Edgar Filing: Western Asset Income Fund

WESTERN ASSET INCOME FUND (PAI)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-02351

Western Asset Income Fund

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 49^th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-888-777-0102

Date of fiscal year end: December 31

Date of reporting period: March 31, 2014

ITEM 1.

SCHEDULE OF INVESTMENTS.

WESTERN ASSET INCOME FUND

FORM N-Q

MARCH 31, 2014

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
CORPORATE BONDS & NOTES - 92.0%
CONSUMER DISCRETIONARY - 9.5%
Automobiles - 0.8%
Ford Motor Credit Co., LLC, Senior Notes		7.000	%		4/15/15	$	610,000	$	648,906
Ford Motor Credit Co., LLC, Senior Notes		8.125	%		1/15/20		410,000		517,008

Total Automobiles									1,165,914

Hotels, Restaurants & Leisure - 0.7%
Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp., Senior Notes		5.625	%		10/15/21		100,000		104,500	^(a)
Paris Las Vegas Holding LLC/Harrah’s Las Vegas LLC/Flamingo Las Vegas Holding LLC, Senior Secured Notes		8.000	%		10/1/20		500,000		526,250	^(a)
Wynn Macau Ltd., Senior Notes		5.250	%		10/15/21		290,000		295,075	^(a)

Total Hotels, Restaurants & Leisure									925,825

Household Durables - 0.6%
Toll Brothers Finance Corp., Senior Notes		4.000	%		12/31/18		690,000		707,250
Toll Brothers Finance Corp., Senior Notes		6.750	%		11/1/19		90,000		102,150

Total Household Durables									809,400

Internet & Catalog Retail - 0.3%
QVC Inc., Senior Secured Notes		5.125	%		7/2/22		400,000		414,961
QVC Inc., Senior Secured Notes		4.375	%		3/15/23		30,000		29,564

Total Internet & Catalog Retail									444,525

Media - 6.1%
21st Century Fox America Inc., Senior Notes		6.550	%		3/15/33		545,000		652,450
21st Century Fox America Inc., Senior Notes		7.750	%		12/1/45		130,000		180,251
Comcast Corp., Bonds		6.400	%		5/15/38		950,000		1,167,903
Comcast Corp., Notes		6.450	%		3/15/37		220,000		270,646
Comcast Corp., Senior Notes		6.950	%		8/15/37		160,000		207,834
DISH DBS Corp., Senior Notes		5.875	%		7/15/22		500,000		533,750
TCI Communications Inc., Senior Debentures		8.750	%		8/1/15		160,000		177,263
Time Warner Cable Inc., Senior Notes		8.750	%		2/14/19		690,000		872,866
Time Warner Entertainment Co., LP, Senior Notes		8.375	%		7/15/33		410,000		565,015
Time Warner Inc., Senior Debentures		7.700	%		5/1/32		595,000		797,923
Time Warner Inc., Senior Notes		4.900	%		6/15/42		150,000		150,537
UBM PLC, Notes		5.750	%		11/3/20		570,000		610,803	^(a)
Virgin Media Finance PLC, Senior Notes		6.375	%		4/15/23		1,000,000		1,060,000	^(a)
WPP Finance 2010, Senior Notes		4.750	%		11/21/21		840,000		902,525
WPP Finance 2010, Senior Notes		5.625	%		11/15/43		150,000		158,021
WPP Finance UK, Senior Notes		8.000	%		9/15/14		180,000		185,879

Total Media									8,493,666

Multiline Retail - 0.3%
Macy’s Retail Holdings Inc., Notes		5.750	%		7/15/14		400,000		405,667

Specialty Retail - 0.7%
American Greetings Corp., Senior Notes		7.375	%		12/1/21		160,000		168,000
Gap Inc., Senior Notes		5.950	%		4/12/21		730,000		821,922

Total Specialty Retail									989,922

TOTAL CONSUMER DISCRETIONARY									13,234,919

CONSUMER STAPLES - 3.9%
Beverages - 1.1%
Anheuser-Busch InBev Worldwide Inc., Senior Notes		5.375	%		1/15/20		260,000		298,476
Constellation Brands Inc., Senior Notes		4.250	%		5/1/23		80,000		78,200
Pernod-Ricard SA, Senior Bonds		5.750	%		4/7/21		350,000		397,318	^(a)
Pernod-Ricard SA, Senior Notes		5.500	%		1/15/42		670,000		728,885	^(a)

Total Beverages									1,502,879

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Food Products - 0.3%
Kraft Foods Group Inc., Senior Notes		5.000	%		6/4/42	$	200,000	$	209,431
Mondelez International Inc., Senior Notes		4.000	%		2/1/24		250,000		253,686

Total Food Products									463,117

Tobacco - 2.5%
Altria Group Inc., Senior Notes		9.950	%		11/10/38		680,000		1,091,047
Altria Group Inc., Senior Notes		10.200	%		2/6/39		230,000		377,437
Lorillard Tobacco Co., Senior Notes		8.125	%		6/23/19		330,000		407,897
Lorillard Tobacco Co., Senior Notes		8.125	%		5/1/40		270,000		347,023
Lorillard Tobacco Co., Senior Notes		7.000	%		8/4/41		320,000		367,162
Philip Morris International Inc., Senior Notes		4.500	%		3/20/42		260,000		254,484
Reynolds American Inc., Senior Notes		4.750	%		11/1/42		720,000		673,448

