UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03395
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: _10/31/14
Item 1. Reports to Stockholders.
Franklin Templeton Investments
Gain From Our Perspective®
At Franklin Templeton Investments, we’re dedicated to one goal: delivering exceptional asset management for our clients. By bringing together multiple, world-class investment teams in a single firm, we’re able to offer specialized expertise across styles and asset classes, all supported by the strength and resources of one of the world’s largest asset managers. This has helped us to become a trusted partner to individual and institutional investors across the globe.
Focus on Investment Excellence
At the core of our firm, you’ll find multiple independent investment teams—each with a focused area of expertise—from traditional to alternative strategies and multi-asset solutions. And because our portfolio groups operate autonomously, their strategies can be combined to deliver true style and asset class diversification.
All of our investment teams share a common commitment to excellence grounded in rigorous, fundamental research and robust, disciplined risk management. Decade after decade, our consistent, research-driven processes have helped Franklin Templeton earn an impressive record of strong, long-term results.
Global Perspective Shaped by Local Expertise
In today’s complex and interconnected world, smart investing demands a global perspective. Franklin Templeton pioneered international investing over 60 years ago, and our expertise in emerging markets spans more than a quarter of a century. Today, our investment professionals are on the ground across the globe, spotting investment ideas and potential risks firsthand. These locally based teams bring in-depth understanding of local companies, economies and cultural nuances, and share their best thinking across our global research network.
Strength and Experience
Franklin Templeton is a global leader in asset management serving clients in over 150 countries.1 We run our business with the same prudence we apply to asset management, staying focused on delivering relevant investment solutions, strong long-term results and reliable, personal service. This approach, focused on putting clients first, has helped us to become one of the most trusted names in financial services.
1. As of 12/31/13. Clients are represented by the total number of shareholder accounts.
Not FDIC Insured | May Lose Value | No Bank Guarantee
Contents | |
Shareholder Letter | 1 |
Semiannual Report | |
Franklin Federal | |
Tax-Free Income Fund | 3 |
Performance Summary | 6 |
Your Fund’s Expenses | 9 |
Financial Highlights and | |
Statement of Investments | 10 |
Financial Statements | 39 |
Notes to Financial Statements | 42 |
Shareholder Information | 48 |
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Semiannual Report
Franklin Federal Tax-Free Income Fund
We are pleased to bring you Franklin Federal Tax-Free Income Fund’s semiannual report for the period ended October 31, 2014.
Your Fund’s Goal and Main Investments
The 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* | ||
10/31/14 | ||
% of Total | ||
Ratings | Long-Term Investments | |
AAA | 10.20 | % |
AA | 54.50 | % |
A | 22.57 | % |
BBB | 8.48 | % |
Below Investment Grade | 0.96 | % |
Refunded | 2.95 | % |
Not Rated | 0.34 | % |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA or Aaa (highest) to D (lowest). The Below Investment Grade category consists of bonds rated below BBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents (defined as bonds with stated maturities, or redemption features, of seven days or less), as well as short-term bonds (defined as bonds maturing in more than seven days but less than one year), are excluded from this breakdown.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $12.22 on April 30, 2014, to $12.50 on October 31, 2014. The Fund’s Class A shares paid dividends totaling 24.14 cents per share for the reporting period.2 The Performance Summary beginning on page 6 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 3.62% based on an annualization of October’s 3.94 cent per share dividend and the maximum offering price of $13.05 on October 31, 2014. An investor in the 2014 maximum federal personal income tax bracket of 39.60% (plus 3.8% Medicare tax) would need to earn a distribution rate of 6.40% from a taxable investment to match the Fund’s Class A tax-free distribution rate. For the Fund’s Class C and Advisor shares’ performance, please see the Performance Summary. Dividend distributions were affected by lower interest rates during the period. This and other factors resulted in reduced income for the portfolio and caused dividends to be lower at the end of the period.
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.
Municipal Bond Market Overview
For the six months ended October 31, 2014, municipal bond market performance remained strong as prices rose. The Barclays Municipal Bond Index, which tracks investment-grade municipal securities, generated a +3.59% total return for the period.3 In comparison, the Barclays U.S. Treasury Index posted a +2.12% six-month return.3
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.
2. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
3. Source: Morningstar.
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 13.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND | |||
Dividend Distributions2 | |||
5/1/14–10/31/14 | |||
Dividend per share (cents) | |||
Month | Class A | Class C | Advisor Class |
May | 4.14 | 3.59 | 4.26 |
June | 4.09 | 3.54 | 4.19 |
July | 4.04 | 3.49 | 4.14 |
August | 3.99 | 3.44 | 4.09 |
September | 3.94 | 3.36 | 4.04 |
October | 3.94 | 3.36 | 4.04 |
Total | 24.14 | 20.78 | 24.76 |
A decline in issuance contributed to municipal market strength throughout this reporting period. The decreased supply did not dampen individual or institutional investor appetite as buyers found attractive the higher relative yields offered by this asset class. Investors seeking tax-free income seemed to recognize the value municipal bonds offered despite current, low interest rates. Throughout the period, demand for tax-exempt income remained strong, and municipal bond fund inflows reversed the outflows of the prior year.
During its October meeting, the Federal Reserve Board (Fed) announced the end of its 25-month-long, $1.7 trillion bond-buying program. Economic data during this reporting period continued to indicate positive trends, with the Fed noting substantial improvement in the labor market outlook. In spite of this, the Fed reiterated that rates may remain low for the near future. This apparent commitment to lower interest rates combined with lower levels of new-issue municipal bond supply compared with the previous year helped support a rise in municipal bond prices during the reporting period.
Certain credit events continued to challenge the municipal bond market during the period under review. In July, independent credit rating agencies Standard & Poor’s (S&P), Moody’s Investors Service and Fitch Ratings downgraded Puerto Rico general obligation debt for the second time in 2014. The City of Detroit, Michigan, after filing for the largest municipal bankruptcy in U.S. history, exited bankruptcy protection shortly following the end of the period, after the bankruptcy judge had
confirmed the plan of bankruptcy. Detroit faced the daunting task of rebuilding investor confidence. In addition, reports from rating agencies and research organizations mentioned under-funded pensions that could affect the fiscal stability of several states and large municipalities. Bonds issued by municipalities involved in such stories have often experienced price erosion in secondary trading, but the extent of price erosion and the contagion to related issues have been unpredictable. Fallout from such headlines during the reporting period was no exception.
On June 28, 2014, Puerto Rico Governor Alejandro Garcia Padilla signed into law the Public Corporation Debt Enforcement and Recovery Act. By virtue of its status as a U.S. territory, Puerto Rico, as well as its public agencies, corporations and cities, cannot file for bankruptcy under the U.S. Bankruptcy Code. The governor’s stated intent for this law was to provide an organized, legal framework for Puerto Rico’s public corporations to restructure their debt should they become insolvent. With passage of the act, the market anticipated a significant likelihood that at least one of Puerto Rico’s public corporations would file under the new act. Franklin Templeton Investments joined in a lawsuit filed in Puerto Rico challenging the constitutionality of
Portfolio Breakdown | |
10/31/14 | |
% of Total | |
Long-Term Investments* | |
Utilities | 17.8 |
General Obligation | 16.4 |
Transportation | 15.7 |
Subject to Government Appropriations | 11.7 |
Hospital & Health Care | 10.7 |
Refunded | 7.2 |
Higher Education | 6.6 |
Tax-Supported | 6.4 |
Other Revenue | 5.6 |
Corporate-Backed | 1.2 |
Housing | 0.7 |
*Does not include short-term investments and other net assets. |
4 | | | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
the act. At period-end, no Puerto Rico public corporation had filed to reorganize under the act. Market reaction to the new law increased volatility within this sector, but despite the negative reaction, Puerto Rico bonds overall delivered a +2.84% total return during the period, as measured by the Barclays Puerto Rico Municipal Bond Index.4
Franklin Templeton also joined a creditors committee made up of bondholders of the Puerto Rico Electric Power Authority (PREPA) with the goal of achieving a negotiated, market-based, long-term solution to PREPA’s liquidity and structural issues.
At period-end, we maintained our positive view of the municipal bond market. We believe municipal bonds continue to be an attractive asset class among fixed income securities, and we intend to follow our solid discipline of investing to maximize income while seeking value in the municipal bond market.
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 while balancing risk and return within the Fund’s range of allowable investments. We generally employ a buy-and-hold approach and invest in securities we believe should provide the most relative value in the market. We do not use leverage or derivatives, nor do we use hedging techniques that could add volatility and contribute to underperformance in adverse markets.
Manager’s Discussion
Our value-oriented philosophy of investing primarily for income and stability of principal, when combined with a positive-sloping municipal yield curve, in which yields for longer term bonds are higher than those for shorter term bonds, led us to favor longer term bonds during the six months under review. Consistent with our strategy, we sought to remain invested in bonds ranging from 15 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. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Puerto Rico’s municipal bond market is widely traded because of its federal and state tax-exemption advantages. During the reporting period, some Puerto Rico issuers experienced a series of downgrades from S&P, Moody’s and Fitch. In February 2014, these credit rating firms downgraded their respective ratings of Puerto Rico’s general obligation debt to below investment grade, along with the ratings of certain related Puerto Rico issuers. Additionally, each rating agency maintained a negative outlook on certain Puerto Rico issuers. Shortly after Puerto Rico enacted legislation related to bankruptcy protection for public corporations, the rating agencies further downgraded ratings of Puerto Rico and many of its public corporations and authorities. The Fund is not required to sell securities that have been downgraded to below investment grade, but it is prohibited from making further purchases of such securities as long as the securities are not rated investment grade by at least one U.S. nationally recognized rating service. Rating actions combined with news related to the commonwealth’s financial position and future financing endeavors caused the Puerto Rico bond market to experience volatility during the reporting period.
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, 2014, 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.
4. Source: Barclays.
See www.franklintempletondatasources.com for additional data provider information.
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Semiannual Report | 5
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Performance Summary as of October 31, 2014
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 tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses.
Net Asset Value | ||||||
Share Class (Symbol) | 10/31/14 | 4/30/14 | Change | |||
A (FKTIX) | $ | 12.50 | $ | 12.22 | +$ | 0.28 |
C (FRFTX) | $ | 12.49 | $ | 12.21 | +$ | 0.28 |
Advisor (FAFTX) | $ | 12.51 | $ | 12.23 | +$ | 0.28 |
Distributions (5/1/14–10/31/14) | ||||||
Dividend | ||||||
Share Class | Income | |||||
A | $ | 0.2414 | ||||
C | $ | 0.2078 | ||||
Advisor | $ | 0.2476 |
6 | Semiannual Report
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Performance as of 10/31/14
Cumulative total return excludes sales charges. Average annual total returns include maximum sales charges. Class A: 4.25% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only; Advisor Class: no sales charges.
Cumulative | Average Annual | Average Annual | Total Annual | ||||||||
Share Class | Total Return1 | Total Return2 | Total Return (9/30/14)3 | Operating Expenses4 | |||||||
A | 0.62 | % | |||||||||
6-Month | + | 4.31 | % | -0.10 | % | ||||||
1-Year | + | 9.56 | % | + | 4.88 | % | + | 4.92 | % | ||
5-Year | + | 30.86 | % | + | 4.62 | % | + | 4.06 | % | ||
10-Year | + | 59.11 | % | + | 4.30 | % | + | 4.32 | % | ||
C | 1.17 | % | |||||||||
6-Month | + | 4.03 | % | + | 3.03 | % | |||||
1-Year | + | 8.96 | % | + | 7.96 | % | + | 8.03 | % | ||
5-Year | + | 27.33 | % | + | 4.95 | % | + | 4.39 | % | ||
10-Year | + | 50.49 | % | + | 4.17 | % | + | 4.20 | % | ||
Advisor | 0.52 | % | |||||||||
6-Month | + | 4.36 | % | + | 4.36 | % | |||||
1-Year | + | 9.66 | % | + | 9.66 | % | + | 9.72 | % | ||
5-Year | + | 31.48 | % | + | 5.63 | % | + | 5.06 | % | ||
10-Year | + | 60.70 | % | + | 4.86 | % | + | 4.88 | % | ||
Distribution | Taxable Equivalent | 30 | -Day | Taxable Equivalent 30-Day | |||||||
Share Class | Rate5 | Distribution Rate6 | Standardized Yield7 | Standardized Yield6 | |||||||
A | 3.62 | % | 6.40 | % | 2.02 | % | 3.57 | % | |||
C | 3.23 | % | 5.71 | % | 1.55 | % | 2.74 | % | |||
Advisor | 3.88 | % | 6.86 | % | 2.21 | % | 3.90 | % |
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.
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Semiannual Report | 7
FRANKLIN FEDERAL TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the credit rating of a bond issuer, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund holds a small portion of its assets in Puerto Rico municipal bonds that have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
Class C: 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. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to
become higher than the figures shown.
5. Distribution rate is based on an annualization of the respective class’s October dividend and the maximum offering price (NAV for Classes C and Advisor) per share on
10/31/14.
6. Taxable equivalent distribution rate and yield assume the 2014 maximum federal income tax rate of 39.60% plus 3.8% Medicare tax.
7. The 30-day standardized yield for the 30 days ended 10/31/14 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.
8 | Semiannual Report
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
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, distribu- tion 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.
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 | ||||
Share Class | Value 5/1/14 | Value 10/31/14 | Period* 5/1/14–10/31/14 | |||
A | ||||||
Actual | $ | 1,000 | $ | 1,043.10 | $ | 3.19 |
Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,022.08 | $ | 3.16 |
C | ||||||
Actual | $ | 1,000 | $ | 1,040.30 | $ | 6.02 |
Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,019.31 | $ | 5.96 |
Advisor | ||||||
Actual | $ | 1,000 | $ | 1,043.60 | $ | 2.68 |
