UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
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: 9/30/18
| Item 1. | Reports to Stockholders. |
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 | | Semiannual Report and Shareholder Letter September 30, 2018 |
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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 six months ended September 30, 2018, benefited from mostly upbeat economic data as the U.S. job market continued to strengthen and the unemployment rate declined. Accordingly, the U.S. Federal Reserve (Fed), under new chairman Jerome Powell, increased its federal funds rate by 0.25% at its June and September 2018 meetings, bringing the rate from 1.75% at the start of the period to 2.25% by period-end. In its September meeting, the Fed cited growing business investment and household spending as further evidence of strong economic growth. The Fed also stated that inflation remained near 2.00% and that longer-term inflation expectations had changed little.
During the six-month period, the municipal bond market posted modest performance similar to other U.S. 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 relatively low inflation, increased employment, the strength of the U.S. economy and international political concerns. Against the backdrop of rising interest rates and increasing market
volatility, municipal bonds performed relatively well compared to other fixed income sectors, as supply and demand patterns remained favorable overall.
Franklin California Tax-Free Income Fund’s semiannual 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
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Not FDIC Insured | May Lose Value | No Bank Guarantee |
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you have questions about your Franklin Templeton tax-free investment.
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 September 30, 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.
Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools.
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Semiannual Report
Franklin California Tax-Free Income Fund
This semiannual report for Franklin California Tax-Free Income Fund covers the period ended September 30, 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 $7.27 on September 10, 2018, to $7.24 on September 30, 2018. The Fund’s Class A shares paid dividends totaling 0.00 cents per share in September. For other performance data, please see the Performance Summary.
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.
Municipal Bond Market Overview
The municipal bond market outperformed the U.S. Treasury and corporate bond markets but underperformed U.S. equity markets during the six-month period ended September 30, 2018. Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, generated a +0.72% total return for the period, while U.S. Treasuries, as measured by the Bloomberg Barclays U.S. Treasury Index, had a -0.49% total return and investment-grade corporate bonds, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, had a -0.02% return.2 U.S. stocks, as represented by the Standard & Poor’s® 500 Index, outperformed the fixed income markets with a +11.41% total return for the reporting period.2
Credit Quality Composition*
9/30/18
| | |
| Ratings | | % of Total Investments |
| |
AAA | | 10.62% |
| |
AA | | 45.66% |
| |
A | | 32.55% |
| |
BBB | | 2.27% |
| |
Below Investment Grade | | 0.89% |
| |
Refunded | | 6.93% |
| |
Not Rated | | 1.08% |
*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 U.S. 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.
Following a volatile March, U.S. stocks posted positive monthly total returns in each of the six months of the reporting period.
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. In fact, both high-yield corporate bonds and high-yield municipal bonds outperformed their investment-grade counterparts, reflecting the risk-on sentiment that prevailed across asset classes during the period. The Bloomberg Barclays U.S. Corporate High Yield Index returned +3.46%, a number that was exceeded by the Bloomberg Barclays High Yield Municipal Bond Index, which returned +3.84%.2 The strong demand for higher-yielding municipal securities is reflective of the healthy underlying economic activity and growth, as measured by gross domestic product.
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, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.
2. 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 15.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
| | |
Portfolio Composition 9/30/18 | | |
| | | % of Total Investments* |
Transportation | | 27.55% |
| |
General Obligation | | 18.56% |
| |
Refunded** | | 12.32% |
| |
Utilities | | 11.80% |
| |
Hospital & Health Care | | 10.68% |
| |
Higher Education | | 7.27% |
| |
Subject to Government Appropriations | | 6.44% |
| |
Tax-Supported | | 3.39% |
| |
Other Revenue | | 1.40% |
Housing | | 0.59% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
Municipal issuance during the reporting period totaled $184 billion, approximately a 12% decline from total issuance in the preceding six-month period (ended March 31, 2018).3 May had the greatest volume of gross issuance during the period, with $35 billion in new issue transactions clearing the market. Overall, primary market activity picked up in April through August after a relatively quiet first quarter, before declining in September. However, diminished issuance ($249 billion in the year-to-date 2018, a 15% decline from the same time period in 2017),3 heavy dealer inventories and selling pressures in 2018 led municipals to have a -0.40% total return year-to-date in 2018, as measured by the Bloomberg Barclays Municipal Bond Index.2 Municipals performed slightly better than U.S. Treasuries year-to-date, which had a total return of -1.67% during the same period, as measured by the Bloomberg Barclays U.S. Treasury Index.
The technical environment remained supportive for municipal bonds during the period. After accounting for redemptions (bonds that matured or were called out of the market), net issuance turned negative in the first three quarters of 2018, standing at -$40 billion at period-end.4 According to the Investment Company Institute, municipal bond funds reported net inflows in four of the six months during the period, with net outflows in April and September. In aggregate, investors placed approximately $7.6 billion into municipal bond funds during the reporting period.5 The combination of net negative supply
and continued demand contributed positively to performance over the period.
The U.S. Federal Reserve (Fed) raised its target range for the federal funds rate 0.25% at both its June and September 2018 meetings. The target range stood at 2.00%–2.25% at period-end. The Fed also increased the discount rate 0.25% at both the June and September 2018 meetings, to finish the period at 2.75%. After the Fed’s anticipated September rate hike, it noted in its press release that “the labor market has continued to strengthen and that economic activity has been rising at a strong rate.” In total, the Fed raised the target range three times in 2017 (March, June and December), as well as three times so far in 2018 (March, June and September).
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, and we intend to follow our solid discipline of investing to maximize income, while seeking value in the municipal bond market.
State Update
During the six months under review California’s large and diverse economy continued to expand at a rate exceeding growth in the country as a whole, fueled by the state’s prominent universities, innovative businesses and position as the leading recipient of venture capital. The state has enjoyed a high rate of job growth relative to most of the U.S., though the gap appears to be narrowing. Unemployment slightly decreased from 4.3% in March 2018 to 4.1% at period-end, which was higher than the 3.7% national rate.6
California enacted a balanced budget for fiscal 2019. Consistent with recent budgets, the fiscal 2019 budget did not raise recurring spending to meet revenues and instead used funds to build reserves, finance capital projects and make a substantial payment to California’s pension fund. The new budget planned to bring reserves in the budget stabilization account to a new high projected to reach its constitutional limit
3. Source: The Bond Buyer, Thomson Reuters.
4. Source: Barclays Municipal Credit Research.
5. Source: Investment Company Institute.
6. Source: Bureau of Labor Statistics.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
and creates two new reserve accounts to cushion budgets during future downturns.
California’s net tax-supported debt was $2,188 per capita and 3.9% of personal income, compared with the $987 and 2.3% national medians, respectively.7 During the period under review, credit rating agency Moody’s affirmed its rating of California’s general obligations bonds as Aa3 and revised its outlook upwards from stable to positive.8 The rating reflected Moody’s positive view of the state’s robust and expanding economy, increasing budgetary reserve levels, strong overall liquidity and declining debt ratios. In contrast, Moody’s noted several challenges facing the state, including vulnerability to changes in federal policy and funding, a volatile revenue structure with a heavy reliance on personal income taxes, and legislation that limits the state’s flexibility in quickly responding to declines in revenue. Moody’s observed that continued fiscal discipline in a good economy or retention of reserves in the face of slower revenue growth could support a higher rating within one to two years.
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 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.
Puerto Rico and its municipal issuers continue to experience significant financial difficulties. We continue to monitor the developments as they pursue resolutions. The Fund holds a
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Dividend Distributions* 4/1/18–9/30/18 |
| | | Dividend per Share (cents) |
| Month | | Class
A** | | Class A1 | | Class C | | Class R6 | | Advisor
Class |
April | | — | | 2.16 | | 1.82 | | 2.21 | | 2.21 |
May | | — | | 2.16 | | 1.82 | | 2.21 | | 2.21 |
June | | — | | 2.16 | | 1.82 | | 2.21 | | 2.21 |
July | | — | | 2.16 | | 1.82 | | 2.21 | | 2.21 |
August | | — | | 2.16 | | 1.82 | | 2.21 | | 2.21 |
September | | — | | 2.16 | | 1.82 | | 2.22 | | 2.21 |
Total | | — | | 12.96 | | 10.92 | | 13.27 | | 13.26 |
*The distribution amount is the sum of all estimated tax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Effective 9/10/18,the Fund began offering Class A shares. See the prospectus for details.
very small portion of its assets in Puerto Rico bonds, which increased in price over the reporting period.
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 September 30, 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.
7. Source: Moody’s Investors Service, States - US: Medians - State debt continues slow growth trend, 4/24/18.
8. This does not indicate Moody’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Performance Summary as of September 30, 2018
The performance tables 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 9/30/18
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 |
| | |
A3 | | | | |
| | |
6-Month | | +0.81% | | -3.47% |
| | |
1-Year | | +0.54% | | -3.74% |
| | |
5-Year | | +25.57% | | +3.75% |
| | |
10-Year | | +67.25% | | +4.82% |
| | |
Advisor | | | | |
| | |
6-Month | | +0.72% | | +0.72% |
| | |
1-Year | | +0.50% | | +0.50% |
| | |
5-Year | | +26.10% | | +4.75% |
| | |
10-Year | | +68.90% | | +5.38% |
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| | | Distribution | | | Taxable Equivalent | | | | | | Taxable Equivalent | |
| Share Class | | Rate4 | | | Distribution Rate5 | | | 30-Day Standardized Yield6 | | | 30-Day Standardized Yield5 | |
A7 | | | —% | | | | —% | | | | —% | | | | —% | |
Advisor | | | 3.67% | | | | 7.83% | | | | 2.48% | | | | 5.29% | |
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 8 for Performance Summary footnotes.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Net Asset Value
| | | | | | | | | | | | | | |
| Share Class (Symbol) | | 9/30/18 | | 9/10/18 | | | 3/31/18 | | | Change | |
A (FTFQX) | | $7.24 | | | $7.27 | | | | N/A | | | | -$0.03 | |
A1 (FKTFX) | | $7.23 | | | N/A | | | | $7.31 | | | | -$0.08 | |
C (FRCTX) | | $7.22 | | | N/A | | | | $7.30 | | | | -$0.08 | |
R6 (FKTQX) | | $7.22 | | | N/A | | | | $7.30 | | | | -$0.08 | |
Advisor (FCAVX) | | $7.22 | | | N/A | | | | $7.30 | | | | -$0.08 | |
Distributions (4/1/18–9/30/18) | |
| Share Class | | Net Investment Income | | | |
A (9/10/18–9/30/18) | | $ — |
A1 | | $0.1296 |
C | | $0.1092 |
R6 | | $0.1327 |
Advisor | | $0.1326 |
Total Annual Operating Expenses8 |
| Share Class | | |
A | | 0.74% |
Advisor | | 0.49% |
See page 8 for Performance Summary footnotes.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
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. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Distribution rate is based on an annualization of the respective class’s September dividend and the maximum offering price (NAV for Advisor Class) per share on 9/30/18.
5. Taxable equivalent distribution rate and yield assume the published rates as of 6/18/18 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.
6. 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.
7. Share Class A launched on 9/10/18 and yield cannot be produced until this share class has been in existence for 30 days. This value will not be calculated until 10/31/18.
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.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Your Fund’s Expenses
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.
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| | | | | | | Actual | | | | Hypothetical | | | | |
| | | | | | | (actual return after expenses) | | | | (5% annual return before expenses) | | | | |
Share Class | | Beginning
Account
Value 4/1/181 | | | | Ending
Account
Value 9/30/18 | | Expenses
Paid During Period
4/1/18–9/30/182,3,4 | | | | Ending
Account
Value 9/30/18 | | Expenses
Paid During Period
4/1/18–9/30/183,4 | | | | Net
Annualized
Expense
Ratio4 |
A | | $1,000 | | | | $ 995.90 | | $0.41 | | | | $1,021.31 | | $3.80 | | | | 0.75% |
A1 | | $1,000 | | | | $1,006.80 | | $2.97 | | | | $1,022.11 | | $2.99 | | | | 0.59% |
C | | $1,000 | | | | $1,004.00 | | $5.78 | | | | $1,019.30 | | $5.82 | | | | 1.15% |
R6 | | $1,000 | | | | $1,007.20 | | $2.42 | | | | $1,022.66 | | $2.43 | | | | 0.48% |
Advisor | | $1,000 | | | | $1,007.20 | | $2.52 | | | | $1,022.56 | | $2.54 | | | | 0.50% |
1. For Classes A1, C, R6 and Advisor, 4/1/18 for Actual and Hypothetical. For Class A, 9/10/18 for Actual and 4/1/18 for Hypothetical.
2. For Classes A1, C, R6 and Advisor, 4/1/18-9/30/18. For Class A, 9/10/18-9/30/18.
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 183/365 to reflect the one-half year period. The multiplier is 20/365 for Actual Class A 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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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Financial Highlights
| | |
| | | Period Ended September 30, 2018 (unaudited)a |
Class A | | |
| |
Per share operating performance | | |
(for a share outstanding throughout the period) | | |
| |
Net asset value, beginning of period | | $ 7.27 |
| |
Income from investment operationsb: | | |
| |
Net investment incomec | | 0.01 |
| |
Net realized and unrealized gains (losses) | | (0.04) |
| |
Total from investment operations | | (0.03) |
| |
Net asset value, end of period | | $7.24 |
| |
Total returnd | | (0.41)% |
| |
Ratios to average net assetse | | |
| |
Expensesf | | 0.75% |
| |
Net investment income | | 3.37% |
| |
Supplemental data | | |
| |
Net assets, end of period (000’s) | | $19,212 |
| |
Portfolio turnover rate | | 7.30% |
aFor the period September 10, 2018 (effective date) to September 30, 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.
fBenefit of expense reduction rounds to less than 0.01%.
| | | | |
| | | |
10 | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2018 (unaudited) | | | | | | | | | | | | | | | | |
| | | Year Ended March 31, | |
| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |
Class A1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Per share operating performance | | | | | | | | | | | | | | | | | | | | | | | | |
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $7.31 | | | | $7.38 | | | | $7.59 | | | | $7.60 | | | | $7.21 | | | | $7.50 | |
| | | | | | |
Income from investment operationsa: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomeb | | | 0.13 | | | | 0.26 | | | | 0.27 | | | | 0.29 | | | | 0.31 | | | | 0.32 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (0.08 | ) | | | (0.06 | ) | | | (0.22 | ) | | | (0.01 | ) | | | 0.39 | | | | (0.29 | ) |
| | | | | | |
Total from investment operations | | | 0.05 | | | | 0.20 | | | | 0.05 | | | | 0.28 | | | | 0.70 | | | | 0.03 | |
| | | | | | |
Less distributions from net investment income. | | | (0.13 | ) | | | (0.27 | ) | | | (0.26 | ) | | | (0.29 | ) | | | (0.31 | ) | | | (0.32 | ) |
| | | | | | |
Net asset value, end of period | | | $7.23 | | | | $7.31 | | | | $7.38 | | | | $7.59 | | | | $7.60 | | | | $7.21 | |
| | | | | | |
Total returnc | | | 0.68% | | | | 2.66% | | | | 0.68% | | | | 3.82% | | | | 9.83% | | | | 0.56% | |
| | | | | | |
Ratios to average net assetsd | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses | | | 0.59% | e | | | 0.59% | | | | 0.59% | | | | 0.57% | | | | 0.58% | | | | 0.57% | |
| | | | | | |
Net investment income | | | 3.53% | | | | 3.53% | | | | 3.54% | | | | 3.87% | | | | 4.11% | | | | 4.47% | |
| | | | | | |
Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $11,798,389 | | | | $12,154,752 | | | | $12,425,129 | | | | $11,836,310 | | | | $11,757,208 | | | | $10,997,355 | |
| | | | | | |
Portfolio turnover rate | | | 7.30% | | | | 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, and is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
eBenefit of expense reduction rounds to less than 0.01%.
