.
The
Board
reviewed
and
considered
information
regarding
the
nature,
quality
and
extent
of
investment
sub-advisory
services
to
be
provided
by
the
Sub-Adviser
to
the
Fund
and
its
shareholders
under
the
Sub-Advisory
Agreement;
the
Sub-Adviser’s
experience
as
a
manager
of
other
funds
and
accounts,
including
those
within
the
FT
organization;
the
personnel,
operations,
financial
condition,
and
investment
management
capabilities,
methodologies
and
resources
of
the
Sub-Adviser
and
the
Sub-Adviser’s
capabilities,
as
demonstrated
by,
among
other
things,
its
policies
and
procedures
reasonably
designed
to
prevent
violations
of
the
federal
securities
laws.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
FRI,
the
parent
of
the
Manager
and
the
Sub-
Adviser,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
Templeton
Income
Trust
Shareholder
Information
38
franklintempleton.com
Semiannual
Report
and
growth
opportunities,
as
evidenced
by
its
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
to
be
provided
by
the
Sub-Adviser
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
noted
its
review
and
consideration
of
the
performance
results
of
the
Fund
in
connection
with
the
February
2021
annual
contract
renewal
(Annual
Contract
Renewal)
of
the
Fund’s
investment
management
agreement
and
at
regular
Board
meetings
throughout
the
year.
The
Board
recalled
that
in
connection
with
the
Annual
Contract
Renewal
the
Board
noted
that
the
Fund
commenced
operations
on
April
1,
2013,
and
thus
had
been
in
operation
for
less
than
10
years.
The
Board
further
recalled
management’s
continued
confidence
in
the
Fund’s
portfolio
management
team,
investment
process
and
long-term
prospects
for
the
Fund.
The
Board
also
recalled
that
management
had
continued
to
add
resources
to
the
portfolio
management
team
as
needed
and
that
the
sources
of
analysis
and
input
had
continued
to
expand.
The
Board
further
recalled
its
conclusion
that
the
Fund’s
management
agreement
should
be
continued
for
an
additional
one-year
period,
and
any
proposed
changes
closely
monitored.
The
Board
noted
management’s
proposal
to
retain
the
Sub-
Adviser
and
make
enhancements
to
the
Fund’s
portfolio
management
team,
80%
policy
under
Rule
35d-1
under
the
1940
Act
and
principal
investment
strategies,
all
as
presented
at
the
Meeting,
and
determined
that,
in
light
of
these
changes,
additional
time
will
be
needed
to
evaluate
the
effectiveness
of
management’s
actions.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
investment
sub-advisory
fee
to
be
charged
by
the
Sub-
Adviser.
The
Board
noted
that
the
addition
of
the
Sub-
Adviser
will
have
no
impact
on
the
amount
of
management
fees
that
are
currently
paid
by
the
Fund
as
the
Sub-Adviser
will
be
paid
by
the
Manager
out
of
the
management
fee
that
the
Manager
receives
from
the
Fund.
The
Board
further
noted
that
the
allocation
of
the
fee
between
the
Manager
and
the
Sub-Adviser
reflected
the
services
to
be
provided
by
each.
The
Board
concluded
that
the
proposed
investment
sub-advisory
fee
is
reasonable.
Management
Profitability
and
Economies
of
Scale
The
Board
noted
management’s
belief
that
the
Manager’s
profitability
is
not
expected
to
materially
change
as
a
result
of
the
addition
of
the
Sub-Adviser.
The
Board
determined
that
its
conclusions
regarding
profitability
and
economies
of
scale
reached
in
connection
with
the
Annual
Contract
Renewal
of
the
investment
management
agreement
with
the
Manager
had
not
changed
as
a
result
of
the
proposal
to
approve
the
Sub-Advisory
Agreement.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
Sub-Advisory
Agreement
for
an
initial
two
year
period.
At
an
in-person
meeting
held
on
February
28,
2022
(Meeting),
the
Board
of
Trustees
(Board)
of
the
Fund,
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
virtual
contract
renewal
meeting
at
which
the
Independent
Trustees
first
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters.
At
that
meeting,
they
met
with
senior
leadership
of
the
global
macro
funds
regarding
the
performance
of
the
funds;
and
met
with
management
to
request
additional
information
that
the
Independent
Trustees
reviewed
and
considered
at
the
Meeting.
The
Board
later
had
an
opportunity
for
an
expanded
discussion
with
the
leadership
of
the
global
macro
funds
to
hear
about
strategies
to
deliver
improved
investment
returns
to
shareholders.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
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of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continued
commitment
to
providing
the
resources
important
to
enhancing
the
investment
process
of
the
global
macro
funds
for
the
benefit
of
the
funds
and
their
shareholders.
The
Board
also
acknowledged
the
ongoing
integration
of
the
Legg
Mason
family
of
funds
into
the
FT
family
of
funds
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
including
various
regulatory
initiatives
and
recent
geopolitical
concerns.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Managers’
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
being
a
global
leader
in
stewardship
and
sustainability
and
the
recent
addition
of
a
senior
executive
focused
on
environmental,
social
and
governance
and
climate
control
initiatives.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
to
be
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2021.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
further
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
emerging
markets
local
currency
debt
funds.
The
Fund
commenced
operations
on
April
1,
2013,
and
thus
has
been
in
operation
for
less
than
10
years.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-
and
five-year
periods
was
above
the
median
of
its
Performance
Universe.
The
Board
also
noted
that
the
Fund’s
annualized
total
return
for
the
one-year
period
was
above
the
median
and
in
the
first
quintile
(best)
of
its
Performance
Universe,
although
for
the
three-
and
five-year
periods
it
had
been
below
the
median
and
in
the
fifth
quintile
(worst)
of
its
Performance
Universe.
The
Board
further
noted
the
recent
changes
to
the
Fund’s
name
and
investment
strategy
(which
emphasizes
sustainability
efforts
of
emerging
market
countries
in
certain
environmental,
social
and
governance
categories)
and
the
recent
hiring
of
a
new
sub-adviser.
In
light
of
these
developments,
the
Board
concluded
that
the
Fund’s
performance
is
satisfactory.
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Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
as
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
or
semi-annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
eight
other
emerging
markets
local
currency
debt
funds.
The
Board
noted
that
the
Management
Rate
for
the
Fund
was
above
the
median
and
in
the
fifth
quintile
(most
expensive)
of
its
Expense
Group,
but
its
actual
total
expense
ratio
was
below
the
median
and
in
the
second
quintile
of
its
Expense
Group.
The
Board
further
noted
that
the
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management.
After
consideration
of
the
above,
the
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2021,
being
the
most
recent
fiscal
year-end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
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Fund
grows
in
size.
The
Board
considered
management’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
noted
that
the
Fund
does
not
currently
have
an
asset
size
that
would
likely
enable
the
Fund
to
achieve
economies
of
scale.
The
Board
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
the
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
Franklin
Templeton
and
Legg
Mason
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Legal,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2022,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2021.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Templeton
Income
Trust
Shareholder
Information
42
franklintempleton.com
Semiannual
Report
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
072
S
08/22
©
2022
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
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SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
Global
Total
Return
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2022
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up
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franklintempleton.com
Semiannual
Report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
The
six
months
ended
June
30,
2022,
were
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impacts
of
COVID-19
and
the
start
of
Russia’s
war
on
Ukraine.
Global
economies
faced
commodity
price
inflation,
tightening
financial
conditions,
weakening
global
growth,
and
supply
chain
disruptions
in
China.
Risk
assets
faced
strong
headwinds,
and
central
bankers
across
many
countries
faced
the
difficult
choice
of
supporting
growth
or
controlling
rising
price
pressures.
Sovereign
bond
yields
rose
across
much
of
the
world
following
higher
headline
inflation
data
and
central
bank
policy
rate
hikes,
and
the
U.S.
dollar
strengthened.
Simultaneously,
the
Russia-Ukraine
war
disrupted
the
flow
of
energy,
food,
commodities
and
goods,
particularly
throughout
Europe,
while
increasing
both
broad
geopolitical
instability
and
the
social
and
economic
strains
of
refugee
flight.
We
expect
broader
economic
strains
as
a
fallout
from
the
war.
Emerging
market
countries
that
are
net
importers
of
food
and
energy
will
be
more
vulnerable
to
trade
shocks
and
political
turmoil
stemming
from
elevated
commodity
prices.
Despite
the
challenging
macroeconomic
environment,
divergences
among
countries
offer
opportunities
for
outperformance
in
duration,
local-currency
sovereign
bonds
and
currencies,
and
we
remain
committed
to
pursuing
our
investment
objectives.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
their
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
Global
Total
Return
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2022,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
Global
Total
Return
Fund
3
Performance
Summary
6
Your
Fund’s
Expenses
8
Financial
Highlights
and
Schedule
of
Investments
9
Financial
Statements
23
Notes
to
Financial
Statements
27
Shareholder
Information
41
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
Global
Total
Return
Fund
This
semiannual
report
for
Templeton
Global
Total
Return
Fund
covers
the
period
ended
June
30,
2022
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
total
investment
return
consisting
of
a
combination
of
interest
income,
capital
appreciation
and
currency
gains.
Under
normal
market
conditions,
the
Fund
invests
primarily
in
fixed
and
floating
rate
debt
securities
and
debt
obligations
(including
convertible
bonds)
of
governments,
government
agencies
and
government-related
or
corporate
issuers
worldwide
(collectively,
“bonds”).
Bonds
may
be
denominated
and
issued
in
the
local
currency
or
in
another
currency.
Bonds
include
debt
securities
of
any
maturity,
such
as
bonds,
notes,
bills
and
debentures.
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-13.31%
cumulative
total
return.
In
comparison,
the
global
fixed
income
market,
as
measured
by
the
Fund’s
benchmark,
the
Bloomberg
Multiverse
Index,
posted
a
-13.97%
cumulative
total
return
for
the
same
period.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
6
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Economic
and
Market
Overview
The
six-month
period
ended
June
30,
2022,
was
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impact
of
COVID-19,
the
start
of
Russia’s
war
on
Ukraine,
commodity-price
inflation,
rising
global
interest
rates,
weakening
global
gross
domestic
product
growth,
and
supply
chain
disruptions.
Risk
assets
faced
strong
headwinds
resulting
from
tighter
financial
conditions.
*Includes
securities
determined
to
have
no
value
at
6/30/22.
**Includes
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Sovereign
bond
yields
rose
across
most
of
the
world
as
many
major
central
banks
embarked
on
policy
rate
hikes
to
curb
inflation.
Inflation
reached
multi-decade
highs
during
the
period,
with
added
supply-side
pressures
coming
from
disruptions
to
the
flow
of
energy,
food,
commodities
and
goods
due
to
the
war
in
Ukraine
and
the
West’s
economic
isolation
of
Russia.
Supply
chain
disruptions
were
compounded
by
China’s
implementation
of
its
zero-COVID
policy.
Simultaneously,
global
economic
growth
was
projected
to
decelerate,
driven
by
the
disruption
of
economic
activity
and
trade
following
Russia’s
invasion
of
Ukraine,
including
a
reduction
in
Russia’s
exports
of
natural
gas
to
Germany,
the
economic
strains
of
refugee
flight
in
Europe,
volatile
and
elevated
commodity
prices,
continued
supply
chain
disruptions,
the
effect
of
COVID-19-related
lockdowns
in
China,
and
the
reduction
of
policy
support
post-COVID-19.
The
combination
of
above-average
inflation
and
below-
average
growth
raised
the
spectre
of
stagflation
reminiscent
of
the
1970s
and
created
a
policy
dilemma
for
many
central
bankers.
Over
the
period,
developed
market
sovereign
bond
yields
trended
higher
concurrently
with
falling
equity
prices
and
strength
in
the
U.S.
dollar.
On
the
monetary
front,
the
first
half
of
2022
marked
the
end
of
pandemic-era
monetary
accommodation
by
the
U.S.
Federal
Reserve.
Portfolio
Composition
6/30/22
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
63.6%
U.S.
Government
and
Agency
Securities
6.0%
Other
0.0%
*
Short-Term
Investments
&
Other
Net
Assets**
30.4%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
14
.
Templeton
Global
Total
Return
Fund
4
franklintempleton.com
Semiannual
Report
Investment
Strategy
We
invest
selectively
in
bonds
around
the
world
based
upon
our
assessment
of
changing
market,
political
and
economic
conditions.
While
seeking
opportunities,
we
consider
various
factors
including
evaluation
of
interest
rates,
currency
exchange
rate
changes
and
credit
risks.
For
purposes
of
pursuing
its
investment
goals,
the
Fund
regularly
enters
into
various
currency
related
transactions
involving
derivative
instruments,
principally
currency
and
cross
currency
forwards,
but
it
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
Manager’s
Discussion
In
bonds,
we
continued
to
maintain
low
portfolio
duration,
while
aiming
at
a
high
overall
portfolio
yield
by
holding
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets,
specifically
in
countries
with
resilient
economies
and
strong
trade
dynamics.
We
were
significantly
underweight
developed
market
duration
in
the
U.S.
and
the
euro
area,
with
a
preference
for
the
higher
yields
available
in
select
emerging
market
local-currency
bonds,
notably
including
Indonesia,
India,
Thailand,
Brazil,
Colombia,
and
Mexico.
We
closed
our
local-currency
positions
in
Egypt
and
Turkey
and
added
new
U.S.
dollar
(USD)-denominated
sovereign
credit
exposures
in
Africa,
Latin
America
and
Asia.
During
the
period,
we
used
interest
rate
swaps
to
actively
manage
duration
exposures.
At
the
beginning
of
the
period,
the
Fund
was
overweight
in
specific
currencies
against
the
USD
and
the
euro.
In
Asia,
we
held
notable
exposures
to
the
South
Korean
won,
Chinese
yuan,
Indian
rupee,
Indonesian
rupiah
and
the
Singapore
dollar,
while
holding
an
underweight
in
the
Japanese
yen.
We
closed
our
exposure
to
the
Japanese
yen
in
March
2022,
thereby
going
further
underweight,
primarily
due
to
expected
depreciation
pressures
on
the
currency
from
widening
rate
differentials
with
the
U.S.
In
April,
we
exited
our
underweight
position
in
the
Australian
dollar
which
had
been
used
to
hedge
against
emerging
market
beta
risks,
as
we
anticipated
rising
commodity
prices
to
boost
Australia’s
terms
of
trade
and
support
its
currency.
In
EMEA
(Europe,
Middle
East
and
Africa),
the
Fund
held
overweight
positions
in
the
Norwegian
krone,
the
Swedish
krona
and
the
British
pound
against
the
euro.
We
added
a
position
in
the
British
pound
against
the
euro
in
April
due
to
expected
monetary
policy
divergences
between
the
Bank
of
England
and
the
European
Central
Bank.
We
closed
our
exposure
to
the
Russian
ruble.
In
the
Americas,
we
held
long
exposures
to
the
Brazilian
real,
Chilean
peso
and
Colombian
peso
against
the
USD,
and
long
exposure
to
the
Canadian
dollar
against
the
euro.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions,
followed
by
overall
credit
exposures
and
interest-rate
strategies.
Among
currencies,
the
Fund’s
position
in
the
Russian
ruble
for
part
of
the
period
detracted
from
absolute
results,
as
did
positions
in
the
South
Korean
won,
Ghanaian
cedi,
Argentine
peso,
Indian
rupee
and
Chinese
yuan.
However,
the
Fund’s
position
in
the
Brazilian
real
against
the
USD
contributed
to
absolute
performance,
as
did
its
position
in
the
Canadian
dollar
against
the
euro.
Among
credit
exposures,
sub-investment-grade
sovereign
credits
detracted
from
absolute
return.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Duration
exposures
in
Ghana
and
Colombia
detracted
from
absolute
performance,
while
duration
exposure
in
Argentina
contributed.
On
a
relative
basis,
the
Fund
fared
better
than
that
of
its
benchmark
index
primarily
due
to
interest-rate
strategies,
followed
by
overall
credit
exposures.
Currency
positions
detracted
from
relative
results.
Its
lack
of
duration
exposures
in
the
euro
area
and
Canada
contributed
to
relative
performance,
as
did
underweighted
duration
exposures
in
the
U.S.,
the
U.K.
and
Japan.
Overweighted
duration
exposure
in
Argentina
also
contributed
to
relative
results,
while
overweighted
duration
exposures
in
Ghana
and
Colombia
detracted.
Among
credit
exposures,
underweighted
exposures
to
investment-grade
corporate
bonds
and
investment-grade
sovereign
credits
contributed
to
relative
return,
while
overweighted
exposure
to
sub-
investment-grade
sovereign
credits
detracted.
Among
currencies,
the
Fund’s
overweighted
position
in
the
Russian
ruble
for
part
of
the
period
detracted
from
relative
performance,
as
did
overweighted
positions
in
the
South
Korean
won,
Ghanaian
cedi,
Argentine
peso
and
Indian
rupee.
However,
the
Fund’s
underweighted
exposure
to
the
euro
contributed
to
relative
results,
as
did
its
underweighted
position
in
the
Japanese
yen.
Its
overweighted
position
in
the
Brazilian
real
against
the
USD
also
contributed
to
relative
Geographic
Composition
6/30/22
%
of
Total
Net
Assets
Americas
29.8%
Asia
Pacific
24.9%
Other
Europe
7.9%
Middle
East
&
Africa
7.0%
Short-Term
Investments
&
Other
Net
Assets
30.4%
Templeton
Global
Total
Return
Fund
5
franklintempleton.com
Semiannual
Report
results,
as
did
its
overweighted
position
in
the
Canadian
dollar
against
the
euro.
Thank
you
for
your
continued
participation
in
Templeton
Global
Total
Return
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho,
Ph.D.
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
June
30,
2022
Templeton
Global
Total
Return
Fund
6
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
6/30/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton
.com
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
6-Month
-13.31%
-16.54%
1-Year
-16.80%
-19.92%
5-Year
-20.47%
-5.21%
10-Year
-1.51%
-0.53%
Advisor
6-Month
-13.28%
-13.28%
1-Year
-16.66%
-16.66%
5-Year
-19.53%
-4.25%
10-Year
+0.96%
+0.10%
See
page
7
for
Performance
Summary
footnotes.
Templeton
Global
Total
Return
Fund
Performance
Summary
7
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Foreign
securities
involve
special
risks,
including
currency
fluctuations
(which
may
be
significant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
developing
markets
involve
heightened
risks
related
to
the
same
factors.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio,
which
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
on
an
amount
that
exceeds
the
Fund’s
initial
investment.
The
Fund
may
not
achieve
the
anticipated
benefits,
and
may
realize
losses
when
a
counterparty
fails
to
perform
as
promised.
The
markets
for
particular
securities
or
types
of
securities
are
or
may
become
relatively
illiquid.
Reduced
liquidity
will
have
an
adverse
impact
on
the
security’s
value
and
on
the
Fund’s
ability
to
sell
such
securities
when
necessary
to
meet
the
Fund’s
liquidity
needs
or
in
response
to
a
specific
market
event.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
relating
to
debt
securities
and
foreign
securities
generally,
including
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
Fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
imposed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
Fund
has
a
fee