Hypothetical (5% return before expenses) | $ | 1,000 | $ | 1,022.58 | $ | 2.65 |
*Expenses are calculated using the most recent six-month expense ratio, annualized for each class (A: 0.62%; C: 1.17%; and Advisor: 0.52%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
Financial Highlights | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
October 31, 2014 | Year Ended April 30, | |||||||||||||||||
(unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||
Class A | ||||||||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 12.22 | $ | 12.79 | $ | 12.48 | $ | 11.47 | $ | 11.89 | $ | 11.21 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.24 | 0.49 | 0.48 | 0.51 | 0.52 | 0.52 | ||||||||||||
Net realized and unrealized gains (losses) | 0.28 | (0.57 | ) | 0.31 | 1.02 | (0.43 | ) | 0.69 | ||||||||||
Total from investment operations | 0.52 | (0.08 | ) | 0.79 | 1.53 | 0.09 | 1.21 | |||||||||||
Less distributions from net investment | ||||||||||||||||||
income | (0.24 | ) | (0.49 | ) | (0.48 | ) | (0.52 | ) | (0.51 | ) | (0.53 | ) | ||||||
Net asset value, end of period | $ | 12.50 | $ | 12.22 | $ | 12.79 | $ | 12.48 | $ | 11.47 | $ | 11.89 | ||||||
Total returnc | 4.31 | % | (0.49 | )% | 6.44 | % | 13.61 | % | 0.78 | % | 11.00 | % | ||||||
Ratios to average net assetsd | ||||||||||||||||||
Expenses | 0.62 | % | 0.62 | % | 0.61 | % | 0.62 | % | 0.62 | % | 0.61 | % | ||||||
Net investment income | 3.84 | % | 4.11 | % | 3.76 | % | 4.25 | % | 4.41 | % | 4.51 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 8,522,936 | $ | 8,243,367 | $ | 9,414,734 | $ | 8,758,460 | $ | 7,925,674 | $ | 8,768,920 | ||||||
Portfolio turnover rate | 3.03 | % | 8.51 | % | 6.31 | % | 8.55 | % | 14.14 | % | 8.16 | % |
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 fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
10 | Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Six Months Ended | ||||||||||||||||||
October 31, 2014 | Year Ended April 30, | |||||||||||||||||
(unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||
Class C | ||||||||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 12.21 | $ | 12.78 | $ | 12.47 | $ | 11.46 | $ | 11.88 | $ | 11.21 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.20 | 0.43 | 0.41 | 0.45 | 0.45 | 0.46 | ||||||||||||
Net realized and unrealized gains (losses) | 0.29 | (0.58 | ) | 0.31 | 1.01 | (0.42 | ) | 0.67 | ||||||||||
Total from investment operations | 0.49 | (0.15 | ) | 0.72 | 1.46 | 0.03 | 1.13 | |||||||||||
Less distributions from net investment | ||||||||||||||||||
income | (0.21 | ) | (0.42 | ) | (0.41 | ) | (0.45 | ) | (0.45 | ) | (0.46 | ) | ||||||
Net asset value, end of period | $ | 12.49 | $ | 12.21 | $ | 12.78 | $ | 12.47 | $ | 11.46 | $ | 11.88 | ||||||
Total returnc | 4.03 | % | (1.05 | )% | 5.87 | % | 13.00 | % | 0.22 | % | 10.31 | % | ||||||
Ratios to average net assetsd | ||||||||||||||||||
Expenses | 1.17 | % | 1.17 | % | 1.16 | % | 1.17 | % | 1.17 | % | 1.17 | % | ||||||
Net investment income | 3.29 | % | 3.56 | % | 3.21 | % | 3.70 | % | 3.86 | % | 3.95 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 1,149,123 | $ | 1,120,471 | $ | 1,525,083 | $ | 1,319,527 | $ | 1,116,089 | $ | 1,222,493 | ||||||
Portfolio turnover rate | 3.03 | % | 8.51 | % | 6.31 | % | 8.55 | % | 14.14 | % | 8.16 | % |
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 fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Six Months Ended | ||||||||||||||||||
October 31, 2014 | Year Ended April 30, | |||||||||||||||||
(unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||
Advisor Class | ||||||||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 12.23 | $ | 12.80 | $ | 12.49 | $ | 11.48 | $ | 11.89 | $ | 11.22 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.25 | 0.50 | 0.49 | 0.52 | 0.53 | 0.54 | ||||||||||||
Net realized and unrealized gains (losses) | 0.28 | (0.57 | ) | 0.31 | 1.02 | (0.42 | ) | 0.67 | ||||||||||
Total from investment operations | 0.53 | (0.07 | ) | 0.80 | 1.54 | 0.11 | 1.21 | |||||||||||
Less distributions from net investment | ||||||||||||||||||
income | (0.25 | ) | (0.50 | ) | (0.49 | ) | (0.53 | ) | (0.52 | ) | (0.54 | ) | ||||||
Net asset value, end of period | $ | 12.51 | $ | 12.23 | $ | 12.80 | $ | 12.49 | $ | 11.48 | $ | 11.89 | ||||||
Total returnc | 4.36 | % | (0.39 | )% | 6.54 | % | 13.71 | % | 0.96 | % | 11.01 | % | ||||||
Ratios to average net assetsd | ||||||||||||||||||
Expenses | 0.52 | % | 0.52 | % | 0.51 | % | 0.52 | % | 0.52 | % | 0.52 | % | ||||||
Net investment income | 3.94 | % | 4.21 | % | 3.86 | % | 4.35 | % | 4.51 | % | 4.60 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 1,546,061 | $ | 1,314,233 | $ | 1,755,892 | $ | 1,389,908 | $ | 1,079,061 | $ | 875,566 | ||||||
Portfolio turnover rate | 3.03 | % | 8.51 | % | 6.31 | % | 8.55 | % | 14.14 | % | 8.16 | % |
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 fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
12 | Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Statement of Investments, October 31, 2014 (unaudited) | ||||||
Principal | ||||||
Amount | Value | |||||
Municipal Bonds 94.6% | ||||||
Alabama 1.0% | ||||||
Alabama State Incentives Financing Authority Special Obligation Revenue, Series A, 5.00%, | ||||||
9/01/42 | $ | 14,300,000 | $ | 15,828,241 | ||
Alabama State Port Authority Docks Facilities Revenue, Refunding, 6.00%, 10/01/40 | 6,000,000 | 6,897,300 | ||||
Birmingham Waterworks Board Water Revenue, | ||||||
Series A, Assured Guaranty, 5.125%, 1/01/34 | 5,600,000 | 6,235,152 | ||||
Series B, 5.00%, 1/01/38 | 3,500,000 | 3,924,900 | ||||
Series B, 5.00%, 1/01/43 | 8,000,000 | 8,886,640 | ||||
East Alabama Health Care Authority Health Care Facilities Revenue, Mandatory Put 9/01/18, | ||||||
Series B, 5.50%, 9/01/33 | 18,500,000 | 20,754,595 | ||||
Mobile GO, wts., Refunding and Improvement, AMBAC Insured, 5.00%, 2/15/30 | 5,000,000 | 5,263,100 | ||||
Montgomery County PBA Revenue, wts., Montgomery County Facilities Project, NATL Insured, | ||||||
5.00%, 3/01/31 | 2,370,000 | 2,493,856 | ||||
Pre-Refunded, 5.00%, 3/01/31 | 3,880,000 | 4,121,530 | ||||
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 | 11,419,100 | ||||
University of Alabama General Revenue, Series A, XLCA Insured, Pre-Refunded, 5.00%, | ||||||
7/01/28 | 5,000,000 | 5,381,700 | ||||
7/01/32 | 5,500,000 | 5,919,870 | ||||
University of South Alabama University Tuition Revenue, Capital Improvement, Refunding, | ||||||
AMBAC Insured, 5.00%, 12/01/36 | 11,570,000 | 12,164,813 | ||||
109,290,797 | ||||||
Alaska 0.6% | ||||||
Alaska State HFC Revenue, General Housing Purpose, Series A, FGIC Insured, Pre-Refunded, | ||||||
5.00%, | ||||||
12/01/29 | 4,000,000 | 4,014,040 | ||||
12/01/30 | 3,500,000 | 3,512,285 | ||||
Alaska State Industrial Development and Export Authority Revenue, Providence Health and | ||||||
Services, Series A, 5.00%, 10/01/40 | 10,000,000 | 10,925,600 | ||||
Alaska State International Airports Revenue, | ||||||
Series B, NATL Insured, 5.00%, 10/01/28 | 5,100,000 | 5,115,708 | ||||
Series C, 5.00%, 10/01/33 | 12,565,000 | 13,944,134 | ||||
aAnchorage Electric Utility Revenue, senior lien, Refunding, Series A, 5.00%, 12/01/41 | 6,625,000 | 7,396,680 | ||||
Matanuska-Susitna Borough Lease Revenue, Goose Creek Correctional Center Project, | ||||||
Assured Guaranty, 6.00%, 9/01/32 | 20,000,000 | 23,498,400 | ||||
68,406,847 | ||||||
Arizona 2.3% | ||||||
Arizona State COP, Department of Administration, Series A, AGMC Insured, 5.00%, 10/01/27 | 14,440,000 | 15,984,069 | ||||
Arizona State Lottery Revenue, Series A, AGMC Insured, 5.00%, 7/01/27 | 15,000,000 | 16,989,150 | ||||
Glendale Municipal Property Corp. Excise Tax Revenue, Subordinate, Refunding, Series C, 5.00%, | ||||||
7/01/38 | 15,500,000 | 16,568,725 | ||||
Maricopa County PCC, PCR, El Paso Electric Co. Palo Verde Project, Series A, 7.25%, | ||||||
2/01/40 | 10,000,000 | 11,762,000 | ||||
Mesa Utility Systems Revenue, 4.00%, 7/01/36 | 19,000,000 | 19,866,400 | ||||
Navajo County PCC Revenue, Mandatory Put 6/01/16, Series E, 5.75%, 6/01/34 | 7,200,000 | 7,726,248 | ||||
Phoenix Civic Improvement Corp. Airport Revenue, | ||||||
junior lien, Series A, 5.00%, 7/01/40 | 24,000,000 | 26,023,680 | ||||
senior lien, Series A, 5.00%, 7/01/33 | 28,000,000 | 31,303,160 |
franklintempleton.com
Semiannual Report | 13
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Arizona (continued) | ||||
Phoenix Civic Improvement Corp. Distribution Revenue, Capital Appreciation, Civic Plaza | ||||
Expansion Project, Series B, NATL RE, FGIC Insured, 5.50%, | ||||
7/01/32 | $ | 6,000,000 | $ | 7,878,840 |
7/01/34 | 5,000,000 | 6,607,150 | ||
7/01/35 | 9,860,000 | 13,054,246 | ||
Phoenix Civic Improvement Corp. Water System Revenue, junior lien, Refunding, Series A, 5.00%, | ||||
7/01/32 | 21,095,000 | 24,106,311 | ||
7/01/34 | 10,000,000 | 11,389,100 | ||
Pima County IDA Lease Revenue, Clark County Detention Facility Project, 5.00%, 9/01/39 | 20,000,000 | 20,798,400 | ||
Pinal County Electrical District No. 3 Revenue, Electric System, Refunding, 5.25%, 7/01/36 | 10,000,000 | 11,315,700 | ||
Salt River Project Agricultural Improvement and Power District Electric System Revenue, | ||||
Salt River Project, Series A, 5.00%, 1/01/38 | 10,000,000 | 10,903,100 | ||
University Medical Center Corp. Hospital Revenue, Tucson, 5.00%, 7/01/35 | 7,000,000 | 7,101,360 | ||
259,377,639 | ||||
Arkansas 0.1% | ||||
University of Arkansas Revenue, Various Facilities, Fayetteville Campus, Series B, 5.00%, | ||||
11/01/37 | 3,100,000 | 3,462,390 | ||
11/01/42 | 9,360,000 | 10,336,248 | ||
13,798,638 | ||||
California 13.4% | ||||
Bay Area Toll Authority Toll Bridge Revenue, San Francisco Bay Area, | ||||
Refunding, Series F-1, 5.00%, 4/01/28 | 24,000,000 | 27,845,760 | ||
Refunding, Series F-1, 5.00%, 4/01/34 | 9,530,000 | 10,824,555 | ||
Series F, Pre-Refunded, 5.00%, 4/01/31 | 20,000,000 | 21,338,000 | ||
Series F-1, Pre-Refunded, 5.00%, 4/01/34 | 20,250,000 | 23,197,185 | ||
Series F-1, Pre-Refunded, 5.00%, 4/01/39 | 14,000,000 | 16,037,560 | ||
Series F-1, Pre-Refunded, 5.50%, 4/01/43 | 30,000,000 | 34,870,500 | ||
California Infrastructure and Economic Development Bank Revenue, Bay Area Toll Bridges Seismic | ||||
Retrofit, first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/33 | 24,500,000 | 31,648,855 | ||
California State Economic Recovery GO, Refunding, Series A, 5.25%, 7/01/21 | 28,580,000 | 33,634,945 | ||
California State Educational Facilities Authority Revenue, Carnegie Institution of Washington, | ||||
Refunding, Series A, 5.00%, 7/01/40 | 24,525,000 | 27,382,408 | ||
California State GO, Various Purpose, | ||||
6.00%, 5/01/18 | 535,000 | 550,033 | ||
5.90%, 4/01/23 | 1,200,000 | 1,229,544 | ||
5.00%, 10/01/29 | 15,000,000 | 17,372,550 | ||
6.00%, 4/01/38 | 100,000,000 | 118,184,000 | ||
6.00%, 11/01/39 | 25,000,000 | 30,362,250 | ||
5.25%, 11/01/40 | 50,000,000 | 57,394,000 | ||
FGIC Insured, 6.00%, 5/01/20 | 850,000 | 874,803 | ||
Refunding, 5.25%, 3/01/30 | 30,000,000 | 34,865,400 | ||
Refunding, 6.00%, 3/01/33 | 12,000,000 | 14,856,000 | ||
Refunding, 5.25%, 3/01/38 | 20,000,000 | 21,876,800 | ||
Refunding, 5.50%, 3/01/40 | 25,000,000 | 28,647,750 | ||
California State Health Facilities Financing Authority Revenue, Children’s Hospital of Orange | ||||
County, Series A, 6.50%, | ||||
11/01/24 | 5,000,000 | 6,200,100 | ||
11/01/38 | 8,000,000 | 9,824,960 |
14 | Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
California (continued) | |||||
California State Public Works Board Lease Revenue, | |||||
Department of Education, Riverside Campus Project, Series B, 6.125%, 4/01/28 | $ | 2,740,000 | $ | 3,320,442 | |
Department of General Services, Office Buildings 8 and 9 Renovation, Series A, 6.00%, | |||||
4/01/27 | 3,980,000 | 4,782,726 | |||
Department of General Services, Office Buildings 8 and 9 Renovation, Series A, 6.125%, | |||||
4/01/29 | 5,000,000 | 6,047,200 | |||
Various Capital Projects, Series A, 5.00%, 4/01/30 | 18,000,000 | 20,553,840 | |||
Various Capital Projects, Series A, 5.00%, 4/01/33 | 12,475,000 | 14,129,310 | |||
Various Capital Projects, Series I, 6.125%, 11/01/29 | 29,300,000 | 36,222,125 | |||
California Statewide CDA, PCR, Refunding, 4.50%, 9/01/29 | 14,830,000 | 15,604,423 | |||
California Statewide CDA Revenue, | |||||
Adventist Health System/West, Series B, Assured Guaranty, 5.00%, 3/01/37 | 10,000,000 | 10,727,900 | |||
St. Joseph Health System, Series B, FGIC Insured, 5.75%, 7/01/47 | 5,000,000 | 5,560,450 | |||
St. Joseph Health System, Series E, AGMC Insured, 5.25%, 7/01/47 | 10,000,000 | 10,737,200 | |||
Colton Joint USD, GO, San Bernardino and Riverside Counties, Election of 2008, Series A, | |||||
Assured Guaranty, 5.375%, 8/01/34 | 15,000,000 | 16,534,200 | |||
Corona-Norco USD, GO, Riverside County, Capital Appreciation, Election of 2006, Series C, | |||||
AGMC Insured, | |||||
zero cpn., 8/01/39 | 7,500,000 | 2,530,725 | |||
zero cpn. to 8/01/17, 6.20% thereafter, 8/01/29 | 3,250,000 | 3,798,340 | |||
zero cpn. to 8/01/17, 6.80% thereafter, 8/01/39 | 8,500,000 | 9,855,835 | |||
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, Capital Appreciation, | |||||
Refunding, Series A, | |||||
5.75%, 1/15/46 | 25,000,000 | 28,668,000 | |||
6.00%, 1/15/49 | 20,000,000 | 23,134,000 | |||
zero cpn. to 1/14/24, 6.85% thereafter, 1/15/42 | 20,000,000 | 12,879,000 | |||
zero cpn. to 1/15/24, 5.40% thereafter, 1/15/30 | 15,475,000 | 10,944,075 | |||
Golden State Tobacco Securitization Corp. Tobacco Settlement Revenue, Enhanced, | |||||
Asset-Backed, Refunding, Series A, AMBAC Insured, 5.00%, 6/01/45 | 13,255,000 | 13,571,397 | |||
Hartnell Community College District GO, Monterey and San Benito Counties, Capital Appreciation, | |||||
Election of 2002, Series D, zero cpn., 8/01/39 | 45,000,000 | 9,144,000 | |||
Jefferson UHSD San Mateo County GO, Capital Appreciation, Election of 2006, Series D, | |||||
Pre-Refunded, zero cpn., | |||||
8/01/35 | 10,500,000 | 3,002,370 | |||
8/01/40 | 10,000,000 | 1,888,400 | |||
8/01/41 | 13,590,000 | 2,360,039 | |||
Los Angeles Community College District GO, Election of 2008, Series C, 5.25%, 8/01/39 | 30,000,000 | 35,762,700 | |||
Los Angeles Department of Airports Revenue, Los Angeles International Airport, Senior, | |||||
Refunding, Series A, 5.00%, 5/15/40 | 25,485,000 | 29,108,457 | |||
Series D, 5.00%, 5/15/40 | 50,000,000 | 57,109,000 | |||
Los Angeles Department of Water and Power Revenue, Power System, Series B, 5.00%, | |||||
7/01/31 | 20,000,000 | 23,511,800 | |||
Los Angeles USD, GO, | |||||
Election of 2002, Series B, AMBAC Insured, 4.50%, 7/01/31 | 28,745,000 | 30,872,130 | |||
Election of 2004, Series F, AGMC Insured, Pre-Refunded, 5.00%, 7/01/30 | 52,475,000 | 56,526,595 | |||
Election of 2004, Series G, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/26 | 10,250,000 | 11,041,402 | |||
Election of 2004, Series G, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/31 | 10,000,000 | 10,772,100 | |||
Series KRY, 5.25%, 7/01/34 | 36,625,000 | 42,873,591 | |||
M-S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39 | 12,500,000 | 17,187,375 | |||
New Haven USD, GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., | |||||
8/01/31 | 2,055,000 | 1,016,465 | |||
8/01/32 | 7,830,000 | 3,681,353 | |||
8/01/33 | 7,660,000 | 3,419,884 | |||
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
California (continued) | |||||
Placentia-Yorba Linda USD, GO, Orange County, Election of 2008, Series A, 5.25%, 8/01/32 | $ | 24,490,000 | $ | 27,578,434 | |
Pomona USD, GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, 5.00%, | |||||
8/01/29 | 5,585,000 | 6,105,745 | |||
Rialto USD, GO, San Bernardino County, Series A, AGMC Insured, zero cpn., 8/01/36 | 20,000,000 | 7,617,600 | |||
Sacramento County Airport System Revenue, Senior, Series B, AGMC Insured, 5.25%, 7/01/33 | 16,355,000 | 17,625,293 | |||
San Diego Public Facilities Financing Authority Water Revenue, Series B, 5.375%, 8/01/34 | 15,000,000 | 17,182,500 | |||
San Francisco City and County COP, Multiple Capital Improvement Projects, Series A, 5.25%, | |||||
4/01/31 | 10,000,000 | 11,323,200 | |||
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, | |||||
Capital Appreciation, Refunding, Series A, 5.75%, 1/15/21 | 50,000,000 | 51,046,000 | |||
Capital Appreciation, senior lien, ETM, zero cpn., 1/01/23 | 7,000,000 | 5,893,930 | |||