| | | | |
| | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | 11 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2018 (unaudited) | | | | | | | | | | | | | | | | |
| | | Year Ended March 31, | |
| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |
Class C | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Per share operating performance | | | | | | | | | | | | | | | | | | | | | | | | |
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $7.30 | | | | $7.36 | | | | $7.58 | | | | $7.58 | | | | $7.19 | | | | $7.49 | |
| | | | | | |
Income from investment operationsa: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomeb | | | 0.11 | | | | 0.22 | | | | 0.23 | | | | 0.25 | | | | 0.26 | | | | 0.28 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (0.08 | ) | | | (0.06 | ) | | | (0.23 | ) | | | (— | )c | | | 0.39 | | | | (0.30 | ) |
| | | | | | |
Total from investment operations | | | 0.03 | | | | 0.16 | | | | — | | | | 0.25 | | | | 0.65 | | | | (0.02 | ) |
| | | | | | |
Less distributions from net investment income | | | (0.11 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.25 | ) | | | (0.26 | ) | | | (0.28 | ) |
| | | | | | |
Net asset value, end of period | | | $7.22 | | | | $7.30 | | | | $7.36 | | | | $7.58 | | | | $7.58 | | | | $7.19 | |
| | | | | | |
Total returnd | | | 0.40% | | | | 2.23% | | | | (0.02)% | | | | 3.39% | | | | 9.26% | | | | (0.14)% | |
| | | | | | |
Ratios to average net assetse | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses | | | 1.15% | f | | | 1.15% | | | | 1.14% | | | | 1.13% | | | | 1.14% | | | | 1.13% | |
| | | | | | |
Net investment income | | | 2.97% | | | | 2.97% | | | | 2.99% | | | | 3.31% | | | | 3.55% | | | | 3.91% | |
| | | | | | |
Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $1,413,885 | | | | $1,527,772 | | | | $1,659,070 | | | | $1,442,032 | | | | $1,316,471 | | | | $1,143,138 | |
| | | | | | |
Portfolio turnover rate | | | 7.30% | | | | 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, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
| | | | |
| | | |
12 | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| | | Six Months Ended September 30, 2018 (unaudited) | | | Year Ended March 31, 2018a | |
Class R6 | | | | | | | | |
| | |
Per share operating performance | | | | | | | | |
(for a share outstanding throughout the period) | | | | | | | | |
| | |
Net asset value, beginning of period | | | $7.30 | | | | $7.46 | |
| | |
Income from investment operationsb: | | | | | | | | |
| | |
Net investment incomec | | | 0.13 | | | | 0.18 | |
| | |
Net realized and unrealized gains (losses) | | | (0.08 | ) | | | (0.18 | ) |
| | |
Total from investment operations | | | 0.05 | | | | — | |
| | |
Less distributions from net investment income | | | (0.13 | ) | | | (0.16 | ) |
| | |
Net asset value, end of period | | | $7.22 | | | | $7.30 | |
| | |
Total returnd | | | 0.72% | | | | (0.05)% | |
| | |
Ratios to average net assetse | | | | | | | | |
| | |
Expenses before waiver and payments by affiliates | | | 0.48% | | | | 0.49% | |
| | |
Expenses net of waiver and payments by affiliates | | | 0.48% | f,g | | | 0.48% | |
| | |
Net investment income | | | 3.64% | | | | 3.64% | |
| | |
Supplemental data | | | | | | | | |
| | |
Net assets, end of period (000’s) | | | $95,795 | | | | $85,534 | |
| | |
Portfolio turnover rate | | | 7.30% | | | | 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.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
| | | | |
| | | |
| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | 13 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended September 30, 2018 (unaudited) | | | | | | | | | | | | | | | | |
| | | Year Ended March 31, | |
| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |
Advisor Class | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Per share operating performance | | | | | | | | | | | | | | | | | | | | | | | | |
(for a share outstanding throughout the period) | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net asset value, beginning of period | | | $ 7.30 | | | | $ 7.36 | | | | $ 7.58 | | | | $ 7.59 | | | | $ 7.20 | | | | $ 7.49 | |
| | | | | | |
Income from investment operationsa: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net investment incomeb | | | 0.13 | | | | 0.27 | | | | 0.28 | | | | 0.30 | | | | 0.31 | | | | 0.32 | |
| | | | | | |
Net realized and unrealized gains (losses) | | | (0.08 | ) | | | (0.06 | ) | | | (0.23 | ) | | | (0.01 | ) | | | 0.39 | | | | (0.28 | ) |
| | | | | | |
Total from investment operations | | | 0.05 | | | | 0.21 | | | | 0.05 | | | | 0.29 | | | | 0.70 | | | | 0.04 | |
| | | | | | |
Less distributions from net investment income | | | (0.13 | ) | | | (0.27 | ) | | | (0.27 | ) | | | (0.30 | ) | | | (0.31 | ) | | | (0.33 | ) |
| | | | | | |
Net asset value, end of period | | | $ 7.22 | | | | $ 7.30 | | | | $ 7.36 | | | | $ 7.58 | | | | $ 7.59 | | | | $ 7.20 | |
| | | | | | |
Total returnc | | | 0.72% | | | | 2.89% | | | | 0.65% | | | | 3.92% | | | | 9.95% | | | | 0.65% | |
| | | | | | |
Ratios to average net assetsd | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Expenses | | | 0.50% | e | | | 0.50% | | | | 0.49% | | | | 0.48% | | | | 0.49% | | | | 0.48% | |
| | | | | | |
Net investment income | | | 3.62% | | | | 3.62% | | | | 3.64% | | | | 3.96% | | | | 4.20% | | | | 4.56% | |
| | | | | | |
Supplemental data | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net assets, end of period (000’s) | | | $1,594,210 | | | | $1,572,721 | | | | $1,463,633 | | | | $1,108,743 | | | | $908,763 | | | | $639,087 | |
| | | | | | |
Portfolio turnover rate | | | 7.30% | | | | 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 is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
eBenefit of expense reduction rounds to less than 0.01%.
| | | | |
| | | |
14 | | Semiannual Report | The accompanying notes are an integral part of these financial statements. | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Statement of Investments, September 30, 2018 (unaudited)
| | | | | | | | |
| | | Principal Amount | | | Value | |
Municipal Bonds 97.4% | | | | | | | | |
California 96.6% | | | | | | | | |
ABAG Finance Authority for Nonprofit Corporations COP, Santa Clara County and Butte Valley-Tulelake Rural Health Projects Inc., California Mortgage Insured, 6.65%, 10/01/22 | | $ | 325,000 | | | $ | 326,193 | |
ABAG Finance Authority for Nonprofit Corporations MFHR, Palo Alto Gardens Apartments, Series A, 5.45%, 4/01/39 | | | 5,500,000 | | | | 5,501,925 | |
ABAG Finance Authority for Nonprofit Corporations Revenue, | | | | | | | | |
Casa de las Campanas Inc., California Mortgage Insured, 6.00%, 9/01/37 | | | 11,000,000 | | | | 11,798,270 | |
Channing House, California Mortgage Insured, Pre-Refunded, 6.00%, 5/15/30 | | | 8,495,000 | | | | 9,074,444 | |
Channing House, California Mortgage Insured, Pre-Refunded, 6.125%, 5/15/40 | | | 17,635,000 | | | | 18,872,977 | |
Esskaton Properties Inc. Obligated Group, Refunding, 5.00%, 11/15/35 | | | 10,000,000 | | | | 10,750,500 | |
San Diego Hospital Assn. Sharp Healthcare, Series B, Pre-Refunded, 6.25%, 8/01/39 | | | 17,500,000 | | | | 18,156,425 | |
St. Rose Hospital, Series A, California Mortgage Insured, Pre-Refunded, 5.625%, 5/15/29 | | | 9,050,000 | | | | 9,268,376 | |
St. Rose Hospital, Series A, California Mortgage Insured, Pre-Refunded, 6.00%, 5/15/29 | | | 8,620,000 | | | | 8,847,740 | |
ABAG Water and Wastewater Revenue, Pooled Financing Program, Refunding, Series A, AGMC Insured, 5.30%, 10/01/21 | | | 55,000 | | | | 55,156 | |
Alameda Corridor Transportation Authority Revenue, | | | | | | | | |
Capital Appreciation, sub. lien, Refunding, Series A, AMBAC Insured, zero cpn., 10/01/29 | | | 20,000,000 | | | | 13,078,400 | |
Capital Appreciation, sub. lien, Refunding, Series A, AMBAC Insured, zero cpn., 10/01/30 | | | 41,665,000 | | | | 25,967,711 | |
Alameda USD Alameda County GO, Election of 2014, Series A, 5.00%, 8/01/39 | | | 18,000,000 | | | | 20,290,680 | |
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 | | | | 2,295,006 | |
Alisal USD, | | | | | | | | |
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 8/01/32 | | | 3,355,000 | | | | 2,034,371 | |
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 8/01/33 | | | 3,610,000 | | | | 2,083,764 | |
GO, Monterey County, Capital Appreciation, Election of 2006, Series B, Assured Guaranty, zero cpn., 2/01/34 | | | 3,345,000 | | | | 1,869,855 | |
Alvord USD, | | | | | | | | |
GO, Riverside County, Capital Appreciation, Election of 2007, Series B, AGMC Insured, zero cpn., 8/01/36 | | | 15,000,000 | | | | 7,209,000 | |
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 | | | | 40,493,150 | |
GO, Riverside County, Election of 2012, Refunding, Series A, AGMC Insured, 5.00%, 8/01/42 | | | 34,690,000 | | | | 37,852,340 | |
Anaheim City School District GO, Orange County, Election of 2010, AGMC Insured, Pre-Refunded, 6.25%, 8/01/40 | | | 7,500,000 | | | | 8,410,125 | |
Anaheim PFA Lease Revenue, | | | | | | | | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/24 | | | 26,855,000 | | | | 22,375,049 | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/26 | | | 29,430,000 | | | | 22,643,442 | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/27 | | | 22,860,000 | | | | 16,852,163 | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/28 | | | 14,425,000 | | | | 10,176,693 | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/29 | | | 24,810,000 | | | | 16,700,107 | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/32 | | | 13,665,000 | | | | 7,962,049 | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/33 | | | 37,070,000 | | | | 20,505,270 | |
Capital Appreciation, Public Improvements Project, Subordinate, Series C, AGMC Insured, zero cpn., 9/01/34 | | | 24,970,000 | | | | 13,130,225 | |
| | | | |
| | | |
| franklintempleton.com | | Semiannual Report | | 15 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | 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., 3/01/37 | | $ | 15,080,000 | | | $ | 6,926,546 | |
Anaheim UHSD, GO, Orange County, Election of 2002, Capital Appreciation, Series A, AGMC Insured, zero cpn., 8/01/26 | | | 8,570,000 | | | | 6,782,384 | |
Antelope Valley Community College District GO, Los Angeles and Kern Counties, Refunding, 5.00%, 8/01/39 | | | 11,750,000 | | | | 13,181,737 | |
Antioch USD, GO, Contra Costa County, School Facilities ID No. 1, Election of 2008, Series B, Assured Guaranty, Pre-Refunded, 5.375%, 8/01/36 | | | 3,130,000 | | | | 3,223,587 | |
Atascadero USD, GO, San Luis Obispo County, Election of 2010, Series A, AGMC Insured, 5.00%, 8/01/40 | | | 6,235,000 | | | | 6,713,162 | |
Atwater PFA Wastewater Revenue, AGMC Insured, Pre-Refunded, 6.125%, 5/01/45 | | | 4,620,000 | | | | 4,830,672 | |
Auburn PFA Wastewater Revenue, Assured Guaranty, Pre-Refunded, 5.50%, 6/01/39 | | | 1,880,000 | | | | 1,927,545 | |
Baldwin Park USD, | | | | | | | | |
GO, Los Angeles County, Capital Appreciation, Election of 2006, Refunding, BAM Insured, zero cpn., 8/01/48 | | | 25,000,000 | | | | 3,774,750 | |
GO, Los Angeles County, Capital Appreciation, Election of 2006, Refunding, BAM Insured, zero cpn., 8/01/53 | | | 60,000,000 | | | | 6,141,000 | |
GO, Los Angeles County, Election of 2006, BAM Insured, 5.00%, 8/01/43 | | | 5,000,000 | | | | 5,488,850 | |
Bay Area Toll Authority Toll Bridge Revenue, | | | | | | | | |
San Francisco Bay Area, Series F-1, 5.00%, 4/01/56 | | | 60,000,000 | | | | 66,612,600 | |
San Francisco Bay Area, Series S-4, AGMC Insured, Pre-Refunded, 5.125%, 4/01/48 | | | 20,000,000 | | | | 22,767,600 | |
San Francisco Bay Area, Subordinate, Refunding, Series S-7, 4.00%, 4/01/42 | | | 94,260,000 | | | | 96,929,443 | |
San Francisco Bay Area, Subordinate, Refunding, Series S-7, 4.00%, 4/01/47 | | | 62,000,000 | | | | 63,436,540 | |
San Francisco Bay Area, Subordinate, Series S-2, Pre-Refunded, 5.00%, 10/01/50 | | | 75,000,000 | | | | 79,748,250 | |
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.00%, 4/01/43 | | | 36,040,000 | | | | 40,834,041 | |
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.125%, 4/01/48 | | | 27,355,000 | | | | 31,140,385 | |
San Francisco Bay Area, Subordinate, Series S-4, Pre-Refunded, 5.25%, 4/01/53 | | | 33,000,000 | | | | 37,743,750 | |
Beaumont Public Improvement Authority Wastewater Revenue, Series A, AGMC Insured, 5.00%, 9/01/49 | | | 10,000,000 | | | | 11,242,300 | |
Beaumont USD, | | | | | | | | |
GO, Riverside County, Capital Appreciation, Election of 2008, Series C, AGMC Insured, zero cpn., 8/01/40 | | | 11,000,000 | | | | 4,302,870 | |
GO, Riverside County, Election of 2008, Series C, AGMC Insured, Pre-Refunded, 5.75%, 8/01/36 | | | 6,200,000 | | | | 6,876,358 | |
Berkeley USD, GO, Alameda County, Election of 2010, Series B, AGMC Insured, 5.375%, 8/01/35 | | | 5,090,000 | | | | 5,399,014 | |
California Community College Financing Authority Lease Revenue, | | | | | | | | |
College of the Sequoias and Kern Community College District, Series A, AGMC Insured, 5.00%, 6/01/30 | | | 2,330,000 | | | | 2,423,899 | |
College of the Sequoias and Kern Community College District, Series A, AGMC Insured, 5.125%, 6/01/35 | | | 1,250,000 | | | | 1,300,613 | |
Grossmont-Cuyamaca Palomar and Shasta-Tehama-Trinity Joint Community College District, Series A, NATL Insured, 5.125%, 4/01/31 | | | 880,000 | | | | 893,270 | |
California County Tobacco Securitization Agency Tobacco Settlement Revenue, | | | | | | | | |
Asset-Backed, Alameda County Tobacco Asset Securitization Corp., 5.875%, 6/01/35 | | | 7,500,000 | | | | 7,571,850 | |
Asset-Backed, Kern County Tobacco Funding Corp., Refunding, 5.00%, 6/01/34 | | | 10,295,000 | | | | 10,930,922 | |
Asset-Backed, Kern County Tobacco Funding Corp., Refunding, 5.00%, 6/01/40 | | | 17,650,000 | | | | 18,728,591 | |
Asset-Backed, Stanislaus County Tobacco Funding Corp., Series A, 5.875%, 6/01/43 | | | 8,690,000 | | | | 8,806,098 | |
California Health Facilities Financing Authority Revenue, | | | | | | | | |
Adventist Health System/West, Series A, Pre-Refunded, 5.75%, 9/01/39 | | | 18,000,000 | | | | 18,641,340 | |
California-Nevada Methodist Homes, Refunding, California Mortgage Insured, 5.00%, 7/01/35 | | | 1,000,000 | | | | 1,125,200 | |
Catholic Healthcare West, Series A, 5.25%, 3/01/41 | | | 50,000,000 | | | | 52,863,000 | |
Catholic Healthcare West, Series A, Pre-Refunded, 6.00%, 7/01/34 | | | 10,000,000 | | | | 10,313,100 | |
| | | | |
