UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORMN-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number811-04149
FranklinTax-Free Trust
(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: 2/28
Date of reporting period: 08/31/19
Item 1. Reports to Stockholders.
Franklin Alabama Tax-Free Income Fund
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Franklin FloridaTax-Free Income Fund
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Franklin GeorgiaTax-Free Income Fund
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Franklin KentuckyTax-Free Income Fund
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Franklin Louisiana Tax-Free Income Fund
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Franklin Maryland Tax-Free Income Fund
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Franklin MissouriTax-Free Income Fund
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Franklin North CarolinaTax-Free Income Fund
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Franklin VirginiaTax-Free Income Fund
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Sign up for electronic delivery at franklintempleton.com/edelivery
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800)632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800)632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
FRANKLIN TEMPLETON
Successful investing begins with ambition. And achievement only comes when you reach for it. That’s why we continually strive to deliver better outcomes for investors. No matter what your goals are, our deep, global investment expertise allows us to offer solutions that can help.
During our more than 70 years of experience, we’ve managed through all kinds of markets—up, down and those in between. We’re always preparing for what may come next. It’s because of this, combined with our strength as one of the world’s largest asset managers that we’ve earned the trust of millions of investors around the world.
Dear Shareholder:
During the six months ended August 31, 2019, the U.S. economy continued to grow amid positive economic data and corporate earnings, but financial markets experienced volatility due to trade concerns and geopolitical issues. The U.S. Federal Reserve (Fed) left the federal funds rate unchanged for most of the period but implemented a much anticipated 25 basis-point reduction at its July meeting, in an effort to support ongoing economic growth, bringing the rate from 2.50% at the start of the period to 2.25% byperiod-end.
After the reporting period, the Fed reduced its key rate to 2.00% at its September meeting, citing weakened business investment and exports and muted inflation pressures, although the job market remained strong and economic activity continued to rise.
During thesix-month period, the municipal bond market posted solid positive performance that outperformed the U.S. stock market but underperformed the U.S. Treasury and corporate bond markets, with generally higher returns for longer-term and lower-rated municipal bonds. Factors contributing to this positive investment environment for
municipals included relatively low inflation, interest rate declines, steady employment and the strength of the U.S. economy.
FranklinTax-Free Trust’s semiannual report includes more detail about municipal bond market conditions and a discussion from the portfolio managers. In addition, on our website,franklintempleton.com, you can find updated commentary by our municipal bond experts. Municipal bonds providetax-free income and diversification from equities. Despite periods of volatility, municipal bonds historically have had a solid long-term record of performance, driven mostly by their compounding income component. Please remember all securities markets fluctuate, as do mutual fund share prices.
As always, we recommend investors consult their financial advisors to help them make the best decisions for the long term. In a constantly changing market environment, we remain committed to our disciplined strategy as we manage the Funds, keeping in mind the trust you have placed in us. We appreciate your confidence and encourage you to
Not FDIC Insured| May Lose Value| No Bank Guarantee
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contact us or your financial advisor when you have questions about your Franklin Templeton tax-free investment.
Sincerely,
Rupert H. Johnson, Jr.
Chairman
FranklinTax-Free Trust
Sheila Amoroso
Senior Vice President and Director
Franklin Municipal Bond Department
This letter reflects our analysis and opinions as of August 31, 2019, unless otherwise indicated. The information is not a complete analysis of every aspect of any market, state, industry, security or fund. Statements of fact are from sources considered reliable.
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Municipal Bond Market Overview
The financial markets experienced volatility during the six months ended August 31, 2019. Continuing trade concerns, uncertainties about the prospects for global economic growth and speculations on major central banks’ future policy decisions led to volatility in domestic fixed income and equity securities. U.S. equities rose during the period, while fixed income assets such as municipal bonds and U.S. Treasuries rallied as interest rates moved in a downward trajectory. Municipal bonds performed well as favorable supply and demand dynamics, combined with interest-rate declines, led to an outperformance compared with the U.S. equity market, but an underperformance compared with the U.S. Treasury and corporate bond markets.
Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, posted a +6.24% total return for the period, while U.S. Treasuries, as measured by the Bloomberg Barclays U.S. Treasury Index, posted a +8.42% total return, and investment-grade corporate bonds, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, posted a +11.08% total return.1U.S. stocks, as represented by the Standard & Poor’s®500 Index, underperformed the fixed income markets with a +6.15% total return.1
Municipal bonds with longer maturities generally outperformed bonds with shorter maturities during thesix-month period. High-yield municipal bonds generally outperformed investment-grade municipal bonds, with the Bloomberg Barclays High Yield Municipal Bond Index posting a +8.59% total return, compared with a +6.24% total return for the Bloomberg Barclays Municipal Bond Index.1
Municipal bond issuance during thesix-month reporting period totaled approximately $188 billion, which represented a slight increase from the prior-year’ssix-month period.2Calendar-year 2019 municipal bond issuance through August was approximately $240 billion, which represented a 5% increase from the prior-year period.2
The U.S. Federal Reserve (Fed) lowered its target range for the federal funds rate by 0.25% at its July meeting, to 2.00%–2.25%, after leaving it unchanged during the first half of 2019. Although Fed Chair Jerome Powell said the first interest rate cut since December 2008 was intended
to “insure against downside risks,” he did not indicate the beginning of a prolonged easing cycle. The Fed cited lingering uncertainties surrounding the economic and inflation outlook, and left the door open for modest additional easing.
Atperiod-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.
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or 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.
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and fixed principal value; their interest payments and principal are guaranteed.
2. Source: The Bond Buyer, Thomson Reuters.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLINTAX-FREE TRUST
Investment Strategy and Manager’s Discussion
Investment Strategy
We use a consistent, disciplined strategy with the objective of maximizingtax-free income and capital preservation by focusing on credit selection. We seek to maintain exposure to securities that produce hightax-free income, while balancing risk and return within each Fund’s range of allowable investments. We do not purchase high-yield securities in our investment-grade funds, however if a security is downgraded we are not required to sell it. Our security selection process includes purchasing securities that we believe are undervalued in the market and which have met our credit selection criteria. We do not use leverage or derivatives, which could add volatility and contribute to underperformance in adverse markets.
Manager’s Discussion
Due to the positive sloping municipal yield curve, we found value in higher quality securities in the 15–30 year maturity range, which allowed us to achieve our objective of maximizing income for our investors. Typically, when interest rates fall, our turnover declines as we maintain exposure to securities that are producing income that exceeds their replacement value in the market. This excess income supports higher distribution rates and reinvestment rates for those investors taking advantage oftax-free compounding. Our turnover increases when rates rise, as opportunities to purchase securities that have the potential to increase income in the portfolios become available. We believe our consistent, disciplined strategy can help our investors achieve high,tax-free income over the long term.
We invite you to read your Fund report for more detailed performance and portfolio information. Thank you for your participation in FranklinTax-Free Trust. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or 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 | Semiannual Report | franklintempleton.com |
Franklin AlabamaTax-Free Income Fund
This semiannual report for Franklin AlabamaTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and Alabama personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 8.42% | |
AA | 77.67% | |
A | 2.47% | |
BBB | 4.10% | |
Refunded | 7.34% |
*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 (highest) to D (lowest). The Below Investment Grade category consists of bonds rated below BBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $10.85 on February 28, 2019, to $11.26 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 16.7626 cents per share for the same period.2 The Performance Summary beginning on page 8 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.49% based on an annualization of August’s 2.4269 cents per share monthly dividend and the maximum offering price of $11.70 on
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 | Advisor Class | |||||||||||||||
March | 2.5500 | 2.6900 | 2.1800 | 2.8100 | 2.7800 | |||||||||||||||
April** | 4.2000 | 4.3400 | 3.8300 | 4.4600 | 4.4300 | |||||||||||||||
May | 2.5942 | 2.7312 | 2.2485 | 2.8614 | 2.8248 | |||||||||||||||
June | 2.2818 | 2.4050 | 1.9613 | 2.5173 | 2.4905 | |||||||||||||||
July | 2.7097 | 2.8589 | 2.3400 | 2.9894 | 2.9595 | |||||||||||||||
August | 2.4269 | 2.5622 | 2.0841 | 2.6822 | 2.6545 | |||||||||||||||
Total | 16.7626 | 17.5873 | 14.6439 | 18.3203 | 18.1393 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.65 cent per share supplemental distribution
August 31, 2019. An investor in the 2019 maximum combined effective federal and Alabama personal income tax bracket of 45.80% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.59% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 60.
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FRANKLIN ALABAMA TAX-FREE INCOME FUND
State Update
Alabama’s economy grew but lagged the nation’s during the period under review. Business sentiment in the state was restrained in 2019’s first quarter but recovered in the second quarter and remained generally positive, with firms in many industries expecting growth in capital expenditures, hiring, sales and profits. The state’s housing market improved as home prices and sales increased. The state’s unemployment rate declined from 3.7% in February 2019 to 3.1% atperiod-end, which was lower than the 3.7% national average.3
Alabama has two major operating funds: the Education Trust Fund (ETF), the main funding source for education programs; and the general fund, the primary source for Medicaid and othernon-education government programs. During the first 11 months of fiscal year (FY) 2019, which ends on September 30, 2019, tax collections contributing to the state’s revenue were up compared with the same prior-year period. The rise was mainly attributed to increased sales taxes, use taxes, and corporate and individual income taxes. The general fund budget for FY 2020, passed in April 2019, was modestly larger compared to the prior year’s budget. Highlights includedcost-of-living raises for the second year in a row for state employees and spending increases for the state’s prison system and department of corrections compared to FY 2019. The state’s approved ETF budget for FY 2020 reached a record high, as lawmakers approved a budget of over $7 billion for the first time. The enacted budget featured pay raises forK-12 teachers and increased spending onpre-kindergarten education, the Foundation Program and Alabama Reading Initiative forK-12 education, community colleges and other higher education institutions, prison education and the Alabama Supercomputer Authority.
Alabama’s nettax-supported debt was 2.2% of personal income and $877 per capita compared with the 2.2% and $1,068 national medians, respectively.4Independent credit rating agency Standard & Poor’s (S&P) affirmed its AA rating with a stable outlook on Alabama’s general obligation debt.5The rating reflected S&P’s view of the state’s expectation of a budgetary structural balance, and recent replenishment of reserves that would likely provide a strong credit support to offset the state’s credit weaknesses, including low economic performance relative to the nation, moderate debt burden
Portfolio Composition
8/31/19
% of Total Investments* | ||
Utilities | 33.79% | |
Higher Education | 17.71% | |
Tax-Supported | 13.95% | |
General Obligation | 12.23% | |
Refunded** | 9.56% | |
Hospital & Health Care | 7.96% | |
Corporate-Backed | 2.65% | |
Transportation | 2.15% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
andlow-funded pension system. S&P’s rating also factored in the likelihood that pledged program revenues would provide very strong debt service coverage (DSC), supported by the state’s large tax base. However, should pledged revenue collections substantially decline, leading to lower DSC, or if weaker revenue collections, or a considerable economic decline contribute to unsustainable projected gaps, S&P could lower the rating.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Thank you for your continued participation in Franklin AlabamaTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN ALABAMA TAX-FREE INCOME FUND
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN ALABAMA TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||
A3,4 | ||||
6-Month | +5.36% | +1.41% | ||
1-Year | +7.11% | +3.09% | ||
5-Year | +15.71% | +2.18% | ||
10-Year | +48.11% | +3.61% | ||
Advisor5 | ||||
6-Month | +5.50% | +5.50% | ||
1-Year | +7.28% | +7.28% | ||
5-Year | +16.15% | +3.04% | ||
10-Year | +48.59% | +4.04% |
Share Class | Distribution Rate6 | Taxable Equivalent Distribution Rate7 | 30-Day Standardized Yield8 | Taxable Equivalent 30-Day Standardized Yield7 | ||||||||||||
A | 2.49% | 4.59% | 1.09% | 2.01% | ||||||||||||
Advisor | 2.83% | 5.22% | 1.38% | 2.55% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 9 for Performance Summary footnotes.
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FRANKLIN ALABAMA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–8/31/19)
Share Class | Net Investment Income | |||
A | $0.167626 | |||
A1 | $0.175873 | |||
C | $0.146439 | |||
R6 | $0.183203 | |||
Advisor | $0.181393 |
Total Annual Operating Expenses6
Share Class | ||||
A | 0.91 | % | ||
Advisor | 0.66 | % |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Effective 9/15/16, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule12b-1 plan. Performance quotations for this class reflect the following methods of calculation: (a) For periods prior to 9/15/16, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule12b-1 fees; and (b) for periods after 9/15/16, actual Advisor Class performance is used reflecting all charges and fees applicable to that class.
6. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
7. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and Alabama personal income tax rate of 45.80%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
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FRANKLIN ALABAMA TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||
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Share Class | Beginning Account Value | Ending Account Value 8/31/19 | Expenses Paid During Period1, 2 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191, 2 | Net Annualized Expense Ratio2 | ||||||||
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A | $1,000 | $1,053.60 | $4.70 | $1,020.56 | $4.62 | 0.91% | ||||||||
A1 | $1,000 | $1,054.40 | $3.92 | $1,021.32 | $3.86 | 0.76% | ||||||||
C | $1,000 | $1,051.90 | $6.76 | $1,018.55 | $6.65 | 1.31% | ||||||||
R6 | $1,000 | $1,055.10 | $3.20 | $1,022.02 | $3.15 | 0.62% | ||||||||
Advisor | $1,000 | $1,055.00 | $3.41 | $1,021.82 | $3.35 | 0.66% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
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Franklin FloridaTax-Free Income Fund
This semiannual report for Franklin FloridaTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal income taxes and any Florida personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 9.80% | |
AA | 31.25% | |
A | 36.49% | |
BBB | 6.95% | |
Below Investment Grade | 3.56% | |
Refunded | 11.61% | |
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 (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $10.44 on February 28, 2019, to $10.78 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 18.5698 cents per share for the same period.2The Performance Summary beginning on page 14 shows that at the end of this reporting period the Fund’s
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||||
|
| |||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 | Advisor Class | |||||||||||||||
March | 3.0100 | 3.1400 | 2.6500 | 3.2500 | 3.2200 | |||||||||||||||
April** | 4.1500 | 4.2800 | 3.7900 | 4.3900 | 4.3600 | |||||||||||||||
May | 2.9588 | 3.0906 | 2.6550 | 3.2239 | 3.1878 | |||||||||||||||
June | 2.6384 | 2.7581 | 2.3580 | 2.8760 | 2.8468 | |||||||||||||||
July | 3.0826 | 3.2229 | 2.7544 | 3.3601 | 3.3264 | |||||||||||||||
August | 2.7300 | 2.8597 | 2.4284 | 2.9855 | 2.9546 | |||||||||||||||
Total | 18.5698 | 19.3513 | 16.6358 | 20.0855 | 19.8956 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.14 cent per share supplemental distribution.
Class A shares’ distribution rate was 2.93% based on an annualization of August’s 2.7300 cents per share monthly dividend and the maximum offering price of $11.20 on August 31, 2019. An investor in the 2019 maximum federal income tax bracket of 37.00% (plus 3.80% Medicare tax) would need to earn a distribution rate of 4.95% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 68.
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FRANKLIN FLORIDA TAX-FREE INCOME FUND
State Update
During the six months under review, Florida’s economy continued to perform strongly and its job growth continued to outperform the nation’s, helped by healthy population growth and positive net migration. Florida’s job growth was broad-based across most job sectors, and especially supported by construction, professional and business services, and leisure and hospitality. The state’s unemployment rate declined from 3.5% in February 2019 to 3.3% atperiod-end, which was lower than the 3.7% national average.3The state’s growing economy, favorable climate and increased housing affordability attracted new residents and foreign buyers, which pressured Florida’s housing market by tightening supply levels and increasing prices. However, the state’s foreclosure rate remained higher than the national rate.
Florida’s net general revenue collections in fiscal year (FY) 2019 (ended June 30, 2019) increased above estimates, compared with FY 2018, primarily reflecting estimated sales tax and above-estimated corporate income tax collections, which remained the state’s largest revenue sources. In June 2019, the governor signed the FY 2020 budget into law. The enacted budget was larger than the previous year’s and was based on steady revenue growth and strong reserves. The budget increased funding for Everglades restoration and protection of water resources,K-12 and higher education, transportation, health care and human services, and hurricane recovery. Other features included tax relief by way of reduced sales tax on commercial rent, increased corporate tax credits, and sales tax exemptions and holidays. Nearperiod-end, Florida’s economists downgraded their revenue projections for FY 2020, one of the main reasons being the removal of Indian gaming revenue.
