FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21357
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Franklin Templeton Limited Duration Income Trust
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(Exact name of registrant as specified in charter)
One Franklin Parkway, San Mateo, CA 94403-1906
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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: 650/312/2000
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Date of fiscal year end: 03/31
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Date of reporting period: 6/30/08
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Item 1. Schedule of Investments.
Franklin Templeton
Limited Duration Income Trust
QUARTERLY STATEMENT OF INVESTMENTS
JUNE 30, 2008
CONTENTS
Statement of Investments ................................................. 3
Notes to Statement of Investments ........................................ 15
(FRANKLIN TEMPLETON INVESTMENTS(R) LOGO)
FRANKLIN - Templeton - Mutual Series
Quarterly Statement of Investments | 1
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Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
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CORPORATE BONDS 46.1%
AUTOMOBILES & COMPONENTS 1.5%
Ford Motor Credit Co. LLC,
(b) FRN, 7.163%, 4/15/12 .......................................... United States 1,000,000 $ 937,416
senior note, 5.80%, 1/12/09 ................................... United States 4,000,000 3,819,896
senior note, 9.875%, 8/10/11 .................................. United States 500,000 421,654
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5,178,966
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BANKS 0.3%
(c) ICICI Bank Ltd., 144A, 6.625%, 10/03/12 ........................... India 1,000,000 988,074
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CAPITAL GOODS 1.7%
RBS Global & Rexnord Corp., senior note, 9.50%, 8/01/14 ........... United States 2,000,000 1,940,000
RSC Equipment Rental Inc., senior note, 9.50%, 12/01/14 ........... United States 2,500,000 2,100,000
TransDigm Inc., senior sub. note, 7.75%, 7/15/14 .................. United States 2,000,000 1,985,000
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6,025,000
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COMMERCIAL SERVICES & SUPPLIES 1.2%
(b) ARAMARK Corp., senior note, FRN, 6.373%, 2/01/15 .................. United States 2,500,000 2,350,000
JohnsonDiversey Holdings Inc., senior disc. note, 10.67%,
5/15/13 ........................................................ United States 2,000,000 2,000,000
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4,350,000
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CONSUMER DURABLES & APPAREL 1.7%
Jarden Corp., senior sub. note, 7.50%, 5/01/17 .................... United States 2,500,000 2,187,500
Jostens IH Corp., senior sub. note, 7.625%, 10/01/12 .............. United States 2,000,000 1,975,000
KB Home, senior note, 6.375%, 8/15/11 ............................. United States 2,000,000 1,850,000
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6,012,500
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CONSUMER SERVICES 3.2%
Host Marriott LP, senior note, K, 7.125%, 11/01/13 ................ United States 2,500,000 2,337,500
MGM MIRAGE, senior note, 6.75%, 4/01/13 ........................... United States 3,000,000 2,602,500
(c) Outback Steakhouse Inc., senior note, 144A, 10.00%, 6/15/15 ....... United States 1,500,000 978,750
Pinnacle Entertainment Inc., senior sub. note, 8.75%, 10/01/13 .... United States 2,000,000 2,010,000
Royal Caribbean Cruises Ltd., senior note, 8.00%, 5/15/10 ......... United States 3,000,000 3,045,000
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10,973,750
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DIVERSIFIED FINANCIALS 5.8%
CIT Group Funding Co. of Canada, senior note, 4.65%, 7/01/10 ...... United States 1,100,000 920,629
CIT Group Inc., senior note, 7.625%, 11/30/12 ..................... United States 1,900,000 1,581,193
General Electric Capital Corp., 4.80%, 5/01/13 .................... United States 3,000,000 2,943,378
GMAC LLC,
7.25%, 3/02/11 ................................................. United States 2,000,000 1,471,158
6.875%, 8/28/12 ................................................ United States 3,000,000 2,056,683
JPMorgan Chase & Co., sub. note, 5.75%, 1/02/13 ................... United States 3,000,000 3,023,574
Lehman Brothers Holdings Inc., senior note, 6.20%, 9/26/14 ........ United States 3,000,000 2,870,280
Quarterly Statement of Investments | 3
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
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CORPORATE BONDS (CONTINUED)
DIVERSIFIED FINANCIALS (CONTINUED)
Merrill Lynch & Co. Inc.,
5.45%, 2/05/13 ................................................. United States 2,500,000 $ 2,361,282
6.15%, 4/25/13 ................................................. United States 500,000 485,294
Morgan Stanley, sub. note, 4.75%, 4/01/14 ......................... United States 2,500,000 2,282,825
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19,996,296
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ENERGY 4.3%
Chesapeake Energy Corp., senior note, 7.50%, 6/15/14 .............. United States 4,000,000 3,990,000
Compagnie Generale de Geophysique-Veritas, senior note, 7.50%,
5/15/15 ........................................................ France 2,000,000 2,005,000
El Paso Corp., senior note, 6.875%, 6/15/14 ....................... United States 1,800,000 1,813,248
Mariner Energy Inc., senior note, 7.50%, 4/15/13 .................. United States 2,000,000 1,950,000
(c) Petroplus Finance Ltd., senior note, 144A, 6.75%, 5/01/14 ......... Switzerland 2,500,000 2,275,000
