N-CSR 1 primary-document.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM N-CSR
 
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)
 
Craig S. Tyle, 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:  12/31/20__
 
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.)
 
A copy of the notice transmitted to shareholders in reliance on Rule 30e-3 under the 1940 Act that contains disclosures specified by paragraph (c)(3) of that rule is included in the Annual Report. Not Applicable.
 
 
 
Annual
Report
and
Shareholder
Letter
Templeton
Global
Bond
Fund
A
Series
of
Templeton
Income
Trust
December
31,
2020
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Not
part
of
the
annual
report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
12
months
ended
December
31,
2020,
the
novel
coronavirus
pandemic
hindered
the
global
economy.
Starting
in
March,
worldwide
efforts
to
slow
the
infection
rate
thwarted
global
economic
activity,
and
central
banks
acted
swiftly
to
maintain
financial
stability.
The
U.S.
Federal
Reserve
enacted
emergency
rate
cuts
and
authorized
open-
ended
purchasing
of
government-backed
and
corporate
bonds
to
bolster
markets,
and
the
European
Central
Bank’s
Pandemic
Emergency
Purchase
Programme
included
private
and
public
sector
securities.
These
measures
helped
U.S.
and
eurozone
economic
growth
to
resume
in
2020’s
third
quarter
after
two
quarters
of
contraction.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
+10.11%
and
+5.52%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
decreased
against
most
foreign
currencies
during
the
period.
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
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
advisors
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
annual
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
December
31,
2020
,
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.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Annual
Report
2
Contents
Annual
Report
Templeton
Global
Bond
Fund
3
Performance
Summary
7
Your
Fund’s
Expenses
10
Financial
Highlights
and
Statement
of
Investments
11
Financial
Statements
30
Notes
to
Financial
Statements
34
Report
of
Independent
Registered
Public
Accounting
Firm
50
Tax
Information
51
Board
Members
and
Officers
52
Shareholder
Information
57
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Templeton
Global
Bond
Fund
This
annual
report
for
Templeton
Global
Bond
Fund
covers
the
fiscal
year
ended
December
31,
2020
.
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
U.S.
and
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
12
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-4.41%
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
+10.11%
in
U.S.
dollar
terms
for
the
same
period.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
on
page
7
.
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
12-month
period
ended
December
31,
2020,
started
optimistically,
as
a
phase
one
trade
deal
between
the
U.S.
and
China
appeared
to
bolster
market
sentiment,
driving
risk
asset
valuations
higher
in
several
markets
across
the
globe.
However,
conditions
changed
radically
and
rapidly
by
late
February,
as
the
novel
coronavirus
(COVID-19)
pandemic
upended
economies
and
financial
markets
around
the
world.
Lockdown
orders
from
governments
trying
to
“flatten
the
curve”
(i.e.,
stem
the
rate
of
infection)
ultimately
brought
entire
countries,
regions
and
continents
to
an
economic
standstill
in
March
and
April.
The
speed
and
pervasiveness
of
the
economic
shocks
were
unprecedented.
There
is
no
historical
comparison
for
the
magnitude
of
aggregate
demand
that
was
destroyed,
nor
the
magnitude
of
job
losses
in
such
a
compressed
timescale.
Risk
aversion
rapidly
escalated
to
crisis
levels
and
deepened
throughout
March,
driving
correlations
to
1.0
across
multiple
asset
classes
as
investors
shed
risk
and
moved
into
perceived
safe
havens.
Credit
markets
experienced
substantial
price
volatility,
with
the
lower-rated
credit
tiers
bearing
the
brunt
of
the
selloffs.
The
U.S.
Federal
Reserve
(Fed)
responded
quickly
to
the
deepening
crisis
with
two
emergency
rate
cuts
in
March,
the
second
of
which
dropped
the
federal
funds
target
rate
100
basis
points
(bps)
to
the
zero
bound
that
was
used
during
the
2008
global
financial
crisis
(GFC).
The
Fed
also
cut
reserve
requirements
and
encouraged
financial
institutions
to
borrow
directly
from
the
discount
window.
Growing
liquidity
strains
throughout
financial
markets
in
March
prompted
the
Fed
to
restart
liquidity
programs
that
had
been
created
during
the
GFC,
such
as
the
Commercial
Paper
Funding
Facility
and
the
Primary
Dealer
Credit
Facility.
On
March
23,
the
Fed
took
its
financial
market
interventions
beyond
the
scope
of
the
GFC
programs
by
creating
corporate
lending
programs,
and
announcing
its
intentions
to
support
lending
to
small-
and
medium-sized
businesses
through
the
newly
created
Main
Street
Business
Lending
Program.
The
Fed
also
pledged
to
buy
unlimited
government
bonds,
abandoning
the
previous
quantitative
easing
(QE)
targets
it
had
announced
a
week
earlier
on
March
15.
The
heightened
demand
for
U.S.
dollars
(USD)
Portfolio
Composition
12/31/20
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
58.3%
U.S.
Government
and
Agency
Securities
20.8%
Short-Term
Investments
&
Other
Net
Assets*
20.9%
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Templeton
Global
Bond
Fund
4
franklintempleton.com
Annual
Report
around
the
world
also
led
the
Fed
to
expand
its
liquidity
swaps
program
with
foreign
central
banks
beyond
the
five
banks
in
its
standing
facility.
On
the
U.S.
fiscal
side,
Congress
passed
the
CARES
Act
(Coronavirus
Aid,
Relief,
and
Economic
Security)
on
March
27,
a
USD$2.2
trillion
fiscal
relief
program
designed
to
provide
loans
to
businesses,
income
support
and
unemployment
benefits
to
individuals,
and
funding
for
hospitals
and
public
health
services.
It
was
the
largest
economic
relief
bill
in
U.S.
history.
In
Europe,
the
European
Central
Bank
(ECB)
unveiled
the
€750
billion
Pandemic
Emergency
Purchase
Programme
(PEPP)
in
an
unscheduled
mid-week
announcement
on
March
18.
ECB
President
Christine
Lagarde
commented
that,
“there
are
no
limits
to
our
commitment
to
the
euro.
We
are
determined
to
use
the
full
potential
of
our
tools,
within
our
mandate.”
PEPP
appeared
geared
to
support
the
more
vulnerable
states,
as
the
program
has
unprecedented
flexibility
to
buy
a
wide
range
of
eligible
securities,
including
Greek
and
Italian
sovereign
debt,
as
well
as
corporate
commercial
paper.
The
European
Commission
passed
its
€750
billion
recovery
fund
in
July,
which
was
largely
viewed
by
markets
as
a
major
step
towards
greater
fiscal
solidarity
across
the
euro
area.
In
the
second
quarter
of
2020,
global
financial
markets
rebounded
from
the
extreme
lows
in
March,
as
extraordinary
measures
from
central
banks
and
governments
appeared
to
improve
market
confidence.
Additionally,
regional
economies
began
to
incrementally
reopen
and
the
improving
economic
data
appeared
to
bolster
optimism
that
the
worst
of
the
economic
shocks
had
passed.
Risk
assets
rallied
and
credit
spreads
tightened
in
many
sectors
during
the
second
quarter,
returning
to
levels
last
seen
in
early
March
and
late
February.
Those
trends
largely
extended
through
July
and
August
as
strengthening
economic
activity
and
profound
policy
interventions
continued
to
fuel
rallies
across
global
financial
markets
through
much
of
the
summer.
However,
many
risk
assets
appeared
detached
from
underlying
economic
fundamentals
due
to
extraordinary
monetary
policies.
Risk
assets
eventually
pulled
back
from
their
summer
high
points
in
September
2020,
as
rising
cases
of
COVID-19
appeared
to
concern
investors,
particularly
as
areas
of
Europe
and
Asia
returned
to
various
mobility
restrictions.
Developed
market
sovereign
bond
yields
fluctuated
during
the
summer
months,
rising
on
reflation
expectations
but
dropping
in
September
as
broad
risk
aversion
returned
to
global
financial
markets.
Additionally,
economic
recoveries
in
many
regions
showed
signs
of
levelling
off
in
August
and
September,
demonstrating
that
the
improvements
in
the
late
spring
and
summer
months
were
rebounds
from
the
extreme
low
points
in
March
and
April,
not
trends
that
could
be
extrapolated
through
upcoming
quarters.
Yoshihide
Suga
was
confirmed
as
the
new
prime
minister
of
Japan
on
September
16,
following
Shinzo
Abe's
resignation
on
August
28.
Abe
had
been
prime
minister
since
December
2012.
We
expected
political
continuity
in
the
near
term,
as
Suga
is
an
Abe
loyalist
who
was
often
credited
with
pushing
through
many
of
Abe’s
critical
domestic
reforms.
In
October
2020,
“risk-on”
sentiment
initially
returned
to
global
financial
markets,
with
risk
assets
rallying
during
the
first
couple
weeks
of
the
month
before
broad
risk
aversion
sharply
returned,
leading
to
significant
price
adjustments
in
various
credit
sectors
during
the
second
half
of
the
month.
Investors
appeared
concerned
over
resurgent
waves
of
COVID-19
cases
around
the
world.
Market
sentiments
ultimately
improved
in
November
on
apparent
optimism
over
promising
vaccine
trials
and
prospects
for
a
potential
global
economic
recovery
in
2021.
Risk
assets
finished
the
final
months
of
the
year
on
broad-based
rallies
as
initial
vaccine
distributions
commenced.
However,
market
optimism
in
the
fourth
quarter
ran
in
stark
contrast
to
the
worsening
pandemic,
as
COVID-19
infections
surged
to
record
levels
in
areas
of
Europe,
the
U.S.
and
Latin
America
in
the
waning
months
of
the
year,
with
a
highly
contagious
variant
of
the
virus
surfacing
in
dozens
of
countries.
The
harsh
realities
of
a
worldwide
health
crisis
and
deepening
economic
hardship
continued
to
have
profound
consequences
for
lives
and
livelihoods
around
the
world.
In
late
December
2020,
the
U.S.
government
passed
a
USD$900
billion
support
package
that
extended
unemployment
benefits
until
mid-March
2021
and
provides
one-time
relief
payments
of
USD$600
to
most
citizens.
Additional
fiscal
stimulus
appeared
likely
with
the
upcoming
change
in
the
U.S.
government.
The
Fed
continued
to
maintain
low
rates
as
well
as
its
emergency
support
program
from
March
through
the
end
of
the
year,
continuously
reaffirming
its
commitment
to
use
its
“full
range
of
tools
to
support
the
U.S.
economy”
at
each
policy
meeting.
The
ECB
also
kept
monetary
policy
unchanged
through
the
end
of
the
year,
with
the
main
refinancing
operations
rate
remaining
at
0.0%,
and
the
main
deposit
facility
rate
remaining
at
-0.5%.
The
ECB
increased
the
size
of
the
PEPP
program
to
€1.85
trillion
in
December,
after
previously
raising
it
to
€1.35
trillion
in
June.
The
U.K.
and
the
European
Union
also
settled
on
final
terms
for
post-Brexit
trade
agreements
in
the
last
week
of
the
year.
Templeton
Global
Bond
Fund
5
franklintempleton.com
Annual
Report
The
Bank
of
Japan
(BOJ)
also
made
no
changes
to
its
rates
policy
in
2020.
Overnight
interest
rates
remained
at
0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
remained
at
0.0%.
In
the
second
quarter,
the
BOJ
removed
QE
caps
and
quadrupled
the
size
of
its
corporate
debt
purchases.
It
also
increasingly
focused
on
ensuring
businesses
had
ample
access
to
capital
through
various
loan
programs,
increasing
its
lending
program
to
USD$1
trillion.
However,
despite
the
BOJ's
efforts
to
drive
inflation
higher
during
the
Abenomics
era,
deflationary
pressures
returned,
with
core
inflation
dropping
to
-0.4%
year-over-
year
in
August
and
falling
further
to
-0.9%
in
November.
The
BOJ
announced
in
December
that
it
had
launched
a
comprehensive
review
of
its
monetary
framework,
scheduled
to
arrive
in
March
2021.
We
continued
to
expect
the
Japanese
yen
to
appreciate
against
the
USD
during
the
period,
on
stable
rate
differentials
and
Japan’s
strong
external
balance.
Nearly
every
country
in
the
world
declared
some
form
of
fiscal
response
to
the
economic
crisis
in
2020,
with
most
countries
pursuing
programs
that
went
beyond
the
measures
they
deployed
during
the
GFC.
Debt-to-GDP
(gross
domestic
product)
ratios
have
risen
significantly
in
just
about
every
country.
On
the
monetary
front,
many
central
banks
aggressively
cut
policy
rates,
with
several
indicating
they
intend
to
respond
to
ongoing
economic
adversity
with
additional
accommodation
as
needed.
During
the
12-month
period,
Brazil
cut
rates
by
250
bps
to
2.00%,
Colombia
cut
rates
by
250
bps
to
1.75%,
Mexico
cut
rates
by
300
bps
to
4.25%,
Indonesia
cut
rates
by
125
bps
to
3.75%,
and
India
cut
rates
by
115
bps
to
4.00%.
In
global
bond
markets,
the
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
period
100
bps
lower,
at
0.92%,
ranging
from
a
pre-pandemic
high
of
1.92%
on
January
1
to
an
all-time
low
of
0.51%
on
August
4.
The
yield
on
the
10-year
German
Bund
finished
the
year
38
bps
lower
at
-0.57%,
ranging
from
a
pre-pandemic
high
of
-0.19%
on
January
13
to
an
all-time
low
of
-0.86%
on
March
9,
during
peak
financial
market
shocks.
Sovereign
bond
yields
also
declined
in
several
countries
on
ongoing
monetary
accommodation
during
the
year,
notably
including
much
of
Latin
America
and
Asia,
particularly
Brazil,
Mexico,
Indonesia
and
India.
In
currency
markets,
the
USD
initially
strengthened
in
March
on
tremendous
demand
for
U.S.
dollars
during
the
financial
market
shocks,
but
then
entered
a
broad-based
weakening
pattern
in
mid-May
that
largely
persisted
through
the
end
of
December.
Many
developed
market
and
emerging
market
currencies
alike
strengthened
against
the
USD
over
the
final
seven
months
of
the
year.
In
credit
markets,
spreads
widened
substantially
during
peak
financial
market
volatility
in
February
and
March,
but
progressively
tightened
from
April
through
December,
with
several
sovereign
and
corporate
sectors
finishing
the
year
at
pre-pandemic
levels.
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
The
strategy
was
structured
around
four
key
pillars
during
much
of
the
reporting
period:
(1)
maintaining
high
liquidity
through
elevated
cash
balances
and
risk-adjusted
position
weights;
(2)
holding
long
exposures
to
perceived
safe-haven
assets
such
as
the
Japanese
yen,
Swiss
franc,
Norwegian
krone
and
Swedish
krona;
(3)
targeting
appropriate
risk-
adjusted
returns
in
a
select
subset
of
emerging
markets;
and
(4)
underweighting
overvalued
developed
fixed
income
markets,
notably
longer-term
USTs.
The
strategy
continued
to
emphasize
select
duration
exposures
in
countries
that
have
attractive
risk-adjusted
yields,
resilient
economic
fundamentals
and
prudent
fiscal
and
monetary
policies.
Several
emerging
markets
continued
to
offer
significantly
higher
yields
than
those
available
in
the
developed
markets.
The
strategy
entered
the
reporting
period
in
a
de-risked
state
as
the
investment
team
saw
elevated
global
financial
market
risks
that
it
believed
were
significantly
underappreciated
by
markets.
While
the
team
was
not
explicitly
anticipating
the
COVID-19
crisis,
it
was
concerned
that
overvalued
risk
assets
were
vulnerable
to
a
geopolitical,
economic
or
financial
market
shock.
The
team
adjusted
the
risk-sizing
Geographic
Composition
12/31/20
%
of
Total
Net
Assets
Americas
46.0%
Asia
Pacific
22.2%
Other
Europe
7.5%
Middle
East
&
Africa
2.6%
Other
0.9%
Short-Term
Investments
&
Other
Net
Assets
20.8%
Templeton
Global
Bond
Fund
6
franklintempleton.com
Annual
Report
of
various
positions
and
hedged
(using
currency
forwards)
a
substantial
amount
of
local-currency
emerging
market
beta
risk
through
proxy
hedges
(net-negative
Australian
dollar)
and
direct
hedges
(Indian
rupee,
South
Korean
won,
Mexican
peso
and
Brazilian
real).
The
strategy
held
a
net-negative
position
in
the
euro
as
the
team
expected
fundamental
weakening
in
the
currency
due
to
structural
and
political
risks
in
the
eurozone,
along
with
headwinds
to
growth
and
reflation
efforts
across
Europe.
The
strategy
remained
significantly
underweighted
in
developed
market
duration,
preferring
to
hold
short-
to
intermediate-term
USTs,
while
holding
no
exposure
to
the
long
end
of
the
curve.
The
strategy
exited
its
negative
duration
exposure
to
USTs
in
the
first
quarter.
The
strategy
held
no
duration
exposure
in
the
eurozone,
and
instead
focused
on
higher-yielding
local-currency
bonds
in
specific
emerging
markets,
such
as
Brazil,
Mexico,
Colombia,
Indonesia,
India
and
Ghana.
The
team
also
continued
to
broadly
avoid
credit
sectors,
which
it
believed
were
overvalued
leading
up
to
the
crisis
and
increasingly
vulnerable
to
insolvencies
as
the
economic
crisis
progressed.
During
the
period,
the
team
used
forward
currency
exchange
contracts
to
actively
manage
currencies,
and
used
interest-rate
swaps
to
tactically
manage
duration
exposures.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
contributed
to
absolute
results,
while
sovereign
credit
exposures
had
a
largely
neutral
effect.
Among
currencies,
positions
in
Latin
America
(the
Brazilian
real
and
Argentine
peso)
detracted
from
absolute
performance.
The
Fund’s
net-negative
positions
in
the
euro
and
the
Australian
dollar
also
detracted
from
absolute
results,
as
did
tactical
positioning
(negative)
in
the
Mexican
peso.
However,
the
Fund’s
net-positive
positions
in
the
Japanese
yen
and
the
Swiss
franc
contributed
to
absolute
performance,
as
did
positions
in
northern
European
currencies
(the
Swedish
krona
and
Norwegian
krone).
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Argentina
and
Mexico)
and
Asia
ex-Japan
(Indonesia)
contributed
to
absolute
results,
while
negative
duration
exposure
to
USTs
during
the
first
quarter
detracted.
On
a
relative
basis,
the
Fund
underperformed
its
benchmark
due
to
currency
positions,
followed
by
interest-rate
strategies.
Sovereign
credit
exposures
had
a
largely
neutral
effect
on
relative
results.
Among
currencies,
overweighted
positions
in
Latin
America
(the
Brazilian
real
and
Argentine
peso)
detracted
from
relative
performance.
The
Fund’s
underweighted
positions
in
the
euro,
the
Australian
dollar
and
the
Mexican
peso
also
detracted
from
relative
results.
However,
overweighted
positions
in
northern
European
currencies
(the
Swedish
krona
and
Norwegian
krone)
contributed
to
relative
performance,
as
did
the
Fund’s
overweighted
positions
in
the
Japanese
yen
and
the
Swiss
franc.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Underweighted
duration
exposure
in
the
U.S.
detracted
from
relative
results,
as
did
select
underweighted
duration
exposures
in
Europe.
However,
select
overweighted
duration
exposures
in
Latin
America
(Argentina
and
Mexico)
and
Asia
ex-Japan
(Indonesia)
contributed
to
relative
performance.
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
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
December
31,
2020
,
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
December
31,
2020
Templeton
Global
Bond
Fund
7
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
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
12/31/20
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
1-Year
-4.41%
5
-8.01%
5-Year
+5.91%
+0.39%
10-Year
+19.04%
+1.37%
Advisor
1-Year
-4.19%
5
-4.19%
5-Year
+7.27%
+1.41%
10-Year
+21.94%
+2.00%
See
page
9
for
Performance
Summary
footnotes.
Templeton
Global
Bond
Fund
Performance
Summary
8
franklintempleton.com
Annual
Report
See
page
9
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(1/1/11–
12/31/20
)
Advisor
Class
(1/1/11–
12/31/20
)
Templeton
Global
Bond
Fund
Performance
Summary
9
franklintempleton.com
Annual
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.
Unexpected
events
and
their
aftermaths,
such
as
the
spread
of
deadly
diseases;
natural,
environmental
or
man-made
disasters;
financial,
political
or
social
disruptions;
terrorism
and
war;
and
other
tragedies
or
catastrophes,
can
cause
investor
fear
and
panic,
which
can
adversely
affect
the
economies
of
many
companies,
sectors,
nations,
regions
and
the
market
in
general,
in
ways
that
cannot
necessarily
be
foreseen.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
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
4/30/21.
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.
Total
return
information
is
based
on
net
asset
values
calculated
for
shareholder
transactions.
Certain
adjustments
were
made
to
the
net
asset
values
of
the
Fund
at
12/31/19
for
financial
reporting
purposes.
Accordingly,
adjusted
total
returns
have
been
disclosed
in
the
Financial
Highlights
and
differ
from
those
reported
here.
6.
Source:
Morningstar.
The
FTSE
WGBI
is
a
market
capitalization-weighted
index
consisting
of
investment-grade
world
government
bond
markets.
7.
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
(1/1/20–12/31/20)
Share
Class
Net
Investment
Income
Tax
Return
of
Capital
Total
A
$0.0120
$0.4383
$0.4503
C
$0.0109
$0.3980
$0.4089
R
$0.0113
$0.4139
$0.4252
R6
$0.0130
$0.4766
$0.4896
Advisor
$0.0126
$0.4628
$0.4754
Total
Annual
Operating
Expenses
7
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
0.92%
0.99%
Advisor
0.67%
0.74%
Your
Fund’s
Expenses
Templeton
Global
Bond
Fund
10
franklintempleton.com
Annual
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
184/366
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
7/1/20
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,000.27
$4.58
$1,020.56
$4.62
0.91%
C
$1,000
$998.18
$6.56
$1,018.57
$6.62
1.31%
R
$1,000
$999.01
$5.80
$1,019.33
$5.86
1.15%
R6
$1,000
$1,002.24
$2.61
$1,022.53
$2.63
0.52%
Advisor
$1,000
$1,001.52
$3.32
$1,021.82
$3.35
0.66%
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
11
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$10.69
$11.30
$11.89
$12.00
$11.32
$11.66
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.41
0.59
0.59
0.56
0.16
0.42
Net
realized
and
unrealized
gains
(losses)
(0.85)
(0.54)
(0.44)
(0.27)
0.60
(0.44)
Total
from
investment
operations
........
(0.44)
0.05
0.15
0.29
0.76
(0.02)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.01)
(0.66)
(0.74)
(0.40)
—
(0.12)
Tax
return
of
capital
................
(0.44)
—
—
—
(0.08)
(0.20)
Total
distributions
...................
(0.45)
(0.66)
(0.74)
(0.40)
(0.08)
(0.32)
Net
asset
value,
end
of
year
...........
$9.80
$10.69
$11.30
$11.89
$12.00
$11.32
Total
return
d
.......................
(4.14)%
0.35%
1.27%
2.35%
6.75%
(0.15)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.93%
0.92%
0.94%
0.97%
0.96%
0.93%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.91%
0.85%
0.86%
0.90%
0.91%
0.90%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.91%
0.85%
0.86%
f
0.89%
0.90%
0.90%
f
Net
investment
income
...............
4.03%
5.27%
4.99%
4.60%
4.22%
3.66%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$4,749,790
$6,514,630
$8,375,227
$9,656,645
$12,703,966
$13,759,572
Portfolio
turnover
rate
................
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
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
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$10.72
$11.33
$11.92
$12.03
$11.35
$11.69
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.37
0.55
0.54
0.51
0.15
0.37
Net
realized
and
unrealized
gains
(losses)
(0.85)
(0.55)
(0.44)
(0.27)
0.59
(0.44)
Total
from
investment
operations
........
(0.48)
—
0.10
0.24
0.74
(0.07)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.01)
(0.61)
(0.69)
(0.35)
—
(0.10)
Tax
return
of
capital
................
(0.40)
—
—
—
(0.06)
(0.17)
Total
distributions
...................
(0.41)
(0.61)
(0.69)
(0.35)
(0.06)
(0.27)
Net
asset
value,
end
of
year
...........
$9.83
$10.72
$11.33
$11.92
$12.03
$11.35
Total
return
d
.......................
(4.52)%
0.06%
0.86%
1.94%
6.59%
(0.55)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.33%
1.32%
1.34%
1.37%
1.35%
1.33%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.31%
1.25%
1.26%
1.30%
1.30%
1.30%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.31%
1.25%
1.26%
f
1.29%
1.29%
1.30%
f
Net
investment
income
...............
3.65%
4.87%
4.59%
4.20%
3.83%
3.26%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$682,582
$1,392,223
$2,218,852
$3,232,023
$4,072,562
$4,430,727
Portfolio
turnover
rate
................
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
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
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
13
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$10.69
$11.30
$11.89
$12.00
$11.32
$11.66
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.38
0.56
0.56
0.53
0.15
0.39
Net
realized
and
unrealized
gains
(losses)
(0.84)
(0.54)
(0.44)
(0.27)
0.60
(0.44)
Total
from
investment
operations
........
(0.46)
0.02
0.12
0.26
0.75
(0.05)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.01)
(0.63)
(0.71)
(0.37)
—
(0.11)
Tax
return
of
capital
................
(0.42)
—
—
—
(0.07)
(0.18)
Total
distributions
...................
(0.43)
(0.63)
(0.71)
(0.37)
(0.07)
(0.29)
Net
asset
value,
end
of
year
...........
$9.80
$10.69
$11.30
$11.89
$12.00
$11.32
Total
return
d
.......................
(4.38)%
0.10%
1.02%
2.10%
6.66%
(0.40)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.18%
1.17%
1.19%
1.22%
1.21%
1.18%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.16%
1.10%
1.11%
1.15%
1.16%
1.15%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.16%
1.10%
1.11%
f
1.14%
1.15%
1.15%
f
Net
investment
income
...............
3.79%
5.02%
4.74%
4.35%
3.97%
3.41%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$170,554
$208,853
$239,671
$274,295
$306,907
$319,155
Portfolio
turnover
rate
................
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
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
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$10.64
$11.25
$11.85
$11.96
$11.28
$11.62
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.45
0.62
0.63
0.61
0.18
0.47
Net
realized
and
unrealized
gains
(losses)
(0.85)
(0.53)
(0.45)
(0.27)
0.60
(0.44)
Total
from
investment
operations
........
(0.40)
0.09
0.18
0.34
0.78
0.03
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.01)
(0.70)
(0.78)
(0.45)
—
(0.14)
Tax
return
of
capital
................
(0.48)
—
—
—
(0.10)
(0.23)
Total
distributions
...................
(0.49)
(0.70)
(0.78)
(0.45)
(0.10)
(0.37)
Net
asset
value,
end
of
year
...........
$9.75
$10.64
$11.25
$11.85
$11.96
$11.28
Total
return
d
.......................
(3.79)%
0.73%
1.57%
2.79%
6.92%
0.25%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.58%
0.57%
0.59%
0.55%
0.55%
0.53%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.54%
0.48%
0.49%
0.48%
0.50%
0.50%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.54%
0.48%
0.49%
f
0.47%
0.49%
0.50%
f
Net
investment
income
...............
4.42%
5.64%
5.36%
5.02%
4.63%
4.06%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$2,273,175
$4,407,299
$4,084,816
$3,870,342
$2,924,394
$3,096,051
Portfolio
turnover
rate
................
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
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
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
15
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$10.64
$11.25
$11.85
$11.96
$11.28
$11.62
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.43
0.61
0.61
0.59
0.17
0.44
Net
realized
and
unrealized
gains
(losses)
(0.84)
(0.54)
(0.44)
(0.27)
0.60
(0.43)
Total
from
investment
operations
........
(0.41)
0.07
0.17
0.32
0.77
0.01
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.01)
(0.68)
(0.77)
(0.43)
—
(0.13)
Tax
return
of
capital
................
(0.47)
—
—
—
(0.09)
(0.22)
Total
distributions
...................
(0.48)
(0.68)
(0.77)
(0.43)
(0.09)
(0.35)
Net
asset
value,
end
of
year
...........
$9.75
$10.64
$11.25
$11.85
$11.96
$11.28
Total
return
d
.......................
(3.92)%
0.60%
1.44%
2.62%
6.86%
0.10%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.69%
0.67%
0.69%
0.72%
0.71%
0.68%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.66%
0.60%
0.61%
0.65%
0.66%
0.65%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.66%
0.60%
0.61%
f
0.64%
0.65%
0.65%
f
Net
investment
income
...............
4.31%
5.52%
5.24%
4.85%
4.47%
3.91%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$7,050,610
$14,244,707
$18,506,219
$20,808,794
$20,838,200
$22,169,948
Portfolio
turnover
rate
................
60.07%
32.63%
19.86%
42.12%
22.63%
49.70%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
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
Statement
of
Investments,
December
31,
2020
Templeton
Global
Bond
Fund
franklintempleton.com
Annual
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
58.3%
Argentina
3.4%
a,b
Argentina
BONCER
,
Index
Linked,
1.1%,
4/17/21
.......
4,504,879,302
ARS
$
31,417,852
Index
Linked,
1%,
8/05/21
........
2,391,463,670
ARS
16,825,838
Index
Linked,
1.2%,
3/18/22
.......
21,298,321,144
ARS
149,091,268
Index
Linked,
1.3%,
9/20/22
.......
210,538,705
ARS
1,407,139
Index
Linked,
1.4%,
3/25/23
.......
12,770,516,789
ARS
83,427,187
Index
Linked,
1.5%,
3/25/24
.......
12,770,516,794
ARS
76,338,009
b,c
Argentina
Bonos
del
Tesoro
Nacional
en
Pesos
Badlar,
FRN,
31.641%,
(ARS
BADLAR
+
2%),
4/03/22
.........
700,128,000
ARS
4,521,604
b
Argentina
Government
Bond
,
18.2%,
10/03/21
................
10,809,194,000
ARS
62,359,495
16%,
10/17/23
.................
11,569,749,000
ARS
36,893,378
15.5%,
10/17/26
................
18,801,412,000
ARS
43,724,508
506,006,278
Brazil
3.2%
Brazil
Notas
do
Tesouro
Nacional,
10%,
1/01/21
......................
2,469,769,000
BRL
475,844,074
Colombia
3.3%
Colombia
Government
Bond
,
Senior
Bond,
7.75%,
4/14/21
......
45,050,000,000
COP
13,351,767
Senior
Bond,
4.375%,
3/21/23
.....
6,831,000,000
COP
2,040,267
Senior
Bond,
9.85%,
6/28/27
......
10,884,000,000
COP
4,151,917
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
249,235,700,000
COP
77,384,736
B,
10%,
7/24/24
................
518,579,000,000
COP
184,094,762
B,
7.5%,
8/26/26
...............
216,664,700,000
COP
73,157,157
B,
6%,
4/28/28
.................
236,008,100,000
COP
73,877,432
B,
7.75%,
9/18/30
..............
175,388,800,000
COP
60,252,821
488,310,859
Ghana
2.6%
Ghana
Government
Bond
,
24.75%,
3/01/21
................
6,310,000
GHS
1,095,326
16.5%,
3/22/21
................
15,240,000
GHS
2,615,134
16.25%,
5/17/21
................
63,860,000
GHS
10,932,406
24.5%,
6/21/21
................
990,000
GHS
175,059
24.75%,
7/19/21
................
10,770,000
GHS
1,909,048
18.75%,
1/24/22
................
243,080,000
GHS
41,756,106
17.6%,
11/28/22
................
3,220,000
GHS
542,313
19.75%,
3/25/24
................
306,980,000
GHS
52,635,616
19%,
11/02/26
.................
890,765,000
GHS
144,372,956
19.75%,
3/15/32
................
840,925,000
GHS
133,673,211
389,707,175
India
2.6%
India
Government
Bond
,
8.79%,
11/08/21
................
7,315,000,000
INR
104,527,087
Senior
Note,
5.22%,
6/15/25
......
2,124,000,000
INR
29,328,138
7.59%,
1/11/26
.................
7,001,000,000
INR
105,877,823
7.27%,
4/08/26
................
1,448,000,000
INR
21,685,973
8.33%,
7/09/26
................
8,401,000,000
INR
129,693,575
391,112,596
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Indonesia
11.1%
Indonesia
Government
Bond
,
FR34,
12.8%,
6/15/21
...........
1,603,246,000,000
IDR
$
119,308,478
FR53,
8.25%,
7/15/21
...........
5,990,194,000,000
IDR
437,262,278
FR61,
7%,
5/15/22
..............
423,493,000,000
IDR
31,410,822
FR35,
Senior
Bond,
12.9%,
6/15/22
.
1,172,669,000,000
IDR
94,428,810
FR43,
10.25%,
7/15/22
..........
377,390,000,000
IDR
29,440,492
FR63,
5.625%,
5/15/23
..........
1,212,431,000,000
IDR
89,215,484
FR46,
9.5%,
7/15/23
............
6,667,220,000,000
IDR
531,475,710
FR39,
11.75%,
8/15/23
..........
641,965,000,000
IDR
53,590,194
FR70,
8.375%,
3/15/24
..........
2,703,357,000,000
IDR
211,979,623
FR44,
10%,
9/15/24
.............
248,790,000,000
IDR
20,576,387
FR40,
11%,
9/15/25
.............
532,795,000,000
IDR
46,769,969
1,665,458,247
Mexico
15.2%
Mexican
Bonos
Desarr
Fixed
Rate
,
M,
6.5%,
6/09/22
...............
6,846,650,000
MXN
354,615,980
M,
Senior
Note,
6.75%,
3/09/23
....
27,380,835,300
MXN
1,445,742,254
M,
Senior
Bond,
8%,
12/07/23
.....
8,497,572,000
MXN
469,357,945
2,269,716,179
Norway
7.5%
d
Norway
Government
Bond
,
144A,
Reg
S,
3.75%,
5/25/21
......
2,807,404,000
NOK
332,109,934
144A,
Reg
S,
2%,
5/24/23
........
2,535,983,000
NOK
307,472,410
144A,
Reg
S,
3%,
3/14/24
........
2,921,308,000
NOK
368,454,827
144A,
Reg
S,
1.75%,
3/13/25
......
890,910,000
NOK
108,999,836
1,117,037,007
South
Korea
8.5%
Korea
Treasury
Bond
,
2.25%,
9/10/23
................
13,848,000,000
KRW
13,150,041
1.875%,
3/10/24
................
239,662,000,000
KRW
225,794,632
1.375%,
9/10/24
................
385,853,010,000
KRW
357,295,174
3%,
9/10/24
...................
146,030,000,000
KRW
143,039,746
1.375%,
12/10/29
...............
592,858,000,000
KRW
529,852,264
1,269,131,857
Supranational
0.9%
e
Inter-American
Development
Bank,
Senior
Bond,
7.5%,
12/05/24
......
2,473,000,000
MXN
135,349,613
Total
Foreign
Government
and
Agency
Securities
(Cost
$10,958,173,228)
..........
8,707,673,885
U.S.
Government
and
Agency
Securities
20.8%
United
States
20.8%
U.S.
Treasury
Notes
,
2.125%,
12/31/21
...............
80,042,000
81,644,610
1.5%,
10/31/24
................
240,150,000
251,707,219
1.5%,
11/30/24
.................
23,675,000
24,827,307
1.75%,
12/31/24
................
940,575,000
996,421,641
2.125%,
5/15/25
................
343,230,000
370,500,694
2.875%,
5/31/25
................
287,950,000
320,389,367
2.625%,
12/31/25
...............
418,885,000
465,829,572
1.625%,
2/15/26
................
226,420,000
240,836,587
2.125%,
5/31/26
................
103,431,000
112,909,481
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
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
$
241,466,367
3,106,532,845
Total
U.S.
Government
and
Agency
Securities
(Cost
$2,984,278,843)
..............
3,106,532,845
Total
Long
Term
Investments
(Cost
$13,942,452,071)
............................
11,814,206,730
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
1.1%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
78.75
JPY,
Expires
1/22/21
...
1
225,932,000
AUD
2,778,542
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
79.00
JPY,
Expires
1/22/21
...
1
202,720,000
AUD
2,153,303
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
81.00
JPY,
Expires
4/29/21
.......
1
146,408,000
AUD
1,561,338
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
81.00
JPY,
Expires
6/21/21
.......
1
225,244,000
AUD
3,159,689
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
84.15
JPY,
Expires
6/18/21
.......
1
232,872,000
AUD
1,167,892
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
86.50
JPY,
Expires
12/20/21
..
1
174,655,000
AUD
1,226,205
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
92,688,000
AUD
5,105,731
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.75,
Expires
4/16/21
...........
1
46,212,000
AUD
1,278,203
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.77,
Expires
5/12/21
...........
1
83,065,000
AUD
1,742,553
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.78,
Expires
2/08/21
......
1
184,817,000
AUD
1,209,533
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
104.78
JPY,
Expires
2/01/21
..
1
52,366,000
109,816
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
110.80
JPY,
Expires
2/24/21
..
1
569,197,000
48,443
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
115.00
JPY,
Expires
2/24/21
..
1
1,138,395,000
14,145
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
115.95
JPY,
Expires
8/11/21
.......
1
322,233,000
181,407
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
19
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
20.65
MXN,
Expires
3/25/21
..
1
491,777,000
$
9,069,786
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
21.16
MXN,
Expires
6/21/21
.......
1
289,877,000
7,165,358
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
April
Strike
Price
22.44
MXN,
Expires
4/21/21
.......
1
61,426,000
489,467
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
22.83
MXN,
Expires
6/09/21
.......
1
73,368,000
739,691
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
22.98
MXN,
Expires
1/14/21
..
1
115,168,000
6,171
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
23.23
MXN,
Expires
3/24/21
.......
1
189,604,000
566,816
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
23.30
MXN,
Expires
4/29/21
.......
1
202,470,000
1,142,073
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
23.75
MXN,
Expires
4/09/21
.......
1
118,157,000
381,002
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
24.50
MXN,
Expires
1/14/21
..
1
96,748,000
661
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
24.81
MXN,
Expires
6/30/21
.......
1
359,772,000
1,972,064
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
25.48
MXN,
Expires
4/09/21
.......
1
112,741,000
157,564
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
276,403,000
8,843,737
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
276,403,000
8,843,737
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
26.09
MXN,
Expires
6/18/21
.......
1
239,830,000
733,670
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
104,398,000
4,807,307
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
104,398,000
4,807,307
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
195,030,000
8,980,720
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
38,699,000
28
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
366,248,000
$
266
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
414,619,000
301
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
March
Strike
Price
28.75
MXN,
Expires
3/30/21
..
1
248,239,000
62,161
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
220,019,000
10,257,310
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
220,016,000
9,476,956
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
29.73
MXN,
Expires
12/07/21
.
1
364,445,000
1,712,267
101,953,220
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
58.95
JPY,
Expires
6/21/21
.......
1
300,323,000
AUD
123,823
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
March
Strike
Price
68.50
JPY,
Expires
3/24/21
.......
1
135,147,000
AUD
64,426
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
175,575,000
AUD
459,622
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
184,812,000
AUD
483,803
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
71.00
JPY,
Expires
4/29/21
.......
1
390,423,000
AUD
819,859
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
71.44
JPY,
Expires
6/21/21
.......
1
300,323,000
AUD
1,175,199
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
75.00
JPY,
Expires
12/20/21
..
1
349,306,000
AUD
5,736,616
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
76.20
JPY,
Expires
6/18/21
.......
1
465,745,000
AUD
4,760,329
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/10/21
......
1
443,553,000
AUD
11,291
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/08/21
......
1
369,632,000
AUD
10,418
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.67,
Expires
4/16/21
...........
1
89,946,000
AUD
$
75,498
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.68,
Expires
1/21/21
......
1
343,114,000
AUD
4,590
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.68,
Expires
2/02/21
......
1
130,858,000
AUD
5,951
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.69,
Expires
3/22/21
......
1
244,883,000
AUD
155,011
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.69,
Expires
1/22/21
......
1
286,468,000
AUD
9,727
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
102.10
JPY,
Expires
2/24/21
..
1
569,197,000
3,350,548
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
102.65
JPY,
Expires
8/11/21
.......
1
483,634,000
9,606,070
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
103.50
JPY,
Expires
2/01/21
..
1
341,519,000
3,016,876
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
18.72
MXN,
Expires
3/25/21
..
1
413,094,000
1,656,395
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
18.83
MXN,
Expires
6/21/21
.......
1
351,363,000
3,364,829
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.43
MXN,
Expires
8/30/21
..
1
165,014,000
3,446,289
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
97,515,000
3,422,567
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
52,200,000
1,832,108
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
52,200,000
1,832,108
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.88
MXN,
Expires
8/11/21
..
1
165,013,000
4,895,991
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
22.83
MXN,
Expires
6/09/21
.......
1
73,368,000
10,010,621
60,330,565
Total
Options
Purchased
(Cost
$342,999,126)
...................................
162,283,785
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Short
Term
Investments
19.7%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
8.1%
Argentina
0.2%
b,f
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
a
Index
Linked,
2/26/21
............
787,468,277
ARS
$
5,435,440
5/21/21
......................
2,167,466,128
ARS
15,695,670
a
Index
Linked,
9/13/21
............
1,177,100,848
ARS
8,431,861
b,f
Argentina
Letras
Del
Tesoro
En
Pesos
A
Descuento
,
3/31/21
.............
513,405,660
ARS
3,257,982
32,820,953
Brazil
1.3%
f
Brazil
Letras
do
Tesouro
Nacional
,
7/01/21
......................
1,017,240,000
BRL
193,860,848
Japan
6.6%
f
Japan
Treasury
Bills
,
3/10/21
......................
22,824,900,000
JPY
221,095,437
3/22/21
......................
22,183,100,000
JPY
214,884,713
3/25/21
......................
30,400,100,000
JPY
294,483,539
4/12/21
......................
3,287,600,000
JPY
31,848,513
6/16/21
......................
22,446,450,000
JPY
217,503,120
979,815,322
Mexico
0.0%
†
f
Mexico
Cetes
,
BI
,
6/17/21
..........
22,133,000
MXN
1,092,237
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,280,474,928)
...........
1,207,589,360
Industry
Shares
Money
Market
Funds
11.6%
United
States
11.6%
g,h
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.............
1,730,879,789
1,730,879,789
Total
Money
Market
Funds
(Cost
$1,730,879,789)
................................
1,730,879,789
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$3,011,354,717
)
.............................
2,938,469,149
a
a
a
a
Total
Investments
(Cost
$17,296,805,914)
99.9%
................................
$14,914,959,664
Options
Written
(1.4)%
.......................................................
(200,664,573)
Other
Assets,
less
Liabilities
1.5%
.............................................
212,416,399
Net
Assets
100.0%
...........................................................
$14,926,711,490
a
a
a
a
Number
of
Contracts
Notional
Amount
#
i
Options
Written
(1.4)%
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.00
JPY,
Expires
1/22/21
...
1
202,720,000
AUD
(7,194,943)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
23
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
i
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.25
JPY,
Expires
1/22/21
...
1
225,932,000
AUD
$
(7,497,525)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
76.80
JPY,
Expires
4/29/21
.......
1
292,818,000
AUD
(10,309,676)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.95
JPY,
Expires
1/22/21
...
1
240,259,000
AUD
(6,451,520)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
78.00
JPY,
Expires
6/21/21
.......
1
225,244,000
AUD
(6,757,018)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
80.50
JPY,
Expires
6/18/21
.......
1
232,872,000
AUD
(3,722,984)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.20
JPY,
Expires
12/20/21
..
1
174,655,000
AUD
(3,803,952)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.72,
Expires
2/02/21
......
1
46,936,000
AUD
(2,423,187)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.72,
Expires
4/16/21
...........
1
30,811,000
AUD
(1,594,570)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.74,
Expires
5/12/21
...........
1
166,130,000
AUD
(6,630,009)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
May
Strike
Price
$0.78,
Expires
5/05/21
...........
1
76,912,000
AUD
(1,247,581)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.00
JPY,
Expires
2/24/21
..
1
1,138,395,000
(952,384)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.65
JPY,
Expires
2/01/21
..
1
227,680,000
(38,038)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
109.90
JPY,
Expires
8/11/21
.......
1
483,634,000
(1,340,921)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
21.48
MXN,
Expires
3/25/21
..
1
491,777,000
(4,894,279)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
22.38
MXN,
Expires
4/29/21
.......
1
101,235,000
(912,660)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
22.56
MXN,
Expires
6/21/21
.......
1
193,250,000
(2,407,471)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
82,922,000
(4,752,438)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
82,922,000
(4,752,438)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
i
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.12
MXN,
Expires
1/21/21
..
1
30,713,000
$
(6,022)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
24.57
MXN,
Expires
4/29/21
.......
1
50,613,000
(159,522)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
25.45
MXN,
Expires
1/14/21
..
1
69,104,000
(155)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
25.87
MXN,
Expires
3/24/21
.......
1
179,949,000
(125,161)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
26.08
MXN,
Expires
3/24/21
.......
1
75,841,600
(47,613)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
26.61
MXN,
Expires
8/30/21
..
1
165,014,000
(836,547)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
27.24
MXN,
Expires
4/09/21
.......
1
225,819,000
(153,438)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
27.38
MXN,
Expires
8/11/21
..
1
165,013,000
(616,507)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
27.93
MXN,
Expires
12/07/21
.
1
121,484,000
(805,355)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
28.24
MXN,
Expires
6/18/21
.......
1
239,830,000
(382,067)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
28.40
MXN,
Expires
6/30/21
.......
1
239,850,000
(439,348)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
29.21
MXN,
Expires
1/14/21
..
1
92,138,000
(6)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
30.36
MXN,
Expires
6/09/21
.......
1
73,368,000
(59,724)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
52,200,000
(868,012)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
52,200,000
(868,012)
(83,051,083)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
64.86
JPY,
Expires
6/21/21
.......
1
450,486,000
AUD
(513,579)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
25
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
i
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
66.00
JPY,
Expires
4/29/21
.......
1
195,212,000
AUD
$
(140,386)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
68.40
JPY,
Expires
12/20/21
..
1
174,655,000
AUD
(1,174,240)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
71.60
JPY,
Expires
6/18/21
.......
1
465,745,000
AUD
(1,832,231)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.64,
Expires
1/21/21
......
1
171,557,000
AUD
(245)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.65,
Expires
3/22/21
......
1
99,337,000
AUD
(18,043)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/27/21
......
1
122,252,000
AUD
(949)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/22/21
......
1
138,613,000
AUD
(775)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.69,
Expires
2/02/21
......
1
46,936,000
AUD
(5,031)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
92,688,000
AUD
(16,892)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
98.00
JPY,
Expires
8/11/21
........
1
161,401,000
(1,203,807)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
98.80
JPY,
Expires
2/01/21
...
1
199,219,000
(92,163)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
104.78
JPY,
Expires
2/01/21
..
1
52,366,000
(903,804)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
19.40
MXN,
Expires
3/25/21
..
1
413,094,000
(5,015,338)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
19.61
MXN,
Expires
6/09/21
.......
1
73,368,000
(1,554,286)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
19.79
MXN,
Expires
6/21/21
.......
1
351,363,000
(9,045,170)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
82,922,000
(3,002,016)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
82,922,000
(3,002,016)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
20.24
MXN,
Expires
6/30/21
.......
1
119,922,000
(4,484,800)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
At
December
31,
2020,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1(c). 
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
i
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
20.39
MXN,
Expires
1/21/21
..
1
30,713,000
$
(914,843)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.94
MXN,
Expires
8/30/21
..
1
165,014,000
(9,891,545)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
21.43
MXN,
Expires
8/11/21
..
1
165,013,000
(12,764,808)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
104,398,000
(9,116,503)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
104,398,000
(9,116,503)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
195,030,000
(17,030,898)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
22.37
MXN,
Expires
1/14/21
..
1
59,430,000
(7,256,174)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.10
MXN,
Expires
1/14/21
..
1
7,675,000
(1,219,301)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.10
MXN,
Expires
1/14/21
..
1
115,173,000
(18,297,144)
(117,613,490)
Total
Options
Written
(Premiums
received
$185,347,791)
.........................
$
(200,664,573)
#
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(f).
b
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
12
regarding
fair
value
measurements.
c
The
coupon
rate
shown
represents
the
rate
at
period
end.
d
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
December
31,
2020,
the
aggregate
value
of
these
securities
was
$1,117,037,007,
representing
7.5%
of
net
assets.
e
A
supranational
organization
is
an
entity
formed
by
two
or
more
central
governments
through
international
treaties.
f
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
g
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
h
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
i
See
Note
1(c)
regarding
written
options.
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
27
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
Brazilian
Real
......
CITI
Buy
1,594,651,400
314,152,275
1/04/21
$
—
$
(7,134,293)
Brazilian
Real
......
CITI
Sell
1,594,651,400
275,234,112
1/04/21
—
(31,783,869)
Brazilian
Real
......
HSBK
Buy
633,440,472
124,440,147
1/05/21
—
(2,483,953)
Brazilian
Real
......
HSBK
Sell
633,440,472
109,383,608
1/05/21
—
(12,572,586)
South
Korean
Won
..
HSBK
Buy
28,730,968,000
26,062,199
1/08/21
346,359
—
South
Korean
Won
..
HSBK
Sell
28,730,968,000
24,564,781
1/08/21
—
(1,843,777)
Euro
.............
UBSW
Sell
85,029,112
91,102,741
CHF
1/11/21
—
(969,925)
Swiss
Franc
.......
UBSW
Sell
91,102,741
84,523,829
EUR
1/11/21
352,529
—
Australian
Dollar
....
JPHQ
Sell
123,055,588
9,383,973,038
JPY
1/13/21
—
(3,992,603)
Euro
.............
UBSW
Sell
52,837,919
56,938,406
CHF
1/13/21
—
(233,238)
Japanese
Yen
......
JPHQ
Sell
8,615,657,865
109,750,000
AUD
1/13/21
1,174,888
—
Mexican
Peso
......
CITI
Buy
3,263,613,000
163,300,676
1/13/21
673,809
—
Mexican
Peso
......
CITI
Sell
3,263,613,000
151,002,313
1/13/21
—
(12,972,171)
Swiss
Franc
.......
UBSW
Sell
56,938,406
52,829,095
EUR
1/13/21
222,455
—
Euro
.............
GSCO
Sell
83,261,381
89,408,569
CHF
1/14/21
—
(721,986)
Swiss
Franc
.......
GSCO
Sell
89,408,569
82,917,766
EUR
1/14/21
302,097
—
Chinese
Yuan
......
CITI
Buy
856,161,690
130,987,081
1/19/21
548,310
—
Chinese
Yuan
......
HSBK
Buy
927,022,870
141,796,483
1/19/21
625,581
—
Euro
.............
DBAB
Sell
109,544,578
1,135,435,030
SEK
1/19/21
4,170,400
—
Euro
.............
DBAB
Sell
187,068,469
2,060,194,402
NOK
1/19/21
11,674,584
—
Euro
.............
JPHQ
Sell
151,994,797
1,649,025,750
NOK
1/19/21
6,581,371
—
Mexican
Peso
......
MSCO
Buy
3,455,593,900
173,653,213
1/19/21
7,037
(165,600)
Mexican
Peso
......
MSCO
Sell
3,455,593,900
155,898,710
1/19/21
—
(17,595,941)
South
Korean
Won
..
CITI
Buy
280,696,000,000
254,225,990
1/19/21
3,783,598
—
South
Korean
Won
..
CITI
Sell
280,696,000,000
234,108,424
1/19/21
—
(23,901,164)
Mexican
Peso
......
CITI
Buy
3,459,417,000
172,383,383
1/21/21
1,344,601
(83,291)
Mexican
Peso
......
CITI
Sell
3,459,417,000
162,861,239
1/21/21
—
(10,783,454)
Mexican
Peso
......
JPHQ
Buy
667,172,000
33,557,090
1/22/21
—
(72,576)
Mexican
Peso
......
JPHQ
Sell
667,172,000
30,131,515
1/22/21
—
(3,352,999)
Euro
.............
HSBK
Sell
256,577,245
31,620,836,206
JPY
1/25/21
—
(7,298,480)
Mexican
Peso
......
MSCO
Buy
753,516,000
37,916,570
1/25/21
—
(112,252)
Mexican
Peso
......
MSCO
Sell
753,516,000
35,442,897
1/25/21
—
(2,361,421)
Australian
Dollar
....
CITI
Sell
171,631,000
13,082,572,975
JPY
1/27/21
—
(5,634,350)
Australian
Dollar
....
HSBK
Buy
56,368,000
41,978,772
1/27/21
1,495,291
—
Australian
Dollar
....
HSBK
Sell
56,368,000
39,952,116
1/27/21
—
(3,521,946)
Japanese
Yen
......
CITI
Sell
13,480,756,895
171,631,000
AUD
1/27/21
1,776,962
—
Mexican
Peso
......
CITI
Buy
2,516,154,000
126,645,460
1/27/21
—
(439,088)
Mexican
Peso
......
CITI
Sell
2,516,154,000
119,245,049
1/27/21
—
(6,961,323)
Brazilian
Real
......
CITI
Sell
1,463,519,779
271,102,508
2/02/21
—
(10,623,163)
Brazilian
Real
......
HSBK
Sell
931,330,043
176,319,438
2/02/21
1,332,579
(4,292,974)
Japanese
Yen
......
CITI
Buy
3,196,674,000
30,515,892
2/03/21
454,470
—
Japanese
Yen
......
CITI
Sell
3,196,674,000
30,807,752
2/03/21
—
(162,610)
Indian
Rupee
......
CITI
Buy
3,363,647,800
45,365,808
2/08/21
530,538
—
Indian
Rupee
......
JPHQ
Buy
4,614,943,200
62,240,625
2/08/21
729,412
—
Euro
.............
UBSW
Sell
85,047,798
91,103,627
CHF
2/09/21
—
(972,224)
Indian
Rupee
......
HSBK
Buy
2,559,257,100
34,505,984
2/09/21
411,035
—
Swiss
Franc
.......
UBSW
Sell
91,103,627
84,534,846
EUR
2/09/21
345,020
—
Australian
Dollar
....
HSBK
Buy
184,817,000
137,652,995
2/10/21
4,913,358
—
Australian
Dollar
....
HSBK
Sell
184,817,000
132,925,007
2/10/21
—
(9,641,346)
Euro
.............
UBSW
Sell
211,905,711
227,761,555
CHF
2/10/21
—
(1,553,330)
South
Korean
Won
..
HSBK
Buy
100,447,500,000
91,575,651
2/10/21
754,687
—
South
Korean
Won
..
HSBK
Sell
100,447,500,000
88,948,268
2/10/21
—
(3,382,070)
Swiss
Franc
.......
UBSW
Sell
227,761,555
211,397,684
EUR
2/10/21
932,135
—
Australian
Dollar
....
HSBK
Buy
81,103,000
60,406,082
2/12/21
2,156,852
—
Australian
Dollar
....
HSBK
Sell
81,103,000
58,896,999
2/12/21
—
(3,665,936)
Euro
.............
GSCO
Sell
110,707,773
119,212,344
CHF
2/12/21
—
(560,031)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
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)
Swiss
Franc
.......
GSCO
Sell
119,212,344
110,511,753
EUR
2/12/21
$
320,337
$
—
Mexican
Peso
......
CITI
Buy
2,629,979,900
131,940,529
2/16/21
—
(324,716)
Mexican
Peso
......
CITI
Sell
2,629,979,900
118,512,940
2/16/21
—
(13,102,874)
Chinese
Yuan
......
JPHQ
Buy
