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
(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: 3/31
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Date of reporting period: 12/31/05
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Item 1. Schedule of Investments.
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
QUARTERLY STATEMENT OF INVESTMENTS
DECEMBER 31, 2005
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CONTENTS
Statement of Investments .................................................. 3
Notes to Statement of Investments ......................................... 12
[LOGO](R)
FRANKLIN TEMPLETON
INVESTMENTS
FRANKLIN o Templeton o Mutual Series
Quarterly Statement of Investments | 1
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FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED)
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COUNTRY PRINCIPAL AMOUNT(C) VALUE
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BONDS 52.1%
COMMERCIAL SERVICES 0.9%
JohnsonDiversey Holdings Inc., senior disc. note, zero cpn. to
5/17/07, 10.67% thereafter, 5/15/13 ................................ United States 4,300,000 $ 3,440,000
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COMMUNICATIONS 7.5%
Dobson Cellular Systems Inc., senior secured note, 9.875%,
11/01/12 ........................................................... United States 4,000,000 4,430,000
Inmarsat Finance PLC, senior note, 7.625%, 6/30/12 .................. United Kingdom 1,924,000 1,993,745
(a),(b)Intelsat Bermuda Ltd., senior note, 144A, FRN, 8.695%, 1/15/12 ...... Bermuda 4,000,000 4,085,000
MCI Inc., senior note, 7.688%, 5/01/09 .............................. United States 2,000,000 2,070,000
Millicom International Cellular SA, senior note, 10.00%, 12/01/13 ... Luxembourg 4,000,000 4,150,000
(b)Qwest Communications International Inc., senior note, 144A, 7.50%,
2/15/14 ............................................................ United States 3,500,000 3,613,750
(a)Rogers Wireless Communications Inc., senior secured note, FRN,
7.616%, 12/15/10 ................................................... Canada 3,000,000 3,112,500
Time Warner Telecom Holdings Inc., senior note, 9.25%, 2/15/14 ...... United States 2,000,000 2,120,000
(b)Wind Acquisition Finance SA, senior note, 144A, 10.75%, 12/01/15 .... Italy 2,700,000 2,801,250
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28,376,245
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CONSUMER DURABLES 2.6%
D.R. Horton Inc., senior note, 8.00%, 2/01/09 ....................... United States 4,000,000 4,282,976
General Motors Acceptance Corp.,
6.875%, 8/28/12 ................................................... United States 2,000,000 1,804,988
7.25%, 3/02/11 .................................................... United States 2,000,000 1,840,192
Simmons Co., senior sub. note, 7.875%, 1/15/14 ...................... United States 2,000,000 1,860,000
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9,788,156
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CONSUMER NON-DURABLES 1.8%
Smithfield Foods Inc., senior note, 8.00%, 10/15/09 ................. United States 4,000,000 4,240,000
Spectrum Brands Inc., senior sub. note, 8.50%, 10/01/13 ............. United States 3,000,000 2,632,500
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6,872,500
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CONSUMER SERVICES 13.5%
Advanstar Communications Inc., senior secured note, 10.75%,
8/15/10 ............................................................ United States 2,000,000 2,202,500
(a)AMC Entertainment Inc., senior note, FRN, 8.59%, 8/15/10 ............ United States 4,000,000 4,135,000
Boyd Gaming Corp., senior sub. note, 8.75%, 4/15/12 ................. United States 2,000,000 2,155,000
CCH II LLC, senior note, 10.25%, 9/15/10 ............................ United States 4,000,000 4,000,000
Clear Channel Communications Inc., senior note, 7.65%, 9/15/10 ...... United States 4,000,000 4,285,932
CSC Holdings Inc., senior note, 8.125%, 7/15/09 ..................... United States 4,000,000 4,060,000
Dex Media West LLC, senior sub. note, 9.875%, 8/15/13 ............... United States 4,000,000 4,460,000
DIRECTV Holdings LLC, senior note, 8.375%, 3/15/13 .................. United States 2,577,000 2,783,160
(b)Hertz Corp., senior note, 144A, 8.875%, 1/01/14 ..................... United States 2,000,000 2,047,500
Liberty Media Corp., senior note, 7.875%, 7/15/09 ................... United States 4,000,000 4,234,832
LIN Television Corp., senior sub. note, 6.50%, 5/15/13 .............. United States 4,000,000 3,855,000
Pinnacle Entertainment Inc., senior sub. note, 8.75%, 10/01/13 ...... United States 4,000,000 4,280,000
QUARTERLY STATEMENT OF INVESTMENTS | 3
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
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COUNTRY PRINCIPAL AMOUNT(C) VALUE
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BONDS (CONT.)
CONSUMER SERVICES (CONT.)