Orange County, Capital Appreciation, senior lien, 5.00%, 1/01/33 | 5,000,000 | 5,022,050 | |||
asenior lien, Refunding, Series A, 5.00%, 1/15/34 | 50,000,000 | 54,411,500 | |||
San Mateo UHSD, GO, Capital Appreciation, Election of 2010, | |||||
Refunding, Series A, zero cpn. to 9/01/28, 6.70% thereafter, 9/01/41 | 20,000,000 | 13,025,400 | |||
Series A, zero cpn. to 9/01/28, 6.45% thereafter, 9/01/33 | 6,065,000 | 3,894,215 | |||
San Mateo-Foster City School District GO, Capital Appreciation, Election of 2008, Series A, | |||||
zero cpn. to 8/01/26, 6.625% thereafter, 8/01/42 | 40,000,000 | 26,832,800 | |||
Santa Ana USD, GO, Orange County, Capital Appreciation, Election of 2008, Series B, | |||||
Assured Guaranty, zero cpn., | |||||
8/01/35 | 10,000,000 | 4,113,100 | |||
8/01/36 | 18,865,000 | 7,293,020 | |||
8/01/37 | 10,000,000 | 3,659,600 | |||
Santa Clara County GO, Election of 2008, Series A, 5.00%, 8/01/34 | 25,000,000 | 28,556,500 | |||
Upland USD, GO, San Bernardino County, Election of 2008, Series B, zero cpn., 8/01/39 | 50,075,000 | 11,636,929 | |||
Washington Township Health Care District Revenue, Series A, 6.25%, 7/01/39 | 3,000,000 | 3,392,700 | |||
West Contra Costa USD, GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., | |||||
8/01/29 | 10,000,000 | 5,643,000 | |||
8/01/30 | 20,845,000 | 11,055,980 | |||
8/01/31 | 20,000,000 | 10,056,000 | |||
8/01/32 | 10,730,000 | 5,097,608 | |||
Whittier UHSD, GO, Los Angeles County, Capital Appreciation, Election of 2008, Refunding, | |||||
Series A, zero cpn., 8/01/34 | 20,000,000 | 6,868,200 | |||
1,502,828,111 | |||||
Colorado 2.2% | |||||
Aurora Water Improvement Revenue, first lien, Series A, AMBAC Insured, 5.00%, | |||||
8/01/32 | 10,000,000 | 10,955,300 | |||
8/01/36 | 41,235,000 | 44,987,797 | |||
8/01/39 | 26,930,000 | 29,229,822 | |||
Colorado State Board of Governors University Enterprise System Revenue, Series A, | |||||
AGMC Insured, 5.00%, 3/01/37 | 10,000,000 | 10,710,200 | |||
NATL RE, FGIC Insured, 5.00%, 3/01/37 | 1,700,000 | 1,820,734 | |||
NATL RE, FGIC Insured, Pre-Refunded, 5.00%, 3/01/37 | 8,300,000 | 9,165,275 | |||
Colorado State COP, UCDHSC Fitzsimons Academic Projects, Refunding, Series A, 5.00%, | |||||
11/01/28 | 10,000,000 | 11,506,000 | |||
11/01/29 | 5,000,000 | 5,731,850 | |||
Colorado State Health Facilities Authority Revenue, | |||||
Health Facility Authority, Hospital, Refunding, Series B, AGMC Insured, 5.25%, 3/01/36 | 10,000,000 | 10,695,100 | |||
Valley View Hospital Assn. Project, Refunding, 5.50%, 5/15/28 | 5,000,000 | 5,517,700 | |||
Valley View Hospital Assn. Project, Refunding, 5.75%, 5/15/36 | 7,000,000 | 7,736,120 | |||
Colorado State Higher Education Capital Construction Lease Purchase Financing Program COP, | |||||
Pre-Refunded, 5.50%, 11/01/27 | 10,000,000 | 11,759,700 | |||
16 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Colorado (continued) | |||||
Colorado Water Resources and Power Development Authority Water Resources Revenue, | |||||
Arapahoe County Water and Wastewater Public Improvement District Project, Series E, | |||||
NATL Insured, 5.00%, 12/01/35 | $ | 10,000,000 | $ | 10,345,800 | |
Denver City and County Airport System Revenue, Subordinate, Series B, 5.25%, 11/15/33 | 16,405,000 | 19,234,206 | |||
Mesa State College Auxiliary Facilities System Enterprise Revenue, XLCA Insured, Pre-Refunded, | |||||
5.00%, 5/15/35 | 9,950,000 | 10,205,616 | |||
Park Creek Metropolitan District Revenue, Senior Limited Property Tax Supported, Refunding and | |||||
Improvement, Assured Guaranty, 6.25%, 12/01/30 | 6,000,000 | 6,874,560 | |||
Public Authority for Colorado Energy Natural Gas Purchase Revenue, 6.50%, 11/15/38 | 20,000,000 | 27,866,800 | |||
Regional Transportation District Sales Tax Revenue, FasTracks Project, Series A, 5.00%, | |||||
11/01/32 | 10,000,000 | 11,588,300 | |||
University of Colorado Enterprise System Revenue, University of Colorado Regents, Series A, | |||||
5.375%, 6/01/32 | 3,500,000 | 4,065,145 | |||
249,996,025 | |||||
District of Columbia 2.7% | |||||
District of Columbia Ballpark Revenue, Series B-1, BHAC Insured, 5.00%, | |||||
2/01/24 | 12,120,000 | 12,630,858 | |||
2/01/25 | 7,000,000 | 7,293,300 | |||
2/01/26 | 9,950,000 | 10,365,611 | |||
District of Columbia Hospital Revenue, Children’s Hospital Obligated Group Issue, Sub Series 1, | |||||
AGMC Insured, 5.45%, 7/15/35 | 23,620,000 | 26,119,941 | |||
District of Columbia Income Tax Secured Revenue, | |||||
Refunding, Series A, 5.00%, 12/01/31 | 10,000,000 | 11,460,700 | |||
Series A, 5.25%, 12/01/34 | 11,000,000 | 12,681,680 | |||
District of Columbia Revenue, | |||||
Assn. of American Medical Colleges Issue, Series B, 5.25%, 10/01/41 | 15,000,000 | 16,376,250 | |||
Deed Tax, Housing Production Trust Fund, New Communities Project, Series A, NATL Insured, | |||||
5.00%, 6/01/32 | 5,000,000 | 5,231,750 | |||
Georgetown University Issue, Growth and Income Securities, AMBAC Insured, zero cpn. to | |||||
4/01/18, 5.00% thereafter, 4/01/32 | 15,370,000 | 14,010,831 | |||
Medlantic/Helix Issue, Series B, AGMC Insured, 5.00%, 8/15/38 | 20,000,000 | 21,014,000 | |||
National Academy of Sciences Project, Series A, 5.00%, 4/01/35 | 10,905,000 | 11,815,677 | |||
National Academy of Sciences Project, Series A, 5.00%, 4/01/40 | 16,960,000 | 18,211,139 | |||
National Public Radio Inc. Issue, 5.00%, 4/01/35 | 7,750,000 | 8,579,095 | |||
District of Columbia Tobacco Settlement FICO Revenue, Asset-Backed, Refunding, 6.50%, | |||||
5/15/33 | 35,000,000 | 39,121,250 | |||
District of Columbia University Revenue, Georgetown University Issue, Refunding, Series D, | |||||
5.50%, 4/01/36 | 5,000,000 | 5,694,600 | |||
District of Columbia Water and Sewer Authority Public Utility Revenue, senior lien, Series A, | |||||
Pre-Refunded, 6.00%, 10/01/35 | 8,000,000 | 9,582,720 | |||
Metropolitan Washington D.C. Airports Authority Airport System Revenue, | |||||
Refunding, Series A, 5.375%, 10/01/29 | 5,000,000 | 5,685,300 | |||
Refunding, Series A, 5.00%, 10/01/35 | 5,000,000 | 5,699,900 | |||
Refunding, Series C, 5.25%, 10/01/27 | 10,745,000 | 12,298,620 | |||
Series A, 5.00%, 10/01/39 | 5,000,000 | 5,583,250 | |||
Series C, 5.00%, 10/01/26 | 10,235,000 | 11,617,953 | |||
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 | 28,810,250 | |||
299,884,675 |
franklintempleton.com
Semiannual Report | 17
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Florida 6.7% | ||||
Brevard County Health Facilities Authority Health Facilities Revenue, Health First Inc. Project, | ||||
Series B, 7.00%, 4/01/39 | $ | 6,500,000 | $ | 7,632,690 |
Brevard County Local Option Fuel Tax Revenue, NATL RE, FGIC Insured, 5.00%, 8/01/37 | 12,245,000 | 12,629,493 | ||
Broward County Water and Sewer Utility Revenue, Series A, 5.25%, 10/01/34 | 8,800,000 | 9,802,496 | ||
Cape Coral Water and Sewer Revenue, | ||||
AMBAC Insured, 5.00%, 10/01/36 | 5,000,000 | 5,188,450 | ||
Refunding, Series A, AGMC Insured, 5.00%, 10/01/42 | 21,510,000 | 23,240,479 | ||
Citizens Property Insurance Corp. Revenue, | ||||
Costal Account, senior secured, Series A-1, 5.00%, 6/01/20 | 20,000,000 | 23,436,400 | ||
High-Risk Account, senior secured, Series A-1, 5.25%, 6/01/17 | 24,250,000 | 26,958,967 | ||
High-Risk Account, senior secured, Series A-1, 5.50%, 6/01/17 | 10,000,000 | 11,180,600 | ||
High-Risk Account, senior secured, Series A-1, 6.00%, 6/01/17 | 25,000,000 | 28,248,250 | ||
Clearwater City Water and Sewer Revenue, Series A, 5.25%, 12/01/39 | 7,000,000 | 7,968,800 | ||
Florida State Board of Education Public Education GO, Capital Outlay, Refunding, Series D, | ||||
6.00%, 6/01/23 | 17,500,000 | 22,908,375 | ||
Florida State Mid-Bay Bridge Authority Revenue, Series A, | ||||
AMBAC Insured, zero cpn., 10/01/23 | 4,950,000 | 3,267,594 | ||
AMBAC Insured, zero cpn., 10/01/24 | 2,970,000 | 1,845,291 | ||
Pre-Refunded, zero cpn., 10/01/23 | 50,000 | 35,954 | ||
Pre-Refunded, zero cpn., 10/01/24 | 30,000 | 20,374 | ||
Florida State Municipal Loan Council Revenue, Series D, AGMC Insured, 5.50%, 10/01/41 | 4,750,000 | 5,155,128 | ||
Hernando County School Board COP, NATL Insured, 5.00%, 7/01/30 | 10,000,000 | 10,183,900 | ||
Hillsborough County Aviation Authority Revenue, Series A, Assured Guaranty, 5.50%, 10/01/38 | 5,000,000 | 5,604,200 | ||
Hillsborough County IDA, PCR, Tampa Electric Co. Project, Series A, 5.65%, 5/15/18 | 6,500,000 | 7,532,070 | ||
Hillsborough County School Board COP, Master Lease Program, Refunding, Series A, 5.00%, | ||||
7/01/28 | 17,650,000 | 19,829,598 | ||
Indian River County School Board COP, NATL RE, FGIC Insured, 5.00%, 7/01/27 | 16,485,000 | 17,882,269 | ||
Jacksonville Economic Development Commission Health Care Facilities Revenue, Mayo Clinic, | ||||
5.00%, 11/15/36 | 17,950,000 | 18,806,035 | ||
Jacksonville Excise Taxes Revenue, Series A, AMBAC Insured, 5.00%, 10/01/32 | 6,015,000 | 6,196,412 | ||
Lee County Transportation Facilities Revenue, Sanibel Bridges and Causeway Project, Series B, | ||||
CIFG Insured, Pre-Refunded, 5.00%, 10/01/35 | 10,645,000 | 11,109,974 | ||
Martin County Health Facilities Authority Hospital Revenue, Martin Memorial Medical Center, | ||||
5.50%, 11/15/42 | 3,800,000 | 4,177,910 | ||
Miami-Dade County Aviation Revenue, Miami International Airport, Hub of the Americas, | ||||
Refunding, Series A, | ||||
5.50%, 10/01/36 | 20,000,000 | 22,842,600 | ||
Assured Guaranty, 5.25%, 10/01/33 | 11,000,000 | 12,205,270 | ||
Assured Guaranty, 5.25%, 10/01/38 | 13,000,000 | 14,230,710 | ||
Miami-Dade County Educational Facilities Authority Revenue, University of Miami Issue, Series A, | ||||
5.50%, 4/01/38 | 12,500,000 | 13,187,250 | ||
Miami-Dade County Expressway Authority Toll System Revenue, | ||||
Refunding, Series A, 5.00%, 7/01/29 | 10,000,000 | 11,380,600 | ||
Refunding, Series A, 5.00%, 7/01/32 | 6,375,000 | 7,180,673 | ||
Series A, 5.00%, 7/01/40 | 30,265,000 | 32,302,440 | ||
Miami-Dade County GO, Building Better Communities Program, Series B-1, 5.75%, 7/01/33 | 20,000,000 | 22,767,000 | ||
Miami-Dade County Public Facilities Revenue, Jackson Health System, Series A, NATL Insured, | ||||
5.00%, 6/01/30 | 10,630,000 | 10,792,639 | ||
Miami-Dade County School Board COP, | ||||
Refunding, Series A, 5.00%, 5/01/31 | 10,000,000 | 11,171,200 | ||
Series A, Assured Guaranty, 5.25%, 2/01/27 | 10,000,000 | 11,031,300 |
18 | Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Florida (continued) | |||||
Miami-Dade County Special Obligation Revenue, | |||||
Juvenile Courthouse Project, Series A, AMBAC Insured, 5.00%, 4/01/32 | $ | 10,000,000 | $ | 10,025,800 | |
sub. bond, Refunding, Series B, 5.00%, 10/01/31 | 5,000,000 | 5,616,700 | |||
sub. bond, Refunding, Series B, 5.00%, 10/01/32 | 4,500,000 | 5,021,730 | |||
sub. bond, Refunding, Series B, 5.00%, 10/01/35 | 3,250,000 | 3,610,100 | |||
Miami-Dade County Transit System Sales Surtax Revenue, Refunding, AGMC Insured, 5.00%, | |||||
7/01/38 | 18,845,000 | 20,446,071 | |||
Miami-Dade County Water and Sewer System Revenue, Refunding, Series A, 5.00%, 10/01/42 | 20,000,000 | 22,186,800 | |||
Orange County Health Facilities Authority Hospital Revenue, Orlando Regional Healthcare System, | |||||
Refunding, Series B, AGMC Insured, 5.00%, 12/01/32 | 20,000,000 | 22,057,800 | |||
Orange County School Board COP, Series A, Assured Guaranty, 5.50%, 8/01/34 | 15,000,000 | 17,099,400 | |||
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 | 19,343,498 | |||
Orlando-Orange County Expressway Authority Revenue, | |||||
Series A, 5.00%, 7/01/40 | 5,000,000 | 5,494,600 | |||
Series A, AGMC Insured, 5.00%, 7/01/32 | 12,000,000 | 13,004,160 | |||
Series C, 5.00%, 7/01/40 | 15,000,000 | 16,483,800 | |||
Palm Beach County Solid Waste Authority Revenue, Improvement, Series B, 5.50%, 10/01/28 | 10,000,000 | 11,569,400 | |||
Pensacola Airport Revenue, Refunding, 6.25%, 10/01/38 | 16,500,000 | 18,135,975 | |||
Port St. Lucie Utility System Revenue, Refunding, Assured Guaranty, 5.25%, 9/01/35 | 3,000,000 | 3,335,910 | |||
South Broward Hospital District Revenue, South Broward Hospital District Obligated Group, | |||||
Refunding, | |||||
4.75%, 5/01/28 | 10,000,000 | 10,687,100 | |||
5.00%, 5/01/36 | 12,500,000 | 13,330,750 | |||
South Lake County Hospital District Revenue, South Lake Hospital Inc., Series A, 6.25%, | |||||
4/01/39 | 5,735,000 | 6,448,262 | |||
South Miami Health Facilities Authority Hospital Revenue, Baptist Health South Florida Obligated | |||||
Group, 5.00%, 8/15/32 | 31,070,000 | 33,505,267 | |||
St. Lucie County Transportation Revenue, AMBAC Insured, 5.00%, 8/01/27 | 5,785,000 | 6,015,590 | |||
Tallahassee Energy System Revenue, Refunding, NATL Insured, 5.00%, 10/01/37 | 20,000,000 | 21,898,800 | |||
Town of Davie Water and Sewer Revenue, AGMC Insured, 5.00%, 10/01/32 | 8,575,000 | 9,390,740 | |||
754,641,644 | |||||
Georgia 3.5% | |||||
Athens-Clarke County Unified Government Water and Sewerage Revenue, 5.50%, 1/01/38 | 14,500,000 | 16,563,495 | |||
Atlanta Airport General Revenue, Refunding, Series C, 6.00%, 1/01/30 | 15,000,000 | 18,244,950 | |||
Atlanta Airport Passenger Facility Charge Revenue, General, sub. lien, Series J, AGMC Insured, | |||||
Pre-Refunded, 5.00%, 1/01/29 | 10,000,000 | 10,075,700 | |||
Atlanta Development Authority Revenue, Tuff Yamacraw LLC Project, Refunding, Series A, | |||||
AMBAC Insured, 5.00%, | |||||
1/01/24 | 6,385,000 | 7,118,828 | |||
1/01/25 | 6,955,000 | 7,783,062 | |||
1/01/26 | 5,000,000 | 5,599,150 | |||
1/01/27 | 5,000,000 | 5,647,150 | |||
Atlanta Water and Wastewater Revenue, | |||||
Refunding, Series A, 6.25%, 11/01/34 | 20,000,000 | 23,943,200 | |||
Refunding, Series B, AGMC Insured, 5.25%, 11/01/34 | 30,000,000 | 33,846,900 | |||
Series A, NATL Insured, 5.00%, 11/01/33 | 5,720,000 | 5,759,068 | |||
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 | 5,304,400 | |||
5.25%, 7/01/38 | 10,000,000 | 10,705,100 |
franklintempleton.com
Semiannual Report | 19
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Georgia (continued) | ||||
Bulloch County Development Authority Student Housing Revenue, Georgia Southern University | ||||
Housing Foundation Four LLC Project, Assured Guaranty, 5.375%, 7/01/39 | $ | 23,075,000 | $ | 25,318,813 |
Burke County Development Authority PCR, Oglethorpe Power Corp. Vogtle Project, | ||||
Series B, 5.50%, 1/01/33 | 15,000,000 | 15,985,200 | ||
Series E, 7.00%, 1/01/23 | 25,000,000 | 28,654,500 | ||
Clark County Hospital Authority Revenue, Athens Regional Medical Center Project, NATL Insured, | ||||
5.00%, 1/01/27 | 5,000,000 | 5,285,400 | ||
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 | 11,644,982 | ||
DeKalb Newton and Gwinnett Counties Joint Development Authority Revenue, Georgia Gwinnett | ||||
College Foundation LLC Project, 6.00%, 7/01/34 | 10,000,000 | 11,467,200 | ||
aFayette County Hospital Authority Revenue Anticipation Certificates, Piedmont Fayette Hospital | ||||
Project, Refunding, Series A, 5.00%, 7/01/39 | 11,420,000 | 12,586,325 | ||
Georgia State Higher Education Facilities Authority Revenue, | ||||
USG Real Estate Foundation I LLC Project, 6.25%, 6/15/40 | 13,970,000 | 16,049,155 | ||
USG Real Estate Foundation I LLC Project, Assured Guaranty, 5.625%, 6/15/38 | 5,000,000 | 5,628,300 | ||
USG Real Estate Foundation II LLC Project, Series A, 5.50%, 6/15/34 | 10,000,000 | 11,164,600 | ||
USG Real Estate Foundation III LLC Project, Series A, 5.00%, 6/15/40 | 5,000,000 | 5,347,350 | ||
Houston County Hospital Authority Revenue, Anticipation Certificates, Houston Healthcare Project, | ||||
5.25%, 10/01/35 | 10,485,000 | 11,227,023 | ||
Jefferson PBA Revenue, Jackson County Facilities, Series A, XLCA Insured, Pre-Refunded, 5.00%, | ||||
3/01/32 | 6,075,000 | 6,708,319 | ||
Main Street Natural Gas Inc. Revenue, Gas Project, Series A, 5.50%, 9/15/28 | 5,000,000 | 6,041,550 | ||
Medical Center Hospital Authority Revenue, Anticipation Certificates, Columbus Regional | ||||
Healthcare System Inc. Project, Refunding, Assured Guaranty, 6.50%, 8/01/38 | 10,000,000 | 11,407,300 | ||
Private Colleges and Universities Authority Revenue, Emory University, Refunding, | ||||
Series A, 5.00%, 9/01/41 | 10,000,000 | 11,277,800 | ||
Series A, 5.00%, 10/01/43 | 10,000,000 | 11,409,900 | ||
Series C, 5.25%, 9/01/39 | 21,000,000 | 23,997,330 | ||
Richmond County Development Authority Educational Facilities Revenue, MCG-PPG Cancer | ||||