waiver
associated
with
any
investment
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
4/30/23.
Fund
investment
results
reflect
the
fee
waiver;
without
this
waiver,
the
results
would
have
been
lower.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
3.75%.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(1/1/22–6/30/22)
Share
Class
Net
Investment
Income
A
$0.3005
C
$0.2829
R
$0.2900
R6
$0.3175
Advisor
$0.3109
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.17%
1.18%
Advisor
0.92%
0.93%
Your
Fund’s
Expenses
Templeton
Global
Total
Return
Fund
8
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
1/1/22
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$866.90
$5.32
$1,019.09
$5.76
1.15%
C
$1,000
$864.90
$7.17
$1,017.11
$7.75
1.55%
R
$1,000
$864.80
$6.47
$1,017.85
$7.01
1.40%
R6
$1,000
$867.70
$3.89
$1,020.63
$4.21
0.84%
Advisor
$1,000
$867.20
$4.17
$1,020.33
$4.51
0.90%
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
9
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.77
$9.98
$11.02
$11.62
$12.04
$12.09
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.27
0.63
0.43
0.60
0.67
0.63
Net
realized
and
unrealized
gains
(losses)
(1.40)
(1.14)
(1.01)
(0.46)
(0.47)
(0.28)
Total
from
investment
operations
........
(1.13)
(0.51)
(0.58)
0.14
0.20
0.35
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.30)
—
(0.02)
(0.74)
(0.62)
(0.16)
Tax
return
of
capital
................
—
(0.70)
(0.44)
—
—
(0.24)
Total
distributions
...................
(0.30)
(0.70)
(0.46)
(0.74)
(0.62)
(0.40)
Net
asset
value,
end
of
period
..........
$7.34
$8.77
$9.98
$11.02
$11.62
$12.04
Total
return
c
.......................
(13.31)%
(5.39)%
(5.32)%
1.21%
1.69%
2.83%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.18%
1.17%
1.08%
1.04%
1.09%
1.07%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.16%
1.16%
1.06%
0.96%
1.01%
1.02%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.15%
1.16%
e
1.04%
0.93%
1.01%
e
1.02%
e
Net
investment
income
...............
6.49%
6.67%
4.19%
5.27%
5.62%
5.15%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$227,347
$299,056
$482,575
$769,018
$811,990
$921,181
Portfolio
turnover
rate
................
15.48%
23.94%
60.89%
27.57%
20.91%
41.66%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.76
$9.96
$11.01
$11.61
$12.02
$12.07
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.25
0.59
0.39
0.56
0.62
0.58
Net
realized
and
unrealized
gains
(losses)
(1.40)
(1.14)
(1.02)
(0.46)
(0.46)
(0.28)
Total
from
investment
operations
........
(1.15)
(0.55)
(0.63)
0.10
0.16
0.30
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.28)
—
(0.01)
(0.70)
(0.57)
(0.14)
Tax
return
of
capital
................
—
(0.65)
(0.41)
—
—
(0.21)
Total
distributions
...................
(0.28)
(0.65)
(0.42)
(0.70)
(0.57)
(0.35)
Net
asset
value,
end
of
period
..........
$7.33
$8.76
$9.96
$11.01
$11.61
$12.02
Total
return
c
.......................
(13.51)%
(5.72)%
(5.80)%
0.81%
1.37%
2.43%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.58%
1.56%
1.48%
1.44%
1.49%
1.47%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.56%
1.56%
e
1.46%
1.36%
1.41%
1.42%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.55%
1.56%
f
1.44%
1.33%
1.41%
f
1.42%
f
Net
investment
income
...............
6.07%
6.21%
3.79%
4.87%
5.22%
4.75%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$26,984
$40,591
$113,438
$237,215
$310,561
$398,445
Portfolio
turnover
rate
................
15.48%
23.94%
60.89%
27.57%
20.91%
41.66%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.78
$9.98
$11.03
$11.63
$12.04
$12.09
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.26
0.61
0.40
0.58
0.64
0.60
Net
realized
and
unrealized
gains
(losses)
(1.41)
(1.14)
(1.02)
(0.47)
(0.46)
(0.28)
Total
from
investment
operations
........
(1.15)
(0.53)
(0.62)
0.11
0.18
0.32
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.29)
—
(0.02)
(0.71)
(0.59)
(0.15)
Tax
return
of
capital
................
—
(0.67)
(0.41)
—
—
(0.22)
Total
distributions
...................
(0.29)
(0.67)
(0.43)
(0.71)
(0.59)
(0.37)
Net
asset
value,
end
of
period
..........
$7.34
$8.78
$9.98
$11.03
$11.63
$12.04
Total
return
c
.......................
(13.52)%
(5.54)%
(5.65)%
0.95%
1.52%
2.58%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.43%
1.42%
1.32%
1.29%
1.34%
1.32%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.41%
1.41%
1.30%
1.21%
1.26%
1.27%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.40%
1.41%
e
1.28%
1.18%
1.26%
e
1.27%
e
Net
investment
income
...............
6.24%
6.44%
3.89%
5.02%
5.37%
4.90%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$3,552
$4,823
$7,741
$7,377
$7,957
$8,788
Portfolio
turnover
rate
................
15.48%
23.94%
60.89%
27.57%
20.91%
41.66%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.78
$9.98
$11.03
$11.63
$12.05
$12.10
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.28
0.66
0.47
0.65
0.71
0.68
Net
realized
and
unrealized
gains
(losses)
(1.40)
(1.13)
(1.02)
(0.47)
(0.47)
(0.29)
Total
from
investment
operations
........
(1.12)
(0.47)
(0.55)
0.18
0.24
0.39
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.32)
—
(0.02)
(0.78)
(0.66)
(0.17)
Tax
return
of
capital
................
—
(0.73)
(0.48)
—
—
(0.27)
Total
distributions
...................
(0.32)
(0.73)
(0.50)
(0.78)
(0.66)
(0.44)
Net
asset
value,
end
of
period
..........
$7.34
$8.78
$9.98
$11.03
$11.63
$12.05
Total
return
c
.......................
(13.23)%
(4.91)%
(5.05)%
1.57%
2.06%
3.22%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.89%
0.79%
0.71%
0.69%
0.73%
0.69%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.85%
0.77%
0.69%
0.60%
0.65%
0.64%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.84%
0.77%
e
0.67%
0.57%
0.65%
e
0.64%
e
Net
investment
income
...............
6.73%
7.01%
4.57%
5.63%
5.98%
5.53%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$76,077
$170,830
$294,519
$876,665
$986,689
$1,058,884
Portfolio
turnover
rate
................
15.48%
23.94%
60.89%
27.57%
20.91%
41.66%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.79
$10.00
$11.04
$11.64
$12.05
$12.10
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.28
0.65
0.46
0.63
0.70
0.66
Net
realized
and
unrealized
gains
(losses)
(1.41)
(1.14)
(1.02)
(0.46)
(0.46)
(0.28)
Total
from
investment
operations
........
(1.13)
(0.49)
(0.56)
0.17
0.24
0.38
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.31)
—
(0.02)
(0.77)
(0.65)
(0.17)
Tax
return
of
capital
................
—
(0.72)
(0.46)
—
—
(0.26)
Total
distributions
...................
(0.31)
(0.72)
(0.48)
(0.77)
(0.65)
(0.43)
Net
asset
value,
end
of
period
..........
$7.35
$8.79
$10.00
$11.04
$11.64
$12.05
Total
return
c
.......................
(13.28)%
(5.14)%
(5.07)%
1.46%
2.03%
3.08%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.93%
0.92%
0.83%
0.79%
0.84%
0.82%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.91%
0.91%
0.81%
0.71%
0.76%
0.77%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.90%
0.91%
e
0.78%
0.68%
0.76%
e
0.77%
e
Net
investment
income
...............
6.73%
6.84%
4.48%
5.52%
5.87%
5.40%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$298,430
$424,413
$1,104,754
$2,684,044
$2,992,808
$3,117,593
Portfolio
turnover
rate
................
15.48%
23.94%
60.89%
27.57%
20.91%
41.66%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Schedule
of
Investments
(unaudited),
June
30,
2022
Templeton
Global
Total
Return
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Shares
a
Value
a
Common
Stocks
0.0%
South
Africa
0.0%
a,b,c
K2016470219
South
Africa
Ltd.,
A
....
Multiline
Retail
434,200,485
$
—
a,b,c
K2016470219
South
Africa
Ltd.,
B
....
Multiline
Retail
50,014,925
—
—
Total
Common
Stocks
(Cost
$1,645,359)
.......................................
—
Principal
Amount
*
a
a
a
a
a
Corporate
Bonds
0.0%
South
Africa
0.0%
a,d,e
K2016470219
South
Africa
Ltd.
,
Senior
Secured
Note,
144A,
PIK,
3%,
12/31/22
.....................
Multiline
Retail
37,071,626
—
Senior
Secured
Note,
144A,
PIK,
8%,
12/31/22
.....................
Multiline
Retail
13,970,079
EUR
—
a,d,e
K2016470260
South
Africa
Ltd.
,
Senior
Secured
Note
,
144A,
PIK,
25
%
,
12/31/22
.....................
Multiline
Retail
17,054,640
—
—
Total
Corporate
Bonds
(Cost
$46,940,536)
......................................
—
a
a
Industry
Principal
Amount
*
a
Value
Foreign
Government
and
Agency
Securities
63.6%
Argentina
3.5%
f
Argentina
BONCER
,
Index
Linked,
1.4%,
3/25/23
.......
354,110,642
ARS
1,324,183
Index
Linked,
1.5%,
3/25/24
.......
5,351,245,305
ARS
16,803,125
Argentina
Government
Bond
,
16%,
10/17/23
.................
483,949,200
ARS
1,132,621
15.5%,
10/17/26
................
2,527,300,600
ARS
2,956,995
22,216,924
Brazil
2.0%
Brazil
Notas
do
Tesouro
Nacional,
10%,
1/01/27
......................
72,690,000
BRL
12,648,205
Colombia
7.2%
Colombia
Titulos
de
Tesoreria
,
B,
10%,
7/24/24
................
32,209,000,000
COP
7,746,549
B,
6.25%,
11/26/25
..............
9,412,000,000
COP
1,992,272
B,
7.5%,
8/26/26
...............
137,696,000,000
COP
29,644,006
B,
5.75%,
11/03/27
..............
6,893,000,000
COP
1,315,169
B,
6%,
4/28/28
.................
1,110,000,000
COP
210,271
B,
7.75%,
9/18/30
..............
4,638,000,000
COP
908,495
B,
7%,
6/30/32
.................
21,094,000,000
COP
3,771,891
45,588,653
Dominican
Republic
1.9%
e
Dominican
Republic
Government
Bond
,
Senior
Bond,
144A,
5.3%,
1/21/41
..
8,400,000
5,850,954
Senior
Bond,
144A,
6.4%,
6/05/49
..
1,460,000
1,094,318
Senior
Bond,
144A,
5.875%,
1/30/60
7,210,000
4,951,581
11,896,853
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Ecuador
4.5%
e
Ecuador
Government
Bond
,
Senior
Bond,
144A,
1%,
7/31/35
....
33,616,000
$
16,269,517
Senior
Note,
144A,
5%,
7/31/30
....
19,217,000
12,484,959
28,754,476
Egypt
3.0%
e
Egypt
Government
Bond
,
Senior
Bond,
144A,
7.625%,
5/29/32
1,330,000
874,761
Senior
Bond,
144A,
7.3%,
9/30/33
..
7,530,000
4,854,990
Senior
Bond,
144A,
8.5%,
1/31/47
..
8,190,000
4,876,629
Senior
Bond,
144A,
7.903%,
2/21/48
1,080,000
620,806
Senior
Bond,
144A,
8.7%,
3/01/49
..
820,000
492,016
Senior
Bond,
144A,
8.875%,
5/29/50
3,120,000
1,904,401
Senior
Bond,
144A,
8.75%,
9/30/51
.
6,580,000
3,982,170
Senior
Bond,
144A,
7.5%,
2/16/61
..
2,370,000
1,325,721
18,931,494
Ghana
4.0%
Ghana
Government
Bond
,
17.6%,
11/28/22
................
1,250,000
GHS
151,535
20.75%,
1/16/23
................
3,200,000
GHS
389,311
16.5%,
2/06/23
................
5,210,000
GHS
616,914
18.85%,
9/28/23
................
8,700,000
GHS
985,229
19.25%,
12/18/23
...............
2,890,000
GHS
323,390
19%,
11/02/26
.................
134,400,000
GHS
12,279,060
19.75%,
3/15/32
................
117,734,000
GHS
9,501,394
Senior
Note,
18.5%,
1/02/23
......
1,920,000
GHS
231,902
Senior
Note,
17.6%,
2/20/23
......
480,000
GHS
56,949
Senior
Note,
17.25%,
7/31/23
......
7,010,000
GHS
792,919
Senior
Note,
18.3%,
3/02/26
......
990,000
GHS
92,211
25,420,814
India
4.5%
India
Government
Bond
,
7.59%,
1/11/26
.................
124,600,000
INR
1,600,536
7.27%,
4/08/26
................
2,050,200,000
INR
26,056,870
Senior
Note,
5.22%,
6/15/25
......
75,000,000
INR
906,980
28,564,386
Indonesia
8.8%
Indonesia
Government
Bond
,
FR44,
10%,
9/15/24
.............
15,790,000,000
IDR
1,167,002
FR46,
9.5%,
7/15/23
............
318,861,000,000
IDR
22,478,978
FR59,
7%,
5/15/27
..............
150,718,000,000
IDR
10,395,217
FR81,
6.5%,
6/15/25
............
14,790,000,000
IDR
1,019,093
FR86,
5.5%,
4/15/26
............
315,285,000,000
IDR
20,793,255
55,853,545
Mexico
4.7%
Mexican
Bonos
Desarr
Fixed
Rate,
M,
Senior
Bond,
8%,
12/07/23
........
605,755,000
MXN
29,548,515
Mongolia
0.9%
e
Mongolia
Government
Bond
,
Senior
Bond,
144A,
4.45%,
7/07/31
.
5,570,000
4,288,516
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Mongolia
(continued)
e
Mongolia
Government
Bond,
(continued)
Senior
Note,
144A,
5.125%,
4/07/26
.
200,000
$
180,486
Senior
Note,
144A,
3.5%,
7/07/27
..
1,380,000
1,121,168
5,590,170
Norway
6.1%
e
Norway
Government
Bond
,
Senior
Bond,
144A,
Reg
S,
2%,
5/24/23
......................
156,261,000
NOK
15,815,786
Senior
Bond,
144A,
Reg
S,
3%,
3/14/24
......................
224,500,000
NOK
22,870,649
38,686,435
South
Korea
4.7%
Korea
Treasury
Bond
,
1.375%,
9/10/24
................
18,210,900,000
KRW
13,493,684
3%,
9/10/24
...................
20,810,000,000
KRW
15,967,644
29,461,328
Sri
Lanka
0.5%
e,g
Sri
Lanka
Government
Bond
,
Senior
Bond,
144A,
6.85%,
11/03/25
2,100,000
692,546
Senior
Bond,
144A,
6.2%,
5/11/27
..
5,300,000
1,724,171
Senior
Bond,
144A,
6.75%,
4/18/28
.
460,000
148,462
Senior
Bond,
144A,
7.85%,
3/14/29
.
659,000
216,330
Senior
Note,
144A,
5.75%,
4/18/23
..
200,000
64,904
Senior
Note,
144A,
6.35%,
6/28/24
..
620,000
201,426
3,047,839
Thailand
5.5%
Thailand
Government
Bond
,
0.75%,
9/17/24
................
525,560,000
THB
14,548,166
1%,
6/17/27
...................
402,200,000
THB
10,622,070
Senior
Note,
0.66%,
11/22/23
......
339,470,000
THB
9,521,067
34,691,303
United
Kingdom
1.8%
e
United
Kingdom
Gilt,
Reg
S,
0.125%,
1/31/23
......................
9,168,000
GBP
11,063,787
Total
Foreign
Government
and
Agency
Securities
(Cost
$670,026,387)
............
401,964,727
U.S.
Government
and
Agency
Securities
6.0%
United
States
6.0%
U.S.
Treasury
Notes
,
2.625%,
12/31/25
...............
16,863,000
16,629,487
1.625%,
2/15/26
................
9,110,000
8,661,262
2.125%,
5/31/26
................
4,164,000
4,023,709
1.625%,
10/31/26
...............
9,120,000
8,591,681
37,906,139
Total
U.S.
Government
and
Agency
Securities
(Cost
$40,872,873)
.................
37,906,139
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
a
a
Industry
Shares
a
Value
a
a
a
a
a
a
Escrows
and
Litigation
Trusts
0.0%
a,b
K2016470219
South
Africa
Ltd.,
Escrow
Account
......................
2,168,033
$
—
Total
Escrows
and
Litigation
Trusts
(Cost
$–)
...................................
—
Total
Long
Term
Investments
(Cost
$759,485,155)
...............................
439,870,866
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
0.1%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
21.67
MXN,
Expires
9/27/22
..
1
14,997,000
132,285
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
12,817,000
285,915
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
12,818,000
251,831
670,031
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
July
Strike
Price
19.19
MXN,
Expires
7/21/22
.......
1
26,569,000
8,149
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.41
MXN,
Expires
8/11/22
..
1
5,983,000
12,836
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
July
Strike
Price
19.88
MXN,
Expires
7/21/22
.......
1
26,569,000
116,035
137,020
Total
Options
Purchased
(Cost
$3,015,347)
.....................................
807,051
Short
Term
Investments
25.9%
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
18.4%
Brazil
9.7%
h
Brazil
Letras
do
Tesouro
Nacional
,
1/01/24
......................
4,500,000
BRL
711,254
7/01/24
......................
116,410,000
BRL
17,380,653
1/01/25
......................
307,150,000
BRL
43,405,797
61,497,704
Singapore
5.7%
h
Singapore
Treasury
Bills
,
8/12/22
......................
2,000,000
SGD
1,436,168
10/18/22
.....................
45,100,000
SGD
32,252,750
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
Short
Term
Investments
(continued)
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Singapore
(continued)
h
Singapore
Treasury
Bills,
(continued)
1/24/23
......................
2,950,000
SGD
$
2,097,003
35,785,921
United
Kingdom
3.0%
h
United
Kingdom
Treasury
Bills
,
7/11/22
......................
940,000
GBP
1,143,716
7/25/22
......................
2,930,000
GBP
3,563,564
8/01/22
......................
4,660,000
GBP
5,666,519
10/24/22
.....................
7,084,000
GBP
8,579,944
18,953,743
Total
Foreign
Government
and
Agency
Securities
(Cost
$124,195,261)
............
116,237,368
Shares
Money
Market
Funds
7.5%
United
States
7.5%
i,j
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
.........
47,113,940
47,113,940
Total
Money
Market
Funds
(Cost
$47,113,940)
..................................
47,113,940
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$171,309,201
)
...............................
163,351,308
a
a
a
Total
Investments
(Cost
$933,809,703)
95.6%
...................................
$604,029,225
Options
Written
(0.0)%
†
......................................................
(258,087)
Other
Assets,
less
Liabilities
4.4%
.............................................
28,617,792
Net
Assets
100.0%
...........................................................
$632,388,930
a
a
a
a
Number
of
Contracts
Notional
Amount
#
k
Options
Written
(0.0)%
†
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
22.06
MXN,
Expires
8/11/22
..
1
5,983,000
(12,868)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
23.09
MXN,
Expires
9/27/22
..
1
7,499,000
(24,527)
(37,395)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
July
Strike
Price
19.60
MXN,
Expires
7/21/22
.......
1
53,138,000
(80,027)
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
k
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.50
MXN,
Expires
8/11/22
..
1
5,983,000
$
(140,665)
(220,692)
Total
Options
Written
(Premiums
received
$821,177)
............................
$
(258,087)
#
Notional
amount
is
the
number
of
units
specified
in
the
contract,
and
can
include
currency
units,
bushels,
shares,
pounds,
barrels
or
other
units.
Currency
units
are
stated
in
U.S.
dollars
unless
otherwise
indicated.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Fair
valued
using
significant
unobservable
inputs.
See
Note
14
regarding
fair
value
measurements.
b
Non-income
producing.
c
See
Note
11
regarding
restricted
securities.
d
Income
may
be
received
in
additional
securities
and/or
cash.
e
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
June
30,
2022,
the
aggregate
value
of
these
securities
was
$117,971,054,
representing
18.7%
of
net
assets.
f
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
g
See
Note
7
regarding
credit
risk
and
defaulted
securities.
h
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
i
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
j
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
k
See
Note
1(c)
regarding
written
options.
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
At
June
30,
2022,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Indian
Rupee
......
HSBK
Buy
999,725,100
13,049,197
7/11/22
$
—
$
(396,305)
Indian
Rupee
......
HSBK
Sell
210,000,000
2,678,230
7/11/22
20,392
—
Chinese
Yuan
......
CITI
Buy
68,911,510
10,692,575
7/12/22
—
(396,890)
Chinese
Yuan
......
CITI
Sell
62,620,000
9,351,852
7/12/22
—
(3,854)
Indian
Rupee
......
HSBK
Buy
993,892,000
12,962,569
7/12/22
—
(384,740)
Chinese
Yuan
......
HSBK
Buy
23,508,820
3,656,854
7/18/22
—
(144,821)
Euro
.............
DBAB
Sell
3,019,074
30,350,750
SEK
7/19/22
—
(198,483)
Japanese
Yen
......
CITI
Buy
4,406,667,000
38,926,006
7/20/22
—
(6,423,602)
Japanese
Yen
......
CITI
Sell
4,406,667,000
38,830,538
7/20/22
6,328,135
—
Euro
.............
CITI
Buy
5,620,000
5,934,776
7/21/22
—
(39,179)
Euro
.............
CITI
Sell
5,620,000
6,583,673
7/21/22
688,076
—
South
Korean
Won
..
JPHQ
Buy
22,407,000,000
18,767,904
7/21/22
—
(1,378,974)
South
Korean
Won
..
JPHQ
Sell
10,500,000,000
8,069,474
7/21/22
—
(79,040)
Singapore
Dollar
....
CITI
Buy
3,280,000
2,406,500
7/25/22
—
(45,588)
Euro
.............
CITI
Buy
14,070,000
14,862,844
7/26/22
—
(97,864)
Euro
.............
CITI
Sell
14,070,000
16,479,347
7/26/22
1,714,367
—
Indian
Rupee
......
JPHQ
Buy
297,586,900
3,907,904
7/27/22
—
(147,460)
South
Korean
Won
..
DBAB
Buy
73,000,000,000
59,205,191
7/28/22
—
(2,547,555)
Chilean
Peso
......
GSCO
Buy
2,725,603,200
3,161,769
7/29/22
—
(205,599)
South
Korean
Won
..
BNDP
Buy
13,543,700,000
10,699,716
8/02/22
—
(187,231)
Canadian
Dollar
....
HSBK
Sell
9,870,000
7,220,480
EUR
8/03/22
—
(85,959)
Euro
.............
HSBK
Sell
66,408,364
95,944,582
CAD
8/03/22
4,805,178
—
South
Korean
Won
..
CITI
Buy
13,227,400,000
11,026,509
8/03/22
—
(759,374)
Chilean
Peso
......
GSCO
Buy
4,748,107,280
5,657,223
8/08/22
—
(518,304)
Chilean
Peso
......
JPHQ
Buy
4,426,090,000
5,365,283
8/08/22
—
(574,886)
Chilean
Peso
......
JPHQ
Sell
4,426,090,000
4,871,061
8/08/22
80,664
—
Chinese
Yuan
......
JPHQ
Buy
106,169,010
15,750,443
8/11/22
106,092
—
Chilean
Peso
......
GSCO
Buy
2,490,030,000
2,844,026
8/16/22
—
(154,007)
Euro
.............
DBAB
Sell
27,635,441
289,890,248
SEK
8/17/22
—
(663,369)
Euro
.............
JPHQ
Sell
2,315,563
24,300,000
SEK
8/17/22
—
(54,583)
Swedish
Krona
.....
DBAB
Sell
35,020,000
3,272,717