644,088,108
98,335,864
2/18/21
422,323
—
Australian
Dollar
....
JPHQ
Sell
947,293,365
72,166,987,357
JPY
2/22/21
—
(31,480,920)
Japanese
Yen
......
JPHQ
Sell
74,406,890,938
947,293,365
AUD
2/22/21
9,776,047
—
South
Korean
Won
..
CITI
Buy
521,261,500,000
472,105,840
2/23/21
7,027,827
—
South
Korean
Won
..
CITI
Sell
521,261,500,000
470,558,790
2/23/21
—
(8,574,877)
Euro
.............
HSBK
Sell
256,565,132
32,208,801,772
JPY
2/24/21
—
(1,695,156)
Australian
Dollar
....
CITI
Sell
229,875,438
17,421,569,810
JPY
2/25/21
—
(8,518,148)
Euro
.............
HSBK
Sell
513,151,152
63,627,789,044
JPY
2/25/21
—
(11,076,357)
Australian
Dollar
....
CITI
Sell
108,379,162
8,212,734,471
JPY
2/26/21
—
(4,025,438)
Euro
.............
CITI
Sell
264,788,375
33,305,558,436
JPY
2/26/21
—
(1,132,322)
Japanese
Yen
......
CITI
Buy
7,644,895,800
73,000,000
2/26/21
1,082,565
—
Japanese
Yen
......
CITI
Sell
7,644,895,800
73,390,915
2/26/21
—
(691,650)
Japanese
Yen
......
JPHQ
Buy
34,612,065,600
326,583,563
2/26/21
8,823,309
—
Japanese
Yen
......
JPHQ
Sell
34,612,065,600
326,627,525
2/26/21
—
(8,779,347)
Brazilian
Real
......
CITI
Sell
1,080,061,400
214,089,754
3/02/21
6,579,729
—
Mexican
Peso
......
CITI
Buy
3,678,191,000
184,328,898
3/02/21
—
(537,359)
Mexican
Peso
......
CITI
Sell
3,678,191,000
164,600,290
3/02/21
—
(19,191,249)
Euro
.............
HSBK
Sell
81,820,000
99,169,931
3/04/21
—
(921,290)
Indian
Rupee
......
CITI
Buy
4,496,477,800
60,487,749
3/08/21
688,868
—
Indian
Rupee
......
JPHQ
Buy
4,628,008,500
62,240,555
3/08/21
725,597
—
Indian
Rupee
......
HSBK
Buy
2,566,417,190
34,505,986
3/09/21
407,256
—
Indian
Rupee
......
JPHQ
Buy
2,823,969,900
37,984,665
3/09/21
432,294
—
Euro
.............
UBSW
Sell
105,567,589
113,876,813
CHF
3/10/21
—
(286,452)
Swiss
Franc
.......
UBSW
Sell
113,876,814
105,375,634
EUR
3/10/21
51,601
—
Australian
Dollar
....
HSBK
Sell
116,332,826
8,961,001,253
JPY
3/11/21
—
(2,904,999)
Euro
.............
GSCO
Sell
138,513,871
149,014,608
CHF
3/11/21
—
(829,267)
Mexican
Peso
......
CITI
Buy
2,927,861,200
146,660,668
3/11/21
—
(511,545)
Mexican
Peso
......
CITI
Sell
4,355,417,000
193,403,893
3/11/21
—
(24,004,081)
Swiss
Franc
.......
GSCO
Sell
149,014,608
138,167,108
EUR
3/11/21
405,001
—
Chinese
Yuan
......
JPHQ
Buy
1,290,035,552
196,648,089
3/15/21
822,035
—
Euro
.............
DBAB
Sell
366,560,867
3,784,784,823
SEK
3/15/21
11,897,617
—
Euro
.............
GSCO
Sell
110,698,770
119,211,506
CHF
3/15/21
—
(522,424)
Swiss
Franc
.......
GSCO
Sell
119,211,506
110,030,556
EUR
3/15/21
—
(295,216)
Chinese
Yuan
......
HSBK
Buy
465,191,770
70,898,249
3/16/21
305,190
—
Mexican
Peso
......
CITI
Sell
1,037,061,000
47,720,897
3/16/21
—
(4,015,286)
Australian
Dollar
....
HSBK
Sell
138,350,000
10,624,034,850
JPY
3/17/21
—
(3,769,791)
Mexican
Peso
......
MSCO
Sell
6,677,088,100
317,094,814
3/17/21
—
(15,967,929)
South
Korean
Won
..
CITI
Buy
465,402,500,000
424,130,373
3/22/21
3,599,656
—
South
Korean
Won
..
CITI
Sell
465,402,500,000
394,241,847
3/22/21
—
(33,488,182)
Mexican
Peso
......
MSCO
Sell
1,040,181,000
46,890,907
3/24/21
—
(4,952,038)
Euro
.............
HSBK
Sell
256,580,052
31,560,372,722
JPY
3/25/21
—
(8,092,709)
Euro
.............
CITI
Sell
212,831,697
26,840,418,163
JPY
3/29/21
—
(312,935)
Euro
.............
CITI
Sell
212,831,697
26,225,334,559
JPY
3/31/21
—
(6,281,050)
Euro
.............
JPHQ
Sell
7,240,756
80,334,375
NOK
3/31/21
504,412
—
Mexican
Peso
......
GSCO
Sell
4,553,281,000
201,847,726
4/05/21
—
(24,768,225)
Euro
.............
GSCO
Sell
16,239,980
19,133,945
4/06/21
—
(747,960)
Australian
Dollar
....
HSBK
Sell
116,332,174
8,807,218,063
JPY
4/13/21
—
(4,376,132)
Australian
Dollar
....
JPHQ
Sell
127,539,626
9,713,771,954
JPY
4/13/21
—
(4,234,711)
Euro
.............
GSCO
Sell
83,133,757
89,409,109
CHF
4/13/21
—
(504,782)
Euro
.............
UBSW
Sell
52,875,701
56,938,406
CHF
4/13/21
—
(240,191)
Mexican
Peso
......
CITI
Sell
2,127,445,200
95,012,983
4/13/21
—
(10,769,949)
Swiss
Franc
.......
GSCO
Sell
89,409,109
82,504,703
EUR
4/13/21
—
(265,461)
Swiss
Franc
.......
UBSW
Sell
56,938,406
52,656,388
EUR
4/13/21
—
(28,345)
Euro
.............
DBAB
Sell
146,242,202
1,513,913,899
SEK
4/15/21
5,160,106
—
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
29
See
Note 
10
regarding
other
derivative
information.
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
.............
BOFA
Sell
64,441,666
76,138,472
4/16/21
$
—
$
(2,771,925)
Euro
.............
DBAB
Sell
109,435,302
1,135,435,030
SEK
4/16/21
4,169,947
—
Australian
Dollar
....
MSCO
Buy
52,830,000
39,658,424
4/21/21
1,111,988
—
Australian
Dollar
....
MSCO
Sell
52,830,000
37,548,923
4/21/21
—
(3,221,490)
Euro
.............
CITI
Sell
264,789,451
32,497,874,151
JPY
4/30/21
—
(9,165,389)
Mexican
Peso
......
CITI
Sell
6,648,063,606
296,987,416
4/30/21
—
(32,912,641)
Australian
Dollar
....
CITI
Sell
177,906,000
13,412,866,900
JPY
5/06/21
—
(7,214,184)
Mexican
Peso
......
CITI
Sell
273,327,200
13,137,257
5/13/21
—
(405,392)
Indian
Rupee
......
CITI
Buy
3,411,282,400
45,365,814
6/08/21
508,416
—
Euro
.............
UBSW
Sell
84,546,185
91,102,741
CHF
6/09/21
—
(272,080)
Indian
Rupee
......
CITI
Buy
947,624,100
12,594,685
6/09/21
147,087
—
Swiss
Franc
.......
UBSW
Sell
91,102,741
84,208,585
EUR
6/09/21
—
(141,808)
Euro
.............
DBAB
Sell
131,443,217
1,352,258,895
SEK
6/11/21
3,489,301
—
Euro
.............
DBAB
Sell
25,295,262
260,010,000
SEK
6/15/21
642,831
—
Euro
.............
DBAB
Sell
29,875,048
320,932,700
NOK
6/15/21
779,272
—
Japanese
Yen
......
CITI
Buy
13,486,362,332
130,039,170
6/15/21
832,868
—
Japanese
Yen
......
JPHQ
Buy
79,748,551,396
768,623,694
6/15/21
5,258,481
—
Chinese
Yuan
......
HSBK
Buy
467,900,010
70,898,238
6/16/21
309,025
—
Euro
.............
DBAB
Sell
30,329,175
322,617,500
NOK
6/16/21
417,853
—
Euro
.............
DBAB
Sell
64,826,175
662,342,000
SEK
6/16/21
1,158,601
—
Euro
.............
DBAB
Sell
16,989,072
180,418,000
NOK
6/18/21
198,198
—
Australian
Dollar
....
CITI
Sell
65,478,000
4,981,448,379
JPY
6/23/21
—
(2,203,829)
Japanese
Yen
......
BNDP
Buy
105,017,337,527
1,019,244,404
6/23/21
—
(49,148)
Euro
.............
CITI
Sell
212,831,779
26,242,158,377
JPY
6/30/21
—
(6,341,753)
Australian
Dollar
....
JPHQ
Sell
123,055,692
9,362,815,399
JPY
7/13/21
—
(4,118,206)
Japanese
Yen
......
CITI
Buy
18,398,773,800
176,120,607
8/13/21
2,558,938
—
Japanese
Yen
......
CITI
Sell
18,398,773,800
177,774,519
8/13/21
—
(905,026)
Euro
.............
DBAB
Sell
25,295,229
260,313,200
SEK
9/15/21
642,766
—
Euro
.............
DBAB
Sell
29,875,081
321,641,100
NOK
9/15/21
772,113
—
Euro
.............
JPHQ
Sell
76,360,969
814,107,200
NOK
9/20/21
1,027,744
—
Total
Forward
Exchange
Contracts
...................................................
$130,697,157
$(523,790,204)
Net
unrealized
appreciation
(depreciation)
............................................
$(393,093,047)
*
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
49
.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
December
31,
2020
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
30
Templeton
Global
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$15,565,926,125
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
1,730,879,789
Value
-
Unaffiliated
issuers
..................................................................
$13,184,079,875
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
1,730,879,789
Cash
....................................................................................
7,063,501
Restricted
currency,
at
value
(cost
$108,059)
(Note
1d)
..............................................
106,650
Foreign
currenc
y,
at
value
(cost
$26,329,089)
......................................................
26,062,444
Receivables:
Capital
shares
sold
........................................................................
35,779,509
Dividends
and
interest
.....................................................................
184,833,079
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
509,622,059
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
130,697,157
Other
assets
..............................................................................
3,155
Total
assets
..........................................................................
15,809,127,218
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
4,882,607
Capital
shares
redeemed
...................................................................
117,349,167
Management
fees
.........................................................................
6,263,290
Distribution
fees
..........................................................................
1,487,925
Transfer
agent
fees
........................................................................
5,426,374
Options
written,
at
value
(premiums
received
$185,347,791)
...........................................
200,664,573
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
523,790,204
Deferred
tax
...............................................................................
18,585,643
Accrued
expenses
and
other
liabilities
...........................................................
3,965,945
Total
liabilities
.........................................................................
882,415,728
Net
assets,
at
value
.................................................................
$14,926,711,490
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$20,303,378,512
Total
distributable
earnings
(losses)
.............................................................
(5,376,667,022)
Net
assets,
at
value
.................................................................
$14,926,711,490
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
December
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
31
Templeton
Global
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$4,749,790,224
Shares
outstanding
........................................................................
484,695,571
Net
asset
value
per
share
a
..................................................................
$9.80
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$10.18
Class
C:
Net
assets,
at
value
.......................................................................
$682,581,571
Shares
outstanding
........................................................................
69,436,649
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$9.83
Class
R:
Net
assets,
at
value
.......................................................................
$170,554,481
Shares
outstanding
........................................................................
17,403,814
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.80
Class
R6:
Net
assets,
at
value
.......................................................................
$2,273,174,752
Shares
outstanding
........................................................................
233,099,593
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.75
Advisor
Class:
Net
assets,
at
value
.......................................................................
$7,050,610,462
Shares
outstanding
........................................................................
722,846,754
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.75
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
year
ended
December
31,
2020
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
32
Templeton
Global
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$6,529,906
Interest:
(net
of
foreign
taxes
of
$28,656,763)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
81,486,939
Paid
in
cash
a
...........................................................................
950,744,956
Total
investment
income
...................................................................
1,038,761,801
Expenses:
Management
fees
(Note
3
a
)
...................................................................
98,298,804
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
13,880,435
    Class
C
................................................................................
6,463,406
    Class
R
................................................................................
914,421
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
8,682,731
    Class
C
................................................................................
1,556,762
    Class
R
................................................................................
288,054
    Class
R6
...............................................................................
1,641,988
    Advisor
Class
............................................................................
16,105,176
Custodian
fees
(Note
4
)
......................................................................
5,839,535
Reports
to
shareholders
......................................................................
1,231,755
Registration
and
filing
fees
....................................................................
410,217
Professional
fees
...........................................................................
363,905
Trustees'
fees
and
expenses
..................................................................
543,962
Other
....................................................................................
998,838
Total
expenses
.........................................................................
157,219,989
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(5,160,995)
Net
expenses
.........................................................................
152,058,994
Net
investment
income
................................................................
886,702,807
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$24,314,771)
Unaffiliated
issuers
......................................................................
(978,572,605)
Written
options
...........................................................................
(349,612,471)
Foreign
currency
transactions
................................................................
(91,609,109)
Forward
exchange
contracts
.................................................................
12,856,283
Swap
contracts
...........................................................................
(1,398,759,947)
Net
realized
gain
(loss)
..................................................................
(2,805,697,849)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
530,339,859
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
4,846,971
Written
options
...........................................................................
(82,604,353)
Forward
exchange
contracts
.................................................................
(48,445,963)
Swap
contracts
...........................................................................
476,588,294
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
8,696,399
Net
change
in
unrealized
appreciation
(depreciation)
............................................
889,421,207
Net
realized
and
unrealized
gain
(loss)
............................................................
(1,916,276,642)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(1,029,573,835)
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
consolidated
financial
statements.
Annual
Report
33
Templeton
Global
Bond
Fund
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$886,702,807
$1,745,032,023
Net
realized
gain
(loss)
.................................................
(2,805,697,849)
(133,827,706)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
889,421,207
(1,464,890,846)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(1,029,573,835)
146,313,471
Distributions
to
shareholders:
Class
A
.............................................................
(6,612,491)
(450,594,449)
Class
C
.............................................................
(1,078,750)
(102,741,096)
Class
R
.............................................................
(206,391)
(12,804,137)
Class
R6
............................................................
(4,369,772)
(286,196,893)
Advisor
Class
........................................................
(13,136,851)
(1,083,896,447)
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
(242,434,431)
—
Class
C
.............................................................
(39,550,308)
—
Class
R
.............................................................
(7,566,931)
—
Class
R6
............................................................
(160,209,371)
—
Advisor
Class
........................................................
(481,637,650)
—
Total
distributions
to
shareholders
..........................................
(956,802,946)
(1,936,233,022)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(1,254,552,693)
(1,464,401,812)
Class
C
.............................................................
(611,685,910)
(726,315,359)
Class
R
.............................................................
(21,561,017)
(18,340,182)
Class
R6
............................................................
(1,802,048,802)
598,029,081
Advisor
Class
........................................................
(6,164,776,063)
(3,256,125,030)
Total
capital
share
transactions
............................................
(9,854,624,485)
(4,867,153,302)
Net
increase
(decrease)
in
net
assets
...................................
(11,841,001,266)
(6,657,072,853)
Net
assets:
Beginning
of
year
.......................................................
26,767,712,756
33,424,785,609
End
of
year
...........................................................
$14,926,711,490
$26,767,712,756
Templeton
Income
Trust
Notes
to
Financial
Statements
Templeton
Global
Bond
Fund
34
franklintempleton.com
Annual
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
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
after
they
have
been
held
for
10
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
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
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.
Templeton
Income
Trust
Notes
to
Financial
Statements
35
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
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.
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
the
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
36
franklintempleton.com
Annual
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
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
10 regarding
other
derivative
information.
d.
Restricted
Currency
At
December
31,
2020,
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.
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
December
31,
2020,
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
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
37
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
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.
2.
Shares
of
Beneficial
Interest
At
December
31,
2020,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
80,792,449
$816,587,860
137,611,766
$1,533,264,819
Shares
issued
in
reinvestment
of
distributions
..........
23,054,024
232,611,154
38,387,362
426,738,930
Shares
redeemed
...............................
(228,757,398)
(2,303,751,707)
(307,683,804)
(3,424,405,561)
Net
increase
(decrease)
..........................
(124,910,925)
$(1,254,552,693)
(131,684,676)
$(1,464,401,812)
Class
C
Shares:
Shares
sold
...................................
4,477,787
$45,842,838
13,548,410
$151,865,696
Shares
issued
in
reinvestment
of
distributions
..........
3,663,000
37,176,208
8,148,728
90,991,905
Shares
redeemed
a
..............................
(68,613,100)
(694,704,956)
(87,656,361)
(969,172,960)
Net
increase
(decrease)
..........................
(60,472,313)
$(611,685,910)
(65,959,223)
$(726,315,359)
1.
Organization
and
Significant
Accounting
Policies
(continued)
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
38
franklintempleton.com
Annual
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:
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Shares
Amount
Shares
Amount
Class
R
Shares:
Shares
sold
...................................
4,274,406
$43,070,893
5,242,028
$58,489,043
Shares
issued
in
reinvestment
of
distributions
..........
758,709
7,649,988
1,110,292
12,316,999
Shares
redeemed
...............................
(7,172,655)
(72,281,898)
(8,022,260)
(89,146,224)
Net
increase
(decrease)
..........................
(2,139,540)
$(21,561,017)
(1,669,940)
$(18,340,182)
Class
R6
Shares:
Shares
sold
...................................
75,175,247
$760,067,332
158,867,377
$1,776,522,575
Shares
issued
in
reinvestment
of
distributions
..........
14,541,119
146,434,916
22,483,223
247,906,617
Shares
redeemed
...............................
(270,886,633)
(2,708,551,050)
(130,160,868)
(1,426,400,111)
Net
increase
(decrease)
..........................
(181,170,267)
$(1,802,048,802)
51,189,732
$598,029,081
Advisor
Class
Shares:
Shares
sold
...................................
254,268,866
$2,575,004,566
448,155,451
$4,971,329,931
Shares
issued
in
reinvestment
of
distributions
..........
44,737,624
450,779,593
87,051,750
962,385,089
Shares
redeemed
...............................
(915,126,570)
(9,190,560,222)
(841,142,266)
(9,189,840,050)
Net
increase
(decrease)
..........................
(616,120,080)
$(6,164,776,063)
(305,935,065)
$(3,256,125,030)
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
Templeton
Distributors,
Inc.
(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
39
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
year
ended
December
31,
2020,
the
gross
effective
investment
management
fee
rate
was
0.482%
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
year:
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
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$67,147
CDSC
retained
..............................................................................
$161,966
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
40
franklintempleton.com
Annual
Report
Templeton
Global
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
year
ended
December
31,
2020,
the
Fund
paid
transfer
agent
fees
of
$28,274,711,
of
which $9,099,610
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies
for
purposes
other
than
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
year
ended
December
31,
2020,
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,
2021.
Prior
to
May
1,
2020,
the
Class
R6
transfer
agent
fees
were
limited
to
0.02%
based
on
the
average
net
assets
of
the
class.
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
year
ended
December
31,
2020,
there
were
no
credits
earned.
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
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%
.........
$3,382,668,169
$11,135,247,450
$(12,787,035,830)
$—
$—
$1,730,879,789
1,730,879,789
$6,529,906
Total
Affiliated
Securities
....
$3,382,668,169
$11,135,247,450
$(12,787,035,830)
$—
$—
$1,730,879,789
$6,529,906
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
41
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
 At
December
31,
2020,
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,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$396,875,278.
The
tax
character
of
distributions
paid
during
the
years
ended
December
31,
2020
and
2019,
was
as
follows:
At
December
31,
2020,
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,
swaps,
options
sold,
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
year
ended
December
31,
2020,
aggregated
$9,784,005,449
and
$17,139,990,619,
respectively.
7.
Credit
Risk
At
December
31,
2020,
the
Fund
had
10.7%
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.
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$7,393,297
Long
term
................................................................................
2,157,815,968
Total
capital
loss
carryforwards
...............................................................
$2,165,209,265
2020
2019
Distributions
paid
from:
Ordinary
income
..........................................................
$25,404,255
$1,936,233,022
Return
of
capital
...........................................................
931,398,691
—
$956,802,946
$1,936,233,022
Cost
of
investments
..........................................................................
$17,117,035,045
Unrealized
appreciation
........................................................................
$1,316,947,751
Unrealized
depreciation
........................................................................
(4,112,780,754)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(2,795,833,003)
Templeton
Income
Trust
Notes
to
Financial
Statements
42
franklintempleton.com
Annual
Report
Templeton
Global
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
December
31,
2020,
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.
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
December
31,
2020,
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
$
162,283,785
a
Options
written,
at
value
$
200,664,573
Unrealized
appreciation
on
OTC
forward
exchange
contracts
130,697,157
Unrealized
depreciation
on
OTC
forward
exchange
contracts
523,790,204
Total
....................
$292,980,942
$724,454,777
a
Purchased
option
contracts
are
included
in
investments
in
securities,
at
value
in
the
Statement
of
Assets
and
Liabilities.
Templeton
Income
Trust
Notes
to
Financial
Statements
43
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
For
the
year
ended
December
31,
2020,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
year
ended
December
31,
2020,
the
average
month
end
notional
amount
of
swap
contracts
and
options
represented
$674,256,000
and
$34,310,165,520
respectively.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$25,033,636,064.
At
December
31,
2020,
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
Year
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Year
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Templeton
Global
Bond
Fund
Interest
rate
contracts
.......
Swap
contracts
$(1,398,759,947)
Swap
contracts
$476,588,294
Foreign
exchange
contracts
..
Investments
576,487,517
a
Investments
54,542,907
a
Written
options
(349,612,471)
Written
options
(82,604,353)
Forward
exchange
contracts
12,856,283
Forward
exchange
contracts
(48,445,963)
Total
....................
$(1,159,028,618)
$400,080,885
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
Derivatives
Templeton
Global
Bond
Fund
Forward
exchange
contracts
.............................
$
130,697,157
$
523,790,204
Options
purchased
.....................................
162,283,785
—
Options
written
........................................
—
200,664,57
3
Total
.............................................
$292,980,942
$724,454,777
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
44
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
At
December
31,
2020,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
the
counterparty,
are
as
follows:
At
December
31,
2020,
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,b
Cash
Collateral
Received
Net
Amount
(Not
less
than
zero)
Templeton
Global
Bond
Fund
Counterparty
BNDP
...................
—
—
—
—
—
BOFA
....................
—
—
—
—
—
CITI
.....................
117,013,954
(117,013,954)
—
—
—
DBAB
...................
45,173,589
—
(43,003,661)
—
2,169,928
GSCO
...................
22,503,927
(22,503,927)
—
—
—
HSBK
...................
19,558,925
(19,558,925)
—
—
—
JPHQ
...................
36,277,913
(36,277,913)
—
—
—
MSCO
...................
50,548,895
(50,548,895)
—
—
—
UBSW
...................
1,903,739
(1,903,739)
—
—
—
Total
...................
$292,980,942
$(247,807,353)
$
(43,003,661)
$—
$2,169,928
$
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
...................
49,148
—
—
(49,148)
—
BOFA
....................
2,771,926
—
—
(2,771,926)
—
CITI
.....................
415,000,356
(117,013,954)
—
(297,986,402)
—
DBAB
...................
—
—
—
—
—
GSCO
...................
40,738,977
(22,503,927)
—
(18,160,000)
75,050
HSBK
...................
82,823,743
(19,558,925)
—
(63,264,818)
—
JPHQ
...................
56,031,362
(36,277,913)
—
(19,753,449)
—
MSCO
...................
122,341,672
(50,548,895)
—
(71,792,777)
—
UBSW
...................
4,697,593
(1,903,739)
—
(2,793,854)
—
Total
...................
$724,454,777
$(247,807,353)
$—
$(476,572,374)
$75,050
10.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
45
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
See
Note
1(c)
regarding
derivative
financial
instruments. 
See
Abbreviations
on
page
49
.
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
billion
(Global
Credit
Facility)
which
matured
on
February
5,
2021.
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.
Effective
February
5,
2021,
the
Borrowers
renewed
the
Global
Credit
Facility
for
a
one
year
term,
maturing
February
4,
2022,
for
a
total
of
$2.675
billion.
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
year
ended
December
31,
2020,
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)
a
At
December
31,
2020,
the
Fund
received
U.S.
Treasury
Bills,
Bonds
and
Notes
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
46
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
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
December
31,
2020,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Global
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
............................
$
—
$
—
$
506,006,278
$
506,006,278
Brazil
...............................
—
475,844,074
—
475,844,074
Colombia
............................
—
488,310,859
—
488,310,859
Ghana
..............................
—
389,707,175
—
389,707,175
India
................................
—
391,112,596
—
391,112,596
Indonesia
............................
—
1,665,458,247
—
1,665,458,247
Mexico
..............................
—
2,269,716,179
—
2,269,716,179
Norway
..............................
—
1,117,037,007
—
1,117,037,007
South
Korea
..........................
—
1,269,131,857
—
1,269,131,857
Supranational
.........................
—
135,349,613
—
135,349,613
U.S.
Government
and
Agency
Securities
.......
—
3,106,532,845
—
3,106,532,845
Options
purchased
.......................
—
162,283,785
—
162,283,785
Short
Term
Investments
...................
1,730,879,789
1,174,768,407
32,820,953
2,938,469,149
Total
Investments
in
Securities
...........
$1,730,879,789
$12,645,252,644
$538,827,231
$14,914,959,664
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
130,697,157
$
—
$
130,697,157
Restricted
Currency
(ARS)
.................
—
—
106,650
106,650
Total
Other
Financial
Instruments
.........
$—
$130,697,157
$106,650
$130,803,807
Receivables:
Interest
(ARS)
...........................
$—
$—
$11,892,277
$11,892,277
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
200,664,573
$
—
$
200,664,573
Forward
exchange
contracts
................
—
523,790,204
—
523,790,204
Total
Other
Financial
Instruments
.........
$—
$724,454,777
$—
$724,454,777
Payables:
Investment
Securities
Purchased
(ARS)
.......
$—
$—
$4,882,607
$4,882,607
Deferred
Tax(ARS)
.......................
$—
$—
$30,205
$30,205
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
47
franklintempleton.com
Annual
Report
Templeton
Global
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
year.
At
December
31,
2020,
the
reconciliation
is
as
follows:
Balance
at
Beginning
of
Year
Purchases
Sales
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Cost
Basis
Adjust-
ments
a
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Year
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Year
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Global
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
.........
$
421,896,146
$
345,644,812
$
(113,449,479)
$
—
$
—
$
87,221,119
$
(201,978,704)
$
(33,327,616)
$
506,006,278
$
(110,620,053)
Short
Term
Investments
.
41,783,420
79,255,533
(57,142,386)
—
—
7,673,373
(27,306,223)
(11,442,764)
32,820,953
961,806
Total
Investments
in
Securities
.
$463,679,566
$424,900,345
$(170,591,865)
$—
$—
94,894,492
(229,284,927)
(44,770,380)
$538,827,231
$(109,658,247)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
$96,378,491
$213,718,157
$(293,815,488)
$—
$—
$—
$(18,859,916)
$2,685,406
$106,650
$1,409
Receivables:
Interest
(ARS)
......
$20,624,672
$118,231,293
$(112,198,057)
$—
$—
$—
$(16,585,448)
$1,819,817
$11,892,277
$429,019
Liabilities:
Payables:
Deferred
Tax
(ARS)
....
$57,813
$—
$—
$—
$—
$—
$—
$(27,608)
$30,205
$(27,608)
Investment
Securities
Purchased
(ARS)
....
$—
$4,882,607
$—
$—
$—
$—
$—
$—
$4,882,607
$—
a
May
include
accretion,
amortization,
partnership
adjustments,
and/or
other
cost
basis
adjustments.
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
48
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
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
December
31,
2020,
are
as
follows:
13.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
The
amendments
in
the
ASU
provides
optional
temporary
financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021.
The
ASU
is
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022. Management
has
reviewed
the
requirements
and
believes
the
adoption
of
this
ASU
will
not
have
a
material
impact
on
the
financial
statements.
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
other
than
those
already
disclosed
in
the
financial
statements.
Description
Fair
Value
at
End
of
Year
Valuation
Technique
Unobservable
Inputs
Amount
/
Range
(Weighted
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
Global
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Argentina
.........
$506,006,278
Market
comparables
Implied
foreign
exchange
rate
143.8
ARS/USD
Decrease
b
Short
Term
Investments:
Argentina
.........
32,820,953
Market
comparables
Implied
foreign
exchange
rate
143.8
ARS/USD
Decrease
c
All
Other
............
11,998,927
d
Liabilities:
All
Other
...........
4,912,812
d
Total
...............
$545,913,346
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
Represents
a
significant
impact
to
fair
value
and
net
assets.
c
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
d
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
49
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
(continued)
Abbreviations
Counterparty
BNDP
BNP
Paribas
SA
BOFA
Bank
of
America
Corp.
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
UBSW
UBS
AG
Selected
Portfolio
BADLAR
Argentina
Deposit
Rates
Badlar
Private
Banks
ARS
CER
Reference
Stabilization
Coefficient
FRN
Floating
Rate
Note
Currency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
CHF
Swiss
Franc
COP
Colombian
Peso
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
USD
United
States
Dollar
Templeton
Income
Trust
Report
of
Independent
Registered
Public
Accounting
Firm
50
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Templeton
Income
Trust
and
Shareholders
of
Templeton
Global
Bond
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
statement
of
investments,
of
Templeton
Global
Bond
Fund
(one
of
the
funds
constituting
Templeton
Income
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2020,
the
related
statement
of
operations
for
the
year
ended
December
31,
2020,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2020,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2020
by
correspondence
with
the
custodian,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
PricewaterhouseCoopers
LLP
San
Francisco,
California
February
19,
2021
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Templeton
Income
Trust
Tax
Information
(unaudited)
51
franklintempleton.com
Annual
Report
Templeton
Global
Bond
Fund
At
December
31,
2020,
more
than
50%
of
the
Fund’s
total
assets
were
invested
in
securities
of
foreign
issuers.
In
most
instances,
foreign
taxes
were
withheld
from
income
paid
to
the
Fund
on
these
investments.
The
Fund
elects
to
treat
foreign
taxes
paid
as
allowed
under
Section
853
of
the
Internal
Revenue
Code.
This
election
will
allow
shareholders
of
record
as
of
the
2021
distribution
date,
to
treat
their
proportionate
share
of
foreign
taxes
paid
by
the
Fund
as
having
been
paid
directly
by
them.
The
shareholder
shall
consider
these
amounts
as
foreign
taxes
paid
in
the
tax
year
in
which
they
receive
the
Fund
distribution.
Templeton
Income
Trust
Board
Members
and
Officers
52
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1992
125
Bar-S
Foods
(meat
packing
company)
(1981-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Ann
Torre
Bates
(1958)
Trustee
Since
2008
30
Ares
Capital
Corporation
(specialty
finance
company)
(2010-present),
United
Natural
Foods,
Inc.
(distributor
of
natural,
organic
and
specialty
foods)
(2013-present),
formerly
,
Allied
Capital
Corporation
(financial
services)
(2003-
2010),
SLM
Corporation
(Sallie
Mae)
(1997-2014)
and
Navient
Corporation
(loan
management,
servicing
and
asset
recovery)
(2014-2016).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Executive
Vice
President
and
Chief
Financial
Officer,
NHP
Incorporated
(manager
of
multifamily
housing)
(1995-1997);
and
Vice
President
and
Treasurer,
US
Airways,
Inc.
(until
1995).
Mary
C.
Choksi
(1950)
Trustee
Since
2016
125
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-May
2020).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Templeton
Income
Trust
53
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
2001
and
Lead
Independent
Trustee
since
2007
125
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Canadian
National
Railway
(railroad)
(2001-present),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
125
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Private
investor;
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(May
2019-January
1,
2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
David
W.
Niemiec
(1949)
Trustee
Since
2005
30
Hess
Midstream
LP
(oil
and
gas
midstream
infrastructure)
(2017-present).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Advisor,
Saratoga
Partners
(private
equity
fund);
and
formerly
,
Managing
Director,
Saratoga
Partners
(1998-2001)
and
SBC
Warburg
Dillon
Read
(investment
banking)
(1997-1998);
Vice
Chairman,
Dillon,
Read
&
Co.
Inc.
(investment
banking)
(1991-1997);
and
Chief
Financial
Officer,
Dillon,
Read
&
Co.
Inc.
(1982-1997).
Larry
D.
Thompson
(1945)
Trustee
Since
2005
125
Graham
Holdings
Company
(education
and
media
organization)
(2011-present);
and
formerly
,
The
Southern
Company
(energy
company)
(2014-May
2020;
previously
2010-2012),
Cbeyond,
Inc.
(business
communications
provider)
(2010-2012).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-September
2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Templeton
Income
Trust
54
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Constantine
D.
Tseretopoulos
(1954)
Trustee
Since
2003
19
None
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Physician,
Chief
of
Staff,
owner
and
operator
of
the
Lyford
Cay
Hospital
(1987-present);
director
of
various
nonprofit
organizations;
and
formerly
,
Cardiology
Fellow,
University
of
Maryland
(1985-1987);
and
Internal
Medicine
Resident,
Greater
Baltimore
Medical
Center
(1982-
1985).
Robert
E.
Wade
(1946)
Trustee
Since
2006
30
El
Oro
Ltd
(investments)
(2003-
2019).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Attorney
at
law
engaged
in
private
practice
as
a
sole
practitioner
(1972-2008)
and
member
of
various
boards.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2007
136
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
39
of
the
investment
companies
in
Franklin
Templeton;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015),
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Chairman
of
the
Board,
Trustee
and
Vice
President
Chairman
of
the
Board
and
Trustee
since
2013
and
Vice
President
since
1996
125
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
37
of
the
investment
companies
in
Franklin
Templeton.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
October
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Advisory
Services,
LLC,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Independent
Board
Members
(continued)
Templeton
Income
Trust
55
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Steven
J.
Gray
(1955)
Vice
President
Since
2009
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Vice
President,
Franklin
Templeton
Distributors,
Inc.
and
FASA,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Michael
Hasenstab
Ph.D.
(1973)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
three
of
the
investment
companies
in
Franklin
Templeton.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
41
of
the
investment
companies
in
Franklin
Templeton;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Robert
G.
Kubilis
(1973)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
2017
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting
and
officer
of
39
of
the
investment
companies
in
Franklin
Templeton.
Robert
Lim
(1948)
Vice
President
–
AML
Compliance
Since
2016
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Templeton
Companies,
LLC;
Chief
Compliance
Officer,
Franklin
Templeton
Distributors,
Inc.
and
Franklin
Templeton
Investor
Services,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Associate
General
Counsel
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Craig
S.
Tyle
(1960)
Vice
President
Since
2005
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
General
Counsel
and
Executive
Vice
President,
Franklin
Resources,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
56
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
major
shareholder
of
Resources.
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
U.S.
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
each
of
Ann
Torre
Bates
and
David
W.
Niemiec
as
an
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
qualify
as
such
an
expert
in
view
of
their
extensive
business
background
and
experience.
Ms.
Bates
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2008.
She
currently
serves
as
a
director
of
Ares
Capital
Corporation
(2010-present)
and
United
Natural
Foods,
Inc.
(2013-present)
and
was
formerly
a
director
of
Navient
Corporation
from
2014
to
2016,
SLM
Corporation
from
1997
to
2014
and
Allied
Capital
Corporation
from
2003
to
2010,
Executive
Vice
President
and
Chief
Financial
Officer
of
NHP
Incorporated
from
1995
to
1997
and
Vice
President
and
Treasurer
of
US
Airways,
Inc.
until
1995.
Mr.
Niemiec
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2005,
currently
serves
as
an
Advisor
to
Saratoga
Partners
and
was
formerly
its
Managing
Director
from
1998
to
2001
and
serves
as
a
director
of
Hess
Midstream
LP
(2017-present).
Mr.
Niemiec
was
formerly
a
director
of
Emeritus
Corporation
from
1999
to
2010
and
OSI
Pharmaceuticals,
Inc.
from
2006
to
2010,
Managing
Director
of
SBC
Warburg
Dillon
Read
from
1997
to
1998,
and
was
Vice
Chairman
from
1991
to
1997
and
Chief
Financial
Officer
from
1982
to
1997
of
Dillon,
Read
&
Co.
Inc.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
have
each
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Bates
and
Mr.
Niemiec
are
independent
Board
members
as
that
term
is
defined
under
the
applicable
U.S.
Securities
and
Exchange
Commission
Rules
and
Releases
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Lori
A.
Weber
(1964)
Vice
President
and
Secretary
Vice
President
since
2011
and
Secretary
since
2013
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Christine
Zhu
(1975)
Vice
President
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
three
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
Shareholder
Information
57
franklintempleton.com
Annual
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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.
406
A
02/21
©
2021
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.
Annual
Report
and
Shareholder
Letter
Templeton
Global
Bond
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Templeton
Distributors,
Inc.
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Annual
Report
and
Shareholder
Letter
Templeton
Emerging
Markets
Bond
Fund
A
Series
of
Templeton
Income
Trust
December
31,
2020
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Not
part
of
the
annual
report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
12
months
ended
December
31,
2020,
the
novel
coronavirus
pandemic
hindered
the
global
economy.
Starting
in
March,
worldwide
efforts
to
slow
the
infection
rate
thwarted
global
economic
activity,
and
central
banks
acted
swiftly
to
maintain
financial
stability.
The
U.S.
Federal
Reserve
enacted
emergency
rate
cuts
and
authorized
open-
ended
purchasing
of
government-backed
and
corporate
bonds
to
bolster
markets,
and
the
European
Central
Bank’s
Pandemic
Emergency
Purchase
Programme
included
private
and
public
sector
securities.
These
measures
helped
U.S.
and
eurozone
economic
growth
to
resume
in
2020’s
third
quarter
after
two
quarters
of
contraction.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
+10.11%
and
+5.52%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
decreased
against
most
foreign
currencies
during
the
period.
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
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
advisors
and
review
their
portfolios
to
design
a
long-term
strategy
and
portfolio
allocation
that
meet
their
individual
needs,
goals
and
risk
tolerance.
Templeton
Emerging
Markets
Bond
Fund’s
annual
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
December
31,
2020
,
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.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Annual
Report
2
Contents
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
3
Performance
Summary
7
Your
Fund’s
Expenses
10
Financial
Highlights
and
Statement
of
Investments
11
Financial
Statements
28
Notes
to
Financial
Statements
32
Report
of
Independent
Registered
Public
Accounting
Firm
48
Tax
Information
49
Board
Members
and
Officers
50
Shareholder
Information
55
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Templeton
Emerging
Markets
Bond
Fund
This
annual
report
for
Templeton
Emerging
Markets
Bond
Fund
covers
the
fiscal
year
ended
December
31,
2020
.
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
governments
or
government-related
entities
that
are
located
in
emerging
market
countries,
as
well
as
bonds
issued
by
emerging
market
corporate
entities.
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
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
12
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-6.80%
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,
posted
a
+5.88%
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
7
.
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
12-month
period
ended
December
31,
2020,
started
optimistically,
as
a
phase
one
trade
deal
between
the
U.S.
and
China
appeared
to
bolster
market
sentiment,
driving
risk
asset
valuations
higher
in
several
markets
across
the
globe.
However,
conditions
changed
radically
and
rapidly
by
late
February,
as
the
novel
coronavirus
(COVID-19)
pandemic
upended
economies
and
financial
markets
around
the
world.
Lockdown
orders
from
governments
trying
to
“flatten
the
curve”
(i.e.,
stem
the
rate
of
infection)
ultimately
brought
entire
countries,
regions
and
continents
to
an
economic
standstill
in
March
and
April.
The
speed
and
pervasiveness
of
the
economic
shocks
were
unprecedented.
There
is
no
historical
comparison
for
the
magnitude
of
aggregate
demand
that
was
destroyed,
nor
the
magnitude
of
job
losses
in
such
a
compressed
timescale.
Risk
aversion
rapidly
escalated
to
crisis
levels
and
deepened
throughout
March,
driving
correlations
to
1.0
across
multiple
asset
classes
as
investors
shed
risk
and
moved
into
perceived
safe
havens.
Credit
markets
experienced
substantial
price
volatility,
with
the
lower-rated
credit
tiers
bearing
the
brunt
of
the
selloffs.
The
U.S.
Federal
Reserve
(Fed)
responded
quickly
to
the
deepening
crisis
with
two
emergency
rate
cuts
in
March,
the
second
of
which
dropped
the
federal
funds
target
rate
100
basis
points
(bps)
to
the
zero
bound
that
was
used
during
the
2008
global
financial
crisis
(GFC).
The
Fed
also
cut
reserve
requirements
and
encouraged
financial
institutions
to
borrow
directly
from
the
discount
window.
Growing
liquidity
strains
throughout
financial
markets
in
March
prompted
the
Fed
to
restart
liquidity
programs
that
had
been
created
during
the
GFC,
such
as
the
Commercial
Paper
Funding
Facility
and
the
Primary
Dealer
Credit
Facility.
On
March
23,
the
Fed
took
its
financial
market
interventions
beyond
the
scope
of
the
GFC
programs
by
creating
corporate
lending
programs,
and
announcing
its
intentions
to
support
lending
to
small-
and
medium-sized
businesses
through
the
newly
created
Main
Street
Business
Lending
Program.
The
Fed
also
pledged
to
buy
unlimited
government
bonds,
abandoning
the
previous
quantitative
easing
(QE)
targets
it
had
announced
a
week
earlier
on
March
15.
The
heightened
demand
for
U.S.
dollars
(USD)
Portfolio
Composition
12/31/20
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
68.2%
Corporate
Bonds
2.2%
Short-Term
Investments
&
Other
Net
Assets*
29.6%
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Templeton
Emerging
Markets
Bond
Fund
4
franklintempleton.com
Annual
Report
around
the
world
also
led
the
Fed
to
expand
its
liquidity
swaps
program
with
foreign
central
banks
beyond
the
five
banks
in
its
standing
facility.
On
the
U.S.
fiscal
side,
Congress
passed
the
CARES
Act
(Coronavirus
Aid,
Relief,
and
Economic
Security)
on
March
27,
a
USD$2.2
trillion
fiscal
relief
program
designed
to
provide
loans
to
businesses,
income
support
and
unemployment
benefits
to
individuals,
and
funding
for
hospitals
and
public
health
services.
It
was
the
largest
economic
relief
bill
in
U.S.
history.
In
Europe,
the
European
Central
Bank
(ECB)
unveiled
the
€750
billion
Pandemic
Emergency
Purchase
Programme
(PEPP)
in
an
unscheduled
mid-week
announcement
on
March
18.
ECB
President
Christine
Lagarde
commented
that,
“there
are
no
limits
to
our
commitment
to
the
euro.
We
are
determined
to
use
the
full
potential
of
our
tools,
within
our
mandate.”
PEPP
appeared
geared
to
support
the
more
vulnerable
states,
as
the
program
has
unprecedented
flexibility
to
buy
a
wide
range
of
eligible
securities,
including
Greek
and
Italian
sovereign
debt,
as
well
as
corporate
commercial
paper.
The
European
Commission
passed
its
€750
billion
recovery
fund
in
July,
which
was
largely
viewed
by
markets
as
a
major
step
towards
greater
fiscal
solidarity
across
the
euro
area.
In
the
second
quarter
of
2020,
global
financial
markets
rebounded
from
the
extreme
lows
in
March,
as
extraordinary
measures
from
central
banks
and
governments
appeared
to
improve
market
confidence.
Additionally,
regional
economies
began
to
incrementally
reopen
and
the
improving
economic
data
appeared
to
bolster
optimism
that
the
worst
of
the
economic
shocks
had
passed.
Risk
assets
rallied
and
credit
spreads
tightened
in
many
sectors
during
the
second
quarter,
returning
to
levels
last
seen
in
early
March
and
late
February.
Those
trends
largely
extended
through
July
and
August
as
strengthening
economic
activity
and
profound
policy
interventions
continued
to
fuel
rallies
across
global
financial
markets
through
much
of
the
summer.
However,
many
risk
assets
appeared
detached
from
underlying
economic
fundamentals
due
to
extraordinary
monetary
policies.
Risk
assets
eventually
pulled
back
from
their
summer
high
points
in
September
2020,
as
rising
cases
of
COVID-19
appeared
to
concern
investors,
particularly
as
areas
of
Europe
and
Asia
returned
to
various
mobility
restrictions.
Developed
market
sovereign
bond
yields
fluctuated
during
the
summer
months,
rising
on
reflation
expectations
but
dropping
in
September
as
broad
risk
aversion
returned
to
global
financial
markets.
Additionally,
economic
recoveries
in
many
regions
showed
signs
of
levelling
off
in
August
and
September,
demonstrating
that
the
improvements
in
the
late
spring
and
summer
months
were
rebounds
from
the
extreme
low
points
in
March
and
April,
not
trends
that
could
be
extrapolated
through
upcoming
quarters.
Yoshihide
Suga
was
confirmed
as
the
new
prime
minister
of
Japan
on
September
16,
following
Shinzo
Abe's
resignation
on
August
28.
Abe
had
been
prime
minister
since
December
2012.
We
expected
political
continuity
in
the
near
term,
as
Suga
is
an
Abe
loyalist
who
was
often
credited
with
pushing
through
many
of
Abe’s
critical
domestic
reforms.
In
October
2020,
“risk-on”
sentiment
initially
returned
to
global
financial
markets,
with
risk
assets
rallying
during
the
first
couple
weeks
of
the
month
before
broad
risk
aversion
sharply
returned,
leading
to
significant
price
adjustments
in
various
credit
sectors
during
the
second
half
of
the
month.
Investors
appeared
concerned
over
resurgent
waves
of
COVID-19
cases
around
the
world.
Market
sentiments
ultimately
improved
in
November
on
apparent
optimism
over
promising
vaccine
trials
and
prospects
for
a
potential
global
economic
recovery
in
2021.
Risk
assets
finished
the
final
months
of
the
year
on
broad-based
rallies
as
initial
vaccine
distributions
commenced.
However,
market
optimism
in
the
fourth
quarter
ran
in
stark
contrast
to
the
worsening
pandemic,
as
COVID-19
infections
surged
to
record
levels
in
areas
of
Europe,
the
U.S.
and
Latin
America
in
the
waning
months
of
the
year,
with
a
highly
contagious
variant
of
the
virus
surfacing
in
dozens
of
countries.
The
harsh
realities
of
a
worldwide
health
crisis
and
deepening
economic
hardship
continued
to
have
profound
consequences
for
lives
and
livelihoods
around
the
world.
In
late
December
2020,
the
U.S.
government
passed
a
USD$900
billion
support
package
that
extended
unemployment
benefits
until
mid-March
2021
and
provides
one-time
relief
payments
of
USD$600
to
most
citizens.
Additional
fiscal
stimulus
appeared
likely
with
the
upcoming
change
in
the
U.S.
government.
The
Fed
continued
to
maintain
low
rates
as
well
as
its
emergency
support
program
from
March
through
the
end
of
the
year,
continuously
reaffirming
its
commitment
to
use
its
“full
range
of
tools
to
support
the
U.S.
economy”
at
each
policy
meeting.
The
ECB
also
kept
monetary
policy
unchanged
through
the
end
of
the
year,
with
the
main
refinancing
operations
rate
remaining
at
0.0%,
and
the
main
deposit
facility
rate
remaining
at
-0.5%.
The
ECB
increased
the
size
of
the
PEPP
program
to
€1.85
trillion
in
December,
after
previously
raising
it
to
€1.35
trillion
in
June.
The
U.K.
and
the
European
Union
also
settled
on
final
terms
for
post-Brexit
trade
agreements
in
the
last
week
of
the
year.
Templeton
Emerging
Markets
Bond
Fund
5
franklintempleton.com
Annual
Report
The
Bank
of
Japan
(BOJ)
also
made
no
changes
to
its
rates
policy
in
2020.
Overnight
interest
rates
remained
at
0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
remained
at
0.0%.
In
the
second
quarter,
the
BOJ
removed
QE
caps
and
quadrupled
the
size
of
its
corporate
debt
purchases.
It
also
increasingly
focused
on
ensuring
businesses
had
ample
access
to
capital
through
various
loan
programs,
increasing
its
lending
program
to
USD$1
trillion.
However,
despite
the
BOJ's
efforts
to
drive
inflation
higher
during
the
Abenomics