Research Center LLC Project, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 12/15/29 | 5,000,000 | 5,027,050 | ||
386,819,100 | ||||
Hawaii 0.5% | ||||
Hawaii State Department of Budget and Finance Special Purpose Revenue, Hawaiian Electric Co. | ||||
and Subsidiary Projects, 6.50%, 7/01/39 | 7,500,000 | 8,727,975 | ||
Hawaii State GO, Series EE, 4.00%, 11/01/32 | 7,000,000 | 7,483,700 | ||
Honolulu City and County Board of Water Supply Water System Revenue, Refunding, Series A, | ||||
NATL Insured, 5.00%, 7/01/36 | 20,000,000 | 21,150,200 | ||
Honolulu City and County GO, ETM, 6.00%, 12/01/14 | 150,000 | 150,636 | ||
Honolulu City and County MFHR, Waipahu Towers Project, Series A, GNMA Secured, 6.90%, | ||||
6/20/35 | 1,080,000 | 1,083,164 | ||
Honolulu City and County Wastewater System Revenue, First Bond Resolution, Senior Series A, | ||||
5.00%, 7/01/38 | 10,000,000 | 11,147,000 | ||
49,742,675 | ||||
Idaho 0.1% | ||||
Idaho State Health Facilities Authority Revenue, St. Luke’s Health System Project, Series A, | ||||
6.75%, 11/01/37 | 12,500,000 | 14,551,375 | ||
Illinois 5.7% | ||||
Aurora Waterworks and Sewerage Revenue, XLCA Insured, 4.75%, 12/01/36 | 7,765,000 | 7,772,221 | ||
Bolingbrook GO, Will and DuPage Counties, Capital Appreciation, Refunding, Series A, zero cpn., | ||||
1/01/36 | 19,000,000 | 6,597,940 | ||
20 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Illinois (continued) | ||||
Bourbonnais Industrial Project Revenue, Olivet Nazarene University Project, | ||||
5.00%, 11/01/44 | $ | 2,000,000 | $ | 2,070,260 |
Radian Insured, 5.125%, 11/01/37 | 5,000,000 | 5,270,800 | ||
Chicago Board of Education GO, Refunding, Series C, AGMC Insured, 5.25%, 12/01/23 | 10,000,000 | 11,111,500 | ||
Chicago GO, | ||||
Lakefront Millennium Project, Parking Facilities, NATL Insured, ETM, 5.75%, 1/01/23 | 8,955,000 | 11,227,421 | ||
Refunding, Series A, AGMC Insured, 5.00%, 1/01/28 | 13,445,000 | 14,277,380 | ||
Refunding, Series A, AGMC Insured, 5.00%, 1/01/29 | 26,000,000 | 27,522,040 | ||
Chicago Midway Airport Revenue, Refunding, Series C, Assured Guaranty, 5.50%, 1/01/24 | 18,460,000 | 22,762,103 | ||
Chicago O’Hare International Airport Revenue, General, third lien, | ||||
Series A, 5.75%, 1/01/39 | 5,000,000 | 5,813,150 | ||
Series C, AGMC Insured, 5.25%, 1/01/35 | 12,850,000 | 14,022,048 | ||
Chicago Park District GO, Series A, 5.00%, 1/01/33 | 4,500,000 | 4,874,625 | ||
Chicago Transit Authority Sales Tax Receipts Revenue, 5.25%, 12/01/40 | 10,000,000 | 11,094,300 | ||
Chicago Wastewater Transmission Revenue, second lien, Series A, BHAC Insured, 5.50%, | ||||
1/01/38 | 18,000,000 | 20,098,260 | ||
Chicago Waterworks Revenue, second lien, Refunding, 5.00%, 11/01/42 | 10,000,000 | 10,834,500 | ||
Cook County GO, Refunding, Series A, 5.25%, 11/15/33 | 8,720,000 | 9,508,114 | ||
Illinois Health Facilities Authority Revenue, | ||||
Loyola University Health System, Series A, NATL Insured, ETM, 5.625%, 7/01/18 | 2,105,000 | 2,462,682 | ||
South Suburban Hospital, ETM, 7.00%, 2/15/18 | 2,160,000 | 2,400,538 | ||
Illinois State Finance Authority Revenue, | ||||
Alexian Brothers Health System, Refunding, Series A, AGMC Insured, 5.50%, 1/01/28 | 45,000,000 | 48,789,900 | ||
Art Institute of Chicago, Refunding, Series A, 5.25%, 3/01/40 | 16,000,000 | 17,388,640 | ||
Columbia College, NATL Insured, 5.00%, 12/01/32 | 15,440,000 | 16,021,934 | ||
Resurrection Health Care, Series B, AGMC Insured, 5.25%, 5/15/29 | 28,650,000 | 30,485,892 | ||
Riverside Health System, 6.25%, 11/15/35 | 5,000,000 | 5,844,600 | ||
Roosevelt University Project, Refunding, 6.50%, 4/01/39 | 15,000,000 | 16,396,200 | ||
Rush University Medical Center Obligated Group, Refunding, Series B, NATL Insured, 5.75%, | ||||
11/01/28 | 2,500,000 | 2,850,500 | ||
Rush University Medical Center Obligated Group, Refunding, Series B, NATL Insured, 5.25%, | ||||
11/01/35 | 3,000,000 | 3,308,940 | ||
Rush University Medical Center Obligated Group, Series B, 7.25%, 11/01/38 | 10,000,000 | 11,830,200 | ||
Sherman Health Systems, Series A, 5.50%, 8/01/37 | 5,000,000 | 5,487,850 | ||
Illinois State Finance Authority Student Housing Revenue, | ||||
CHF-DeKalb II LLC, Northern Illinois University Project, 6.875%, 10/01/43 | 15,000,000 | 18,152,700 | ||
CHF-Normal LLC, Illinois State University Project, 7.00%, 4/01/43 | 7,500,000 | 9,027,750 | ||
Illinois State GO, | ||||
5.25%, 7/01/30 | 16,915,000 | 18,538,840 | ||
5.50%, 7/01/33 | 5,000,000 | 5,613,900 | ||
5.50%, 7/01/38 | 20,000,000 | 21,945,400 | ||
AGMC Insured, 5.00%, 9/01/29 | 12,000,000 | 12,209,640 | ||
Assured Guaranty, 5.25%, 4/01/34 | 10,000,000 | 10,452,200 | ||
Refunding, 5.00%, 1/01/24 | 12,820,000 | 13,832,267 | ||
Illinois State Municipal Electric Agency Power Supply System Revenue, Series A, NATL RE, | ||||
FGIC Insured, 5.00%, 2/01/35 | 20,000,000 | 21,365,800 | ||
Illinois State Revenue, Build Illinois, Sales Tax Bonds, Series B, 5.25%, 6/15/34 | 15,000,000 | 16,778,700 | ||
Illinois State Toll Highway Authority Toll Highway Revenue, Senior, Refunding, Series A-1, 5.00%, | ||||
1/01/31 | 10,245,000 | 11,646,311 |
franklintempleton.com
Semiannual Report | 21
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Illinois (continued) | ||||
Metropolitan Pier and Exposition Authority Dedicated State Tax Revenue, | ||||
Capital Appreciation, McCormick Place Expansion Project, Refunding, Series B, NATL Insured, | ||||
5.50%, 6/15/20 | $ | 8,240,000 | $ | 9,097,207 |
Capital Appreciation, McCormick Place Expansion Project, Refunding, Series B, NATL Insured, | ||||
5.55%, 6/15/21 | 6,000,000 | 6,610,680 | ||
Capital Appreciation, McCormick Place Expansion Project, Refunding, Series B, NATL Insured, | ||||
zero cpn. to 6/14/17, 5.65% thereafter, 6/15/22 | 30,000,000 | 30,716,400 | ||
McCormick Place Expansion Project, Series A, 5.50%, 6/15/50 | 15,000,000 | 16,340,250 | ||
Metropolitan Pier and Exposition Authority Hospitality Facilities Revenue, McCormick Place | ||||
Convention Center, ETM, 7.00%, 7/01/26 | 12,000,000 | 16,126,320 | ||
Metropolitan Pier and Exposition Authority Revenue, McCormick Place Expansion Project, | ||||
Series A, 5.00%, 6/15/42 | 5,000,000 | 5,386,300 | ||
Railsplitter Tobacco Settlement Authority Revenue, Refunding, 6.00%, 6/01/28 | 14,530,000 | 16,989,493 | ||
Regional Transportation Authority Revenue, Series A, AMBAC Insured, 7.20%, 11/01/20 | 720,000 | 843,077 | ||
Southwestern Illinois Development Authority Revenue, Capital Appreciation, Local Government | ||||
Program, AGMC Insured, zero cpn., | ||||
12/01/24 | 3,850,000 | 2,588,663 | ||
12/01/26 | 7,700,000 | 4,684,064 | ||
University of Illinois University Revenue, Auxiliary Facilities System, | ||||
Refunding, Series A, 5.125%, 4/01/36 | 2,950,000 | 3,249,513 | ||
Refunding, Series A, 5.25%, 4/01/41 | 5,000,000 | 5,495,050 | ||
Series A, 5.75%, 4/01/38 | 7,000,000 | 8,060,080 | ||
Upper River Valley Development Authority Environmental Facilities Revenue, General Electric Co. | ||||
Project, 5.45%, 2/01/23 | 3,600,000 | 3,612,384 | ||
637,487,527 | ||||
Indiana 1.4% | ||||
Carmel RDA Lease Rental Revenue, Multipurpose, Series A, 4.00%, 2/01/38 | 5,220,000 | 5,406,145 | ||
Indiana Bond Bank Revenue, Special Program, Hendricks Regional Health Project, Series A, | ||||
5.50%, 2/01/29 | 9,000,000 | 10,238,490 | ||
Indiana Health and Educational Facility Financing Authority Hospital Revenue, 5.50%, 3/01/27 | 6,500,000 | 7,027,410 | ||
Indiana State Finance Authority Environmental Revenue, Duke Energy Indiana Inc. Project, | ||||
Refunding, Series B, 6.00%, 8/01/39 | 10,000,000 | 11,230,900 | ||
Indiana State Finance Authority Hospital Revenue, Deaconess Hospital Obligated Group, Series A, | ||||
6.75%, 3/01/39 | 9,750,000 | 11,424,075 | ||
Indiana State Finance Authority Revenue, Educational Facilities, Marian University Project, | ||||
6.375%, 9/15/41 | 12,500,000 | 13,846,250 | ||
Indiana State Finance Authority Wastewater Utility Revenue, CWA Authority Project, first lien, | ||||
Refunding, Series A, 5.00%, 10/01/39 | 30,000,000 | 33,980,400 | ||
Series A, 5.00%, 10/01/37 | 5,000,000 | 5,653,950 | ||
Series A, 5.25%, 10/01/38 | 12,000,000 | 13,648,320 | ||
Series A, 4.00%, 10/01/42 | 22,615,000 | 23,060,290 | ||
Indiana State Municipal Power Agency Power Supply System Revenue, Series B, 6.00%, | ||||
1/01/39 | 4,000,000 | 4,532,240 | ||
Indianapolis Local Public Improvement Bond Bank Revenue, Pilot Infrastructure Project, Series F, | ||||
Assured Guaranty, 5.00%, 1/01/35 | 10,000,000 | 11,150,700 | ||
Jasper County PCR, Northern Indiana Public Service Co. Project, Refunding, Series C, | ||||
NATL Insured, 5.60%, 11/01/16 | 5,000,000 | 5,389,950 | ||
University of Southern Indiana Revenue, Student Fee, Series J, Assured Guaranty, 5.75%, | ||||
10/01/28 | 2,000,000 | 2,332,460 | ||
158,921,580 |
22 | Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Kansas 0.2% | ||||
Kansas State Development Finance Authority Hospital Revenue, Adventist Health System/Sunbelt | ||||
Obligated Group, Refunding, Series C, 5.75%, 11/15/38 | $ | 6,250,000 | $ | 7,200,875 |
Wyandotte County Kansas City Unified Government Utility System Revenue, | ||||
Improvement, Refunding, Series A, 5.00%, 9/01/44 | 3,000,000 | 3,360,570 | ||
Series A, BHAC Insured, 5.25%, 9/01/34 | 5,000,000 | 5,495,200 | ||
16,056,645 | ||||
Kentucky 0.8% | ||||
Carroll County Environmental Facilities Revenue, Kentucky Utilities Co. Project, Series A, | ||||
AMBAC Insured, 5.75%, 2/01/26 | 12,500,000 | 14,223,875 | ||
Jefferson County Capital Projects Corp. Lease Revenue, Refunding, Series A, zero cpn., | ||||
8/15/16 | 7,005,000 | 6,903,848 | ||
8/15/17 | 7,115,000 | 6,899,558 | ||
Kentucky Economic Development Finance Authority Health System Revenue, Norton Healthcare | ||||
Inc., Refunding, Series B, NATL Insured, zero cpn., 10/01/18 | 8,585,000 | 7,791,145 | ||
Kentucky Economic Development Finance Authority Louisville Arena Project Revenue, Louisville | ||||
Arena Authority Inc., Series A, Sub Series A-1, Assured Guaranty, 6.00%, 12/01/38 | 4,000,000 | 4,269,200 | ||
Kentucky State Municipal Power Agency Power System Revenue, Prairie State Project, Series A, | ||||
NATL Insured, 5.00%, 9/01/32 | 10,000,000 | 10,899,600 | ||
Kentucky State Property and Buildings Commission Revenues, Project No. 90, Refunding, 5.50%, | ||||
11/01/28 | 15,000,000 | 17,283,300 | ||
Louisville/Jefferson County Metro Government College Revenue, Bellarmine University Project, | ||||
Refunding and Improvement, Series A, 6.00%, 5/01/33 | 3,000,000 | 3,276,240 | ||
Louisville/Jefferson County Metro Government Health Facilities Revenue, Jewish Hospital and | ||||
St. Mary’s HealthCare Inc. Project, Pre-Refunded, 6.125%, 2/01/37 | 11,500,000 | 13,486,280 | ||
Paducah Electric Plant Board Revenue, Series A, Assured Guaranty, 5.25%, 10/01/35 | 7,000,000 | 7,804,370 | ||
92,837,416 | ||||
Louisiana 1.9% | ||||
East Baton Rouge Sewerage Commission Revenue, Refunding, Series A, 5.25%, 2/01/39 | 6,000,000 | 6,703,020 | ||
Lafayette Communications Systems Revenue, XLCA Insured, 5.25%, 11/01/27 | 12,485,000 | 13,759,718 | ||
Lafayette Public Improvement Sales Tax GO, Series B, NATL Insured, Pre-Refunded, 4.75%, | ||||
3/01/30 | 5,055,000 | 5,180,718 | ||
Lafayette Public Trust Financing Authority Revenue, Ragin’ Cajun Facilities, Housing and Package | ||||
Project, Assured Guaranty, 5.50%, 10/01/35 | 6,000,000 | 6,757,680 | ||
Louisiana Local Government Environmental Facilities and CDA Revenue, | ||||
Bossier City Public Improvement Projects, AMBAC Insured, 5.00%, 11/01/32 | 6,730,000 | 7,249,960 | ||
sub. lien, East Baton Rouge, Series A, 5.00%, 2/01/44 | 5,820,000 | 6,435,989 | ||
Louisiana Public Facilities Authority Hospital Revenue, Franciscan Missionaries of Our Lady Health | ||||
System Project, Series A, 6.75%, 7/01/39 | 10,000,000 | 11,679,100 | ||
Louisiana Public Facilities Authority Revenue, | ||||
Millennium Housing LLC Student Housing, Student Housing and Auxiliary Facilities Project, | ||||
Assured Guaranty, 5.00%, 11/01/30 | 10,000,000 | 10,766,500 | ||
Ochsner Clinic Foundation Project, 6.75%, 5/15/41 | 15,500,000 | 18,337,430 | ||
Ochsner Clinic Foundation Project, Series B, 5.25%, 5/15/38 | 10,260,000 | 10,746,427 | ||
Ochsner Clinic Foundation Project, Series B, 5.50%, 5/15/47 | 10,000,000 | 10,529,300 | ||
Ochsner Clinic Foundation Project, Series B, ETM, 5.75%, 5/15/23 | 10,000,000 | 12,908,500 | ||
Louisiana State Gasoline and Fuels Tax Revenue, | ||||
second lien, Series B, 5.00%, 5/01/45 | 13,690,000 | 15,234,643 | ||
Series A, AGMC Insured, Pre-Refunded, 5.00%, 5/01/35 | 31,040,000 | 31,778,441 |
franklintempleton.com
Semiannual Report | 23
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Louisiana (continued) | ||||
St. Charles Parish Consolidated Waterworks and Wastewater District No. 1 Revenue, Series A, | ||||
AMBAC Insured, 5.00%, 7/01/36 | $ | 6,230,000 | $ | 6,480,820 |
St. John the Baptist Parish Revenue, Marathon Oil Corp. Project, Series A, 5.125%, 6/01/37 | 40,500,000 | 42,758,280 | ||
217,306,526 | ||||
Maine 0.3% | ||||
Maine State Educational Loan Authority Student Loan Revenue, Supplemental Education Loan | ||||
Program, Series A-3, Assured Guaranty, 5.875%, 12/01/39 | 12,190,000 | 13,246,263 | ||
Maine State Health and Higher Educational Facilities Authority Revenue, Maine General Medical | ||||
Center Issue, | ||||
6.75%, 7/01/36 | 4,250,000 | 4,724,725 | ||
7.00%, 7/01/41 | 10,000,000 | 11,197,600 | ||
29,168,588 | ||||
Maryland 1.0% | ||||
Baltimore Project Revenue, | ||||
Wastewater Projects, Series C, 5.00%, 7/01/38 | 5,000,000 | 5,734,850 | ||
Wastewater Projects, Series C, 5.00%, 7/01/43 | 10,000,000 | 11,350,400 | ||
Water Projects, Series C, AMBAC Insured, 5.00%, 7/01/37 | 8,130,000 | 8,781,701 | ||
Maryland State EDC, PCR, Potomac Electric Project, Refunding, 6.20%, 9/01/22 | 5,000,000 | 5,933,650 | ||
Maryland State EDC Student Housing Revenue, University of Maryland College Park Projects, | ||||
Refunding, Assured Guaranty, 5.00%, 6/01/33 | 15,000,000 | 15,685,650 | ||
Maryland State GO, Refunding, Second Series C, 5.00%, 8/01/23 | 24,265,000 | 30,228,366 | ||
Maryland State Health and Higher Educational Facilities Authority Revenue, | ||||
Anne Arundel Health System Issue, Series A, 6.75%, 7/01/39 | 3,000,000 | 3,649,740 | ||
LifeBridge Health Issue, Refunding, Assured Guaranty, 5.00%, 7/01/28 | 3,000,000 | 3,201,810 | ||
Upper Chesapeake Hospitals Issue, Series C, 6.00%, 1/01/38 | 5,000,000 | 5,468,700 | ||
Western Maryland Health System Issue, Series A, NATL Insured, Pre-Refunded, 5.00%, | ||||
7/01/34 | 19,345,000 | 20,265,435 | ||
110,300,302 | ||||
Massachusetts 2.8% | ||||
Massachusetts Bay Transportation Authority Revenue, Assessment, Refunding, Series A, 5.25%, | ||||
7/01/34 | 27,630,000 | 31,439,072 | ||
Massachusetts Bay Transportation Authority Sales Tax Revenue, Refunding, Senior Series A, | ||||
5.00%, 7/01/28 | 10,000,000 | 12,443,300 | ||
Massachusetts State Department of Transportation Metropolitan Highway System Revenue, | ||||
Senior, Refunding, Series B, 5.00%, 1/01/37 | 31,000,000 | 33,387,000 | ||
Massachusetts State Development Finance Agency Revenue, | ||||
Brandeis University Issue, Refunding, Series O-1, 5.00%, 10/01/40 | 19,865,000 | 22,105,176 | ||
Massachusetts/Saltonstall Redevelopment Building Corp. Project, 100 Cambridge Street | ||||
Redevelopment, Series A, NATL Insured, 5.125%, 8/01/28 | 6,735,000 | 6,740,590 | ||
Wellesley College Issue, Series J, 5.00%, 7/01/42 | 10,000,000 | 11,271,100 | ||
Worcester Polytechnic Institute Issue, Refunding, NATL Insured, 5.00%, 9/01/37 | 10,000,000 | 10,867,800 | ||
Massachusetts State Educational Financing Authority Education Loan Revenue, | ||||
Issue I, 6.00%, 1/01/28 | 12,715,000 | 13,997,181 | ||
Refunding, Series K, 5.25%, 7/01/29 | 10,000,000 | 10,724,800 | ||
Series H, Assured Guaranty, 6.35%, 1/01/30 | 4,660,000 | 5,017,142 | ||
Massachusetts State GO, Consolidated Loan, Series C, AMBAC Insured, 5.00%, 8/01/37 | 10,000,000 | 10,879,200 |
24 | Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Massachusetts (continued) | |||||
Massachusetts State Health and Educational Facilities Authority Revenue, | |||||
Berklee College of Music Issue, Refunding, Series A, 5.00%, 10/01/37 | $ | 10,000,000 | $ | 10,860,300 | |
