UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-02790
Franklin California Tax-Free Income Fund
(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
(Name and address of agent for service)
Registrant’s telephone number, including area code: 650 312-2000
Date of fiscal year end: 3/31
Date of reporting period: 3/31/18
Item 1. Reports to Stockholders.
| Annual Report and Shareholder Letter | |||
March 31, 2018 |
Franklin California Tax-Free Income Fund
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Franklin Templeton Investments
Why choose Franklin Templeton Investments?
Successful investing begins with ambition. And achievement only comes when you reach for it. That’s why we continually strive to deliver better outcomes for investors. No matter what your goals are, our deep, global investment expertise allows us to offer solutions that can help.
During our more than 70 years of experience, we’ve managed through all kinds of markets—up, down and those in between. We’re always preparing for what may come next. It’s because of this, combined with our strength as one of the world’s largest asset managers that we’ve earned the trust of millions of investors around the world.
Dear Shareholder:
The 12 months ended March 31, 2018, benefited from mostly upbeat economic data as the US job market continued to improve and the unemployment rate declined. Accordingly, the US Federal Reserve (Fed), under new chairman Jerome Powell, increased its target for the federal funds rate a quarter point from a range of 1.25% to 1.50% to a range of 1.50% to 1.75% at its recent March meeting. This was the Fed’s third rate hike for the 12 months, following June and December.
During the 12 months, the municipal bond market posted modest performance similar to other US fixed income classes, with generally higher returns for longer term and lower rated municipal bonds. Factors contributing to this positive investment environment for municipals included consistently low inflation, stagnant wage growth and international political concerns. Federal government fiscal reform uncertainty also benefited tax-free municipals during most of the period, despite some volatility in reaction to the government’s tax code efforts.
Franklin California Tax-Free Income Fund’s annual report includes more detail about municipal bond market conditions
and a discussion from the portfolio managers. In addition, on our website, franklintempleton.com, you can find updated commentary by our municipal bond experts. Municipal bonds can provide tax-free income and diversification from equities. Despite periods of volatility, municipal bonds historically have had a solid long-term record of performance, driven mostly by their compounding income component. Please remember all securities markets fluctuate, as do mutual fund share prices.
As always, we recommend investors consult their financial advisors to help them make the best decisions for the long term. In a constantly changing market environment, we remain committed to our disciplined strategy as we manage the Fund, keeping in mind the trust you have placed in us. We appreciate your confidence in us and encourage you to contact us when you have questions about your Franklin Templeton tax-free investment.
Not FDIC Insured | May Lose Value | No Bank Guarantee
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Sincerely,
Rupert H. Johnson, Jr.
Chairman
Franklin California Tax-Free Income Fund
Sheila Amoroso
Rafael R. Costas Jr.
Senior Vice Presidents and Co-Directors
Franklin Municipal Bond Department
This letter reflects our analysis and opinions as of March 31, 2018, unless otherwise indicated. The information is not a complete analysis of every aspect of any market, state, industry, security or fund. Statements of fact are from sources considered reliable.
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Franklin California Tax-Free Income Fund
This annual report for Franklin California Tax-Free Income Fund covers the fiscal year ended March 31, 2018.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and California personal income taxes (for California residents) as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Performance Overview
The Fund’s Class A share price, as measured by net asset value, decreased from $7.38 on March 31, 2017, to $7.31 on March 31, 2018. The Fund’s Class A shares paid dividends totaling 26.57 cents per share for the reporting period.2 The Performance Summary beginning on page 7 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 3.40% based on an annualization of March’s 2.16 cent per share dividend and the maximum offering price of $7.63 on March 31, 2018. An investor in the 2018 maximum combined effective federal and California personal income tax bracket of 53.10% (including 3.8% Medicare tax) would need to earn a distribution rate of 7.25% from a taxable investment to match the Fund’s Class A tax-free distribution rate. For other performance data, please see the Performance Summary. During the period under review, the Fund experienced a reduction of its monthly dividend. While there are many factors that can impact a Funds’ ability to distribute dividends, the primary reason for the dividend cut was due to bonds maturing or being called away by issuers, which were purchased by the Fund at yields greater than the prevailing market yields.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures
Credit Quality Composition*
3/31/18
Ratings | % of Total Investments | |
AAA | 11.41% | |
AA | 47.67% | |
A | 12.31% | |
BBB | 16.14% | |
Below Investment Grade | 1.08% | |
Refunded | 9.70% | |
Not Rated | 1.69% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated below BBB-. The Refunded category generally consists of refunded bonds secured by US government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Municipal Bond Market Overview
The municipal bond market outperformed the US Treasury market but underperformed US stock markets during the 12-month period ended March 31, 2018. Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, generated a +2.66% total return for the period, while US Treasuries, as measured by the Bloomberg Barclays US Treasury Index, posted a +0.43% total return.3 Both high-yield corporate bonds and high-yield municipal bonds outperformed their investment-grade counterparts. US stocks, as represented by the Standard & Poor’s® 500 Index, outperformed both municipals and US Treasuries with a +13.99% total return for the reporting period.3 US stocks
1. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, US investors must be properly certified on Form W-9 and non-US investors on Form W-8BEN.
2. The distribution amount is the sum of all net investment income distributions for the period shown. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
3. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).
The SOI begins on page 17.
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generated strong returns through the first ten months of the reporting period, but experienced a significant bout of volatility in early February that led to losses in that month and reduced overall returns. Multiple factors, including recent indications of rising interest rates and proposed steel and aluminum tariffs, contributed to the volatility in stock markets and also drove losses in both the municipal bond market and US Treasury market during the first quarter of 2018.
Municipal issuance during the reporting period totaled $407 billion, a modest 7% decline from total issuance in the previous 12-month period ended March 31, 2017.4 Impending tax reform contained potential implications for the municipal bond market and caused a deluge of supply in December, as issuers rushed to market before the end of the 2017. December supply of $63 billion and fourth-quarter 2017 supply of $145 billion eclipsed previous monthly and quarterly records of municipal bond issuance, respectively.4 Despite this extraordinary supply pressuring the market, strong demand buoyed returns through the end of 2017. However, diminished issuance ($62 billion in the first quarter of 2018, a 32% decline from the first quarter in 2017),4 heavy dealer inventories and selling pressures in 2018 led municipals to have a -1.11% total return during the first quarter of 2018, as measured by the Bloomberg Barclays Municipal Bond Index.3 Municipal performance was in line with US Treasuries, which had a total return of -1.18% during the same period.3
After accounting for redemptions (bonds that matured or were called out of the market), net issuance stood at $64 billion in 2017, which marked a third consecutive year of positive net issuance.5 Net issuance turned negative in the first three months of 2018, standing at -$19 billion at period-end.5 According to the Investment Company Institute, municipal bond funds reported inflows for 10 of the 12 months of the reporting period, with the only negative flows occurring in December 2017 and February 2018. The total inflows for the period were approximately $30 billion.6
The Federal Reserve (Fed) raised its target range for the federal funds rate 0.25% at its December 2017 meeting and another 0.25% at its March 2018 meeting. The target range stood at 1.50%–1.75% at period-end. The Fed also increased the discount rate 0.25% to 2.00% in December and another 0.25% at the March 2018 meeting, to finish the period at 2.25%. The Fed cited a strengthening economic outlook and strong labor
4. Source: The Bond Buyer, Thomson Reuters.
5. Source: Barclays Municipal Credit Research.
6. Source: Investment Company Institute.
Portfolio Composition | ||||
3/31/18 | ||||
% of Total Investments* | ||||
Transportation | 22.53 | % | ||
General Obligation | 18.23 | % | ||
Refunded** | 17.25 | % | ||
Utilities | 13.05 | % | ||
Hospital & Health Care | 9.99 | % | ||
Subject to Government Appropriations | 6.79 | % | ||
Higher Education | 6.39 | % | ||
Tax-Supported | 3.47 | % | ||
Other Revenue | 1.76 | % | ||
Housing | 0.54 | % |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
market conditions in its press release following the March, 2018 decision. In total, the Fed raised the target range three times in 2017 (March, June, and December), and once so far in 2018.
On February 27, 2018, Jerome Powell spoke before Congress for the first time as Fed Chair after succeeding Janet Yellen in that role. In his prepared remarks, Powell noted an economic backdrop of solid growth and a strong labor market. He reiterated the Fed’s intention to gradually raise interest rates in an effort to keep the economy from overheating while still fostering a return of inflation to the Fed’s 2% target.
Investors continued to favor risky assets through most of the period. Municipal bonds with longer maturities generally performed better than bonds with shorter maturities, and high yield tax-exempt bonds outperformed their investment-grade counterparts. During the 12-month reporting period, the Bloomberg Barclays High Yield Municipal Bond Index generated a +6.03% total return and the Bloomberg Barclays Municipal Long Bond (22+ Years) Index returned +4.68%.3
Several developments affected Puerto Rico bonds over the reporting period. Please visit franklintempleton.com/investor/products/fund-resources/puerto-rico for the latest Puerto Rico updates from Franklin Templeton.
At period-end, we maintained our positive view of the municipal bond market. We believe municipal bonds continue to be an attractive asset class among fixed income securities,
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
and we intend to follow our solid discipline of investing to maximize income, while seeking value in the municipal bond market.
State Update
California’s large and diverse economy continued to expand during the 12 months under review. Universities and innovative businesses supported the state’s expansion. Job growth in the state outpaced that of the nation’s. Unemployment decreased from 4.9% in March 2017 to 4.3% at period-end, yet remained above the 4.1% national rate.7
Enactment of California’s fiscal year 2018 budget extended the state’s recent track record of balanced fiscal operations. Highlights of the budget were increased spending for general fund expenditures, education, Medi-Cal funding and pension contributions, all of which are included in the fiscal year 2019 budget proposal unveiled in January 2018. Additionally, California approved legislation raising taxes on motor fuel and vehicle registrations. California’s revenues have increased and the state continued to make deposits to its budget stabilization account, resulting in large budget reserves.
California’s net tax-supported debt was $2,217 per capita and 4.2% of personal income, compared with the $1,006 and 2.5% national medians, respectively.8 During the period under review, independent credit rating agency Standard & Poor’s (S&P) assigned California’s general obligations bonds a rating of AA- with a stable outlook.9 The rating reflected S&P’s view on the state’s expanding economy, increasing budgetary reserve levels, strong overall liquidity and declining debt ratios. In contrast, S&P cited several challenges to the state, including high housing costs, a volatile revenue structure, retirement benefit liabilities and a large backlog of deferred maintenance and infrastructure needs. Nevertheless, the stable outlook reflected S&P’s view that California has brought its finances into structural alignment.
Investment Strategy
We use a consistent, disciplined strategy in an effort to maximize tax-exempt income for our shareholders, while balancing risk and return within the Fund’s range of allowable investments. We generally employ a buy-and-hold approach and invest in securities we believe should provide the most relative value in the market. We do not use leverage or
Dividend Distributions*
4/1/17–3/31/18
Dividend per Share (cents) | ||||||||||||||||||||
|
| |||||||||||||||||||
Month
| Class
| Class M**
| Class C
| Class R6***
| Advisor
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April | 2.26 | — | 1.92 | — | 2.31 | |||||||||||||||
May | 2.26 | — | 1.92 | — | 2.31 | |||||||||||||||
June | 2.26 | — | 1.91 | — | 2.31 | |||||||||||||||
July | 2.26 | — | 1.91 | — | 2.31 | |||||||||||||||
August | 2.26 | — | 1.91 | — | 2.31 | |||||||||||||||
Sep- tember | 2.21 | — | 1.86 | 2.28 | 2.27 | |||||||||||||||
October | 2.21 | — | 1.86 | 2.28 | 2.27 | |||||||||||||||
November | 2.21 | — | 1.86 | 2.28 | 2.27 | |||||||||||||||
December | 2.16 | — | 1.81 | 2.22 | 2.21 | |||||||||||||||
January | 2.16 | — | 1.81 | 2.22 | 2.21 | |||||||||||||||
February | 2.16 | 2.21 | 1.81 | 2.22 | 2.21 | |||||||||||||||
March | 2.16 | 2.21 | 1.82 | 2.21 | 2.21 | |||||||||||||||
Total | 26.57 | 4.42 | 22.40 | 15.71 | 27.20 |
*The distribution amount is the sum of all net investment income distributions for the period shown. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Effective 1/25/18, the Fund began offering Class M shares. See the prospectus for details.
***Effective 8/1/17, the Fund began offering Class R6 shares. See the prospectus for details.
derivatives, nor do we use hedging techniques that could add volatility and contribute to underperformance in adverse markets.
Manager’s Discussion
Based on the combination of our value-oriented philosophy of investing primarily for income and a positive-sloping municipal yield curve, we favored the use of longer term bonds. Consistent with our strategy, we sought to purchase bonds that ranged from 15 to 30 years in maturity with good call features. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
The Fund holds a very small portion of its assets in Puerto Rico bonds, which decreased in price over the period. Puerto Rico and its municipal issuers continue to experience significant financial difficulties and we continue to monitor developments affecting them.
7. Source: Bureau of Labor Statistics.
8. Source: Moody’s Investors Service, State Government - US: Medians - Total State Debt Remains Essentially Flat in 2017, 5/3/17.
9. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Thank you for your continued participation in Franklin California Tax-Free Income Fund. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2018, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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Performance Summary as of March 31, 2018
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/18
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 4.25% and the minimum is 0%. Class A: 4.25% maximum initial sales charge; Advisor Class: no sales charges. For other share classes, visit franklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||||||
A | ||||||||
1-Year | +2.66% | -1.74% | ||||||
5-Year | +18.52% | +2.57% | ||||||
10-Year | +60.75% | +4.41% | ||||||
Advisor | ||||||||
1-Year | +2.89% | +2.89% | ||||||
5-Year | +19.11% | +3.56% | ||||||
10-Year | +62.35% | +4.97% |
Share Class | Distribution Rate3 | Taxable Equivalent Distribution Rate4 | 30-Day Standardized Yield5 | Taxable Equivalent 30-Day Standardized Yield4 | ||||||||||||
A | 3.40% | 7.25% | 2.23% | 4.75% | ||||||||||||
Advisor | 3.63% | 7.74% | 2.42% | 5.16% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 10 for Performance Summary footnotes.
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PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
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PERFORMANCE SUMMARY
Net Asset Value
Share Class (Symbol) | 3/31/18 | 1/25/18 | 8/1/17 | 3/31/17 | Change | |||||||||||||||
A (FKTFX) | $7.31 | N/A | N/A | $7.38 | -$0.07 | |||||||||||||||
M (FCTMX) | $7.31 | $7.41 | N/A | N/A | -$0.10 | |||||||||||||||
C (FRCTX) | $7.30 | N/A | N/A | $7.36 | -$0.06 | |||||||||||||||
R6 (FKTQX) | $7.30 | N/A | $7.46 | N/A | -$0.16 | |||||||||||||||
Advisor (FCAVX) | $7.30 | N/A | N/A | $7.36 | -$0.06 |
Distributions (4/1/17–3/31/18)
Share Class | Net Investment Income | |||
A | $0.2657 | |||
M (1/25/18–3/31/18) | $0.0442 | |||
C | $0.2240 | |||
R6 (8/1/17–3/31/18) | $0.1571 | |||
Advisor | $0.2720 |
Total Annual Operating Expenses8
Share Class | ||||
A | 0.59% | |||
Advisor | 0.49% |
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PERFORMANCE SUMMARY
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. The Fund holds a very small portion of its assets in Puerto Rico municipal bonds that have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Distribution rate is based on an annualization of the respective class’s March dividend and the maximum offering price (NAV for Advisor Class) per share on 3/31/18.
4. Taxable equivalent distribution rate and yield assume the published rates as of 1/15/18 for the maximum combined effective federal and California personal income tax rate of 53.10%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax. This combined rate does not consider the impact of California’s surcharge on taxable income in excess of $1 million.
5. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
6. Source: Morningstar. The Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody’s, S&P and Fitch.
7. Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||
|
| |||||||||||
Share Class | Beginning Account Value 10/1/171 | Ending Account Value 3/31/18 | Expenses Paid During Period2,3,4 | Ending Account Value 3/31/18 | Expenses Paid During 10/1/17–3/31/183,4 | Net Annualized Expense Ratio4 | ||||||
|
|
|
| |||||||||
A | $1,000 | $997.30 | $3.04 | $1,021.89 | $3.07 | 0.61% | ||||||
M | $1,000 | �� | $992.50 | $0.89 | $1,022.44 | $2.52 | 0.50% | |||||
C | $1,000 | $994.50 | $5.82 | $1,019.10 | $5.89 | 1.17% | ||||||
R6 | $1,000 | $997.80 | $2.49 | $1,022.54 | $2.52 | 0.50% | ||||||
Advisor | $1,000 | $997.80 | $2.59 | $1,022.39 | $2.62 | 0.52% |
1. For Classes A, C, R6 and Advisor, 10/1/17 for Actual and Hypothetical. For Class M, 1/25/18 for Actual and 10/1/17 for Hypothetical.
2. For Classes A, C, R6 and Advisor, 10/1/17–3/31/18. For Class M, 1/25/18–3/31/18.
3. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period. The multiplier is 65/365 for Actual Class M expenses to reflect the number of days since inception.
4. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
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Year Ended March 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Class A
| ||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||
(for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ 7.38 | $ 7.59 | $ 7.60 | $ 7.21 | $ 7.50 | |||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||
Net investment incomeb | 0.26 | 0.27 | 0.29 | 0.31 | 0.32 | |||||||||||||||
Net realized and unrealized gains (losses) | (0.06 | ) | (0.22 | ) | (0.01 | ) | 0.39 | (0.29 | ) | |||||||||||
Total from investment operations | 0.20 | 0.05 | 0.28 | 0.70 | 0.03 | |||||||||||||||
Less distributions from net investment income | (0.27 | ) | (0.26 | ) | (0.29 | ) | (0.31 | ) | (0.32 | ) | ||||||||||
Net asset value, end of year | $ 7.31 | $ 7.38 | $ 7.59 | $ 7.60 | $ 7.21 | |||||||||||||||
Total returnc | 2.66% | 0.68% | 3.82% | 9.83% | 0.56% | |||||||||||||||
Ratios to average net assets | ||||||||||||||||||||
Expenses | 0.59% | 0.59% | 0.57% | 0.58% | 0.57% | |||||||||||||||
Net investment income | 3.53% | 3.54% | 3.87% | 4.11% | 4.47% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $12,154,752 | $12,425,129 | $11,836,310 | $11,757,208 | $10,997,355 | |||||||||||||||
Portfolio turnover rate | 13.05% | 19.37% | 8.77% | 9.71% | 20.33% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
12 |
Annual Report |
| The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Year Ended March 31, 2018a | ||
Class M
| ||
Per share operating performance | ||
(for a share outstanding throughout the year) | ||
Net asset value, beginning of year | $ 7.41 | |
Income from investment operationsb: | ||
Net investment incomec | 0.05 | |
Net realized and unrealized gains (losses) | (0.11) | |
Total from investment operations | (0.06) | |
Less distributions from net investment income | (0.04) | |
Net asset value, end of year | $ 7.31 | |
Total returnd | (0.75)% | |
Ratios to average net assetse | ||
Expenses | 0.50% | |
Net investment income | 3.62% | |
Supplemental data | ||
Net assets, end of year (000’s) | $5 | |
Portfolio turnover rate | 13.05% |
aFor the period January 25, 2018 (effective date) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. |
| Annual Report |
13 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Year Ended March 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Class C
| ||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||
(for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year
| $ 7.36 | $ 7.58 | $ 7.58 | $ 7.19 | $ 7.49 | |||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||
Net investment incomeb | 0.22 | 0.23 | 0.25 | 0.26 | 0.28 | |||||||||||||||
Net realized and unrealized gains (losses) | (0.06) | (0.23) | (—) | c | 0.39 | (0.30) | ||||||||||||||
Total from investment operations | 0.16 | — | 0.25 | 0.65 | (0.02) | |||||||||||||||
Less distributions from net investment income | (0.22) | (0.22) | (0.25) | (0.26) | (0.28) | |||||||||||||||
Net asset value, end of year | $ 7.30 | $ 7.36 | $ 7.58 | $ 7.58 | $ 7.19 | |||||||||||||||
Total returnd | 2.23% | (0.02)% | 3.39% | 9.26% | (0.14)% | |||||||||||||||
Ratios to average net assets | ||||||||||||||||||||
Expenses | 1.15% | 1.14% | 1.13% | 1.14% | 1.13% | |||||||||||||||
Net investment income | 2.97% | 2.99% | 3.31% | 3.55% | 3.91% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $1,527,772 | $1,659,070 | $1,442,032 | $1,316,471 | $1,143,138 | |||||||||||||||
Portfolio turnover rate | 13.05% | 19.37% | 8.77% | 9.71% | 20.33% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cAmount rounds to less than $0.01 per share.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
14 |
Annual Report |
| The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Year Ended March 31, 2018a | ||
Class R6
| ||
Per share operating performance | ||
(for a share outstanding throughout the year) | ||
Net asset value, beginning of year | $ 7.46 | |
Income from investment operationsb: | ||
Net investment incomec | 0.18 | |
Net realized and unrealized gains (losses) | (0.18) | |
Total from investment operations | — | |
Less distributions from net investment income | (0.16) | |
Net asset value, end of year | $ 7.30 | |
Total returnd | (0.05)% | |
Ratios to average net assetse | ||
Expenses before waiver and payments by affiliates | 0.49% | |
Expenses net of waiver and payments by affiliates | 0.48% | |
Net investment income | 3.64% | |
Supplemental data | ||
Net assets, end of year (000’s) | $85,534 | |
Portfolio turnover rate | 13.05% |
aFor the period August 1, 2017 (effective date) to March 31, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. |
| Annual Report |
15 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Year Ended March 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Advisor Class
| ||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||
(for a share outstanding throughout the year) | ||||||||||||||||||||
Net asset value, beginning of year | $ 7.36 | $ 7.58 | $ 7.59 | $ 7.20 | $ 7.49 | |||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||
Net investment incomeb | 0.27 | 0.28 | 0.30 | 0.31 | 0.32 | |||||||||||||||
Net realized and unrealized gains (losses) | (0.06) | (0.23) | (0.01) | 0.39 | (0.28) | |||||||||||||||
Total from investment operations | 0.21 | 0.05 | 0.29 | 0.70 | 0.04 | |||||||||||||||
Less distributions from net investment income | (0.27) | (0.27) | (0.30) | (0.31) | (0.33) | |||||||||||||||
Net asset value, end of year | $ 7.30 | $ 7.36 | $ 7.58 | $ 7.59 | $ 7.20 | |||||||||||||||
Total return | 2.89% | 0.65% | 3.92% | 9.95% | 0.65% | |||||||||||||||
Ratios to average net assets | ||||||||||||||||||||
Expenses | 0.50% | 0.49% | 0.48% | 0.49% | 0.48% | |||||||||||||||
Net investment income | 3.62% | 3.64% | 3.96% | 4.20% | 4.56% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of year (000’s) | $1,572,721 | $1,463,633 | $1,108,743 | $908,763 | $639,087 | |||||||||||||||
Portfolio turnover rate | 13.05% | 19.37% | 8.77% | 9.71% | 20.33% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
16 |
Annual Report |
| The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Statement of Investments, March 31, 2018
Principal Amount | Value | |||||||
Municipal Bonds 97.4% | ||||||||
California 96.9% | ||||||||
ABAG Finance Authority for Nonprofit Corp. COP, Butte Valley-Tulelake Rural Health Projects Inc., California Mortgage Insured, 6.65%, 10/01/22 | $ | 325,000 | $ | 326,209 | ||||
ABAG Finance Authority for Nonprofit Corp. Revenue, San Diego Hospital Assn. Sharp Healthcare, Series B, Pre-Refunded, 6.25%, 8/01/39 | 17,500,000 | 18,573,975 | ||||||
ABAG Finance Authority for Nonprofit Corps. Insured Health Facility Revenue, Institute on Aging, Series A, California Mortgage Insured, Pre-Refunded, 5.65%, 8/15/38 | 9,000,000 | 9,138,510 | ||||||
ABAG Finance Authority for Nonprofit Corps. MFHR, Palo Alto Gardens Apartments, Series A, 5.45%, 4/01/39 | 5,500,000 | 5,502,805 | ||||||
ABAG Finance Authority for Nonprofit Corps. Revenue, | ||||||||
Casa de las Campanas Inc., California Mortgage Insured, 6.00%, 9/01/37 | 11,000,000 | 12,074,150 | ||||||
Channing House, California Mortgage Insured, Pre-Refunded, 6.00%, 5/15/30 | 8,495,000 | 9,266,006 | ||||||
Channing House, California Mortgage Insured, Pre-Refunded, 6.125%, 5/15/40 | 17,635,000 | 19,281,227 | ||||||
Eskaton Properties Inc., Refunding, 5.00%, 11/15/35 | 10,000,000 | 10,923,700 | ||||||
St. Rose Hospital, Series A, California Mortgage Insured, Pre-Refunded, 5.625%, 5/15/29 | 9,050,000 | 9,458,608 | ||||||
St. Rose Hospital, Series A, California Mortgage Insured, Pre-Refunded, 6.00%, 5/15/29 | 8,620,000 | 9,044,794 | ||||||
ABAG Water and Wastewater Revenue, Pooled Financing Program, Refunding, Series A, AGMC Insured, 5.30%, 10/01/21 | 55,000 | 55,161 | ||||||
Alameda Corridor Transportation Authority Revenue, | ||||||||
Capital Appreciation, sub. lien, Refunding, Series A, AMBAC Insured, zero cpn., 10/01/29 | 20,000,000 | 12,757,600 | ||||||
Capital Appreciation, sub. lien, Refunding, Series A, AMBAC Insured, zero cpn., 10/01/30 | 41,665,000 | 25,370,652 | ||||||
Alameda County COP, | ||||||||
Alameda County Medical Center Project, NATL Insured, ETM, 5.00%, 6/01/23 | 19,195,000 | 19,241,260 | ||||||
Alameda County Medical Center Project, NATL Insured, ETM, 5.30%, 6/01/26 | 7,000,000 | 7,018,340 | ||||||
Alameda County Medical Center Project, NATL Insured, ETM, 5.00%, 6/01/28 | 8,925,000 | 8,946,509 | ||||||
Alameda USD Alameda County GO, Election of 2014, Series A, 5.00%, 8/01/39 | 18,000,000 | 20,188,080 | ||||||
Alhambra City Elementary School District GO, Los Angeles County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/27 | 3,035,000 | 2,284,778 | ||||||
Alisal USD, | ||||||||
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 8/01/32 | 3,355,000 | 2,023,568 | ||||||
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 8/01/33 | 3,610,000 | 2,073,620 | ||||||
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 2/01/34 | 3,345,000 | 1,866,543 | ||||||
Alvord USD, | ||||||||
GO, Riverside County, Capital Appreciation, Election of 2007, Series B, AGMC Insured, zero cpn., 8/01/36 | 15,000,000 | 7,119,450 | ||||||
GO, Riverside County, Capital Appreciation, Election of 2007, Series B, AGMC Insured, zero cpn. to 8/01/26, 7.35% thereafter, 8/01/46 | 42,500,000 | 41,250,500 | ||||||
GO, Riverside County, Election of 2007, Series A, AGMC Insured, 5.00%, 8/01/32 | 20,695,000 | 20,924,094 | ||||||
GO, Riverside County, Election of 2012, Refunding, Series A, AGMC Insured, 5.00%, 8/01/42 | 34,690,000 | 38,279,027 | ||||||
Anaheim City School District GO, Orange County, Election of 2010, AGMC Insured, Pre-Refunded, 6.25%, 8/01/40 | 7,500,000 | 8,586,225 | ||||||
Anaheim PFA Lease Revenue, | ||||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/24 | 26,855,000 | 22,216,067 | ||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/26 | 29,430,000 | 22,495,998 | ||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/27 | 22,860,000 | 16,752,951 | ||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/28 | 14,425,000 | 10,134,140 |
franklintempleton.com |
Annual Report |
17 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Anaheim PFA Lease Revenue, (continued) | ||||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/29 | $ | 24,810,000 | $ | 16,679,763 | ||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/32 | 13,665,000 | 7,932,259 | ||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/33 | 37,070,000 | 20,534,185 | ||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/34 | 24,970,000 | 13,204,885 | ||||||
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 3/01/37 | 15,080,000 | 7,064,829 | ||||||
Anaheim UHSD, GO, Orange County, Election of 2002, Capital Appreciation, Series A, AGMC Insured, zero cpn., 8/01/26 | 8,570,000 | 6,748,447 | ||||||
Antelope Valley Community College District GO, Los Angeles and Kern Counties, Refunding, 5.00%, 8/01/39 | 11,750,000 | 13,252,472 | ||||||
Antioch USD, GO, Contra Costa County, School Facilities ID No. 1, Series B, Assured Guaranty, Pre-Refunded, 5.375%, 8/01/36 | 3,130,000 | 3,286,250 | ||||||
Atascadero USD, GO, Election of 2010, Series A, AGMC Insured, 5.00%, 8/01/40 | 6,235,000 | 6,800,452 | ||||||
Atwater PFA Wastewater Revenue, AGMC Insured, Pre-Refunded, 6.125%, 5/01/45 | 4,620,000 | 4,939,473 | ||||||
Auburn PFA Wastewater Revenue, Assured Guaranty, Pre-Refunded, 5.50%, 6/01/39 | 1,880,000 | 1,966,424 | ||||||
Azusa RDA Tax Allocation, Series B, Pre-Refunded, 7.00%, 8/01/38 | 8,420,000 | 8,569,960 | ||||||
Baldwin Park USD, | ||||||||
GO, Los Angeles County, Capital Appreciation, Election of 2006, AGMC Insured, Pre-Refunded, zero cpn., 8/01/28 | 5,810,000 | 3,235,473 | ||||||
GO, Los Angeles County, Capital Appreciation, Election of 2006, AGMC Insured, Pre-Refunded, zero cpn., 8/01/36 | 11,410,000 | 3,809,571 | ||||||
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/48 | 25,000,000 | 3,711,250 | ||||||
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/53 | 60,000,000 | 6,028,800 | ||||||
GO, Los Angeles County, Election of 2006, BAM Insured, 5.00%, 8/01/43 | 5,000,000 | 5,519,900 | ||||||
Bay Area Toll Authority Toll Bridge Revenue, | ||||||||
San Francisco Bay Area, Series F-1, 5.00%, 4/01/56 | 60,000,000 | 67,782,600 | ||||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/39 | 81,800,000 | 81,800,000 | ||||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.50%, 4/01/43 | 18,000,000 | 18,000,000 | ||||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.125%, 4/01/47 | 53,585,000 | 53,585,000 | ||||||
San Francisco Bay Area, Series S-4, AGMC Insured, Pre-Refunded, 5.125%, 4/01/48 | 20,000,000 | 23,008,000 | ||||||
San Francisco Bay Area, Subordinate, Refunding, Series S-7, 4.00%, 4/01/42 | 94,260,000 | 97,795,693 | ||||||
San Francisco Bay Area, Subordinate, Refunding, Series S-7, 4.00%, 4/01/47 | 62,000,000 | 64,035,460 | ||||||
San Francisco Bay Area, Subordinate, Series S-2, Pre-Refunded, 5.00%, 10/01/50 | 75,000,000 | 81,211,500 | ||||||
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.00%, 4/01/43 | 36,040,000 | 41,247,059 | ||||||
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.125%, 4/01/48 | 27,355,000 | 31,469,192 | ||||||
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.25%, 4/01/53 | 33,000,000 | 38,158,560 | ||||||
Beaumont USD, | ||||||||
GO, Capital Appreciation, Election of 2008, Series C, AGMC Insured, zero cpn., 8/01/40 | 11,000,000 | 4,348,080 | ||||||
GO, Election of 2008, Series C, AGMC Insured, 5.75%, 8/01/36 | 6,200,000 | 6,946,852 | ||||||
Bell GO, Election of 2003, NATL Insured, 5.00%, 8/01/34 | 5,195,000 | 5,199,364 | ||||||
Berkeley USD, GO, Election of 2010, Series B, AGMC Insured, 5.375%, 8/01/35 | 5,090,000 | 5,491,957 | ||||||
California Community College Financing Authority Lease Revenue, | ||||||||
College of the Sequoias and Kern Community College District, AGMC Insured, 5.00%, 6/01/30 | 2,330,000 | 2,459,292 | ||||||
College of the Sequoias and Kern Community College District, AGMC Insured, 5.125%, 6/01/35 | 1,250,000 | 1,319,925 | ||||||
Grossmont-Cuyamaca Palomar and Shasta-Tehama-Trinity Joint Community College District, Series A, NATL Insured, 5.125%, 4/01/31 | 880,000 | 894,467 |
18 |
Annual Report |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
California County Tobacco Securitization Agency Tobacco Settlement Revenue, | ||||||||
Asset-Backed, Alameda County Tobacco Asset Securitization Corp., 5.875%, 6/01/35 | $ | 7,500,000 | $ | 7,569,975 | ||||
Asset-Backed, Kern County Tobacco Funding Corp., Refunding, 5.00%, 6/01/34 | 10,295,000 | 11,298,145 | ||||||
Asset-Backed, Kern County Tobacco Funding Corp., Refunding, 5.00%, 6/01/40 | 17,650,000 | 19,019,110 | ||||||
Asset-Backed, Stanislaus County Tobacco Funding Corp., Series A, 5.875%, 6/01/43 | 8,690,000 | 8,802,622 | ||||||
California Health Facilities Financing Authority Revenue, | ||||||||
Adventist Health System/West, Series A, Pre-Refunded, 5.75%, 9/01/39 | 18,000,000 | 19,006,740 | ||||||
California-Nevada Methodist Homes, Refunding, California Mortgage Insured, 5.00%, 7/01/35 | 1,000,000 | 1,135,580 | ||||||
Catholic Healthcare West, Series A, 5.25%, 3/01/41 | 50,000,000 | 53,516,500 | ||||||
Catholic Healthcare West, Series A, Pre-Refunded, 6.00%, 7/01/34 | 10,000,000 | 10,539,700 | ||||||
Cedars-Sinai Medical Center, Pre-Refunded, 5.00%, 8/15/39 | 4,200,000 | 4,397,442 | ||||||
Children’s Hospital Los Angeles, Refunding, Series A, 5.00%, 8/15/42 | 7,750,000 | 8,671,243 | ||||||
Children’s Hospital Los Angeles, Refunding, Series A, 5.00%, 8/15/47 | 10,370,000 | 11,541,395 | ||||||
Children’s Hospital Los Angeles, Series A, AGMC Insured, Pre-Refunded, 5.25%, 7/01/38 | 17,000,000 | 18,330,930 | ||||||
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/24 | 10,500,000 | 11,299,995 | ||||||
Children’s Hospital of Orange County, Series A, 6.25%, 11/01/29 | 13,870,000 | 14,866,143 | ||||||
Children’s Hospital of Orange County, Series A, 5.25%, 11/01/41 | 10,000,000 | 11,069,100 | ||||||
Community Program for Persons with Developmental Disabilities, Series A, California Mortgage Insured, 6.25%, 2/01/26 | 5,000,000 | 5,591,500 | ||||||
El Camino Hospital, 4.125%, 2/01/47 | 11,000,000 | 11,315,480 | ||||||
El Camino Hospital, 5.00%, 2/01/47 | 12,500,000 | 14,054,250 | ||||||
Feedback Foundation Inc., Series A, California Mortgage Insured, 6.50%, 12/01/22 | 620,000 | 622,585 | ||||||
Kaiser Permanente, Refunding, Series A, Subseries A-2, 4.00%, 11/01/38 | 25,000,000 | 26,050,500 | ||||||
Kaiser Permanente, Refunding, Series A, Subseries A-2, 4.00%, 11/01/44 | 385,000,000 | 398,321,000 | ||||||
Kaiser Permanente, Series A, Subseries A-2, 5.00%, 11/01/47 | 30,000,000 | 38,975,400 | ||||||
Lucile Salter Packard Children’s Hospital at Stanford, Series A, 5.00%, 8/15/51 | 39,455,000 | 43,031,990 | ||||||
Lucile Salter Packard Children’s Hospital at Stanford, Series A, 5.00%, 11/15/56 | 12,000,000 | 13,615,920 | ||||||
Lucile Salter Packard Children’s Hospital at Stanford, Series B, 5.00%, 8/15/55 | 12,960,000 | 14,599,181 | ||||||
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/34 | 1,000,000 | 1,132,100 | ||||||
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/39 | 1,450,000 | 1,622,478 | ||||||
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/44 | 1,160,000 | 1,290,825 | ||||||
Pomona Valley Hospital, Refunding, Series A, NATL Insured, 5.625%, 7/01/19 | 3,705,000 | 3,716,634 | ||||||
Providence Health and Services, Refunding, Series A, 5.00%, 10/01/38 | 9,000,000 | 10,248,480 | ||||||
Providence Health and Services, Series C, Pre-Refunded, 6.25%, 10/01/28 | 4,000,000 | 4,094,440 | ||||||
Providence Health and Services, Series C, Pre-Refunded, 6.50%, 10/01/38 | 6,500,000 | 6,659,835 | ||||||
Rady Children’s Hospital, 5.25%, 8/15/41 | 11,000,000 | 11,826,760 | ||||||
Stanford Health Care, Refunding, Series A, 4.00%, 11/15/40 | 40,000,000 | 41,553,600 | ||||||