Quebecor Media Inc., senior disc. note, zero cpn. to 7/15/06,
13.75% thereafter, 7/15/11 ......................................... Canada 4,000,000 $ 4,155,000
Royal Caribbean Cruises Ltd., senior note, 8.00%, 5/15/10 ........... United States 4,000,000 4,364,468
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51,018,392
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ELECTRONIC TECHNOLOGY 1.9%
Flextronics International Ltd., senior sub. note,
6.25%, 11/15/14 ................................................... Singapore 2,300,000 2,279,875
6.50%, 5/15/13 .................................................... Singapore 700,000 714,875
Sanmina-SCI Corp., senior sub. note, 6.75%, 3/01/13 ................. United States 2,000,000 1,912,500
Xerox Corp., senior note, 9.75%, 1/15/09 ............................ United States 2,000,000 2,222,500
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7,129,750
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ENERGY MINERALS 1.5%
Chesapeake Energy Corp., senior note, 7.50%, 6/15/14 ................ United States 4,000,000 4,260,000
(b)Massey Energy Co., senior note, 144A, 6.875%, 12/15/13 .............. United States 1,500,000 1,520,625
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5,780,625
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HEALTH SERVICES 4.6%
DaVita Inc.,
senior note, 6.625%, 3/15/13 ...................................... United States 1,900,000 1,942,750
senior sub. note, 7.25%, 3/15/15 .................................. United States 1,000,000 1,017,500
Fresenius Medical Care Capital Trust II, 7.875%, 2/01/08 ............ Germany 4,000,000 4,140,000
HCA Inc., senior note, 8.75%, 9/01/10 ............................... United States 2,000,000 2,221,994
Tenet Healthcare Corp., senior note, 6.375%, 12/01/11 ............... United States 4,000,000 3,670,000
Vanguard Health Holding Co. II LLC, senior sub. note, 9.00%,
10/01/14 ........................................................... United States 4,000,000 4,270,000
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17,262,244
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INDUSTRIAL SERVICES 1.6%
Allied Waste North America Inc., senior note, B, 8.50%, 12/01/08 .... United States 4,000,000 4,220,000
Hanover Equipment Trust 01, senior secured note, A, 8.50%,
9/01/08 ............................................................ United States 1,693,000 1,762,836
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5,982,836
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NON-ENERGY MINERALS 1.1%
(a)Ispat Inland ULC, senior secured note, FRN, 10.804%, 4/01/10 ........ United States 4,000,000 4,180,000
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PROCESS INDUSTRIES 4.5%
(b)Crown Americas Inc., senior note, 144A, 7.625%, 11/15/13 ............ United States 3,000,000 3,127,500
Graphic Packaging International Corp., senior note, 8.50%, 8/15/11 .. United States 1,150,000 1,158,625
Jefferson Smurfit Corp., senior note, 7.50%, 6/01/13 ................ United States 1,750,000 1,618,750
JSG Funding PLC, senior sub. note, 7.75%, 4/01/15 ................... Ireland 3,000,000 2,505,000
Nalco Co.,
senior note, 7.75%, 11/15/11 ...................................... United States 2,000,000 2,065,000
senior sub. note, 8.875%, 11/15/13 ................................ United States 2,000,000 2,105,000
Rhodia SA, senior note, 10.25%, 6/01/10 ............................. France 4,000,000 4,400,000
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16,979,875
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4 | Quarterly Statement of Investments
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
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COUNTRY PRINCIPAL AMOUNT(C) VALUE
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BONDS (CONT.)