(c) SandRidge Energy Inc., senior note, 144A, 8.00%, 6/01/18 .......... United States 900,000 909,000
The Williams Co. Inc., 8.125%, 3/15/12 ............................ United States 2,000,000 2,110,000
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15,052,248
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FOOD, BEVERAGE & TOBACCO 1.5%
Dean Foods Inc., senior note, 7.00%, 6/01/16 ...................... United States 1,200,000 1,047,000
Dole Food Co. Inc., senior note, 8.625%, 5/01/09 .................. United States 100,000 95,750
Reynolds American Inc., senior secured note, 7.25%, 6/01/13 ....... United States 2,000,000 2,078,394
Smithfield Foods Inc., senior note, 8.00%, 10/15/09 ............... United States 2,000,000 2,000,000
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5,221,144
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HEALTH CARE EQUIPMENT & SERVICES 5.1%
Coventry Health Care Inc., senior note, 5.875%, 1/15/12 ........... United States 3,000,000 2,898,666
DaVita Inc.,
senior note, 6.625%, 3/15/13 ................................... United States 900,000 868,500
senior sub. note, 7.25%, 3/15/15 ............................... United States 1,000,000 977,500
FMC Finance III SA, senior note, 6.875%, 7/15/17 .................. Germany 2,000,000 1,975,000
HCA Inc., senior secured note, 9.125%, 11/15/14 ................... United States 3,000,000 3,075,000
Tenet Healthcare Corp., senior note, 6.375%, 12/01/11 ............. United States 2,500,000 2,406,250
(b, d) U.S. Oncology Holdings Inc., senior note, FRN, PIK, 7.949%,
3/15/12 ........................................................ United States 2,107,000 1,675,065
(d) United Surgical Partners International Inc., senior sub. note, PIK,
9.25%, 5/01/17 ................................................. United States 2,000,000 1,850,000
Vanguard Health Holding Co. II LLC, senior sub. note, 9.00%,
10/01/14 ....................................................... United States 2,000,000 1,990,000
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17,715,981
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INSURANCE 0.5%
(c) Metropolitan Life Global Funding I, senior secured note, 144A,
5.125%, 4/10/13 ................................................ United States 1,700,000 1,676,418
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MATERIALS 4.3%
Crown Americas Inc., senior note, 7.625%, 11/15/13 ................ United States 3,000,000 3,007,500
(b) Freeport-McMoRan Copper & Gold Inc., senior note, FRN, 5.883%,
4/01/15 ........................................................ United States 3,000,000 3,033,330
4 | Quarterly Statement of Investments
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
-------------------- ------------------- ------------
CORPORATE BONDS (CONTINUED)
MATERIALS (CONTINUED)
Huntsman International LLC, senior sub. note, 7.875%, 11/15/14 .... United States 1,500,000 $ 1,380,000
(c) Ineos Group Holdings PLC, 144A, 8.50%, 2/15/16 .................... United Kingdom 3,000,000 1,987,500
(c) MacDermid Inc., senior sub. note, 144A, 9.50%, 4/15/17 ............ United States 2,000,000 1,820,000
Nalco Co., senior sub. note, 8.875%, 11/15/13 ..................... United States 2,500,000 2,575,000
Smurfit Kappa Funding PLC, senior sub. note, 7.75%, 4/01/15 ....... Ireland 1,200,000 1,098,000
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14,901,330
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MEDIA 6.3%
CanWest Media Inc., senior sub. note, 8.00%, 9/15/12 .............. Canada 3,000,000 2,685,000
CCH II LLC, senior note, 10.25%, 9/15/10 .......................... United States 4,000,000 3,890,000
CSC Holdings Inc., senior note, 8.125%, 7/15/09 ................... United States 1,000,000 1,010,000
Dex Media Finance/West, senior sub. note, 9.875%, 8/15/13 ......... United States 4,000,000 3,610,000
DIRECTV Holdings LLC, senior note, 8.375%, 3/15/13 ................ United States 1,000,000 1,035,000
Lamar Media Corp., senior sub. note,
7.25%, 1/01/13 ................................................. United States 1,000,000 966,250
C, 6.625%, 8/15/15 ............................................. United States 2,000,000 1,830,000
Liberty Media Corp., senior note, 7.875%, 7/15/09 ................. United States 2,000,000 2,029,760
Quebecor Media Inc., senior note, 7.75%, 3/15/16 .................. Canada 2,500,000 2,337,500
Radio One Inc., senior sub. note, B, 8.875%, 7/01/11 .............. United States 2,000,000 1,705,000
(c) Rainbow National Services LLC, senior sub. deb., 144A, 10.375%,
9/01/14 ........................................................ United States 600,000 640,500
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21,739,010
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RETAILING 0.5%
Michaels Stores Inc., senior note, 10.00%, 11/01/14 ............... United States 2,000,000 1,742,500
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SOFTWARE & SERVICES 1.2%
SunGard Data Systems Inc., senior note, 9.125%, 8/15/13 ........... United States 4,000,000 4,060,000
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TECHNOLOGY HARDWARE & EQUIPMENT 1.1%
(c) Nortel Networks Ltd., senior note, 144A, 10.75%, 7/15/16 .......... Canada 1,300,000 1,293,500
Sanmina-SCI Corp.,
(b, c) senior note, 144A, FRN, 5.526%, 6/15/14 .................... United States 1,000,000 930,000
senior sub. note, 6.75%, 3/01/13 ........................... United States 1,700,000 1,534,250
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3,757,750
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TELECOMMUNICATION SERVICES 3.7%
(c) Digicel Group Ltd., senior note, 144A, 8.875%, 1/15/15 ............ Jamaica 2,000,000 1,907,500
(c) Intelsat Subsidiary Holding Co. Ltd., senior note, 144A, 8.50%,