Sutter Health, Refunding, Series A, 5.00%, 8/15/43 | 20,000,000 | 22,456,800 | ||||||
Sutter Health, Refunding, Series A, 4.00%, 11/15/48 | 36,810,000 | 37,576,016 | ||||||
Sutter Health, Refunding, Series A, 5.00%, 11/15/48 | 63,470,000 | 72,296,773 | ||||||
Sutter Health, Refunding, Series B, 5.00%, 11/15/46 | 26,565,000 | 30,033,326 | ||||||
Sutter Health, Series A, 5.00%, 8/15/52 | 89,990,000 | 98,473,357 | ||||||
Sutter Health, Series A, Pre-Refunded, 5.00%, 8/15/38 | 30,300,000 | 30,700,263 |
franklintempleton.com |
Annual Report |
19 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
California Infrastructure and Economic Development Bank Revenue, | ||||||||
Academy of Motion Picture Arts and Sciences Obligated Group, Refunding, Series A, 5.00%, 11/01/41 | $ | 8,000,000 | $ | 8,889,760 | ||||
Bay Area Toll Bridges Seismic Retrofit, first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/33 | 13,460,000 | 16,602,641 | ||||||
Bay Area Toll Bridges Seismic Retrofit, first lien, Series A, FGIC Insured, Pre-Refunded, 5.00%, 7/01/29 | 50,985,000 | 62,421,955 | ||||||
Clean Water State Revolving Fund, Green Bonds, 5.00%, 10/01/48 | 10,000,000 | 11,744,300 | ||||||
Infrastructure SRF, Refunding, Series A, 5.00%, 10/01/40 | 4,015,000 | 4,559,033 | ||||||
Infrastructure SRF, Refunding, Series A, 5.00%, 10/01/43 | 1,900,000 | 2,150,629 | ||||||
UCSF 2130 Third Street, 5.00%, 5/15/52 | 10,950,000 | 12,662,142 | ||||||
California Municipal Finance Authority COP, | ||||||||
Community Hospitals of Central California Obligated Group, Pre-Refunded, 5.375%, 2/01/29 | 10,000,000 | 10,318,200 | ||||||
Community Hospitals of Central California Obligated Group, Pre-Refunded, 5.50%, 2/01/39 | 13,250,000 | 13,685,262 | ||||||
California Municipal Finance Authority Mobile Home Park Revenue, Caritas Projects, Senior, Refunding, Series A, 4.00%, 8/15/52 | 27,350,000 | 27,370,239 | ||||||
California Municipal Finance Authority Senior Living Revenue, | ||||||||
Pilgrim Place in Claremont, Series A, California Mortgage Insured, Pre-Refunded, 5.875%, 5/15/29 | 2,895,000 | 3,033,699 | ||||||
Pilgrim Place in Claremont, Series A, California Mortgage Insured, Pre-Refunded, 6.125%, 5/15/39 | 5,830,000 | 6,125,348 | ||||||
California School Facilities Financing Authority Revenue, Azusa USD, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/32 | 10,000,000 | 10,456,900 | ||||||
California State Educational Facilities Authority Revenue, | ||||||||
Chapman University, 5.00%, 4/01/45 | 10,000,000 | 10,982,000 | ||||||
Loma Linda University, Refunding, Series A, 5.00%, 4/01/47 | 11,000,000 | 12,281,720 | ||||||
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/26 | 7,620,000 | 5,877,535 | ||||||
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/27 | 7,365,000 | 5,453,488 | ||||||
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/28 | 4,120,000 | 2,931,339 | ||||||
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/30 | 5,685,000 | 3,716,967 | ||||||
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/31 | 7,615,000 | 4,755,263 | ||||||
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/32 | 7,615,000 | 4,546,612 | ||||||
Pepperdine University, Refunding, 5.00%, 10/01/49 | 13,060,000 | 14,904,333 | ||||||
Santa Clara University, Capital Appreciation, Refunding, AMBAC Insured, zero cpn., 9/01/26 | 5,150,000 | 3,858,432 | ||||||
Santa Clara University, Refunding, 5.00%, 4/01/45 | 15,495,000 | 17,343,863 | ||||||
Stanford University, Refunding, Series U-1, 5.25%, 4/01/40 | 24,960,000 | 32,901,523 | ||||||
Stanford University, Refunding, Series U-3, 5.00%, 6/01/43 | 56,950,000 | 73,987,162 | ||||||
Stanford University, Series U-4, 5.00%, 6/01/43 | 24,205,000 | 31,446,168 | ||||||
Stanford University, Series U-6, 5.00%, 5/01/45 | 90,580,000 | 118,588,242 | ||||||
California State GO, | ||||||||
NATL Insured, 6.00%, 10/01/21 | 65,000 | 66,459 | ||||||
NATL RE, FGIC Insured, 5.625%, 10/01/26 | 5,005,000 | 5,108,053 | ||||||
Pre-Refunded, 5.00%, 8/01/34 | 26,795,000 | 27,111,449 | ||||||
Various Purpose, 5.125%, 4/01/24 | 5,000 | 5,013 | ||||||
Various Purpose, 6.00%, 5/01/24 | 2,565,000 | 2,574,029 | ||||||
Various Purpose, 5.20%, 4/01/26 | 20,000 | 20,054 |
20 |
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franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
California State GO, (continued) | ||||||||
Various Purpose, 6.00%, 4/01/38 | $ | 57,130,000 | $ | 59,576,878 | ||||
Various Purpose, 5.00%, 10/01/39 | 15,000,000 | 17,210,250 | ||||||
Various Purpose, 6.00%, 11/01/39 | 100,000,000 | 106,697,000 | ||||||
Various Purpose, 5.25%, 11/01/40 | 69,685,000 | 75,492,548 | ||||||
Various Purpose, AGMC Insured, 5.50%, 4/01/19 | 275,000 | 280,385 | ||||||
Various Purpose, AGMC Insured, 5.50%, 3/01/20 | 190,000 | 193,219 | ||||||
Various Purpose, AMBAC Insured, 5.90%, 3/01/25 | 210,000 | 213,839 | ||||||
Various Purpose, FGIC Insured, 6.00%, 8/01/19 | 605,000 | 613,730 | ||||||
Various Purpose, FGIC Insured, 5.375%, 6/01/26 | 1,335,000 | 1,343,437 | ||||||
Various Purpose, NATL Insured, 6.00%, 8/01/24 | 990,000 | 1,004,711 | ||||||
Various Purpose, Pre-Refunded, 5.00%, 8/01/34 | 21,205,000 | 21,455,431 | ||||||
Various Purpose, Refunding, 5.625%, 9/01/24 | 255,000 | 259,386 | ||||||
Various Purpose, Refunding, 6.00%, 3/01/33 | 25,000,000 | 27,017,500 | ||||||
Various Purpose, Refunding, 5.50%, 3/01/40 | 25,000,000 | 26,719,750 | ||||||
Various Purpose, Refunding, 5.00%, 10/01/41 | 15,250,000 | 16,759,597 | ||||||
Various Purpose, Refunding, 5.00%, 4/01/42 | 85,000,000 | 92,928,800 | ||||||
Various Purpose, Refunding, 5.00%, 4/01/43 | 44,745,000 | 49,369,396 | ||||||
Various Purpose, Refunding, 5.00%, 10/01/44 | 25,000,000 | 28,134,750 | ||||||
Various Purpose, Refunding, 5.00%, 8/01/45 | 22,500,000 | 25,550,550 | ||||||
Various Purpose, Refunding, 5.00%, 9/01/45 | 10,000,000 | 11,468,800 | ||||||
Various Purpose, Refunding, 5.00%, 8/01/46 | 20,000,000 | 22,895,800 | ||||||
Various Purpose, Refunding, 5.00%, 10/01/47 | 81,000,000 | 92,192,580 | ||||||
a California State Health Facilities Financing Authority Revenue, | ||||||||
Sutter Health, Series A, 4.00%, 11/15/42 | 11,680,000 | 12,008,558 | ||||||
Sutter Health, Series A, 5.00%, 11/15/48 | 34,500,000 | 39,296,880 | ||||||
California State Municipal Finance Authority Revenue, | ||||||||
Channing House Project, Series B, California Mortgage Insured, 5.00%, 5/15/47 | 10,000,000 | 11,393,000 | ||||||
City of Anaheim Water System Project, Refunding, Series A, 5.25%, 10/01/45 | 13,145,000 | 15,277,513 | ||||||
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/42 | 5,500,000 | 6,055,775 | ||||||
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/47 | 13,500,000 | 14,789,520 | ||||||
Community Medical Centers, Series A, 5.00%, 2/01/46 | 15,000,000 | 16,498,650 | ||||||
Eisenhower Medical Center, Refunding, Series A, 5.00%, 7/01/42 | 5,100,000 | 5,673,903 | ||||||
Eisenhower Medical Center, Refunding, Series A, 5.00%, 7/01/47 | 4,000,000 | 4,433,520 | ||||||
Eisenhower Medical Center, Series A, Pre-Refunded, 5.75%, 7/01/40 | 7,000,000 | 7,616,630 | ||||||
Inland Regional Center Project, Refunding, 5.00%, 6/15/45 | 23,300,000 | 25,552,877 | ||||||
NorthBay Healthcare Group, Series A, 5.25%, 11/01/41 | 5,500,000 | 6,007,375 | ||||||
NorthBay Healthcare Group, Series A, 5.00%, 11/01/47 | 8,650,000 | 9,253,165 | ||||||
South Central Los Angeles Regional Center Project, 5.75%, 12/01/43 | 33,895,000 | 38,637,588 | ||||||
University of La Verne, Refunding, Series A, 4.00%, 6/01/47 | 8,000,000 | 8,298,160 | ||||||
California State PCFA Revenue, San Jose Water Company Project, 4.75%, 11/01/46 | 15,000,000 | 16,228,350 | ||||||
California State Public School District Financing Authority Lease Revenue, Southern Kern USD, Series B, AGMC Insured, ETM, 5.90%, 9/01/26 | 1,615,000 | 1,862,886 | ||||||
California State Public Works Board Lease Revenue, | ||||||||
Various Capital Projects, Refunding, Series G, 5.00%, 11/01/31 | 16,520,000 | 18,432,025 | ||||||
Various Capital Projects, Series A, 5.00%, 4/01/31 | 48,070,000 | 52,996,214 | ||||||
Various Capital Projects, Series A, 5.00%, 4/01/32 | 17,885,000 | 19,681,906 | ||||||
Various Capital Projects, Series A, 5.00%, 4/01/37 | 29,000,000 | 31,832,430 | ||||||
Various Capital Projects, Series A, Subseries A-1, Pre-Refunded, 5.50%, 3/01/25 | 8,700,000 | 9,341,103 | ||||||
Various Capital Projects, Series A, Subseries A-1, Pre-Refunded, 6.00%, 3/01/35 | 10,000,000 | 10,830,700 | ||||||
Various Capital Projects, Series G, Subseries G-1, Pre-Refunded, 5.75%, 10/01/30 | 100,000,000 | 106,211,000 | ||||||
Various Capital Projects, Series I, 5.00%, 11/01/38 | 40,000,000 | 44,667,600 |
franklintempleton.com |
Annual Report |
21 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
California State Public Works Board Lease Revenue, (continued) | ||||||||
Various Capital Projects, Series I, Pre-Refunded, 6.375%, 11/01/34 | $ | 50,000,000 | $ | 53,753,000 | ||||
Various Judicial Council Projects, Series D, 5.00%, 12/01/31 | 15,000,000 | 16,424,850 | ||||||
California State University Revenue, | ||||||||
Systemwide, Refunding, Series A, 5.00%, 11/01/39 | 23,000,000 | 26,168,250 | ||||||
Systemwide, Refunding, Series A, 5.00%, 11/01/42 | 29,105,000 | 33,675,067 | ||||||
Systemwide, Refunding, Series A, 5.00%, 11/01/42 | 29,645,000 | 32,314,532 | ||||||
Systemwide, Refunding, Series A, 5.00%, 11/01/43 | 11,000,000 | 12,569,150 | ||||||
Systemwide, Refunding, Series A, 5.00%, 11/01/44 | 32,345,000 | 36,405,915 | ||||||
Systemwide, Refunding, Series A, 5.00%, 11/01/47 | 63,000,000 | 72,406,530 | ||||||
Systemwide, Series A, AGMC Insured, 5.00%, 11/01/33 | 110,000 | 110,318 | ||||||
Systemwide, Series A, AGMC Insured, Pre-Refunded, 5.00%, 11/01/33 | 4,890,000 | 4,903,790 | ||||||
California Statewide CDA, | ||||||||
COP, Insured Health Facilities, UniHealth America, Series A, AMBAC Insured, Pre-Refunded, 5.75%, 10/01/25 | 8,820,000 | 9,644,846 | ||||||
COP, NATL Insured, 5.00%, 4/01/18 | 2,200,000 | 2,200,000 | ||||||
COP, NATL Insured, 5.125%, 4/01/23 | 6,000,000 | 6,016,140 | ||||||
MFHR, 740 S. Olive Street Apartments, Series L, GNMA Secured, 5.10%, 7/20/50 | 10,000,000 | 10,370,700 | ||||||
California Statewide CDA Revenue, | ||||||||
Adventist Health System/West, Refunding, Series A, 5.00%, 3/01/35 | 9,250,000 | 10,432,890 | ||||||
Adventist Health System/West, Series B, Assured Guaranty, Pre-Refunded, 5.00%, 3/01/37 | 16,500,000 | 16,580,850 | ||||||
Cottage Health System Obligated Group, Refunding, 5.25%, 11/01/30 | 18,500,000 | 19,843,655 | ||||||
Cottage Health System Obligated Group, Refunding, 5.00%, 11/01/40 | 56,000,000 | 59,027,920 | ||||||
Enloe Medical Center, Series B, California Mortgage Insured, Pre-Refunded, 6.25%, 8/15/28 | 17,215,000 | 17,520,738 | ||||||
Enloe Medical Center, Series B, California Mortgage Insured, Pre-Refunded, 6.25%, 8/15/33 | 20,000,000 | 20,355,200 | ||||||
Enloe Medical Center, Series B, California Mortgage Insured, Pre-Refunded, 5.75%, 8/15/38 | 36,500,000 | 37,081,810 | ||||||
Henry Mayo Newhall Memorial Hospital, Refunding, Series A, AGMC Insured, 5.25%, 10/01/43 | 3,000,000 | 3,341,310 | ||||||
Henry Mayo Newhall Memorial Hospital, Series B, AMBAC Insured, Pre-Refunded, 5.05%, 10/01/28 | 7,825,000 | 7,965,615 | ||||||
Insured Health Facility, CLARE Foundation Inc. and Principals Inc., Refunding, Series A, California Mortgage Insured, 5.00%, 8/01/21 | 600,000 | 601,548 | ||||||
Insured Health Facility, North County Serenity House Inc., Refunding, California Mortgage Insured, 5.50%, 1/01/28 | 2,945,000 | 2,953,599 | ||||||
Kaiser Permanente, Series A, 5.00%, 4/01/42 | 88,945,000 | 97,561,102 | ||||||
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.25%, 8/01/24 | 11,945,000 | 12,629,210 | ||||||
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.625%, 8/01/29 | 20,015,000 | 21,314,174 | ||||||
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.75%, 2/01/38 | 37,455,000 | 39,947,256 | ||||||
Poway RHF Housing Inc., Series A, California Mortgage Insured, 5.25%, 11/15/35 | 2,000,000 | 2,278,620 | ||||||
The Redwoods Project, Refunding, California Mortgage Insured, 5.125%, 11/15/35 | 2,000,000 | 2,257,800 | ||||||
The Redwoods Project, Refunding, California Mortgage Insured, 5.375%, 11/15/44 | 7,250,000 | 8,258,258 | ||||||
St. Joseph Health System, Series B, FGIC Insured, Pre-Refunded, 5.75%, 7/01/47 | 29,600,000 | 29,915,240 | ||||||
St. Joseph Health System, Series C, FGIC Insured, Pre-Refunded, 5.75%, 7/01/47 | 12,000,000 | 12,127,800 | ||||||
St. Joseph Health System, Series E, AGMC Insured, Pre-Refunded, 5.25%, 7/01/47 | 35,300,000 | 35,632,879 | ||||||
Sutter Health, Series B, Pre-Refunded, 5.25%, 11/15/48 | 63,255,000 | 63,540,913 | ||||||
Sutter Health, Series C, AGMC Insured, Pre-Refunded, 5.05%, 8/15/38 | 15,000,000 | 15,200,850 | ||||||
Sutter Health, Series C, Pre-Refunded, 5.00%, 11/15/38 | 23,925,000 | 24,026,203 | ||||||
California Statewide CDA Student Housing Revenue, | ||||||||
CHF-Irvine LLC, UCI East Campus Apartments, Phase II, Pre-Refunded, 5.50%, 5/15/26 | 9,500,000 | 9,544,555 | ||||||
CHF-Irvine LLC, UCI East Campus Apartments, Phase II, Pre-Refunded, 6.00%, 5/15/40 | 59,000,000 | 59,310,930 | ||||||
University of California, Irvine East Campus Apartments, Phase I, CHF-Irvine LLC, Refunding, 5.125%, 5/15/31 | 8,000,000 | 8,585,840 |
22 |
Annual Report |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
California Statewide CDA Student Housing Revenue, (continued) | ||||||||
University of California, Irvine East Campus Apartments, Phase I, CHF-Irvine LLC, Refunding, 5.375%, 5/15/38 | $ | 8,500,000 | $ | 9,106,560 | ||||
California Statewide CDA Water and Wastewater Revenue, Pooled Financing Program, Series A, AGMC Insured, 5.25%, 10/01/24 | 275,000 | 275,751 | ||||||
Campbell USD, | ||||||||
GO, Capital Appreciation, Series B, NATL Insured, zero cpn., 8/01/20 | 5,000,000 | 4,795,750 | ||||||
GO, Capital Appreciation, Series B, NATL Insured, zero cpn., 8/01/21 | 6,280,000 | 5,895,036 | ||||||
Carlsbad USD, | ||||||||
COP, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 10/01/34 | 14,000,000 | 14,714,980 | ||||||
COP, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 10/01/41 | 3,880,000 | 4,078,152 | ||||||
GO, Capital Appreciation, Election of 2006, Series B, zero cpn. to 5/01/19, 6.00% thereafter, 5/01/34 | 14,000,000 | 15,781,640 | ||||||
GO, Capital Appreciation, Election of 2006, Series C, zero cpn. to 8/01/26, 6.625% thereafter, 8/01/35 | 33,000,000 | 30,664,920 | ||||||
Castaic USD, COP, Refunding, AGMC Insured, 5.125%, 9/01/33 | 1,000,000 | 1,062,480 | ||||||
Castro Valley USD, COP, Solar Projects, AGMC Insured, 5.00%, 9/01/32 | 2,620,000 | 2,826,587 | ||||||
Centinela Valley UHSD, | ||||||||
GO, Los Angeles County, Election of 2010, Series B, AGMC Insured, 5.00%, 8/01/50 | 3,850,000 | 4,294,252 | ||||||
GO, Los Angeles County, Refunding, Series A, NATL Insured, 5.50%, 8/01/33 | 15,630,000 | 18,882,916 | ||||||
Central USD, | ||||||||
GO, Fresno County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/29 | 3,000,000 | 3,154,650 | ||||||
GO, Fresno County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.625%, 8/01/33 | 3,500,000 | 3,686,165 | ||||||
Cerritos PFAR Tax Allocation, Redevelopment Project, Refunding, Series A, AMBAC Insured, 5.00%, 11/01/22 | 1,675,000 | 1,712,118 | ||||||
Chaffey Joint UHSD, GO, Election of 2012, Series B, 5.00%, 8/01/44 | 27,500,000 | 30,853,625 | ||||||
Charter Oak USD, GO, Los Angeles County, Election of 2012, Refunding, Series A, AGMC Insured, 5.00%, 8/01/40 | 5,000,000 | 5,580,050 | ||||||
Chico USD, GO, Election of 2012, Series A, 5.00%, 8/01/43 | 8,000,000 | 8,902,880 | ||||||
Chula Vista IDR, San Diego Gas and Electric Co., Refunding, Series A, 5.875%, 2/15/34 | 17,500,000 | 18,302,900 | ||||||
Coachella Valley USD, | ||||||||
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/36 | 8,000,000 | 3,984,160 | ||||||
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/37 | 8,000,000 | 3,806,480 | ||||||
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/40 | 7,500,000 | 3,097,500 | ||||||
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/43 | 10,000,000 | 3,520,200 | ||||||
College of the Sequoias Tulare Area ID No. 3 GO, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/33 | 5,000,000 | 5,257,750 | ||||||
College of the Sequoias Visalia Area ID No. 2 GO, | ||||||||
Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/33 | 5,750,000 | 6,046,413 | ||||||
Election of 2008, Series B, AGMC Insured, 5.00%, 8/01/39 | 3,000,000 | 3,177,570 | ||||||
Colton Joint USD, | ||||||||
GO, San Bernardino and Riverside Counties, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/42 | 16,365,000 | 6,000,555 | ||||||
GO, San Bernardino and Riverside Counties, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.375%, 8/01/34 | 10,665,000 | 11,197,397 |
franklintempleton.com |
Annual Report |
23 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Compton CRDA Tax Allocation, | ||||||||
Redevelopment Project, second lien, Series B, 5.70%, 8/01/30 | $ | 10,000,000 | $ | 10,637,100 | ||||
Redevelopment Project, second lien, Series B, 6.00%, 8/01/35 | 11,160,000 | 11,940,642 | ||||||
Redevelopment Project, second lien, Series B, 6.00%, 8/01/42 | 10,000,000 | 10,676,100 | ||||||
Compton Sewer Revenue, 6.00%, 9/01/39 | 11,775,000 | 12,211,028 | ||||||
Coronado CDA Tax Allocation, | ||||||||
Coronado Community Development Project, NATL Insured, 5.375%, 9/01/26 | 2,700,000 | 2,707,290 | ||||||
Coronado Community Development Project, Refunding, NATL Insured, 5.00%, 9/01/34 | 6,115,000 | 6,128,759 | ||||||
Corona-Norco USD, | ||||||||
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 9/01/23 | 2,320,000 | 2,031,415 | ||||||
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 9/01/24 | 2,620,000 | 2,220,109 | ||||||
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 3/01/25 | 1,400,000 | 1,159,970 | ||||||
GO, Riverside County, Capital Appreciation, Series C, NATL Insured, zero cpn., 9/01/25 | 4,655,000 | 3,796,432 | ||||||