PRODUCER MANUFACTURING 3.1%
Case New Holland Inc., senior note, 9.25%, 8/01/11 .................. United States 4,000,000 $ 4,300,000
(b)Invensys PLC, senior note, 144A, 9.875%, 3/15/11 .................... United Kingdom 3,000,000 2,985,000
Milacron Escrow Corp., senior secured note, 11.50%, 5/15/11 ......... United States 1,600,000 1,376,000
TRW Automotive Inc., senior note, 9.375%, 2/15/13 ................... United States 3,000,000 3,262,500
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11,923,500
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REAL ESTATE INVESTMENT TRUSTS 1.1%
Host Marriott LP, senior note, 9.25%, 10/01/07 ...................... United States 4,000,000 4,240,000
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RETAIL TRADE 0.5%
(a),(b)GSC Holdings Corp., 144A, FRN, 7.845%, 10/01/11 ..................... United States 2,000,000 1,990,000
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TECHNOLOGY SERVICES 0.8%
(a),(b)Sungard Data Systems Inc., senior note, 144A, FRN, 8.525%,
8/15/13 ............................................................ United States 3,000,000 3,120,000
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UTILITIES 5.1%
Aquila Inc., senior note, 9.95%, 2/01/11 ............................ United States 2,000,000 2,215,000
(b),(d),(e)Calpine Corp., senior secured note, 144A, 8.50%, 7/15/10 ............ United States 3,000,000 2,475,000
(b)Dynegy Holdings Inc., secured note, 144A, 9.875%, 7/15/10 ........... United States 4,000,000 4,405,000
Edison Mission Energy, senior note, 9.875%, 4/15/11 ................. United States 2,000,000 2,342,500
El Paso Natural Gas Co., senior note, A, 7.625%, 8/01/10 ............ United States 4,000,000 4,226,316
TXU Corp., 4.80%, 11/15/09 .......................................... United States 4,000,000 3,867,488
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19,531,304
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TOTAL BONDS (COST $195,347,676) 197,615,427
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MORTGAGE-BACKED SECURITIES 32.8%
FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC) FIXED RATE 14.8%
FHLMC Gold 15 Year, 4.50%, 6/01/18 - 9/01/18 ........................ United States 3,646,634 3,558,299
FHLMC Gold 15 Year, 5.00%, 9/01/18 - 11/01/18 ....................... United States 7,842,758 7,778,235
FHLMC Gold 15 Year, 5.50%, 7/01/19 .................................. United States 381,197 383,686
FHLMC Gold 30 Year, 5.00%, 8/01/33 - 6/01/34 ........................ United States 13,816,267 13,417,219
FHLMC Gold 30 Year, 5.50%, 8/01/33 - 2/01/35 ........................ United States 9,695,746 9,627,401
FHLMC Gold 30 Year, 6.00%, 7/01/28 - 4/01/35 ........................ United States 10,539,585 10,660,345
FHLMC Gold 30 Year, 6.50%, 1/01/35 .................................. United States 4,758,227 4,878,156
FHLMC Gold 30 Year, 7.00%, 9/01/27 .................................. United States 1,336,052 1,395,429
FHLMC Gold 30 Year, 8.00%, 1/01/31 .................................. United States 338,398 361,017
FHLMC Gold 30 Year, 8.50%, 7/01/31 .................................. United States 3,668,485 3,982,236
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56,042,023
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FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) ADJUSTABLE RATE 1.0%
(a)FNMA, 4.613%, 7/01/34 ............................................... United States 3,763,299 3,709,956
(a)FNMA, 5.942%, 6/01/32 ............................................... United States 169,837 167,712
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3,877,668
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FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) FIXED RATE 11.6%
FNMA 15 Year, 5.00%, 10/01/17 ....................................... United States 2,062,265 2,044,135
FNMA 15 Year, 5.50%, 10/01/17 - 4/01/18 ............................. United States 4,151,020 4,180,300
FNMA 15 Year, 7.00%, 9/01/18 ........................................ United States 535,390 561,467
QUARTERLY STATEMENT OF INVESTMENTS | 5
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
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COUNTRY PRINCIPAL AMOUNT(C) VALUE
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MORTGAGE-BACKED SECURITIES (CONT.)
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) FIXED RATE (CONT.)
FNMA 30 Year, 5.00%, 10/01/35 ....................................... United States 2,214,903 $ 2,146,841
(f)FNMA 30 Year, 5.50%, 8/01/33 - 1/15/36 .............................. United States 17,028,182 16,890,688
(f)FNMA 30 Year, 6.00%, 1/01/29 - 11/01/35 ............................. United States 14,544,679 14,690,472
FNMA 30 Year, 6.50%, 8/01/32 ........................................ United States 2,195,878 2,257,457
FNMA 30 Year, 8.00%, 10/01/29 ....................................... United States 388,275 414,863
FNMA 30 Year, 8.50%, 8/01/26 ........................................ United States 642,724 697,603
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43,883,826
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GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) FIXED RATE 5.4%
GNMA I SF 30 Year, 5.50%, 4/15/33 - 12/15/34 ........................ United States 8,842,446 8,907,762
GNMA I SF 30 Year, 6.50%, 6/15/31 - 12/15/33 ........................ United States 3,748,853 3,918,811
GNMA II SF 30 Year, 5.00%, 10/20/33 ................................. United States 4,427,964 4,359,540
GNMA II SF 30 Year, 7.00%, 1/20/24 - 12/20/30 ....................... United States 2,293,187 2,393,847
GNMA II SF 30 Year, 8.00%, 1/20/28 - 2/20/32 ........................ United States 814,928 868,561
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20,448,521
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TOTAL MORTGAGE-BACKED SECURITIES (COST $125,392,008) 124,252,038
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ASSET-BACKED SECURITIES AND COMMERCIAL MORTGAGE-BACKED
SECURITIES 10.1%
FINANCE 10.1%
(a)Argent Securities Inc., 2003-W5, M4, FRN, 8.129%, 10/25/33 .......... United States 4,000,000 4,058,882