1/15/13 ........................................................ Bermuda 2,000,000 1,960,000
MetroPCS Wireless Inc., senior note, 9.25%, 11/01/14 .............. United States 2,000,000 1,935,000
Millicom International Cellular SA, senior note, 10.00%,
12/01/13 ....................................................... Luxembourg 2,000,000 2,130,000
Qwest Communications International Inc., senior note, B, 7.50%,
2/15/14 ........................................................ United States 2,000,000 1,910,000
(c) Wind Acquisition Finance SA, senior note, 144A, 10.75%,
12/01/15 ....................................................... Italy 3,000,000 3,165,000
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13,007,500
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Quarterly Statement of Investments | 5
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
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CORPORATE BONDS (CONTINUED)
UTILITIES 2.2%
Dynegy Holdings Inc., senior note, 7.50%, 6/01/15 ................. United States 2,000,000 $ 1,855,000
NRG Energy Inc., senior note, 7.25%, 2/01/14 ...................... United States 2,800,000 2,681,000
PNM Resources Inc., senior note, 9.25%, 5/15/15 ................... United States 1,000,000 1,037,500
(c) Texas Competitive Electric Holdings Co. LLC, senior note, 144A,
10.25%, 11/01/15 ............................................... United States 2,000,000 1,970,000
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7,543,500
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TOTAL CORPORATE BONDS (COST $169,005,093) ......................... 159,941,967
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MORTGAGE-BACKED SECURITIES 36.4%
(b) FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC) ADJUSTABLE RATE 0.3%
FHLMC, 4.452%, 5/01/34 ............................................ United States 1,035,678 1,041,975
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FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC) FIXED RATE 11.9%
(e) FHLMC Gold 15 Year, 4.50%, 7/01/19 ................................ United States 2,475,000 2,391,469
(e) FHLMC Gold 15 Year, 5.00%, 7/01/18 ................................ United States 4,582,000 4,525,440
FHLMC Gold 15 Year, 5.50%, 7/01/19 ................................ United States 248,290 251,552
(e) FHLMC Gold 15 Year, 6.00%, 7/01/18 ................................ United States 1,166,000 1,193,511
(e) FHLMC Gold 30 Year, 5.50%, 7/15/37 ................................ United States 8,722,000 8,592,531
FHLMC Gold 30 Year, 6.00%, 7/01/28 - 11/01/33 ..................... United States 3,661,090 3,725,738
(e) FHLMC Gold 30 Year, 6.00%, 7/01/32 ................................ United States 14,585,000 14,733,125
(e) FHLMC Gold 30 Year, 6.50%, 7/01/29 ................................ United States 2,711,000 2,794,447
FHLMC Gold 30 Year, 7.00%, 9/01/27 ................................ United States 831,331 881,351
FHLMC Gold 30 Year, 8.00%, 1/01/31 ................................ United States 130,109 140,979
FHLMC Gold 30 Year, 8.50%, 7/01/31 ................................ United States 1,773,230 1,964,999
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41,195,142
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(b) FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) ADJUSTABLE RATE 0.6%
FNMA, 4.586%, 7/01/34 ............................................. United States 1,909,644 1,932,377
FNMA, 5.992%, 6/01/32 ............................................. United States 104,693 106,789
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2,039,166
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FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) FIXED RATE 21.0%
(e) FNMA 15 Year, 5.00%, 7/01/18 ...................................... United States 1,420,000 1,404,247
(e) FNMA 15 Year, 5.50%, 7/01/17 ...................................... United States 7,885,000 7,937,979
(e) FNMA 15 Year, 6.00%, 7/01/17 ...................................... United States 8,041,000 8,243,279
FNMA 15 Year, 6.50%, 7/01/20 ...................................... United States 403,332 412,425
FNMA 15 Year, 7.00%, 9/01/18 ...................................... United States 297,494 314,749
(e) FNMA 30 Year, 5.00%, 7/15/37 ...................................... United States 5,864,000 5,621,195
(e) FNMA 30 Year, 5.50%, 7/01/33 ...................................... United States 12,298,000 12,123,135
FNMA 30 Year, 6.00%, 4/01/33 ...................................... United States 1,009,174 1,025,080
(e) FNMA 30 Year, 6.00%, 7/15/37 ...................................... United States 17,910,000 18,069,507
(e) FNMA 30 Year, 6.50%, 7/01/32 ...................................... United States 15,123,000 15,569,597
FNMA 30 Year, 6.50%, 8/01/32 ...................................... United States 1,319,622 1,370,114
FNMA 30 Year, 8.00%, 10/01/29 ..................................... United States 209,736 227,850
FNMA 30 Year, 8.50%, 8/01/26 ...................................... United States 479,715 526,268
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72,845,425
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6 | Quarterly Statement of Investments
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
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MORTGAGE-BACKED SECURITIES (CONTINUED)
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) FIXED RATE 2.6%
(e) GNMA I SF 30 Year, 5.50%, 7/01/33 ................................. United States 5,910,000 $ 5,881,372
GNMA I SF 30 Year, 6.50%, 9/15/32 - 6/15/31 ....................... United States 2,234,900 2,320,790
GNMA II SF 30 Year, 7.00%, 1/20/24 - 1/20/29 ...................... United States 206,754 220,156
GNMA II SF 30 Year, 8.00%, 1/20/28 - 2/20/32 ...................... United States 427,746 467,067