era,
deflationary
pressures
returned,
with
core
inflation
dropping
to
-0.4%
year-over-
year
in
August
and
falling
further
to
-0.9%
in
November.
The
BOJ
announced
in
December
that
it
had
launched
a
comprehensive
review
of
its
monetary
framework,
scheduled
to
arrive
in
March
2021.
We
continued
to
expect
the
Japanese
yen
to
appreciate
against
the
USD
during
the
period,
on
stable
rate
differentials
and
Japan’s
strong
external
balance.
Nearly
every
country
in
the
world
declared
some
form
of
fiscal
response
to
the
economic
crisis
in
2020,
with
most
countries
pursuing
programs
that
went
beyond
the
measures
they
deployed
during
the
GFC.
Debt-to-GDP
(gross
domestic
product)
ratios
have
risen
significantly
in
just
about
every
country.
On
the
monetary
front,
many
central
banks
aggressively
cut
policy
rates,
with
several
indicating
they
intend
to
respond
to
ongoing
economic
adversity
with
additional
accommodation
as
needed.
During
the
12-month
period,
Brazil
cut
rates
by
250
bps
to
2.00%,
Colombia
cut
rates
by
250
bps
to
1.75%,
Mexico
cut
rates
by
300
bps
to
4.25%,
Indonesia
cut
rates
by
125
bps
to
3.75%,
and
India
cut
rates
by
115
bps
to
4.00%.
In
global
bond
markets,
the
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
period
100
bps
lower,
at
0.92%,
ranging
from
a
pre-pandemic
high
of
1.92%
on
January
1
to
an
all-time
low
of
0.51%
on
August
4.
The
yield
on
the
10-year
German
Bund
finished
the
year
38
bps
lower
at
-0.57%,
ranging
from
a
pre-pandemic
high
of
-0.19%
on
January
13
to
an
all-time
low
of
-0.86%
on
March
9,
during
peak
financial
market
shocks.
Sovereign
bond
yields
also
declined
in
several
countries
on
ongoing
monetary
accommodation
during
the
year,
notably
including
much
of
Latin
America
and
Asia,
particularly
Brazil,
Mexico,
Indonesia
and
India.
In
currency
markets,
the
USD
initially
strengthened
in
March
on
tremendous
demand
for
U.S.
dollars
during
the
financial
market
shocks,
but
then
entered
a
broad-based
weakening
pattern
in
mid-May
that
largely
persisted
through
the
end
of
December.
Many
developed
market
and
emerging
market
currencies
alike
strengthened
against
the
USD
over
the
final
seven
months
of
the
year.
In
credit
markets,
spreads
widened
substantially
during
peak
financial
market
volatility
in
February
and
March,
but
progressively
tightened
from
April
through
December,
with
several
sovereign
and
corporate
sectors
finishing
the
year
at
pre-pandemic
levels.
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.
We
manage
the
Fund’s
exposure
to
various
currencies
and
regularly
use
currency
and
cross
currency
forward
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
During
the
reporting
period,
the
team
actively
pursued
select
duration
exposures
in
emerging
market
countries
that
offered
positive
real
yields,
favoring
countries
that
have
solid
underlying
fundamentals,
strong
domestic
drivers,
and
prudent
fiscal
and
monetary
policies.
The
team
generally
preferred
the
intermediate
to
short-term
ranges
of
local-
currency
yield
curves,
based
on
attractive
risk-adjusted
returns
in
those
segments,
and
its
broad
strategy
of
avoiding
interest-rate
risks
given
its
expectations
for
rising
rates.
The
team
maintained
largely
unhedged
exposure
to
local-
currency
markets
to
capture
higher
levels
of
income
from
local-currency
bonds.
Several
emerging
markets
continued
to
offer
significantly
higher
yields
than
much
of
the
global
fixed
income
markets
around
the
world.
The
strategy
entered
the
reporting
period
in
a
de-risked
state
as
the
investment
team
saw
elevated
global
financial
market
risks
that
it
believed
were
significantly
underappreciated
by
markets.
While
the
team
was
not
explicitly
anticipating
the
COVID-19
crisis,
it
was
concerned
that
overvalued
risk
assets
were
vulnerable
to
a
geopolitical,
economic
or
financial
market
shock.
The
team
adjusted
the
Geographic
Composition
12/31/20
%
of
Total
Net
Assets
Americas
37.5%
Asia
Pacific
26.7%
Middle
East
&
Africa
6.2%
Short-Term
Investments
&
Other
Net
Assets
29.6%
Templeton
Emerging
Markets
Bond
Fund
6
franklintempleton.com
Annual
Report
risk-sizing
of
various
positions
and
hedged
various
areas
of
local-currency
emerging
market
beta
risk
through
proxy
hedges
(net-negative
Australian
dollar)
and
direct
hedges
(South
Korean
won,
Mexican
peso
and
Brazilian
real).
The
strategy
continued
to
focus
on
value
and
attractive
levels
of
yield
in
local-currency
bonds
in
specific
emerging
markets,
such
as
Brazil,
Mexico,
Colombia,
Indonesia,
India
and
Ghana.
The
strategy
exited
its
negative
duration
exposure
to
USTs
in
the
first
quarter.
The
strategy
held
various
sovereign
credit
exposures
but
generally
continued
to
prefer
the
valuations
in
specific
local-currency
markets
over
the
more
fully
valued
credit
markets.
During
the
period,
the
team
used
forward
currency
exchange
contracts
to
actively
manage
currencies,
and
used
interest-rate
swaps
to
tactically
manage
duration
exposures.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
contributed
to
absolute
results,
while
overall
credit
exposures
had
a
largely
neutral
effect.
Among
currencies,
positions
in
Latin
America
(the
Brazilian
real,
Argentine
peso
and
Mexican
peso)
and
Asia
ex-Japan
(the
Indonesian
rupiah)
detracted
from
absolute
performance.
The
Fund’s
net-negative
position
in
the
Australian
dollar
also
detracted
from
absolute
results.
However,
its
net-
positive
position
in
the
Japanese
yen
contributed
to
absolute
performance,
as
did
its
net-negative
position
in
the
euro
at
the
beginning
of
the
period.
The
Fund
maintained
low
overall
portfolio
duration,
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Argentina,
Mexico,
and
Colombia
contributed,
while
Brazil
detracted),
Asia
ex-Japan
(India
and
Indonesia)
and
Africa
(Ghana)
contributed
to
absolute
results.
Thank
you
for
your
participation
in
Templeton
Emerging
Markets
Bond
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Michael
Hasenstab,
Ph.D.
Lead
Portfolio
Manager
Calvin
Ho
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
December
31,
2020,
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
December
31,
2020
Templeton
Emerging
Markets
Bond
Fund
7
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
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
12/31/20
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
1-Year
-6.80%
-10.28%
5-Year
+11.12%
+1.36%
Since
Inception
(4/1/13)
+4.34%
+0.06%
Advisor
1-Year
-6.46%
-6.46%
5-Year
+12.43%
+2.37%
Since
Inception
(4/1/13)
+6.27%
+0.79%
See
page
9
for
Performance
Summary
footnotes.
Templeton
Emerging
Markets
Bond
Fund
Performance
Summary
8
franklintempleton.com
Annual
Report
See
page
9
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(4/1/13–
12/31/20
)
Advisor
Class
(4/1/13–
12/31/20
)
Templeton
Emerging
Markets
Bond
Fund
Performance
Summary
9
franklintempleton.com
Annual
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.
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.
Unexpected
events
and
their
aftermaths,
such
as
the
spread
of
deadly
diseases;
natural,
environmental
or
man-made
disasters;
financial,
political
or
social
disruptions;
terrorism
and
war;
and
other
tragedies
or
catastrophes,
can
cause
investor
fear
and
panic,
which
can
adversely
affect
the
economies
of
many
companies,
sectors,
nations,
regions
and
the
market
in
general,
in
ways
that
cannot
necessarily
be
foreseen.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
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
4/30/21.
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.
Source:
Morningstar.
The
JPM
EMBI
Global
tracks
total
returns
for
U.S.
dollar-denominated
debt
instruments
issued
by
emerging
market
sovereign
and
quasi-sovereign
entities:
Brady
bonds,
loans
and
Eurobonds.
6.
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
(1/1/20–12/31/20)
Share
Class
Net
Investment
Income
Tax
Return
of
Capital
Total
A
$0.0103
$0.4983
$0.5086
C
$0.0097
$0.4688
$0.4785
R
$0.0102
$0.4969
$0.5071
R6
$0.0108
$0.5226
$0.5334
Advisor
$0.0106
$0.5123
$0.5229
Total
Annual
Operating
Expenses
6
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.26%
2.08%
Advisor
1.01%
1.83%
Your
Fund’s
Expenses
Templeton
Emerging
Markets
Bond
Fund
10
franklintempleton.com
Annual
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
184/366
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
7/1/20
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,003.13
$5.18
$1,019.97
$5.22
1.03%
C
$1,000
$1,000.75
$7.51
$1,017.63
$7.57
1.49%
R
$1,000
$1,002.80
$5.55
$1,019.60
$5.60
1.10%
R6
$1,000
$1,004.69
$3.84
$1,021.30
$3.88
0.76%
Advisor
$1,000
$1,003.94
$4.21
$1,020.93
$4.25
0.84%
Templeton
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
11
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$7.73
$8.13
$9.16
$8.84
$8.75
$8.33
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.48
0.62
0.68
0.70
0.21
0.55
Net
realized
and
unrealized
gains
(losses)
(1.00)
(0.51)
(0.99)
0.20
0.04
0.06
Total
from
investment
operations
........
(0.52)
0.11
(0.31)
0.90
0.25
0.61
Less
distributions
from:
Net
investment
income
..............
(0.01)
(0.51)
(0.52)
(0.57)
(0.16)
(0.19)
Net
realized
gains
.................
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
................
(0.50)
—
(0.19)
—
—
—
Total
distributions
...................
(0.51)
(0.51)
(0.72)
(0.58)
(0.16)
(0.19)
Net
asset
value,
end
of
year
...........
$6.70
$7.73
$8.13
$9.16
$8.84
$8.75
Total
return
d
.......................
(6.80)%
1.33%
(3.30)%
10.21%
2.89%
7.47%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
2.10%
2.16%
2.15%
2.46%
3.22%
2.45%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.07%
1.13%
1.14%
1.22%
1.11%
1.15%
Net
investment
income
...............
6.84%
7.75%
8.03%
7.51%
7.16%
6.56%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$16,004
$21,984
$20,728
$19,042
$14,214
$13,643
Portfolio
turnover
rate
................
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
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.
Templeton
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$7.72
$8.12
$9.15
$8.84
$8.73
$8.31
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.44
0.59
0.65
0.67
0.20
0.51
Net
realized
and
unrealized
gains
(losses)
(0.99)
(0.52)
(1.00)
0.19
0.03
0.07
Total
from
investment
operations
........
(0.55)
0.07
(0.35)
0.86
0.23
0.58
Less
distributions
from:
Net
investment
income
..............
(0.01)
(0.47)
(0.49)
(0.54)
(0.12)
(0.16)
Net
realized
gains
.................
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
................
(0.47)
—
(0.18)
—
—
—
Total
distributions
...................
(0.48)
(0.47)
(0.68)
(0.55)
(0.12)
(0.16)
Net
asset
value,
end
of
year
...........
$6.69
$7.72
$8.12
$9.15
$8.84
$8.73
Total
return
d
.......................
(7.22)%
0.89%
(3.69)%
9.75%
2.67%
6.98%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
2.54%
2.56%
2.54%
2.89%
3.74%
2.94%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.51%
1.53%
1.53%
1.65%
1.63%
1.64%
Net
investment
income
...............
6.33%
7.35%
7.64%
7.08%
6.64%
6.07%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$1,821
$2,276
$2,799
$2,553
$548
$464
Portfolio
turnover
rate
................
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
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.
Templeton
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
13
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$7.73
$8.14
$9.17
$8.85
$8.71
$8.30
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.47
0.62
0.68
0.70
0.21
0.51
Net
realized
and
unrealized
gains
(losses)
(0.98)
(0.52)
(1.00)
0.20
0.05
0.07
Total
from
investment
operations
........
(0.51)
0.10
(0.32)
0.90
0.26
0.58
Less
distributions
from:
Net
investment
income
..............
(0.01)
(0.51)
(0.51)
(0.57)
(0.12)
(0.17)
Net
realized
gains
.................
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
................
(0.50)
—
(0.19)
—
—
—
Total
distributions
...................
(0.51)
(0.51)
(0.71)
(0.58)
(0.12)
(0.17)
Net
asset
value,
end
of
year
...........
$6.71
$7.73
$8.14
$9.17
$8.85
$8.71
Total
return
d
.......................
(6.81)%
1.32%
(3.40)%
10.13%
2.96%
7.15%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
2.13%
2.18%
2.18%
2.50%
3.12%
2.77%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.10%
1.15%
1.22%
1.26%
1.01%
1.47%
Net
investment
income
...............
6.67%
7.73%
7.95%
7.47%
7.26%
6.24%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$12
$13
$12
$14
$10
$9
Portfolio
turnover
rate
................
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$7.74
$8.14
$9.17
$8.85
$8.77
$8.34
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.52
0.66
0.74
0.74
0.22
0.57
Net
realized
and
unrealized
gains
(losses)
(1.02)
(0.52)
(1.02)
0.19
0.04
0.06
Total
from
investment
operations
........
(0.50)
0.14
(0.28)
0.93
0.26
0.63
Less
distributions
from:
Net
investment
income
..............
(0.01)
(0.54)
(0.54)
(0.60)
(0.18)
(0.20)
Net
realized
gains
.................
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
................
(0.52)
—
(0.20)
—
—
—
Total
distributions
...................
(0.53)
(0.54)
(0.75)
(0.61)
(0.18)
(0.20)
Net
asset
value,
end
of
year
...........
$6.71
$7.74
$8.14
$9.17
$8.85
$8.77
Total
return
d
.......................
(6.47)%
1.69%
(2.95)%
10.50%
2.90%
7.84%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
2.04%
1.94%
1.91%
2.87%
5.59%
6.58%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.75%
0.75%
0.78%
0.92%
0.91%
0.93%
Net
investment
income
...............
7.37%
8.13%
8.39%
7.81%
7.36%
6.77%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$598
$1,057
$831
$281
$4
$4
Portfolio
turnover
rate
................
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Financial
Highlights
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
15
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$7.75
$8.16
$9.19
$8.86
$8.78
$8.35
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.51
0.63
0.76
0.74
0.21
0.55
Net
realized
and
unrealized
gains
(losses)
(1.01)
(0.51)
(1.05)
0.19
0.04
0.07
Total
from
investment
operations
........
(0.50)
0.12
(0.29)
0.93
0.25
0.62
Less
distributions
from:
Net
investment
income
..............
(0.01)
(0.53)
(0.53)
(0.59)
(0.17)
(0.19)
Net
realized
gains
.................
—
—
(0.01)
(0.01)
—
—
Tax
return
of
capital
................
(0.51)
—
(0.20)
—
—
—
Total
distributions
...................
(0.52)
(0.53)
(0.74)
(0.60)
(0.17)
(0.19)
Net
asset
value,
end
of
year
...........
$6.73
$7.75
$8.16
$9.19
$8.86
$8.78
Total
return
d
.......................
(6.46)%
1.45%
(3.01)%
10.53%
2.90%
7.65%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
..........................
1.91%
1.91%
1.89%
2.24%
3.09%
2.30%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.86%
0.88%
0.88%
1.00%
0.98%
1.00%
Net
investment
income
...............
7.20%
8.00%
8.29%
7.73%
7.29%
6.71%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$3,950
$14,504
$10,797
$1,585
$312
$353
Portfolio
turnover
rate
................
56.59%
23.82%
18.82%
77.90%
15.23%
40.40%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
Templeton
Income
Trust
Statement
of
Investments,
December
31,
2020
Templeton
Emerging
Markets
Bond
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
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
2.2%
Costa
Rica
2.2%
a,c
Reventazon
Finance
Trust,
Senior
Secured
Bond,
144A,
8%,
11/15/33
.
Diversified
Financial
Services
525,840
507,166
South
Africa
0.0%
†
a,d,e
K2016470219
South
Africa
Ltd.
,
Senior
Secured
Note,
144A,
PIK,
3%,
12/31/22
.....................
Multiline
Retail
177,306
—
Senior
Secured
Note,
144A,
PIK,
8%,
12/31/22
.....................
Multiline
Retail
47,366
EUR
59
a,d,e
K2016470260
South
Africa
Ltd.,
Senior
Secured
Note,
144A,
PIK,
25%,
12/31/22
.....................
Multiline
Retail
167,015
732
791
Total
Corporate
Bonds
(Cost
$826,155)
........................................
507,957
Foreign
Government
and
Agency
Securities
68.2%
Argentina
7.5%
f,g
Argentina
BONCER
,
Index
Linked,
1.1%,
4/17/21
.......
11,774,256
ARS
82,116
Index
Linked,
1%,
8/05/21
........
4,262,723
ARS
29,992
Index
Linked,
1.2%,
3/18/22
.......
115,477,096
ARS
808,356
Index
Linked,
1.3%,
9/20/22
.......
155,809
ARS
1,041
Index
Linked,
1.4%,
3/25/23
.......
83,236,383
ARS
543,766
Index
Linked,
1.5%,
3/25/24
.......
27,558,310
ARS
164,735
g
Argentina
Government
Bond
,
16%,
10/17/23
.................
9,877,000
ARS
31,496
15.5%,
10/17/26
................
4,332,000
ARS
10,074
1,671,576
Chile
9.5%
Chile
Bonos
Tesoreria
Pesos
,
4.5%,
2/28/21
.................
50,000,000
CLP
70,815
e
144A,
Reg
S,
4%,
3/01/23
........
1,090,000,000
CLP
1,648,856
2.5%,
3/01/25
.................
150,000,000
CLP
222,038
Tesoreria
General
de
LA
Republica,
4.5%,
3/01/21
.................
135,000,000
CLP
191,263
2,132,972
China
4.0%
China
Government
Bond,
2.64%,
8/13/22
......................
5,900,000
CNY
902,537
Colombia
4.1%
Colombia
Government
Bond
,
Senior
Bond,
7.75%,
4/14/21
......
58,000,000
COP
17,190
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Colombia
(continued)
Colombia
Government
Bond,
(continued)
Senior
Bond,
9.85%,
6/28/27
......
13,000,000
COP
$
4,959
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
178,900,000
COP
55,546
B,
10%,
7/24/24
................
383,000,000
COP
135,965
B,
7.5%,
8/26/26
...............
1,199,800,000
COP
405,114
B,
6%,
4/28/28
.................
428,400,000
COP
134,102
B,
7.75%,
9/18/30
..............
381,800,000
COP
131,163
B,
7%,
6/30/32
.................
107,000,000
COP
34,542
918,581
Ecuador
2.9%
e
Ecuador
Government
Bond
,
Senior
Note,
144A,
0.5%,
7/31/30
..
40,000
25,750
Senior
Bond,
144A,
0.5%,
7/31/35
..
831,500
454,207
Senior
Bond,
144A,
0.5%,
7/31/40
..
337,000
172,712
652,669
Ethiopia
0.9%
e
Ethiopia
Government
Bond,
Senior
Note,
144A,
6.625%,
12/11/24
.....
200,000
204,034
Ghana
4.3%
Ghana
Government
Bond
,
24.75%,
3/01/21
................
100,000
GHS
17,359
16.5%,
3/22/21
................
1,010,000
GHS
173,313
16.25%,
5/17/21
................
1,140,000
GHS
195,160
24.5%,
6/21/21
................
730,000
GHS
129,084
24.75%,
7/19/21
................
540,000
GHS
95,718
19.5%,
10/18/21
................
885,000
GHS
153,121
18.75%,
1/24/22
................
320,000
GHS
54,969
18.25%,
7/25/22
................
50,000
GHS
8,551
17.6%,
11/28/22
................
150,000
GHS
25,263
16.5%,
2/06/23
................
340,000
GHS
55,970
19.25%,
11/27/23
...............
50,000
GHS
8,489
19.75%,
3/25/24
................
270,000
GHS
46,295
963,292
India
7.2%
India
Government
Bond
,
7.26%,
1/14/29
................
74,400,000
INR
1,107,021
Senior
Note,
5.77%,
8/03/30
......
37,000,000
INR
503,534
1,610,555
Indonesia
5.6%
Indonesia
Government
Bond
,
FR61,
7%,
5/15/22
..............
16,436,000,000
IDR
1,219,071
FR63,
5.625%,
5/15/23
..........
308,000,000
IDR
22,664
FR70,
8.375%,
3/15/24
..........
174,000,000
IDR
13,644
1,255,379
Mexico
11.3%
Mexican
Bonos
Desarr
Fixed
Rate
,
M,
Senior
Note,
7.25%,
12/09/21
...
880,000
MXN
45,433
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Mexico
(continued)
Mexican
Bonos
Desarr
Fixed
Rate,
(continued)
M,
6.5%,
6/09/22
...............
29,203,000
MXN
$
1,512,543
M,
Senior
Note,
6.75%,
3/09/23
....
6,113,000
MXN
322,774
M,
Senior
Bond,
8%,
12/07/23
.....
2,094,000
MXN
115,661
M
20,
10%,
12/05/24
............
8,780,000
MXN
528,584
2,524,995
Senegal
1.0%
e
Senegal
Government
Bond,
Senior
Note,
144A,
6.25%,
7/30/24
.......
200,000
220,937
South
Korea
5.3%
Korea
Treasury
Bond
,
1.875%,
6/10/26
................
96,500,000
KRW
90,838
1.375%,
12/10/29
...............
1,226,500,000
KRW
1,096,154
1,186,992
Thailand
4.6%
Bank
of
Thailand
,
Senior
Note,
1.75%,
2/18/21
......
300,000
THB
10,017
1.62%,
3/12/21
................
350,000
THB
11,696
1.84%,
5/27/21
................
1,950,000
THB
65,388
1.43%,
8/26/21
................
810,000
THB
27,184
Senior
Note,
1.32%,
11/25/21
......
2,660,000
THB
89,431
0.9%,
2/24/22
.................
22,768,000
THB
763,426
Thailand
Government
Bond,
Senior
Bond,
3.65%,
12/17/21
...........
1,470,000
THB
50,549
1,017,691
Total
Foreign
Government
and
Agency
Securities
(Cost
$15,273,261)
..............
15,262,210
Total
Long
Term
Investments
(Cost
$16,114,414)
................................
15,770,167
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
0.5%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
78.75
JPY,
Expires
1/22/21
...
1
432,000
AUD
5,313
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
79.00
JPY,
Expires
1/22/21
...
1
387,000
AUD
4,111
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
81.00
JPY,
Expires
4/29/21
.......
1
280,000
AUD
2,986
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
81.00
JPY,
Expires
6/21/21
.......
1
431,000
AUD
6,046
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
115,000
AUD
6,335
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
19
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.75,
Expires
4/16/21
...........
1
172,000
AUD
$
4,757
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.77,
Expires
5/12/21
...........
1
310,000
AUD
6,503
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.78,
Expires
2/08/21
......
1
229,000
AUD
1,499
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
April
Strike
Price
22.44
MXN,
Expires
4/21/21
.......
1
77,000
614
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
22.98
MXN,
Expires
1/14/21
..
1
145,000
8
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
23.30
MXN,
Expires
4/29/21
.......
1
254,000
1,433
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
24.50
MXN,
Expires
1/14/21
..
1
121,000
1
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
348,000
11,135
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
348,000
11,135
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
245,000
11,282
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
131,000
6,032
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
131,000
6,032
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
520,000
—
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
461,000
—
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
49,000
—
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
29.73
MXN,
Expires
12/07/21
.
1
457,000
2,147
87,369
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
58.95
JPY,
Expires
6/21/21
.......
1
575,000
AUD
$
237
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
March
Strike
Price
68.50
JPY,
Expires
3/24/21
.......
1
258,000
AUD
123
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
460,000
AUD
1,204
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
230,000
AUD
602
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
71.00
JPY,
Expires
4/29/21
.......
1
746,000
AUD
1,567
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
71.44
JPY,
Expires
6/21/21
.......
1
575,000
AUD
2,250
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/10/21
......
1
551,000
AUD
14
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/08/21
......
1
458,000
AUD
13
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.67,
Expires
4/16/21
...........
1
336,000
AUD
282
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.68,
Expires
1/21/21
......
1
428,000
AUD
6
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.68,
Expires
2/02/21
......
1
489,000
AUD
22
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.69,
Expires
3/22/21
......
1
304,000
AUD
192
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.69,
Expires
1/22/21
......
1
355,000
AUD
12
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
66,000
2,316
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
66,000
2,316
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
122,000
4,282
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
20.66
MXN,
Expires
3/24/21
.......
1
152,000
7,075
22,513
Total
Options
Purchased
(Cost
$244,440)
......................................
109,882
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
Short
Term
Investments
31.1%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
8.2%
Argentina
0.8%
g,h
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
f
Index
Linked,
2/26/21
............
581,417
ARS
$
4,013
5/21/21
......................
13,000,825
ARS
94,145
f
Index
Linked,
9/13/21
............
7,060,409
ARS
50,576
g,h
Argentina
Letras
Del
Tesoro
En
Pesos
A
Descuento
,
3/31/21
.............
3,079,477
ARS
19,542
168,276
Brazil
4.3%
h
Brazil
Letras
do
Tesouro
Nacional
,
10/01/21
.....................
2,720,000
BRL
513,949
1/01/22
......................
2,440,000
BRL
456,769
970,718
Egypt
2.9%
h
Egypt
Treasury
Bills
,
2/16/21
......................
800,000
EGP
50,390
2/23/21
......................
400,000
EGP
25,068
3/16/21
......................
500,000
EGP
31,173
6/22/21
......................
3,300,000
EGP
199,094
7/13/21
......................
1,300,000
EGP
77,888
9/07/21
......................
1,000,000
EGP
58,663
12/07/21
.....................
300,000
EGP
17,102
12/21/21
.....................
3,200,000
EGP
182,146
641,524
Mexico
0.2%
h
Mexico
Cetes
,
BI,
1/28/21
....................
306,700
MXN
15,383
BI,
2/25/21
....................
244,500
MXN
12,222
BI,
3/25/21
....................
50,200
MXN
2,501
BI,
4/08/21
....................
61,800
MXN
3,074
BI,
5/06/21
....................
306,600
MXN
15,200
BI,
10/21/21
...................
10,000
MXN
487
48,867
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,925,646)
...............
1,829,385
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Short
Term
Investments
(continued)
a
a
Industry
Shares
a
Value
a
a
a
a
a
a
Money
Market
Funds
22.9%
United
States
22.9%
i,j
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.............
5,134,983
$
5,134,983
Total
Money
Market
Funds
(Cost
$5,134,983)
...................................
5,134,983
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$7,060,629
)
.................................
6,964,368
a
a
a
a
Total
Investments
(Cost
$23,419,483)
102.0%
...................................
$22,844,417
Options
Written
(1.0)%
.......................................................
(221,797)
Other
Assets,
less
Liabilities
(1.0)%
...........................................
(237,443)
Net
Assets
100.0%
...........................................................
$22,385,177
a
a
a
a
Number
of
Contracts
Notional
Amount
#
k
Options
Written
(1.0)%
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.00
JPY,
Expires
1/22/21
...
1
387,000
AUD
(13,735)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.25
JPY,
Expires
1/22/21
...
1
432,000
AUD
(14,336)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
76.80
JPY,
Expires
4/29/21
.......
1
560,000
AUD
(19,717)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.95
JPY,
Expires
1/22/21
...
1
460,000
AUD
(12,352)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
78.00
JPY,
Expires
6/21/21
.......
1
431,000
AUD
(12,929)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.72,
Expires
2/02/21
......
1
175,000
AUD
(9,035)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.72,
Expires
4/16/21
...........
1
115,000
AUD
(5,952)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.74,
Expires
5/12/21
...........
1
619,000
AUD
(24,703)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
May
Strike
Price
$0.78,
Expires
5/05/21
...........
1
287,000
AUD
(4,655)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
22.38
MXN,
Expires
4/29/21
.......
1
127,000
(1,145)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
104,000
(5,960)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
104,000
(5,960)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
23
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
k
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.12
MXN,
Expires
1/21/21
..
1
39,000
$
(8)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
24.57
MXN,
Expires
4/29/21
.......
1
64,000
(202)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
25.45
MXN,
Expires
1/14/21
..
1
87,000
—
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
27.93
MXN,
Expires
12/07/21
.
1
152,000
(1,008)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
29.21
MXN,
Expires
1/14/21
..
1
115,000
—
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
66,000
(1,097)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
66,000
(1,097)
(133,891)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
64.86
JPY,
Expires
6/21/21
.......
1
862,000
AUD
(983)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
66.00
JPY,
Expires
4/29/21
.......
1
373,000
AUD
(268)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.64,
Expires
1/21/21
......
1
214,000
AUD
—
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.65,
Expires
3/22/21
......
1
124,000
AUD
(23)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/27/21
......
1
152,000
AUD
(1)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/22/21
......
1
172,000
AUD
(1)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.69,
Expires
2/02/21
......
1
175,000
AUD
(19)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
115,000
AUD
(21)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
104,000
(3,765)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
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,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
104,000
$
(3,765)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
20.39
MXN,
Expires
1/21/21
..
1
39,000
(1,162)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
131,000
(11,440)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
131,000
(11,440)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
245,000
(21,395)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
22.37
MXN,
Expires
1/14/21
..
1
75,000
(9,157)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.10
MXN,
Expires
1/14/21
..
1
144,000
(22,877)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.10
MXN,
Expires
1/14/21
..
1
10,000
(1,589)
(87,906)
Total
Options
Written
(Premiums
received
$138,448)
............................
$
(221,797)
#
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
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
December
31,
2020,
the
aggregate
value
of
these
securities
was
$2,727,287,
representing
12.2%
of
net
assets.
f
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
g
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
13
regarding
fair
value
measurements.
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
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
25
At
December
31,
2020,
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
Brazilian
Real
......
CITI
Buy
312,317
60,527
1/04/21
$
—
$
(396)
Brazilian
Real
......
CITI
Sell
312,317
53,905
1/04/21
—
(6,225)
Australian
Dollar
....
JPHQ
Sell
79,166
6,037,045
JPY
1/13/21
—
(2,569)
Chinese
Yuan
......
CITI
Buy
1,612,760
246,742
1/19/21
1,033
—
Chinese
Yuan
......
HSBK
Buy
1,746,240
267,103
1/19/21
1,178
—
Mexican
Peso
......
MSCO
Buy
4,334,800
218,206
1/19/21
—
(570)
Mexican
Peso
......
MSCO
Sell
4,334,800
195,564
1/19/21
—
(22,072)
Mexican
Peso
......
CITI
Buy
4,349,000
218,758
1/21/21
—
(461)
Mexican
Peso
......
CITI
Sell
4,349,000
204,741
1/21/21
—
(13,556)
Mexican
Peso
......
CITI
Buy
3,225,000
162,202
1/22/21
—
(344)
Mexican
Peso
......
CITI
Sell
3,225,000
151,688
1/22/21
—
(10,170)
Mexican
Peso
......
JPHQ
Buy
830,000
41,747
1/22/21
—
(90)
Mexican
Peso
......
JPHQ
Sell
830,000
37,485
1/22/21
—
(4,171)
Mexican
Peso
......
MSCO
Buy
945,000
47,540
1/25/21
—
(129)
Mexican
Peso
......
MSCO
Sell
945,000
44,450
1/25/21
—
(2,962)
Australian
Dollar
....
HSBK
Buy
356,000
251,336
1/27/21
23,231
—
Australian
Dollar
....
HSBK
Sell
356,000
253,404
1/27/21
—
(21,163)
Brazilian
Real
......
CITI
Sell
3,761,958
696,865
2/02/21
—
(27,307)
Brazilian
Real
......
HSBK
Buy
2,146,680
416,068
2/02/21
—
(2,834)
Brazilian
Real
......
HSBK
Sell
3,240,971
600,391
2/02/21
—
(23,492)
Indian
Rupee
......
CITI
Buy
7,952,700
107,259
2/08/21
1,254
—
Indian
Rupee
......
JPHQ
Buy
10,911,100
147,155
2/08/21
1,725
—
Indian
Rupee
......
HSBK
Buy
12,826,900
172,943
2/09/21
2,060
—
Australian
Dollar
....
HSBK
Buy
229,000
161,685
2/10/21
14,963
—
Australian
Dollar
....
HSBK
Sell
229,000
164,703
2/10/21
—
(11,946)
Australian
Dollar
....
HSBK
Buy
101,000
71,312
2/12/21
6,599
—
Australian
Dollar
....
HSBK
Sell
101,000
73,346
2/12/21
—
(4,565)
Thai
Baht
.........
DBAB
Buy
15,130,000
502,491
2/12/21
2,409
—
Thai
Baht
.........
DBAB
Sell
15,130,000
496,799
2/12/21
—
(8,101)
Indian
Rupee
......
HSBK
Buy
9,986,332
134,918
2/16/21
1,233
—
Mexican
Peso
......
CITI
Buy
5,077,000
254,633
2/16/21
—
(558)
Mexican
Peso
......
CITI
Sell
7,926,400
357,182
2/16/21
—
(39,491)
Chilean
Peso
......
BAST
Buy
985,116,436
1,332,850
2/18/21
53,638
—
Chilean
Peso
......
BAST
Sell
985,116,436
1,281,286
2/18/21
—
(105,202)
Chinese
Yuan
......
JPHQ
Buy
1,213,270
185,235
2/18/21
795
—
Australian
Dollar
....
JPHQ
Sell
156,375
11,913,007
JPY
2/22/21
—
(5,197)
Australian
Dollar
....
CITI
Sell
138,315
10,482,506
JPY
2/25/21
—
(5,125)
Australian
Dollar
....
JPHQ
Sell
699,125
52,989,559
JPY
2/25/21
—
(25,858)
Australian
Dollar
....
CITI
Sell
138,685
10,509,216
JPY
2/26/21
—
(5,151)
Chilean
Peso
......
BAST
Buy
13,041,052
17,617
3/01/21
738
—
Chilean
Peso
......
BAST
Sell
13,041,052
17,015
3/01/21
—
(1,340)
Chilean
Peso
......
BAST
Buy
110,247,188
148,407
3/04/21
6,767
—
Chilean
Peso
......
BAST
Sell
110,247,188
146,119
3/04/21
—
(9,054)
Indian
Rupee
......
CITI
Buy
10,631,000
143,011
3/08/21
1,629
—
Indian
Rupee
......
JPHQ
Buy
10,942,000
147,155
3/08/21
1,715
—
Japanese
Yen
......
HSBK
Buy
56,603,160
533,004
3/08/21
15,564
—
Mexican
Peso
......
CITI
Sell
4,005,000
183,132
3/08/21
—
(16,855)
Mexican
Peso
......
JPHQ
Sell
12,490,000
626,075
3/08/21
2,395
—
Indian
Rupee
......
HSBK
Buy
12,862,690
172,941
3/09/21
2,041
—
Indian
Rupee
......
JPHQ
Buy
14,153,500
190,376
3/09/21
2,167
—
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
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)
Australian
Dollar
....
HSBK
Sell
72,500
5,584,602
JPY
3/11/21
$
—
$
(1,810)
Australian
Dollar
....
HSBK
Sell
95,000
7,436,980
JPY
3/15/21
—
(1,215)
Australian
Dollar
....
JPHQ
Sell
107,498
8,416,176
JPY
3/15/21
—
(1,367)
Chinese
Yuan
......
JPHQ
Buy
2,430,050
370,428
3/15/21
1,548
—
Indian
Rupee
......
CITI
Buy
8,034,756
108,271
3/15/21
958
—
Indian
Rupee
......
HSBK
Buy
9,986,332
134,545
3/15/21
1,214
—
Russian
Ruble
.....
DBAB
Buy
12,603,700
170,999
3/15/21
—
(2,005)
Chinese
Yuan
......
HSBK
Buy
876,290
133,552
3/16/21
575
—
Australian
Dollar
....
HSBK
Sell
50,000
3,839,550
JPY
3/17/21
—
(1,362)
Mexican
Peso
......
MSCO
Sell
4,553,100
211,183
3/17/21
—
(15,932)
Chilean
Peso
......
BAST
Buy
36,216,368
48,929
3/18/21
2,050
—
Chilean
Peso
......
BAST
Sell
36,216,368
46,625
3/18/21
—
(4,353)
Japanese
Yen
......
JPHQ
Buy
7,210,185
69,900
3/22/21
—
(9)
Japanese
Yen
......
BNDP
Buy
19,212,550
183,506
3/24/21
2,733
—
Japanese
Yen
......
JPHQ
Buy
7,210,184
69,266
3/24/21
627
—
Thai
Baht
.........
DBAB
Buy
7,800,000
260,382
4/09/21
—
(221)
Thai
Baht
.........
DBAB
Sell
7,800,000
237,133
4/09/21
—
(23,028)
Thai
Baht
.........
DBAB
Buy
7,370,000
246,028
4/12/21
—
(218)
Thai
Baht
.........
DBAB
Sell
7,370,000
224,251
4/12/21
—
(21,559)
Australian
Dollar
....
BNDP
Sell
492,000
37,241,448
JPY
4/13/21
—
(18,572)
Australian
Dollar
....
HSBK
Sell
72,500
5,488,793
JPY
4/13/21
—
(2,727)
Australian
Dollar
....
JPHQ
Sell
184,170
13,983,080
JPY
4/13/21
—
(6,540)
Japanese
Yen
......
HSBK
Buy
50,614,050
481,548
4/20/21
9,261
—
Japanese
Yen
......
JPHQ
Buy
9,929,110
94,550
4/20/21
1,733
—
Australian
Dollar
....
MSCO
Buy
31,000
21,919
4/21/21
2,004
—
Australian
Dollar
....
MSCO
Sell
31,000
22,033
4/21/21
—
(1,890)
Japanese
Yen
......
JPHQ
Buy
16,809,900
161,120
4/23/21
1,893
—
Australian
Dollar
....
HSBK
Buy
228,000
161,036
4/27/21
14,923
—
Australian
Dollar
....
HSBK
Sell
228,000
162,234
4/27/21
—
(13,726)
Australian
Dollar
....
SCNY
Sell
1,522,000
111,773,549
JPY
4/30/21
—
(90,614)
Australian
Dollar
....
CITI
Sell
35,000
2,613,275
JPY
5/06/21
—
(1,666)
Japanese
Yen
......
MSCO
Buy
30,000,000
287,956
5/06/21
3,016
—
Mexican
Peso
......
CITI
Sell
344,000
16,534
5/13/21
—
(510)
South
Korean
Won
..
DBAB
Buy
337,450,000
311,977
5/18/21
—
(1,900)
South
Korean
Won
..
DBAB
Sell
337,450,000
304,173
5/18/21
—
(5,904)
South
Korean
Won
..
SCNY
Buy
1,033,600,000
948,605
5/18/21
1,153
—
South
Korean
Won
..
SCNY
Sell
1,033,600,000
932,515
5/18/21
—
(17,243)
Japanese
Yen
......
JPHQ
Buy
18,359,100
175,996
6/04/21
2,136
—
Chilean
Peso
......
BAST
Buy
41,338,222
55,757
6/07/21
2,453
—
Chilean
Peso
......
BAST
Sell
41,338,222
53,819
6/07/21
—
(4,391)
Russian
Ruble
.....
JPHQ
Buy
3,028,400
40,229
6/07/21
10
—
Russian
Ruble
.....
MSCO
Buy
41,698,100
552,132
6/07/21
1,908
—
Chilean
Peso
......
BAST
Buy
41,348,595
55,610
6/08/21
2,615
—
Chilean
Peso
......
BAST
Sell
41,348,595
53,415
6/08/21
—
(4,810)
Indian
Rupee
......
CITI
Buy
8,065,300
107,259
6/08/21
1,202
—
Japanese
Yen
......
HSBK
Buy
30,849,590
297,176
6/08/21
2,162
—
Japanese
Yen
......
JPHQ
Buy
55,961,050
538,942
6/08/21
4,057
—
Indian
Rupee
......
CITI
Buy
4,749,400
63,123
6/09/21
737
—
Russian
Ruble
.....
JPHQ
Buy
5,600,900
75,119
6/09/21
—
(717)
Russian
Ruble
.....
DBAB
Buy
8,000,300
107,319
6/15/21
—
(1,115)
Chinese
Yuan
......
HSBK
Buy
881,390
133,552
6/16/21
582
—
Indian
Rupee
......
CITI
Buy
5,413,527
72,154
6/16/21
569
—
Indian
Rupee
......
HSBK
Buy
7,037,585
93,822
6/16/21
718
—
Japanese
Yen
......
BNDP
Buy
19,212,550
186,462
6/22/21
—
(6)
Australian
Dollar
....
JPHQ
Sell
79,166
6,023,433
JPY
7/13/21
—
(2,649)
Russian
Ruble
.....
JPHQ
Buy
3,991,800
52,529
9/08/21
—
(50)
Russian
Ruble
.....
MSCO
Buy
25,819,800
339,774
9/08/21
—
(326)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Emerging
Markets
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
27
See
Note 11
regarding
other
derivative
information.
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)
Russian
Ruble
.....
JPHQ
Buy
5,601,000
74,424
9/09/21
$
—
$
(797)
Russian
Ruble
.....
DBAB
Buy
8,077,100
107,320
9/14/21
—
(1,205)
Russian
Ruble
.....
DBAB
Buy
12,061,300
158,950
12/15/21
—
(2,162)
Total
Forward
Exchange
Contracts
...................................................
$205,971
$(629,553)
Net
unrealized
appreciation
(depreciation)
............................................
$(423,582)
*
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
47
.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
December
31,
2020
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$18,284,500
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
5,134,983
Value
-
Unaffiliated
issuers
..................................................................
$17,709,434
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
5,134,983
Cash
....................................................................................
29,532
Restricted
currency,
at
value
(cost
$650)
(Note
1
d
)
..................................................
641
Foreign
currency,
at
value
(cost
$53,500)
.........................................................
52,903
Receivables:
Capital
shares
sold
........................................................................
30,738
Interest
.................................................................................
193,332
Affiliates
................................................................................
13,063
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
110,000
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
205,971
Other
assets
..............................................................................
3
Total
assets
..........................................................................
23,480,600
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
29,286
Capital
shares
redeemed
...................................................................
128,260
Distribution
fees
..........................................................................
3,664
Transfer
agent
fees
........................................................................
4,184
Options
written,
at
value
(premiums
received
$138,448)
..............................................
221,797
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
629,553
Deferred
tax
...............................................................................
8,274
Accrued
expenses
and
other
liabilities
...........................................................
70,405
Total
liabilities
.........................................................................
1,095,423
Net
assets,
at
value
.................................................................
$22,385,177
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$26,627,207
Total
distributable
earnings
(losses)
.............................................................
(4,242,030)
Net
assets,
at
value
.................................................................
$22,385,177
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
December
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
29
Templeton
Emerging
Markets
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$16,004,098
Shares
outstanding
........................................................................
2,387,660
Net
asset
value
per
share
a
..................................................................
$6.70
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$6.96
Class
C:
Net
assets,
at
value
.......................................................................
$1,821,184
Shares
outstanding
........................................................................
272,047
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$6.69
Class
R:
Net
assets,
at
value
.......................................................................
$12,488
Shares
outstanding
........................................................................
1,861
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$6.71
Class
R6:
Net
assets,
at
value
.......................................................................
$597,765
Shares
outstanding
........................................................................
89,024
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$6.71
Advisor
Class:
Net
assets,
at
value
.......................................................................
$3,949,642
Shares
outstanding
........................................................................
586,671
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$6.73
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
year
ended
December
31,
2020
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
30
Templeton
Emerging
Markets
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$23,445
Interest:
(net
of
foreign
taxes
of
$20,287)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
402,111
Paid
in
cash
a
...........................................................................
1,770,829
Total
investment
income
...................................................................
2,196,385
Expenses:
Management
fees
(Note
3
a
)
...................................................................
261,720
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
37,020
    Class
C
................................................................................
12,915
    Class
R
................................................................................
29
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
24,325
    Class
C
................................................................................
2,720
    Class
R
................................................................................
17
    Class
R6
...............................................................................
1,867
    Advisor
Class
............................................................................
10,005
Custodian
fees
(Note
4
)
......................................................................
10,632
Reports
to
shareholders
......................................................................
24,560
Registration
and
filing
fees
....................................................................
77,346
Professional
fees
...........................................................................
81,555
Other
....................................................................................
30,730
Total
expenses
.........................................................................
575,441
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(288,423)
Net
expenses
.........................................................................
287,018
Net
investment
income
................................................................
1,909,367
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$27,827)
Unaffiliated
issuers
......................................................................
(8,739,428)
Written
options
...........................................................................
(411,660)
Foreign
currency
transactions
................................................................
(101,811)
Forward
exchange
contracts
.................................................................
(140,486)
Swap
contracts
...........................................................................
(376,632)
Net
realized
gain
(loss)
..................................................................
(9,770,017)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
5,615,982
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
7,168
Written
options
...........................................................................
(105,659)
Forward
exchange
contracts
.................................................................
(148,436)
Swap
contracts
...........................................................................
258,894
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
796
Net
change
in
unrealized
appreciation
(depreciation)
............................................
5,628,745
Net
realized
and
unrealized
gain
(loss)
............................................................
(4,141,272)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(2,231,905)
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.
Annual
Report
31
Templeton
Emerging
Markets
Bond
Fund
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$1,909,367
$3,259,143
Net
realized
gain
(loss)
.................................................
(9,770,016)
(587,392)
Net
change
in
unrealized
appreciation
(depreciation)
...........................
5,628,744
(2,713,168)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(2,231,905)
(41,417)
Distributions
to
shareholders:
Class
A
.............................................................
(26,203)
(1,534,594)
Class
C
.............................................................
(2,760)
(146,421)
Class
R
.............................................................
(18)
(833)
Class
R6
............................................................
(1,003)
(60,150)
Advisor
Class
........................................................
(10,061)
(858,560)
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
(1,266,497)
—
Class
C
.............................................................
(133,396)
—
Class
R
.............................................................
(882)
—
Class
R6
............................................................
(48,460)
—
Advisor
Class
........................................................
(486,289)
—
Total
distributions
to
shareholders
..........................................
(1,975,569)
(2,600,558)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(3,251,397)
2,732,389
Class
C
.............................................................
(154,051)
(376,079)
Class
R
.............................................................
968
1,900
Class
R6
............................................................
(349,326)
269,881
Advisor
Class
........................................................
(9,487,320)
4,681,136
Total
capital
share
transactions
............................................
(13,241,126)
7,309,227
Net
increase
(decrease)
in
net
assets
...................................
(17,448,600)
4,667,252
Net
assets:
Beginning
of
year
.......................................................
39,833,777
35,166,525
End
of
year
...........................................................
$22,385,177
$39,833,777
Templeton
Income
Trust
Notes
to
Financial
Statements
Templeton
Emerging
Markets
Bond
Fund
32
franklintempleton.com
Annual
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
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
after
they
have
been
held
for
10
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
33
franklintempleton.com
Annual
Report
Templeton
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
34
franklintempleton.com
Annual
Report
Templeton
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
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
the
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.
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
11 regarding
other
derivative
information.
d.
Restricted
Currency
At
December
31,
2020,
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.
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
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
35
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
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
December
31,
2020,
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)
e.
Income
and
Deferred
Taxes
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
36
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
December
31,
2020,
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:
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
498,364
$3,493,684
1,737,941
$14,058,875
Shares
issued
in
reinvestment
of
distributions
..........
120,598
838,933
135,979
1,074,166
Shares
redeemed
...............................
(1,077,053)
(7,584,014)
(1,577,986)
(12,400,652)
Net
increase
(decrease)
..........................
(458,091)
$(3,251,397)
295,934
$2,732,389
Class
C
Shares:
Shares
sold
...................................
59,073
$421,140
153,472
$1,237,487
Shares
issued
in
reinvestment
of
distributions
..........
19,355
134,492
17,826
141,013
Shares
redeemed
a
..............................
(101,273)
(709,683)
(221,103)
(1,754,579)
Net
increase
(decrease)
..........................
(22,845)
$(154,051)
(49,805)
$(376,079)
Class
R
Shares:
Shares
sold
...................................
88
$610
199
$1,609
Shares
issued
in
reinvestment
of
distributions
..........
57
393
41
326
Shares
redeemed
...............................
(5)
(35)
(5)
(35)
Net
increase
(decrease)
..........................
140
$968
235
$1,900
Class
R6
Shares:
Shares
sold
...................................
50,785
$349,186
83,564
$660,409
Shares
issued
in
reinvestment
of
distributions
..........
7,069
49,462
7,593
59,970
Shares
redeemed
...............................
(105,405)
(747,974)
(56,600)
(450,498)
Net
increase
(decrease)
..........................
(47,551)
$(349,326)
34,557
$269,881
Advisor
Class
Shares:
Shares
sold
...................................
335,564
$2,375,582
2,513,136
$20,291,787
Shares
issued
in
reinvestment
of
distributions
..........
64,721
453,263
107,358
846,179
Shares
redeemed
...............................
(1,684,325)
(12,316,165)
(2,073,478)
(16,456,830)
Net
increase
(decrease)
..........................
(1,284,040)
$(9,487,320)
547,016
$4,681,136
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
Templeton
Distributors,
Inc.
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Templeton
Income
Trust
Notes
to
Financial
Statements
37
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
a.
Management
Fees
Effective
June
1,
2020,
the
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
average
daily
net
assets of
the
Fund
as
follows:
Prior
to
June
1,
2020,
the
Fund
paid
fees
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
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
year:
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
Annualized
Fee
Rate
Net
Assets
1.050%
Up
to
and
including
$1
billion
1.030%
Over
$1
billion,
up
to
and
including
$5
billion
1.010%
Over
$5
billion,
up
to
and
including
$10
billion
0.990%
Over
$10
billion,
up
to
and
including
$15
billion
0.970%
Over
$15
billion,
up
to
and
including
$20
billion
0.950%
In
excess
of
$20
billion
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
0.65%
Class
R
....................................................................................
0.50%
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
38
franklintempleton.com
Annual
Report
Templeton
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
year
ended
December
31,
2020,
the
Fund
paid
transfer
agent
fees
of
$38,934,
of
which $21,984
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies
for
purposes
other
than
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
year
ended
December
31,
2020,
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,
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,
2021.
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,
2021. 
Prior
to
May
1,
2020,
expenses
(excluding
certain
fees
and
expenses
as
previously
disclosed)
for
Class
R6
were
limited
to
0.74%
based
on
the
average
net
assets
of
the
class.
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$1,388
CDSC
retained
..............................................................................
$67
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Templeton
Emerging
Markets
Bond
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.........
$12,266,921
$35,608,346
$(42,740,284)
$—
$—
$5,134,983
5,134,983
$23,445
Total
Affiliated
Securities
....
$12,266,921
$35,608,346
$(42,740,284)
$—
$—
$5,134,983
$23,445
3.
Transactions
with
Affiliates
(continued)
d.
Sales
Charges/Underwriting
Agreements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
39
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
h.
Other
Affiliated
Transactions
At
December
31,
2020,
Advisers
owned
23.6%
of
the
Fund's
outstanding
shares.
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
year
ended
December
31,
2020,
there
were
no
credits
earned.
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2020,
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,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$657,513.
The
tax
character
of
distributions
paid
during
the
years
ended
December
31,
2020
and
2019,
was
as
follows:
At
December
31,
2020,
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,
inflation
related
adjustments
on
foreign
securities
and
wash
sales.
In
accordance
with
U.S.
GAAP
permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
At
the
year
ended
December
31,
2020,
such
reclassifications
were
as
follows:
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$669,959
Long
term
................................................................................
1,646,306
Total
capital
loss
carryforwards
...............................................................
$2,316,265
2020
2019
Distributions
paid
from:
Ordinary
income
..........................................................
$40,045
$2,600,558
Return
of
capital
...........................................................
1,935,524
—
$1,975,569
$2,600,558
Cost
of
investments
..........................................................................
$23,460,082
Unrealized
appreciation
........................................................................
$1,672,350
Unrealized
depreciation
........................................................................
(2,933,393)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(1,261,043)
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
40
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
year
ended
December
31,
2020,
aggregated
$10,077,102
and
$19,084,532,
respectively.
7.
Credit
Risk
At
December
31,
2020,
the
Fund
had
26.3%
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.
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
December
31,
2020,
the
Fund
had
8.1%
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.
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
December
31,
2020,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
Paid-in
Capital
..............................................................................
$(5,234,688)
Total
distributable
earnings
(los
s
)
................................................................
$5,234,688
5.
Income
Taxes
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
41
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
11.
Other
Derivative
Information
At
December
31,
2020,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
For
the
year
ended
December
31,
2020,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
Principal
Amount
/
Shares
Issuer
Acquisition
Date
Cost
Value
Templeton
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
—
525,840
Reventazon
Finance
Trust,
Senior
Secured
Bond,
144A,
8%,
11/15/33
.............
12/18/13
525,840
507,166
Total
Restricted
Securities
(Value
is
2.27%
of
Net
Assets)
.............
$540,838
$507,166
a
The
Fund
also
invests
in
unrestricted
securities
of
the
issuer,
valued
at
$59
as
of
December
31,
2020.
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
Emerging
Markets
Bond
Fund
Foreign
exchange
contracts
..
Investments
in
securities,
at
value
$
109,882
a
Options
written,
at
value
$
221,797
Unrealized
appreciation
on
OTC
forward
exchange
contracts
205,971
Unrealized
depreciation
on
OTC
forward
exchange
contracts
629,553
Total
....................
$315,853
$851,350
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
Year
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Year
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Templeton
Emerging
Markets
Bond
Fund
Interest
rate
contracts
.......
Swap
contracts
$(376,632)
Swap
contracts
$258,894
Foreign
exchange
contracts
..
Investments
567,325
a
Investments
2,415
a
Written
options
(411,660)
Written
options
(105,659)
Forward
exchange
contracts
(140,486)
Forward
exchange
contracts
(148,436)
Total
....................
$(361,453)
$7,214
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.
10.
Restricted
Securities
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
42
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
For
the
year
ended
December
31,
2020,
the
average
month
end
notional
amount
of
swap
contracts
and
options
represented
$170,154
and
$22,892,952,
respectively.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$23,287,563.
At
December
31,
2020,
OTC
derivative
assets
and
liabilities
are
as
follows:
At
December
31,
2020,
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
Emerging
Markets
Bond
Fund
Derivatives
Forward
exchange
contracts
.............................
$
205,971
$
629,553
Options
purchased
.....................................
109,882
—
Options
written
........................................
—
221,797
Total
.............................................
$315,853
$851,350
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
Emerging
Markets
Bond
Fund
Counterparty
BAST
....................
$68,261
$(68,261)
$—
$—
$—
BNDP
...................
2,733
(2,733)
—
—
—
CITI
.....................
74,736
(74,736)
—
—
—
DBAB
...................
2,409
(2,409)
—
—
—
HSBK
...................
104,369
(89,541)
—
—
14,828
JPHQ
...................
20,801
(20,801)
—
—
—
MSCO
...................
41,391
(41,391)
—
—
—
SCNY
...................
1,153
(1,153)
—
—
—
Total
...................
$315,853
$(301,025)
$
—
$—
$14,828
$
1
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
43
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
At
December
31,
2020,
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
47
.
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
billion
(Global
Credit
Facility)
which
matured
on
February
5,
2021.
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.
Effective
February
5,
2021,
the
Borrowers
renewed
the
Global
Credit
Facility
for
a
one
year
term,
maturing
February
4,
2022,
for
a
total
of
$2.675
billion.
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
year
ended
December
31,
2020,
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
a
Net
Amount
(Not
less
than
zero)
Templeton
Emerging
Markets
Bond
Fund
Counterparty
BAST
....................
$129,150
$(68,261)
$—
$—
$60,889
BNDP
...................
18,578
(2,733)
—
—
15,845
CITI
.....................
250,959
(74,736)
—
—
176,223
DBAB
...................
67,418
(2,409)
—
(65,009)
—
HSBK
...................
89,541
(89,541)
—
—
—
JPHQ
...................
50,014
(20,801)
—
—
29,213
MSCO
...................
137,833
(41,391)
—
—
96,442
SCNY
...................
107,857
(1,153)
—
—
106,704
Total
...................
$851,350
$(301,025)
$—
$(65,009)
$485,316
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
44
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
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
December
31,
2020,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Common
Stocks
........................
$
—
$
—
$
—
a
$
—
Corporate
Bonds
........................
—
—
507,957
a
507,957
Foreign
Government
and
Agency
Securities
:
Argentina
............................
—
—
1,671,576
1,671,576
Chile
................................
—
2,132,972
—
2,132,972
China
...............................
—
902,537
—
902,537
Colombia
............................
—
918,581
—
918,581
Ecuador
.............................
—
652,669
—
652,669
Ethiopia
.............................
—
204,034
—
204,034
Ghana
..............................
—
963,292
—
963,292
India
................................
—
1,610,555
—
1,610,555
Indonesia
............................
—
1,255,379
—
1,255,379
Mexico
..............................
—
2,524,995
—
2,524,995
Senegal
.............................
—
220,937
—
220,937
South
Korea
..........................
—
1,186,992
—
1,186,992
Thailand
.............................
—
1,017,691
—
1,017,691
Options
purchased
.......................
—
109,882
—
109,882
Short
Term
Investments
...................
5,134,983
1,661,109
168,276
6,964,368
Total
Investments
in
Securities
...........
$5,134,983
$15,361,625
$2,347,809
$22,844,417
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
205,971
$
—
$
205,971
Restricted
Currency
(ARS)
.................
—
—
641
641
Total
Other
Financial
Instruments
.........
$—
$205,971
$641
$206,612
Receivables:
Interest
(ARS)
...........................
$—
$—
$9,213
$9,213
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
221,797
$
—
$
221,797
Forward
exchange
contracts
................
—
629,553
—
629,553
Total
Other
Financial
Instruments
.........
$—
$851,350
$—
$851,350
Payables:
Investment
Securities
Purchased
(ARS)
.......
$—
$—
$29,286
$29,286
Templeton
Income
Trust
Notes
to
Financial
Statements
45
franklintempleton.com
Annual
Report
Templeton
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
year.
At
December
31,
2020,
the
reconciliation
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Emerging
Markets
Bond
Fund
(continued)
Liabilities:
Payables:
Deferred
Tax(ARS)
.......................
$—
$—
$86
$86
a
Includes
securities
determined
to
have
no
value
at
December
31,
2020.
Balance
at
Beginning
of
Year
Purchases
Sales
Transfer
Into
Level
3
a
Transfer
Out
of
Level
3
Cost
Basis
Adjust-
ments
b
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Year
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Year
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
South
Africa
.......
$
1,993
c
$
—
$
—
$
—
$
—
$
—
$
—
$
(1,993)
$
—
c
$
(1,993)
Corporate
Bonds
:
Costa
Rica
........
552,327
—
(10,740)
—
—
—
—
(34,421)
507,166
(23,951)
South
Africa
.......
878
c
82
—
125
—
(10,371)
—
10,077
791
c
10,077
Foreign
Government
and
Agency
Securities
:
Argentina
.........
1,770,959
1,366,676
(1,358,112)
—
—
502,752
(5,002,602)
4,391,9
03
1,671,576
(516,238)
Short
Term
Investments
.
489,445
472,011
(504,023)
—
—
85,807
(237,218)
(137,746)
168,276
3,696
Total
Investments
in
Securities
.
$2,815,602
$1,838,769
$(1,872,875)
$125
$—
578,188
(5,239,820)
4,227,820
$2,347,809
$(528,409)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
$497,166
$1,266,619
$(1,430,254)
$—
$—
$—
$(336,491)
$3,601
$641
$(9)
Receivables:
Interest
(ARS)
......
$50,491
$380,650
$(395,830)
$—
$—
$—
$(29,032)
$2,934
$9,213
$60
Liabilities:
Payables:
Deferred
Tax
(ARS)
....
$164
$—
$—
$—
$—
$—
$—
$(78)
$86
$(78)
Investment
Securities
Purchased
(ARS)
....
$—
$29,286
$—
$—
$—
$—
$—
$—
$29,286
$—
a
Transferred
into
level
3
as
a
result
of
the
unavailability
of
a
quoted
market
price
in
an
active
market
for
identical
securities
or
as
a
result
of
the
unreliability
of
the
foreign
exchange
rate
and
other
significant
observable
valuation
inputs.
May
include
amounts
related
to
a
corporate
action.
b
May
include
accretion,
amortization,
partnership
adjustments,
and/or
other
cost
basis
adjustments.
c
Includes
securities
determined
to
have
no
value.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
46
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
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
December
31,
2020,
are
as
follows:
14.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
The
amendments
in
the
ASU
provides
optional
temporary
financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021.
The
ASU
is
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022. Management
has
reviewed
the
requirements
and
believes
the
adoption
of
this
ASU
will
not
have
a
material
impact
on
the
financial
statements.
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
other
than
those
already
disclosed
in
the
financial
statements.
Description
Fair
Value
at
End
of
Year
Valuation
Technique
Unobservable
Inputs
Amount/
Range
(Weight
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
Emerging
Markets
Bond
Fund
Assets:
Investments
in
Securities:
Corporate
Bonds:
Costa
Rica
..........
$507,166
Discounted
cash
flow
Discount
rate
(
b
)
8.7%
Decrease
c
Foreign
Government
and
Agency
Securities:
Argentina
...........
1,671,576
Market
comparables
Implied
foreign
exchange
rate
143.8
ARS/USD
Decrease
c
Short
Term
Investments:
Argentina
...........
168,276
Market
comparables
Implied
foreign
exchange
rate
143.8
ARS/USD
Decrease
c
All
Other
............
10,645
d,e
Liabilities:
Investment
Securities
Purchased
(
ARS
)
......
29,286
Market
comparables
Implied
foreign
exchange
rate
143.8
ARS/USD
Decrease
c
All
Other
............
86
e
Total
...............
$2,328,291
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
December
31,
2020.
e
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
47
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
(continued)
Abbreviations
Counterparty
BAST
Banco
Santander
SA
BNDP
BNP
Paribas
SA
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
SCNY
Standard
Chartered
Bank
Selected
Portfolio
CER
Reference
Stabilization
Coefficient
PIK
Payment-In-Kind
Currency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
CLP
Chilean
Peso
CNY
Chinese
Yuan
COP
Colombian
Peso
EGP
Egyptian
Pound
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
MXN
Mexican
Peso
THB
Thai
Baht
USD
United
States
Dollar
Templeton
Income
Trust
Report
of
Independent
Registered
Public
Accounting
Firm
48
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Templeton
Income
Trust
and
Shareholders
of
Templeton
Emerging
Markets
Bond
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
statement
of
investments,
of
Templeton
Emerging
Markets
Bond
Fund
(one
of
the
funds
constituting
Templeton
Income
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2020,
the
related
statement
of
operations
for
the
year
ended
December
31,
2020,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2020,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2020
by
correspondence
with
the
custodian,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
PricewaterhouseCoopers
LLP
San
Francisco,
California
February
19,
2021
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Templeton
Income
Trust
Tax
Information
(unaudited)
49
franklintempleton.com
Annual
Report
Templeton
Emerging
Markets
Bond
Fund
At
December
31,
2020,
more
than
50%
of
the
Fund’s
total
assets
were
invested
in
securities
of
foreign
issuers.
In
most
instances,
foreign
taxes
were
withheld
from
income
paid
to
the
Fund
on
these
investments.
The
Fund
elects
to
treat
foreign
taxes
paid
as
allowed
under
Section
853
of
the
Internal
Revenue
Code.
This
election
will
allow
shareholders
of
record
as
of
the
2021
distribution
date,
to
treat
their
proportionate
share
of
foreign
taxes
paid
by
the
Fund
as
having
been
paid
directly
by
them.
The
shareholder
shall
consider
these
amounts
as
foreign
taxes
paid
in
the
tax
year
in
which
they
receive
the
Fund
distribution.
Templeton
Income
Trust
Board
Members
and
Officers
50
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1992
125
Bar-S
Foods
(meat
packing
company)
(1981-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Ann
Torre
Bates
(1958)
Trustee
Since
2008
30
Ares
Capital
Corporation
(specialty
finance
company)
(2010-present),
United
Natural
Foods,
Inc.
(distributor
of
natural,
organic
and
specialty
foods)
(2013-present),
formerly
,
Allied
Capital
Corporation
(financial
services)
(2003-
2010),
SLM
Corporation
(Sallie
Mae)
(1997-2014)
and
Navient
Corporation
(loan
management,
servicing
and
asset
recovery)
(2014-2016).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Executive
Vice
President
and
Chief
Financial
Officer,
NHP
Incorporated
(manager
of
multifamily
housing)
(1995-1997);
and
Vice
President
and
Treasurer,
US
Airways,
Inc.
(until
1995).
Mary
C.
Choksi
(1950)
Trustee
Since
2016
125
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-May
2020).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Templeton
Income
Trust
51
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
2001
and
Lead
Independent
Trustee
since
2007
125
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Canadian
National
Railway
(railroad)
(2001-present),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
125
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Private
investor;
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(May
2019-January
1,
2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
David
W.
Niemiec
(1949)
Trustee
Since
2005
30
Hess
Midstream
LP
(oil
and
gas
midstream
infrastructure)
(2017-present).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Advisor,
Saratoga
Partners
(private
equity
fund);
and
formerly
,
Managing
Director,
Saratoga
Partners
(1998-2001)
and
SBC
Warburg
Dillon
Read
(investment
banking)
(1997-1998);
Vice
Chairman,
Dillon,
Read
&
Co.
Inc.
(investment
banking)
(1991-1997);
and
Chief
Financial
Officer,
Dillon,
Read
&
Co.
Inc.
(1982-1997).
Larry
D.
Thompson
(1945)
Trustee
Since
2005
125
Graham
Holdings
Company
(education
and
media
organization)
(2011-present);
and
formerly
,
The
Southern
Company
(energy
company)
(2014-May
2020;
previously
2010-2012),
Cbeyond,
Inc.
(business
communications
provider)
(2010-2012).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-September
2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Templeton
Income
Trust
52
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Constantine
D.
Tseretopoulos
(1954)
Trustee
Since
2003
19
None
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Physician,
Chief
of
Staff,
owner
and
operator
of
the
Lyford
Cay
Hospital
(1987-present);
director
of
various
nonprofit
organizations;
and
formerly
,
Cardiology
Fellow,
University
of
Maryland
(1985-1987);
and
Internal
Medicine
Resident,
Greater
Baltimore
Medical
Center
(1982-
1985).
Robert
E.
Wade
(1946)
Trustee
Since
2006
30
El
Oro
Ltd
(investments)
(2003-
2019).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Attorney
at
law
engaged
in
private
practice
as
a
sole
practitioner
(1972-2008)
and
member
of
various
boards.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2007
136
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
39
of
the
investment
companies
in
Franklin
Templeton;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015),
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Chairman
of
the
Board,
Trustee
and
Vice
President
Chairman
of
the
Board
and
Trustee
since
2013
and
Vice
President
since
1996
125
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
37
of
the
investment
companies
in
Franklin
Templeton.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
October
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Advisory
Services,
LLC,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Independent
Board
Members
(continued)
Templeton
Income
Trust
53
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Steven
J.
Gray
(1955)
Vice
President
Since
2009
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Vice
President,
Franklin
Templeton
Distributors,
Inc.
and
FASA,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Michael
Hasenstab
Ph.D.
(1973)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
three
of
the
investment
companies
in
Franklin
Templeton.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
41
of
the
investment
companies
in
Franklin
Templeton;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Robert
G.
Kubilis
(1973)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
2017
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting
and
officer
of
39
of
the
investment
companies
in
Franklin
Templeton.
Robert
Lim
(1948)
Vice
President
–
AML
Compliance
Since
2016
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Templeton
Companies,
LLC;
Chief
Compliance
Officer,
Franklin
Templeton
Distributors,
Inc.
and
Franklin
Templeton
Investor
Services,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Associate
General
Counsel
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Craig
S.
Tyle
(1960)
Vice
President
Since
2005
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
General
Counsel
and
Executive
Vice
President,
Franklin
Resources,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
54
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
major
shareholder
of
Resources.
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
U.S.
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
each
of
Ann
Torre
Bates
and
David
W.
Niemiec
as
an
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
qualify
as
such
an
expert
in
view
of
their
extensive
business
background
and
experience.
Ms.
Bates
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2008.
She
currently
serves
as
a
director
of
Ares
Capital
Corporation
(2010-present)
and
United
Natural
Foods,
Inc.
(2013-present)
and
was
formerly
a
director
of
Navient
Corporation
from
2014
to
2016,
SLM
Corporation
from
1997
to
2014
and
Allied
Capital
Corporation
from
2003
to
2010,
Executive
Vice
President
and
Chief
Financial
Officer
of
NHP
Incorporated
from
1995
to
1997
and
Vice
President
and
Treasurer
of
US
Airways,
Inc.
until
1995.
Mr.
Niemiec
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2005,
currently
serves
as
an
Advisor
to
Saratoga
Partners
and
was
formerly
its
Managing
Director
from
1998
to
2001
and
serves
as
a
director
of
Hess
Midstream
LP
(2017-present).
Mr.
Niemiec
was
formerly
a
director
of
Emeritus
Corporation
from
1999
to
2010
and
OSI
Pharmaceuticals,
Inc.
from
2006
to
2010,
Managing
Director
of
SBC
Warburg
Dillon
Read
from
1997
to
1998,
and
was
Vice
Chairman
from
1991
to
1997
and
Chief
Financial
Officer
from
1982
to
1997
of
Dillon,
Read
&
Co.
Inc.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
have
each
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Bates
and
Mr.
Niemiec
are
independent
Board
members
as
that
term
is
defined
under
the
applicable
U.S.
Securities
and
Exchange
Commission
Rules
and
Releases
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Lori
A.
Weber
(1964)
Vice
President
and
Secretary
Vice
President
since
2011
and
Secretary
since
2013
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Christine
Zhu
(1975)
Vice
President
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
three
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
Shareholder
Information
55
franklintempleton.com
Annual
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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
A
02/21
©
2021
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.
Annual
Report
and
Shareholder
Letter
Templeton
Emerging
Markets
Bond
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Templeton
Distributors,
Inc.
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Annual
Report
and
Shareholder
Letter
Templeton
Global
Total
Return
Fund
A
Series
of
Templeton
Income
Trust
December
31,
2020
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Not
part
of
the
annual
report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
12
months
ended
December
31,
2020,
the
novel
coronavirus
pandemic
hindered
the
global
economy.
Starting
in
March,
worldwide
efforts
to
slow
the
infection
rate
thwarted
global
economic
activity,
and
central
banks
acted
swiftly
to
maintain
financial
stability.
The
U.S.
Federal
Reserve
enacted
emergency
rate
cuts
and
authorized
open-
ended
purchasing
of
government-backed
and
corporate
bonds
to
bolster
markets,
and
the
European
Central
Bank’s
Pandemic
Emergency
Purchase
Programme
included
private
and
public
sector
securities.
These
measures
helped
U.S.
and
eurozone
economic
growth
to
resume
in
2020’s
third
quarter
after
two
quarters
of
contraction.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
+10.11%
and
+5.52%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
decreased
against
most
foreign
currencies
during
the
period.
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
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
advisors
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
annual
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
December
31,
2020
,
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.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Annual
Report
2
Contents
Annual
Report
Templeton
Global
Total
Return
Fund
3
Performance
Summary
7
Your
Fund’s
Expenses
10
Financial
Highlights
and
Statement
of
Investments
11
Financial
Statements
31
Notes
to
Financial
Statements
35
Report
of
Independent
Registered
Public
Accounting
Firm
51
Tax
Information
52
Board
Members
and
Officers
53
Shareholder
Information
58
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Templeton
Global
Total
Return
Fund
This
annual
report
for
Templeton
Global
Total
Return
Fund
covers
the
fiscal
year
ended
December
31,
2020
.
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.
*Includes
U.S.
and
foreign
government
and
agency
securities,
money
market
funds
and
other
net
assets
(including
derivatives).
Performance
Overview
For
the
12
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-5.83%
cumulative
total
return.
In
comparison,
the
global
fixed
income
market,
as
measured
by
the
Fund’s
benchmark,
the
Bloomberg
Barclays
Multiverse
Index,
posted
a
+9.02%
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
7
.
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
12-month
period
ended
December
31,
2020,
started
optimistically,
as
a
phase
one
trade
deal
between
the
U.S.
and
China
appeared
to
bolster
market
sentiment,
driving
risk
asset
valuations
higher
in
several
markets
across
the
globe.
However,
conditions
changed
radically
and
rapidly
by
late
February,
as
the
novel
coronavirus
(COVID-19)
pandemic
upended
economies
and
financial
markets
around
the
world.
Lockdown
orders
from
governments
trying
to
“flatten
the
curve”
(i.e.,
stem
the
rate
of
infection)
ultimately
brought
entire
countries,
regions
and
continents
to
an
economic
standstill
in
March
and
April.
The
speed
and
pervasiveness
of
the
economic
shocks
were
unprecedented.
There
is
no
historical
comparison
for
the
magnitude
of
aggregate
demand
that
was
destroyed,
nor
the
magnitude
of
job
losses
in
such
a
compressed
timescale.
Risk
aversion
rapidly
escalated
to
crisis
levels
and
deepened
throughout
March,
driving
correlations
to
1.0
across
multiple
asset
classes
as
investors
shed
risk
and
moved
into
perceived
safe
havens.
Credit
markets
experienced
substantial
price
volatility,
with
the
lower-rated
credit
tiers
bearing
the
brunt
of
the
selloffs.
The
U.S.
Federal
Reserve
(Fed)
responded
quickly
to
the
deepening
crisis
with
two
emergency
rate
cuts
in
March,
the
second
of
which
dropped
the
federal
funds
target
rate
100
basis
points
(bps)
to
the
zero
bound
that
was
used
during
the
2008
global
financial
crisis
(GFC).
The
Fed
also
cut
reserve
requirements
and
encouraged
financial
institutions
to
borrow
directly
from
the
discount
window.
Growing
liquidity
strains
throughout
financial
markets
in
March
prompted
the
Fed
to
restart
liquidity
programs
that
had
been
created
during
the
GFC,
such
as
the
Commercial
Paper
Funding
Facility
and
the
Primary
Dealer
Credit
Facility.
On
March
23,
the
Fed
took
its
financial
market
interventions
beyond
the
scope
of
the
GFC
programs
by
creating
corporate
lending
programs,
and
announcing
its
intentions
to
support
lending
to
small-
and
medium-sized
businesses
through
the
newly
created
Main
Street
Business
Lending
Program.
The
Fed
also
pledged
to
buy
unlimited
government
bonds,
abandoning
the
previous
quantitative
easing
(QE)
targets
it
had
announced
a
week
earlier
on
March
15.
The
heightened
demand
for
U.S.
dollars
(USD)
Portfolio
Composition
12/31/20
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
62.1%
U.S.
Government
and
Agency
Securities
15.6%
Short-Term
Investments
&
Other
Net
Assets*
22.3%
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Templeton
Global
Total
Return
Fund
4
franklintempleton.com
Annual
Report
around
the
world
also
led
the
Fed
to
expand
its
liquidity
swaps
program
with
foreign
central
banks
beyond
the
five
banks
in
its
standing
facility.
On
the
U.S.
fiscal
side,
Congress
passed
the
CARES
Act
(Coronavirus
Aid,
Relief,
and
Economic
Security)
on
March
27,
a
USD$2.2
trillion
fiscal
relief
program
designed
to
provide
loans
to
businesses,
income
support
and
unemployment
benefits
to
individuals,
and
funding
for
hospitals
and
public
health
services.
It
was
the
largest
economic
relief
bill
in
U.S.
history.
In
Europe,
the
European
Central
Bank
(ECB)
unveiled
the
€750
billion
Pandemic
Emergency
Purchase
Programme
(PEPP)
in
an
unscheduled
mid-week
announcement
on
March
18.
ECB
President
Christine
Lagarde
commented
that,
“there
are
no
limits
to
our
commitment
to
the
euro.
We
are
determined
to
use
the
full
potential
of
our
tools,
within
our
mandate.”
PEPP
appeared
geared
to
support
the
more
vulnerable
states,
as
the
program
has
unprecedented
flexibility
to
buy
a
wide
range
of
eligible
securities,
including
Greek
and
Italian
sovereign
debt,
as
well
as
corporate
commercial
paper.
The
European
Commission
passed
its
€750
billion
recovery
fund
in
July,
which
was
largely
viewed
by
markets
as
a
major
step
towards
greater
fiscal
solidarity
across
the
euro
area.
In
the
second
quarter
of
2020,
global
financial
markets
rebounded
from
the
extreme
lows
in
March,
as
extraordinary
measures
from
central
banks
and
governments
appeared
to
improve
market
confidence.
Additionally,
regional
economies
began
to
incrementally
reopen
and
the
improving
economic
data
appeared
to
bolster
optimism
that
the
worst
of
the
economic
shocks
had
passed.
Risk
assets
rallied
and
credit
spreads
tightened
in
many
sectors
during
the
second
quarter,
returning
to
levels
last
seen
in
early
March
and
late
February.
Those
trends
largely
extended
through
July
and
August
as
strengthening
economic
activity
and
profound
policy
interventions
continued
to
fuel
rallies
across
global
financial
markets
through
much
of
the
summer.
However,
many
risk
assets
appeared
detached
from
underlying
economic
fundamentals
due
to
extraordinary
monetary
policies.
Risk
assets
eventually
pulled
back
from
their
summer
high
points
in
September
2020,
as
rising
cases
of
COVID-19
appeared
to
concern
investors,
particularly
as
areas
of
Europe
and
Asia
returned
to
various
mobility
restrictions.
Developed
market
sovereign
bond
yields
fluctuated
during
the
summer
months,
rising
on
reflation
expectations
but
dropping
in
September
as
broad
risk
aversion
returned
to
global
financial
markets.
Additionally,
economic
recoveries
in
many
regions
showed
signs
of
levelling
off
in
August
and
September,
demonstrating
that
the
improvements
in
the
late
spring
and
summer
months
were
rebounds
from
the
extreme
low
points
in
March
and
April,
not
trends
that
could
be
extrapolated
through
upcoming
quarters.
Yoshihide
Suga
was
confirmed
as
the
new
prime
minister
of
Japan
on
September
16,
following
Shinzo
Abe's
resignation
on
August
28.
Abe
had
been
prime
minister
since
December
2012.
We
expected
political
continuity
in
the
near
term,
as
Suga
is
an
Abe
loyalist
who
was
often
credited
with
pushing
through
many
of
Abe’s
critical
domestic
reforms.
In
October
2020,
“risk-on”
sentiment
initially
returned
to
global
financial
markets,
with
risk
assets
rallying
during
the
first
couple
weeks
of
the
month
before
broad
risk
aversion
sharply
returned,
leading
to
significant
price
adjustments
in
various
credit
sectors
during
the
second
half
of
the
month.
Investors
appeared
concerned
over
resurgent
waves
of
COVID-19
cases
around
the
world.
Market
sentiments
ultimately
improved
in
November
on
apparent
optimism
over
promising
vaccine
trials
and
prospects
for
a
potential
global
economic
recovery
in
2021.
Risk
assets
finished
the
final
months
of
the
year
on
broad-based
rallies
as
initial
vaccine
distributions
commenced.
However,
market
optimism
in
the
fourth
quarter
ran
in
stark
contrast
to
the
worsening
pandemic,
as
COVID-19
infections
surged
to
record
levels
in
areas
of
Europe,
the
U.S.
and
Latin
America
in
the
waning
months
of
the
year,
with
a
highly
contagious
variant
of
the
virus
surfacing
in
dozens
of
countries.
The
harsh
realities
of
a
worldwide
health
crisis
and
deepening
economic
hardship
continued
to
have
profound
consequences
for
lives
and
livelihoods
around
the
world.
In
late
December
2020,
the
U.S.
government
passed
a
USD$900
billion
support
package
that
extended
unemployment
benefits
until
mid-March
2021
and
provides
one-time
relief
payments
of
USD$600
to
most
citizens.
Additional
fiscal
stimulus
appeared
likely
with
the
upcoming
change
in
the
U.S.
government.
The
Fed
continued
to
maintain
low
rates
as
well
as
its
emergency
support
program
from
March
through
the
end
of
the
year,
continuously
reaffirming
its
commitment
to
use
its
“full
range
of
tools
to
support
the
U.S.
economy”
at
each
policy
meeting.
The
ECB
also
kept
monetary
policy
unchanged
through
the
end
of
the
year,
with
the
main
refinancing
operations
rate
remaining
at
0.0%,
and
the
main
deposit
facility
rate
remaining
at
-0.5%.
The
ECB
increased
the
size
of
the
PEPP
program
to
€1.85
trillion
in
December,
after
previously
raising
it
to
€1.35
trillion
in
June.
The
U.K.
and
the
European
Union
also
settled
on
final
terms
for
post-Brexit
trade
agreements
in
the
last
week
of
the
year.
Templeton
Global
Total
Return
Fund
5
franklintempleton.com
Annual
Report
The
Bank
of
Japan
(BOJ)
also
made
no
changes
to
its
rates
policy
in
2020.
Overnight
interest
rates
remained
at
-0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
remained
at
0.0%.
In
the
second
quarter,
the
BOJ
removed
QE
caps
and
quadrupled
the
size
of
its
corporate
debt
purchases.
It
also
increasingly
focused
on
ensuring
businesses
had
ample
access
to
capital
through
various
loan
programs,
increasing
its
lending
program
to
USD$1
trillion.
However,
despite
the
BOJ's
efforts
to
drive
inflation
higher
during
the
Abenomics
era,
deflationary
pressures
returned,
with
core
inflation
dropping
to
-0.4%
year-over-
year
in
August
and
falling
further
to
-0.9%
in
November.
The
BOJ
announced
in
December
that
it
had
launched
a
comprehensive
review
of
its
monetary
framework,
scheduled
to
arrive
in
March
2021.
We
continued
to
expect
the
Japanese
yen
to
appreciate
against
the
USD
during
the
period,
on
stable
rate
differentials
and
Japan’s
strong
external
balance.
Nearly
every
country
in
the
world
declared
some
form
of
fiscal
response
to
the
economic
crisis
in
2020,
with
most
countries
pursuing
programs
that
went
beyond
the
measures
they
deployed
during
the
GFC.
Debt-to-GDP
(gross
domestic
product)
ratios
have
risen
significantly
in
just
about
every
country.
On
the
monetary
front,
many
central
banks
aggressively
cut
policy
rates,
with
several
indicating
they
intend
to
respond
to
ongoing
economic
adversity
with
additional
accommodation
as
needed.
During
the
12-month
period,
Brazil
cut
rates
by
250
bps
to
2.00%,
Colombia
cut
rates
by
250
bps
to
1.75%,
Mexico
cut
rates
by
300
bps
to
4.25%,
Indonesia
cut
rates
by
125
bps
to
3.75%,
and
India
cut
rates
by
115
bps
to
4.00%.
In
global
bond
markets,
the
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
period
100
bps
lower,
at
0.92%,
ranging
from
a
pre-pandemic
high
of
1.92%
on
January
1
to
an
all-time
low
of
0.51%
on
August
4.
The
yield
on
the
10-year
German
Bund
finished
the
year
38
bps
lower
at
-0.57%,
ranging
from
a
pre-pandemic
high
of
-0.19%
on
January
13
to
an
all-time
low
of
-0.86%
on
March
9,
during
peak
financial
market
shocks.
Sovereign
bond
yields
also
declined
in
several
countries
on
ongoing
monetary
accommodation
during
the
year,
notably
including
much
of
Latin
America
and
Asia,
particularly
Brazil,
Mexico,
Indonesia
and
India.
In
currency
markets,
the
USD
initially
strengthened
in
March
on
tremendous
demand
for
U.S.
dollars
during
the
financial
market
shocks,
but
then
entered
a
broad-based
weakening
pattern
in
mid-May
that
largely
persisted
through
the
end
of
December.
Many
developed
market
and
emerging
market
currencies
alike
strengthened
against
the
USD
over
the
final
seven
months
of
the
year.
In
credit
markets,
spreads
widened
substantially
during
peak
financial
market
volatility
in
February
and
March,
but
progressively
tightened
from
April
through
December,
with
several
sovereign
and
corporate
sectors
finishing
the
year
at
pre-pandemic
levels.
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
The
strategy
was
structured
around
four
key
pillars
during
much
of
the
reporting
period:
(1)
maintaining
high
liquidity
through
elevated
cash
balances
and
risk-adjusted
position
weights;
(2)
holding
long
exposures
to
perceived
safe-haven
assets
such
as
the
Japanese
yen,
Swiss
franc,
Norwegian
krone
and
Swedish
krona;
(3)
targeting
appropriate
risk-
adjusted
returns
in
a
select
subset
of
emerging
markets;
and
(4)
underweighting
overvalued
developed
fixed
income
markets,
notably
longer-term
USTs.
The
strategy
continued
to
emphasize
select
duration
exposures
in
countries
that
have
attractive
risk-adjusted
yields,
resilient
economic
fundamentals
and
prudent
fiscal
and
monetary
policies.
Several
emerging
markets
continued
to
offer
significantly
higher
yields
than
those
available
in
the
developed
markets.
The
strategy
entered
the
reporting
period
in
a
de-risked
state
as
the
investment
team
saw
elevated
global
financial
market
risks
that
it
believed
were
significantly
underappreciated
by
markets.
While
the
team
was
not
explicitly
anticipating
the
COVID-19
crisis,
it
was
concerned
that
overvalued
risk
assets
were
vulnerable
to
a
geopolitical,
economic
or
financial
market
shock.
The
team
adjusted
the
risk-sizing
of
various
positions
and
hedged
(using
currency
forwards)
Geographic
Composition
12/31/20
%
of
Total
Net
Assets
Americas
44.2%
Asia
Pacific
21.6%
Other
Europe
7.6%
Middle
East
&
Africa
4.3%
Short-Term
Investments
&
Other
Net
Assets
22.3%
Templeton
Global
Total
Return
Fund
6
franklintempleton.com
Annual
Report
a
substantial
amount
of
local-currency
emerging
market
beta
risk
through
proxy
hedges
(net-negative
Australian
dollar)
and
direct
hedges
(Indian
rupee,
South
Korean
won,
Mexican
peso
and
Brazilian
real).
The
strategy
held
a
net-negative
position
in
the
euro
as
the
team
expected
fundamental
weakening
in
the
currency
due
to
structural
and
political
risks
in
the
eurozone,
along
with
headwinds
to
growth
and
reflation
efforts
across
Europe.
The
strategy
remained
significantly
underweighted
in
developed
market
duration,
preferring
to
hold
short-
to
intermediate-term
USTs,
while
holding
no
exposure
to
the
long
end
of
the
curve.
The
strategy
exited
its
negative
duration
exposure
to
USTs
in
the
first
quarter.
The
strategy
held
no
duration
exposure
in
the
eurozone,
and
instead
focused
on
higher-yielding
local-currency
bonds
in
specific
emerging
markets,
such
as
Brazil,
Mexico,
Colombia,
Indonesia,
India
and
Ghana.
The
team
also
continued
to
broadly
avoid
credit
sectors,
which
it
believed
were
overvalued
leading
up
to
the
crisis
and
increasingly
vulnerable
to
insolvencies
as
the
economic
crisis
progressed.
During
the
period,
the
team
used
forward
currency
exchange
contracts
to
actively
manage
currencies,
and
used
interest-rate
swaps
to
tactically
manage
duration
exposures.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
contributed
to
absolute
results,
while
overall
credit
exposures
had
a
largely
neutral
effect.
Among
currencies,
positions
in
Latin
America
(the
Brazilian
real
and
Argentine
peso)
detracted
from
absolute
performance.
The
Fund’s
net-
negative
positions
in
the
Australian
dollar
and
the
euro
also
detracted
from
absolute
results,
as
did
tactical
positioning
(negative)
in
the
Mexican
peso.
However,
the
Fund’s
net-positive
positions
in
the
Japanese
yen
and
the
Swiss
franc
contributed
to
absolute
performance,
as
did
positions
in
northern
European
currencies
(the
Swedish
krona).
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Argentina
and
Mexico),
Asia
ex-Japan
(India)
and
Africa
(Ghana)
contributed
to
absolute
results,
while
negative
duration
exposure
to
USTs
during
the
first
quarter
detracted.
On
a
relative
basis,
the
Fund
underperformed
its
benchmark
due
to
currency
positions,
followed
by
overall
credit
exposures.
Interest-rate
strategies
had
a
largely
neutral
effect
on
relative
results.
Among
currencies,
overweighted
positions
in
Latin
America
(the
Brazilian
real
and
Argentine
peso)
detracted
from
relative
performance.
The
Fund’s
underweighted
positions
in
the
euro,
the
Australian
dollar
and
the
Mexican
peso
also
detracted
from
relative
results.
However,
overweighted
positions
in
northern
European
currencies
(the
Swedish
krona)
contributed
to
relative
performance,
as
did
the
Fund’s
overweighted
positions
in
the
Japanese
yen
and
the
Swiss
franc.
Among
credit
exposures,
underweighted
exposure
to
corporate
bonds
detracted
from
relative
return.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Underweighted
duration
exposure
in
the
U.S.
detracted
from
relative
performance,
as
did
select
underweighted
duration
exposures
in
Europe.
However,
select
overweighted
duration
exposures
in
Latin
America
(Argentina
and
Mexico),
Asia
ex-Japan
(India)
and
Africa
(Ghana)
contributed
to
relative
results.
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
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
December
31,
2020
,
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
December
31,
2020
Templeton
Global
Total
Return
Fund
7
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
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
12/31/20
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
1-Year
-5.83%
5
-9.35%
5-Year
+8.63%
+0.89%
10-Year
+26.44%
+1.98%
Advisor
1-Year
-5.59%
5
-5.59%
5-Year
+10.08%
+1.94%
10-Year
+29.62%
+2.63%
See
page
9
for
Performance
Summary
footnotes.
Templeton
Global
Total
Return
Fund
Performance
Summary
8
franklintempleton.com
Annual
Report
See
page
9
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(1/1/11–
12/31/20
)
Advisor
Class
(1/1/11–
12/31/20
)
Templeton
Global
Total
Return
Fund
Performance
Summary
9
franklintempleton.com
Annual
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
sig-
nificant
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.
Unexpected
events
and
their
aftermaths,
such
as
the
spread
of
deadly
diseases;
natural,
environmental
or
man-made
disasters;
financial,
political
or
social
disruptions;
terrorism
and
war;
and
other
tragedies
or
catastrophes,
can
cause
investor
fear
and
panic,
which
can
adversely
affect
the
economies
of
many
companies,
sectors,
nations,
regions
and
the
market
in
general,
in
ways
that
cannot
necessarily
be
foreseen.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
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
4/30/21.
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.
Total
return
information
is
based
on
net
asset
values
calculated
for
shareholder
transactions.
Certain
adjustments
were
made
to
the
net
asset
values
of
the
Fund
at
12/31/19
for
financial
reporting
purposes.
Accordingly,
adjusted
total
returns
have
been
disclosed
in
the
Financial
Highlights
and
differ
from
those
reported
here.
6.
Source:
Morningstar.
The
Bloomberg
Barclays
Multiverse
Index
provides
a
broad-based
measure
of
the
global
fixed
income
bond
market.
The
index
represents
the
union
of
the
Global
Aggregate
Index
and
the
Global
High
Yield
Index
and
captures
investment-grade
and
high
yield
securities
in
all
eligible
currencies.
7.
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
(1/1/20–12/31/20)
Share
Class
Net
Investment
Income
Tax
Return
of
Capital
Total
A
$0.0160
$0.4422
$0.4582
C
$0.0145
$0.4020
$0.4165
R
$0.0152
$0.4162
$0.4314
R6
$0.0174
$0.4802
$0.4976
Advisor
$0.0169
$0.4669
$0.4838
Total
Annual
Operating
Expenses
7
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.01%
1.12%
Advisor
0.76%
0.87%
Your
Fund’s
Expenses
Templeton
Global
Total
Return
Fund
10
franklintempleton.com
Annual
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
184/366
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
7/1/20
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,001.79
$5.25
$1,019.89
$5.30
1.04%
C
$1,000
$998.74
$7.26
$1,017.87
$7.33
1.45%
R
$1,000
$999.53
$6.46
$1,018.67
$6.53
1.29%
R6
$1,000
$1,002.73
$3.43
$1,021.72
$3.46
0.68%
Advisor
$1,000
$1,003.06
$4.00
$1,021.15
$4.03
0.79%
Templeton
Income
Trust
Financial
Highlights
Templeton
Global
Total
Return
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
11
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$11.02
$11.62
$12.04
$12.09
$11.38
$11.63
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.43
0.60
0.67
0.63
0.21
0.58
Net
realized
and
unrealized
gains
(losses)
(1.01)
(0.46)
(0.47)
(0.28)
0.60
(0.47)
Total
from
investment
operations
........
(0.58)
0.14
0.20
0.35
0.81
0.11
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.02)
(0.74)
(0.62)
(0.16)
—
(0.13)
Tax
return
of
capital
................
(0.44)
—
—
(0.24)
(0.10)
(0.23)
Total
distributions
...................
(0.46)
(0.74)
(0.62)
(0.40)
(0.10)
(0.36)
Net
asset
value,
end
of
year
...........
$9.98
$11.02
$11.62
$12.04
$12.09
$11.38
Total
return
d
.......................
(5.32)%
1.21%
1.69%
2.83%
7.08%
1.08%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.08%
1.04%
1.09%
1.07%
1.10%
1.07%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.06%
0.96%
1.01%
1.02%
1.09%
1.06%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.04%
0.93%
1.01%
f
1.02%
f
1.07%
1.06%
f
Net
investment
income
...............
4.19%
5.27%
5.62%
5.15%
5.22%
5.14%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$482,575
$769,018
$811,990
$921,181
$1,197,319
$1,227,550
Portfolio
turnover
rate
................
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
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
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
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$11.01
$11.61
$12.02
$12.07
$11.38
$11.61
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.39
0.56
0.62
0.58
0.19
0.54
Net
realized
and
unrealized
gains
(losses)
(1.02)
(0.46)
(0.46)
(0.28)
0.59
(0.46)
Total
from
investment
operations
........
(0.63)
0.10
0.16
0.30
0.78
0.08
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.01)
(0.70)
(0.57)
(0.14)
—
(0.12)
Tax
return
of
capital
................
(0.41)
—
—
(0.21)
(0.09)
(0.19)
Total
distributions
...................
(0.42)
(0.70)
(0.57)
(0.35)
(0.09)
(0.31)
Net
asset
value,
end
of
year
...........
$9.96
$11.01
$11.61
$12.02
$12.07
$11.38
Total
return
d
.......................
(5.80)%
0.81%
1.37%
2.43%
6.85%
0.76%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.48%
1.44%
1.49%
1.47%
1.50%
1.47%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.46%
1.36%
1.41%
1.42%
1.49%
1.46%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.44%
1.33%
1.41%
f
1.42%
f
1.47%
1.46%
f
Net
investment
income
...............
3.79%
4.87%
5.22%
4.75%
4.82%
4.74%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$113,438
$237,215
$310,561
$398,445
$481,915
$517,428
Portfolio
turnover
rate
................
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
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
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
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
13
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$11.03
$11.63
$12.04
$12.09
$11.40
$11.63
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.40
0.58
0.64
0.60
0.19
0.56
Net
realized
and
unrealized
gains
(losses)
(1.02)
(0.47)
(0.46)
(0.28)
0.59
(0.46)
Total
from
investment
operations
........
(0.62)
0.11
0.18
0.32
0.78
0.10
Less
distributions
from:
Net
investment
income
and
net
fore
ign
currency
gains
....................
(0.02)
(0.71)
(0.59)
(0.15)
—
(0.12)
Tax
return
of
capital
................
(0.41)
—
—
(0.22)
(0.09)
(0.21)
Total
distributions
...................
(0.43)
(0.71)
(0.59)
(0.37)
(0.09)
(0.33)
Net
asset
value,
end
of
year
...........
$9.98
$11.03
$11.63
$12.04
$12.09
$11.40
Total
return
d
.......................
(5.65)%
0.95%
1.52%
2.58%
6.89%
0.91%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.32%
1.29%
1.34%
1.32%
1.35%
1.32%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.30%
1.21%
1.26%
1.27%
1.34%
1.31%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.28%
1.18%
1.26%
f
1.27%
f
1.32%
1.31%
f
Net
investment
income
...............
3.89%
5.02%
5.37%
4.90%
4.97%
4.89%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$7,741
$7,377
$7,957
$8,788
$9,782
$9,692
Portfolio
turnover
rate
................
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
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
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
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$11.03
$11.63
$12.05
$12.10
$11.41
$11.64
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.47
0.65
0.71
0.68
0.22
0.64
Net
realized
and
unrealized
gains
(losses)
(1.02)
(0.47)
(0.47)
(0.29)
0.59
(0.47)
Total
from
investment
operations
........
(0.55)
0.18
0.24
0.39
0.81
0.17
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.02)
(0.78)
(0.66)
(0.17)
—
(0.15)
Tax
return
of
capital
................
(0.48)
—
—
(0.27)
(0.12)
(0.25)
Total
distributions
...................
(0.50)
(0.78)
(0.66)
(0.44)
(0.12)
(0.40)
Net
asset
value,
end
of
year
...........
$9.98
$11.03
$11.63
$12.05
$12.10
$11.41
Total
return
d
.......................
(5.05)%
1.57%
2.06%
3.22%
7.21%
1.47%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.71%
0.69%
0.73%
0.69%
0.72%
0.69%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.69%
0.60%
0.65%
0.64%
0.71%
0.68%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.67%
0.57%
0.65%
f
0.64%
f
0.69%
0.68%
f
Net
investment
income
...............
4.57%
5.63%
5.98%
5.53%
5.60%
5.52%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$294,519
$876,665
$986,689
$1,058,884
$904,147
$882,402
Portfolio
turnover
rate
................
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
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
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
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
15
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$11.04
$11.64
$12.05
$12.10
$11.41
$11.64
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.46
0.63
0.70
0.66
0.21
0.61
Net
realized
and
unrealized
gains
(losses)
(1.02)
(0.46)
(0.46)
(0.28)
0.59
(0.45)
Total
from
investment
operations
........
(0.56)
0.17
0.24
0.38
0.80
0.16
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.02)
(0.77)
(0.65)
(0.17)
—
(0.14)
Tax
return
of
capital
................
(0.46)
—
—
(0.26)
(0.11)
(0.25)
Total
distributions
...................
(0.48)
(0.77)
(0.65)
(0.43)
(0.11)
(0.39)
Net
asset
value,
end
of
year
...........
$10.00
$11.04
$11.64
$12.05
$12.10
$11.41
Total
return
d
.......................
(5.07)%
1.46%
2.03%
3.08%
7.06%
1.42%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.83%
0.79%
0.84%
0.82%
0.85%
0.82%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.81%
0.71%
0.76%
0.77%
0.84%
0.81%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.78%
0.68%
0.76%
f
0.77%
f
0.82%
0.81%
f
Net
investment
income
...............
4.48%
5.52%
5.87%
5.40%
5.47%
5.39%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$1,104,754
$2,684,044
$2,992,808
$3,117,593
$2,729,232
$2,497,162
Portfolio
turnover
rate
................
60.89%
27.57%
20.91%
41.66%
17.10%
44.16%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
repurchas-
es
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
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
Statement
of
Investments,
December
31,
2020
Templeton
Global
Total
Return
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
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
35,452,226
—
Senior
Secured
Note,
144A,
PIK,
8%,
12/31/22
.....................
Multiline
Retail
12,419,349
EUR
15,594
a,d,e
K2016470260
South
Africa
Ltd.,
Senior
Secured
Note,
144A,
PIK,
25%,
12/31/22
.....................
Multiline
Retail
13,475,270
59,058
74,652
Total
Corporate
Bonds
(Cost
$45,511,211)
......................................
74,652
Foreign
Government
and
Agency
Securities
62.1%
Argentina
4.4%
f,g
Argentina
BONCER
,
Index
Linked,
1.1%,
4/17/21
.......
603,765,896
ARS
4,210,774
Index
Linked,
1%,
8/05/21
........
332,242,520
ARS
2,337,589
Index
Linked,
1.2%,
3/18/22
.......
4,210,952,760
ARS
29,477,266
Index
Linked,
1.3%,
9/20/22
.......
28,435,643
ARS
190,050
Index
Linked,
1.4%,
3/25/23
.......
2,606,552,060
ARS
17,028,074
Index
Linked,
1.5%,
3/25/24
.......
2,606,552,065
ARS
15,581,123
g,h
Argentina
Bonos
del
Tesoro
Nacional
en
Pesos
Badlar,
FRN,
31.641%,
(ARS
BADLAR
+
2%),
4/03/22
.........
9,178,000
ARS
59,274
g
Argentina
Government
Bond
,
18.2%,
10/03/21
................
1,518,433,000
ARS
8,760,016
16%,
10/17/23
.................
1,462,549,400
ARS
4,663,748
15.5%,
10/17/26
................
2,527,300,600
ARS
5,877,483
88,185,397
Bosnia
and
Herzegovina
0.0%
†
e,h
Bosnia
and
Herzegovina
Government
Bond,
B,
Senior
Bond,
Reg
S,
FRN,
0.25%,
(6-month
EUR
LIBOR
+
0.813%),
12/20/21
..............
14,913
EUR
17,620
Brazil
1.1%
Brazil
Notas
do
Tesouro
Nacional,
10%,
1/01/21
......................
112,525,000
BRL
21,679,904
Colombia
4.8%
Colombia
Government
Bond
,
Senior
Bond,
7.75%,
4/14/21
......
12,635,000,000
COP
3,744,719
Senior
Bond,
4.375%,
3/21/23
.....
1,916,000,000
COP
572,266
Senior
Bond,
9.85%,
6/28/27
......
3,053,000,000
COP
1,164,627
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Colombia
(continued)
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
20,636,000,000
COP
$
6,407,234
B,
10%,
7/24/24
................
59,139,000,000
COP
20,994,256
B,
7.5%,
8/26/26
...............
176,576,000,000
COP
59,621,149
B,
7%,
6/30/32
.................
11,774,000,000
COP
3,800,881
96,305,132
Ecuador
1.8%
e
Ecuador
Government
Bond
,
Senior
Note,
144A,
0.5%,
7/31/30
..
18,062,000
11,627,412
Senior
Bond,
144A,
0.5%,
7/31/35
..
43,884,000
23,971,635
Senior
Bond,
144A,
0.5%,
7/31/40
..
620,000
317,750
35,916,797
Ghana
4.3%
Ghana
Government
Bond
,
24.75%,
3/01/21
................
990,000
GHS
171,850
16.5%,
3/22/21
................
480,000
GHS
82,366
24.5%,
6/21/21
................
50,930,000
GHS
9,005,808
24.75%,
7/19/21
................
32,520,000
GHS
5,764,369
19.5%,
10/18/21
................
71,467,000
GHS
12,365,101
18.75%,
1/24/22
................
42,240,000
GHS
7,255,957
18.25%,
7/25/22
................
22,820,000
GHS
3,902,666
17.6%,
11/28/22
................
1,250,000
GHS
210,525
16.5%,
2/06/23
................
5,210,000
GHS
857,660
19.75%,
3/25/24
................
36,690,000
GHS
6,290,966
19%,
11/02/26
.................
134,400,000
GHS
21,783,215
19.75%,
3/15/32
................
117,734,000
GHS
18,714,965
86,405,448
India
4.3%
India
Government
Bond
,
Senior
Note,
5.22%,
6/15/25
......
285,000,000
INR
3,935,273
7.59%,
1/11/26
.................
3,011,900,000
INR
45,549,695
7.27%,
4/08/26
................
2,423,700,000
INR
36,298,544
85,783,512
Indonesia
9.9%
Indonesia
Government
Bond
,
FR34,
12.8%,
6/15/21
...........
34,970,000,000
IDR
2,602,357
FR53,
8.25%,
7/15/21
...........
1,074,263,000,000
IDR
78,417,274
FR61,
7%,
5/15/22
..............
167,591,000,000
IDR
12,430,362
FR35,
Senior
Bond,
12.9%,
6/15/22
.
95,624,000,000
IDR
7,700,093
FR43,
10.25%,
7/15/22
..........
3,593,000,000
IDR
280,293
FR63,
5.625%,
5/15/23
..........
125,716,000,000
IDR
9,250,682
FR46,
9.5%,
7/15/23
............
651,100,000,000
IDR
51,902,267
FR39,
11.75%,
8/15/23
..........
20,613,000,000
IDR
1,720,740
FR70,
8.375%,
3/15/24
..........
418,021,000,000
IDR
32,778,480
FR44,
10%,
9/15/24
.............
15,790,000,000
IDR
1,305,925
198,388,473
Mexico
16.5%
Mexican
Bonos
Desarr
Fixed
Rate
,
M,
Senior
Note,
7.25%,
12/09/21
...
1,873,390,000
MXN
96,720,510
M,
6.5%,
6/09/22
...............
2,251,240,000
MXN
116,600,919
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Mexico
(continued)
Mexican
Bonos
Desarr
Fixed
Rate,
(continued)
M,
Senior
Note,
6.75%,
3/09/23
....
545,370,000
MXN
$
28,796,216
M,
Senior
Bond,
8%,
12/07/23
.....
1,583,065,000
MXN
87,439,581
329,557,226
Norway
7.6%
e
Norway
Government
Bond
,
144A,
Reg
S,
3.75%,
5/25/21
......
523,796,000
NOK
61,963,955
144A,
Reg
S,
2%,
5/24/23
........
518,911,000
NOK
62,914,781
144A,
Reg
S,
3%,
3/14/24
........
224,500,000
NOK
28,315,436
153,194,172
South
Korea
7.4%
Korea
Treasury
Bond
,
1.375%,
9/10/21
................
16,003,000,000
KRW
14,786,682
2%,
12/10/21
..................
19,554,000,000
KRW
18,192,902
2.25%,
9/10/23
................
32,791,710,000