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16 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
California Health Facilities Financing Authority Revenue, (continued) | | | | | | | | |
Cedars-Sinai Medical Center, Pre-Refunded, 5.00%, 8/15/39 | | $ | 4,200,000 | | | $ | 4,316,088 | |
Children’s Hospital Los Angeles, Refunding, Series A, 5.00%, 8/15/42 | | | 7,750,000 | | | | 8,554,915 | |
Children’s Hospital Los Angeles, Refunding, Series A, 5.00%, 8/15/47 | | | 10,370,000 | | | | 11,389,164 | |
Children’s Hospital Los Angeles, Series A, AGMC Insured, Pre-Refunded, 5.25%, 7/01/38 | | | 17,000,000 | | | | 17,991,780 | |
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/24 | | | 10,500,000 | | | | 11,027,835 | |
Children’s Hospital of Orange County, Series A, 6.25%, 11/01/29 | | | 13,870,000 | | | | 14,539,505 | |
Children’s Hospital of Orange County, Series A, 5.25%, 11/01/41 | | | 10,000,000 | | | | 10,894,100 | |
Community Program for Persons with Developmental Disabilities, Series A, California Mortgage Insured, 6.25%, 2/01/26 | | | 5,000,000 | | | | 5,463,400 | |
El Camino Hospital, 4.125%, 2/01/47 | | | 11,000,000 | | | | 11,096,140 | |
El Camino Hospital, 5.00%, 2/01/47 | | | 12,500,000 | | | | 13,882,375 | |
Feedback Foundation Inc. Olive Crest Treatment Centers and South California Alcohol and Drug Programs Inc., Series A, California Mortgage Insured, 6.50%, 12/01/22 | | | 620,000 | | | | 622,294 | |
Kaiser Permanente, Refunding, Series A, Subseries A-2, 4.00%, 11/01/38 | | | 25,000,000 | | | | 25,631,500 | |
Kaiser Permanente, Refunding, Series A, Subseries A-2, 4.00%, 11/01/44 | | | 385,000,000 | | | | 394,428,650 | |
Kaiser Permanente, Series A, Subseries A-2, 5.00%, 11/01/47 | | | 30,000,000 | | | | 37,406,700 | |
Lucile Salter Packard Children’s Hospital at Stanford, Series A, 5.00%, 8/15/51 | | | 39,455,000 | | | | 42,540,776 | |
Lucile Salter Packard Children’s Hospital at Stanford, Series A, 5.00%, 11/15/56 | | | 22,000,000 | | | | 24,538,360 | |
Lucile Salter Packard Children’s Hospital at Stanford, Series B, 5.00%, 8/15/55 | | | 12,960,000 | | | | 14,267,923 | |
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/34 | | | 1,000,000 | | | | 1,128,460 | |
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/39 | | | 1,450,000 | | | | 1,614,633 | |
Northern California Presbyterian Homes and Services Inc., Refunding, California Mortgage Insured, 5.00%, 7/01/44 | | | 1,160,000 | | | | 1,283,528 | |
Pomona Valley Hospital Medical Center, Refunding, Series A, NATL Insured, 5.625%, 7/01/19 | | | 1,885,000 | | | | 1,890,730 | |
Providence Health and Services, Refunding, Series A, 5.00%, 10/01/38 | | | 9,000,000 | | | | 10,033,560 | |
Providence Health and Services, Series C, Pre-Refunded, 6.25%, 10/01/28 | | | 4,000,000 | | | | 4,000,000 | |
Providence Health and Services, Series C, Pre-Refunded, 6.50%, 10/01/38 | | | 6,500,000 | | | | 6,500,000 | |
Rady Children’s Hospital, 5.25%, 8/15/41 | | | 11,000,000 | | | | 11,684,530 | |
Stanford Health Care, Refunding, Series A, 4.00%, 11/15/40 | | | 40,000,000 | | | | 41,170,400 | |
Sutter Health, Refunding, Series A, 5.00%, 8/15/43 | | | 20,000,000 | | | | 22,242,600 | |
Sutter Health, Refunding, Series A, 4.00%, 11/15/48 | | | 36,810,000 | | | | 37,116,995 | |
Sutter Health, Refunding, Series A, 5.00%, 11/15/48 | | | 63,470,000 | | | | 71,532,594 | |
Sutter Health, Refunding, Series B, 5.00%, 11/15/46 | | | 26,565,000 | | | | 29,657,432 | |
Sutter Health, Series A, 4.00%, 11/15/42 | | | 11,680,000 | | | | 11,876,224 | |
Sutter Health, Series A, 5.00%, 11/15/48 | | | 34,500,000 | | | | 38,623,440 | |
Sutter Health, Series A, 5.00%, 8/15/52 | | | 89,990,000 | | | | 96,900,332 | |
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 | | | | 8,827,920 | |
Bay Area Toll Bridges Seismic Retrofit, first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/33 | | | 13,460,000 | | | | 16,284,177 | |
Bay Area Toll Bridges Seismic Retrofit, first lien, Series A, FGIC Insured, Pre-Refunded, 5.00%, 7/01/29 | | | 50,985,000 | | | | 61,381,351 | |
Clean Water State Revolving Fund, Green Bonds, 5.00%, 10/01/48 | | | 10,000,000 | | | | 11,535,000 | |
Infrastructure SRF, Refunding, Series A, 5.00%, 10/01/40 | | | 4,015,000 | | | | 4,575,494 | |
Infrastructure SRF, Refunding, Series A, 5.00%, 10/01/43 | | | 1,900,000 | | | | 2,161,364 | |
California Municipal Finance Authority COP, | | | | | | | | |
Community Hospitals of Central California Obligated Group, Pre-Refunded, 5.375%, 2/01/29 | | | 10,000,000 | | | | 10,123,000 | |
Community Hospitals of Central California Obligated Group, Pre-Refunded, 5.50%, 2/01/39 | | | 13,250,000 | | | | 13,418,407 | |
| | | | |
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| franklintempleton.com | | Semiannual Report | | 17 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
California Municipal Finance Authority Mobile Home Park Revenue, Caritas Projects, Senior, Refunding, Series A, 4.00%, 8/15/52 | | $ | 27,350,000 | | | $ | 26,509,534 | |
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 | | | | 2,968,359 | |
Pilgrim Place in Claremont, Series A, California Mortgage Insured, Pre-Refunded, 6.125%, 5/15/39 | | | 5,830,000 | | | | 5,986,710 | |
California School Facilities Financing Authority Revenue, Azusa USD, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/32 | | | 10,000,000 | | | | 10,272,500 | |
California State Community College Financing Authority College Housing Revenue, Orange Coast Properties LLC, Orange Coast College Project, 5.25%, 5/01/53 | | | 6,250,000 | | | | 6,897,875 | |
California State Educational Facilities Authority Revenue, | | | | | | | | |
Chapman University, 5.00%, 4/01/45 | | | 10,000,000 | | | | 10,993,000 | |
Loma Linda University, Refunding, Series A, 5.00%, 4/01/47 | | | 11,000,000 | | | | 12,135,750 | |
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/26 | | | 7,620,000 | | | | 5,948,782 | |
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/27 | | | 7,365,000 | | | | 5,495,984 | |
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/28 | | | 4,120,000 | | | | 2,941,144 | |
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/30 | | | 5,685,000 | | | | 3,718,445 | |
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/31 | | | 7,615,000 | | | | 4,758,842 | |
Loyola Marymount University, Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 10/01/32 | | | 7,615,000 | | | | 4,539,606 | |
Pepperdine University, Refunding, 5.00%, 10/01/49 | | | 13,060,000 | | | | 14,606,696 | |
Santa Clara University, Capital Appreciation, Refunding, AMBAC Insured, zero cpn., 9/01/26 | | | 5,150,000 | | | | 3,862,758 | |
Santa Clara University, Refunding, 5.00%, 4/01/45 | | | 15,495,000 | | | | 17,263,754 | |
Stanford University, Refunding, Series U-1, 5.25%, 4/01/40 | | | 24,960,000 | | | | 32,006,458 | |
Stanford University, Refunding, Series U-3, 5.00%, 6/01/43 | | | 56,950,000 | | | | 71,528,061 | |
Stanford University, Series U-4, 5.00%, 6/01/43 | | | 24,205,000 | | | | 30,400,996 | |
Stanford University, Series U-6, 5.00%, 5/01/45 | | | 90,580,000 | | | | 114,327,359 | |
California State GO, | | | | | | | | |
NATL Insured, 6.00%, 10/01/21 | | | 65,000 | | | | 66,359 | |
Various Purpose, 5.125%, 4/01/24 | | | 5,000 | | | | 5,014 | |
Various Purpose, 6.00%, 5/01/24 | | | 2,565,000 | | | | 2,573,772 | |
Various Purpose, 5.20%, 4/01/26 | | | 20,000 | | | | 20,056 | |
Various Purpose, 6.00%, 4/01/38 | | | 36,920,000 | | | | 37,661,723 | |
Various Purpose, 6.00%, 11/01/39 | | | 100,000,000 | | | | 104,341,000 | |
Various Purpose, 5.25%, 11/01/40 | | | 69,685,000 | | | | 74,276,545 | |
Various Purpose, AGMC Insured, 5.50%, 4/01/19 | | | 140,000 | | | | 142,629 | |
Various Purpose, AGMC Insured, 5.50%, 3/01/20 | | | 190,000 | | | | 192,937 | |
Various Purpose, AMBAC Insured, 5.90%, 3/01/25 | | | 210,000 | | | | 213,608 | |
Various Purpose, FGIC Insured, 6.00%, 8/01/19 | | | 310,000 | | | | 314,383 | |
Various Purpose, FGIC Insured, 5.375%, 6/01/26 | | | 1,335,000 | | | | 1,342,770 | |
Various Purpose, NATL Insured, 6.00%, 8/01/24 | | | 990,000 | | | | 1,003,632 | |
Various Purpose, NATL RE, FGIC Insured, 5.625%, 10/01/26 | | | 5,005,000 | | | | 5,098,343 | |
Various Purpose, Pre-Refunded, 6.00%, 4/01/38 | | | 20,210,000 | | | | 20,645,525 | |
Various Purpose, Refunding, 5.625%, 9/01/24 | | | 255,000 | | | | 258,955 | |
Various Purpose, Refunding, 6.00%, 3/01/33 | | | 25,000,000 | | | | 26,455,250 | |
Various Purpose, Refunding, 5.00%, 10/01/39 | | | 15,000,000 | | | | 16,914,900 | |
| | | | |
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18 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
California State GO, (continued) | | | | | | | | |
Various Purpose, Refunding, 5.50%, 3/01/40 | | $ | 25,000,000 | | | $ | 26,202,500 | |
Various Purpose, Refunding, 5.00%, 10/01/41 | | | 15,250,000 | | | | 16,500,500 | |
Various Purpose, Refunding, 5.00%, 4/01/42 | | | 85,000,000 | | | | 91,925,800 | |
Various Purpose, Refunding, 5.00%, 4/01/43 | | | 44,745,000 | | | | 48,778,762 | |
Various Purpose, Refunding, 5.00%, 10/01/44 | | | 25,000,000 | | | | 27,798,250 | |
Various Purpose, Refunding, 5.00%, 8/01/45 | | | 22,500,000 | | | | 25,141,950 | |
Various Purpose, Refunding, 5.00%, 9/01/45 | | | 10,000,000 | | | | 11,279,200 | |
Various Purpose, Refunding, 5.00%, 8/01/46 | | | 20,000,000 | | | | 22,519,600 | |
Various Purpose, Refunding, 5.00%, 10/01/47 | | | 81,000,000 | | | | 90,765,360 | |
California State Municipal Finance Authority Revenue, | | | | | | | | |
Channing House Project, Series B, California Mortgage Insured, 5.00%, 5/15/47 | | | 10,000,000 | | | | 11,272,700 | |
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/42 | | | 5,500,000 | | | | 6,008,310 | |
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/46 | | | 15,000,000 | | | | 16,187,400 | |
Community Medical Centers, Refunding, Series A, 5.00%, 2/01/47 | | | 20,750,000 | | | | 22,590,110 | |
Eisenhower Medical Center, Refunding, Series A, 5.00%, 7/01/42 | | | 5,100,000 | | | | 5,523,912 | |
Eisenhower Medical Center, Refunding, Series A, 5.00%, 7/01/47 | | | 4,000,000 | | | | 4,317,080 | |
Eisenhower Medical Center, Series A, Pre-Refunded, 5.75%, 7/01/40 | | | 7,000,000 | | | | 7,462,000 | |
Inland Regional Center Project, Refunding, 5.00%, 6/15/45 | | | 23,300,000 | | | | 25,240,424 | |
LINXS APM Project, senior lien, Series A, 5.00%, 12/31/43 | | | 78,650,000 | | | | 86,003,775 | |
NorthBay Healthcare Group, Series A, 5.25%, 11/01/41 | | | 5,500,000 | | | | 5,939,010 | |
NorthBay Healthcare Group, Series A, 5.00%, 11/01/47 | | | 8,650,000 | | | | 9,156,198 | |
South Central Los Angeles Regional Center Project, 5.75%, 12/01/43 | | | 33,895,000 | | | | 37,755,302 | |
University of La Verne, Refunding, Series A, 4.00%, 6/01/47 | | | 8,000,000 | | | | 8,134,560 | |
California State PCFA Revenue, San Jose Water Co. Project, 4.75%, 11/01/46 | | | 15,000,000 | | | | 15,908,100 | |
California State Public School District Financing Authority Lease Revenue, Southern Kern USD, Series B, AGMC Insured, ETM, 5.90%, 9/01/26 | | | 1,475,000 | | | | 1,702,312 | |
California State Public Works Board Lease Revenue, | | | | | | | | |
Various Capital Projects, Refunding, Series G, 5.00%, 11/01/31 | | | 16,520,000 | | | | 18,233,950 | |
Various Capital Projects, Series A, 5.00%, 4/01/31 | | | 48,070,000 | | | | 52,390,532 | |
Various Capital Projects, Series A, 5.00%, 4/01/32 | | | 17,885,000 | | | | 19,486,244 | |
Various Capital Projects, Series A, 5.00%, 4/01/37 | | | 29,000,000 | | | | 31,382,930 | |
Various Capital Projects, Series A, Subseries A-1, Pre-Refunded, 5.50%, 3/01/25 | | | 8,700,000 | | | | 9,159,795 | |
Various Capital Projects, Series A, Subseries A-1, Pre-Refunded, 6.00%, 3/01/35 | | | 10,000,000 | | | | 10,598,000 | |
Various Capital Projects, Series G, Subseries G-1, Pre-Refunded, 5.75%, 10/01/30 | | | 100,000,000 | | | | 103,988,000 | |
Various Capital Projects, Series I, 5.00%, 11/01/38 | | | 40,000,000 | | | | 44,139,600 | |
Various Capital Projects, Series I, Pre-Refunded, 6.375%, 11/01/34 | | | 50,000,000 | | | | 52,491,500 | |
Various Judicial Council Projects, Series D, 5.00%, 12/01/31 | | | 15,000,000 | | | | 16,290,750 | |
California State University Revenue, | | | | | | | | |
Systemwide, Refunding, Series A, 5.00%, 11/01/39 | | | 23,000,000 | | | | 25,796,800 | |
Systemwide, Refunding, Series A, 5.00%, 11/01/42 | | | 29,105,000 | | | | 32,984,696 | |
Systemwide, Refunding, Series A, 5.00%, 11/01/42 | | | 29,645,000 | | | | 31,874,304 | |
Systemwide, Refunding, Series A, 5.00%, 11/01/43 | | | 11,000,000 | | | | 12,334,080 | |
Systemwide, Refunding, Series A, 5.00%, 11/01/44 | | | 32,345,000 | | | | 36,163,327 | |
Systemwide, Refunding, Series A, 5.00%, 11/01/47 | | | 63,000,000 | | | | 71,145,900 | |
Systemwide, Refunding, Series A, 5.00%, 11/01/48 | | | 66,640,000 | | | | 76,532,708 | |
California Statewide CDA, | | | | | | | | |
COP, Citrus Valley Health Partners Inc., NATL Insured, 5.125%, 4/01/23 | | | 6,000,000 | | | | 6,016,260 | |
COP, Insured Health Facilities, UniHealth America, Series A, AMBAC Insured, Pre-Refunded, 5.75%, 10/01/25 | | | 8,820,000 | | | | 9,459,009 | |
MFHR, 740 S. Olive Street Apartments, Series L, GNMA Secured, 5.10%, 7/20/50 | | | 10,000,000 | | | | 10,286,700 | |
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| franklintempleton.com | | Semiannual Report | | 19 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
California Statewide CDA Revenue, | | | | | | | | |
Adventist Health System/West, Refunding, Series A, 5.00%, 3/01/35 | | $ | 9,250,000 | | | $ | 10,386,362 | |
Adventist Health System/West, Refunding, Series A, 5.00%, 3/01/48 | | | 64,000,000 | | | | 71,532,160 | |
Cottage Health System Obligated Group, Refunding, 5.25%, 11/01/30 | | | 18,500,000 | | | | 19,644,965 | |
Cottage Health System Obligated Group, Refunding, 5.00%, 11/01/40 | | | 56,000,000 | | | | 58,379,440 | |
Henry Mayo Newhall Memorial Hospital, Refunding, Series A, AGMC Insured, 5.25%, 10/01/43 | | | 3,000,000 | | | | 3,276,690 | |
Henry Mayo Newhall Memorial Hospital, Series B, AMBAC Insured, Pre-Refunded, 5.05%, 10/01/28 | | | 7,825,000 | | | | 7,825,000 | |
Huntington Memorial Hospital Project, 5.00%, 7/01/48 | | | 7,980,000 | | | | 8,821,970 | |
Insured Health Facility, CLARE Foundation Inc. and Principals Inc., Refunding, Series A, California Mortgage Insured, 5.00%, 8/01/21 | | | 460,000 | | | | 461,145 | |