Total Tobacco									3,518,498

TOTAL CONSUMER STAPLES									5,484,494

ENERGY - 15.2%
Energy Equipment & Services - 0.5%
Baker Hughes Inc., Senior Notes		7.500	%		11/15/18		370,000		454,685
Cameron International Corp., Senior Notes		4.000	%		12/15/23		250,000		250,693
Rowan Cos., Inc., Senior Notes		5.850	%		1/15/44		80,000		81,278

Total Energy Equipment & Services									786,656

Oil, Gas & Consumable Fuels - 14.7%
Anadarko Finance Co., Senior Notes		7.500	%		5/1/31		465,000		592,066
Apache Corp., Senior Notes		6.900	%		9/15/18		100,000		119,718
Apache Corp., Senior Notes		6.000	%		1/15/37		190,000		224,418
Apache Corp., Senior Notes		5.100	%		9/1/40		80,000		84,733
Apache Corp., Senior Notes		5.250	%		2/1/42		90,000		97,106
ConocoPhillips, Notes		6.500	%		2/1/39		810,000		1,064,424
ConocoPhillips, Senior Notes		6.000	%		1/15/20		310,000		366,945
Devon Energy Corp., Senior Notes		5.600	%		7/15/41		310,000		343,335
Devon Financing Corp. LLC, Debentures		7.875	%		9/30/31		380,000		516,917
El Paso Corp., Medium-Term Notes		7.800	%		8/1/31		2,000,000		2,126,442
Enbridge Energy Partners LP, Senior Notes		9.875	%		3/1/19		120,000		157,205
Energy Transfer Equity LP, Senior Notes		7.500	%		10/15/20		250,000		285,938
Enterprise Products Operating LLC, Senior Notes		6.125	%		10/15/39		320,000		373,330
EOG Resources Inc., Senior Notes		5.875	%		9/15/17		540,000		614,471
Hess Corp., Notes		7.875	%		10/1/29		1,180,000		1,549,736
Hess Corp., Senior Bonds		6.000	%		1/15/40		300,000		339,115
Kerr-McGee Corp., Notes		6.950	%		7/1/24		1,080,000		1,309,597
LUKOIL International Finance BV, Bonds		6.356	%		6/7/17		310,000		333,250	^(a)
LUKOIL International Finance BV, Senior Notes		4.563	%		4/24/23		200,000		183,000	^(a)
MEG Energy Corp., Senior Notes		6.375	%		1/30/23		600,000		621,000	^(a)
Murray Energy Corp., Senior Secured Notes		8.625	%		6/15/21		350,000		368,375	^(a)
Noble Energy Inc., Senior Notes		6.000	%		3/1/41		390,000		445,682
Noble Energy Inc., Senior Notes		5.250	%		11/15/43		150,000		156,561
Pemex Project Funding Master Trust, Senior Bonds		6.625	%		6/15/35		2,635,000		2,924,850
Petrobras Global Finance BV, Senior Notes		3.250	%		3/17/17		500,000		501,552
Petrobras Global Finance BV, Senior Notes		4.875	%		3/17/20		140,000		140,308
Petrobras Global Finance BV, Senior Notes		7.250	%		3/17/44		280,000		287,427
Petrobras International Finance Co., Global Notes		5.875	%		3/1/18		879,000		937,712
Petrobras International Finance Co., Senior Notes		6.750	%		1/27/41		525,000		508,769
Petroleos Mexicanos, Notes		6.375	%		1/23/45		380,000		409,925	^(a)
Phillips 66, Senior Notes		5.875	%		5/1/42		160,000		185,109
Plains Exploration & Production Co., Senior Notes		6.875	%		2/15/23		410,000		456,125
Shell International Finance BV, Senior Notes		6.375	%		12/15/38		250,000		322,281
Transcontinental Gas Pipe Line Co. LLC, Senior Notes		5.400	%		8/15/41		310,000		335,859
Transcontinental Gas Pipe Line Co. LLC, Senior Notes		4.450	%		8/1/42		450,000		422,010
Williams Cos. Inc., Debentures		7.500	%		1/15/31		47,000		51,722
Williams Cos. Inc., Senior Notes		7.750	%		6/15/31		37,000		41,511

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Oil, Gas & Consumable Fuels - (continued)
Williams Cos. Inc., Senior Notes		8.750	%		3/15/32	$	610,000	$	735,370