KRW
31,138,960
1.375%,
9/10/24
................
67,806,900,000
KRW
62,788,361
3%,
9/10/24
...................
20,810,000,000
KRW
20,383,874
147,290,779
Total
Foreign
Government
and
Agency
Securities
(Cost
$1,537,578,975)
...........
1,242,724,460
U.S.
Government
and
Agency
Securities
15.6%
United
States
15.6%
U.S.
Treasury
Notes
,
1.5%,
11/30/24
.................
26,650,000
27,947,105
1.75%,
12/31/24
................
102,789,400
108,892,521
2%,
2/15/25
...................
32,780,000
35,101,490
2.125%,
5/15/25
................
39,210,000
42,325,357
2.875%,
5/31/25
................
50,610,000
56,311,533
2.625%,
12/31/25
...............
16,863,000
18,752,842
1.625%,
2/15/26
................
9,110,000
9,690,051
2.125%,
5/31/26
................
4,164,000
4,545,591
1.625%,
10/31/26
...............
9,120,000
9,725,625
313,292,115
Total
U.S.
Government
and
Agency
Securities
(Cost
$299,520,561)
................
313,292,115
Total
Long
Term
Investments
(Cost
$1,884,256,106)
.............................
1,556,091,227
Number
of
Contracts
Notional
Amount
#
a
a
aa
Options
Purchased
1.0%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
78.75
JPY,
Expires
1/22/21
...
1
24,793,000
AUD
304,908
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
79.00
JPY,
Expires
1/22/21
...
1
22,245,000
AUD
236,288
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
19
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
81.00
JPY,
Expires
4/29/21
.......
1
16,067,000
AUD
$
171,343
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
84.15
JPY,
Expires
6/18/21
.......
1
25,554,000
AUD
128,158
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
86.50
JPY,
Expires
12/20/21
..
1
19,166,000
AUD
134,559
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
14,816,000
AUD
816,141
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.75,
Expires
4/16/21
...........
1
22,153,000
AUD
612,742
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.77,
Expires
5/12/21
...........
1
39,819,000
AUD
835,330
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.78,
Expires
2/08/21
......
1
29,541,000
AUD
193,331
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
104.78
JPY,
Expires
2/01/21
..
1
10,260,000
21,516
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
110.80
JPY,
Expires
2/24/21
..
1
69,699,500
5,932
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
115.00
JPY,
Expires
2/24/21
..
1
139,399,000
1,732
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
115.95
JPY,
Expires
8/11/21
.......
1
63,132,000
35,541
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
21.16
MXN,
Expires
6/21/21
.......
1
39,371,000
973,197
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
April
Strike
Price
22.44
MXN,
Expires
4/21/21
.......
1
4,302,000
34,280
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
22.83
MXN,
Expires
6/09/21
.......
1
9,967,000
100,487
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
22.98
MXN,
Expires
1/14/21
..
1
16,134,000
864
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
23.23
MXN,
Expires
3/24/21
.......
1
25,753,000
76,988
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
23.30
MXN,
Expires
4/29/21
.......
1
28,366,000
160,004
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
23.75
MXN,
Expires
4/09/21
.......
1
16,050,000
51,754
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
24.50
MXN,
Expires
1/14/21
..
1
13,553,000
$
93
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
24.81
MXN,
Expires
6/30/21
.......
1
48,867,000
267,861
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
25.48
MXN,
Expires
4/09/21
.......
1
15,315,000
21,404
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
38,722,000
1,238,942
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
25.55
MXN,
Expires
12/22/22
.
1
38,722,000
1,238,942
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
26.09
MXN,
Expires
6/18/21
.......
1
32,574,000
99,648
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
7,827,000
360,417
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
7,827,000
360,417
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
14,622,000
673,312
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
5,421,000
4
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
58,082,000
42
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
26.53
MXN,
Expires
1/14/21
..
1
51,308,000
37
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
March
Strike
Price
28.75
MXN,
Expires
3/30/21
..
1
33,718,000
8,443
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
29,878,000
1,392,916
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
29,880,000
1,287,049
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
29.73
MXN,
Expires
12/07/21
.
1
51,060,000
239,894
12,084,516
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
March
Strike
Price
68.50
JPY,
Expires
3/24/21
.......
1
14,830,000
AUD
$
7,070
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
10,007,000
AUD
26,196
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
29,541,000
AUD
77,333
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
71.00
JPY,
Expires
4/29/21
.......
1
42,844,000
AUD
89,969
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
75.00
JPY,
Expires
12/20/21
..
1
38,332,000
AUD
629,522
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
76.20
JPY,
Expires
6/18/21
.......
1
51,109,000
AUD
522,380
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/10/21
......
1
70,899,000
AUD
1,805
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/08/21
......
1
59,082,000
AUD
1,665
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.67,
Expires
4/16/21
...........
1
43,120,000
AUD
36,193
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.68,
Expires
1/21/21
......
1
54,844,000
AUD
734
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.68,
Expires
2/02/21
......
1
62,733,000
AUD
2,853
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.69,
Expires
3/22/21
......
1
39,141,000
AUD
24,776
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.69,
Expires
1/22/21
......
1
45,789,000
AUD
1,555
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
102.10
JPY,
Expires
2/24/21
..
1
69,699,500
410,282
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
102.65
JPY,
Expires
8/11/21
.......
1
94,755,000
1,882,050
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
103.50
JPY,
Expires
2/01/21
..
1
66,911,000
591,072
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
18.83
MXN,
Expires
6/21/21
.......
1
47,722,000
457,010
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.43
MXN,
Expires
8/30/21
..
1
22,409,000
468,008
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
7,311,000
$
256,600
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
3,914,000
137,373
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
3,914,000
137,373
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.88
MXN,
Expires
8/11/21
..
1
22,410,000
664,912
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
20.66
MXN,
Expires
3/24/21
.......
1
17,022,000
792,295
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
22.83
MXN,
Expires
6/09/21
.......
1
9,967,000
1,359,937
8,578,963
Total
Options
Purchased
(Cost
$42,434,245)
....................................
20,663,479
Short
Term
Investments
19.7%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
10.2%
Argentina
0.2%
g,i
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
f
Index
Linked,
2/26/21
............
106,357,630
ARS
734,126
5/21/21
......................
333,618,227
ARS
2,415,891
f
Index
Linked,
9/13/21
............
184,134,515
ARS
1,319,000
g,i
Argentina
Letras
Del
Tesoro
En
Pesos
A
Descuento
,
3/31/21
.............
80,145,352
ARS
508,588
4,977,605
Brazil
1.1%
i
Brazil
Letras
do
Tesouro
Nacional
,
10/01/21
.....................
117,900,000
BRL
22,277,450
Egypt
1.6%
i
Egypt
Treasury
Bills
,
2/16/21
......................
40,900,000
EGP
2,576,189
2/23/21
......................
18,900,000
EGP
1,184,442
3/16/21
......................
25,700,000
EGP
1,602,318
6/22/21
......................
157,700,000
EGP
9,514,273
7/13/21
......................
63,000,000
EGP
3,774,560
9/07/21
......................
46,100,000
EGP
2,704,369
12/07/21
.....................
12,600,000
EGP
718,293
12/21/21
.....................
157,600,000
EGP
8,970,679
31,045,123
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
23
Short
Term
Investments
(continued)
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Japan
7.3%
i
Japan
Treasury
Bills
,
1/12/21
......................
5,502,900,000
JPY
$
53,295,475
2/10/21
......................
2,241,150,000
JPY
21,707,467
3/10/21
......................
5,497,400,000
JPY
53,251,057
3/25/21
......................
1,326,600,000
JPY
12,850,677
4/12/21
......................
552,500,000
JPY
5,352,325
146,457,001
Total
Foreign
Government
and
Agency
Securities
(Cost
$199,456,800)
............
204,757,179
Industry
Shares
Money
Market
Funds
9.5%
United
States
9.5%
j,k
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.............
189,612,936
189,612,936
Total
Money
Market
Funds
(Cost
$189,612,936)
.................................
189,612,936
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$389,069,736
)
...............................
394,370,115
a
a
a
a
Total
Investments
(Cost
$2,315,760,087)
98.4%
..................................
$1,971,124,821
Options
Written
(1.2)%
.......................................................
(24,623,103)
Other
Assets,
less
Liabilities
2.8%
.............................................
56,525,306
Net
Assets
100.0%
...........................................................
$2,003,027,024
a
a
a
a
Number
of
Contracts
Notional
Amount
#
l
Options
Written
(1.2)%
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.00
JPY,
Expires
1/22/21
...
1
22,245,000
AUD
(789,520)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.25
JPY,
Expires
1/22/21
...
1
24,793,000
AUD
(822,753)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
76.80
JPY,
Expires
4/29/21
.......
1
32,133,000
AUD
(1,131,354)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.95
JPY,
Expires
1/22/21
...
1
26,365,000
AUD
(707,962)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
80.50
JPY,
Expires
6/18/21
.......
1
25,554,000
AUD
(408,538)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.20
JPY,
Expires
12/20/21
..
1
19,166,000
AUD
(417,432)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.72,
Expires
2/02/21
......
1
22,501,000
AUD
(1,161,670)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
l
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.72,
Expires
4/16/21
...........
1
14,770,500
AUD
$
(764,422)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.74,
Expires
5/12/21
...........
1
79,639,000
AUD
(3,178,277)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
May
Strike
Price
$0.78,
Expires
5/05/21
...........
1
36,870,000
AUD
(598,064)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.00
JPY,
Expires
2/24/21
..
1
139,399,000
(116,622)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.65
JPY,
Expires
2/01/21
..
1
44,607,000
(7,452)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
109.90
JPY,
Expires
8/11/21
.......
1
94,755,000
(262,717)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
22.38
MXN,
Expires
4/29/21
.......
1
14,183,000
(127,863)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
22.56
MXN,
Expires
6/21/21
.......
1
26,247,000
(326,980)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
11,616,000
(665,738)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
22.75
MXN,
Expires
12/22/22
.
1
11,616,000
(665,738)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.12
MXN,
Expires
1/21/21
..
1
2,151,000
(422)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
24.57
MXN,
Expires
4/29/21
.......
1
7,092,000
(22,353)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
25.45
MXN,
Expires
1/14/21
..
1
9,681,000
(22)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
25.87
MXN,
Expires
3/24/21
.......
1
24,442,000
(17,000)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
26.08
MXN,
Expires
3/24/21
.......
1
10,301,000
(6,467)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
26.61
MXN,
Expires
8/30/21
..
1
22,409,000
(113,604)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
27.24
MXN,
Expires
4/09/21
.......
1
30,675,000
(20,843)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
27.38
MXN,
Expires
8/11/21
..
1
22,410,000
(83,726)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
25
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
l
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
27.93
MXN,
Expires
12/07/21
.
1
17,020,000
$
(112,831)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
28.24
MXN,
Expires
6/18/21
.......
1
32,574,000
(51,893)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
28.40
MXN,
Expires
6/30/21
.......
1
32,578,000
(59,675)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
29.21
MXN,
Expires
1/14/21
..
1
6,453,000
—
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
30.36
MXN,
Expires
6/09/21
.......
1
9,967,000
(8,113)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
3,914,000
(65,084)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
3,914,000
(65,084)
(12,780,219)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
66.00
JPY,
Expires
4/29/21
.......
1
21,422,000
AUD
(15,405)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
68.40
JPY,
Expires
12/20/21
..
1
19,166,000
AUD
(128,857)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
71.60
JPY,
Expires
6/18/21
.......
1
51,109,000
AUD
(201,062)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.64,
Expires
1/21/21
......
1
27,422,000
AUD
(39)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.65,
Expires
3/22/21
......
1
15,878,000
AUD
(2,884)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/27/21
......
1
19,541,000
AUD
(152)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/22/21
......
1
22,156,000
AUD
(124)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.69,
Expires
2/02/21
......
1
22,501,000
AUD
(2,412)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
14,816,000
AUD
(2,700)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
l
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
98.00
JPY,
Expires
8/11/21
........
1
31,622,000
$
(235,852)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
98.80
JPY,
Expires
2/01/21
...
1
39,032,000
(18,057)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
104.78
JPY,
Expires
2/01/21
..
1
10,260,000
(177,081)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
19.61
MXN,
Expires
6/09/21
.......
1
9,967,000
(211,149)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
19.79
MXN,
Expires
6/21/21
.......
1
47,722,000
(1,228,512)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
11,616,000
(420,533)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
December
Strike
Price
19.93
MXN,
Expires
12/22/22
.
1
11,616,000
(420,533)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
20.24
MXN,
Expires
6/30/21
.......
1
16,289,000
(609,170)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
20.39
MXN,
Expires
1/21/21
..
1
2,151,000
(64,071)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.94
MXN,
Expires
8/30/21
..
1
22,409,000
(1,343,278)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
21.43
MXN,
Expires
8/11/21
..
1
22,410,000
(1,733,556)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
7,827,000
(683,489)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
7,827,000
(683,489)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
14,622,000
(1,276,859)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
22.37
MXN,
Expires
1/14/21
..
1
8,326,000
(1,016,573)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.10
MXN,
Expires
1/14/21
..
1
5,379,000
(854,543)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
January
Strike
Price
23.10
MXN,
Expires
1/14/21
..
1
3,226,000
(512,504)
(11,842,884)
Total
Options
Written
(Premiums
received
$21,909,639)
..........................
$
(24,623,103)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
27
At
December
31,
2020,
the
Fund
had
the
following
forward
exchange
contracts
outstanding.
See
Note
1
(
c
). 
#
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
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
December
31,
2020,
the
aggregate
value
of
these
securities
was
$189,203,241,
representing
9.4%
of
net
assets.
f
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
g
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
13
regarding
fair
value
measurements.
h
The
coupon
rate
shown
represents
the
rate
at
period
end.
i
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
j
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
k
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
l
See
Note
1(c)
regarding
written
options.
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
.............
CITI
Buy
8,900,000
10,383,784
1/04/21
$
489,346
$
—
Euro
.............
CITI
Sell
8,900,000
10,032,436
1/04/21
—
(840,694)
Brazilian
Real
......
HSBK
Buy
22,412,692
4,405,010
1/05/21
—
(89,898)
Brazilian
Real
......
HSBK
Sell
22,412,692
3,870,263
1/05/21
—
(444,849)
Euro
.............
UBSW
Sell
14,988,575
16,059,208
CHF
1/11/21
—
(170,974)
Swiss
Franc
.......
UBSW
Sell
16,059,208
14,899,505
EUR
1/11/21
62,142
—
South
Korean
Won
..
DBAB
Buy
28,685,000,000
26,514,766
1/13/21
—
(148,318)
South
Korean
Won
..
DBAB
Sell
28,685,000,000
23,926,099
1/13/21
—
(2,440,350)
Euro
.............
GSCO
Sell
14,676,966
15,760,567
CHF
1/14/21
—
(127,269)
Swiss
Franc
.......
GSCO
Sell
15,760,567
14,616,395
EUR
1/14/21
53,252
—
Euro
.............
JPHQ
Buy
3,066,139
3,635,913
1/15/21
110,918
—
Euro
.............
JPHQ
Sell
3,066,139
3,489,726
1/15/21
—
(257,106)
Mexican
Peso
......
GSCO
Buy
388,256,400
19,532,162
1/15/21
—
(29,606)
Mexican
Peso
......
GSCO
Sell
388,256,400
18,000,000
1/15/21
—
(1,502,556)
Chinese
Yuan
......
CITI
Buy
169,481,510
25,929,551
1/19/21
108,541
—
Chinese
Yuan
......
HSBK
Buy
183,508,820
28,069,324
1/19/21
123,837
—
Euro
.............
DBAB
Sell
2,928,182
30,350,750
SEK
1/19/21
111,477
—
Mexican
Peso
......
MSCO
Buy
484,085,800
24,326,659
1/19/21
986
(23,198)
Mexican
Peso
......
MSCO
Sell
484,085,800
21,839,473
1/19/21
—
(2,464,973)
South
Korean
Won
..
HSBK
Buy
62,817,875,625
56,982,833
1/19/21
757,976
—
South
Korean
Won
..
HSBK
Sell
62,817,875,625
52,118,042
1/19/21
—
(5,622,767)
Mexican
Peso
......
CITI
Buy
484,590,000
24,147,208
1/21/21
188,350
(11,667)
Mexican
Peso
......
CITI
Sell
484,590,000
22,813,361
1/21/21
—
(1,510,530)
Mexican
Peso
......
CITI
Buy
361,135,000
18,165,575
1/22/21
—
(40,668)
Mexican
Peso
......
CITI
Sell
361,135,000
16,986,035
1/22/21
—
(1,138,871)
Mexican
Peso
......
JPHQ
Buy
2,892,000
145,460
1/22/21
—
(315)
Mexican
Peso
......
JPHQ
Sell
93,465,000
4,221,163
1/22/21
—
(469,726)
Euro
.............
HSBK
Sell
48,576,693
5,986,640,188
JPY
1/25/21
—
(1,381,791)
Mexican
Peso
......
MSCO
Sell
52,778,000
2,482,502
1/25/21
—
(165,399)
Australian
Dollar
....
HSBK
Buy
45,744,000
32,295,264
1/27/21
2,984,992
—
Australian
Dollar
....
HSBK
Sell
45,744,000
32,560,930
1/27/21
—
(2,719,327)
Mexican
Peso
......
CITI
Sell
341,694,000
16,193,491
1/27/21
—
(945,348)
Brazilian
Real
......
CITI
Sell
103,097,701
19,097,825
2/02/21
—
(748,349)
Brazilian
Real
......
HSBK
Sell
122,627,118
22,967,260
2/02/21
88,087
(726,389)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
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)
Japanese
Yen
......
CITI
Buy
469,730,000
4,484,108
2/03/21
$
66,781
$
—
Japanese
Yen
......
CITI
Sell
469,730,000
4,468,470
2/03/21
—
(82,419)
South
Korean
Won
..
DBAB
Buy
28,680,000,000
26,491,329
2/04/21
—
(128,855)
South
Korean
Won
..
DBAB
Sell
28,680,000,000
23,945,896
2/04/21
—
(2,416,579)
Indian
Rupee
......
CITI
Buy
619,835,000
8,359,768
2/08/21
97,765
—
Indian
Rupee
......
JPHQ
Buy
850,416,900
11,469,368
2/08/21
134,412
—
Euro
.............
UBSW
Sell
14,991,869
16,059,365
CHF
2/09/21
—
(171,380)
Indian
Rupee
......
HSBK
Buy
999,725,100
13,479,106
2/09/21
160,563
—
Swiss
Franc
.......
UBSW
Sell
16,059,365
14,901,448
EUR
2/09/21
60,819
—
Australian
Dollar
....
HSBK
Buy
29,541,000
21,047,384
2/10/21
1,740,307
—
Australian
Dollar
....
HSBK
Sell
29,541,000
21,246,626
2/10/21
—
(1,541,065)
Euro
.............
UBSW
Sell
27,519,519
29,578,666
CHF
2/10/21
—
(201,726)
South
Korean
Won
..
HSBK
Buy
18,046,110,000
16,452,219
2/10/21
135,585
—
South
Korean
Won
..
HSBK
Sell
18,046,110,000
15,980,191
2/10/21
—
(607,613)
Swiss
Franc
.......
UBSW
Sell
29,578,666
27,453,543
EUR
2/10/21
121,053
—
Australian
Dollar
....
HSBK
Buy
12,964,000
9,411,475
2/12/21
588,967
—
Australian
Dollar
....
HSBK
Sell
12,964,000
9,414,457
2/12/21
—
(585,986)
Euro
.............
GSCO
Sell
19,515,101
21,014,251
CHF
2/12/21
—
(98,720)
Swiss
Franc
.......
GSCO
Sell
21,014,251
19,480,548
EUR
2/12/21
56,468
—
Euro
.............
DBAB
Sell
6,544,256
66,685,319
SEK
2/16/21
107,247
—
Indian
Rupee
......
HSBK
Buy
609,733,409
8,237,637
2/16/21
75,266
—
Mexican
Peso
......
CITI
Sell
368,430,700
16,602,334
2/16/21
—
(1,835,566)
Chinese
Yuan
......
JPHQ
Buy
127,500,470
19,466,077
2/18/21
83,601
—
Australian
Dollar
....
JPHQ
Sell
185,596,654
14,139,179,985
JPY
2/22/21
—
(6,167,838)
Japanese
Yen
......
JPHQ
Sell
14,566,236,399
185,596,654
AUD
2/22/21
2,029,623
—
Euro
.............
HSBK
Sell
48,574,399
6,097,957,242
JPY
2/24/21
—
(320,937)
Australian
Dollar
....
CITI
Sell
88,444,085
6,702,911,891
JPY
2/25/21
—
(3,277,339)
Australian
Dollar
....
JPHQ
Sell
55,761,545
4,226,390,509
JPY
2/25/21
—
(2,062,489)
Euro
.............
HSBK
Sell
97,152,753
12,046,382,220
JPY
2/25/21
—
(2,097,041)
Japanese
Yen
......
CITI
Sell
4,332,864,222
55,170,000
AUD
2/25/21
574,367
—
Japanese
Yen
......
JPHQ
Sell
4,379,613,754
55,761,545
AUD
2/25/21
577,699
—
Euro
.............
CITI
Sell
46,964,965
5,907,337,849
JPY
2/26/21
—
(200,838)
Japanese
Yen
......
CITI
Buy
4,488,976,400
43,000,000
2/26/21
500,251
—
Mexican
Peso
......
CITI
Sell
622,073,000
27,837,977
3/02/21
—
(3,245,714)
Indian
Rupee
......
CITI
Buy
828,586,800
11,146,358
3/08/21
126,941
—
Indian
Rupee
......
JPHQ
Buy
852,824,500
11,469,355
3/08/21
133,709
—
Indian
Rupee
......
HSBK
Buy
1,002,522,050
13,479,107
3/09/21
159,087
—
Indian
Rupee
......
JPHQ
Buy
1,103,130,100
14,837,986
3/09/21
168,868
—
Euro
.............
UBSW
Sell
13,709,725
14,788,818
CHF
3/10/21
—
(37,201)
Swiss
Franc
.......
UBSW
Sell
14,788,818
13,684,797
EUR
3/10/21
6,701
—
Australian
Dollar
....
HSBK
Sell
15,958,516
1,229,268,528
JPY
3/11/21
—
(398,507)
Euro
.............
GSCO
Sell
24,416,644
26,267,670
CHF
3/11/21
—
(146,180)
Swiss
Franc
.......
GSCO
Sell
26,267,670
24,355,518
EUR
3/11/21
71,392
—
Chinese
Yuan
......
JPHQ
Buy
255,369,010
38,927,476
3/15/21
162,726
—
Euro
.............
DBAB
Sell
64,035,013
661,169,174
SEK
3/15/21
2,078,411
—
Euro
.............
GSCO
Sell
19,513,514
21,014,103
CHF
3/15/21
—
(92,091)
Indian
Rupee
......
CITI
Buy
490,576,422
6,610,651
3/15/21
58,476
—
Indian
Rupee
......
HSBK
Buy
609,733,409
8,214,885
3/15/21
74,119
—
Russian
Ruble
.....
DBAB
Buy
1,246,919,900
16,917,436
3/15/21
—
(198,403)
Swiss
Franc
.......
GSCO
Sell
21,014,103
19,395,724
EUR
3/15/21
—
(52,040)
Chinese
Yuan
......
HSBK
Buy
92,087,030
14,034,662
3/16/21
60,414
—
Australian
Dollar
....
HSBK
Sell
13,830,000
1,062,019,530
JPY
3/17/21
—
(376,843)
Mexican
Peso
......
MSCO
Sell
922,376,400
43,786,633
3/17/21
—
(2,222,827)
South
Korean
Won
..
CITI
Buy
22,784,500,000
20,763,959
3/22/21
176,227
—
South
Korean
Won
..
CITI
Sell
22,784,500,000
19,300,720
3/22/21
—
(1,639,466)
Mexican
Peso
......
MSCO
Sell
141,170,000
6,363,882
3/24/21
—
(672,075)
Euro
.............
HSBK
Sell
48,577,224
5,975,192,891
JPY
3/25/21
—
(1,532,159)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
29
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
.............
CITI
Sell
11,738,958
1,480,411,746
JPY
3/29/21
$
—
$
(17,260)
Euro
.............
CITI
Sell
11,738,958
1,446,486,158
JPY
3/31/21
—
(346,438)
Euro
.............
JPHQ
Sell
10,058,992
111,596,972
NOK
3/31/21
700,152
—
Norwegian
Krone
...
JPHQ
Sell
111,596,972
10,196,561
EUR
3/31/21
—
(531,755)
Mexican
Peso
......
GSCO
Sell
618,596,000
27,422,467
4/05/21
—
(3,364,942)
Euro
.............
JPHQ
Sell
58,227,043
648,986,972
NOK
4/06/21
4,390,460
—
Norwegian
Krone
...
JPHQ
Sell
170,350,000
15,692,217
EUR
4/06/21
—
(652,408)
Euro
.............
GSCO
Sell
3,672,261
3,949,462
CHF
4/13/21
—
(22,298)
Mexican
Peso
......
CITI
Sell
288,996,300
12,906,749
4/13/21
—
(1,463,011)
Swiss
Franc
.......
GSCO
Sell
3,949,462
3,644,474
EUR
4/13/21
—
(11,726)
Euro
.............
DBAB
Sell
25,547,248
264,467,663
SEK
4/15/21
901,426
—
Euro
.............
DBAB
Sell
2,925,261
30,350,750
SEK
4/16/21
111,465
—
Australian
Dollar
....
MSCO
Buy
3,918,000
2,843,763
4/21/21
179,869
—
Australian
Dollar
....
MSCO
Sell
3,918,000
2,784,718
4/21/21
—
(238,913)
Australian
Dollar
....
HSBK
Buy
29,355,000
21,769,673
4/27/21
885,169
—
Australian
Dollar
....
HSBK
Sell
29,355,000
20,887,609
4/27/21
—
(1,767,233)
Euro
.............
CITI
Sell
46,965,156
5,764,080,562
JPY
4/30/21
—
(1,625,646)
Mexican
Peso
......
CITI
Sell
903,171,600
40,347,177
4/30/21
—
(4,471,341)
Australian
Dollar
....
CITI
Sell
72,500,000
5,547,521,000
JPY
5/06/21
—
(2,149,163)
Mexican
Peso
......
CITI
Sell
20,493,000
984,980
5/13/21
—
(30,395)
South
Korean
Won
..
CITI
Buy
2,182,000,000
1,988,409
5/17/21
16,601
—
South
Korean
Won
..
CITI
Sell
2,182,000,000
1,956,161
5/17/21
—
(48,848)
Russian
Ruble
.....
JPHQ
Buy
143,649,800
1,908,212
6/07/21
454
—
Russian
Ruble
.....
MSCO
Buy
1,977,888,300
26,189,565
6/07/21
90,509
—
Indian
Rupee
......
CITI
Buy
628,612,700
8,359,767
6/08/21
93,688
—
Euro
.............
UBSW
Sell
14,903,446
16,059,208
CHF
6/09/21
—
(47,961)
Indian
Rupee
......
CITI
Buy
370,171,300
4,919,874
6/09/21
57,457
—
Russian
Ruble
.....
JPHQ
Buy
265,673,400
3,563,207
6/09/21
—
(34,012)
Swiss
Franc
.......
UBSW
Sell
16,059,208
14,843,935
EUR
6/09/21
—
(24,997)
Euro
.............
DBAB
Sell
6,350,772
65,335,344
SEK
6/11/21
168,588
—
Euro
.............
DBAB
Sell
6,335,782
65,125,500
SEK
6/15/21
161,012
—
Euro
.............
DBAB
Sell
6,904,101
74,167,300
NOK
6/15/21
180,089
—
Japanese
Yen
......
CITI
Buy
4,334,591,013
41,795,304
6/15/21
267,688
—
Japanese
Yen
......
JPHQ
Buy
12,232,463,013
117,897,576
6/15/21
806,587
—
Russian
Ruble
.....
DBAB
Buy
791,496,100
10,617,410
6/15/21
—
(110,268)
Chinese
Yuan
......
HSBK
Buy
92,623,160
14,034,663
6/16/21
61,173
—
Euro
.............
DBAB
Sell
10,659,610
113,388,400
NOK
6/16/21
146,860
—
Euro
.............
DBAB
Sell
16,237,218
165,898,900
SEK
6/16/21
290,198
—
Indian
Rupee
......
CITI
Buy
330,532,557
4,405,515
6/16/21
34,720
—
Indian
Rupee
......
HSBK
Buy
429,692,325
5,728,467
6/16/21
43,839
—
Euro
.............
DBAB
Sell
9,274,223
98,489,000
NOK
6/18/21
108,195
—
Euro
.............
JPHQ
Sell
2,382,663
24,300,000
SEK
6/18/21
37,132
—
Australian
Dollar
....
CITI
Sell
18,000,000
1,384,353,000
JPY
6/23/21
—
(460,790)
Japanese
Yen
......
BNDP
Buy
8,960,392,716
86,964,975
6/23/21
—
(4,193)
Euro
.............
CITI
Sell
11,738,963
1,447,414,093
JPY
6/30/21
—
(349,786)
Japanese
Yen
......
CITI
Buy
2,703,540,000
25,879,393
8/13/21
376,014
—
Japanese
Yen
......
CITI
Sell
2,703,540,000
25,787,295
8/13/21
—
(468,112)
Russian
Ruble
.....
JPHQ
Buy
189,344,300
2,491,635
9/08/21
—
(2,361)
Russian
Ruble
.....
MSCO
Buy
1,224,720,700
16,116,655
9/08/21
—
(15,483)
Russian
Ruble
.....
JPHQ
Buy
265,673,500
3,530,160
9/09/21
—
(37,803)
Russian
Ruble
.....
DBAB
Buy
799,087,600
10,617,411
9/14/21
—
(119,220)
Euro
.............
DBAB
Sell
6,335,779
65,201,500
SEK
9/15/21
160,996
—
Euro
.............
DBAB
Sell
6,904,098
74,330,900
NOK
9/15/21
178,435
—
Russian
Ruble
.....
DBAB
Buy
1,193,258,200
15,725,347
12/15/21
—
(213,875)
Total
Forward
Exchange
Contracts
...................................................
$25,916,525
$(75,061,073)
Net
unrealized
appreciation
(depreciation)
............................................
$(49,144,548)
Templeton
Income
Trust
Statement
of
Investments
Templeton
Global
Total
Return
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
30
See
Note 11
regarding
other
derivative
information.
*
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
50
.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
December
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
31
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$2,126,147,151
Cost
-
Controlled
affiliates
(Note
3
f
)
............................................................
189,612,936
Value
-
Unaffiliated
issuers
..................................................................
$1,781,511,885
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
189,612,936
Cash
....................................................................................
1,529,922
Restricted
currency,
at
value
(cost
$5,263)
(Note
1d)
................................................
5,195
Foreign
currency,
at
value
(cost
$12,719,692)
......................................................
12,701,678
Receivables:
Investment
securities
sold
...................................................................
23,637,380
Capital
shares
sold
........................................................................
12,684,809
Interest
.................................................................................
22,801,534
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
59,206,097
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
25,916,525
Other
assets
..............................................................................
522
Total
assets
..........................................................................
2,129,608,483
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
832,736
Capital
shares
redeemed
...................................................................
21,808,393
Management
fees
.........................................................................
1,122,417
Distribution
fees
..........................................................................
175,234
Transfer
agent
fees
........................................................................
727,596
Options
written,
at
value
(premiums
received
$21,909,639)
............................................
24,623,103
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
75,061,073
Deferred
tax
...............................................................................
1,653,560
Accrued
expenses
and
other
liabilities
...........................................................
577,347
Total
liabilities
.........................................................................
126,581,459
Net
assets,
at
value
.................................................................
$2,003,027,024
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$2,993,826,238
Total
distributable
earnings
(losses)
.............................................................
(990,799,214)
Net
assets,
at
value
.................................................................
$2,003,027,024
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
December
31,
2020
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
32
Templeton
Global
Total
Return
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$482,574,696
Shares
outstanding
........................................................................
48,369,437
Net
asset
value
per
share
a
..................................................................
$9.98
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$10.37
Class
C:
Net
assets,
at
value
.......................................................................
$113,438,408
Shares
outstanding
........................................................................
11,387,586
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$9.96
Class
R:
Net
assets,
at
value
.......................................................................
$7,741,144
Shares
outstanding
........................................................................
775,442
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.98
Class
R6:
Net
assets,
at
value
.......................................................................
$294,518,931
Shares
outstanding
........................................................................
29,503,026
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.98
Advisor
Class:
Net
assets,
at
value
.......................................................................
$1,104,753,845
Shares
outstanding
........................................................................
110,528,531
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$10.00
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
year
ended
December
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
33
Templeton
Global
Total
Return
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$675,900
Interest:
(net
of
foreign
taxes
of
$3,643,928)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
15,681,856
Paid
in
cash
a
...........................................................................
143,529,178
Total
investment
income
...................................................................
159,886,934
Expenses:
Management
fees
(Note
3
a
)
...................................................................
18,981,845
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
1,584,407
    Class
C
................................................................................
1,104,399
    Class
R
................................................................................
38,808
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
937,737
    Class
C
................................................................................
250,544
    Class
R
................................................................................
11,645
    Class
R6
...............................................................................
169,392
    Advisor
Class
............................................................................
2,484,460
Custodian
fees
(Note
4
)
......................................................................
1,038,487
Reports
to
shareholders
......................................................................
159,884
Registration
and
filing
fees
....................................................................
141,216
Professional
fees
...........................................................................
130,686
Trustees'
fees
and
expenses
..................................................................
85,149
Other
....................................................................................
187,734
Total
expenses
.........................................................................
27,306,393
Expense
reductions
(Note
4
)
...............................................................
(654,099)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(698,960)
Net
expenses
.........................................................................
25,953,334
Net
investment
income
................................................................
133,933,600
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$3,207,999)
Unaffiliated
issuers
......................................................................
(218,175,114)
Written
options
...........................................................................
(54,441,459)
Foreign
currency
transactions
................................................................
(17,540,863)
Forward
exchange
contracts
.................................................................
19,078,912
Swap
contracts
...........................................................................
(250,330,755)
Net
realized
gain
(loss)
..................................................................
(521,409,279)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
104,652,718
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
479,790
Written
options
...........................................................................
(13,686,200)
Forward
exchange
contracts
.................................................................
14,012,906
Swap
contracts
...........................................................................
63,730,756
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
935,798
Net
change
in
unrealized
appreciation
(depreciation)
............................................
170,125,768
Net
realized
and
unrealized
gain
(loss)
............................................................
(351,283,511)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(217,349,911)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
consolidated
financial
statements.
34
Templeton
Global
Total
Return
Fund
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$133,933,600
$291,403,217
Net
realized
gain
(loss)
.................................................
(521,409,279)
13,491,017
Net
change
in
unrealized
appreciation
(depreciation)
...........................
170,125,768
(246,131,686)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(217,349,911)
58,762,548
Distributions
to
shareholders:
Class
A
.............................................................
(992,841)
(53,580,319)
Class
C
.............................................................
(241,971)
(17,117,841)
Class
R
.............................................................
(11,071)
(471,568)
Class
R6
............................................................
(953,591)
(66,820,847)
Advisor
Class
........................................................
(2,811,103)
(213,023,799)
Distributions
to
sharehol
ders
from
tax
return
of
capital:
Class
A
.............................................................
(27,465,171)
—
Class
C
.............................................................
(6,693,699)
—
Class
R
.............................................................
(306,249)
—
Class
R6
............................................................
(26,379,395)
—
Advisor
Class
........................................................
(77,764,112)
—
Total
distributions
to
shareholders
..........................................
(143,619,203)
(351,014,374)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(217,260,963)
1,628,341
Class
C
.............................................................
(104,199,862)
(58,716,297)
Class
R
.............................................................
1,086,048
(168,919)
Class
R6
............................................................
(510,743,871)
(57,198,816)
Advisor
Class
........................................................
(1,379,205,858)
(128,977,729)
Total
capital
share
transactions
............................................
(2,210,324,506)
(243,433,420)
Net
increase
(decrease)
in
net
assets
...................................
(2,571,293,620)
(535,685,246)
Net
assets:
Beginning
of
year
.......................................................
4,574,320,644
5,110,005,890
End
of
year
...........................................................
$2,003,027,024
$4,574,320,644
Templeton
Income
Trust
35
franklintempleton.com
Annual
Report
Notes
to
Financial
Statements
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
after
they
have
been
held
for
10
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
36
franklintempleton.com
Annual
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.
At
December
31,
2020,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
inputs
within
the
fair
value
hierarchy.
See
the
Fair
Value
Measurements
note
for
more
information.
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
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
37
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
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
the
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.
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
11 regarding
other
derivative
information.
d.
Restricted
Currency
At
December
31,
2020,
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
38
franklintempleton.com
Annual
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
December
31,
2020,
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
39
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
December
31,
2020,
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:
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
18,417,702
$189,471,069
27,739,363
$316,049,876
Shares
issued
in
reinvestment
of
distributions
..........
2,048,612
21,146,454
3,651,073
41,607,474
Shares
redeemed
...............................
(41,849,275)
(427,878,486)
(31,508,489)
(356,029,009)
Net
increase
(decrease)
..........................
(21,382,961)
$(217,260,963)
(118,053)
$1,628,341
Class
C
Shares:
Shares
sold
...................................
1,324,479
$13,677,606
4,902,227
$55,948,189
Shares
issued
in
reinvestment
of
distributions
..........
600,638
6,200,018
1,290,434
14,728,659
Shares
redeemed
a
..............................
(12,084,491)
(124,077,486)
(11,402,770)
(129,393,145)
Net
increase
(decrease)
..........................
(10,159,374)
$(104,199,862)
(5,210,109)
$(58,716,297)
Class
R
Shares:
Shares
sold
...................................
693,427
$7,104,295
314,061
$3,634,587
Shares
issued
in
reinvestment
of
distributions
..........
30,150
309,106
38,850
442,922
Shares
redeemed
...............................
(616,867)
(6,327,353)
(368,422)
(4,246,428)
Net
increase
(decrease)
..........................
106,710
$1,086,048
(15,511)
$(168,919)
Class
R6
Shares:
Shares
sold
...................................
10,273,374
$109,626,734
14,685,966
$170,174,528
Shares
issued
in
reinvestment
of
distributions
..........
2,177,213
22,631,186
5,172,158
59,102,231
Shares
redeemed
...............................
(62,403,556)
(643,001,791)
(25,241,418)
(286,475,575)
Net
increase
(decrease)
..........................
(49,952,969)
$(510,743,871)
(5,383,294)
$(57,198,816)
Advisor
Class
Shares:
Shares
sold
...................................
56,929,039
$591,194,306
139,289,419
$1,593,975,649
Shares
issued
in
reinvestment
of
distributions
..........
6,796,675
70,563,584
16,077,993
183,620,401
Shares
redeemed
...............................
(196,224,056)
(2,040,963,748)
(169,414,689)
(1,906,573,779)
Net
increase
(decrease)
..........................
(132,498,342)
$(1,379,205,858)
(14,047,277)
$(128,977,729)
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
Templeton
Distributors,
Inc.
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Templeton
Income
Trust
Notes
to
Financial
Statements
40
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
year
ended
December
31,
2020,
the
gross
effective
investment
management
fee
rate
was
0.623%
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
year:
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
..............................
$8,431
CDSC
retained
..............................................................................
$54,780
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
41
franklintempleton.com
Annual
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
year
ended
December
31,
2020,
the
Fund
paid
transfer
agent
fees
of
$3,853,778,
of
which $1,193,037
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies
for
purposes
other
than
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
year
ended
December
31,
2020,
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,
2021.
Prior
to
May
1,
2020,
the
Class
R6
transfer
agent
fees
were
limited
to
0.02%
based
on
the
average
net
assets
of
the
class.
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
year
ended
December
31,
2020,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations. 
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
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%
.........
$507,468,590
$2,430,590,653
$(2,748,446,307)
$—
$—
$189,612,936
189,612,936
$675,900
Total
Affiliated
Securities
....
$507,468,590
$2,430,590,653
$(2,748,446,307)
$—
$—
$189,612,936
$675,900
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
42
franklintempleton.com
Annual
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,
2020,
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,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$63,904,938.
The
tax
character
of
distributions
paid
during
the
years
ended
December
31,
2020
and
2019,
was
as
follows:
At
December
31,
2020,
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.
In
accordance
with
U.S.
GAAP
permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
At
the
year
ended
December
31,
2020,
such
reclassifications
were
as
follows:
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
year
ended
December
31,
2020,
aggregated
$1,379,733,804
and
$2,981,719,452,
respectively.
7.
Credit
Risk
At
December
31,
2020,
the
Fund
had
14.7%
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.
Capital
loss
carryforwards
not
subject
to
expiration:
Long
term
................................................................................
$518,875,717
2020
2019
Distributions
paid
from:
Ordinary
income
..........................................................
$5,010,577
$351,014,374
Return
of
capital
...........................................................
138,608,626
—
$143,619,203
$351,014,374
Cost
of
investments
..........................................................................
$2,303,582,326
Unrealized
appreciation
........................................................................
$161,776,353
Unrealized
depreciation
........................................................................
(568,001,510)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(406,225,157)
Paid-in
Capital
..............................................................................
$(46,227,231)
Total
distributable
earnings
(loss)
................................................................
$46,227,231
Templeton
Income
Trust
Notes
to
Financial
Statements
43
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
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
December
31,
2020,
the
Fund
had
4.7%
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.
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
December
31,
2020,
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
$15,594
as
of
December
31,
2020.
Templeton
Income
Trust
Notes
to
Financial
Statements
44
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
11.
Other
Derivative
Information
At
December
31,
2020,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
For
the
year
ended
December
31,
2020,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
year
ended
December
31,
2020,
the
average
month
end
notional
amount
of
swap
contracts
and
options
represented
$126,556,769
and
$5,777,558,221,
respectively.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$4,268,235,062.
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
Foreign
exchange
contracts
..
Investments
in
securities,
at
value
$
20,663,479
a
Options
written,
at
value
$
24,623,103
Unrealized
appreciation
on
OTC
forward
exchange
contracts
25,916,525
Unrealized
depreciation
on
OTC
forward
exchange
contracts
75,061,073
Total
....................
$46,580,004
$99,684,176
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
Year
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Year
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Templeton
Global
Total
Return
Fund
Interest
rate
contracts
.......
Swap
contracts
$(250,330,755)
Swap
contracts
$63,730,756
Foreign
exchange
contracts
..
Investments
91,398,515
a
Investments
16,360,550
a
Written
options
(54,441,459)
Written
options
(13,686,200)
Forward
exchange
contracts
19,078,912
Forward
exchange
contracts
14,012,907
Total
....................
$(194,294,787)
$80,418,013
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
45
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
At
December
31,
2020,
OTC
derivative
assets
and
liabilities
are
as
follows:
At
December
31,
2020,
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
Derivatives
Templeton
Global
Total
Return
Fund
Forward
exchange
contracts
.............................
$
25,916,525
$
75,061,073
Options
purchased
.....................................
20,663,479
—
Options
written
........................................
—
24,623,103
Total
.............................................
$46,580,004
$99,684,176
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
Global
Total
Return
Fund
Counterparty
BNDP
...................
$—
$—
$—
$—
$—
CITI
.....................
13,574,612
(13,574,612)
—
—
—
DBAB
...................
4,704,399
(4,704,399)
—
—
—
GSCO
...................
1,641,536
(1,641,536)
—
—
—
HSBK
...................
8,978,654
(8,978,654)
—
—
—
JPHQ
...................
9,336,340
(9,336,340)
—
—
—
MSCO
...................
8,093,748
(8,093,748)
—
—
—
UBSW
...................
250,715
(250,715)
—
—
—
Total
...................
$46,580,004
$(46,580,004)
$
—
$—
$—
$
1
11.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
46
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
At
December
31,
2020,
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
50
.
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
billion
(Global
Credit
Facility)
which
matured
on
February
5,
2021.
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.
Effective
February
5,
2021,
the
Borrowers
renewed
the
Global
Credit
Facility
for
a
one
year
term,
maturing
February
4,
2022,
for
a
total
of
$2.675
billion.
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
year
ended
December
31,
2020,
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
a
Net
Amount
(Not
less
than
zero)
Templeton
Global
Total
Return
Fund
Counterparty
BNDP
...................
$4,193
$—
$—
$(4,193)
$—
CITI
.....................
37,746,517
(13,574,612)
—
(24,171,905)
—
DBAB
...................
5,775,867
(4,704,399)
—
(1,071,468)
—
GSCO
...................
5,666,689
(1,641,536)
—
(3,990,000)
35,153
HSBK
...................
20,816,329
(8,978,654)
—
(11,837,675)
—
JPHQ
...................
10,215,813
(9,336,340)
—
(879,473)
—
MSCO
...................
18,804,529
(8,093,748)
—
(10,710,781)
—
UBSW
...................
654,239
(250,715)
—
(300,000)
103,524
Total
...................
$99,684,176
$(46,580,004)
$—
$(52,965,495)
$138,677
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
47
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
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
December
31,
2020,
in
valuing
the
Fund's
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
Securities:
Common
Stocks
........................
$
—
$
—
$
—
a
$
—
Corporate
Bonds
........................
—
—
74,652
a
74,652
Foreign
Government
and
Agency
Securities
:
Argentina
............................
—
—
88,185,397
88,185,397
Bosnia
and
Herzegovina
.................
—
17,620
—
17,620
Brazil
...............................
—
21,679,904
—
21,679,904
Colombia
............................
—
96,305,132
—
96,305,132
Ecuador
.............................
—
35,916,797
—
35,916,797
Ghana
..............................
—
86,405,448
—
86,405,448
India
................................
—
85,783,512
—
85,783,512
Indonesia
............................
—
198,388,473
—
198,388,473
Mexico
..............................
—
329,557,226
—
329,557,226
Norway
..............................
—
153,194,172
—
153,194,172
South
Korea
..........................
—
147,290,779
—
147,290,779
U.S.
Government
and
Agency
Securities
.......
—
313,292,115
—
313,292,115
Options
purchased
.......................
—
20,663,479
—
20,663,479
Short
Term
Investments
...................
189,612,936
199,779,574
4,977,605
394,370,115
Total
Investments
in
Securities
...........
$189,612,936
$1,688,274,231
$93,237,654
$1,971,124,821
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
25,916,525
$
—
$
25,916,525
Restricted
Currency
(ARS)
.................
—
—
5,195
5,195
Total
Other
Financial
Instruments
.........
$—
$25,916,525
$5,195
$25,921,720
Receivables:
Interest
(ARS)
...........................
$—
$—
$1,629,514
$1,629,514
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
24,623,103
$
—
$
24,623,103
Forward
exchange
contracts
................
—
75,061,073
—
75,061,073
Total
Other
Financial
Instruments
.........
$—
$99,684,176
$—
$99,684,176
Payables:
Investment
Securities
Purchased
(ARS)
.......
$—
$—
$763,524
$763,524
Deferred
Tax(ARS)
.......................
$—
$—
$4,195
$4,195
Templeton
Income
Trust
Notes
to
Financial
Statements
48
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
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
year.
At
December
31,
2020,
the
reconciliation
is
as
follows:
a
Includes
securities
determined
to
have
no
value
at
December
31,
2020.
Balance
at
Beginning
of
Year
Purchases
Sales
Transfer
Into
Level
3
a
Transfer
Out
of
Level
3
Cost
Basis
Adjust-
ments
b
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Year
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Year
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
Global
Total
Return
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
South
Africa
.......
$
345,754
c
$
—
$
—
$
—
$
—
$
—
$
—
$
(345,754)
$
—
c
$
(345,754)
Corporate
Bonds
:
South
Africa
.......
96,896
c
7,378
—
32,272
—
1,433,954
—
(1,495,848)
74,652
c
(1,495,848)
Foreign
Government
and
Agency
Securities
:
Argentina
.........
74,554,061
60,304,441
(26,263,429)
—
—
17,022,727
(59,836,428)
22,404,025
88,185,397
(11,115,394)
Short
Term
Investments
.
5,831,458
5,188,638
(3,712,902)
—
—
666,005
(1,403,572)
(1,592,022)
4,977,605
141,260
Total
Investments
in
Securities
.
$80,828,169
$65,500,457
$(29,976,331)
$32,272
$—
19,122,686
(61,240,000)
18,970,401
$93,237,654
$(12,815,736)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
$14,601,411
$33,735,193
$(45,938,486)
$—
$—
$—
$(2,868,001)
$475,078
$5,195
$(68)
Receivables:
Interest
(ARS)
......
$2,621,567
$18,827,361
$(17,836,936)
$—
$—
$—
$(2,214,836)
$232,358
$1,629,514
$54,891
Liabilities:
Payables:
Deferred
Tax
(ARS)
....
$8,030
$—
$—
$—
$—
$—
$—
$(3,835)
$4,195
$(3,835)
Investment
Securities
Purchased
(ARS)
....
$—
$763,524
$—
$—
$—
$—
$—
$—
$763,524
$—
a
Transferred
into
level
3
as
a
result
of
the
unavailability
of
a
quoted
market
price
in
an
active
market
for
identical
securities
or
as
a
result
of
the
unreliability
of
the
foreign
exchange
rate
and
other
significant
observable
valuation
inputs.
May
include
amounts
related
to
a
corporate
action.
b
May
include
accretion,
amortization,
partnership
adjustments,
and/or
other
cost
basis
adjustments.
c
Includes
securities
determined
to
have
no
value.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
49
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
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
December
31,
2020,
are
as
follows:
14.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
The
amendments
in
the
ASU
provides
optional
temporary
financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021.
The
ASU
is
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022. Management
has
reviewed
the
requirements
and
believes
the
adoption
of
this
ASU
will
not
have
a
material
impact
on
the