Insured Health Facility, North County Serenity House Inc., Refunding, California Mortgage Insured, 5.50%, 1/01/28 | | | 2,945,000 | | | | 2,953,364 | |
Kaiser Permanente, Series A, 5.00%, 4/01/42 | | | 88,945,000 | | | | 95,267,211 | |
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.25%, 8/01/24 | | | 11,890,000 | | | | 12,283,678 | |
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.625%, 8/01/29 | | | 20,015,000 | | | | 20,818,802 | |
Methodist Hospital of Southern California Project, FHA Insured, Pre-Refunded, 6.75%, 2/01/38 | | | 37,455,000 | | | | 38,997,771 | |
Poway RHF Housing Inc., Series A, California Mortgage Insured, 5.25%, 11/15/35 | | | 2,000,000 | | | | 2,244,300 | |
The Redwoods, a Community of Seniors Project, Refunding, California Mortgage Insured, 5.125%, 11/15/35 | | | 2,000,000 | | | | 2,224,320 | |
The Redwoods, a Community of Seniors Project, Refunding, California Mortgage Insured, 5.375%, 11/15/44 | | | 7,250,000 | | | | 8,145,447 | |
California Statewide CDA Student Housing Revenue, | | | | | | | | |
University of California, Irvine East Campus Apartments, Phase I, CHF-Irvine LLC, Refunding, 5.125%, 5/15/31 | | | 8,000,000 | | | | 8,437,360 | |
University of California, Irvine East Campus Apartments, Phase I, CHF-Irvine LLC, Refunding, 5.375%, 5/15/38 | | | 8,500,000 | | | | 8,949,735 | |
California Statewide CDA Water and Wastewater Revenue, Pooled Financing Program, Monterey Merced Los Angeles san Bernardino County, Series A, AGMC Insured, 5.25%, 10/01/24 | | | 275,000 | | | | 275,726 | |
Campbell USD, | | | | | | | | |
GO, Capital Appreciation, Series B, NATL Insured, zero cpn., 8/01/20 | | | 5,000,000 | | | | 4,829,000 | |
GO, Capital Appreciation, Series B, NATL Insured, zero cpn., 8/01/21 | | | 6,280,000 | | | | 5,927,692 | |
Carlsbad USD, | | | | | | | | |
COP, San Diego County, Project, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 10/01/34 | | | 14,000,000 | | | | 14,454,860 | |
COP, San Diego County, Project, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 10/01/41 | | | 3,880,000 | | | | 4,006,061 | |
GO, San Diego County, Capital Appreciation, Election of 2006, Series B, zero cpn. to 5/01/19, 6.00% thereafter, 5/01/34 | | | 14,000,000 | | | | 16,184,560 | |
GO, San Diego County, Capital Appreciation, Election of 2006, Series C, zero cpn. to 8/01/26, 6.625% thereafter, 8/01/35 | | | 33,000,000 | | | | 30,611,790 | |
Castaic USD, COP, Refunding, AGMC Insured, 5.125%, 9/01/33 | | | 1,000,000 | | | | 1,047,400 | |
Castro Valley USD, COP, Solar Projects, AGMC Insured, 5.00%, 9/01/32 | | | 2,620,000 | | | | 2,786,946 | |
Centinela Valley UHSD, | | | | | | | | |
GO, Los Angeles County, Election of 2010, Series B, AGMC Insured, 5.00%, 8/01/50 | | | 3,850,000 | | | | 4,203,815 | |
GO, Los Angeles County, Refunding, Series A, NATL Insured, 5.50%, 8/01/33 | | | 15,630,000 | | | | 18,514,673 | |
Central USD, | | | | | | | | |
GO, Fresno County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/29 | | | 3,000,000 | | | | 3,092,790 | |
GO, Fresno County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.625%, 8/01/33 | | | 3,500,000 | | | | 3,611,825 | |
Cerritos PFAR Tax Allocation, Redevelopment Project, Refunding, Series A, AMBAC Insured, 5.00%, 11/01/22 | | | 1,675,000 | | | | 1,712,386 | |
Chaffey Joint UHSD, GO, San Bernardino County, Election of 2012, Series B, 5.00%, 8/01/44 | | | 27,500,000 | | | | 30,631,700 | |
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20 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
Charter Oak USD, GO, Los Angeles County, Election of 2012, Refunding, Series A, AGMC Insured, 5.00%, 8/01/40 | | $ | 5,000,000 | | | $ | 5,548,050 | |
Chico USD, GO, Election of 2012, Series A, 5.00%, 8/01/43 | | | 8,000,000 | | | | 8,835,440 | |
Chula Vista IDR, San Diego Gas and Electric Co., Refunding, Series A, 5.875%, 2/15/34 | | | 17,500,000 | | | | 17,953,950 | |
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 | | | | 4,003,840 | |
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/37 | | | 8,000,000 | | | | 3,801,920 | |
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/40 | | | 7,500,000 | | | | 3,072,450 | |
GO, Riverside and Imperial Counties, Capital Appreciation, Election of 2005, Series C, AGMC Insured, zero cpn., 8/01/43 | | | 10,000,000 | | | | 3,459,400 | |
Coalinga-Huron Joint USD, GO, Fresno Monterey and San Benito Counties, Election of 2016, Series B, BAM Insured, 5.00%, 8/01/48 | | | 13,210,000 | | | | 14,661,118 | |
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 | | | | 5,154,650 | |
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 | | | | 5,927,847 | |
Election of 2008, Series B, AGMC Insured, 5.00%, 8/01/39 | | | 3,000,000 | | | | 3,130,530 | |
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 | | | | 5,886,981 | |
GO, San Bernardino and Riverside Counties, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.375%, 8/01/34 | | | 10,665,000 | | | | 10,983,883 | |
Compton CRDA Tax Allocation, | | | | | | | | |
Redevelopment Project, second lien, Series B, 5.70%, 8/01/30 | | | 10,000,000 | | | | 10,469,700 | |
Redevelopment Project, second lien, Series B, 6.00%, 8/01/35 | | | 11,160,000 | | | | 11,745,342 | |
Redevelopment Project, second lien, Series B, 6.00%, 8/01/42 | | | 10,000,000 | | | | 10,511,700 | |
Compton Sewer Revenue, Los Angeles County, 6.00%, 9/01/39 | | | 11,775,000 | | | | 12,032,755 | |
Coronado CDA Tax Allocation, | | | | | | | | |
Coronado Community Development Project, NATL Insured, 5.375%, 9/01/26 | | | 2,700,000 | | | | 2,700,567 | |
Coronado Community Development Project, Refunding, NATL Insured, 5.00%, 9/01/34 | | | 6,115,000 | | | | 6,116,162 | |
Corona-Norco USD, | | | | | | | | |
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 9/01/23 | | | 2,320,000 | | | | 2,059,348 | |
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 9/01/24 | | | 2,620,000 | | | | 2,251,445 | |
GO, Riverside County, Capital Appreciation, Series B, AGMC Insured, zero cpn., 3/01/25 | | | 1,400,000 | | | | 1,182,482 | |
GO, Riverside County, Capital Appreciation, Series C, NATL Insured, zero cpn., 9/01/25 | | | 4,655,000 | | | | 3,846,101 | |
GO, Riverside County, Capital Appreciation, Series C, NATL Insured, zero cpn., 9/01/26 | | | 6,080,000 | | | | 4,844,909 | |
GO, Riverside County, Election of 2006, Series C, AGMC Insured, Pre-Refunded, 5.50%, 8/01/39 | | | 7,500,000 | | | | 7,735,125 | |
GO, Riverside County, Election of 2014, Series A, 5.00%, 8/01/44 | | | 20,000,000 | | | | 22,309,200 | |
Covina PFA Wastewater Revenue, Assured Guaranty, 5.375%, 10/01/29 | | | 6,550,000 | | | | 6,754,687 | |
Covina PFA Water Revenue, AGMC Insured, 5.50%, 10/01/40 | | | 3,500,000 | | | | 3,723,055 | |
Cudahy RDA Allocation, Refunding, Series C, 6.00%, 10/01/27 | | | 5,490,000 | | | | 5,490,000 | |
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 | | | | 17,894,661 | |
Delano UHSD, GO, Refunding, Series A, NATL Insured, 5.15%, 2/01/32 | | | 8,520,000 | | | | 9,674,204 | |
Delano USD, COP, Refinancing Project, NATL Insured, 5.125%, 1/01/22 | | | 1,320,000 | | | | 1,366,398 | |
East Bay MUD Water System Revenue, | | | | | | | | |
Alameda and Contra Costa Counties, Refunding, Series A, 5.00%, 6/01/35 | | | 10,000,000 | | | | 11,244,800 | |
Alameda and Contra Costa Counties, Refunding, Series A, 5.00%, 6/01/36 | | | 7,355,000 | | | | 8,399,410 | |
Alameda and Contra Costa Counties, Series C, 5.00%, 6/01/44 | | | 14,000,000 | | | | 15,579,060 | |
| | | | |
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| franklintempleton.com | | Semiannual Report | | 21 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
East Bay MUD Water System Revenue, (continued) | | | | | | | | |
Alameda and Contra Costa Counties, Series C, 4.00%, 6/01/45 | | $ | 9,070,000 | | | $ | 9,358,970 | |
Eastern California Municipal Water District Financing Authority Water and Wastewater Revenue, Series B, 5.00%, 7/01/46 | | | 30,705,000 | | | | 34,389,600 | |
El Monte UHSD, GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre- Refunded, 5.50%, 6/01/34 | | | 11,355,000 | | | | 11,638,307 | |
Elk Grove Finance Authority Special Tax Revenue, BAM Insured, 5.00%, 9/01/38 | | | 1,500,000 | | | | 1,658,400 | |
Escondido UHSD, | | | | | | | | |
COP, Public School Facilities Project, Series A, AGMC Insured, 5.00%, 6/01/33 | | | 3,500,000 | | | | 3,637,550 | |
COP, Public School Facilities Project, Series A, AGMC Insured, 5.00%, 6/01/37 | | | 2,500,000 | | | | 2,597,000 | |
Fairfax Elementary School District GO, | | | | | | | | |
Capital Appreciation, Election of 2010, Refunding, AGMC Insured, zero cpn., 11/01/48 | | | 10,380,000 | | | | 2,638,077 | |
Election of 2010, AGMC Insured, 5.75%, 11/01/40 | | | 2,250,000 | | | | 2,467,575 | |
Folsom Cordova USD, GO, School Facilities ID No. 5, Election of 2014, Sacramento County, Series C, 4.00%, 10/01/43 | | | 17,500,000 | | | | 18,113,200 | |
Fontana RDA Tax Allocation, Jurupa Hills Redevelopment Project, Refunding, Series A, 5.50%, 10/01/27 | | | 12,500,000 | | | | 12,500,000 | |
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, | | | | | | | | |
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/37 | | | 41,250,000 | | | | 19,359,037 | |
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/38 | | | 77,650,000 | | | | 34,636,559 | |
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn., 1/15/39 | | | 56,100,000 | | | | 23,903,088 | |
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn. to 1/15/24, 5.50% thereafter, 1/15/31 | | | 35,000,000 | | | | 31,938,200 | |
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn. to 1/15/24, 5.625% thereafter, 1/15/32 | | | 37,260,000 | | | | 34,159,223 | |
Capital Appreciation, Refunding, Series A, zero cpn., 1/15/42 | | | 130,000,000 | | | | 45,494,800 | |
Capital Appreciation, Refunding, Series A, zero cpn. to 1/14/24, 6.85% thereafter, 1/15/42 | | | 98,000,000 | | | | 89,051,620 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/22 | | | 30,835,000 | | | | 28,877,594 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/23 | | | 5,765,000 | | | | 5,266,673 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/24 | | | 72,045,000 | | | | 63,831,870 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/25 | | | 20,660,000 | | | | 17,744,461 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/26 | | | 23,475,000 | | | | 19,508,899 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/27 | | | 15,000,000 | | | | 12,033,300 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/28 | | | 2,000,000 | | | | 1,545,140 | |
Capital Appreciation, senior lien, Series A, ETM, zero cpn., 1/01/29 | | | 35,310,000 | | | | 26,076,788 | |
Refunding, Series A, 5.75%, 1/15/46 | | | 260,000,000 | | | | 293,883,200 | |
Refunding, Series A, 6.00%, 1/15/49 | | | 305,000,000 | | | | 351,982,200 | |
Refunding, Series A, 6.00%, 1/15/53 | | | 190,000,000 | | | | 218,864,800 | |
Refunding, Series A, AGMC Insured, 5.00%, 1/15/42 | | | 10,000,000 | | | | 10,843,200 | |
Fort Bragg USD, GO, Election of 2008, AGMC Insured, 5.125%, 8/01/41 | | | 4,380,000 | | | | 4,661,240 | |
Fowler USD, | | | | | | | | |
GO, Fresno County, Capital Appreciation, Election of 2004, Series C, AGMC Insured, zero cpn., 8/01/41 | | | 3,095,000 | | | | 1,208,969 | |
GO, Fresno County, Capital Appreciation, Election of 2004, Series C, AGMC Insured, zero cpn., 8/01/42 | | | 3,005,000 | | | | 1,121,226 | |
GO, Fresno County, Election of 2004, Series C, AGMC Insured, 5.25%, 8/01/39 | | | 3,555,000 | | | | 3,739,185 | |
Franklin-McKinley School District GO, Santa Clara County, Election of 2010, Series C, BAM Insured, 5.00%, 8/01/44 | | | 5,000,000 | | | | 5,448,700 | |
Fresno USD, | | | | | | | | |
GO, Capital Appreciation, Election of 2001, Series G, zero cpn., 8/01/41 | | | 47,000,000 | | | | 11,043,120 | |
GO, Capital Appreciation, Election of 2010, Refunding, Series B, zero cpn., 8/01/41 | | | 35,000,000 | | | | 8,239,700 | |
GO, Refunding, Series C, NATL Insured, 5.90%, 2/01/20 | | | 2,065,000 | | | | 2,170,439 | |
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22 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
Fresno USD, (continued) | | | | | | | | |
GO, Refunding, Series C, NATL Insured, 5.90%, 8/01/22 | | $ | 3,000,000 | | | $ | 3,303,360 | |
Fullerton School District Financing Authority Special Tax Revenue, senior lien, Refunding, Series A, AGMC Insured, 5.00%, 9/01/31 | | | 2,500,000 | | | | 2,745,975 | |
Fullerton School District GO, Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/23 | | | 3,030,000 | | | | 2,684,762 | |
Glendale Community College District GO, Capital Appreciation, NATL Insured, zero cpn., 8/01/28 | | | 15,000,000 | | | | 10,134,000 | |
Glendora PFAR Tax Allocation, Project No. 1, Refunding, Series A, NATL Insured, 5.00%, 9/01/24 | | | 5,000,000 | | | | 5,012,750 | |
Golden State Tobacco Securitization Corp. Enhanced Tobacco Settlement Revenue, | | | | | | | | |
Asset-Backed, Series A, 5.00%, 6/01/35 | | | 25,000,000 | | | | 27,855,000 | |
Asset-Backed, Series A, 5.00%, 6/01/40 | | | 212,525,000 | | | | 234,236,554 | |
Asset-Backed, Series A, 5.00%, 6/01/45 | | | 144,305,000 | | | | 158,594,081 | |
Golden State Tobacco Securitization Corp. Tobacco Settlement Revenue, Asset-Backed, Refunding, Series A-1, 5.00%, 6/01/35 | | | 18,340,000 | | | | 20,466,706 | |
Grand Terrace CRDA Tax Allocation Revenue, Community Redevelopment Project Area, Series A, 6.00%, 9/01/33. | | | 10,000,000 | | | | 10,442,500 | |
Grossmont UHSD, | | | | | | | | |
GO, San Diego County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/24 | | | 5,110,000 | | | | 4,410,697 | |
GO, San Diego County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/33 | | | 1,440,000 | | | | 1,478,635 | |
GO, San Diego County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.25%, 8/01/33 | | | 7,510,000 | | | | 7,726,889 | |
Hacienda La Puente USD, GO, Los Angeles County, Election of 2016, Series A, 4.00%, 8/01/47 | | | 15,655,000 | | | | 16,029,154 | |
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 | | | | 21,925,000 | |
Hawthorne School District GO, | | | | | | | | |
Capital Appreciation, Election of 2004, Series C, Assured Guaranty, zero cpn., 8/01/48 | | | 37,665,000 | | | | 9,958,249 | |
Los Angeles County, Election of 2008, Series A, Assured Guaranty, 5.00%, 8/01/34 | | | 1,000,000 | | | | 1,022,140 | |
Hayward USD, GO, Alameda County, Capital Appreciation, Election of 2008, Series A, AGMC Insured, Pre-Refunded, zero cpn., 8/01/38 | | | 9,875,000 | | | | 2,639,193 | |