Total Oil, Gas & Consumable Fuels									20,533,894

TOTAL ENERGY									21,320,550

FINANCIALS - 38.9%
Banks - 18.2%
Bank of America Corp., Junior Subordinated Notes		5.200	%		6/1/23		330,000		310,200	^(b)(c)
Bank of America Corp., Senior Notes		6.500	%		8/1/16		70,000		78,404
Bank of America Corp., Senior Notes		7.625	%		6/1/19		70,000		86,154
Bank of America Corp., Senior Notes		5.625	%		7/1/20		30,000		34,138
Bank of America Corp., Senior Notes		5.875	%		2/7/42		320,000		370,010
Bank of America Corp., Senior Notes		4.875	%		4/1/44		840,000		843,822
Barclays Bank PLC, Subordinated Notes		10.179	%		6/12/21		240,000		321,679	^(a)
BPCE SA, Subordinated Notes		5.150	%		7/21/24		410,000		407,884	^(a)
CIT Group Inc., Secured Notes		5.250	%		4/1/14		370,000		370,000	^(a)
CIT Group Inc., Senior Notes		5.000	%		8/1/23		200,000		204,500
Citigroup Inc., Junior Subordinated Notes		5.950	%		1/30/23		200,000		195,500	^(b)(c)
Citigroup Inc., Senior Notes		6.375	%		8/12/14		315,000		321,614
Citigroup Inc., Senior Notes		5.500	%		10/15/14		120,000		123,162
Citigroup Inc., Senior Notes		6.010	%		1/15/15		142,000		148,004
Citigroup Inc., Senior Notes		8.500	%		5/22/19		1,280,000		1,630,822
Citigroup Inc., Senior Notes		8.125	%		7/15/39		450,000		650,838
Citigroup Inc., Senior Notes		5.875	%		1/30/42		240,000		275,477
Citigroup Inc., Subordinated Notes		5.500	%		9/13/25		750,000		798,899
Citigroup Inc., Subordinated Notes		6.125	%		8/25/36		550,000		601,713
Citigroup Inc., Subordinated Notes		6.675	%		9/13/43		370,000		433,270
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, Junior Subordinated Notes		11.000	%		6/30/19		708,000		939,870	^(a)(b)(c)
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, Senior Notes		5.250	%		5/24/41		570,000		615,371
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, Subordinated Notes		5.750	%		12/1/43		450,000		491,075
Credit Agricole SA, Subordinated Notes		8.375	%		10/13/19		560,000		635,600	^(a)(b)(c)
HSBC Finance Capital Trust IX, Junior Subordinated Notes		5.911	%		11/30/35		1,350,000		1,402,312	^(b)
HSBC Holdings PLC, Subordinated Notes		5.250	%		3/14/44		410,000		414,574
ING Bank NV, Subordinated Notes		5.800	%		9/25/23		600,000		639,868	^(a)
Intesa Sanpaolo SpA, Senior Notes		3.625	%		8/12/15		1,240,000		1,272,228	^(a)
JPMorgan Chase & Co., Junior Subordinated Bonds		5.150	%		5/1/23		410,000		384,375	^(b)(c)
JPMorgan Chase & Co., Junior Subordinated Bonds		6.000	%		8/1/23		260,000		256,100	^(b)(c)
JPMorgan Chase & Co., Junior Subordinated Bonds		6.125	%		4/30/24		290,000		287,825	^(b)(c)
JPMorgan Chase & Co., Subordinated Notes		6.125	%		6/27/17		720,000		816,175
JPMorgan Chase & Co., Subordinated Notes		5.625	%		8/16/43		440,000		473,112
M&T Bank Corp., Junior Subordinated Bonds		6.875	%		5/15/16		880,000		860,200	^(c)
Mizuho Financial Group Cayman Ltd., Subordinated Notes		5.790	%		4/15/14		550,000		550,982	^(a)
Royal Bank of Scotland Group PLC, Junior Subordinated Bonds		7.648	%		9/30/31		1,360,000		1,462,000	^(b)(c)
Royal Bank of Scotland Group PLC, Subordinated Notes		5.000	%		10/1/14		580,000		587,962
Royal Bank of Scotland Group PLC, Subordinated Notes		5.050	%		1/8/15		170,000		173,965
Royal Bank of Scotland Group PLC, Subordinated Notes		6.125	%		12/15/22		310,000		324,656
Royal Bank of Scotland Group PLC, Subordinated Notes		6.100	%		6/10/23		1,010,000		1,048,399
Royal Bank of Scotland Group PLC, Subordinated Notes		6.000	%		12/19/23		350,000		358,384
Royal Bank of Scotland NV, Subordinated Notes		7.750	%		5/15/23		480,000		537,766
Santander UK PLC, Subordinated Notes		5.000	%		11/7/23		200,000		205,759	^(a)

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Banks - (continued)
Standard Chartered PLC, Subordinated Notes		5.200	%		1/26/24	$	260,000	$	266,931	^(a)
Standard Chartered PLC, Subordinated Notes		5.700	%		3/26/44		410,000		406,146	^(a)
Wachovia Capital Trust III, Junior Subordinated Bonds		5.570	%		5/16/14		1,190,000		1,143,888	^(b)(c)
Wells Fargo & Co., Subordinated Notes		5.375	%		11/2/43		430,000		452,958
Wells Fargo Capital X, Capital Securities		5.950	%		12/15/36		130,000		130,000

