UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03395
Franklin Federal 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:_4/30
Date of reporting period:_10/31/10
Item 1. Reports to Stockholders.
Contents | |||||
Shareholder Letter | 1 | Semiannual Report | Financial Statements | 52 | |
Franklin Federal Tax-Free Income Fund | 4 | Notes to Financial Statements | 55 | ||
Performance Summary | 8 | Shareholder Information | 63 | ||
Your Fund’s Expenses | 11 | ||||
Financial Highlights and | |||||
Statement of Investments | 13 |
Shareholder Letter
Dear Shareholder:
U.S. economic activity expanded at a modest pace through the six months ended October 31, 2010. Even though in September the National Bureau of Economic Research declared the recession officially ended in June 2009, most economists continued to warn that growth will be sluggish as consumers and the financial system try to reduce debt. Toward the end of the reporting period, growth seemed hindered by weakness in the employment market and consumer spending, the expiration of a housing tax credit, and a wider trade gap. Growth registered an annualized 1.7% in 2010’s second quarter and an annualized 2.5% in the third quarter.
During the spring and summer of 2010, fears surrounding the European Union’s economy undermined investor confidence in global markets, leading to significant equity market sell-offs and renewed demand for the safety of U.S. Treasury bonds.
The municipal bond market experienced healthy performance in the six-month period under review. The Barclays Capital (BC) Municipal Bond Index returned +3.95%, and securities with maturities 22 years and longer, which make up a substantial portion of Franklin Federal Tax-Free Income Fund’s portfolio, returned +4.70%.1
1. Source: © 2010 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The BC Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody’s, Standard & Poor’s and Fitch. STANDARD & POOR’S®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC. Standard & Poor’s does not sponsor, endorse, sell or promote any S&P index-based product. The BC Municipal Bond Index: Long Component is the long (22+ years) component of the BC Municipal Bond Index.
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
Not part of the semiannual report | 1
Semiannual Report
Franklin Federal Tax-Free Income Fund
Your Fund’s Goal and Main Investments: Franklin Federal Tax-Free Income Fund
seeks to provide as high a level of income exempt from federal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in investment-grade municipal securities that pay interest free from such taxes.1
Credit Quality Breakdown* | ||
10/31/10 | ||
% of Total | ||
Ratings | Long-Term Investments** | |
AAA | 11.9 | % |
AA | 41.3 | % |
A | 26.6 | % |
BBB | 10.5 | % |
Below Investment Grade | 0.9 | % |
Not Rated by S&P | 8.8 | % |
*Standard & Poor’s (S&P) is the primary independent rating agency; Moody’s is the secondary rating agency; Fitch is the tertiary rating agency. Securities not rated by an independent rating agency are assigned comparable internal ratings. Ratings for securities not rated by S&P are in the table below.
**Does not include short-term investments and other net assets.
Ratings | Moody’s | Fitch | Internal | |||
AAA or Aaa | 0.2 | % | — | 0.5 | % | |
AA or Aa | 3.6 | % | — | 0.1 | % | |
A | 2.3 | % | — | 0.3 | % | |
BBB or Baa | 1.3 | % | — | 0.2 | % | |
Below Investment Grade | 0.1 | % | 0.1 | % | 0.1 | % |
Total | 7.5 | % | 0.1 | % | 1.2 | % |
We are pleased to bring you Franklin Federal Tax-Free Income Fund’s semi-annual report for the six months ended October 31, 2010.
1. Dividends are generally subject to state and local taxes, if any. 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.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI). The SOI begins on page 17.
4 | Semiannual Report
Dividend Distributions2 | ||||
Dividend per Share | ||||
Month | Class A | Class B | Class C | Advisor Class |
May | 4.25 cents | 3.68 cents | 3.70 cents | 4.34 cents |
June | 4.25 cents | 3.69 cents | 3.70 cents | 4.34 cents |
July | 4.25 cents | 3.69 cents | 3.70 cents | 4.34 cents |
August | 4.25 cents | 3.69 cents | 3.70 cents | 4.34 cents |
September | 4.25 cents | 3.68 cents | 3.72 cents | 4.34 cents |
October | 4.25 cents | 3.68 cents | 3.72 cents | 4.34 cents |
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $11.89 on April 30, 2010, to $12.05 on October 31, 2010. The Fund’s Class A shares paid dividends totaling 25.50 cents per share for the reporting period.2 The Performance Summary beginning on page 8 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 4.05% based on an annualization of October’s 4.25 cent per share dividend and the maximum offering price of $12.58 on October 31, 2010. An investor in the 2010 maximum federal personal income tax bracket of 35.00% would need to earn a distribution rate of 6.23% from a taxable investment to match the Fund’s Class A tax-free distribution rate. For the F und’s Class B, C and Advisor shares’ performance, please see the Performance Summary.
Municipal Bond Market Overview
For the six months ended October 31, 2010, the municipal bond market posted strong results with a +3.95% total return as measured by the Barclays Capital (BC) Municipal Bond Index.3 Coupon payments generated 2.33% of the total return, and 1.62% came from bond price appreciation. This was historically strong six-month performance for municipal bonds. Fixed income investments
2. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
3. Source: © 2010 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The BC Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody’s, Standard & Poor’s and Fitch.
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. Please visit franklintempleton.com or call (800) 342-5236 for most recent month-end performance.
Semiannual Report | 5
generally produced robust results during the same six-month period, and the Treasury bond market returned +6.25% according to the BC U.S. Treasury Bond Index.4
Despite municipal bonds’ strength, many tax-free bonds retained their pre-tax yield advantage over Treasuries. As of period-end, the 4.70% yield of the BC Municipal Bond Index: Long Component exceeded the 3.62% yield of the BC U.S. Treasury Index: Long Component.5 Investors continued to purchase municipal bond mutual fund shares even though budgetary pressures at state and local levels and concerns regarding some issuers’ abilities to repay debt were well publicized. Investor interest also increased for lower investment-grade and speculative-grade issues during the reporting period, which contributed to the BC Baa Municipal Bond Index’s +5.14% return and the BC Municipal Bond High Yield Index’s +6.71% return, compared with the BC Aaa Munici pal Bond Index’s +3.26% total return.6
The American Recovery and Reinvestment Act of February 2009 allowed municipalities to issue taxable bonds and receive a 35% federal government subsidy for all coupon payments distributed to investors for the life of the bonds. Such bonds, however, are not part of the Fund’s tax-free portfolio. The subsidy enabled municipalities to borrow significantly below their after-tax cost in the traditional tax-exempt municipal bond market. In May 2010, the House of Representatives modified and approved certain provisions of the Act. If these modifications become law, municipalities would continue to receive a subsidy for their taxable borrowing at 32% starting in 2011 and 30% in 2012. Municipal bond new-issue supply fell 0.4% from May 1 through October 31, 2010, compared with the same period in 2009.7 Notably, issuance of taxable municipals surged 35.8% while tax-free issuance fell 13.2% for the same period.7 This comparative shortage of tax-free supply, at a time when many observers believed taxes are likely to rise in the future, supported the municipal bond market’s performance. We continued to believe these new, subsidized, taxable municipal bonds, known as Build America Bonds, may suppress future supply of tax-exempt municipal bonds as long as the government permits their use.
4. Source: © 2010 Morningstar. The BC U.S. Treasury Index is the U.S. Treasury component of the U.S. Government Index and covers public obligations of the U.S. Treasury with a remaining maturity of one year or more.
5. Source: © 2010 Morningstar. The BC Municipal Bond Index: Long Component is the long (22+ years) component of the BC Municipal Bond Index. The BC U.S. Treasury Index: Long Component is the long component of the BC U.S. Treasury Index and covers public obligations of the U.S. Treasury with remaining maturity of 10 years or more.
6. Source: © 2010 Morningstar. The BC Baa Municipal Bond Index is the Baa credit quality component of the BC Municipal Bond Index. The BC Municipal Bond High Yield Index consists of bonds that must be nonrated or rated Ba1 or below. They must have an outstanding par value of at least $3 million and be issued as part of a transaction of at least $20 million. The bonds must be dated after 12/31/90 and must be at least one year from their maturity date. The BC Aaa Municipal Bond Index is the Aaa credit quality component of the BC Municipal Bond Index.
7. Source: Thomson Reuters.
6 | Semiannual Report
Given the various ratings changes, the relatively steep yield curve, and the reduced tax-exempt supply during the reporting period, we looked for opportunities to keep the portfolio fully invested in longer term bonds.
Investment Strategy
We use a consistent, disciplined strategy in an effort to maximize tax-exempt income for our shareholders by seeking to maintain exposure to higher coupon securities. We generally employ a buy-and-hold approach and invest in securities we believe should provide the most relative value in the market. As we invest during different interest rate environments, the Fund’s portfolio becomes progressively more diversified with a broad range of securities. This broad diversification may help mitigate interest rate risk. We do not use leverage or exotic derivatives, nor do we use hedging techniques that could add volatility and contribute to underperformance in adverse markets. We generally stay fully invested to help maximize income distribution.
Manager’s Discussion
Our value-oriented philosophy of investing primarily for income and stability of principal, when combined with a positive sloping municipal yield curve, favored longer term bonds during the six months under review. Consistent with our strategy, we sought to remain fully invested in bonds ranging from 20 to 30 years in maturity with good call features. Our relative-value, income-oriented philosophy also led the Fund to maintain its positions in higher coupon bonds, which provided income performance during the reporting period. As we continued to invest across different interest rate environments, the Fund has remained well diversified with a broad range of securities.
Thank you for your continued participation in Franklin Federal 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 October 31, 2010, 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, country, 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.
Portfolio Breakdown |
10/31/10 |
% of Total |
Long-Term Investments* |
Utilities | 16.7 | % |
General Obligation | 16.3 | % |
Transportation | 13.5 | % |
Hospital & Health Care | 11.7 | % |
Subject to Government Appropriations | 10.7 | % |
Refunded | 10.1 | % |
Tax-Supported | 6.9 | % |
Higher Education | 6.1 | % |
Other Revenue | 5.7 | % |
Corporate-Backed | 1.3 | % |
Housing | 1.0 | % |
*Does not include short-term investments and other net assets.
Semiannual Report | 7
Performance Summary as of 10/31/10
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. The performance table does 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.
Price and Distribution Information | ||||||||
Class A (Symbol: FKTIX) | Change | 10/31/10 | 4/30/10 | |||||
Net Asset Value (NAV) | +$ | 0.16 | $ | 12.05 | $ | 11.89 | ||
Distributions (5/1/10–10/31/10) | ||||||||
Dividend Income | $ | 0.2550 | ||||||
Class B (Symbol: FFTBX) | Change | 10/31/10 | 4/30/10 | |||||
Net Asset Value (NAV) | +$ | 0.17 | $ | 12.05 | $ | 11.88 | ||
Distributions (5/1/10–10/31/10) | ||||||||
Dividend Income | $ | 0.2211 | ||||||
Class C (Symbol: FRFTX) | Change | 10/31/10 | 4/30/10 | |||||
Net Asset Value (NAV) | +$ | 0.17 | $ | 12.05 | $ | 11.88 | ||
Distributions (5/1/10–10/31/10) | ||||||||
Dividend Income | $ | 0.2224 | ||||||
Advisor Class (Symbol: FAFTX) | Change | 10/31/10 | 4/30/10 | |||||
Net Asset Value (NAV) | +$ | 0.17 | $ | 12.06 | $ | 11.89 | ||
Distributions (5/1/10–10/31/10) | ||||||||
Dividend Income | $ | 0.2604 |
8 | Semiannual Report
Performance Summary (continued)
Performance
Cumulative total return excludes sales charges. Average annual total returns include maximum sales charges. Class A: 4.25% maximum initial sales charge; Class B: contingent deferred sales charge (CDSC) declining from 4% to 1% over six years, and eliminated thereafter; Class C: 1% CDSC in first year only; Advisor Class: no sales charges.
Class A | 6-Month | 1-Year | 5-Year | 10-Year | ||||||||||
Cumulative Total Return1 | + | 3.53 | % | + | 7.10 | % | + | 25.59 | % | + | 65.69 | % | ||
Average Annual Total Return2 | -0.89 | % | + | 2.57 | % | + | 3.76 | % | + | 4.72 | % | |||
Avg. Ann. Total Return (9/30/10)3 | + | 0.96 | % | + | 3.73 | % | + | 4.85 | % | |||||
Distribution Rate4 | 4.05 | % | ||||||||||||
Taxable Equivalent Distribution Rate5 | 6.23 | % | ||||||||||||
30-Day Standardized Yield6 | 3.22 | % | ||||||||||||
Taxable Equivalent Yield5 | 4.95 | % | ||||||||||||
Total Annual Operating Expenses7 | 0.61 | % | ||||||||||||
Class B | 6-Month | 1-Year | 5-Year | 10-Year | ||||||||||
Cumulative Total Return1 | + | 3.32 | % | + | 6.58 | % | + | 22.20 | % | + | 58.46 | % | ||
Average Annual Total Return2 | -0.68 | % | + | 2.58 | % | + | 3.75 | % | + | 4.71 | % | |||
Avg. Ann. Total Return (9/30/10)3 | + | 0.81 | % | + | 3.70 | % | + | 4.85 | % | |||||
Distribution Rate4 | 3.66 | % | ||||||||||||
Taxable Equivalent Distribution Rate5 | 5.63 | % | ||||||||||||
30-Day Standardized Yield6 | 2.82 | % | ||||||||||||
Taxable Equivalent Yield5 | 4.34 | % | ||||||||||||
Total Annual Operating Expenses7 | 1.17 | % | ||||||||||||
Class C | 6-Month | 1-Year | 5-Year | 10-Year | ||||||||||
Cumulative Total Return1 | + | 3.34 | % | + | 6.61 | % | + | 22.17 | % | + | 56.89 | % | ||
Average Annual Total Return2 | + | 2.34 | % | + | 5.61 | % | + | 4.09 | % | + | 4.61 | % | ||
Avg. Ann. Total Return (9/30/10)3 | + | 3.84 | % | + | 4.04 | % | + | 4.73 | % | |||||
Distribution Rate4 | 3.70 | % | ||||||||||||
Taxable Equivalent Distribution Rate5 | 5.69 | % | ||||||||||||
30-Day Standardized Yield6 | 2.81 | % | ||||||||||||
Taxable Equivalent Yield5 | 4.32 | % | ||||||||||||
Total Annual Operating Expenses7 | 1.17 | % | ||||||||||||
Advisor Class8 | 6-Month | 1-Year | 5-Year | 10-Year | ||||||||||
Cumulative Total Return1 | + | 3.66 | % | + | 7.20 | % | + | 26.14 | % | + | 67.06 | % | ||
Average Annual Total Return2 | + | 3.66 | % | + | 7.20 | % | + | 4.75 | % | + | 5.27 | % | ||
Avg. Ann. Total Return (9/30/10)3 | + | 5.42 | % | + | 4.71 | % | + | 5.39 | % | |||||
Distribution Rate4 | 4.32 | % | ||||||||||||
Taxable Equivalent Distribution Rate5 | 6.65 | % | ||||||||||||
30-Day Standardized Yield6 | 3.46 | % | ||||||||||||
Taxable Equivalent Yield5 | 5.32 | % | ||||||||||||
Total Annual Operating Expenses7 | 0.52 | % |
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.
Semiannual Report | 9
Performance Summary (continued)
Endnotes
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. The Fund’s prospectus also includes a description of the main investment risks.
Class B: Class C: | These shares have higher annual fees and expenses than Class A shares. Prior to 1/1/04, these shares were offered with an initial sales charge; thus actual total returns would have differed. These shares have higher annual fees and expenses than Class A shares. |
Advisor Class: | Shares are available to certain eligible investors as described in the prospectus. |
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. Six-month return has not been annualized.
3. In accordance with SEC rules, we provide standardized average annual total return information through the latest calendar quarter.
4. Distribution rate is based on an annualization of the respective class’s October dividend and the maximum offering price (NAV for Classes B, C and Advisor) per share on 10/31/10.
5. Taxable equivalent distribution rate and yield assume the 2010 maximum federal income tax rate of 35.00%.
6. The 30-day standardized yield for the 30 days ended 10/31/10 reflects an estimated yield to maturity (assuming all portfolio securities are held to maturity). It should be regarded as an estimate of the Fund’s rate of investment income, and it may not equal the Fund’s actual income distribution rate (which reflects the Fund’s past dividends paid to shareholders) or the income reported in the Fund’s financial statements.
7. Figures are as stated in the Fund’s prospectus current as of the date of this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
8. Effective 3/20/02, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule 12b-1 plan. Performance quotations for this class reflect the following methods of calculation: (a) For periods prior to 3/20/02, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule 12b-1 fees; and (b) for periods after 3/19/02, actual Advisor Class performance is used reflecting all charges and fees applicable to that class. Since 3/20/02 (commencement of sales), the cumulative and average annual total returns of Advisor Class shares were +54.43% and +5.17%.
10 | Semiannual Report
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs:
- Transaction costs, including sales charges (loads) on Fund purchases; and
- 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 following table 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 first line (Actual) for each share class listed in the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of Fund expenses.
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:
1. | Divide your account value by $1,000. |
If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6. | |
2. | Multiply the result by the number under the heading “Expenses Paid During Period.” |
If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50. |
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Information in the second line (Hypothetical) for each class in the table can help you compare ongoing costs of investing in the Fund with those of other mutual funds. This information may not be used to estimate the actual ending account balance or expenses you paid during the period. The hypothetical “Ending Account Value” is based on the actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Expenses Paid During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds.
Semiannual Report | 11
Your Fund’s Expenses (continued)
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transaction costs, such as sales charges. Therefore, the second line for each class is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transaction costs were included, your total costs would have been higher. Please refer to the Fund prospectus for additional information on operating expenses.
Beginning Account | Ending Account | Expenses Paid During | ||||
Class A | Value 5/1/10 | Value 10/31/10 | Period* 5/1/10–10/31/10 | |||
Actual | $ | 1,000 | $ | 1,035.30 | $ | 3.13 |
Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,022.13 | $ | 3.11 |
Class B | ||||||
Actual | $ | 1,000 | $ | 1,033.20 | $ | 5.94 |
Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,019.36 | $ | 5.90 |
Class C | ||||||
Actual | $ | 1,000 | $ | 1,033.40 | $ | 5.95 |
Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,019.36 | $ | 5.90 |
Advisor Class | ||||||
Actual | $ | 1,000 | $ | 1,036.60 | $ | 2.62 |
Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,022.63 | $ | 2.60 |
*Expenses are calculated using the most recent six-month expense ratio, annualized for each class (A: 0.61%; B: 1.16%; C: 1.16%; and Advisor: 0.51%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.
12 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Financial Highlights
Six Months Ended | ||||||||||||||||||
October 31, 2010 | Year Ended April 30, | |||||||||||||||||
Class A | (unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the | ||||||||||||||||||
period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 11.89 | $ | 11.21 | $ | 11.82 | $ | 12.11 | $ | 11.99 | $ | 12.23 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.26 | 0.52 | 0.53 | 0.53 | 0.55 | 0.53 | ||||||||||||
Net realized and unrealized gains | ||||||||||||||||||
(losses) | 0.16 | 0.69 | (0.61 | ) | (0.29 | ) | 0.12 | (0.22 | ) | |||||||||
Total from investment operations | 0.42 | 1.21 | (0.08 | ) | 0.24 | 0.67 | 0.31 | |||||||||||
Less distributions from net | ||||||||||||||||||
investment income | (0.26 | ) | (0.53 | ) | (0.53 | ) | (0.53 | ) | (0.55 | ) | (0.55 | ) | ||||||
Redemption feesc | — | — | —d | —d | —d | —d | ||||||||||||
Net asset value, end of period | $ | 12.05 | $ | 11.89 | $ | 11.21 | $ | 11.82 | $ | 12.11 | $ | 11.99 | ||||||
Total returne | 3.53 | % | 11.00 | % | (0.55 | )% | 2.06 | % | 5.66 | % | 2.55 | % | ||||||
Ratios to average net assetsf | ||||||||||||||||||
Expenses | 0.61 | % | 0.61 | % | 0.61 | % | 0.60 | % | 0.61 | % | 0.61 | % | ||||||
Net investment income | 4.23 | % | 4.51 | % | 4.73 | % | 4.44 | % | 4.58 | % | 4.33 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 9,122,494 | $ | 8,768,920 | $ | 7,513,448 | $ | 6,901,918 | $ | 6,570,140 | $ | 6,279,940 | ||||||
Portfolio turnover rate | 4.56 | % | 8.16 | % | 6.74 | % | 15.47 | % | 6.13 | % | 7.98 | % |
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 shares in relation to income earned and/or fluctuating market value of the investments of the Fund. bBased on average daily shares outstanding. cEffective September 1, 2008, the redemption fee was eliminated. dAmount rounds to less than $0.01 per share. eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year. fRatios are annualized for periods less than one year.
Semiannual Report | The accompanying notes are an integral part of these financial statements. | 13
Franklin Federal Tax-Free Income Fund | ||||||||||||||||||
Financial Highlights (continued) | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
October 31, 2010 | Year Ended April 30, | |||||||||||||||||
Class B | (unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 11.88 | $ | 11.21 | $ | 11.81 | $ | 12.10 | $ | 11.98 | $ | 12.22 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.22 | 0.46 | 0.47 | 0.46 | 0.49 | 0.46 | ||||||||||||
Net realized and unrealized gains (losses) | 0.17 | 0.67 | (0.60 | ) | (0.29 | ) | 0.11 | (0.22 | ) | |||||||||
Total from investment operations | 0.39 | 1.13 | (0.13 | ) | 0.17 | 0.60 | 0.24 | |||||||||||
Less distributions from net investment income | (0.22 | ) | (0.46 | ) | (0.47 | ) | (0.46 | ) | (0.48 | ) | (0.48 | ) | ||||||
Redemption feesc | — | — | —d | —d | —d | —d | ||||||||||||
Net asset value, end of period | $ | 12.05 | $ | 11.88 | $ | 11.21 | $ | 11.81 | $ | 12.10 | $ | 11.98 | ||||||
Total returne | 3.32 | % | 10.28 | % | (1.02 | )% | 1.49 | % | 5.08 | % | 1.99 | % | ||||||
Ratios to average net assetsf | ||||||||||||||||||
Expenses | 1.16 | % | 1.17 | % | 1.17 | % | 1.16 | % | 1.17 | % | 1.17 | % | ||||||
Net investment income | 3.68 | % | 3.95 | % | 4.17 | % | 3.88 | % | 4.02 | % | 3.77 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 52,451 | $ | 78,742 | $ | 130,925 | $ | 178,156 | $ | 225,834 | $ | 260,416 | ||||||
Portfolio turnover rate | 4.56 | % | 8.16 | % | 6.74 | % | 15.47 | % | 6.13 | % | 7.98 | % | ||||||
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 shares in relation to income earned and/or fluctuating market value of the investments of the Fund. | ||||||||||||||||||
bBased on average daily shares outstanding. | ||||||||||||||||||
cEffective September 1, 2008, the redemption fee was eliminated. | ||||||||||||||||||
dAmount rounds to less than $0.01 per share. | ||||||||||||||||||
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year. | ||||||||||||||||||
fRatios are annualized for periods less than one year. | ||||||||||||||||||
14 | The accompanying notes are an integral part of these financial statements. | Semiannual Report |
Franklin Federal Tax-Free Income Fund
Financial Highlights (continued)
Six Months Ended | ||||||||||||||||||
October 31, 2010 | Year Ended April 30, | |||||||||||||||||
Class C | (unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the | ||||||||||||||||||
period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 11.88 | $ | 11.21 | $ | 11.81 | $ | 12.11 | $ | 11.99 | $ | 12.23 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.22 | 0.46 | 0.47 | 0.46 | 0.49 | 0.46 | ||||||||||||
Net realized and unrealized gains | ||||||||||||||||||
(losses) | 0.17 | 0.67 | (0.60 | ) | (0.30 | ) | 0.11 | (0.22 | ) | |||||||||
Total from investment operations | 0.39 | 1.13 | (0.13 | ) | 0.16 | 0.60 | 0.24 | |||||||||||
Less distributions from net investment | ||||||||||||||||||
income | (0.22 | ) | (0.46 | ) | (0.47 | ) | (0.46 | ) | (0.48 | ) | (0.48 | ) | ||||||
Redemption feesc | — | — | —d | —d | —d | —d | ||||||||||||
Net asset value, end of period | $ | 12.05 | $ | 11.88 | $ | 11.21 | $ | 11.81 | $ | 12.11 | $ | 11.99 | ||||||
Total returne | 3.34 | % | 10.31 | % | (1.01 | )% | 1.41 | % | 5.08 | % | 1.99 | % | ||||||
Ratios to average net assetsf | ||||||||||||||||||
Expenses | 1.16 | % | 1.17 | % | 1.17 | % | 1.16 | % | 1.17 | % | 1.17 | % | ||||||
Net investment income | 3.68 | % | 3.95 | % | 4.17 | % | 3.88 | % | 4.02 | % | 3.77 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 1,369,247 | $ | 1,222,493 | $ | 808,779 | $ | 594,724 | $ | 449,918 | $ | 403,084 | ||||||
Portfolio turnover rate | 4.56 | % | 8.16 | % | 6.74 | % | 15.47 | % | 6.13 | % | 7.98 | % |
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 shares in relation to income earned and/or fluctuating market value of the investments of the Fund. bBased on average daily shares outstanding. cEffective September 1, 2008, the redemption fee was eliminated. dAmount rounds to less than $0.01 per share. eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year. fRatios are annualized for periods less than one year.