Emmanuel College Issue, NATL Insured, 5.00%, 7/01/37 | 10,000,000 | 10,394,800 | |||
Northeastern University Issue, Series A, 5.00%, 10/01/35 | 20,000,000 | 22,229,600 | |||
Northeastern University Issue, Series R, 5.00%, 10/01/33 | 6,830,000 | 7,448,115 | |||
Springfield College Issue, 5.50%, 10/15/31 | 1,710,000 | 1,888,507 | |||
Springfield College Issue, 5.625%, 10/15/40 | 7,000,000 | 7,676,480 | |||
Massachusetts State HFAR, Housing, Series B, 7.00%, 12/01/38 | 9,140,000 | 9,885,915 | |||
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, Series A, | |||||
AGMC Insured, Pre-Refunded, 5.00%, 8/15/30 | 2,005,000 | 2,081,030 | |||
AMBAC Insured, 4.50%, 8/15/35 | 30,000,000 | 31,831,800 | |||
Massachusetts State Transportation Fund Revenue, Accelerated Bridge Program, Series A, 4.00%, | |||||
6/01/35 | 11,795,000 | 12,443,135 | |||
Massachusetts State Water Pollution Abatement Trust Revenue, MWRA Program, Series A, 5.00%, | |||||
8/01/32 | 225,000 | 225,662 | |||
Massachusetts State Water Pollution Abatement Trust Water Pollution Abatement Revenue, | |||||
MWRA Program, Refunding, Sub Series A, 5.75%, 8/01/29 | 450,000 | 451,633 | |||
University of Massachusetts Building Authority Project Revenue, Senior Series 1, 5.00%, | |||||
11/01/39 | 20,000,000 | 23,149,800 | |||
309,439,138 | |||||
Michigan 2.8% | |||||
Detroit City School District GO, School Building and Site Improvement, Refunding, Series A, | |||||
5.00%, | |||||
5/01/30 | 1,245,000 | 1,361,943 | |||
5/01/33 | 1,500,000 | 1,616,355 | |||
Detroit GO, Distribution State Aid, 5.00%, 11/01/30 | 22,500,000 | 24,334,425 | |||
Detroit Sewage Disposal System Revenue, second lien, Series A, NATL Insured, 5.00%, | |||||
7/01/30 | 5,470,000 | 5,512,885 | |||
Detroit Water and Sewerage Department Sewage Disposal System Revenue, senior lien, | |||||
Refunding, Series A, 5.25%, 7/01/39 | 12,000,000 | 12,873,720 | |||
Grand Rapids Public Schools GO, School Building and Site, AGMC Insured, 4.50%, 5/01/31 | 21,800,000 | 23,458,544 | |||
Michigan State Building Authority Revenue, Facilities Program, | |||||
Refunding, Series I, 6.25%, 10/15/38 | 15,000,000 | 17,283,000 | |||
Refunding, Series I-A, 5.375%, 10/15/36 | 6,730,000 | 7,747,913 | |||
Refunding, Series I-A, 5.25%, 10/15/44 | 20,655,000 | 23,529,143 | |||
Refunding, Series IA, NATL RE, FGIC Insured, 5.00%, 10/15/31 | 9,475,000 | 10,012,517 | |||
Series H, 5.125%, 10/15/33 | 12,500,000 | 13,943,125 | |||
Series H, AGMC Insured, 5.00%, 10/15/26 | 5,000,000 | 5,652,450 | |||
Michigan State Finance Authority Revenue, | |||||
Hospital, Trinity Health Credit Group, Refunding, Series MI, 5.00%, 12/01/39 | 29,750,000 | 33,094,792 | |||
School District of the City of Detroit, Refunding, 5.00%, 6/01/18 | 2,400,000 | 2,613,216 | |||
School District of the City of Detroit, Refunding, 5.00%, 6/01/19 | 1,900,000 | 2,088,461 | |||
School District of the City of Detroit, Refunding, 5.00%, 6/01/20 | 1,500,000 | 1,671,585 | |||
School District of the City of Detroit, Refunding, 5.50%, 6/01/21 | 10,000,000 | 11,600,100 | |||
Michigan State GO, Environmental Program, Refunding, Series A, | |||||
6.00%, 11/01/24 | 1,000,000 | 1,201,390 | |||
5.50%, 11/01/25 | 1,000,000 | 1,151,870 | |||
Michigan State HDA, SFMR, Series A, 5.00%, 12/01/19 | 405,000 | 425,384 | |||
Michigan State Hospital Finance Authority Revenue, | |||||
MidMichigan Obligated Group, Series A, 6.00%, 6/01/29 | 4,000,000 | 4,705,280 | |||
MidMichigan Obligated Group, Series A, 6.125%, 6/01/39 | 5,000,000 | 5,769,050 | |||
Trinity Health Credit Group, Refunding, Series C, 5.00%, 12/01/34 | 10,000,000 | 11,137,700 | |||
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Michigan (continued) | |||||
Michigan State Strategic Fund Limited Obligation Revenue, The Detroit Edison Co. Exempt | |||||
Facilities Project, Refunding, Series KT, 5.625%, 7/01/20 | $ | 7,000,000 | $ | 8,243,760 | |
Michigan Tobacco Settlement Finance Authority Revenue, Tobacco Settlement Asset-Backed, | |||||
Senior Series A, 6.00%, 6/01/34 | 42,680,000 | 36,277,146 | |||
Royal Oak Hospital Finance Authority Hospital Revenue, William Beaumont Hospital Obligated | |||||
Group, | |||||
Refunding, Series W, 6.375%, 8/01/29 | 10,000,000 | 11,918,400 | |||
Series V, Pre-Refunded, 8.25%, 9/01/39 | 20,000,000 | 25,562,600 | |||
Wayne State University Revenue, General, AMBAC Insured, 5.00%, 11/15/36 | 5,000,000 | 5,420,500 | |||
310,207,254 | |||||
Minnesota 0.2% | |||||
Minneapolis Health Care System Revenue, Fairview Health Services, Series A, | |||||
6.625%, 11/15/28 | 11,000,000 | 12,945,240 | |||
6.75%, 11/15/32 | 6,250,000 | 7,382,688 | |||
Western Minnesota Municipal Power Agency Revenue, Series A, 5.00%, 1/01/46 | 5,000,000 | 5,687,900 | |||
26,015,828 | |||||
Mississippi 0.6% | |||||
Mississippi Business Finance Corp. PCR, System Energy Resource Inc. Project, Refunding, | |||||
5.875%, 4/01/22 | 45,000,000 | 45,024,300 | |||
Mississippi Development Bank Special Obligation Revenue, | |||||
City of Jackson GO Capital City Convention Center Project, Refunding, Series A, 5.00%, | |||||
3/01/36 | 10,000,000 | 12,569,800 | |||
City of Jackson Water and Sewer System Project, AGMC Insured, 6.875%, 12/01/40 | 3,400,000 | 4,426,936 | |||
62,021,036 | |||||
Missouri 0.4% | |||||
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 | 16,990,800 | |||
Missouri State Joint Municipal Electric Utility Commission Power Project Revenue, | |||||
Iatan 2 Project, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 1/01/34 | 14,000,000 | 14,761,740 | |||
Plum Point Project, NATL Insured, 5.00%, 1/01/34 | 13,000,000 | 13,411,190 | |||
45,163,730 | |||||
Nebraska 1.6% | |||||
Adams County School District No. 018 GO, Hastings Public Schools, AGMC Insured, | |||||
Pre-Refunded, 5.00%, 12/15/31 | 5,795,000 | 6,349,639 | |||
Lancaster County Correctional Facility Joint Public Agency GO, Building, 5.00%, 12/01/28 | 5,000,000 | 5,763,650 | |||
Lancaster County School District No. 001 GO, Lincoln Public Schools, 5.00%, 1/15/36 | 24,725,000 | 26,495,063 | |||
Lincoln Electric System Revenue, Pre-Refunded, 5.00%, 9/01/31 | 8,645,000 | 8,987,947 | |||
Madison County Hospital Authority No. 001 Hospital Revenue, Faith Regional Health Services | |||||
Project, Series A-1, 6.00%, 7/01/33 | 12,000,000 | 13,084,320 | |||
Municipal Energy Agency of Nebraska Power Supply System Revenue, Refunding, Series A, | |||||
BHAC Insured, 5.375%, 4/01/39 | 5,000,000 | 5,660,750 | |||
Omaha Convention Hotel Corp. Revenue, Convention Center, first tier, Refunding, AMBAC Insured, | |||||
5.00%, 2/01/35 | 30,000,000 | 31,215,600 | |||
Omaha Public Facilities Corp. Lease Revenue, Baseball Stadium Project, 5.00%, 6/01/36 | 9,000,000 | 9,787,590 | |||
Omaha Public Power District Revenue, Electric System, Series C, 5.00%, 2/01/39 | 23,305,000 | 25,604,038 | |||
Omaha Public Power District Separate Electric System Revenue, Nebraska City 2, Series A, | |||||
AMBAC Insured, 5.00%, 2/01/30 | 12,165,000 | 12,606,833 |
26 | Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Nebraska (continued) | ||||
University of Nebraska Revenue, | ||||
Kearney Student Fees and Facilities, 5.00%, 7/01/30 | $ | 5,000,000 | $ | 5,206,100 |
Lincoln Student Fees and Facilities, 5.00%, 7/01/37 | 5,000,000 | 5,632,600 | ||
Lincoln Student Fees and Facilities, 5.00%, 7/01/42 | 7,500,000 | 8,362,050 | ||
Lincoln Student Fees and Facilities, Series A, 5.25%, 7/01/34 | 5,000,000 | 5,606,550 | ||
Omaha Student Facilities Project, 5.00%, 5/15/32 | 5,000,000 | 5,415,600 | ||
University of Nebraska Omaha Health and Recreation Project, 5.00%, 5/15/38 | 5,000,000 | 5,374,000 | ||
181,152,330 | ||||
Nevada 0.3% | ||||
Clark County School District GO, | ||||
Refunding, Series A, NATL RE, FGIC Insured, 5.00%, 6/15/24 | 15,000,000 | 16,942,950 | ||
Series C, AGMC Insured, Pre-Refunded, 5.00%, 6/15/21 | 10,000,000 | 10,529,000 | ||
Nevada State GO, Municipal Bond Bank Project No. 40-41, Series A, ETM, 6.375%, 12/01/17 | 6,015,000 | 6,039,421 | ||
33,511,371 | ||||
New Hampshire 0.2% | ||||
Nashua Housing Authority MFR, Clocktower Project, Refunding, GNMA Secured, 6.25%, | ||||
6/20/33 | 4,818,000 | 4,822,915 | ||
New Hampshire Health and Education Facilities Authority Revenue, The Memorial Hospital Issue, | ||||
Refunding, 5.25%, | ||||
6/01/26 | 1,000,000 | 1,019,900 | ||
6/01/36 | 1,100,000 | 1,109,361 | ||
New Hampshire Higher Educational and Health Facilities Authority Revenue, New Hampshire | ||||
Catholic Charities Issue, 5.80%, 8/01/22 | 885,000 | 885,867 | ||
New Hampshire Municipal Bond Bank Revenue, Series B, 5.00%, 8/15/39 | 11,250,000 | 12,715,200 | ||
New Hampshire State Business Finance Authority Revenue, Elliot Hospital Obligated Group, | ||||
Series A, 6.125%, 10/01/39 | 5,000,000 | 5,598,650 | ||
26,151,893 | ||||
New Jersey 3.1% | ||||
Bayonne GO, General Improvement, Refunding, 5.75%, 7/01/35 | 9,000,000 | 10,328,850 | ||
New Jersey EDA Revenue, | ||||
Motor Vehicle Surcharges, Series A, NATL Insured, 5.00%, 7/01/29 | 10,000,000 | 10,043,500 | ||
Motor Vehicle Surcharges, Series A, NATL Insured, 5.00%, 7/01/34 | 5,000,000 | 5,017,550 | ||
School Facilities Construction, Refunding, Series NN, 5.00%, 3/01/30 | 15,000,000 | 16,396,350 | ||
School Facilities Construction, Refunding, Series NN, 5.00%, 3/01/31 | 14,775,000 | 16,084,065 | ||
School Facilities Construction, Series NN, 5.00%, 3/01/28 | 22,000,000 | 24,213,420 | ||
School Facilities Construction, Series O, Pre-Refunded, 5.125%, 3/01/28 | 20,000,000 | 20,325,000 | ||
School Facilities, Series U, 5.00%, 9/01/37 | 7,715,000 | 8,078,068 | ||
School Facilities, Series U, Pre-Refunded, 5.00%, 9/01/37 | 14,285,000 | 16,049,769 | ||
New Jersey Health Care Facilities Financing Authority State Contract Revenue, Hospital Asset | ||||
Transformation Program, Series A, 5.25%, 10/01/38 | 10,000,000 | 10,815,400 | ||
New Jersey State COP, Equipment Lease Purchase, Series A, 5.25%, | ||||
6/15/25 | 20,305,000 | 22,958,457 | ||
6/15/26 | 8,000,000 | 9,015,520 | ||
6/15/27 | 4,000,000 | 4,494,720 | ||
6/15/28 | 2,000,000 | 2,235,300 | ||
New Jersey State Housing and Mortgage Finance Agency Revenue, Series AA, 6.375%, | ||||
10/01/28 | 2,735,000 | 2,879,791 |
franklintempleton.com
Semiannual Report | 27
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
New Jersey (continued) | ||||
New Jersey State Transportation Trust Fund Authority Revenue, Transportation System, | ||||
Series A, 6.00%, 12/15/38 | $ | 39,505,000 | $ | 46,187,666 |
Series A, Pre-Refunded, 6.00%, 12/15/38 | 20,495,000 | 24,713,281 | ||
Series B, 5.25%, 6/15/36 | 10,000,000 | 10,925,800 | ||
Series D, 5.25%, 12/15/23 | 50,000,000 | 58,909,000 | ||
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 | 10,449,400 | ||
Series E, 5.25%, 1/01/40 | 13,925,000 | 15,578,872 | ||
345,699,779 | ||||
New York 7.7% | ||||
Long Island Power Authority Electric System Revenue, General, Refunding, Series A, 6.00%, | ||||
5/01/33 | 12,500,000 | 14,589,625 | ||
MTA Dedicated Tax Fund Revenue, Series B, | ||||
5.25%, 11/15/28 | 6,000,000 | 7,044,360 | ||
5.25%, 11/15/29 | 4,000,000 | 4,685,720 | ||
5.25%, 11/15/30 | 3,000,000 | 3,506,400 | ||
5.00%, 11/15/34 | 15,000,000 | 16,965,750 | ||
MTA Revenue, Transportation, | ||||
Refunding, Series D, 5.25%, 11/15/40 | 15,000,000 | 16,743,150 | ||
Series A, 5.00%, 11/15/37 | 25,000,000 | 27,093,000 | ||
Series A, 5.00%, 11/15/38 | 11,800,000 | 13,224,496 | ||
Series C, 6.50%, 11/15/28 | 15,000,000 | 18,162,900 | ||
Series D, 5.00%, 11/15/34 | 10,000,000 | 11,077,800 | ||
Series D, 5.00%, 11/15/36 | 9,500,000 | 10,676,575 | ||
Sub Series A-1, 5.00%, 11/15/40 | 30,000,000 | 33,480,300 | ||
aSub Series D-1, 5.00%, 11/15/39 | 15,000,000 | 16,834,950 | ||
New York City GO, | ||||
Fiscal 2002, Series D, 5.50%, 6/01/24 | 180,000 | 180,693 | ||
Fiscal 2009, Series E, Sub Series E-1, 6.25%, 10/15/28 | 10,000,000 | 11,905,700 | ||
Fiscal 2010, Refunding, Series C, 5.00%, 8/01/23 | 24,620,000 | 28,620,504 | ||
Fiscal 2013, Series F, Sub Series F-1, 5.00%, 3/01/30 | 20,000,000 | 23,277,800 | ||
Series F, 5.25%, 1/15/23 | 5,000 | 5,018 | ||
New York City Municipal Water Finance Authority Water and Sewer System Revenue, | ||||
Fiscal 2009, Series A, 5.75%, 6/15/40 | 6,000,000 | 6,920,460 | ||
Second General Resolution, Fiscal 2008, Refunding, Series AA, 5.00%, 6/15/37 | 10,000,000 | 10,903,500 | ||
Second General Resolution, Fiscal 2009, Refunding, Series EE, 5.25%, 6/15/40 | 64,970,000 | 73,642,845 | ||
Second General Resolution, Fiscal 2009, Refunding, Series FF-2, 5.50%, 6/15/40 | 15,000,000 | 17,236,950 | ||
Second General Resolution, Fiscal 2012, Refunding, Series AA, 5.00%, 6/15/34 | 10,000,000 | 11,364,300 | ||
Second General Resolution, Fiscal 2013, Refunding, Series DD, 5.00%, 6/15/35 | 30,705,000 | 35,258,551 | ||
Second General Resolution, Fiscal 2014, Refunding, Series BB, 5.00%, 6/15/46 | 15,000,000 | 16,766,250 | ||
New York City Transitional Finance Authority Building Aid Revenue, | ||||
Fiscal 2009, Series S-2, 6.00%, 7/15/38 | 20,000,000 | 23,253,600 | ||
Fiscal 2009, Series S-3, 5.25%, 1/15/34 | 10,170,000 | 11,493,117 | ||
Fiscal 2009, Series S-4, 5.50%, 1/15/34 | 12,890,000 | 14,723,989 | ||
Fiscal 2011, Series S-2, Sub Series S-2A, 5.00%, 7/15/40 | 35,000,000 | 39,283,300 | ||
Fiscal 2012, Series S-1, Sub Series S-1A, 5.25%, 7/15/37 | 5,300,000 | 6,059,596 | ||
New York City Transitional Finance Authority Revenue, Future Tax Secured, | ||||
Fiscal 2011, sub. bond, Series C, 5.00%, 11/01/39 | 15,000,000 | 17,082,750 | ||
Fiscal 2014, sub. bond, Series A, Sub Series A-1, 5.00%, 11/01/34 | 15,000,000 | 17,373,900 |
28 | Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
New York (continued) | ||||
New York Convention Center Development Corp. Revenue, Hotel Unit Fee Secured, | ||||
AMBAC Insured, 5.00%, 11/15/30 | $ | 10,000,000 | $ | 10,394,300 |
New York Liberty Development Corp. Liberty Revenue, | ||||
One World Trade Center, Port Authority Consolidated, Secured, 5.25%, 12/15/43 | 25,000,000 | 28,440,000 | ||
Second Priority, Bank of America Tower at One Bryant Park Project, Class 1, Refunding, | ||||
5.625%, 1/15/46 | 25,000,000 | 28,159,250 | ||
Seven World Trade Center Project, Refunding, 5.00%, 9/15/43 | 6,500,000 | 7,114,380 | ||
New York Liberty Development Corp. Revenue, Goldman Sachs Headquarters Issue, | ||||
5.25%, 10/01/35 | 40,000,000 | 47,478,400 | ||
5.50%, 10/01/37 | 24,995,000 | 30,455,658 | ||
New York State Dormitory Authority Lease Revenues, State University Dormitory Facilities, | ||||
Series A, 5.00%, 7/01/41 | 10,000,000 | 11,230,200 | ||
New York State Dormitory Authority Revenues, State Supported Debt, Upstate Community | ||||
Colleges, Series C, 6.00%, 7/01/31 | 23,215,000 | 27,480,060 | ||
New York State Dormitory Authority State Personal Income Tax Revenue, General Purpose, | ||||
Series A, 5.00%, 2/15/36 | 15,000,000 | 17,089,500 | ||
New York State HFAR, Housing Project Mortgage, Refunding, Series A, AGMC Insured, | ||||
6.10%, 11/01/15 | 95,000 | 95,251 | ||
6.125%, 11/01/20 | 240,000 | 240,492 | ||
New York State Urban Development Corp. Revenue, State Personal Income Tax, | ||||
General Purpose, Series A, 5.00%, 3/15/31 | 10,000,000 | 11,442,600 | ||
State Facilities and Equipment, Series B-1, 5.00%, 3/15/36 | 5,000,000 | 5,601,150 | ||
Port Authority of New York and New Jersey Revenue, Consolidated, One Hundred Seventy-Ninth | ||||
Series, 5.00%, 12/01/38 | 20,000,000 | 22,967,600 | ||
Triborough Bridge and Tunnel Authority Revenue, General Purpose, Series B, Pre-Refunded, | ||||
5.50%, 1/01/30 | 15,000,000 | 18,740,550 | ||
Triborough Bridge and Tunnel Authority Revenues, General, MTA Bridges and Tunnels, | ||||
Series A, 5.25%, 11/15/38 | 25,000,000 | 28,145,250 | ||
Series A-2, 5.25%, 11/15/34 | 7,500,000 | 8,488,425 | ||
863,000,915 | ||||
North Carolina 2.2% | ||||
Charlotte Airport Revenue, Series A, NATL Insured, 5.00%, 7/01/34 | 6,000,000 | 6,000,840 | ||
Charlotte COP, | ||||
Cultural Arts Facilities, Refunding, Series E, 5.00%, 6/01/34 | 13,000,000 | 14,484,990 | ||
Transit Projects, Phase II, Series E, 5.00%, 6/01/30 | 15,940,000 | 16,306,461 | ||
North Carolina Eastern Municipal Power Agency Power System Revenue, | ||||
Refunding, Series B, 6.00%, 1/01/22 | 1,250,000 | 1,552,563 | ||
Refunding, Series B, 6.25%, 1/01/23 | 39,030,000 | 49,404,174 | ||
Series A, 5.50%, 1/01/26 | 4,500,000 | 5,086,530 | ||