EUR
8/17/22
11,012
—
Chilean
Peso
......
GSCO
Buy
4,873,629,902
5,621,257
8/19/22
—
(359,842)
Chinese
Yuan
......
JPHQ
Buy
69,110,470
10,808,340
8/22/22
—
(487,170)
Russian
Ruble
.....
JPHQ
Buy
409,323,200
5,123,247
8/24/22
1,680,875
—
Russian
Ruble
.....
JPHQ
Sell
409,323,200
3,149,453
8/24/22
—
(3,654,670)
Mexican
Peso
......
CITI
Sell
2,374,000
117,881
8/31/22
1,106
—
Mexican
Peso
......
MSCO
Buy
32,640,000
1,622,527
8/31/22
—
(17,002)
Mexican
Peso
......
MSCO
Sell
185,841,000
8,869,634
8/31/22
—
(271,677)
Chilean
Peso
......
GSCO
Buy
4,022,440,000
4,843,396
9/02/22
—
(514,932)
Chilean
Peso
......
GSCO
Buy
4,022,439,044
4,780,934
9/06/22
—
(456,112)
South
Korean
Won
..
CITI
Buy
4,625,900,000
3,675,433
9/06/22
—
(81,321)
South
Korean
Won
..
CITI
Buy
18,190,000,000
14,678,825
9/07/22
—
(545,559)
Russian
Ruble
.....
DBAB
Buy
1,193,258,200
14,858,152
9/15/22
4,200,207
—
Russian
Ruble
.....
DBAB
Sell
1,193,258,200
9,066,570
9/15/22
—
(9,991,789)
Euro
.............
DBAB
Sell
15,279,343
161,330,000
SEK
9/19/22
—
(279,199)
Euro
.............
JPHQ
Sell
20,709,106
205,956,200
NOK
9/19/22
—
(875,527)
Norwegian
Krone
...
JPHQ
Sell
38,200,000
3,835,033
EUR
9/19/22
156,050
—
Australian
Dollar
....
CITI
Buy
9,570,100
7,076,993
9/21/22
—
(466,916)
Australian
Dollar
....
CITI
Sell
9,570,100
7,007,151
9/21/22
397,073
—
Chilean
Peso
......
GSCO
Buy
7,039,267,283
8,422,701
9/21/22
—
(877,339)
Chinese
Yuan
......
BOFA
Buy
88,647,670
13,183,770
9/21/22
53,540
—
Chinese
Yuan
......
HSBK
Buy
184,710,190
27,519,376
9/21/22
62,466
—
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
At
June
30,
2022,
the
Fund
had
the
following
interest
rate
swap
contracts
outstanding.
See
Note
1(c). 
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
Indian
Rupee
......
SCNY
Buy
556,800,000
7,066,887
9/21/22
$
—
$
(67,574)
New
Zealand
Dollar
.
BOFA
Buy
7,120,000
4,456,408
9/21/22
—
(14,084)
New
Zealand
Dollar
.
BOFA
Sell
6,360,000
3,999,899
9/21/22
31,756
—
New
Zealand
Dollar
.
CITI
Buy
8,370,000
5,695,718
9/21/22
—
(473,492)
New
Zealand
Dollar
.
JPHQ
Buy
18,800,000
12,819,156
9/21/22
—
(1,089,424)
Euro
.............
HSBK
Buy
2,890,000
3,065,626
9/22/22
—
(19,519)
Euro
.............
HSBK
Sell
21,550,000
24,093,547
9/22/22
1,379,499
—
Chilean
Peso
......
GSCO
Buy
1,881,820,000
2,267,963
10/11/22
—
(258,607)
Indian
Rupee
......
CITI
Buy
828,586,800
10,721,879
10/11/22
—
(324,976)
Euro
.............
DBAB
Sell
11,729,562
122,103,913
SEK
10/12/22
—
(394,102)
Euro
.............
HSBK
Sell
12,360,000
12,977,197
10/12/22
—
(71,632)
Indian
Rupee
......
CITI
Buy
270,784,000
3,517,589
10/12/22
—
(120,176)
Singapore
Dollar
....
MSCO
Buy
3,270,000
2,400,352
10/21/22
—
(44,100)
Euro
.............
BZWS
Sell
8,627,000
9,450,447
10/25/22
331,875
—
Euro
.............
DBAB
Sell
3,851,100
3,250,000
GBP
10/25/22
—
(105,027)
Euro
.............
DBAB
Sell
11,280,000
12,340,305
10/25/22
417,564
—
Chilean
Peso
......
JPHQ
Buy
4,526,493,553
5,461,503
10/26/22
—
(640,973)
Euro
.............
HSBK
Sell
20,450,833
28,032,161
CAD
11/03/22
149,876
—
Indian
Rupee
......
CITI
Buy
408,835,000
5,235,433
11/10/22
—
(119,856)
Indian
Rupee
......
HSBK
Buy
257,214,374
3,264,805
11/14/22
—
(47,597)
Mexican
Peso
......
MSCO
Sell
70,825,000
3,489,673
12/06/22
71,038
—
Chinese
Yuan
......
BOFA
Buy
134,698,690
20,166,286
12/08/22
—
(37,944)
Chinese
Yuan
......
JPHQ
Buy
66,647,640
9,969,580
12/09/22
—
(10,152)
South
Korean
Won
..
JPHQ
Buy
7,726,500,000
6,131,656
12/14/22
—
(105,867)
Indian
Rupee
......
CITI
Buy
821,108,980
10,375,398
12/15/22
—
(134,912)
Chilean
Peso
......
JPHQ
Buy
4,526,506,447
4,933,522
12/27/22
—
(165,612)
Mexican
Peso
......
MSCO
Sell
110,190,000
5,044,175
12/27/22
—
(252,247)
Euro
.............
DBAB
Sell
11,335,000
12,491,214
1/25/23
414,694
—
Chilean
Peso
......
GSCO
Buy
2,675,860,000
3,168,198
3/07/23
—
(378,547)
Euro
.............
BZWS
Sell
4,048,000
4,496,093
4/25/23
155,315
—
Total
Forward
Exchange
Contracts
...................................................
$23,256,850
$(39,243,142)
Net
unrealized
appreciation
(depreciation)
............................................
$(15,986,292)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
Interest
Rate
Swap
Contracts
Description
Payment
Frequency
Counter-
party
Maturity
Date
Notional
Amount
Value
Unamortized
Upfront
Payments
(Receipts)
Unrealized
Appreciation
(Depreciation)
aa
aa
aa
aa
Centrally
Cleared
Swap
Contracts
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
1.762%
...
Annual
3/15/27
$13,000,000
$
534,956
$
—
$
534,956
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
1.811%
...
Annual
3/15/32
6,700,000
531,243
—
531,243
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Interest
Rate
Swap
Contracts
(continued)
Description
Payment
Frequency
Counter-
party
Maturity
Date
Notional
Amount
Value
Unamortized
Upfront
Payments
(Receipts)
Unrealized
Appreciation
(Depreciation)
aa
aa
aa
aa
Centrally
Cleared
Swap
Contracts
(continued)
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.176%
...
Annual
3/28/32
$3,330,000
$
169,996
$
—
$
169,996
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.257%
...
Annual
3/30/32
3,330,000
136,877
—
136,877
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.253%
...
Annual
3/31/32
3,320,000
147,411
—
147,411
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.418%
...
Annual
4/11/32
4,260,000
118,967
—
118,967
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.463%
...
Annual
4/18/32
1,330,000
32,450
—
32,450
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.541%
...
Annual
4/19/32
710,000
12,495
—
12,495
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.549%
...
Annual
4/19/32
1,750,000
29,569
—
29,569
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.67%
....
Annual
4/21/32
1,720,000
11,035
—
11,035
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.645%
...
Annual
5/16/32
425,000
4,430
—
4,430
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.741%
...
Annual
5/19/32
1,400,000
2,882
—
2,882
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.662%
...
Annual
6/02/32
1,824,000
23,902
—
23,902
Receive
Floating
1-day
SOFR
............
Annual
Pay
Fixed
2.989%
...
Annual
6/30/32
1,421,000
(19,132)
—
(19,132)
Total
Interest
Rate
Swap
Contracts
...............................
$1,737,081
$
—
$1,737,081
See
Note 12 regarding
other
derivative
information.
See
Abbreviations
on
page
40.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2022
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
23
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$886,695,763
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
47,113,940
Value
-
Unaffiliated
issuers
..................................................................
$556,915,285
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
47,113,940
Cash
....................................................................................
11,834,552
Restricted
currency,
at
value
(cost
$1,088,683)
(Note
1d)
.............................................
1,020,870
Foreign
currency,
at
value
(cost
$1,385,622)
......................................................
1,327,759
Receivables:
Capital
shares
sold
........................................................................
222,253
Interest
.................................................................................
10,049,676
Foreign
tax
refund
.........................................................................
57,046
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
22,230,000
Centrally
cleared
swap
contracts
............................................................
1,924,396
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
23,256,850
Total
assets
..........................................................................
675,952,627
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
570
Capital
shares
redeemed
...................................................................
1,133,515
Management
fees
.........................................................................
360,834
Distribution
fees
..........................................................................
66,609
Transfer
agent
fees
........................................................................
298,155
Trustees'
fees
and
expenses
.................................................................
8,793
Variation
margin
on
centrally
cleared
swap
contracts
...............................................
444,476
Deposits
from
brokers
for:
OTC
derivative
contracts
..................................................................
360,000
Options
written,
at
value
(premiums
received
$821,177)
..............................................
258,087
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
39,243,142
Accrued
expenses
and
other
liabilities
...........................................................
1,389,516
Total
liabilities
.........................................................................
43,563,697
Net
assets,
at
value
.................................................................
$632,388,930
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$1,614,176,541
Total
distributable
earnings
(losses)
.............................................................
(981,787,611)
Net
assets,
at
value
.................................................................
$632,388,930
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2022
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
Templeton
Global
Total
Return
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$227,346,551
Shares
outstanding
........................................................................
30,991,365
Net
asset
value
per
share
a
..................................................................
$7.34
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$7.63
Class
C:
Net
assets,
at
value
.......................................................................
$26,983,976
Shares
outstanding
........................................................................
3,682,428
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$7.33
Class
R:
Net
assets,
at
value
.......................................................................
$3,551,851
Shares
outstanding
........................................................................
483,845
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.34
Class
R6:
Net
assets,
at
value
.......................................................................
$76,076,576
Shares
outstanding
........................................................................
10,365,953
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.34
Advisor
Class:
Net
assets,
at
value
.......................................................................
$298,429,976
Shares
outstanding
........................................................................
40,595,462
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.35
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2022
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
25
Templeton
Global
Total
Return
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$49,561
Interest:
(net
of
foreign
taxes
of
$459,373)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
8,074,190
Paid
in
cash
a
...........................................................................
23,191,074
Total
investment
income
...................................................................
31,314,825
Expenses:
Management
fees
(Note
3
a
)
...................................................................
2,719,211
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
335,983
    Class
C
................................................................................
111,355
    Class
R
................................................................................
10,415
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
118,684
    Class
C
................................................................................
15,319
    Class
R
................................................................................
1,842
    Class
R6
...............................................................................
35,565
    Advisor
Class
............................................................................
166,975
Custodian
fees
(Note
4
)
......................................................................
402,319
Reports
to
shareholders
fees
..................................................................
99,407
Registration
and
filing
fees
....................................................................
47,271
Professional
fees
...........................................................................
70,908
Trustees'
fees
and
expenses
..................................................................
60,674
Other
....................................................................................
51,075
Total
expenses
.........................................................................
4,247,003
Expense
reductions
(Note
4
)
...............................................................
(31,024)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(103,124)
Net
expenses
.........................................................................
4,112,855
Net
investment
income
................................................................
27,201,970
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$372,142)
Unaffiliated
issuers
......................................................................
(45,861,284)
Written
options
...........................................................................
1,803,851
Foreign
currency
transactions
................................................................
1,375,609
Forward
exchange
contracts
.................................................................
(27,367,241)
Net
realized
gain
(loss)
..................................................................
(70,049,065)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(49,407,629)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(308,469)
Written
options
...........................................................................
(1,145,180)
Forward
exchange
contracts
.................................................................
(14,968,515)
Swap
contracts
...........................................................................
1,737,081
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
588,509
Net
change
in
unrealized
appreciation
(depreciation)
............................................
(63,504,203)
Net
realized
and
unrealized
gain
(loss)
............................................................
(133,553,268)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(106,351,298)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Semiannual
Report
{Footer
Text}
26
Templeton
Global
Total
Return
Fund
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$27,201,970
$99,109,733
Net
realized
gain
(loss)
.................................................
(70,049,065)
(292,219,793)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(63,504,203)
117,035,760
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(106,351,298)
(76,074,300)
Distributions
to
shareholders:
Class
A
.............................................................
(9,661,633)
—
Class
C
.............................................................
(1,142,746)
—
Class
R
.............................................................
(144,579)
—
Class
R6
............................................................
(4,891,606)
—
Advisor
Class
........................................................
(13,878,598)
—
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(30,448,824)
Class
C
.............................................................
—
(5,080,573)
Class
R
.............................................................
—
(484,917)
Class
R6
............................................................
—
(17,832,933)
Advisor
Class
........................................................
—
(54,993,271)
Total
distributions
to
shareholders
..........................................
(29,719,162)
(108,840,518)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(25,860,334)
(131,576,618)
Class
C
.............................................................
(7,947,060)
(63,666,922)
Class
R
.............................................................
(564,772)
(2,105,564)
Class
R6
............................................................
(73,807,214)
(94,091,202)
Advisor
Class
........................................................
(63,073,827)
(586,959,303)
Total
capital
share
transactions
............................................
(171,253,207)
(878,399,609)
Net
increase
(decrease)
in
net
assets
...................................
(307,323,667)
(1,063,314,427)
Net
assets:
Beginning
of
period
.....................................................
939,712,597
2,003,027,024
End
of
period
..........................................................
$632,388,930
$939,712,597
Templeton
Income
Trust
27
franklintempleton.com
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
Templeton
Global
Total
Return
Fund
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
Global
Total
Return
Fund
(Fund)
is
included
in
this
report.
The
Fund
offers five
classes
of
shares:
Class
A,
Class
C,
Class
R,
Class
R6
and
Advisor
Class. Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees.
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust's Board
of
Trustees
(the
Board),
the Fund's
administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Debt
securities
generally
trade
in
the OTC
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
are
centrally
cleared
or
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day.
Events
can
occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Fund's
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Fund's
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Fund's
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the Fund
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
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
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Derivative
Financial
Instruments
The
Fund invested
in
derivative
financial
instruments
in
order
to
manage
risk
or
gain
exposure
to
various
other
investments
or
markets.
Derivatives
are
financial
contracts
based
on
an
underlying
or
notional
amount,
require
no
initial
investment
or
an
initial
net
investment
that
is
smaller
than
would
normally
be
required
to
have
a
similar
response
to
changes
in
market
factors,
and
require
or
permit
net
settlement.
Derivatives
contain
various
risks
including
the
potential
inability
of
the
counterparty
to
fulfill
their
obligations
under
the
terms
of
the
contract,
the
potential
for
an
illiquid
secondary
market,
and/or
the
potential
for
market
movements
which
expose
the
Fund
to
gains
or
losses
in
excess
of
the
amounts
shown
in
the
Statement
of
Assets
and
Liabilities.
Realized
gain
and
loss
and
unrealized
appreciation
and
depreciation
on
these
contracts
for
the
period
are
included
in
the
Statement
of
Operations.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
29
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
or
initial
margin
requirements
are
set
by
the
broker
or
exchange
clearing
house
for
exchange
traded
and
centrally
cleared
derivatives.
Initial
margin
deposited
is
held
at
the
exchange
and
can
be
in
the
form
of
cash
and/or
securities.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund
for
OTC
derivatives,
if
any,
is
held
in
segregated
accounts
with
the
Fund's
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
The
Fund entered
into
interest
rate
swap
contracts
primarily
to
manage
interest
rate
risk.
An
interest
rate
swap
is
an
agreement
between
the
Fund
and
a
counterparty
to
exchange
cash
flows
based
on
the
difference
between
two
interest
rates,
applied
to
a
notional
amount.
These
agreements
may
be
privately
negotiated
in
the
over-the-
counter
market
(OTC
interest
rate
swaps)
or
may
be
executed
on
a
registered
exchange
(centrally
cleared
interest
rate
swaps).
For
centrally
cleared
interest
rate
swaps,
required
initial
margins
are
pledged
by
the
Fund,
and
the
daily
change
in
fair
value
is
accounted
for
as
a
variation
margin
payable
or
receivable
in
the
Statement
of
Assets
and
Liabilities.
Over
the
term
of
the
contract,
contractually
required
payments
to
be
paid
and
to
be
received
are
accrued
daily
and
recorded
as
unrealized
depreciation
and
appreciation
until
the
payments
are
made,
at
which
time
they
are