Semiannual Report | The accompanying notes are an integral part of these financial statements. | 15
Franklin Federal Tax-Free Income Fund
Financial Highlights (continued)
Six Months Ended | ||||||||||||||||||
October 31, 2010 | Year Ended April 30, | |||||||||||||||||
Advisor Class | (unaudited) | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the | ||||||||||||||||||
period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 11.89 | $ | 11.22 | $ | 11.82 | $ | 12.12 | $ | 12.00 | $ | 12.23 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.26 | 0.54 | 0.54 | 0.54 | 0.57 | 0.54 | ||||||||||||
Net realized and unrealized gains | ||||||||||||||||||
(losses) | 0.17 | 0.67 | (0.60 | ) | (0.30 | ) | 0.11 | (0.21 | ) | |||||||||
Total from investment operations | 0.43 | 1.21 | (0.06 | ) | 0.24 | 0.68 | 0.33 | |||||||||||
Less distributions from net | ||||||||||||||||||
investment income | (0.26 | ) | (0.54 | ) | (0.54 | ) | (0.54 | ) | (0.56 | ) | (0.56 | ) | ||||||
Redemption feesc | — | — | —d | —d | —d | —d | ||||||||||||
Net asset value, end of period | $ | 12.06 | $ | 11.89 | $ | 11.22 | $ | 11.82 | $ | 12.12 | $ | 12.00 | ||||||
Total returne | 3.66 | % | 11.01 | % | (0.38 | )% | 2.07 | % | 5.76 | % | 2.63 | % | ||||||
Ratios to average net assetsf | ||||||||||||||||||
Expenses | 0.51 | % | 0.52 | % | 0.52 | % | 0.51 | % | 0.52 | % | 0.52 | % | ||||||
Net investment income | 4.33 | % | 4.60 | % | 4.82 | % | 4.53 | % | 4.67 | % | 4.42 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 1,078,564 | $ | 875,566 | $ | 458,341 | $ | 252,943 | $ | 191,387 | $ | 155,857 | ||||||
Portfolio turnover rate | 4.56 | % | 8.16 | % | 6.74 | % | 15.47 | % | 6.13 | % | 7.98 | % |
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 shares in relation to income earned and/or fluctuating market value of the investments of the Fund. bBased on average daily shares outstanding. cEffective September 1, 2008, the redemption fee was eliminated. dAmount rounds to less than $0.01 per share. eTotal return is not annualized for periods less than one year. fRatios are annualized for periods less than one year.
16 | The accompanying notes are an integral part of these financial statements. | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited)
Principal Amount | Value | |||
Municipal Bonds 98.2% | ||||
Alabama 1.1% | ||||
Anniston Regional Medical Center Board Revenue, Series A, AMBAC Insured, 5.125%, | ||||
6/01/28 | $ | 7,000,000 | $ | 6,999,790 |
Birmingham Waterworks Board Water Revenue, Series A, Assured Guaranty, 5.125%, | ||||
1/01/34 | 5,600,000 | 5,974,415 | ||
Courtland IDB Solid Waste Disposal Revenue, Champion International Corp. Project, | ||||
Refunding, 6.00%, 8/01/29 | 12,000,000 | 12,024,600 | ||
East Alabama Health Care Authority Health Care Facilities Revenue, Mandatory Put 9/01/18, | ||||
Series B, 5.50%, 9/01/33 | 18,500,000 | 19,796,110 | ||
Fairfield IDB Environmental Improvement Revenue, USX Corp. Project, Refunding, 5.45%, | ||||
9/01/14 | 1,445,000 | 1,449,104 | ||
Homewood GO, wts., Refunding, AGMC Insured, 4.75%, 9/01/30 | 9,265,000 | 9,612,901 | ||
Mobile GO, wts., Refunding and Improvement, AMBAC Insured, 5.00%, 2/15/30 | 5,000,000 | 5,233,300 | ||
Montgomery County PBA Revenue, wts., Facilities Project, NATL Insured, 5.00%, | ||||
3/01/31 | 6,250,000 | 6,553,000 | ||
Tuscaloosa Public Educational Building Authority Student Housing Revenue, Ridgecrest | ||||
Student Housing LLC University of Alabama Ridgecrest Residential Project, | ||||
Assured Guaranty, 6.75%, 7/01/38 | 10,000,000 | 11,436,700 | ||
University of Alabama General Revenue, Series A, | ||||
NATL Insured, 5.00%, 7/01/29 | 10,000,000 | 10,409,500 | ||
NATL Insured, 5.00%, 7/01/34 | 10,500,000 | 10,774,575 | ||
XLCA Insured, 5.00%, 7/01/28 | 5,000,000 | 5,289,750 | ||
XLCA Insured, 5.00%, 7/01/32 | 5,500,000 | 5,750,360 | ||
University of South Alabama University Revenues, Tuition, Capital Improvement, Refunding, | ||||
AMBAC Insured, 5.00%, 12/01/36 | 11,570,000 | 11,930,058 | ||
123,234,163 | ||||
Alaska 0.4% | ||||
Alaska State HFC Revenue, General Housing, Series A, FGIC Insured, 5.00%, | ||||
12/01/29 | 4,000,000 | 4,165,800 | ||
12/01/30 | 3,500,000 | 3,634,400 | ||
Alaska State International Airports Revenues, | ||||
Series B, NATL Insured, 5.00%, 10/01/28 | 5,100,000 | 5,244,330 | ||
Series C, 5.00%, 10/01/33 | 12,565,000 | 13,092,981 | ||
Matanuska-Susitna Borough Lease Revenue, Goose Creek Correctional Center, | ||||
Assured Guaranty, 6.00%, 9/01/32 | 20,000,000 | 22,997,200 | ||
49,134,711 | ||||
Arizona 3.1% | ||||
Arizona State COP, Department of Administration, Series A, AGMC Insured, 5.00%, | ||||
10/01/27 | 14,440,000 | 15,148,427 | ||
Arizona State Lottery Revenue, Series A, AGMC Insured, 5.00%, 7/01/27 | 15,000,000 | 16,104,600 | ||
Downtown Phoenix Hotel Corp. Revenue, Senior Series A, FGIC Insured, 5.00%, | ||||
7/01/29 | 14,465,000 | 12,897,717 | ||
7/01/36 | 15,000,000 | 12,924,600 | ||
Glendale Western Loop 101 Public Facilities Corp. Excise Tax Revenue, third lien, Series A, | ||||
6.25%, 7/01/38 | 10,000,000 | 10,576,000 | ||
Maricopa County IDA Health Facility Revenue, Catholic Healthcare West Project, Refunding, | ||||
Series A, 5.00%, 7/01/16 | 15,135,000 | 15,158,005 |
Semiannual Report | 17
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Arizona (continued) | ||||
Maricopa County IDA Hospital Facility Revenue, Mayo Clinic Hospital, 5.25%, 11/15/37 | $ | 19,000,000 | $ | 19,014,060 |
Maricopa County PCC, PCR, El Paso Electric Co. Project, Series A, 7.25%, 2/01/40 | 10,000,000 | 11,658,400 | ||
Navajo County PCC Revenue, Mandatory Put 6/01/16, Series E, 5.75%, 6/01/34 | 7,200,000 | 7,968,096 | ||
Phoenix Civic Improvement Corp. Airport Revenue, | ||||
junior lien, Series A, 5.00%, 7/01/40 | 24,000,000 | 24,702,720 | ||
senior lien, Series A, 5.00%, 7/01/33 | 28,000,000 | 29,081,080 | ||
Phoenix Civic Improvement Corp. Distribution Revenue, Capital Appreciation, Civic Plaza, | ||||
Series B, NATL RE, FGIC Insured, zero cpn. to 7/01/13, 5.50% thereafter, | ||||
7/01/32 | 6,000,000 | 5,771,880 | ||
7/01/34 | 5,000,000 | 4,753,700 | ||
7/01/35 | 9,860,000 | 9,334,462 | ||
Phoenix Civic Improvement Corp. Water System Revenue, junior lien, Refunding, | ||||
5.00%, 7/01/32 | 21,095,000 | 22,593,378 | ||
Series A, 5.00%, 7/01/34 | 10,000,000 | 10,627,500 | ||
Pima County IDA Lease Revenue, | ||||
Metro Police Facility, Nevada Project, Series A, 5.25%, 7/01/31 | 8,900,000 | 9,341,262 | ||
Metro Police Facility, Nevada Project, Series A, 5.50%, 7/01/39 | 22,500,000 | 23,538,825 | ||
Pima County Arizona, 5.00%, 9/01/39 | 20,000,000 | 20,194,200 | ||
Salt River Project Agricultural Improvement and Power District Electric System Revenue, | ||||
Salt River Project, Refunding, Series A, 5.125%, 1/01/27 | 35,000,000 | 36,289,400 | ||
Salt River Project, Series B, 5.00%, 1/01/25 | 17,500,000 | 18,368,875 | ||
Series A, 5.00%, 1/01/38 | 10,000,000 | 10,565,800 | ||
Salt Verde Financial Corp. Senior Gas Revenue, 5.00%, 12/01/37 | 5,000,000 | 4,723,650 | ||
University Medical Center Corp. Hospital Revenue, 5.00%, 7/01/35 | 7,000,000 | 6,806,170 | ||
358,142,807 | ||||
Arkansas 0.8% | ||||
Fort Smith Water and Sewer Revenue, Construction, Refunding, AGMC Insured, 5.00%, | ||||
10/01/32 | 10,000,000 | 10,644,200 | ||
Little Rock Sewer Revenue, Construction, Series A, AGMC Insured, 5.00%, 6/01/31 | 8,690,000 | 9,281,181 | ||
Pope County PCR, Arkansas Power and Light Co. Project, Refunding, 6.30%, | ||||
12/01/16 | 2,600,000 | 2,608,918 | ||
11/01/20 | 60,500,000 | 60,707,515 | ||
University of Arkansas University Revenues, | ||||
Construction, University of Arkansas for Medical Sciences Campus, Series B, NATL Insured, | ||||
5.00%, 11/01/28 | 1,000,000 | 1,072,030 | ||
Various Facility, Fayetteville Campus, AMBAC Insured, 5.00%, 11/01/31 | 7,705,000 | 8,226,320 | ||
Various Facility, Fayetteville Campus, NATL RE, FGIC Insured, 5.00%, 12/01/27 | 5,000,000 | 5,211,150 | ||
97,751,314 | ||||
California 12.4% | ||||
Bay Area Toll Authority Toll Bridge Revenue, San Francisco Bay Area, Refunding, | ||||
Series F, 5.00%, 4/01/31 | 20,000,000 | 20,953,800 | ||
Series F-1, 5.00%, 4/01/28 | 24,000,000 | 26,200,560 | ||
Series F-1, 5.00%, 4/01/34 | 10,000,000 | 10,511,100 | ||
Series F-1, 5.00%, 4/01/39 | 24,815,000 | 25,906,364 | ||
Series F-1, 5.50%, 4/01/43 | 30,000,000 | 32,421,000 |
18 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
California (continued) | ||||
California Educational Facilities Authority Revenue, | ||||
Carnegie Institute of Washington, Refunding, Series A, 5.00%, 7/01/40 | $ | 22,525,000 | $ | 24,314,161 |
Stanford University, Refunding, 5.25%, 4/01/40 | 30,000,000 | 36,390,000 | ||
California Health Facilities Financing Authority Revenue, Children’s Hospital of Orange | ||||
County, Series A, 6.50%, | ||||
11/01/24 | 5,000,000 | 5,685,450 | ||
11/01/38 | 8,000,000 | 8,769,680 | ||
California Infrastructure and Economic Development Bank Revenue, Bay Area Toll Bridges, | ||||
first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/33 | 24,500,000 | 30,141,125 | ||
California State Economic Recovery GO, Refunding, Series A, 5.25%, 7/01/21 | 59,500,000 | 68,953,360 | ||
California State GO, | ||||
6.00%, 5/01/18 | 535,000 | 546,251 | ||
5.90%, 4/01/23 | 1,200,000 | 1,216,284 | ||
5.00%, 10/01/29 | 25,000,000 | 25,778,750 | ||
FGIC Insured, 6.00%, 5/01/20 | 850,000 | 866,601 | ||
Pre-Refunded, 5.125%, 6/01/25 | 24,705,000 | 25,401,434 | ||
Pre-Refunded, 5.25%, 4/01/27 | 17,500,000 | 20,147,225 | ||
Pre-Refunded, 5.00%, 2/01/32 | 49,000,000 | 51,832,690 | ||
Refunding, 5.00%, 2/01/26 | 47,000,000 | 48,169,760 | ||
Various Purpose, 5.25%, 11/01/25 | 16,260,000 | 17,276,250 | ||
Various Purpose, 5.50%, 11/01/33 | 2,500,000 | 2,598,400 | ||
Various Purpose, 6.00%, 4/01/38 | 100,000,000 | 111,366,000 | ||
Various Purpose, 6.00%, 11/01/39 | 25,000,000 | 27,984,250 | ||
Various Purpose, Refunding, 5.25%, 3/01/30 | 30,000,000 | 31,696,500 | ||
Various Purpose, Refunding, 6.00%, 3/01/33 | 12,000,000 | 13,662,000 | ||
Various Purpose, Refunding, 5.25%, 3/01/38 | 20,000,000 | 20,462,200 | ||
Various Purpose, Refunding, 5.50%, 3/01/40 | 25,000,000 | 26,533,500 | ||
California State Public Works Board Lease Revenue, | ||||
Department of Education, Riverside Campus Project, Series B, 6.125%, 4/01/28 | 2,740,000 | 2,990,655 | ||
Department of General Services, Buildings 8 and 9, Series A, 6.00%, 4/01/27 | 3,980,000 | 4,332,986 | ||
Department of General Services, Buildings 8 and 9, Series A, 6.125%, 4/01/29 | 5,000,000 | 5,428,600 | ||
Various Capital Projects, Series I, 6.125%, 11/01/29 | 29,300,000 | 31,952,529 | ||
California Statewide CDA Revenue, | ||||
Adventist, Series B, Assured Guaranty, 5.00%, 3/01/37 | 10,000,000 | 10,195,900 | ||
St. Joseph Health System, Series B, FGIC Insured, 5.75%, 7/01/47 | 5,000,000 | 5,177,950 | ||
St. Joseph Health System, Series E, AGMC Insured, 5.25%, 7/01/47 | 10,000,000 | 10,285,000 | ||
California Statewide CDA, PCR, Refunding, 4.50%, 9/01/29 | 14,830,000 | 14,570,327 | ||
Colton Joint USD, GO, Election of 2008, Series A, Assured Guaranty, 5.375%, 8/01/34 | 15,000,000 | 15,783,900 | ||
Corona-Norco USD, GO, Capital Appreciation, Election of 2006, Series C, AGMC Insured, | ||||
zero cpn., 8/01/39 | 7,500,000 | 1,371,075 | ||
zero cpn. to 8/01/17, 6.20% thereafter, 8/01/29 | 3,250,000 | 2,424,695 | ||
zero cpn. to 8/01/17, 6.80% thereafter, 8/01/39 | 8,500,000 | 6,086,510 | ||
Foothill/Eastern Corridor Agency Toll Road Revenue, | ||||
Capital Appreciation, Refunding, 5.85%, 1/15/23 | 35,000,000 | 35,977,550 | ||
Capital Appreciation, Refunding, zero cpn., 1/15/24 | 65,000,000 | 27,619,800 | ||
Refunding, 5.75%, 1/15/40 | 20,000,000 | 19,774,800 | ||
Golden State Tobacco Securitization Corp. Tobacco Settlement Revenue, | ||||
Enhanced, Series A, AMBAC Insured, 5.00%, 6/01/45 | 13,255,000 | 12,647,258 | ||
Series A-1, Pre-Refunded, 6.25%, 6/01/33 | 19,275,000 | 21,295,984 | ||
Semiannual Report | 19 |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | ||||
Municipal Bonds (continued) | |||||
California (continued) | |||||
Hacienda La Puente USD, GO, Election of 2000, Series B, AGMC Insured, Pre-Refunded, | |||||
5.00%, 8/01/27 | $ | 5,000,000 | $ | 5,600,800 | |
Hartnell Community College District GO, Capital Appreciation, Election of 2002, Series D, | |||||
zero cpn., 8/01/39 | 45,000,000 | 6,233,850 | |||
Inland Empire Tobacco Asset Securitization Corp. Revenue, Series C-1, zero cpn., | |||||
6/01/36 | 100,000,000 | 5,496,000 | |||
Los Angeles Community College District GO, Election of 2008, Series C, 5.25%, | |||||
8/01/39 | 25,000,000 | 26,545,250 | |||
Los Angeles Department of Airports Airport Revenue, Senior, Los Angeles International | |||||
Airport, Refunding, Series A, 5.00%, 5/15/40 | 25,485,000 | 26,145,316 | |||
Los Angeles Regional Airports Improvement Corp. Lease Revenue, Facilities Sublease, | |||||
Delta Air Lines Inc., Los Angeles International Airport, Refunding, 6.35%, 11/01/25 | 7,500,000 | 7,499,325 | |||
Los Angeles USD, GO, | |||||
Election of 2002, Series B, AMBAC Insured, 4.50%, 7/01/31 | 28,745,000 | 27,767,383 | |||
Election of 2004, Series F, AGMC Insured, 5.00%, 7/01/30 | 52,475,000 | 54,487,416 | |||
Election of 2004, Series G, AMBAC Insured, 5.00%, 7/01/26 | 10,250,000 | 10,785,357 | |||
Election of 2004, Series G, AMBAC Insured, 5.00%, 7/01/31 | 10,000,000 | 10,317,400 | |||
Series A, NATL Insured, Pre-Refunded, 5.00%, 1/01/28 | 25,000,000 | 27,913,500 | |||
Series KRY, 5.25%, 7/01/34 | 36,625,000 | 38,638,276 | |||
Los Angeles Wastewater System Revenue, Refunding, NATL Insured, 5.00%, 6/01/25 | 10,000,000 | 10,638,200 | |||
M | -S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39 | 12,500,000 | 14,688,250 | ||
Metropolitan Water District of Southern California Waterworks Revenue, Series B-2, NATL RE, | |||||
FGIC Insured, 5.00%, 10/01/27 | 9,645,000 | 10,462,028 | |||
New Haven USD, GO, Capital Appreciation, Assured Guaranty, zero cpn., | |||||
8/01/31 | 2,055,000 | 613,890 | |||
8/01/32 | 7,830,000 | 2,174,313 | |||
8/01/33 | 7,660,000 | 1,978,961 | |||
Pajaro Valley USD, GO, Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/26 | 5,285,000 | 5,920,046 | |||
Placentia-Yorba Linda USD, GO, 2008 Election, Series A, 5.25%, 8/01/32 | 24,490,000 | 26,040,217 | |||
Pomona USD, GO, Election of 2008, Series A, Assured Guaranty, 5.00%, 8/01/29 | 5,585,000 | 5,887,930 | |||
Sacramento County Airport System Revenue, Senior Series B, AGMC Insured, 5.25%, | |||||
7/01/33 | 16,355,000 | 16,778,922 | |||
San Diego Public Facilities Financing Authority Water Revenue, Series B, 5.375%, | |||||
8/01/34 | 15,000,000 | 16,346,550 | |||
San Francisco City and County COP, Multiple Capital Improvement Project, Series A, 5.25%, | |||||
4/01/31 | 10,000,000 | 10,548,600 | |||
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, | |||||
Capital Appreciation, Refunding, Series A, 5.75%, 1/15/21 | 50,000,000 | 50,374,500 | |||
senior lien, 5.00%, 1/01/33 | 5,000,000 | 4,223,550 | |||
senior lien, ETM, zero cpn., 1/01/23 | 7,000,000 | 4,707,080 | |||
Santa Ana USD, GO, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, | |||||
zero cpn., | |||||
8/01/35 | 10,000,000 | 2,113,900 | |||
8/01/36 | 18,865,000 | 3,717,160 | |||
8/01/37 | 10,000,000 | 1,840,400 | |||
Santa Clara County GO, 5.00%, 8/01/34 | 25,000,000 | 27,038,750 | |||
Upland USD, Election of 2008, Series B, zero cpn., 8/01/39 | 50,075,000 | 8,183,256 | |||
Washington Township Health Care District Revenue, Series A, 6.25%, 7/01/39 | 3,000,000 | 3,210,690 |
20 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | ||||
Municipal Bonds (continued) | |||||
California (continued) | |||||
West Contra Costa USD, GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., | |||||
8/01/29 | $ | 10,000,000 | $ | 3,380,800 | |
8/01/30 | 20,845,000 | 6,487,381 | |||
8/01/31 | 20,000,000 | 5,658,400 | |||
8/01/32 | 10,730,000 | 2,850,424 | |||
Whittier UHSD, GO, Capital Appreciation Bonds, Refunding, zero cpn., 8/01/34 | 20,000,000 | 4,646,000 | |||
1,441,640,285 | |||||
Colorado 2.0% | |||||
Aurora Water Improvement Revenue, first lien, Series A, AMBAC Insured, 5.00%, | |||||
8/01/32 | 10,000,000 | 10,634,000 | |||
8/01/36 | 41,235,000 | 42,896,770 | |||
8/01/39 | 26,930,000 | �� | 27,951,455 | ||
Colorado Health Facilities Authority Revenue, | |||||
Health Facility Authority, Hospital, Refunding, Series B, AGMC Insured, 5.25%, | |||||
3/01/36 | 10,000,000 | 10,348,600 | |||
Valley View Hospital Assn. Project, Refunding, 5.50%, 5/15/28 | 5,000,000 | 5,174,250 | |||
Valley View Hospital Assn. Project, Refunding, 5.75%, 5/15/36 | 7,000,000 | 7,241,710 | |||
Colorado Springs Airport Revenue, Capital Appreciation, Series C, ETM, zero cpn., | |||||
1/01/11 | 1,450,000 | 1,448,782 | |||
Colorado State Board of Governors University Enterprise System Revenue, Series A, | |||||
AGMC Insured, 5.00%, 3/01/37 | 10,000,000 | 10,456,900 | |||
NATL RE, FGIC Insured, 5.00%, 3/01/37 | 10,000,000 | 10,428,600 | |||
Colorado State Higher Education Capital Construction Lease Purchase Financing Program | |||||
COP, | |||||
5.50%, 11/01/27 | 7,335,000 | 8,065,713 | |||
Pre | -Refunded, 5.50%, 11/01/27 | 2,665,000 | 3,355,448 | ||
Colorado Water Resources and Power Development Authority Water Resources Revenue, | |||||
Arapahoe County Water Improvement, Series E, NATL Insured, 5.00%, 12/01/35 | 10,000,000 | 10,079,800 | |||
Denver City and County Airport Revenue, System, Refunding, Series A, XLCA Insured, | |||||
5.00%, 11/15/25 | 8,000,000 | 8,462,240 | |||
Mesa State College Auxiliary Facilities Enterprise Revenue, XLCA Insured, 5.00%, | |||||
5/15/35 | 9,950,000 | 10,042,137 | |||
Northwest Parkway Public Highway Authority Revenue, Series A, AMBAC Insured, | |||||
Pre | -Refunded, 5.125%, 6/15/31 | 7,500,000 | 7,855,050 | ||
Park Creek Metropolitan District Revenue, Senior Property Tax Support, Refunding and | |||||
Improvement, Assured Guaranty, 6.25%, 12/01/30 | 6,000,000 | 6,837,540 | |||
Public Authority for Colorado Energy Natural Gas Purchase Revenue, 6.50%, 11/15/38 | 20,000,000 | 23,515,600 | |||
Pueblo County School District No. 060 GO, NATL RE, FGIC Insured, Pre-Refunded, 5.00%, | |||||
12/15/22 | 5,500,000 | 6,021,675 | |||
Thornton Water Enterprise Revenue, NATL Insured, 5.00%, 12/01/34 | 10,000,000 | 10,399,200 | |||
University of Colorado Enterprise System Revenue, Series A, 5.375%, 6/01/32 | 3,500,000 | 3,841,075 | |||
University of Colorado Hospital Authority Revenue, Series A, AMBAC Insured, 5.00%, | |||||
11/15/29 | 8,500,000 | 8,501,190 | |||
233,557,735 | |||||
Connecticut 0.0%† | |||||
Meriden Housing Authority MFR, Connecticut Baptist Housing Project, GNMA Secured, | |||||
5.80%, 8/20/39 | 2,555,000 | 2,646,443 |
Semiannual Report | 21
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
District of Columbia 2.5% | ||||||
District of Columbia Ballpark Revenue, Series B-1, BHAC Insured, 5.00%, | ||||||
2/01/24 | $ | 12,120,000 | $ | 12,971,551 | ||
2/01/25 | 7,000,000 | 7,464,170 | ||||
2/01/26 | 9,950,000 | 10,570,681 | ||||
District of Columbia GO, Series E, NATL Insured, ETM, 6.00%, 6/01/13 | 15,000 | 15,060 | ||||
District of Columbia Hospital Revenue, Children’s Hospital Obligation, Sub Series 1, | ||||||
AGMC Insured, 5.45%, 7/15/35 | 24,760,000 | 25,820,223 | ||||