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8,889,385
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TOTAL MORTGAGE-BACKED SECURITIES
(Cost $125,921,117) ............................................ 126,011,093
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ASSET-BACKED SECURITIES AND COMMERCIAL
MORTGAGE-BACKED SECURITIES 7.5%
BANKS 3.9%
Banc of America Commercial Mortgage Inc., 2005-3, A2, 4.501%,
7/10/43 ........................................................ United States 5,000,000 4,949,277
(b) Citigroup/Deutsche Bank Commercial Mortgage Trust, 2005-CD1,
A3, FRN, 5.225%, 7/15/44 ....................................... United States 3,000,000 2,956,807
A4, FRN, 5.225%, 7/15/44 ....................................... United States 400,000 386,384
Greenwich Capital Commercial Funding Corp., 2004-GG1, A7,
5.317%, 6/10/36 ................................................ United States 1,605,000 1,579,531
GS Mortgage Securities Corp. II, 2003-C1, A3, 4.608%, 1/10/40 ..... United States 400,000 383,919
LB-UBS Commercial Mortgage Trust,
(b) 2002-C2, A4, FRN, 5.594%, 6/15/31 ............................. United States 2,000,000 2,010,254
2005-C1, A2, 4.31%, 2/15/30 ................................... United States 1,395,000 1,381,900
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13,648,072
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COMMERCIAL SERVICES & SUPPLIES 0.0%(f)
(b) Merrill Lynch Mortgage Investors Trust, 2003-OPT1, B2, FRN,
5.233%, 7/25/34 ................................................ United States 275,237 47,306
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DIVERSIFIED FINANCIALS 3.6%
(b) Argent Securities Inc., 2003-W5, M4, FRN, 6.233%, 10/25/33 ........ United States 1,421,498 907,717
(b) Chase Credit Card Master Trust, 2003-6, A, FRN, 2.581%,
2/15/11 ........................................................ United States 1,700,000 1,699,147
(b) Chase Funding Mortgage Loan Asset-Backed Certificates, 2004-2,
2A2, FRN, 2.733%, 2/25/35 ...................................... United States 1,922,951 1,712,569
(b) Chase Issuance Trust, 2005-A9, A9, FRN, 2.491%, 11/15/11 .......... United States 1,000,000 995,202
Citigroup Commercial Mortgage Trust, 2008-C7, A4, 6.095%,
12/10/49 ....................................................... United States 700,000 685,161
(b) GSAMP Trust, 2003-AHL, B1, FRN, 6.483%, 10/25/33 .................. United States 1,333,924 639,762
(b) JPMorgan Chase Commercial Mortgage Securities Corp., 2005-LD5,
A4, FRN, 5.179%, 12/15/44 ...................................... United States 1,000,000 964,882
(b) MBNA Master Credit Card Trust, 1997-B, A, FRN, 2.631%,
8/15/14 ........................................................ United States 3,000,000 2,942,549
(b) Morgan Stanley ABS Capital,
2003-HE3, B1, FRN, 5.783%, 10/25/33 ............................ United States 824,961 371,374
2003-NC10, B1, FRN, 7.433%, 10/25/33 ........................... United States 605,756 159,028
(b) Morgan Stanley Dean Witter Capital I, 2003-NC3, B1, FRN, 6.983%,
3/25/33 ........................................................ United States 683,608 124,933
Quarterly Statement of Investments | 7
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
-------------------- ------------------- ------------
ASSET-BACKED SECURITIES AND COMMERCIAL
MORTGAGE-BACKED SECURITIES (CONTINUED)
DIVERSIFIED FINANCIALS (CONTINUED)
(b) New Century Home Equity Loan Trust, 2003-2, M3, FRN, 8.033%,
1/25/33 ........................................................ United States 903,015 $ 128,481
(b) Option One Mortgage Loan Trust, 2003-6, M5, FRN, 5.783%,
11/25/33 ....................................................... United States 999,439 402,652
(b) Specialty Underwriting & Residential Finance, 2003-BC4, B2, FRN,
4.983%, 11/25/34 ............................................... United States 465,742 175,599
(b) Structured Asset Investment Loan Trust,
2003-BC2, M3, FRN, 5.733%, 4/25/33 ............................. United States 13,987 1,967
2003-BC13, M4, FRN, 6.608%, 11/25/33 ........................... United States 586,583 385,309
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12,296,332
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TOTAL ASSET-BACKED SECURITIES AND COMMERCIAL
MORTGAGE-BACKED SECURITIES (COST $30,976,663) .................. 25,991,710
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(b) SENIOR FLOATING RATE INTERESTS 57.1%
AUTOMOBILES & COMPONENTS 2.6%
Allison Transmission, Term Loan B, 5.23% - 5.47%, 8/07/14 ......... United States 2,481,250 2,220,719
Cooper Standard Automotive Inc., Term Loan D, 5.313%,
12/23/11 ....................................................... United States 877,500 844,594
Federal Mogul Corp., Term Loan B, 4.40% - 4.42%, 12/27/14 ......... United States 2,750,000 2,310,000
Key Safety Systems Inc., Term Loan B, 4.74% - 5.07%, 3/10/14 ...... United States 1,994,949 1,760,543
TRW Automotive Inc., Tranche B-1 Term Loan, 4.188% - 4.25%,
2/09/14 ........................................................ United States 1,908,091 1,852,040
------------
8,987,896
------------
CAPITAL GOODS 4.3%
Goodman Global Holdings Co. Inc., Term Loan B, 7.50%,
2/13/14 ........................................................ United States 3,300,000 3,264,937
GPS CCMP Merger Corp. (Generac), Term Loan B, 5.184%,
11/12/13 ....................................................... United States 1,312,646 1,101,802
Oshkosh Truck Corp.,
Term Loan A, 3.95% - 4.18%, 12/06/11 ........................... United States 775,000 726,563
Term Loan B, 4.20% - 4.43%, 12/06/13 ........................... United States 2,834,750 2,669,391
RBS Global Inc. (Rexnord Corp.), Term Loan, 4.983% - 5.318%,