realized.
The
Fund
purchased
or
wrote
OTC
option
contracts
primarily
to
manage
and/or
gain
exposure
to
foreign
exchange
rate
risk.
An
option
is
a
contract
entitling
the
holder
to
purchase
or
sell
a
specific
amount
of
shares
or
units
of
an
asset
or
notional
amount
of
a
swap
(swaption),
at
a
specified
price.
When
an
option
is
purchased
or
written,
an
amount
equal
to
the
premium
paid
or
received
is
recorded
as
an
asset
or
liability,
respectively.
Upon
exercise
of
an
option,
the
acquisition
cost
or
sales
proceeds
of
the
underlying
investment
is
adjusted
by
any
premium
received
or
paid.
Upon
expiration
of
an
option,
any
premium
received
or
paid
is
recorded
as
a
realized
gain
or
loss.
Upon
closing
an
option
other
than
through
expiration
or
exercise,
the
difference
between
the
premium
received
or
paid
and
the
cost
to
close
the
position
is
recorded
as
a
realized
gain
or
loss.
See
Note
12
regarding
other
derivative
information.
d.
Restricted
Currency
At
June
30,
2022,
the
Fund
held
currencies
in
certain
markets
in
which
the
ability
to
repatriate
such
currency
is
limited.
As
a
result
of
such
limitations
on
repatriation,
the
Fund
may
incur
substantial
delays
in
gaining
access
to
these
assets
and
may
be
exposed
to
potential
adverse
movements
in
currency
value.
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
30
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
e.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
June
30,
2022,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
g.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
h.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Fund,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
1.
Organization
and
Significant
Accounting
Policies
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
June
30,
2022,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
Six
Months
Ended
June
30,
2022
Year
Ended
December
31,
2021
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
2,073,133
$17,472,013
10,894,207
$102,795,619
Shares
issued
in
reinvestment
of
distributions
..........
1,060,985
8,702,908
2,590,205
24,336,012
Shares
redeemed
...............................
(6,226,549)
(52,035,255)
(27,770,053)
(258,708,249)
Net
increase
(decrease)
..........................
(3,092,431)
$(25,860,334)
(14,285,641)
$(131,576,618)
Class
C
Shares:
Shares
sold
...................................
153,999
$1,275,513
526,361
$4,902,146
Shares
issued
in
reinvestment
of
distributions
..........
135,354
1,110,669
518,088
4,903,645
Shares
redeemed
a
..............................
(1,239,093)
(10,333,242)
(7,799,867)
(73,472,713)
Net
increase
(decrease)
..........................
(949,740)
$(7,947,060)
(6,755,418)
$(63,666,922)
Class
R
Shares:
Shares
sold
...................................
28,826
$236,519
181,030
$1,731,229
Shares
issued
in
reinvestment
of
distributions
..........
17,141
140,701
50,428
475,946
Shares
redeemed
...............................
(111,427)
(941,992)
(457,595)
(4,312,739)
Net
increase
(decrease)
..........................
(65,460)
$(564,772)
(226,137)
$(2,105,564)
Class
R6
Shares:
Shares
sold
...................................
422,997
$3,585,133
4,889,790
$45,765,527
Shares
issued
in
reinvestment
of
distributions
..........
289,877
2,383,684
1,088,543
10,318,585
Shares
redeemed
...............................
(9,807,499)
(79,776,031)
(16,020,781)
(150,175,314)
Net
increase
(decrease)
..........................
(9,094,625)
$(73,807,214)
(10,042,448)
$(94,091,202)
Advisor
Class
Shares:
Shares
sold
...................................
7,148,674
$60,202,795
30,970,594
$291,205,951
Shares
issued
in
reinvestment
of
distributions
..........
1,482,691
12,207,091
5,072,593
48,042,025
Shares
redeemed
...............................
(16,312,970)
(135,483,713)
(98,294,651)
(926,207,279)
Net
increase
(decrease)
..........................
(7,681,605)
$(63,073,827)
(62,251,464)
$(586,959,303)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
June
30,
2022,
the
annualized
gross
effective
investment
management
fee
rate
was
0.662%
of
the
Fund’s
average
daily
net
assets. 
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
and
R
compensation
distribution
plans,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
Annualized
Fee
Rate
Net
Assets
0.700%
Up
to
and
including
$200
million
0.650%
Over
$200
million,
up
to
and
including
$1.3
billion
0.600%
Over
$1.3
billion,
up
to
and
including
$2.5
billion
0.585%
Over
$2.5
billion,
up
to
and
including
$5
billion
0.575%
Over
$5
billion,
up
to
and
including
$10
billion
0.565%
In
excess
of
$10
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$1,342
CDSC
retained
..............................................................................
$25,500
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
33
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
June
30,
2022,
the
Fund
paid
transfer
agent
fees
of
$338,385,
of
which $259,843
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
June
30,
2022,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
April
30,
2023.
4.
Expense
Offset
Arrangement
The
Fund
has
entered
into
an
arrangement
with
its
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Fund's
custodian
expenses.
During
the
period
ended
June
30,
2022,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations.
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
Global
Total
Return
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
$
21,628,901
$
358,367,606
$
(332,882,567)
$
—
$
—
$
47,113,940
47,113,940
$
49,561
Total
Affiliated
Securities
...
$21,628,901
$358,367,606
$(332,882,567)
$—
$—
$47,113,940
$49,561
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
34
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2021,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2021,
the
Fund
deferred
late-year
ordinary
losses
of
$22,520,057.
At
June
30,
2022,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
foreign
currency
transactions,
foreign
capital
gains
tax,
payments-in-kind,
bond
discounts
and
premiums,
tax
straddles
and
inflation
related
adjustments
on
foreign
securities.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2022,
aggregated
$98,767,321
and
$261,527,528,
respectively.
7.
Credit Risk
and
Defaulted
Securities
At
June
30,
2022,
the
Fund
had
32.0%
of
its
portfolio
invested
in
high
yield
or
other
securities
rated
below
investment
grade
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
The
Fund
held
defaulted
securities
and/or
other
securities
for
which
the
income
has
been
deemed
uncollectible.
At
June
30,
2022,
the
aggregate
value
of
these
securities
was
$3,047,839,
representing
0.5%
of
the
Fund's
net
assets.
The
Fund
discontinues
accruing
income
on
securities
for
which
income
has
been
deemed
uncollectible
and
provides
an
estimate
for
losses
on
interest
receivable.
The
securities
have
been
identified
in
the
accompanying
Schedule
of
Investments.
8.
Concentration
of
Risk
Investments
in
issuers
domiciled
or
with
significant
operations
in
developing
or
emerging
market
countries
may
be
subject
to
higher
risks
than
investments
in
developed
countries.
These
risks
include
fluctuating
currency
values,
underdeveloped
legal
or
business
systems,
and
changing
local
and
regional
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Currencies
of
developing
or
emerging
market
countries
may
be
subject
to
significantly
greater
risks
than
currencies
of
developed
countries,
including
the
potential
inability
to
repatriate
those
currencies
into
U.S.
dollars.
Capital
loss
carryforwards
not
subject
to
expiration:
Long
term
................................................................................
$519,629,681
Cost
of
investments
..........................................................................
$954,503,789
Unrealized
appreciation
........................................................................
$45,610,604
Unrealized
depreciation
........................................................................
(410,436,852)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(364,826,248)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
35
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
At
June
30,
2022,
the
Fund
had
3.7%
of
its
net
assets
denominated
in
Argentine
Pesos. Argentina
has
restricted
currency
repatriation
since
September
2019,
and
had
restructured
certain
issues
of
its
debt.
Political
and
economic
conditions
in
Argentina
could
continue
to
affect
the
value
of
the
Fund's
holdings.
9.
Geopolitical
Risk
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
10.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
11.
Restricted
Securities
The
Fund
invests
in
securities
that
are
restricted
under
the
Securities
Act
of
1933
(1933
Act).
Restricted
securities
are
often
purchased
in
private
placement
transactions,
and
cannot
be
sold
without
prior
registration
unless
the
sale
is
pursuant
to
an
exemption
under
the
1933
Act.
Disposal
of
these
securities
may
require
greater
effort
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult.
The Fund
may
have
registration
rights
for
restricted
securities.
The
issuer
generally
incurs
all
registration
costs.
At
June
30,
2022,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
Shares
Issuer
Acquisition
Date
Cost
Value
Templeton
Global
Total
Return
Fund
434,200,485
a
K2016470219
South
Africa
Ltd.,
A
...............
2/22/11
-
2/01/17
$
1,608,225
$
—
50,014,925
a
K2016470219
South
Africa
Ltd.,
B
...............
2/01/17
37,134
—
Total
Restricted
Securities
(Value
is
—%
of
Net
Assets)
..............
$1,645,359
$—
a
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$0
as
of
June
30,
2022.
8.
Concentration
of
Risk
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
36
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
12.
Other
Derivative
Information
At
June
30,
2022,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
For
the
period
ended
June
30,
2022,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
June
30,
2022,
the
average
month
end
notional
amount
of
swap
contracts
and
options
represented
$22,132,143
and
$166,715,857,
respectively.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$1,152,429,198.
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
Global
Total
Return
Fund
Interest
rate
contracts
.......
Variation
margin
on
centrally
cleared
swap
contracts
$
1,756,213
a
Variation
margin
on
centrally
cleared
swap
contracts
$
19,132
a
Foreign
exchange
contracts
..
Investments
in
securities,
at
value
807,051
b
Options
written,
at
value
258,087
Unrealized
appreciation
on
OTC
forward
exchange
contracts
23,256,850
Unrealized
depreciation
on
OTC
forward
exchange
contracts
39,243,142
Total
....................
$25,820,114
$39,520,361
a
This
amount
reflects
the
cumulative
appreciation
(depreciation)
of
centrally
cleared
swap
contracts
as
reported
in
the
Schedule
of
Investments.
Only
the
variation
margin
receivable/payable
at
period
end
is
separately
reported
within
the
Statement
of
Assets
and
Liabilities.
Prior
variation
margin
movements
were
recorded
to
cash
upon
receipt
or
payment.
b
Purchased
option
contracts
are
included
in
investments
in
securities,
at
value
in
the
Statement
of
Assets
and
Liabilities.
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Period
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Period
Templeton
Global
Total
Return
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Interest
rate
contracts
..........
Swap
contracts
$—
Swap
contracts
$1,737,081
Foreign
exchange
contracts
.....
Investments
(2,610,069)
a
Investments
1,270,621
a
Written
options
1,803,851
Written
options
(1,145,180)
Forward
exchange
contracts
(27,367,241)
Forward
exchange
contracts
(14,968,515)
Total
.......................
$(28,173,459)
$(13,105,993)
a
Purchased
option
contracts
are
included
in
net
realized
gain
(loss)
from
investments
and
net
change
in
unrealized
appreciation
(depreciation)
on
investments
in
the
Statement
of
Operations.
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
37
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
At
June
30,
2022,
OTC
derivative
assets
and
liabilities
are
as
follows:
At
June
30,
2022,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
Global
Total
Return
Fund
Derivatives
Forward
exchange
contracts
.............................
$
23,256,850
$
39,243,142
Options
purchased
.....................................
807,051
—
Options
written
........................................
—
258,087
Total
.............................................
$24,063,901
$39,501,229
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
a
Cash
Collateral
Received
Net
Amount
(Not
less
than
zero)
Templeton
Global
Total
Return
Fund
Counterparty
BNDP
...................
$—
$—
$—
$—
$—
BOFA
....................
85,296
(52,028)
—
—
33,268
BZWS
...................
487,190
—
—
(360,000)
127,190
CITI
.....................
9,385,226
(9,385,226)
—
—
—
DBAB
...................
5,043,477
(5,043,477)
—
—
—
GSCO
...................
—
—
—
—
—
HSBK
...................
6,417,411
(1,150,573)
(3,858,830)
—
1,408,008
JPHQ
...................
2,023,681
(2,023,681)
—
—
—
MSCO
...................
621,620
(621,620)
—
—
—
SCNY
...................
—
—
—
—
—
Total
...................
$24,063,901
$(18,276,605)
$
(3,858,830)
$(360,000)
$1,568,466
$
1
12.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
38
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
At
June
30,
2022,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
40
.
13.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
3,
2023.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
period
ended
June
30,
2022,
the Fund
did
not
use
the
Global
Credit
Facility.
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
Cash
Collateral
Pledged
b
Net
Amount
(Not
less
than
zero)
Templeton
Global
Total
Return
Fund
Counterparty
BNDP
...................
$187,231
$—
$—
$(187,231)
$—
BOFA
....................
52,028
(52,028)
—
—
—
BZWS
...................
—
—
—
—
—
CITI
.....................
10,138,113
(9,385,226)
—
(752,887)
—
DBAB
...................
14,179,524
(5,043,477)
—
(9,136,047)
—
GSCO
...................
3,723,289
—
—
(3,723,289)
—
HSBK
...................
1,150,573
(1,150,573)
—
—
—
JPHQ
...................
9,264,338
(2,023,681)
—
(7,240,657)
—
MSCO
...................
738,559
(621,620)
—
—
116,939
SCNY
...................
67,574
—
—
—
67,574
Total
...................
$39,501,229
$(18,276,605)
$—
$(21,040,111)
$184,513
a
At
June
30,
2022,
the
Fund
received
U.K
Inflation-Linked
Gilt
Bonds
as
collateral
for
derivatives.
b
In
some
instances,
the
collateral
amounts
disclosed
in
the
table
above
were
adjusted
due
to
the
requirement
to
limit
collateral
amounts
to
avoid
the
effect
of
overcollateralization.
Actual
collateral
received
and/or
pledged
may
be
more
than
the
amounts
disclosed
herein.
12.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
39
franklintempleton.com
Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
14.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
June
30,
2022,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the
period.
Level
1
Level
2
Level
3
Total
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
Securities:
Common
Stocks
........................
$
—
$
—
$
—
a
$
—
Corporate
Bonds
........................
—
—
—
a
—
Foreign
Government
and
Agency
Securities
....
—
401,964,727
—
401,964,727
U.S.
Government
and
Agency
Securities
.......
—
37,906,139
—
37,906,139
Escrows
and
Litigation
Trusts
...............
—
—
—
a
—
Options
purchased
.......................
—
807,051
—
807,051
Short
Term
Investments
...................
47,113,940
116,237,368
—
163,351,308
Total
Investments
in
Securities
...........
$47,113,940
$556,915,285
$—
$604,029,225
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
23,256,850
$
—
$
23,256,850
Restricted
Currency
(ARS)
.................
—
1,020,870
—
1,020,870
Swap
contracts
.........................
—
1,756,213
—
1,756,213
Total
Other
Financial
Instruments
.........
$—
$26,033,933
$—
$26,033,933
Receivables:
Interest
(ARS)
...........................
$—
$469,693
$—
$469,693
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
258,087
$
—
$
258,087
Forward
exchange
contracts
................
—
39,243,142
—
39,243,142
Swap
contracts
..........................
—
19,132
—
19,132
Total
Other
Financial
Instruments
.........
$—
$39,520,361
$—
$39,520,361
Payables:
Deferred
Tax
(ARS)
.......................
$—
$2,378
$—
$2,378
a
Includes
securities
determined
to
have
no
value
at
June
30,
2022.
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
40
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Semiannual
Report
Templeton
Global
Total
Return
Fund
(continued)
15.
New
Accounting
Pronouncements
In June
2022,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
is
currently
evaluating
the
impact,
if
any,
of
applying
this
ASU.
16.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Counterparty
BNDP
BNP
Paribas
SA
BOFA
Bank
of
America
Corp.
BZWS
Barclays
Bank
plc
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
SCNY
Standard
Chartered
Bank
Currency
ARS
Argentine
Peso
BRL
Brazilian
Real
CAD
Canadian
Dollar
COP
Colombian
Peso
EUR
Euro
GBP
British
Pound
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
SGD
Singapore
Dollar
THB
Thai
Baht
USD
United
States
Dollar
Selected
Portfolio
PIK
Payment-In-Kind
SOFR
Secured
Overnight
Financing
Rate
Templeton
Income
Trust
Shareholder
Information
41
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BOARD
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENTS
TEMPLETON
INCOME
TRUST
Templeton
Global
Total
Return
Fund
(Fund)
At
an
in-person
meeting
held
on
February
28,
2022
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Trust,
on
behalf
of
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
virtual
contract
renewal
meeting
at
which
the
Independent
Trustees
first
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters.
At
that
meeting,
they
met
with
senior
leadership
of
the
global
macro
funds
regarding
the
performance
of
the
funds;
and
met
with
management
to
request
additional
information
that
the
Independent
Trustees
reviewed
and
considered
at
the
Meeting.
The
Board
later
had
an
opportunity
for
an
expanded
discussion
with
the
leadership
of
the
global
macro
funds
to
hear
about
strategies
to
deliver
improved
investment
returns
to
shareholders.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continued
commitment
to
providing
the
resources
important
to
enhancing
the
investment
process
of
the
global
macro
funds
for
the
benefit
of
the
funds
and
their
shareholders.
The
Board
also
acknowledged
the
ongoing
integration
of
the
Legg
Mason
family
of
funds
into
the
FT
family
of
funds
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
including
various
regulatory
initiatives
and
recent
geopolitical
concerns.
Templeton
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Trust
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42
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The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
being
a
global
leader
in
stewardship
and
sustainability
and
the
recent
addition
of
a
senior
executive
focused
on
environmental,
social
and
governance
and
climate
control
initiatives.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2021.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
further
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
international
income
funds.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-,
five-
and
10-year
periods
was
above
the
median
and
in
the
first
quintile
(best)
of
its
Performance
Universe.
The
Board
also
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-
and
five-year
periods
was
below
the
median
of
its
Performance
Universe,
but
for
the
10-year
period
was
above
the
median
and
in
the
second
quintile
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
Fund’s
relative
underperformance
in
comparison
to
its
Performance
Universe
over
the
reporting
periods
was
largely
due
to
the
Fund’s
performance
in
2019
and
2020.
Management
further
explained
that
the
underperformance
was
driven
by
the
Fund’s
defensive
positioning
amid
the
pandemic,
which
restrained
the
Fund’s
participation
in
the
risk
asset
rallies
in
the
second
half
of
2020.
Management
also
explained
that
the
Fund’s
long
exposure
to
emerging
market
local
currency
assets
and
short
exposure
to
US
Treasury
duration
during
the
three-
and
five-year
reporting
periods
detracted
from
the
Fund’s
relative
performance
versus
the
Performance
Universe.
Management
further
explained
that
after
vaccines
were