District of Columbia Income Tax Secured Revenue, | ||||||
Refunding, Series A, 5.00%, 12/01/31 | 10,000,000 | 10,888,500 | ||||
Series A, 5.25%, 12/01/34 | 11,000,000 | 12,064,030 | ||||
District of Columbia Revenue, | ||||||
Capital Appreciation, Georgetown University, Growth and Income Securities, | ||||||
AMBAC Insured, zero cpn. to 4/01/18, 5.00% thereafter, 4/01/32 | 15,370,000 | 9,867,694 | ||||
Capital Appreciation, Georgetown University, Series A, NATL Insured, Pre-Refunded, | ||||||
zero cpn., 4/01/20 | 8,860,000 | 5,390,513 | ||||
Capital Appreciation, Georgetown University, Series A, NATL Insured, Pre-Refunded, | ||||||
zero cpn., 4/01/22 | 12,870,000 | 6,924,703 | ||||
Capital Appreciation, Georgetown University, Series A, NATL Insured, Pre-Refunded, | ||||||
zero cpn., 4/01/23 | 14,160,000 | 7,164,677 | ||||
Deed Tax, Housing Product Trust Fund, Series A, NATL Insured, 5.00%, 6/01/32 | 5,000,000 | 5,140,800 | ||||
Georgetown University, Refunding, Series D, 5.50%, 4/01/36 | 5,000,000 | 5,264,900 | ||||
Medlantic/Helix, Series B, AGMC Insured, 5.00%, 8/15/38 | 20,000,000 | 20,262,400 | ||||
National Academy Sciences, Series A, 5.00%, 4/01/35 | 10,905,000 | 11,353,086 | ||||
National Academy Sciences, Series A, 5.00%, 4/01/40 | 16,960,000 | 17,551,395 | ||||
National Public Radio, Series A, 5.00%, 4/01/35 | 7,750,000 | 8,008,230 | ||||
District of Columbia Tobacco Settlement FICO Revenue, Asset-Backed Bonds, Refunding, | ||||||
6.50%, 5/15/33 | 35,000,000 | 35,081,200 | ||||
District of Columbia Water and Sewer Authority Public Utility Revenue, Refunding, Series A, | ||||||
6.00%, 10/01/35 | 8,000,000 | 9,012,000 | ||||
Metropolitan Washington D.C. Airports Authority Airport System Revenue, | ||||||
Refunding, Series A, 5.375%, 10/01/29 | 5,000,000 | 5,261,100 | ||||
Refunding, Series A, 5.00%, 10/01/35 | 5,000,000 | 5,329,750 | ||||
Refunding, Series C, 5.25%, 10/01/27 | 10,745,000 | 11,831,427 | ||||
Series A, 5.00%, 10/01/39 | 15,155,000 | 16,091,276 | ||||
Series C, 5.00%, 10/01/26 | 10,235,000 | 11,110,809 | ||||
Metropolitan Washington D.C. Airports Authority Dulles Toll Road Revenue, Capital | ||||||
Appreciation, second lien, Series C, Assured Guaranty, zero cpn. to 10/01/16, | ||||||
6.50% thereafter, 10/01/41 | 25,000,000 | 19,292,000 | ||||
289,732,175 | ||||||
Florida 6.7% | ||||||
Brevard County Health Facilities Authority Health Care Facilities Revenue, Health First Inc. | ||||||
Project, 7.00%, 4/01/39 | 6,500,000 | 7,307,365 | ||||
Brevard County Local Option Fuel Tax Revenue, NATL RE, FGIC Insured, 5.00%, | ||||||
8/01/37 | 12,245,000 | 11,025,643 | ||||
Broward County School Board COP, | ||||||
NATL Insured, 5.00%, 7/01/28 | 17,415,000 | 17,774,620 | ||||
Series A, AGMC Insured, 5.25%, 7/01/24 | 25,000,000 | 25,468,750 | ||||
Broward County Water and Sewer Utility Revenue, Series A, 5.25%, 10/01/34 | 8,800,000 | 9,452,960 | ||||
22 | | | Semiannual Report |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | ||||
Municipal Bonds (continued) | |||||
Florida (continued) | |||||
Cape Coral Water and Sewer Revenue, AMBAC Insured, 5.00%, 10/01/36 | $ | 5,000,000 | $ | 5,017,550 | |
Citizens Property Insurance Corp. Revenue, High-Risk Account, Senior Secured, Series A-1, | |||||
5.25%, 6/01/17 | 24,250,000 | 25,987,270 | |||
5.50%, 6/01/17 | 10,000,000 | 10,799,700 | |||
6.00%, 6/01/17 | 25,000,000 | 27,637,500 | |||
Clearwater Water and Sewer Revenue, Series A, 5.25%, 12/01/39 | 7,000,000 | 7,484,330 | |||
Florida State Board of Education Capital Outlay GO, Public Education, Refunding, Series D, | |||||
6.00%, 6/01/23 | 17,500,000 | 22,124,550 | |||
Florida State Mid-Bay Bridge Authority Revenue, Series A, | |||||
AMBAC Insured, zero cpn., 10/01/23 | 4,950,000 | 2,570,832 | |||
AMBAC Insured, zero cpn., 10/01/24 | 2,970,000 | 1,443,064 | |||
Pre | -Refunded, zero cpn., 10/01/23 | 50,000 | 31,365 | ||
Pre | -Refunded, zero cpn., 10/01/24 | 30,000 | 17,773 | ||
Hernando County School Board COP, NATL Insured, 5.00%, 7/01/30 | 10,000,000 | 10,158,300 | |||
Hillsborough County Aviation Authority Revenue, Series A, Assured Guaranty, 5.50%, | |||||
10/01/38 | 5,000,000 | 5,028,400 | |||
Hillsborough County IDA, PCR, Tampa Electric Co. Project, Series A, 5.65%, 5/15/18 | 6,500,000 | 7,410,260 | |||
Hillsborough County IDAR, Refunding, Series A, 5.25%, 10/01/24 | 13,500,000 | 13,783,905 | |||
Hillsborough County School Board COP, Master Lease Program, Series B, NATL Insured, | |||||
5.00%, 7/01/27 | 5,000,000 | 5,107,000 | |||
Indian River County School Board COP, NATL RE, FGIC Insured, 5.00%, 7/01/27 | 16,485,000 | 16,877,673 | |||
Jacksonville Capital Improvement Revenue, Series A, AMBAC Insured, 5.00%, | |||||
10/01/30 | 20,175,000 | 20,419,521 | |||
Jacksonville Economic Development Commission Health Care Facilities Revenue, | |||||
Mayo Clinic, 5.00%, 11/15/36 | 17,950,000 | 18,314,564 | |||
Jacksonville Excise Taxes Revenue, Series A, AMBAC Insured, 5.00%, 10/01/32 | 6,015,000 | 6,119,420 | |||
Jacksonville Sales Tax Revenue, AMBAC Insured, 5.00%, | |||||
10/01/23 | 6,000,000 | 6,122,700 | |||
10/01/26 | 20,000,000 | 20,309,400 | |||
Jacksonville Transportation Revenue, NATL Insured, 5.00%, 10/01/31 | 5,000,000 | 5,132,400 | |||
Lee County Transportation Facilities Revenue, Sanibel Bridges and Causeway, Series B, | |||||
CIFG Insured, 5.00%, 10/01/35 | 10,645,000 | 10,947,637 | |||
Miami-Dade County Aviation Revenue, Miami International Airport, | |||||
Hub of the Americas, Refunding, Series A, CIFG Insured, 5.00%, 10/01/38 | 15,000,000 | 14,431,950 | |||
Refunding, Series A, 5.50%, 10/01/36 | 20,000,000 | 20,886,400 | |||
Refunding, Series A, Assured Guaranty, 5.25%, 10/01/33 | 11,000,000 | 11,220,550 | |||
Refunding, Series A, Assured Guaranty, 5.25%, 10/01/38 | 13,000,000 | 13,158,730 | |||
Miami-Dade County Educational Facilities Authority Revenue, University of Miami, Series A, | |||||
5.50%, 4/01/38 | 12,500,000 | 12,834,250 | |||
Miami | -Dade County Expressway Authority Toll System Revenue, Series A, 5.00%, | ||||
7/01/40 | 30,265,000 | 30,938,094 | |||
Miami | -Dade County GO, Building Better Communities Program, Series B-1, 5.75%, | ||||
7/01/33 | 20,000,000 | 21,833,600 | |||
Miami-Dade County Public Facilities Revenue, Jackson Health System, Series A, | |||||
NATL Insured, 5.00%, 6/01/30 | 10,630,000 | 10,655,406 | |||
Miami | -Dade County School Board COP, Assured Guaranty, 5.25%, 2/01/27 | 10,000,000 | 10,987,800 | ||
Miami-Dade County Special Obligation Revenue, | |||||
Juvenile Courthouse Project, Series A, AMBAC Insured, 5.00%, 4/01/32 | 10,000,000 | 10,008,500 | |||
sub. bond, Series B, NATL Insured, zero cpn., 10/01/34 | 5,500,000 | 1,169,685 | |||
Semiannual Report | 23 |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Florida (continued) | ||||||
Miami-Dade County Transit Sales Surtax Revenue, Refunding, AGMC Insured, 5.00%, | ||||||
7/01/38 | $ | 18,845,000 | $ | 19,461,043 | ||
Orange County Health Facilities Authority Revenue, Hospital, Orlando Regional Healthcare | ||||||
System, Refunding, Series B, AGMC Insured, 5.00%, 12/01/32 | 20,000,000 | 20,250,400 | ||||
Orange County School Board COP, Series A, Assured Guaranty, 5.50%, 8/01/34 | 15,000,000 | 16,084,650 | ||||
Orlando Tourist Development Tax Revenue, 6th Cent Contract Payments, | ||||||
second lien sub. bonds, Series B, Assured Guaranty, 5.50%, 11/01/38 | 18,490,000 | 17,652,773 | ||||
third lien sub. bonds, Series C, Assured Guaranty, 5.50%, 11/01/38 | 5,000,000 | 4,708,050 | ||||
Orlando Utilities Commission Water and Electric Revenue, Refunding, 5.00%, 10/01/22 | 7,500,000 | 7,797,975 | ||||
Orlando-Orange County Expressway Authority Revenue, | ||||||
Series A, AGMC Insured, 5.00%, 7/01/32 | 12,000,000 | 12,425,160 | ||||
Series B, AMBAC Insured, 5.00%, 7/01/28 | 10,630,000 | 10,927,746 | ||||
a Series C, 5.00%, 7/01/40 | 21,000,000 | 21,401,730 | ||||
Palm Beach County School Board COP, Refunding, Series D, AGMC Insured, 5.00%, | ||||||
8/01/28 | 25,000,000 | 25,432,500 | ||||
Palm Beach County Solid Waste Authority Revenue, Improvement, Series B, 5.50%, | ||||||
10/01/28 | 10,000,000 | 10,867,000 | ||||
Pensacola Airport Revenue, Airport Revenue Bonds, Refunding, 6.25%, 10/01/38 | 16,500,000 | 16,912,170 | ||||
Port St. Lucie GO, NATL Insured, 5.00%, 7/01/32 | 7,000,000 | 7,303,660 | ||||
Port St. Lucie Utility Revenue, System, Refunding, Assured Guaranty, 5.25%, 9/01/35 | 3,000,000 | 3,189,600 | ||||
South Broward Hospital District Revenue, South Broward Hospital District Obligated Group, | ||||||
Refunding, | ||||||
4.75%, 5/01/28 | 10,000,000 | 10,286,900 | ||||
5.00%, 5/01/36 | 12,500,000 | 12,687,250 | ||||
South Lake County Hospital District Revenue, South Lake Hospital, Series A, 6.25%, | ||||||
4/01/39 | 4,215,000 | 4,434,053 | ||||
South Miami Health Facilities Authority Hospital Revenue, Baptist Health South Florida | ||||||
Group, 5.00%, 8/15/32 | 31,070,000 | 31,894,287 | ||||
St. Lucie County Transportation Revenue, AMBAC Insured, 5.00%, 8/01/27 | 5,785,000 | 5,995,516 | ||||
Tallahassee Energy System Revenue, Refunding, NATL Insured, 5.00%, 10/01/37 | 20,000,000 | 20,385,200 | ||||
Tampa Bay Water Utility System Revenue, | ||||||
Refunding and Improvement, Series A, NATL RE, FGIC Insured, 5.00%, 10/01/28 | 5,000,000 | 5,035,650 | ||||
Series B, FGIC Insured, Pre-Refunded, 5.00%, 10/01/26 | 4,755,000 | 4,957,753 | ||||
Series B, NATL RE, FGIC Insured, 5.00%, 10/01/26 | 5,245,000 | 5,302,066 | ||||
Series B, NATL RE, FGIC Insured, 5.00%, 10/01/31 | 10,000,000 | 10,058,000 | ||||
783,450,549 | ||||||
Georgia 4.6% | ||||||
Athens-Clarke County Unified Government Water and Sewer Revenue, 5.50%, 1/01/38 | 14,500,000 | 15,821,530 | ||||
Atlanta Airport Passenger Facility Charge Revenue, General, sub. lien, | ||||||
Refunding, Series C, AGMC Insured, 5.00%, 1/01/33 | 19,500,000 | 19,950,060 | ||||
Series J, AGMC Insured, 5.00%, 1/01/29 | 10,000,000 | 10,302,000 | ||||
Atlanta Development Authority Revenue, | ||||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/24 | 6,385,000 | 6,596,407 | ||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/25 | 6,955,000 | 7,139,516 | ||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/26 | 5,000,000 | 5,101,100 | ||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/27 | 5,000,000 | 5,066,200 | ||||
Yamacraw Design Center Project, Series A, NATL Insured, Pre-Refunded, 5.125%, | ||||||
1/01/27 | 5,000,000 | 5,261,950 | ||||
24 | | | Semiannual Report |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Georgia (continued) | ||||
Atlanta Development Authority Student Housing Facilities Revenue, Piedmont Ellis LLC, | ||||
Series A, XLCA Insured, 5.00%, 9/01/30 | $ | 10,000,000 | $ | 10,284,100 |
Atlanta Water and Wastewater Revenue, Refunding, | ||||
Series A, 6.25%, 11/01/34 | 20,000,000 | 22,755,800 | ||
Series A, NATL Insured, 5.00%, 11/01/33 | 13,000,000 | 13,196,170 | ||
Series B, AGMC Insured, 5.25%, 11/01/34 | 30,000,000 | 32,061,000 | ||
Bleckley-Dodge County Joint Development Authority Student Housing Facilities Revenue, | ||||
MGC Real Estate Foundation II LLC Project, | ||||
5.00%, 7/01/33 | 5,000,000 | 5,053,550 | ||
5.25%, 7/01/38 | 10,000,000 | 10,201,400 | ||
Bulloch County Development Authority Revenue, Assured Guaranty, 5.375%, 7/01/39 | 23,075,000 | 24,678,020 | ||
Burke County Development Authority PCR, Oglethorpe Power Corp., Vogtle Project, | ||||
Series B, 5.50%, 1/01/33 | 15,000,000 | 15,936,900 | ||
Series E, 7.00%, 1/01/23 | 25,000,000 | 29,834,500 | ||
Clark County Hospital Authority Revenue, Athens Regional Medical Center Project, | ||||
NATL Insured, 5.00%, 1/01/27 | 5,000,000 | 5,187,400 | ||
Clayton County Development Authority Student Housing and Activity Center Revenue, | ||||
CSU Foundation Real Estate I LLC Project, XLCA Insured, 5.00%, 7/01/33 | 11,125,000 | 11,422,149 | ||
Cobb County Hospital Authority Revenue, Refunding, AMBAC Insured, 5.00%, 4/01/28 | 18,000,000 | 18,775,800 | ||
DeKalb Newton and Gwinnett Counties Joint Development Authority Revenue, Georgia | ||||
Gwinnett College Foundation LLC Project, 6.00%, 7/01/34 | 10,000,000 | 11,264,000 | ||
Georgia State GO, Refunding, Series I, 5.00%, | ||||
7/01/19 | 39,000,000 | 47,293,350 | ||
7/01/21 | 24,950,000 | 30,260,358 | ||
Georgia State Higher Education Facilities Authority Revenue, | ||||
USG Real Estate Foundation I LLC Project, 5.50%, 6/15/34 | 10,000,000 | 10,744,200 | ||
USG Real Estate Foundation I LLC Project, 6.25%, 6/15/40 | 13,970,000 | 15,464,511 | ||
USG Real Estate Foundation I LLC Project, Assured Guaranty, 5.625%, 6/15/38 | 5,000,000 | 5,349,100 | ||
USG Real Estate Foundation III LLC Project, Series A, 5.00%, 6/15/40 | 5,000,000 | 5,068,350 | ||
Griffin Combined Public Utility Revenue, Refunding and Improvement, AMBAC Insured, | ||||
5.00%, 1/01/25 | 5,000,000 | 5,205,750 | ||
Gwinnett County Hospital Authority Revenue, Anticipation Certificates, Gwinnett Hospital | ||||
System Inc. Project, Series B, NATL Insured, Pre-Refunded, 5.30%, 9/01/27 | 10,000,000 | 10,818,700 | ||
Gwinnett County Water and Sewer Authority Revenue, Pre-Refunded, 5.25%, 8/01/25 | 20,000,000 | 21,684,400 | ||
Henry County and Henry County Water and Sewer Authority Revenue, Refunding and | ||||
Improvement, Series A, NATL Insured, 5.00%, 2/01/26 | 5,770,000 | 6,097,794 | ||
Houston County Hospital Authority Revenue, Anticipation Certificates, Houston Healthcare | ||||
Project, 5.25%, 10/01/35 | 10,485,000 | 10,678,972 | ||
Jefferson PBA Revenue, Jackson County Facilities, Series A, XLCA Insured, 5.00%, | ||||
3/01/32 | 6,075,000 | 6,304,635 | ||
Main Street Natural Gas Inc. Gas Project Revenue, Series A, 5.50%, 9/15/28 | 5,000,000 | 5,143,400 | ||
Medical Center Hospital Authority Revenue, Anticipation Certificates, Columbus Regional | ||||
Healthcare Systems, Refunding, Assured Guaranty, 6.50%, 8/01/38 | 10,000,000 | 10,825,700 | ||
Metropolitan Atlanta Rapid Transit Authority Sales Tax Revenue, Second Indenture Series, | ||||
NATL Insured, Pre-Refunded, 5.00%, | ||||
7/01/25 | 12,160,000 | 13,315,322 | ||
7/01/26 | 12,800,000 | 14,016,128 |
Semiannual Report | 25
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Georgia (continued) | ||||
Private Colleges and Universities Authority Revenue, Emory University, Refunding, Series C, | ||||
5.25%, 9/01/39 | $ | 21,000,000 | $ | 23,016,840 |
Richmond County Development Authority Educational Facilities Revenue, MCG-PPG Cancer | ||||
Research Center, Series A, AMBAC Insured, 5.00%, 12/15/29 | 5,000,000 | 5,117,250 | ||
532,294,312 | ||||
Hawaii 0.3% | ||||
Hawaii State Airports System Revenue, Second Series, | ||||
ETM, 6.90%, 7/01/12 | 250,000 | 266,275 | ||
NATL Insured, ETM, 6.90%, 7/01/12 | 185,000 | 197,043 | ||
Hawaii State Department of Budget and Finance Special Purpose Revenue, | ||||
Hawaiian Electric Co. and Subsidiary, 6.50%, 7/01/39 | 7,500,000 | 8,394,225 | ||
Wilcox Memorial Hospital Projects, Refunding, 5.25%, 7/01/13 | 445,000 | 445,690 | ||
Wilcox Memorial Hospital Projects, Refunding, 5.35%, 7/01/18 | 2,040,000 | 2,041,877 | ||
Wilcox Memorial Hospital Projects, Refunding, 5.50%, 7/01/28 | 1,470,000 | 1,470,500 | ||
Hawaii State GO, | ||||
Refunding, Series BW, 6.375%, 3/01/11 | 75,000 | 76,498 | ||
Series BW, ETM, 6.375%, 3/01/11 | 25,000 | 25,500 | ||
Hawaii State Housing Finance and Development Corp. SFM Purchase Revenue, Refunding, | ||||
Series A, FNMA Insured, 5.75%, 7/01/30 | 165,000 | 165,043 | ||
Honolulu City and County Board of Water Supply Water System Revenue, Refunding, | ||||
Series A, NATL Insured, 5.00%, 7/01/36 | 20,000,000 | 20,951,600 | ||
Honolulu City and County GO, ETM, 6.00%, 12/01/14 | 150,000 | 180,093 | ||
Honolulu City and County MFHR, Waipahu Towers Project, Series A, GNMA Secured, 6.90%, | ||||
6/20/35 | 1,150,000 | 1,154,255 | ||
35,368,599 | ||||
Idaho 0.1% | ||||
Idaho Health Facilities Authority Revenue, St. Luke’s Health System Project, Series A, | ||||
6.75%, 11/01/37 | 12,500,000 | 13,979,375 | ||
Idaho Housing Agency Revenue, Refunding, Series D-1, FHA Insured, 6.45%, 7/01/19 | 5,000 | 5,005 | ||
13,984,380 | ||||
Illinois 5.4% | ||||
Aurora Waterworks and Sewer Revenue, XLCA Insured, 4.75%, 12/01/36 | 7,765,000 | 7,859,422 | ||
Bourbonnais Industrial Project Revenue, Olivet Nazarene University Project, Radian Insured, | ||||
5.125%, 11/01/37 | 5,000,000 | 4,638,650 | ||
Chicago Board of Education GO, Refunding, | ||||
a 5.00%, 12/01/31 | 12,500,000 | 12,817,000 | ||
Series C, AGMC Insured, 5.25%, 12/01/23 | 15,860,000 | 17,585,885 | ||
Chicago COP, Radian Insured, 7.75%, 7/15/11 | 2,400,000 | 2,400,000 | ||
Chicago GO, | ||||
Lakefront Millennium Parking Facilities, NATL Insured, ETM, 5.75%, 1/01/23 | 8,955,000 | 11,217,033 | ||
Refunding, Series A, 5.25%, 1/01/37 | 13,785,000 | 14,283,052 | ||
Refunding, Series A, AGMC Insured, 5.00%, 1/01/28 | 13,445,000 | 14,307,900 | ||
Refunding, Series A, AGMC Insured, 5.00%, 1/01/29 | 26,000,000 | 27,505,920 | ||
Chicago Midway Airport Revenue, Refunding, Series C, Assured Guaranty, 5.50%, | ||||
1/01/24 | 18,460,000 | 20,866,261 |
26 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Illinois (continued) | ||||
Chicago O’Hare International Airport Revenue, AGMC Insured, 5.25%, 1/01/35 | $ | 12,850,000 | $ | 13,438,530 |
Chicago Park District GO, Series A, 5.00%, 1/01/33 | 4,500,000 | 4,750,290 | ||
Chicago Wastewater Transmission Revenue, Series A, BHAC Insured, 5.50%, 1/01/38 | 18,000,000 | 19,375,560 | ||
Cook County GO, Refunding, Series A, 5.25%, 11/15/33 | 8,720,000 | 9,243,200 | ||
Illinois Development Finance Authority Revenue, Provena Health, Refunding, Series A, | ||||
NATL Insured, 5.50%, 5/15/21 | 10,000,000 | 10,027,900 | ||
Illinois Finance Authority Revenue, | ||||
Alexian Brothers Health System, Refunding, Series A, AGMC Insured, 5.50%, 1/01/28 | 45,000,000 | 48,617,100 | ||
Art Institute of Chicago, Refunding, Series A, 5.25%, 3/01/40 | 16,215,000 | 16,732,745 | ||
Columbia College, NATL Insured, 5.00%, 12/01/32 | 15,440,000 | 15,448,492 | ||
Resurrection Health Care, Series B, AGMC Insured, 5.25%, 5/15/29 | 28,650,000 | 29,694,579 | ||
Riverside Health System, 6.25%, 11/15/35 | 5,000,000 | 5,396,950 | ||
Roosevelt University Project, Refunding, 6.50%, 4/01/39 | 15,000,000 | 16,198,050 | ||
Rush University Medical Center Obligation Group, Series B, 7.25%, 11/01/38 | 10,000,000 | 11,292,100 | ||
Rush University Medical Center, Refunding, Series B, NATL Insured, 5.75%, | ||||
11/01/28 | 2,500,000 | 2,620,625 | ||
Rush University Medical Center, Refunding, Series B, NATL Insured, 5.25%, | ||||
11/01/35 | 3,000,000 | 3,023,370 | ||
Sherman Health System, Series A, 5.50%, 8/01/37 | 5,000,000 | 4,856,450 | ||
Illinois Health Facilities Authority Revenue, | ||||
Loyola University Health Systems, Refunding, Series A, NATL Insured, 5.625%, | ||||
7/01/18 | 7,090,000 | 7,102,549 | ||
Loyola University Health Systems, Series A, NATL Insured, ETM, 5.625%, 7/01/18 | 2,105,000 | 2,647,858 | ||
Methodist Medical Center, Refunding, NATL Insured, 5.25%, 11/15/21 | 2,885,000 | 2,887,020 | ||
Northwestern Medical Facility Foundation, Refunding, NATL Insured, 5.125%, | ||||
11/15/28 | 7,500,000 | 7,255,650 | ||
South Suburban Hospital, ETM, 7.00%, 2/15/18 | 3,840,000 | 4,549,056 | ||
Illinois Municipal Electric Agency Power Supply Revenue, Series A, NATL RE, FGIC Insured, | ||||