financial
statements.
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,
other
than
those
already
disclosed
in
the
financial
statements.
Description
Fair
Value
at
End
of
Year
Valuation
Technique
Unobservable
Inputs
Amount
/
Range
(Weighted
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
Global
Total
Return
Fund 
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Argentina
..........
$88,185,397
Market
Comparables
Implied
Foreign
exchange
rate
143.8
ARS/USD
Decrease
b
Short
Term
Investments:
Argentina
..........
4,977,605
Market
Comparables
Implied
Foreign
exchange
rate
143.8
ARS/USD
Decrease
c
All
Other
............
1,709,361
d,e
Liabilities:
All
Other
...............
767,719
e
Total
..................
$94,104,644
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
Represents
a
significant
impact
to
fair
value
and
net
assets.
c
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
d
Includes
securities
determined
to
have
no
value
at
December
31,
2020.
e
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
13.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
50
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
(continued)
Abbreviations
Counterparty
BNDP
BNP
Paribas
SA
CITI
Citibank
NA
DBAB
Deutsche
Bank
AG
GSCO
Goldman
Sachs
Group,
Inc.
HSBK
HSBC
Bank
plc
JPHQ
JPMorgan
Chase
Bank
NA
MSCO
Morgan
Stanley
UBSW
UBS
AG
Selected
Portfolio
BADLAR
Argentina
Deposit
Rates
Badlar
Private
Banks
ARS
CER
Reference
Stabilization
Coefficient
FRN
Floating
Rate
Note
LIBOR
London
Inter-Bank
Offered
Rate
PIK
Payment-In-Kind
Currency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
CHF
Swiss
Franc
COP
Colombian
Peso
EGP
Egyptian
Pound
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
USD
United
States
Dollar
Templeton
Income
Trust
Report
of
Independent
Registered
Public
Accounting
Firm
51
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Templeton
Income
Trust
and
Shareholders
of
Templeton
Global
Total
Return
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
statement
of
investments,
of
Templeton
Global
Total
Return
Fund
(one
of
the
funds
constituting
Templeton
Income
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2020,
the
related
statement
of
operations
for
the
year
ended
December
31,
2020,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2020,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2020
by
correspondence
with
the
custodian,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
PricewaterhouseCoopers
LLP
San
Francisco,
California
February
19,
2021
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Templeton
Income
Trust
Tax
Information
(unaudited)
52
franklintempleton.com
Annual
Report
Templeton
Global
Total
Return
Fund
At
December
31,
2020,
more
than
50%
of
the
Fund’s
total
assets
were
invested
in
securities
of
foreign
issuers.
In
most
instances,
foreign
taxes
were
withheld
from
income
paid
to
the
Fund
on
these
investments.
The
Fund
elects
to
treat
foreign
taxes
paid
as
allowed
under
Section
853
of
the
Internal
Revenue
Code.
This
election
will
allow
shareholders
of
record
as
of
the
2021
distribution
date,
to
treat
their
proportionate
share
of
foreign
taxes
paid
by
the
Fund
as
having
been
paid
directly
by
them.
The
shareholder
shall
consider
these
amounts
as
foreign
taxes
paid
in
the
tax
year
in
which
they
receive
the
Fund
distribution.
Templeton
Income
Trust
Board
Members
and
Officers
53
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1992
125
Bar-S
Foods
(meat
packing
company)
(1981-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Ann
Torre
Bates
(1958)
Trustee
Since
2008
30
Ares
Capital
Corporation
(specialty
finance
company)
(2010-present),
United
Natural
Foods,
Inc.
(distributor
of
natural,
organic
and
specialty
foods)
(2013-present),
formerly
,
Allied
Capital
Corporation
(financial
services)
(2003-
2010),
SLM
Corporation
(Sallie
Mae)
(1997-2014)
and
Navient
Corporation
(loan
management,
servicing
and
asset
recovery)
(2014-2016).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Executive
Vice
President
and
Chief
Financial
Officer,
NHP
Incorporated
(manager
of
multifamily
housing)
(1995-1997);
and
Vice
President
and
Treasurer,
US
Airways,
Inc.
(until
1995).
Mary
C.
Choksi
(1950)
Trustee
Since
2016
125
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-May
2020).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Templeton
Income
Trust
54
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
2001
and
Lead
Independent
Trustee
since
2007
125
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Canadian
National
Railway
(railroad)
(2001-present),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
125
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Private
investor;
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(May
2019-January
1,
2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
David
W.
Niemiec
(1949)
Trustee
Since
2005
30
Hess
Midstream
LP
(oil
and
gas
midstream
infrastructure)
(2017-present).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Advisor,
Saratoga
Partners
(private
equity
fund);
and
formerly
,
Managing
Director,
Saratoga
Partners
(1998-2001)
and
SBC
Warburg
Dillon
Read
(investment
banking)
(1997-1998);
Vice
Chairman,
Dillon,
Read
&
Co.
Inc.
(investment
banking)
(1991-1997);
and
Chief
Financial
Officer,
Dillon,
Read
&
Co.
Inc.
(1982-1997).
Larry
D.
Thompson
(1945)
Trustee
Since
2005
125
Graham
Holdings
Company
(education
and
media
organization)
(2011-present);
and
formerly
,
The
Southern
Company
(energy
company)
(2014-May
2020;
previously
2010-2012),
Cbeyond,
Inc.
(business
communications
provider)
(2010-2012).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-September
2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Templeton
Income
Trust
55
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Constantine
D.
Tseretopoulos
(1954)
Trustee
Since
2003
19
None
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Physician,
Chief
of
Staff,
owner
and
operator
of
the
Lyford
Cay
Hospital
(1987-present);
director
of
various
nonprofit
organizations;
and
formerly
,
Cardiology
Fellow,
University
of
Maryland
(1985-1987);
and
Internal
Medicine
Resident,
Greater
Baltimore
Medical
Center
(1982-
1985).
Robert
E.
Wade
(1946)
Trustee
Since
2006
30
El
Oro
Ltd
(investments)
(2003-
2019).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Attorney
at
law
engaged
in
private
practice
as
a
sole
practitioner
(1972-2008)
and
member
of
various
boards.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2007
136
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
39
of
the
investment
companies
in
Franklin
Templeton;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015),
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Chairman
of
the
Board,
Trustee
and
Vice
President
Chairman
of
the
Board
and
Trustee
since
2013
and
Vice
President
since
1996
125
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
37
of
the
investment
companies
in
Franklin
Templeton.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
October
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Advisory
Services,
LLC,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Independent
Board
Members
(continued)
Templeton
Income
Trust
56
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Steven
J.
Gray
(1955)
Vice
President
Since
2009
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Vice
President,
Franklin
Templeton
Distributors,
Inc.
and
FASA,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Michael
Hasenstab
Ph.D.
(1973)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
three
of
the
investment
companies
in
Franklin
Templeton.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
41
of
the
investment
companies
in
Franklin
Templeton;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Robert
G.
Kubilis
(1973)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
2017
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting
and
officer
of
39
of
the
investment
companies
in
Franklin
Templeton.
Robert
Lim
(1948)
Vice
President
–
AML
Compliance
Since
2016
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Templeton
Companies,
LLC;
Chief
Compliance
Officer,
Franklin
Templeton
Distributors,
Inc.
and
Franklin
Templeton
Investor
Services,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Associate
General
Counsel
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Craig
S.
Tyle
(1960)
Vice
President
Since
2005
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
General
Counsel
and
Executive
Vice
President,
Franklin
Resources,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
57
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
major
shareholder
of
Resources.
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
U.S.
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
each
of
Ann
Torre
Bates
and
David
W.
Niemiec
as
an
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
qualify
as
such
an
expert
in
view
of
their
extensive
business
background
and
experience.
Ms.
Bates
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2008.
She
currently
serves
as
a
director
of
Ares
Capital
Corporation
(2010-present)
and
United
Natural
Foods,
Inc.
(2013-present)
and
was
formerly
a
director
of
Navient
Corporation
from
2014
to
2016,
SLM
Corporation
from
1997
to
2014
and
Allied
Capital
Corporation
from
2003
to
2010,
Executive
Vice
President
and
Chief
Financial
Officer
of
NHP
Incorporated
from
1995
to
1997
and
Vice
President
and
Treasurer
of
US
Airways,
Inc.
until
1995.
Mr.
Niemiec
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2005,
currently
serves
as
an
Advisor
to
Saratoga
Partners
and
was
formerly
its
Managing
Director
from
1998
to
2001
and
serves
as
a
director
of
Hess
Midstream
LP
(2017-present).
Mr.
Niemiec
was
formerly
a
director
of
Emeritus
Corporation
from
1999
to
2010
and
OSI
Pharmaceuticals,
Inc.
from
2006
to
2010,
Managing
Director
of
SBC
Warburg
Dillon
Read
from
1997
to
1998,
and
was
Vice
Chairman
from
1991
to
1997
and
Chief
Financial
Officer
from
1982
to
1997
of
Dillon,
Read
&
Co.
Inc.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
have
each
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Bates
and
Mr.
Niemiec
are
independent
Board
members
as
that
term
is
defined
under
the
applicable
U.S.
Securities
and
Exchange
Commission
Rules
and
Releases
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Lori
A.
Weber
(1964)
Vice
President
and
Secretary
Vice
President
since
2011
and
Secretary
since
2013
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Christine
Zhu
(1975)
Vice
President
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
three
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
Shareholder
Information
58
franklintempleton.com
Annual
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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.
407
A
02/21
©
2021
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.
Annual
Report
and
Shareholder
Letter
Templeton
Global
Total
Return
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Templeton
Distributors,
Inc.
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Annual
Report
and
Shareholder
Letter
Templeton
International
Bond
Fund
A
Series
of
Templeton
Income
Trust
December
31,
2020
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Not
part
of
the
annual
report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
12
months
ended
December
31,
2020,
the
novel
coronavirus
pandemic
hindered
the
global
economy.
Starting
in
March,
worldwide
efforts
to
slow
the
infection
rate
thwarted
global
economic
activity,
and
central
banks
acted
swiftly
to
maintain
financial
stability.
The
U.S.
Federal
Reserve
enacted
emergency
rate
cuts
and
authorized
open-
ended
purchasing
of
government-backed
and
corporate
bonds
to
bolster
markets,
and
the
European
Central
Bank’s
Pandemic
Emergency
Purchase
Programme
included
private
and
public
sector
securities.
These
measures
helped
U.S.
and
eurozone
economic
growth
to
resume
in
2020’s
third
quarter
after
two
quarters
of
contraction.
In
this
environment,
global
government
bonds,
as
measured
by
the
FTSE
World
Government
Bond
Index,
posted
total
returns
of
+10.11%
and
+5.52%
in
U.S.
dollar
and
local
currency
terms,
respectively.
1
The
U.S.
dollar
decreased
against
most
foreign
currencies
during
the
period.
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
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
advisors
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
annual
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
December
31,
2020
,
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.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Annual
Report
2
Contents
Annual
Report
Templeton
International
Bond
Fund
3
Performance
Summary
7
Your
Fund’s
Expenses
10
Financial
Highlights
and
Statement
of
Investments
11
Financial
Statements
29
Notes
to
Financial
Statements
33
Report
of
Independent
Registered
Public
Accounting
Firm
48
Tax
Information
49
Board
Members
and
Officers
50
Shareholder
Information
55
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Templeton
International
Bond
Fund
This
annual
report
for
Templeton
International
Bond
Fund
covers
the
fiscal
year
ended
December
31,
2020
.
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
less
liabilities
(including
derivatives).
Performance
Overview
For
the
12
months
under
review,
the
Fund’s
Class
A
shares
posted
a
-5.95%
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
+10.78%
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
7
.
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
12-month
period
ended
December
31,
2020,
started
optimistically,
as
a
phase
one
trade
deal
between
the
U.S.
and
China
appeared
to
bolster
market
sentiment,
driving
risk
asset
valuations
higher
in
several
markets
across
the
globe.
However,
conditions
changed
radically
and
rapidly
by
late
February,
as
the
novel
coronavirus
(COVID-19)
pandemic
upended
economies
and
financial
markets
around
the
world.
Lockdown
orders
from
governments
trying
to
“flatten
the
curve”
(i.e.,
stem
the
rate
of
infection)
ultimately
brought
entire
countries,
regions
and
continents
to
an
economic
standstill
in
March
and
April.
The
speed
and
pervasiveness
of
the
economic
shocks
were
unprecedented.
There
is
no
historical
comparison
for
the
magnitude
of
aggregate
demand
that
was
destroyed,
nor
the
magnitude
of
job
losses
in
such
a
compressed
timescale.
Risk
aversion
rapidly
escalated
to
crisis
levels
and
deepened
throughout
March,
driving
correlations
to
1.0
across
multiple
asset
classes
as
investors
shed
risk
and
moved
into
perceived
safe
havens.
Credit
markets
experienced
substantial
price
volatility,
with
the
lower-rated
credit
tiers
bearing
the
brunt
of
the
selloffs.
The
U.S.
Federal
Reserve
(Fed)
responded
quickly
to
the
deepening
crisis
with
two
emergency
rate
cuts
in
March,
the
second
of
which
dropped
the
federal
funds
target
rate
100
basis
points
(bps)
to
the
zero
bound
that
was
used
during
the
2008
global
financial
crisis
(GFC).
The
Fed
also
cut
reserve
requirements
and
encouraged
financial
institutions
to
borrow
directly
from
the
discount
window.
Growing
liquidity
strains
throughout
financial
markets
in
March
prompted
the
Fed
to
restart
liquidity
programs
that
had
been
created
during
the
GFC,
such
as
the
Commercial
Paper
Funding
Facility
and
the
Primary
Dealer
Credit
Facility.
On
March
23,
the
Fed
took
its
financial
market
interventions
beyond
the
scope
of
the
GFC
programs
by
creating
corporate
lending
programs,
and
announcing
its
intentions
to
support
lending
to
small-
and
medium-sized
businesses
through
the
newly
created
Main
Street
Business
Lending
Program.
The
Fed
also
pledged
to
buy
unlimited
government
bonds,
abandoning
the
previous
quantitative
easing
(QE)
targets
it
had
announced
a
week
earlier
on
March
15.
The
heightened
demand
for
U.S.
dollars
(USD)
Portfolio
Composition
12/31/20
%
of
Total
Net
Assets
Foreign
Government
and
Agency
Securities
59.1%
Short-Term
Investments
&
Other
Net
Assets*
40.9%
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
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
16
.
Templeton
International
Bond
Fund
4
franklintempleton.com
Annual
Report
around
the
world
also
led
the
Fed
to
expand
its
liquidity
swaps
program
with
foreign
central
banks
beyond
the
five
banks
in
its
standing
facility.
On
the
U.S.
fiscal
side,
Congress
passed
the
CARES
Act
(Coronavirus
Aid,
Relief,
and
Economic
Security)
on
March
27,
a
USD$2.2
trillion
fiscal
relief
program
designed
to
provide
loans
to
businesses,
income
support
and
unemployment
benefits
to
individuals,
and
funding
for
hospitals
and
public
health
services.
It
was
the
largest
economic
relief
bill
in
U.S.
history.
In
Europe,
the
European
Central
Bank
(ECB)
unveiled
the
€750
billion
Pandemic
Emergency
Purchase
Programme
(PEPP)
in
an
unscheduled
mid-week
announcement
on
March
18.
ECB
President
Christine
Lagarde
commented
that,
“there
are
no
limits
to
our
commitment
to
the
euro.
We
are
determined
to
use
the
full
potential
of
our
tools,
within
our
mandate.”
PEPP
appeared
geared
to
support
the
more
vulnerable
states,
as
the
program
has
unprecedented
flexibility
to
buy
a
wide
range
of
eligible
securities,
including
Greek
and
Italian
sovereign
debt,
as
well
as
corporate
commercial
paper.
The
European
Commission
passed
its
€750
billion
recovery
fund
in
July,
which
was
largely
viewed
by
markets
as
a
major
step
towards
greater
fiscal
solidarity
across
the
euro
area.
In
the
second
quarter
of
2020,
global
financial
markets
rebounded
from
the
extreme
lows
in
March,
as
extraordinary
measures
from
central
banks
and
governments
appeared
to
improve
market
confidence.
Additionally,
regional
economies
began
to
incrementally
reopen
and
the
improving
economic
data
appeared
to
bolster
optimism
that
the
worst
of
the
economic
shocks
had
passed.
Risk
assets
rallied
and
credit
spreads
tightened
in
many
sectors
during
the
second
quarter,
returning
to
levels
last
seen
in
early
March
and
late
February.
Those
trends
largely
extended
through
July
and
August
as
strengthening
economic
activity
and
profound
policy
interventions
continued
to
fuel
rallies
across
global
financial
markets
through
much
of
the
summer.
However,
many
risk
assets
appeared
detached
from
underlying
economic
fundamentals
due
to
extraordinary
monetary
policies.
Risk
assets
eventually
pulled
back
from
their
summer
high
points
in
September
2020,
as
rising
cases
of
COVID-19
appeared
to
concern
investors,
particularly
as
areas
of
Europe
and
Asia
returned
to
various
mobility
restrictions.
Developed
market
sovereign
bond
yields
fluctuated
during
the
summer
months,
rising
on
reflation
expectations
but
dropping
in
September
as
broad
risk
aversion
returned
to
global
financial
markets.
Additionally,
economic
recoveries
in
many
regions
showed
signs
of
levelling
off
in
August
and
September,
demonstrating
that
the
improvements
in
the
late
spring
and
summer
months
were
rebounds
from
the
extreme
low
points
in
March
and
April,
not
trends
that
could
be
extrapolated
through
upcoming
quarters.
Yoshihide
Suga
was
confirmed
as
the
new
prime
minister
of
Japan
on
September
16,
following
Shinzo
Abe's
resignation
on
August
28.
Abe
had
been
prime
minister
since
December
2012.
We
expected
political
continuity
in
the
near
term,
as
Suga
is
an
Abe
loyalist
who
was
often
credited
with
pushing
through
many
of
Abe’s
critical
domestic
reforms.
In
October
2020,
“risk-on”
sentiment
initially
returned
to
global
financial
markets,
with
risk
assets
rallying
during
the
first
couple
weeks
of
the
month
before
broad
risk
aversion
sharply
returned,
leading
to
significant
price
adjustments
in
various
credit
sectors
during
the
second
half
of
the
month.
Investors
appeared
concerned
over
resurgent
waves
of
COVID-19
cases
around
the
world.
Market
sentiments
ultimately
improved
in
November
on
apparent
optimism
over
promising
vaccine
trials
and
prospects
for
a
potential
global
economic
recovery
in
2021.
Risk
assets
finished
the
final
months
of
the
year
on
broad-based
rallies
as
initial
vaccine
distributions
commenced.
However,
market
optimism
in
the
fourth
quarter
ran
in
stark
contrast
to
the
worsening
pandemic,
as
COVID-19
infections
surged
to
record
levels
in
areas
of
Europe,
the
U.S.
and
Latin
America
in
the
waning
months
of
the
year,
with
a
highly
contagious
variant
of
the
virus
surfacing
in
dozens
of
countries.
The
harsh
realities
of
a
worldwide
health
crisis
and
deepening
economic
hardship
continued
to
have
profound
consequences
for
lives
and
livelihoods
around
the
world.
In
late
December
2020,
the
U.S.
government
passed
a
USD$900
billion
support
package
that
extended
unemployment
benefits
until
mid-March
2021
and
provides
one-time
relief
payments
of
USD$600
to
most
citizens.
Additional
fiscal
stimulus
appeared
likely
with
the
upcoming
change
in
the
U.S.
government.
The
Fed
continued
to
maintain
low
rates
as
well
as
its
emergency
support
program
from
March
through
the
end
of
the
year,
continuously
reaffirming
its
commitment
to
use
its
“full
range
of
tools
to
support
the
U.S.
economy”
at
each
policy
meeting.
The
ECB
also
kept
monetary
policy
unchanged
through
the
end
of
the
year,
with
the
main
refinancing
operations
rate
remaining
at
0.0%,
and
the
main
deposit
facility
rate
remaining
at
-0.5%.
The
ECB
increased
the
size
of
the
PEPP
program
to
€1.85
trillion
in
December,
after
previously
raising
it
to
€1.35
trillion
in
June.
The
U.K.
and
the
European
Union
also
settled
on
final
terms
for
post-Brexit
trade
agreements
in
the
last
week
of
the
year.
Templeton
International
Bond
Fund
5
franklintempleton.com
Annual
Report
The
Bank
of
Japan
(BOJ)
also
made
no
changes
to
its
rates
policy
in
2020.
Overnight
interest
rates
remained
at
0.1%
and
the
yield
target
on
the
10-year
Japanese
government
bond
remained
at
0.0%.
In
the
second
quarter,
the
BOJ
removed
QE
caps
and
quadrupled
the
size
of
its
corporate
debt
purchases.
It
also
increasingly
focused
on
ensuring
businesses
had
ample
access
to
capital
through
various
loan
programs,
increasing
its
lending
program
to
USD$1
trillion.
However,
despite
the
BOJ's
efforts
to
drive
inflation
higher
during
the
Abenomics
era,
deflationary
pressures
returned,
with
core
inflation
dropping
to
-0.4%
year-over-
year
in
August
and
falling
further
to
-0.9%
in
November.
The
BOJ
announced
in
December
that
it
had
launched
a
comprehensive
review
of
its
monetary
framework,
scheduled
to
arrive
in
March
2021.
We
continued
to
expect
the
Japanese
yen
to
appreciate
against
the
USD
during
the
period,
on
stable
rate
differentials
and
Japan’s
strong
external
balance.
Nearly
every
country
in
the
world
declared
some
form
of
fiscal
response
to
the
economic
crisis
in
2020,
with
most
countries
pursuing
programs
that
went
beyond
the
measures
they
deployed
during
the
GFC.
Debt-to-GDP
(gross
domestic
product)
ratios
have
risen
significantly
in
just
about
every
country.
On
the
monetary
front,
many
central
banks
aggressively
cut
policy
rates,
with
several
indicating
they
intend
to
respond
to
ongoing
economic
adversity
with
additional
accommodation
as
needed.
During
the
12-month
period,
Brazil
cut
rates
by
250
bps
to
2.00%,
Colombia
cut
rates
by
250
bps
to
1.75%,
Mexico
cut
rates
by
300
bps
to
4.25%,
Indonesia
cut
rates
by
125
bps
to
3.75%,
and
India
cut
rates
by
115
bps
to
4.00%.
In
global
bond
markets,
the
yield
on
the
10-year
U.S.
Treasury
(UST)
note
finished
the
period
100
bps
lower,
at
0.92%,
ranging
from
a
pre-pandemic
high
of
1.92%
on
January
1
to
an
all-time
low
of
0.51%
on
August
4.
The
yield
on
the
10-year
German
Bund
finished
the
year
38
bps
lower
at
-0.57%,
ranging
from
a
pre-pandemic
high
of
-0.19%
on
January
13
to
an
all-time
low
of
-0.86%
on
March
9,
during
peak
financial
market
shocks.
Sovereign
bond
yields
also
declined
in
several
countries
on
ongoing
monetary
accommodation
during
the
year,
notably
including
much
of
Latin
America
and
Asia,
particularly
Brazil,
Mexico,
Indonesia
and
India.
In
currency
markets,
the
USD
initially
strengthened
in
March
on
tremendous
demand
for
U.S.
dollars
during
the
financial
market
shocks,
but
then
entered
a
broad-based
weakening
pattern
in
mid-May
that
largely
persisted
through
the
end
of
December.
Many
developed
market
and
emerging
market
currencies
alike
strengthened
against
the
USD
over
the
final
seven
months
of
the
year.
In
credit
markets,
spreads
widened
substantially
during
peak
financial
market
volatility
in
February
and
March,
but
progressively
tightened
from
April
through
December,
with
several
sovereign
and
corporate
sectors
finishing
the
year
at
pre-pandemic
levels.
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
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
The
strategy
was
structured
around
four
key
pillars
during
much
of
the
reporting
period:
(1)
maintaining
high
liquidity
through
elevated
cash
balances
and
risk-adjusted
position
weights;
(2)
holding
long
exposures
to
perceived
safe-haven
assets
such
as
the
Japanese
yen,
Swiss
franc,
Norwegian
krone
and
Swedish
krona;
(3)
targeting
appropriate
risk-
adjusted
returns
in
a
select
subset
of
emerging
markets;
and
(4)
underweighting
overvalued
developed
fixed
income
markets.
The
strategy
continued
to
emphasize
select
duration
exposures
in
countries
that
have
attractive
risk-adjusted
yields,
resilient
economic
fundamentals
and
prudent
fiscal
and
monetary
policies.
Several
emerging
markets
continued
to
offer
significantly
higher
yields
than
those
available
in
the
developed
markets.
The
strategy
entered
the
reporting
period
in
a
de-risked
state
as
the
investment
team
saw
elevated
global
financial
market
risks
that
it
believed
were
significantly
underappreciated
by
markets.
While
the
team
was
not
explicitly
anticipating
Geographic
Composition
12/31/20
%
of
Total
Net
Assets
Asia
33.7%
Latin
America
&
Caribbean
15.1%
Europe
4.6%
Australia
&
New
Zealand
4.5%
Middle East & Africa
1.2%
Short-Term
Investments
&
Other
Net
Assets
40.9%
Templeton
International
Bond
Fund
6
franklintempleton.com
Annual
Report
the
COVID-19
crisis,
it
was
concerned
that
overvalued
risk
assets
were
vulnerable
to
a
geopolitical,
economic
or
financial
market
shock.
The
team
adjusted
the
risk-sizing
of
various
positions
and
hedged
(using
currency
forwards)
a
substantial
amount
of
local-currency
emerging
market
beta
risk
through
proxy
hedges
(net-negative
Australian
dollar)
and
direct
hedges
(Indian
rupee,
South
Korean
won,
Mexican
peso
and
Brazilian
real).
The
strategy
held
a
net-negative
position
in
the
euro
as
the
team
expected
fundamental
weakening
in
the
currency
due
to
structural
and
political
risks
in
the
eurozone,
along
with
headwinds
to
growth
and
reflation
efforts
across
Europe.
The
strategy
remained
significantly
underweighted
in
developed
market
duration,
and
it
exited
its
negative
duration
exposure
to
USTs
in
the
first
quarter.
The
strategy
held
no
duration
exposure
in
the
eurozone,
and
instead
focused
on
higher-yielding
local-currency
bonds
in
specific
emerging
markets,
such
as
Brazil,
Mexico,
Colombia,
Indonesia,
India
and
Ghana.
The
team
also
continued
to
broadly
avoid
credit
sectors,
which
it
believed
were
overvalued
leading
up
to
the
crisis
and
increasingly
vulnerable
to
insolvencies
as
the
economic
crisis
progressed.
During
the
period,
the
team
used
forward
currency
exchange
contracts
to
actively
manage
currencies,
and
used
interest-rate
swaps
to
tactically
manage
duration
exposures.
During
the
period,
the
Fund’s
negative
absolute
performance
was
primarily
due
to
currency
positions.
Interest-rate
strategies
contributed
to
absolute
results,
while
sovereign
credit
exposures
had
a
largely
neutral
effect.
Among
currencies,
positions
in
Latin
America
(the
Brazilian
real
and
Argentine
peso)
detracted
from
absolute
performance.
The
Fund’s
net-negative
positions
in
the
Australian
dollar
and
the
euro
also
detracted
from
absolute
results,
as
did
tactical
positioning
(negative)
in
the
Mexican
peso.
However,
the
Fund’s
net-positive
positions
in
the
Japanese
yen
and
the
Swiss
franc
contributed
to
absolute
performance,
as
did
positions
in
northern
European
currencies
(the
Swedish
krona).
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
duration
exposures
in
Latin
America
(Mexico
and
Argentina)
and
Asia
ex-Japan
(India)
contributed
to
absolute
results,
while
negative
duration
exposure
to
USTs
during
the
first
quarter
detracted.
On
a
relative
basis,
the
Fund
underperformed
its
benchmark
due
to
currency
positions,
followed
by
interest-rate
strategies.
Sovereign
credit
exposures
had
a
largely
neutral
effect
on
relative
results.
Among
currencies,
the
Fund’s
underweighted
positions
in
the
euro,
the
Australian
dollar
and
the
Mexican
peso
detracted
from
relative
results.
Overweighted
positions
in
Latin
America
(the
Brazilian
real
and
Argentine
peso)
also
detracted
from
relative
performance.
However,
overweighted
positions
in
northern
European
currencies
(the
Swedish
krona
and
Norwegian
krone)
contributed
to
relative
performance,
as
did
the
Fund’s
overweighted
positions
in
the
Japanese
yen
and
the
Swiss
franc.
The
Fund
maintained
a
defensive
approach
regarding
interest
rates
in
developed
markets,
while
holding
duration
exposures
in
select
emerging
markets.
Select
underweighted
duration
exposures
in
Europe
detracted
from
relative
results,
as
did
negative
duration
exposure
to
USTs
during
the
first
quarter.
However,
select
overweighted
duration
exposures
in
Latin
America
(Argentina
and
Mexico)
and
Asia
ex-Japan
(India)
contributed
to
relative
performance.
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
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
December
31,
2020
,
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
December
31,
2020
Templeton
International
Bond
Fund
7
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
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
12/31/20
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
1-Year
-5.95%
5
-9.46%
5-Year
+6.94%
+0.58%
10-Year
+9.02%
+0.48%
Advisor
1-Year
-5.70%
5
-5.70%
5-Year
+8.36%
+1.62%
10-Year
+11.98%
+1.14%
See
page
for
9
Performance
Summary
footnotes.
Templeton
International
Bond
Fund
Performance
Summary
8
franklintempleton.com
Annual
Report
See
page
9
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(1/1/11–
12/31/20
)
Advisor
Class
(1/1/11–
12/31/20
)
Templeton
International
Bond
Fund
Performance
Summary
9
franklintempleton.com
Annual
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.
Unexpected
events
and
their
aftermaths,
such
as
the
spread
of
deadly
diseases;
natural,
environmental
or
man-made
disasters;
financial,
political
or
social
disruptions;
terrorism
and
war;
and
other
tragedies
or
catastrophes,
can
cause
investor
fear
and
panic,
which
can
adversely
affect
the
economies
of
many
companies,
sectors,
nations,
regions
and
the
market
in
general,
in
ways
that
cannot
necessarily
be
foreseen.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
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
4/30/21.
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.
Total
return
information
is
based
on
net
asset
values
calculated
for
shareholder
transactions.
Certain
adjustments
were
made
to
the
net
asset
values
of
the
Fund
at
12/31/19
for
financial
reporting
purposes.
Accordingly,
adjusted
total
returns
have
been
disclosed
in
the
Financial
Highlights
and
differ
from
those
reported
here.
6.
Source:
Morningstar.
The
FTSE
Non-USD
WGBI
is
a
market
capitalization-weighted
index
consisting
of
investment-grade
world
government
bond
markets;
it
includes
all
WGBI
countries
except
the
U.S.
and
is
stated
in
U.S.
dollar
terms.
7.
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
(1/1/20–12/31/20)
Share
Class
Net
Investment
Income
Tax
Return
of
Capital
Total
A
$0.0031
$0.2089
$0.2120
C
$0.0025
$0.1720
$0.1745
R
$0.0028
$0.1828
$0.1856
R6
$0.0034
$0.2443
$0.2477
Advisor
$0.0031
$0.2323
$0.2354
Total
Annual
Operating
Expenses
7
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.09%
1.30%
Advisor
0.84%
1.05%
Your
Fund’s
Expenses
Templeton
International
Bond
Fund
10
franklintempleton.com
Annual
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
184/366
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
7/1/20
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
Ending
Account
Value
12/31/20
Expenses
Paid
During
Period
7/1/20–12/31/20
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$995.43
$5.04
$1,020.09
$5.10
0.99%
C
$1,000
$993.36
$6.99
$1,018.13
$7.07
1.39%
R
$1,000
$993.88
$6.26
$1,018.86
$6.34
1.24%
R6
$1,000
$996.20
$3.08
$1,022.05
$3.12
0.60%
Advisor
$1,000
$996.67
$3.78
$1,021.35
$3.82
0.74%
Templeton
Income
Trust
Financial
Highlights
Templeton
International
Bond
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
11
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$9.77
$10.14
$10.57
$10.61
$10.07
$10.03
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.20
0.42
0.40
0.42
0.12
0.34
Net
realized
and
unrealized
gains
(losses)
(0.75)
(0.23)
(0.22)
(0.18)
0.44
(0.17)
Total
from
investment
operations
........
(0.55)
0.19
0.18
0.24
0.56
0.17
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(—)
d
(0.56)
(0.59)
(0.28)
—
(0.04)
Net
realized
gains
.................
—
—
(0.01)
—
—
—
Tax
return
of
capital
................
(0.21)
—
(0.01)
—
(0.02)
(0.09)
Total
distributions
...................
(0.21)
(0.56)
(0.61)
(0.28)
(0.02)
(0.13)
Net
asset
value,
end
of
year
...........
$9.01
$9.77
$10.14
$10.57
$10.61
$10.07
Total
return
e
.......................
(5.66)%
1.86%
1.82%
2.25%
5.54%
1.70%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.21%
1.20%
1.26%
1.44%
1.58%
1.27%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.00%
1.00%
0.99%
0.99%
1.00%
0.99%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.99%
0.98%
0.98%
0.99%
g
0.99%
0.99%
g
Net
investment
income
...............
2.12%
4.18%
3.93%
3.87%
3.48%
3.28%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$22,455
$39,532
$38,856
$71,262
$84,766
$92,981
Portfolio
turnover
rate
................
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
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
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$9.78
$10.16
$10.58
$10.62
$10.08
$10.04
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.16
0.39
0.36
0.38
0.11
0.29
Net
realized
and
unrealized
gains
(losses)
(0.75)
(0.25)
(0.21)
(0.18)
0.43
(0.16)
Total
from
investment
operations
........
(0.59)
0.14
0.15
0.20
0.54
0.13
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(—)
d
(0.52)
(0.55)
(0.24)
—
(0.03)
Net
realized
gains
.................
—
—
(0.01)
—
—
—
Tax
return
of
capital
................
(0.17)
—
(0.01)
—
(—)
d
(0.06)
Total
distributions
...................
(0.17)
(0.52)
(0.57)
(0.24)
—
(0.09)
Net
asset
value,
end
of
year
...........
$9.02
$9.78
$10.16
$10.58
$10.62
$10.08
Total
return
e
.......................
(6.03)%
1.35%
1.52%
1.84%
5.36%
1.30%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.61%
1.60%
1.66%
1.84%
1.98%
1.66%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.40%
1.40%
1.39%
1.39%
1.40%
1.38%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.39%
1.38%
1.38%
1.39%
g
1.39%
1.38%
g
Net
investment
income
...............
1.70%
3.78%
3.53%
3.47%
3.08%
2.89%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$3,541
$6,694
$8,654
$9,733
$11,563
$11,906
Portfolio
turnover
rate
................
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
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.
Annual
Report
13
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$9.76
$10.14
$10.56
$10.61
$10.08
$10.03
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.17
0.41
0.39
0.40
0.11
0.30
Net
realized
and
unrealized
gains
(losses)
(0.73)
(0.25)
(0.22)
(0.19)
0.43
(0.15)
Total
from
investment
operations
........
(0.56)
0.16
0.17
0.21
0.54
0.15
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(—)
d
(0.54)
(0.57)
(0.26)
—
(0.03)
Net
realized
gains
.................
—
—
(0.01)
—
—
—
Tax
return
of
capital
................
(0.19)
—
(0.01)
—
(0.01)
(0.07)
Total
distributions
...................
(0.19)
(0.54)
(0.59)
(0.26)
(0.01)
(0.10)
Net
asset
value,
end
of
year
...........
$9.01
$9.76
$10.14
$10.56
$10.61
$10.08
Total
return
e
.......................
(5.83)%
1.52%
1.67%
1.92%
5.44%
1.44%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.46%
1.45%
1.51%
1.69%
1.83%
1.52%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
1.25%
1.25%
1.24%
1.24%
1.25%
1.24%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
1.24%
1.23%
1.23%
1.24%
g
1.24%
1.24%
g
Net
investment
income
...............
1.82%
3.93%
3.68%
3.62%
3.23%
3.03%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$138
$254
$300
$286
$1,010
$1,005
Portfolio
turnover
rate
................
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
a
Year
Ended
December
31,
Year
Ended
December
31,
2017
a
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
................................
$9.77
$10.15
$10.57
$10.78
Income
from
investment
operations
b
:
Net
investment
income
c
......................................
0.19
0.45
0.45
0.18
Net
realized
and
unrealized
gains
(losses)
........................
(0.70)
(0.23)
(0.22)
(0.24)
Total
from
investment
operations
.................................
(0.51)
0.22
0.23
(0.06)
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
...............
(—)
d
(0.60)
(0.63)
(0.15)
Net
realized
gains
..........................................
—
—
(0.01)
—
Tax
return
of
capital
.........................................
(0.25)
—
(0.01)
—
Total
distributions
............................................
(0.25)
(0.60)
(0.65)
(0.15)
Net
asset
value,
end
of
year
....................................
$9.01
$9.77
$10.15
$10.57
Total
return
e
................................................
(5.29)%
2.14%
2.28%
(0.61)%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
.
0.80%
1.24%
1.09%
0.99%
Expenses
net
of
waiver
and
payments
by
affiliates
....................
0.61%
0.62%
0.66%
0.68%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
..
0.60%
0.60%
0.65%
0.68%
g
Net
investment
income
........................................
2.14%
4.56%
4.26%
4.39%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..................................
$47,663
$3,878
$904
$414
Portfolio
turnover
rate
.........................................
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.
Annual
Report
15
a
Year
Ended
December
31,
2016
a
Year
Ended
August
31,
2016
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.......
$9.78
$10.15
$10.58
$10.62
$10.08
$10.04
Income
from
investment
operations
b
:
Net
investment
income
c
.............
0.21
0.45
0.44
0.45
0.13
0.35
Net
realized
and
unrealized
gains
(losses)
(0.73)
(0.23)
(0.23)
(0.18)
0.43
(0.16)
Total
from
investment
operations
........
(0.52)
0.22
0.21
0.27
0.56
0.19
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(—)
d
(0.59)
(0.62)
(0.31)
—
(0.04)
Net
realized
gains
.................
—
—
(0.01)
—
—
—
Tax
return
of
capital
................
(0.24)
—
(0.01)
—
(0.02)
(0.11)
Total
distributions
...................
(0.24)
(0.59)
(0.64)
(0.31)
(0.02)
(0.15)
Net
asset
value,
end
of
year
...........
$9.02
$9.78
$10.15
$10.58
$10.62
$10.08
Total
return
e
.......................
(5.41)%
2.12%
2.07%
2.51%
5.59%
1.95%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.96%
0.95%
1.01%
1.19%
1.33%
1.02%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.75%
0.75%
0.74%
0.74%
0.75%
0.74%
Expenses
net
of
waiver
and
payments
by
affiliates
and
expense
reduction
........
0.74%
0.73%
0.73%
0.74%
g
0.74%
0.74%
g
Net
investment
income
...............
2.30%
4.43%
4.18%
4.12%
3.73%
3.53%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.........
$284,611
$393,873
$346,303
$276,074
$249,190
$248,750
Portfolio
turnover
rate
................
86.26%
24.26%
43.13%
88.62%
31.37%
105.96%
a
For
the
period
September
1,
2016
to
December
31,
2016.
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
Statement
of
Investments,
December
31,
2020
Templeton
International
Bond
Fund
franklintempleton.com
Annual
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
59.1%
Argentina
1.4%
a,b
Argentina
BONCER
,
Index
Linked,
1.1%,
4/17/21
.......
44,021,772
ARS
$
307,016
Index
Linked,
1%,
8/05/21
........
24,186,311
ARS
170,170
Index
Linked,
1.2%,
3/18/22
.......
226,162,975
ARS
1,583,173
Index
Linked,
1.3%,
9/20/22
.......
2,023,851
ARS
13,526
Index
Linked,
1.4%,
3/25/23
.......
141,177,752
ARS
922,285
Index
Linked,
1.5%,
3/25/24
.......
141,177,758
ARS
843,915
b,c
Argentina
Bonos
del
Tesoro
Nacional
en
Pesos
Badlar
,
FRN,
31.641%,
(ARS
BADLAR
+
2%),
4/03/22
.........
5,808,000
ARS
37,510
b
Argentina
Government
Bond
,
18.2%,
10/03/21
................
73,832,000
ARS
425,946
16%,
10/17/23
.................
171,501,000
ARS
546,879
15.5%,
10/17/26
................
153,089,000
ARS
356,023
5,206,443
Australia
4.5%
d
Australia
Government
Bond,
Senior
Note,
Reg
S,
2%,
12/21/21
........
20,570,000
AUD
16,160,101
Brazil
0.1%
Brazil
Notas
do
Tesouro
Nacional,
10%,
1/01/21
......................
1,269,000
BRL
244,495
Colombia
1.5%
Colombia
Government
Bond
,
Senior
Bond,
7.75%,
4/14/21
......
378,000,000
COP
112,030
Senior
Bond,
4.375%,
3/21/23
.....
57,000,000
COP
17,025
Senior
Bond,
9.85%,
6/28/27
......
91,000,000
COP
34,714
Colombia
Titulos
de
Tesoreria
,
B,
7%,
5/04/22
.................
11,789,100,000
COP
3,660,376
B,
10%,
7/24/24
................
4,505,000,000
COP
1,599,268
5,423,413
Ghana
1.2%
Ghana
Government
Bond
,
24.75%,
3/01/21
................
180,000
GHS
31,245
16.5%,
3/22/21
................
360,000
GHS
61,775
16.25%,
5/17/21
................
1,510,000
GHS
258,502
24.5%,
6/21/21
................
50,000
GHS
8,841
24.75%,
7/19/21
................
280,000
GHS
49,632
18.75%,
1/24/22
................
2,960,000
GHS
508,467
17.6%,
11/28/22
................
130,000
GHS
21,895
19%,
9/18/23
..................
50,000
GHS
8,452
19.75%,
3/25/24
................
2,910,000
GHS
498,956
19%,
11/02/26
.................
8,740,000
GHS
1,416,557
19.75%,
3/15/32
................
8,740,000
GHS
1,389,308
4,253,630
India
3.4%
India
Government
Bond
,
8.79%,
11/08/21
................
110,000,000
INR
1,571,836
8.2%,
2/15/22
.................
19,000,000
INR
273,281
8.15%,
6/11/22
.................
82,000,000
INR
1,191,879
8.13%,
9/21/22
................
51,000,000
INR
745,600
6.84%,
12/19/22
................
12,000,000
INR
173,585
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
17
a
a
Industry
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
India
(continued)
India
Government
Bond,
(continued)
7.16%,
5/20/23
................
19,100,000
INR
$
279,104
8.83%,
11/25/23
................
156,700,000
INR
2,403,541
7.68%,
12/15/23
................
43,400,000
INR
648,122
9.15%,
11/14/24
................
82,200,000
INR
1,294,800
Senior
Note,
5.22%,
6/15/25
......
48,000,000
INR
662,783
7.59%,
1/11/26
.................
157,000,000
INR
2,374,349
7.27%,
4/08/26
................
33,000,000
INR
494,224
12,113,104
Indonesia
4.8%
Indonesia
Government
Bond
,
FR63,
5.625%,
5/15/23
..........
1,674,000,000
IDR
123,180
FR39,
11.75%,
8/15/23
..........
1,040,000,000
IDR
86,818
FR70,
8.375%,
3/15/24
..........
28,607,000,000
IDR
2,243,174
FR44,
10%,
9/15/24
.............
686,000,000
IDR
56,736
FR81,
6.5%,
6/15/25
............
192,279,000,000
IDR
14,440,084
FR40,
11%,
9/15/25
.............
1,060,000,000
IDR
93,049
17,043,041
Mexico
12.1%
Mexican
Bonos
Desarr
Fixed
Rate
,
M,
6.5%,
6/10/21
...............
95,838,000
MXN
4,860,862
M,
Senior
Note,
7.25%,
12/09/21
...
230,620,000
MXN
11,906,589
M,
6.5%,
6/09/22
...............
119,018,000
MXN
6,164,428
M,
Senior
Note,
6.75%,
3/09/23
....
266,398,000
MXN
14,066,147
M,
Senior
Bond,
8%,
12/07/23
.....
113,932,000
MXN
6,292,961
43,290,987
Norway
4.6%
d
Norway
Government
Bond
,
144A,
Reg
S,
3.75%,
5/25/21
......
39,383,000
NOK
4,658,925
144A,
Reg
S,
2%,
5/24/23
........
44,234,000
NOK
5,363,102
144A,
Reg
S,
3%,
3/14/24
........
37,171,000
NOK
4,688,254
144A,
Reg
S,
1.75%,
3/13/25
......
12,526,000
NOK
1,532,514
144A,
Reg
S,
1.5%,
2/19/26
.......
2,424,000
NOK
294,777
16,537,572
Singapore
4.5%
Singapore
Government
Bond
,
3.125%,
9/01/22
................
5,500,000
SGD
4,361,334
2.375%,
6/01/25
................
14,460,000
SGD
11,897,672
16,259,006
South
Korea
21.0%
Korea
Treasury
Bond
,
2%,
12/10/21
..................
3,665,000,000
KRW
3,409,890
1.375%,
9/10/24
................
1,485,100,000
KRW
1,375,184
1.875%,
6/10/26
................
18,495,000,000
KRW
17,409,849
1.375%,
12/10/29
...............
59,376,400,000
KRW
53,066,198
75,261,121
Total
Foreign
Government
and
Agency
Securities
(Cost
$220,666,539)
............
211,792,913
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
18
a
a  
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
0.6%
Calls
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
78.75
JPY,
Expires
1/22/21
...
1
4,180,000
AUD
$
51,406
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
79.00
JPY,
Expires
1/22/21
...
1
3,749,000
AUD
39,822
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
81.00
JPY,
Expires
4/29/21
.......
1
2,708,000
AUD
28,879
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
81.00
JPY,
Expires
6/21/21
.......
1
4,164,000
AUD
58,412
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
84.15
JPY,
Expires
6/18/21
.......
1
4,306,000
AUD
21,595
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
86.50
JPY,
Expires
12/20/21
..
1
3,229,000
AUD
22,670
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
1,114,000
AUD
61,365
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.75,
Expires
4/16/21
...........
1
1,666,000
AUD
46,081
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.77,
Expires
5/12/21
...........
1
2,993,000
AUD
62,788
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.78,
Expires
2/08/21
......
1
2,221,000
AUD
14,535
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
104.78
JPY,
Expires
2/01/21
..
1
1,268,000
2,659
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
110.80
JPY,
Expires
2/24/21
..
1
13,785,000
1,173
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
115.00
JPY,
Expires
2/24/21
..
1
27,570,000
343
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
115.95
JPY,
Expires
8/11/21
.......
1
7,804,000
4,393
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
20.65
MXN,
Expires
3/25/21
..
1
3,875,000
71,466
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
21.16
MXN,
Expires
6/21/21
.......
1
2,285,000
56,482
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
22.83
MXN,
Expires
6/09/21
.......
1
578,000
5,827
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
23.23
MXN,
Expires
3/24/21
.......
1
1,495,000
4,469
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
19
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Calls
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
23.30
MXN,
Expires
4/29/21
.......
1
2,438,000
$
13,752
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
23.75
MXN,
Expires
4/09/21
.......
1
932,000
3,005
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
24.81
MXN,
Expires
6/30/21
.......
1
2,838,000
15,556
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
25.48
MXN,
Expires
4/09/21
.......
1
890,000
1,244
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
26.09
MXN,
Expires
6/18/21
.......
1
1,891,000
5,785
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
2,349,000
108,167
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
1,257,000
57,882
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
26.30
MXN,
Expires
10/19/23
.
1
1,257,000
57,882
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
March
Strike
Price
28.75
MXN,
Expires
3/30/21
..
1
1,958,000
490
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.19
MXN,
Expires
8/29/24
..
1
1,734,000
80,839
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
29.71
MXN,
Expires
8/09/24
..
1
1,735,000
74,733
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
29.73
MXN,
Expires
12/07/21
.
1
4,390,000
20,626
994,326
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
58.95
JPY,
Expires
6/21/21
.......
1
5,552,000
AUD
2,289
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
March
Strike
Price
68.50
JPY,
Expires
3/24/21
.......
1
2,499,000
AUD
1,191
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
4,441,000
AUD
11,626
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
69.20
JPY,
Expires
6/24/21
.......
1
2,220,000
AUD
5,812
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
20
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
71.00
JPY,
Expires
4/29/21
.......
1
7,222,000
AUD
$
15,166
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
71.44
JPY,
Expires
6/21/21
.......
1
5,552,000
AUD
21,726
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
75.00
JPY,
Expires
12/20/21
..
1
6,459,000
AUD
106,076
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
76.20
JPY,
Expires
6/18/21
.......
1
8,612,000
AUD
88,022
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/10/21
......
1
5,329,000
AUD
136
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
February
Strike
Price
$0.65,
Expires
2/08/21
......
1
4,442,000
AUD
125
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.67,
Expires
4/16/21
...........
1
3,242,000
AUD
2,721
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.68,
Expires
1/21/21
......
1
4,124,000
AUD
55
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.68,
Expires
2/02/21
......
1
4,716,000
AUD
215
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.69,
Expires
3/22/21
......
1
2,942,000
AUD
1,862
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.69,
Expires
1/22/21
......
1
3,443,000
AUD
117
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
102.10
JPY,
Expires
2/24/21
..
1
13,785,000
81,145
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
102.65
JPY,
Expires
8/11/21
.......
1
11,712,000
232,627
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
103.50
JPY,
Expires
2/01/21
..
1
8,271,000
73,064
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
18.72
MXN,
Expires
3/25/21
..
1
3,255,000
13,052
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
18.83
MXN,
Expires
6/21/21
.......
1
2,770,000
26,527
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.43
MXN,
Expires
8/30/21
..
1
1,300,000
27,150
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
628,000
22,041
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
21
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
aa
a
a
Options
Purchased
(continued)
Puts
-
Over-the-Counter
(continued)
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
628,000
$
22,041
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
19.85
MXN,
Expires
10/19/23
.
1
1,174,000
41,205
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
19.88
MXN,
Expires
8/11/21
..
1
1,301,000
38,601
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
20.66
MXN,
Expires
3/24/21
.......
1
1,464,000
68,142
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
22.83
MXN,
Expires
6/09/21
.......
1
578,000
78,865
981,599
Total
Options
Purchased
(Cost
$3,610,298)
.....................................
1,975,925
Short
Term
Investments
40.2%
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
9.4%
Argentina
0.1%
b,e
Argentina
Letras
de
la
Nacion
Argentina
con
Ajuste
por
CER
,
a
Index
Linked,
2/26/21
............
7,570,963
ARS
52,258
5/21/21
......................
26,186,756
ARS
189,631
a
Index
Linked,
9/13/21
............
14,453,335
ARS
103,533
b,e
Argentina
Letras
Del
Tesoro
En
Pesos
A
Descuento
,
3/31/21
.............
6,290,877
ARS
39,921
385,343
Brazil
2.5%
e
Brazil
Letras
do
Tesouro
Nacional
,
7/01/21
......................
25,274,000
BRL
4,816,601
10/01/21
.....................
12,000,000
BRL
2,267,425
1/01/22
......................
10,700,000
BRL
2,003,044
9,087,070
Japan
4.6%
e
Japan
Treasury
Bills
,
3/25/21
......................
958,600,000
JPY
9,285,888
6/16/21
......................
751,850,000
JPY
7,285,327
16,571,215
Mexico
2.2%
e
Mexico
Cetes
,
BI,
1/28/21
....................
18,431,500
MXN
924,471
BI,
2/25/21
....................
60,255,700
MXN
3,012,098
BI,
3/25/21
....................
33,216,800
MXN
1,655,129
BI,
5/06/21
....................
18,431,500
MXN
913,745
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
22
Short
Term
Investments
(continued)
a
a
Principal
Amount
*
a
Value
a
a
a
a
a
a
Foreign
Government
and
Agency
Securities
(continued)
Mexico
(continued)
e
Mexico
Cetes,
(continued)
BI,
6/17/21
....................
20,882,200
MXN
$
1,030,511
BI,
10/21/21
...................
5,754,100
MXN
279,879
7,815,833
Total
Foreign
Government
and
Agency
Securities
(Cost
$35,657,628)
..............
33,859,461
Industry
Shares
Money
Market
Funds
30.8%
United
States
30.8%
f,g
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0%
.............
110,460,274
110,460,274
Total
Money
Market
Funds
(Cost
$110,460,274)
.................................
110,460,274
a
a
a
a
a
Total
Short
Term
Investments
(Cost
$146,117,902
)
...............................
144,319,735
a
a
a
a
Total
Investments
(Cost
$370,394,739)
99.9%
...................................
$358,088,573
Options
Written
(0.6)%
.......................................................
(2,336,146)
Other
Assets,
less
Liabilities
0.7%
.............................................
2,655,679
Net
Assets
100.0%
...........................................................
$358,408,106
a
a
a
a
Number
of
Contracts
Notional
Amount
#
h
Options
Written
(0.6)%
a
Calls
-
Over-the-Counter
a
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.00
JPY,
Expires
1/22/21
...
1
3,749,000
AUD
(133,060)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.25
JPY,
Expires
1/22/21
...
1
4,180,000
AUD
(138,713)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
76.80
JPY,
Expires
4/29/21
.......
1
5,416,000
AUD
(190,689)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
January
Strike
Price
76.95
JPY,
Expires
1/22/21
...
1
4,441,000
AUD
(119,251)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
78.00
JPY,
Expires
6/21/21
.......
1
4,164,000
AUD
(124,914)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
80.50
JPY,
Expires
6/18/21
.......
1
4,306,000
AUD
(68,841)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
81.20
JPY,
Expires
12/20/21
..
1
3,229,000
AUD
(70,327)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.72,
Expires
2/02/21
......
1
1,691,000
AUD
(87,302)
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
23
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
h
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
April
Strike
Price
$0.72,
Expires
4/16/21
...........
1
1,110,500
AUD
$
(57,472)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
May
Strike
Price
$0.74,
Expires
5/12/21
...........
1
5,986,000
AUD
(238,893)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
May
Strike
Price
$0.78,
Expires
5/05/21
...........
1
2,772,000
AUD
(44,964)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.00
JPY,
Expires
2/24/21
..
1
27,570,000
(23,065)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
107.65
JPY,
Expires
2/01/21
..
1
5,514,000
(921)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
109.90
JPY,
Expires
8/11/21
.......
1