Healdsburg RDA Tax Allocation Revenue, Sotoyome Community Development Project, Pre-Refunded, 5.375%, 8/01/34 | | | 7,750,000 | | | | 8,239,257 | |
Huntington Beach City School District GO, Capital Appreciation, Election of 2002, Series A, NATL Insured, zero cpn., 8/01/28 | | | 10,005,000 | | | | 7,330,764 | |
Huntington Beach UHSD, COP, Adult Education Project, AGMC Insured, 5.25%, 9/01/39 | | | 2,000,000 | | | | 2,105,580 | |
Indian Wells Valley Water District COP, | | | | | | | | |
Refunding, Assured Guaranty, 5.125%, 10/01/32 | | | 1,690,000 | | | | 1,710,652 | |
Refunding, Assured Guaranty, 5.25%, 10/01/39 | | | 7,590,000 | | | | 7,683,888 | |
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 | | | | 36,666,350 | |
Irvine USD Special Tax, | | | | | | | | |
CFD No. 01-1, South Irvine Communities, Refunding, BAM Insured, 5.00%, 9/01/38 | | | 7,000,000 | | | | 7,636,160 | |
CFD No. 09-1, Series D, 5.00%, 3/01/57 | | | 10,000,000 | | | | 10,884,100 | |
Jefferson UHSD San Mateo County GO, | | | | | | | | |
Refunding, Series A, NATL Insured, 6.45%, 8/01/25 | | | 3,045,000 | | | | 3,570,658 | |
Refunding, Series A, NATL Insured, 6.45%, 8/01/29 | | | 3,075,000 | | | | 3,809,864 | |
Jurupa PFA Special Tax Revenue, | | | | | | | | |
Refunding, Series A, AGMC Insured, 5.25%, 9/01/42 | | | 3,250,000 | | | | 3,616,243 | |
Series A, AGMC Insured, 5.125%, 9/01/37 | | | 4,000,000 | | | | 4,426,000 | |
Jurupa PFAR, superior lien, Refunding, Series A, AGMC Insured, 5.00%, 9/01/30 | | | 4,000,000 | | | | 4,192,560 | |
Jurupa USD, GO, Riverside County, Election of 2014, Series A, 5.00%, 8/01/39 | | | 10,165,000 | | | | 11,451,889 | |
La Habra COP, Park La Habra and Viewpark Refinancing Project, Refunding, Series A, AGMC Insured, 5.25%, 9/01/40 | | | 7,900,000 | | | | 8,329,207 | |
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| franklintempleton.com | | Semiannual Report | | 23 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
La Mirada RDA Tax Allocation, Merged Project Area, Refunding, Series A, AGMC Insured, 5.00%, 8/15/28 | | $ | 1,855,000 | | | $ | 1,946,785 | |
La Palma Community Development Commission Tax Allocation, La Palma Community Development Project No. 1, Refunding, 6.10%, 6/01/22 | | | 340,000 | | | | 340,857 | |
Lake Elsinore PFA Tax Allocation Revenue, Series A, Assured Guaranty, 5.25%, 9/01/33 | | | 10,065,000 | | | | 10,344,706 | |
Lake Elsinore USD, COP, School Facilities Project Funding Program, AGMC Insured, 5.00%, 6/01/42 | | | 10,000,000 | | | | 10,366,400 | |
Lake Tahoe USD, GO, Election of 2008, AGMC Insured, 5.375%, 8/01/29 | | | 10,000,000 | | | | 10,278,000 | |
Lakeside USD San Diego County GO, Capital Appreciation, Election of 2008, Series B, zero cpn., 8/01/45 | | | 11,540,000 | | | | 3,573,246 | |
Lammersville Joint USD, GO, Election of 2016, Series A, 4.00%, 8/01/46 | | | 41,340,000 | | | | 42,174,655 | |
Lancaster School District GO, | | | | | | | | |
Capital Appreciation, Election of 1999, NATL Insured, zero cpn., 8/01/25 | | | 5,495,000 | | | | 4,486,722 | |
Capital Appreciation, Election of 1999, NATL Insured, zero cpn., 7/01/26 | | | 5,965,000 | | | | 4,678,648 | |
Lawndale RDA Tax Allocation, | | | | | | | | |
Economic Revitalization Project, Assured Guaranty, 5.50%, 8/01/39 | | | 10,280,000 | | | | 10,562,494 | |
Economic Revitalization Project, Assured Guaranty, 5.50%, 8/01/44 | | | 6,085,000 | | | | 6,249,660 | |
Lemon Grove School District GO, | | | | | | | | |
Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/50 | | | 20,990,000 | | | | 5,225,880 | |
Election of 2008, Series A, Assured Guaranty, 5.125%, 8/01/33 | | | 2,100,000 | | | | 2,154,957 | |
Live Oak School District COP, | | | | | | | | |
Assured Guaranty, Pre-Refunded, 5.50%, 8/01/29 | | | 1,245,000 | | | | 1,283,508 | |
Assured Guaranty, Pre-Refunded, 5.875%, 8/01/34 | | | 2,270,000 | | | | 2,347,203 | |
Assured Guaranty, Pre-Refunded, 5.875%, 8/01/39 | | | 2,750,000 | | | | 2,843,528 | |
Lodi USD, GO, San Joaquin County, Election of 2016, 4.00%, 8/01/41 | | | 15,000,000 | | | | 15,495,750 | |
Long Beach Bond Finance Authority Natural Gas Purchase Revenue, | | | | | | | | |
Series A, 5.50%, 11/15/28 | | | 8,000,000 | | | | 9,610,240 | |
Series A, 5.00%, 11/15/29 | | | 17,465,000 | | | | 20,332,928 | |
Series A, 5.50%, 11/15/30 | | | 5,000,000 | | | | 6,102,500 | |
Series A, 5.00%, 11/15/35 | | | 69,800,000 | | | | 83,095,504 | |
Series A, 5.50%, 11/15/37 | | | 35,000,000 | | | | 44,020,900 | |
Los Angeles Community College District GO, Refunding, 5.00%, 8/01/38 | | | 10,000,000 | | | | 11,393,600 | |
Los Angeles County MTA Sales Tax Revenue, | | | | | | | | |
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/35 | | | 17,655,000 | | | | 20,408,827 | |
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/37 | | | 10,970,000 | | | | 12,591,256 | |
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/38 | | | 28,160,000 | | | | 32,258,970 | |
Measure R, Senior, Refunding, Series A, 5.00%, 6/01/39 | | | 10,000,000 | | | | 11,440,800 | |
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 | | | | 27,121,937 | |
Los Angeles Department of Airports Revenue, | | | | | | | | |
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/34 | | | 18,500,000 | | | | 18,836,145 | |
Los Angeles International Airport, Senior, Refunding, Series A, 5.25%, 5/15/39 | | | 14,000,000 | | | | 14,280,140 | |
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/40 | | | 19,445,000 | | | | 20,376,027 | |
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/35 | | | 80,000,000 | | | | 83,869,600 | |
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/40 | | | 30,000,000 | | | | 31,436,400 | |
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/41 | | | 14,500,000 | | | | 15,846,325 | |
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/42 | | | 10,000,000 | | | | 11,068,200 | |
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/44 | | | 60,000,000 | | | | 66,931,200 | |
Los Angeles International Airport, Subordinate, Series A, 5.00%, 5/15/47 | | | 23,000,000 | | | | 25,367,160 | |
Los Angeles International Airport, Subordinate, Series B, 5.00%, 5/15/41 | | | 12,500,000 | | | | 13,726,500 | |
Los Angeles International Airport, Subordinate, Series B, 5.00%, 5/15/46 | | | 53,000,000 | | | | 57,941,190 | |
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24 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
Los Angeles Department of Water and Power Revenue, | | | | | | | | |
Power System, Refunding, Series A, 5.00%, 7/01/35 | | $ | 15,105,000 | | | $ | 16,969,259 | |
Power System, Refunding, Series A, 5.00%, 7/01/36 | | | 17,795,000 | | | | 19,937,162 | |
Power System, Refunding, Series A, 5.00%, 7/01/46 | | | 15,000,000 | | | | 16,815,750 | |
Power System, Series A, 5.00%, 7/01/42 | | | 120,000,000 | | | | 136,287,600 | |
Power System, Series A, 5.00%, 7/01/47 | | | 125,000,000 | | | | 141,481,250 | |
Power System, Series B, 5.00%, 7/01/35 | | | 11,995,000 | | | | 13,697,690 | |
Power System, Series B, 5.00%, 7/01/43 | | | 62,000,000 | | | | 68,356,240 | |
Power System, Series C, 5.00%, 7/01/47 | | | 52,275,000 | | | | 59,530,770 | |
Power System, Series D, 5.00%, 7/01/44 | | | 51,940,000 | | | | 57,702,743 | |
Power System, Series E, 5.00%, 7/01/44 | | | 34,000,000 | | | | 37,772,300 | |
Water System, Refunding, Series A, 5.00%, 7/01/43 | | | 81,095,000 | | | | 88,574,392 | |
Water System, Refunding, Series A, 5.00%, 7/01/46 | | | 37,255,000 | | | | 41,764,718 | |
Water System, Series A, 5.00%, 7/01/44 | | | 50,000,000 | | | | 55,547,500 | |
Los Angeles Harbor Department Revenue, Exempt Facility, Refunding, Series B, 5.00%, 8/01/44 | | | 10,300,000 | | | | 11,510,765 | |
Los Angeles Mortgage Revenue, FHA Insured Mortgage Loans, Section 8 Assisted Projects, Refunding, Series 1, NATL Insured, 6.50%, 7/01/22 | | | 285,000 | | | | 285,807 | |
Los Angeles USD, | | | | | | | | |
GO, Election of 2004, Series I, 5.00%, 7/01/29 | | | 10,000,000 | | | | 10,226,400 | |
GO, Election of 2004, Series I, 5.00%, 1/01/34 | | | 36,760,000 | | | | 37,589,306 | |
GO, Election of 2005, Series F, 5.00%, 7/01/29 | | | 2,250,000 | | | | 2,300,940 | |
GO, Election of 2008, Series B-1, 5.25%, 7/01/42 | | | 35,000,000 | | | | 41,069,700 | |
Los Angeles Wastewater System Revenue, | | | | | | | | |
Green Bonds, Refunding, Series C, 5.00%, 6/01/45 | | | 24,690,000 | | | | 27,762,670 | |
Green Bonds, Series A, 5.00%, 6/01/44 | | | 9,000,000 | | | | 10,125,810 | |
Series A, Pre-Refunded, 5.00%, 6/01/39 | | | 25,000,000 | | | | 25,550,250 | |
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 | | | | 11,020,838 | |
GO, Santa Clara and Santa Cruz Counties, Election of 2014, Series A, 4.00%, 8/01/44 | | | 16,090,000 | | | | 16,596,030 | |
Madera County COP, | | | | | | | | |
Valley Children’s Hospital Project, NATL Insured, 5.00%, 3/15/23 | | | 8,500,000 | | | | 8,525,925 | |
Valley Children’s Hospital Project, NATL Insured, 5.75%, 3/15/28 | | | 27,500,000 | | | | 27,583,875 | |
McFarland PFAR, Water and Wastewater Financing Projects, Series A, AGMC Insured, 5.00%, 10/01/40 | | | 5,115,000 | | | | 5,361,594 | |
Mendocino-Lake Community College District GO, Election of 2006, Series B, AGMC Insured, 5.125%, 8/01/41 | | | 7,500,000 | | | | 7,992,150 | |
The Metropolitan Water District of Southern California Water Revenue, Authorization, Series A, 5.00%, 7/01/40 | | | 10,000,000 | | | | 11,383,200 | |
Midpeninsula Regional Open Space District GO, Green Bond, 4.00%, 9/01/48 | | | 11,220,000 | | | | 11,600,582 | |
Milpitas RDA Tax Allocation, Redevelopment Project Area No. 1, NATL Insured, ETM, 5.50%, 1/15/24 | | | 10,365,000 | | | | 11,223,015 | |
Modesto High School District Stanislaus County GO, | | | | | | | | |
Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/21 | | | 9,660,000 | | | | 9,102,811 | |
Capital Appreciation, Series A, NATL Insured, zero cpn., 8/01/23 | | | 10,815,000 | | | | 9,601,016 | |
Capital Appreciation, Series A, NATL Insured, zero cpn., 5/01/27 | | | 12,770,000 | | | | 9,915,777 | |
Monterey Peninsula USD, | | | | | | | | |
GO, Election of 2010, Series A, AGMC Insured, Pre-Refunded, 5.75%, 8/01/41 | | | 17,500,000 | | | | 19,409,075 | |
GO, Election of 2010, Series C, 5.00%, 8/01/41 | | | 11,190,000 | | | | 12,435,671 | |
Moorpark USD, | | | | | | | | |
COP, Assured Guaranty, Pre-Refunded, 5.625%, 11/01/28 | | | 2,180,000 | | | | 2,269,990 | |
GO, Capital Appreciation, Election of 2008, Series A, Assured Guaranty, zero cpn., 8/01/32 | | | 5,870,000 | | | | 3,492,357 | |
| | | | |
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| franklintempleton.com | | Semiannual Report | | 25 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
Moreno Valley USD, | | | | | | | | |
GO, Riverside County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/27 | | $ | 6,315,000 | | | $ | 4,983,356 | |
GO, Riverside County, Capital Appreciation, Election of 2004, AGMC Insured, zero cpn., 8/01/28 | | | 6,625,000 | | | | 5,050,304 | |
GO, Riverside County, Election of 2014, Series A, AGMC Insured, 5.00%, 8/01/44 | | | 29,220,000 | | | | 32,196,641 | |
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 | | | | 45,168,750 | |
Mount San Jacinto Community College District GO, Election of 2014, Series B, 4.00%, 8/01/43 | | | 17,200,000 | | | | 17,793,572 | |
M-S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39 | | | 25,000,000 | | | | 34,282,500 | |
M-S-R Public Power Agency San Juan Project Revenue, Series E, NATL Insured, ETM, 6.00%, 7/01/22 | | | 6,330,000 | | | | 6,948,568 | |
Murrieta Valley USD, COP, School Facility Bridge Funding Program, Pre-Refunded, 5.75%, 5/01/41 | | | 12,000,000 | | | | 12,746,880 | |
Needles PFAR Tax Allocation, Redevelopment Project, Series A, 7.50%, 8/15/22 | | | 540,000 | | | | 540,616 | |
Newport Mesa USD, GO, Capital Appreciation, Election of 2005, zero cpn. to 7/31/21, 6.30% thereafter, 8/01/42 | | | 20,000,000 | | | | 22,078,200 | |
Northern California Public Power Agency Revenue, AMBAC Insured, Pre-Refunded, 7.50%, 7/01/23 | | | 2,425,000 | | | | 2,688,161 | |
Oak Grove School District GO, Capital Appreciation, Election of 2008, Series B-1, Pre-Refunded, zero cpn., 6/01/41 | | | 36,240,000 | | | | 8,036,945 | |
Oak View USD, GO, San Joaquin County, Election of 2008, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/49 | | | 1,895,000 | | | | 2,003,659 | |
Oakland GO, Series B, Pre-Refunded, 6.25%, 1/15/39 | | | 10,045,000 | | | | 10,177,393 | |
Oakland USD Alameda County GO, Election of 2006, Series A, Pre-Refunded, 6.125%, 8/01/29 | | | 7,225,000 | | | | 7,488,568 | |
Oceanside USD, | | | | | | | | |
GO, San Diego County, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/38 | | | 10,590,000 | | | | 4,828,405 | |
GO, San Diego County, Capital Appreciation, Election of 2008, Series B, AGMC Insured, zero cpn., 8/01/39 | | | 7,860,000 | | | | 3,423,502 | |
GO, San Diego County, Refunding, 5.00%, 8/01/48 | | | 12,000,000 | | | | 13,276,560 | |
Ontario-Montclair School District GO, San Bernardino County, Election of 2016, Series A, 5.00%, 8/01/46 | | | 11,765,000 | | | | 13,237,743 | |
Orange County Sanitation District Revenue, Wastewater, Refunding, Series A, 5.00%, 2/01/36 | | | 8,350,000 | | | | 9,490,359 | |
Orange County Water District Revenue COP, | | | | | | | | |
Series B, NATL Insured, ETM, 5.00%, 8/15/28 | | | 13,740,000 | | | | 16,064,808 | |
Series B, NATL Insured, ETM, 5.00%, 8/15/34 | | | 3,305,000 | | | | 3,947,426 | |
Series B, NATL Insured, Pre-Refunded, 5.00%, 8/15/34 | | | 4,140,000 | | | | 5,132,234 | |
Orange Special Tax, CFD No. 06-1, Del Rio Public Improvements, Refunding, AGMC Insured, 5.00%, 10/01/40 | | | 7,500,000 | | | | 8,226,975 | |
Oxnard School District GO, Ventura County, Election of 2012, Series C, BAM Insured, 4.00%, 8/01/44 | | | 10,755,000 | | | | 11,036,028 | |
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 | | | | 67,930,179 | |
Election of 2006, Series C, 5.00%, 8/01/44. | | | 35,120,000 | | | | 39,868,575 | |
Palomar Health Revenue, Refunding, AGMC Insured, 5.00%, 11/01/47 | | | 35,000,000 | | | | 38,737,300 | |
Palomar Pomerado Health COP, Pre-Refunded, 6.75%, 11/01/39 | | | 30,000,000 | | | | 31,598,100 | |
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 | | | | 44,442,360 | |
Capital Appreciation, Election of 2004, Series A, zero cpn. to 8/01/20, 6.75% thereafter, 8/01/40 | | | 60,000,000 | | | | 69,774,000 | |
Paramount USD, | | | | | | | | |
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/43 | | | 32,000,000 | | | | 7,256,960 | |