approved
toward
the
end
of
2020
management
significantly
repositioned
the
Fund’s
strategies
back
towards
risk
allocations
and
expanded
on
that
risk
positioning
throughout
2021,
emphasizing
specific
currencies
against
the
US
dollar
and
the
euro,
as
well
as
local
currency
bonds
in
a
select
set
of
emerging
markets.
Management
reported
that
this
resulted
in
notable
improvement
in
the
Fund’s
performance
for
the
one-year
period
ended
January
31,
2022.
Management
further
explained
the
steps
the
portfolio
management
team
is
taking
in
an
effort
to
improve
the
Fund’s
peer
rankings
across
all
reporting
periods
and
reduce
the
impact
of
the
Fund’s
relative
underperformance
in
2019
and
2020.
The
Board
noted
management’s
continued
confidence
in
the
Fund’s
portfolio
management
team,
commitment
to
an
enhanced
investment
process
for
the
benefit
of
Fund
shareholders
and
commitment
to
have
ongoing
conversations
with
the
Board
regarding
management’s
strategies
for
addressing
the
performance
of
the
global
macro
funds
as
a
whole.
Based
on
the
foregoing,
the
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-
year
period,
and
that
management’s
efforts
and
the
recent
improved
performance
of
the
Fund
should
continue
to
be
closely
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
or
semi-annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
Templeton
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limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
six
other
international
income
funds.
The
Board
noted
that
the
Management
Rate
was
below
the
median
and
in
the
first
quintile
(least
expensive)
of
its
Expense
Group,
but
the
actual
total
expense
ratio
for
the
Fund
was
above
the
median
and
in
the
fifth
quintile
(most
expensive)
of
its
Expense
Group.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2021,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
noted
that
the
Fund
had
experienced
a
decrease
in
assets
and
would
not
be
expected
to
demonstrate
additional
economies
of
scale
in
the
near
term,
but
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
the
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Templeton
Income
Trust
Shareholder
Information
44
franklintempleton.com
Semiannual
Report
Liquidity
Risk
Management
Program
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
Franklin
Templeton
and
Legg
Mason
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Legal,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2022,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2021.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
Templeton
Income
Trust
Shareholder
Information
45
franklintempleton.com
Semiannual
Report
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
as
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
407
S
08/22
©
2022
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Semiannual
Report
and
Shareholder
Letter
Templeton
Global
Total
Return
Fund
Investment
Manager
Distributor
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Services
Franklin
Advisers,
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LLC
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SEMIANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Templeton
Global
Bond
Fund
A
Series
of
Templeton
Income
Trust
June
30,
2022
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franklintempleton.com
Semiannual
Report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
The
six
months
ended
June
30,
2022,
were
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impacts
of
COVID-19
and
the
start
of
Russia’s
war
on
Ukraine.
Global
economies
faced
commodity
price
inflation,
tightening
financial
conditions,
weakening
global
growth,
and
supply
chain
disruptions
in
China.
Risk
assets
faced
strong
headwinds,
and
central
bankers
across
many
countries
faced
the
difficult
choice
of
supporting
growth
or
controlling
rising
price
pressures.
Sovereign
bond
yields
rose
across
much
of
the
world
following
higher
headline
inflation
data
and
central
bank
policy
rate
hikes,
and
the
U.S.
dollar
strengthened.
Simultaneously,
the
Russia-Ukraine
war
disrupted
the
flow
of
energy,
food,
commodities
and
goods,
particularly
throughout
Europe,
while
increasing
both
broad
geopolitical
instability
and
the
social
and
economic
strains
of
refugee
flight.
We
expect
broader
economic
strains
as
a
fallout
from
the
war.
Emerging
market
countries
that
are
net
importers
of
food
and
energy
will
be
more
vulnerable
to
trade
shocks
and
political
turmoil
stemming
from
elevated
commodity
prices.
Despite
the
challenging
macroeconomic
environment,
divergences
among
countries
offer
opportunities
for
outperformance
in
duration,
local-currency
sovereign
bonds
and
currencies,
and
we
remain
committed
to
pursuing
our
investment
objectives.
Historically,
patient
investors
have
achieved
rewarding
results
by
evaluating
their
goals,
diversifying
their
assets
globally
and
maintaining
a
disciplined
investment
program,
all
hallmarks
of
the
Templeton
investment
philosophy.
We
continue
to
recommend
investors
consult
their
financial
professionals
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
Global
Bond
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
Please
remember
all
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Sincerely,
Michael
Hasenstab,
Ph.D.
Executive
Vice
President,
Chief
Investment
Officer
of
Templeton
Global
Macro
This
letter
reflects
our
analysis
and
opinions
as
of
June
30,
2022,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Templeton
Global
Bond
Fund
3
Performance
Summary
6
Your
Fund’s
Expenses
8
Financial
Highlights
and
Schedule
of
Investments
9
Financial
Statements
21
Notes
to
Financial
Statements
25
Shareholder
Information
37
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Templeton
Global
Bond
Fund
This
semiannual
report
for
Templeton
Global
Bond
Fund
covers
the
period
ended
June
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
current
income
with
capital
appreciation
and
growth
of
income.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
bonds,
predominantly
those
issued
by
governments,
government-related
entities
and
government
agencies
located
around
the
world.
Bonds
include
debt
obligations
of
any
maturity,
such
as
bonds,
notes,
bills
and
debentures.
*Includes
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
six
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-6.93%
cumulative
total
return.
In
comparison,
global
government
bonds,
as
measured
by
the
Fund’s
benchmark,
the
FTSE
World
Government
Bond
Index
(WGBI),
had
a
cumulative
total
return
of
-14.79%
in
U.S.
dollar
terms
for
the
same
period.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
6
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Economic
and
Market
Overview
The
six-month
period
ended
June
30,
2022,
was
characterized
by
challenges
to
the
global
economy
in
the
form
of
the
lingering
economic
impact
of
COVID-19,
the
start
of
Russia’s
war
on
Ukraine,
commodity-price
inflation,
rising
global
interest
rates,
weakening
global
gross
domestic
product
growth,
and
supply
chain
disruptions.
Risk
assets
faced
strong
headwinds
resulting
from
tighter
financial
conditions.
Sovereign
bond
yields
rose
across
most
of
the
world
as
many
major
central
banks
embarked
on
policy
rate
hikes
to
curb
inflation.
Inflation
reached
multi-decade
highs
during
the
period,
with
added
supply-side
pressures
coming
from
disruptions
to
the
flow
of
energy,
food,
commodities
and
goods
due
to
the
war
in
Ukraine
and
the
West’s
economic
isolation
of
Russia.
Supply
chain
disruptions
were
compounded
by
China’s
implementation
of
its
zero-COVID
policy.
Simultaneously,
global
economic
growth
was
projected
to
decelerate,
driven
by
the
disruption
of
economic
activity
and
trade
following
Russia’s
invasion
of
Ukraine,
including
a
reduction
in
Russia’s
exports
of
natural
gas
to
Germany,
the
economic
strains
of
refugee
flight
in
Europe,
volatile
and
elevated
commodity
prices,
continued
supply
chain
disruptions,
the
effect
of
COVID-19-related
lockdowns
in
China,
and
the
reduction
of
policy
support
post-COVID-19.
The
combination
of
above-average
inflation
and
below-
average
growth
raised
the
spectre
of
stagflation
reminiscent
of
the
1970s
and
created
a
policy
dilemma
for
many
central
bankers.
Over
the
period,
developed
market
sovereign
bond
yields
trended
higher
concurrently
with
falling
equity
prices
and
strength
in
the
U.S.
dollar.
On
the
monetary
front,
the
first
half
of
2022
marked
the
end
of
pandemic-era
monetary
accommodation
by
the
U.S.
Federal
Reserve.
Portfolio
Composition
6/30/22
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
57.4%
U.S.
Government
and
Agency
Securities
14.6%
Short-Term
Investments
&
Other
Net
Assets*
28.0%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
14
.
Templeton
Global
Bond
Fund
4
franklintempleton.com
Semiannual
Report
Investment
Strategy
We
invest
selectively
in
bonds
around
the
world
based
upon
our
assessment
of
changing
market,
political
and
economic
conditions.
While
seeking
opportunities,
we
monitor
various
factors
including
changes
in
interest
rates,
currency
exchange
rates
and
credit
risks.
For
purposes
of
pursuing
its
investment
goals,
the
Fund
regularly
enters
into
various
currency-related
transactions
involving
derivative
instruments,
principally
currency
and
cross
currency
forwards,
but
it
may
also
use
currency
and
currency
index
futures
contracts
and
currency
options.
Manager’s
Discussion
In
bonds,
we
continued
to
maintain
low
portfolio
duration,
while
aiming
at
a
high
overall
portfolio
yield
by
holding
compelling
risk-adjusted
yields
in
various
local-currency
bond
markets,
specifically
in
countries
with
resilient
economies
and
strong
trade
dynamics.
We
were
significantly
underweight
developed
market
duration
in
the
U.S.
and
the
euro
area,
with
a
preference
for
the
higher
yields
available
in
select
emerging
market
local-currency
bonds,
notably
including
Indonesia,
India,
Thailand,
Brazil,
Colombia,
and
Mexico.
At
the
beginning
of
the
period,
the
Fund
was
overweight
in
specific
currencies
against
the
U.S.
dollar
(USD)
and
the
euro.
In
Asia,
we
held
notable
exposures
to
the
South
Korean
won,
the
Chinese
yuan,
the
Indonesian
rupiah,
the
Indian
rupee
and
the
Singapore
dollar,
while
holding
an
underweight
in
the
Japanese
yen.
We
closed
our
exposure
to
the
Japanese
yen
in
March
2022,
thereby
going
further
underweight,
primarily
due
to
expected
depreciation
pressures
on
the
currency
from
widening
rate
differentials
with
the
U.S.
In
April,
we
exited
our
underweight
position
in
the
Australian
dollar
which
had
been
used
to
hedge
against
emerging
market
beta
risks,
as
we
anticipated
rising
commodity
prices
to
boost
Australia’s
terms
of
trade
and
support
its
currency.
In
EMEA
(Europe,
Middle
East
and
Africa),
the
Fund
held
overweight
positions
in
the
Norwegian
krone,
the
Swedish
krona
and
the
British
pound
against
the
euro.
We
added
a
position
in
the
British
pound
against
the
euro
in
April
due
to
expected
monetary
policy
divergences
between
the
Bank
of
England
and
the
European
Central
Bank.
In
the
Americas,
we
held
long
exposures
to
the
Brazilian
real,
Colombian
peso
and
Chilean
peso
against
the
USD,
and
long
exposure
to
the
Canadian
dollar
against
the
euro.
During
the
period,
we
used
currency
forwards
and
currency
options
to
actively
manage
currency
exposures.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions,
followed
by
interest-
rate
strategies.
Sovereign
credit
exposures
had
a
largely
neutral
effect
on
absolute
results.
Among
currencies,
positions
in
the
South
Korean
won,
Ghanaian
cedi,
Argentine
peso,
Indonesian
rupiah
and
Chinese
yuan
detracted
from
absolute
performance,
while
the
Fund’s
position
in
the
Brazilian
real
contributed.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Exposure
to
short-
to
intermediate-term
U.S.
Treasuries
detracted
from
absolute
results,
as
did
duration
exposure
in
Ghana.
However,
duration
exposure
in
Argentina
contributed
to
absolute
performance.
On
a
relative
basis,
the
Fund’s
performance
fared
better
than
that
of
its
benchmark
index
primarily
due
to
interest-rate
strategies,
followed
by
currency
positions.
Sovereign
credit
exposures
had
a
largely
neutral
effect
on
relative
results.
Its
lack
of
duration
exposure
in
the
euro
area
contributed
to
relative
performance,
as
did
underweighted
duration
exposures
in
the
U.S.,
the
U.K.
and
Japan.
Overweighted
duration
exposure
in
Argentina
also
contributed
to
relative
results,
while
duration
exposure
in
Ghana
detracted.
Among
currencies,
the
Fund’s
underweighted
exposure
to
the
euro
contributed
to
relative
performance,
as
did
its
underweighted
position
in
the
Japanese
yen
and
its
overweighted
position
in
the
Brazilian
real.
However,
overweighted
positions
in
the
South
Korean
won,
Ghanaian
cedi,
Argentine
peso
and
Indonesian
rupiah
detracted
from
relative
results.
Thank
you
for
your
continued
participation
in
Templeton
Global
Bond
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho,
Ph.D.
Portfolio
Manager
Geographic
Composition
6/30/22
%
of
Total
Net
Assets
Asia
Pacific
32.1%
Americas
26.1%
Other
Europe
9.6%
Middle
East
&
Africa
2.5%
Supranational
1.7%
Short-Term
Investments
&
Other
Net
Assets
28.0%
Templeton
Global
Bond
Fund
5
franklintempleton.com
Semiannual
Report
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
June
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
June
30,
2022
Templeton
Global
Bond
Fund
6
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
6/30/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
6-Month
-6.93%
-10.38%
1-Year
-9.20%
-12.58%
5-Year
-14.66%
-3.86%
10-Year
+1.66%
-0.22%
Advisor
6-Month
-6.85%
-6.85%
1-Year
-9.01%
-9.01%
5-Year
-13.55%
-2.87%
10-Year
+4.26%
+0.42%
See
page
7
for
Performance
Summary
footnotes.
Templeton
Global
Bond
Fund
Performance
Summary
7
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio
that
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
In
losses
on
an
amount
that
exceeds
the
Fund’s
initial
investment.
The
Fund
may
not
achieve
the
anticipated
benefits
and
may
realize
losses
when
a
counterparty
fails
to
perform
as
promised.
The
markets
for
particular
securities
or
types
of
securities
are
or
may
become
relatively
illiquid.
Reduced
liquidity
will
have
an
adverse
impact
on
the
security’s
value
and
on
the
Fund’s
ability
to
sell
such
securities
when
necessary
to
meet
the
Fund’s
liquidity
needs
or
in
response
to
a
specific
market
event.
Foreign
securities
involve
special
risks,
including
currency
fluctuations
(which
may
be
significant
over
the
short
term)
and
economic
and
political
uncertainties;
investments
in
emerging
markets
involve
heightened
risks
related
to
the
same
factors.
Sovereign
debt
securities
are
subject
to
various
risks
in
addition
to
those
relating
to
debt
securities
and
foreign
securities
generally,
including,
but
not
limited
to,
the
risk
that
a
government
entity
may
be
unwilling
or
unable
to
pay
interest
and
repay
principal
on
its
sovereign
debt,
or
otherwise
meet
its
obligations
when
due.
Investments
in
lower
rated
bonds
include
higher
risk
of
default
and
loss
of
principal.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
As
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
Fund
has
a
fee
waiver
associated
with
any
investment
it
makes
in
a
Franklin
Templeton
money
fund
and/or
other
Franklin
Templeton
fund,
contractually
guaranteed
through
4/30/23.
Fund
investment
results
reflect
the
fee
waiver;
without
this
waiver,
the
results
would
have
been
lower.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
3.75%.
5.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(1/1/22–6/30/22)
Share
Class
Net
Investment
Income
A
$0.2394
C
$0.2213
R
$0.2287
R6
$0.2581
Advisor
$0.2502
Total
Annual
Operating
Expenses
5
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
0.97%
0.98%
Advisor
0.72%
0.73%
Your
Fund’s
Expenses
Templeton
Global
Bond
Fund
8
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
181/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
1/1/22
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
Ending
Account
Value
6/30/22
Expenses
Paid
During
Period
1/1/22–6/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$930.70
$4.83
$1,019.79
$5.05
1.01%
C
$1,000
$929.00
$6.74
$1,017.81
$7.05
1.41%
R
$1,000
$929.50
$6.02
$1,018.56
$6.30
1.26%
R6
$1,000
$931.20
$2.78
$1,021.92
$2.91
0.58%
Advisor
$1,000
$931.50
$3.63
$1,021.03
$3.80
0.76%
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
9
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.84
$9.80
$10.69
$11.30
$11.89
$12.00
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.20
0.42
0.41
0.59
0.59
0.56
Net
realized
and
unrealized
gains
(losses)
(0.80)
(0.90)
(0.85)
(0.54)
(0.44)
(0.27)
Total
from
investment
operations
........
(0.60)
(0.48)
(0.44)
0.05
0.15
0.29
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.24)
—
(0.01)
(0.66)
(0.74)
(0.40)
Tax
return
of
capital
................
—
(0.48)
(0.44)
—
—
—
Total
distributions
...................
(0.24)
(0.48)
(0.45)
(0.66)
(0.74)
(0.40)
Net
asset
value,
end
of
period
..........
$8.00
$8.84
$9.80
$10.69
$11.30
$11.89
Total
return
c
.......................
(6.93)%
(5.06)%
(4.14)%
0.35%
1.27%
2.35%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.02%
0.97%
0.93%
0.92%
0.94%
0.97%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.01%
0.96%
0.91%
0.85%
0.86%
0.90%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.01%
0.96%
0.91%
0.85%
0.86%
e
0.89%
Net
investment
income
...............
4.71%
4.51%
4.03%
5.27%
4.99%
4.60%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$2,903,045
$3,478,172
$4,749,790
$6,514,630
$8,375,227
$9,656,645
Portfolio
turnover
rate
................
5.60%
28.44%
60.07%
32.63%
19.86%
42.12%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.88
$9.83
$10.72
$11.33
$11.92
$12.03
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.19
0.38
0.37
0.55
0.54
0.51
Net
realized
and
unrealized
gains
(losses)
(0.81)
(0.90)
(0.85)
(0.55)
(0.44)
(0.27)
Total
from
investment
operations
........
(0.62)
(0.52)
(0.48)
—
0.10
0.24
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.22)
—
(0.01)
(0.61)
(0.69)
(0.35)
Tax
return
of
capital
................
—
(0.43)
(0.40)
—
—
—
Total
distributions
...................
(0.22)
(0.43)
(0.41)
(0.61)
(0.69)
(0.35)
Net
asset
value,
end
of
period
..........
$8.04
$8.88
$9.83
$10.72
$11.33
$11.92
Total
return
c
.......................
(7.10)%
(5.38)%
(4.52)%
0.06%
0.86%
1.94%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.42%
1.36%
1.33%
1.32%
1.34%
1.37%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.41%
1.36%
e
1.31%
1.25%
1.26%
1.30%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.41%
1.36%
1.31%
1.25%
1.26%
f
1.29%
Net
investment
income
...............
4.30%
4.07%
3.65%
4.87%
4.59%
4.20%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$163,555
$224,611
$682,582
$1,392,223
$2,218,852
$3,232,023
Portfolio
turnover
rate
................
5.60%
28.44%
60.07%
32.63%
19.86%
42.12%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
11
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.84
$9.80
$10.69
$11.30
$11.89
$12.00
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.19
0.40
0.38
0.56
0.56
0.53
Net
realized
and
unrealized
gains
(losses)
(0.80)
(0.91)
(0.84)
(0.54)
(0.44)
(0.27)
Total
from
investment
operations
........
(0.61)
(0.51)
(0.46)
0.02
0.12
0.26
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.23)
—
(0.01)
(0.63)
(0.71)
(0.37)
Tax
return
of
capital
................
—
(0.45)
(0.42)
—
—
—
Total
distributions
...................
(0.23)
(0.45)
(0.43)
(0.63)
(0.71)
(0.37)
Net
asset
value,
end
of
period
..........
$8.00
$8.84
$9.80
$10.69
$11.30
$11.89
Total
return
c
.......................
(7.05)%
(5.30)%
(4.38)%
0.10%
1.02%
2.10%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.27%
1.22%
1.18%
1.17%
1.19%
1.22%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.26%
1.21%
1.16%
1.10%
1.11%
1.15%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.26%
1.21%
1.16%
1.10%
1.11%
e
1.14%
Net
investment
income
...............
4.46%
4.26%
3.79%
5.02%
4.74%
4.35%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$114,793
$137,543
$170,554
$208,853
$239,671
$274,295
Portfolio
turnover
rate
................
5.60%
28.44%
60.07%
32.63%
19.86%
42.12%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.80
$9.75
$10.64
$11.25
$11.85
$11.96
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.22
0.45
0.45
0.62
0.63
0.61
Net
realized
and
unrealized
gains
(losses)
(0.80)
(0.89)
(0.85)
(0.53)
(0.45)
(0.27)
Total
from