11,712,000
(32,473)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
21.48
MXN,
Expires
3/25/21
..
1
3,875,000
(38,565)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
22.38
MXN,
Expires
4/29/21
.......
1
1,219,000
(10,990)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
22.56
MXN,
Expires
6/21/21
.......
1
1,523,000
(18,973)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
24.57
MXN,
Expires
4/29/21
.......
1
610,000
(1,923)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
25.87
MXN,
Expires
3/24/21
.......
1
1,419,000
(987)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
March
Strike
Price
26.08
MXN,
Expires
3/24/21
.......
1
598,000
(375)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
26.61
MXN,
Expires
8/30/21
..
1
1,300,000
(6,590)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
April
Strike
Price
27.24
MXN,
Expires
4/09/21
.......
1
1,781,000
(1,210)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
27.38
MXN,
Expires
8/11/21
..
1
1,301,000
(4,861)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
December
Strike
Price
27.93
MXN,
Expires
12/07/21
.
1
1,463,000
(9,699)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
28.24
MXN,
Expires
6/18/21
.......
1
1,891,000
(3,012)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
28.40
MXN,
Expires
6/30/21
.......
1
1,892,000
(3,466)
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
24
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
h
Options
Written
(continued)
a
Calls
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
30.36
MXN,
Expires
6/09/21
.......
1
578,000
$
(470)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
628,000
(10,443)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
34.95
MXN,
Expires
10/19/23
.
1
628,000
(10,443)
(1,452,892)
Puts
-
Over-the-Counter
Currency
Options
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
64.86
JPY,
Expires
6/21/21
.......
1
8,328,000
AUD
(9,494)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
April
Strike
Price
66.00
JPY,
Expires
4/29/21
.......
1
3,611,000
AUD
(2,597)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
December
Strike
Price
68.40
JPY,
Expires
12/20/21
..
1
3,229,000
AUD
(21,709)
Foreign
Exchange
AUD/JPY,
Counterparty
CITI,
June
Strike
Price
71.60
JPY,
Expires
6/18/21
.......
1
8,612,000
AUD
(33,880)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
January
Strike
Price
$0.64,
Expires
1/21/21
......
1
2,062,000
AUD
(3)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
March
Strike
Price
$0.65,
Expires
3/22/21
......
1
1,194,000
AUD
(217)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/27/21
......
1
1,469,000
AUD
(12)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.66,
Expires
1/22/21
......
1
1,666,000
AUD
(9)
Foreign
Exchange
AUD/USD,
Counterparty
MSCO,
February
Strike
Price
$0.69,
Expires
2/02/21
......
1
1,691,000
AUD
(181)
Foreign
Exchange
AUD/USD,
Counterparty
HSBK,
January
Strike
Price
$0.72,
Expires
1/22/21
......
1
1,114,000
AUD
(203)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
August
Strike
Price
98.00
JPY,
Expires
8/11/21
........
1
3,909,000
(29,155)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
98.80
JPY,
Expires
2/01/21
...
1
4,825,000
(2,232)
Foreign
Exchange
USD/JPY,
Counterparty
CITI,
February
Strike
Price
104.78
JPY,
Expires
2/01/21
..
1
1,268,000
(21,885)
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
25
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
h
Options
Written
(continued)
a
Puts
-
Over-the-Counter
(continued)
a
Currency
Options
(continued)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
March
Strike
Price
19.40
MXN,
Expires
3/25/21
..
1
3,255,000
$
(39,519)
Foreign
Exchange
USD/MXN,
Counterparty
GSCO,
June
Strike
Price
19.61
MXN,
Expires
6/09/21
.......
1
578,000
(12,245)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
19.79
MXN,
Expires
6/21/21
.......
1
2,770,000
(71,308)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
June
Strike
Price
20.24
MXN,
Expires
6/30/21
.......
1
946,000
(35,378)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
20.94
MXN,
Expires
8/30/21
..
1
1,300,000
(77,927)
Foreign
Exchange
USD/MXN,
Counterparty
MSCO,
August
Strike
Price
21.43
MXN,
Expires
8/11/21
..
1
1,301,000
(100,641)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
2,349,000
(205,125)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
1,257,000
(109,767)
Foreign
Exchange
USD/MXN,
Counterparty
CITI,
October
Strike
Price
22.32
MXN,
Expires
10/19/23
.
1
1,257,000
(109,767)
(883,254)
Total
Options
Written
(Premiums
received
$2,344,625)
...........................
$
(2,336,146)
#
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.
a
Redemption
price
at
maturity
is
adjusted
for
inflation.
See
Note
1(f).
b
Securities
denominated
in
Argentine
Peso
have
been
designated
as
Level
3
investments.
See
Note
12
regarding
fair
value
measurements.
c
The
coupon
rate
shown
represents
the
rate
at
period
end.
d
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
December
31,
2020,
the
aggregate
value
of
these
securities
was
$32,697,673,
representing
9.1%
of
net
assets.
e
The
security
was
issued
on
a
discount
basis
with
no
stated
coupon
rate.
f
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
g
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
h
See
Note
1(c)
regarding
written
options.
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
26
At
December
31,
2020,
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
Brazilian
Real
......
HSBK
Buy
13,569,498
2,666,961
1/05/21
$
—
$
(54,428)
Brazilian
Real
......
HSBK
Sell
13,569,498
2,343,205
1/05/21
—
(269,329)
Euro
.............
BOFA
Sell
926,408
1,055,262
1/11/21
—
(76,699)
Euro
.............
UBSW
Sell
1,293,253
1,385,630
CHF
1/11/21
—
(14,752)
Swiss
Franc
.......
UBSW
Sell
1,385,630
1,285,567
EUR
1/11/21
5,362
—
Australian
Dollar
....
JPHQ
Sell
890,818
67,932,015
JPY
1/13/21
—
(28,903)
Euro
.............
UBSW
Sell
803,640
866,006
CHF
1/13/21
—
(3,547)
Japanese
Yen
......
JPHQ
Sell
69,977,183
890,818
AUD
1/13/21
9,094
—
Mexican
Peso
......
CITI
Buy
17,025,000
829,836
1/13/21
25,555
—
Mexican
Peso
......
CITI
Sell
49,145,000
2,273,863
1/13/21
—
(195,341)
Swiss
Franc
.......
UBSW
Sell
866,006
803,506
EUR
1/13/21
3,383
—
Euro
.............
GSCO
Sell
1,266,366
1,359,862
CHF
1/14/21
—
(10,981)
Swiss
Franc
.......
GSCO
Sell
1,359,862
1,261,140
EUR
1/14/21
4,595
—
Mexican
Peso
......
CITI
Sell
72,338,000
3,340,938
1/15/21
—
(292,681)
Chinese
Yuan
......
CITI
Buy
19,192,940
2,936,393
1/19/21
12,292
—
Chinese
Yuan
......
HSBK
Buy
20,781,470
3,178,713
1/19/21
14,024
—
Euro
.............
DBAB
Sell
1,413,741
14,653,500
SEK
1/19/21
53,822
—
Mexican
Peso
......
CITI
Sell
41,674,000
1,961,914
1/21/21
—
(129,903)
Mexican
Peso
......
CITI
Sell
31,060,000
1,460,911
1/22/21
—
(97,950)
Mexican
Peso
......
JPHQ
Sell
8,042,000
363,201
1/22/21
—
(40,417)
Euro
.............
HSBK
Sell
3,273,701
403,454,119
JPY
1/25/21
—
(93,122)
Australian
Dollar
....
HSBK
Buy
3,438,000
2,560,371
1/27/21
91,201
—
Australian
Dollar
....
HSBK
Sell
3,438,000
2,447,195
1/27/21
—
(204,377)
Mexican
Peso
......
CITI
Sell
19,864,000
941,391
1/27/21
—
(54,957)
Brazilian
Real
......
CITI
Sell
12,406,827
2,298,242
2/02/21
—
(90,057)
Brazilian
Real
......
HSBK
Sell
24,142,139
4,624,028
2/02/21
53,331
(76,634)
Brazilian
Real
......
JPHQ
Sell
10,726,202
1,984,019
2/02/21
—
(80,761)
South
Korean
Won
..
DBAB
Buy
49,525,667,500
45,746,191
2/04/21
—
(222,510)
South
Korean
Won
..
DBAB
Sell
49,525,667,500
41,354,098
2/04/21
—
(4,169,582)
Indian
Rupee
......
CITI
Buy
32,885,300
443,527
2/08/21
5,187
—
Indian
Rupee
......
JPHQ
Buy
45,118,800
608,506
2/08/21
7,131
—
Euro
.............
UBSW
Sell
1,293,537
1,385,643
CHF
2/09/21
—
(14,787)
Indian
Rupee
......
HSBK
Buy
53,040,300
715,132
2/09/21
8,519
—
Swiss
Franc
.......
UBSW
Sell
1,385,643
1,285,735
EUR
2/09/21
5,248
—
Australian
Dollar
....
HSBK
Buy
2,221,000
1,654,216
2/10/21
59,045
—
Australian
Dollar
....
HSBK
Sell
2,221,000
1,597,399
2/10/21
—
(115,863)
Euro
.............
UBSW
Sell
3,222,985
3,464,145
CHF
2/10/21
—
(23,625)
Swiss
Franc
.......
UBSW
Sell
3,464,145
3,215,258
EUR
2/10/21
14,177
—
Australian
Dollar
....
HSBK
Buy
974,000
725,442
2/12/21
25,903
—
Australian
Dollar
....
HSBK
Sell
974,000
707,319
2/12/21
—
(44,026)
Euro
.............
GSCO
Sell
1,683,813
1,813,163
CHF
2/12/21
—
(8,518)
Swiss
Franc
.......
GSCO
Sell
1,813,163
1,680,831
EUR
2/12/21
4,872
—
Euro
.............
DBAB
Sell
3,834,778
39,075,998
SEK
2/16/21
62,844
—
Mexican
Peso
......
CITI
Sell
76,068,500
3,427,821
2/16/21
—
(378,982)
Chinese
Yuan
......
JPHQ
Buy
14,438,800
2,204,437
2/18/21
9,467
—
Australian
Dollar
....
DBAB
Buy
22,152,000
16,614,665
2/19/21
474,107
—
Australian
Dollar
....
DBAB
Sell
22,152,000
16,213,492
2/19/21
—
(875,281)
Australian
Dollar
....
JPHQ
Sell
5,362,214
408,505,823
JPY
2/22/21
—
(178,200)
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
27
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
.............
BOFA
Sell
1,770,468
2,105,449
2/22/21
$
—
$
(59,939)
Japanese
Yen
......
JPHQ
Sell
413,156,325
5,260,000
AUD
2/22/21
54,283
—
Euro
.............
HSBK
Sell
3,273,546
410,956,043
JPY
2/24/21
—
(21,629)
Australian
Dollar
....
CITI
Sell
8,946,293
678,012,672
JPY
2/25/21
—
(331,509)
Australian
Dollar
....
JPHQ
Sell
1,787,405
135,474,543
JPY
2/25/21
—
(66,112)
Euro
.............
HSBK
Sell
6,547,358
811,834,745
JPY
2/25/21
—
(141,324)
Australian
Dollar
....
CITI
Sell
5,119,797
387,966,987
JPY
2/26/21
—
(190,160)
Euro
.............
CITI
Sell
2,449,810
308,141,454
JPY
2/26/21
—
(10,476)
Japanese
Yen
......
JPHQ
Buy
192,605,080
1,814,738
2/26/21
51,694
—
Japanese
Yen
......
JPHQ
Sell
96,138,970
922,939
2/26/21
—
(8,692)
Mexican
Peso
......
CITI
Sell
68,408,000
3,061,281
3/02/21
—
(356,924)
Euro
.............
DBAB
Sell
3,493,967
4,138,498
3/08/21
—
(136,083)
Indian
Rupee
......
CITI
Buy
43,960,600
591,369
3/08/21
6,735
—
Indian
Rupee
......
JPHQ
Buy
45,246,500
608,505
3/08/21
7,094
—
Japanese
Yen
......
JPHQ
Buy
206,531,830
1,945,752
3/08/21
55,845
—
Japanese
Yen
......
JPHQ
Sell
206,531,830
1,962,829
3/08/21
—
(38,768)
Mexican
Peso
......
CITI
Sell
53,493,000
2,446,009
3/08/21
—
(225,127)
Singapore
Dollar
....
HSBK
Sell
1,617,000
1,186,745
3/08/21
—
(37,616)
Singapore
Dollar
....
SCNY
Sell
18,025,000
13,212,485
3/08/21
—
(435,698)
South
Korean
Won
..
HSBK
Buy
13,355,000,000
12,174,333
3/08/21
101,022
—
South
Korean
Won
..
HSBK
Sell
13,355,000,000
11,262,439
3/08/21
—
(1,012,915)
Indian
Rupee
......
HSBK
Buy
53,188,700
715,133
3/09/21
8,440
—
Indian
Rupee
......
JPHQ
Buy
58,526,500
787,228
3/09/21
8,959
—
Mexican
Peso
......
JPHQ
Sell
61,493,000
3,028,690
3/09/21
—
(41,560)
Euro
.............
UBSW
Sell
1,605,633
1,732,012
CHF
3/10/21
—
(4,357)
Swiss
Franc
.......
UBSW
Sell
1,732,013
1,602,714
EUR
3/10/21
785
—
Australian
Dollar
....
HSBK
Sell
1,740,005
134,030,845
JPY
3/11/21
—
(43,450)
Euro
.............
GSCO
Sell
2,106,729
2,266,440
CHF
3/11/21
—
(12,613)
Mexican
Peso
......
BAST
Sell
55,890,511
2,779,102
3/11/21
—
(10,767)
Mexican
Peso
......
CITI
Sell
65,586,000
2,912,370
3/11/21
—
(361,465)
Swiss
Franc
.......
GSCO
Sell
2,266,440
2,101,455
EUR
3/11/21
6,160
—
Chinese
Yuan
......
JPHQ
Buy
28,919,280
4,408,345
3/15/21
18,428
—
Euro
.............
DBAB
Sell
4,730,696
48,845,001
SEK
3/15/21
153,546
—
Euro
.............
GSCO
Sell
1,683,676
1,813,150
CHF
3/15/21
—
(7,946)
Swiss
Franc
.......
GSCO
Sell
1,813,150
1,673,513
EUR
3/15/21
—
(4,490)
Australian
Dollar
....
HSBK
Sell
23,430,000
1,800,946,950
JPY
3/16/21
—
(621,739)
Chinese
Yuan
......
HSBK
Buy
10,428,400
1,589,356
3/16/21
6,842
—
Mexican
Peso
......
CITI
Sell
66,237,000
3,047,930
3/16/21
—
(256,456)
Australian
Dollar
....
HSBK
Sell
1,160,000
89,077,560
JPY
3/17/21
—
(31,608)
Mexican
Peso
......
MSCO
Sell
67,721,100
3,199,391
3/17/21
—
(178,634)
South
Korean
Won
..
CITI
Buy
955,000,000
870,310
3/22/21
7,386
—
South
Korean
Won
..
CITI
Sell
955,000,000
808,979
3/22/21
—
(68,717)
Japanese
Yen
......
JPHQ
Buy
19,695,795
189,211
3/24/21
1,713
—
Mexican
Peso
......
MSCO
Sell
8,326,000
375,332
3/24/21
—
(39,638)
Euro
.............
HSBK
Sell
3,273,736
402,682,657
JPY
3/25/21
—
(103,256)
Euro
.............
CITI
Sell
3,033,083
382,505,163
JPY
3/29/21
—
(4,460)
Euro
.............
CITI
Sell
3,033,083
373,739,552
JPY
3/31/21
—
(89,512)
Euro
.............
JPHQ
Sell
6,712,937
74,475,000
NOK
3/31/21
467,251
—
Mexican
Peso
......
GSCO
Sell
35,879,000
1,590,522
4/05/21
—
(195,169)
Euro
.............
GSCO
Sell
724,793
853,951
4/06/21
—
(33,382)
Euro
.............
JPHQ
Sell
4,307,285
534,015,040
JPY
4/06/21
—
(95,758)
Euro
.............
JPHQ
Sell
6,681,889
74,475,000
NOK
4/06/21
503,830
—
Australian
Dollar
....
HSBK
Sell
1,739,995
131,730,671
JPY
4/13/21
—
(65,454)
Australian
Dollar
....
JPHQ
Sell
3,545,907
268,941,629
JPY
4/13/21
—
(128,639)
Euro
.............
GSCO
Sell
1,264,425
1,359,870
CHF
4/13/21
—
(7,678)
Euro
.............
UBSW
Sell
804,214
866,006
CHF
4/13/21
—
(3,653)
Mexican
Peso
......
CITI
Sell
16,778,900
749,356
4/13/21
—
(84,941)
Templeton
Income
Trust
Statement
of
Investments
Templeton
International
Bond
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
28
See
Note 
10
regarding
other
derivative
information.
See
A
bbreviations
on
page
47
.
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)
Swiss
Franc
.......
GSCO
Sell
1,359,870
1,254,857
EUR
4/13/21
$
—
$
(4,038)
Swiss
Franc
.......
UBSW
Sell
866,006
800,879
EUR
4/13/21
—
(431)
Euro
.............
DBAB
Sell
1,887,347
19,538,000
SEK
4/15/21
66,594
—
Euro
.............
BOFA
Sell
473,307
559,216
4/16/21
—
(20,359)
Euro
.............
DBAB
Sell
1,412,331
14,653,500
SEK
4/16/21
53,816
—
Euro
.............
HSBK
Sell
396,000
467,227
4/16/21
—
(17,685)
Australian
Dollar
....
MSCO
Buy
294,000
220,700
4/21/21
6,188
—
Australian
Dollar
....
MSCO
Sell
294,000
208,961
4/21/21
—
(17,928)
Australian
Dollar
....
HSBK
Buy
2,207,000
1,644,517
4/27/21
58,744
—
Australian
Dollar
....
HSBK
Sell
2,207,000
1,570,395
4/27/21
—
(132,866)
Euro
.............
DBAB
Sell
922,000
1,097,475
4/27/21
—
(31,808)
Euro
.............
DBAB
Sell
915,000
1,086,883
4/29/21
—
(33,876)
Euro
.............
CITI
Sell
2,449,820
300,668,798
JPY
4/30/21
—
(84,798)
Euro
.............
GSCO
Sell
1,005,086
1,185,419
4/30/21
—
(45,711)
Euro
.............
HSBK
Sell
810,000
955,577
4/30/21
—
(36,591)
Mexican
Peso
......
CITI
Sell
52,377,100
2,339,830
4/30/21
—
(259,304)
Australian
Dollar
....
CITI
Sell
336,000
25,087,440
JPY
5/06/21
—
(15,997)
Mexican
Peso
......
CITI
Sell
3,291,000
158,179
5/13/21
—
(4,881)
Singapore
Dollar
....
SCNY
Sell
1,804,297
1,341,432
5/18/21
—
(25,019)
South
Korean
Won
..
DBAB
Buy
19,729,690,000
18,240,364
5/18/21
—
(111,068)
South
Korean
Won
..
DBAB
Sell
19,729,690,000
17,784,109
5/18/21
—
(345,188)
Euro
.............
GSCO
Sell
88,914
105,958
5/20/21
—
(3,000)
Euro
.............
CITI
Sell
48,798
58,007
5/24/21
—
(1,797)
Euro
.............
MSCO
Sell
807,000
961,992
5/27/21
—
(27,085)
Indian
Rupee
......
CITI
Buy
33,351,000
443,527
6/08/21
4,971
—
Euro
.............
UBSW
Sell
1,285,907
1,385,630
CHF
6/09/21
—
(4,138)
Indian
Rupee
......
CITI
Buy
19,639,400
261,023
6/09/21
3,048
—
Swiss
Franc
.......
UBSW
Sell
1,385,630
1,280,773
EUR
6/09/21
—
(2,157)
Euro
.............
DBAB
Sell
3,798,293
39,076,002
SEK
6/11/21
100,830
—
Euro
.............
DBAB
Sell
1,053,303
10,826,900
SEK
6/15/21
26,768
—
Euro
.............
DBAB
Sell
1,057,240
11,357,400
NOK
6/15/21
27,577
—
Japanese
Yen
......
HSBK
Buy
179,703,666
1,730,916
6/15/21
12,934
—
Japanese
Yen
......
JPHQ
Buy
483,133,508
4,656,484
6/15/21
31,857
—
Chinese
Yuan
......
HSBK
Buy
10,489,110
1,589,355
6/16/21
6,928
—
Euro
.............
DBAB
Sell
1,632,328
17,363,400
NOK
6/16/21
22,489
—
Euro
.............
DBAB
Sell
2,699,389
27,580,200
SEK
6/16/21
48,245
—
Euro
.............
DBAB
Sell
1,477,356
15,689,000
NOK
6/18/21
17,235
—
Euro
.............
JPHQ
Sell
410,838
4,190,000
SEK
6/18/21
6,403
—
Japanese
Yen
......
BNDP
Buy
4,594,021,443
44,587,215
6/23/21
—
(2,150)
Euro
.............
CITI
Sell
3,033,084
373,979,308
JPY
6/30/21
—
(90,377)
Australian
Dollar
....
JPHQ
Sell
890,819
67,778,852
JPY
7/13/21
—
(29,812)
Euro
.............
DBAB
Sell
1,053,299
10,839,500
SEK
9/15/21
26,765
—
Euro
.............
DBAB
Sell
1,057,244
11,382,500
NOK
9/15/21
27,324
—
Total
Forward
Exchange
Contracts
...................................................
$2,957,888
$(14,762,591)
Net
unrealized
appreciation
(depreciation)
............................................
$(11,804,703)
*
In
U.S.
dollars
unless
otherwise
indicated.
a
May
be
comprised
of
multiple
contracts
with
the
same
counterparty,
currency
and
settlement
date.
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
December
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
29
Templeton
International
Bond
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$259,934,465
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
110,460,274
Value
-
Unaffiliated
issuers
..................................................................
$247,628,299
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
110,460,274
Cash
....................................................................................
60,434
Restricted
currency,
at
value
(cost
$413)
(Note
1d)
..................................................
408
Foreign
currency,
at
value
(cost
$888,7
09)
........................................................
889,865
Receivables:
Capital
shares
sold
........................................................................
689,757
Dividends
and
interest
.....................................................................
1,698,658
Deposits
with
brokers
for:
OTC
derivative
contracts
..................................................................
12,111,890
Unrealized
appreciation
on
OTC
forward
exchange
contracts
..........................................
2,957,888
Other
assets
..............................................................................
55
Total
assets
..........................................................................
376,497,528
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
59,932
Capital
shares
redeemed
...................................................................
387,166
Management
fees
.........................................................................
186,732
Distribution
fees
..........................................................................
6,843
Transfer
agent
fees
........................................................................
151,214
Options
written,
at
value
(premiums
received
$2,344,625)
............................................
2,336,146
Unrealized
depreciation
on
OTC
forward
exchange
contracts
..........................................
14,762,591
Deferred
tax
...............................................................................
78,939
Accrued
expenses
and
other
liabilities
...........................................................
119,859
Total
liabilities
.........................................................................
18,089,422
Net
assets,
at
value
.................................................................
$358,408,106
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$407,053,076
Total
distributable
earnings
(losses)
.............................................................
(48,644,970)
Net
assets,
at
value
.................................................................
$358,408,106
Templeton
Income
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
(continued)
December
31,
2020
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
30
Templeton
International
Bond
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$22,454,839
Shares
outstanding
........................................................................
2,492,073
Net
asset
value
per
share
a
..................................................................
$9.01
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
................................
$9.36
Class
C:
Net
assets,
at
value
.......................................................................
$3,540,986
Shares
outstanding
........................................................................
392,474
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$9.02
Class
R:
Net
assets,
at
value
.......................................................................
$138,295
Shares
outstanding
........................................................................
15,351
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.01
Class
R6:
Net
assets,
at
value
.......................................................................
$47,663,080
Shares
outstanding
........................................................................
5,288,017
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.01
Advisor
Class:
Net
assets,
at
value
.......................................................................
$284,610,906
Shares
outstanding
........................................................................
31,555,987
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$9.02
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
year
ended
December
31,
2020
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
31
Templeton
International
Bond
Fund
Investment
income:
Dividends:
Non-controlled
affiliates
(Note
3
f
)
.............................................................
$327,205
Interest:
(net
of
foreign
taxes
of
$314,050)
Unaffiliated
issuers:
Inflation
principal
adjustments
..............................................................
868,931
Paid
in
cash
a
...........................................................................
10,713,989
Total
investment
income
...................................................................
11,910,125
Expenses:
Management
fees
(Note
3
a
)
...................................................................
2,656,867
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
63,012
    Class
C
................................................................................
32,036
    Class
R
................................................................................
1,036
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
49,482
    Class
C
................................................................................
9,695
    Class
R
................................................................................
406
    Class
R6
...............................................................................
10,881
    Advisor
Class
............................................................................
667,804
Custodian
fees
(Note
4
)
......................................................................
73,481
Reports
to
shareholders
......................................................................
41,268
Registration
and
filing
fees
....................................................................
78,048
Professional
fees
...........................................................................
96,278
Trustees'
fees
and
expenses
..................................................................
9,880
Other
....................................................................................
37,687
Total
expenses
.........................................................................
3,827,861
Expense
reductions
(Note
4
)
...............................................................
(53,429)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(800,384)
Net
expenses
.........................................................................
2,974,048
Net
investment
income
................................................................
8,936,077
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
(net
of
foreign
taxes
of
$489,785)
Unaffiliated
issuers
......................................................................
(19,619,347)
Written
options
...........................................................................
(1,891,162)
Foreign
currency
transactions
................................................................
(1,219,451)
Forward
exchange
contracts
.................................................................
(9,010,021)
Swap
contracts
...........................................................................
(8,577,292)
Net
realized
gain
(loss)
..................................................................
(40,317,273)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
11,690,665
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(16,435)
Written
options
...........................................................................
(676,754)
Forward
exchange
contracts
.................................................................
(5,064,879)
Swap
contracts
...........................................................................
2,292,168
Change
in
deferred
taxes
on
unrealized
appreciation
...............................................
162,622
Net
change
in
unrealized
appreciation
(depreciation)
............................................
8,387,387
Net
realized
and
unrealized
gain
(loss)
............................................................
(31,929,886)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(22,993,809)
a
Includes
amortization
of
premium
and
accretion
of
discount.
Templeton
Income
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
32
Templeton
International
Bond
Fund
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$8,936,077
$18,323,401
Net
realized
gain
(loss)
.................................................
(40,317,273)
3,247,377
Net
change
in
unrealized
appreciation
(depreciation)
...........................
8,387,387
(12,425,122)
Net
increase
(decrease)
in
net
a
ssets
resulting
from
operations
................
(22,993,809)
9,145,656
Distributions
to
shareholders:
Class
A
.............................................................
(7,709)
(1,893,755)
Class
C
.............................................................
(1,269)
(401,102)
Class
R
.............................................................
(55)
(20,808)
Class
R6
............................................................
(6,250)
(84,671)
Advisor
Class
........................................................
(115,519)
(21,779,436)
Distributions
to
shareholders
from
tax
return
of
capital:
Class
A
.............................................................
(584,021)
—
Class
C
.............................................................
(96,112)
—
Class
R
.............................................................
(4,195)
—
Class
R6
............................................................
(473,513)
—
Advisor
Class
........................................................
(8,751,774)
—
Total
distributions
to
shareholders
..........................................
(10,040,417)
(24,179,772)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(14,984,775)
1,809,627
Class
C
.............................................................
(2,707,500)
(1,686,642)
Class
R
.............................................................
(96,363)
(32,661)
Class
R6
............................................................
44,431,591
3,013,566
Advisor
Class
........................................................
(79,432,266)
61,144,821
Total
capital
share
transactions
............................................
(52,789,313)
64,248,711
Net
increase
(decrease)
in
net
assets
...................................
(85,823,539)
49,214,595
Net
assets:
Beginning
of
year
.......................................................
444,231,645
395,017,050
End
of
year
...........................................................
$358,408,106
$444,231,645
Templeton
Income
Trust
33
franklintempleton.com
Annual
Report
Notes
to
Financial
Statements
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
after
they
have
been
held
for
10
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
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
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.
Templeton
Income
Trust
Notes
to
Financial
Statements
34
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
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.
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
the
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
35
franklintempleton.com
Annual
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.
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
10 regarding
other
derivative
information.
d.
Restricted
Currency
At
December
31,
2020,
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.
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
December
31,
2020,
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
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
36
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
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)
f.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
37
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
December
31,
2020,
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:
Year
Ended
December
31,
2020
Year
Ended
December
31,
2019
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
623,127
$5,709,090
2,401,277
$24,053,424
Shares
issued
in
reinvestment
of
distributions
..........
60,786
568,481
183,501
1,837,264
Shares
redeemed
...............................
(2,237,883)
(21,262,346)
(2,369,156)
(24,081,061)
Net
increase
(decrease)
..........................
(1,553,970)
$(14,984,775)
215,622
$1,809,627
Class
C
Shares:
Shares
sold
...................................
51,910
$486,685
142,908
$1,442,085
Shares
issued
in
reinvestment
of
distributions
..........
9,259
86,820
35,410
356,950
Shares
redeemed
a
..............................
(353,148)
(3,281,005)
(346,045)
(3,485,677)
Net
increase
(decrease)
..........................
(291,979)
$(2,707,500)
(167,727)
$(1,686,642)
Class
R
Shares:
Shares
sold
...................................
7,870
$73,492
56,260
$574,591
Shares
issued
in
reinvestment
of
distributions
..........
455
4,250
2,059
20,808
Shares
redeemed
...............................
(18,954)
(174,105)
(61,947)
(628,060)
Net
increase
(decrease)
..........................
(10,629)
$(96,363)
(3,628)
$(32,661)
Class
R6
Shares:
Shares
sold
...................................
5,280,144
$48,122,104
374,336
$3,678,772
Shares
issued
in
reinvestment
of
distributions
..........
51,999
471,073
7,370
73,446
Shares
redeemed
...............................
(440,933)
(4,161,586)
(73,935)
(738,652)
Net
increase
(decrease)
..........................
4,891,210
$44,431,591
307,771
$3,013,566
Advisor
Class
Shares:
Shares
sold
...................................
10,498,840
$97,278,176
16,844,801
$169,081,917
Shares
issued
in
reinvestment
of
distributions
..........
867,079
8,090,374
1,928,208
19,357,439
Shares
redeemed
...............................
(20,086,196)
(184,800,816)
(12,600,100)
(127,294,535)
Net
increase
(decrease)
..........................
(8,720,277)
$(79,432,266)
6,172,909
$61,144,821
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
Templeton
Distributors,
Inc.
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Templeton
Income
Trust
Notes
to
Financial
Statements
38
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
year
ended
December
31,
2020,
the
gross
effective
investment
management
fee
rate
was
0.676%
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.
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
year:
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%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$552
CDSC
retained
..............................................................................
$420
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
39
franklintempleton.com
Annual
Report
Templeton
International
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
year
ended
December
31,
2020,
the
Fund
paid
transfer
agent
fees
of
$738,268,
of
which $142,036
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies
for
purposes
other
than
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
year
ended
December
31,
2020,
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%
based
on
the
average
net
assets
of
each
class
until
April
30,
2021.
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,
2021.
Prior
to
May
1,
2020,
expenses
(excluding
certain
fees
and
expenses
as
previously
disclosed)
for
Class
R6
were
limited
to
0.59%
based
on
the
average
net
assets
of
the
class.
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
year
ended
December
31,
2020,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations. 
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
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%
.........
$118,942,853
$261,064,173
$(269,546,752)
$—
$—
$110,460,274
110,460,274
$327,205
Total
Affiliated
Securities
....
$118,942,853
$261,064,173
$(269,546,752)
$—
$—
$110,460,274
$327,205
3.
Transactions
with
Affiliates
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
40
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
December
31,
2020,
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,
2020,
the
Fund
deferred
late-year
ordinary
losses
of
$8,234,818.
The
tax
character
of
distributions
paid
during
the
years
ended
December
31,
2020
and
2019,
was
as
follows:
At
December
31,
2020,
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,
inflation
related
adjustments
on
foreign
securities
and
options.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
year
ended
December
31,
2020,
aggregated
$196,867,030
and
$224,250,095,
respectively.
7.
Shareholder
Concentrations
The
Fund
has
a
concentration
of
a
shareholder
holding
a
significant
percentage
of
shares
outstanding.
Investment
activities
of
the
shareholder
could
have
a
material
impact
on
the
Fund.
At
December
31,
2020,
there
was
one
unaffiliated
shareholder
holding
61.3%
of
the
Fund's
outstanding
shares.
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
................................................................................
$873,814
Long
term
................................................................................
16,517,393
Total
capital
loss
carryforwards
...............................................................
$17,391,207
2020
2019
Distributions
paid
from:
Ordinary
income
..........................................................
$130,802
$24,179,772
Return
of
capital
...........................................................
9,909,615
—
$10,040,417
$24,179,772
Cost
of
investments
..........................................................................
$366,815,837
Unrealized
appreciation
........................................................................
$31,737,387
Unrealized
depreciation
........................................................................
(54,605,500)
Net
unrealized
appreciation
(depreciation)
..........................................................
$(22,868,113)
Templeton
Income
Trust
Notes
to
Financial
Statements
41
franklintempleton.com
Annual
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
December
31,
2020,
the
Fund
had
1.6%
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.
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
December
31,
2020,
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
..
Investments
in
securities,
at
value
$
1,975,925
a
Options
written,
at
value
$
2,336,146
Unrealized
appreciation
on
OTC
forward
exchange
contracts
2,957,888
Unrealized
depreciation
on
OTC
forward
exchange
contracts
14,762,591
Total
....................
$4,933,813
$17,098,737
a
Purchased
option
contracts
are
included
in
investments
in
securities,
at
value
in
the
Statement
of
Assets
and
Liabilities.
Templeton
Income
Trust
Notes
to
Financial
Statements
42
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
For
the
year
ended
December
31,
2020,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
For
the
year
ended
December
31,
2020,
the
average
month
end
notional
amount
of
swap
contracts
and
options
represented
$5,023,077
and
$466,732,420,
respectively.
The
average
month
end
contract
value
of
forward
exchange
contracts
was
$489,297,499.
At
December
31,
2020,
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
Year
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Year
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Templeton
International
Bond
Fund
Interest
rate
contracts
.......
Swap
contracts
$(8,577,292)
Swap
contracts
$2,292,168
Foreign
exchange
contracts
..
Investments
2,622,881
a
Investments
768,154
a
Written
options
(1,891,162)
Written
options
(676,754)
Forward
exchange
contracts
(9,010,021)
Forward
exchange
contracts
(5,064,879)
Total
....................
$(16,855,594)
$(2,681,311)
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
Derivatives
Templeton
International
Bond
Fund
Forward
exchange
contracts
.............................
$
2,957,888
$
14,762,591
Options
purchased
.....................................
1,975,925
—
Options
written
........................................
—
2,336,146
Total
.............................................
$4,933,813
$17,098,737
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
43
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
At
December
31,
2020,
OTC
derivative
assets,
which
may
be
offset
against
OTC
derivative
liabilities
and
collateral
received
from
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
International
Bond
Fund
Counterparty
BAST
....................
$—
$—
$—
$—
$—
BNDP
...................
—
—
—
—
—
BOFA
....................
—
—
—
—
—
CITI
.....................
1,460,076
(1,460,076)
—
—
—
DBAB
...................
1,161,962
(1,161,962)
—
—
—
GSCO
...................
184,837
(184,837)
—
—
—
HSBK
...................
525,073
(525,073)
—
—
—
JPHQ
...................
1,233,049
(737,622)
(356,270)
—
139,157
MSCO
...................
339,861
(339,861)
—
—
—
SCNY
...................
—
—
—
—
—
UBSW
...................
28,955
(28,955)
—
—
—
Total
...................
$4,933,813
$(4,438,386)
$
(356,270)
$—
$139,157
$
1
10.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
44
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
At
December
31,
2020,
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
47
.
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
billion
(Global
Credit
Facility)
which
matured
on
February
5,
2021.
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.
Effective
February
5,
2021,
the
Borrowers
renewed
the
Global
Credit
Facility
for
a
one
year
term,
maturing
February
4,
2022,
for
a
total
of
$2.675
billion.
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
year
ended
December
31,
2020,
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
International
Bond
Fund
Counterparty
BAST
....................
$10,767
$—
$—
$—
$10,767
BNDP
...................
2,150
—
—
—
2,150
BOFA
....................
156,997
—
—
(120,000)
36,997
CITI
.....................
5,302,844
(1,460,076)
—
(3,830,000)
12,768
DBAB
...................
5,925,396
(1,161,962)
—
(4,763,434)
—
GSCO
...................
424,325
(184,837)
—
(239,488)
—
HSBK
...................
3,169,317
(525,073)
—
(2,539,982)
104,262
JPHQ
...................
737,622
(737,622)
—
—
—
MSCO
...................
837,155
(339,861)
—
(270,000)
227,294
SCNY
...................
460,717
—
—
(180,000)
280,717
UBSW
...................
71,447
(28,955)
—
—
42,492
Total
...................
$17,098,737
$(4,438,386)
$—
$(11,942,904)
$717,447
a
At
December
31,
2020
the
Fund
received
U.S.
Treasury
Bonds
and
Notes
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.
10.
Other
Derivative
Information
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
45
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
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
December
31,
2020,
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
year.
At
December
31,
2020,
the
reconciliation
is
as
follows:
Level
1
Level
2
Level
3
Total
Templeton
International
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
............................
$
—
$
—
$
5,206,443
$
5,206,443
Australia
.............................
—
16,160,101
—
16,160,101
Brazil
...............................
—
244,495
—
244,495
Colombia
............................
—
5,423,413
—
5,423,413
Ghana
..............................
—
4,253,630
—
4,253,630
India
................................
—
12,113,104
—
12,113,104
Indonesia
............................
—
17,043,041
—
17,043,041
Mexico
..............................
—
43,290,987
—
43,290,987
Norway
..............................
—
16,537,572
—
16,537,572
Singapore
............................
—
16,259,006
—
16,259,006
South
Korea
..........................
—
75,261,121
—
75,261,121
Options
purchased
.......................
—
1,975,925
—
1,975,925
Short
Term
Investments
...................
110,460,274
33,474,118
385,343
144,319,735
Total
Investments
in
Securities
...........
$110,460,274
$242,036,513
$5,591,786
$358,088,573
Other
Financial
Instruments:
Forward
exchange
contracts
...............
$
—
$
2,957,888
$
—
$
2,957,888
Restricted
Currency
(ARS)
.................
—
—
408
408
Total
Other
Financial
Instruments
.........
$—
$2,957,888
$408
$2,958,296
Receivables:
Interest
(ARS)
...........................
$—
$—
$113,485
$113,485
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
—
$
2,336,146
$
—
$
2,336,146
Forward
exchange
contracts
................
—
14,762,591
—
14,762,591
Total
Other
Financial
Instruments
.........
$—
$17,098,737
$—
$17,098,737
Payables:
Investment
Securities
Purchased
(ARS)
.......
$—
$—
$59,932
$59,932
Deferred
Tax(ARS)
.......................
$—
$—
$116
$116
Templeton
Income
Trust
Notes
to
Financial
Statements
46
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
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
December
31,
2020,
are
as
follows:
Balance
at
Beginning
of
Year
Purchases
Sales
Transfer
Into
Level
3
Transfer
Out
of
Level
3
Cost
Basis
Adjust-
ments
a
Net
Realized
Gain
(Loss)
Net
Unr
ealized
Appreciation
(Depreciation)
Balance
at
End
of
Year
Net
Change
in
Unrealized
Appreciation
(Depreciation)
on
Assets
Held
at
Year
End
a
a
a
a
a
a
a
a
a
a
a
Templeton
International
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities
:
Argentina
.........
$
4,541,263
$
3,401,263
$
(1,315,982)
$
—
$
—
$
895,860
$
(2,478,706)
$
162,745
$
5,206,443
$
(812,075)
Short
Term
Investments
.
398,851
947,535
(631,862)
—
—
81,238
(301,403)
(109,016)
385,343
10,699
Total
Investments
in
Securities
.
$4,940,114
$4,348,798
$(1,947,844)
$—
$—
977,098
(2,780,109)
53,729
$5,591,786
$(801,374)
Other
Financial
Instruments:
Restricted
Currency
(ARS)
$1,007,116
$2,312,456
$(3,149,489)
$—
$—
$—
$(190,406)
$20,731
$408
$(5)
Receivables:
Interest
(ARS)
......
$193,203
$1,200,467
$(1,133,754)
$—
$—
$—
$(163,232)
$16,801
$113,485
$3,969
Liabilities:
Payables:
Deferred
Tax
(ARS)
....
$222
$—
$—
$—
$—
$—
$—
$(106)
$116
$(106)
Investment
Securities
Purchased
(ARS)
....
$—
$59,932
$—
$—
$—
$—
$—
$—
$59,932
$—
a
May
include
accretion,
amortization,
partnership
adjustments,
and/or
other
cost
basis
adjustments.
Description
Fair
Value
at
End
of
Year
Valuation
Technique
Unobservable
Inputs
Amount/
Range
(Weight
Average)
Impact
to
Fair
Value
if
Input
Increases
a
Templeton
International
Bond
Fund
Assets:
Investments
in
Securities:
Foreign
Government
and
Agency
Securities:
Argentina
...........
$5,206,443
Market
comparables
Implied
Foreign
exchange
rate
143.8
ARS/USD
Decrease
b
Short
Term
Investments:
Argentina
...........
385,343
Market
comparables
Implied
Foreign
exchange
rate
143.8
ARS/USD
Decrease
c
All
Other
............
113,893
d
Liabilities:
All
Other
............
60,048
d
Total
...............
$5,645,631
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.
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Notes
to
Financial
Statements
47
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
(continued)
13.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
The
amendments
in
the
ASU
provides
optional
temporary
financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021.
The
ASU
is
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022. Management
has
reviewed
the
requirements
and
believes
the
adoption
of
this
ASU
will
not
have
a
material
impact
on
the
financial
statements.
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
other
than
those
already
disclosed
in
the
financial
statements.
Abbreviations
b
Represents
a
significant
impact
to
fair
value
and
net
assets.
c
Represents
a
significant
impact
to
fair
value
but
not
net
assets.
d
Includes
values
derived
using
private
transaction
prices
or
non-public
third
party
pricing
information
which
is
unobservable.
May
also
include
fair
value
of
immaterial
assets
and/or
liabilities
developed
using
various
valuation
techniques
and
unobservable
inputs.
Counterparty
BAST
Banco
Santander
SA
BNDP
BNP
Paribas
SA
BOFA
Bank
of
America
Corp.
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
UBSW
UBS
AG
Currency
ARS
Argentine
Peso
AUD
Australian
Dollar
BRL
Brazilian
Real
CHF
Swiss
Franc
COP
Colombian
Peso
EUR
Euro
GHS
Ghanaian
Cedi
IDR
Indonesian
Rupiah
INR
Indian
Rupee
JPY
Japanese
Yen
KRW
South
Korean
Won
MXN
Mexican
Peso
NOK
Norwegian
Krone
SEK
Swedish
Krona
SGD
Singapore
Dollar
USD
United
States
Dollar
Selected
Portfolio
BADLAR
Argentina
Deposit
Rates
Badlar
Private
Banks
ARS
CER
Reference
Stabilization
Coefficient
FRN
Floating
Rate
Note
12.
Fair
Value
Measurements
(continued)
Templeton
Income
Trust
Report
of
Independent
Registered
Public
Accounting
Firm
48
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Templeton
Income
Trust
and
Shareholders
of
Templeton
International
Bond
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
statement
of
investments,
of
Templeton
International
Bond
Fund
(one
of
the
funds
constituting
Templeton
Income
Trust,
referred
to
hereafter
as
the
"Fund")
as
of
December
31,
2020,
the
related
statement
of
operations
for
the
year
ended
December
31,
2020,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2020,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2020
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2020
by
correspondence
with
the
custodian,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
PricewaterhouseCoopers
LLP
San
Francisco,
California
February
19,
2021
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Templeton
Income
Trust
Tax
Information
(unaudited)
49
franklintempleton.com
Annual
Report
Templeton
International
Bond
Fund
At
December
31,
2020,
more
than
50%
of
the
Fund’s
total
assets
were
invested
in
securities
of
foreign
issuers.
In
most
instances,
foreign
taxes
were
withheld
from
income
paid
to
the
Fund
on
these
investments.
The
Fund
elects
to
treat
foreign
taxes
paid
as
allowed
under
Section
853
of
the
Internal
Revenue
Code.
This
election
will
allow
shareholders
of
record
as
of
the
first
distribution
in
2021,
to
treat
their
proportionate
share
of
foreign
taxes
paid
by
the
Fund
as
having
been
paid
directly
by
them.
The
shareholder
shall
consider
these
amounts
as
foreign
taxes
paid
in
the
tax
year
in
which
they
receive
the
Fund
distribution.
Templeton
Income
Trust
Board
Members
and
Officers
50
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1992
125
Bar-S
Foods
(meat
packing
company)
(1981-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Ann
Torre
Bates
(1958)
Trustee
Since
2008
30
Ares
Capital
Corporation
(specialty
finance
company)
(2010-present),
United
Natural
Foods,
Inc.
(distributor
of
natural,
organic
and
specialty
foods)
(2013-present),
formerly
,
Allied
Capital
Corporation
(financial
services)
(2003-
2010),
SLM
Corporation
(Sallie
Mae)
(1997-2014)
and
Navient
Corporation
(loan
management,
servicing
and
asset
recovery)
(2014-2016).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Executive
Vice
President
and
Chief
Financial
Officer,
NHP
Incorporated
(manager
of
multifamily
housing)
(1995-1997);
and
Vice
President
and
Treasurer,
US
Airways,
Inc.
(until
1995).
Mary
C.
Choksi
(1950)
Trustee
Since
2016
125
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-May
2020).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Templeton
Income
Trust
51
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
2001
and
Lead
Independent
Trustee
since
2007
125
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Canadian
National
Railway
(railroad)
(2001-present),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
125
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Private
investor;
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(May
2019-January
1,
2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
David
W.
Niemiec
(1949)
Trustee
Since
2005
30
Hess
Midstream
LP
(oil
and
gas
midstream
infrastructure)
(2017-present).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Advisor,
Saratoga
Partners
(private
equity
fund);
and
formerly
,
Managing
Director,
Saratoga
Partners
(1998-2001)
and
SBC
Warburg
Dillon
Read
(investment
banking)
(1997-1998);
Vice
Chairman,
Dillon,
Read
&
Co.
Inc.
(investment
banking)
(1991-1997);
and
Chief
Financial
Officer,
Dillon,
Read
&
Co.
Inc.
(1982-1997).
Larry
D.
Thompson
(1945)
Trustee
Since
2005
125
Graham
Holdings
Company
(education
and
media
organization)
(2011-present);
and
formerly
,
The
Southern
Company
(energy
company)
(2014-May
2020;
previously
2010-2012),
Cbeyond,
Inc.
(business
communications
provider)
(2010-2012).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-September
2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Templeton
Income
Trust
52
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Constantine
D.
Tseretopoulos
(1954)
Trustee
Since
2003
19
None
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Physician,
Chief
of
Staff,
owner
and
operator
of
the
Lyford
Cay
Hospital
(1987-present);
director
of
various
nonprofit
organizations;
and
formerly
,
Cardiology
Fellow,
University
of
Maryland
(1985-1987);
and
Internal
Medicine
Resident,
Greater
Baltimore
Medical
Center
(1982-
1985).
Robert
E.
Wade
(1946)
Trustee
Since
2006
30
El
Oro
Ltd
(investments)
(2003-
2019).
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Attorney
at
law
engaged
in
private
practice
as
a
sole
practitioner
(1972-2008)
and
member
of
various
boards.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2007
136
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
39
of
the
investment
companies
in
Franklin
Templeton;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015),
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Chairman
of
the
Board,
Trustee
and
Vice
President
Chairman
of
the
Board
and
Trustee
since
2013
and
Vice
President
since
1996
125
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
37
of
the
investment
companies
in
Franklin
Templeton.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
October
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Advisory
Services,
LLC,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Independent
Board
Members
(continued)
Templeton
Income
Trust
53
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Steven
J.
Gray
(1955)
Vice
President
Since
2009
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Vice
President,
Franklin
Templeton
Distributors,
Inc.
and
FASA,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Michael
Hasenstab
Ph.D.
(1973)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
three
of
the
investment
companies
in
Franklin
Templeton.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
41
of
the
investment
companies
in
Franklin
Templeton;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Robert
G.
Kubilis
(1973)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
2017
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting
and
officer
of
39
of
the
investment
companies
in
Franklin
Templeton.
Robert
Lim
(1948)
Vice
President
–
AML
Compliance
Since
2016
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Templeton
Companies,
LLC;
Chief
Compliance
Officer,
Franklin
Templeton
Distributors,
Inc.
and
Franklin
Templeton
Investor
Services,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Associate
General
Counsel
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Craig
S.
Tyle
(1960)
Vice
President
Since
2005
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
General
Counsel
and
Executive
Vice
President,
Franklin
Resources,
Inc.;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
41
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
54
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
major
shareholder
of
Resources.
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
U.S.
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
each
of
Ann
Torre
Bates
and
David
W.
Niemiec
as
an
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
qualify
as
such
an
expert
in
view
of
their
extensive
business
background
and
experience.
Ms.
Bates
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2008.
She
currently
serves
as
a
director
of
Ares
Capital
Corporation
(2010-present)
and
United
Natural
Foods,
Inc.
(2013-present)
and
was
formerly
a
director
of
Navient
Corporation
from
2014
to
2016,
SLM
Corporation
from
1997
to
2014
and
Allied
Capital
Corporation
from
2003
to
2010,
Executive
Vice
President
and
Chief
Financial
Officer
of
NHP
Incorporated
from
1995
to
1997
and
Vice
President
and
Treasurer
of
US
Airways,
Inc.
until
1995.
Mr.
Niemiec
has
served
as
a
member
of
the
Fund
Audit
Committee
since
2005,
currently
serves
as
an
Advisor
to
Saratoga
Partners
and
was
formerly
its
Managing
Director
from
1998
to
2001
and
serves
as
a
director
of
Hess
Midstream
LP
(2017-present).
Mr.
Niemiec
was
formerly
a
director
of
Emeritus
Corporation
from
1999
to
2010
and
OSI
Pharmaceuticals,
Inc.
from
2006
to
2010,
Managing
Director
of
SBC
Warburg
Dillon
Read
from
1997
to
1998,
and
was
Vice
Chairman
from
1991
to
1997
and
Chief
Financial
Officer
from
1982
to
1997
of
Dillon,
Read
&
Co.
Inc.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Bates
and
Mr.
Niemiec
have
each
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Bates
and
Mr.
Niemiec
are
independent
Board
members
as
that
term
is
defined
under
the
applicable
U.S.
Securities
and
Exchange
Commission
Rules
and
Releases
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Lori
A.
Weber
(1964)
Vice
President
and
Secretary
Vice
President
since
2011
and
Secretary
since
2013
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
41
of
the
investment
companies
in
Franklin
Templeton.
Christine
Zhu
(1975)
Vice
President
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Vice
President,
Franklin
Advisers,
Inc.;
and
officer
of
three
of
the
investment
companies
in
Franklin
Templeton.
Interested
Board
Members
and
Officers
(continued)
Templeton
Income
Trust
Shareholder
Information
55
franklintempleton.com
Annual
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
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
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.
447
A
02/21
©
2021
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.
Annual
Report
and
Shareholder
Letter
Templeton
International
Bond
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Templeton
Distributors,
Inc.
(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.      
 