(a)GSR Mortgage Trust, 2003-AHL, B1, FRN, 8.379%, 10/25/33 ............. United States 5,000,000 5,078,615
(a)Merrill Lynch Mortgage Investors Inc., 2003-OPT1, B2, FRN, 7.129%,
7/25/34 ............................................................ United States 1,000,000 1,014,666
(a)Morgan Stanley ABS Capital,
2003-HE3, B1, FRN, 7.679%, 10/25/33 ............................... United States 3,500,000 3,522,472
2003-NC10, B1, FRN, 7.679%, 10/25/33 .............................. United States 3,000,000 3,058,605
(b)Morgan Stanley Auto Loan Trust, 2003-HB1, D, 144A, 5.50%,
4/15/11 ............................................................ United States 546,327 543,576
(a)Morgan Stanley Dean Witter Capital I, 2003-NC3, B1, FRN, 7.379%,
3/25/33 ............................................................ United States 4,508,000 4,555,722
(a)New Century Home Equity Loan Trust, 2003-2, M3, FRN, 8.079%,
1/25/33 ............................................................ United States 5,000,000 5,111,777
(a)Option One Mortgage Loan Trust, 2003-6, M5, FRN, 7.679%,
11/25/33 ........................................................... United States 3,500,000 3,569,112
(a)Residential Asset Securities Corp., 2003-KS10, MII3, FRN, 6.929%,
12/25/33 ........................................................... United States 1,500,000 1,524,583
(a)Specialty Underwriting & Residential Finance, 2003-BC4, B2, FRN,
6.879%, 11/25/34 ................................................... United States 1,500,000 1,514,304
(a)Structured Asset Investment Loan Trust,
2003-BC2, M3, FRN, 7.629%, 4/25/33 ................................ United States 1,471,000 1,480,081
2003-BC13, M4, FRN, 7.129%, 11/25/33 .............................. United States 3,340,000 3,394,098
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TOTAL ASSET-BACKED SECURITIES AND COMMERCIAL
MORTGAGE-BACKED SECURITIES (COST $37,504,319) 38,426,493
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6 | Quarterly Statement of Investments
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
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COUNTRY PRINCIPAL AMOUNT(C) VALUE
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(a)SENIOR FLOATING RATE INTERESTS 48.8%
COMMERCIAL SERVICES 0.1%
JohnsonDiversey Inc., Term Loan B, 6.87%, 12/09/11 .................. United States 521,967 $ 527,382
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COMMUNICATIONS 5.9%
AAT Communications Corp., First Lien Term Loan, 6.16%, 7/27/12 ...... United States 3,000,000 3,039,375
Alaska Communications Systems Holdings Inc.,
Incremental Term Loan, 6.527%, 2/01/12 ............................ United States 100,000 101,125
Term Loan, 6.527%, 2/01/12 ........................................ United States 4,000,000 4,045,000
Fairpoint Communications Inc., Term Loan B, 6.313%, 2/08/12 ......... United States 2,000,000 2,008,250
Hawaiian Telecom Communications Inc., Term Loan B, 6.78%,
10/31/12 ........................................................... United States 3,370,000 3,393,169
Iowa Telecommunications Services Inc., Term Loan B, 6.28 - 6.40%,
11/23/11 ........................................................... United States 4,000,000 4,041,876
New Skies Satellites BV, Term Loan, 6.188%, 5/02/11 ................. Netherlands 500,739 504,599
Panamsat Corp., Term Loan B1, 6.438 - 6.489%, 8/01/11 ............... United States 3,960,000 4,011,480
Valor Telecommunications Enterprises LLC, Term Loan, 5.811 - 6.277%,
2/24/12 ............................................................ United States 1,160,000 1,160,986
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22,305,860
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CONSUMER DURABLES 4.0%
Eastman Kodak Co., Term Loan B, 6.424 - 6.75%, 10/18/12 ............. United States 2,329,412 2,335,396
Jarden Corp., Term Loan B2, 6.277%, 1/24/12 ......................... United States 3,821,117 3,835,446
Sealy Mattress Co., Term Loan D, 6.118 - 6.16%, 4/12/13 ............. United States 3,254,821 3,293,980
Solo Cup Co., Term Loan B, 6.98 - 7.027%, 2/27/11 ................... United States 1,969,925 1,986,340
Stile Acquisition Corp. (Masonite), Canadian Term Loan,
6.206 - 6.527%, 4/05/13 ............................................ Canada 1,837,054 1,820,884
Stile U.S. Acquisition Corp. (Masonite), U.S. Term Loan,
6.206 - 6.527%, 4/05/13 ............................................ United States 1,840,184 1,823,987
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15,096,033
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CONSUMER NON-DURABLES 1.8%
Acco Brands Corp., Term Loan B, 5.918 - 6.247%, 8/05/12 ............. United States 1,139,145 1,153,147
Constellation Brands Inc., Term Loan B, 5.438 - 5.75%,
12/22/11 ........................................................... United States 1,565,556 1,584,636
Dole Food Co. Inc., Term Loan B, 5.438 - 7.75%, 4/18/12 ............. Bermuda 1,078,103 1,083,606
Meow Mix Co., Term Loan B, 7.09%, 7/13/11 ........................... United States 651,027 658,280
Michael Foods Inc., Term Loan B1, 6.501 - 6.671%, 11/21/10 .......... United States 638,926 647,844
Southern Wine & Spirits of America Inc., Term Loan B, 6.027%,
5/31/12 ............................................................ United States 1,657,475 1,677,448
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6,804,961
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CONSUMER SERVICES 13.6%
Alderwoods Group Inc., Term Loan B2, 5.84 - 6.37%, 9/17/09 .......... United States 659,376 667,467
Arby's Restaurant Holdings LLC, Term Loan B, 6.493 - 6.777%,
7/25/12 ............................................................ United States 1,741,250 1,752,133
Charter Communications Operating LLC, Term Loan B, 7.50%,
4/27/11 ............................................................ United States 1,967,554 1,975,009
Cinram International Inc., Term Loan D, 6.66%, 9/30/09 .............. Canada 2,750,054 2,776,121
QUARTERLY STATEMENT OF INVESTMENTS | 7
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
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COUNTRY PRINCIPAL AMOUNT(C) VALUE
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(a)SENIOR FLOATING RATE INTERESTS (CONT.)