Total Banks									25,344,571

Capital Markets - 6.8%
Deutsche Bank AG, Subordinated Notes		4.296	%		5/24/28		500,000		471,123	^(b)
Goldman Sachs Capital I, Capital Securities		6.345	%		2/15/34		685,000		709,240
Goldman Sachs Capital II, Junior Subordinated Bonds		4.000	%		5/16/14		880,000		677,600	^(b)(c)
Goldman Sachs Group Inc., Senior Notes		6.000	%		5/1/14		40,000		40,176
Goldman Sachs Group Inc., Senior Notes		5.375	%		3/15/20		270,000		301,249
Goldman Sachs Group Inc., Senior Notes		5.250	%		7/27/21		510,000		564,565
Goldman Sachs Group Inc., Senior Notes		6.250	%		2/1/41		570,000		676,844
Goldman Sachs Group Inc., Subordinated Notes		6.750	%		10/1/37		640,000		733,132
Merrill Lynch & Co. Inc., Senior Notes		6.400	%		8/28/17		300,000		344,393
Merrill Lynch & Co. Inc., Subordinated Notes		5.700	%		5/2/17		1,000,000		1,112,245
Merrill Lynch & Co. Inc., Subordinated Notes		6.110	%		1/29/37		320,000		357,880
Merrill Lynch & Co. Inc., Subordinated Notes		7.750	%		5/14/38		900,000		1,186,760
Morgan Stanley, Medium-Term Notes		6.625	%		4/1/18		100,000		116,576
Morgan Stanley, Senior Notes		6.000	%		5/13/14		860,000		865,303
Morgan Stanley, Senior Notes		5.500	%		7/24/20		100,000		112,848
Morgan Stanley, Senior Notes		6.375	%		7/24/42		90,000		109,788
Morgan Stanley, Subordinated Notes		5.000	%		11/24/25		230,000		236,652
State Street Corp., Junior Subordinated Notes		4.956	%		3/15/18		480,000		522,911
UBS AG Stamford CT, Subordinated Notes		7.625	%		8/17/22		340,000		398,781

Total Capital Markets									9,538,066

Consumer Finance - 2.6%
Ally Financial Inc., Subordinated Notes		8.000	%		12/31/18		201,000		239,693
American Express Co., Subordinated Debentures		6.800	%		9/1/66		370,000		405,409	^(b)
Capital One Financial Corp., Senior Notes		6.750	%		9/15/17		230,000		268,093
HSBC Finance Corp., Senior Notes		6.676	%		1/15/21		1,300,000		1,517,023
SLM Corp., Senior Notes		7.250	%		1/25/22		830,000		915,075
SLM Corp., Senior Notes		6.125	%		3/25/24		290,000		289,637

Total Consumer Finance									3,634,930

Diversified Financial Services - 6.9%
Beaver Valley Funding Corp., Senior Secured Bonds		9.000	%		6/1/17		41,000		43,397
Carlyle Holdings II Finance LLC, Senior Secured Notes		5.625	%		3/30/43		220,000		234,744	^(a)
CME Group Inc., Senior Notes		5.300	%		9/15/43		440,000		492,336
General Electric Capital Corp., Junior Subordinated Bonds		6.250	%		12/15/22		600,000		642,000	^(b)(c)
General Electric Capital Corp., Notes		5.300	%		2/11/21		480,000		539,879
General Electric Capital Corp., Senior Notes		5.900	%		5/13/14		600,000		603,749
General Electric Capital Corp., Senior Notes		6.875	%		1/10/39		440,000		579,454
General Electric Capital Corp., Subordinated Debentures		6.375	%		11/15/67		750,000		825,000	^(b)
ILFC E-Capital Trust I, Junior Subordinated Notes		1.784	%		12/21/65		470,000		444,150	^(a)(b)
ILFC E-Capital Trust II, Bonds		6.250	%		12/21/65		790,000		766,300	^(a)(b)
International Lease Finance Corp., Senior Notes		8.750	%		3/15/17		190,000		223,013
International Lease Finance Corp., Senior Notes		8.875	%		9/1/17		470,000		559,300
International Lease Finance Corp., Senior Notes		6.250	%		5/15/19		130,000		143,325
International Lease Finance Corp., Senior Notes		8.250	%		12/15/20		190,000		229,803
International Lease Finance Corp., Senior Secured Notes		7.125	%		9/1/18		700,000		813,750	^(a)
Voya Financial Inc., Junior Subordinated Notes		5.650	%		5/15/53		130,000		129,220	^(b)
Voya Financial Inc., Senior Notes		5.500	%		7/15/22		760,000		852,501
ZFS Finance USA Trust II, Bonds		6.450	%		12/15/65		1,440,000		1,551,600	^(a)(b)

Total Diversified Financial Services									9,673,521

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Insurance - 3.9%
AIA Group Ltd., Senior Notes		4.875	%		3/11/44	$	400,000	$	405,618	^(a)
Allstate Corp., Junior Subordinated Debentures		6.500	%		5/15/57		480,000		509,328	^(b)
American Equity Investment Life Holding Co., Senior Notes		6.625	%		7/15/21		60,000		63,975
American International Group Inc., Junior Subordinated Debentures		6.250	%		3/15/37		80,000		84,000
American International Group Inc., Senior Notes		6.400	%		12/15/20		90,000		107,230
AXA SA, Subordinated Bonds		8.600	%		12/15/30		200,000		258,000
Delphi Financial Group Inc., Senior Notes		7.875	%		1/31/20		170,000		200,226
Fidelity & Guaranty Life Holdings Inc., Senior Notes		6.375	%		4/1/21		190,000		202,350	^(a)
Five Corners Funding Trust, Bonds		4.419	%		11/15/23		370,000		377,764	^(a)
Liberty Mutual Group Inc., Junior Subordinated Bonds		7.800	%		3/15/37		190,000		210,900	^(a)
Liberty Mutual Insurance Co., Subordinated Notes		7.875	%		10/15/26		490,000		596,662	^(a)
MetLife Inc., Junior Subordinated Debentures		6.400	%		12/15/36		1,150,000		1,213,250
Prudential Financial Inc., Junior Subordinated Debentures		8.875	%		6/15/38		340,000		416,500	^(b)
Prudential Holdings LLC, Bonds, AGM-Insured		7.245	%		12/18/23		260,000		318,759	^(a)
Teachers Insurance & Annuity Association of America - College Retirement Equity Fund, Notes		6.850	%		12/16/39		400,000		524,893	^(a)