GO, Los Angeles County, Capital Appreciation, Election of 2006, BAM Insured, zero cpn., 8/01/48 | | | 28,000,000 | | | | 4,248,440 | |
GO, Los Angeles County, Election of 2006, AGMC Insured, 5.00%, 8/01/46 | | | 11,270,000 | | | | 12,009,425 | |
GO, Los Angeles County, Election of 2006, BAM Insured, 5.00%, 8/01/48 | | | 2,450,000 | | | | 2,680,251 | |
Pasadena Electric Revenue, Refunding, Series A, 4.00%, 6/01/46 | | | 22,625,000 | | | | 23,194,924 | |
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26 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
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 | | | $ | 1,727,518 | |
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/23 | | | 1,985,000 | | | | 1,745,470 | |
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/24 | | | 2,075,000 | | | | 1,760,389 | |
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/25 | | | 2,170,000 | | | | 1,772,999 | |
GO, Stanislaus and Santa Clara Counties, Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/26 | | | 2,265,000 | | | | 1,778,772 | |
Perris School District COP, School Facility Bridge Funding Program, AGMC Insured, 5.50%, 9/01/34 | | | 4,000,000 | | | | 4,213,800 | |
Perris SFMR, Capital Appreciation, Series A, GNMA Secured, ETM, zero cpn., 6/01/23 | | | 19,095,000 | | | | 17,060,619 | |
Perris UHSD, GO, Riverside County, Election of 2012, Series A, AGMC Insured, 5.00%, 9/01/42 | | | 5,000,000 | | | | 5,482,350 | |
Pittsburg USD Financing Authority Revenue, Board Program, AGMC Insured, Pre-Refunded, 5.50%, 9/01/46 | | | 9,980,000 | | | | 10,978,699 | |
Placentia-Yorba Linda USD, | | | | | | | | |
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/43 | | | 27,955,000 | | | | 10,007,890 | |
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/46 | | | 89,200,000 | | | | 26,966,052 | |
GO, Capital Appreciation, Election of 2008, Series D, zero cpn., 8/01/49 | | | 85,000,000 | | | | 22,306,550 | |
Pleasanton USD, COP, AGMC Insured, Pre-Refunded, 5.00%, 8/01/29 | | | 4,000,000 | | | | 4,229,360 | |
Pomona USD, | | | | | | | | |
GO, Election of 2008, Series C, AGMC Insured, 5.25%, 8/01/40 | | | 16,000,000 | | | | 17,258,400 | |
GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 8/01/33 | | | 5,675,000 | | | | 5,838,894 | |
Poway RDA Successor Agency Tax Allocation, | | | | | | | | |
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 12/15/31 | | | 10,180,000 | | | | 12,170,597 | |
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 12/15/32 | | | 11,215,000 | | | | 13,500,841 | |
Paguay Redevelopment Project, Refunding, Series A, 5.00%, 6/15/33 | | | 5,835,000 | | | | 7,269,185 | |
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 | | | | 13,290,750 | |
The Regents of the University of California Revenue, | | | | | | | | |
General, Refunding, Series AZ, 5.00%, 5/15/48 | | | 25,000,000 | | | | 28,544,000 | |
Limited Project, Refunding, Series O, 5.00%, 5/15/48 | | | 20,000,000 | | | | 22,641,200 | |
Limited Project, Refunding, Series O, 5.00%, 5/15/58 | | | 10,000,000 | | | | 11,259,300 | |
Rialto USD, | | | | | | | | |
GO, Capital Appreciation, Election of 1999, Series A, NATL Insured, zero cpn., 6/01/19 | | | 1,655,000 | | | | 1,633,915 | |
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 | | | | 25,999,380 | |
Richmond Joint Powers Financing Authority Lease Revenue, Civic Center Project, Refunding, Assured Guaranty, 5.875%, 8/01/37 | | | 24,000,000 | | | | 24,702,960 | |
Rio Hondo Community College District GO, Capital Appreciation, Election of 2004, Series C, zero cpn., 8/01/35 | | | 10,000,000 | | | | 5,280,800 | |
Ripon USD, | | | | | | | | |
GO, Capital Appreciation, Election of 2012, Refunding, Series A, BAM Insured, 5.00%, 8/01/42 | | | 2,315,000 | | | | 2,575,623 | |
GO, Capital Appreciation, Election of 2012, Refunding, Series A, BAM Insured, 5.00%, 8/01/42 | | | 705,000 | | | | 767,604 | |
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 | | | | 12,449,189 | |
Riverside County Hospital Project, Capital Appreciation, Series A, NATL Insured, zero cpn., 6/01/24 | | | 13,005,000 | | | | 11,017,316 | |
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| franklintempleton.com | | Semiannual Report | | 27 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
Riverside County SFMR, | | | | | | | | |
Capital Appreciation, Mortgage, Series A, GNMA Secured, ETM, zero cpn., 11/01/20 | | $ | 25,055,000 | | | $ | 23,778,197 | |
Capital Appreciation, Mortgage, Series B, GNMA Secured, ETM, zero cpn., 6/01/23 | | | 26,160,000 | | | | 23,372,914 | |
Riverside County Transportation Commission Sales Tax Revenue, Limited Tax, Series A, Pre-Refunded, 5.25%, 6/01/39 | | | 11,000,000 | | | | 12,626,350 | |
Riverside County Transportation Commission Toll Revenue, senior lien, Series A, 5.75%, 6/01/48 | | | 10,000,000 | | | | 10,987,000 | |
Riverside Electric Revenue, | | | | | | | | |
Issue D, AGMC Insured, 5.00%, 10/01/33 | | | 10,000,000 | | | | 10,145,700 | |
Issue D, AGMC Insured, 5.00%, 10/01/38 | | | 4,695,000 | | | | 4,761,763 | |
Issue D, Pre-Refunded, AGMC Insured, 5.00%, 10/01/38 | | | 615,000 | | | | 615,000 | |
Refunding, Series A, 5.00%, 10/01/43 | | | 11,535,000 | | | | 12,716,415 | |
Riverside Sewer Revenue, Refunding, Series A, 5.00%, 8/01/40 | | | 25,000,000 | | | | 27,627,250 | |
RNR School Financing Authority Special Tax, CFD No. 92-1, Subordinate, Refunding, Series A, BAM Insured, 5.00%, 9/01/36 | | | 11,145,000 | | | | 12,394,800 | |
Road 17 Levee Area PFA Assessment Revenue, Road 17 Levee Improvement Project, Pre-Refunded, 7.00%, 9/01/39 | | | 8,865,000 | | | | 9,280,768 | |
Rocklin USD, | | | | | | | | |
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/25 | | | 8,160,000 | | | | 6,789,528 | |
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/26 | | | 8,695,000 | | | | 6,961,391 | |
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/27 | | | 9,080,000 | | | | 6,956,279 | |
GO, Capital Appreciation, Election of 2002, NATL Insured, zero cpn., 8/01/28 | | | 16,615,000 | | | | 12,160,851 | |
Rohnert Park Community Development Commission Tax Allocation Revenue, Redevelopment Project, Series R, NATL Insured, ETM, 5.00%, 8/01/37 | | | 1,380,000 | | | | 1,381,932 | |
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 | | | | 5,635,450 | |
Sacramento City USD, GO, Election of 2012, Measure Q, Series E, 4.00%, 5/01/47 | | | 20,000,000 | | | | 20,478,000 | |
Sacramento County Airport System Revenue, | | | | | | | | |
Senior, 5.00%, 7/01/40 | | | 9,000,000 | | | | 9,437,220 | |
Senior, Refunding, Series A, 5.00%, 7/01/41 | | | 10,000,000 | | | | 11,218,700 | |
Subordinate, Refunding, Series B, 5.00%, 7/01/41 | | | 9,000,000 | | | | 10,064,070 | |
Sacramento County Sanitation Districts Financing Authority Revenue, Sacramento Regional County Sanitation District, Refunding, Series A, 5.00%, 12/01/44 | | | 25,000,000 | | | | 27,875,250 | |
Sacramento Water Revenue, 5.00%, 9/01/38 | | | 21,630,000 | | | | 24,009,733 | |
Salida Area Public Facilities Financing Agency No. 88 Special Tax, Refunding, AGMC Insured, 5.00%, 9/01/30 | | | 5,435,000 | | | | 5,858,930 | |
San Bernardino Community College District GO, Capital Appreciation, Election of 2008, Series B, zero cpn., 8/01/48 | | | 66,390,000 | | | | 18,271,856 | |
San Bernardino County COP, Medical Center Financing Project, Refunding, 5.00%, 8/01/26 | | | 13,045,000 | | | | 13,083,352 | |
San Bernardino County SFMR, Capital Appreciation, Series A, GNMA Secured, ETM, zero cpn., 5/01/22 | | | 13,100,000 | | | | 10,736,498 | |
San Buenaventura Public Facilities Financing Authority Wastewater Revenue, | | | | | | | | |
Series C, 5.00%, 1/01/39 | | | 8,500,000 | | | | 9,388,845 | |
Series C, 5.00%, 1/01/44 | | | 10,840,000 | | | | 11,951,317 | |
San Buenaventura Public Facilities Financing Authority Water Revenue, Series C, 5.00%, 1/01/44 | | | 8,555,000 | | | | 9,432,059 | |
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 | | | | 31,711,949 | |
San Diego County COP, The Salk Institute for Biological Studies, Pre-Refunded, 5.125%, 7/01/40 | | | 15,000,000 | | | | 15,829,650 | |
San Diego County Regional Airport Authority Revenue, | | | | | | | | |
Consolidated Rental Car Facilities, Series A, 5.00%, 7/01/44 | | | 5,645,000 | | | | 6,227,282 | |
Subordinate, Refunding, Series A, 5.00%, 7/01/27 | | | 11,565,000 | | | | 12,145,216 | |
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28 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
San Diego County Regional Transportation Commission Sales Tax Revenue, | | | | | | | | |
Refunding, Series A, 5.00%, 4/01/48 | | $ | 25,000,000 | | | $ | 28,227,250 | |
Series A, 5.00%, 4/01/44 | | | 54,915,000 | | | | 61,119,846 | |
Series A, 5.00%, 4/01/48 | | | 20,000,000 | | | | 22,216,600 | |
San Diego USD, | | | | | | | | |
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/21 | | | 12,160,000 | | | | 11,481,715 | |
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/22 | | | 8,440,000 | | | | 7,746,823 | |
GO, Capital Appreciation, Election of 1998, Series A, NATL Insured, zero cpn., 7/01/23 | | | 11,120,000 | | | | 9,910,700 | |
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 | | | | 120,220,462 | |
GO, Capital Appreciation, Election of 2008, Series C, zero cpn. to 6/30/30, 6.625% thereafter, 7/01/48 | | | 29,840,000 | | | | 23,377,850 | |
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 | | | | 48,756,770 | |
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 | | | | 64,097,670 | |
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series F, 5.00%, 7/01/40 | | | 56,510,000 | | | | 64,102,684 | |
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series F, 5.00%, 7/01/45 | | | 34,370,000 | | | | 38,852,879 | |
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series G, 5.00%, 7/01/40 | | | 13,000,000 | | | | 14,746,680 | |
GO, Dedicated Unlimited Ad Valorem Property Tax, Election of 2012, Series I, 4.00%, 7/01/47 | | | 40,000,000 | | | | 41,189,600 | |
San Francisco BART District GO, Election of 2016, Refunding, Series A-1, 5.00%, 8/01/47 | | | 15,000,000 | | | | 17,311,500 | |
San Francisco City and County Airport Commission International Airport Revenue, | | | | | | | | |
Refunding, Second Series, Series D, 5.00%, 5/01/43 | | | 185,000,000 | | | | 206,300,900 | |
Refunding, Second Series, Series D, 5.00%, 5/01/48 | | | 167,000,000 | | | | 185,511,950 | |
Refunding, Second Series, Series D, 5.25%, 5/01/48 | | | 120,000,000 | | | | 136,441,200 | |
Refunding, Second Series, Series E, 5.00%, 5/01/48 | | | 50,000,000 | | | | 56,362,500 | |
Refunding, Series B, 5.00%, 5/01/47 | | | 65,375,000 | | | | 73,050,025 | |
Second Series, Series B, 5.00%, 5/01/44 | | | 31,000,000 | | | | 34,179,980 | |
Second Series, Series B, 5.00%, 5/01/46 | | | 12,500,000 | | | | 13,669,000 | |
San Francisco City and County Public Utilities Commission Wastewater Revenue, Series B, 5.00%, 10/01/43 | | | 16,475,000 | | | | 18,901,767 | |
San Francisco City and County Public Utilities Commission Water Revenue, | | | | | | | | |
Refunding, Series A, 5.00%, 11/01/36 | | | 5,000,000 | | | | 5,637,550 | |
Sub-Series A, 5.00%, 11/01/36 | | | 23,490,000 | | | | 25,606,684 | |
Sub-Series A, 5.00%, 11/01/41 | | | 5,800,000 | | | | 6,266,668 | |
Sub-Series A, 5.00%, 11/01/43 | | | 71,735,000 | | | | 77,737,067 | |
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 | | | | 11,195,000 | |
San Gabriel USD, | | | | | | | | |
GO, Los Angeles County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 8/01/26 | | | 3,530,000 | | | | 2,832,754 | |
GO, Los Angeles County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 2/01/27 | | | 1,850,000 | | | | 1,451,899 | |
San Jacinto USD, | | | | | | | | |
COP, Refunding, AGMC Insured, 5.125%, 9/01/30 | | | 4,375,000 | | | | 4,587,406 | |
COP, Refunding, AGMC Insured, 5.375%, 9/01/40 | | | 12,000,000 | | | | 12,629,040 | |
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, | | | | | | | | |
Capital Appreciation, Refunding, Series A, NATL Insured, zero cpn., 1/15/26 | | | 13,155,000 | | | | 10,304,575 | |
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.65% thereafter, 1/15/37 | | | 104,745,000 | | | | 102,971,667 | |
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.70% thereafter, 1/15/38 | | | 140,340,000 | | | | 138,291,036 | |
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/40 | | | 158,655,000 | | | | 157,806,196 | |
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/41 | | | 141,024,000 | | | | 140,395,033 | |
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| franklintempleton.com | | Semiannual Report | | 29 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, (continued) | | | | | | | | |
Capital Appreciation, Refunding, Series A, zero cpn. to 7/15/21, 5.75% thereafter, 1/15/42 | | $ | 141,024,000 | | | $ | 140,688,363 | �� |
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/25 | | | 5,700,000 | | | | 4,895,616 | |
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/28 | | | 33,545,000 | | | | 25,797,782 | |
senior lien, Capital Appreciation, ETM, zero cpn., 1/01/29 | | | 37,050,000 | | | | 27,361,795 | |
senior lien, Refunding, Series A, 5.00%, 1/15/44 | | | 125,000,000 | | | | 135,125,000 | |
senior lien, Refunding, Series A, 5.00%, 1/15/50 | | | 430,000,000 | | | | 463,325,000 | |
San Jose Airport Revenue, | | | | | | | | |
Refunding, Series A, 5.00%, 3/01/41 | | | 10,000,000 | | | | 11,092,500 | |
Refunding, Series A, 5.00%, 3/01/47 | | | 20,000,000 | | | | 21,940,400 | |
Refunding, Series B, 5.00%, 3/01/47 | | | 10,000,000 | | | | 11,177,500 | |
San Jose Financing Authority Lease Revenue, Civic Center Project, Refunding, Series A, AMBAC Insured, 5.00%, 6/01/39 | | | 20,885,000 | | | | 20,925,726 | |
San Jose GO, | | | | | | | | |
Libraries, Parks and Public Safety Projects, 5.00%, 9/01/28 | | | 11,600,000 | | | | 11,626,796 | |
Libraries, Parks and Public Safety Projects, NATL Insured, 5.00%, 9/01/34 | | | 15,820,000 | | | | 15,873,946 | |
Libraries and Parks Projects, NATL Insured, 5.00%, 9/01/36 | | | 35,150,000 | | | | 35,267,049 | |
San Jose Special Hotel Tax Revenue, | | | | | | | | |
Convention Center Expansion and Renovation Project, 6.50%, 5/01/36 | | | 10,000,000 | | | | 11,064,800 | |
Convention Center Expansion and Renovation Project, 6.50%, 5/01/42 | | | 10,000,000 | | | | 11,064,800 | |
San Jose USD, | | | | | | | | |
COP, Capital Appreciation, AGMC Insured, ETM, zero cpn., 1/01/27 | | | 7,105,000 | | | | 5,653,591 | |