CONSUMER SERVICES (CONT.)
Dex Media West LLC, Term Loan B, 5.87 - 6.28%, 3/09/10 .............. United States 2,810,941 $ 2,829,628
DIRECTV Holdings LLC, Term Loan B, 5.87%, 4/13/13 ................... United States 1,133,333 1,145,021
Emmis Operating Co., Term Loan B, 6.120%, 11/10/11 .................. United States 667,942 671,931
Entravision Communications Corp., Term Loan B, 5.55%, 3/29/12 ....... United States 1,100,000 1,108,250
Hertz Corp.,
Credit Link, 4.50%, 12/21/12 ...................................... United States 155,556 157,682
Term Loan B, 8.50%, 12/21/12 ...................................... United States 1,062,133 1,076,655
Insight Midwest Holdings LLC,
Term Loan A, 5.813%, 6/30/09 ...................................... United States 1,062,898 1,063,978
Term Loan C, 6.563%, 12/31/09 ..................................... United States 1,989,400 2,017,377
Intelsat (Bermuda) Ltd., senior Term Loan Facility, 5.813%,
7/28/11 ............................................................ Bermuda 2,412,845 2,438,481
Mediacom Broadband (MCC Iowa), Term Loan C, 6.23 - 6.527%,
1/31/14 ............................................................ United States 1,985,000 2,013,999
MediaNews Group Inc., Term Loan C, 5.64%, 12/30/10 .................. United States 2,283,525 2,288,412
Metro-Goldwyn-Mayer Inc., Term Loan B, 6.78%, 4/08/12 ............... United States 2,900,000 2,922,739
Mission Broadcasting Inc., Term Loan B, 6.28%, 10/01/12 ............. United States 1,698,419 1,710,449
Nexstar Broadcasting Inc., Term Loan B, 6.28%, 10/01/12 ............. United States 1,728,906 1,741,152
Penn National Gaming Inc., Term Loan B, 5.97 - 6.28%,
10/03/12 ........................................................... United States 1,795,500 1,819,206
R.H. Donnelley Inc., Term Loan D, 5.81 - 6.28%, 6/30/11 ............. United States 3,456,212 3,476,984
Rainbow National Services LLC, Term Loan B, 7.188%, 3/31/12 ......... United States 2,481,250 2,503,891
Regal Cinemas Inc., Term Loan B, 6.527%, 11/10/10 ................... United States 4,385,463 4,439,671
UPC Financing Partnership, Term Loan H2, 6.804%, 9/30/12 ............ Netherlands 4,000,000 4,041,072
WMG Acquisition Corp., Term Loan B, (Warner Music), 6.194 - 6.59%,
2/23/11 ............................................................ United States 4,906,419 4,964,246
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51,601,554
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ELECTRONIC TECHNOLOGY 0.2%
Onex Wind Finance LP (Mid-Western Aircraft), Term Loan B, 6.409%,
12/31/11 ........................................................... United States 597,000 605,893
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ENERGY MINERALS 0.7%
Citgo Petroleum Corp., Term Loan B, 5.676%, 11/15/12 ................ United States 1,700,000 1,714,345
Walter Industries Inc., Term Loan B, 6.054 - 6.527%, 10/03/12 ....... United States 798,000 809,222
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2,523,567
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FINANCE 5.7%
(f)Capital Automotive., Term Loan B, 8.00%, 12/05/10 ................... United States 2,910,000 2,923,642
Conseco Inc., Term Loan, 6.37%, 6/22/10 ............................. United States 1,109,424 1,118,668
Fidelity National Information Services Inc., Term Loan B, 6.11%,
3/09/13 ........................................................... United States 4,443,412 4,466,372
General Growth Properties Inc., Term Loan B, 6.22%, 11/15/08 ........ United States 3,965,737 3,998,125
Kyle Acquisition Group,
Term Loan B, 6.50%, 7/20/08 ...................................... United States 311,573 312,936
Term Loan C, 6.50%, 7/20/10 ...................................... United States 288,427 290,050
8 | QUARTERLY STATEMENT OF INVESTMENTS
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
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COUNTRY PRINCIPAL AMOUNT(c) VALUE
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(a)SENIOR FLOATING RATE INTERESTS (CONT.)