GO, Riverside County, Capital Appreciation, Series C, NATL Insured, zero cpn., 9/01/26 | 6,080,000 | 4,768,362 | ||||||
GO, Riverside County, Election of 2006, Series B, Assured Guaranty, Pre-Refunded, 5.375%, 2/01/34 | 12,000,000 | 12,156,360 | ||||||
GO, Riverside County, Election of 2006, Series C, AGMC Insured, Pre-Refunded, 5.50%, 8/01/39 | 7,500,000 | 7,891,725 | ||||||
GO, Riverside County, Election of 2014, Series A, 5.00%, 8/01/44 | 20,000,000 | 22,334,200 | ||||||
Covina PFA Wastewater Revenue, Assured Guaranty, 5.375%, 10/01/29 | 6,550,000 | 6,878,810 | ||||||
Covina PFA Water Revenue, AGMC Insured, 5.50%, 10/01/40 | 3,500,000 | 3,801,070 | ||||||
Cudahy RDA Allocation, Refunding, Series C, 6.00%, 10/01/27 | 5,490,000 | 5,539,190 | ||||||
Daly City Housing Development Finance Agency Mobile Home Park Revenue, Franciscan Mobile Home Park Acquisition Project, senior bond, Refunding, Series A, 5.00%, 12/15/47 | 17,870,000 | 17,896,984 | ||||||
Delano UHSD, GO, Refunding, Series A, NATL Insured, 5.15%, 2/01/32 | 8,520,000 | 9,851,165 | ||||||
Delano USD, COP, Refinancing Project, NATL Insured, 5.125%, 1/01/22 | 1,320,000 | 1,383,175 | ||||||
East Bay MUD Wastewater System Revenue, Alameda and Contra Costa Counties, Refunding, Series A-2, 5.00%, 6/01/38 | 12,060,000 | 15,202,354 | ||||||
East Bay MUD Water System Revenue, | ||||||||
Alameda and Contra Costa Counties, Refunding, Series A, 5.00%, 6/01/35 | 10,000,000 | 11,455,900 | ||||||
Alameda and Contra Costa Counties, Refunding, Series A, 5.00%, 6/01/36 | 7,355,000 | 8,475,387 | ||||||
Alameda and Contra Costa Counties, Series C, 5.00%, 6/01/44 | 14,000,000 | 15,790,460 | ||||||
Alameda and Contra Costa Counties, Series C, 4.00%, 6/01/45 | 9,070,000 | 9,471,710 | ||||||
Eastern California Municipal Water District Financing Authority Water and Wastewater Revenue, Series B, 5.00%, 7/01/46 | 30,705,000 | 34,889,477 | ||||||
El Monte UHSD, GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre- Refunded, 5.50%, 6/01/34 | 11,355,000 | 11,870,290 | ||||||
Elk Grove Finance Authority Special Tax Revenue, BAM Insured, 5.00%, 9/01/38 | 1,500,000 | 1,665,360 | ||||||
Elsinore Valley Municipal Water District COP, Series A, BHAC Insured, Pre-Refunded, 5.00%, 7/01/29 | 7,245,000 | 7,308,973 | ||||||
Escondido UHSD, | ||||||||
COP, Public School Facilities Project, Series A, AGMC Insured, 5.00%, 6/01/33 | 3,500,000 | 3,697,260 | ||||||
COP, Public School Facilities Project, Series A, AGMC Insured, 5.00%, 6/01/37 | 2,500,000 | 2,640,900 | ||||||
Fairfax Elementary School District GO, | ||||||||
Capital Appreciation, Election of 2010, Refunding, AGMC Insured, zero cpn., 11/01/48 | 10,380,000 | 2,750,908 | ||||||
Election of 2010, AGMC Insured, 5.75%, 11/01/40 | 2,250,000 | 2,519,213 | ||||||
Fontana RDA Tax Allocation, Jurupa Hills Redevelopment Project, Refunding, Series A, 5.50%, 10/01/27 | 12,500,000 | 12,737,250 | ||||||
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, | ||||||||
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/37 | 41,250,000 | 19,140,412 | ||||||
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/38 | 77,650,000 | 34,453,305 | ||||||
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/39 | 56,100,000 | 23,792,571 | ||||||
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn. to 1/15/24, 5.50% thereafter, 1/15/31 | 35,000,000 | 31,685,500 |
24 |
Annual Report |
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, (continued) | ||||||||
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn. to 1/15/24, 5.625% thereafter, 1/15/32 | $ | 37,260,000 | $ | 33,885,362 | ||||
Capital Appreciation, Refunding, Series A, zero cpn., 1/15/42 | 130,000,000 | 45,007,300 | ||||||
Capital Appreciation, Refunding, Series A, zero cpn. to 1/14/24, 6.85% thereafter, 1/15/42 | 98,000,000 | 87,631,600 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/22 | 30,835,000 | 28,610,255 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/23 | 5,765,000 | 5,201,414 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/24 | 72,045,000 | 63,104,215 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/25 | 20,660,000 | 17,565,958 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/26 | 23,475,000 | 19,366,171 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/27 | 15,000,000 | 11,998,050 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/28 | 2,000,000 | 1,544,480 | ||||||
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/29 | 35,310,000 | 26,052,424 | ||||||
Refunding, Series A, 5.75%, 1/15/46 | 260,000,000 | 297,988,600 | ||||||
Refunding, Series A, 6.00%, 1/15/49 | 305,000,000 | 357,475,250 | ||||||
Refunding, Series A, 6.00%, 1/15/53 | 190,000,000 | 222,246,800 | ||||||
Refunding, Series A, AGMC Insured, 5.00%, 1/15/42 | 10,000,000 | 10,981,800 | ||||||
Fort Bragg USD, GO, Election of 2008, AGMC Insured, 5.125%, 8/01/41 | 4,380,000 | 4,740,430 | ||||||
Fowler USD, | ||||||||
GO, Fresno County, Capital Appreciation, Election of 2004, Series C, AGMC Insured, zero cpn., 8/01/41 | 3,095,000 | 1,248,430 | ||||||
GO, Fresno County, Capital Appreciation, Election of 2004, Series C, AGMC Insured, zero cpn., 8/01/42 | 3,005,000 | 1,160,321 | ||||||
GO, Fresno County, Election of 2004, Series C, AGMC Insured, 5.25%, 8/01/39 | 3,555,000 | 3,801,290 | ||||||
Franklin-McKinley School District GO, Santa Clara County, Election of 2010, Series C, BAM Insured, 5.00%, 8/01/44 | 5,000,000 | 5,504,300 | ||||||
Fresno USD, | ||||||||
GO, Capital Appreciation, Election of 2001, Series G, zero cpn., 8/01/41 | 47,000,000 | 11,004,580 | ||||||
GO, Capital Appreciation, Election of 2010, Series B, zero cpn., Refunding, 8/01/41 | 35,000,000 | 8,246,350 | ||||||
GO, Refunding, Series C, NATL Insured, 5.90%, 2/01/20 | 2,065,000 | 2,220,371 | ||||||
GO, Refunding, Series C, NATL Insured, 5.90%, 8/01/22 | 3,000,000 | 3,320,310 | ||||||
Fullerton School District Financing Authority Special Tax Revenue, senior lien, Refunding, Series A, AGMC Insured, 5.00%, 9/01/31 | 2,500,000 | 2,770,350 | ||||||
Fullerton School District GO, Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/23 | 3,030,000 | 2,666,945 | ||||||
Glendale Community College District GO, Capital Appreciation, NATL Insured, zero cpn., 8/01/28 | 15,000,000 | 10,063,050 | ||||||
Glendora PFAR Tax Allocation, Project No. 1, Refunding, Series A, NATL Insured, 5.00%, 9/01/24 | 5,000,000 | 5,013,200 | ||||||
Golden State Tobacco Securitization Corp. Enhanced Tobacco Settlement Revenue, | ||||||||
Asset-Backed, Senior, Series A, 5.75%, 6/01/47 | 72,885,000 | 73,315,750 | ||||||
Asset-Backed, Senior, Series A-1, 5.125%, 6/01/47 | 5,000,000 | 5,000,050 | ||||||
Asset-Backed, Series A, 5.00%, 6/01/35 | 25,000,000 | 28,389,250 | ||||||
Asset-Backed, Series A, 5.00%, 6/01/40 | 212,525,000 | 239,723,949 | ||||||
Asset-Backed, Series A, 5.00%, 6/01/45 | 144,305,000 | 162,180,060 | ||||||
Grand Terrace CRDA Tax Allocation Revenue, Community Redevelopment Project Area, Series A, 6.00%, 9/01/33 | 10,000,000 | 10,653,000 | ||||||
Grossmont UHSD, | ||||||||
GO, San Diego County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/24 . | 5,110,000 | 4,350,245 | ||||||
GO, San Diego County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/33 | 1,440,000 | 1,504,814 | ||||||
GO, San Diego County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.25%, 8/01/33 | 7,510,000 | 7,872,583 | ||||||
Hacienda La Puente USD, GO, Los Angeles County, Election of 2016, Series A, 4.00%, 8/01/47 | 15,655,000 | 16,348,830 |
franklintempleton.com |
Annual Report |
25 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Hartnell Community College District GO, Monterey and San Benito Counties, Capital Appreciation, Election of 2002, zero cpn. to 8/01/22, 6.125% thereafter, 8/01/33 | $ | 20,000,000 | $ | 21,989,000 | ||||
Hawthorne School District GO, | ||||||||
Capital Appreciation, Election of 2004, Series C, Assured Guaranty, zero cpn., 8/01/48 | 37,665,000 | 10,128,119 | ||||||
Los Angeles County, Election of 2008, Series A, Assured Guaranty, 5.00%, 8/01/34 | 1,000,000 | 1,036,950 | ||||||
Hayward USD, GO, Alameda County, Capital Appreciation, Election of 2008, Series A, AGMC Insured, Pre-Refunded, zero cpn., 8/01/38 | 9,875,000 | 2,623,294 | ||||||
Healdsburg RDA Tax Allocation Revenue, Sotoyome Community Development Project, Pre-Refunded, 5.375%, 8/01/34 | 7,750,000 | 8,398,985 | ||||||
Huntington Beach City School District GO, Capital Appreciation, Election of 2002, Series A, NATL Insured, zero cpn., 8/01/28 | 10,005,000 | 7,301,949 | ||||||
Huntington Beach UHSD, COP, Adult Education Project, AGMC Insured, 5.25%, 9/01/39 | 2,000,000 | 2,145,380 | ||||||
Indian Wells Valley Water District COP, | ||||||||
Refunding, Assured Guaranty, 5.125%, 10/01/32 | 1,690,000 | 1,734,194 | ||||||
Refunding, Assured Guaranty, 5.25%, 10/01/39 | 7,590,000 | 7,795,841 | ||||||
Inland Empire Tobacco Securitization Authority Revenue, Tobacco Settlement Asset-Backed, Inland Empire Tobacco Securitization Corp., Capital Appreciation, Series B, 5.75%, 6/01/26 | 35,000,000 | 36,335,950 | ||||||
Irvine USD Financing Authority Special Tax, | ||||||||
Group II, Series A, Pre-Refunded, 5.00%, 9/01/26 | 1,720,000 | 1,744,699 | ||||||
Group II, Series A, Pre-Refunded, 5.125%, 9/01/36 | 6,305,000 | 6,398,755 | ||||||
Irvine USD Special Tax, | ||||||||
CFD No. 01-1, South Irvine Communities, Refunding, BAM Insured, 5.00%, 9/01/38 | 7,000,000 | 7,729,820 | ||||||
CFD No. 09-1, Series D, 5.00%, 3/01/57 | 10,000,000 | 10,991,500 | ||||||
Jefferson UHSD San Mateo County GO, | ||||||||
Refunding, Series A, NATL Insured, 6.45%, 8/01/25 | 3,045,000 | 3,645,504 | ||||||
Refunding, Series A, NATL Insured, 6.45%, 8/01/29 | 3,075,000 | 3,888,184 | ||||||
Jurupa PFA Special Tax Revenue, | ||||||||
Refunding, Series A, AGMC Insured, 5.25%, 9/01/42 | 3,250,000 | 3,652,350 | ||||||
Series A, AGMC Insured, 5.125%, 9/01/37 | 4,000,000 | 4,449,000 | ||||||
Jurupa PFAR, superior lien, Refunding, Series A, AGMC Insured, 5.00%, 9/01/30 | 4,000,000 | 4,254,720 | ||||||
Jurupa USD, GO, Riverside County, Election of 2014, Series A, 5.00%, 8/01/39 | 10,165,000 | 11,393,644 | ||||||
La Habra COP, Park La Habra and Viewpark Refinancing Project, Refunding, Series A, AGMC Insured, 5.25%, 9/01/40 | 7,900,000 | 8,487,760 | ||||||
La Mirada RDA Tax Allocation, Merged Project Area, Refunding, Series A, AGMC Insured, 5.00%, 8/15/28 | 1,855,000 | 1,978,079 | ||||||
La Palma Community Development Commission Tax Allocation, La Palma Community Development Project No. 1, Refunding, 6.10%, 6/01/22 | 575,000 | 576,507 | ||||||
Lake Elsinore PFA Tax Allocation Revenue, Series A, Assured Guaranty, 5.25%, 9/01/33 | 10,065,000 | 10,529,198 | ||||||
Lake Elsinore USD, COP, School Facilities Project Funding Program, AGMC Insured, 5.00%, 6/01/42 | 10,000,000 | 10,520,300 | ||||||
Lake Tahoe USD, GO, Election of 2008, AGMC Insured, 5.375%, 8/01/29 | 10,000,000 | 10,476,200 | ||||||
Lakeside USD San Diego County GO, Capital Appreciation, Election of 2008, Series B, zero cpn., 8/01/45 | 11,540,000 | 3,667,758 | ||||||
Lammersville Joint USD, GO, Election of 2016, Series A, 4.00%, 8/01/46 | 41,340,000 | 42,760,029 | ||||||
Lancaster School District GO, | ||||||||
Capital Appreciation, Election of 1999, NATL Insured, zero cpn., 8/01/25 | 5,495,000 | 4,462,654 | ||||||
Capital Appreciation, Election of 1999, NATL Insured, zero cpn., 7/01/26 | 5,965,000 | 4,651,388 | ||||||
Lawndale RDA Tax Allocation, | ||||||||
Economic Revitalization Project, Assured Guaranty, 5.50%, 8/01/39 | 10,280,000 | 10,768,197 | ||||||
Economic Revitalization Project, Assured Guaranty, 5.50%, 8/01/44 | 6,085,000 | 6,369,900 | ||||||
Lemon Grove School District GO, | ||||||||
Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/50 | 20,990,000 | 5,494,972 | ||||||
Election of 2008, Series A, Assured Guaranty, 5.125%, 8/01/33 | 2,100,000 | 2,188,326 |
26 |
Annual Report |
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Live Oak School District COP, | ||||||||
Assured Guaranty, Pre-Refunded, 5.50%, 8/01/29 | $ | 1,245,000 | $ | 1,308,346 | ||||
Assured Guaranty, Pre-Refunded, 5.875%, 8/01/34 | 2,270,000 | 2,396,621 | ||||||
Assured Guaranty, Pre-Refunded, 5.875%, 8/01/39 | 2,750,000 | 2,903,395 | ||||||
Lodi Electric System Revenue COP, Series A, Assured Guaranty, 5.00%, 7/01/32 | 18,960,000 | 19,113,197 | ||||||
Lodi USD, GO, San Joaquin County, Election of 2016, 4.00%, 8/01/41 | 15,000,000 | 15,762,750 | ||||||
Long Beach Bond Finance Authority Natural Gas Purchase Revenue, | ||||||||
Series A, 5.50%, 11/15/28 | 8,000,000 | 9,644,880 | ||||||
Series A, 5.00%, 11/15/29 | 17,465,000 | 20,457,453 | ||||||
Series A, 5.50%, 11/15/30 | 5,000,000 | 6,144,950 | ||||||
Series A, 5.00%, 11/15/35 | 69,800,000 | 83,785,128 | ||||||
Series A, 5.50%, 11/15/37 | 35,000,000 | 44,468,550 | ||||||
Los Angeles Community College District GO, | ||||||||
Election of 2001, Series E-1, Pre-Refunded, 5.00%, 8/01/33 | 25,000,000 | 25,295,250 | ||||||
Election of 2003, Series F-1, Pre-Refunded, 5.00%, 8/01/33 | 20,000,000 | 20,236,200 | ||||||
Refunding, 5.00%, 8/01/38 | 10,000,000 | 11,559,400 | ||||||
Los Angeles County MTA Sales Tax Revenue, | ||||||||
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/35 | 17,655,000 | 20,723,792 | ||||||
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/37 | 10,970,000 | 12,789,155 | ||||||
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/38 | 28,160,000 | 32,784,998 | ||||||
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/39 | 10,000,000 | 11,626,500 | ||||||
Los Angeles County Sanitation Districts Financing Authority Revenue, Capital Projects, District No. 20, Green Bonds, Refunding, Series A, 4.00%, 10/01/42 | 26,430,000 | 27,631,243 | ||||||
Los Angeles Department of Airports Revenue, | ||||||||
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/34 | 18,500,000 | 19,180,430 | ||||||
Los Angeles International Airport, Senior, Refunding, Series A, 5.25%, 5/15/39 | 14,000,000 | 14,547,120 | ||||||
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/40 | 19,445,000 | 20,710,286 | ||||||
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/35 | 80,000,000 | 85,240,000 | ||||||
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/40 | 30,000,000 | 31,952,100 | ||||||
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/41 | 14,500,000 | 16,109,935 | ||||||
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/42 | 10,000,000 | 11,370,900 | ||||||
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/44 | 60,000,000 | 68,821,800 | ||||||
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/47 | 23,000,000 | 26,056,010 | ||||||
Los Angeles International Airport, Subordinate, Series B, 5.00%, 5/15/41 | 12,500,000 | 14,068,250 | ||||||
Los Angeles International Airport, Subordinate, Series B, 5.00%, 5/15/46 | 53,000,000 | 59,447,980 | ||||||
Los Angeles International Airport, Subordinate, Series C, Pre-Refunded, 5.125%, 5/15/33 | 16,000,000 | 16,069,120 | ||||||
Los Angeles Department of Water and Power Revenue, | ||||||||
Power System, Refunding, Series A, 5.00%, 7/01/33 | 66,020,000 | 75,235,732 | ||||||
Power System, Refunding, Series A, 5.00%, 7/01/34 | 53,105,000 | 60,342,680 | ||||||
Power System, Refunding, Series A, 5.00%, 7/01/35 | 15,105,000 | 17,123,934 | ||||||
Power System, Refunding, Series A, 5.00%, 7/01/36 | 17,795,000 | 20,138,424 | ||||||
Power System, Refunding, Series A, 5.00%, 7/01/46 | 15,000,000 | 17,092,200 | ||||||
Power System, Series A, 5.00%, 7/01/42 | 120,000,000 | 138,933,600 | ||||||
Power System, Series A, 5.00%, 7/01/47 | 125,000,000 | 144,202,500 | ||||||
Power System, Series A, Subseries A-1, 5.25%, 7/01/38 | 10,000,000 | 10,089,800 | ||||||
Power System, Series B, 5.00%, 7/01/35 | 11,995,000 | 13,838,392 | ||||||
Power System, Series B, 5.00%, 7/01/43 | 62,000,000 | 69,084,120 | ||||||
Power System, Series C, 5.00%, 7/01/42 | 41,155,000 | 47,972,326 | ||||||
Power System, Series C, 5.00%, 7/01/47 | 52,275,000 | 60,704,344 | ||||||
Power System, Series D, 5.00%, 7/01/44 | 51,940,000 | 58,189,940 | ||||||
Power System, Series E, 5.00%, 7/01/39 | 13,950,000 | 15,713,559 | ||||||
Power System, Series E, 5.00%, 7/01/44 | 34,000,000 | 38,091,220 |
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Annual Report | 27
|
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Los Angeles Department of Water and Power Revenue, (continued) | ||||||||
Water System, Refunding, Series A, 5.00%, 7/01/43 | $ | 81,095,000 | $ | 89,242,615 | ||||
Water System, Refunding, Series A, 5.00%, 7/01/46 | 37,255,000 | 42,451,327 | ||||||
Water System, Series A, 5.00%, 7/01/44 | 50,000,000 | 56,016,500 | ||||||
Los Angeles Harbor Department Revenue, Exempt Facility, Refunding, Series B, 5.00%, 8/01/44 | 10,300,000 | 11,567,209 | ||||||
Los Angeles Mortgage Revenue, FHA Insured Mortgage Loans, Section 8 Assisted Projects, Refunding, Series 1, NATL Insured, 6.50%, 7/01/22 | 315,000 | 315,898 | ||||||
Los Angeles USD, | ||||||||
GO, Election of 2004, Series I, 5.00%, 7/01/29 | 10,000,000 | 10,409,400 | ||||||
GO, Election of 2004, Series I, 5.00%, 1/01/34 | 36,760,000 | 38,218,637 | ||||||
GO, Election of 2005, Series F, 5.00%, 7/01/29 | 2,250,000 | 2,342,115 | ||||||
GO, Election of 2008, Series B-1, 5.25%, 7/01/42 | 35,000,000 | 41,904,100 | ||||||
Los Angeles Wastewater System Revenue, | ||||||||
Green Bonds, Refunding, Series C, 5.00%, 6/01/45 | 24,690,000 | 28,054,259 | ||||||
Green Bonds, Series A, 5.00%, 6/01/44 | 9,000,000 | 10,201,500 | ||||||
Series A, Pre-Refunded, 5.00%, 6/01/39 | 25,000,000 | 26,006,000 | ||||||
Los Gatos-Saratoga Joint UHSD, | ||||||||
GO, Santa Clara and Santa Cruz Counties, Election of 2014, Series A, 4.00%, 8/01/39 | 10,635,000 | 11,087,519 | ||||||
GO, Santa Clara and Santa Cruz Counties, Election of 2014, Series A, 4.00%, 8/01/44 | 16,090,000 | 16,718,636 | ||||||
Madera County COP, | ||||||||
Valley Children’s Hospital Project, NATL Insured, 5.00%, 3/15/23 | 8,500,000 | 8,525,755 | ||||||