North Carolina State Capital Improvement Limited Obligation Revenue, Series A, 5.00%, | ||||
5/01/23 | 20,000,000 | 23,399,000 | ||
5/01/24 | 5,500,000 | 6,384,565 | ||
5/01/25 | 5,750,000 | 6,674,772 | ||
5/01/26 | 20,000,000 | 23,273,800 | ||
5/01/27 | 4,500,000 | 5,202,450 | ||
5/01/28 | 4,250,000 | 4,903,395 | ||
North Carolina Turnpike Authority Triangle Expressway System Revenue, | ||||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/33 | 25,000,000 | 12,202,000 | ||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/34 | 15,000,000 | 6,971,850 | ||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/35 | 15,215,000 | 6,714,379 | ||
Series A, Assured Guaranty, 5.50%, 1/01/29 | 6,750,000 | 7,664,287 | ||
Series A, Assured Guaranty, 5.75%, 1/01/39 | 10,380,000 | 11,786,698 | ||
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
North Carolina (continued) | |||||
Raleigh Combined Enterprise System Revenue, 5.00%, 3/01/40 | $ | 13,115,000 | $ | 14,678,964 | |
Wake County GO, Refunding, Series C, 5.00%, 3/01/25 | 21,780,000 | 27,544,077 | |||
250,235,795 | |||||
North Dakota 0.3% | |||||
Grand Forks Health Care System Revenue, Altru Health System Obligated Group, | |||||
Assured Guaranty, 5.00%, 12/01/26 | 8,385,000 | 8,758,384 | |||
Refunding, 5.50%, 12/01/20 | 8,870,000 | 9,757,000 | |||
Refunding, 5.50%, 12/01/24 | 13,945,000 | 14,981,811 | |||
33,497,195 | |||||
Ohio 2.8% | |||||
Akron Income Tax Revenue, Community Learning Centers, Refunding, Series A, 5.00%, | |||||
12/01/29 | 10,000,000 | 11,587,700 | |||
American Municipal Power-Ohio Inc. Revenue, Prairie State Energy Campus Project, Refunding, | |||||
Series A, 5.00%, 2/15/38 | 22,500,000 | 24,244,200 | |||
Bowling Green Student Housing Revenue, CFP I LLC, State University Project, 6.00%, 6/01/45 | 6,750,000 | 7,295,603 | |||
Buckeye Tobacco Settlement Financing Authority Revenue, Asset-Backed, | |||||
Senior Capital Appreciation Turbo Term Bond, Series A-3, 6.25%, 6/01/37 | 15,000,000 | 12,520,500 | |||
Senior Current Interest Turbo Term Bond, Series A-2, 5.75%, 6/01/34 | 11,250,000 | 8,934,863 | |||
Cleveland-Cuyahoga County Port Authority Development Lease Revenue, Administrative | |||||
Headquarters Project, 5.00%, 7/01/37 | 6,000,000 | 7,272,300 | |||
Hamilton County Sewer System Revenue, The Metropolitan Sewer District of Greater Cincinnati, | |||||
Improvement and Refunding, Series A, 5.00%, 12/01/38 | 12,000,000 | 13,842,120 | |||
JobsOhio Beverage System Statewide Liquor Profits Revenue, senior lien, Series A, 5.00%, | |||||
1/01/38 | 21,060,000 | 23,632,690 | |||
Kent State University Revenues, General Receipts, Series A, 5.00%, 5/01/37 | 10,500,000 | 11,720,100 | |||
Little Miami Local School District GO, School Improvement, AGMC Insured, Pre-Refunded, 5.00%, | |||||
12/01/34 | 4,000,000 | 4,375,840 | |||
Maple Heights City School District GO, School Facilities Improvement, | |||||
5.00%, 1/15/37 | 23,890,000 | 25,293,537 | |||
Pre-Refunded, 5.00%, 1/15/37 | 5,480,000 | 6,013,697 | |||
Marysville Wastewater Treatment System Revenue, Refunding, XLCA Insured, 5.00%, | |||||
12/01/31 | 8,000,000 | 8,394,640 | |||
12/01/36 | 13,725,000 | 14,328,488 | |||
Ohio State Air Quality Development Authority Revenue, | |||||
Environmental Improvement, Buckeye Power Inc. Project, 6.00%, 12/01/40 | 15,000,000 | 16,534,650 | |||
Pollution Control, FirstEnergy Generation Corp. Project, Refunding, Series C, 5.625%, | |||||
6/01/18 | 8,500,000 | 9,519,575 | |||
Ohio State GO, Infrastructure Improvement, Series A, 5.375%, 9/01/28 | 10,000,000 | 11,310,100 | |||
Ohio State Turnpike Commission Revenue, junior lien, Series A-3, zero cpn. to 2/14/23, | |||||
5.75% thereafter, 2/15/35 | 35,000,000 | 27,966,400 | |||
Ohio State University Revenue, Special Purpose General Receipts, Series A, 5.00%, 6/01/38 | 10,000,000 | 11,380,100 | |||
Ohio State Water Development Authority PCR, FirstEnergy Nuclear Generation Corp. Project, | |||||
Mandatory Put 6/01/16, Refunding, Series A, 5.875%, 6/01/33 | 13,000,000 | 13,924,560 | |||
Scioto County Hospital Facilities Revenue, Southern Ohio Medical Center, Refunding, 5.75%, | |||||
2/15/38 | 17,000,000 | 18,671,440 | |||
Toledo Water System Revenue, Improvement and Refunding, 5.00%, 11/15/38 | 20,000,000 | 22,556,600 | |||
311,319,703 | |||||
Oregon 0.8% | |||||
Oregon Health and Science University Revenue, Series A, 5.75%, 7/01/39 | 5,000,000 | 5,788,400 | |||
Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Series A, | |||||
4.50%, 11/15/32 | 30,000,000 | 31,479,300 | |||
30 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Oregon (continued) | ||||||
Oregon State GO, State Board of Higher Education, Series A, Pre-Refunded, 5.00%, | ||||||
8/01/26 | $ | 3,340,000 | $ | 3,457,802 | ||
8/01/26 | 3,290,000 | 3,407,289 | ||||
8/01/27 | 3,505,000 | 3,628,621 | ||||
8/01/27 | 3,450,000 | 3,572,992 | ||||
Port of Portland International Airport Revenue, Series Nineteen, 5.50%, 7/01/38 | 25,000,000 | 28,219,750 | ||||
Portland Sewer System Revenue, second lien, Series A, 5.00%, 3/01/35 | 11,540,000 | 12,816,901 | ||||
92,371,055 | ||||||
Pennsylvania 2.5% | ||||||
Centennial School District Bucks County GO, Series B, AGMC Insured, 5.25%, 12/15/37 | 13,655,000 | 15,449,677 | ||||
Coatesville Area School District GO, AGMC Insured, 5.00%, 8/01/24 | 6,420,000 | 6,979,053 | ||||
Commonwealth Financing Authority Revenue, Series B, 5.00%, 6/01/42 | 5,400,000 | 5,923,314 | ||||
Delaware Valley Regional Finance Authority Local Government Revenue, Series B, | ||||||
AMBAC Insured, 5.60%, 7/01/17 | 5,000,000 | 5,521,950 | ||||
Northampton County General Purpose Authority Hospital Revenue, St. Luke’s Hospital Project, | ||||||
Series A, 5.375%, 8/15/28 | 5,000,000 | 5,497,850 | ||||
Pennsylvania State Economic Development Financing Authority Water Facilities Revenue, Aqua | ||||||
Pennsylvania Inc. Project, Series B, 5.00%, 12/01/43 | 20,000,000 | 21,639,200 | ||||
Pennsylvania State Economic Development Financing Authority Water Facility Revenue, | ||||||
Pennsylvania-American Water Co. Project, 6.20%, 4/01/39 | 12,500,000 | 14,372,625 | ||||
Pennsylvania State Higher Educational Facilities Authority Revenue, Temple University, Refunding, | ||||||
NATL Insured, 5.00%, 4/01/33 | 13,225,000 | 13,841,682 | ||||
Pennsylvania State Turnpike Commission Turnpike Revenue, | ||||||
Capital Appreciation, Series C, AGMC Insured, zero cpn. to 6/01/16, 6.25% thereafter, | ||||||
6/01/33 | 5,000,000 | 5,863,100 | ||||
Motor License Fund-Enhanced, Subordinate, Series A, 5.00%, 12/01/37 | 3,000,000 | 3,311,310 | ||||
Motor License Fund-Enhanced, Subordinate, Series A, Sub Series A-1, 5.00%, 12/01/38 | 20,000,000 | 21,604,600 | ||||
Refunding, Series C, Sub Series C-1, Assured Guaranty, 6.00%, 6/01/28 | 5,000,000 | 5,755,200 | ||||
Refunding, Series C, Sub Series C-1, Assured Guaranty, 6.25%, 6/01/38 | 15,000,000 | 17,120,100 | ||||
sub. bond, Series B, 5.75%, 6/01/39 | 20,000,000 | 22,652,800 | ||||
Philadelphia Gas Works Revenue, Fifth Series A-1, AGMC Insured, 5.00%, 9/01/29 | 5,000,000 | 5,010,900 | ||||
Philadelphia GO, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/24 | 11,000,000 | 12,362,680 | ||||
Philadelphia Hospitals and Higher Educational Facilities Authority Revenue, Mortgage, | ||||||
North Philadelphia Health Systems, Refunding, Series A, FHA Insured, | ||||||
5.30%, 1/01/18 | 770,000 | 772,549 | ||||
5.35%, 1/01/23 | 5,690,000 | 5,708,720 | ||||
5.375%, 1/01/28 | 3,700,000 | 3,706,142 | ||||
Philadelphia Municipal Authority Lease Revenue, 6.375%, 4/01/29 | 4,500,000 | 5,253,705 | ||||
Philadelphia RDAR, Neighborhood Transformation Initiative, Series C, NATL RE, FGIC Insured, | ||||||
5.00%, | ||||||
4/15/29 | 10,965,000 | 11,061,273 | ||||
4/15/30 | 12,000,000 | 12,102,120 | ||||
Philadelphia School District GO, Series E, | ||||||
6.00%, 9/01/38 | 24,665,000 | 27,620,113 | ||||
Pre-Refunded, 6.00%, 9/01/38 | 335,000 | 399,186 | ||||
Philadelphia Water and Wastewater Revenue, Series A, | ||||||
5.25%, 1/01/25 | 1,000,000 | 1,119,190 | ||||
5.00%, 1/01/26 | 5,000,000 | 5,523,600 | ||||
5.00%, 1/01/27 | 1,750,000 | 1,927,415 | ||||
5.25%, 1/01/32 | 5,000,000 | 5,499,900 |
franklintempleton.com
Semiannual Report | 31
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Pennsylvania (continued) | |||||
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 | $ | 19,596,780 | |
283,196,734 | |||||
Rhode Island 1.2% | |||||
Narragansett Bay Commission Wastewater System Revenue, Series A, NATL Insured, | |||||
Pre-Refunded, 5.00%, 8/01/30 | 7,990,000 | 8,274,843 | |||
Rhode Island Convention Center Authority Revenue, Refunding, Series A, Assured Guaranty, | |||||
5.50%, 5/15/27 | 17,300,000 | 19,787,567 | |||
Rhode Island Housing and Mortgage Finance Corp. Revenue, Homeownership Opportunity, | |||||
Refunding, Series 15-A, 6.85%, 10/01/24 | 155,000 | 155,264 | |||
Series 10-A, 6.50%, 10/01/22 | 220,000 | 220,251 | |||
Series 10-A, 6.50%, 4/01/27 | 130,000 | 130,168 | |||
Rhode Island State EDC Airport Revenue, Series B, NATL Insured, 5.00%, | |||||
7/01/27 | 12,280,000 | 12,603,332 | |||
7/01/30 | 14,965,000 | 15,134,254 | |||
Rhode Island State Health and Educational Building Corp. Higher Education Facilities Revenue, | |||||
Brown University Issue, Refunding, Series A, 5.00%, 9/01/39 | 9,000,000 | 10,124,730 | |||
Rhode Island State Health and Educational Building Corp. Higher Education Facility Revenue, | |||||
New England Institute of Technology Issue, Series A, 5.125%, 3/01/40 | 16,435,000 | 17,482,731 | |||
Rhode Island State Health and Educational Building Corp. Revenue, | |||||
Higher Education Facility, Board of Governors for Higher Education, University of Rhode Island, | |||||
Educational and General Issue, Refunding, Series G, AMBAC, 5.00%, 9/15/30 | 10,000,000 | 10,292,900 | |||
Hospital Financing, Lifespan Obligated Group Issue, Refunding, Series A, AGMC Insured, | |||||
5.00%, 5/15/26 | 5,000,000 | 5,282,850 | |||
Hospital Financing, Lifespan Obligated Group Issue, Refunding, Series A, AGMC Insured, | |||||
5.00%, 5/15/32 | 12,440,000 | 13,035,254 | |||
Hospital Financing, Lifespan Obligated Group Issue, Series A, 7.00%, 5/15/39 | 8,200,000 | 9,597,854 | |||
Public Schools, Bond Financing Program, Town of East Greenwich Issue, Series A, 5.00%, | |||||
5/15/37 | 10,585,000 | 11,850,543 | |||
133,972,541 | |||||
South Carolina 1.4% | |||||
Charleston Educational Excellence Finance Corp. Revenue, Charleston County School District | |||||
Project, Pre-Refunded, 5.25%, 12/01/30 | 8,000,000 | 8,434,240 | |||
Greenville County School District Installment Purchase Revenue, Building Equity Sooner for | |||||
Tomorrow, Refunding, 5.00%, 12/01/28 | 7,500,000 | 8,134,725 | |||
Greenwood Fifty School Facilities Inc. Installment Purchase Revenue, Greenwood School | |||||
District No. 50, South Carolina Project, Refunding, Assured Guaranty, 4.50%, 12/01/32 | 7,030,000 | 7,368,776 | |||
Lancaster Educational Assistance Program Inc. Revenue, School District of Lancaster County | |||||
Project, Pre-Refunded, 5.00%, 12/01/26 | 12,300,000 | 12,343,173 | |||
Newberry Investing in Children’s Education Installment Revenue, Newberry County School District | |||||
Project, Pre-Refunded, 5.00%, 12/01/30 | 4,000,000 | 4,204,200 | |||
Piedmont Municipal Power Agency Electric Revenue, Series A-2, 5.00%, 1/01/24 | 10,000,000 | 10,858,400 | |||
SCAGO Educational Facilities Corp. for Beaufort School District Revenue, Installment Purchase, | |||||
School District of Beaufort County Project, Refunding, AGMC Insured, 5.00%, 12/01/31 | 5,340,000 | 5,739,218 | |||
SCAGO Educational Facilities Corp. for Chesterfield School District Revenue, Installment | |||||
Purchase, Chesterfield County School District Project, Assured Guaranty, 5.00%, 12/01/29 | 7,500,000 | 7,930,800 | |||
SCAGO Educational Facilities Corp. for Colleton School District Revenue, Installment Purchase, | |||||
School District of Colleton County Project, Assured Guaranty, 5.00%, | |||||
12/01/25 | 3,340,000 | 3,558,503 | |||
12/01/26 | 4,000,000 | 4,253,280 |
32 | Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
South Carolina (continued) | ||||
SCAGO Educational Facilities Corp. for Pickens School District Revenue, Installment Purchase, | ||||
School District of Pickens County Project, AGMC Insured, 5.00%, | ||||
12/01/25 | $ | 18,900,000 | $ | 20,560,743 |
12/01/31 | 10,000,000 | 10,751,800 | ||
South Carolina Jobs EDA Hospital Revenue, | ||||
AnMed Health Project, Refunding and Improvement, Series B, Assured Guaranty, 5.375%, | ||||
2/01/29 | 4,000,000 | 4,511,160 | ||
Palmetto Health, Refunding and Improvement, 5.75%, 8/01/39 | 3,000,000 | 3,263,520 | ||
Palmetto Health, Refunding, Series A, AGMC Insured, 5.00%, 8/01/35 | 20,000,000 | 20,793,400 | ||
South Carolina State Public Service Authority Revenue, Refunding, | ||||
Series A, 5.50%, 1/01/38 | 7,500,000 | 8,554,425 | ||
Series B, 5.25%, 1/01/34 | 6,000,000 | 6,745,620 | ||
University of South Carolina Higher Education Revenue, Special Moore School Business Project, | ||||
5.00%, 5/01/32 | 11,490,000 | 13,178,685 | ||
161,184,668 | ||||
South Dakota 0.4% | ||||
Huron School District No. 2-2 GO, 5.00%, 6/15/39 | 4,000,000 | 4,360,160 | ||
South Dakota State Health and Educational Facilities Authority Revenue, | ||||
Avera Health Issue, Series B, 5.50%, 7/01/35 | 3,000,000 | 3,269,670 | ||
Avera Health Issue, Series B, 5.25%, 7/01/38 | 5,000,000 | 5,381,150 | ||
Sanford Health, 5.00%, 11/01/27 | 2,355,000 | 2,496,795 | ||
Sanford Health, 5.00%, 11/01/40 | 12,945,000 | 13,369,596 | ||
Vocational Education Program, Refunding, Series A, 5.00%, 8/01/46 | 6,005,000 | 6,479,695 | ||
Vocational Education Program, Series A, 5.125%, 8/01/46 | 7,000,000 | 7,607,180 | ||
42,964,246 | ||||
Tennessee 0.2% | ||||
Knox County Health Educational and Housing Facility Board Revenue, University Health System | ||||
Inc., Refunding, 5.25%, 4/01/27 | 17,500,000 | 18,880,400 | ||
Metropolitan Government of Nashville and Davidson County Water and Sewer Revenue, | ||||
Refunding, 5.00%, 7/01/40 | 5,000,000 | 5,679,600 | ||
24,560,000 | ||||
Texas 9.6% | ||||
Allen ISD, GO, Collin County, School Building Unlimited Tax, Series A, 5.00%, 2/15/39 | 11,575,000 | 12,971,408 | ||
Austin Community College District Public Facility Corp. Revenue, | ||||
Educational Facility Project, Round Rock Campus, 5.25%, 8/01/33 | 8,675,000 | 9,775,684 | ||
Hays New Campus Project, 5.00%, 8/01/36 | 5,700,000 | 6,348,546 | ||
Austin ISD, GO, Travis County, Refunding, 5.00%, 8/01/33 | 10,000,000 | 11,365,500 | ||
Austin Water and Wastewater System Revenue, Refunding, Series A, 5.00%, 11/15/38 | 20,000,000 | 22,780,000 | ||
Bexar County GO, Certificates of Obligation, Combined Flood Control Tax and Revenue, | ||||
AGMC Insured, 5.00%, 6/15/37 | 20,000,000 | 21,298,400 | ||
Bexar County Hospital District GO, Certificates of Obligation, Combination Tax and Revenue, | ||||
5.00%, 2/15/38 | 10,000,000 | 10,697,000 | ||
Central Texas Regional Mobility Authority Revenue, senior lien, Refunding, 6.00%, 1/01/41 | 14,000,000 | 16,039,100 | ||
Corpus Christi Utility System Revenue, | ||||
Improvement, junior lien, 5.00%, 7/15/38 | 6,000,000 | 6,565,740 | ||
Improvement, junior lien, 5.00%, 7/15/43 | 7,000,000 | 7,605,850 | ||
junior lien, Refunding, 5.00%, 7/15/37 | 12,625,000 | 13,892,171 | ||
Crowley ISD, GO, Tarrant and Johnson Counties, Unlimited Tax School Building, PSF Guarantee, | ||||
5.00%, 8/01/36 | 13,900,000 | 15,346,990 | ||
Dallas Civic Center Revenue, Refunding and Improvement, Assured Guaranty, 5.25%, 8/15/34 | 18,975,000 | 21,292,227 | ||
franklintempleton.com | Semiannual Report | 33 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Texas (continued) | ||||
Dallas County Utility and Reclamation District GO, Refunding, Series A, AMBAC Insured, 5.375%, | ||||
2/15/29 | $ | 28,325,000 | $ | 30,567,490 |
Dallas Waterworks and Sewer System Revenue, Refunding, 5.00%, 10/01/35 | 10,000,000 | 11,399,800 | ||
Dallas/Fort Worth International Airport Revenue, | ||||
Joint Improvement, Series A, 5.00%, 11/01/42 | 25,000,000 | 27,780,000 | ||
Joint, Refunding, Series D, 5.25%, 11/01/32 | 10,000,000 | 11,666,900 | ||
Denton ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/38 | 15,710,000 | 16,923,755 | ||
Ector County ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/36 | 10,355,000 | 11,933,723 | ||