The strategy employed by the state to pay down debt and slow the pace of issuance led to positive results. Florida’s nettax-supported debt was 1.7% of personal income and $812 per capita, compared with the 2.2% and $1,068 national medians, respectively.4Independent credit rating agency Standard & Poor’s (S&P) maintained its AAA rating with a stable outlook for Florida’s general obligation debt, reflecting its assessment of the state’s continued strong employment and population growth, revenue growth, structurally balanced budgeting, strong reserve levels, relatively well-funded pensions and moderate debt burden.5
Portfolio Composition
8/31/19
% of Total Investments* | ||
Hospital & Health Care | 25.68% | |
Utilities | 19.66% | |
Transportation | 18.32% | |
Refunded** | 13.94% | |
General Obligation | 8.70% | |
Tax-Supported | 7.54% | |
Higher Education | 2.52% | |
Other Revenue | 1.65% | |
Housing | 1.07% | |
Subject to Government Appropriations | 0.92% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The stable outlook reflected S&P’s assessment of Florida’s strong economic growth and the rating agency’s expectation that Florida would maintain structural budget balance. Some potential risks that S&P believes could return Florida to structural budgetary imbalance include a major economic downturn or withdrawal of federal aid. S&P also believes that economic damage or increased debt resulting from catastrophic hurricanes could pressure the state’s credit rating.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Thank you for your continued participation in Franklin FloridaTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
12 | Semiannual Report | franklintempleton.com |
FRANKLIN FLORIDA TAX-FREE INCOME FUND
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 13 |
FRANKLIN FLORIDA TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||||||
A3,4 | ||||||||
6-Month | +5.07% | +1.13% | ||||||
1-Year | +6.54% | +2.54% | ||||||
5-Year | +15.68% | +2.17% | ||||||
10-Year | +44.80% | +3.38% | ||||||
Advisor5 | ||||||||
6-Month | +5.19% | +5.19% | ||||||
1-Year | +6.79% | +6.79% | ||||||
5-Year | +16.41% | +3.09% | ||||||
10-Year | +45.61% | +3.83% |
Share Class | Distribution Rate6 | Taxable Equivalent Distribution Rate7 | 30-Day Standardized Yield8 | Taxable Equivalent 30-Day Standardized Yield7 | ||||||||||||
A | 2.93% | 4.95% | 1.10% | 1.86% | ||||||||||||
Advisor | 3.28% | 5.54% | 1.39% | 2.35% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 15 for Performance Summary footnotes.
14 | Semiannual Report | franklintempleton.com |
FRANKLIN FLORIDATAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(3/1/19–8/31/19)
Share Class | Net Investment Income | |||
A | $0.185698 | |||
A1 | $0.193513 | |||
C | $0.166358 | |||
R6 | $0.200855 | |||
Advisor | $0.198956 |
Total Annual Operating Expenses6
Share Class | ||||
A | 0.85 | % | ||
Advisor | 0.60 | % |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Effective 9/15/16, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule12b-1 plan. Performance quotations for this class reflect the following methods of calculation: (a) For periods prior to 9/15/16, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule12b-1 fees; and (b) for periods after 9/15/16, actual Advisor Class performance is used reflecting all charges and fees applicable to that class.
6. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
7. Taxable equivalent distribution rate and yield assume the 2019 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN FLORIDA TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||
|
| |||||||||||
Share Class | Beginning Account | Ending Account | Expenses Paid During Period1, 2 | Ending Account | Expenses Paid During Period 3/1/19–8/31/191, 2 | Net Annualized Ratio2 | ||||||
|
|
|
| |||||||||
A | $1,000 | $1,050.70 | $4.38 | $1,020.86 | $4.32 | 0.85% | ||||||
A1 | $1,000 | $1,051.60 | $3.61 | $1,021.62 | $3.56 | 0.70% | ||||||
C | $1,000 | $1,048.80 | $6.44 | $1,018.85 | $6.34 | 1.25% | ||||||
R6 | $1,000 | $1,052.10 | $2.89 | $1,022.32 | $2.85 | 0.56% | ||||||
Advisor | $1,000 | $1,051.90 | $3.09 | $1,022.12 | $3.05 | 0.60% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
16 | Semiannual Report | franklintempleton.com |
Franklin GeorgiaTax-Free Income Fund
This semiannual report for Franklin GeorgiaTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and Georgia personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 8.43% | |
AA | 66.43% | |
A | 11.77% | |
BBB | 2.80% | |
Below Investment Grade | 0.86% | |
Refunded | 9.09% | |
Not Rated | 0.62% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $11.59 on February 28, 2019, to $12.03 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 18.9958 cents per share for the same period.2The Performance Summary beginning on page 20 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.58% based on an
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 | Advisor Class | |||||||||||||
March | 2.9700 | 3.1200 | 2.5800 | 3.2500 | 3.2100 | |||||||||||||
April** | 4.7400 | 4.8900 | 4.3500 | 5.0200 | 4.9800 | |||||||||||||
May | 2.9705 | 3.1200 | 2.6110 | 3.2627 | 3.2212 | |||||||||||||
June | 2.6162 | 2.7514 | 2.2831 | 2.8784 | 2.8437 | |||||||||||||
July | 3.0165 | 3.1764 | 2.6281 | 3.3244 | 3.2878 | |||||||||||||
August | 2.6826 | 2.8299 | 2.3246 | 2.9665 | 2.9294 | |||||||||||||
Total | 18.9958 | 19.8877 | 16.7768 | 20.7020 | 20.4721 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.77 cent per share supplemental distribution.
annualization of August’s 2.6826 cents per share monthly dividend and the maximum offering price of $12.50 on August 31, 2019. An investor in the 2019 maximum combined effective federal and Georgia personal income tax bracket of 46.80% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.85% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 77.
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
State Update
During the six months under review, Georgia’s highly diversified and broad-based economy outpaced the nation. The Atlanta metropolitan area is the engine of the state’s economic performance and has recently experienced one of the largest population increases in the U.S. The state’sper-capita income is lower than the nation’s, but recent economic and population growth is helping to close this gap. Georgia’s low cost of living, strong transportation network, solid population growth, and favorable weather and business costs have attracted business investment and job creation. Ongoing job growth has bolstered income tax and sales tax receipts that account for the majority of general fund revenue. The state’s unemployment declined from 3.9% in February 2019 to 3.6% atperiod-end, which was lower than the 3.7% national rate.3
Georgia ended fiscal year (FY) 2019 on June 30 with revenues exceeding estimates. The budget adopted for FY 2019 assumed net revenue growth over the prior year’s amended budget, including expected tax growth. Budget priorities included eliminating remaining austerity adjustments, providing additional funds for the Quality Basic Education (QBE) program to fund enrollment growth and teacher training, and fully funding the QBE funding formula. Additional funds were added for contributions to the Teachers’ Retirement System and for Medicaid services, although Georgia is not a Medicaid expansion state. Georgia’s long-term liabilities are moderate and unlikely to grow to a level that pressures the state’s budget. The state treasurer also reported excess reserves which should serve as a buffer to the state government. Georgia’s legislature proposed a $27.5 billion FY 2020 budget to increase spending forK-12 education with smaller raises for teachers. The budget would also increase public health care funding, including nursing home care for the elderly and disabled.
The state’s nettax-supported debt was 2.3% of personal income and $996 per capita, compared with the 2.2% and $1,068 national medians.4S&P also rated the company highly at AAA with a stable outlook.5In S&P’s view, the rating reflected Georgia’s well-diversified and broad-based economic growth that outpaces the nation, strong financial monitoring and oversight, including a history of budget adjustments (usually through spending cuts) to restore fiscal balance, continued growth in the state’s revenue shortfall
Portfolio Composition
8/31/19
% of Total Investments* | ||
Utilities | 21.05% | |
Hospital & Health Care | 16.97% | |
General Obligation | 14.02% | |
Subject to Government Appropriations | 12.60% | |
Refunded** | 9.31% | |
Higher Education | 8.63% | |
Transportation | 6.65% | |
Tax-Supported | 6.62% | |
Housing | 4.15% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
reserve, a moderate debt position coupled with rapid amortization, and proactive management of long-term liabilities through full funding of state pension contributions and creation of reserves for other post-employment benefits. The state’s stable outlook is due to active management of its budget and revenue forecast coupled with Georgia’s willingness to adjust to unforeseen economic events.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Thank you for your continued participation in Franklin GeorgiaTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
18 | Semiannual Report | franklintempleton.com |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||
A3,4 | ||||
6-Month | +5.47% | +1.52% | ||
1-Year | +6.88% | +2.87% | ||
5-Year | +15.36% | +2.12% | ||
10-Year | +48.65% | +3.65% | ||
Advisor5 | ||||
6-Month | +5.69% | +5.69% | ||
1-Year | +7.23% | +7.23% | ||
5-Year | +15.99% | +3.01% | ||
10-Year | +49.36% | +4.09% |
Share Class | Distribution Rate6 | Taxable Equivalent Distribution Rate7 | 30-Day Standardized Yield8 | Taxable Equivalent 30-Day Standardized Yield7 | ||||
A | 2.58% | 4.85% | 1.14% | 2.14% | ||||
Advisor | 2.92% | 5.49% | 1.44% | 2.71% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 21 for Performance Summary footnotes.
20 | Semiannual Report | franklintempleton.com |
FRANKLIN GEORGIATAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(3/1/19–8/31/19)
Share Class | Net Investment Income | |
A | $0.189958 | |
A1 | $0.198877 | |
C | $0.167768 | |
R6 | $0.207020 | |
Advisor | $0.204721 |
Total Annual Operating Expenses6
Share Class | ||
A | 0.87% | |
Advisor | 0.62% |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and shareprice will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Effective 9/15/16, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule12b-1 plan. Performance quotations for this class reflect the following methods of calculation: (a) For periods prior to 9/15/16, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule12b-1 fees; and (b) for periods after 9/15/16, actual Advisor Class performance is used reflecting all charges and fees applicable to that class.
6. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
7. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and Georgia personal income tax rate of 46.80%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
franklintempleton.com | Semiannual Report | 21 |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||
|
| |||||||||||||||||
Share Class | Beginning Account Value | Ending Account Value 8/31/19 | Expenses Paid During Period1, 2 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191, 2 | Net Annualized Expense Ratio2 | ||||||||||||
|
|
|
| |||||||||||||||
A | $1,000 | $1,054.70 | $4.39 | $1,020.86 | $4.32 | 0.85% | ||||||||||||
A1 | $1,000 | $1,055.50 | $3.62 | $1,021.62 | $3.56 | 0.70% | ||||||||||||
C | $1,000 | $1,052.80 | $6.45 | $1,018.85 | $6.34 | 1.25% | ||||||||||||
R6 | $1,000 | $1,057.10 | $2.90 | $1,022.32 | $2.85 | 0.56% | ||||||||||||
Advisor | $1,000 | $1,056.90 | $3.10 | $1,022.12 | $3.05 | 0.60% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
22 | Semiannual Report | franklintempleton.com |
Franklin KentuckyTax-Free Income Fund
This semiannual report for Franklin KentuckyTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and Kentucky personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 4.64% | |
AA | 44.14% | |
A | 30.71% | |
BBB | 14.27% | |
Refunded | 6.24% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $10.76 on February 28, 2019, to $11.13 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 16.9885 cents per share for the same period.2The Performance Summary beginning on page 26 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.44% based on an annualization of August’s 2.3498 cents per share monthly dividend and the maximum offering price of $11.56 on
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||
Month | Class A | Class A1 | Class R6 | Advisor Class | ||||
March | 2.6600 | 2.7900 | 2.9100 | 2.8800 | ||||
April** | 4.3900 | 4.5200 | 4.6400 | 4.6100 | ||||
May | 2.6043 | 2.7403 | 2.8708 | 2.8338 | ||||
June | 2.3067 | 2.4305 | 2.5460 | 2.5159 | ||||
July | 2.6777 | 2.8234 | 2.9583 | 2.9235 | ||||
August | 2.3498 | 2.4839 | 2.6077 | 2.5758 | ||||
Total | 16.9885 | 17.7881 | 18.5328 | 18.3390 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.73 cent per share supplemental distribution.
August 31, 2019. An investor in the 2019 maximum combined effective federal and Kentucky personal income tax bracket of 46.80% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.59% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 85.
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
Commonwealth Update
During the six months under review, Kentucky’s economy continued to grow modestly, given slow population gains and marginal expansion in a number of job sectors. The health care sector is an important component of economic stability and employment in Kentucky, as Kentucky expanded Medicare under the Affordable Care Act. However, the commonwealth’s economy continued to be hindered by relatively low wealth levels and a weak demographic profile that includes an aging population. Kentucky’s unemployment rate rose from 4.1% in February 2019 to 4.4% atperiod-end, which was higher than the 3.7% national rate.3
Growth in fiscal year (FY) 2019 general fund collections reached anall-time high. The resulting strong budget surplus may assist efforts to achieve structural balance across the commonwealth’s operations despite higher fixed costs, which are an important aspect of Kentucky’s budget. Kentucky’s 2019–2020 biennium budget included the governor’s desired funding for a statewide broadband construction project. The new budget also included a plan to replenish the commonwealth’s reserves, reduce higher education funding and modestly lessen employee benefits. Kentucky’s budgeted pension reforms were challenged and ultimately struck down by the state’s supreme court before the reporting period. Kentucky has increased pension funding in recent years, but unfunded pension liabilities remain a significant budgetary issue. For FY 2020, the state legislature approved the governor’s proposals to issue park improvement bonds and increase higher education funding andnon-profit sales tax exemptions in FY 2020. General fund receipts increased modestly in early FY 2020 due to higher sales tax and cigarette tax revenues resulting from recent legislation, despite decreased tax revenues from other sources.
Kentucky’s nettax-supported debt was $1,932 per capita and 4.8% of personal income, compared with the $1,068 and 2.2% national medians, respectively.4During the period under review, independent credit rating agency Standard & Poor’s (S&P) affirmed Kentucky’s issuer credit rating of A with a stable outlook.5The rating reflected increased vulnerability to fiscal strain resulting from rising pension costs and years of uneven budgetary management that has relied on spending and reserve reductions amid economic expansion. Kentucky’s moderately high debt burden,
Portfolio Composition
8/31/19
% of Total Investments* | ||
Utilities | 29.73% | |
Subject to Government Appropriations | 22.91% | |
Higher Education | 20.93% | |
Refunded** | 10.88% | |
Hospital & Health Care | 9.59% | |
Housing | 2.99% | |
Tax-Supported | 2.08% | |
Transportation | 0.89ı% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
including a large unfunded pension liability, and increasing Medicaid costs to cover expansion under the Affordable Care Act are likely to further pressure future budgets. The stable outlook reflected the implementation of pension reform, the adoption of a biennium budget that fully funds its required pension plan contributions and the transfer of funds for reserves. Future rating upgrades from S&P will depend on reducing unfunded pension liabilities and achieving structural budgetary balance.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Thank you for your continued participation in Franklin KentuckyTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
24 | Semiannual Report | franklintempleton.com |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||
A3,4 | ||||
6-Month | +5.05% | +1.12% | ||
1-Year | +7.08% | +3.07% | ||
5-Year | +14.76% | +2.01% | ||
10-Year | +46.98% | +3.53% | ||
Advisor5 | ||||
6-Month | +5.19% | +5.19% | ||
1-Year | +7.15% | +7.15% | ||
5-Year | +15.19% | +2.87% | ||
10-Year | +47.44% | +3.96% |
Share Class | Distribution Rate6 | Taxable Equivalent Distribution Rate7 | 30-Day Standardized Yield8 | Taxable Equivalent 30-Day Standardized Yield7 | ||||
A | 2.44% | 4.59% | 1.25% | 2.35% | ||||
Advisor | 2.78% | 5.23% | 1.54% | 2.89% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 27 for Performance Summary footnotes.
26 | Semiannual Report | franklintempleton.com |
FRANKLIN KENTUCKYTAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(3/1/19–8/31/19)
Share Class | Net Investment Income | |||
A | $0.169885 | |||
A1 | $0.177881 | |||
R6 | $0.185328 | |||
Advisor | $0.183390 |
Total Annual Operating Expenses6
Share Class | ||||
A | 0.96% | |||
Advisor | 0.71% |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Effective 9/15/16, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule12b-1 plan. Performance quotations for this class reflect the following methods of calculation: (a) For periods prior to 9/15/16, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule12b-1 fees; and (b) for periods after 9/15/16, actual Advisor Class performance is used reflecting all charges and fees applicable to that class.
6. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
7. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and Kentucky personal income tax rate of 46.80%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
franklintempleton.com | Semiannual Report | 27 |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||
|
| |||||||||||
Share Class | Beginning Account Value 3/1/19 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191, 2 | Ending Account Value 8/31/19 | Expenses Paid During Period | Net Annualized Expense Ratio2 | ||||||
|
|
|
| |||||||||
A | $1,000 | $1,050.50 | $4.95 | $1,020.31 | $4.88 | 0.96% | ||||||
A1 | $1,000 | $1,051.40 | $4.18 | $1,021.06 | $4.12 | 0.81% | ||||||
R6 | $1,000 | $1,052.10 | $3.46 | $1,021.77 | $3.40 | 0.67% | ||||||
Advisor | $1,000 | $1,051.90 | $3.66 | $1,021.57 | $3.61 | 0.71% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
28 | Semiannual Report | franklintempleton.com |
Franklin LouisianaTax-Free Income Fund
This semiannual report for Franklin LouisianaTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and Louisiana personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 0.87% | |
AA | 39.03% | |
A | 42.03% | |
BBB | 2.70% | |
Below Investment Grade | 1.35% | |
Refunded | 14.02% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $10.93 on February 28, 2019, to $11.40 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 16.8673 cents per share for the same period.2 The Performance Summary beginning on page 32 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.49% based on an annualization of August’s 2.4604 cents per share monthly
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||||
|
| |||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 |
Advisor Class | |||||||||||||||
March | 2.7500 | 2.8900 | 2.3800 | 3.0100 | 2.9800 | |||||||||||||||
April** | 3.8700 | 4.0100 | 3.5000 | 4.1300 | 4.1000 | |||||||||||||||
May | 2.6590 | 2.7992 | 2.3179 | 2.9293 | 2.8950 | |||||||||||||||
June | 2.3625 | 2.4883 | 2.0453 | 2.6026 | 2.5759 | |||||||||||||||
July | 2.7654 | 2.9187 | 2.4020 | 3.0520 | 3.0214 | |||||||||||||||
August | 2.4604 | 2.5986 | 2.1216 | 2.7213 | 2.6931 | |||||||||||||||
Total | 16.8673 | 17.7048 | 14.7668 | 18.4452 | 18.2654 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.12 cent per share supplemental distribution.
dividend and the maximum offering price of $11.84 on August 31, 2019. An investor in the 2019 maximum combined effective federal and Louisiana personal income tax bracket of 46.80% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.68% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 93.
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN LOUISIANA TAX-FREE INCOME FUND
State Update
Louisiana’s economy overall grew during the six months under review, supported by a strong start in the first quarter of 2019, despite moderate growth in the second quarter. The growth was evidenced by improved employment in the manufacturing, health and social services and hospitality sectors. However, the state’s slow population growth, high poverty rate and low per capita income relative to the nation’s limited Louisiana’s economic base, which remained exposed to energy sector fluctuations. Crude oil prices were mixed during the period and did not translate to higher rig counts or other signs of oil industry revival. The state’s unemployment rate decreased from 4.9% in February 2019 to 4.3% atperiod-end, still significantly higher than the 3.7% national average.3
The state initially balanced the fiscal year (FY) 2019 budget, ended June 30, 2019, primarily through a higher revenue forecast amid an improving economic outlook and budget surpluses. The state ended FY 2018 with a budget surplus and is likely to close FY 2019 with another surplus. In June 2019, the governor signed the state’s FY 2019-2020 operating budget, which highlighted full funding for Taylor Opportunity Program for Students (TOPS), increased spending on education, corrections, health care and public safety programs, as well as pay raises for teachers and school employees. Additionally, higher-than-projected tax collections in FY 2018 and FY 2019, which remained unspent, were allocated by the state to pay for a long list of construction work andone-time projects.
Louisiana’s nettax-supported debt was 3.5% of personal income and $1,523 per capita, compared with the 2.2% and $1,068 national medians, respectively.4 Independent credit rating agency Moody’s Investors Service (Moody’s) affirmed its rating of Aa3 on Louisiana’s general obligation debt, maintaining a stable outlook.5 The rating reflected Moody’s view of the state’s large and diverse tax base, moderate combined debt and pension burden and adherence to certain financial best practices. According to Moody’s, the state’s challenges include financial and economic strain amid energy sector volatility, difficulty in closing large structural budget gaps, and erosion of reserves and liquidity after years of structural budgetary imbalance. The stable outlook reflected the state’s recent stabilization of its
Portfolio Composition
8/31/19
% of Total Investments* | ||
Tax-Supported | 15.89% | |
Hospital & Health Care | 15.72% | |
Refunded** | 14.78% | |
Utilities | 12.83% | |
Higher Education | 12.81% | |
Transportation | 11.24% | |
General Obligation | 7.78% | |
Subject to Government Appropriations | 5.48% | |
Other Revenue | 2.36% | |
Housing | 1.11% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
economic base and implementation of recurring, although time-limited, solutions to large structural budget gaps.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Thank you for your continued participation in Franklin LouisianaTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate Moody’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
30 | Semiannual Report | franklintempleton.com |
FRANKLIN LOUISIANA TAX-FREE INCOME FUND
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN LOUISIANA TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||
A3,4 | ||||
6-Month | +5.88% | +1.91% | ||
1-Year | +7.80% | +3.76% | ||
5-Year | +17.66% | +2.52% | ||
10-Year | +50.69% | +3.79% | ||
Advisor5 | ||||
6-Month | +6.01% | +6.01% | ||
1-Year | +8.07% | +8.07% | ||
5-Year | +18.20% | +3.40% | ||
10-Year | +51.30% | +4.23% |
Share Class | Distribution Rate6 | Taxable Equivalent Distribution Rate7 | 30-Day Standardized Yield8 | Taxable Equivalent 30-Day Standardized Yield7 | ||||||||||
A | 2.49% | 4.68% | 1.16% | 2.18% | ||||||||||
Advisor | 2.83% | 5.32% | 1.46% | 2.74% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 33 for Performance Summary footnotes.
32 | Semiannual Report | franklintempleton.com |
FRANKLIN LOUISIANATAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(3/1/19–8/31/19)
Share Class | Net Investment Income | |||
A | $0.168673 | |||
A1 | $0.177048 | |||
C | $0.147668 | |||
R6 | $0.184452 | |||
Advisor | $0.182654 |
Total Annual Operating Expenses9
Share Class | ||||
A | 0.88 | % | ||
Advisor | 0.63 | % |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Effective 9/15/16, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule12b-1 plan. Performance quotations for this class reflect the following methods of calculation: (a) For periods prior to 9/15/16, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule12b-1 fees; and (b) for periods after 9/15/16, actual Advisor Class performance is used reflecting all charges and fees applicable to that class.
6. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
7. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and Louisiana personal income tax rate of 46.80%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
8. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
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FRANKLIN LOUISIANA TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (ofcourse, your account value and expenses will differ from those in this illustration):Divide your account value by $1,000 (ifyour account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (ifActual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||
Share Class | Beginning Account Value | Ending Value 8/31/19 | Expenses Paid During Period1,2 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191,2 | Net Annualized Expense Ratio2 | ||||||||||||
|
|
|
| |||||||||||||||
A | $1,000 | $1,058.80 | $4.50 | $1,020.76 | $4.42 | 0.87% | ||||||||||||
A1 | $1,000 | $1,060.60 | $3.73 | $1,021.52 | $3.66 | 0.72% | ||||||||||||
C | $1,000 | $1,057.80 | $6.57 | $1,018.75 | $6.44 | 1.27% | ||||||||||||
R6 | $1,000 | $1,060.30 | $3.00 | $1,022.22 | $2.95 | 0.58% | ||||||||||||
Advisor | $1,000 | $1,060.10 | $3.21 | $1,022.02 | $3.15 | 0.62% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
34 | Semiannual Report | franklintempleton.com |
Franklin MarylandTax-Free Income Fund
This semiannual report for Franklin MarylandTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and Maryland personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |||
AAA | 18.84% | |||
AA | 37.68% | |||
A | 24.64% | |||
BBB | 11.27% | |||
Below Investment Grade | 1.94% | |||
Refunded | 2.75% | |||
Not Rated | 2.88% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $10.80 on February 28, 2019, to $11.22 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 17.1242 cents per share for the same period.22The Performance Summary beginning on page 37 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.34% based on an
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||||
|
| |||||||||||||||||||
Month | Class A | Class A | Class C | Class R6 | Advisor Class | |||||||||||||||
March | 2.7700 | 2.9100 | 2.4000 | 3.0400 | 3.0000 | |||||||||||||||
April** | 4.5700 | 4.7100 | 4.2000 | 4.8400 | 4.8000 | |||||||||||||||
May | 2.6559 | 2.7964 | 2.3316 | 2.9374 | 2.8929 | |||||||||||||||
June | 2.3677 | 2.4942 | 2.0649 | 2.6201 | 2.5823 | |||||||||||||||
July | 2.4880 | 2.6382 | 2.1337 | 2.7852 | 2.7414 | |||||||||||||||
August | 2.2726 | 2.4109 | 1.9462 | 2.5458 | 2.5055 | |||||||||||||||
Total | 17.1242 | 17.9597 | 15.0764 | 18.7685 | 18.5221 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.80 cent per share supplemental distribution.
annualization of August’s 2.2726 cents per share monthly dividend and the maximum offering price of $11.66 on August 31, 2019. An investor in the 2019 maximum combined effective federal and Maryland personal income tax bracket of 49.75% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.66% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 102.
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
State Update
Maryland’s economy continued to grow slowly during the six months under review amid mixed economic conditions. The state’s home prices rose, while the foreclosure rate declined, but remained higher than the nation’s. Maryland’s economic strengths consist of strong wealth and income indicators and a relatively diversified industry base that includes a significant federal government presence, which provides well-paying civilian and national defense jobs. Maryland’s unemployment rate rose from 3.7% in February 2019 to 3.8% atperiod-end, which was slightly higher than the 3.7% national average.3
Maryland’s state revenues for fiscal year (FY) 2019 were above its estimates, largely due to higher individual and corporate income taxes. However, these estimates were revised and reduced in March 2019, in lieu of taxpayers’ behavior and timing of receipts. Maryland’s enacted FY 2020 budget, which was larger in comparison to the previous year’s budget, is structurally balanced and prioritizes investments in areas such as education, health care, state employees and public safety. The budget provided the largest education funding ever in the state, including pay raises for teachers, implementing recommendations by the Kirwan Commission and funding to the Broadening Options and Opportunities for Students Today (BOOST) program.
The state’s nettax-supported debt was 3.8% of personal income and $2,343 per capita, compared with the 2.2% and $1,068 national medians, respectively.4Independent credit rating agency Standard & Poor’s (S&P) affirmed the state’s general obligation debt rating at AAA with a stable outlook.5S&P cited the state’s broad and diverse economy, continued strong wealth and income levels, proactive financial and budget management, and well-developed financial and debt management policies despite continued slow economic growth. The outlook reflected S&P’s view of the state’s continued practice of structural budget alignment, maintenance of healthy reserve levels, and proactivemid-year budget adjustments in case of slower-than-anticipated revenue growth. However, S&P expressed concern about the state’s moderately high debt levels and inability to consistently fund pensions and other long-term liabilities.
Portfolio Composition
8/31/19
% of Total Investments* | ||||
Hospital & Health Care | 22.99% | |||
Utilities | 18.35% | |||
General Obligation | 14.44% | |||
Housing | 14.23% | |||
Higher Education | 12.88% | |||
Transportation | 6.12% | |||
Other Revenue | 4.51% | |||
Subject to Government Appropriations | 3.41% | |||
Refunded** | 3.07% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Thank you for your continued participation in Franklin MarylandTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
36 | Semiannual Report | franklintempleton.com |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||||||
A3,4 | ||||||||
6-Month | +5.51% | +1.56% | ||||||
1-Year | +7.12% | +3.10% | ||||||
5-Year | +15.44% | +2.13% | ||||||
10-Year | +46.23% | +3.48% | ||||||
Advisor | ||||||||
6-Month | +5.73% | +5.73% | ||||||
1-Year | +7.48% | +7.48% | ||||||
5-Year | +16.40% | +3.08% | ||||||
10-Year | +48.07% | +4.00% |
Share Class | Distribution Rate5 | Taxable Equivalent Distribution Rate6 | 30-Day Standardized Yield7 | Taxable Equivalent 30-Day Standardized Yield6 | ||||||||||||
A | 2.34% | 4.66% | 1.16% | 2.31% | ||||||||||||
Advisor | 2.67% | 5.31% | 1.46% | 2.91% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 38 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 37 |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–8/31/19)
Share Class | Net Investment Income | |||
A | $0.171242 | |||
A1 | $0.179597 | |||
C | $0.150764 | |||
R6 | $0.187685 | |||
Advisor | $0.185221 |
Total Annual Operating Expenses8
Share Class | ||||
A | 0.88% | |||
Advisor | 0.63% |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
6. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and Maryland state and local personal income tax rate of 49.75%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
7. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
38 | Semiannual Report | franklintempleton.com |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||
|
| |||||||||||||
Share Class | Beginning Account Value 3/1/19 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191,2 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191,2 | Net Annualized Expense Ratio2 | ||||||||
|
|
|
| |||||||||||
A | $1,000 | $1,055.10 | $4.49 | $1,020.76 | $4.42 | 0.87% | ||||||||
A1 | $1,000 | $1,055.90 | $3.72 | $1,021.52 | $3.66 | 0.72% | ||||||||
C | $1,000 | $1,053.00 | $6.55 | $1,018.75 | $6.44 | 1.27% | ||||||||
R6 | $1,000 | $1,056.60 | $2.95 | $1,022.27 | $2.90 | 0.57% | ||||||||
Advisor | $1,000 | $1,057.30 | $3.21 | $1,022.02 | $3.15 | 0.62% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Semiannual Report | 39 |
Franklin Missouri Tax-Free Income Fund
This semiannual report for Franklin MissouriTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and Missouri personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 8.79% | |
AA | 48.75% | |
A | 23.25% | |
BBB | 10.33% | |
Below Investment Grade | 4.45% | |
Refunded | 4.23% | |
Not Rated | 0.20% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $11.47 on February 28, 2019, to $11.94 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 17.5869 cents per share for the same period.2 The Performance Summary beginning on page 42 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.44% based on an
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||||
|
| |||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 | Advisor Class | |||||||||||||||
March | 2.8400 | 2.9900 | 2.4600 | 3.1200 | 3.0800 | |||||||||||||||
April** | 4.1500 | 4.3000 | 3.7700 | 4.4300 | 4.3900 | |||||||||||||||
May | 2.7737 | 2.9206 | 2.4006 | 3.0601 | 3.0216 | |||||||||||||||
June | 2.4805 | 2.5777 | 2.0806 | 2.7004 | 2.6702 | |||||||||||||||
July | 2.8173 | 2.9749 | 2.4172 | 3.1172 | 3.0825 | |||||||||||||||
August | 2.5254 | 2.6699 | 2.1565 | 2.8013 | 2.7693 | |||||||||||||||
Total | 17.5869 | 18.4331 | 15.2849 | 19.2290 | 19.0136 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.31 cent per share supplemental distribution
annualization of August’s 2.5254 cents per share monthly dividend and the maximum offering price of $12.41 on August 31, 2019. An investor in the 2019 maximum combined effective federal and Missouri personal income tax bracket of 46.20% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.54% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 110.
40 | Semiannual Report | franklintempleton.com |
FRANKLIN MISSOURI TAX-FREE INCOME FUND
State Update
Missouri’s economy steadily expanded during the six months under review but underperformed the national economy. Missouri’s housing market improved, as home prices and sales rose, and the foreclosure rate, which was below the national average, marginally declined. The state’s unemployment rate remained unchanged from 3.2% in February 2019 to 3.2% atperiod-end, but stayed below the 3.7% national average.3
The state concluded fiscal year (FY) 2019 on June 30, 2019, with higheryear-to-date general revenue collections than the prior year, mainly because of growth in collections of corporate, sales and use taxes, and decline in refunds, while individual income tax and other collections decreased. In June 2019, the state’s governor signed the FY 2020 budget that included increased spending on infrastructure, workforce development, education, public safety as well as cost of living pay raises for state employees, without increasing the tax burden.
Missouri’s nettax-supported debt was 1.1% of personal income and $487 per capita compared with the 2.2% and $1,068 national medians, respectively.4 Independent credit rating agency Moody’s Investors Service (Moody’s) rated Missouri’s general obligation bonds at Aaa with a stable outlook.5 The rating reflected Moody’s view of the state’s history of solid reserve levels, sound fiscal management controls and affordable debt and pension burden. It also incorporated the state’s below-average wealth and demographic indicators, revenue-raising constraints and expectations that the state’s economy would continue to lag the nation’s. Furthermore, it reflected the concerns regarding the state’s ability to balance an income tax cut that will incrementally reduce revenues over the next few years. The rating agency also noted that any economic weakening that negatively affects the state’s revenue collections could lead to a downgrade.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Portfolio Composition
8/31/19
% of Total Investments* | ||
Utilities | 30.22% | |
Hospital & Health Care | 22.80% | |
General Obligation | 14.81% | |
Higher Education | 8.52% | |
Tax-Supported | 7.78% | |
Transportation | 6.78% | |
Refunded** | 4.23% | |
Subject to Government Appropriations | 3.51% | |
Corporate-Backed | 1.08% | |
Housing | 0.27% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
Thank you for your continued participation in Franklin MissouriTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate Moody’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 41 |
FRANKLIN MISSOURI TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||||
A3,4 | ||||||
6-Month | +5.67% | +1.71% | ||||
1-Year | +7.45% | +3.42% | ||||
5-Year | +16.66% | +2.34% | ||||
10-Year | +46.98% | +3.53% | ||||
Advisor | ||||||
6-Month | +5.80% | +5.80% | ||||
1-Year | +7.62% | +7.62% | ||||
5-Year | +17.33% | +3.25% | ||||
10-Year | +48.59% | +4.04% |
Share Class | Distribution Rate5 | Taxable Equivalent Distribution Rate6 | 30-Day Standardized Yield7 | Taxable Equivalent 30-Day Standardized Yield6 | ||||||||||||
A | 2.44% | 4.54% | 1.23% | 2.29% | ||||||||||||
Advisor | 2.78% | 5.17% | 1.52% | 2.83% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 43 for Performance Summary footnotes.