Valley Children’s Hospital Project, NATL Insured, 5.75%, 3/15/28 | 27,500,000 | 27,581,675 | ||||||
McFarland PFAR, Water and Wastewater Financing Projects, Series A, AGMC Insured, 5.00%, 10/01/40 | 5,115,000 | 5,441,542 | ||||||
Mendocino-Lake Community College District GO, Election of 2006, Series B, AGMC Insured, 5.125%, 8/01/41 | 7,500,000 | 8,129,625 | ||||||
The Metropolitan Water District of Southern California Water Revenue, Authorization, Series A, 5.00%, 7/01/40 | 10,000,000 | 11,447,200 | ||||||
Midpeninsula Regional Open Space District GO, Green Bond, 4.00%, 9/01/48 | 11,220,000 | 11,815,894 | ||||||
Milpitas RDA Tax Allocation, Redevelopment Project Area No. 1, NATL Insured, ETM, 5.50%, 1/15/24 | 10,365,000 | 11,444,618 | ||||||
Modesto High School District Stanislaus County GO, | ||||||||
Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/21 | 9,660,000 | 9,020,122 | ||||||
Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/23 | 10,815,000 | 9,504,114 | ||||||
Capital Appreciation, Series A, NATL Insured, zero cpn., 5/01/27 | 12,770,000 | 9,753,981 | ||||||
Montebello USD, GO, Election of 2004, AGMC Insured, Pre-Refunded, 5.00%, 8/01/33 | 2,700,000 | 2,731,428 | ||||||
Monterey Peninsula USD, | ||||||||
GO, Election of 2010, Series A, AGMC Insured, Pre-Refunded, 5.75%, 8/01/41 | 17,500,000 | 19,783,225 | ||||||
GO, Election of 2010, Series C, 5.00%, 8/01/41 | 11,190,000 | 12,686,774 | ||||||
Moorpark USD, | ||||||||
COP, Assured Guaranty, Pre-Refunded, 5.625%, 11/01/28 | 2,180,000 | 2,316,490 | ||||||
GO, Capital Appreciation, Election of 2008, Series A, Assured Guaranty, zero cpn., 8/01/32 | 5,870,000 | 3,500,868 | ||||||
Moreno Valley USD, | ||||||||
GO, Riverside County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/27 | 6,315,000 | 4,962,769 | ||||||
GO, Riverside County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/28 | 6,625,000 | 5,047,853 | ||||||
GO, Riverside County, Election of 2014, Series A, AGMC Insured, 5.00%, 8/01/44 | 29,220,000 | 32,328,424 | ||||||
Mount San Antonio Community College District GO, Los Angeles County, Capital Appreciation, Election of 2008, Series A, zero cpn. to 8/01/28, 6.25% thereafter, 8/01/43 | 55,000,000 | 45,452,000 | ||||||
Mount San Jacinto Community College District GO, Election of 2014, Series B, 4.00%, 8/01/43 | 17,200,000 | 18,168,704 | ||||||
M-S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39 | 25,000,000 | 35,201,250 | ||||||
M-S-R Public Power Agency San Juan Project Revenue, Series E, NATL Insured, ETM, 6.00%, 7/01/22 | 6,330,000 | 6,989,776 | ||||||
Murrieta Valley USD, COP, School Facility Bridge Funding Program, Pre-Refunded, 5.75%, 5/01/41 | 12,000,000 | 13,008,720 |
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Annual Report |
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Needles PFAR Tax Allocation, Redevelopment Project, Series A, 7.50%, 8/15/22 | $ | 655,000 | $ | 655,779 | ||||
Newport Mesa USD, GO, Capital Appreciation, Election of 2005, zero cpn. to 7/31/21, 6.30% thereafter, 8/01/42 | 20,000,000 | 21,782,000 | ||||||
Northern California Public Power Agency Revenue, AMBAC Insured, Pre-Refunded, 7.50%, 7/01/23 | 2,830,000 | 3,174,722 | ||||||
Oak Grove School District GO, Capital Appreciation, Election of 2008, Series B-1, Pre-Refunded, zero cpn., 6/01/41 | 36,240,000 | 7,976,062 | ||||||
Oak View USD, GO, San Joaquin County, Election of 2008, Series A, AGMC Insured, 5.00%, 8/01/49 | 1,895,000 | 1,970,838 | ||||||
Oakland GO, Series B, Pre-Refunded, 6.25%, 1/15/39 | 10,045,000 | 10,416,464 | ||||||
Oakland USD Alameda County GO, Election of 2006, Series A, Pre-Refunded, 6.125%, 8/01/29 | 7,225,000 | 7,656,549 | ||||||
Oceanside USD, | ||||||||
GO, San Diego County, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/38 | 10,590,000 | 4,858,586 | ||||||
GO, San Diego County, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/39 | 7,860,000 | 3,448,732 | ||||||
GO, San Diego County, Election of 2008, Refunding, Series A, Assured Guaranty, 5.25%, 8/01/33 | 5,000,000 | 5,058,450 | ||||||
GO, San Diego County, Refunding, 5.00%, 8/01/48 | 12,000,000 | 13,392,120 | ||||||
Ontario-Montclair School District GO, San Bernardino County, Election of 2016, Series A, 5.00%, 8/01/46 | 11,765,000 | 13,481,043 | ||||||
Orange County Sanitation District Revenue, Wastewater, Refunding, Series A, 5.00%, 2/01/36 | 8,350,000 | 9,564,424 | ||||||
Orange County Water District Revenue COP, | ||||||||
Series B, NATL Insured, ETM, 5.00%, 8/15/28 | 13,740,000 | 16,342,081 | ||||||
Series B, NATL Insured, ETM, 5.00%, 8/15/34 | 3,305,000 | 4,027,076 | ||||||
Series B, NATL Insured, Pre-Refunded, 5.00%, 8/15/34 | 4,140,000 | 5,273,242 | ||||||
Orange Special Tax, CFD No. 06-1, Del Rio Public Improvements, Refunding, AGMC Insured, 5.00%, 10/01/40 | 7,500,000 | 8,398,575 | ||||||
Oxnard School District GO, Ventura County, Election of 2012, Series C, BAM Insured, 4.00%, 8/01/44 | 10,755,000 | 11,144,008 | ||||||
Palomar Community College District GO, | ||||||||
Capital Appreciation, Election of 2006, Series B, zero cpn. to 8/01/25, 6.20% thereafter, 8/01/39 | 69,410,000 | 67,094,482 | ||||||
Election of 2006, Series C, 5.00%, 8/01/44 | 35,120,000 | 39,609,741 | ||||||
Palomar Health Revenue, Refunding, AGMC Insured, 5.00%, 11/01/47 | 35,000,000 | 39,391,800 | ||||||
Palomar Pomerado Health COP, Pre-Refunded, 6.75%, 11/01/39 | 30,000,000 | 32,377,500 | ||||||
Palomar Pomerado Health GO, | ||||||||
Capital Appreciation, Election of 2004, Series A, Assured Guaranty, zero cpn. to 8/01/19, 7.00% thereafter, 8/01/38 | 36,000,000 | 44,143,560 | ||||||
Capital Appreciation, Election of 2004, Series A, zero cpn. to 8/01/20, 6.75% thereafter, 8/01/40 | 60,000,000 | 68,894,400 | ||||||
Paramount USD, | ||||||||
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/43 | 32,000,000 | 7,204,800 | ||||||
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/48 | 28,000,000 | 4,215,680 | ||||||
GO, Los Angeles County, Election of 2006, AGMC Insured, 5.00%, 8/01/46 | 11,270,000 | 12,167,655 | ||||||
GO, Los Angeles County, Election of 2006, BAM Insured, 5.00%, 8/01/48 | 2,450,000 | 2,702,203 | ||||||
Pasadena Electric Revenue, Refunding, Series A, 4.00%, 6/01/46 | 22,625,000 | 23,617,332 | ||||||
Patterson Joint USD, | ||||||||
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/22 | 1,900,000 | 1,688,188 | ||||||
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/23 | 1,985,000 | 1,701,820 | ||||||
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/24 | 2,075,000 | 1,713,307 | ||||||
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/25 | 2,170,000 | 1,723,327 | ||||||
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/26 | 2,265,000 | 1,727,448 |
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Annual Report |
29 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Perris School District COP, School Facility Bridge Funding Program, AGMC Insured, 5.50%, 9/01/34 | $ | 4,000,000 | $ | 4,292,520 | ||||
Perris SFMR, Capital Appreciation, Series A, GNMA Secured, ETM, zero cpn., 6/01/23 | 19,095,000 | 16,865,659 | ||||||
Perris UHSD, GO, Riverside County, Election of 2012, Series A, AGMC Insured, 5.00%, 9/01/42 | 5,000,000 | 5,522,200 | ||||||
Pittsburg USD Financing Authority Revenue, Board Program, AGMC Insured, Pre-Refunded, 5.50%, 9/01/46 | 9,980,000 | 11,227,999 | ||||||
Placentia-Yorba Linda USD, | ||||||||
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/43 | 27,955,000 | 10,380,251 | ||||||
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/46 | 89,200,000 | 28,746,484 | ||||||
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/49 | 85,000,000 | 23,493,150 | ||||||
Pleasanton USD, COP, AGMC Insured, Pre-Refunded, 5.00%, 8/01/29 | 4,000,000 | 4,305,640 | ||||||
Pomona USD, | ||||||||
GO, Election of 2008, Series C, AGMC Insured, 5.25%, 8/01/40 | 16,000,000 | 17,514,080 | ||||||
GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 8/01/33 | 5,675,000 | 5,948,989 | ||||||
Poway RDA Successor Agency Tax Allocation, | ||||||||
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 12/15/31 | 10,180,000 | 12,432,630 | ||||||
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 12/15/32 | 11,215,000 | 13,799,945 | ||||||
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 6/15/33 | 5,835,000 | 7,275,195 | ||||||
Poway USD, GO, Capital Appreciation, School Facilities ID No. 2007-1, Election of 2008, Refunding, Series B, zero cpn., 8/01/46 | 45,000,000 | 13,879,800 | ||||||
Rancho Water District Financing Authority Revenue, Capital Appreciation, AMBAC Insured, ETM, zero cpn., 8/15/18 | 13,605,000 | 13,520,785 | ||||||
Rialto RDA Tax Allocation, Series A, 6.25%, 9/01/37 | 13,525,000 | 13,791,037 | ||||||
Rialto USD, | ||||||||
GO, Capital Appreciation, Election of 1999, Series A, NATL Insured, zero cpn., 6/01/19 | 3,415,000 | 3,263,408 | ||||||
GO, Capital Appreciation, Election of 2010, Series A, AGMC Insured, zero cpn. to 8/01/26, 7.35% thereafter, 8/01/41 | 27,000,000 | 25,437,510 | ||||||
Richmond Joint Powers Financing Authority Lease Revenue, Civic Center Project, Refunding, Assured Guaranty, 5.875%, 8/01/37 | 24,000,000 | 25,198,800 | ||||||
Rio Hondo Community College District GO, Capital Appreciation, Election of 2004, Series C, zero cpn., 8/01/35 | 10,000,000 | 5,343,200 | ||||||
Ripon USD, | ||||||||
GO, Capital Appreciation, Election of 2012, Refunding, Series A, BAM Insured, zero cpn. to 8/01/18, 5.00% thereafter, 8/01/42 | 2,315,000 | 2,564,418 | ||||||
GO, Capital Appreciation, Election of 2012, Refunding, Series A, BAM Insured, zero cpn. to 8/01/18, 5.00% thereafter, 8/01/42 | 705,000 | 754,562 | ||||||
Riverside County Asset Leasing Corp. Leasehold Revenue, | ||||||||
Riverside County Hospital Project, Capital Appreciation, Series A, NATL Insured, zero cpn., 6/01/23 | 14,160,000 | 12,335,909 | ||||||
Riverside County Hospital Project, Capital Appreciation, Series A, NATL Insured, zero cpn., 6/01/24 | 13,005,000 | 10,944,098 | ||||||
Riverside County SFMR, | ||||||||
Capital Appreciation, Mortgage, Series A, GNMA Secured, ETM, zero cpn., 11/01/20 | 25,055,000 | 23,393,352 | ||||||
Capital Appreciation, Mortgage, Series B, GNMA Secured, ETM, zero cpn., 6/01/23 | 26,160,000 | 23,046,960 | ||||||
Riverside County Transportation Commission Sales Tax Revenue, Limited Tax, Series A, Pre- Refunded, 5.25%, 6/01/39 | 11,000,000 | 12,762,090 | ||||||
Riverside County Transportation Commission Toll Revenue, senior lien, Series A, 5.75%, 6/01/48 | 10,000,000 | 11,133,400 | ||||||
Riverside Electric Revenue, | ||||||||
Issue D, AGMC Insured, 5.00%, 10/01/33 | 10,000,000 | 10,159,300 | ||||||
Issue D, AGMC Insured, 5.00%, 10/01/38 | 5,310,000 | 5,392,995 | ||||||
Refunding, Series A, 5.00%, 10/01/43 | 11,535,000 | 12,900,052 | ||||||
Riverside Sewer Revenue, Refunding, Series A, 5.00%, 8/01/40 | 25,000,000 | 28,021,750 |
30 |
Annual Report |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
RNR School Financing Authority Special Tax, CFD No. 92-1, Subordinate, Refunding, Series A, BAM Insured, 5.00%, 9/01/36 | $ | 11,145,000 | $ | 12,451,194 | ||||
Road 17 Levee Area PFA Assessment Revenue, Road 17 Levee Improvement Project, Pre-Refunded, 7.00%, 9/01/39 | 8,865,000 | 9,521,099 | ||||||
Rocklin USD, | ||||||||
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/25 | 8,160,000 | 6,762,518 | ||||||
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/26 | 8,695,000 | 6,931,741 | ||||||
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/27 | 9,080,000 | 6,935,032 | ||||||
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/28 | 16,615,000 | 12,129,615 | ||||||
Rohnert Park Community Development Commission Tax Allocation Revenue, | ||||||||
Redevelopment Project, Series R, NATL Insured, 5.00%, 8/01/37 | 3,620,000 | 3,627,493 | ||||||
Redevelopment Project, Series R, NATL Insured, ETM, 5.00%, 8/01/37 | 1,380,000 | 1,382,125 | ||||||
Roseville Electric System Revenue COP, AGMC Insured, 5.00%, 2/01/34 | 5,000 | 5,013 | ||||||
Roseville Natural Gas Financing Authority Gas Revenue, 5.00%, 2/15/26 | 5,000,000 | 5,718,550 | ||||||
Sacramento City USD, GO, Election of 2012, Measure Q, Series E, 4.00%, 5/01/47 | 20,000,000 | 20,886,400 | ||||||
Sacramento County Airport System Revenue, | ||||||||
PFC/Grant, Subordinate, Series C, Assured Guaranty, Pre-Refunded, 5.75%, 7/01/39 | 5,000,000 | 5,052,600 | ||||||
Senior, 5.00%, 7/01/40 | 9,000,000 | 9,556,740 | ||||||
Senior, Refunding, Series A, 5.00%, 7/01/41 | 10,000,000 | 11,395,900 | ||||||
Senior, Series A, AGMC Insured, Pre-Refunded, 5.00%, 7/01/41 | 10,000,000 | 10,084,500 | ||||||
Senior, Series B, AGMC Insured, 5.25%, 7/01/39 | 20,000,000 | 20,166,800 | ||||||
Senior, Series B, Assured Guaranty, 5.50%, 7/01/34 | 16,320,000 | 16,477,814 | ||||||
Subordinate, Refunding, Series B, 5.00%, 7/01/41 | 9,000,000 | 10,186,290 | ||||||
Sacramento County Sanitation Districts Financing Authority Revenue, | ||||||||
Sacramento Regional County Sanitation District, NATL Insured, 5.00%, 12/01/36 | 13,220,000 | 13,250,142 | ||||||
Sacramento Regional County Sanitation District, Refunding, Series A, 5.00%, 12/01/44 | 25,000,000 | 28,137,000 | ||||||
Sacramento Water Revenue, 5.00%, 9/01/38 | 21,630,000 | 24,083,923 | ||||||
Salida Area Public Facilities Financing Agency No. 88 Special Tax, Refunding, AGMC Insured, 5.00%, 9/01/30 | 5,435,000 | 5,900,616 | ||||||
San Bernardino Community College District GO, Capital Appreciation, Election of 2008, Series B, zero cpn., 8/01/48 | 66,390,000 | 18,988,204 | ||||||
San Bernardino County COP, Medical Center Financing Project, Refunding, 5.00%, 8/01/26 | 13,045,000 | 13,082,570 | ||||||
San Bernardino County SFMR, Capital Appreciation, Series A, GNMA Secured, ETM, zero cpn., 5/01/22 | 15,040,000 | 12,046,138 | ||||||
San Buenaventura Public Facilities Financing Authority Wastewater Revenue, | ||||||||
Series C, 5.00%, 1/01/39 | 8,500,000 | 9,523,910 | ||||||
Series C, 5.00%, 1/01/44 | 10,840,000 | 12,121,288 | ||||||
San Buenaventura Public Facilities Financing Authority Water Revenue, Series C, 5.00%, 1/01/44 | 8,555,000 | 9,566,201 | ||||||
San Diego Community College District GO, Capital Appreciation, Election of 2002, zero cpn. to 8/01/19, 6.00% thereafter, 8/01/33 | 26,880,000 | 31,462,502 | ||||||
San Diego County COP, The Salk Institute for Biological Studies, 5.125%, 7/01/40 | 15,000,000 | 15,914,400 | ||||||
San Diego County Regional Airport Authority Revenue, | ||||||||
Consolidated Rental Car Facilities, Series A, 5.00%, 7/01/44 | 5,645,000 | 6,273,119 | ||||||
Subordinate, Refunding, Series A, 5.00%, 7/01/27 | 11,565,000 | 12,361,944 | ||||||
San Diego County Regional Transportation Commission Sales Tax Revenue, | ||||||||
Refunding, Series A, 5.00%, 4/01/48 | 25,000,000 | 28,722,000 | ||||||
Series A, 5.00%, 4/01/44 | 54,915,000 | 62,024,296 | ||||||
Series A, 5.00%, 4/01/48 | 20,000,000 | 22,542,000 | ||||||
San Diego USD, | ||||||||
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/21 | 12,160,000 | 11,410,701 | ||||||
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/22 | 8,440,000 | 7,717,367 | ||||||
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/23 | 11,120,000 | 9,888,794 |
franklintempleton.com |
Annual Report |
31 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
San Diego USD, (continued) | ||||||||
GO, Capital Appreciation, Election of 2008, Series A, Pre-Refunded, zero cpn. to 7/01/19, 6.00% thereafter, 7/01/33 | $ | 104,505,000 | $ | 118,826,365 | ||||
GO, Capital Appreciation, Election of 2008, Series C, zero cpn. to 6/30/30, 6.625% thereafter, 7/01/48 | 29,840,000 | 23,438,126 | ||||||
GO, Dedicated Unlimited Ad Valorem Property Tax, Capital Appreciation, Election of 2008, Series E, zero cpn. to 7/01/32, 5.375% thereafter, 7/01/47 | 74,270,000 | 50,508,799 | ||||||
GO, Dedicated Unlimited Ad Valorem Property Tax, Capital Appreciation, Refunding, Series R-2, zero cpn. to 6/30/30, 6.625% thereafter, 7/01/40 | 79,500,000 | 66,238,605 | ||||||
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series F, 5.00%, 7/01/40 | 56,510,000 | 65,048,096 | ||||||
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series F, 5.00%, 7/01/45 | 34,370,000 | 39,319,624 | ||||||
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series G, 5.00%, 7/01/40 | 13,000,000 | 14,964,170 | ||||||
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series I, 4.00%, 7/01/47 | 40,000,000 | 41,920,800 | ||||||
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series I, 5.00%, 7/01/47 | 10,000,000 | 11,630,100 | ||||||
San Francisco BART District GO, Election of 2016, Refunding, Series A-1, 5.00%, 8/01/47 | 15,000,000 | 17,451,000 | ||||||
San Francisco City and County Airport Commission International Airport Revenue, | ||||||||
Refunding, Series A, 5.00%, 5/01/47 | 11,000,000 | 12,410,310 | ||||||
Refunding, Series B, 5.00%, 5/01/47 | 40,000,000 | 45,666,400 | ||||||
Second Series, Series B, 5.00%, 5/01/44 | 31,000,000 | 34,420,540 | ||||||
Second Series, Series B, 5.00%, 5/01/46 | 12,500,000 | 13,967,500 | ||||||
San Francisco City and County Public Utilities Commission Water Revenue, | ||||||||
Refunding, Series A, 5.00%, 11/01/36 | 5,000,000 | 5,684,500 | ||||||
Sub-Series A, 5.00%, 11/01/36 | 23,490,000 | 26,002,725 | ||||||
Sub-Series A, 5.00%, 11/01/41 | 5,800,000 | 6,336,906 | ||||||
Sub-Series A, 5.00%, 11/01/43 | 71,735,000 | 78,791,572 | ||||||
San Francisco City and County RDA Successor Agency Tax Allocation, Transbay Infrastructure Projects, third lien, Series B, AGMC Insured, 5.00%, 8/01/46 | 10,000,000 | 11,363,500 | ||||||
San Gabriel USD, | ||||||||
GO, Los Angeles County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 8/01/26 | 3,530,000 | 2,811,857 | ||||||
GO, Los Angeles County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 2/01/27 | 1,850,000 | 1,423,594 | ||||||
San Jacinto USD, | ||||||||
COP, Refunding, AGMC Insured, 5.125%, 9/01/30 | 4,375,000 | 4,664,231 | ||||||
COP, Refunding, AGMC Insured, 5.375%, 9/01/40 | 12,000,000 | 12,834,120 | ||||||
