FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-07866
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TEMPLETON EMERGING MARKETS INCOME FUND
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(Exact name of registrant as specified in charter)
500 EAST BROWARD BLVD., SUITE 2100, FORT LAUDERDALE, FL 33394-3091
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(Address of principal executive offices) (Zip code)
CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)
Registrant's telephone number, including area code: 954/527-7500
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Date of fiscal year end: 8/31
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Date of reporting period: 05/31/09
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ITEM 1. SCHEDULE OF INVESTMENTS.
Templeton Emerging Markets Income Fund
QUARTERLY STATEMENT OF INVESTMENTS
MAY 31, 2009
CONTENTS
Statement of Investments ................................................... 3
Notes to Statement of Investments .......................................... 8
(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)
Franklin - TEMPLETON - Mutual Series
Quarterly Statement of Investments | 1
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Templeton Emerging Markets Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2009 (UNAUDITED)
PRINCIPAL AMOUNT(a) VALUE
------------------- --------------
BONDS 92.4%
ARGENTINA 7.5%
(b,c) Government of Argentina, senior bond, FRN, 1.683%, 8/03/12 ............... 140,605,000 $ 45,345,112
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BOSNIA & HERZEGOVINA 0.8%
(b) Government of Bosnia & Herzegovina, FRN, 4.148%, 12/11/17 ................ 6,502,937 EUR 5,103,490
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BRAZIL 13.8%
Nota Do Tesouro Nacional,
10.082%, 1/01/12 ...................................................... 64,080(d) BRL 32,015,016
10.082%, 1/01/14 ...................................................... 20,000(d) BRL 9,586,752
10.082%, 1/01/17 ...................................................... 46,400(d) BRL 21,465,834
(e) Index Linked, 6.00%, 5/15/15 .......................................... 5,600(d) BRL 5,040,117
(e) Index Linked, 6.00%, 5/15/45 .......................................... 17,820(d) BRL 15,480,091
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83,587,810
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COLOMBIA 1.5%
Government of Colombia,
senior bond, 11.75%, 2/25/20 .......................................... 4,255,000 5,818,713
senior note 7.375%, 3/18/19 ........................................... 3,000,000 3,195,000
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9,013,713
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EL SALVADOR 0.4%
(f) Government of El Salvador, 144A, 7.65%, 6/15/35 .......................... 2,650,000 2,256,025
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FIJI 1.5%
Republic of Fiji, 6.875%, 9/13/11 ........................................ 12,360,000 9,208,200
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GEORGIA 0.9%
Government of Georgia, 7.50%, 4/15/13 .................................... 6,950,000 5,577,375
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GHANA 0.7%
(g) Government of Ghana, Reg S, 8.50%, 10/04/17 .............................. 5,300,000 4,280,280
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HUNGARY 0.4%
Government of Hungary,
3.50%, 7/18/16 ........................................................ 145,000 EUR 167,993
4.375%, 7/04/17 ....................................................... 390,000 EUR 460,356
5.75%, 6/11/18 ........................................................ 1,135,000 EUR 1,450,101
senior note, 3.875%, 2/24/20 .......................................... 465,000 EUR 501,792
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2,580,242
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INDIA 1.6%
(f) ICICI Bank Ltd.,
144A, 6.625%, 10/03/12 ................................................ 6,625,000 6,543,844
(b) sub. bond, 144A, FRN, 6.375%, 4/30/22 ................................. 4,100,000 3,099,776
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9,643,620
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INDONESIA 12.4%
Government of Indonesia,
FR19, 14.25%, 6/15/13 ................................................. 169,282,000,000 IDR 19,124,431
FR20, 14.275%, 12/15/13 ............................................... 166,215,000,000 IDR 18,939,468
FR26, 11.00%, 10/15/14 ................................................ 120,832,000,000 IDR 12,417,868
FR28, 10.00%, 7/15/17 ................................................. 18,800,000,000 IDR 1,813,315
FR31, 11.00%, 11/15/20 ................................................ 132,050,000,000 IDR 13,054,212
FR36, 11.50%, 9/15/19 ................................................. 40,000,000,000 IDR 4,110,788