7/22/13 ........................................................ United States 3,000,000 2,838,750
Spirit Aerosystems Inc. (Onex Wind Finance LP), Term Loan B,
4.568%, 12/31/11 ............................................... United States 1,266,664 1,232,622
TriMas Co. LLC,
Term Loan B, 5.157%, 8/02/13 ................................... United States 1,588,628 1,505,225
Tranche B-1 L/C, 4.69%, 8/02/11 ................................ United States 373,136 353,547
URS Corp., Term Loan B, 5.308%, 5/15/13 ........................... United States 1,353,512 1,356,049
------------
15,048,886
------------
COMMERCIAL SERVICES & SUPPLIES 3.9%
Acco Brands Corp., Term Loan B, 4.428% - 4.553%, 8/17/12 .......... United States 702,330 684,772
Affinion Group Inc., Term Loan B, 4.983% - 5.178%, 10/17/12 ....... United States 4,000,000 3,873,332
8 | Quarterly Statement of Investments
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
-------------------- ------------------- ------------
(b) SENIOR FLOATING RATE INTERESTS (CONTINUED)
COMMERCIAL SERVICES & SUPPLIES (CONTINUED)
(e) ARAMARK Corp.,
Synthetic L/C, 2.44%, 1/26/14 .................................. United States 271,357 $ 256,587
Term Loan B, 4.676%, 1/26/14 ................................... United States 4,271,345 4,038,847
Nielsen Finance LLC (VNU Inc.), Dollar Term Loan, 4.734%,
8/09/13 ........................................................ United States 4,036,441 3,771,190
West Corp., Term Loan B-2, 4.858% - 5.295%, 10/24/13 .............. United States 870,297 799,896
------------
13,424,624
------------
CONSUMER DURABLES & APPAREL 1.2%
Jarden Corp., Term Loan B2, 4.551%, 1/24/12 ....................... United States 2,912,264 2,784,043
Jostens IH Corp. (Visant Holding Corp.), Term Loan C, 5.171%,
12/21/11 ....................................................... United States 1,350,000 1,331,438
------------
4,115,481
------------
CONSUMER SERVICES 5.3%
Arby's Restaurant Holdings LLC, Term Loan B, 4.733% - 5.149%,
7/25/12 ........................................................ United States 1,524,172 1,451,774
Education Management LLC, Term Loan C, 4.563%, 6/01/13 ............ United States 3,856,609 3,578,613
Laureate Education Inc., Closing Date Term Loan, 5.733%,
8/17/14 ........................................................ United States 2,339,855 2,179,965
OSI Restaurant Partners LLC (Outback),
Pre-Funded Revolving Credit, 2.596%, 6/14/13 ................... United States 296,204 255,031
Term Loan B, 5.125%, 6/14/14 ................................... United States 3,712,764 3,196,690
Penn National Gaming Inc., Term Loan B, 4.20% - 4.66%,
10/03/12 ....................................................... United States 4,225,055 4,104,759
VML U.S. Finance LLC (Venetian Macau),
Delayed Draw, 5.06%, 5/25/12 ................................... Macau 1,166,667 1,136,224
New Project Term Loans, 5.06%, 5/25/13 ......................... Macau 977,778 952,264
Term Loan B, 5.06%, 5/24/13 .................................... Macau 1,703,704 1,659,247
------------
18,514,567
------------
DIVERSIFIED FINANCIALS 0.5%
Nuveen Investments Inc., Term Loan B, 5.483%, 11/13/14 ............ United States 1,895,250 1,775,849
------------
ENERGY 0.4%
Dresser Inc., Term Loan B, 4.983% - 5.469%, 5/04/14 ............... United States 1,559,077 1,503,730
------------
FOOD, BEVERAGE & TOBACCO 0.5%
Dean Foods Co., Term Loan B, 3.99% - 4.31%, 4/02/14 ............... United States 1,756,707 1,665,689
------------
HEALTH CARE EQUIPMENT & SERVICES 5.5%
Bausch and Lomb Inc.,
Delayed Draw Term Loan, 6.051%, 4/28/15 ........................ United States 84,000 82,504
Parent Term Loan B, 6.051%, 4/28/15 ............................ United States 557,200 547,275
Community Health Systems Inc., Term Loan, 4.733% - 4.899%,
7/25/14 ........................................................ United States 2,448,964 2,311,798
DaVita Inc., Term Loan B-1, 3.99% - 4.22%, 10/05/12 ............... United States 3,717,434 3,579,658
DJO Finance LLC, Term Loan B, 5.483% - 5.801%, 5/20/14 ............ United States 2,736,250 2,667,844
Quarterly Statement of Investments | 9
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
-------------------- ------------------- ------------
(b) SENIOR FLOATING RATE INTERESTS (CONTINUED)
HEALTH CARE EQUIPMENT & SERVICES (CONTINUED)
Fresenius Medical Care Holdings Inc., Term Loan B,
4.019% - 4.184%, 3/31/13 ....................................... United States 1,504,464 $ 1,464,032
HCA Inc., Term Loan B-1, 5.051%, 11/18/13 ......................... United States 4,090,769 3,847,691
Health Management Associates Inc., Term Loan B, 4.551%,
2/28/14 ........................................................ United States 1,213,230 1,130,730
Iasis Healthcare LLC,
Delayed Draw Term Loan, 4.483%, 3/14/14 ........................ United States 480,176 456,368
Initial Term Loan, 4.483%, 3/14/14 ............................. United States 1,387,750 1,318,941
Synthetic L/C, 2.609%, 3/14/14 ................................. United States 128,047 121,698
Vanguard Health Holding Co. II LLC, Replacement Term Loan,
5.051%, 9/23/11 ................................................ United States 1,584,060 1,532,578
------------
19,061,117
------------
HOUSEHOLD & PERSONAL PRODUCTS 0.0%(f)
Central Garden & Pet Co., Term Loan B, 3.99%, 9/30/12 ............. United States 179,284 159,114
------------
INSURANCE 0.6%
Conseco Inc., Term Loan, 4.483%, 10/10/13 ......................... United States 2,174,902 1,897,602
------------
MATERIALS 7.7%
Anchor Glass Container Corp., Term Loan, 7.75%, 6/20/14 ........... United States 1,200,000 1,183,500
Celanese U.S. Holdings LLC, Dollar Term Loan, 4.188%, 4/02/14 ..... United States 3,989,924 3,803,519
Georgia-Pacific Corp.,
Additional Term Loan, 4.446% - 4.551%, 12/20/12 ................ United States 1,673,978 1,583,216