42 | Semiannual Report | franklintempleton.com |
FRANKLIN MISSOURITAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(3/1/19–8/31/19)
Share Class | Net Investment Income | |||
A | $0.175869 | |||
A1 | $0.184331 | |||
C | $0.152849 | |||
R6 | $0.192290 | |||
Advisor | $0.190136 |
Total Annual Operating Expenses8
Share Class | ||||
A | 0.84 | % | ||
Advisor | 0.59 | % |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
6. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and Missouri personal income tax rate of 46.20%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
7. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
franklintempleton.com | Semiannual Report | 43 |
FRANKLIN MISSOURI TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||
|
| |||||||||||
Share Class | Beginning Account Value 3/1/19 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191, 2 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191, 2 | Net Annualized Expense Ratio2 | ||||||
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|
|
| |||||||||
A | $1,000 | $1,056.70 | $4.24 | $1,021.01 | $4.17 | 0.82% | ||||||
A1 | $1,000 | $1,057.50 | $3.47 | $1,021.77 | $3.40 | 0.67% | ||||||
C | $1,000 | $1,055.00 | $6.30 | $1,019.00 | $6.19 | 1.22% | ||||||
R6 | $1,000 | $1,058.20 | $2.74 | $1,022.47 | $2.69 | 0.53% | ||||||
Advisor | $1,000 | $1,058.00 | $2.95 | $1,022.27 | $2.90 | 0.57% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
44 | Semiannual Report | franklintempleton.com |
Franklin North Carolina Tax-Free Income Fund
This semiannual report for Franklin North CarolinaTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and North Carolina personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 23.03% | |
AA | 57.25% | |
A | 9.62% | |
BBB | 2.60% | |
Below Investment Grade | 2.93% | |
Refunded | 4.57% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $11.30 on February 28, 2019, to $11.74 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 15.9146 cents per share for the same period.2 The Performance Summary beginning on page 47 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.33% based on an annualization of August’s 2.3676 cents per share monthly
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||||
|
| |||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 | Advisor Class | |||||||||||||||
March | 2.6200 | 2.7700 | 2.2400 | 2.8900 | 2.8600 | |||||||||||||||
April** | 3.5700 | 3.7200 | 3.1900 | 3.8400 | 3.8100 | |||||||||||||||
May | 2.5618 | 2.7069 | 2.2078 | 2.8362 | 2.8046 | |||||||||||||||
June | 2.1938 | 2.3259 | 1.8661 | 2.4416 | 2.4151 | |||||||||||||||
July | 2.6014 | 2.7569 | 2.2197 | 2.8924 | 2.8614 | |||||||||||||||
August | 2.3676 | 2.5089 | 2.0101 | 2.6335 | 2.6051 | |||||||||||||||
Total | 15.9146 | 16.7886 | 13.7337 | 17.5337 | 17.3562 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 0.95 cent per share supplemental distribution.
dividend and the maximum offering price of $12.20 on August 31, 2019. An investor in the 2019 maximum combined effective federal and North Carolina personal income tax bracket of 46.05% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.32% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period.
Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 121.
franklintempleton.com | Semiannual Report | 45 |
FRANKLIN NORTH CAROLINA TAX-FREE INCOME FUND
State Update
North Carolina’s diverse economy continued to grow during the six months under review, helped by strong employment and population growth and a favorable business climate. The state’s housing market had mixed signals, as home prices rose while foreclosure rates increased above the nation’s. North Carolina’s unemployment rate rose from 3.9% in February 2019 to 4.2% atperiod-end, which was higher than the national average of 3.7%.3
The state ended fiscal year (FY) 2019 on June 30, 2019, with revenues that were higher than expected and better than the prior year, largely due to growth in sales and use taxes and individual income tax collections. In August 2019, the governor vetoed the latest Republican House budget due to low pay increases for teachers and absence of Medicaid expansion. However, towardperiod-end, the governor signed a number of smaller budget bills, including pay raises for state employees. The proposed budget featured funding ofpro-lifenon-profit Human Coalition, education, salary raises for state employees and investment in rural communities.
North Carolina’s nettax-supported debt remained relatively low at 1.2% of personal income and $531 per capita, compared with the 2.2% and $1,068 national medians, respectively.4Independent credit rating agency Standard & Poor’s (S&P) affirmed its AAA rating and a stable outlook for the state’s general obligation debt.5S&P cited the state’s strengths, including its diverse economic base, prudent fiscal management,low-to-moderate debt burden, well-funded pension system and progress in addressing other postemployment benefits. The stable outlook reflected the strength of the state’s growing economy and budgetary performance in recent years that led to increasing reserves. S&P expects North Carolina to continue to focus on its structural budget adjustments.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Portfolio Composition
8/31/19
% of Total Investments* | ||
Higher Education | 20.78% | |
Hospital & Health Care | 19.78% | |
Refunded** | 19.37% | |
Utilities | 17.39% | |
Transportation | 9.29% | |
General Obligation | 7.63% | |
Housing | 3.51% | |
Subject to Government Appropriations | 1.95% | |
Corporate-Backed | 0.30% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
Thank you for your continued participation in Franklin North CarolinaTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
46 | Semiannual Report | franklintempleton.com |
FRANKLIN NORTH CAROLINA TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||
A3,4 | ||||
6-Month | +5.33% | +1.38% | ||
1-Year | +6.88% | +2.87% | ||
5-Year | +13.65% | +1.81% | ||
10-Year | +40.83% | +3.09% | ||
Advisor | ||||
6-Month | +5.38% | +5.38% | ||
1-Year | +7.06% | +7.06% | ||
5-Year | +14.31% | +2.71% | ||
10-Year | +42.28% | +3.59% |
Share Class | Distribution Rate5 | Taxable Equivalent Distribution Rate6 | 30-Day Standardized Yield7 | Taxable Equivalent 30-Day Standardized Yield6 | ||||
A | 2.33% | 4.32% | 0.99% | 1.84% | ||||
Advisor | 2.67% | 4.95% | 1.29% | 2.39% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 48 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 47 |
FRANKLIN NORTH CAROLINATAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(3/1/19–8/31/19)
Share Class | Net Investment Income | |||
A | $0.159146 | |||
A1 | $0.167886 | |||
C | $0.137337 | |||
R6 | $0.175337 | |||
Advisor | $0.173562 |
Total Annual Operating Expenses8
Share Class | ||
A | 0.83% | |
Advisor | 0.58% |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
6. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and North Carolina personal income tax rate of 46.05%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
7. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
48 | Semiannual Report | franklintempleton.com |
FRANKLIN NORTH CAROLINA TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||
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| |||||||||||
Share Class | Beginning Value 3/1/19 | Ending Account | Expenses Paid During Period | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191,2 | Net Annualized Ratio2 | ||||||
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| |||||||||
A | $1,000 | $1,053.30 | $4.23 | $1,021.01 | $4.17 | 0.82% | ||||||
A1 | $1,000 | $1,053.20 | $3.46 | $1,021.77 | $3.40 | 0.67% | ||||||
C | $1,000 | $1,050.50 | $6.29 | $1,019.00 | $6.19 | 1.22% | ||||||
R6 | $1,000 | $1,054.90 | $2.79 | $1,022.42 | $2.75 | 0.54% | ||||||
Advisor | $1,000 | $1,053.80 | $2.94 | $1,022.27 | $2.90 | 0.57% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Semiannual Report | 49 |
Franklin Virginia Tax-Free Income Fund
This semiannual report for Franklin VirginiaTax-Free Income Fund covers the period ended August 31, 2019.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal and Virginia personal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in securities that pay interest free from such taxes.1
Credit Quality Composition*
8/31/19
Ratings | % of Total Investments | |
AAA | 17.54% | |
AA | 58.64% | |
A | 8.40% | |
BBB | 4.75% | |
Below Investment Grade | 1.77% | |
Refunded | 7.90% | |
Not Rated | 1.00% |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $10.92 on February 28, 2019, to $11.29 on August 31, 2019. The Fund’s Class A shares paid dividends totaling 16.3291 cents per share for the same period.2 The Performance Summary beginning on page 52 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 2.38% based on an
Dividend Distributions*
3/1/19–8/31/19
Dividend per Share (cents) | ||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 | Advisor Class | |||||||||||||
March | 2.6900 | 2.8300 | 2.3200 | 2.9500 | 2.9200 | |||||||||||||
April** | 3.9600 | 4.1000 | 3.5900 | 4.2200 | 4.1900 | |||||||||||||
May | 2.5862 | 2.7263 | 2.2497 | 2.8564 | 2.8225 | |||||||||||||
June | 2.1900 | 2.3237 | 1.8838 | 2.4394 | 2.4115 | |||||||||||||
July | 2.5748 | 2.7267 | 2.2128 | 2.8619 | 2.8294 | |||||||||||||
August | 2.3281 | 2.4661 | 1.9932 | 2.5904 | 2.5606 | |||||||||||||
Total | 16.3291 | 17.1728 | 14.2495 | 17.9181 | 17.7340 |
*The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Includes a 1.27 cent per share supplemental distribution.
annualization of August’s 2.3281 cents per share monthly dividend and the maximum offering price of $11.73 on August 31, 2019. An investor in the 2019 maximum combined effective federal and Virginia personal income tax bracket of 46.55% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.45% from a taxable investment to match the Fund’s Class Atax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by low 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. For most recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
1. For investors subject to alternative minimum tax, a small portion of the 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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
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 131.
50 | Semiannual Report | franklintempleton.com |
FRANKLIN VIRGINIA TAX-FREE INCOME FUND
Commonwealth Update
Virginia’s economy remained stable and continued to grow during the six months under review, helped by a sizable federal government presence. The state’s home sales and prices increased, and the foreclosure rate rose before ending the period relatively unchanged and below the national rate. The commonwealth’s unemployment rate declined from 2.9% in February 2019 to 2.8% atperiod-end, which was lower than the 3.7% national average.3
The commonwealth ended fiscal year (FY) 2019 on June 30, 2019, with a sizable budget surplus after strong revenue growth, outperforming lawmakers’ expectations. The strong performance was largely due to highernon-withholding income tax collections and lower individual income tax refunds than in previous years. In April 2019, the legislature passed an amendment to the biennial budget that ends the suspension of driver’s licenses for unpaid court fines or fees. In May 2019, the governor signed the new budget that includes further investments in education and funding of critical infrastructure improvements and affordable housing. However, the governor regretted that the budget restricts participation in the Regional Greenhouse Gas Initiative, prohibits funding for certain contraceptives as well as some family planning and does not fund body-worn cameras for use by law enforcement officers.
Virginia’s nettax-supported debt was 2.7% of personal income and $1,502 per capita, compared with the 2.2% and $1,068 national medians, respectively.4 Independent credit rating agency Standard & Poor’s (S&P) affirmed the commonwealth’s general obligation debt rating of AAA and maintained a stable outlook.5 The rating reflected S&P’s view of Virginia’s strong and diverse economy, strong financial policies and practices, long history of proactive and conservative financial management, and the state’s moderate debt levels. The stable outlook reflected S&P’s opinion that the commonwealth should continue to experience positive revenue performance in the 2018–2020 biennium and remain committed to structural budget solutions and the rebuilding of reserve balances. S&P stated that if the commonwealth reversed its efforts to rebuild its reserves, returned to structural imbalance or experienced weaker economic performance relative to the nation’s, it might lead the rating agency to consider a lower rating.
Portfolio Composition
8/31/19
% of Total Investments* | ||||
Utilities | 21.63% | |||
Transportation | 20.82% | |||
Refunded** | 15.36% | |||
Hospital & Health Care | 14.54% | |||
Higher Education | 12.79% | |||
General Obligation | 6.99% | |||
Subject to Government Appropriations | 4.08% | |||
Housing | 2.18% | |||
Other Revenue | 1.61% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
Manager’s Discussion
We used various investment strategies during the six months under review as we sought to maximizetax-free income for shareholders. Please read the Investment Strategy and Manager’s Discussion on page 4 for more information.
Thank you for your continued participation in Franklin VirginiaTax-Free Income Fund. We believe our conservative,buy-and-hold investment strategy can help us achieve high, current,tax-free income for shareholders.
The foregoing information reflects our analysis, opinions and portfolio holdings as of August 31, 2019, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
3. Source: Bureau of Labor Statistics.
4. Source: Moody’s Investors Service,“State government – U.S.: Medians – Flat debt total signals cautious borrowing, despite infrastructure needs,”6/3/19.
5. This does not indicate S&P’s rating of the Fund.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 51 |
FRANKLIN VIRGINIA TAX-FREE INCOME FUND
Performance Summary as of August 31, 2019
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 8/31/191
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||||||
A3,4 | ||||||||
6-Month | +4.92% | +0.98% | ||||||
1-Year | +6.59% | +2.59% | ||||||
5-Year | +14.16% | +1.90% | ||||||
10-Year | +42.36% | +3.20% | ||||||
Advisor | ||||||||
6-Month | +5.14% | +5.14% | ||||||
1-Year | +6.85% | +6.85% | ||||||
5-Year | +15.01% | +2.84% | ||||||
10-Year | +44.05% | +3.72% |
Share Class | Distribution Rate5 | Taxable Equivalent Distribution Rate6 | 30-Day Standardized Yield7 | Taxable Equivalent 30-Day Standardized Yield6 | ||||||||||||
A | 2.38% | 4.45% | 0.92% | 1.72% | ||||||||||||
Advisor | 2.72% | 5.09% | 1.20% | 2.25% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 53 for Performance Summary footnotes.
52 | Semiannual Report | franklintempleton.com |
FRANKLIN VIRGINIATAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(3/1/19–8/31/19)
Share Class | Net Investment Income | |
A | $0.163291 | |
A1 | $0.171728 | |
C | $0.142495 | |
R6 | $0.179181 | |
Advisor | $0.177340 |
Total Annual Operating Expenses8
Share Class | ||
A | 0.84% | |
Advisor | 0.59% |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Because the Fund invests principally in a single state, it is subject to greater risk of adverse economic and regulatory changes in that state than a geographically diversified fund. Puerto Rico municipal bonds have been impacted by recent adverse economic and market changes, which may cause the Fund’s share price to decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. Distribution rate is based on an annualization of the respective class’s August dividend and the maximum offering price (NAV for Advisor Class) per share on 8/31/19.