Quarterly Statement of Investments | 3
Templeton Emerging Markets Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2009 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE
------------------- --------------
BONDS (CONTINUED)
INDONESIA (CONTINUED)
Government of Indonesia, (continued)
FR46, 9.50%, 7/15/23 .................................................. 3,200,000,000 IDR $ 276,773
FR47, 10.00%, 2/15/28 ................................................. 12,210,000,000 IDR 1,044,198
FR48, 9.00%, 9/15/18 .................................................. 5,450,000,000 IDR 485,945
(f) senior note, 144A, 11.625%, 3/04/19 ................................... 2,745,000 3,438,113
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74,705,111
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IRAQ 5.0%
Government of Iraq,
(f) 144A, 5.80%, 1/15/28 .................................................. 46,800,000 29,367,000
(g) Reg S, 5.80%, 1/15/28 ................................................. 1,675,000 1,051,062
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30,418,062
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KAZAKHSTAN 5.5%
HSBK (Europe) BV,
(f) 144A, 7.25%, 5/03/17 .................................................. 4,305,000 2,539,950
(g) Reg S, 7.25%, 5/03/17 ................................................. 21,730,000 12,820,700
(f) Kazmunaigaz Finance Sub BV, 144A, 9.125%, 7/02/18 ........................ 19,200,000 17,664,000
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33,024,650
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MEXICO 3.4%
Government of Mexico, M 20, 7.50%, 6/03/27 ............................... 2,978,000(h) MXN 20,566,586
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NETHERLANDS 1.9%
Rabobank Nederland, senior note, 8.75%, 1/24/17 .......................... 157,900,000 MXN 11,315,446
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PAKISTAN 1.5%
(f) Government of Pakistan, 144A, 6.875%, 6/01/17 ............................ 15,000,000 9,075,000
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PANAMA 1.1%
Government of Panama, 6.70%, 1/26/36 ..................................... 6,639,000 6,539,415
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PERU 4.7%
Government of Peru,
7.35%, 7/21/25 ........................................................ 9,420,000 10,089,762
8.75%, 11/21/33 ....................................................... 12,550,000 15,182,990
(f) Peru Enhanced Pass-Through Finance Ltd., senior secured bond, A-1, 144A,
zero cpn., 5/31/18 .................................................... 4,443,667 3,083,760
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28,356,512
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PHILIPPINES 3.8%
Government of the Philippines,
9.00%, 2/15/13 ........................................................ 16,460,000 18,890,789
(g) Reg S, 8.75%, 10/07/16 ................................................ 3,750,000 4,361,719
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23,252,508
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POLAND 0.8%
Government of Poland, 6.25%, 10/24/15 .................................... 15,380,000 PLN 4,914,567
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RUSSIA 6.2%
(g) Alfa MTN Markets Ltd. for ABH Financial Ltd., Reg S, 8.20%, 6/25/12 ...... 1,575,000 1,378,125
(g) Gaz Capital SA, senior bond, Reg S, 8.146%, 4/11/18 ...................... 6,000,000 5,491,764
(f) Gazprom, secured note, 144A, 7.51%, 7/31/13 .............................. 4,550,000 4,413,500
(g) Government of Russia, senior bond, Reg S, 7.50%, 3/31/30 ................. 427,200 430,041
4 | Quarterly Statement of Investments
Templeton Emerging Markets Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2009 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE
------------------- --------------
BONDS (CONTINUED)
RUSSIA (CONTINUED)
LUKOIL International Finance BV,
(f) 144A, 6.356%, 6/07/17 ................................................. 890,000 $ 743,150
(f) 144A, 6.656%, 6/07/22 ................................................. 4,540,000 3,461,750
(g) Reg S, 6.356%, 6/07/17 ................................................ 2,300,000 1,920,500
(g) Reg S, 6.656%, 6/07/22 ................................................ 3,970,000 3,072,750
VTB Capital (VNESHTORGBK), 6.315% to 2/04/10, 7.815% thereafter,
2/04/15 ............................................................... 17,000,000 14,365,000
(f) VTB Capital SA, senior note, 144A, 6.25%, 6/30/35 ........................ 2,400,000 1,926,000
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37,202,580
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SOUTH AFRICA 2.0%
(b,f) Edcon Holdings, 144A, FRN, 7.15%, 6/15/15 ................................ 1,200,000 EUR 661,775
(b,g) Edcon Proprietary Ltd., senior secured note, Reg S, FRN, 4.90%, 6/15/14 .. 2,100,000 EUR 1,885,636