FINANCE (CONT.)
LandSource Communities Development LLC, Term Loan B, 6.875%,
3/31/10 ............................................................ United States 1,000,000 $ 1,007,100
Lion Gables Realty LP, Term Loan B, 6.09 - 6.15%, 9/30/06 ........... United States 562,421 565,409
Macerich Co., Interim Loan Facility, 6.038%, 3/31/06 ................ United States 1,238,000 1,239,547
Maguire Properties Inc., Term Loan B, 6.081%, 2/23/10 ............... United States 1,377,778 1,385,190
Nasdaq Stock Market Inc., Term Loan B, 6.00 - 6.188%,
12/08/11 ........................................................... United States 1,700,000 1,713,636
Newkirk Master LP, Term Loan B, 5.804 - 6.00%, 8/11/08 .............. United States 690,903 696,733
Yellowstone Club, Term Loan, 6.764%, 9/30/10 ........................ United States 1,941,680 1,950,579
-------------
21,667,987
-------------
HEALTH SERVICES 1.5%
DaVita Inc., Term Loan B, 6.40 - 6.94%, 10/05/12 .................... United States 2,875,147 2,917,276
LifePoint Hospitals Inc., Term Loan B, 6.185%, 4/15/12 .............. United States 2,938,881 2,959,697
-------------
5,876,973
-------------
INDUSTRIAL SERVICES 1.4%
Allied Waste North America Inc.,
Credit Link, 4.168%, 1/15/12 ...................................... United States 802,703 807,993
Term Loan B, 6.09 - 6.39%, 1/15/12 ................................ United States 2,067,516 2,081,013
Epco Holdings Inc., Term Loan B, 6.418 - 6.639%, 8/18/10 ............ United States 594,000 603,049
(f)Petroleum Geo-Services ASA and PGS Finance Inc., Term Loan,
7.00%, 12/17/12 .................................................... Norway 800,000 807,375
Washington Group International Inc., Synthetic Term Loan, 3.92%,
6/14/10 ............................................................ United States 900,000 902,376
-------------
5,201,806
-------------
NON-ENERGY MINERALS 1.4%
Novelis Corp., U.S. Term Loan, 6.011%, 1/09/12 ...................... United States 1,400,370 1,410,831
Novelis Inc., Canadian Term Loan, 6.011%, 1/09/12 ................... Canada 757,322 762,980
St. Marys Cement Inc., Term Loan B, 6.527%, 12/04/09 ................ Canada 2,959,862 3,006,109
-------------
5,179,920
-------------
PROCESS INDUSTRIES 5.0%
Berry Plastics Corp., Term Loan, 6.447%, 12/02/11 ................... United States 2,890,487 2,928,124
Boise Cascade LLC, Term Loan D, 6.156 - 6.281%, 10/28/11 ............ United States 622,114 631,056
Brenntag,
(f)Term Loan B2, 8.75%, 12/22/13 .................................. United States 401,807 407,248
(f)Term Loan B3, 8.75%, 12/22/12 .................................. Germany 98,193 99,523
Graham Packaging Co., First Lien Term Loan, 6.375 - 6.813%,
10/07/11 ........................................................... United States 1,686,815 1,703,363
Hexion Specialty Chemicals Inc.,
Tranche B-1, 6.875%, 5/31/12 ...................................... United States 457,036 462,402
Tranche B-3 Credit Linked, 4.069%, 5/31/12 ........................ United States 109,091 110,372
Huntsman International LLC, Term Loan B, 6.12%, 8/16/12 ............. United States 3,701,728 3,725,153
Nalco Co., Term Loan B, 5.87 - 8.25%, 11/04/10 ...................... United States 3,267,824 3,314,188
NewPage Corp., Term Loan, 7.563%, 5/02/11 ........................... United States 2,992,500 3,029,906
Polymer Group Inc., Term Loan, 6.769%, 11/22/10 ..................... United States 800,000 805,192
QUARTERLY STATEMENT OF INVESTMENTS | 9
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------
COUNTRY PRINCIPAL AMOUNT(C) VALUE
------------------------------------------------------------------------------------------------------------------------------------
(a)SENIOR FLOATING RATE INTERESTS (CONT.)