investment
operations
........
(0.58)
(0.44)
(0.40)
0.09
0.18
0.34
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.26)
—
(0.01)
(0.70)
(0.78)
(0.45)
Tax
return
of
capital
................
—
(0.51)
(0.48)
—
—
—
Total
distributions
...................
(0.26)
(0.51)
(0.49)
(0.70)
(0.78)
(0.45)
Net
asset
value,
end
of
period
..........
$7.96
$8.80
$9.75
$10.64
$11.25
$11.85
Total
return
c
.......................
(6.88)%
(4.59)%
(3.79)%
0.73%
1.57%
2.79%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.63%
0.63%
0.58%
0.57%
0.59%
0.55%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.58%
0.58%
0.54%
0.48%
0.49%
0.48%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.58%
0.58%
0.54%
0.48%
0.49%
e
0.47%
Net
investment
income
...............
5.14%
4.85%
4.42%
5.64%
5.36%
5.02%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$781,799
$944,502
$2,273,175
$4,407,299
$4,084,816
$3,870,342
Portfolio
turnover
rate
................
5.60%
28.44%
60.07%
32.63%
19.86%
42.12%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$8.80
$9.75
$10.64
$11.25
$11.85
$11.96
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.21
0.44
0.43
0.61
0.61
0.59
Net
realized
and
unrealized
gains
(losses)
(0.80)
(0.89)
(0.84)
(0.54)
(0.44)
(0.27)
Total
from
investment
operations
........
(0.59)
(0.45)
(0.41)
0.07
0.17
0.32
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.25)
—
(0.01)
(0.68)
(0.77)
(0.43)
Tax
return
of
capital
................
—
(0.50)
(0.47)
—
—
—
Total
distributions
...................
(0.25)
(0.50)
(0.48)
(0.68)
(0.77)
(0.43)
Net
asset
value,
end
of
period
..........
$7.96
$8.80
$9.75
$10.64
$11.25
$11.85
Total
return
c
.......................
(6.85)%
(4.74)%
(3.92)%
0.60%
1.44%
2.62%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.77%
0.72%
0.69%
0.67%
0.69%
0.72%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.76%
0.71%
0.66%
0.60%
0.61%
0.65%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.76%
0.71%
0.66%
0.60%
0.61%
e
0.64%
Net
investment
income
...............
4.95%
4.74%
4.31%
5.52%
5.24%
4.85%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$2,723,794
$3,641,639
$
7,050,610
$14,244,707
$18,506,219
$20,808,794
Portfolio
turnover
rate
................
5.60%
28.44%
60.07%
32.63%
19.86%
42.12%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned,
adjustments
to
interest
income
for
the
inflation-indexed
bonds,
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Templeton
Income
Trust
Schedule
of
Investments
(unaudited),
June
30,
2022
Templeton
Global
Bond
Fund
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
57.4%
Argentina
2.2%
a
Argentina
BONCER
,
Index
Linked,
1.4%,
3/25/23
.......
13,584,727,120
ARS
$
50,799,552
Index
Linked,
1.5%,
3/25/24
.......
18,646,414,533
ARS
58,550,491
Argentina
Government
Bond
,
16%,
10/17/23
.................
5,986,154,700
ARS
14,009,821
15.5%,
10/17/26
................
18,801,412,000
ARS
21,998,048
145,357,912
Brazil
0.6%
Brazil
Notas
do
Tesouro
Nacional,
10%,
1/01/27
......................
216,080,000
BRL
37,598,350
Colombia
5.3%
Colombia
Government
Bond
,
Senior
Bond,
4.375%,
3/21/23
.....
6,831,000,000
COP
1,572,734
Senior
Bond,
9.85%,
6/28/27
......
10,884,000,000
COP
2,583,927
Colombia
Titulos
de
Tesoreria
,
B,
10%,
7/24/24
................
416,163,000,000
COP
100,090,875
B,
6.25%,
11/26/25
..............
126,303,000,000
COP
26,735,011
B,
7.5%,
8/26/26
...............
385,951,200,000
COP
83,089,848
B,
5.75%,
11/03/27
..............
91,769,000,000
COP
17,509,322
B,
6%,
4/28/28
.................
294,498,100,000
COP
55,787,749
B,
7.75%,
9/18/30
..............
258,536,800,000
COP
50,642,399
B,
7%,
6/30/32
.................
79,255,000,000
COP
14,171,860
352,183,725
Ghana
2.5%
Ghana
Government
Bond
,
19.75%,
3/25/24
................
186,550,000
GHS
20,559,827
19%,
11/02/26
.................
868,065,000
GHS
79,308,200
19.75%,
3/15/32
................
840,925,000
GHS
67,864,506
Senior
Note,
18.3%,
3/02/26
......
6,300,000
GHS
586,798
168,319,331
India
4.6%
India
Government
Bond
,
8.2%,
9/24/25
.................
320,200,000
INR
4,184,920
7.59%,
1/11/26
.................
4,022,000,000
INR
51,664,187
7.27%,
4/08/26
................
1,448,000,000
INR
18,403,252
8.33%,
7/09/26
................
8,401,000,000
INR
110,582,682
7.26%,
1/14/29
................
6,911,000,000
INR
87,090,940
Senior
Note,
5.22%,
6/15/25
......
2,124,000,000
INR
25,685,673
Senior
Note,
5.15%,
11/09/25
......
622,300,000
INR
7,438,787
305,050,441
Indonesia
9.6%
Indonesia
Government
Bond
,
FR39,
11.75%,
8/15/23
..........
641,965,000,000
IDR
46,509,767
FR40,
11%,
9/15/25
.............
532,795,000,000
IDR
40,834,682
FR44,
10%,
9/15/24
.............
248,790,000,000
IDR
18,387,497
FR46,
9.5%,
7/15/23
............
3,202,089,000,000
IDR
225,740,020
FR59,
7%,
5/15/27
..............
502,090,000,000
IDR
34,629,802
FR70,
8.375%,
3/15/24
..........
2,197,357,000,000
IDR
155,463,284
FR81,
6.5%,
6/15/25
............
162,429,000,000
IDR
11,192,037
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Indonesia
(continued)
Indonesia
Government
Bond,
(continued)
FR86,
5.5%,
4/15/26
............
1,712,391,000,000
IDR
$
112,933,322
645,690,411
Mexico
3.4%
Mexican
Bonos
Desarr
Fixed
Rate,
M,
Senior
Bond,
8%,
12/07/23
........
4,627,572,000
MXN
225,731,329
Norway
8.3%
b
Norway
Government
Bond
,
Senior
Bond,
144A,
Reg
S,
2%,
5/24/23
......................
1,700,983,000
NOK
172,163,133
Senior
Bond,
144A,
Reg
S,
3%,
3/14/24
......................
2,921,308,000
NOK
297,604,495
Senior
Bond,
144A,
Reg
S,
1.75%,
3/13/25
......................
890,910,000
NOK
87,657,106
557,424,734
South
Korea
14.8%
Korea
Monetary
Stabilization
Bond
,
Senior
Note,
0.87%,
2/02/23
......
94,950,000,000
KRW
73,045,353
Senior
Note,
0.905%,
4/02/23
......
183,420,000,000
KRW
140,609,999
Korea
Treasury
Bond
,
2.25%,
9/10/23
................
13,848,000,000
KRW
10,632,557
0.875%,
12/10/23
...............
247,523,000,000
KRW
185,601,500
1.875%,
3/10/24
................
239,662,000,000
KRW
181,447,649
1.375%,
9/10/24
................
385,853,010,000
KRW
285,904,513
3%,
9/10/24
...................
146,030,000,000
KRW
112,049,740
989,291,311
Supranational
1.7%
c
Inter-American
Development
Bank,
Senior
Bond,
7.5%,
12/05/24
......
2,473,000,000
MXN
116,180,721
Thailand
3.1%
Thailand
Government
Bond
,
0.75%,
9/17/24
................
3,255,070,000
THB
90,104,459
1%,
6/17/27
...................
2,318,690,000
THB
61,236,420
Senior
Note,
0.66%,
11/22/23
......
1,957,120,000
THB
54,891,066
206,231,945
United
Kingdom
1.3%
b
United
Kingdom
Gilt,
Reg
S,
0.125%,
1/31/23
......................
73,872,000
GBP
89,147,481
Total
Foreign
Government
and
Agency
Securities
(Cost
$6,040,489,555)
...........
3,838,207,691
U.S.
Government
and
Agency
Securities
14.6%
United
States
14.6%
U.S.
Treasury
Notes
,
2.875%,
5/31/25
................
37,950,000
37,795,828
2.625%,
12/31/25
...............
418,885,000
413,084,424
1.625%,
2/15/26
................
226,420,000
215,267,047
2.125%,
5/31/26
................
103,431,000
99,946,264
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
U.S.
Government
and
Agency
Securities
(continued)
United
States
(continued)
U.S.
Treasury
Notes,
(continued)
1.625%,
10/31/26
...............
226,430,000
$
213,312,980
979,406,543
Total
U.S.
Government
and
Agency
Securities
(Cost
$1,054,880,268)
..............
979,406,543
Total
Long
Term
Investments
(Cost
$7,095,369,823)
.............................
4,817,614,234
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
0.1%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
21.67
MXN,
Expires
9/27/22
..
1
77,693,000
685,313
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
102,286,100
2,281,749
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
102,284,100
2,009,542
4,976,604
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
July
Strike
Price
19.19
MXN,
Expires
7/21/22
.......
1
137,641,000
42,214
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.41
MXN,
Expires
8/11/22
..
1
30,993,000
66,491
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
July
Strike
Price
19.88
MXN,
Expires
7/21/22
.......
1
137,641,000
601,122
709,827
Total
Options
Purchased
(Cost
$21,822,656)
....................................
5,686,431
Short
Term
Investments
25.5%
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
16.3%
Brazil
8.7%
d
Brazil
Letras
do
Tesouro
Nacional
,
1/01/24
......................
398,720,000
BRL
63,020,238
7/01/24
......................
1,240,310,000
BRL
185,185,103
1/01/25
......................
2,370,780,000
BRL
335,033,681
583,239,022
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
Short
Term
Investments
(continued)
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Singapore
4.6%
d
Singapore
Treasury
Bills
,
8/12/22
......................
36,540,000
SGD
$
26,238,788
8/19/22
......................
353,020,000
SGD
253,393,256
1/24/23
......................
34,850,000
SGD
24,773,071
304,405,115
United
Kingdom
3.0%
d
United
Kingdom
Treasury
Bills
,
7/11/22
......................
46,288,000
GBP
56,319,471
7/25/22
......................
23,611,000
GBP
28,716,492
8/01/22
......................
37,599,000
GBP
45,720,055
10/24/22
.....................
57,117,000
GBP
69,178,522
199,934,540
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,157,089,608)
...........
1,087,578,677
Shares
Money
Market
Funds
9.2%
United
States
9.2%
e,f
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
.........
616,034,253
616,034,253
Total
Money
Market
Funds
(Cost
$616,034,253)
.................................
616,034,253
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$1,773,123,861
)
.............................
1,703,612,930
a
a
a
Total
Investments
(Cost
$8,890,316,340)
97.6%
..................................
$6,526,913,595
Options
Written
(0.0)%
†
......................................................
(1,336,977)
Other
Assets,
less
Liabilities
2.4%
.............................................
161,408,934
Net
Assets
100.0%
...........................................................
$6,686,985,552
a
a
a
a
Number
of
Contracts
Notional
Amount
#
g
Options
Written
(0.0)%
†
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
22.06
MXN,
Expires
8/11/22
..
1
30,993,000
(66,660)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
September
Strike
Price
23.09
MXN,
Expires
9/27/22
..
1
38,848,000
(127,058)
(193,718)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
July
Strike
Price
19.60
MXN,
Expires
7/21/22
.......
1
275,287,000
(414,588)
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
g
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.50
MXN,
Expires
8/11/22
..
1
30,993,000
$
(728,671)
(1,143,259)
Total
Options
Written
(Premiums
received
$4,254,034)
...........................
$
(1,336,977)
#
Notional
amount
is
the
number
of
units
specified
in
the
contract,
and
can
include
currency
units,
bushels,
shares,
pounds,
barrels
or
other
units.
Currency
units
are
stated
in
U.S.
dollars
unless
otherwise
indicated.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(g).
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
June
30,
2022,
the
aggregate
value
of
these
securities
was
$646,572,215,
representing
9.7%
of
net
assets.
c
A
supranational
organization
is
an
entity
formed
by
two
or
more
central
governments
through
international
treaties.
d
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
e
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
f
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
g
See
Note
1(c)
regarding
written
options.
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
19
At
June
30,
2022,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
Forward
Exchange
Contracts
Currency
Counter-
party
a
Type
Quantity
Contract
Amount
*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
Euro
.............
DBAB
Sell
91,640,825
946,200,680
SEK
7/06/22
$
—
$
(3,543,240)
Swedish
Krona
.....
DBAB
Sell
946,200,680
88,254,286
EUR
7/06/22
—
(5,755)
Indian
Rupee
......
HSBK
Buy
2,559,257,100
33,405,434
7/11/22
—
(1,014,527)
Chinese
Yuan
......
CITI
Buy
856,161,690
132,845,347
7/12/22
—
(4,930,988)
Chinese
Yuan
......
HSBK
Buy
927,022,870
144,200,674
7/18/22
—
(5,710,718)
Euro
.............
DBAB
Sell
16,012,892
157,994,402
NOK
7/19/22
—
(750,185)
Euro
.............
DBAB
Sell
112,944,895
1,135,435,030
SEK
7/19/22
—
(7,425,324)
Euro
.............
JPHQ
Sell
167,269,437
1,649,025,750
NOK
7/19/22
—
(7,975,669)
Norwegian
Krone
...
DBAB
Sell
157,994,402
15,894,505
EUR
7/19/22
626,009
—
Norwegian
Krone
...
JPHQ
Sell
1,649,025,750
166,060,849
EUR
7/19/22
6,707,985
—
Japanese
Yen
......
CITI
Buy
22,495,124,025
198,709,211
7/20/22
—
(32,791,161)
Japanese
Yen
......
CITI
Sell
22,495,124,025
198,007,653
7/20/22
32,089,602
—
South
Korean
Won
..
JPHQ
Buy
37,708,300,000
31,584,136
7/21/22
—
(2,320,648)
Euro
.............
CITI
Buy
14,400,000
15,269,760
7/26/22
—
(158,480)
Euro
.............
CITI
Sell
114,670,000
134,306,091
7/26/22
13,972,028
—
Indian
Rupee
......
JPHQ
Buy
4,614,943,200
60,603,325
7/27/22
—
(2,286,789)
South
Korean
Won
..
DBAB
Buy
73,188,000,000
59,357,664
7/28/22
—
(2,554,115)
Chilean
Peso
......
GSCO
Buy
23,075,149,700
26,767,763
7/29/22
—
(1,740,617)
Chilean
Peso
......
JPHQ
Buy
29,488,000,000
35,329,779
8/02/22
—
(3,372,601)
South
Korean
Won
..
BNDP
Buy
115,172,700,000
90,988,071
8/02/22
—
(1,592,173)
Euro
.............
HSBK
Sell
354,541,815
511,912,995
CAD
8/03/22
25,407,568
—
South
Korean
Won
..
CITI
Buy
73,606,900,000
61,359,536
8/03/22
—
(4,225,714)
Australian
Dollar
....
CITI
Buy
7,000,000
5,172,580
8/08/22
—
(339,514)
Australian
Dollar
....
CITI
Sell
7,000,000
5,010,040
8/08/22
176,974
—
Chilean
Peso
......
GSCO
Buy
19,040,583,935
22,686,267
8/08/22
—
(2,078,472)
Chilean
Peso
......
JPHQ
Buy
33,537,277,800
40,653,710
8/08/22
—
(4,356,012)
Australian
Dollar
....
JPHQ
Buy
62,696,000
46,310,902
8/11/22
—
(3,021,885)
Australian
Dollar
....
JPHQ
Sell
62,696,000
44,883,985
8/11/22
1,594,968
—
Chilean
Peso
......
GSCO
Buy
11,267,220,000
12,869,028
8/16/22
—
(696,870)
Euro
.............
DBAB
Sell
64,429,949
675,857,278
SEK
8/17/22
—
(1,546,594)
Chilean
Peso
......
GSCO
Buy
20,158,326,990
23,250,665
8/19/22
—
(1,488,381)
Mexican
Peso
......
CITI
Sell
12,123,650
601,999
8/31/22
5,650
—
Mexican
Peso
......
MSCO
Sell
962,975,000
45,959,909
8/31/22
—
(1,407,754)
Chilean
Peso
......
GSCO
Buy
19,189,570,000
23,106,045
9/02/22
—
(2,456,551)
Chilean
Peso
......
GSCO
Buy
19,189,599,252
22,808,105
9/06/22
—
(2,175,947)
Euro
.............
DBAB
Sell
88,093,240
946,200,680
SEK
9/06/22
—
(2,054)
Euro
.............
DBAB
Sell
124,592,990
1,315,540,000
SEK
9/19/22
—
(2,276,686)
Euro
.............
JPHQ
Sell
2,104,965
20,934,300
NOK
9/19/22
—
(88,992)
Norwegian
Krone
...
JPHQ
Sell
20,934,300
2,101,669
EUR
9/19/22
85,518
—
Australian
Dollar
....
CITI
Buy
87,210,200
64,491,071
9/21/22
—
(4,254,899)
Australian
Dollar
....
CITI
Sell
87,210,200
63,854,611
9/21/22
3,618,439
—
Chilean
Peso
......
GSCO
Buy
33,581,830,440
40,181,700
9/21/22
—
(4,185,470)
Chinese
Yuan
......
BOFA
Buy
657,155,720
97,732,855
9/21/22
396,897
—
Chinese
Yuan
......
HSBK
Buy
933,091,780
139,018,338
9/21/22
315,557
—
New
Zealand
Dollar
.
BOFA
Buy
56,380,000
35,288,242
9/21/22
—
(111,524)
New
Zealand
Dollar
.
CITI
Buy
66,290,000
45,109,815
9/21/22
—
(3,750,031)
New
Zealand
Dollar
.
JPHQ
Buy
181,180,000
123,541,207
9/21/22
—
(10,499,034)
South
Korean
Won
..
BNDP
Buy
263,744,500,000
203,283,825
9/21/22
1,735,589
—
South
Korean
Won
..
MSCO
Buy
52,490,000,000
40,411,117
9/21/22
391,512
—
Euro
.............
CITI
Sell
247,200,000
276,406,680
9/22/22
15,853,895
—
Euro
.............
HSBK
Sell
256,580,000
286,864,137
9/22/22
16,424,682
—
Indian
Rupee
......
JPHQ
Buy
4,628,008,500
60,068,901
10/07/22
—
(1,976,084)
Chilean
Peso
......
GSCO
Buy
7,546,330,000
9,094,813
10/11/22
—
(1,037,045)
Templeton
Income
Trust
Schedule
of
Investments
(unaudited)
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
Forward
Exchange
Contracts
(continued)
Currency
Counter-
party
a
Type
Quantity
Contract
Amount*
Settlement
Date
Unrealized
Appreciation
Unrealized
Depreciation
a
a
a
a
a
a
a
a
OTC
Forward
Exchange
Contracts
(continued)
Indian
Rupee
......
JPHQ
Buy
2,823,969,900
36,705,919
10/11/22
$
—
$
(1,271,440)
Euro
.............
DBAB
Sell
148,217,960
1,532,958,929
SEK
10/12/22
—
(5,959,861)
Indian
Rupee
......
CITI
Buy
2,857,906,500
37,125,312
10/12/22
—
(1,268,356)
Euro
.............
BZWS
Sell
69,550,000
76,188,547
10/25/22
2,675,546
—
Euro
.............
DBAB
Sell
90,939,000
99,487,107
10/25/22
3,366,347
—
Chilean
Peso
......
JPHQ
Buy
17,871,274,547
21,562,831
10/26/22
—
(2,530,657)
Euro
.............
HSBK
Sell
150,541,304
206,348,472
CAD
11/03/22
1,103,258
—
Mexican
Peso
......
MSCO
Sell
1,191,004,000
58,682,867
12/06/22
1,194,577
—
Chinese
Yuan
......
BOFA
Buy
1,188,701,030
177,965,241
12/08/22
—
(334,849)
Chinese
Yuan
......
CITI
Buy
841,154,240
126,070,389
12/08/22
—
(374,731)
Chinese
Yuan
......
JPHQ
Buy
588,157,946
87,980,426
12/09/22
—
(89,592)
Chilean
Peso
......
JPHQ
Buy
17,871,325,453
19,478,284
12/27/22
—
(653,863)
Mexican
Peso
......
MSCO
Sell
852,385,000
39,019,684
12/27/22
—
(1,951,282)
Euro
.............
DBAB
Sell
91,387,000
100,708,824
1/25/23
3,343,413
—
Chilean
Peso
......
GSCO
Buy
12,107,880,000
14,335,638
3/07/23
—
(1,712,871)
Euro
.............
BZWS
Sell
32,638,000
36,250,863
4/25/23
1,252,268
—
Mexican
Peso
......
CITI
Sell
522,579,750
22,751,029
10/23/23
—
(975,269)
Total
Forward
Exchange
Contracts
...................................................
$132,338,282
$(147,271,274)
Net
unrealized
appreciation
(depreciation)
............................................
$(14,932,992)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
See
Note 
10
 regarding
other
derivative
information.
See
Abbreviations
on
page
36
.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2022
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
21
Templeton
Global
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$8,274,282,087
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
616,034,253
Value
-
Unaffiliated
issuers
..................................................................
$5,910,879,342
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
616,034,253
Cash
....................................................................................
362,349
Restricted
cash
for
OTC
derivative
contracts
(Note
1d)
...............................................
40,491,750
Restricted
currency,
at
value
(cost
$53,411,684)
(Note
1e)
............................................
44,480,500
Foreign
currency,
at
value
(cost
$6,108,103)
......................................................
6,036,112
Receivables:
Capital
shares
sold
........................................................................
6,754,052
Interest
.................................................................................
77,591,415
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
76,400,486
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
132,338,282
Total
assets
..........................................................................
6,911,368,541
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
3,683
Capital
shares
redeemed
...................................................................
21,604,446
Management
fees
.........................................................................
2,691,102
Distribution
fees
..........................................................................
755,854
Transfer
agent
fees
........................................................................
3,900,464
Trustees'
fees
and
expenses
.................................................................
89,908
Deposits
from
brokers
for:
OTC
derivative
contracts
..................................................................
40,491,750
Options
written,
at
value
(premiums
received
$4,254,034)
............................................
1,336,977
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
147,271,274
Deferred
tax
...............................................................................
1,563,189
Accrued
expenses
and
other
liabilities
...........................................................
4,674,342
Total
liabilities
.........................................................................
224,382,989
Net
assets,
at
value
.................................................................
$6,686,985,552
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$11,552,192,184
Total
distributable
earnings
(losses)
.............................................................
(4,865,206,632)