Term Loan B, 4.399% - 4.551%, 12/20/12 ......................... United States 2,437,500 2,305,341
Graphic Packaging International Inc., Term Loan B, 4.698% - 4.92%,
5/16/14 ........................................................ United States 1,500,000 1,422,054
Hexion Specialty Chemicals BV, Term Loan C-2, 5.063%, 5/03/13 ..... Netherlands 701,490 633,095
Hexion Specialty Chemicals Inc., Term Loan C-1, 4.938%, 5/03/13 ... United States 3,237,509 2,921,852
Huntsman International LLC, Term Loan B, 4.233%, 4/19/14 .......... United States 2,711,000 2,521,230
Ineos U.S. Finance LLC,
Term Loan B2, 4.885%, 12/16/13 ................................. United States 392,000 355,250
Term Loan C2, 5.385%, 12/23/14 ................................. United States 392,000 355,250
Lyondell Chemical Co.,
(e) Tranche B-1, 7.75%, 12/20/14 .................................. United States 750,000 663,758
Tranche B-2, 7.00%, 12/20/14 .................................. United States 2,000,000 1,750,000
NewPage Corp., Term Loan, 6.56%, 12/22/14 ......................... United States 842,240 838,398
Oxbow Carbon LLC,
Delayed Draw Term Loan, 4.801%, 5/08/14 ........................ United States 239,195 226,338
Term Loan B, 4.471% - 4.801%, 5/08/14 .......................... United States 2,667,360 2,523,989
(e) PQ Corp., Term Loan, 7.25%, 7/30/14 ............................... United States 1,800,000 1,701,000
Verso Paper Holdings LLC, Term Loan B, 4.551%, 8/01/13 ............ United States 1,904,298 1,821,779
------------
26,609,569
------------
10 | Quarterly Statement of Investments
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
-------------------- ------------------- ------------
(b) SENIOR FLOATING RATE INTERESTS (CONTINUED)
MEDIA 10.7%
Charter Communications Operating LLC, Term Loan, 4.90%,
3/06/14 ........................................................ United States 2,356,654 $ 2,074,659
Citadel Broadcasting Corp., Term Loan B, 4.115% - 4.435%,
6/12/14 ........................................................ United States 4,000,000 3,475,000
CSC Holdings Inc. (Cablevision), Incremental Term Loan, 4.225%,
3/29/13 ........................................................ United States 782,000 744,694
Dex Media East LLC, Term Loan B, 4.49% - 4.81%, 10/24/14 .......... United States 1,750,000 1,583,020
Dex Media West LLC, Term Loan B, 7.00%, 10/24/14 .................. United States 1,600,000 1,562,501
Entravision Communications Corp., Term Loan B, 4.20%,
3/29/13 ........................................................ United States 1,892,883 1,780,493
(e) Gray Television Inc., Term Loan B, 4.19%, 12/31/14 ................ United States 1,703,537 1,533,183
Idearc Inc., Term Loan B, 4.49% - 4.80%, 11/17/14 ................. United States 4,043,450 3,244,868
Insight Midwest Holdings, Term Loan B, 4.69%, 4/02/14 ............. United States 2,160,000 2,081,706
MCC Iowa,
Term Loan Tranche D-1, 4.20% - 4.24%, 1/31/15 .................. United States 1,499,788 1,380,430
Term Loan Tranche D-2, 4.20% - 4.24%, 1/31/15 .................. United States 58,115 53,490
Term Loan E, 6.50%, 1/03/16 .................................... United States 900,000 896,812
Mission Broadcasting Inc., Term Loan B, 4.551%, 10/01/12 .......... United States 887,287 829,613
Nexstar Broadcasting Inc., Term Loan B, 4.649%, 10/01/12 .......... United States 839,818 785,230
Regal Cinemas Corp., Term Loan, 4.301%, 10/27/13 .................. United States 3,788,920 3,598,421
Tribune Co.,
Term Loan B, 5.482%, 5/16/14 ................................... United States 3,960,000 2,994,750
Term Loan X, 5.478%, 5/16/09 ................................... United States 1,000,000 960,417
Univision Communications Inc., Initial Term Loan, 4.733% - 5.149%,
9/29/14 ........................................................ United States 5,000,000 4,128,125
UPC Financing Partnership, Term Loan N, 4.209%, 12/31/14 .......... Netherlands 3,570,000 3,379,898
------------
37,087,310
------------
PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES 0.6%
Mylan Inc., Term Loan B, 5.75%, 10/02/14 .......................... United States 2,189,000 2,171,214
------------
REAL ESTATE 0.5%
CB Richard Ellis Services Inc., Term Loan B, 3.982%, 12/20/13 ..... United States 1,725,951 1,632,102
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.7%
Marvell Technology Group Ltd., Term Loan, 4.983%, 11/08/09 ........ Bermuda 2,342,000 2,271,740
------------
SOFTWARE & SERVICES 4.3%
Affiliated Computer Services Inc.,
Additional Term Loan, 4.448% - 4.483%, 3/20/13 ................. United States 1,764,000 1,712,458
Term Loan B, 4.483%, 3/20/13 ................................... United States 488,750 474,469
Dealer Computer Services Inc. (Reynolds & Reynolds), First Lien
Term Loan, 4.801%, 10/26/12 ....................................... United States 3,388,271 3,233,681
Emdeon Business Services LLC, First Lien Term Loan, 4.81%,
11/16/13 ....................................................... United States 2,599,478 2,482,502
First Data Corp., Term Loan B-2, 5.231% - 5.552%, 9/24/14 ......... United States 2,977,500 2,741,905
Lender Processing Services Inc., Term Loan B, 6.50%, 7/02/14 ...... United States 1,000,000 1,001,250
Quarterly Statement of Investments | 11
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
-------------------- ------------------- ------------
(b) SENIOR FLOATING RATE INTERESTS (CONTINUED)
SOFTWARE & SERVICES (CONTINUED)
Macrovision Solutions Corp., Term Loan B, 7.25%, 5/02/13 .......... United States 1,250,000 $ 1,251,563
SunGard Data Systems Inc., New U.S. Term Loan, 4.508%,
2/28/14 ........................................................ United States 2,014,371 1,912,142
------------
14,809,970
------------
TECHNOLOGY HARDWARE & EQUIPMENT 1.9%