San Joaquin Delta Community College District GO, | ||||||||
Capital Appreciation, Election of 2004, Series B, AGMC Insured, zero cpn., 8/01/31 | 10,475,000 | 4,908,899 | ||||||
Capital Appreciation, Election of 2004, Series B, AGMC Insured, zero cpn., 8/01/32 | 15,185,000 | 6,707,063 | ||||||
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, | ||||||||
Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 1/15/26 | 13,155,000 | 10,212,226 | ||||||
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.65% thereafter, 1/15/37 | 104,745,000 | 100,941,709 | ||||||
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.70% thereafter, 1/15/38 | 140,340,000 | 135,357,930 | ||||||
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/40 | 158,655,000 | 154,682,279 | ||||||
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/41 | 141,024,000 | 137,824,165 | ||||||
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/42 | 141,024,000 | 138,120,316 | ||||||
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/25 | 5,700,000 | 4,846,368 | ||||||
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/28 | 33,545,000 | 25,780,674 | ||||||
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/29 | 37,050,000 | 27,481,467 | ||||||
senior lien, Refunding, Series A, 5.00%, 1/15/44 | 125,000,000 | 136,228,750 | ||||||
senior lien, Refunding, Series A, 5.00%, 1/15/50 | 430,000,000 | 467,001,500 |
32 |
Annual Report |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
San Jose Airport Revenue, | ||||||||
Refunding, Series A, 5.00%, 3/01/41 | $ | 10,000,000 | $ | 11,229,000 | ||||
Refunding, Series A, 5.00%, 3/01/47 | 20,000,000 | 22,360,200 | ||||||
Refunding, Series B, 5.00%, 3/01/47 | 10,000,000 | 11,419,000 | ||||||
San Jose Financing Authority Lease Revenue, Civic Center Project, Refunding, Series A, AMBAC Insured, 5.00%, 6/01/39 | 20,885,000 | 20,931,782 | ||||||
San Jose GO, | ||||||||
Libraries, Parks and Public Safety Projects, 5.00%, 9/01/28 | 11,600,000 | 11,628,652 | ||||||
Libraries, Parks and Public Safety Projects, NATL Insured, 5.00%, 9/01/34 | 15,820,000 | 15,878,059 | ||||||
Libraries and Parks Projects, NATL Insured, 5.00%, 9/01/36 | 35,150,000 | 35,276,891 | ||||||
San Jose RDA Tax Allocation, | ||||||||
Merged Area Redevelopment Project, Series A, ETM, 6.50%, 8/01/18 | 3,515,000 | 3,572,470 | ||||||
Merged Area Redevelopment Project, Series B, Pre-Refunded, 7.00%, 8/01/35 | 28,565,000 | 29,078,599 | ||||||
San Jose Special Hotel Tax Revenue, | ||||||||
Convention Center Expansion and Renovation Project, 6.50%, 5/01/36 | 10,000,000 | 11,333,300 | ||||||
Convention Center Expansion and Renovation Project, 6.50%, 5/01/42 | 10,000,000 | 11,333,300 | ||||||
San Jose USD, | ||||||||
COP, Capital Appreciation, AGMC Insured, ETM, zero cpn., 1/01/27 | 7,105,000 | 5,634,265 | ||||||
COP, Capital Appreciation, AGMC Insured, ETM, zero cpn., 1/01/29 | 7,105,000 | 5,270,063 | ||||||
San Juan USD, | ||||||||
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/26 | 15,825,000 | 12,011,808 | ||||||
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/27 | 18,605,000 | 14,196,917 | ||||||
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/28 | 19,470,000 | 14,213,879 | ||||||
San Luis Obispo County Financing Authority Revenue, | ||||||||
Nacimiento Water Project, Refunding, Series A, BAM Insured, 5.00%, 9/01/37 | 10,000,000 | 11,158,000 | ||||||
Nacimiento Water Project, Series A, NATL Insured, 5.00%, 9/01/32 | 525,000 | 526,376 | ||||||
San Marcos PFAR, Series A, ETM, 6.25%, 9/02/22 | 15,000,000 | 17,596,950 | ||||||
San Marcos School Financing Authority Lease Revenue, AGMC Insured, Pre-Refunded, 5.00%, 8/15/40 | 15,635,000 | 16,849,214 | ||||||
San Marino USD, GO, Los Angeles County, Capital Appreciation, Election of 2000, Series A, NATL Insured, zero cpn., 7/01/25 | 6,080,000 | 5,103,978 | ||||||
San Mateo UHSD, | ||||||||
COP, Phase I Projects, Capital Appreciation, Series B, AMBAC Insured, Pre-Refunded, zero cpn. to 12/15/19, 5.00% thereafter, 12/15/43 | 11,535,000 | 12,319,380 | ||||||
GO, Capital Appreciation, Election of 2000, Series B, NATL Insured, zero cpn., 9/01/22 | 5,000,000 | 4,563,800 | ||||||
Sanger Financing Authority Wastewater Revenue, | ||||||||
Fresno County, Subordinate, AGMC Insured, 5.00%, 6/15/35 | 2,360,000 | 2,595,127 | ||||||
Fresno County, Subordinate, AGMC Insured, 5.00%, 6/15/43 | 3,225,000 | 3,528,408 | ||||||
Sanger Financing Authority Water Revenue, Fresno County, AGMC Insured, 5.00%, 6/15/43 | 2,930,000 | 3,205,654 | ||||||
Sanger USD, GO, Fresno County, Election of 2016, Series A, BAM Insured, 4.00%, 8/01/41 | 10,000,000 | 10,410,800 | ||||||
Santa Ana CRDA Tax Allocation, | ||||||||
Merged Project Area, Refunding, Series A, 6.25%, 9/01/24 | 7,005,000 | 7,880,835 | ||||||
Merged Project Area, Refunding, Series A, 6.75%, 9/01/28 | 13,500,000 | 15,296,175 | ||||||
Santa Ana USD, COP, Financing Project, Capital Appreciation, AGMC Insured, zero cpn., 4/01/24 | 14,245,000 | 11,550,843 | ||||||
Santa Barbara Housing Authority Revenue, Refunding and Acquisition, 6.25%, 11/15/20 | 1,500,000 | 1,551,405 | ||||||
Santa Cruz County RDA Tax Allocation, | ||||||||
Live Oak/Soquel Community Improvement Project Area, Series A, Pre-Refunded, 7.00%, 9/01/36 | 5,000,000 | 5,370,050 | ||||||
Refunding, Series A, BAM Insured, 5.00%, 9/01/35 | 20,000,000 | 22,484,200 | ||||||
Santa Maria Joint UHSD, GO, Santa Barbara and San Luis Obispo Counties, Election of 2004, 4.00%, 8/01/37 | 14,230,000 | 14,761,206 |
franklintempleton.com |
Annual Report |
33 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Santa Paula Utility Authority Wastewater Enterprise Revenue, | ||||||||
Series A, 5.00%, 2/01/45 | $ | 16,495,000 | $ | 18,132,459 | ||||
Series A, 5.00%, 2/01/50 | 21,050,000 | 23,005,334 | ||||||
Santee School District COP, Capital Improvement Project, Assured Guaranty, Pre-Refunded, 5.50%, 10/01/48 | 15,460,000 | 15,768,118 | ||||||
Santee School District GO, | ||||||||
Election of 2006, Series B, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/38 | 1,000,000 | 1,011,810 | ||||||
Election of 2006, Series B, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/48 | 5,250,000 | 5,312,003 | ||||||
Saugus/Hart School Facilities Financing Authority Lease Revenue, | ||||||||
Series A, AGMC Insured, 5.00%, 9/01/35 | 2,000,000 | 2,123,980 | ||||||
Series A, AGMC Insured, 5.00%, 9/01/40 | 1,500,000 | 1,592,985 | ||||||
School Facilities Financing Authority Revenue, Capital Appreciation, Grant Joint UHSD, Series A, AGMC Insured, zero cpn., 8/01/42 | 49,000,000 | 17,813,950 | ||||||
Semitropic ID of Semitropic Water Storage District Revenue, second lien, Refunding, Series A, AGMC Insured, 5.00%, 12/01/45 | 10,000,000 | 11,099,200 | ||||||
Snowline Joint USD, COP, Refinancing Project, Assured Guaranty, Pre-Refunded, 5.00%, 9/01/34 | 13,390,000 | 14,028,301 | ||||||
Sonoma CDA Tax Allocation, Redevelopment Project, 7.125%, 12/01/36 | 10,775,000 | 12,693,812 | ||||||
Southern California Public Power Authority Gas Project Revenue, Project No. 1, Series A, 5.00%, 11/01/33 | 17,500,000 | 20,793,850 | ||||||
Southern California Water Replenishment District Financing Authority Revenue, Refunding, 5.00%, 8/01/41 | 10,000,000 | 11,334,600 | ||||||
Southern California Water Replenishment District Revenue COP, Pre-Refunded, 5.00%, 8/01/41 | 22,870,000 | 25,301,310 | ||||||
Southern Mono Health Care District GO, | ||||||||
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/28 | 2,340,000 | 1,640,246 | ||||||
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/29 | 2,440,000 | 1,636,044 | ||||||
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/30 | 2,550,000 | 1,634,601 | ||||||
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/31 | 2,660,000 | 1,627,574 | ||||||
Southwestern Community College District GO, Election of 2008, Series D, 5.00%, 8/01/44 | 10,000,000 | 11,201,700 | ||||||
Stanislaus USD, | ||||||||
GO, Election of 2008, Series A, Assured Guaranty, 5.625%, 8/01/33 | 4,140,000 | 4,338,886 | ||||||
GO, Election of 2008, Series B, AGMC Insured, Pre-Refunded, 5.125%, 8/01/41 | 3,400,000 | 3,746,086 | ||||||
Sulphur Springs USD, | ||||||||
COP, AGMC Insured, ETM, 6.50%, 12/01/37 | 2,925,000 | 3,302,998 | ||||||
COP, Refunding, AGMC Insured, 6.50%, 12/01/37 | 11,390,000 | 14,286,135 | ||||||
Sweetwater UHSD, GO, Election of 2006, Series A, AGMC Insured, Pre-Refunded, 5.625%, 8/01/47 | 10,000,000 | 10,138,400 | ||||||
Temple City USD, GO, Election of 2012, Series A, 5.00%, 8/01/43 | 10,000,000 | 11,128,600 | ||||||
Trabuco Canyon PFA Special Tax Revenue, Refunding, Series C, AGMC Insured, 6.10%, 7/01/19 | 1,715,000 | 1,770,377 | ||||||
Truckee PFA Tax Allocation Revenue, | ||||||||
Truckee Redevelopment Project Loan, Series A, AGMC Insured, 5.00%, 9/01/30 | 1,255,000 | 1,336,450 | ||||||
Truckee Redevelopment Project Loan, Series A, AGMC Insured, 5.375%, 9/01/37 | 5,000,000 | 5,368,250 | ||||||
Tulare County Board of Education COP, | ||||||||
Capital Improvement Projects, BAM Insured, 5.375%, 5/01/33 | 3,185,000 | 3,572,200 | ||||||
Capital Improvement Projects, BAM Insured, 5.50%, 5/01/38 | 8,305,000 | 9,330,003 | ||||||
Capital Improvement Projects, BAM Insured, 5.50%, 5/01/43 | 10,855,000 | 12,173,014 | ||||||
Tustin CRDA Tax Allocation, | ||||||||
Orange County, Housing, AGMC Insured, Pre-Refunded, 5.00%, 9/01/30 | 2,125,000 | 2,292,556 | ||||||
Orange County, Housing, AGMC Insured, Pre-Refunded, 5.25%, 9/01/39 | 3,250,000 | 3,525,405 | ||||||
Twin Cities Police Authority CFD Special Tax, No. 2008-1, Public Safety, Police and Emergency Response Facilities and Services, Pre-Refunded, 6.00%, 8/01/44 | 10,710,000 | 11,534,563 |
34 |
Annual Report |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Union Elementary School District GO, | ||||||||
Santa Clara County, Capital Appreciation, Election of 1999, Series A, NATL Insured, zero cpn., 9/01/24 | $ | 2,000,000 | $ | 1,726,160 | ||||
Santa Clara County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/25 | 5,500,000 | 4,595,195 | ||||||
Santa Clara County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/26 | 5,850,000 | 4,715,334 | ||||||
University of California Regents Medical Center Pooled Revenue, | ||||||||
Refunding, Series J, 5.00%, 5/15/48 | 75,000,000 | 83,760,000 | ||||||
Refunding, Series L, 5.00%, 5/15/47 | 49,575,000 | 56,134,764 | ||||||
University of California Revenue, | ||||||||
Limited Project, Refunding, Series I, 5.00%, 5/15/40 | 22,990,000 | 26,232,280 | ||||||
Limited Project, Refunding, Series I, 5.00%, 5/15/50 | 25,420,000 | 28,794,759 | ||||||
Limited Project, Series M, 5.00%, 5/15/47 | 88,000,000 | 102,402,080 | ||||||
Refunding, Series AR, 5.00%, 5/15/41 | 13,760,000 | 15,965,590 | ||||||
Refunding, Series AY, 5.00%, 5/15/36 | 22,540,000 | 26,683,979 | ||||||
Refunding, Series AY, 5.00%, 5/15/37 | 14,000,000 | 16,536,800 | ||||||
Upland COP, | ||||||||
San Antonio Community Hospital, Pre-Refunded, 6.50%, 1/01/41 | 34,130,000 | 38,395,567 | ||||||
San Antonio Regional Hospital, Refunding, 5.00%, 1/01/47 | 14,400,000 | 16,068,816 | ||||||
Upland USD, GO, Capital Appreciation, Election of 2008, Series C, zero cpn., 8/01/45 | 62,900,000 | 19,829,225 | ||||||
Val Verde USD, | ||||||||
COP, Riverside County, Refunding, Series A, Assured Guaranty, 5.125%, 3/01/36 | 7,020,000 | 7,208,557 | ||||||
GO, Riverside County, Convertible Capital Appreciation, Election of 2008, Refunding, Series B, AGMC Insured, zero cpn. to 7/31/22, 6.125% thereafter, 8/01/34 | 1,000,000 | 1,036,040 | ||||||
GO, Riverside County, Election of 2012, Refunding, Series B, BAM Insured, 5.00%, 8/01/44 | 15,000,000 | 16,575,150 | ||||||
Vallejo PFAR, Local Agency, Hiddenbrooke ID, Refunding, Series A, 5.80%, 9/01/31 | 3,835,000 | 3,847,272 | ||||||
Vallejo RDA Tax Allocation, Waterfront Redevelopment Project, 7.90%, 5/01/19 | 565,000 | 565,192 | ||||||
Victor Valley Joint UHSD, GO, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/34 | 28,350,000 | 29,626,033 | ||||||
Vista RDA Successor Agency Tax Allocation, Vista Redevelopment Project, Refunding, Series B-1, AGMC Insured, 5.00%, 9/01/37 | 3,020,000 | 3,376,058 | ||||||
Vista USD, | ||||||||
GO, San Diego County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 8/01/26 | 7,150,000 | 5,630,268 | ||||||
GO, San Diego County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 2/01/27 | 4,795,000 | 3,757,889 | ||||||
Washington Township Health Care District GO, Series B, 5.00%, 8/01/45 | 15,000,000 | 16,698,750 | ||||||
Washington Township Health Care District Revenue, Series A, 5.50%, 7/01/38 | 11,000,000 | 11,675,840 | ||||||
West Contra Costa USD, GO, Contra Costa County, Refunding, Assured Guaranty, 5.25%, 8/01/29 | 2,500,000 | 2,615,300 | ||||||
West Hills Community College District School Facilities ID No. 3 GO, Election of 2008, Series B, AGMC Insured, Pre-Refunded, 6.50%, 8/01/41 | 4,000,000 | 4,604,480 | ||||||
West Sacramento Area Flood Control Agency Assessment Revenue, | ||||||||
5.25%, 9/01/41 | 9,030,000 | 9,880,265 | ||||||
AGMC Insured, 5.00%, 9/01/40 | 3,000,000 | 3,336,960 | ||||||
AGMC Insured, 5.00%, 9/01/45 | 7,500,000 | 8,300,775 | ||||||
West Sacramento Financing Authority Special Tax Revenue, Series A, XLCA Insured, 5.00%, 9/01/34 | 4,940,000 | 5,751,099 | ||||||
Western Placer USD, | ||||||||
COP, Refinancing Project, AGMC Insured, 5.20%, 11/01/41 | 1,000,000 | 1,096,870 | ||||||
COP, Refinancing Project, Series B, Assured Guaranty, Pre-Refunded, 5.125%, 8/01/47 | 10,275,000 | 10,398,814 |
franklintempleton.com |
Annual Report |
35 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
Western Riverside Water and Wastewater Financing Authority Revenue, | ||||||||
Eastern Municipal Water District ID, Assured Guaranty, 5.50%, 9/01/34 | $ | 1,750,000 | $ | 1,839,285 | ||||
Eastern Municipal Water District ID, Assured Guaranty, 5.625%, 9/01/39 | 2,500,000 | 2,630,100 | ||||||
Westminster School District GO, Election of 2008, Series A-1, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/34 | 18,980,000 | 19,834,290 | ||||||
Wiseburn School District GO, | ||||||||
Los Angeles County, Election of 2010, Series A, AGMC Insured, Pre-Refunded, 5.75%, 8/01/40 | 9,215,000 | 10,076,326 | ||||||
Los Angeles County, Election of 2010, Series B, AGMC Insured, Pre-Refunded, 5.625%, 5/01/41 | 10,000,000 | 11,247,100 | ||||||
Yosemite Community College District GO, Election of 2004, Series C, AGMC Insured, Pre-Refunded, 5.00%, 8/01/32 | 5,000,000 | 5,058,200 | ||||||
|
| |||||||
14,861,123,547 | ||||||||
|
| |||||||
U.S. Territories 0.5% | ||||||||
Puerto Rico 0.5% | ||||||||
Children’s Trust Fund Tobacco Settlement Revenue, | ||||||||
Asset-Backed, Refunding, 5.50%, 5/15/39 | 6,210,000 | 5,977,063 | ||||||
Asset-Backed, Refunding, 5.625%, 5/15/43 | 16,000,000 | 15,285,120 | ||||||
bPuerto Rico Commonwealth Infrastructure Financing Authority Special Tax Revenue, 5.00% | 9,475,000 | 722,469 | ||||||
bPuerto Rico Electric Power Authority Power Revenue, | ||||||||
Refunding, Series A, 5.00%, 7/01/29 | 20,000,000 | 7,750,000 | ||||||
Refunding, Series A, 5.00%, 7/01/42 | 24,000,000 | 9,300,000 | ||||||
Series A, 7.00%, 7/01/33 | 50,000,000 | 19,375,000 | ||||||
Series WW, 5.00%, 7/01/28 | 12,030,000 | 4,661,625 | ||||||
Series WW, 5.25%, 7/01/33 | 32,250,000 | 12,496,875 | ||||||
Series XX, 5.25%, 7/01/40 | 14,000,000 | 5,425,000 | ||||||
Puerto Rico Industrial Tourist Educational Medical and Environmental Control Facilities Financing Authority Revenue, Cogeneration Facility, AES Puerto Rico Project, 6.625%, 6/01/26 | 5,800,000 | 5,176,500 | ||||||
|
| |||||||
86,169,652 | ||||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $13,532,209,631) | 14,947,293,199 | |||||||
|
| |||||||
Short Term Investments 1.7% | ||||||||
Municipal Bonds 1.7% | ||||||||
California 1.7% | ||||||||
cCalifornia PCFA, PCR, Pacific Gas and Electric Co., Refunding, Series F, LOC TD Bank NA, Daily VRDN and Put, 1.52%, 11/01/26 | 58,030,000 | 58,030,000 | ||||||
cCalifornia State GO, Series A-3, LOC Bank of Montreal, Daily VRDN and Put, 1.40%, 5/01/33 | 13,200,000 | 13,200,000 | ||||||
cIrvine 1915 Act Special Assessment, | ||||||||
Limited Obligation Improvement, AD No. 94-13, LOC State Street Bank & Trust Co., Daily VRDN and Put, 1.52%, 9/02/22 | 14,212,000 | 14,212,000 | ||||||
Limited Obligation Improvement, AD No. 97-16, LOC State Street Bank & Trust Co., Daily VRDN and Put, 1.52%, 9/02/22 | 8,300,000 | 8,300,000 | ||||||
cIrvine Ranch Water District GO, ID, Consolidated, Series B, LOC Bank of America, Daily VRDN and Put, 1.47%, 10/01/41 | 3,950,000 | 3,950,000 | ||||||
Los Angeles County Revenue, TRAN, Refunding, 5.00%, 6/29/18 | 49,000,000 | 49,416,500 |
36 |
Annual Report |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS
Principal Amount | Value | |||||||
Short Term Investments (continued) | ||||||||
Municipal Bonds (continued) | ||||||||
California (continued) | ||||||||
cLos Angeles Department of Water and Power Revenue, | ||||||||
Power System, Refunding, Series B, Subseries B-6, SPA TD Bank NA, Daily VRDN and Put, 1.47%, 7/01/34 | $ | 12,200,000 | $ | 12,200,000 | ||||
Power System, Refunding, Subseries A-4, SPA Bank of America, Daily VRDN and Put, 1.55%, 7/01/35 | 35,300,000 | 35,300,000 | ||||||
Water System, Refunding, Series B, Subseries B-2, SPA Royal Bank of Canada, Daily VRDN and Put, 1.48%, 7/01/35 | 19,300,000 | 19,300,000 | ||||||
Los Angeles GO, TRAN, Series A, 5.00%, 6/28/18 | 28,000,000 | 28,235,480 | ||||||
cThe Metropolitan Water District of Southern California Water Revenue, Refunding, Series B-3, SPA Citibank, Daily VRDN and Put, 1.49%, 7/01/35 | 18,800,000 | 18,800,000 | ||||||
|
| |||||||
Total Short Term Investments (Cost $261,058,078) | 260,943,980 | |||||||
|
| |||||||
Total Investments (Cost $13,793,267,709) 99.1% | 15,208,237,179 | |||||||
Other Assets, less Liabilities 0.9% | 132,547,375 | |||||||
|
| |||||||
Net Assets 100.0% | $ | 15,340,784,554 | ||||||
|
|
See Abbreviations on page 49.