Total Insurance									5,489,455

Real Estate Investment Trusts (REITs) - 0.1%
Health Care REIT Inc., Senior Notes		5.875	%		5/15/15		130,000		137,288

Real Estate Management & Development - 0.3%
Security Capital Group Inc., Senior Notes		7.700	%		6/15/28		280,000		365,454

Thrifts & Mortgage Finance - 0.1%
Santander Holdings USA Inc., Senior Notes		4.625	%		4/19/16		160,000		170,680

TOTAL FINANCIALS									54,353,965

HEALTH CARE - 1.3%
Biotechnology - 0.4%
Amgen Inc., Senior Notes		5.150	%		11/15/41		420,000		432,691
Gilead Sciences Inc., Senior Notes		5.650	%		12/1/41		60,000		68,730

Total Biotechnology									501,421

Health Care Providers & Services - 0.8%
Aetna Inc., Senior Notes		6.500	%		9/15/18		240,000		283,053
Catholic Health Initiatives, Secured Bonds		4.350	%		11/1/42		30,000		27,450
Humana Inc., Senior Notes		6.450	%		6/1/16		220,000		244,362
Humana Inc., Senior Notes		8.150	%		6/15/38		190,000		267,111
UnitedHealth Group Inc., Senior Notes		6.000	%		11/15/17		31,000		35,213
WellPoint Inc., Notes		5.875	%		6/15/17		290,000		326,976

Total Health Care Providers & Services									1,184,165

Pharmaceuticals - 0.1%
Zoetis Inc., Senior Notes		4.700	%		2/1/43		160,000		158,343

TOTAL HEALTH CARE									1,843,929

INDUSTRIALS - 5.4%
Aerospace & Defense - 1.1%
Esterline Technologies Corp., Senior Notes		7.000	%		8/1/20		750,000		811,875
Exelis Inc., Senior Notes		5.550	%		10/1/21		520,000		536,238
Textron Inc., Senior Notes		4.300	%		3/1/24		250,000		254,654

Total Aerospace & Defense									1,602,767

Airlines - 1.7%
Air Canada, Pass-Through Trust, Secured Notes		6.625	%		5/15/18		280,000		286,994	^(a)

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Airlines - (continued)
American Airlines, Pass-Through Trust, Senior Secured Notes		5.600	%		7/15/20	$	311,822	$	325,074	^(a)
Delta Air Lines Inc., Pass-Through Certificates, Secured Notes		8.021	%		8/10/22		89,498		103,147
Delta Air Lines Inc., Pass-Through Certificates, Senior Secured Notes		7.750	%		12/17/19		205,565		240,511
United Airlines Inc., Pass-Through Certificates		6.545	%		2/2/19		106,314		118,009
United Airlines Inc., Pass-Through Certificates, Secured Notes		9.750	%		1/15/17		84,137		96,757
United Airlines Inc., Pass-Through Certificates, Secured Notes		9.250	%		5/10/17		152,405		170,694
United Airlines Inc., Pass-Through Certificates, Secured Notes		6.250	%		4/11/20		161,385		172,279
United Airlines Inc., Pass-Through Certificates, Senior Secured Notes		6.125	%		4/29/18		140,000		147,525
United Airlines Inc., Pass-Through Certificates, Senior Secured Notes		7.250	%		11/10/19		181,737		212,632
United Airlines Inc., Pass-Through Certificates, Senior Secured Notes		7.256	%		3/15/20		138,242		153,794
US Airways, Pass-Through Trust, Senior Secured Bonds		5.900	%		10/1/24		345,767		386,395

Total Airlines									2,413,811

Commercial Services & Supplies - 1.1%
Republic Services Inc., Senior Notes		5.500	%		9/15/19		130,000		147,404
Republic Services Inc., Senior Notes		5.250	%		11/15/21		330,000		368,905
Taylor Morrison Communities Inc./Monarch Communities Inc., Senior Notes		5.250	%		4/15/21		600,000		606,000	^(a)
Waste Management Inc., Senior Notes		7.750	%		5/15/32		250,000		345,841

Total Commercial Services & Supplies									1,468,150

Construction & Engineering - 0.1%
Ausdrill Finance Pty Ltd., Senior Notes		6.875	%		11/1/19		200,000		182,000	^(a)

Industrial Conglomerates - 0.2%
United Technologies Corp., Senior Notes		6.125	%		2/1/19		200,000		235,646

Machinery - 0.7%
Valmont Industries Inc., Senior Notes		6.625	%		4/20/20		790,000		917,343

Marine - 0.2%
Horizon Lines LLC, Senior Secured Notes		11.000	%		10/15/16		287,000		287,000

Road & Rail - 0.3%
Burlington Northern Santa Fe LLC, Senior Notes		4.900	%		4/1/44		460,000		474,138