PROCESS INDUSTRIES (CONT.)
Resolution Europe BV (Hexion), Tranche B-2, 7.063%, 5/31/12 ......... Netherlands 629,564 $ 636,955
Rockwood Specialties Group Inc., Term Loan E, 6.216%, 7/30/12 ....... United States 995,000 1,006,893
-------------
18,860,375
-------------
PRODUCER MANUFACTURING 3.4%
Day International Group Inc., Term Loan B, 7.03%, 12/05/12 .......... United States 779,705 790,182
Euramax International Inc., Term Loan B, 7.241%, 6/29/12 ............ United States 1,218,158 1,210,327
Headwaters Inc., Term Loan B, 6.43 - 8.50%, 4/30/11 ................. United States 1,029,654 1,037,805
Itron Inc., Term Loan C, 6.125 - 8.00%, 7/01/11 ..................... United States 135,135 136,514
Nortek Inc., Term Loan, 6.94 - 8.50%, 8/27/11 ....................... United States 1,979,950 1,999,997
Sensus Metering Systems Inc., Term Loan, 6.35 - 6.54%,
12/17/10 ........................................................... United States 2,781,311 2,813,268
TriMas Corp., Term Loan B, 8.02%, 12/06/09 .......................... United States 2,037,159 2,057,530
TRW Automotive Inc., Term Loan B, 6.125%, 6/30/12 ................... United States 2,977,500 2,981,222
-------------
13,026,845
-------------
RETAIL TRADE 2.2%
The Jean Coutu Group (PJC) Inc., Term Loan B, 6.50%, 7/30/11 ........ Canada 3,873,765 3,915,462
Neiman Marcus Group Inc., Term Loan, 6.947%, 4/06/13 ................ United States 1,200,000 1,211,020
Travelcenters of America Inc., Term Loan, 6.16 - 6.44%,
12/01/11 ........................................................... United States 2,500,000 2,528,125
The William Carter Co., Term Loan B, 5.65 - 5.811%, 7/14/12 ......... United States 860,064 870,098
-------------
8,524,705
-------------
TECHNOLOGY SERVICES 0.8%
Sungard Data Systems Inc., Term Loan, 6.81%, 2/11/13 ................ United States 2,869,580 2,904,253
-------------
UTILITIES 1.1%
AES Corp., Term Loan B, 5.07 - 5.69%, 4/30/08 ....................... United States 571,431 575,648
Texas Genco LLC,
Delay Draw, 6.369 - 8.25%, 12/14/11 ............................... United States 1,032,236 1,035,622
First Lien Term Loan, 6.369 - 6.389%, 12/14/11 .................... United States 2,489,052 2,497,219
-------------
4,108,489
-------------
TOTAL SENIOR FLOATING RATE INTERESTS
(COST $183,819,633) 184,816,603
-------------
FOREIGN GOVERNMENT AND AGENCY SECURITIES 3.7%
(a),(g)Government of Argentina, FRN, 4.005%, 8/03/12 ....................... Argentina 3,950,000 3,048,169
Government of Korea, 6.90%, 1/16/07 ................................. South Korea 3,600,000,000 KRW 3,651,501
Government of Norway, 6.75%, 1/15/07 ................................ Norway 8,300,000 NOK 1,278,308
Government of Poland, 8.50%, 11/12/06 ............................... Poland 8,750,000 PLN 2,783,650
Government of Singapore, 5.625%, 7/01/08 ............................ Singapore 2,150,000 SGD 1,378,989
Government of Sweden, 8.00%, 8/15/07 ................................ Sweden 8,300,000 SEK 1,133,513
New South Wales Treasury Corp., 6.50%, 5/01/06 ...................... Australia 800,000 AUD 588,718
-------------
TOTAL FOREIGN GOVERNMENT AND AGENCY SECURITIES
(COST $13,324,184) 13,862,848
-------------
TOTAL LONG TERM INVESTMENTS (COST $555,387,820) 558,973,409
-------------
10 | Quarterly Statement of Investments
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 2005 (UNAUDITED) (CONTINUED)
------------------------------------------------------------------------------------------------------------------------------------
COUNTRY PRINCIPAL AMOUNT(c) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT TERM INVESTMENTS 3.3%
FOREIGN GOVERNMENT SECURITIES 0.8%
Thailand Treasury Bill, 7/27/06 ..................................... Thailand 64,000,000 THB $ 1,522,740
Thailand Treasury Bill, 9/07/06 ..................................... Thailand 65,000,000 THB 1,541,144
-------------
TOTAL FOREIGN GOVERNMENT SECURITIES (COST $3,075,155) 3,063,884
-------------
TOTAL INVESTMENTS BEFORE MONEY FUND
(COST $558,462,975) 562,037,293
-------------
SHARES
MONEY FUND (COST $9,468,546) 2.5%
(h)Franklin Institutional Fiduciary Trust Money Market Portfolio ....... United States 9,468,546 9,468,546
-------------
TOTAL INVESTMENTS (COST $567,931,521) 150.8% ........................ 571,505,839
PREFERRED SHARES (50.1)% ............................................ (190,000,000)
OTHER ASSETS, LESS LIABILITIES (0.7)% ............................... (2,594,804)
-------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0% ....................... $ 378,911,035
=============
CURRENCY ABBREVIATIONS
AUD - Australian Dollar
KRW - South Korean Won
NOK - Norwegian Krone
PLN - Polish Zloty
SEK - Swedish Krona
SGD - Singapore Dollar
THB - Thai Baht
SELECTED PORTFOLIO ABBREVIATIONS
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FRN - Floating Rate Note
GNMA - Government National Mortgage Association
SF - Single Family
(a) The coupon rate shown represents the rate at period end.