5.00%, 2/01/35 | 20,000,000 | 20,592,600 | ||
Illinois State GO, | ||||
AGMC Insured, 5.00%, 9/01/29 | 12,000,000 | 12,142,800 | ||
Assured Guaranty, 5.25%, 4/01/34 | 10,000,000 | 10,202,400 | ||
Refunding, 5.00%, 1/01/24 | 12,820,000 | 13,276,648 | ||
Illinois State Revenue, Build Illinois, Series B, 5.25%, 6/15/34 | 15,000,000 | 15,708,150 | ||
Illinois State Toll Highway Authority Toll Highway Revenue, Senior, Refunding, Series A-1, | ||||
5.00%, 1/01/31 | 10,245,000 | 10,586,671 | ||
Kane County School District No. 129 GO, Series A, FGIC Insured, Pre-Refunded, 5.25%, | ||||
2/01/22 | 5,285,000 | 5,603,527 | ||
Metropolitan Pier and Exposition Authority Dedicated State Tax Revenue, | ||||
Capital Appreciation, McCormick Place, Refunding, Series B, NATL Insured, zero cpn. to | ||||
6/14/12, 5.50% thereafter, 6/15/20 | 8,240,000 | 8,122,250 | ||
Capital Appreciation, McCormick Place, Refunding, Series B, NATL Insured, zero cpn. to | ||||
6/14/12, 5.55% thereafter, 6/15/21 | 6,000,000 | 5,870,640 | ||
Capital Appreciation, McCormick Place, Refunding, Series B, NATL Insured, zero cpn. to | ||||
6/14/17, 5.65% thereafter, 6/15/22 | 30,000,000 | 23,059,800 | ||
McCormick Place Expansion Project, 6.50%, 6/15/22 | 5,000 | 5,013 | ||
McCormick Place Expansion Project, 6.50%, 6/15/27 | 555,000 | 556,454 |
Semiannual Report | 27
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Illinois (continued) | ||||
Metropolitan Pier and Exposition Authority Dedicated State Tax Revenue, (continued) | ||||
McCormick Place Expansion Project, Refunding, NATL RE, FGIC Insured, 5.25%, | ||||
12/15/28 | $ | 39,580,000 | $ | 40,010,630 |
McCormick Place Expansion Project, Series A, FGIC Insured, 6.65%, 6/15/12 | 250,000 | 250,665 | ||
McCormick Place Expansion Project, Series A, FGIC Insured, ETM, zero cpn., 6/15/11 | 9,690,000 | 9,653,663 | ||
McCormick Place Expansion Project, Series A, NATL Insured, 5.00%, 12/15/28 | 26,795,000 | 27,622,430 | ||
Metropolitan Pier and Exposition Authority Hospitality Facilities Revenue, McCormick Place | ||||
Convention Center, ETM, 7.00%, 7/01/26 | 12,000,000 | 16,561,800 | ||
Regional Transportation Authority Revenue, Series A, AMBAC Insured, 7.20%, 11/01/20 | 1,000,000 | 1,222,000 | ||
Southwestern Illinois Development Authority Revenue, Capital Appreciation, Local | ||||
Government Program, AGMC Insured, zero cpn., | ||||
12/01/24 | 3,850,000 | 2,040,770 | ||
12/01/26 | 7,700,000 | 3,654,189 | ||
University of Illinois University Revenues, Auxiliary Facilities System, | ||||
Refunding, Series A, AMBAC Insured, 5.00%, 4/01/30 | 5,000,000 | 5,023,150 | ||
Refunding, Series B, NATL RE, FGIC Insured, 5.125%, 4/01/26 | 3,585,000 | 3,609,701 | ||
Series A, 5.75%, 4/01/38 | 7,000,000 | 7,761,880 | ||
Series B, FGIC Insured, Pre-Refunded, 5.125%, 4/01/26 | 8,415,000 | 8,582,711 | ||
Upper River Valley Development Authority Environmental Facilities Revenue, General Electric | ||||
Co. Project, 5.45%, 2/01/23 | 3,600,000 | 3,607,848 | ||
623,967,587 | ||||
Indiana 0.9% | ||||
Indiana Bond Bank Revenue, Special Program, Hendricks Regional Health, Series A, 5.50%, | ||||
2/01/29 | 9,000,000 | 9,926,280 | ||
Indiana Finance Authority Hospital Revenue, Deaconess Hospital Obligation, Series A, | ||||
6.75%, 3/01/39 | 9,750,000 | 10,871,640 | ||
Indiana Health and Educational Facility Financing Authority Hospital Revenue, 5.50%, | ||||
3/01/27 | 6,500,000 | 6,705,920 | ||
Indiana Health Facility Financing Authority Hospital Revenue, | ||||
Community Foundation Northwest Indiana, Refunding, Series A, 6.375%, 8/01/21 | 15,590,000 | 15,939,528 | ||
Community Foundation Northwest Indiana, Series A, Pre-Refunded, 6.375%, | ||||
8/01/21 | 1,910,000 | 2,011,402 | ||
Jackson County Schneck Memorial Hospital, Refunding, 5.25%, 2/15/22 | 1,200,000 | 1,203,204 | ||
Indiana Health Facility Financing Authority Revenue, Greenwood Village South Project, | ||||
Refunding, 5.625%, 5/15/28 | 1,750,000 | 1,515,430 | ||
Indiana Municipal Power Agency Power Supply System Revenue, Indiana Municipal Power | ||||
Agency, Series B, 6.00%, 1/01/39 | 4,000,000 | 4,326,280 | ||
Indiana State Finance Authority Environmental Revenue, Duke Energy Indiana, Refunding, | ||||
Series B, 6.00%, 8/01/39 | 10,000,000 | 11,134,900 | ||
Indiana Transportation Finance Authority Highway Revenue, Pre-Refunded, 5.375%, | ||||
12/01/25 | 15,000,000 | 15,059,700 | ||
Indianapolis Local Public Improvement Bond Bank Revenue, Pilot Infrastructure Project, | ||||
Series F, Assured Guaranty, 5.00%, 1/01/35 | 10,000,000 | 10,540,400 | ||
Jasper County EDR, Georgia-Pacific Corp. Project, | ||||
5.625%, 12/01/27 | 3,500,000 | 3,445,155 | ||
Refunding, 6.70%, 4/01/29 | 3,000,000 | 3,004,710 |
28 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Indiana (continued) | ||||
Jasper County PCR, Northern Indiana Public Service Co., Refunding, Series C, | ||||
NATL Insured, 5.60%, 11/01/16 | $ | 5,000,000 | $ | 5,540,550 |
Madison County Authority Anderson Hospital Revenue, Refunding, Series A, NATL Insured, | ||||
8.00%, 1/01/14 | 55,000 | 55,279 | ||
Petersburg PCR, Indianapolis Power and Light Co. Projects, Refunding, 5.75%, 8/01/21 | 5,000,000 | 5,159,150 | ||
University of Southern Indiana Revenue, Student Fee, Series J, Assured Guaranty, 5.75%, | ||||
10/01/28 | 2,000,000 | 2,258,520 | ||
108,698,048 | ||||
Kansas 0.7% | ||||
Burlington PCR, Kansas Gas and Electric Co. Project, Refunding, | ||||
Series A, NATL Insured, 5.30%, 6/01/31 | 18,000,000 | 18,422,460 | ||
Series B, NATL Insured, 4.85%, 6/01/31 | 19,325,000 | 19,578,544 | ||
Kansas State Development Finance Authority Health Facilities Revenue, Stormont-Vail | ||||
HealthCare Inc., Series L, NATL Insured, 5.125%, 11/15/36 | 3,750,000 | 3,801,862 | ||
Kansas State Development Finance Authority Hospital Revenue, | ||||
Adventist Health, Refunding, 5.75%, 11/15/38 | 6,250,000 | 6,947,062 | ||
Susan B. Allen Memorial Hospital, Series Z, Radian Insured, 5.25%, 12/15/23 | 2,000,000 | 2,003,320 | ||
Kansas State Development Finance Authority Revenue, Water Pollution Control, Revolving | ||||
Fund, | ||||
Refunding, Series II, 5.125%, 11/01/18 | 3,450,000 | 3,596,108 | ||
Series II, Pre-Refunded, 5.125%, 11/01/18 | 1,550,000 | 1,624,044 | ||
Overland Park Development Corp. Revenue, second tier, Convention, Refunding, Series B, | ||||
AMBAC Insured, 5.125%, 1/01/32 | 20,000,000 | 17,872,400 | ||
Wyandotte County Kansas City Unified Government Utility System Revenue, Series A, | ||||
BHAC Insured, 5.25%, 9/01/34 | 5,000,000 | 5,329,250 | ||
79,175,050 | ||||
Kentucky 1.2% | ||||
Carroll County Environmental Facilities Revenue, AMBAC Insured, 5.75%, 2/01/26 | 12,500,000 | 13,076,750 | ||
Jefferson County Capital Projects Corp. Lease Revenue, Refunding, Series A, zero cpn., | ||||
8/15/13 | 6,825,000 | 6,457,269 | ||
8/15/14 | 6,860,000 | 6,263,249 | ||
8/15/16 | 7,005,000 | 5,916,983 | ||
8/15/17 | 7,115,000 | 5,732,698 | ||
Kentucky Economic Development Finance Authority Health System Revenue, | ||||
Norton Healthcare Inc., | ||||
Refunding, Series B, NATL Insured, zero cpn., 10/01/18 | 8,585,000 | 5,817,454 | ||
Refunding, Series C, NATL Insured, 6.05%, 10/01/19 | 7,385,000 | 7,966,273 | ||
Refunding, Series C, NATL Insured, 6.10%, 10/01/21 | 6,050,000 | 6,497,881 | ||
Refunding, Series C, NATL Insured, 6.10%, 10/01/23 | 11,295,000 | 12,079,551 | ||
Series C, NATL Insured, Pre-Refunded, 6.05%, 10/01/19 | 3,695,000 | 4,290,486 | ||
Series C, NATL Insured, Pre-Refunded, 6.10%, 10/01/21 | 2,875,000 | 3,342,475 | ||
Series C, NATL Insured, Pre-Refunded, 6.10%, 10/01/23 | 5,650,000 | 6,568,690 | ||
Kentucky Economic Development Finance Authority Hospital System Revenue, Appalachian | ||||
Regional Health Center Facility, Refunding and Improvement, | ||||
5.80%, 10/01/12 | 1,000,000 | 1,003,080 | ||
5.85%, 10/01/17 | 5,615,000 | 5,536,446 |
Semiannual Report | 29
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Kentucky (continued) | ||||
Kentucky Economic Development Finance Authority Louisville Arena Project Revenue, | ||||
Louisville Arena, Sub Series A-1, Assured Guaranty, 6.00%, 12/01/38 | $ | 4,000,000 | $ | 4,317,560 |
Kentucky State Municipal Power Agency Power System Revenue, Prairie State Project, | ||||
Series A, NATL Insured, 5.00%, 9/01/32 | 10,000,000 | 10,302,800 | ||
Kentucky State Property and Buildings Commission Revenues, Project No. 90, Refunding, | ||||
5.50%, 11/01/28 | 15,000,000 | 16,645,650 | ||
Louisville and Jefferson County Metropolitan Government College Revenue, Bellarmine | ||||
University, Refunding and Improvement, Series A, 6.00%, 5/01/33 | 3,000,000 | 3,137,910 | ||
Louisville and Jefferson County Metropolitan Government Health Facilities Revenue, Jewish | ||||
Hospital and St. Mary’s HealthCare Inc. Project, Refunding, 6.125%, 2/01/37 | 11,500,000 | 12,313,165 | ||
Paducah Electric Plant Board Revenue, Series A, Assured Guaranty, 5.25%, 10/01/35 | 7,000,000 | 7,454,790 | ||
144,721,160 | ||||
Louisiana 2.7% | ||||
Calcasieu Parish Inc. IDB, PCR, Gulf States Utilities Co. Project, Refunding, 6.75%, | ||||
10/01/12 | 7,695,000 | 7,723,856 | ||
East Baton Rouge Parish Sewer Commission Revenue, Refunding, Series A, 5.25%, | ||||
2/01/39 | 6,000,000 | 6,426,180 | ||
Greater New Orleans Expressway Commission Revenue, Refunding, AMBAC Insured, 5.00%, | ||||
11/01/27 | 5,655,000 | 5,850,211 | ||
Jefferson Parish Home Mortgage Authority SFMR, Refunding, Series G-2, GNMA Secured, | ||||
5.55%, 6/01/32 | 670,000 | 675,842 | ||
Lafayette Communications Systems Revenue, XLCA Insured, 5.25%, 11/01/27 | 12,485,000 | 13,202,638 | ||
Lafayette Public Improvement Sales Tax GO, Series B, NATL Insured, 4.75%, 3/01/30 | 5,055,000 | 5,310,429 | ||
Louisiana Local Government Environmental Facilities and CDA Revenue, | ||||
Bossier City Public Improvement Projects, AMBAC Insured, 5.00%, 11/01/32 | 6,730,000 | 6,942,197 | ||
Jefferson Parking Garage Project, AMBAC Insured, 5.00%, 9/01/31 | 4,290,000 | 4,170,695 | ||
NATL Insured, 5.00%, 12/01/26 | 5,605,000 | 5,762,837 | ||
Louisiana Public Facilities Authority Hospital Revenue, Franciscan Missionaries of Our Lady | ||||
Health System Project, 6.75%, 7/01/39 | 10,000,000 | 11,061,600 | ||
Louisiana Public Facilities Authority Revenue, | ||||
Cleco Power Project, Mandatory Put 12/01/11, 7.00%, 12/01/38 | 10,000,000 | 10,571,200 | ||
Millennium Housing LLC Student Housing, CIFG Insured, 5.00%, 11/01/30 | 10,000,000 | 9,375,100 | ||
Ochsner Clinic Foundation Project, Series B, 5.25%, 5/15/38 | 10,260,000 | 9,940,504 | ||
Ochsner Clinic Foundation Project, Series B, 5.50%, 5/15/47 | 10,000,000 | 9,738,800 | ||
Ochsner Clinic Foundation Project, Series B, ETM, 5.75%, 5/15/23 | 10,000,000 | 12,855,100 | ||
Tulane University of Louisiana, Series A, AMBAC Insured, Pre-Refunded, 5.00%, | ||||
7/01/32 | 5,000,000 | 5,371,700 | ||
Louisiana State Gas and Fuels Tax Revenue, | ||||
second lien, Series B, 5.00%, 5/01/45 | 38,690,000 | 40,813,694 | ||
Series A, AGMC Insured, 5.00%, 5/01/35 | 31,040,000 | 31,944,816 | ||
Series A, AMBAC Insured, 5.00%, 6/01/27 | 19,250,000 | 19,742,607 | ||
Louisiana State GO, Refunding, 5.00%, 11/15/22 | 18,995,000 | 22,021,853 | ||
New Orleans GO, | ||||
Public Improvement, NATL Insured, 5.00%, 10/01/33 | 3,545,000 | 3,464,174 | ||
Radian Insured, 5.00%, 12/01/27 | 5,935,000 | 6,138,392 | ||
Radian Insured, 5.125%, 12/01/33 | 11,645,000 | 11,806,633 | ||
Pointe Coupee Parish PCR, Gulf States Utilities Co. Project, Refunding, 6.70%, 3/01/13 | 1,490,000 | 1,495,543 |
30 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Louisiana (continued) | ||||
Rapides Finance Authority Revenue, Cleco Power LLC Project, Mandatory Put 10/01/11, | ||||
6.00%, 10/01/38 | $ | 4,750,000 | $ | 4,931,593 |
St. Charles Parish Consolidated Waterworks and Wastewater District No. 1 Revenue, | ||||
Series A, AMBAC Insured, 5.00%, 7/01/36 | 6,230,000 | 6,303,452 | ||
St. John the Baptist Parish Revenue, Marathon Oil Corp. Project, Series A, 5.125%, | ||||
6/01/37 | 40,500,000 | 40,178,835 | ||
West Feliciana Parish PCR, Gulf States Utilities Co. Project, 7.00%, 11/01/15 | 1,350,000 | 1,350,000 | ||
315,170,481 | ||||
Maine 0.2% | ||||
Maine Educational Loan Authority Student Loan Revenue, A, Series A-3, Assured Guaranty, | ||||
5.875%, 12/01/39 | 17,715,000 | 19,564,446 | ||
Maine Health and Higher Educational Facilities Authority Revenue, Series A, NATL Insured, | ||||
5.00%, 7/01/32 | 6,045,000 | 6,188,146 | ||
25,752,592 | ||||
Maryland 0.8% | ||||
Baltimore Project Revenue, | ||||
Wastewater Projects, Series D, AMBAC Insured, 5.00%, 7/01/37 | 5,000,000 | 5,298,600 | ||
Water Projects, Series C, AMBAC Insured, 5.00%, 7/01/37 | 8,130,000 | 8,615,524 | ||
Maryland State EDC Student Housing Revenue, University of Maryland College Park Projects, | ||||
Refunding, CIFG Insured, 5.00%, 6/01/33 | 15,000,000 | 14,959,050 | ||
Maryland State EDC, PCR, Potomac Electric Project, Refunding, 6.20%, 9/01/22 | 5,000,000 | 5,931,900 | ||
Maryland State GO, State and Local Facilities Loan, Refunding, Third Series C, 5.00%, | ||||
11/01/19 | 17,420,000 | 21,174,532 | ||
Maryland State Health and Higher Educational Facilities Authority Revenue, | ||||
Anne Arundel Health System, Series A, 6.75%, 7/01/39 | 3,000,000 | 3,521,850 | ||
LifeBridge Health, Refunding, Assured Guaranty, 5.00%, 7/01/28 | 3,000,000 | 3,170,160 | ||
Upper Chesapeake Hospitals, Series C, 6.00%, 1/01/38 | 5,000,000 | 5,362,750 | ||
Western Maryland Health, Series A, NATL Insured, 5.00%, 7/01/34 | 19,345,000 | 19,495,504 | ||
87,529,870 | ||||
Massachusetts 3.4% | ||||
Massachusetts Bay Transportation Authority Revenue, Assessment, Refunding, Series A, | ||||
5.25%, 7/01/34 | 27,630,000 | 30,269,770 | ||
Massachusetts Bay Transportation Authority Sales Tax Revenue, Refunding, Senior Series A, | ||||
5.00%, 7/01/28 | 10,000,000 | 11,688,400 | ||
Massachusetts Educational Financing Authority Education Loan Revenue, | ||||
Series H, Assured Guaranty, 6.35%, 1/01/30 | 8,070,000 | 8,791,781 | ||
Series I, 6.00%, 1/01/28 | 20,000,000 | 21,768,400 | ||
Massachusetts State College Building Authority Project Revenue, Series B, 5.00%, | ||||
5/01/35 | 3,500,000 | 3,748,500 | ||
Massachusetts State Department of Transportation Metropolitan Highway System Revenue, | ||||
Senior, Refunding, Series B, 5.00%, 1/01/37 | 31,000,000 | 31,823,360 | ||
Massachusetts State Development Finance Agency Revenue, | ||||
Brandeis University, Refunding, Series O-1, 5.00%, 10/01/40 | 19,865,000 | 20,542,595 | ||
Massachusetts/Saltonstall Redevelopment Building Corp., Series A, NATL Insured, | ||||
5.125%, 8/01/28 | 6,735,000 | 6,779,249 | ||
Worcester Polytechnic Institute, Refunding, NATL Insured, 5.00%, 9/01/37 | 10,000,000 | 10,403,800 |
Semiannual Report | 31
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Massachusetts (continued) | ||||||
Massachusetts State GO, | ||||||
Consolidated Loan, Series C, AMBAC Insured, 5.00%, 8/01/37 | $ | 10,000,000 | $ | 10,615,800 | ||
NATL Insured, Pre-Refunded, 5.00%, 8/01/22 | 4,100,000 | 4,416,274 | ||||
Massachusetts State Health and Educational Facilities Authority Revenue, | ||||||
Berklee College of Music, Refunding, Series A, 5.00%, 10/01/37 | 10,000,000 | 10,281,800 | ||||
Berkshire Health System, Series E, 6.25%, 10/01/31 | 2,250,000 | 2,290,703 | ||||
Berkshire Health System, Series E, Radian Insured, 5.70%, 10/01/25 | 4,500,000 | 4,567,995 | ||||
CareGroup, Series E-1, 5.125%, 7/01/33 | 3,000,000 | 3,034,830 | ||||
CareGroup, Series E-1, 5.125%, 7/01/38 | 3,500,000 | 3,509,660 | ||||
Emmanuel College, NATL Insured, 5.00%, 7/01/37 | 10,000,000 | 10,016,200 | ||||
Harvard University, Refunding, Series A, 5.00%, 12/15/34 | 20,000,000 | 21,914,600 | ||||
Harvard University, Refunding, Series A, 5.50%, 11/15/36 | 51,450,000 | 58,601,035 | ||||
Harvard University, Series FF, Pre-Refunded, 5.00%, 7/15/22 | 13,550,000 | 14,604,867 | ||||
Northeastern University, Series A, 5.00%, 10/01/35 | 20,000,000 | 20,791,800 | ||||
Northeastern University, Series R, 5.00%, 10/01/33 | 6,830,000 | 7,096,370 | ||||
Springfield College, 5.50%, 10/15/31 | 1,710,000 | 1,806,410 | ||||
Springfield College, 5.625%, 10/15/40 | 7,000,000 | 7,317,520 | ||||
Massachusetts State HFA Housing Revenue, Series B, 7.00%, 12/01/38 | 10,000,000 | 10,967,200 | ||||
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, Series A, | ||||||
AGMC Insured, 5.00%, 8/15/30 | 15,000,000 | 15,982,350 | ||||
AMBAC Insured, 4.50%, 8/15/35 | 30,000,000 | 30,260,100 | ||||
Massachusetts State Water Pollution Abatement Trust Revenue, MWRA Program, Series A, | ||||||
5.00%, 8/01/32 | 225,000 | 230,229 | ||||
Pre-Refunded, 5.00%, 8/01/32 | 4,775,000 | 5,156,427 | ||||
Massachusetts State Water Pollution Abatement Trust Water Pollution Abatement Revenue, | ||||||
MWRA Program, Refunding, Sub Series A, 5.75%, 8/01/29 | 450,000 | 451,310 | ||||
389,729,335 | ||||||
Michigan 3.7% | ||||||
Anchor Bay School District GO, Refunding, 5.00%, 5/01/29 | 6,300,000 | 6,340,068 | ||||
Chippewa Valley School GO, Pre-Refunded, 5.125%, 5/01/27 | 5,310,000 | 5,680,160 | ||||
Detroit City School District GO, School Building and Site Improvement, | ||||||
Series A, AGMC Insured, Pre-Refunded, 5.125%, 5/01/31 | 14,925,000 | 15,919,005 | ||||
Series A, FGIC Insured, Pre-Refunded, 5.00%, 5/01/23 | 2,000,000 | 2,206,000 | ||||
Series B, FGIC Insured, 5.00%, 5/01/33 | 16,870,000 | 16,757,308 | ||||
Detroit GO, Distribution State Aid, 5.00%, 11/01/30 | 22,500,000 | 23,033,250 | ||||
Detroit Sewer Disposal System Revenue, | ||||||
second lien, Series A, NATL Insured, 5.00%, 7/01/30 | 5,470,000 | 5,471,860 | ||||
senior lien, Series A, FGIC Insured, Pre-Refunded, 5.125%, 7/01/31 | 10,000,000 | 10,314,300 | ||||
Detroit Water Supply System Revenue, | ||||||
second lien, Series B, AGMC Insured, 7.00%, 7/01/36 | 5,000,000 | 5,775,450 | ||||
second lien, Series B, FGIC Insured, Pre-Refunded, 5.50%, 7/01/33 | 5,000,000 | 5,212,550 | ||||
senior lien, Refunding, Series B, Assured Guaranty, 5.00%, 7/01/21 | 10,000,000 | 10,444,900 | ||||
senior lien, Refunding, Series D, AGMC Insured, 5.00%, 7/01/32 | 32,650,000 | 32,920,015 | ||||
senior lien, Series A, FGIC Insured, Pre-Refunded, 5.25%, 7/01/33 | 7,060,000 | 7,273,353 | ||||
senior lien, Series A, NATL RE, FGIC Insured, 5.00%, 7/01/30 | 17,575,000 | 17,696,795 | ||||
senior lien, Series A, NATL RE, FGIC Insured, Pre-Refunded, 5.25%, 7/01/33 | 6,170,000 | 6,364,849 | ||||
Detroit/Wayne County Stadium Authority Revenue, NATL RE, FGIC Insured, 5.25%, | ||||||
2/01/27 | 8,625,000 | 8,485,448 | ||||
32 | | | Semiannual Report |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Michigan (continued) | ||||
Grand Rapids Public Schools GO, School Building and Site, AGMC Insured, 4.50%, | ||||
5/01/31 | $ | 21,800,000 | $ | 22,455,744 |
Michigan State Building Authority Revenue, | ||||
Facilities Program, Refunding, Series I, 5.00%, 10/15/24 | 29,920,000 | 30,760,154 | ||
Facilities Program, Refunding, Series I, 6.25%, 10/15/38 | 15,000,000 | 16,983,900 | ||
Facilities Program, Series H, 5.125%, 10/15/33 | 12,500,000 | 13,088,750 | ||
Facilities Program, Series H, AGMC Insured, 5.00%, 10/15/26 | 5,000,000 | 5,400,300 | ||
Facilities Program, Series I, Pre-Refunded, 5.00%, 10/15/24 | 1,430,000 | 1,492,162 | ||
Refunding, Series IA, NATL RE, FGIC Insured, 5.00%, 10/15/31 | 9,475,000 | 9,794,592 | ||