6. Taxable equivalent distribution rate and yield assume the published rates as of 7/16/19 for the maximum combined effective federal and Virginia personal income tax rate of 46.55%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
7. The Fund’s30-day standardized yield is calculated over a trailing30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
franklintempleton.com | Semiannual Report | 53 |
FRANKLIN VIRGINIA TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (ofcourse, your account value and expenses will differ from those in this illustration):Divide your account value by $1,000 (ifyour account had an $8,600 value, then $8,600÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (ifActual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||
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Share Class | Beginning Account Value 3/1/19 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191, 2 | Ending Account Value 8/31/19 | Expenses Paid During Period 3/1/19–8/31/191, 2 | Net Annualized Expense Ratio2 | ||||||
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|
| |||||||||
A | $1,000 | $1,049.20 | $4.33 | $1,020.91 | $4.27 | 0.84% | ||||||
A1 | $1,000 | $1,050.90 | $3.56 | $1,021.67 | $3.51 | 0.69% | ||||||
C | $1,000 | $1,047.40 | $6.38 | $1,018.90 | $6.29 | 1.24% | ||||||
R6 | $1,000 | $1,050.70 | $2.84 | $1,022.37 | $2.80 | 0.55% | ||||||
Advisor | $1,000 | $1,051.40 | $3.04 | $1,022.17 | $3.00 | 0.59% |
1. Expenses are equal to the annualized expense ratio for thesix-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
54 | Semiannual Report | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Franklin AlabamaTax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $10.85 | $10.79 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.15 | 0.15 | ||||||
Net realized and unrealized gains (losses) | 0.43 | 0.06 | ||||||
Total from investment operations. | 0.58 | 0.21 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.17 | ) | (0.15 | ) | ||||
Net asset value, end of period | $11.26 | $10.85 | ||||||
Total returnd | 5.36% | 1.98% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.91% | 0.92% | ||||||
Net investment income | 2.73% | 2.91% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $10,902 | $7,334 | ||||||
Portfolio turnover rate | 1.42% | 8.57% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 55 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Alabama Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016a | 2015 | ||||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.84 | $10.88 | $11.16 | $11.35 | $11.55 | $11.18 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.33 | 0.35 | 0.39 | 0.42 | 0.44 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.43 | (0.04 | ) | (0.27 | ) | (0.20 | ) | (0.20 | ) | 0.37 | ||||||||||||||
Total from investment operations | 0.59 | 0.29 | 0.08 | 0.19 | 0.22 | 0.81 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.33 | ) | (0.36 | ) | (0.38 | ) | (0.42 | ) | (0.44 | ) | ||||||||||||
Net asset value, end of period | $11.25 | $10.84 | $10.88 | $11.16 | $11.35 | $11.55 | ||||||||||||||||||
Total returnd | 5.44% | 2.76% | 0.72% | 1.69% | 1.99% | 7.35% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.76%f | 0.77% | f | 0.74% | 0.72% | 0.71% | 0.72% | |||||||||||||||||
Net investment income | 2.88% | 3.06% | 3.16% | 3.38% | 3.73% | 3.83% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $188,661 | $188,290 | $208,340 | $225,050 | $228,212 | $224,586 | ||||||||||||||||||
Portfolio turnover rate | 1.42% | 8.57% | 14.66% | 16.81% | 10.70% | 6.46% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
56 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Alabama Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016a | 2015 | ||||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.98 | $11.02 | $11.30 | $11.49 | $11.69 | $11.31 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.13 | 0.27 | 0.29 | 0.33 | 0.37 | 0.38 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.44 | (0.04 | ) | (0.27 | ) | (0.20 | ) | (0.21 | ) | 0.38 | ||||||||||||||
Total from investment operations | 0.57 | 0.23 | 0.02 | 0.13 | 0.16 | 0.76 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.15 | ) | (0.27 | ) | (0.30 | ) | (0.32 | ) | (0.36 | ) | (0.38 | ) | ||||||||||||
Net asset value, end of period | $11.40 | $10.98 | $11.02 | $11.30 | $11.49 | $11.69 | ||||||||||||||||||
Total returnd | 5.19% | 2.15% | 0.16% | 1.11% | 1.41% | 6.77% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 1.31%f | 1.32%f | 1.29% | 1.27% | 1.26% | 1.27% | ||||||||||||||||||
Net investment income | 2.33% | 2.51% | 2.61% | 2.83% | 3.18% | 3.28% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $31,312 | $30,641 | $45,422 | $55,619 | $54,075 | $53,424 | ||||||||||||||||||
Portfolio turnover rate | 1.42% | 8.57% | 14.66% | 16.81% | 10.70% | 6.46% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 57 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Alabama Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||
Year Ended February 28, | ||||||||||||
|
| |||||||||||
2019 | 2018a | |||||||||||
| ||||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $10.84 | $10.88 | $11.13 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.17 | 0.35 | 0.22 | |||||||||
Net realized and unrealized gains (losses) | 0.42 | (0.04 | ) | (0.26 | ) | |||||||
Total from investment operations | 0.59 | 0.31 | (0.04 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.18 | ) | (0.35 | ) | (0.21 | ) | ||||||
Net asset value, end of period | $11.25 | $10.84 | $10.88 | |||||||||
Total returnd | 5.51% | 2.78% | (0.26)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.64% | 0.65% | 0.66% | |||||||||
Expenses net of waiver and payments by affiliates | 0.62% | f | 0.63% | f | 0.61% | |||||||
Net investment income | 3.02% | 3.20% | 3.29% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $1,006 | $824 | $1,516 | |||||||||
Portfolio turnover rate | 1.42% | 8.57% | 14.66% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
58 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Alabama Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||
Year Ended February 28, | ||||||||||||||||
|
| |||||||||||||||
2019 | 2018 | 2017a | ||||||||||||||
| ||||||||||||||||
Advisor Class | ||||||||||||||||
Per share operating performance | ||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $10.84 | $10.88 | $11.16 | $11.49 | ||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.17 | 0.34 | 0.36 | 0.18 | ||||||||||||
Net realized and unrealized gains (losses) | 0.42 | (0.04 | ) | (0.27 | ) | (0.33 | ) | |||||||||
Total from investment operations | 0.59 | 0.30 | 0.09 | (0.15 | ) | |||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.18 | ) | (0.34 | ) | (0.37 | ) | (0.18 | ) | ||||||||
Net asset value, end of period | $11.25 | $10.84 | $10.88 | $11.16 | ||||||||||||
Total returnd | 5.50% | 2.86% | 0.82% | (1.33)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses | 0.66% | f | 0.67% | f | 0.64% | 0.62% | ||||||||||
Net investment income | 2.98% | 3.16% | 3.26% | 3.48% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $11,224 | $8,335 | $7,689 | $5,149 | ||||||||||||
Portfolio turnover rate | 1.42% | 8.57% | 14.66% | 16.81% |
aFor the period September 15, 2016 (effective date) to February 28, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 59 |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin AlabamaTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 98.4% | ||||||||
Alabama 98.4% | ||||||||
Alabama Community College System Board of Trustees Revenue, Bishop State Community College, BAM Insured, 4.00%, 1/01/49 | $ | 2,000,000 | $ | 2,233,060 | ||||
Alabama Federal Aid Highway Finance Authority Special Obligation Revenue, Series A, 5.00%, 6/01/37 | 4,130,000 | 5,140,239 | ||||||
Alabama Special Care Facilities Financing Authority Birmingham Revenue, Ascension Senior Credit Group, Refunding, Series B, 5.00%, 11/15/46 | 3,000,000 | 3,526,590 | ||||||
Alabama State Port Authority Docks Facilities Revenue,Pre-Refunded, 6.00%, 10/01/40 | 3,000,000 | 3,159,630 | ||||||
Anniston PBA Building Revenue, Judicial Center Project, AGMC Insured,Pre-Refunded, 5.00%, 3/01/43 | 4,120,000 | 4,359,619 | ||||||
Auburn University General Fee Revenue, Refunding, Series A, 5.00%, 6/01/33 | 2,500,000 | 2,976,625 | ||||||
Baldwin County Board of Education Revenue, | ||||||||
Capital Outlay School wts., Refunding, 5.00%, 6/01/27 | 3,015,000 | 3,295,968 | ||||||
School wts., Refunding, 5.00%, 6/01/24 | 2,605,000 | 2,861,045 | ||||||
School wts., Refunding, 5.00%, 6/01/26 | 2,870,000 | 3,140,698 | ||||||
Bessemer Governmental Utility Services Corp. Water Supply Revenue, Refunding, BAM Insured, 5.00%, 6/01/39 | 6,000,000 | 7,209,420 | ||||||
Bessemer Water Revenue, wts., Refunding, AGMC Insured, 5.00%, 1/01/47 | 2,590,000 | 3,035,765 | ||||||
Birmingham GO, Convertible, Capital Appreciation, Series A, 5.00%, 3/01/43 | 5,000,000 | 5,508,800 | ||||||
Birmingham Water Works Board Water Revenue, | ||||||||
Senior, Refunding, Series A, 4.00%, 1/01/35 | 4,000,000 | 4,541,000 | ||||||
Series B, 5.00%, 1/01/43 | 3,745,000 | 4,128,825 | ||||||
Subordinate, Refunding, Series B, 5.00%, 1/01/43 | 10,000,000 | 11,932,800 | ||||||
Calhoun County Board of Education Special Tax School wts. Revenue, BAM Insured, 5.00%, 2/01/46 | 6,000,000 | 6,985,800 | ||||||
Chatom IDB Gulf Opportunity Zone Revenue, | ||||||||
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/30 | 5,250,000 | 5,420,415 | ||||||
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/37 | 5,000,000 | 5,149,850 | ||||||
Cullman Utilities Board Water Revenue, AGMC Insured, 5.00%, 9/01/41 | 3,000,000 | 3,097,530 | ||||||
DCH Health Care Authority Health Care Facilities Revenue, Refunding, 5.00%, 6/01/36 | 2,000,000 | 2,308,680 | ||||||
East Alabama Health Care Authority Health Care Facilities Revenue, Series A, 5.00%, 9/01/41 | 3,000,000 | 3,607,830 | ||||||
Homewood Educational Building Authority Revenue, Educational Facilities, Samford University, Series A, AGMC Insured, 5.00%, 12/01/41 | 10,000,000 | 10,904,300 | ||||||
Homewood GO, Capital Improvement wts.,Pre-Refunded, 5.00%, 9/01/42 | 4,000,000 | 4,467,920 | ||||||
Huntsville GO, | ||||||||
wts., Series A, 5.00%, 5/01/39 | 1,000,000 | 1,281,700 | ||||||
wts., Series B, 5.00%, 5/01/38 | 4,775,000 | 5,956,049 | ||||||
Huntsville Water System Revenue, wts., 5.00%, 11/01/35 | 4,000,000 | 4,735,720 | ||||||
Infirmary Health System Special Care Facilities Financing Authority of Mobile Revenue, Infirmary Health System Inc., Series A, 5.00%, 2/01/41 | 3,000,000 | 3,450,990 | ||||||
Jacksonville State University Tuition and Fee Revenue, Refunding, AGMC Insured, 5.00%, 12/01/36 | 5,000,000 | 6,126,000 | ||||||
Limestone County Water and Sewer Authority Water Revenue, | ||||||||
AGMC Insured, 5.00%, 12/01/39 | 3,750,000 | 3,778,125 | ||||||
Refunding, Series B, BAM Insured, 5.00%, 12/01/43 | 5,920,000 | 6,897,096 | ||||||
Madison GO, wts., Series A, 5.00%, 4/01/37 | 2,590,000 | 3,017,972 | ||||||
Madison Water and Wastewater Board Water and Sewer Revenue, Refunding, 5.00%, 12/01/41 | 4,610,000 | 5,500,375 | ||||||
Marshall County Board of Education Special Tax, School wts., AGMC Insured, 4.00%, 3/01/41 | 1,000,000 | 1,088,600 | ||||||
Mobile Water and Sewer Commissioners Water and Sewer Revenue, Refunding, 5.00%, 1/01/36 | 10,000,000 | 11,100,200 | ||||||
Morgan County Board of Education Capital Outlay School wts. Revenue, | ||||||||
Pre-Refunded, 5.00%, 3/01/35 | 4,300,000 | 4,776,054 | ||||||
Refunding, 5.00%, 3/01/35 | 2,720,000 | 2,977,883 |
60 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Alabama Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Alabama(continued) | ||||||||
Opelika Utilities Board Utility Revenue, | ||||||||
Assured Guaranty,Pre-Refunded, 5.00%, 6/01/37 | $ | 3,000,000 | $ | 3,028,770 | ||||
Refunding, 4.00%, 6/01/41 | 2,000,000 | 2,223,600 | ||||||
Oxford GO, wts., Series C, 5.00%, 10/01/29 | 1,435,000 | 1,590,941 | ||||||
Pelham GO, wts., 5.00%, 2/01/34 | 2,635,000 | 3,024,190 | ||||||
Phenix City GO, School wts., Series A, 5.00%, 8/01/43 | 3,000,000 | 3,352,080 | ||||||
Phenix City Water and Sewer Revenue, wts., Series A, AGMC Insured, 5.00%, 8/15/40 | 2,000,000 | 2,062,120 | ||||||
Selma IDBR, | ||||||||
Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.80%, 5/01/34 | 3,000,000 | 3,087,600 | ||||||
Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.375%, 12/01/35 | 3,000,000 | 3,260,040 | ||||||
Talladega County Board of Education Special Tax School wts. Revenue, Sales Tax, Refunding, BAM Insured, 5.00%, 11/01/39 | 2,000,000 | 2,412,360 | ||||||
Troy Public Educational Building Authority Educational Facilities Revenue, | ||||||||
AGMC Insured, 5.25%, 12/01/40 | 295,000 | 308,018 | ||||||
AGMC Insured,Pre-Refunded, 5.25%, 12/01/40 | 1,705,000 | 1,791,768 | ||||||
Trussville GO, | ||||||||
wts., Series A, 4.00%, 8/01/41 | 3,000,000 | 3,387,540 | ||||||
wts., Series B, 5.00%, 10/01/39 | 1,895,000 | 2,126,493 | ||||||
wts., Series B,Pre-Refunded, 5.00%, 10/01/39 | 1,105,000 | 1,274,827 | ||||||
Tuscaloosa City Board of Education School Tax wts. Revenue, 5.00%, 8/01/41 | 4,000,000 | 4,772,960 | ||||||
Tuscaloosa County Board of Education Special Tax, School wts., 4.00%, 2/01/47 | 5,000,000 | 5,517,650 | ||||||
University of Alabama at Birmingham Medicine Finance Authority Revenue, Refunding, Series B, 5.00%, 9/01/29 | 5,000,000 | 6,148,400 | ||||||
University of Alabama General Fee Revenue, University of Alabama in Huntsville, SeriesB-2, 5.00%, 9/01/48 | 5,000,000 | 6,127,650 | ||||||
University of Alabama General Revenue, University of Alabama at Birmingham, Refunding, SeriesD-2, 5.00%, 10/01/37 | 7,520,000 | 8,498,578 | ||||||
University of Montevallo Revenue, Refunding, BAM Insured, 5.00%, 5/01/42 | 2,500,000 | 3,010,500 | ||||||
University of South Alabama Revenue, University Facilities, Series A, BAM Insured, 5.00%, 4/01/49 | 2,000,000 | 2,469,460 | ||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $221,916,119) | 239,154,718 | |||||||
|
|
franklintempleton.com | Semiannual Report | 61 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Alabama Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Short Term Investments (Cost $1,295,000) 0.5% | ||||||||
Municipal Bonds 0.5% | ||||||||
Alabama 0.5% | ||||||||
aMobile IDB, PCR, Alabama Power Co. Barry Plant Project, First Series, Daily VRDN and Put, 1.43%, 6/01/34 | $ | 1,295,000 | $ | 1,295,000 | ||||
|
| |||||||
Total Investments (Cost $223,211,119) 98.9% | 240,449,718 | |||||||
Other Assets, less Liabilities 1.1% | 2,655,173 | |||||||
|
| |||||||
Net Assets 100.0% | $ | 243,104,891 | ||||||
|
|
See Abbreviations on page 167.
aVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
62 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin FloridaTax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $10.44 | $10.44 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.17 | 0.17 | ||||||
Net realized and unrealized gains (losses) | 0.36 | — | d | |||||
Total from investment operations | 0.53 | 0.17 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.19 | ) | (0.17 | ) | ||||
Net asset value, end of period | $10.78 | $10.44 | ||||||
Total returne | 5.07% | 1.71% | ||||||
Ratios to average net assetsf | ||||||||
Expensesg | 0.85% | 0.85% | ||||||
Net investment income | 3.24% | 3.48% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $42,831 | $29,086 | ||||||
Portfolio turnover rate | 3.65% | 10.03% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
gBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 63 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Florida Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016a | 2015 | ||||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.43 | $10.47 | $10.88 | $11.19 | $11.38 | $11.05 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.18 | 0.38 | 0.39 | 0.43 | 0.45 | 0.48 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.35 | (0.04 | ) | (0.39 | ) | (0.31 | ) | (0.20 | ) | 0.34 | ||||||||||||||
Total from investment operations | 0.53 | 0.34 | — | 0.12 | 0.25 | 0.82 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.38 | ) | (0.41 | ) | (0.43 | ) | (0.44 | ) | (0.49 | ) | ||||||||||||
Net asset value, end of period | $10.77 | $10.43 | $10.47 | $10.88 | $11.19 | $11.38 | ||||||||||||||||||
Total returnd | 5.16% | 3.36% | (0.02)% | 1.05% | 2.32% | 7.57% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.70% | f | 0.70% | f | 0.67% | g | 0.65% | 0.64% | 0.64% | |||||||||||||||
Net investment income | 3.39% | 3.63% | 3.63% | 3.82% | 4.01% | 4.25% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $456,382 | $462,869 | $536,099 | $635,594 | $689,641 | $725,177 | ||||||||||||||||||
Portfolio turnover rate | 3.65% | 10.03% | 10.10% | 13.84% | 5.17% | 5.17% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
64 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Florida Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | �� | |||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.66 | $10.69 | $11.10 | $11.41 | $11.59 | $11.25 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.15 | 0.33 | 0.34 | 0.37 | 0.39 | 0.42 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.37 | (0.03 | ) | (0.40 | ) | (0.32 | ) | (0.19 | ) | 0.35 | ||||||||||||||
Total from investment operations | 0.52 | 0.30 | (0.06 | ) | 0.05 | 0.20 | 0.77 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.17 | ) | (0.33 | ) | (0.35 | ) | (0.36 | ) | (0.38 | ) | (0.43 | ) | ||||||||||||
Net asset value, end of period | $11.01 | $10.66 | $10.69 | $11.10 | $11.41 | $11.59 | ||||||||||||||||||
Total returnd | 4.88% | 2.81% | (0.58)% | 0.46% | 1.81% | 6.94% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses. | 1.25% | f | 1.25% | f | 1.22% | g | 1.20% | 1.19% | 1.19% | |||||||||||||||
Net investment income | 2.84% | 3.08% | 3.08% | 3.27% | 3.46% | 3.70% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $37,631 | $39,117 | $73,237 | $90,754 | $88,734 | $89,809 | ||||||||||||||||||
Portfolio turnover rate | 3.65% | 10.03% | 10.10% | 13.84% | 5.17% | 5.17% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 65 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Florida Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||
(unaudited) | 2019 | 2018a | ||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $10.46 | $10.49 | $10.82 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.19 | 0.39 | 0.24 | |||||||||
Net realized and unrealized gains (losses) | 0.35 | (0.02 | ) | (0.33 | ) | |||||||
Total from investment operations | 0.54 | 0.37 | (0.09 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.20 | ) | (0.40 | ) | (0.24 | ) | ||||||
Net asset value, end of period | $10.80 | $10.46 | $10.49 | |||||||||
Total returnd | 5.21% | 3.57% | (0.88)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.58% | 0.58% | 0.58% | |||||||||
Expenses net of waiver and payments by affiliates | 0.56% | f | 0.56% | f | 0.54% | |||||||
Net investment income | 3.53% | 3.77% | 3.76% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $3,192 | $2,343 | $2,387 | |||||||||
Portfolio turnover rate | 3.65% | 10.03% | 10.10% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
66 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Florida Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||
(unaudited) | 2019 | 2018 | 2017a | |||||||||||||
Advisor Class | ||||||||||||||||
Per share operating performance | ||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $10.46 | $10.49 | $10.89 | $11.23 | ||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.19 | 0.39 | 0.40 | 0.20 | ||||||||||||
Net realized and unrealized gains (losses) | 0.35 | (0.03 | ) | (0.38 | ) | (0.34 | ) | |||||||||
Total from investment operations | 0.54 | 0.36 | 0.02 | (0.14 | ) | |||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.20 | ) | (0.39 | ) | (0.42 | ) | (0.20 | ) | ||||||||
Net asset value, end of period | $10.80 | $10.46 | $10.49 | $10.89 | ||||||||||||
Total returnd | 5.19% | 3.54% | 0.17% | (1.25)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses | 0.60% | f | 0.60% | f | 0.57% | g | 0.55% | |||||||||
Net investment income | 3.49% | 3.73% | 3.73% | 3.92% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $30,662 | $25,472 | $20,467 | $10,916 | ||||||||||||
Portfolio turnover rate | 3.65% | 10.03% | 10.10% | 13.84% |
aFor the period September 15, 2016 (effective date) to February 28, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 67 |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin FloridaTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 98.5% | ||||||||
Florida 95.0% | ||||||||
Atlantic Beach Health Care Facilities Revenue, Fleet Landing Project, Refunding, Series A, 5.00%, 11/15/38 | $ | 1,105,000 | $ | 1,289,458 | ||||
Brevard County Health Facilities Authority Health Facilities Revenue, Health First Inc. Project, Refunding, 5.00%, 4/01/39 | 5,000,000 | 5,577,200 | ||||||
Central Expressway Authority Revenue, | ||||||||
senior lien, Refunding, Series B, 4.00%, 7/01/39 | 5,000,000 | 5,559,550 | ||||||
senior lien, Refunding, Series B, 4.00%, 7/01/40 | 5,825,000 | 6,464,294 | ||||||
Citizens Property Insurance Corp. Revenue, Personal Lines Account/Commercial Lines Account, senior secured, SeriesA-1, 5.00%, 6/01/22 | 5,000,000 | 5,521,400 | ||||||
City of Winter Park Water and Sewer Revenue, Improvement,Pre-Refunded, 5.00%, 12/01/34 | 2,000,000 | 2,018,920 | ||||||
Clearwater City Water and Sewer Revenue, Series A,Pre-Refunded, 5.25%, 12/01/39 | 2,000,000 | 2,020,380 | ||||||
Collier County Educational Facilities Authority Revenue, Hodges University Inc. Project, 5.625%, 11/01/28 | 2,860,000 | 3,148,860 | ||||||
Collier County IDA Health Care Facilities Revenue, NCH Healthcare System Project, 6.25%, 10/01/39 | 5,000,000 | 5,368,500 | ||||||
Escambia County Health Facilities Authority Health Facility Revenue, | ||||||||
Baptist Hospital Inc. Project, Refunding, Series A, 5.75%, 8/15/29 | 7,195,000 | 7,473,159 | ||||||
Baptist Hospital Inc. Project, Series A, 6.00%, 8/15/36 | 11,000,000 | 11,442,420 | ||||||
Florida Higher Educational Facilities Financing Authority Revenue, | ||||||||
Nova Southeastern University Project, 6.375%, 4/01/31 | 2,750,000 | 2,937,055 | ||||||
Rollins College Project,Pre-Refunded, 5.00%, 12/01/37 | 10,000,000 | 10,478,200 | ||||||
The University of Tampa Project, Refunding, Series A, 5.25%, 4/01/42 | 2,000,000 | 2,192,060 | ||||||
Florida State Board of Education GO, | ||||||||
Full Faith and Credit, Public Education Capital Outlay, Refunding, Series C, 4.00%, 6/01/35 | 5,340,000 | 6,107,465 | ||||||
Full Faith and Credit, Public Education Capital Outlay, Refunding, Series F, 4.00%, 6/01/37 | 8,000,000 | 9,067,920 | ||||||
Public Education Capital Outlay, Refunding, Series D, 6.00%, 6/01/23 | 15,000,000 | 17,728,650 | ||||||
Public Education Capital Outlay, Series H, 5.00%, 6/01/40 | 7,295,000 | 7,494,518 | ||||||
Florida State Governmental Utility Authority Revenue, Lehigh Utility System,Pre-Refunded, 5.25%, 10/01/40 | 5,000,000 | 5,423,400 | ||||||
Florida StateMid-Bay Bridge Authority Revenue, | ||||||||
Exchangeable, Series D, ETM, 6.10%, 10/01/22 | 3,545,000 | 3,985,963 | ||||||
first senior lien, Refunding, Series A, 5.00%, 10/01/40 | 5,000,000 | 5,711,600 | ||||||
Series A, ETM, 6.875%, 10/01/22 | 5,000,000 | 5,433,700 | ||||||
Florida State Municipal Loan Council Revenue, Series D, AGMC Insured, 5.50%, 10/01/41 | 3,750,000 | 4,055,100 | ||||||
Florida State Municipal Power Agency Revenue, | ||||||||
All-Requirements Power Supply Project, Series A,Pre-Refunded, 6.25%, 10/01/31 | 2,000,000 | 2,007,740 | ||||||
Stanton Project, Refunding, 5.50%, 10/01/19 | 1,000,000 | 1,003,280 | ||||||
aFort Myers Utility System Revenue, Refunding, Series A, 4.00%, 10/01/44 | 8,000,000 | 9,076,560 | ||||||
Fort Pierce Utilities Authority Revenue, | ||||||||
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/20 | 3,090,000 | 3,039,417 | ||||||
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/21 | 2,585,000 | 2,500,807 | ||||||
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/22 | 3,090,000 | 2,937,910 | ||||||
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/23 | 3,060,000 | 2,855,806 | ||||||
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/24 | 2,560,000 | 2,342,861 | ||||||
Gainesville Utilities System Revenue, Refunding, Series A, 5.00%, 10/01/47 | 5,000,000 | 6,298,750 | ||||||
Greater Orlando Aviation Authority Airport Facilities Revenue, Series A, 5.00%, 10/01/39 | 5,000,000 | 5,206,100 | ||||||
Halifax Hospital Medical Center Hospital Revenue, | ||||||||
Daytona Beach, Refunding, 5.00%, 6/01/46 | 4,250,000 | 4,819,500 | ||||||
Daytona Beach, Refunding and Improvement, 5.00%, 6/01/36 | 2,500,000 | 2,943,250 |
68 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Florida Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Florida(continued) | ||||||||
Hillsborough County Aviation Authority Revenue, | ||||||||
Tampa International Airport, Customer Facility Charge, Series A, 5.00%, 10/01/44 | $ | 5,000,000 | $ | 5,711,550 | ||||
Tampa International Airport, Series E, 5.00%, 10/01/43 | 5,000,000 | 6,149,250 | ||||||
Jacksonville Sales Tax Revenue, Better Jacksonville, Refunding, 5.00%, 10/01/30 | 2,000,000 | 2,223,240 | ||||||
Lakeland Hospital Revenue, Lakeland Regional Health Systems, 5.00%, 11/15/45 | 12,300,000 | 14,002,320 | ||||||
Lee County IDA Health Care Facilities Revenue, Shell Point-Alliance, Improvement, 5.00%, 11/15/44 | 5,000,000 | 5,870,850 | ||||||
Martin County Health Facilities Authority Hospital Revenue, Martin Memorial Medical Center,Pre-Refunded, 5.50%, 11/15/42 | 2,100,000 | 2,299,521 | ||||||
Melbourne Water and Sewer Improvement Revenue, Capital Appreciation, FGIC Insured, ETM, zero cpn., 10/01/26 | 1,500,000 | 1,353,300 | ||||||
Melbourne Water and Sewer Revenue, | ||||||||
Capital Appreciation, Refunding, Series B, NATL Insured, zero cpn., 10/01/22 | 1,785,000 | 1,698,178 | ||||||
Capital Appreciation, Refunding, Series B, NATL Insured, zero cpn., 10/01/26 | 4,500,000 | 3,949,740 | ||||||
Miami Beach RDA Tax Increment Revenue, City Center/Historic Convention Village, Refunding, Series A, AGMC Insured, 5.00%, 2/01/40 | 5,000,000 | 5,740,950 | ||||||
Miami Beach Stormwater Revenue, 5.00%, 9/01/41 | 10,000,000 | 11,782,700 | ||||||
Miami Health Facilities Authority Revenue, Miami Jewish Health Systems Inc. Project, Refunding, 5.125%, 7/01/46 | 2,250,000 | 2,585,790 | ||||||
Miami Parking System Revenue, Refunding, Assured Guaranty, 5.00%, 10/01/39 | 4,000,000 | 4,011,200 | ||||||
Miami Special Obligation Revenue, Parking, Marlins Stadium Project, Series A, AGMC Insured, 5.25%, 7/01/35 | 5,000,000 | 5,166,100 | ||||||
Miami-Dade County Aviation Revenue, | ||||||||
Miami International Airport, Hub of the Americas, Series A,Pre-Refunded, 5.50%, 10/01/36 | 5,000,000 | 5,016,750 | ||||||
Miami International Airport, Refunding, Series B, 5.00%, 10/01/37 | 10,000,000 | 11,548,400 | ||||||
Miami International Airport, Refunding, Series B, 5.00%, 10/01/40 | 5,000,000 | 6,049,900 | ||||||
Miami International Airport, SeriesA-1,Pre-Refunded, 5.375%, 10/01/35 | 5,920,000 | 6,192,261 | ||||||
Miami International Airport, SeriesA-1,Pre-Refunded, 5.375%, 10/01/35 | 1,580,000 | 1,653,533 | ||||||
Miami-Dade County Expressway Authority Toll System Revenue, Series A, 5.00%, 7/01/40 | 18,770,000 | 19,344,737 | ||||||
Miami-Dade County Health Facilities Authority Hospital Revenue, | ||||||||
Miami Children’s Hospital Project, Series A, 6.125%, 8/01/42 | 1,055,000 | 1,096,789 | ||||||
Miami Children’s Hospital Project, Series A,Pre-Refunded, 6.125%, 8/01/42 | 2,945,000 | 3,075,316 | ||||||
Nicklaus Children’s Hospital Project, Refunding, 5.00%, 8/01/42 | 3,000,000 | 3,581,370 | ||||||
Nicklaus Children’s Hospital Project, Refunding, 4.00%, 8/01/47 | 3,500,000 | 3,824,660 | ||||||
Miami-Dade County School District GO, School, 5.00%, 3/15/43 | 2,465,000 | 2,765,976 | ||||||
Miami-Dade County Seaport Revenue, Series A, 6.00%, 10/01/38 | 10,000,000 | 11,820,600 | ||||||
Miami-Dade County Transit System Sales Surtax Revenue, | ||||||||
5.00%, 7/01/42 | 15,000,000 | 16,467,000 | ||||||
5.00%, 7/01/43 | 10,000,000 | 12,354,300 | ||||||
4.00%, 7/01/47 | 5,000,000 | 5,633,350 | ||||||
Miami-Dade County Water and Sewer System Revenue, | ||||||||
Assured Guaranty,Pre-Refunded, 5.00%, 10/01/39 | 10,000,000 | 10,425,500 | ||||||
Refunding, 5.00%, 10/01/43 | 5,000,000 | 6,233,150 | ||||||
Refunding, Series A, 5.00%, 10/01/42 | 10,000,000 | 11,070,400 | ||||||
North Sumter County Utility Dependent District Utility Revenue, 5.75%, 10/01/43 | 5,000,000 | 5,244,900 |
franklintempleton.com | Semiannual Report | 69 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Florida Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Florida(continued) | ||||||||
Orange County Health Facilities Authority Revenue, | ||||||||
Hospital, Orlando Health Inc., Series A, 5.00%, 10/01/42 | $ | 10,000,000 | $ | 10,742,600 | ||||
Hospital, Orlando Health Obligated Group, Series A, 5.00%, 10/01/47 | 5,000,000 | 6,100,100 | ||||||
Presbyterian Retirement Communities Project, 5.00%, 8/01/41 | 5,000,000 | 5,580,350 | ||||||
Orlando-Orange County Expressway Authority Revenue, | ||||||||
Refunding, Series A, 5.00%, 7/01/35 | 8,330,000 | 9,431,226 | ||||||
Series A,Pre-Refunded, 5.00%, 7/01/40 | 5,000,000 | 5,161,300 | ||||||
Series C,Pre-Refunded, 5.00%, 7/01/35 | 4,000,000 | 4,129,040 | ||||||
Series C,Pre-Refunded, 5.00%, 7/01/40 | 2,755,000 | 2,843,876 | ||||||
Palm Beach County Health Facilities Authority Revenue, Lifespace Communities Inc., Refunding, Series B, 5.00%, 5/15/47 | 5,000,000 | 5,642,350 | ||||||
Palm Beach County Water and Sewer Revenue, 5.00%, 10/01/40 | 5,000,000 | 5,014,050 | ||||||
Palm Beach GO, Underground Utility Project, 4.00%, 7/01/43 | 5,000,000 | 5,736,600 | ||||||
Sarasota County Health Facilities Authority Revenue, | ||||||||
Retirement Facility, Improvement, Sunnyside Village Project, 5.00%, 5/15/33 | 600,000 | 686,184 | ||||||
Retirement Facility, Improvement, Sunnyside Village Project, 5.00%, 5/15/38 | 1,025,000 | 1,169,392 | ||||||
Retirement Facility, Improvement, Sunnyside Village Project, 5.00%, 5/15/48 | 1,850,000 | 2,103,487 | ||||||
Retirement Facility, Improvement, Village On The Isle Project, Series A, 5.00%, 1/01/37 | 2,350,000 | 2,612,424 | ||||||
Retirement Facility, Improvement, Village On The Isle Project, Series A, 5.00%, 1/01/42 | 1,600,000 | 1,768,256 | ||||||
Retirement Facility, Improvement, Village On The Isle Project, Series A, 5.00%, 1/01/47 | 2,450,000 | 2,702,350 | ||||||
Sarasota County Public Hospital District Revenue, Hospital, Sarasota Memorial Hospital Project, 4.00%, 7/01/48 | 10,000,000 | 11,100,400 | ||||||
South Lake County Hospital District Revenue, South Lake Hospital Inc., Refunding, 5.25%, 10/01/34 | 5,000,000 | 5,105,700 | ||||||
South Miami Health Facilities Authority Hospital Revenue, | ||||||||
Baptist Health South Florida, Refunding, 4.00%, 8/15/42 | 5,000,000 | 5,550,400 | ||||||
Baptist Health South Florida, Refunding, 5.00%, 8/15/42 | 6,500,000 | 7,801,365 | ||||||
St. Petersburg Public Utility Revenue, Series A,Pre-Refunded, 5.00%, 10/01/36 | 2,180,000 | 2,186,475 | ||||||
Sunrise Utilities System Revenue, AMBAC Insured,Pre-Refunded, 5.20%, 10/01/22 | 1,050,000 | 1,091,160 | ||||||
Tamarac Utility System Revenue, Assured Guaranty,Pre-Refunded, 5.00%, 10/01/39 | 1,585,000 | 1,589,707 | ||||||
Tampa Bay Water Regional Water Supply Authority Utility System Revenue, 5.00%, 10/01/38 | 10,000,000 | 11,442,800 | ||||||
Tampa Hospital Revenue, H. Lee Moffitt Cancer Center Project, Refunding, Series B, 5.00%, 7/01/37 | 5,000,000 | 5,818,650 | ||||||
Tampa Sports Authority Revenue, | ||||||||
Guaranteed Package, Tampa Bay Arena Project, NATL Insured, 6.05%, 10/01/20 | 570,000 | 583,714 | ||||||
Guaranteed Package, Tampa Bay Arena Project, NATL Insured, 6.10%, 10/01/26 | 2,695,000 | 3,197,644 | ||||||
Tampa-Hillsborough County Expressway Authority Revenue, 5.00%, 7/01/47 | 5,000,000 | 6,025,700 | ||||||
University of North Florida FICO Revenue, Capital Improvement, Housing Project, Refunding, AGMC Insured, 5.00%, 11/01/35 | 5,000,000 | 6,026,050 | ||||||
Volusia County Educational Facility Authority Revenue, | ||||||||
Educational Facilities, Embry-Riddle Aeronautical University Inc. Project, Refunding, 5.00%, 10/15/42 | 1,500,000 | 1,779,855 | ||||||
Educational Facilities, Embry-Riddle Aeronautical University Inc. Project, Refunding, 5.00%, 10/15/47 | 3,500,000 | 4,135,145 | ||||||
|
| |||||||
542,333,684 | ||||||||
|
| |||||||
U.S. Territories 3.5% | ||||||||
Puerto Rico 3.5% | ||||||||
bPuerto Rico Electric Power Authority Power Revenue, | ||||||||
SeriesA-RSA-1, 5.00%, 7/01/42 | 10,000,000 | 8,000,000 | ||||||
SeriesXX-RSA-1, 5.25%, 7/01/40 | 10,000,000 | 8,025,000 |
70 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Florida Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
U.S. Territories(continued) | ||||||||
Puerto Rico(continued) | ||||||||
Puerto Rico Industrial Tourist Educational Medical and Environmental Control Facilities Financing Authority Revenue, Cogeneration Facility, AES Puerto Rico Project, 6.625%, 6/01/26 | $ | 3,900,000 | $ | 4,002,375 | ||||
|
| |||||||
20,027,375 | ||||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $524,492,479) | 562,361,059 | |||||||
|
| |||||||
Short Term Investments 2.1% | ||||||||
Municipal Bonds 2.1% | ||||||||
Florida 2.1% | ||||||||
cMartin County PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 1.43%, 7/15/22 | 11,700,000 | 11,700,000 | ||||||
cSt. Lucie County PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 1.38%, 9/01/28 | 300,000 | 300,000 | ||||||
|
| |||||||
Total Short Term Investments (Cost $12,000,000) | 12,000,000 | |||||||
|
| |||||||
Total Investments (Cost $536,492,479) 100.6% | 574,361,059 | |||||||
Other Assets, less Liabilities (0.6)% | (3,663,480 | ) | ||||||
|
| |||||||
Net Assets 100.0% | $ | 570,697,579 | ||||||
|
|
See Abbreviations on page 167.