CommScope Inc., Term Loan B, 4.983% - 5.301%, 12/27/14 ........... United States 2,569,376 2,476,236
Flextronics International USA Inc.,
Term Loan A, 4.934% - 4.963%, 10/01/14 ......................... United States 1,854,964 1,698,838
Term Loan A-1, 4.963%, 10/01/14 ................................ United States 531,696 486,945
Sensus Metering Systems Inc.,
Term Loan B1, 4.449% - 4.818%, 12/17/10 ........................ United States 2,084,295 1,980,080
Term Loan B2, 4.483%, 12/17/10 ................................. Luxembourg 53,716 51,030
------------
6,693,129
------------
TELECOMMUNICATION SERVICES 3.6%
Alltel Communications Inc., Term Loan B-3, 5.232%, 5/18/15 ........ United States 2,487,500 2,475,063
GCI Holdings Inc., Add-On Term Loan, 6.74%, 8/31/12 ............... United States 2,400,000 2,361,000
Intelsat Corp. (Panamsat),
Tranche B-2-A, 5.184%, 1/03/14 ................................. United States 1,626,449 1,549,193
Tranche B-2-B, 5.184%, 1/03/14 ................................. United States 1,625,960 1,548,727
Tranche B-2-C, 5.184%, 1/03/14 ................................. United States 1,625,960 1,548,727
Intelsat Subsidiary Holding Co. Ltd., Term Loan B, 5.184%,
6/30/13 ........................................................ United States 873,476 852,185
Windstream Corp., Tranche B-1, 4.22%, 7/17/13 ..................... United States 2,028,079 1,968,684
------------
12,303,579
------------
UTILITIES 2.3%
Dynegy Holdings Inc.,
Term L/C Facility, 3.983%, 4/02/13 ............................. United States 2,923,913 2,758,712
Term Loan B, 3.983%, 4/02/13 ................................... United States 75,516 71,250
NRG Energy Inc.,
Credit Link, 2.701%, 2/01/13 ................................... United States 819,782 782,949
Term Loan, 4.301%, 2/01/13 ..................................... United States 1,673,579 1,598,383
Texas Competitive Electric Holdings Co. LLC, Term Loan B-2,
5.948% - 6.478%, 10/10/14 ...................................... United States 2,985,000 2,769,208
------------
7,980,502
------------
TOTAL SENIOR FLOATING RATE INTERESTS
(COST $206,446,349) ............................................ 197,713,670
------------
FOREIGN GOVERNMENT AND AGENCY SECURITIES 5.1%
European Investment Bank, senior note, 4.50%, 5/15/13 ............. Supranational(g) 1,680,000 NOK 309,908
(b, h) Government of Argentina, senior bond, FRN, 3.092%, 8/03/12 ........ Argentina 3,950,000 2,087,015
Government of Malaysia,
6.45%, 7/01/08 ................................................. Malaysia 1,400,000 MYR 428,462
7.00%, 3/15/09 ................................................. Malaysia 1,500,000 MYR 469,621
3.756%, 4/28/11 ................................................ Malaysia 7,510,000 MYR 2,273,711
12 | Quarterly Statement of Investments
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
COUNTRY/ORGANIZATION PRINCIPAL AMOUNT(a) VALUE
-------------------- ------------------- ------------
FOREIGN GOVERNMENT AND AGENCY SECURITIES (CONTINUED)
Government of Norway,
5.50%, 5/15/09 ................................................. Norway 3,360,000 NOK $ 655,001
6.00%, 5/16/11 ................................................. Norway 3,850,000 NOK 763,422
Government of Poland, 6.00%, 5/24/09 .............................. Poland 5,645,000 PLN 2,628,660
Government of Singapore, 5.625%, 7/01/08 .......................... Singapore 2,150,000 SGD 1,580,359
Government of Sweden,
5.00%, 1/28/09 ................................................. Sweden 2,800,000 SEK 466,221
4.00%, 12/01/09 ................................................ Sweden 15,300,000 SEK 2,517,151
Korea Treasury Bond, 5.25%, 9/10/12 ............................... South Korea 3,600,000,000 KRW 3,353,124
------------
TOTAL FOREIGN GOVERNMENT AND AGENCY SECURITIES
(COST $17,198,215) ............................................. 17,532,655
------------
TOTAL INVESTMENTS BEFORE SHORT TERM INVESTMENTS
(COST $549,547,437) ............................................ 527,191,095
------------
SHORT TERM INVESTMENTS 2.5%
FOREIGN GOVERNMENT AND AGENCY SECURITIES 0.5%
(i) Egypt Treasury Bills, 7/01/08 - 12/16/08 .......................... Egypt 9,150,000 EGP 1,663,012
(i) Government of Sweden, Strip, 9/17/08 .............................. Sweden 1,500,000 SEK 246,821
(i) Norway Treasury Bill, 9/17/08 ..................................... Norway 240,000 NOK 46,566
------------
TOTAL FOREIGN GOVERNMENT AND AGENCY SECURITIES
(COST $1,869,746) .............................................. 1,956,399
------------
TOTAL INVESTMENTS BEFORE MONEY MARKET FUND
(COST $551,417,183) ............................................ 529,147,494
------------
SHARES
-------------------
MONEY MARKET FUND (COST $6,950,187) 2.0%
(j) Franklin Institutional Fiduciary Trust Money Market Portfolio,
2.17% .......................................................... United States 6,950,187 6,950,187
------------
TOTAL INVESTMENTS (COST $558,367,370) 154.7% ...................... 536,097,681
PREFERRED SHARES (26.0)% .......................................... (90,000,000)
NET UNREALIZED LOSS ON FORWARD EXCHANGE
CONTRACTS (0.0)%(f) ............................................ (75,601)
OTHER ASSETS, LESS LIABILITIES (28.7)% ............................ (99,501,075)
------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%. .................... $346,521,005
============
CURRENCY ABBREVIATIONS
EGP - Egyptian Pound
KRW - South Korean Won
MYR - Malaysian Ringgit
NOK - Norwegian Krone
PLN - Polish Zloty
SEK - Swedish Krona
SGD - Singapore Dollar
Quarterly Statement of Investments | 13
Franklin Templeton
Limited Duration Income Trust
STATEMENT OF INVESTMENTS, JUNE 30, 2008 (UNAUDITED) (CONTINUED)
SELECTED PORTFOLIO ABBREVIATIONS
FHLMC - Federal Home Loan Mortgage Corp.