Net
assets,
at
value
.................................................................
$6,686,985,552
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
June
30,
2022
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Templeton
Global
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$2,903,045,459
Shares
outstanding
........................................................................
362,849,423
Net
asset
value
per
share
a
..................................................................
$8.00
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$8.31
Class
C:
Net
assets,
at
value
.......................................................................
$163,554,574
Shares
outstanding
........................................................................
20,347,826
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$8.04
Class
R:
Net
assets,
at
value
.......................................................................
$114,792,806
Shares
outstanding
........................................................................
14,346,685
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$8.00
Class
R6:
Net
assets,
at
value
.......................................................................
$781,798,588
Shares
outstanding
........................................................................
98,264,361
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.96
Advisor
Class:
Net
assets,
at
value
.......................................................................
$2,723,794,125
Shares
outstanding
........................................................................
342,159,753
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$7.96
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Templeton
Income
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2022
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
23
Templeton
Global
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$360,939
Interest:
(net
of
foreign
taxes
of
$5,147,939)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
53,793,787
Paid
in
cash
a
...........................................................................
161,877,086
Total
investment
income
...................................................................
216,031,812
Expenses:
Management
fees
(Note
3
a
)
...................................................................
18,608,431
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
4,026,458
    Class
C
................................................................................
634,325
    Class
R
................................................................................
317,141
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
3,344,519
    Class
C
................................................................................
202,803
    Class
R
................................................................................
131,722
    Class
R6
...............................................................................
278,986
    Advisor
Class
............................................................................
3,279,007
Custodian
fees
.............................................................................
1,089,527
Reports
to
shareholders
fees
..................................................................
750,463
Registration
and
filing
fees
....................................................................
71,323
Professional
fees
...........................................................................
206,169
Trustees'
fees
and
expenses
..................................................................
466,142
Other
....................................................................................
219,013
Total
expenses
.........................................................................
33,626,029
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(747,102)
Net
expenses
.........................................................................
32,878,927
Net
investment
income
................................................................
183,152,885
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$5,933,811)
Unaffiliated
issuers
......................................................................
(240,157,450)
Written
options
...........................................................................
16,581,803
Foreign
currency
transactions
................................................................
(17,496,661)
Forward
exchange
contracts
.................................................................
(10,179,595)
Net
realized
gain
(loss)
..................................................................
(251,251,903)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(417,583,625)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(10,893,635)
Written
options
...........................................................................
(12,660,286)
Forward
exchange
contracts
.................................................................
(9,356,174)
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
8,120,061
Net
change
in
unrealized
appreciation
(depreciation)
............................................
(442,373,659)
Net
realized
and
unrealized
gain
(loss)
............................................................
(693,625,562)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(510,472,677)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
consolidated
financial
statements.
24
Templeton
Global
Bond
Fund
Six
Months
Ended
June
30,
2022
(unaudited)
Year
Ended
December
31,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$183,152,885
$540,121,289
Net
realized
gain
(loss)
.................................................
(251,251,903)
(2,006,022,254)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(442,373,659)
855,771,203
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(510,472,677)
(610,129,762)
Distributions
to
shareholders:
Class
A
.............................................................
(89,462,749)
—
Class
C
.............................................................
(4,924,398)
—
Class
R
.............................................................
(3,367,224)
—
Class
R6
............................................................
(25,816,253)
—
Advisor
Class
........................................................
(91,189,477)
—
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
—
(209,944,924)
Class
C
.............................................................
—
(19,709,087)
Class
R
.............................................................
—
(7,458,286)
Class
R6
............................................................
—
(81,909,746)
Advisor
Class
........................................................
—
(292,507,439)
Total
distributions
to
shareholders
..........................................
(214,760,101)
(611,529,482)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(263,790,692)
(843,885,623)
Class
C
.............................................................
(42,880,979)
(412,473,388)
Class
R
.............................................................
(10,514,763)
(17,094,511)
Class
R6
............................................................
(79,922,835)
(1,171,294,552)
Advisor
Class
........................................................
(617,138,838)
(2,833,837,735)
Total
capital
share
transactions
............................................
(1,014,248,107)
(5,278,585,809)
Net
increase
(decrease)
in
net
assets
...................................
(1,739,480,885)
(6,500,245,053)
Net
assets:
Beginning
of
period
.....................................................
8,426,466,437
14,926,711,490
End
of
period
..........................................................
$6,686,985,552
$8,426,466,437
Templeton
Income
Trust
25
franklintempleton.com
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
Templeton
Global
Bond
Fund
1.
Organization
and
Significant
Accounting
Policies
Templeton
Income
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of four separate
funds
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
Templeton
Global
Bond
Fund
(Fund)
is
included
in
this
report.
The
Fund
offers five
classes
of
shares:
Class
A,
Class
C,
Class
R,
Class
R6
and
Advisor
Class. Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees.
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation 
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust's Board
of
Trustees
(the
Board),
the Fund's
administrator
has
responsibility
for
oversight
of
valuation,
including
leading
the
cross-functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Debt
securities
generally
trade
in
the over-the-counter
(OTC)
market
rather
than
on
a
securities
exchange.
The
Fund's
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
Certain
derivative
financial
instruments
trade
in
the
OTC
market.
The
Fund's
pricing
services
use
various
techniques
including
industry
standard
option
pricing
models
and
proprietary
discounted
cash
flow
models
to
determine
the
fair
value
of
those
instruments.
The
Fund's
net
benefit
or
obligation
under
the
derivative
contract,
as
measured
by
the
fair
value
of
the
contract,
is
included
in
net
assets.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
26
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
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
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Derivative
Financial
Instruments
The
Fund invested
in
derivative
financial
instruments
in
order
to
manage
risk
or
gain
exposure
to
various
other
investments
or
markets.
Derivatives
are
financial
contracts
based
on
an
underlying
or
notional
amount,
require
no
initial
investment
or
an
initial
net
investment
that
is
smaller
than
would
normally
be
required
to
have
a
similar
response
to
changes
in
market
factors,
and
require
or
permit
net
settlement.
Derivatives
contain
various
risks
including
the
potential
inability
of
the
counterparty
to
fulfill
their
obligations
under
the
terms
of
the
contract,
the
potential
for
an
illiquid
secondary
market,
and/or
the
potential
for
market
movements
which
expose
the
Fund
to
gains
or
losses
in
excess
of
the
amounts
shown
in
the
Statement
of
Assets
and
Liabilities.
Realized
gain
and
loss
and
unrealized
appreciation
and
depreciation
on
these
contracts
for
the
period
are
included
in
the
Statement
of
Operations.
Derivative
counterparty
credit
risk
is
managed
through
a
formal
evaluation
of
the
creditworthiness
of
all
potential
counterparties.
The
Fund
attempts
to
reduce its
exposure
to
counterparty
credit
risk
on
OTC
derivatives,
whenever
possible,
by
entering
into
International
Swaps
and
Derivatives
Association
(ISDA)
master
agreements
with
certain
counterparties.
These
agreements
contain
various
provisions,
including
but
not
limited
to
collateral
requirements,
events
of
default,
or
early
termination.
Termination
events
applicable
to
the
counterparty
include
certain
deteriorations
in
the
credit
quality
of
the
counterparty.
Termination
events
applicable
to
the Fund
include
failure
of
the
Fund
to
maintain
certain
net
asset
levels
and/or
limit
the
decline
in
net
assets
over
various
periods
of
time.
In
the
event
of
default
or
early
termination,
the
ISDA
master
agreement
gives
the
non-defaulting
party
the
right
to
net
and
close-out
all
transactions
traded,
whether
or
not
arising
under
the
ISDA
agreement,
to
one
net
amount
payable
by
one
counterparty
to
the
other.
However,
absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
Early
termination
by
the
counterparty
may
result
in
an
immediate
payment
by
the
Fund
of
any
net
liability
owed
to
that
counterparty
under
the
ISDA
agreement.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
terms
are
contract
specific
for
OTC
derivatives.
For
OTC
derivatives
traded
under
an
ISDA
master
agreement,
posting
of
collateral
is
required
by
either
the
Fund
or
the
applicable
counterparty
if
the
total
net
exposure
of
all
OTC
derivatives
with
the
applicable
counterparty
exceeds
the
minimum
transfer
amount,
which
typically
ranges
from
$100,000
to
$250,000,
and
can
vary
depending
on
the
counterparty
and
the
type
of
agreement.
Generally,
collateral
is
determined
at
the
close
of
Fund
business
each
day
and
any
additional
collateral
required
due
to
changes
in
derivative
values
may
be
delivered
by
the
Fund
or
the
counterparty
the
next
business
day,
or
within
a
few
business
days.
Collateral
pledged
and/or
received
by
the
Fund,
if
any,
is
held
in
segregated
accounts
with
the
Fund’s
custodian/counterparty
broker
and
can
be
in
the
form
of
cash
and/or
securities.
Unrestricted
cash
may
be
invested
according
to
the
Fund's
investment
objectives.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
1.
Organization
and
Significant
Accounting
Policies
(continued)
b.
Foreign
Currency
Translation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
27
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
The
Fund entered
into
OTC
forward
exchange
contracts
primarily
to
manage
and/or
gain
exposure
to
certain
foreign
currencies.
A
forward
exchange
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
a
foreign
currency at
a
specific
exchange
rate
on
a
future
date.
The
Fund
purchased
or
wrote
OTC
option
contracts
primarily
to
manage
and/or
gain
exposure
to
foreign
exchange
rate
risk.
An
option
is
a
contract
entitling
the
holder
to
purchase
or
sell
a
specific
amount
of
shares
or
units
of
an
asset
or
notional
amount
of
a
swap
(swaption),
at
a
specified
price.
When
an
option
is
purchased
or
written,
an
amount
equal
to
the
premium
paid
or
received
is
recorded
as
an
asset
or
liability,
respectively.
Upon
exercise
of
an
option,
the
acquisition
cost
or
sales
proceeds
of
the
underlying
investment
is
adjusted
by
any
premium
received
or
paid.
Upon
expiration
of
an
option,
any
premium
received
or
paid
is
recorded
as
a
realized
gain
or
loss.
Upon
closing
an
option
other
than
through
expiration
or
exercise,
the
difference
between
the
premium
received
or
paid
and
the
cost
to
close
the
position
is
recorded
as
a
realized
gain
or
loss.
See
Note
10
regarding
other
derivative
information.
d.
Restricted
Cash
At
June
30,
2022, the
Fund
held
restricted
cash
in
connection
with
investments
in
certain
derivative
securities.
Restricted
cash
is
held
in
a
segregated
account
with
the
Fund’s
custodian
and
is
reflected
in
the
Statement
of
Assets
and
Liabilities.
e.
Restricted
Currency
At
June
30,
2022,
the
Fund
held
currencies
in
certain
markets
in
which
the
ability
to
repatriate
such
currency
is
limited.
As
a
result
of
such
limitations
on
repatriation,
the
Fund
may
incur
substantial
delays
in
gaining
access
to
these
assets
and
may
be
exposed
to
potential
adverse
movements
in
currency
value.
f.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
The
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
June
30,
2022,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
g.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
28
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
Inflation-indexed
bonds
are
adjusted
for
inflation
through
periodic
increases
or
decreases
in
the
security's
interest
accruals,
face
amount,
or
principal
redemption
value,
by
amounts
corresponding
to
the
rate
of
inflation
as
measured
by
an
index.
Any
increase
or
decrease
in
the
face
amount
or
principal
redemption
value
will
be
included
as
inflation
principal
adjustments
in
the
Statement
of
Operations.
h.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
i.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Fund,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
June
30,
2022,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Six
Months
Ended
June
30,
2022
Year
Ended
December
31,
2021
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
12,965,386
$112,108,477
61,352,126
$571,486,366
Shares
issued
in
reinvestment
of
distributions
..........
9,852,392
84,117,424
21,080,149
195,552,208
Shares
redeemed
...............................
(53,243,799)
(460,016,593)
(173,852,402)
(1,610,924,197)
Net
increase
(decrease)
..........................
(30,426,021)
$(263,790,692)
(91,420,127)
$(843,885,623)
Class
C
Shares:
Shares
sold
...................................
569,211
$4,938,453
1,917,322
$17,969,247
Shares
issued
in
reinvestment
of
distributions
..........
560,379
4,812,776
2,051,987
19,259,827
Shares
redeemed
a
..............................
(6,067,769)
(52,632,208)
(48,119,953)
(449,702,462)
Net
increase
(decrease)
..........................
(4,938,179)
$(42,880,979)
(44,150,644)
$(412,473,388)
Class
R
Shares:
Shares
sold
...................................
1,113,631
$9,610,693
3,459,188
$32,312,942
Shares
issued
in
reinvestment
of
distributions
..........
392,259
3,349,661
798,274
7,402,232
Shares
redeemed
...............................
(2,709,950)
(23,475,117)
(6,110,531)
(56,809,685)
Net
increase
(decrease)
..........................
(1,204,060)
$(10,514,763)
(1,853,069)
$(17,094,511)
1.
Organization
and
Significant
Accounting
Policies
(continued)
g.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
29
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
June
30,
2022,
the
annualized
gross
effective
investment
management
fee
rate
was 0.493%
of
the
Fund’s
average daily
net
assets. 
Six
Months
Ended
June
30,
2022
Year
Ended
December
31,
2021
Shares
Amount
Shares
Amount
Class
R6
Shares:
Shares
sold
...................................
11,407,853
$98,008,570
38,421,013
$362,388,556
Shares
issued
in
reinvestment
of
distributions
..........
2,682,489
22,785,424
7,914,365
73,490,988
Shares
redeemed
...............................
(23,193,392)
(200,716,829)
(172,067,560)
(1,607,174,096)
Net
increase
(decrease)
..........................
(9,103,050)
$(79,922,835)
(125,732,182)
$(1,171,294,552)
Advisor
Class
Shares:
Shares
sold
...................................
45,078,471
$389,420,103
138,423,255
$1,290,069,401
Shares
issued
in
reinvestment
of
distributions
..........
9,752,965
82,906,131
28,836,253
266,893,652
Shares
redeemed
...............................
(126,452,160)
(1,089,465,072)
(476,325,785)
(4,390,800,788)
Net
increase
(decrease)
..........................
(71,620,724)
$(617,138,838)
(309,066,277)
$(2,833,837,735)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.650%
Up
to
and
including
$200
million
0.585%
Over
$200
million,
up
to
and
including
$700
million
0.550%
Over
$700
million,
up
to
and
including
$1.2
billion
0.525%
Over
$1.2
billion,
up
to
and
including
$1.3
billion
0.475%
Over
$1.3
billion,
up
to
and
including
$35
billion
0.470%
Over
$35
billion,
up
to
and
including
$50
billion
0.465%
Over
$50
billion,
up
to
and
including
$65
billion
0.460%
Over
$65
billion,
up
to
and
including
$80
billion
0.455%
In
excess
of
$80
billion
2.
Shares
of
Beneficial
Interest
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
30
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by
Advisers
based
on
the
Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund’s
Class A reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund’s
Class C
and
R
compensation
distribution
plans,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
Fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
period:
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
June
30,
2022,
the
Fund
paid
transfer
agent
fees
of
$7,237,037,
of
which $2,218,127
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$13,215
CDSC
retained
..............................................................................
$17,930
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
31
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
June
30,
2022,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
April
30,
2023.
4.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
 At
December
31,
2021,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Fund
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
December
31,
2021,
the
Fund
deferred
late-year
ordinary
losses
of
$77,284,473.
At
June
30,
2022,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
foreign
currency
transactions,
foreign
capital
gains
tax,
bond
discounts
and
premiums,
tax
straddles
and
inflation
related
adjustments
on
foreign
securities.
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
Global
Bond
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.895%
$
509,242,008
$
1,518,454,500
$
(1,411,662,255)
$
—
$
—
$
616,034,253
616,034,253
$
360,939
Total
Affiliated
Securities
...
$509,242,008
$1,518,454,500
$(1,411,662,255)
$—
$—
$616,034,253
$360,939
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$26,605,105