aSecurity purchased on a when-issued basis. See Note 1(b).
bSee Note 7 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 71 |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin GeorgiaTax-Free Income Fund
Six Months Ended August 31, 2019 | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $11.59 | $11.57 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.17 | 0.17 | ||||||
Net realized and unrealized gains (losses) | 0.46 | 0.02 | ||||||
Total from investment operations | 0.63 | 0.19 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.19 | ) | (0.17 | ) | ||||
Net asset value, end of period | $12.03 | $11.59 | ||||||
Total returnd | 5.47% | 1.70% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.85% | 0.87% | ||||||
Net investment income | 2.90% | 3.10% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $35,049 | $19,705 | ||||||
Portfolio turnover rate | 4.13% | 11.78% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
72 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Georgia Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016a | 2015 | ||||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.59 | $11.65 | $11.99 | $12.32 | $12.46 | $12.02 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.18 | 0.38 | 0.39 | 0.42 | 0.45 | 0.46 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.46 | (0.06 | ) | (0.33 | ) | (0.33 | ) | (0.14 | ) | 0.44 | ||||||||||||||
Total from investment operations | 0.64 | 0.32 | 0.06 | 0.09 | 0.31 | 0.90 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.38 | ) | (0.40 | ) | (0.42 | ) | (0.45 | ) | (0.46 | ) | ||||||||||||
Net asset value, end of period | $12.03 | $11.59 | $11.65 | $11.99 | $12.32 | $12.46 | ||||||||||||||||||
Total returnd | 5.55% | 2.83% | 0.46% | 0.69% | 2.56% | 7.57% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.70% | f | 0.72% | f | 0.69% | g | 0.67% | 0.67% | 0.67% | |||||||||||||||
Net investment income | 3.05% | 3.25% | 3.25% | 3.36% | 3.67% | 3.73% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $314,903 | $313,940 | $363,390 | $428,301 | $429,103 | $410,603 | ||||||||||||||||||
Portfolio turnover rate | 4.13% | 11.78% | 9.33% | 8.34% | 4.92% | 11.89% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 73 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Georgia Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | ||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.77 | $11.83 | $12.16 | $12.49 | $12.63 | $12.17 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.15 | 0.32 | 0.33 | 0.35 | 0.39 | 0.40 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.47 | (0.06 | ) | (0.33 | ) | (0.33 | ) | (0.15 | ) | 0.45 | ||||||||||||||
Total from investment operations | 0.62 | 0.26 | — | 0.02 | 0.24 | 0.85 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.17 | ) | (0.32 | ) | (0.33 | ) | (0.35 | ) | (0.38 | ) | (0.39 | ) | ||||||||||||
Net asset value, end of period | $12.22 | $11.77 | $11.83 | $12.16 | $12.49 | $12.63 | ||||||||||||||||||
Total returnd | 5.28% | 2.22% | (0.02)% | 0.12% | 1.97% | 7.06% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 1.25% | f | 1.27% | f | 1.24% | g | 1.22% | 1.22% | 1.22% | |||||||||||||||
Net investment income | 2.50% | 2.70% | 2.70% | 2.81% | 3.12% | 3.18% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $66,938 | $72,542 | $109,722 | $128,544 | $126,117 | $123,265 | ||||||||||||||||||
Portfolio turnover rate | 4.13% | 11.78% | 9.33% | 8.34% | 4.92% | 11.89% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
74 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Georgia Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||
Year Ended February 28, | ||||||||||||
|
| |||||||||||
2019 | 2018a | |||||||||||
| ||||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $11.59 | $11.66 | $11.94 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.19 | 0.39 | 0.24 | |||||||||
Net realized and unrealized gains (losses) | 0.47 | (0.06 | ) | (0.29 | ) | |||||||
Total from investment operations | 0.66 | 0.33 | (0.05 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.21 | ) | (0.40 | ) | (0.23 | ) | ||||||
Net asset value, end of period | $12.04 | $11.59 | $11.66 | |||||||||
Total returnd | 5.71% | 2.86% | (0.40)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.57% | 0.59% | 4.47% | |||||||||
Expenses net of waiver and payments by affiliates | 0.56% | f | 0.57% | f | 0.55% | |||||||
Net investment income | 3.19% | 3.40% | 3.39% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $4,688 | $3,786 | $5 | |||||||||
Portfolio turnover rate | 4.13% | 11.78% | 9.33% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 75 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Georgia Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||
Year Ended February 28, | ||||||||||||||||
|
| |||||||||||||||
2019 | 2018 | 2017a | ||||||||||||||
| ||||||||||||||||
Advisor Class | ||||||||||||||||
Per share operating performance | ||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $11.59 | $11.66 | $11.99 | $12.41 | ||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.19 | 0.39 | 0.40 | 0.20 | ||||||||||||
Net realized and unrealized gains (losses) | 0.46 | (0.07 | ) | (0.32 | ) | (0.43 | ) | |||||||||
Total from investment operations | 0.65 | 0.32 | 0.08 | (0.23 | ) | |||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.20 | ) | (0.39 | ) | (0.41 | ) | (0.19 | ) | ||||||||
Net asset value, end of period | $12.04 | $11.59 | $11.66 | $11.99 | ||||||||||||
Total returnd | 5.69% | 2.83% | 0.64% | (1.82)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses | 0.60%f | 0.62% | f | 0.59% | g | 0.57% | ||||||||||
Net investment income | 3.15% | 3.35% | 3.35% | 3.46% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $52,667 | $40,142 | $35,389 | $21,454 | ||||||||||||
Portfolio turnover rate | 4.13% | 11.78% | 9.33% | 8.34% |
aFor the period September 15, 2016 (effective date) to February 28, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
76 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin GeorgiaTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 98.7% | ||||||||
Georgia 97.8% | ||||||||
Athens Housing Authority Revenue, | ||||||||
UGAREF East Campus Housing Phase II LLC Project, Refunding, 5.00%, 6/15/36 | $ | 2,390,000 | $ | 2,913,625 | ||||
UGAREF Fraternity Row LLC Project, Refunding, 4.00%, 6/15/40 | 5,000,000 | 5,593,100 | ||||||
Atlanta Airport General Revenue, | ||||||||
Refunding, Series B, 5.00%, 1/01/42 | 2,000,000 | 2,156,760 | ||||||
Refunding, Series C, 6.00%, 1/01/30 | 6,000,000 | 6,386,040 | ||||||
Series A, 5.00%, 1/01/40 | 9,000,000 | 9,105,390 | ||||||
Atlanta Airport Passenger Facility Charge Revenue, | ||||||||
General, sub. lien, Refunding, Series A, 5.00%, 1/01/33 | 4,005,000 | 4,583,923 | ||||||
General, sub. lien, Refunding, Series A, 5.00%, 1/01/34 | 3,250,000 | 3,713,905 | ||||||
aGeneral, sub. lien, Series D, 4.00%, 7/01/39 | 4,500,000 | 5,166,810 | ||||||
Atlanta and Fulton County Recreation Authority Revenue, Park Improvement, Refunding, Series A, 5.00%, 12/01/35 | 3,530,000 | 4,124,381 | ||||||
The Atlanta Development Authority Revenue, | ||||||||
New Downtown Atlanta Stadium Project, senior lien, SeriesA-1, 5.25%, 7/01/40 | 7,750,000 | 9,276,285 | ||||||
New Downtown Atlanta Stadium Project, senior lien, SeriesA-1, 5.25%, 7/01/44 | 3,000,000 | 3,572,670 | ||||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/26 | 2,555,000 | 2,919,522 | ||||||
Atlanta Development Authority Student Housing Facilities Revenue, Piedmont/Ellis LLC University Commons Project Located on the Campus of Georgia State University,Pre-Refunded, 5.00%, 9/01/32 | 2,000,000 | 2,297,040 | ||||||
Atlanta Tax Allocation, Beltline Project, Refunding, Series B, 5.00%, 1/01/31 | 1,780,000 | 2,171,475 | ||||||
Atlanta Water and Wastewater Revenue, | ||||||||
Refunding, 4.00%, 11/01/38 | 1,450,000 | 1,712,203 | ||||||
Refunding, 5.00%, 11/01/43 | 10,000,000 | 11,788,200 | ||||||
Refunding, Series B, 5.00%, 11/01/47 | 5,000,000 | 6,139,000 | ||||||
Series A, AGMC Insured, 5.50%, 11/01/27 | 5,000,000 | 6,282,850 | ||||||
Series A,Pre-Refunded, 6.00%, 11/01/28 | 5,055,000 | 5,094,480 | ||||||
Bainbridge PFAR, Decatur County Projects, AGMC Insured, 4.00%, 3/01/43. | 4,000,000 | 4,427,680 | ||||||
bBaldwin County Hospital Authority Revenue, | ||||||||
Oconee Regional Medical Center, 5.25%, 12/01/22 | 2,500,000 | 25 | ||||||
Oconee Regional Medical Center, 5.375%, 12/01/28 | 2,000,000 | 20 | ||||||
Bartow-Cartersville Joint Development Authority Revenue, GHC Student Center LLC Project, AGMC Insured, 5.00%, 6/15/36 | 4,155,000 | 4,395,948 | ||||||
Bibb County Development Authority Revenue, Macon State College Foundation Real Estate II LLC Project, AGMC Insured, 5.00%, 7/01/40 | 5,000,000 | 5,442,000 | ||||||
Brookhaven Development Authority Revenue, Children’s Healthcare of Atlanta, Series A, 4.00%, 7/01/44 | 6,000,000 | 6,855,600 | ||||||
Brunswick and Glynn County Joint Water and Sewer Commission Revenue, Series C, AGMC Insured,Pre-Refunded, 5.00%, 6/01/33 | 2,045,000 | 2,103,876 | ||||||
Buford GO, Refunding, Series C, 4.00%, 1/01/43 | 5,000,000 | 5,568,000 | ||||||
Bulloch County Development Authority Student Housing Revenue, Georgia Southern University Housing Foundation Five LLC Project, AGMC Insured, 5.00%, 7/01/36 | 2,055,000 | 2,178,999 | ||||||
Burke County Development Authority PCR, Oglethorpe Power Corp. Vogtle Project, Refunding, Series D, 4.125%, 11/01/45 | 6,000,000 | 6,503,700 | ||||||
Carroll City-County Hospital Authority Revenue, | ||||||||
Anticipation Certificates, Tanner Medical Center Inc. Project, 5.00%, 7/01/41 | 2,000,000 | 2,315,220 | ||||||
Anticipation Certificates, Tanner Medical Center Inc. Project,Pre-Refunded, 5.00%, 7/01/40 | 5,000,000 | 5,160,050 | ||||||
Carrollton Payroll Development Authority Revenue, UWG Athletic Complex LLC Project, Anticipation Certificates, Refunding, AGMC Insured, 5.00%, 6/15/37 | 3,140,000 | 3,705,483 | ||||||
Cartersville Water and Sewer Revenue, Refunding, 5.00%, 6/01/48 | 4,000,000 | 4,916,560 |
franklintempleton.com | Semiannual Report | 77 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin GeorgiaTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Georgia(continued) | ||||||||
City of Dalton GO, 5.00%, 2/01/48 | $ | 3,000,000 | $ | 3,696,270 | ||||
Clayton County Development Authority Revenue, Tuff ArchivesLLC-Secretary of State of Georgia Project, Refunding, 5.00%, 7/01/33 | 5,000,000 | 5,498,700 | ||||||
Clayton County Development Authority Student Housing Revenue, CSU Foundation Real Estate II LLC Project, AGMC Insured, 5.00%, 7/01/36 | 3,000,000 | 3,179,910 | ||||||
Clayton County Hospital Authority Revenue, | ||||||||
Anticipation Certificates, Southern Regional Medical Center Project, Series A,Pre-Refunded, 5.00%, 8/01/30 | 2,000,000 | 2,068,620 | ||||||
Anticipation Certificates, Southern Regional Medical Center Project, Series A,Pre-Refunded, 5.25%, 8/01/35 | 1,000,000 | 1,036,560 | ||||||
Clayton County Urban RDAR, Clayton County Project, Refunding, 5.00%, 2/01/28 | 1,285,000 | 1,398,825 | ||||||
Cobb County Development Authority Revenue, Georgia Tech Cobb Research Campus, Series A, 4.00%, 6/01/42 | 1,600,000 | 1,789,280 | ||||||
Cobb County Development Authority Student Housing Revenue, Kennesaw State University Real Estate | ||||||||
Foundations Projects, Senior, Refunding, Series A, 5.00%, 7/15/38 | 2,000,000 | 2,325,320 | ||||||
Cobb County Development Authority Student Recreation and Activities Center Revenue, | ||||||||
KSU SRAC Real Estate Foundation LLC Project, 5.00%, 7/15/35 | 2,500,000 | 2,726,150 | ||||||
KSU SRAC Real Estate Foundation LLC Project, 5.00%, 7/15/38 | 2,500,000 | 2,723,225 | ||||||
Columbus Water and Sewerage Revenue, Series A, 5.00%, 5/01/33 | 1,030,000 | 1,193,451 | ||||||
Coweta County Development Authority Revenue, Piedmont Healthcare Inc. Project, 5.00%, 6/15/40 | 5,000,000 | 5,134,400 | ||||||
Coweta County Water and Sewage Authority Revenue, Refunding, 4.00%, 6/01/39 | 1,500,000 | 1,738,320 | ||||||
Dalton-Whitfield County Joint Development Authority Revenue, Hamilton Health Care System Obligated Group, 4.00%, 8/15/41 | 3,000,000 | 3,359,490 | ||||||
Decatur Urban RDAR, City of Decatur Projects, Series A, 5.00%, 1/01/38 | 6,195,000 | 6,859,538 | ||||||
DeKalb County Water and Sewerage Revenue, | ||||||||
Refunding, Series B, AGMC Insured, 5.00%, 10/01/35 | 10,655,000 | 13,097,232 | ||||||
Second Resolution, Series A, 5.25%, 10/01/41 | 11,425,000 | 12,337,972 | ||||||
DeKalb Newton and Gwinnett County Joint Development Authority Revenue, GGCF Athletic Fields LLC Project, Series A, AGMC Insured, 5.00%, 7/01/39 | 5,000,000 | 5,443,450 | ||||||
DeKalb Private Hospital Authority Revenue, Anticipation Certificates, Children’s Healthcare of Atlanta Inc. Project,Pre-Refunded, 5.25%, 11/15/39 | 5,000,000 | 5,041,250 | ||||||
Fairburn GO, AGMC Insured,Pre-Refunded, 5.75%, 12/01/31 | 2,000,000 | 2,208,160 | ||||||
Floyd County Hospital Authority Revenue, Anticipation Certificates, Floyd Medical Center Project, Refunding, Series A, 4.00%, 7/01/43 | 7,735,000 | 8,500,688 | ||||||
Forsyth County School District GO, 5.00%, 2/01/38 | 2,650,000 | 3,354,529 | ||||||
Fulton County Development Authority Hospital Revenue, Anticipation Certificates, Wellstar Health System Inc. Project, Series A, 5.00%, 4/01/47 | 1,000,000 | 1,181,760 | ||||||
Fulton County Development Authority Revenue, | ||||||||
AMC Campus Project I LLC Project, AGMC Insured, 5.00%, 6/15/37 | 3,075,000 | 3,252,766 | ||||||
Georgia Tech Facilities, 4.00%, 3/01/43 | 2,000,000 | 2,257,740 | ||||||
Georgia Tech Facilities Inc. Project, Refunding, Series A, 5.00%, 6/01/34 | 4,000,000 | 4,010,320 | ||||||
Georgia Tech Facilities Inc. Project, Series A, 5.00%, 6/01/41 | 3,500,000 | 3,595,480 | ||||||