Government of South Africa,
4.50%, 4/05/16 ........................................................ 4,000,000 EUR 4,991,596
senior note, 5.875%, 5/30/22 .......................................... 5,000,000 4,587,500
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12,126,507
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SOUTH KOREA 1.0%
Korea Treasury Bond,
0475-1112, 4.75%, 12/10/11 ............................................ 2,804,070,000 KRW 2,275,245
0475-1203, 4.75%, 3/10/12 ............................................. 2,255,000,000 KRW 1,824,585
0525-2703, 5.25%, 3/10/27 ............................................. 2,179,600,000 KRW 1,677,492
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5,777,322
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(i) SUPRANATIONAL 4.3%
(j) Corporacion Andina De Fomento, 8.125%, 6/04/19 ........................... 4,550,000 4,542,037
Inter-American Development Bank, senior note, 7.50%, 12/05/24 ............ 355,000,000 MXN 21,534,245
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26,076,282
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UKRAINE 5.5%
(f) City of Kiev, 144A, 8.625%, 7/15/11 ...................................... 22,400,000 12,824,000
(f) Government of the Ukraine, 144A,
7.65%, 6/11/13 ........................................................ 11,948,000 9,397,102
(b) FRN, 5.15%, 8/05/09 ................................................... 11,660,000 11,216,920
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33,438,022
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UNITED ARAB EMIRATES 0.9%
(f) DP World Ltd., 144A, 6.85%, 7/02/37 ...................................... 8,080,000 5,677,008
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UNITED KINGDOM 0.5%
(f) Anglo American Capital PLC,
144A, 9.375%, 4/08/19 ................................................. 1,000,000 1,065,690
senior note, 144A, 9.375%, 4/08/14 .................................... 2,000,000 2,117,360
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3,183,050
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UNITED STATES 2.0%
General Electric Capital Corp., senior note, A, 8.50%, 4/06/18 ........... 185,000,000 MXN 11,853,461
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Quarterly Statement of Investments | 5
Templeton Emerging Markets Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2009 (UNAUDITED) (CONTINUED)
PRINCIPAL AMOUNT(a) VALUE
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BONDS (CONTINUED)
VENEZUELA 0.3%
Government of Venezuela,
10.75%, 9/19/13 ....................................................... 1,295,000 $ 1,029,525
(g) senior bond, Reg S, 5.375%, 8/07/10 ................................... 870,000 785,828
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1,815,353
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VIETNAM 0.5%
Government of Vietnam,
(f) 144A, 6.875%, 1/15/16 ................................................. 1,895,000 1,885,525
(g) Reg S, 6.875%, 1/15/16 ................................................ 1,405,000 1,397,975
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3,283,500
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TOTAL BONDS (COST $623,089,246) 559,196,809
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SHORT TERM INVESTMENTS 4.4%
FOREIGN GOVERNMENT AND AGENCY SECURITIES (COST $7,981,649) 1.3%
EGYPT 1.3%
(k) Egypt Treasury Bills, 7/07/09 - 9/22/09 .................................. 43,350,000 EGP 7,608,378
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TOTAL INVESTMENTS BEFORE MONEY MARKET FUNDS
(COST $631,070,895) ................................................... 566,805,187
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SHARES
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MONEY MARKET FUNDS (COST $18,824,185) 3.1%
UNITED STATES 3.1%
(l) Institutional Fiduciary Trust Money Market Portfolio, 0.02% .............. 18,824,185 18,824,185
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TOTAL INVESTMENTS (COST $649,895,080) 96.8% .............................. 585,629,372
NET UNREALIZED APPRECIATION ON FORWARD EXCHANGE CONTRACTS 0.6% ........... 3,253,406
OTHER ASSETS, LESS LIABILITIES 2.6% ...................................... 15,797,158
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NET ASSETS 100.0% ........................................................ $ 604,679,936
==============
See Abbreviations on page 11.
(a) The principal amount is stated in U.S. dollars unless otherwise indicated.
(b) The coupon rate shown represents the rate at period end.
(c) The principal amount is stated in original face, and scheduled paydowns are
reflected in the market price on ex-date.
(d) Principal amount is stated in 1,000 Brazilian Real units.
(e) Redemption price at maturity is adjusted for inflation.