COP, Capital Appreciation, AGMC Insured, ETM, zero cpn., 1/01/29 | | | 7,105,000 | | | | 5,247,114 | |
San Juan USD, | | | | | | | | |
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/26 | | | 15,825,000 | | | | 12,058,017 | |
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/27 | | | 18,605,000 | | | | 14,415,712 | |
GO, Capital Appreciation, Election of 1998, Series B, NATL Insured, zero cpn., 8/01/28 | | | 19,470,000 | | | | 14,500,867 | |
San Luis Obispo County Financing Authority Revenue, Nacimiento Water Project, Refunding, Series A, BAM Insured, 5.00%, 9/01/37 | | | 10,000,000 | | | | 11,082,100 | |
San Marcos PFAR, Series A, ETM, 6.25%, 9/02/22 | | | 15,000,000 | | | | 17,310,150 | |
San Marcos School Financing Authority Lease Revenue, AGMC Insured, Pre-Refunded, 5.00%, 8/15/40 | | | 15,635,000 | | | | 16,550,429 | |
San Marino USD, GO, Los Angeles County, Capital Appreciation, Election of 2000, Series A, NATL Insured, zero cpn., 7/01/25 | | | 6,080,000 | | | | 5,110,909 | |
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 | | | | 12,559,885 | |
GO, Capital Appreciation, Election of 2000, Series B, NATL Insured, zero cpn., 9/01/22 | | | 5,000,000 | | | | 4,591,400 | |
Sanger Financing Authority Wastewater Revenue, | | | | | | | | |
Fresno County, Subordinate, AGMC Insured, 5.00%, 6/15/35 | | | 2,360,000 | | | | 2,571,975 | |
Fresno County, Subordinate, AGMC Insured, 5.00%, 6/15/43 | | | 3,225,000 | | | | 3,485,225 | |
Sanger Financing Authority Water Revenue, Fresno County, AGMC Insured, 5.00%, 6/15/43 | | | 2,930,000 | | | | 3,166,422 | |
Sanger USD, GO, Fresno County, Election of 2016, Series A, BAM Insured, 4.00%, 8/01/41 | | | 10,000,000 | | | | 10,261,800 | |
Santa Ana CRDA Tax Allocation, | | | | | | | | |
Merged Project Area, Refunding, Series A, 6.25%, 9/01/24 | | | 7,005,000 | | | | 7,697,794 | |
Merged Project Area, Refunding, Series A, 6.75%, 9/01/28 | | | 13,500,000 | | | | 14,925,870 | |
Santa Ana USD, COP, Financing Project, Capital Appreciation, AGMC Insured, zero cpn., 4/01/24 | | | 14,245,000 | | | | 11,541,299 | |
Santa Barbara Housing Authority Revenue, Refunding and Acquisition, 6.25%, 11/15/20 | | | 1,500,000 | | | | 1,532,085 | |
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 | | | | 5,234,500 | |
Refunding, Series A, BAM Insured, 5.00%, 9/01/35 | | | 20,000,000 | | | | 22,560,200 | |
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30 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
Santa Maria Joint UHSD, GO, Santa Barbara and San Luis Obispo Counties, Election of 2004, 4.00%, 8/01/37 | | $ | 14,230,000 | | | $ | 14,571,520 | |
Santa Paula Utility Authority Wastewater Enterprise Revenue, | | | | | | | | |
Series A, 5.00%, 2/01/45 | | | 16,495,000 | | | | 18,173,696 | |
Series A, 5.00%, 2/01/50 | | | 21,050,000 | | | | 23,040,698 | |
Santee School District COP, Capital Improvement Project, Assured Guaranty, Pre-Refunded, 5.50%, 10/01/48 | | | 15,460,000 | | | | 15,460,000 | |
Saugus/Hart School Facilities Financing Authority Lease Revenue, | | | | | | | | |
Series A, AGMC Insured, 5.00%, 9/01/35 | | | 2,000,000 | | | | 2,088,620 | |
Series A, AGMC Insured, 5.00%, 9/01/40 | | | 1,500,000 | | | | 1,566,465 | |
School Facilities Financing Authority Revenue, Capital Appreciation, Grant Joint UHSD, Series A, AGMC Insured, zero cpn., 8/01/42 | | | 49,000,000 | | | | 17,270,540 | |
Semitropic ID of Semitropic Water Storage District Revenue, second lien, Refunding, Series A, AGMC Insured, 5.00%, 12/01/45 | | | 10,000,000 | | | | 10,949,400 | |
Snowline Joint USD, COP, Refinancing Project, Assured Guaranty, Pre-Refunded, 5.00%, 9/01/34 | | | 13,390,000 | | | | 13,782,595 | |
Sonoma CDA Tax Allocation, Redevelopment Project, 7.125%, 12/01/36 | | | 10,775,000 | | | | 12,366,467 | |
Southern California Public Power Authority Gas Project Revenue, Project No. 1, Series A, 5.00%, 11/01/33 | | | 17,500,000 | | | | 20,465,200 | |
Southern California Water Replenishment District Revenue COP, Pre-Refunded, 5.00%, 8/01/41 | | | 22,870,000 | | | | 24,893,538 | |
Southern Mono Health Care District GO, | | | | | | | | |
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/28 | | | 2,340,000 | | | | 1,657,305 | |
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/29 | | | 2,440,000 | | | | 1,645,634 | |
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/30 | | | 2,550,000 | | | | 1,639,242 | |
Capital Appreciation, Election of 2001, Series A, NATL Insured, zero cpn., 8/01/31 | | | 2,660,000 | | | | 1,628,718 | |
Southwestern Community College District GO, Election of 2008, Series D, 5.00%, 8/01/44 | | | 10,000,000 | | | | 11,246,300 | |
Stanislaus USD, | | | | | | | | |
GO, Election of 2008, Series A, Assured Guaranty, 5.625%, 8/01/33 | | | 4,140,000 | | | | 4,256,293 | |
GO, Election of 2008, Series B, AGMC Insured, Pre-Refunded, 5.125%, 8/01/41 | | | 3,400,000 | | | | 3,687,946 | |
Sulphur Springs USD, | | | | | | | | |
COP, AGMC Insured, ETM, 6.50%, 12/01/37 | | | 2,925,000 | | | | 3,227,738 | |
COP, Refunding, AGMC Insured, 6.50%, 12/01/37 | | | 11,390,000 | | | | 13,925,642 | |
Temple City USD, GO, Election of 2012, Series A, 5.00%, 8/01/43 | | | 10,000,000 | | | | 10,982,400 | |
Trabuco Canyon PFA Special Tax Revenue, Refunding, Series C, AGMC Insured, 6.10%, 7/01/19 | | | 890,000 | | | | 916,495 | |
Truckee PFA Tax Allocation Revenue, | | | | | | | | |
Truckee Redevelopment Project Loan, Series A, AGMC Insured, 5.00%, 9/01/30 | | | 1,255,000 | | | | 1,316,621 | |
Truckee Redevelopment Project Loan, Series A, AGMC Insured, 5.375%, 9/01/37 | | | 5,000,000 | | | | 5,279,400 | |
Tulare County Board of Education COP, | | | | | | | | |
Capital Improvement Projects, BAM Insured, 5.375%, 5/01/33 | | | 3,185,000 | | | | 3,522,196 | |
Capital Improvement Projects, BAM Insured, 5.50%, 5/01/38 | | | 8,305,000 | | | | 9,213,484 | |
Capital Improvement Projects, BAM Insured, 5.50%, 5/01/43 | | | 10,855,000 | | | | 12,042,428 | |
Tustin CRDA Tax Allocation, | | | | | | | | |
Orange County, Housing, AGMC Insured, Pre-Refunded, 5.00%, 9/01/30 | | | 2,125,000 | | | | 2,252,330 | |
Orange County, Housing, AGMC Insured, Pre-Refunded, 5.25%, 9/01/39 | | | 3,250,000 | | | | 3,459,950 | |
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 | | | | 11,291,767 | |
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 | | | | 1,727,720 | |
Santa Clara County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/25 | | | 5,500,000 | | | | 4,597,285 | |
Santa Clara County, Capital Appreciation, Election of 1999, Series B, NATL Insured, zero cpn., 9/01/26 | | | 5,850,000 | | | | 4,716,504 | |
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| franklintempleton.com | | Semiannual Report | | 31 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
| |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
University of California Regents Medical Center Pooled Revenue, | | | | | | | | |
Refunding, Series J, 5.00%, 5/15/48 | | $ | 75,000,000 | | | $ | 81,693,750 | |
Refunding, Series L, 5.00%, 5/15/47 | | | 49,575,000 | | | | 54,928,604 | |
University of California Revenue, | | | | | | | | |
Limited Project, Refunding, Series I, 5.00%, 5/15/40 | | | 22,990,000 | | | | 25,878,004 | |
Limited Project, Refunding, Series I, 5.00%, 5/15/50 | | | 25,420,000 | | | | 28,434,812 | |
Limited Project, Series M, 5.00%, 5/15/47 | | | 88,000,000 | | | | 98,859,200 | |
Refunding, Series AR, 5.00%, 5/15/41 | | | 13,760,000 | | | | 15,462,112 | |
Refunding, Series AY, 5.00%, 5/15/36 | | | 22,540,000 | | | | 25,940,835 | |
Refunding, Series AY, 5.00%, 5/15/37 | | | 14,000,000 | | | | 16,032,240 | |
Upland COP, | | | | | | | | |
San Antonio Community Hospital, Pre-Refunded, 6.50%, 1/01/41 | | | 34,130,000 | | | | 37,566,550 | |
San Antonio Regional Hospital, Refunding, 5.00%, 1/01/47 | | | 14,400,000 | | | | 15,771,168 | |
Upland USD, GO, Capital Appreciation, Election of 2008, Series C, zero cpn., 8/01/45 | | | 62,900,000 | | | | 19,454,970 | |
Val Verde USD, | | | | | | | | |
COP, Riverside County, Refunding, Series A, Assured Guaranty, 5.125%, 3/01/36 | | | 7,020,000 | | | | 7,097,782 | |
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 | | | | 1,046,180 | |
GO, Riverside County, Election of 2012, Refunding, Series B, BAM Insured, 5.00%, 8/01/44 | | | 15,000,000 | | | | 16,624,800 | |
Vallejo PFAR, Local Agency, Hiddenbrooke ID, Refunding, Series A, 5.80%, 9/01/31 | | | 3,730,000 | | | | 3,742,346 | |
Vallejo RDA Tax Allocation, Waterfront Redevelopment Project, 7.90%, 5/01/19 | | | 295,000 | | | | 295,077 | |
Victor Valley Joint UHSD, GO, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/34 | | | 28,350,000 | | | | 29,110,630 | |
Vista RDA Successor Agency Tax Allocation, Vista Redevelopment Project, Refunding, Series B-1, AGMC Insured, 5.00%, 9/01/37 | | | 3,020,000 | | | | 3,329,097 | |
Vista USD, | | | | | | | | |
GO, San Diego County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 8/01/26 | | | 7,150,000 | | | | 5,658,582 | |
GO, San Diego County, Capital Appreciation, Election of 2002, Series A, AGMC Insured, zero cpn., 2/01/27 | | | 4,795,000 | | | | 3,769,350 | |
Washington Township Health Care District GO, Series B, 5.00%, 8/01/45 | | | 15,000,000 | | | | 16,634,550 | |
Washington Township Health Care District Revenue, Series A, 5.50%, 7/01/38 | | | 11,000,000 | | | | 11,483,340 | |
West Contra Costa USD, GO, Contra Costa County, Refunding, Assured Guaranty, 5.25%, 8/01/29 | | | 2,500,000 | | | | 2,573,250 | |
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 | | | | 4,512,880 | |
West Sacramento Area Flood Control Agency Assessment Revenue, | | | | | | | | |
5.25%, 9/01/41 | | | 9,030,000 | | | | 9,734,069 | |
AGMC Insured, 5.00%, 9/01/40 | | | 3,000,000 | | | | 3,309,000 | |
AGMC Insured, 5.00%, 9/01/45 | | | 7,500,000 | | | | 8,233,650 | |
West Sacramento Financing Authority Special Tax Revenue, Series A, XLCA Insured, 5.00%, 9/01/34 | | | 4,940,000 | | | | 5,623,795 | |
Western Placer USD, COP, Refinancing Project, AGMC Insured, 5.20%, 11/01/41 | | | 1,000,000 | | | | 1,077,090 | |
Western Riverside Water and Wastewater Financing Authority Revenue, | | | | | | | | |
Eastern Municipal Water District ID, Assured Guaranty, 5.50%, 9/01/34 | | | 1,750,000 | | | | 1,804,355 | |
Eastern Municipal Water District ID, Assured Guaranty, 5.625%, 9/01/39 | | | 2,500,000 | | | | 2,580,450 | |
Westminster School District GO, Election of 2008, Series A-1, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/34 | | | 18,980,000 | | | | 19,489,233 | |
Wiseburn School District GO, | | | | | | | | |
Los Angeles County, Election of 2010, Series A, AGMC Insured, Pre-Refunded, 5.75%, 8/01/40 | | | 9,215,000 | | | | 9,867,330 | |
Los Angeles County, Election of 2010, Series B, AGMC Insured, Pre-Refunded, 5.625%, 5/01/41 | | | 10,000,000 | | | | 11,041,900 | |
| | | | | | | | |
| | | | | | | 14,410,571,758 | |
| | | | | | | | |
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32 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Municipal Bonds (continued) | | | | | | | | |
U.S. Territories 0.8% | | | | | | | | |
Puerto Rico 0.8% | | | | | | | | |
Children’s Trust Fund Tobacco Settlement Revenue, | | | | | | | | |
Asset-Backed, Refunding, 5.50%, 5/15/39 | | $ | 6,210,000 | | | $ | 6,293,338 | |
Asset-Backed, Refunding, 5.625%, 5/15/43 | | | 16,000,000 | | | | 16,205,920 | |
aPuerto Rico Commonwealth Infrastructure Financing Authority Special Tax Revenue, 5.00%, 7/01/46 | | | 9,475,000 | | | | 2,013,438 | |
aPuerto Rico Electric Power Authority Power Revenue, | | | | | | | | |
Refunding, Series A, 5.00%, 7/01/29 | | | 20,000,000 | | | | 13,150,000 | |
Refunding, Series A, 5.00%, 7/01/42 | | | 24,000,000 | | | | 15,780,000 | |
Series A, 7.00%, 7/01/33 | | | 50,000,000 | | | | 33,000,000 | |
Series WW, 5.00%, 7/01/28 | | | 12,030,000 | | | | 7,909,725 | |
Series WW, 5.25%, 7/01/33 | | | 32,250,000 | | | | 21,204,375 | |
Series XX, 5.25%, 7/01/40 | | | 14,000,000 | | | | 9,205,000 | |
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 | | | | 5,662,250 | |
| | | | | | | | |
| | | | | | | 130,424,046 | |
| | | | | | | | |
Total Municipal Bonds before Short Term Investments
(Cost $13,313,537,711) | | | | | | | 14,540,995,804 | |
| | | | | | | | |
| | |
Short Term Investments 1.5% | | | | | | | | |
| | |
Municipal Bonds 1.5% | | | | | | | | |
California 1.5% | | | | | | | | |
bIrvine 1915 Act Special Assessment, | | | | | | | | |
Limited Obligation Improvement, AD No. 94-13, LOC State Street Bank & Trust Co., Daily VRDN and Put, 1.30%, 9/02/22 | | | 14,086,000 | | | | 14,086,000 | |
Limited Obligation Improvement, AD No. 97-16, LOC State Street Bank & Trust Co., Daily VRDN and Put, 1.30%, 9/02/22 | | | 15,600,000 | | | | 15,600,000 | |
bIrvine Ranch Water District GO, ID, Consolidated, Series B, LOC Bank of America, Daily VRDN and Put, 1.35%, 10/01/41 | | | 900,000 | | | | 900,000 | |
bLos Angeles Department of Water and Power Revenue, | | | | | | | | |
Power System, Refunding, Series A, Subseries A-4, SPA Bank of America, Daily VRDN and Put, 1.34%, 7/01/35 | | | 33,600,000 | | | | 33,600,000 | |
Power System, Refunding, Series B, Subseries B-6, SPA TD Bank NA, Daily VRDN and Put, 1.33%, 7/01/34 | | | 41,400,000 | | | | 41,400,000 | |
Water System, Refunding, Series B, Subseries B-2, SPA Royal Bank of Canada, Daily VRDN and Put, 1.35%, 7/01/35 | | | 31,100,000 | | | | 31,100,000 | |
bThe Metropolitan Water District of Southern California Water Revenue, Refunding, Series B-3, SPA Citibank, Daily VRDN and Put, 1.33%, 7/01/35 | | | 56,900,000 | | | | 56,900,000 | |
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| franklintempleton.com | | Semiannual Report | | 33 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| | | | | | | | |
| | | Principal
Amount | | | Value | |
Short Term Investments (continued) | | | | | | | | |
Municipal Bonds (continued) | | | | | | | | |
California (continued) | | | | | | | | |
bUniversity of California Revenue, General, Refunding, Series AL, Daily VRDN and Put, 1.38%, 5/15/48 | | $ | 25,000,000 | | | $ | 25,000,000 | |
| | | | | | | | |
Total Short Term Investments (Cost $218,586,000) | | | | | | | 218,586,000 | |
| | | | | | | | |
Total Investments (Cost $13,532,123,711) 98.9% | | | | | | | 14,759,581,804 | |
Other Assets, less Liabilities 1.1% | | | | | | | 161,909,011 | |
| | | | | | | | |
Net Assets 100.0% | | | | | | $ | 14,921,490,815 | |
| | | | | | | | |
See Abbreviations on page 45.