FNMA - Federal National Mortgage Association
FRN - Floating Rate Note
GNMA - Government National Mortgage Association
L/C - Letter of Credit
PIK - Payment-In-Kind
REIT - Real Estate Investment Trust
SF - Single Family
(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) 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 June 30, 2008, the
aggregate value of these securities was $22,501,242, representing 6.49% of
net assets.
(d) Income may be received in additional securities and/or cash.
(e) A portion or all of the security purchased on a delayed delivery or
to-be-announced basis.
(f) Rounds to less than 0.1% of net assets.
(g) A supranational organization is an entity formed by two or more central
governments through international treaties.
(h) The principal amount is stated in original face, and scheduled paydowns are
reflected in the market price on ex-date.
(i) The security is traded on a discount basis with no stated coupon rate.
(j) The Franklin 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.
14 | Quarterly Statement of Investments
Franklin Templeton
Limited Duration Income Trust
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED)
1. ORGANIZATION
Franklin Templeton Limited Duration Income Trust (Fund) is registered under the
Investment Company Act of 1940, as amended, (1940 Act) as a diversified,
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 securities, government securities, mortgage pass-through
securities, other mortgage-backed securities, and asset-backed 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.
Senior secured corporate loans with floating or variable interest rates
generally trade in the over-the-counter market rather than on a securities
exchange. The Fund may utilize independent pricing services, quotations from
loan dealers and other financial institutions, 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 use independent market quotations
from loan dealers or financial institutions and may incorporate valuation
methodologies that consider multiple bond characteristics such as dealer quotes,
issuer type, coupon, maturity, weighted average maturity, interest rate spreads
and yield curves, cash flow and credit risk/quality analysis, 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
Quarterly Statement of Investments | 15
Franklin Templeton
Limited Duration Income Trust
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
2. SECURITY VALUATION (CONTINUED)
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. INCOME TAXES
At June 30, 2008, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments ............................................ $560,229,053
============
Unrealized appreciation ........................................ $ 2,578,866
Unrealized depreciation ........................................ (26,710,238)
------------
Net unrealized appreciation (depreciation) ..................... $(24,131,372)
============
4. FORWARD EXCHANGE CONTRACTS
At June 30, 2008, the Fund had the following forward exchange contracts
outstanding:
CONTRACT SETTLEMENT UNREALIZED UNREALIZED
AMOUNT(a) DATE GAIN (LOSS)
--------------- ---------- ---------- ----------
CONTRACTS TO SELL
1,905,000,000 South Korean Won ....... 2,195,257 CHF 2/13/09 $338,545 $ --
1,980,000 EURO ................... 2,964,515 3/04/09 -- (113,584)
990,000 EURO ................... 150,663,150 JPY 3/05/09 -- (98,965)
990,000 EURO ................... 152,260,020 JPY 3/09/09 -- (83,052)
975,000 EURO ................... 1,487,509 3/16/09 -- (27,306)
320,000 EURO ................... 49,532,800 JPY 4/06/09 -- (22,320)
990,000,000 South Korean Won ....... 1,002,096 CHF 4/24/09 40,308 --
1,140,000 EURO ................... 1,753,685 5/29/09 -- (11,136)
311,100,000 South Korean Won ....... 313,640 CHF 6/02/09 11,488 --
1,140,000 EURO ................... 1,736,961 6/03/09 -- (27,435)
391,937 EURO ................... 1,955,883 MYR 6/12/09 -- (6,486)
1,934,000 EURO ................... 2,957,183 6/15/09 -- (34,374)
514,044 EURO ................... 2,552,999 MYR 6/15/09 -- (12,140)
1,019,036 EURO ................... 5,044,228 MYR 6/16/09 -- (29,144)
-------- ---------
Unrealized gain (loss) on forward exchange contracts ...................... 390,341 (465,942)
======== =========
Net unrealized gain (loss) on forward exchange contracts ............... $ (75,601)
=========
(a) In U.S. dollars unless otherwise indicated.
CURRENCY ABBREVIATIONS
CHF - Swiss Franc
JPY - Japanese Yen
MYR - Malaysian Ringgit
16 | Quarterly Statement of Investments
Franklin Templeton
Limited Duration Income Trust
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
5. FAIR VALUE MEASUREMENTS
The Fund adopted Financial Accounting Standards Board (FASB) issued FASB
Statement No. 157, "Fair Value Measurement" (SFAS 157), on April 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 June 30, 2008, in valuing
the Fund's assets and liabilities carried at fair value:
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
---------- ------------ ------- ------------
ASSETS:
Investments in Securities $6,950,187 $529,147,494 $ -- $536,097,681
Other Financial Instruments(a) -- 390,341 -- 390,341
LIABILITIES:
Other Financial Instruments(a) -- 485,694 -- 485,694
(a) Other financial instruments may include net unrealized appreciation
(depreciation) of futures, forward exchange contracts, swaps, and unfunded
loan commitments.
Quarterly Statement of Investments | 17
Franklin Templeton
Limited Duration Income Trust
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
6. NEW ACCOUNTING PRONOUNCEMENT
In March 2008, FASB issued FASB Statement No. 161, "Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133"
(SFAS 161), which expands disclosures about derivative investments and hedging
activities. SFAS 161 is effective for fiscal years beginning after November 15,
2008, and interim periods within those fiscal years. The Fund is currently
evaluating the impact, if any, of applying the various provisions of SFAS 161.
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.
18 | Quarterly Statement of Investments
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 Galen G. Vetter, Chief Executive Officer - Finance and Administration,
and Laura F. Fergerson, 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.
Franklin Templeton Limited Duration Income Trust
By /s/GALEN G. VETTER
----------------------------------
Galen G. Vetter
Chief Executive Officer -
Finance and Administration
Date August 27, 2008
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/GALEN G. VETTER
----------------------------------
Galen G. Vetter
Chief Executive Officer -
Finance and Administration
Date August 27, 2008
By /s/LAURA F. FERGERSON
-----------------------------------
Laura F. Fergerson
Chief Financial Officer and
Chief Accounting Officer
Date August 27, 2008