Michigan State GO, Environmental Program, Refunding, Series A, | ||||
6.00%, 11/01/24 | 1,000,000 | 1,184,750 | ||
5.50%, 11/01/25 | 1,000,000 | 1,128,620 | ||
Michigan State HDA, SFMR, Series A, 5.00%, 12/01/19 | 10,000,000 | 10,519,400 | ||
Michigan State Hospital Finance Authority Revenue, Mid-Michigan Obligation Group, | ||||
Series A, | ||||
6.00%, 6/01/29 | 4,000,000 | 4,290,480 | ||
6.125%, 6/01/39 | 5,000,000 | 5,468,500 | ||
Michigan State Strategic Fund Limited Obligation Revenue, Detroit Education, Refunding, | ||||
5.625%, 7/01/20 | 7,000,000 | 7,945,770 | ||
Michigan State Strategic Fund Resources Recovery Limited Obligation Revenue, Detroit | ||||
Education Exempt Facilities, Refunding, Series D, XLCA Insured, 5.25%, 12/15/32 | 10,000,000 | 10,133,200 | ||
Michigan State Trunk Line Revenue, Series A, AGMC Insured, Pre-Refunded, 5.25%, | ||||
11/01/30 | 10,000,000 | 10,485,000 | ||
Michigan Tobacco Settlement Finance Authority Revenue, Tobacco Settlement Asset, | ||||
Senior Series A, 6.00%, 6/01/34 | 42,680,000 | 37,783,750 | ||
Royal Oak Hospital Finance Authority Hospital Revenue, William Beaumont Hospital, | ||||
Refunding, 8.25%, 9/01/39 | 20,000,000 | 24,165,800 | ||
Refunding, Series W, 6.375%, 8/01/29 | 10,000,000 | 10,758,000 | ||
Series M, NATL Insured, 5.25%, 11/15/31 | 10,000,000 | 9,812,600 | ||
Wayne State University Revenues, General, AMBAC Insured, 5.00%, 11/15/36 | 5,000,000 | 5,088,450 | ||
West Ottawa Public School District GO, Series A, 5.00%, 5/01/27 | 5,000,000 | 5,165,700 | ||
423,800,933 | ||||
Minnesota 0.7% | ||||
Cloquet PCR, Potlatch Corp. Projects, Refunding, 5.90%, 10/01/26 | 9,100,000 | 8,807,890 | ||
Golden Valley Revenue, Covenant Retirement Communities, Series A, 5.50%, 12/01/29 | 1,500,000 | 1,489,425 | ||
Minneapolis and St. Paul Metropolitan Airports Commission Airport Revenue, | ||||
Series A, FGIC Insured, Pre-Refunded, 5.25%, 1/01/32 | 32,025,000 | 32,284,082 | ||
Series C, FGIC Insured, Pre-Refunded, 5.25%, 1/01/26 | 19,000,000 | 19,152,190 | ||
Minneapolis Health Care System Revenue, Fairview Health Services, Series A, | ||||
6.625%, 11/15/28 | 11,000,000 | 12,537,140 | ||
6.75%, 11/15/32 | 6,250,000 | 7,107,875 | ||
Minnesota Agricultural and Economic Development Board Revenue, Health Care System, | ||||
Refunding, Series A, NATL Insured, 5.75%, 11/15/26 | 510,000 | 510,439 | ||
University of Minnesota Revenue, Series A, ETM, 5.75%, 7/01/13 | 1,250,000 | 1,409,750 | ||
83,298,791 |
Semiannual Report | 33
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Mississippi 0.8% | ||||
Claiborne County PCR, Systems Energy Resources Inc. Project, Refunding, 6.20%, | ||||
2/01/26 | $ | 36,500,000 | $ | 36,509,125 |
Mississippi Business Finance Corp. PCR, System Energy Resource Inc. Project, | ||||
Refunding, | ||||
5.875%, 4/01/22 | 40,000,000 | 40,145,200 | ||
5.90%, 5/01/22 | 8,250,000 | 8,279,040 | ||
Mississippi State GO, Refunding, 5.75%, 12/01/12 | 2,000,000 | 2,213,240 | ||
87,146,605 | ||||
Missouri 1.0% | ||||
Jackson County Special Obligation Revenue, NATL Insured, 5.00%, 12/01/22 | 9,095,000 | 9,404,685 | ||
Missouri Development Finance Board Cultural Facilities Revenue, Nelson Gallery Foundation, | ||||
Series A, NATL Insured, 5.00%, 12/01/30 | 11,500,000 | 11,663,530 | ||
Missouri Joint Municipal Electric Utility Commission Power Project Revenue, | ||||
Iatan 2 Project, Series A, AMBAC Insured, 5.00%, 1/01/34 | 14,000,000 | 14,221,620 | ||
Plum Point Project, NATL Insured, 5.00%, 1/01/34 | 13,000,000 | 12,788,880 | ||
Missouri State Board of Public Buildings Special Obligation Revenue, Series A, 4.75%, | ||||
10/15/28 | 8,250,000 | 8,583,465 | ||
Missouri State Health and Educational Facilities Authority Health Facilities Revenue, | ||||
St. Luke’s Health System, Series B, AGMC Insured, 5.50%, 11/15/35 | 15,000,000 | 15,805,200 | ||
Missouri State Health and Educational Facilities Authority Revenue, SSM Health Care, | ||||
Series A, AMBAC Insured, Pre-Refunded, 5.25%, 6/01/21 | 9,950,000 | 10,320,936 | ||
Series B, AMBAC Insured, Pre-Refunded, 5.25%, 6/01/21 | 7,550,000 | 7,840,448 | ||
St. Louis Airport Revenue, | ||||
Airport Development Program, Series A, NATL Insured, Pre-Refunded, 5.00%, | ||||
7/01/20 | 5,000,000 | 5,154,750 | ||
Airport Development Program, Series A, NATL Insured, Pre-Refunded, 5.00%, | ||||
7/01/21 | 7,250,000 | 7,474,388 | ||
Capital Improvement Program, Series A, NATL Insured, Pre-Refunded, 5.00%, | ||||
7/01/27 | 12,390,000 | 13,321,852 | ||
Taney County IDA Hospital Revenue, The Skaggs Community Hospital Assn., Refunding, | ||||
5.40%, 5/15/28 | 4,000,000 | 3,516,880 | ||
120,096,634 | ||||
Montana 0.3% | ||||
Forsyth PCR, Puget Sound Energy, Refunding, Series A, AMBAC Insured, 5.00%, | ||||
3/01/31 | 30,000,000 | 30,226,500 | ||
Nebraska 1.3% | ||||
Adams County School District No. 018 GO, Hastings Public Schools, AGMC Insured, | ||||
5.00%, 12/15/31 | 5,795,000 | 6,167,850 | ||
Lancaster County Correctional Facility Joint Public Agency GO, Building, 5.00%, | ||||
12/01/28 | 5,000,000 | 5,527,350 | ||
Lancaster County School District No. 001 GO, Lincoln Public Schools, 5.00%, 1/15/36 | 24,725,000 | 25,985,481 | ||
Lincoln Electric System Revenue, 5.00%, 9/01/31 | 8,645,000 | 9,164,737 | ||
Madison County Hospital Authority No. 001 Hospital Revenue, Faith Regional Health | ||||
Services Project, Series A-1, 6.00%, 7/01/33 | 12,000,000 | 12,605,400 | ||
Municipal Energy Agency of Nebraska Power Supply System Revenue, Refunding, Series A, | ||||
BHAC Insured, 5.375%, 4/01/39 | 5,000,000 | 5,479,300 |
34 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Nebraska (continued) | ||||
Omaha Convention Hotel Corp. Revenue, Convention Center, first tier, | ||||
Refunding, AMBAC Insured, 5.00%, 2/01/35 | $ | 30,000,000 | $ | 30,724,500 |
Series A, AMBAC Insured, Pre-Refunded, 5.125%, 4/01/26 | 12,500,000 | 13,322,875 | ||
Omaha Public Facilities Corp. Lease Revenue, Baseball Stadium Project, 5.00%, | ||||
6/01/36 | 9,000,000 | 9,547,110 | ||
Omaha Public Power District Separate Electricity Revenue, System, Nebraska City 2, | ||||
Series A, AMBAC Insured, 5.00%, 2/01/30 | 12,165,000 | 12,850,255 | ||
University of Nebraska Revenues, | ||||
Kearney Student Fees and Facilities, 5.00%, 7/01/30 | 5,000,000 | 5,346,250 | ||
Lincoln Student Fees and Facilities, Series A, 5.25%, 7/01/34 | 5,000,000 | 5,449,450 | ||
Omaha Student Facilities Project, 5.00%, 5/15/32 | 5,000,000 | 5,344,200 | ||
University of Nebraska Omaha Health and Recreation Project, 5.00%, 5/15/38 | 5,000,000 | 5,269,150 | ||
152,783,908 | ||||
Nevada 0.6% | ||||
Clark County Airport Revenue, sub. lien, | ||||
Series A-2, NATL RE, FGIC Insured, 5.125%, 7/01/27 | 10,000,000 | 10,289,800 | ||
Series B, FGIC Insured, Pre-Refunded, 5.25%, 7/01/31 | 20,000,000 | 20,652,000 | ||
Clark County School District GO, | ||||
Refunding, Series A, NATL RE, FGIC Insured, 5.00%, 6/15/24 | 15,000,000 | 16,403,850 | ||
Series C, AGMC Insured, 5.00%, 6/15/21 | 10,000,000 | 10,917,000 | ||
Nevada State GO, Municipal Bond Bank Project No. 40-41, Series A, ETM, 6.375%, | ||||
12/01/17 | 10,275,000 | 10,312,915 | ||
Washoe County GO, Reno Sparks Convention, Refunding, Series A, NATL RE, FGIC Insured, | ||||
5.00%, 7/01/24 | 5,000,000 | 5,080,600 | ||
73,656,165 | ||||
New Hampshire 0.3% | ||||
Nashua Housing Authority MFR, Clocktower Project, Refunding, GNMA Secured, 6.25%, | ||||
6/20/33 | 5,268,000 | 5,271,266 | ||
New Hampshire Health and Education Facilities Authority Revenue, | ||||
Exeter Project, 6.00%, 10/01/24 | 2,000,000 | 2,059,380 | ||
Exeter Project, 5.75%, 10/01/31 | 1,000,000 | 1,022,400 | ||
The Memorial Hospital, Refunding, 5.25%, 6/01/26 | 1,000,000 | 977,090 | ||
The Memorial Hospital, Refunding, 5.25%, 6/01/36 | 1,100,000 | 1,018,424 | ||
New Hampshire Higher Educational and Health Facilities Authority Revenue, New Hampshire | ||||
Catholic Charities, 5.80%, 8/01/22 | 1,050,000 | 1,050,137 | ||
New Hampshire Municipal Bond Bank Revenue, Series B, 5.00%, 8/15/39 | 11,250,000 | 12,030,525 | ||
New Hampshire State Business Finance Authority Revenue, Elliot Hospital Obligation Group, | ||||
Series A, 6.125%, 10/01/39 | 5,000,000 | 5,210,350 | ||
28,639,572 | ||||
New Jersey 3.1% | ||||
Health Care Facilities Financing Authority Revenue, Englewood Hospital, NATL Insured, | ||||
5.00%, 8/01/23 | 5,000,000 | 5,140,300 | ||
Hudson County Improvement Authority Solid Waste Systems Revenue, Refunding, | ||||
Series 1, 6.00%, 1/01/19 | 2,100,000 | 1,900,521 | ||
Series 1, 6.00%, 1/01/29 | 5,000,000 | 4,128,800 | ||
Series 2, 6.125%, 1/01/19 | 2,000,000 | 1,825,040 | ||
Series 2, 6.125%, 1/01/29 | 5,000,000 | 4,188,950 | ||
Semiannual Report | 35 |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
New Jersey (continued) | ||||
New Jersey EDA Lease Revenue, International Center for Public Health Project, University | ||||
of Medicine and Dentistry, AMBAC Insured, 6.00%, 6/01/32 | $ | 5,000,000 | $ | 5,003,500 |
New Jersey EDA Revenue, | ||||
Cigarette Tax, 5.75%, 6/15/29 | 20,000,000 | 19,901,400 | ||
Motor Vehicle Surcharge Revenue, Series A, NATL Insured, 5.00%, 7/01/29 | 10,000,000 | 10,333,500 | ||
Motor Vehicle Surcharge Revenue, Series A, NATL Insured, 5.00%, 7/01/34 | 5,000,000 | 5,058,150 | ||
School Facilities Construction, Series C, NATL Insured, 4.75%, 6/15/25 | 7,500,000 | 7,582,200 | ||
School Facilities Construction, Series O, 5.125%, 3/01/28 | 20,000,000 | 21,129,000 | ||
School Facilities Construction, Series U, 5.00%, 9/01/37 | 22,000,000 | 22,875,160 | ||
New Jersey Health Care Facilities Financing Authority State Contract Revenue, Hospital | ||||
Asset Transformation Program, Series A, 5.25%, 10/01/38 | 10,000,000 | 10,433,300 | ||
New Jersey State COP, Equipment Lease Purchase, Series A, 5.25%, | ||||
6/15/25 | 20,305,000 | 22,077,017 | ||
6/15/26 | 8,000,000 | 8,692,080 | ||
6/15/27 | 4,000,000 | 4,327,880 | ||
6/15/28 | 2,000,000 | 2,159,420 | ||
New Jersey State Housing and Mortgage Finance Agency Revenue, Series AA, 6.375%, | ||||
10/01/28 | 7,105,000 | 7,799,727 | ||
New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, | ||||
Series A, 6.00%, 12/15/38 | 60,000,000 | 68,916,600 | ||
Series A, AGMC Insured, 5.00%, 12/15/34 | 35,000,000 | 36,486,800 | ||
Series D, 5.25%, 12/15/23 | 50,000,000 | 56,328,500 | ||
New Jersey State Turnpike Authority Turnpike Revenue, | ||||
Growth and Income Securities, Series B, AMBAC Insured, zero cpn. to 1/01/15, | ||||
5.15% thereafter, 1/01/35 | 10,000,000 | 8,396,800 | ||
Series E, 5.25%, 1/01/40 | 13,925,000 | 15,055,571 | ||
Tobacco Settlement FICO Revenue, Asset-Backed, Pre-Refunded, 5.75%, 6/01/32 | 14,830,000 | 15,827,317 | ||
365,567,533 | ||||
New Mexico 0.1% | ||||
New Mexico Finance Authority Revenue, New Mexico Finance Authority, Series B, 5.50%, | ||||
6/01/39 | 11,000,000 | 11,013,200 | ||
New York 5.3% | ||||
Long Island Power Authority Electric System Revenue, General, Refunding, Series A, 6.00%, | ||||
5/01/33 | 12,500,000 | 14,295,125 | ||
MTA Commuter Facilities Revenue, Series A, Pre-Refunded, 5.25%, 7/01/28 | 5,000,000 | 5,165,350 | ||
MTA Dedicated Tax Fund Revenue, | ||||
Series A, NATL Insured, ETM, 6.25%, 4/01/11 | 1,280,000 | 1,311,808 | ||
Series A, NATL RE, FGIC Insured, Pre-Refunded, 5.00%, 11/15/31 | 14,250,000 | 14,941,980 | ||
Series B, 5.25%, 11/15/28 | 6,000,000 | 6,679,260 | ||
Series B, 5.25%, 11/15/29 | 4,000,000 | 4,443,160 | ||
Series B, 5.25%, 11/15/30 | 3,000,000 | 3,325,110 | ||
Series B, 5.00%, 11/15/34 | 5,000,000 | 5,321,250 | ||
MTA Revenue, | ||||
Refunding, Series E, 5.25%, 11/15/31 | 10,000,000 | 10,370,300 | ||
Refunding, Series U, 5.125%, 11/15/31 | 20,720,000 | 21,436,912 | ||
Series A, 5.00%, 11/15/37 | 25,000,000 | 25,624,750 | ||
Transportation, Series C, 6.50%, 11/15/28 | 15,000,000 | 17,769,600 |
36 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
New York (continued) | ||||
MTA Transit Facilities Revenue, Service Contract, Series 8, Pre-Refunded, 5.375%, | ||||
7/01/21 | $ | 15,000,000 | $ | 16,917,750 |
New York City GO, | ||||
Refunding, Series C, 5.00%, 8/01/23 | 24,620,000 | 27,676,081 | ||
Refunding, Series H, 6.125%, 8/01/25 | 5,000 | 5,017 | ||
Series D, 8.00%, 8/01/16 | 5,000 | 5,087 | ||
Series D, 5.50%, 6/01/24 | 16,405,000 | 17,099,096 | ||
Series D, Pre-Refunded, 5.50%, 6/01/24 | 7,535,000 | 8,138,780 | ||
Series E, 6.50%, 12/01/12 | 20,000 | 20,095 | ||
Series E, Sub Series E-1, 6.25%, 10/15/28 | 10,000,000 | 11,893,900 | ||
Series F, 5.25%, 1/15/23 | 10,200,000 | 10,866,468 | ||
Series F, Pre-Refunded, 5.25%, 1/15/23 | 9,800,000 | 10,812,634 | ||
New York City Municipal Water Finance Authority Water and Sewer System Revenue, | ||||
Refunding, Series D, 5.25%, 6/15/25 | 7,215,000 | 7,448,189 | ||
Refunding, Series D, 5.00%, 6/15/37 | 19,800,000 | 20,890,980 | ||
Refunding, Series FF-2, 5.50%, 6/15/40 | 15,000,000 | 16,729,800 | ||
Series A, 5.75%, 6/15/40 | 6,000,000 | 6,826,740 | ||
Series D, Pre-Refunded, 5.25%, 6/15/25 | 2,785,000 | 2,897,848 | ||
Series G, AGMC Insured, 5.125%, 6/15/32 | 24,215,000 | 24,708,986 | ||
New York City Transitional Finance Authority Building Aid Revenue, Fiscal 2009, | ||||
Series S-2, 6.00%, 7/15/38 | 20,000,000 | 23,143,400 | ||
Series S-3, 5.25%, 1/15/34 | 10,170,000 | 10,947,496 | ||
Series S-4, 5.50%, 1/15/34 | 12,890,000 | 14,478,692 | ||
New York City Transitional Finance Authority Revenue, Future Tax Secured, | ||||
Refunding, Series B, 5.00%, 5/01/30 | 7,200,000 | 7,476,408 | ||
Series B, Pre-Refunded, 5.00%, 5/01/30 | 300,000 | 317,169 | ||
Series D, 5.00%, 2/01/27 | 10,000,000 | 10,578,000 | ||
New York City Trust for Cultural Resources Revenue, Museum of Modern Art 2001, Series D, | ||||
AMBAC Insured, 5.125%, 7/01/31 | 8,000,000 | 8,201,120 | ||
New York Convention Center Development Corp. Revenue, Hotel Unit Fee Secured, | ||||
AMBAC Insured, 5.00%, 11/15/30 | 10,000,000 | 10,304,500 | ||
New York Liberty Development Corp. Liberty Revenue, Second Priority, Bank of America | ||||
Tower at One Bryant Park Project, Class 1, Refunding, 5.625%, 1/15/46 | 25,000,000 | 26,214,250 | ||
New York Liberty Development Corp. Revenue, | ||||
5.50%, 10/01/37 | 13,000,000 | 13,975,390 | ||
Goldman Sachs Headquarters, 5.25%, 10/01/35 | 25,000,000 | 25,956,250 | ||
New York State Dormitory Authority Revenues, | ||||
City University System Consolidated, Third General, Refunding, Series 1, 5.25%, | ||||
7/01/25 | 10,000,000 | 10,000,000 | ||
Non-State Supported Debt, Cornell University, Refunding, Series A, 5.00%, 7/01/40 | 25,000,000 | 26,861,250 | ||
State Supported Debt, Upstate Community Colleges, 6.00%, 7/01/31 | 23,215,000 | 26,143,804 | ||
State Supported Debt, Upstate Community Colleges, Refunding, Series A, 5.00%, | ||||
7/01/28 | 1,535,000 | 1,543,749 | ||
New York State HFAR, Housing Project Mortgage, Refunding, Series A, AGMC Insured, | ||||
6.10%, 11/01/15 | 370,000 | 370,818 | ||
6.125%, 11/01/20 | 305,000 | 305,543 | ||
New York State Urban Development Corp. Revenue, State Personal Income Tax, Series B-1, | ||||
5.00%, 3/15/36 | 5,000,000 | 5,312,100 |
Semiannual Report | 37
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
New York (continued) | ||||||
Onondaga County GO, 5.875%, 2/15/12 | $ | 300,000 | $ | 320,841 | ||
Sales Tax Asset Receivable Corp. Revenue, Series A, AMBAC Insured, 5.00%, 10/15/29 | 8,000,000 | 8,533,280 | ||||
Triborough Bridge and Tunnel Authority Revenues, | ||||||
General Purpose, 5.25%, 11/15/38 | 25,000,000 | 27,031,750 | ||||
General Purpose, Refunding, Series A, 5.00%, 1/01/27 | 5,000,000 | 5,157,150 | ||||
General Purpose, Series A, 5.00%, 1/01/32 | 3,085,000 | 3,169,745 | ||||
General Purpose, Series B, Pre-Refunded, 5.50%, 1/01/30 | 15,000,000 | 19,154,850 | ||||
General Purpose, Series X, ETM, 6.625%, 1/01/12 | 1,800,000 | 1,873,170 | ||||
General Purpose, Series Y, ETM, 6.00%, 1/01/12 | 500,000 | 518,905 | ||||
General, Series A-2, 5.25%, 11/15/34 | 7,500,000 | 8,170,875 | ||||
609,682,561 | ||||||
North Carolina 2.1% | ||||||
Charlotte Airport Revenue, Series A, NATL Insured, 5.00%, 7/01/34 | 6,000,000 | 6,089,760 | ||||
Charlotte COP, | ||||||
Refunding, Series C, 5.00%, 6/01/34 | 13,000,000 | 13,723,060 | ||||
Transit Projects, Phase II, Series E, 5.00%, 6/01/30 | 15,940,000 | 16,620,638 | ||||
North Carolina Eastern Municipal Power Agency Power System Revenue, | ||||||
Refunding, Series B, 6.00%, 1/01/22 | 1,250,000 | 1,564,238 | ||||
Refunding, Series B, 6.25%, 1/01/23 | 39,030,000 | 50,077,051 | ||||
Refunding, Series D, 5.125%, 1/01/23 | 12,000,000 | 12,429,840 | ||||
Refunding, Series D, 5.125%, 1/01/26 | 3,000,000 | 3,108,090 | ||||
Series A, 5.50%, 1/01/26 | 4,500,000 | 5,092,920 | ||||
North Carolina Medical Care Commission Revenue, Rowan Regional Medical Center, | ||||||
AGMC Insured, 4.75%, 9/01/24 | 6,970,000 | 7,168,436 | ||||
North Carolina State Capital Improvement Limited Obligation Revenue, 5.00%, | ||||||
5/01/22 | 5,000,000 | 5,704,700 | ||||
5/01/24 | 5,500,000 | 6,192,065 | ||||
5/01/25 | 5,750,000 | 6,437,298 | ||||
5/01/27 | 4,500,000 | 4,985,325 | ||||
5/01/28 | 4,250,000 | 4,682,140 | ||||
North Carolina Turnpike Authority Triangle Expressway System Revenue, | ||||||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/33 | 25,000,000 | 7,495,500 | ||||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/34 | 15,000,000 | 4,249,800 | ||||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/35 | 15,215,000 | 3,996,828 | ||||
Series A, Assured Guaranty, 5.50%, 1/01/29 | 6,750,000 | 7,331,175 | ||||
Series A, Assured Guaranty, 5.75%, 1/01/39 | 10,380,000 | 11,103,694 | ||||
Wake County GO, Refunding, Series C, 5.00%, | ||||||
3/01/24 | 18,125,000 | 22,082,412 | ||||
3/01/25 | 21,780,000 | 26,594,033 | ||||
Winston-Salem Water and Sewer System Revenue, Pre-Refunded, 5.125%, 6/01/28 | 11,000,000 | 11,415,250 | ||||
238,144,253 | ||||||
North Dakota 0.3% | ||||||
Grand Forks Health Care System Revenue, Altru Health System Obligation Group, | ||||||
Assured Guaranty, 5.00%, 12/01/26 | 8,385,000 | 8,686,021 | ||||
Refunding, 5.50%, 12/01/20 | 8,870,000 | 9,067,624 | ||||
Refunding, 5.50%, 12/01/24 | 13,945,000 | 14,041,778 | ||||
31,795,423 | ||||||
38 | | | Semiannual Report |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | ||||
Municipal Bonds (continued) | |||||
Ohio 2.7% | |||||
Akron Bath Copley Joint Township Hospital District Revenue, Hospital Improvement | |||||
Children’s Hospital Center, AGMC Insured, 5.00%, 11/15/31 | $ | 9,250,000 | $ | 9,344,165 | |
Akron Income Tax Revenue, Community Learning Centers, NATL RE, FGIC Insured, 5.00%, | |||||
12/01/26 | 6,085,000 | 6,372,516 | |||
12/01/27 | 3,185,000 | 3,326,955 | |||
American Municipal Power-Ohio Inc. Revenue, Prairie State Energy Campus Project, | |||||
Refunding, Series A, 5.00%, 2/15/38 | 22,500,000 | 23,232,825 | |||
Bowling Green Student Housing Revenue, CFP I LLC, State University Project, 6.00%, | |||||
6/01/45 | 6,750,000 | 6,882,570 | |||
Buckeye Tobacco Settlement Financing Authority Revenue, Asset-Backed, | |||||
Senior Capital Appreciation Turbo Term Bond, Series A-3, zero cpn. to 12/01/12, | |||||
6.25% thereafter, 6/01/37 | 15,000,000 | 10,446,600 | |||
Senior Current Interest Turbo Term Bond, Series A-2, 5.875%, 6/01/30 | 17,500,000 | 14,698,425 | |||
Senior Current Interest Turbo Term Bond, Series A-2, 5.75%, 6/01/34 | 11,250,000 | 8,982,450 | |||