(b) 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 December 31, 2005,
the value of these securities was $32,714,201, representing 8.63% of net
assets applicable to common shares.
(c) The principal amount is stated in U.S. dollars unless otherwise indicated.
(d) Defaulted security.
(e) See Note 3 regarding other considerations.
(f) Security purchased on a when-issued or to-be-announced basis.
(g) The principal amount is stated in original face, and scheduled paydowns
are reflected in the market price on ex-date.
(h) The Franklin Institutional Fiduciary Trust Money Market Portfolio is
managed by the Fund's investment manager.
Quarterly Statement of Investments | See Notes to Statement of Investments. | 11
FRANKLIN TEMPLETON
LIMITED DURATION INCOME TRUST
NOTES TO STATEMENT OF INVESTMENTS (UNAUDITED)
The Franklin Templeton Limited Duration Income Trust (the Fund) is registered
under the Investment Company Act of 1940 as a diversified, closed-end investment
company.
1. INCOME TAXES
At December 31, 2005, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:
Cost of investments .................................. $569,978,908
============
Unrealized appreciation .............................. $ 7,136,921
Unrealized depreciation .............................. (5,609,990)
------------
Net unrealized appreciation (depreciation) ........... $ 1,526,931
============
2. UNFUNDED LOAN COMMITMENTS
The Fund may enter into certain credit agreements, all or a portion of which may
be unfunded. The Fund is obligated to fund these loan commitments at the
borrowers' discretion.
At December 31, 2005, unfunded commitments were as follows:
-------------------------------------------------------------------
UNFUNDED
BORROWER COMMITMENT
-------------------------------------------------------------------
Eastman Kodak Co., Term Loan B2 ...................... $ 970,588
Hertz Corp., Delay Draw .............................. 182,311
JohnsonDiversey Inc., Delay Draw ..................... 178,033
----------
$1,330,932
==========
3. OTHER CONSIDERATIONS
Directors or employees of Franklin Advisors, Inc., as the Fund's Investment
Manager, may serve as members of various bondholders' steering committees, on
credit committees, or may represent the Fund in certain corporate restructuring
negotiations. At January 6, 2006, such individuals serve in one or more of these
capacities for Calpine Corp. As a result of this involvement, such individuals
may be in possession of certain material non-public information. If the Fund's
Investment Manager, while in possession of such information, seeks to sell any
of its holdings in these securities it will comply with all applicable federal
securities laws.
For information on the Fund's policy regarding valuation of investments and
other significant accounting policies, please refer to the Fund's most recent
semiannual or annual shareholder report.
12 | 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 Jimmy D. Gambill, Chief Executive Officer - Finance and Administration,
and Galen G. Vetter, Chief Financial 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/ JIMMY D. GAMBILL
Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date February 21, 2006
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/ JIMMY D. GAMBILL
Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date February 21, 2006
By /S/ GALEN G. VETTER
Galen G. Vetter
Chief Financial Officer
Date February 21, 2006
Exhibit A
I, Jimmy D. Gambill, certify that:
1. I have reviewed this report on Form N-Q of FRANKLIN TEMPLETON LIMITED
DURATION INCOME TRUST;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this
report fairly present in all material respects the investments of the registrant
as of the end of the fiscal quarter for which the report is filed;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date within 90
days prior to the filing date of this report, based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer(s) and I have disclosed to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
February 21, 2006
/S/JIMMY D. GAMBILL
Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
I, Galen G. Vetter, certify that:
1. I have reviewed this report on Form N-Q of FRANKLIN TEMPLETON LIMITED
DURATION INCOME TRUST;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this
report fairly present in all material respects the investments of the registrant
as of the end of the fiscal quarter for which the report is filed;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date within 90
days prior to the filing date of this report, based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer(s) and I have disclosed to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
February 21, 2006
/S/GALEN G. VETTER
Galen G. Vetter
Chief Financial Officer