Forney ISD, GO, School Building, Series A, PSF Guarantee, 6.00%, 8/15/37 | 2,000,000 | 2,319,700 | ||
Goose Creek Consolidated ISD, GO, Schoolhouse, PSF Guarantee, 5.00%, 2/15/38 | 6,045,000 | 6,963,417 | ||
Grand Parkway Transportation Corp. System Toll Revenue, Series B, zero cpn. to 9/30/23, 5.80% | ||||
thereafter, 10/01/45 | 10,000,000 | 7,303,900 | ||
Harris County Health Facilities Development Corp. Hospital Revenue, Memorial Hermann | ||||
Healthcare System, Series B, Pre-Refunded, 7.25%, 12/01/35 | 13,500,000 | 16,895,385 | ||
Harris County Hospital District Revenue, senior lien, Refunding, Series A, NATL Insured, 5.125%, | ||||
2/15/32 | 10,215,000 | 10,728,202 | ||
Harris County MTA Revenue, Contractual Obligations, Series B, 5.00%, 11/01/33 | 10,000,000 | 11,155,800 | ||
Hays County GO, Road, 5.00%, 2/15/36 | 6,960,000 | 7,620,226 | ||
Hidalgo County Regional Mobility Authority Vehicle Registration Revenue, senior lien, Refunding, | ||||
5.25%, 12/01/38 | 5,000,000 | 5,725,150 | ||
5.00%, 12/01/43 | 5,000,000 | 5,492,900 | ||
Houston Airport System Revenue, Refunding, second lien, Series A, 5.50%, | ||||
7/01/34 | 5,000,000 | 5,712,550 | ||
7/01/39 | 30,850,000 | 35,234,710 | ||
Houston Utility System Revenue, Combined, first lien, Refunding, Series D, 5.00%, 11/15/36 | 10,000,000 | 11,326,400 | ||
Keller ISD, GO, School Building, 5.50%, 2/15/35 | 10,000,000 | 11,810,500 | ||
Laredo Waterworks Sewer System Revenue, | ||||
5.25%, 3/01/40 | 16,535,000 | 18,489,768 | ||
AGMC Insured, 5.00%, 3/01/41 | 2,500,000 | 2,690,350 | ||
Lower Colorado River Authority Revenue, Refunding and Improvement, 2014, Series A, | ||||
NATL Insured, 5.00%, 5/15/26 | 50,000 | 50,144 | ||
Lower Colorado River Authority Transmission Contract Revenue, LCRA Transmission Services | ||||
Corp. Project, Refunding, | ||||
5.50%, 5/15/36 | 15,310,000 | 16,810,227 | ||
Series A, 5.00%, 5/15/36 | 10,000,000 | 11,144,400 | ||
Lufkin Health Facilities Development Corp. Revenue, Memorial Health System of East Texas, | ||||
Refunding and Improvement, 6.25%, 2/15/37 | 5,000,000 | 5,756,500 | ||
Manor ISD, GO, School Building, PSF Guarantee, 5.00%, 8/01/37 | 8,175,000 | 8,726,894 | ||
Matagorda County Hospital District Revenue, FHA Insured, 5.00%, 2/15/35 | 10,000,000 | 10,493,400 | ||
North Fort Bend Water Authority Water System Revenue, Assured Guaranty, 5.25%, 12/15/34 | 20,000,000 | 22,067,200 | ||
North Harris County Regional Water Authority Revenue, senior lien, | ||||
5.25%, 12/15/33 | 27,000,000 | 29,474,280 | ||
5.50%, 12/15/38 | 25,000,000 | 27,891,500 | ||
aRefunding, 5.00%, 12/15/34 | 5,040,000 | 5,752,757 | ||
aRefunding, 5.00%, 12/15/35 | 5,190,000 | 5,900,096 | ||
North Texas Tollway Authority Revenue, | ||||
Special Projects System, Capital Appreciation, first tier, Refunding, Series I, zero cpn. to | ||||
1/01/15, 6.50% thereafter, 1/01/43 | 25,000,000 | 30,630,500 | ||
Special Projects System, Capital Appreciation, Series B, zero cpn., 9/01/37 | 7,500,000 | 2,405,175 | ||
Special Projects System, Capital Appreciation, Series B, zero cpn., 9/01/43 | 7,500,000 | 1,488,150 | ||
Special Projects System, Capital Appreciation, Series C, zero cpn. to 9/01/21, 6.75% thereafter, | ||||
9/01/45 | 25,000,000 | 24,081,500 | ||
34 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Texas (continued) | ||||
North Texas Tollway Authority Revenue, (continued) | ||||
System, first tier, Refunding, Series A, 6.25%, 1/01/39 | $ | 12,500,000 | $ | 14,494,125 |
System, first tier, Refunding, Series A, 5.75%, 1/01/40 | 35,000,000 | 38,834,600 | ||
System, first tier, Refunding, Series K, Sub Series K-2, 6.00%, 1/01/38 | 15,000,000 | 17,135,850 | ||
System, second tier, Refunding, Series F, 5.75%, 1/01/38 | 30,000,000 | 33,345,000 | ||
Port of Houston Authority Harris County GO, Refunding, Series A, 5.625%, 10/01/38 | 14,000,000 | 15,712,200 | ||
Rio Grande City Consolidated ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/37 | 10,510,000 | 11,101,293 | ||
San Antonio Electric and Gas Systems Revenue, junior lien, 5.00%, 2/01/38 | 10,000,000 | 11,270,900 | ||
San Antonio Public Facilities Corp. Lease Revenue, Refunding and Improvement, Convention | ||||
Center Refinancing and Expansion Project, 4.00%, | ||||
9/15/34 | 9,000,000 | 9,225,630 | ||
9/15/42 | 41,000,000 | 41,025,830 | ||
San Jacinto River Authority Special Project Revenue, Group Project, AGMC Insured, 5.00%, | ||||
10/01/32 | 5,000,000 | 5,450,500 | ||
10/01/37 | 3,000,000 | 3,222,120 | ||
Southwest Higher Education Authority Revenue, Southern Methodist University Project, Series A, | ||||
5.00%, 10/01/38 | 24,380,000 | 27,635,217 | ||
Tarrant County Cultural Education Facilities Finance Corp. Hospital Revenue, | ||||
Cook Children’s Medical Center, Refunding, Series A, 5.25%, 12/01/39 | 10,000,000 | 11,645,700 | ||
Hendrick Medical Center Obligation Group, Refunding, 5.50%, 9/01/43 | 5,350,000 | 5,924,536 | ||
Tarrant County Health Facilities Development Corp. Health System Revenue, Harris Methodist | ||||
Health System, FGIC Insured, ETM, 6.00%, 9/01/24 | 4,000,000 | 4,840,240 | ||
Tarrant Regional Water District Water Revenue, Refunding and Improvement, 5.00%, 3/01/37 | 10,000,000 | 11,284,600 | ||
Texas City IDC Marine Terminal Revenue, ARCO Pipe Line Co. Project, Refunding, 7.375%, | ||||
10/01/20 | 500,000 | 666,745 | ||
Texas State GO, | ||||
Transportation Commission, Highway Improvement, 5.00%, 4/01/39 | 40,000,000 | 46,548,400 | ||
Transportation Commission-Mobility Fund, Refunding, 5.00%, 10/01/23 | 46,345,000 | 57,548,904 | ||
Water Financial Assistance, Refunding, Series C-1, 5.00%, 8/01/34 | 7,000,000 | 7,965,160 | ||
Texas State Municipal Power Agency Revenue, Transmission, sub. lien, Refunding, 5.00%, | ||||
9/01/40 | 15,250,000 | 16,453,072 | ||
Texas State Revenue, Transportation Commission-Mobility Fund, Series A, 5.00%, 4/01/33 | 10,000,000 | 10,880,800 | ||
Texas State Turnpike Authority Central Turnpike System Revenue, Capital Appreciation, | ||||
AMBAC Insured, zero cpn., 8/15/31 | 43,500,000 | 15,993,210 | ||
Texas State University System Financing Revenue, Refunding, AGMC Insured, 5.00%, 3/15/26 | 6,425,000 | 6,754,410 | ||
Tyler Health Facilities Development Corp. Hospital Revenue, East Texas Medical Center, Regional | ||||
Healthcare System Project, Refunding and Improvement, Series A, 5.25%, 11/01/32 | 6,250,000 | 6,514,500 | ||
1,079,865,507 | ||||
Utah 1.3% | ||||
Jordan Valley Water Conservancy District Water Revenue, Series B, 5.00%, 10/01/41 | 15,000,000 | 16,653,000 | ||
Metropolitan Water District Salt Lake and Sandy Water Revenue, Refunding, Series A, 5.00%, | ||||
7/01/37 | 13,950,000 | 15,784,007 | ||
South Valley Water Reclamation Facility Sewer Revenue, AMBAC Insured, Pre-Refunded, 5.00%, | ||||
8/15/30 | 5,730,000 | 5,944,990 | ||
St. George Electric Revenue, AGMC Insured, 5.00%, | ||||
6/01/33 | 5,000,000 | 5,280,650 | ||
6/01/38 | 5,000,000 | 5,241,100 | ||
State Board of Regents University of Utah Revenue, General, Refunding, Series A, 5.00%, | ||||
8/01/43 | 21,975,000 | 24,968,654 | ||
Uintah County Municipal Building Authority Lease Revenue, 5.50%, 6/01/37 | 5,000,000 | 5,496,900 | ||
Utah Associated Municipal Power Systems Revenue, Central St. George Project, Refunding, | ||||
5.25%, 12/01/27 | 9,735,000 | 10,894,341 | ||
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Utah (continued) | |||||
Utah State Transit Authority Sales Tax Revenue, Series A, | |||||
5.25%, 6/15/38 | $ | 13,185,000 | $ | 14,689,936 | |
AGMC Insured, 5.00%, 6/15/36 | 33,000,000 | 36,516,810 | |||
Weber Basin Water Conservancy District Water Revenue, Series B, 5.00%, 4/01/39 | 7,180,000 | 8,080,659 | |||
149,551,047 | |||||
Vermont 0.6% | |||||
University of Vermont and State Agricultural College Revenue, NATL Insured, Pre-Refunded, | |||||
5.00%, 10/01/30 | 12,210,000 | 12,743,333 | |||
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 | 5,922,070 | |||
Hospital, Fletcher Allen Health Care Project, Series A, 4.75%, 12/01/36 | 5,000,000 | 5,171,350 | |||
Middlebury College Project, Refunding, 5.00%, 11/01/38 | 10,000,000 | 11,230,600 | |||
Middlebury College Project, Refunding, 5.00%, 11/01/40 | 26,565,000 | 30,253,550 | |||
65,320,903 | |||||
Virginia 0.3% | |||||
Fairfax County EDA Facility Revenue, Community Services Facilities Project, Series A, 4.50%, | |||||
3/01/37 | 11,130,000 | 11,951,839 | |||
Greater Richmond Convention Center Authority Hotel Tax Revenue, Refunding, NATL Insured, | |||||
5.00%, 6/15/30 | 6,000,000 | 6,176,940 | |||
Norfolk Parking System Revenue, Series A, NATL Insured, Pre-Refunded, 5.00%, 2/01/27 | 5,000,000 | 5,058,150 | |||
Virginia State Resources Authority Infrastructure Revenue, Virginia Pooled Financing Program, | |||||
Series A, 5.00%, 11/01/39 | 12,355,000 | 13,856,256 | |||
37,043,185 | |||||
Washington 2.9% | |||||
Central Puget Sound Regional Transportation Authority Sales and Use Tax Revenue, Series A, | |||||
5.00%, 11/01/34 | 11,405,000 | 12,539,341 | |||
FYI Properties Lease Revenue, Washington State District Project, 5.50%, | |||||
6/01/34 | 11,935,000 | 13,522,355 | |||
6/01/39 | 16,250,000 | 18,358,600 | |||
Goat Hill Properties Lease Revenue, Government Office Building Project, NATL Insured, | |||||
Pre-Refunded, 5.00%, 12/01/33 | 18,500,000 | 18,565,675 | |||
King County GO, Sewer Revenues, 5.125%, 1/01/33 | 10,000,000 | 11,368,300 | |||
King County Public Hospital District No. 1 GO, Series B, 5.25%, 12/01/37 | 5,000,000 | 5,306,850 | |||
King County Sewer Revenue, Refunding, 5.00%, 1/01/32 | 7,085,000 | 7,993,581 | |||
NJB Properties Lease Revenue, King County Washington Project, Series A, 5.00%, 12/01/36 | 10,000,000 | 10,751,800 | |||
Washington State GO, | |||||
Motor Vehicle Fuel Tax, Senior 520 Corridor Program Toll, Series C, 5.00%, 6/01/33 | 5,000,000 | 5,720,600 | |||
Motor Vehicle Fuel Tax, Series B-1, 4.00%, 8/01/42 | 14,530,000 | 14,988,276 | |||
Various Purpose, Series A, 5.00%, 7/01/33 | 44,300,000 | 49,710,359 | |||
Washington State Health Care Facilities Authority Revenue, | |||||
Central Washington Health Services Assn., 6.75%, 7/01/29 | 5,000,000 | 5,738,500 | |||
Fred Hutchinson Cancer Research Center, Refunding, Series A, 6.00%, 1/01/33 | 7,500,000 | 8,540,400 | |||
MultiCare Health System, Series B, AGMC Insured, 5.00%, 8/15/34 | 17,550,000 | 19,241,118 | |||
MultiCare Health System, Series B, AGMC Insured, 5.00%, 8/15/41 | 9,170,000 | 9,830,148 | |||
MultiCare Health System, Series B, Assured Guaranty, 6.00%, 8/15/39 | 1,500,000 | 1,778,070 | |||
Providence Health and Services, Refunding, Series A, 5.00%, 10/01/42 | 10,175,000 | 11,242,968 | |||
Providence Health and Services, Refunding, Series A, NATL RE, FGIC Insured, 5.00%, | |||||
10/01/36 | 9,750,000 | 10,191,285 | |||
Providence Health and Services, Refunding, Series C, AGMC Insured, 5.25%, 10/01/33 | 10,000,000 | 11,143,800 | |||
aProvidence Health and Services, Refunding, Series D, 5.00%, 10/01/41 | 19,000,000 | 21,132,180 | |||
36 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Washington (continued) | ||||
Washington State Health Care Facilities Authority Revenue, (continued) | ||||
Providence Health and Services, Series A, FGIC Insured, Pre-Refunded, 5.00%, 10/01/36 | $ | 250,000 | $ | 271,958 |
Virginia Mason Medical Center, Series B, ACA Insured, 6.00%, 8/15/37 | 30,000,000 | 32,943,600 | ||
Virginia Mason Medical Center, Series C, Radian Insured, 5.50%, 8/15/36 | 16,000,000 | 17,383,040 | ||
Washington State Higher Education Facilities Authority Revenue, Whitworth University Project, | ||||
Refunding, | ||||
5.375%, 10/01/29 | 3,000,000 | 3,348,780 | ||
5.875%, 10/01/34 | 6,000,000 | 6,822,300 | ||
328,433,884 | ||||
West Virginia 0.5% | ||||
County Commission of Harrison County Solid Waste Disposal Revenue, Allegheny Energy Supply | ||||
Co. LLC Harrison Station Project, Refunding, Series D, 5.50%, 10/15/37 | 9,000,000 | 9,250,380 | ||
Pleasants County PCR, County Commission, Series F, 5.25%, 10/15/37 | 14,000,000 | 14,430,220 | ||
West Virginia EDA Lottery Revenue, Series A, 5.00%, 6/15/35 | 9,415,000 | 10,639,891 | ||
West Virginia State GO, Series A, NATL RE, FGIC Insured, 5.20%, 11/01/26 | 10,000,000 | 11,632,800 | ||
West Virginia State University Revenues, West Virginia University Projects, Series A, 5.00%, | ||||
10/01/44 | 10,000,000 | 11,326,800 | ||
57,280,091 | ||||
Wisconsin 0.8% | ||||
Monroe RDAR, 6.00%, 2/15/39 | 11,790,000 | 13,039,740 | ||
Wisconsin State General Fund Annual Appropriation Revenue, Series A, 6.00%, 5/01/33 | 25,290,000 | 30,188,167 | ||
Wisconsin State Health and Educational Facilities Authority Revenue, | ||||
Marquette University, Refunding, Series B-1, 5.00%, 10/01/30 | 6,865,000 | 7,707,885 | ||
Marquette University, Refunding, Series B-1, 5.00%, 10/01/33 | 1,500,000 | 1,641,690 | ||
Marquette University, Refunding, Series B-2, 5.00%, 10/01/30 | 3,470,000 | 3,896,046 | ||
Marquette University, Series B-3, 5.00%, 10/01/30 | 2,150,000 | 2,413,977 | ||
Marquette University, Series B-3, 5.00%, 10/01/33 | 1,750,000 | 1,916,180 | ||
Ministry Health Care Inc., AGMC Insured, 5.00%, 8/01/31 | 1,500,000 | 1,635,870 | ||
Ministry Health Care Inc., AGMC Insured, 5.00%, 8/01/34 | 8,000,000 | 8,682,800 | ||
Thedacare Inc., AMBAC Insured, 5.00%, 12/15/30 | 10,000,000 | 10,233,200 | ||
Thedacare Inc., Series A, 5.50%, 12/15/38 | 5,000,000 | 5,633,500 | ||
86,989,055 | ||||
Wyoming 0.1% | ||||
Campbell County Solid Waste Facilities Revenue, Basin Electric Power Cooperative, Dry Fork | ||||
Station Facilities, Series A, 5.75%, 7/15/39 | 5,500,000 | 6,149,770 | ||
U.S. Territories 2.6% | ||||
Puerto Rico 2.5% | ||||
Children’s Trust Fund Tobacco Settlement Revenue, Asset-Backed, Refunding, 5.375%, | ||||
5/15/33 | 15,410,000 | 15,478,421 | ||
Puerto Rico Commonwealth Highways and Transportation Authority Highway Revenue, Series Y, | ||||
Pre-Refunded, | ||||
5.00%, 7/01/36 | 62,000,000 | 66,819,260 | ||
5.50%, 7/01/36 | 7,000,000 | 7,601,860 | ||
Puerto Rico Electric Power Authority Power Revenue, | ||||
Refunding, Series A, 5.00%, 7/01/42 | 18,925,000 | 9,462,689 | ||
Series XX, 5.25%, 7/01/40 | 15,000,000 | 7,500,150 | ||
Puerto Rico Industrial Tourist Educational Medical and Environmental Control Facilities Financing | ||||
Authority Industrial Revenue, Guaynabo Warehouse for Emergencies Project, Series A, 5.15%, | ||||
7/01/19 | 530,000 | 450,648 |
franklintempleton.com
Semiannual Report | 37
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
U.S. Territories (continued) | ||||
Puerto Rico (continued) | ||||
Puerto Rico PBA Guaranteed Revenue, Government Facilities, Refunding, | ||||
Series D, 5.25%, 7/01/27 | $ | 3,265,000 | $ | 2,428,899 |
Series N, 5.00%, 7/01/37 | 20,000,000 | 13,533,200 | ||
Puerto Rico Public Finance Corp. Revenue, Commonwealth Appropriation, Refunding, Series B, | ||||
5.50%, 8/01/31 | 21,000,000 | 11,079,390 | ||
Puerto Rico Sales Tax FICO Sales Tax Revenue, | ||||
Capital Appreciation, first subordinate, Series A, zero cpn. to 8/01/16, 6.75% thereafter, | ||||
8/01/32 | 25,000,000 | 19,165,250 | ||
Capital Appreciation, first subordinate, Series A, zero cpn. to 8/01/19, 6.25% thereafter, | ||||
8/01/33 | 36,500,000 | 21,214,530 | ||
first subordinate, Series A, 5.50%, 8/01/42 | 40,000,000 | 29,863,200 | ||
first subordinate, Series A, 6.00%, 8/01/42 | 22,500,000 | 17,592,075 | ||
first subordinate, Series C, 5.50%, 8/01/40 | 50,000,000 | 37,661,500 | ||
Refunding, Senior Series C, 5.00%, 8/01/40 | 27,825,000 | 21,718,247 | ||
Senior Series C, 5.25%, 8/01/40 | 7,150,000 | 5,662,800 | ||
287,232,119 | ||||
U.S. Virgin Islands 0.1% | ||||
Virgin Islands PFAR, Virgin Islands Matching Fund Loan Note, Working Capital, sub. lien, | ||||
Refunding, Series B, 5.25%, 10/01/29 | 5,750,000 | 6,451,845 | ||
Total U.S. Territories | 293,683,964 | |||
Total Municipal Bonds before Short Term Investments | ||||
(Cost $9,657,968,828) | 10,611,398,727 | |||
Short Term Investments (Cost $19,400,000) 0.2% | ||||
Municipal Bonds 0.2% | ||||
Georgia 0.2% | ||||
bBurke County Development Authority PCR, Georgia Power Co. Plant Vogtle Project, Refunding, | ||||
First Series, Daily VRDN and Put, 0.06%, 7/01/49 | 19,400,000 | 19,400,000 | ||
Total Investments (Cost $9,677,368,828) 94.8% | 10,630,798,727 | |||
Other Assets, less Liabilities 5.2% | 587,320,964 | |||
Net Assets 100.0% | $ | 11,218,119,691 |
See Abbreviations on page 47.