Senior Current Interest Turbo Term Bond, Series A-2, 6.00%, 6/01/42 | 5,000,000 | 3,948,750 | |||
Cleveland Airport System Revenue, Series A, AGMC Insured, 5.00%, 1/01/31 | 17,930,000 | 17,971,060 | |||
Cleveland State University General Receipt Revenue, NATL RE, FGIC Insured, 5.00%, | |||||
6/01/29 | 5,000,000 | 5,159,950 | |||
Columbus City School District GO, School Facilities Construction and Improvement, | |||||
FGIC Insured, Pre-Refunded, 5.00%, 12/01/28 | 16,000,000 | 17,784,960 | |||
Cuyahoga County Hospital Facilities Revenue, Canton Inc. Project, 7.50%, 1/01/30 | 17,100,000 | 17,322,813 | |||
Hamilton County Sales Tax Revenue, | |||||
Refunding, Series B, AMBAC Insured, 5.25%, 12/01/32 | 1,995,000 | 2,000,985 | |||
Series B, AMBAC Insured, Pre-Refunded, 5.25%, 12/01/32 | 8,005,000 | 8,036,059 | |||
Kettering City School District GO, School Improvement, FGIC Insured, Pre-Refunded, 5.00%, | |||||
12/01/30 | 1,860,000 | 2,104,311 | |||
Little Miami Local School District GO, School Improvement, AGMC Insured, Pre-Refunded, | |||||
5.00%, 12/01/34 | 4,000,000 | 4,812,880 | |||
Maple Heights City School District GO, School Facilities Improvement, 5.00%, 1/15/37 | 29,370,000 | 30,444,355 | |||
Marysville Wastewater Treatment System Revenue, Refunding, XLCA Insured, 5.00%, | |||||
12/01/31 | 8,000,000 | 8,150,720 | |||
12/01/36 | 13,725,000 | 13,795,821 | |||
Nordonia Hills Local School District GO, School Improvement, AMBAC Insured, | |||||
Pre-Refunded, | |||||
5.375%, 12/01/20 | 4,275,000 | 4,334,765 | |||
5.45%, 12/01/25 | 3,000,000 | 3,042,120 | |||
Ohio State Air Quality Development Authority Revenue, Pollution Control, FirstEnergy | |||||
Solutions Corp., Refunding, Series C, 5.625%, 6/01/18 | 8,500,000 | 9,441,885 | |||
Ohio State GO, Series A, 5.375%, 9/01/28 | 10,000,000 | 11,167,900 | |||
Ohio State Water Development Authority Pollution Control Facilities Revenue, FirstEnergy | |||||
Solutions Corp., Mandatory Put 6/01/16, Refunding, Series A, 5.875%, 6/01/33 | 13,000,000 | 14,475,110 | |||
Pickerington Local School District GO, School Facilities Construction and Improvement, | |||||
FGIC Insured, Pre-Refunded, 5.00%, 12/01/28 | 15,000,000 | 15,746,250 | |||
Scioto County Hospital Revenue, Southern Ohio Medical Center, Refunding, 5.75%, | |||||
2/15/38 | 17,000,000 | 17,737,290 | |||
Springboro Community City School District GO, School Improvement, NATL Insured, | |||||
Pre | -Refunded, 5.00%, 12/01/27 | 10,350,000 | 11,836,777 |
Semiannual Report | 39
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | ||||
Municipal Bonds (continued) | |||||
Ohio (continued) | |||||
University of Cincinnati COP, Jefferson Avenue Residence Hall, NATL Insured, 5.125%, | |||||
6/01/28 | $ | 4,000,000 | $ | 4,001,800 | |
University of Cincinnati General Receipts Revenue, Series A, FGIC Insured, Pre-Refunded, | |||||
5.25%, 6/01/24 | 5,000,000 | 5,192,350 | |||
311,795,417 | |||||
Oregon 1.1% | |||||
Lane County School District No. 19 Springfield GO, Refunding, NATL RE, FGIC Insured, | |||||
6.00%, 10/15/13 | 1,250,000 | 1,419,088 | |||
Oregon Health and Science University Revenue, Series A, | |||||
5.75%, 7/01/39 | 5,000,000 | 5,480,300 | |||
NATL Insured, 5.00%, 7/01/26 | 10,500,000 | 10,597,755 | |||
Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Series A, | |||||
4.50%, 11/15/32 | 30,000,000 | 30,966,900 | |||
Oregon State EDR, Georgia-Pacific Corp. Project, | |||||
Refunding, Series 183, 5.70%, 12/01/25 | 3,500,000 | 3,406,725 | |||
Series CLVII, 6.35%, 8/01/25 | 5,500,000 | 5,500,880 | |||
Oregon State GO, State Board of Higher Education, Series A, | |||||
5.00%, 8/01/26 | 6,630,000 | 7,108,885 | |||
5.00%, 8/01/27 | 6,955,000 | 7,432,113 | |||
Pre | -Refunded, 5.00%, 8/01/26 | 12,000,000 | 12,418,080 | ||
Port of Portland International Airport Revenue, Series Nineteen, 5.50%, 7/01/38 | 25,000,000 | 27,023,750 | |||
Portland Sewer System Revenue, second lien, Series A, 5.00%, 3/01/35 | 11,540,000 | 12,365,456 | |||
123,719,932 | |||||
Pennsylvania 3.4% | |||||
Allegheny County Hospital Development Authority Revenue, Health System, Series A, | |||||
NATL Insured, Pre-Refunded, 6.50%, 11/15/30 | 10,000,000 | 10,220,800 | |||
Allegheny County Port Authority Special Revenue, Transportation, Refunding, NATL RE, | |||||
FGIC Insured, 5.00%, 3/01/29 | 10,000,000 | 10,118,500 | |||
Centennial School District Bucks County GO, Series B, AGMC Insured, 5.25%, 12/15/37 | 13,655,000 | 14,690,185 | |||
Coatesville School District GO, AGMC Insured, 5.00%, 8/01/24 | 6,420,000 | 6,981,686 | |||
Delaware Valley Regional Finance Authority Local Government Revenue, Series B, | |||||
AMBAC Insured, 5.60%, 7/01/17 | 5,000,000 | 5,618,800 | |||
Erie County Hospital Authority Revenue, Hamot Health Foundation, CIFG Insured, 5.00%, | |||||
11/01/37 | 5,000,000 | 4,670,450 | |||
Erie Water Authority Water Revenue, Series A, NATL Insured, Pre-Refunded, 5.20%, | |||||
12/01/30 | 18,700,000 | 19,649,773 | |||
Montgomery County IDA Retirement Community Revenue, ACTS Retirement-Life | |||||
Communities Inc. Obligated Group, 5.25%, 11/15/28 | 2,500,000 | 2,499,775 | |||
Northampton County General Purpose Authority Hospital Revenue, St. Luke’s Hospital | |||||
Project, Series A, 5.375%, 8/15/28 | 5,000,000 | 5,148,500 | |||
Northampton County General Purpose Authority Revenue, County Agreement, AGMC Insured, | |||||
5.25%, 10/01/30 | 12,150,000 | 12,658,356 | |||
Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue, | |||||
Allegheny Energy Supply Co. LLC Project, 7.00%, 7/15/39 | 20,000,000 | 22,551,400 | |||
a Pennsylvania Economic Development Financing Authority Water Facilities Revenue, | |||||
Aqua Inc. Project, Series B, 5.00%, 12/01/43 | 20,000,000 | 20,638,600 |
40 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Pennsylvania (continued) | ||||||
Pennsylvania Economic Development Financing Authority Water Facility Revenue, | ||||||
American Water Co. Project, 6.20%, 4/01/39 | $ | 12,500,000 | $ | 13,853,750 | ||
Pennsylvania State Higher Educational Facilities Authority Revenue, Temple University, | ||||||
Refunding, NATL Insured, 5.00%, 4/01/33 | 14,225,000 | 14,875,225 | ||||
Pennsylvania State Turnpike Commission Revenue, AMBAC Insured, Pre-Refunded, 5.00%, | ||||||
7/15/31 | 5,850,000 | 6,100,029 | ||||
Pennsylvania State Turnpike Commission Turnpike Revenue, | ||||||
5.00%, 12/01/38 | 20,000,000 | 20,919,800 | ||||
Capital Appreciation, Series C, AGMC Insured, zero cpn. to 6/01/16, 6.25% thereafter, | ||||||
6/01/33 | 5,000,000 | 4,064,750 | ||||
Refunding, Series C, Sub Series C-1, Assured Guaranty, 6.00%, 6/01/28 | 5,000,000 | 5,735,950 | ||||
Refunding, Series C, Sub Series C-1, Assured Guaranty, 6.25%, 6/01/38 | 15,000,000 | 17,050,500 | ||||
Series B, 5.75%, 6/01/39 | 20,000,000 | 21,702,800 | ||||
Philadelphia Authority for Industrial Development Lease Revenue, Series B, AGMC Insured, | ||||||
Pre | -Refunded, 5.25%, 10/01/30 | 15,630,000 | 16,487,774 | |||
Philadelphia Gas Works Revenue, | ||||||
Fifth Series A-1, AGMC Insured, 5.00%, 9/01/29 | 5,000,000 | 5,143,350 | ||||
Refunding, First Series A, AGMC Insured, 5.00%, 7/01/26 | 5,000,000 | 5,005,150 | ||||
Philadelphia GO, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/24 | 11,000,000 | 11,762,410 | ||||
Philadelphia Hospitals and Higher Educational Facilities Authority Revenue, Mortgage, | ||||||
North Philadelphia Health Systems, Refunding, Series A, FHA Insured, | ||||||
5.30%, 1/01/18 | 2,175,000 | 2,180,851 | ||||
5.35%, 1/01/23 | 5,690,000 | 5,705,534 | ||||
5.375%, 1/01/28 | 3,700,000 | 3,709,990 | ||||
Philadelphia Municipal Authority Revenue, Lease, 6.375%, 4/01/29 | 4,500,000 | 4,891,410 | ||||
Philadelphia RDAR, Neighborhood Transformation, Series C, NATL RE, FGIC Insured, | ||||||
5.00 | %, | |||||
4/15/29 | 10,965,000 | 11,016,755 | ||||
4/15/30 | 12,000,000 | 12,018,600 | ||||
Philadelphia School District GO, | ||||||
Series A, AGMC Insured, Pre-Refunded, 5.75%, 2/01/30 | 14,050,000 | 14,237,989 | ||||
Series E, 6.00%, 9/01/38 | 25,000,000 | 27,484,000 | ||||
Philadelphia Water and Wastewater Revenue, Series A, | ||||||
5.25%, 1/01/25 | 1,000,000 | 1,089,160 | ||||
5.00%, 1/01/26 | 5,000,000 | 5,294,950 | ||||
5.00%, 1/01/27 | 1,750,000 | 1,843,310 | ||||
5.25%, 1/01/32 | 5,000,000 | 5,267,450 | ||||
NATL RE, FGIC Insured, 5.00%, 11/01/31 | 8,995,000 | 9,132,983 | ||||
Pittsburgh and Allegheny County Sports and Exhibition Authority Hotel Room Regional | ||||||
Enterprise Tower Revenue, Refunding, Assured Guaranty, 5.00%, 2/01/35 | 18,000,000 | 18,431,100 | ||||
400,452,395 | ||||||
Rhode Island 1.1% | ||||||
Narragansett Bay Commission Wastewater System Revenue, Series A, NATL Insured, 5.00%, | ||||||
8/01/30 | 7,990,000 | 8,296,656 | ||||
Rhode Island Convention Center Authority Revenue, Refunding, Series A, Assured Guaranty, | ||||||
5.50%, 5/15/27 | 17,300,000 | 19,252,824 |
Semiannual Report | 41
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Rhode Island (continued) | ||||||
Rhode Island Housing and Mortgage Finance Corp. Revenue, Homeownership Opportunity, | ||||||
Refunding, Series 15-A, 6.85%, 10/01/24 | $ | 620,000 | $ | 620,143 | ||
Refunding, Series 25-A, 4.95%, 10/01/16 | 85,000 | 85,092 | ||||
Series 10-A, 6.50%, 10/01/22 | 475,000 | 475,380 | ||||
Series 10-A, 6.50%, 4/01/27 | 265,000 | 265,233 | ||||
Rhode Island State EDC Airport Revenue, Series B, NATL Insured, 5.00%, | ||||||
7/01/27 | 12,280,000 | 12,675,539 | ||||
7/01/30 | 14,965,000 | 15,313,535 | ||||
Rhode Island State Health and Educational Building Corp. Higher Education Facility Revenue, | ||||||
Brown University Rhode Island, Refunding, Series A, 5.00%, 9/01/39 | 9,695,000 | 10,276,312 | ||||
New England Institute of Technology, Series A, 5.125%, 3/01/40 | 16,435,000 | 16,720,312 | ||||
Rhode Island State Health and Educational Building Corp. Revenue, | ||||||
Higher Education Facility, University of Rhode Island, Refunding, Series A, | ||||||
AMBAC Insured, 5.00%, 9/15/30 | 10,000,000 | 10,303,900 | ||||
Hospital Financing, Lifespan Obligated Group, 6.375%, 8/15/21 | 925,000 | 958,022 | ||||
Hospital Financing, Lifespan Obligated Group, Pre-Refunded, 6.375%, 8/15/21 | 6,075,000 | 6,562,033 | ||||
Hospital Financing, Lifespan Obligated Group, Refunding, Series A, AGMC Insured, | ||||||
5.00%, 5/15/26 | 5,000,000 | 5,251,000 | ||||
Hospital Financing, Lifespan Obligated Group, Refunding, Series A, AGMC Insured, | ||||||
5.00%, 5/15/32 | 14,440,000 | 14,719,125 | ||||
Hospital Financing, Lifespan Obligated Group, Series A, 7.00%, 5/15/39 | 8,200,000 | 9,395,150 | ||||
131,170,256 | ||||||
South Carolina 2.0% | ||||||
Anderson County School District No. 5 GO, 5.00%, 2/01/36 | 11,415,000 | 12,171,015 | ||||
Charleston Educational Excellence Finance Corp. Revenue, Charleston County School | ||||||
District, 5.25%, 12/01/30 | 8,000,000 | 8,561,360 | ||||
Columbia Waterworks and Sewer System Revenue, 5.00%, 2/01/40 | 10,000,000 | 10,694,000 | ||||
Dorchester County Waterworks and Sewer System Revenue, Refunding, NATL Insured, | ||||||
5.00%, 10/01/28 | 8,000,000 | 8,246,320 | ||||
Greenville County School District Installment Purchase Revenue, Building Equity Sooner | ||||||
Tomorrow, Refunding, 5.00%, 12/01/28 | 7,500,000 | 7,988,325 | ||||
Greenwood Fifty School Facilities Inc. Installment Purchase Revenue, Greenwood School | ||||||
District 50, Refunding, Assured Guaranty, 4.50%, 12/01/32 | 7,030,000 | 7,029,789 | ||||
Lancaster Educational Assistance Program Inc. Revenue, School District of Lancaster County | ||||||
Project, 5.00%, 12/01/26 | 12,300,000 | 12,711,435 | ||||
Medical University of South Carolina Hospital Authority Hospital Facilities Revenue, | ||||||
Mortgage, Refunding, Series A, NATL Insured, 5.00%, 8/15/31 | 12,720,000 | 13,000,222 | ||||
Newberry Investing in Children’s Education Installment Revenue, Newberry County School | ||||||
District Project, 5.00%, 12/01/30 | 4,000,000 | 4,040,920 | ||||
Piedmont Municipal Power Agency Electric Revenue, Series A-2, 5.00%, 1/01/24 | 10,000,000 | 10,962,300 | ||||
Scago Educational Facilities Corp. for Beaufort School District Revenue, Beaufort School | ||||||
District, AGMC Insured, 5.00%, 12/01/31 | 5,340,000 | 5,643,152 | ||||
Scago Educational Facilities Corp. for Chesterfield School District Revenue, School Project, | ||||||
Assured Guaranty, 5.00%, 12/01/29 | 7,500,000 | 7,880,250 | ||||
Scago Educational Facilities Corp. for Colleton School District Revenue, School Project, | ||||||
Assured Guaranty, 5.00%, | ||||||
12/01/25 | 3,340,000 | 3,524,067 | ||||
12/01/26 | 4,000,000 | 4,205,000 | ||||
42 | | | Semiannual Report |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
South Carolina (continued) | ||||
Scago Educational Facilities Corp. for Pickens School District Revenue, Pickens County | ||||
Project, AGMC Insured, 5.00%, | ||||
12/01/25 | $ | 18,900,000 | $ | 20,046,285 |
12/01/31 | 10,000,000 | 10,419,400 | ||
South Carolina Jobs EDA Hospital Facilities Revenue, Palmetto Health, Refunding, Series A, | ||||
AGMC Insured, 5.00%, 8/01/35 | 20,000,000 | 20,264,200 | ||
South Carolina Jobs EDA Hospital Revenue, | ||||
Anmed Health, Refunding and Improvement, Series B, Assured Guaranty, 5.375%, | ||||
2/01/29 | 4,000,000 | 4,307,080 | ||
Palmetto Health, Refunding and Improvement, 5.75%, 8/01/39 | 3,000,000 | 3,067,950 | ||
South Carolina Public Service Authority Revenue, Series B, AGMC Insured, Pre-Refunded, | ||||
5.25%, 1/01/33 | 31,835,000 | 33,644,820 | ||
South Carolina State Public Service Authority Revenue, Refunding, | ||||
Series A, 5.50%, 1/01/38 | 7,500,000 | 8,221,650 | ||
Series B, 5.25%, 1/01/34 | 6,000,000 | 6,539,340 | ||
Sumter Two School Facilities Inc. Installment Purchase Revenue, Sumter County School | ||||
District 2, Refunding, Assured Guaranty, 4.50%, 12/01/32 | 6,000,000 | 5,974,860 | ||
229,143,740 | ||||
South Dakota 0.3% | ||||
South Dakota Health and Educational Facilities Authority Revenue, | ||||
Avera Health Issue, AMBAC Insured, 5.25%, 7/01/22 | 15,425,000 | 15,847,799 | ||
Avera Health Issue, Series B, 5.50%, 7/01/35 | 3,000,000 | 3,140,910 | ||
Avera Health Issue, Series B, 5.25%, 7/01/38 | 5,000,000 | 5,132,800 | ||
Sanford Health, 5.00%, 11/01/27 | 2,355,000 | 2,402,053 | ||
Sanford Health, 5.00%, 11/01/40 | 12,945,000 | 12,949,272 | ||
39,472,834 | ||||
Tennessee 0.2% | ||||
Knox County Health Educational and Housing Facilities Board Hospital Facilities Revenue, | ||||
Series A, AGMC Insured, Pre-Refunded, 5.00%, 1/01/22 | 2,740,000 | 2,997,204 | ||
Knox County Health Educational and Housing Facilities Board Revenue, University Health | ||||
System Inc., Refunding, 5.25%, 4/01/27 | 17,500,000 | 17,765,475 | ||
Tennessee HDA Revenue, Homeownership Program, Refunding, Series 1D, 4.70%, | ||||
7/01/15 | 190,000 | 191,543 | ||
20,954,222 | ||||
Texas 8.2% | ||||
Allen ISD, GO, School Building, Series A, 5.00%, 2/15/39 | 12,575,000 | 13,164,264 | ||
Austin Community College District Public Facility Corp. Revenue, Educational Facility | ||||
Project, Round Rock Campus, 5.25%, 8/01/33 | 8,675,000 | 9,253,622 | ||
Austin Electric Utility System Revenue, Refunding, NATL Insured, 5.00%, 11/15/28 | 10,000,000 | 10,277,300 | ||
Austin ISD, GO, Refunding, 5.00%, 8/01/33 | 10,000,000 | 10,680,300 | ||
Austin Water and Wastewater System Revenue, Refunding, Series A, 5.00%, 11/15/39 | 16,400,000 | 17,281,664 | ||
Bexar County GO, Certificates of Obligation, Combined Flood Control Tax, AGMC Insured, | ||||
5.00%, 6/15/37 | 20,000,000 | 20,945,000 | ||
Bexar County HFC, MFHR, American Opportunity Housing, Series A, NATL Insured, 5.80%, | ||||
1/01/31 | 6,000,000 | 5,562,900 | ||
Bexar County Hospital District GO, Certificates of Obligation, 5.00%, 2/15/38 | 10,000,000 | 10,484,100 |
Semiannual Report | 43
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | ||||
Municipal Bonds (continued) | |||||
Texas (continued) | |||||
Bridge City ISD, GO, PSF Guarantee, Pre-Refunded, 5.375%, 2/15/32 | $ | 1,930,000 | $ | 1,958,159 | |
Carrollton GO, Improvement, AGMC Insured, Pre-Refunded, 5.25%, 8/15/19 | 1,000,000 | 1,039,020 | |||
Crowley ISD, GO, School Building, PSF Guarantee, 5.00%, 8/01/36 | 13,900,000 | 14,893,572 | |||
Dallas Civic Center Revenue, Refunding and Improvement, Assured Guaranty, 5.25%, | |||||
8/15/34 | 18,975,000 | 19,800,792 | |||
Dallas County Utility and Reclamation District GO, Refunding, Series A, AMBAC Insured, | |||||
5.375%, 2/15/29 | 28,325,000 | 28,767,436 | |||
Dallas ISD, GO, | |||||
PSF Guarantee, Pre-Refunded, 5.25%, 2/15/20 | 1,695,000 | 1,801,480 | |||
Refunding, PSF Guarantee, 5.25%, 2/15/20 | 305,000 | 321,080 | |||
Dallas Waterworks and Sewer System Revenue, Refunding, 5.00%, 10/01/35 | 10,000,000 | 10,802,800 | |||
Dallas-Fort Worth International Airport Revenue, | |||||
a Joint Improvement, Series A, 5.00%, 11/01/42 | 25,000,000 | 25,117,000 | |||
Refunding and Improvement, Series A, NATL RE, FGIC Insured, 5.625%, 11/01/26 | 85,000,000 | 86,026,800 | |||
Denton ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/38 | 15,710,000 | 16,577,035 | |||
Duncanville ISD, GO, Series B, PSF Guarantee, Pre-Refunded, 5.25%, 2/15/32 | 9,850,000 | 10,435,878 | |||
Forney ISD, GO, School Building, Series A, PSF Guarantee, 6.00%, 8/15/37 | 2,000,000 | 2,295,380 | |||
Gulf Coast Waste Disposal Authority Environmental Improvement Revenue, USX Corp. | |||||
Projects, Refunding, 5.50%, 9/01/17 | 3,250,000 | 3,259,360 | |||
Gulf Coast Waste Disposal Authority Revenue, Valero Energy Corp. Project, 5.70%, | |||||
4/01/32 | 3,000,000 | 2,974,200 | |||
Harris County Flood Control District GO, Contract Tax, Refunding, Series A, 5.00%, | |||||
10/01/39 | 15,000,000 | 16,052,100 | |||
Harris County Health Facilities Development Corp. Hospital Revenue, Memorial Hermann | |||||
Healthcare System, Refunding, Series B, 7.25%, 12/01/35 | 13,500,000 | 15,565,500 | |||
Harris County Hospital District Revenue, senior lien, Refunding, Series A, NATL Insured, | |||||
5.125%, 2/15/32 | 10,215,000 | 10,287,833 | |||
Harris County MTA Revenue, Contractual Obligations, Series B, 5.00%, 11/01/33 | 10,000,000 | 10,648,100 | |||
Harris County Revenue, Series C, 5.00%, 8/15/33 | 6,000,000 | 6,335,640 | |||
Hays Consolidated ISD, GO, Capital Appreciation, PSF Guarantee, Pre-Refunded, zero cpn., | |||||
8/15/19 | 5,285,000 | 3,293,083 | |||
8/15/21 | 8,420,000 | 4,629,905 | |||
8/15/22 | 8,470,000 | 4,379,329 | |||
Hidalgo County GO, Certificates of Obligation, AGMC Insured, Pre-Refunded, 5.25%, | |||||
8/15/21 | 2,500,000 | 2,596,525 | |||
Houston Airport System Revenue, Refunding, second lien, Series A, 5.50%, | |||||
7/01/34 | 5,000,000 | 5,421,750 | |||
7/01/39 | 30,850,000 | 33,221,748 | |||
Houston Area Water Corp. Contract Revenue, Northeast Water Purification Project, | |||||
FGIC Insured, Pre-Refunded, 5.125%, 3/01/28 | 15,000,000 | 15,929,250 | |||
Houston GO, Public Improvement, Refunding, NATL Insured, 5.00%, 3/01/25 | 5,000,000 | 5,182,050 | |||
Houston Higher Education Finance Corp. Higher Education Revenue, Rice University Project, | |||||
Series A, 5.00%, 5/15/40 | 12,985,000 | 13,920,569 | |||
Houston Water and Sewer Systems Revenue, junior lien, Series B, FGIC Insured, | |||||
Pre | -Refunded, 5.25%, 12/01/30 | 14,000,000 | 14,052,080 | ||
Keller ISD, GO, School Building, 5.50%, 2/15/35 | 10,000,000 | 10,915,500 | |||