aSee Note 7 regarding defaulted securities.
bVariable 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.
| | | | |
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34 | | Semiannual 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
September 30, 2018 (unaudited)
| | | | |
Assets: | | | | |
Investments in securities: | | | | |
Cost - Unaffiliated issuers | | $ | 13,532,123,711 | |
| | | | |
Value - Unaffiliated issuers | | $ | 14,759,581,804 | |
Cash | | | 797,986 | |
Receivables: | | | | |
Capital shares sold | | | 18,242,210 | |
Interest | | | 163,879,351 | |
Other assets | | | 5,857 | |
| | | | |
Total assets | | | 14,942,507,208 | |
| | | | |
Liabilities: | | | | |
Payables: | | | | |
Capital shares redeemed | | | 11,215,667 | |
Management fees | | | 5,490,673 | |
Distribution fees | | | 3,456,266 | |
Transfer agent fees | | | 638,448 | |
Accrued expenses and other liabilities | | | 215,339 | |
| | | | |
Total liabilities | | | 21,016,393 | |
| | | | |
Net assets, at value | | $ | 14,921,490,815 | |
| | | | |
Net assets consist of: | | | | |
Paid-in capital | | $ | 14,412,769,249 | |
Total distributable earnings (loss) | | | 508,721,566 | |
| | | | |
Net assets, at value | | $ | 14,921,490,815 | |
| | | | |
Class A: | | | | |
Net assets, at value | | $ | 19,211,858 | |
| | | | |
Shares outstanding | | | 2,654,075 | |
| | | | |
Net asset value per sharea | | | $7.24 | |
| | | | |
Maximum offering price per share (net asset value per share ÷ 95.75%) | | | $7.56 | |
| | | | |
Class A1: | | | | |
Net assets, at value | | $ | 11,798,389,253 | |
| | | | |
Shares outstanding | | | 1,631,705,396 | |
| | | | |
Net asset value per sharea | | | $7.23 | |
| | | | |
Maximum offering price per share (net asset value per share ÷ 95.75%) | | | $7.55 | |
| | | | |
Class C: | | | | |
Net assets, at value | | $ | 1,413,885,183 | |
| | | | |
Shares outstanding | | | 195,927,556 | |
| | | | |
Net asset value and maximum offering price per sharea | | | $7.22 | |
| | | | |
Class R6: | | | | |
Net assets, at value | | $ | 95,794,553 | |
| | | | |
Shares outstanding | | | 13,265,652 | |
| | | | |
Net asset value and maximum offering price per share | | | $7.22 | |
| | | | |
Advisor Class: | | | | |
Net assets, at value | | $ | 1,594,209,968 | |
| | | | |
Shares outstanding | | | 220,861,774 | |
| | | | |
Net asset value and maximum offering price per share | | | $7.22 | |
| | | | |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
| | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | 35 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Operations
for the six months ended September 30, 2018 (unaudited)
| | | | |
Investment income: | | | | |
Interest: | | | | |
Unaffiliated issuers | | | $ 313,408,824 | |
| | | | |
| |
Expenses: | | | | |
Management fees (Note 3a) | | | 33,407,361 | |
Distribution fees: (Note 3c) | | | | |
Class A | | | 795 | |
Class A1 | | | 5,703,748 | |
Class C | | | 4,798,056 | |
Transfer agent fees: (Note 3e) | | | | |
Class A | | | 155 | |
Class A1 | | | 3,107,296 | |
Class C | | | 381,081 | |
Class R6 | | | 12,312 | |
Advisor Class | | | 410,844 | |
Custodian fees (Note 4) | | | 64,787 | |
Reports to shareholders | | | 117,086 | |
Registration and filing fees | | | 72,223 | |
Professional fees | | | 314,242 | |
Trustees’ fees and expenses | | | 72,824 | |
Other | | | 229,772 | |
| | | | |
| |
Total expenses | | | 48,692,582 | |
Expense reductions (Note 4) | | | (17,170 | ) |
Expenses waived/paid by affiliates (Note 3f) | | | (1,791 | ) |
| | | | |
| |
Net expenses | | | 48,673,621 | |
| | | | |
| |
Net investment income | | | 264,735,203 | |
| | | | |
| |
Realized and unrealized gains (losses): | | | | |
Net realized gain (loss) from: | | | | |
Investments: | | | | |
Unaffiliated issuers | | | 24,061,306 | |
| | | | |
| |
Net change in unrealized appreciation (depreciation) on: | | | | |
Investments: | | | | |
Unaffiliated issuers | | | (187,511,377 | ) |
| | | | |
| |
Net realized and unrealized gain (loss) | | | (163,450,071 | ) |
| | | | |
| |
Net increase (decrease) in net assets resulting from operations | | | $ 101,285,132 | |
| | | | |
| | | | |
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36 | | Semiannual 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
| | | | | | | | |
| | | Six Months Ended September 30, 2018 (unaudited) | | | Year Ended March 31, 2018 | |
| |
Increase (decrease) in net assets: | | | | | | | | |
Operations: | | | | | | | | |
Net investment income | | | $ 264,735,203 | | | | $ 546,734,003 | |
Net realized gain (loss) | | | 24,061,306 | | | | (354,828,173 | ) |
Net change in unrealized appreciation (depreciation) | | | (187,511,377 | ) | | | 222,438,228 | |
| | | | |
Net increase (decrease) in net assets resulting from operations | | | 101,285,132 | | | | 414,344,058 | |
| | | | |
Distributions to shareholders: (Note 1c) | | | | | | | | |
Class A1 | | | (213,751,808 | ) | | | (446,567,107 | ) |
Class M | | | (45 | ) | | | (30 | ) |
Class C | | | (22,193,120 | ) | | | (48,932,320 | ) |
Class R6 | | | (1,623,147 | ) | | | (658,554 | ) |
Advisor Class | | | (28,863,120 | ) | | | (57,924,101 | ) |
| | | | |
Total distributions to shareholders | | | (266,431,240 | ) | | | (554,082,112 | ) |
| | | | |
Capital share transactions: (Note 2) | | | | | | | | |
Class A | | | 19,205,495 | | | | — | |
Class A1 | | | (225,625,664 | ) | | | (160,991,115 | ) |
Class M | | | (4,920 | ) | | | 5,000 | |
Class C | | | (97,977,114 | ) | | | (117,971,740 | ) |
Class R6 | | | 11,292,388 | | | | 86,850,620 | |
Advisor Class | | | 38,962,184 | | | | 124,798,723 | |
| | | | |
Total capital share transactions | | | (254,147,631 | ) | | | (67,308,512 | ) |
| | | | |
Net increase (decrease) in net assets | | | (419,293,739 | ) | | | (207,046,566 | ) |
Net assets: | | | | | | | | |
Beginning of period | | | 15,340,784,554 | | | | 15,547,831,120 | |
| | | | |
End of period (Note 1c) | | | $14,921,490,815 | | | | $15,340,784,554 | |
| | | | |
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| franklintempleton.com | | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | 37 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Notes to Financial Statements (unaudited)
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 A1, 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.
Class M was closed to investors effective at the close of market June 8, 2018.
Effective September 10, 2018, Class A shares were renamed A1, and the Fund began offering a new class of shares, Class A. Class A1 shares are only offered to existing Class A1 shareholders.
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 each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. 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. 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.
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 September 30, 2018, the Fund has
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38 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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.
c. 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.
d. 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.
e. 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.
f. 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.
*Effective with the current reporting period, it is no longer required to present certain line items on the Statements of Changes in Net Assets. Such disclosure changes are included in the Statements of Changes in Net Assets, therefore prior period amounts are presented below.
For the year ended March 31, 2018, distributions to shareholders were as follows:
| | | | |
| Distributions from net investment income: | | | | |
Class A1 | | $ | (446,567,107 | ) |
Class M | | | (30 | ) |
Class C | | | (48,932,320 | ) |
Class R6 | | | (658,554 | ) |
Advisor Class | | | (57,924,101 | ) |
For the year ended March 31, 2018, undistributed net investment income included in net assets was $37,087,757.
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| franklintempleton.com | | Semiannual Report | | 39 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest
At September 30, 2018, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended | | | | | | Year Ended | |
| | | September 30, 2018a, b | | | | | | March 31, 2018c, d | |
| | | Shares | | | Amount | | | | | | Shares | | | Amount | |
Class A Shares: | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 2,674,609 | | | $ | 19,353,750 | | | | | | | | | | | | | |
Shares redeemed | | | (20,534 | ) | | | (148,255 | ) | | | | | | | | | | | | |
| | | | | |
Net increase (decrease) | | | 2,654,075 | | | $ | 19,205,495 | | | | | | | | | | | | | |
| | | | | |
Class A1 Shares: | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 53,139,195 | | | $ | 387,130,267 | | | | | | | | 131,096,653 | | | $ | 974,057,514 | |
Shares issued in reinvestment of distributions | | | 24,054,309 | | | | 175,152,652 | | | | | | | | 49,117,202 | | | | 364,365,036 | |
Shares redeemed | | | (108,143,825 | ) | | | (787,908,583 | ) | | | | | | | (202,019,054 | ) | | | (1,499,413,665 | ) |
| | | | | |
Net increase (decrease) | | | (30,950,321 | ) | | $ | (225,625,664 | ) | | | | | | | (21,805,199 | ) | | $ | (160,991,115 | ) |
| | | | | |
Class M Shares: | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | — | | | $ | — | | | | | | | | 675 | | | $ | 5,000 | |
Shares redeemed | | | (675 | ) | | | (4,920 | ) | | | | | | | — | | | | — | |
| | | | | |
Net increase (decrease) | | | (675 | ) | | $ | (4,920 | ) | | | | | | | 675 | | | $ | 5,000 | |
| | | | | |
Class C Shares: | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 6,912,346 | | | $ | 50,280,023 | | | | | | | | 23,485,863 | | | $ | 174,614,502 | |
Shares issued in reinvestment of distributions | | | 2,733,289 | | | | 19,870,438 | | | | | | | | 5,818,615 | | | | 43,101,731 | |
Shares redeemed | | | (23,116,048 | ) | | | (168,127,575 | ) | | | | | | | (45,273,541 | ) | | | (335,687,973 | ) |
| | | | | |
Net increase (decrease) | | | (13,470,413 | ) | | $ | (97,977,114 | ) | | | | | | | (15,969,063 | ) | | $ | (117,971,740 | ) |
| | | | | |
Class R6 Shares: | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 3,036,203 | | | $ | 22,110,339 | | | | | | | | 12,489,223 | | | $ | 92,531,756 | |
Shares issued in reinvestment of distributions | | | 223,211 | | | | 1,622,753 | | | | | | | | 89,820 | | | | 658,449 | |
Shares redeemed | | | (1,711,228 | ) | | | (12,440,704 | ) | | | | | | | (861,577 | ) | | | (6,339,585 | ) |
| | | | | |
Net increase (decrease) | | | 1,548,186 | | | $ | 11,292,388 | | | | | | | | 11,717,466 | | | $ | 86,850,620 | |
| | | | | |
Advisor Class Shares: | | | | | | | | | | | | | | | | | | | | |
Shares sold | | | 28,318,133 | | | $ | 206,024,925 | | | | | | | | 69,267,581 | | | $ | 514,241,679 | |
Shares issued in reinvestment of distributions | | | 3,269,054 | | | | 23,765,823 | | | | | | | | 6,419,698 | | | | 47,539,621 | |
Shares redeemed | | | (26,241,477 | ) | | | (190,828,564 | ) | | | | | | | (58,952,698 | ) | | | (436,982,577 | ) |
Net increase (decrease) | | | 5,345,710 | | | $ | 38,962,184 | | | | | | | | 16,734,581 | | | $ | 124,798,723 | |
aFor the period September 10, 2018 (effective date) to September 30, 2018, for Class A.
bClass M was closed to investors on June 8, 2018.
cFor the period January 25, 2018 (effective date) to March 31, 2018, for Class M.
dFor the period August 1, 2017 (effective date) to March 31, 2018, for Class R6.
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40 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 | | |
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 period ended September 30, 2018, the annualized gross effective investment management fee rate was 0.440% 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 A1 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 A1 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 | | | 0.25 | % |
Class A1 | | | 0.10 | % |
Class C | | | 0.65 | % |
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| franklintempleton.com | | Semiannual Report | | 41 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
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 period:
| | | | |
Sales charges retained net of commissions paid to unaffiliated brokers/dealers | | | $420,238 | |
CDSC retained | | | $130,124 | |
Effective September 10, 2018, the Board approved changes to certain front-end sales charges and dealer commissions on Class A and A1 shares. Further details are disclosed in the Fund’s Prospectus.
e. Transfer Agent Fees
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. The fees are based on an annualized asset based fee of 0.02% plus a transaction based fee. 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 period ended September 30, 2018, the Fund paid transfer agent fees of $3,911,688, of which $2,018,067 was retained by Investor Services.
f. Waiver and Expense Reimbursements
Investor Services has contractually agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.01% based on the average net assets of the class until September 30, 2019.
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 period ended September 30, 2018, these purchase and sale transactions aggregated $107,485,000 and $139,685,000, respectively.
4. Expense Offset Arrangement
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 period ended September 30, 2018, the custodian fees were reduced as noted in the Statement of Operations.
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.
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42 | | Semiannual Report | | franklintempleton.com |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 | | $ | 771,179,522a | |
| | | | |
aIncludes $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.
At September 30, 2018, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| | | | |
Cost of investments | | | $13,545,036,692 | |
| | | | |
| |
Unrealized appreciation | | | $ 1,315,343,493 | |
Unrealized depreciation | | | (100,798,381) | |
| | | | |
Net unrealized appreciation (depreciation) | | | $ 1,214,545,112 | |
| | | | |
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.
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the period ended September 30, 2018, aggregated $1,081,480,996 and $1,359,492,419, respectively.
7. Defaulted Securities
The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At September 30, 2018, the aggregate value of these securities was $102,262,538, representing 0.7% 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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| franklintempleton.com | | Semiannual Report | | 43 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 period ended September 30, 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 September 30, 2018, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.
11. New Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurements. The amendments in the ASU modify the disclosure requirements on fair value measurements in Topic 820. The ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Management is currently evaluating the impact, if any, of applying this provision.
12. 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, except for the following:
On February 27, 2018, the Board approved an automatic conversion feature for Class C that will convert shareholders’ Class C shares into Class A shares after they have been held for 10 years. The conversion feature will become effective October 5, 2018. Further details are disclosed in the Fund’s Prospectus.
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FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Abbreviations
| | | | | | |
| Selected Portfolio | | | | |
| | | |
1915 Act | | Improvement Bond Act of 1915 | | IDR | | Industrial Development Revenue |
ABAG | | The Association of Bay Area Governments | | LOC | | Letter of Credit |
AD | | Assessment District | | MFHR | | Multi-Family Housing Revenue |
AGMC | | Assured Guaranty Municipal Corp. | | MTA | | Metropolitan Transit Authority |
AMBAC | | American Municipal Bond Assurance Corp. | | MUD | | Municipal Utility District |
BAM | | Build America Mutual Assurance Co. | | NATL | | National Public Financial Guarantee Corp. |
BART | | Bay Area Rapid Transit | | NATL RE | | National Public Financial Guarantee Corp. Reinsured |
CDA | | Community Development Authority/Agency | | PCFA | | Pollution Control Financing Authority |
CFD | | Community Facilities District | | PFA | | Public Financing Authority |
COP | | Certificate of Participation | | PFAR | | Public Financing Authority Revenue |
CRDA | | Community Redevelopment Authority/Agency | | RDA | | Redevelopment Agency/Authority |
ETM | | Escrow to Maturity | | SFMR | | Single Family Mortgage Revenue |
FGIC | | Financial Guaranty Insurance Co. | | SPA | | Standby Purchase Agreement |
FHA | | Federal Housing Authority/Agency | | SRF | | State Revolving Fund |
GNMA | | Government National Mortgage Association | | UHSD | | Unified/Union High School District |
GO | | General Obligation | | USD | | Unified/Union School District |
ID | | Improvement District | | XLCA | | XL Capital Assurance |
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| franklintempleton.com | | Semiannual Report | | 45 |
FRANKLIN CALIFORNIA TAX-FREE INCOME FUND
Shareholder Information
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 U.S. 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 U.S. 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.
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| | Semiannual 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.
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© 2018 Franklin Templeton Investments. All rights reserved. | | 1112 S 11/18 |
(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. N/A |
| 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 provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, 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 control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A
(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 | | November 27, 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 | | November 27, 2018 |
| | |
| By | | /s/ GASTON GARDEY |
| | Gaston Gardey |
| | Chief Financial Officer and Chief Accounting Officer |
| Date | | November 27, 2018 |