(f) Security was purchased pursuant to Rule 144A under the Securities Act of
1933 and 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. These securities have been deemed liquid under
guidelines approved by the Fund's Board of Trustees. At May 31, 2009, the
aggregate value of these securities was $132,457,248, representing 21.91%
of net assets.
(g) Security was purchased pursuant to Regulation S under the Securities Act of
1933, which exempts from registration securities offered and sold outside
of the United States. Such a security 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.
These securities have been deemed liquid under guidelines approved by the
Fund's Board of Trustees. At May 31, 2009, the aggregate value of these
securities was $38,876,380, representing 6.43% of net assets.
(h) Principal amount is stated in 100 Mexican Peso Units.
(i) A supranational organization is an entity formed by two or more central
governments through international treaties.
(j) Security purchased on a when-issued basis.
(k) The security is traded on a discount basis with no stated coupon rate.
(l) The Institutional Fiduciary Trust Money Market Portfolio is managed by the
Fund's investment manager. The rate shown is the annualized seven-day yield
at period end.
See Notes to Statement of Investments.
6 | Quarterly Statement of Investments
Templeton Emerging Markets Income Fund
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED)
1. ORGANIZATION
Templeton Emerging Markets Income Fund (Fund) is registered under the Investment
Company Act of 1940, as amended, as a closed-end investment company.
2. SECURITY VALUATION
Securities listed on a securities 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. Over-the-counter securities and listed securities for
which there is no reported sale 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. Investments in open-end mutual funds are valued at the closing net asset
value.
Corporate debt securites and government securities generally trade in the
over-the-counter market rather than on a securities exchange. The Fund may
utilize independent pricing services, quotations from bond dealers, and
information with respect to bond and note transactions, to assist in determining
a current market value for each security. The Fund's pricing services may use
valuation models or matrix pricing which considers information with respect to
comparable bond and note transactions, quotations from bond dealers, or by
reference to other securities that are considered comparable in such
characteristics as rating, interest rate and maturity date, option adjusted
spread models, prepayment projections, interest rate spreads and yield curves,
to determine current value.
The Fund has procedures to determine the fair value of individual securities and
other assets for which market prices are not readily available or which may not
be reliably priced. Methods for valuing these securities may include:
fundamental analysis, matrix pricing, discounts from market prices of similar
securities, or discounts applied due to the nature and duration of restrictions
on the disposition of the securities. Due to the inherent uncertainty of
valuations of such securities, the fair values may differ significantly from the
values that would have been used had a ready market for such investments
existed. Occasionally, events occur between the time at which trading in a
security is completed and the close of the NYSE that might call into question
the availability (including the reliability) of the value of a portfolio
security held by the Fund. If such an event occurs, the securities may be valued
using fair value procedures, which may include the use of independent pricing
services. All security valuation procedures are approved by the Fund's Board of
Trustees.
3. DERIVATIVE FINANCIAL INSTRUMENTS
The Fund may invest in derivative financial instruments (derivatives) 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,
Quarterly Statement of Investments | 7
Templeton Emerging Markets Income Fund
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
3. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
and require or permit net settlement. Derivatives may 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 the potential for market movements.
Derivatives are marked to market daily based upon quotations from market makers
or the Fund's independent pricing services and the Fund's net benefit or
obligation under the contract, as measured by the fair market value of the
contract, is included in net assets.
The Fund enters into foreign exchange contracts in order to manage foreign
exchange rate risk between the trade date and settlement date of securities
transactions. A foreign exchange contract is an agreement between the Fund and a
counterparty to buy or sell a foreign currency for a specific exchange rate on a
future date.
The Fund enters into forward exchange contracts in order to hedge against
fluctuations in foreign exchange rates or to 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 for a specific exchange rate on a
future date.
The Fund enters into interest rate swap contracts in order 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 principal amount. 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. Pursuant to the terms of the interest
rate swap contract, cash or securities may be required to be deposited as
collateral.