a Laredo Waterworks Sewer System Revenue, 5.25%, 3/01/40 | 16,535,000 | 17,252,454 |
44 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Texas (continued) | ||||
Lower Colorado River Authority Revenue, | ||||
Improvement, Series A, NATL Insured, Pre-Refunded, 5.00%, 5/15/26 | $ | 130,000 | $ | 133,240 |
Refunding and Improvement, Series A, NATL Insured, 5.00%, 5/15/26 | 1,870,000 | 1,889,317 | ||
Lower Colorado River Authority Transmission Contract Revenue, LCRA Transmission Services | ||||
Corp. Project, Refunding, | ||||
5.50%, 5/15/36 | 15,310,000 | 16,217,730 | ||
Series B, AGMC Insured, 5.00%, 5/15/31 | 10,000,000 | 10,218,900 | ||
Lufkin Health Facilities Development Corp. Health System Revenue, Memorial Health | ||||
System of East Texas, Refunding, 6.25%, 2/15/37 | 5,000,000 | 5,129,250 | ||
Manor ISD, GO, School Building, PSF Guarantee, 5.00%, 8/01/37 | 8,175,000 | 8,568,953 | ||
Matagorda County Hospital District Revenue, FHA Insured, 5.00%, 2/15/35 | 10,000,000 | 10,127,900 | ||
North Central Texas Health Facility Development Corp. Revenue, Children’s Medical Center | ||||
Dallas, Refunding, AMBAC Insured, 5.25%, 8/15/24 | 19,335,000 | 20,007,278 | ||
North Fort Bend Water Authority Water System Revenue, Assured Guaranty, 5.25%, | ||||
12/15/34 | 20,000,000 | 21,513,400 | ||
North Harris County Regional Water Authority Revenue, senior lien, | ||||
5.25%, 12/15/33 | 27,000,000 | 28,120,500 | ||
5.50%, 12/15/38 | 25,000,000 | 26,129,250 | ||
North Texas Tollway Authority Revenue, | ||||
Capital Appreciation, System, first tier, Refunding, Series I, zero cpn. to 1/01/15, | ||||
6.50% thereafter, 1/01/43 | 25,000,000 | 21,004,750 | ||
System, first tier, Refunding, Series A, 6.25%, 1/01/39 | 12,500,000 | 13,790,875 | ||
System, first tier, Refunding, Series A, 5.75%, 1/01/40 | 35,000,000 | 37,166,500 | ||
System, first tier, Refunding, Series K-2, 6.00%, 1/01/38 | 15,000,000 | 16,308,000 | ||
System, second tier, Refunding, Series F, 5.75%, 1/01/38 | 30,000,000 | 31,430,100 | ||
Northside ISD, GO, | ||||
PSF Guarantee, Pre-Refunded, 5.00%, 2/15/26 | 1,345,000 | 1,363,198 | ||
Refunding, PSF Guarantee, 5.00%, 2/15/26 | 1,155,000 | 1,161,018 | ||
Pasadena GO, Certificates of Obligation, FGIC Insured, Pre-Refunded, 5.25%, 4/01/32 | 3,000,000 | 3,061,350 | ||
Port Corpus Christi IDC Revenue, Valero, Refunding, Series B, 5.40%, 4/01/18 | 3,745,000 | 3,745,861 | ||
Port Corpus Christi Nueces County General Revenue, Union Pacific, Refunding, 5.65%, | ||||
12/01/22 | 15,000,000 | 15,320,700 | ||
Port Houston Authority Harris County GO, Refunding, | ||||
Series A, 5.625%, 10/01/38 | 14,000,000 | 15,392,720 | ||
Series D-2, 5.00%, 10/01/39 | 27,500,000 | 29,567,725 | ||
Rio Grande City Consolidated ISD, GO, School Building, PSF Guarantee, 5.00%, | ||||
8/15/37 | 10,510,000 | 11,047,271 | ||
San Antonio Water Revenue, Systems, Refunding, AGMC Insured, 5.00%, | ||||
5/15/25 | 5,000,000 | 5,254,100 | ||
5/15/28 | 5,000,000 | 5,193,000 | ||
Southmost Regional Water Authority Water Supply Contract Revenue, NATL Insured, 5.00%, | ||||
9/01/25 | 5,000,000 | 5,100,300 | ||
Tarrant County Health Facilities Development Corp. Health System Revenue, Harris | ||||
Methodist Health System, FGIC Insured, ETM, 6.00%, 9/01/24 | 4,000,000 | 4,978,000 | ||
Tarrant County Health Facilities Development Corp. Revenue, Bethesda Living Centers, | ||||
Series C, 5.75%, | ||||
8/15/18 | 1,445,000 | 1,424,409 | ||
8/15/28 | 3,900,000 | 3,415,152 |
Semiannual Report | 45
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Texas (continued) | ||||
Texas A&M University Revenue, Financing System, Series D, 5.00%, 5/15/34 | $ | 5,000,000 | $ | 5,379,800 |
Texas City IDC Marine Terminal Revenue, ARCO Pipe Line Co. Project, Refunding, 7.375%, | ||||
10/01/20 | 500,000 | 602,770 | ||
Texas State GO, Water Financial Assistance, Refunding, Series C-1, 5.00%, 8/01/34 | 7,000,000 | 7,570,850 | ||
Texas State Municipal Power Agency Revenue, sub. lien, Transmission, Refunding, 5.00%, | ||||
9/01/40 | 15,250,000 | 15,533,650 | ||
Texas State Revenue, Transportation Commission-Mobility Fund, Series A, 5.00%, | ||||
4/01/33 | 10,000,000 | 10,676,800 | ||
Texas State Turnpike Authority Central Texas Turnpike System Revenue, Capital Appreciation, | ||||
AMBAC Insured, zero cpn., 8/15/31 | 43,500,000 | 11,984,250 | ||
Texas State University System Financing Revenue, Refunding, AGMC Insured, 5.00%, | ||||
3/15/26 | 6,425,000 | 6,951,336 | ||
Tyler Health Facilities Development Corp. Hospital Revenue, East Texas Medical Center, | ||||
Refunding and Improvement, Series A, 5.25%, 11/01/32 | 6,250,000 | 6,260,875 | ||
Wylie ISD, GO, | ||||
PSF Guarantee, Pre-Refunded, 7.00%, 8/15/24 | 660,000 | 694,512 | ||
Refunding, PSF Guarantee, 7.00%, 8/15/24 | 340,000 | 353,134 | ||
953,191,282 | ||||
Utah 0.9% | ||||
Intermountain Power Agency Power Supply Revenue, ETM, 6.15%, 7/01/14 | 15,280,000 | 16,321,638 | ||
South Jordan Sales Tax Revenue, AMBAC Insured, Pre-Refunded, 5.20%, 8/15/26 | 4,770,000 | 4,954,265 | ||
South Valley Water Reclamation Facility Sewer Revenue, AMBAC Insured, 5.00%, | ||||
8/15/30 | 5,730,000 | 5,997,190 | ||
St. George Electric Revenue, AGMC Insured, 5.00%, | ||||
6/01/33 | 5,000,000 | 5,230,700 | ||
6/01/38 | 5,000,000 | 5,181,600 | ||
Uintah County Municipal Building Authority Lease Revenue, 5.50%, 6/01/37 | 5,000,000 | 5,262,100 | ||
Utah Associated Municipal Power Systems Revenue, Central St. George Project, Refunding, | ||||
5.25%, 12/01/27 | 9,735,000 | 10,288,727 | ||
Utah State Transit Authority Sales Tax Revenue, Series A, | ||||
5.25%, 6/15/38 | 13,185,000 | 14,275,399 | ||
AGMC Insured, 5.00%, 6/15/36 | 33,000,000 | 35,146,980 | ||
102,658,599 | ||||
Vermont 0.6% | ||||
University of Vermont and State Agricultural College Revenue, Refunding, NATL Insured, | ||||
5.00%, 10/01/30 | 12,210,000 | 12,860,427 | ||
Vermont Educational and Health Buildings Financing Agency Revenue, | ||||
Hospital, Fletcher Allen Health Care Project, Refunding, Series B, AGMC Insured, 5.00%, | ||||
12/01/34 | 5,500,000 | 5,596,965 | ||
Hospital, Fletcher Allen Health Care Project, Series A, 4.75%, 12/01/36 | 5,000,000 | 4,509,200 | ||
Hospital, Fletcher Allen Health Care Project, Series A, AMBAC Insured, 6.125%, | ||||
12/01/27 | 13,000,000 | 13,177,710 | ||
Middlebury College Project, Refunding, 5.00%, 11/01/38 | 20,000,000 | 21,389,200 | ||
a Middlebury College Project, Refunding, 5.00%, 11/01/40 | 10,000,000 | 10,655,900 | ||
68,189,402 |
46 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Virginia 0.2% | ||||
Greater Richmond Convention Center Authority Hotel Tax Revenue, Refunding, NATL Insured, | ||||
5.00%, 6/15/30 | $ | 12,260,000 | $ | 12,486,810 |
Medical College Hospital Authority Revenue, General Revenue Bonds, NATL Insured, | ||||
5.125%, 7/01/18 | 2,000,000 | 2,004,180 | ||
Norfolk Parking System Revenue, Refunding, Series A, NATL Insured, 5.00%, 2/01/27 | 5,000,000 | 5,054,850 | ||
Virginia State HDA Commonwealth Mortgage Revenue, Series H, Sub Series H-1, | ||||
NATL Insured, 5.35%, 7/01/31 | 8,510,000 | 8,658,414 | ||
28,204,254 | ||||
Washington 4.7% | ||||
Bellingham Housing Authority Revenue, Pacific Rim and Cascade Meadows Project, | ||||
Refunding, NATL Insured, 5.20%, 11/01/27 | 200,000 | 200,008 | ||
Central Puget Sound Regional Transportation Authority Sales and Use Tax Revenue, | ||||
Series A, | ||||
5.00%, 11/01/34 | 11,405,000 | 11,931,911 | ||
AMBAC Insured, 5.00%, 11/01/30 | 20,000,000 | 21,135,400 | ||
Clark County PUD No. 1 Generating System Revenue, Refunding, AGMC Insured, 5.50%, | ||||
1/01/25 | 5,280,000 | 5,295,946 | ||
Energy Northwest Electric Revenue, Columbia Generating Station, Refunding, | ||||
Series A, 5.00%, 7/01/24 | 15,255,000 | 16,715,514 | ||
Series B, AGMC Insured, 5.35%, 7/01/18 | 11,500,000 | 12,341,685 | ||
FYI Properties Lease Revenue, Washington State District Project, 5.50%, | ||||
6/01/34 | 11,935,000 | 12,793,604 | ||
6/01/39 | 16,250,000 | 17,347,525 | ||
Goat Hill Properties Lease Revenue, Government Office Building Project, NATL Insured, | ||||
5.00%, 12/01/33 | 18,500,000 | 19,132,885 | ||
Grant County PUD No. 2 Wanapum Hydro Electric Revenue, Refunding, Series D, | ||||
AGMC Insured, 5.20%, 1/01/23 | 6,000,000 | 6,155,520 | ||
King County GO, Limited Tax, Sewer, 5.125%, 1/01/33 | 10,000,000 | 10,863,300 | ||
King County Public Hospital District No. 1 GO, Series B, 5.25%, 12/01/37 | 5,000,000 | 5,271,150 | ||
King County Sewer Revenue, Refunding, 5.00%, 1/01/32 | 7,085,000 | 7,695,089 | ||
NJB Properties Lease Revenue, King County Washington Project, Series A, 5.00%, | ||||
12/01/36 | 10,000,000 | 10,343,500 | ||
Pierce County School District No. 320 Sumner GO, AGMC Insured, Pre-Refunded, 6.00%, | ||||
12/01/14 | 2,000,000 | 2,009,020 | ||
Pierce County School District No. 403 Bethel GO, NATL RE, FGIC Insured, Pre-Refunded, | ||||
5.25%, 12/01/22 | 5,000,000 | 5,491,400 | ||
Port of Seattle Revenue, Refunding, Series A, | ||||
NATL Insured, 5.00%, 7/01/33 | 10,000,000 | 10,351,800 | ||
NATL RE, FGIC Insured, 5.00%, 4/01/31 | 21,680,000 | 21,985,905 | ||
Seattle Municipal Light and Power Revenue, Pre-Refunded, 5.40%, 12/01/25 | 10,000,000 | 10,040,000 | ||
Snohomish County Housing Authority Revenue, Pooled, 6.30%, 4/01/16 | 130,000 | 131,122 | ||
Snohomish County USD No. 6 GO, 6.50%, 12/01/11 | 5,415,000 | 5,577,396 | ||
Spokane County School District No. 81 Spokane GO, 5.00%, 12/01/26 | 17,000,000 | 19,008,550 | ||
Twenty-Fifth Avenue Properties Washington Student Housing Revenue, NATL Insured, | ||||
5.125%, 6/01/22 | 2,925,000 | 2,973,848 | ||
5.25%, 6/01/33 | 9,770,000 | 9,831,258 |
Semiannual Report | 47
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Washington (continued) | ||||
Washington State GO, | ||||
AMBAC Insured, 5.00%, 1/01/31 | $ | 7,925,000 | $ | 8,416,112 |
Credit, Series C, AGMC Insured, 5.00%, 1/01/30 | 17,435,000 | 18,782,202 | ||
Motor Vehicle Fuel Tax, Series B, NATL RE, FGIC Insured, 5.00%, 7/01/27 | 10,000,000 | 10,636,800 | ||
Series A, NATL RE, FGIC Insured, 5.00%, 7/01/27 | 10,000,000 | 10,636,800 | ||
Various Purpose, Series A, 5.00%, 7/01/33 | 44,300,000 | 47,589,275 | ||
Various Purpose, Series C, 5.00%, 8/01/34 | 37,660,000 | 40,615,557 | ||
Various Purpose, Series C, AGMC Insured, Pre-Refunded, 5.25%, 1/01/26 | 10,120,000 | 10,201,061 | ||
Washington State Health Care Facilities Authority Revenue, | ||||
Central Washington Health Services, 6.75%, 7/01/29 | 5,000,000 | 5,454,350 | ||
Fred Hutchinson Cancer Center, Refunding, Series A, 6.00%, 1/01/33 | 7,500,000 | 7,828,500 | ||
MultiCare Health System, Series B, AGMC Insured, 5.00%, 8/15/34 | 17,550,000 | 17,740,417 | ||
MultiCare Health System, Series B, AGMC Insured, 5.00%, 8/15/41 | 9,170,000 | 9,222,177 | ||
MultiCare Health System, Series B, Assured Guaranty, 6.00%, 8/15/39 | 1,500,000 | 1,634,370 | ||
Providence Health and Services, Refunding, Series A, NATL RE, FGIC Insured, 5.00%, | ||||
10/01/36 | 9,750,000 | 9,873,922 | ||
Providence Health and Services, Refunding, Series C, AGMC Insured, 5.25%, | ||||
10/01/33 | 10,000,000 | 10,560,400 | ||
Providence Health and Services, Series A, FGIC Insured, Pre-Refunded, 5.00%, | ||||
10/01/36 | 250,000 | 300,570 | ||
Series C, Radian Insured, 5.50%, 8/15/36 | 16,000,000 | 16,197,120 | ||
Virginia Mason Medical, Series B, ACA Insured, 6.00%, 8/15/37 | 30,000,000 | 31,163,400 | ||
Washington State Higher Education Facilities Authority Revenue, Whitworth University | ||||
Project, Refunding, | ||||
5.375%, 10/01/29 | 3,000,000 | 3,157,080 | ||
5.875%, 10/01/34 | 6,000,000 | 6,490,020 | ||
Washington State Public Power Supply System Revenue, | ||||
Nuclear Project No. 2, Refunding, Series A, 6.30%, 7/01/12 | 7,700,000 | 8,414,868 | ||
Nuclear Project No. 3, Capital Appreciation, Refunding, Series B, zero cpn., 7/01/14 | 12,450,000 | 11,672,124 | ||
Nuclear Project No. 3, Capital Appreciation, Series B, ETM, zero cpn., 7/01/14 | 2,550,000 | 2,435,403 | ||
Nuclear Project No. 3, Refunding, Series B, zero cpn., 7/01/12 | 6,400,000 | 6,283,392 | ||
Nuclear Project No. 3, Refunding, Series B, zero cpn., 7/01/13 | 11,000,000 | 10,624,350 | ||
550,553,606 | ||||
West Virginia 0.5% | ||||
County Commission of Harrison County Solid Waste Disposal Revenue, Allegheny Energy | ||||
Supply Co. LLC, Refunding, Series D, 5.50%, 10/15/37 | 9,000,000 | 8,801,820 | ||
Pleasants County PCR, County Commission, Series F, 5.25%, 10/15/37 | 14,000,000 | 14,096,740 | ||
West Virginia EDA Lottery Revenue, Series A, 5.00%, 6/15/35 | 9,415,000 | 9,846,113 | ||
West Virginia State GO, Series A, NATL RE, FGIC Insured, 5.20%, 11/01/26 | 10,000,000 | 11,395,900 | ||
West Virginia State Water Development Water Revenue, Loan Program 2, Refunding, | ||||
Series B, AMBAC Insured, 5.00%, 11/01/29 | 7,500,000 | 7,726,875 | ||
West Virginia University Revenues, Improvement, West Virginia University Projects, Series C, | ||||
NATL RE, FGIC Insured, 5.00%, 10/01/34 | 10,000,000 | 10,260,000 | ||
62,127,448 | ||||
Wisconsin 0.7% | ||||
Janesville IDR, Simmons Manufacturing Co., 7.00%, 10/15/17 | 2,200,000 | 2,208,712 | ||
Monroe RDAR, 6.00%, 2/15/39 | 11,790,000 | 12,352,501 |
48 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Municipal Bonds (continued) | ||||
Wisconsin (continued) | ||||
Wisconsin State General Fund Annual Appropriation Revenue, Series A, 6.00%, 5/01/33 | $ | 25,290,000 | $ | 28,726,911 |
Wisconsin State Health and Educational Facilities Authority Revenue, | ||||
Marquette University, 5.00%, 10/01/30 | 2,150,000 | 2,249,394 | ||
Marquette University, Refunding, 5.00%, 10/01/30 | 6,865,000 | 7,156,076 | ||
Marquette University, Refunding, 5.00%, 10/01/33 | 1,500,000 | 1,537,515 | ||
Marquette University, Refunding, Series B2, 5.00%, 10/01/30 | 3,470,000 | 3,567,195 | ||
Marquette University, Series B3, 5.00%, 10/01/33 | 1,750,000 | 1,800,330 | ||
Ministry Health, AGMC Insured, 5.00%, 8/01/31 | 1,500,000 | 1,535,670 | ||
Ministry Health, AGMC Insured, 5.00%, 8/01/34 | 8,000,000 | 8,099,360 | ||
Thedacare Inc., AMBAC Insured, 5.00%, 12/15/30 | 10,000,000 | 10,203,700 | ||
Thedacare Inc., Series A, 5.50%, 12/15/38 | 5,000,000 | 5,155,100 | ||
84,592,464 | ||||
Wyoming 0.1% | ||||
Campbell County Solid Waste Facilities Revenue, Basin Electric Power Cooperative, Series A, | ||||
5.75%, 7/15/39 | 5,500,000 | 6,014,855 | ||
U.S. Territories 2.6% | ||||
Puerto Rico 2.5% | ||||
Children’s Trust Fund Puerto Rico Tobacco Settlement Revenue, Asset-Backed Bonds, | ||||
Refunding, 5.375%, 5/15/33 | 18,945,000 | 18,959,777 | ||
Puerto Rico Commonwealth Highway and Transportation Authority Highway Revenue, | ||||
Series Y, Pre-Refunded, | ||||
5.00%, 7/01/36 | 62,000,000 | 74,217,720 | ||
5.50%, 7/01/36 | 7,000,000 | 8,569,470 | ||
Puerto Rico Commonwealth Highway and Transportation Authority Transportation Revenue, | ||||
Refunding, Series K, 5.00%, 7/01/30 | 19,190,000 | 19,283,647 | ||
Puerto Rico Electric Power Authority Power Revenue, Series XX, 5.25%, 7/01/40 | 15,000,000 | 15,645,600 | ||
Puerto Rico Industrial Tourist Educational Medical and Environmental Control Facilities | ||||
Financing Authority Industrial Revenue, Guaynabo Warehouse, Series A, 5.15%, | ||||
7/01/19 | 790,000 | 807,617 | ||
Puerto Rico PBA Guaranteed Revenue, Government Facilities, | ||||
Refunding, Series D, 5.25%, 7/01/27 | 3,265,000 | 3,302,515 | ||
Refunding, Series N, 5.00%, 7/01/37 | 20,000,000 | 19,425,000 | ||
Series D, Pre-Refunded, 5.25%, 7/01/27 | 8,735,000 | 9,405,237 | ||
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, | ||||
Capital Appreciation, first sub., Series A, zero cpn. to 8/01/16, 6.75% thereafter, | ||||
8/01/32 | 25,000,000 | 21,143,500 | ||
Capital Appreciation, first sub., Series A, zero cpn. to 8/01/19, 6.25% thereafter, | ||||
8/01/33 | 36,500,000 | 25,390,495 | ||
first sub., Series A, 5.50%, 8/01/42 | 30,000,000 | 32,035,500 | ||
first sub., Series C, 5.50%, 8/01/40 | 50,000,000 | 53,377,000 | ||
301,563,078 | ||||
U.S. Virgin Islands 0.1% | ||||
Virgin Islands PFAR, Matching Fund Loan, sub. lien, Series B, 5.25%, 10/01/29 | 5,750,000 | 5,883,572 | ||
Total U.S. Territories | 307,446,650 | |||
Total Municipal Bonds before Short Term Investments | ||||
(Cost $10,862,099,349) | 11,411,221,030 | |||
Semiannual Report | 49 |
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
Principal Amount | Value | |||
Short Term Investments 1.3% | ||||
Municipal Bonds 1.3% | ||||
California 0.3% | ||||
b Metropolitan Water District of Southern California Waterworks Revenue, Series B, | ||||
Weekly VRDN and Put, 0.26%, 7/01/27 | $ | 34,000,000 | $ | 34,000,000 |
Florida 0.1% | ||||
b Broward County Educational Facilities Authority Revenue, Educational Facilities, Nova | ||||
Southeastern University, Refunding, Series C, Daily VRDN and Put, 0.29%, 4/01/24 | 9,800,000 | 9,800,000 | ||
b Jacksonville Health Facilities Authority Hospital Revenue, Baptist Medical Center, | ||||
Daily VRDN and Put, 0.31%, 8/15/34 | 2,400,000 | 2,400,000 | ||
12,200,000 | ||||
Illinois 0.2% | ||||
Illinois State GO, 3.00%, 6/14/11 | 25,000,000 | 25,236,250 | ||
Louisiana 0.3% | ||||
b Louisiana Public Facilities Authority Hospital Revenue, Franciscan Missionaries of Our Lady | ||||
Health System Project, Refunding, Series D, Daily VRDN and Put, 0.28%, 7/01/28 | 10,800,000 | 10,800,000 | ||
b Louisiana State Offshore Terminal Authority Deepwater Port Revenue, Loop Inc. Project, | ||||
First Stage, ACES, Refunding, Daily VRDN and Put, 0.29%, 9/01/17 | 19,100,000 | 19,100,000 | ||
29,900,000 | ||||
Michigan 0.1% | ||||
b Eastern Michigan University Revenues, General, Refunding, Series A, Daily VRDN and Put, | ||||
0.31%, 3/01/49 | 7,400,000 | 7,400,000 | ||
b Michigan State Strategic Fund Limited Obligation Revenue, Detroit Symphony, Series A, | ||||
Daily VRDN and Put, 0.30%, 6/01/31 | 7,100,000 | 7,100,000 | ||
14,500,000 | ||||
Minnesota 0.2% | ||||
b Minneapolis and St. Paul Housing and RDA Health Care System Revenue, Allina Health | ||||
System, Refunding, Series B-2, Daily VRDN and Put, 0.27%, 11/15/35 | 12,500,000 | 12,500,000 | ||
b St. Paul Housing and RDA Health Care Revenue, Allina Health System, Refunding, Series C, | ||||
Weekly VRDN and Put, 0.23%, 11/15/35 | 8,600,000 | 8,600,000 | ||
21,100,000 | ||||
Missouri 0.0%† | ||||
b Missouri Development Finance Board Cultural Facilities Revenue, The Nelson Gallery | ||||
Foundation, Refunding, Series A, Daily VRDN and Put, 0.23%, 12/01/37 | 100,000 | 100,000 | ||
North Carolina 0.0%† | ||||
b North Carolina Medical Care Commission Hospital Revenue, Iredell Memorial Hospital, | ||||
Refunding, Daily VRDN and Put, 0.30%, 10/01/37 | 4,000,000 | 4,000,000 | ||
Pennsylvania 0.1% | ||||
b Geisinger Authority Health System Revenue, Geisinger Health System, Refunding, Series A, | ||||
Daily VRDN and Put, 0.27%, 5/15/35 | 7,300,000 | 7,300,000 | ||
Total Short Term Investments (Cost $148,232,537) | 148,336,250 | |||
Total Investments (Cost $11,010,331,886) 99.5% | 11,559,557,280 | |||
Other Assets, less Liabilities 0.5% | 63,198,486 | |||
Net Assets 100.0% | $ | 11,622,755,766 |
50 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Statement of Investments, October 31, 2010 (unaudited) (continued)
See Abbreviations on page 62.
- Rounds to less than 0.1% of net assets.