aSecurity purchased on a when-issued or delayed delivery basis. See Note 1(b).
bVariable 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.
38 | Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Financial Statements
Statement of Assets and Liabilities
October 31, 2014 (unaudited)
Assets: | |||
Investments in securities: | |||
Cost | $ | 9,677,368,828 | |
Value | $ | 10,630,798,727 | |
Cash | 574,554,668 | ||
Receivables: | |||
Capital shares sold | 14,788,812 | ||
Interest | 143,171,595 | ||
Other assets | 2,223 | ||
Total assets | 11,363,316,025 | ||
Liabilities: | |||
Payables: | |||
Investment securities purchased | 124,105,303 | ||
Capital shares redeemed | 14,022,212 | ||
Management fees | 4,186,873 | ||
Distribution fees | 1,358,890 | ||
Transfer agent fees | 1,215,298 | ||
Accrued expenses and other liabilities | 307,758 | ||
Total liabilities | 145,196,334 | ||
Net assets, at value | $ | 11,218,119,691 | |
Net assets consist of: | |||
Paid-in capital | $ | 10,448,218,561 | |
Undistributed net investment income | 6,583,360 | ||
Net unrealized appreciation (depreciation) | 953,429,899 | ||
Accumulated net realized gain (loss) | (190,112,129 | ) | |
Net assets, at value | $ | 11,218,119,691 | |
Class A: | |||
Net assets, at value | $ | 8,522,935,907 | |
Shares outstanding | 681,591,825 | ||
Net asset value per sharea | $ | 12.50 | |
Maximum offering price per share (net asset value per share ÷ 95.75%) | $ | 13.05 | |
Class C: | |||
Net assets, at value | $ | 1,149,122,536 | |
Shares outstanding | 91,970,537 | ||
Net asset value and maximum offering price per sharea | $ | 12.49 | |
Advisor Class: | |||
Net assets, at value | $ | 1,546,061,248 | |
Shares outstanding | 123,547,445 | ||
Net asset value and maximum offering price per share | $ | 12.51 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable. | |||
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | | | 39 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Operations
for the six months ended October 31, 2014 (unaudited)
Investment income: | |||
Interest | $ | 245,744,469 | |
Expenses: | |||
Management fees (Note 3a) | 24,664,156 | ||
Distribution fees: (Note 3c) | |||
Class A | 4,231,777 | ||
Class C | 3,720,882 | ||
Transfer agent fees: (Note 3e) | |||
Class A | 2,346,315 | ||
Class C | 317,408 | ||
Advisor Class | 395,921 | ||
Custodian fees | 47,927 | ||
Reports to shareholders | 235,728 | ||
Registration and filing fees | 260,042 | ||
Professional fees | 112,874 | ||
Trustees’ fees and expenses | 64,762 | ||
Other | 222,353 | ||
Total expenses | 36,620,145 | ||
Net investment income | 209,124,324 | ||
Realized and unrealized gains (losses): | |||
Net realized gain (loss) from investments | (8,955,969 | ) | |
Net change in unrealized appreciation (depreciation) on investments | 265,570,232 | ||
Net realized and unrealized gain (loss) | 256,614,263 | ||
Net increase (decrease) in net assets resulting from operations | $ | 465,738,587 |
40 | Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND | ||||||
FINANCIAL STATEMENTS | ||||||
Statements of Changes in Net Assets | ||||||
Six Months Ended | ||||||
October 31, 2014 | Year Ended | |||||
(unaudited) | April 30, 2014 | |||||
Increase (decrease) in net assets: | ||||||
Operations: | ||||||
Net investment income | $ | 209,124,324 | $ | 449,446,314 | ||
Net realized gain (loss) from investments | (8,955,969 | ) | (133,548,602 | ) | ||
Net change in unrealized appreciation (depreciation) on investments | 265,570,232 | (477,200,838 | ) | |||
Net increase (decrease) in net assets resulting from operations | 465,738,587 | (161,303,126 | ) | |||
Distributions to shareholders from: | ||||||
Net investment income: | ||||||
Class A | (163,626,640 | ) | (338,916,803 | ) | ||
Class C | (19,066,764 | ) | (43,100,658 | ) | ||
Advisor Class | (27,996,076 | ) | (63,773,911 | ) | ||
Total distributions to shareholders | (210,689,480 | ) | (445,791,372 | ) | ||
Capital share transactions: (Note 2) | ||||||
Class A | 84,271,107 | (730,497,906 | ) | |||
Class C | 2,251,145 | (326,845,365 | ) | |||
Advisor Class | 198,477,765 | (353,200,936 | ) | |||
Total capital share transactions | 285,000,017 | (1,410,544,207 | ) | |||
Net increase (decrease) in net assets | 540,049,124 | (2,017,638,705 | ) | |||
Net assets: | ||||||
Beginning of period | 10,678,070,567 | 12,695,709,272 | ||||
End of period | $ | 11,218,119,691 | $ | 10,678,070,567 | ||
Undistributed net investment income included in net assets: | ||||||
End of period | $ | 6,583,360 | $ | 8,148,516 |
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report | 41
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting 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 management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Fund offers three classes of shares: Class A, Class C, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily due to differing arrangements for distribution and transfer agent fees.
The following summarizes the Fund’s significant accounting policies.
a. Financial Instrument Valuation
The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share at the close of the New York Stock Exchange (NYSE), generally at 4 p.m. Eastern time (NYSE close) on each day the NYSE is open for trading. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Debt securities generally trade in the over-the-counter market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates,
anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.
The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
b. Securities Purchased on a When-Issued and Delayed Delivery Basis
The Fund purchases 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 and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
c. Income Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
The Fund recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained upon examination by the tax authorities based on the technical merits of the tax position. As of October 31, 2014, and for all open tax years, the Fund has determined that no liability for unrecognized tax benefits is required in the Fund’s financial statements related to uncertain tax positions taken on a tax return (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction statute of limitation.
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.
e. Insurance
The scheduled payments of interest and principal for each insured municipal security in the Fund are insured by either a new issue insurance policy or a secondary insurance policy. Some municipal securities in the Fund are secured by collateral guaranteed by an agency of the U.S. government. Depending on the type of coverage, premiums for insurance are either added to the cost basis of the security or paid by a third party.
Insurance companies typically insure municipal bonds that tend to be of very high quality, with the majority of underlying municipal bonds rated A or better. However, an event involving an insurer could have an adverse effect on the value of the securities insured by that insurance company. There can be no assurance the insurer will be able to fulfill its obligations under the terms of the policy.
f. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Fund’s organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest | ||||||||||||||
At October 31, 2014, 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, 2014 | April 30, 2014 | |||||||||||||
Shares | Amount | Shares | Amount | |||||||||||
Class A Shares: | ||||||||||||||
Shares sold | 43,447,993 | $ | 537,349,371 | 126,987,593 | $ | 1,512,426,000 | ||||||||
Shares issued in reinvestment of distributions | 11,394,696 | 140,480,630 | 24,038,774 | 287,863,451 | ||||||||||
Shares redeemed | (48,028,201 | ) | (593,558,894 | ) | (212,506,889 | ) | (2,530,787,357 | ) | ||||||
Net increase (decrease) | 6,814,488 | $ | 84,271,107 | (61,480,522 | ) | $ | (730,497,906 | ) | ||||||
Class C Shares: | ||||||||||||||
Shares sold | 5,742,188 | $ | 70,942,130 | 11,234,248 | $ | 135,129,834 | ||||||||
Shares issued in reinvestment of distributions | 1,309,978 | 16,142,616 | 3,049,740 | 36,536,890 | ||||||||||
Shares redeemed | (6,867,594 | ) | (84,833,601 | ) | (41,853,867 | ) | (498,512,089 | ) | ||||||
Net increase (decrease) | 184,572 | $ | 2,251,145 | (27,569,879 | ) | $ | (326,845,365 | ) | ||||||
Advisor Class Shares: | ||||||||||||||
Shares sold | 24,108,085 | $ | 298,285,173 | 46,340,565 | $ | 555,154,397 | ||||||||
Shares issued in reinvestment of distributions | 1,996,259 | 24,633,215 | 4,782,816 | 57,278,697 | ||||||||||
Shares redeemed | (10,056,441 | ) | (124,440,623 | ) | (80,833,312 | ) | (965,634,030 | ) | ||||||
Net increase (decrease) | 16,047,903 | $ | 198,477,765 | (29,709,931 | ) | $ | (353,200,936 | ) | ||||||
3. Transactions with Affiliates | ||||||||||||||
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton | ||||||||||||||
Investments. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries: | ||||||||||||||
Subsidiary | Affiliation | |||||||||||||
Franklin Advisers, Inc. (Advisers) | Investment manager | |||||||||||||
Franklin Templeton Services, LLC (FT Services) | Administrative manager | |||||||||||||
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter | |||||||||||||
Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent | |||||||||||||
a. Management Fees | ||||||||||||||
The Fund pays an investment management fee to Advisers based on the month-end net assets of the Fund as follows: | ||||||||||||||
Annualized Fee Rate | Net Assets | |||||||||||||
0.625 | % | Up to and including $100 million | ||||||||||||
0.500 | % | Over $100 million, up to and including $250 million | ||||||||||||
0.450 | % | Over $250 million, up to and including $7.5 billion | ||||||||||||
0.440 | % | Over $7.5 billion, up to and including $10 billion | ||||||||||||
0.430 | % | Over $10 billion, up to and including $12.5 billion | ||||||||||||
0.420 | % | Over $12.5 billion, up to and including $15 billion | ||||||||||||
0.400 | % | Over $15 billion, up to and including $17.5 billion | ||||||||||||
0.380 | % | Over $17.5 billion, up to and including $20 billion | ||||||||||||
0.360 | % | In excess of $20 billion |
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
c. Distribution Fees
The Board has adopted distribution plans for each share class, with the exception of Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are not charged on shares held by affiliates. 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 C compensation distribution plan, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. The plan year, for purposes of monitoring compliance with the maximum annual plan rate, is February 1 through January 31.
The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:
Class A | 0.10 | % |
Class C | 0.65 | % |
d. Sales Charges/Underwriting Agreements |
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. These charges are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the period:
Sales charges retained net of commissions paid to unaffiliated | ||
broker/dealers | $ | 866,530 |
CDSC retained | $ | 54,169 |
e. Transfer Agent Fees |
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholding servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets.
For the period ended October 31, 2014, the Fund paid transfer agent fees of $3,059,644, of which $998,396 was retained by Investor Services.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND | |||
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) | |||
4. Income Taxes (continued) | |||
At April 30, 2014, capital loss carryforwards were as follows: | |||
Capital loss carryforwards subject to expiration: | |||
2017 | $ | 15,858,622 | |
2018 | 3,803,336 | ||
2019 | 17,435,155 | ||
Capital loss carryforwards not subject to expiration: | |||
Short term | 88,398,022 | ||
Long term | 50,032,740 | ||
Total capital loss carryforwards | $ | 175,527,875 | |
At October 31, 2014, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were | |||
as follows: | |||
Cost of investments | $ | 9,681,513,295 | |
Unrealized appreciation | $ | 1,033,577,864 | |
Unrealized depreciation | (84,292,432 | ) | |
Net unrealized appreciation (depreciation) | $ | 949,285,432 |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of bond discounts and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the period ended October 31, 2014, aggregated $317,466,572 and $333,130,320, 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 $1.5 billion (Global Credit Facility) which matures on February 13, 2015. 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 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 0.07% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses on the Statement of Operations. During the period ended October 31, 2014, the Fund did not use the Global Credit Facility.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
7. Fair Value Measurements
The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
- Level 1 – quoted prices in active markets for identical financial instruments
- Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
- Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
At October 31, 2014, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.
8. 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.
Abbreviations | |||
Selected Portfolio | |||
ACA | American Capital Access Holdings Inc. | IDA | Industrial Development Authority/Agency |
AGMC | Assured Guaranty Municipal Corp. | IDC | Industrial Development Corp. |
AMBAC | American Municipal Bond Assurance Corp. | ISD | Independent School District |
BHAC | Berkshire Hathaway Assurance Corp. | MFHR | Multi-Family Housing Revenue |
CDA | Community Development Authority/Agency | MFR | Multi-Family Revenue |
CIFG | CDC IXIS Financial Guaranty | MTA | Metropolitan Transit Authority |
COP | Certificate of Participation | NATL | National Public Financial Guarantee Corp. |
EDA | Economic Development Authority | NATL RE | National Public Financial Guarantee Corp. Reinsured |
EDC | Economic Development Corp. | PBA | Public Building Authority |
ETM | Escrow to Maturity | PCC | Pollution Control Corp. |
FGIC | Financial Guaranty Insurance Co. | PCR | Pollution Control Revenue |
FHA | Federal Housing Authority/Agency | PFAR | Public Financing Authority Revenue |
FICO | Financing Corp. | PSF | Permanent School Fund |
GNMA | Government National Mortgage Association | RDA | Redevelopment Agency/Authority |
GO | General Obligation | RDAR | Redevelopment Agency Revenue |
HDA | Housing Development Authority/Agency | SFMR | Single Family Mortgage Revenue |
HFAR | Housing Finance Authority Revenue | UHSD | Unified/Union High School District |
HFC | Housing Finance Corp. | USD | Unified/Union School District |
XLCA | XL Capital Assurance |
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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, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Fund’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Fund files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
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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 changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.
Item 12. Exhibits.
(a) (1) Code of Ethics
(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FRANKLIN FEDERAL TAX-FREE INCOME FUND
By /s/ Laura F. Fergerson
Laura F. Fergerson
Chief Executive Officer –
Finance and Administration
Date December 26, 2014
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 26, 2014
By /s/ Gaston Gardey
Gaston Gardey
Chief Financial Officer and
Chief Accounting Officer
Date December 26, 2014