(a)      Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $393,367 for the fiscal year ended December 31, 2020 and $396,066 for the fiscal year ended December 31, 2019.
 
(b)      Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.
 
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements. 
 
(c)      Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
 
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $0 for the fiscal year ended December 31, 2020 and $20,000 for the fiscal year ended December 31, 2019.  The services for which these fees were paid included professional fees in connection with tax treatment of equipment lease transactions and professional fees in connection with an Indonesia withholding tax refund claim.
 
(d)      All Other Fees
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended December 31, 2020 and $14,503 for the fiscal year ended December 31, 2019.  The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.
 
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $49,800 for the fiscal year ended December 31, 2020 and $160,144 for the fiscal year ended December 31, 2019.  The services for which these fees were paid included valuation services related to Fair Value engagement, issuance of an Auditors' Certificate for South Korean regulatory shareholder disclosures, benchmarking services in connection with the ICI TA survey,
and
professional fees in connection with determining the feasibility of a U.S. direct lending structure. 
 
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
 
      (i)   pre-approval of all audit and audit related services;
 
      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;
 
      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
 
      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
 
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
 
(f) No disclosures are required by this Item 4(f).
 
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $49,800 for the fiscal year ended December 31, 2020 and $194,647 for the fiscal year ended December 31, 2019.
 
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence
.
 
 
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.
During the period covered by this report, a third-party service provider commenced performing certain accounting and administrative services for the Registrant that are subject to Franklin Templeton’s oversight.
 
 
 
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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
 
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
 
 
 
 
 
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 February 26, 2021
 
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 February 26, 2021
 
 
 
By S/ROBERT G. KUBILIS _________________________
      Robert G. Kubilis
      Chief Financial Officer and Chief Accounting Officer
Date February 26, 2021