- A portion or all of the security is purchased on a when-issued or delayed delivery basis. See Note 1(b).
- Variable rate demand notes (VRDNs) are tax-exempt 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. The coupon rate shown represents the rate at period end.
Semiannual Report | The accompanying notes are an integral part of these financial statements. | 51
Franklin Federal Tax-Free Income Fund
Financial Statements
Statement of Assets and Liabilities
October 31, 2010 (unaudited)
Assets: | ||||
Investments in securities: | ||||
Cost | $ | 11,010,331,886 | ||
Value | $ | 11,559,557,280 | ||
Cash | 27,327 | |||
Receivables: | ||||
Capital shares sold | 23,945,618 | |||
Interest | 167,049,701 | |||
Other assets | 7,365 | |||
Total assets | 11,750,587,291 | |||
Liabilities: | ||||
Payables: | ||||
Investment securities purchased | 107,953,479 | |||
Capital shares redeemed | 13,221,747 | |||
Affiliates | 6,062,077 | |||
Accrued expenses and other liabilities | 594,222 | |||
Total liabilities | 127,831,525 | |||
Net assets, at value | $ | 11,622,755,766 | ||
Net assets consist of: | ||||
Paid-in capital | $ | 11,119,131,846 | ||
Undistributed net investment income | 8,154,220 | |||
Net unrealized appreciation (depreciation) | 549,225,394 | |||
Accumulated net realized gain (loss) | (53,755,694 | ) | ||
Net assets, at value | $ | 11,622,755,766 | ||
Class A: | ||||
Net assets, at value | $ | 9,122,493,506 | ||
Shares outstanding | 756,819,203 | |||
Net asset value per sharea | $ | 12.05 | ||
Maximum offering price per share (net asset value per share ÷ 95.75%) | $ | 12.58 | ||
Class B: | ||||
Net assets, at value | $ | 52,451,227 | ||
Shares outstanding | 4,353,395 | |||
Net asset value and maximum offering price per sharea | $ | 12.05 | ||
Class C: | ||||
Net assets, at value | $ | 1,369,246,921 | ||
Shares outstanding | 113,676,874 | |||
Net asset value and maximum offering price per sharea | $ | 12.05 | ||
Advisor Class: | ||||
Net assets, at value | $ | 1,078,564,112 | ||
Shares outstanding | 89,418,099 | |||
Net asset value and maximum offering price per share | $ | 12.06 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
52 | The accompanying notes are an integral part of these financial statements. | Semiannual Report
Franklin Federal Tax-Free Income Fund
Financial Statements (continued)
Statement of Operations
for the six months ended October 31, 2010 (unaudited)
Investment income: | ||
Interest | $ | 275,684,952 |
Expenses: | ||
Management fees (Note 3a) | 25,456,735 | |
Distribution fees: (Note 3c) | ||
Class A | 4,486,470 | |
Class B | 216,013 | |
Class C | 4,262,715 | |
Transfer agent fees (Note 3e) | 2,475,863 | |
Custodian fees | 79,070 | |
Reports to shareholders | 193,729 | |
Registration and filing fees | 231,611 | |
Professional fees | 82,469 | |
Trustees’ fees and expenses | 100,918 | |
Other | 352,574 | |
Total expenses | 37,938,167 | |
Net investment income | 237,746,785 | |
Realized and unrealized gains (losses): | ||
Net realized gain (loss) from investments | 12,089,311 | |
Net change in unrealized appreciation (depreciation) on investments | 145,273,097 | |
Net realized and unrealized gain (loss) | 157,362,408 | |
Net increase (decrease) in net assets resulting from operations | $ | 395,109,193 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. | 53
Franklin Federal Tax-Free Income Fund
Financial Statements (continued)
Statements of Changes in Net Assets | ||||||
Six Months Ended | ||||||
October 31, 2010 | Year Ended | |||||
(unaudited) | April 30, 2010 | |||||
Increase (decrease) in net assets: | ||||||
Operations: | ||||||
Net investment income | $ | 237,746,785 | $ | 451,833,475 | ||
Net realized gain (loss) from investments | 12,089,311 | (33,650,880 | ) | |||
Net change in unrealized appreciation (depreciation) on investments | 145,273,097 | 605,101,551 | ||||
Net increase (decrease) in net assets resulting from operations | 395,109,193 | 1,023,284,146 | ||||
Distributions to shareholders from: | ||||||
Net investment income: | ||||||
Class A | (190,350,122 | ) | (374,034,781 | ) | ||
Class B | (1,252,941 | ) | (4,301,852 | ) | ||
Class C | (23,954,000 | ) | (40,773,300 | ) | ||
Advisor Class | (20,837,119 | ) | (31,991,274 | ) | ||
Total distributions to shareholders | (236,394,182 | ) | (451,101,207 | ) | ||
Capital share transactions: (Note 2) | ||||||
Class A | 227,492,740 | 783,750,561 | ||||
Class B | (27,245,151 | ) | (58,840,451 | ) | ||
Class C | 128,609,030 | 357,449,883 | ||||
Advisor Class | 189,462,783 | 379,684,921 | ||||
Total capital share transactions | 518,319,402 | 1,462,044,914 | ||||
Net increase (decrease) in net assets | 677,034,413 | 2,034,227,853 | ||||
Net assets: | ||||||
Beginning of period | 10,945,721,353 | 8,911,493,500 | ||||
End of period | $ | 11,622,755,766 | $ | 10,945,721,353 | ||
Undistributed net investment income included in net assets: | ||||||
End of period | $ | 8,154,220 | $ | 6,801,617 |
54 | The accompanying notes are an integral part of these financial statements. | Semiannual Report
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNT POLICIES
Franklin Federal Tax-Free Income Fund (Fund) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company. The Fund offers four classes of shares: Class A, Class B, Class C, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, distribution fees, voting rights on matters affecting a single class and its exchange privilege.
The following summarizes the Fund’s significant accounting policies.
a. Financial Instrument Valuation
The Fund values its investments in securities and other assets and liabilities 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. Under procedures approved by the Fund’s Board of Trustees, the Fund may 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, option-adjusted spreads, credit spreads, estimated default rates, 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 securities and other financial instruments for which market prices are not readily available or which may not be reliably priced. Under these procedures, the Fund 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. The Fund may also use an income-based valuation approach 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.
b. Securities Purchased on a When-Issued and Delayed Delivery Basis
The Fund may purchase securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations
Semiannual Report | 55
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited) (continued)
1. | ORGANIZATION AND SIGNIFICANT ACCOUNT POLICIES (continued) |
b. | Securities Purchased on a When-Issued and Delayed Delivery Basis (continued) |
and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
c. Income Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code and to distribute to shareholders substantially all of its income and net realized gains. As a result, no provision for U.S. federal income taxes is required. The Fund files U.S. income tax returns as well as tax returns in certain other jurisdictions. The Fund recognizes in its financial statements the effects including penalties and interest, if any, of a tax position taken on a tax return (or expected to be taken) when it’s more likely than not (a greater than 50% probability), based on the technical merits, that the tax position will be sustained upon examination by the tax authorities. As of October 31, 2010, and for all open tax years, the Fund has determined that no provision for income tax is required in the Fund’s financial statements. Open tax years are those that remain subject to examination and are based on each tax jurisdiction statute of limitation. The Fund is not aware of any tax position for which it is reasonably possible that the total amounts of unrecognized tax effects will significantly change in the next twelve months.
d. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with accounting principles generally accepted in the United States of America. 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, not including 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.
56 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited) (continued)
1. | ORGANIZATION AND SIGNIFICANT ACCOUNT POLICIES (continued) |
e. | Insurance |
The scheduled payments of interest and principal for each insured municipal security in the Fund are insured by either a new issue insurance policy or a secondary insurance policy. Some municipal securities in the Fund are secured by collateral guaranteed by an agency of the U.S. government. 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, there is a risk that in the event of an issuer default, the insurer may not be able to fulfill its obligations under the terms of the policy.
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.
f. Accounting Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Fund’s organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.
2. SHARES OF BENEFICIAL INTEREST
At October 31, 2010, 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 | |||||||||
October 31, 2010 | April 30, 2010 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Class A Shares: | ||||||||||
Shares sold | 57,638,914 | $ | 689,988,770 | 149,422,313 | $ | 1,733,061,109 | ||||
Shares issued in reinvestment | ||||||||||
of distributions | 10,088,122 | 120,494,926 | 19,722,539 | 228,480,392 | ||||||
Shares redeemed | (48,707,604 | ) | (582,990,956 | ) | (101,323,294 | ) | (1,177,790,940 | ) | ||
Net increase (decrease) | 19,019,432 | $ | 227,492,740 | 67,821,558 | $ | 783,750,561 |
Semiannual Report | 57
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited) (continued)
2. SHARES OF BENEFICIAL INTEREST (continued) | ||||||||||
Six Months Ended | Year Ended | |||||||||
October 31, 2010 | April 30, 2010 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Class B Shares: | ||||||||||
Shares sold | 84,730 | $ | 1,010,598 | 355,118 | $ | 4,101,771 | ||||
Shares issued in reinvestment | ||||||||||
of distributions | 75,636 | 902,268 | 252,995 | 2,921,023 | ||||||
Shares redeemed | (2,435,414 | ) | (29,158,017 | ) | (5,661,845 | ) | (65,863,245 | ) | ||
Net increase (decrease) | (2,275,048 | ) | $ | (27,245,151 | ) | (5,053,732 | ) | $ | (58,840,451 | ) |
Class C Shares: | ||||||||||
Shares sold | 17,094,170 | $ | 204,568,665 | 41,855,467 | $ | 486,721,522 | ||||
Shares issued in reinvestment | ||||||||||
of distributions | 1,410,280 | 16,840,590 | 2,386,599 | 27,681,428 | ||||||
Shares redeemed | (7,752,857 | ) | (92,800,225 | ) | (13,473,011 | ) | (156,953,067 | ) | ||
Net increase (decrease) | 10,751,593 | $ | 128,609,030 | 30,769,055 | $ | 357,449,883 | ||||
Advisor Class Shares: | ||||||||||
Shares sold | 22,266,185 | $ | 267,042,727 | 52,597,122 | $ | 611,167,429 | ||||
Shares issued in reinvestment | ||||||||||
of distributions | 1,366,134 | 16,330,183 | 2,095,665 | 24,351,482 | ||||||
Shares redeemed | (7,836,061 | ) | (93,910,127 | ) | (21,918,093 | ) | (255,833,990 | ) | ||
Net increase (decrease) | 15,796,258 | $ | 189,462,783 | 32,774,694 | $ | 379,684,921 |
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 Franklin Advisers, Inc. (Advisers) Franklin Templeton Services, LLC (FT Services) Franklin Templeton Distributors, Inc. (Distributors) Franklin Templeton Investor Services, LLC (Investor Services) | Affiliation Investment manager Administrative manager Principal underwriter 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 | ||
58 | | | Semiannual Report |
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited) (continued)
3. | TRANSACTIONS WITH AFFILIATES (continued) |
b. | Administrative Fees |
Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on average daily net assets, and is not an additional expense of the Fund.
c. Distribution Fees
The Fund’s Board of Trustees has adopted distribution plans for each share class, with the exception of Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s Class A reimbursement distribution plan, 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 rate. Under the Class A reimbursement distribution plan, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods.
In addition, under the Fund’s Class B and C compensation distribution plans, 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 for each class.
The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:
Class A | 0.10 | % |
Class B | 0.65 | % |
Class C | 0.65 | % |
d. Sales Charges/Underwriting Agreements
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 | ||
broker/dealers | $ | 1,561,102 |
Contingent deferred sales charges retained | $ | 146,060 |
e. Transfer Agent Fees
For the period ended October 31, 2010, the Fund paid transfer agent fees of $2,475,863, of which $1,301,868 was retained by Investor Services.
Semiannual Report | 59
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited) (continued)
4. INCOME TAXES
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At April 30, 2010, the capital loss carryforwards were as follows:
Capital loss carryforwards expiring in: | ||
2012 | $ | 11,276,986 |
2014 | 1,937,789 | |
2017 | 19,058,829 | |
2018 | 3,803,336 | |
$ | 36,076,940 |
For tax purposes, realized capital losses occurring subsequent to October 31 may be deferred and treated as occurring on the first day of the following fiscal year. At April 30, 2010, the Fund deferred realized capital losses of $29,768,066.
At October 31, 2010, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
Cost of investments | $ | 11,009,234,035 | |
Unrealized appreciation | $ | 608,859,521 | |
Unrealized depreciation | (58,536,276 | ) | |
Net unrealized appreciation (depreciation) | $ | 550,323,245 |
Net investment income differs for financial statement and tax purposes primarily due to differing treatments of bond discounts, non-deductible expenses and regulatory settlements.
Net realized gains (losses) differ for financial statement and tax purposes primarily due to differing treatments of bond discounts, bond workout expenditures and defaulted securities.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding short term securities) for the period ended October 31, 2010, aggregated $1,055,547,706 and $502,332,785, respectively.
6. 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 $750 million (Global Credit Facility) which matures on January 21, 2011. 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.
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
60 | Semiannual Report
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited) (continued)
6. CREDIT FACILITY (continued)
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 0.10% based upon the unused portion of the Global Credit Facility, which is reflected in other expenses on the Statement of Operations. During the period ended October 31, 2010, the Fund did not use the Global Credit Facility.
7. REGULATORY AND LITIGATION MATTERS
During the period ended October 31, 2010, the Fund received $351,116 resulting from a settlement between the SEC and Advisers relating to market-timing activities, as previously reported in the Fund’s financial statements during the years ended April 30, 2004 through April 30, 2007. This payment is included in capital shares transactions on the Statements of Changes in Net Assets.
8. 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 investments and are summarized in the following fair value hierarchy:
- Level 1 – quoted prices in active markets for identical securities
- Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speed, credit risk, etc.)
- Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
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 October 31, 2010, all of the Fund’s investments in securities carried at fair value were in Level 2 inputs.
9. 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.
Semiannual Report | 61
Franklin Federal Tax-Free Income Fund
Notes to Financial Statements (unaudited) (continued)
Abbreviations | |||
Selected Portfolio | |||
ACA | - American Capital Access Holdings Inc. | MFHR | - Multi-Family Housing Revenue |
ACES | - Adjustable Convertible Exempt Security | MFR | - Multi-Family Revenue |
AGMC | - Assured Guaranty Municipal Corp. | MTA | - Metropolitan Transit Authority |
AMBAC | - American Municipal Bond Assurance Corp. | NATL | - National Public Financial Guarantee Corp. |
BHAC | - Berkshire Hathaway Assurance Corp. | NATL RE | - National Public Financial Guarantee Corp. Reinsured |
CDA | - Community Development Authority/Agency | PBA | - Public Building Authority |
CIFG | - CDC IXIS Financial Guaranty | PCC | - Pollution Control Corp. |
COP | - Certificate of Participation | PCR | - Pollution Control Revenue |
EDA | - Economic Development Authority | PFAR | - Public Financing Authority Revenue |
EDC | - Economic Development Corp. | PSF | - Permanent School Fund |
EDR | - Economic Development Revenue | PUD | - Public Utility District |
ETM | - Escrow to Maturity | RDA | - Redevelopment Agency/Authority |
FGIC | - Financial Guaranty Insurance Co. | RDAR | - Redevelopment Agency Revenue |
FHA | - Federal Housing Authority/Agency | SFM | - Single Family Mortgage |
FICO | - Financing Corp. | SFMR | - Single Family Mortgage Revenue |
FNMA | - Federal National Mortgage Association | UHSD | - Unified/Union High School District |
GNMA | - Government National Mortgage Association | USD | - Unified/Union School District |
GO | - General Obligation | XLCA | - XL Capital Assurance |
HDA | - Housing Development Authority/Agency | ||
HFA | - Housing Finance Authority/Agency | ||
HFAR | - Housing Finance Authority Revenue | ||
HFC | - Housing Finance Corp. | ||
IDA | - Industrial Development Authority/Agency | ||
IDAR | - Industrial Development Authority Revenue | ||
IDB | - Industrial Development Bond/Board | ||
IDC | - Industrial Development Corp. | ||
IDR | - Industrial Development Revenue | ||
ISD | - Independent School District |
62 | Semiannual Report
Franklin Federal 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, 500 East Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, 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.
Semiannual Report | 63
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Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
Item 3. Audit Committee Financial Expert.
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
(2) The audit committee financial expert is John B. Wilson and he is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. Principal Accountant Fees and Services. 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 ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
(b) Changes in Internal Controls. There have been no significant changes in the Registrant’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.
Item 12. Exhibits.
(a) (1) Code of Ethics
(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. FergersonChief 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 Laura F. FergersonChief 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 FEDERAL TAX-FREE INCOME FUND
By /s/LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer –
Finance and Administration
Date December 28, 2010
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/LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer –
Finance and Administration
Date December 28, 2010
By /s/GASTON GARDEY
Gaston Gardey
Chief Financial Officer and
Chief Accounting Officer
Date December 28, 2010