TOTAL INDUSTRIALS									7,580,855

INFORMATION TECHNOLOGY - 0.9%
Internet Software & Services - 0.1%
VeriSign Inc., Senior Notes		4.625	%		5/1/23		150,000		144,000

IT Services - 0.4%
Electronic Data Systems Corp., Notes		7.450	%		10/15/29		420,000		501,146

Semiconductors & Semiconductor Equipment - 0.1%
National Semiconductor Corp., Senior Notes		6.600	%		6/15/17		110,000		127,803

Software - 0.1%
Interface Security Systems Holdings Inc./Interface Security Systems LLC, Senior Secured Notes		9.250	%		1/15/18		210,000		210,000	^(a)

Technology Hardware, Storage & Peripherals - 0.2%
Hewlett-Packard Co., Senior Notes		4.650	%		12/9/21		310,000		327,942

TOTAL INFORMATION TECHNOLOGY									1,310,891

MATERIALS - 5.5%
Chemicals - 1.0%
Dow Chemical Co., Debentures		7.375	%		11/1/29		800,000		1,035,045

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Chemicals - (continued)
Ecolab Inc., Senior Notes		5.500	%		12/8/41	$	140,000	$	159,458
LYB International Finance BV, Senior Bonds		4.875	%		3/15/44		100,000		99,819

Total Chemicals									1,294,322

Containers & Packaging - 0.7%
Rock-Tenn Co., Senior Notes		4.450	%		3/1/19		470,000		503,524
Rock-Tenn Co., Senior Notes		4.900	%		3/1/22		460,000		491,867

Total Containers & Packaging									995,391

Metals & Mining - 3.6%
Barrick Gold Corp., Senior Notes		4.100	%		5/1/23		690,000		654,558
BHP Billiton Finance USA Ltd., Senior Notes		5.000	%		9/30/43		100,000		105,818
Cliffs Natural Resources Inc., Senior Notes		5.900	%		3/15/20		140,000		146,035
Cliffs Natural Resources Inc., Senior Notes		4.800	%		10/1/20		20,000		19,638
Cliffs Natural Resources Inc., Senior Notes		4.875	%		4/1/21		370,000		360,394
Freeport-McMoRan Copper & Gold Inc., Senior Notes		5.450	%		3/15/43		120,000		118,004
Rio Tinto Finance USA Ltd., Senior Notes		9.000	%		5/1/19		660,000		858,540
Southern Copper Corp., Senior Notes		5.375	%		4/16/20		150,000		161,699
Southern Copper Corp., Senior Notes		5.250	%		11/8/42		470,000		402,393
Steel Dynamics Inc., Senior Notes		6.125	%		8/15/19		140,000		152,250
Vale Overseas Ltd., Notes		6.875	%		11/21/36		1,148,000		1,223,168
Vedanta Resources PLC, Senior Notes		6.000	%		1/31/19		350,000		350,000	^(a)
Xstrata Finance Canada Ltd., Senior Notes		6.900	%		11/15/37		430,000		476,397	^(a)

Total Metals & Mining									5,028,894

Paper & Forest Products - 0.2%
Georgia-Pacific Corp., Senior Bonds		7.375	%		12/1/25		250,000		314,787

TOTAL MATERIALS									7,633,394

TELECOMMUNICATION SERVICES - 7.7%
Diversified Telecommunication Services - 6.3%
AT&T Inc., Senior Notes		5.550	%		8/15/41		300,000		314,943
British Telecommunications PLC, Bonds		9.625	%		12/15/30		330,000		510,121
Deutsche Telekom International Finance BV, Senior Notes		5.750	%		3/23/16		160,000		174,805
Intelsat Jackson Holdings SA, Senior Notes		5.500	%		8/1/23		750,000		735,000	^(a)
Koninklijke KPN NV, Senior Notes		8.375	%		10/1/30		200,000		269,587
Qwest Corp., Debentures		6.875	%		9/15/33		1,000,000		986,143
Telecom Italia Capital SA, Senior Notes		7.175	%		6/18/19		360,000		412,650
Telefonica Emisiones SAU, Senior Notes		3.729	%		4/27/15		230,000		236,719
Telefonica Emisiones SAU, Senior Notes		7.045	%		6/20/36		60,000		72,622
TW Telecom Holdings Inc., Senior Notes		5.375	%		10/1/22		750,000		765,000
Verizon Communications Inc., Senior Notes		5.150	%		9/15/23		1,790,000		1,958,831
Verizon Communications Inc., Senior Notes		6.550	%		9/15/43		1,920,000		2,336,515

Total Diversified Telecommunication Services									8,772,936

Wireless Telecommunication Services - 1.4%
America Movil SAB de CV, Senior Notes		6.125	%		3/30/40		850,000		959,267
Sprint Capital Corp., Global Notes		6.900	%		5/1/19		330,000		362,175
Sprint Corp., Senior Notes		7.875	%		9/15/23		300,000		330,000	^(a)
Telefonica Europe BV, Senior Notes		8.250	%		9/15/30		230,000		297,999