4. INCOME TAXES
At May 31, 2009, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments ............................................ $654,428,201
============
Unrealized appreciation ........................................ $ 18,705,761
Unrealized depreciation ........................................ (87,504,590)
------------
Net unrealized appreciation (depreciation) ..................... $(68,798,829)
============
8 | Quarterly Statement of Investments
Templeton Emerging Markets Income Fund
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
5. FORWARD EXCHANGE CONTRACTS
At May 31, 2009, the Fund had the following forward exchange contracts
outstanding:
CONTRACT SETTLEMENT UNREALIZED UNREALIZED
AMOUNT(a) DATE APPRECIATION DEPRECIATION
---------- ---------- ------------ ------------
CONTRACTS TO BUY
8,324,767 Malaysian Ringgit .... 1,681,570 EUR 6/16/09 $ 7,706 $ --
7,951,887 Malaysian Ringgit .... 1,609,368 EUR 6/17/09 2,872 --
5,367,447 Peruvian Nuevo Sol ... 1,749,032 5/18/10 20,456 --
CONTRACTS TO SELL
67,925,352 Mexican Peso ......... 5,089,948 6/08/09 -- (66,525)
34,649,958 Mexican Peso ......... 3,175,982 6/12/09 547,234 --
11,914,000 Mexican Peso ......... 846,231 7/31/09 -- (50,823)
19,326,000 Brazilian Real ....... 8,569,908 8/04/09 -- (1,089,799)
180,829 Euro ................. 264,878 8/18/09 9,348 --
61,513,239 Mexican Peso ......... 4,568,414 8/18/09 -- (52,212)
457,957,173 Mexican Peso ......... 34,903,942 8/21/09 517,610 --
74,700,583 Mexican Peso ......... 6,956,657 8/27/09 1,352,081 --
725,485 Euro ................. 1,013,684 9/10/09 -- (11,326)
362,390 Euro ................. 505,680 9/11/09 -- (6,324)
13,012,157 Mexican Peso ......... 1,157,459 9/15/09 183,869 --
688,058 Euro ................. 970,299 9/21/09 -- (1,756)
39,897,968 Mexican Peso ......... 3,467,579 10/01/09 489,224 --
39,728,544 Mexican Peso ......... 3,462,183 10/05/09 498,181 --
11,801,000 Mexican Peso ......... 871,083 12/01/09 -- (2,200)
7,600,000 Euro ................. 10,313,656 3/29/10 -- (415,479)
Unrealized appreciation (depreciation) on offsetting forward
exchange contracts .................................................. 1,321,269 --
---------- -----------
Unrealized appreciation (depreciation) on forward exchange contracts ... 4,949,850 (1,696,444)
---------- -----------
NET UNREALIZED APPRECIATION (DEPRECIATION) ON FORWARD
EXCHANGE CONTRACTS ............................................... $3,253,406
==========
See Abbreviation on page 11.
(a) In U.S. dollar unless otherwise indicated.
6. INTEREST RATE SWAPS
At May 31, 2009, the Fund had the following interest rate swap contracts
outstanding:
COUNTER- RECEIVE -- PAY -- NOTIONAL PRINCIPAL EXPIRATION UNREALIZED UNREALIZED
PARTY FIXED RATE FLOATING RATE AMOUNT(a) DATE APPRECIATION DEPRECIATION
------------- ---------- ------------------------- ------------------ ---------- ------------ ------------
Merrill Lynch 7.053% Tasa Nominal Annual Rate 4,700,000,000 CLP 6/13/18 $1,346,682 $--
JPMorgan 7.06% Tasa Nominal Annual Rate 1,568,000,000 CLP 6/13/18 450,736 --
Merrill Lynch 7.094% Tasa Nominal Annual Rate 5,100,000,000 CLP 6/16/18 1,478,632 --
JPMorgan 7.15% Tasa Nominal Annual Rate 1,600,000,000 CLP 6/18/18 476,301 --
JPMorgan 7.855% Tasa Nominal Annual Rate 403,200,000 CLP 7/17/18 170,690 --
Quarterly Statement of Investments | 9
Templeton Emerging Markets Income Fund
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
6. INTEREST RATE SWAPS (CONTINUED)
COUNTER- RECEIVE -- PAY -- NOTIONAL PRINCIPAL EXPIRATION UNREALIZED UNREALIZED
PARTY FIXED RATE FLOATING RATE AMOUNT(a) DATE APPRECIATION DEPRECIATION
------------- ---------- ------------------------- ------------------ ---------- ------------ ------------
Merrill Lynch 9.03% MXN Interbank Equilibrium
Interest Rate 241,000,000 MXN 8/17/18 $1,259,687 $--
Merrill Lynch 9.10% MXN Interbank Equilibrium
Interest Rate 80,000,000 MXN 8/04/28 278,653 --
---------- ---
Unrealized appreciation (depreciation) on interest rate swap contracts ................. $5,461,381 $--
---------- ---
Net unrealized appreciation (depreciation) on interest rate swap contracts .......... $5,461,381
==========
See Abbreviations on page 11.