Long
term
................................................................................
2,149,582,805
Total
capital
loss
carryforwards
...............................................................
$2,176,187,910
Cost
of
investments
..........................................................................
$8,818,180,741
Unrealized
appreciation
........................................................................
$355,406,066
Unrealized
depreciation
........................................................................
(2,662,943,182)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(2,307,537,116)
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
32
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
5.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2022,
aggregated
$354,104,703
and
$1,494,042,206,
respectively.
6.
Credit
Risk
At
June
30,
2022,
the
Fund
had
15.0%
of
its
portfolio
invested
in
high
yield
securities
or
other
securities
rated
below
investment
grade
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
7.
Concentration
of
Risk
Investments
in
issuers
domiciled
or
with
significant
operations
in
developing
or
emerging
market
countries
may
be
subject
to
higher
risks
than
investments
in
developed
countries.
These
risks
include
fluctuating
currency
values,
underdeveloped
legal
or
business
systems,
and
changing
local
and
regional
economic,
political
and
social
conditions,
which
may
result
in
greater
market
volatility.
In
addition,
certain
foreign
securities
may
not
be
as
liquid
as
U.S.
securities.
Currencies
of
developing
or
emerging
market
countries
may
be
subject
to
significantly
greater
risks
than
currencies
of
developed
countries,
including
the
potential
inability
to
repatriate
those
currencies
into
U.S.
dollars.
At
June
30,
2022,
the
Fund
had
2.9%
of
its
net
assets
denominated
in
Argentine
Pesos. Argentina
has
restricted
currency
repatriation
since
September
2019,
and
had
restructured
certain
issues
of
its
debt.
Political
and
economic
conditions
in
Argentina
could
continue
to
affect
the
value
of
the
Fund's
holdings.
8.
Geopolitical
Risk
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
9.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
10.
Other
Derivative
Information
At
June
30,
2022,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
Global
Bond
Fund
Foreign
exchange
contracts
..
Investments
in
securities,
at
value
$
5,686,431
a
Options
written,
at
value
$
1,336,977
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
33
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
For
the
period
ended
June
30,
2022,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
period
ended
June
30,
2022,
the
average
month
end
notional
amount
of
options
represented
$1,516,870,086.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$7,265,222,587.
At
June
30,
2022,
OTC
derivative
assets
and
liabilities
are
as
follows:
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Templeton
Global
Bond
Fund
(continued)
Unrealized
appreciation
on
OTC
forward
exchange
contracts
$
132,338,282
Unrealized
depreciation
on
OTC
forward
exchange
contracts
$
147,271,274
Total
....................
$138,024,713
$148,608,251
a
Purchased
option
contracts
are
included
in
investments
in
securities,
at
value
in
the
Statement
of
Assets
and
Liabilities.
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Period
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Period
Templeton
Global
Bond
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Foreign
exchange
contracts
.....
Investments
$(29,290,110)
a
Investments
$17,298,810
a
Written
options
16,581,803
Written
options
(12,660,286)
Forward
exchange
contracts
(10,179,595)
Forward
exchange
contracts
(9,356,174)
Total
.......................
$(22,887,902)
$(4,717,650)
a
Purchased
option
contracts
are
included
in
net
realized
gain
(loss)
from
investments
and
net
change
in
unrealized
appreciation
(depreciation)
on
investments
in
the
Statement
of
Operations.
Gross
Amounts
of
Assets
and
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Assets
a
Liabilities
a
Templeton
Global
Bond
Fund
Derivatives
Forward
exchange
contracts
.............................
$
132,338,282
$
147,271,274
Options
purchased
.....................................
5,686,431
—
Options
written
........................................
—
1,336,977
Total
.............................................
$138,024,713
$148,608,251
a
Absent
an
event
of
default
or
early
termination,
OTC
derivative
assets
and
liabilities
are
presented
gross
and
not
offset
in
the
Statement
of
Assets
and
Liabilities.
10.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
34
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
At
June
30,
2022,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
At
June
30,
2022,
OTC
derivative
liabilities,
which
may
be
offset
against
OTC
derivative
assets
and
collateral
pledged
to
the
counterparty,
are
as
follows:
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Assets
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Received
a
Cash
Collateral
Received
Net
Amount
(Not
less
than
zero)
Templeton
Global
Bond
Fund
Counterparty
BNDP
...................
$1,735,589
$(1,592,173)
$—
$—
$143,416
BOFA
....................
396,897
(396,897)
—
—
—
BZWS
...................
3,927,814
—
(3,069,918)
—
857,896
CITI
.....................
67,045,237
(53,610,789)
—
(12,540,000)
894,448
DBAB
...................
7,335,769
(7,335,769)
—
—
—
GSCO
...................
—
—
—
—
—
HSBK
...................
43,251,065
(6,725,245)
(5,797,717)
(27,951,750)
2,776,353
JPHQ
...................
8,388,471
(8,388,471)
—
—
—
MSCO
...................
5,943,871
(4,154,367)
—
—
1,789,504
Total
...................
$138,024,713
$(82,203,711)
$
(8,867,635)
$(40,491,750)
$6,461,617
$
1
Amounts
Not
Offset
in
the
Statement
of
Assets
and
Liabilities
Gross
Amounts
of
Liabilities
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
Available
for
Offset
Financial
Instruments
Collateral
Pledged
Cash
Collateral
Pledged
b
Net
Amount
(Not
less
than
zero)
Templeton
Global
Bond
Fund
Counterparty
BNDP
...................
$1,592,173
$(1,592,173)
$—
$—
$—
BOFA
....................
446,373
(396,897)
—
(49,476)
—
BZWS
...................
—
—
—
—
—
CITI
.....................
53,610,789
(53,610,789)
—
—
—
DBAB
...................
24,063,814
(7,335,769)
—
(15,490,032)
1,238,013
GSCO
...................
17,572,224
—
—
(17,572,224)
—
HSBK
...................
6,725,245
(6,725,245)
—
—
—
JPHQ
...................
40,443,266
(8,388,471)
—
(32,054,795)
—
MSCO
...................
4,154,367
(4,154,367)
—
—
—
Total
...................
$148,608,251
$(82,203,711)
$—
$(65,166,527)
$1,238,013
10.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
35
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
36
.
11.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
3,
2023.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
period
ended
June
30,
2022,
the Fund
did
not
use
the
Global
Credit
Facility.
12.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
June
30,
2022,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
a
At
June
30,
2022,
the
Fund
received
U.S.
Treasury
Bonds
and
Notes
and
U.K
Treasury
Inflation-Linked
Gilt
Bonds
as
collateral
for
derivatives.
b
In
some
instances,
the
collateral
amounts
disclosed
in
the
table
above
were
adjusted
due
to
the
requirement
to
limit
collateral
amounts
to
avoid
the
effect
of
over
collateralization.
Actual
collateral
received
and/or
pledged
may
be
more
than
the
amounts
disclosed
herein.
10.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
(unaudited)
36
franklintempleton.com
Semiannual
Report
Templeton
Global
Bond
Fund
(continued)
13.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Level
1
Level
2
Level
3
Total
Templeton
Global
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
....
$
—
$
3,838,207,691
$
—
$
3,838,207,691
U.S.
Government
and
Agency
Securities
.......
—
979,406,543
—
979,406,543
Options
purchased
.......................
—
5,686,431
—
5,686,431
Short
Term
Investments
...................
616,034,253
1,087,578,677
—
1,703,612,930
Total
Investments
in
Securities
...........
$616,034,253
$5,910,879,342
$—
$6,526,913,595
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
132,338,282
$
—
$
132,338,282
Restricted
Currency
(ARS)
.................
—
44,480,500
—
44,480,500
Total
Other
Financial
Instruments
.........
$—
$176,818,782
$—
$176,818,782
Receivables:
Interest
(ARS)
...........................
$—
$3,630,958
$—
$3,630,958
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
1,336,977
$
—
$
1,336,977
Forward
exchange
contracts
................
—
147,271,274
—
147,271,274
Total
Other
Financial
Instruments
.........
$—
$148,608,251
$—
$148,608,251
Payables:
Deferred
Tax
(ARS)
.......................
$—
$17,119
$—
$17,119
Counterparty
BNDP
BNP
Paribas
SA
BOFA
Bank
of
America
Corp.
BZWS
Barclays
Bank
plc
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
Currency
ARS
Argentine
Peso
BRL
Brazilian
Real
CAD
Canadian
Dollar
COP
Colombian
Peso
EUR
Euro
GBP
British
Pound
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
SGD
Singapore
Dollar
THB
Thai
Baht
USD
United
States
Dollar
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Shareholder
Information
37
franklintempleton.com
Semiannual
Report
BOARD
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENTS
TEMPLETON
INCOME
TRUST
Templeton
Global
Bond
Fund
(Fund)
At
an
in-person
meeting
held
on
February
28,
2022
(Meeting),
the
Board
of
Trustees
(Board)
of
Templeton
Income
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
investment
management
agreement
between
Franklin
Advisers,
Inc.
(Manager)
and
the
Trust,
on
behalf
of
the
Fund
(Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
the
Management
Agreement.
In
considering
the
continuation
of
the
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
the
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
the
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
virtual
contract
renewal
meeting
at
which
the
Independent
Trustees
first
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters.
At
that
meeting,
they
met
with
senior
leadership
of
the
global
macro
funds
regarding
the
performance
of
the
funds;
and
met
with
management
to
request
additional
information
that
the
Independent
Trustees
reviewed
and
considered
at
the
Meeting.
The
Board
later
had
an
opportunity
for
an
expanded
discussion
with
the
leadership
of
the
global
macro
funds
to
hear
about
strategies
to
deliver
improved
investment
returns
to
shareholders.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
the
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
the
Manager;
(ii)
the
investment
performance
of
the
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
the
Manager
and
its
affiliates
from
the
relationship
with
the
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
the
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
In
approving
the
continuance
of
the
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
the
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
the
Manager,
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
the
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
the
Manager
and
its
affiliates;
and
management
fees
charged
by
the
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Fund
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Fund.
The
Board
noted
management’s
continued
commitment
to
providing
the
resources
important
to
enhancing
the
investment
process
of
the
global
macro
funds
for
the
benefit
of
the
funds
and
their
shareholders.
The
Board
also
acknowledged
the
ongoing
integration
of
the
Legg
Mason
family
of
funds
into
the
FT
family
of
funds
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
including
various
regulatory
initiatives
and
recent
geopolitical
concerns.
Templeton
Income
Trust
Shareholder
Information
38
franklintempleton.com
Semiannual
Report
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Manager’s
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Fund
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
being
a
global
leader
in
stewardship
and
sustainability
and
the
recent
addition
of
a
senior
executive
focused
on
environmental,
social
and
governance
and
climate
control
initiatives.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
the
Manager
and
its
affiliates
to
the
Fund
and
its
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
the
Fund
over
various
time
periods
ended
November
30,
2021.
The
Board
considered
the
performance
returns
for
the
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
further
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
the
Fund’s
performance
results
is
below.
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
retail
and
institutional
international
income
funds.
The
Board
noted
that
the
Fund’s
annualized
income
return
for
the
one-,
three-,
five-
and
10-year
periods
was
above
the
medians
and
in
the
first
quintile
(best)
of
its
Performance
Universe.
The
Board
also
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-
and
five-year
periods
was
below
the
median
of
its
Performance
Universe
and
for
the
10-year
period
was
equal
to
the
median
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
Fund’s
relative
underperformance
in
comparison
to
its
Performance
Universe
over
the
reporting
periods
was
largely
due
to
the
Fund’s
performance
in
2019
and
2020.
Management
further
explained
that
the
underperformance
was
driven
by
the
Fund’s
defensive
positioning
amid
the
pandemic,
which
restrained
the
Fund’s
participation
in
the
risk
asset
rallies
in
the
second
half
of
2020.
Management
also
explained
that
the
Fund’s
long
exposure
to
emerging
market
local
currency
assets
and
short
exposure
to
US
Treasury
duration
during
the
three-
and
five-year
reporting
periods
detracted
from
the
Fund’s
relative
performance
versus
the
Performance
Universe.
Management
further
explained
that
after
vaccines
were
approved
toward
the
end
of
2020
management
significantly
repositioned
the
Fund’s
strategies
back
towards
risk
allocations
and
expanded
on
that
risk
positioning
throughout
2021,
emphasizing
specific
currencies
against
the
US
dollar
and
the
euro,
as
well
as
local
currency
bonds
in
a
select
set
of
emerging
markets.
Management
reported
that
this
resulted
in
notable
improvement
in
the
Fund’s
performance
for
the
one-year
period
ended
January
31,
2022.
Management
further
explained
the
steps
the
portfolio
management
team
is
taking
in
an
effort
to
improve
the
Fund’s
peer
rankings
across
all
reporting
periods
and
reduce
the
impact
of
the
Fund’s
relative
underperformance
in
2019
and
2020.
The
Board
noted
management’s
continued
confidence
in
the
Fund’s
portfolio
management
team,
commitment
to
an
enhanced
investment
process
for
the
benefit
of
Fund
shareholders
and
commitment
to
have
ongoing
conversations
with
the
Board
regarding
management’s
strategies
for
addressing
the
performance
of
the
global
macro
funds
as
a
whole.
Based
on
the
foregoing,
the
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-
year
period,
and
that
management’s
efforts
and
the
recent
improved
performance
of
the
Fund
should
continue
to
be
closely
monitored.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
the
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
the
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
or
semi-annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Templeton
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Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges,
and
the
actual
total
expense
ratio,
for
comparative
consistency,
was
shown
for
Class
A
shares
for
the
Fund
and
for
each
other
fund
in
the
Expense
Group.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
The
Expense
Group
for
the
Fund
included
the
Fund
and
six
other
international
income
funds.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
the
Fund
were
below
the
medians
and
in
the
first
quintile
(least
expensive)
of
its
Expense
Group.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
the
Manager
and
its
affiliates
in
connection
with
the
operation
of
the
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
provided
by
the
Manager
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2021,
being
the
most
recent
fiscal
year-
end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Fund’s
profitability
report
presentations
from
prior
years.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
by
the
Manager
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Fund’s
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
the
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
the
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Manager
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Fund,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
the
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
the
Manager
and
its
affiliates
from
providing
services
to
the
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
the
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
the
Manager
may
realize
economies
of
scale,
if
any,
as
the
Fund
grows
larger
and
whether
the
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints,
which
operate
generally
to
share
any
economies
of
scale
with
the
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
the
Manager’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
the
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
noted
that
the
Fund
had
experienced
a
decrease
in
assets
and
would
not
be
expected
to
demonstrate
additional
economies
of
scale
in
the
near
term,
but
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
the
Manager
and
its
affiliates,
the
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
the
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
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manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
Franklin
Templeton
and
Legg
Mason
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Legal,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2022,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2021.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Schedule
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Templeton
Income
Trust
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41
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Semiannual
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Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
406
S
08/22
©
2022
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Semiannual
Report
and
Shareholder
Letter
Templeton
Global
Bond
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Item 2. Code of Ethics. 
 
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
(c) N/A
 
(d) N/A
 
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
 
Item 3. Audit Committee Financial Expert.
 
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
 
(2) The audit committee financial experts are Ann Torre Bates and David W. Niemiec and they are "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
 
 
 
Item 4.
Principal Accountant Fees and Services.       N/A        
 
Item 5. Audit Committee
of Listed Registrants.       
N/A
 
 
Item 6. Schedule of Investments.                     
N/A
 
 
Item 7
. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.         N/A
 
 
Item 8. Portfolio Managers of Closed-End Management Investment Companies.  N/A
 
 
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.        N/A
 
 
Item 10. Submission of Matters to a Vote of Security Holders.
 
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
 
 
Item 11. Controls and Procedures.
 
(a) Evaluation of Disclosure Controls and Procedures.
The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSRS, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
 
(b) Changes in Internal Controls.
There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
 
 
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                                               N/A
 
 
Item 13. Exhibits.
 
(a)(1) Code of Ethics
 
 
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
 
(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
TEMPLETON INCOME TRUST
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date  August 26, 2022
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date  August 26, 2022
 
 
By S\CHRISTOPHER KINGS______________________
      Christopher Kings
      Chief Financial Officer, Chief Accounting Officer and Treasurer
Date  August 26, 2022