Total Wireless Telecommunication Services									1,949,441

TOTAL TELECOMMUNICATION SERVICES									10,722,377

UTILITIES - 3.7%
Electric Utilities - 2.3%
CenterPoint Energy Houston Electric LLC, Senior Secured Bonds		4.500	%		4/1/44		210,000		215,382
Enersis SA, Notes		7.400	%		12/1/16		452,000		510,402
FirstEnergy Corp., Notes		7.375	%		11/15/31		830,000		953,384
Pacific Gas & Electric Co., First Mortgage Bonds		6.050	%		3/1/34		140,000		165,346
PNPP II Funding Corp., Senior Bonds		9.120	%		5/30/16		647,000		671,818

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Electric Utilities - (continued)
Virginia Electric and Power Co., Senior Notes		8.875	%		11/15/38	$	390,000	$	631,974

Total Electric Utilities									3,148,306

Gas Utilities - 0.1%
Southern Natural Gas Co., Senior Notes		5.900	%		4/1/17		170,000		190,818	^(a)

Multi-Utilities - 1.3%
CenterPoint Energy Inc., Senior Notes		6.850	%		6/1/15		1,150,000		1,231,489
Dominion Resources Inc., Senior Notes		8.875	%		1/15/19		250,000		316,487
DTE Energy Co., Senior Notes		6.350	%		6/1/16		260,000		288,949

Total Multi-Utilities									1,836,925

TOTAL UTILITIES									5,176,049

TOTAL CORPORATE BONDS & NOTES (Cost - $116,815,236)									128,661,423

ASSET-BACKED SECURITIES - 1.3%
Countrywide Asset-Backed Certificates, 2004-6 1A1		0.424	%		12/25/34		514,490		476,966	^(b)
Dryden Senior Loan Fund, 2014-31A C		3.120	%		4/18/26		250,000		247,390	^(a)(b)
Madison Park Funding Ltd., 2013-11A C		3.050	%		10/23/25		250,000		245,996	^(a)(b)
Morgan Stanley Capital Inc., 2005-WMC2 M2		0.799	%		2/25/35		324,843		319,483	^(b)
SLM Student Loan Trust, 2011-A A3		2.655	%		1/15/43		330,000		350,194	^(a)(b)
Whitehorse Ltd., 2013-1A A3L		3.236	%		11/24/25		200,000		198,749	^(a)(b)

TOTAL ASSET-BACKED SECURITIES (Cost - $1,800,286)									1,838,778

COLLATERALIZED MORTGAGE OBLIGATIONS - 0.1%
Thornburg Mortgage Securities Trust, 2007-4 3A1 (Cost - $126,790)		6.095	%		9/25/37		128,421		134,379	^(b)

MUNICIPAL BONDS - 0.7%
Alabama - 0.4%
Jefferson County, AL, Sewer Revenue		6.000	%		10/1/42		500,000		504,825

California - 0.1%
University of California Revenue		4.062	%		5/15/33		150,000		143,805

Illinois - 0.2%
Chicago, IL, GO, Taxable Project		7.781	%		1/1/35		10,000		11,748
Illinois State, GO, Build America Bonds-Taxable		6.725	%		4/1/35		310,000		345,009

Total Illinois									356,757

TOTAL MUNICIPAL BONDS (Cost - $989,411)									1,005,387

SOVEREIGN BONDS - 1.7%
Canada - 0.7%
Quebec Province		7.970	%		7/22/36		650,000		958,655

Colombia - 0.4%
Republic of Colombia, Senior Bonds		5.625	%		2/26/44		490,000		511,560

Mexico - 0.0%
United Mexican States, Senior Notes		4.750	%		3/8/44		30,000		28,500

Russia - 0.0%
Russian Foreign Bond - Eurobond, Senior Bonds		7.500	%		3/31/30		38,610		43,919	^(a)

Turkey - 0.4%
Republic of Turkey, Notes		4.875	%		4/16/43		620,000		527,000

Venezuela - 0.2%
Bolivarian Republic of Venezuela, Senior Bonds		5.750	%		2/26/16		420,000		364,875	^(a)

TOTAL SOVEREIGN BONDS (Cost - $2,245,758)									2,434,509

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2014


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 0.5%
U.S. Government Obligations - 0.5%
U.S. Treasury Notes		2.000	%		2/28/21	$	500,000	$	490,508
U.S. Treasury Notes		2.750	%		2/15/24		180,000		180,394

TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost - $671,981)									670,902


						SHARES
PREFERRED STOCKS - 2.0%
FINANCIALS - 2.0%
Banks - 0.1%
U.S. Bancorp		5.150	%				4,292		93,351

Capital Markets - 0.3%
State Street Corp.		5.900	%				14,282		369,761	^(b)

Consumer Finance - 1.3%
GMAC Capital Trust I		8.125	%				67,500		1,842,750	^(b)

Diversified Financial Services - 0.3%
Citigroup Capital XIII		7.875	%				15,253		423,118	^(b)

TOTAL PREFERRED STOCKS (Cost - $2,475,939)									2,728,980

TOTAL INVESTMENTS - 98.3% (Cost - $125,125,401#)									137,474,358
Other Assets in Excess of Liabilities - 1.7%									2,321,996

TOTAL NET ASSETS - 100.0%								$	139,796,354

(a)

Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors, unless otherwise noted.

(b)	Variable rate security. Interest rate disclosed is as of the most recent information available.

(c)	Security has no maturity date. The date shown represents the next call date.

#	Aggregate cost for federal income tax purposes is substantially the same.

Abbreviations used in this schedule:



AGM		— Assured Guaranty Municipal Corp.
GO		— General Obligation
REIT		— Real Estate Investment Trust

See Notes to Schedule of Investments.