(a) In U.S. Dollar unless otherwise indicated.
7. FAIR VALUE MEASUREMENTS
The Fund adopted Financial Accounting Standards Board (FASB) Statement No. 157,
"Fair Value Measurement" (SFAS 157), on September 1, 2008. SFAS 157 defines fair
value, establishes a framework for measuring fair value, and expands disclosures
about fair value measurements. The Fund has determined that the implementation
of SFAS 157 did not have a material impact on the Fund's financial statements.
SFAS 157 establishes 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 investments and are summarized in the following fair
value hierarchy:
- Level 1 - quoted prices in active markets for identical securities
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speed, credit risk,
etc.)
- Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities.
The following is a summary of the inputs used as of May 31, 2009, in valuing the
Fund's assets and liabilities carried at fair value:
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
----------- ------------ ------- ------------
ASSETS:
Investments in Securities ........ $26,432,563 $559,196,809 $-- $585,629,372
Other Financial Instruments(a) ... -- 10,411,231 -- 10,411,231
LIABILITIES:
Other Financial Instruments(a) ... -- 1,696,444 -- 1,696,444
(a) Other financial instruments may include unrealized appreciation or
depreciation on forward exchange contracts and swaps.
10 | Quarterly Statement of Investments
Templeton Emerging Markets Income Fund
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
7. NEW ACCOUNTING PRONOUNCEMENTS
In April 2009, FASB issued FASB Staff Position FSP FAS 157-4, "Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly" (FSP
FAS 157-4), which provides additional guidance when the volume and level of
activity for the asset or liability measured at fair value have significantly
decreased. Additionally, FSP FAS 157-4 amends SFAS 157, expanding disclosure
requirements by reporting entities surrounding the major categories of assets
and liabilities carried at fair value. FSP FAS 157-4 is effective for interim
and annual periods ending after June 15, 2009. The Fund believes applying FSP
FAS 157-4 will not have a material impact on its financial statements.
In May 2009, FASB issued Statement No. 165, "Subsequent Events", which is
intended to establish general standards of accounting for and disclosure of
events that occur after the balance sheet date but before the statements are
issued or are available to be issued. FASB 165 is effective for interim or
annual financial periods ending after June 15, 2009, the adoption of FASB 165
will not have a material impact on the financial statements.
ABBREVIATIONS
CURRENCY
BRL - Brazilian Real
CLP - Chilean Peso
EGP - Egyptian Pound
EUR - Euro
IDR - Indonesian Rupiah
KRW - South Korean Won
MXN - Mexican Peso
PLN - Polish Zloty
SELECTED PORTFOLIO
FRN - Floating Rate Note
MTN - Medium Term Note
For information on the Fund's policy regarding other significant accounting
policies, please refer to the Fund's most recent semiannual or annual
shareholder report.
Quarterly Statement of Investments | 11
ITEM 2. CONTROLS AND PROCEDURES.
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 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 Quarterly Schedule of Portfolio
Holdings on Form N-Q, the Registrant had carried out an evaluation, under the
supervision and with the participation of the Registrant's management, including
the Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.
(b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Quarterly Schedule of Portfolio Holdings
on Form N-Q.
ITEM 3. EXHIBITS.
(a) Certification pursuant to Section 30a-2 under the Investment Company Act of
1940 of Laura F. Fergerson, Chief Executive Officer - Finance and
Administration, and Mark H. Otani, 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 EMERGING MARKETS INCOME FUND
By /s/LAURA F. FERGERSON
----------------------------
Laura F. Fergerson
Chief Executive Officer -
Finance and Administration
Date July 27, 2009
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/LAURA F. FERGERSON
----------------------------
Laura F. Fergerson
Chief Executive Officer -
Finance and Administration
Date July 27, 2009
By /s/MARK H. OTANI
-----------------------------
Mark H. Otani
Chief Financial Officer and
Chief Accounting Officer
Date July 27, 2009