aSecurity purchased on a when-issued basis. See Note 1(b).
bSee Note 7 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | |
Annual Report |
37 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Statement of Assets and Liabilities
March 31, 2018
Assets: | ||||
Investments in securities: | ||||
Cost - Unaffiliated issuers | $ | 13,793,267,709 | ||
|
| |||
Value - Unaffiliated issuers | $ | 15,208,237,179 | ||
Cash | 36,152 | |||
Receivables: | ||||
Capital shares sold | 42,137,751 | |||
Interest | 166,543,859 | |||
Other assets | 14,041 | |||
|
| |||
Total assets | 15,416,968,982 | |||
|
| |||
Liabilities: | ||||
Payables: | ||||
Investment securities purchased | 50,967,138 | |||
Capital shares redeemed | 14,057,136 | |||
Management fees | 5,624,579 | |||
Distribution fees | 3,490,680 | |||
Transfer agent fees | 1,526,398 | |||
Accrued expenses and other liabilities | 518,497 | |||
|
| |||
Total liabilities | 76,184,428 | |||
|
| |||
Net assets, at value | $ | 15,340,784,554 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 14,666,916,880 | ||
Undistributed net investment income | 37,087,757 | |||
Net unrealized appreciation (depreciation) | 1,414,969,470 | |||
Accumulated net realized gain (loss) | (778,189,553 | ) | ||
|
| |||
Net assets, at value | $ | 15,340,784,554 | ||
|
|
38 |
Annual Report |
| The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (continued)
March 31, 2018
Class A: | ||||
Net assets, at value | $12,154,752,209 | |||
|
| |||
Shares outstanding | 1,662,655,717 | |||
|
| |||
Net asset value per sharea | $7.31 | |||
|
| |||
Maximum offering price per share (net asset value per share ÷ 95.75%) | $7.63 | |||
|
| |||
Class M: | ||||
Net assets, at value | $ 4,934 | |||
|
| |||
Shares outstanding | 675 | |||
|
| |||
Net asset value per sharea | $7.31 | |||
|
| |||
Maximum offering price per share (net asset value per share ÷ 95.75%) | $7.63 | |||
|
| |||
Class C: | ||||
Net assets, at value | $ 1,527,771,922 | |||
|
| |||
Shares outstanding | 209,397,969 | |||
|
| |||
Net asset value and maximum offering price per sharea | $7.30 | |||
|
| |||
Class R6: | ||||
Net assets, at value | $ 85,534,319 | |||
|
| |||
Shares outstanding | 11,717,466 | |||
|
| |||
Net asset value and maximum offering price per share | $7.30 | |||
|
| |||
Advisor Class: | ||||
Net assets, at value | $ 1,572,721,170 | |||
|
| |||
Shares outstanding | 215,516,064 | |||
|
| |||
Net asset value and maximum offering price per share | $7.30 | |||
|
|
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | |
Annual Report |
39 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Operations
for the year ended March 31, 2018
Investment income: | ||||
Interest: | ||||
Unaffiliated issuers | $ | 647,656,052 | ||
|
| |||
Expenses: | ||||
Management fees (Note 3a) | 69,050,978 | |||
Distribution fees: (Note 3c) | ||||
Class A | 11,851,900 | |||
Class C | 10,523,034 | |||
Transfer agent fees: (Note 3e) | ||||
Class A | 5,231,897 | |||
Class C | 678,211 | |||
Class R6 | 6,340 | |||
Advisor Class | 664,482 | |||
Custodian fees (Note 4) | 135,141 | |||
Reports to shareholders | 240,067 | |||
Registration and filing fees | 142,809 | |||
Professional fees | 1,736,054 | |||
Trustees’ fees and expenses | 132,638 | |||
Other | 530,004 | |||
|
| |||
Total expenses | 100,923,555 | |||
Expenses waived/paid by affiliates (Note 3f) | (1,506 | ) | ||
|
| |||
Net expenses | 100,922,049 | |||
|
| |||
Net investment income | 546,734,003 | |||
|
| |||
Realized and unrealized gains (losses): | ||||
Net realized gain (loss) from: | ||||
Investments: | ||||
Unaffiliated issuers | (354,828,173 | ) | ||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments: | ||||
Unaffiliated issuers | 222,438,228 | |||
|
| |||
Net realized and unrealized gain (loss) | (132,389,945 | ) | ||
|
| |||
Net increase (decrease) in net assets resulting from operations | $ | 414,344,058 | ||
|
|
40 |
Annual Report |
| The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Year Ended March 31, | ||||||||
2018 | 2017 | |||||||
Increase (decrease) in net assets: | ||||||||
Operations: | ||||||||
Net investment income | $ | 546,734,003 | $ | 532,635,976 | ||||
Net realized gain (loss) | (354,828,173 | ) | (131,547,391 | ) | ||||
Net change in unrealized appreciation (depreciation) | 222,438,228 | (368,463,584 | ) | |||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 414,344,058 | 32,625,001 | ||||||
|
| |||||||
Distributions to shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (446,567,107 | ) | (431,162,576 | ) | ||||
Class M | (30 | ) | — | |||||
Class C | (48,932,320 | ) | (46,896,440 | ) | ||||
Class R6 | (658,554 | ) | — | |||||
Advisor Class | (57,924,101 | ) | (45,745,403 | ) | ||||
|
| |||||||
Total distributions to shareholders | (554,082,112 | ) | (523,804,419 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | ||||||||
Class A | (160,991,115 | ) | 982,740,167 | |||||
Class M | 5,000 | — | ||||||
Class C | (117,971,740 | ) | 271,665,967 | |||||
Class R6 | 86,850,620 | — | ||||||
Advisor Class | 124,798,723 | 397,519,619 | ||||||
|
| |||||||
Total capital share transactions | (67,308,512 | ) | 1,651,925,753 | |||||
|
| |||||||
Net increase (decrease) in net assets | (207,046,566 | ) | 1,160,746,335 | |||||
Net assets: | ||||||||
Beginning of year | 15,547,831,120 | 14,387,084,785 | ||||||
|
| |||||||
End of year | $ | 15,340,784,554 | $ | 15,547,831,120 | ||||
|
| |||||||
Undistributed net investment income included in net assets: | ||||||||
End of year | $ | 37,087,757 | $ | 24,474,001 | ||||
|
|
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The accompanying notes are an integral part of these financial statements.| |
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41 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Franklin California Tax-Free Income Fund (Fund) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Fund offers five classes of shares: Class A, Class M, Class C, Class R6 and Advisor Class. Each class of shares may differ by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees due to differing arrangements for distribution and transfer agent fees. Effective August 1, 2017, the Fund began offering a new class of shares, Class R6. Effective January 25, 2018, the Fund began offering a new class of shares, Class M.
The following summarizes the Fund’s significant accounting policies.
a. Financial Instrument Valuation
The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The VC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Debt securities generally trade in the over-the-counter market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics
such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.
The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
b. Securities Purchased on a When-Issued Basis
The Fund purchases securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
c. Income Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2018, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
d. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.
e. Insurance
The scheduled payments of interest and principal for each insured municipal security in the Fund are insured by either a new issue insurance policy or a secondary insurance policy.
Some municipal securities in the Fund are secured by collateral guaranteed by an agency of the U.S. government. Depending on the type of coverage, premiums for insurance are either added to the cost basis of the security or paid by a third party.
Insurance companies typically insure municipal bonds that tend to be of very high quality, with the majority of underlying municipal bonds rated A or better. However, an event involving an insurer could have an adverse effect on the value of the securities insured by that insurance company. There can be no assurance the insurer will be able to fulfill its obligations under the terms of the policy.
f. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Fund’s organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest
At March 31, 2018, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
Year Ended March 31, | ||||||||||||||||
|
| |||||||||||||||
2018 | 2017 | |||||||||||||||
|
| |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
| ||||||||||||||||
Class A Shares: | ||||||||||||||||
Shares sold | 131,096,653 | $ | 974,057,514 | 138,111,775 | $ | 1,228,390,202 | ||||||||||
Shares issued in reinvestment of distributions | 49,117,202 | 364,365,036 | 46,250,683 | 349,247,848 | ||||||||||||
Shares issued on reorganization | — | — | 183,132,097 | 1,218,817,365 | ||||||||||||
Shares redeemed | (202,019,054 | ) | (1,499,413,665) | (242,199,683 | ) | (1,813,715,248) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) |
|
(21,805,199 |
) | $ | (160,991,115) | 125,294,872 | $ | 982,740,167 | ||||||||
|
| |||||||||||||||
Class M Sharesa: | ||||||||||||||||
Shares sold | 675 | $ | 5,000 | |||||||||||||
|
| |||||||||||||||
Class C Shares: | ||||||||||||||||
Shares sold | 23,485,863 | $ | 174,614,502 | 41,642,029 | $ | 339,929,545 | ||||||||||
Shares issued in reinvestment of distributions | 5,818,615 | 43,101,731 | 5,306,351 | 39,987,177 | ||||||||||||
Shares issued on reorganization | — | — | 23,217,403 | 154,318,083 | ||||||||||||
Shares redeemed | (45,273,541 | ) | (335,687,973) | (35,162,592 | ) | (262,568,838) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) |
|
(15,969,063 |
) | $ | (117,971,740) | 35,003,191 | $ | 271,665,967 | ||||||||
|
| |||||||||||||||
Class R6 Sharesb: | ||||||||||||||||
Shares sold | 12,489,223 | $ | 92,531,756 | |||||||||||||
Shares issued in reinvestment of distributions | 89,820 | 658,449 | ||||||||||||||
Shares redeemed | (861,577 | ) | (6,339,585) | |||||||||||||
|
| |||||||||||||||
Net increase (decrease) |
|
11,717,466 |
| $ | 86,850,620 | |||||||||||
|
| |||||||||||||||
Advisor Class Shares: | ||||||||||||||||
Shares sold | 69,267,581 | $ | 514,241,679 | 84,142,552 | $ | 639,006,707 | ||||||||||
Shares issued in reinvestment of distributions | 6,419,698 | 47,539,621 | 4,796,170 | 36,121,080 | ||||||||||||
Shares issued on reorganization | — | — | 8,099,297 | 53,833,593 | ||||||||||||
Shares redeemed | (58,952,698 | ) | (436,982,577) | (44,567,844 | ) | (331,441,761) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) |
|
16,734,581 |
| $ | 124,798,723 | 52,470,175 | $ | 397,519,619 | ||||||||
|
|
aFor the period January 25, 2018 (effective date) to March 31, 2018.
bFor the period August 1, 2017 (effective date) to March 31, 2018.
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) | Investment manager | |
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter | |
Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
a. Management Fees
The Fund pays an investment management fee to Advisers based on the month-end net assets of the Fund as follows:
Annualized Fee Rate | Net Assets | |
0.625% | Up to and including $100 million | |
0.500% | Over $100 million, up to and including $250 million | |
0.450% | Over $250 million, up to and including $7.5 billion | |
0.440% | Over $7.5 billion, up to and including $10 billion | |
0.430% | Over $10 billion, up to and including $12.5 billion | |
0.420% | Over $12.5 billion, up to and including $15 billion | |
0.400% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | In excess of $20 billion |
For the year ended March 31, 2018, the gross effective investment management fee rate was 0.439% of the Fund’s average daily net assets.
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
c. Distribution Fees
The Board has adopted distribution plans for each share class, with the exception of Class R6 and Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s Class A and M reimbursement distribution plans, the Fund reimburses Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rates for each share class. Under the Class A and M reimbursement distribution plans, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Fund’s Class C compensation distribution plan, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.
The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:
Class A | 0.10 | % | ||
Class M | 0.25 | % | ||
Class C | 0.65 | % |
d. Sales Charges/Underwriting Agreements
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. These charges are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the year:
Sales charges retained net of commissions paid to unaffiliated brokers/dealers | $ | 1,252,517 | ||
CDSC retained | $ | 184,565 |
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
e. Transfer Agent Fees
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. Effective November 1, 2017, the fees are based on an annualized asset based fee of 0.02% plus a transaction based fee. Prior to November 1, 2017, the fees were account based fees that varied based on fund or account type. In addition, each class reimburses Investor Services for out of pocket expenses incurred and, except for Class R6, reimburses shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.
For the year ended March 31, 2018, the Fund paid transfer agent fees of $6,580,930, of which $2,174,054 was retained by Investor Services.
f. Waiver and Expense Reimbursements
Investor Services has voluntarily agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.03%. Investor Services may discontinue this waiver in the future.
g. Interfund Transactions
The Fund engaged in purchases and sales of investments with funds or other accounts that have common investment managers (or affiliated investment managers), directors, trustees or officers. During the year ended March 31, 2018, these purchase and sale transactions aggregated $191,000,000 and $57,100,000, respectively.
4. Expense Offset Arrangement
Effective December 1, 2017, the Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the year ended March 31, 2018, there were no credits earned.
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.
At March 31, 2018, capital loss carryforwards were as follows:
Capital loss carryforwards not subject to expiration: | ||||
Short term | 289,951,988 | |||
Long term | 481,227,534 | |||
|
| |||
Total capital loss carryforwards |
|
771,179,522 |
a | |
|
|
a Includes $21,132,347 from the acquired Franklin California Insured Tax-Free Income Fund, which may be carried over to offset future capital gains, subject to certain limitations.
On March 31, 2018, the Fund had expired capital loss carryforwards of $ 7,170,324, which were reclassified to paid-in capital.
The tax character of distributions paid during the years ended March 31, 2018 and 2017, was as follows:
2018 | 2017 | |||||||
|
| |||||||
Distributions paid from tax exempt income | $ | 554,082,112 | $ | 523,804,419 | ||||
|
|
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
At March 31, 2018, the cost of investments, net unrealized appreciation (depreciation) and undistributed tax exempt income for income tax purposes were as follows:
Cost of investments | $13,804,711,045 | |||
|
| |||
Unrealized appreciation | $ 1,522,537,184 | |||
Unrealized depreciation | (119,011,050 | ) | ||
|
| |||
Net unrealized appreciation (depreciation) | $ 1,403,526,134 | |||
|
| |||
Distributable earnings - undistributed tax exempt income | $ 47,134,554 | |||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of defaulted securities and wash sales.
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. Certain provisions of the Act were effective upon enactment with the remainder becoming effective for tax years beginning after December 31, 2017. Management has reviewed the requirements and believes the adoption of these provisions of the Act will not have a material impact on the financial statements.
6. Investment Transactions
Purchases and sales investments (excluding short term securities) for the year ended March 31, 2018, aggregated $1,999,876,682 and $2,036,116,892, respectively.
7. Defaulted Securities
The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At March 31, 2018, the aggregate value of these securities was $59,730,969, representing 0.4% of the Fund’s net assets. The Fund discontinues accruing income on securities for which income has been deemed uncollectible and provides an estimate for losses on interest receivable. The securities have been identified in the accompanying Statement of Investments.
8. Concentration of Risk
The Fund invests a large percentage of its total assets in obligations of issuers within California and U.S. territories. Such concentration may subject the Fund to risks associated with industrial or regional matters, and economic, political or legal developments occurring within California and U.S. territories. Investing in Puerto Rico securities may expose the Fund to heightened risks due to recent adverse economic and market changes, credit downgrades and ongoing restructuring discussions. In addition, investments in these securities are sensitive to interest rate changes and credit risk of the issuer and may subject the Fund to increased market volatility. The market for these investments may be limited, which may make them difficult to buy or sell.
9. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 8, 2019. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
9. Credit Facility (continued)
Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the year ended March 31, 2018, the Fund did not use the Global Credit Facility.
10. Fair Value Measurements
The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
• | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
At March 31, 2018, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.