Notes to Schedule of Investments (unaudited)

1. Organization and significant accounting policies

Western Asset Income Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as a closed-end diversified investment company.

The Fund seeks high level of current income, consistent with prudent investment risk. Capital appreciation is a secondary investment objective.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(a) Investment valuation. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investment’s fair value. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Directors.

The Board of Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North American Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Directors, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Directors. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Directors, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Directors quarterly.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

•

Level 1 – quoted prices in active markets for identical investments

Notes to Schedule of Investments (unaudited) (continued)

•

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities carried at fair value:


ASSETS
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Long-term investments†:
Corporate bonds & notes		—	$	128,661,423		—	$	128,661,423
Asset-backed securities		—		1,838,778		—		1,838,778
Collateralized mortgage obligations		—		134,379		—		134,379
Municipal bonds		—		1,005,387		—		1,005,387
Sovereign bonds		—		2,434,509		—		2,434,509
U.S. government & agency obligations		—		670,902		—		670,902
Preferred stocks	$	2,728,980		—		—		2,728,980

Total investments	$	2,728,980	$	134,745,378		—	$	137,474,358

Other financial instruments:
Futures contracts	$	23,227		—		—	$	23,227

Total	$	2,752,207	$	134,745,378		—	$	137,497,585


LIABILITIES
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Other financial instruments:
Futures contracts	$	276,540		—		—	$	276,540

†	See Schedule of Investments for additional detailed categorizations.

(b) Repurchase agreements. The Fund may enter into repurchase agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Fund’s holding period. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian, acting on the Fund’s behalf, take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

(c) Futures contracts. The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain exposure to, or hedge against, changes in certain asset classes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the Fund is required to deposit cash or cash equivalents with a broker in an amount equal to a certain percentage of the contract amount. This is known as the ‘‘initial margin’’ and subsequent payments (‘‘variation margin’’) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. For certain futures, including foreign denominated futures, variation margin is not settled daily, but is recorded as a net variation margin payable or receivable. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded.

Notes to Schedule of Investments (unaudited) (continued)

Futures contracts involve, to varying degrees, risk of loss. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

(d) Credit and market risk. The Fund invests in high-yield instruments that are subject to certain credit and market risks. The yields of high-yield obligations reflect, among other things, perceived credit and market risks. The Fund’s investments in securities rated below investment grade typically involves risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading.

(e) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions, where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Fund’s investment manager attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the investment manager. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.

The Fund has entered into master agreements with certain of its derivative counterparties that provide for general obligations, representations, agreements, collateral, events of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Fund’s net assets or NAV over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.

Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearing house for exchange traded derivatives while collateral terms are contract specific for over-the-counter traded derivatives. Securities pledged as collateral, if any, to cover the obligations of the Fund under derivative contracts, are noted in the Schedule of Investments.

At March 31, 2014, the Fund did not have any open derivative transactions with credit related contingent features in a net liability position.

(f) Security transactions. Security transactions are accounted for on a trade date basis.

2. Investments

At March 31, 2014, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:


Gross unrealized appreciation	$	12,901,342
Gross unrealized depreciation		(552,385	)

Net unrealized appreciation	$	12,348,957

At March 31, 2014, the Fund had the following open futures contracts:


	Number of Contracts		Expiration Date		Basis Value		Market Value		Unrealized Gain (Loss)
Contracts to Buy:
U.S. Treasury 2-Year Notes		17		6/14	$	3,737,383	$	3,732,563	$	(4,820	)
U.S. Treasury 5-Year Notes		138		6/14		16,512,027		16,415,531		(96,496	)

										(101,316	)

Contracts to Sell:
U.S. Treasury 10-Year Notes		48		6/14		5,951,227		5,928,000		23,227
U.S. Treasury Long-Term Bonds		97		6/14		12,751,817		12,922,219		(170,402	)
U.S. Treasury Ultra Long-Term Bonds		3		6/14		428,584		433,406		(4,822	)

										(151,997	)

Net unrealized loss on open futures contracts									$	(253,313	)

Notes to Schedule of Investments (unaudited) (continued)

3. Derivative instruments and hedging activities

GAAP requires enhanced disclosure about an entity’s derivative and hedging activities.

The following is a summary of the Fund’s derivative instruments categorized by risk exposure at March 31, 2014.


	Futures Contracts
Primary Underlying Risk	Unrealized Appreciation		Unrealized Depreciation			Total
Interest Rate Risk	$	23,227	$	(276,540	)	$	(253,313	)

During the period ended March 31, 2014, the volume of derivative activity for the Fund was as follows:


	Average market value
Futures contracts (to buy)	$	21,037,922
Futures contracts (to sell)		21,834,762

ITEM 2.

CONTROLS AND PROCEDURES.

(a)

The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 3.

EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.

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.

Western Asset Income Fund


By:		/s/ KENNETH D. FULLER
		Kenneth D. Fuller
		Chief Executive Officer

Date:		May 23, 2014

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/ KENNETH D. FULLER
		Kenneth D. Fuller
		Chief Executive Officer

Date:		May 23, 2014

By:		/s/ RICHARD F. SENNETT
		Richard F. Sennett
		Principal Financial Officer

Date:		May 23, 2014