11. Subsequent Events
The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
Abbreviations
Selected Portfolio
1915 Act | Improvement Bond Act of 1915 | |
ABAG | The Association of Bay Area Governments | |
AD | Assessment District | |
AGMC | Assured Guaranty Municipal Corp. | |
AMBAC | American Municipal Bond Assurance Corp. | |
BAM | Build America Mutual Assurance Co. | |
BART | Bay Area Rapid Transit | |
BHAC | Berkshire Hathaway Assurance Corp. | |
CDA | Community Development Authority/Agency | |
CFD | Community Facilities District | |
COP | Certificate of Participation | |
CRDA | Community Redevelopment Authority/Agency | |
ETM | Escrow to Maturity | |
FGIC | Financial Guaranty Insurance Co. | |
FHA | Federal Housing Authority/Agency | |
GNMA | Government National Mortgage Association | |
GO | General Obligation | |
ID | Improvement District | |
IDR | Industrial Development Revenue |
LOC | Letter of Credit | |
MFHR | Multi-Family Housing Revenue | |
MTA | Metropolitan Transit Authority | |
MUD | Municipal Utility District | |
NATL | National Public Financial Guarantee Corp. | |
NATL RE | National Public Financial Guarantee Corp. Reinsured | |
PCFA | Pollution Control Financing Authority | |
PCR | Pollution Control Revenue | |
PFA | Public Financing Authority | |
PFAR | Public Financing Authority Revenue | |
RDA | Redevelopment Agency/Authority | |
SFMR | Single Family Mortgage Revenue | |
SPA | Standby Purchase Agreement | |
SRF | State Revolving Fund | |
TRAN | Tax and Revenue Anticipation Note | |
UHSD | Unified/Union High School District | |
USD | Unified/Union School District | |
XLCA | XL Capital Assurance | |
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Franklin California Tax-Free Income Fund
Opinions on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Franklin California Tax-Free Income Fund (the “Fund”) as of March 31, 2018, the related statement of operations for the year ended March 31, 2018, the statement of changes in net assets for each of the two years in the period ended March 31, 2018, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended March 31, 2018 and the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2018 by correspondence with the custodian and broker. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 17, 2018
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Under Section 852(b)(5)(A) of the Internal Revenue Code, the Fund hereby reports 100% of the distributions paid from net investment income as exempt-interest dividends for the fiscal year ended March 31, 2018. A portion of the Fund’s exempt-interest dividends may be subject to the federal alternative minimum tax. By mid-February 2019, shareholders will be notified of amounts for use in preparing their 2018 income tax returns.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Special Meeting of Shareholders
MEETING OF SHAREHOLDERS: OCTOBER 30, 2017 AND RECONVENED ON DECEMBER 15, 2017 AND DECEMBER 29, 2017
(UNAUDITED)
A Special Meeting of Shareholders of Franklin California Tax-Free Income Fund was held at the offices of Franklin Templeton Investments, One Franklin Parkway, San Mateo, California on October 30, 2017 and reconvened on December 15, 2017 and December 29, 2017. The purpose of the meeting was to elect Trustees of Franklin California Tax-Free Income Fund and to vote on the following proposals for the Fund: to approve the use of a “manager of managers” structure whereby the Fund’s investment manager would be able to hire and replace subadvisers without shareholder approval; to approve an amended fundamental investment restriction regarding investments in commodities; and to consider a shareholder proposal. At the meeting, (i) the following persons were elected by the shareholders to serve as Trustees of Franklin California Tax-Free Income Fund: Harris J. Ashton, Terrence J. Checki, Mary C. Choksi, Edith E. Holiday, Gregory E. Johnson, Rupert H. Johnson, Jr., J. Michael Luttig, Larry D. Thompson, and John B. Wilson; (ii) the proposals to use a “manager of managers” structure and to approve the amended fundamental investment restriction regarding investments in commodities were approved by shareholders; and (iii) sufficient votes were not received to pass the shareholder proposal. No other business was transacted at the meeting.
In connection with the meeting, management is aware that some shareholders received from the proxy solicitor numerous calls and mailings that may have been distracting. Management is taking steps to ensure that, in the future, for any new shareholder meeting solicitations that occur, such activity is not repeated. Management apologizes for any inconvenience that may have been caused as a result of such calls and mailings.
The results of the voting at the meeting are as follows:
Proposal 1. To elect a Board of Trustees:
Name | For | Withheld | ||||||
Harris J. Ashton | 1,150,912,025 | 42,062,491 | ||||||
Terrence J. Checki | 1,150,935,447 | 42,039,069 | ||||||
Mary C. Choksi | 1,150,539,740 | 42,434,777 | ||||||
Edith E. Holiday | 1,150,677,005 | 42,297,511 | ||||||
Gregory E. Johnson | 1,150,896,514 | 42,078,003 | ||||||
Rupert H. Johnson, Jr. | 1,150,837,742 | 42,136,774 | ||||||
J. Michael Luttig | 1,151,429,340 | 41,545,177 | ||||||
Larry D. Thompson | 1,151,528,683 | 41,445,833 | ||||||
John B. Wilson | 1,151,795,522 | 41,178,994 |
Total Trust Shares Outstanding*: 2,119,254,942
* As of the record date.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
SPECIAL MEETING OF SHAREHOLDERS
Proposal 2. | To approve the use of a “manager of managers” structure whereby the Fund’s investment manager would be able to hire and replace subadvisers without shareholder approval: |
Shares | ||||
For | 816,142,540.00 | |||
Against | 77,967,544.00 | |||
Abstain | 62,677,743.00 | |||
Broker Non-Votes | 236,186,686.00 | |||
Total Fund Shares Voted | 1,192,974,516.00 | |||
Total Fund Shares Outstanding* | 2,119,254,942.00 |
Proposal 3. | To approve an amended fundamental investment restriction regarding investments in commodities: |
Shares | ||||
For | 822,912,696 | |||
Against | 56,447,011 | |||
Abstain | 77,428,123 | |||
Broker Non-Votes | 236,186,686 | |||
Total Fund Shares Voted | 1,192,974,516 | |||
Total Fund Shares Outstanding* | 2,119,254,942 |
Proposal 4. | Shareholder proposal requesting that the Fund’s Board institute transparent procedures to prevent holding investments in companies that, in the judgment of management, substantially contribute to genocide or crimes against humanity: |
Shares | ||||
For | 209,861,333 | |||
Against | 672,471,811 | |||
Abstain | 74,454,683 | |||
Broker Non-Votes | 236,186,686 | |||
Total Fund Shares Voted | 1,192,974,516 | |||
Total Fund Shares Outstanding* | 2,119,254,942 |
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The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Fund, principal occupations during at least the past five years and number of US registered portfolios overseen in the Franklin Templeton Investments fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
Independent Board Members
Name, Year of Birth
| Position
| Length of
| Number of Portfolios in
| Other Directorships Held
| ||||
Harris J. Ashton (1932) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 1977 | 139 | Bar-S Foods (meat packing company) (1981-2010). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998). | ||||||||
Terrence J. Checki (1945) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since December 2017 | 113 | Hess Corporation (exploration of oil and gas) (2014-present). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Member of the Council on Foreign Relations (1996-present); Member of the National Committee on U.S.-China Relations (1999-present); member of the Board of Trustees of the Economic Club of New York (2013 -present); member of the Board of Trustees of the Foreign Policy Association (2005-present) and member of various other boards of trustees and advisory boards; and formerly, Executive Vice President of the Federal Reserve Bank of New York and Head of its Emerging Markets and Internal Affairs Group and Member of Management Committee (1995-2014); and Visiting Fellow at the Council on Foreign Relations (2014). | ||||||||
Mary C. Choksi (1950) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2014 | 139 | Avis Budget Group Inc. (car rental) (2007-present), Omnicom Group Inc. (advertising and marketing communications services) (2011-present) and White Mountains Insurance Group, Ltd. (holding company) (2017-present). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director of various companies; and formerly, Founder and Senior Advisor, Strategic Investment Group (investment management group) (2015-2017); Founding Partner and Senior Managing Director, Strategic Investment Group (1987–2015); Founding Partner and Managing Director, Emerging Markets Management LLC (investment management firm) (1987-2011); and Loan Officer/Senior Loan Officer/Senior Pension Investment Officer, World Bank Group (international financial institution) (1977-1987). | ||||||||
Edith E. Holiday (1952) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 1998 | 139 | Hess Corporation (exploration of oil and gas) (1993-present), Canadian National Railway (railroad) (2001-present), White Mountains Insurance Group, Ltd. (holding company) (2004-present). Santander Consumer USA Holdings, Inc. (consumer finance) (2016-present), RTI International Metals, Inc. (manufacture and distribution of titanium) (1999-2015) and H.J. Heinz Company (processed foods and allied products) (1994-2013). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant Secretary for Public Affairs and Public Liaison-United States Treasury Department (1988-1989). | ||||||||
J. Michael Luttig (1954) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2009 | 139 | Boeing Capital Corporation (aircraft financing) (2006-2013). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (aerospace company)(2006-present); and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006). | ||||||||
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Independent Board Members (continued)
Name, Year of Birth
| Position
| Length of
| Number of Portfolios in
| Other Directorships Held
| ||||
Larry D. Thompson (1945) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2007 | 139 | The Southern Company (energy company) (2014-present; previously 2010-2012), Graham Holdings Company (education and media organization) (2011-present) and Cbeyond, Inc. (business communications provider) (2010-2012). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director of various companies; Counsel, Finch McCranie, LLP (law firm) (2015-present); Independent Compliance Monitor and Auditor, Volkswagen AG (manufacturer of automobiles and commercial vehicles) (2017 – present); John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; previously 2011-2012); and formerly, Executive Vice President - Government Affairs, General Counsel and Corporate Secretary, PepsiCo, Inc. (consumer products) (2012-2014); Senior Vice President - Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and Deputy Attorney General, U.S. Department of Justice (2001-2003). | ||||||||
John B. Wilson (1959) One Franklin Parkway San Mateo, CA 94403-1906 | Lead Independent Trustee | Trustee since 2007 and Lead Independent Trustee since 2008 | 113 | None | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
President and Founder, Hyannis Port Capital, Inc. (real estate and private equity investing) (2002-present); Senior Advisor, McKinsey & Co. (consulting) (2017-present); serves on private and non-profit boards; and formerly, President, Staples International and Head of Global Transformation (office supplies) (2012-2016); Chief Operating Officer and Executive Vice President, Gap, Inc. (retail) (1996-2000); Chief Financial Officer and Executive Vice President – Finance and Strategy, Staples, Inc. (1992-1996); Senior Vice President – Corporate Planning, Northwest Airlines, Inc. (airlines) (1990-1992); and Vice President and Partner, Bain & Company (consulting firm) (1986-1990). | ||||||||
Interested Board Members and Officers
Name, Year of Birth
| Position
| Length of
| Number of Portfolios in
| Other Directorships Held
| ||||
**Gregory E. Johnson (1961) One Franklin Parkway San Mateo, CA 94403-1906 | Trustee | Since 2013 | 153 | None | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Chairman of the Board, Member - Office of the Chairman, Director and Chief Executive Officer, Franklin Resources, Inc.; officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 43 of the investment companies in Franklin Templeton Investments; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. (1994-2015). | ||||||||
**Rupert H. Johnson, Jr. (1940) One Franklin Parkway San Mateo, CA 94403-1906 | Chairman of the Board, Trustee and Vice President | Chairman of the Board since 2013, Trustee since 1983 and Vice President since 1982 | 139 | None | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Vice Chairman, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton Investments. | ||||||||
Sheila Amoroso (1959) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 1999 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Vice President, Franklin Advisers, Inc.; and officer of seven of the investment companies in Franklin Templeton Investments. | ||||||||
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Interested Board Members and Officers (continued)
Name, Year of Birth
| Position
| Length of
| Number of Portfolios in
| Other Directorships Held
| ||||
Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2012 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
Rafael R. Costas, Jr. (1965) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 1999 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Vice President, Franklin Advisers, Inc.; and officer of seven of the investment companies in Franklin Templeton Investments. | ||||||||
Gaston Gardey (1967) One Franklin Parkway San Mateo, CA 94403-1906 | Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2009 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Treasurer, U.S. Fund Administration & Reporting, Franklin Templeton Investments; and officer of 28 of the investment companies in Franklin Templeton Investments. | ||||||||
Aliya S. Gordon (1973) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2009 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Associate General Counsel, Franklin Templeton Investments; and officer of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2009 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc. and FASA, LLC; and officer of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 | Chief Executive Officer – Finance and Administration | Since June 2017 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Vice President, Franklin Templeton Services, LLC; officer of 45 of the investment companies in Franklin Templeton Investments; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton Investments (2009-2017). | ||||||||
Robert Lim (1948) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President – AML Compliance | Since 2016 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Vice President, Franklin Templeton Companies, LLC; Chief Compliance Officer, Franklin Templeton Distributors, Inc. and Franklin Templeton Investor Services, LLC; and officer of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
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Interested Board Members and Officers (continued)
Name, Year of Birth
| Position
| Length of
| Number of Portfolios in
| Other Directorships Held
| ||||
Christopher J. Molumphy (1962) One Franklin Parkway San Mateo, CA 94403-1906 | President and Chief Executive Officer – Investment Management | Since 2010 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director and Executive Vice President, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 21 of the investment companies in Franklin Templeton Investments. | ||||||||
Kimberly H. Novotny (1972) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Vice President | Since 2013 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Associate General Counsel, Franklin Templeton Investments; Vice President and Corporate Secretary, Fiduciary Trust International of the South; Vice President. Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
Robert C. Rosselot (1960) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Chief Compliance Officer | Since 2013 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director, Global Compliance, Franklin Templeton Investments; Vice President, Franklin Templeton Companies, LLC; officer of 45 of the investment companies in Franklin Templeton Investments; and formerly, Senior Associate General Counsel, Franklin Templeton Investments (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013). | ||||||||
Karen L. Skidmore (1952) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President and Secretary | Since 2006 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Associate General Counsel, Franklin Templeton Investments; and officer of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
Navid J. Tofigh (1972) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2015 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Associate General Counsel, Franklin Templeton Investments; and officer of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
Craig S. Tyle (1960) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 2005 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
Thomas Walsh (1961) One Franklin Parkway San Mateo, CA 94403-1906 | Vice President | Since 1999 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Vice President, Franklin Advisers, Inc.; and officer of seven of the investment companies in Franklin Templeton Investments. | ||||||||
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Interested Board Members and Officers (continued)
Name, Year of Birth
| Position
| Length of
| Number of Portfolios in
| Other Directorships Held
| ||||
Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 | Vice President | Since 2011 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of 45 of the investment companies in Franklin Templeton Investments. | ||||||||
*We base the number of portfolios on each separate series of the US registered investment companies within the Franklin Templeton Investments fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources.
Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson.
Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated John B. Wilson as its audit committee financial expert. The Board believes that Mr. Wilson qualifies as such an expert in view of his extensive business background and experience, including service as chief financial officer of Staples, Inc. from 1992 to 1996. Mr. Wilson has been a Member and Chairman of the Fund’s Audit Committee since 2007. As a result of such background and experience, the Board believes that Mr. Wilson has acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Wilson is an independent Board member as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
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Board Approval of Investment Management Agreements
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
(Fund)
At an in-person meeting held on February 27, 2018 (Meeting), the Board of Trustees (Board) of the Fund, including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisers, Inc. (Manager) and the Fund (Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of the Management Agreement.
In considering the continuation of the Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of the Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of the Fund; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with the Fund; (iv) the extent to which economies of scale are realized as the Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of the Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Fund and its shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for the Fund; reports on expenses, shareholder services, marketing support payments made to financial intermediaries and third party servicing arrangements; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to U.S. funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board also reviewed and considered an annual report on payments made by Franklin Templeton Investments (FTI) or the Fund to financial intermediaries, as well as a memorandum relating to third-party servicing arrangements in response to a guidance update in 2016 from the U.S. Securities and Exchange Commission (SEC) relating to mutual fund distribution and sub-accounting fees. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans and developing strategies to address areas of heightened concern in the mutual fund industry, such as cybersecurity and liquidity risk management. The Board also recognized management’s commitment to facilitating Board oversight of particular areas, including derivatives and payments to intermediaries, by enhanced reporting.
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the mutual fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Fund by the FTI organization.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Fund and its shareholders.
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SHAREHOLDER INFORMATION
Fund Performance
The Board reviewed and considered the performance results of the Fund over various time periods ended December 31, 2017. The Board considered the performance returns for the Fund in comparison to the performance returns of mutual funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. A summary of the Fund’s performance results is below.
The Performance Universe for the Fund included the Fund and all retail and institutional California municipal debt funds. The Board noted that the Fund’s annualized income return and annualized total return for the one-, three-, five- and 10-year periods were above the medians of its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding the Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board also noted the quarterly and annual reports it receives on all marketing support payments made by FTI to financial intermediaries. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers (Management Rate), if any, of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other mutual funds deemed comparable to and with a similar expense structure as the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges,
and the actual total expense ratio, for comparative consistency, was shown for Class A shares for funds with multiple classes of shares. The Board received a description of the methodology used by Broadridge to select the mutual funds included in an Expense Group.
The Expense Group for the Fund included the Fund and seven other California municipal debt funds. The Board noted that the Management Rate for the Fund was slightly above the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board also noted that the Management Rate had declined over time due to breakpoints in the fee schedule and concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of the Fund. In this respect, the Board considered the Fund profitability analysis provided by the Manager that addresses the overall profitability of FTI’s U.S. fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2017, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product related changes, the overall methodology has remained consistent with that used in the Fund’s profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to Franklin Resources, Inc. and certain Franklin Templeton funds, has been engaged by the Manager to periodically review and assess the allocation methodologies to be used solely by the Fund’s Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to the Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. The Board also noted management’s expenditures in improving shareholder services provided to the Fund, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent SEC and other regulatory requirements.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund
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SHAREHOLDER INFORMATION
operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to the Fund was not excessive in view of the nature, extent and quality of services provided to the Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints, which operate generally to share any economies of scale with a Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered the Manager’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the Franklin Templeton family of funds as a whole. The Board concluded that, to the extent economies of scale may be realized by the Manager and its affiliates, the Fund’s management fee structure provided a sharing of benefits with the Fund and its shareholders as the Fund grows.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of the Management Agreement for an additional one-year period.
Proxy Voting Policies and Procedures
The Fund’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Fund uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Fund’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Fund’s proxy voting records are also made available online at franklintempleton.com and posted on the US Securities and
Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Fund files a complete statement of investments with the US Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Householding of Reports and Prospectuses
You will receive the Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.
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Annual Report and Shareholder Letter Franklin California Tax-Free Income Fund
Investment Manager Franklin Advisers, Inc.
Distributor Franklin Templeton Distributors, Inc. (800) DIAL BEN® / 342-5236 franklintempleton.com
Shareholder Services (800) 632-2301 |
Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
© 2018 Franklin Templeton Investments. All rights reserved. | 112 A 05/18 |
Item 2. | Code of Ethics. |
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
Item 3. | Audit Committee Financial Expert. |
(a) (1) The Registrant has an audit committee financial expert serving on its audit committee.
(2) The audit committee financial expert is John B. Wilson and he is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. | Principal Accountant Fees and Services. |
(a) Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $95,645 for the fiscal year ended March 31, 2018 and $88,503 for the fiscal year ended March 31, 2017.
(b) Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of Item 4.
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.
(c) Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s
investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning.
(d) All Other Fees
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $5,569 for the fiscal year ended March 31, 2018 and $0 for the fiscal year ended March 31, 2017. The services for which these fees were paid include review of materials provided to the fund Board in connection with the investment management contract renewal process.
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant other than services reported in paragraphs (a)-(c) of Item 4 were $14,000 for the fiscal year ended March 31, 2018 and $255,000 for the fiscal year ended March 31, 2017. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process and derivatives assessments and benchmarking services in connection with the 2015 ICI TA Survey.
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
(f) No disclosures are required by this Item 4(f).
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $19,569 for the fiscal year ended March 31, 2018 and $255,000 for the fiscal year ended March 31, 2017.
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 5. | Audit Committee of Listed Registrants. N/A |
Item 6. | Schedule of Investments. N/A |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A |
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. N/A |
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A |
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.
Item 11. | Controls and Procedures. |
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to 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 Shareholder Report on Form N-CSR, 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 changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.
Item 12. | Exhibits. |
(a) (1) Code of Ethics
(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer – Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer – Finance and Administration, and Gaston Gardey, 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 CALIFORNIA TAX-FREE INCOME FUND
By | /s/ MATTHEW T. HINKLE | |
Matthew T. Hinkle | ||
Chief Executive Officer – Finance and Administration | ||
Date | May 24, 2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By | /s/ MATTHEW T. HINKLE | |
Matthew T. Hinkle | ||
Chief Executive Officer – Finance and Administration | ||
Date | May 24, 2018 |
By | /s/ GASTON GARDEY | |
Gaston Gardey | ||
Chief Financial Officer and Chief Accounting Officer | ||
Date | May 24, 2018 |