Piedmont Healthcare Inc. Project, Refunding, Series A, 5.00%, 7/01/44 | 10,000,000 | 11,253,100 | ||||||
Fulton County GO, Library Bond, 4.00%, 7/01/40 | 5,000,000 | 5,641,450 | ||||||
Fulton County Residential Care Facilities Elderly Authority Retirement Facility Revenue, Lenbrook Square Foundation Inc. Project, Refunding, 5.00%, 7/01/42 | 6,000,000 | 6,594,840 |
78 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin GeorgiaTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Georgia(continued) | ||||||||
Gainesville and Hall County Hospital Authority Revenue, | ||||||||
Anticipation Certificates, Northeast Georgia Health System Inc. Project, Refunding, Series A, 5.375%, 2/15/40 | $ | 1,245,000 | $ | 1,268,045 | ||||
Anticipation Certificates, Northeast Georgia Health System Inc. Project, Refunding, Series A, 5.00%, 2/15/42 | 7,000,000 | 8,252,930 | ||||||
Anticipation Certificates, Northeast Georgia Health System Inc. Project, Series A,Pre-Refunded, 5.375%, 2/15/40 | 3,755,000 | 3,827,396 | ||||||
Georgia State GO, | ||||||||
Series A, 4.00%, 7/01/36 | 5,000,000 | 5,830,550 | ||||||
SeriesA-2, 4.00%, 2/01/36 | 5,000,000 | 5,719,700 | ||||||
Georgia State HFAR, | ||||||||
SFM, Series A, 3.80%, 12/01/37 | 5,000,000 | 5,215,100 | ||||||
SFM, Series A, 3.85%, 12/01/38 | 6,150,000 | 6,756,205 | ||||||
SFM, Series A, 3.95%, 12/01/43 | 3,000,000 | 3,276,660 | ||||||
SFM, Series B, 4.05%, 12/01/38 | 1,640,000 | 1,826,370 | ||||||
Georgia State Municipal Electric Authority Revenue, Power, Series GG, 5.00%, 1/01/39 | 7,000,000 | 7,694,120 | ||||||
Georgia State Municipal Gas Authority Revenue, | ||||||||
Gas Portfolio III Project, Refunding, Series S, 5.00%, 10/01/25 | 2,500,000 | 2,774,875 | ||||||
Gas Portfolio III Project, Refunding, Series S, 5.00%, 10/01/26 | 2,500,000 | 2,773,275 | ||||||
Glynn-Brunswick Memorial Hospital Authority Revenue, Anticipation Certificates, Southeast Georgia Health System Project, 5.00%, 8/01/47 | 5,000,000 | 5,872,300 | ||||||
Gwinnett County Development Authority COP, | ||||||||
Gwinnett County Public Schools Project, Refunding, NATL Insured, 5.25%, 1/01/22 | 3,000,000 | 3,286,890 | ||||||
Gwinnett County Public Schools Project, Refunding, NATL Insured, 5.25%, 1/01/24 | 2,000,000 | 2,346,580 | ||||||
Gwinnett County Hospital Authority Revenue, Anticipation Certificates, Gwinnett Hospital System Inc. Project, Series D, AGMC Insured, 5.50%, 7/01/37 | 4,000,000 | 4,009,440 | ||||||
Gwinnett County School District GO, 5.00%, 2/01/41 | 3,000,000 | 3,851,220 | ||||||
Henry County School District GO, 4.00%, 8/01/33 | 5,000,000 | 5,723,850 | ||||||
Hogansville Combined Public Utility System Revenue, Refunding, AGMC Insured, 6.00%, 10/01/23 | 2,240,000 | 2,406,947 | ||||||
Lawrenceville Building Authority Revenue, 5.00%, 4/01/35 | 2,270,000 | 2,667,432 | ||||||
Macon Water Authority Revenue, Water and Sewer, 4.00%, 10/01/35 | 2,810,000 | 3,324,370 | ||||||
Main Street Natural Gas Inc. Gas Supply Revenue, Series A, 5.00%, 5/15/38 | 2,500,000 | 3,434,950 | ||||||
Main Street Natural Gas Inc. Revenue, Gas Project, Series A, 5.50%, 9/15/27 | 5,000,000 | 6,386,300 | ||||||
Medical Center Hospital Authority Revenue, Anticipation Certificates, Columbus Regional Healthcare System Inc. Project, AGMC Insured,Pre-Refunded, 5.00%, 8/01/41 | 5,000,000 | 5,176,150 | ||||||
Metropolitan Atlanta Rapid Transit Authority Sales Tax Revenue, Third Indenture Series, Series B, 5.00%, 7/01/45 | 5,000,000 | 6,004,800 | ||||||
Moultrie-Colquitt County Development Authority Revenue, Philadelphia College of Osteopathic Medicine Project, 5.00%, 12/01/43 | 4,815,000 | 5,866,837 | ||||||
Paulding County Hospital Authority Revenue, Anticipation Certificates, Series A, 5.00%, 4/01/42 | 3,500,000 | 3,757,145 | ||||||
Pierce County School District GO, 4.00%, 1/01/43 | 3,725,000 | 4,163,246 | ||||||
Private Colleges and Universities Authority Revenue, | ||||||||
Emory University, Green, Refunding, Series B, 5.00%, 9/01/48 | 3,255,000 | 4,135,608 | ||||||
Emory University, Refunding, Series A, 5.00%, 9/01/41 | 8,695,000 | 9,282,608 | ||||||
Emory University, Refunding, Series A, 5.00%, 10/01/43 | 5,000,000 | 5,650,650 | ||||||
Emory University, Refunding, Series B, 5.00%, 9/01/35 | 10,000,000 | 10,006,600 | ||||||
Richmond County Hospital Authority Revenue, Anticipation Certificates, University Health Services Inc. Project, Refunding, 4.00%, 1/01/35 | 8,000,000 | 8,851,520 |
franklintempleton.com | Semiannual Report | 79 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin GeorgiaTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Georgia(continued) | ||||||||
Sandy Springs PFAR, City Center Project, 5.00%, 5/01/41 | $ | 3,000,000 | $ | 3,623,610 | ||||
Thomasville Hospital Authority Revenue, | ||||||||
Anticipation Certificates, John D. Archbold Memorial Hospital Inc. Project,Pre-Refunded, 5.25%, 11/01/35 | 1,000,000 | 1,047,850 | ||||||
Anticipation Certificates, John D. Archbold Memorial Hospital Inc. Project,Pre-Refunded, 5.375%, 11/01/40 | 5,000,000 | 5,246,450 | ||||||
Tift County Hospital Revenue, Anticipation Certificates, Refunding, 5.00%, 12/01/38 | 2,000,000 | 2,210,000 | ||||||
Valdosta and Lowndes County Hospital Authority Revenue, Certificates, South Georgia Medical Center Project, Series B,Pre-Refunded, 5.00%, 10/01/41 | 3,000,000 | 3,240,000 | ||||||
Worth County School District GO, 5.00%, 12/01/42 | 5,000,000 | 6,101,500 | ||||||
|
| |||||||
463,959,695 | ||||||||
|
| |||||||
U.S. Territories 0.9% | ||||||||
Puerto Rico 0.9% | ||||||||
bPuerto Rico Electric Power Authority Power Revenue, SeriesXX-RSA-1, 5.25%, 7/01/40 | 5,000,000 | 4,012,500 | ||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $441,516,484) | 467,972,195 | |||||||
|
| |||||||
Short Term Investments 1.5% | ||||||||
Municipal Bonds 1.5% | ||||||||
Georgia 1.5% | ||||||||
cAthens-Clarke County Unified Government Development Authority Revenue, University of Georgia Athletic Assn. Project, Series B, LOC Wells Fargo Bank, Daily VRDN and Put, 1.38%, 7/01/35 | 3,100,000 | 3,100,000 | ||||||
cFulton County Development Authority Revenue, Children’s Healthcare of Atlanta Inc. Project, Refunding, SPA PNC Bank, Weekly VRDN and Put, 1.36%, 7/01/42 | 3,900,000 | 3,900,000 | ||||||
|
| |||||||
Total Short Term Investments (Cost $7,000,000) | 7,000,000 | |||||||
|
| |||||||
Total Investments (Cost $448,516,484) 100.2% | 474,972,195 | |||||||
Other Assets, less Liabilities (0.2)% | (727,134 | ) | ||||||
|
| |||||||
Net Assets 100.0% | $ | 474,245,061 | ||||||
|
|
See Abbreviations on page 167.
aSecurity purchased on a when-issued basis. See Note 1(b).
bSee Note 7 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
80 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin KentuckyTax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $10.76 | $10.68 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.15 | 0.15 | ||||||
Net realized and unrealized gains (losses) | 0.39 | 0.08 | ||||||
Total from investment operations | 0.54 | 0.23 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.17 | ) | (0.15 | ) | ||||
Net asset value, end of period | $11.13 | $10.76 | ||||||
Total returnd | 5.05% | 2.16% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.96% | 0.97% | ||||||
Net investment income | 2.74% | 3.00% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $6,033 | $2,785 | ||||||
Portfolio turnover rate | 8.64% | 18.61% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 81 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Kentucky Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.75 | $10.77 | $11.01 | $11.31 | $11.52 | $11.12 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.34 | 0.37 | 0.40 | 0.41 | 0.43 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.39 | (0.02 | ) | (0.24 | ) | (0.30 | ) | (0.21 | ) | 0.40 | ||||||||||||||
Total from investment operations | 0.55 | 0.32 | 0.13 | 0.10 | 0.20 | 0.83 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.34 | ) | (0.37 | ) | (0.40 | ) | (0.41 | ) | (0.43 | ) | ||||||||||||
Net asset value, end of period | $11.12 | $10.75 | $10.77 | $11.01 | $11.31 | $11.52 | ||||||||||||||||||
Total returnd | 5.14% | 3.01% | 1.20% | 0.86% | 1.82% | 7.61% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.81% | f | 0.82% | f | 0.79% | 0.77% | 0.76% | 0.78% | ||||||||||||||||
Net investment income | 2.89% | 3.15% | 3.40% | 3.51% | 3.61% | 3.81% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $131,378 | $130,267 | $150,182 | $165,613 | $173,093 | $168,278 | ||||||||||||||||||
Portfolio turnover rate | 8.64% | 18.61% | 13.90% | 9.14% | 5.91% | 6.35% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
82 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Kentucky Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||
(unaudited) | 2019 | 2018a | ||||||||
Class R6 | ||||||||||
Per share operating performance | ||||||||||
(for a share outstanding throughout the period) | ||||||||||
Net asset value, beginning of period | $10.75 | $10.77 | $10.98 | |||||||
Income from investment operationsb: | ||||||||||
Net investment incomec | 0.17 | 0.35 | 0.23 | |||||||
Net realized and unrealized gains (losses) | 0.39 | (0.02) | (0.22 | ) | ||||||
Total from investment operations | 0.56 | 0.33 | 0.01 | |||||||
Less distributions from: | ||||||||||
Net investment income | (0.19 | ) | (0.35) | (0.22 | ) | |||||
Net asset value, end of period | $11.12 | $10.75 | $10.77 | |||||||
Total returnd | 5.21% | 3.13% | 0.07% | |||||||
Ratios to average net assetse | ||||||||||
Expenses before waiver and payments by affiliates | 0.70% | 0.70% | 0.70% | |||||||
Expenses net of waiver and payments by affiliates | 0.67% | f | 0.67%f | 0.65% | ||||||
Net investment income | 3.03% | 3.30% | 3.54% | |||||||
Supplemental data | ||||||||||
Net assets, end of period (000’s) | $1,962 | $1,843 | $2,085 | |||||||
Portfolio turnover rate | 8.64% | 18.61% | 13.90% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 83 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Kentucky Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||
(unaudited) | 2019 | 2018 | 2017a | |||||||||||||
Advisor Class | ||||||||||||||||
Per share operating performance | ||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $10.75 | $10.77 | $11.01 | $11.35 | ||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.16 | 0.35 | 0.38 | 0.19 | ||||||||||||
Net realized and unrealized gains (losses) | 0.39 | (0.02 | ) | (0.24 | ) | (0.35 | ) | |||||||||
Total from investment operations | 0.55 | 0.33 | 0.14 | (0.16 | ) | |||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.18 | ) | (0.35 | ) | (0.38 | ) | (0.18 | ) | ||||||||
Net asset value, end of period | $11.12 | $10.75 | $10.77 | $11.01 | ||||||||||||
Total returnd | 5.19% | 3.10% | 1.30% | (1.36)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses | 0.71% | f | 0.72% | f | 0.69% | 0.67% | ||||||||||
Net investment income | 2.99% | 3.25% | 3.50% | 3.61% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $11,653 | $9,298 | $7,438 | $6,896 | ||||||||||||
Portfolio turnover rate | 8.64% | 18.61% | 13.90% | 9.14% |
aFor the period September 15, 2016 (effective date) to February 28, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
84 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin KentuckyTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 98.0% | ||||||||
Kentucky 98.0% | ||||||||
Boyle County Revenue, Educational Facilities, Centre College of Kentucky, Refunding, 5.00%, 6/01/37 | $ | 2,000,000 | $ | 2,394,680 | ||||
aCampbell and Kenton Counties Sanitation District No. 1 Revenue, Refunding, 4.00%, 8/01/34 | 5,310,000 | 6,096,517 | ||||||
a,bCaroll County Pollution Control Revenue, Kentucky Utilities Co. Project, Refunding, Series A, Mandatory Put, 1.55%, 9/01/26 | 2,000,000 | 2,010,980 | ||||||
Eastern Kentucky University General Receipts Revenue, Series A, 4.00%, 10/01/37 | 1,540,000 | 1,738,460 | ||||||
Fayette County School District Finance Corp. Revenue, | ||||||||
School Building, Series A, 4.00%, 5/01/38 | 1,000,000 | 1,112,520 | ||||||
School Building, Series D, 5.00%, 8/01/34 | 1,985,000 | 2,354,408 | ||||||
Glasgow Healthcare Revenue, T.J. Samson Community Hospital Project, 6.45%, 2/01/41 | 2,000,000 | 2,131,580 | ||||||
Greater Kentucky Housing Assistance Corp. Mortgage Revenue, Section 8 Assisted Projects, Refunding, Series A, NATL Insured, 6.10%, 1/01/24 | 145,000 | 145,478 | ||||||
Jefferson County School District Finance Corp. School Building Revenue, Refunding, Series B, 4.00%, 12/01/26 | 3,500,000 | 4,129,265 | ||||||
Kentucky Bond Development Corp. Industrial Building Revenue, City of Stamping Ground, Transylvania University Project, Series B, 4.00%, 3/01/49 | 2,500,000 | 2,688,450 | ||||||
Kentucky Bond Development Corp. Transient Room Tax Revenue, Lexington Center Corp. Project, Refunding, Series A, 5.00%, 9/01/48 | 2,500,000 | 3,034,300 | ||||||
Kentucky Economic Development Finance Authority Revenue, | ||||||||
Commonspirit Health, Refunding, SeriesA-2, 5.00%, 8/01/49 | 2,000,000 | 2,433,300 | ||||||
Hospital, Baptist Healthcare System Obligated Group, 5.25%, 8/15/46 | 5,000,000 | 5,292,450 | ||||||
Kentucky Rural Water Finance Corp. Public Project Revenue, | ||||||||
Multimodal, Flexible Term Program, Series A, 5.00%, 2/01/26 | 485,000 | 486,411 | ||||||
Multimodal, Flexible Term Program, Series I, 5.00%, 2/01/34 | 1,010,000 | 1,012,384 | ||||||
Kentucky State Housing Corp. Conduit MFHR, | ||||||||
Collateral Mortgage Loan, Country Place Apartments Project, GNMA Secured, 5.00%, 4/20/40 | 2,280,000 | 2,327,036 | ||||||
Collateral Mortgage Loan, Country Place Apartments Project, GNMA Secured, 5.25%, 4/20/45 | 1,850,000 | 1,887,888 | ||||||
Kentucky State Infrastructure Authority Revenue, | ||||||||
Wastewater and Drinking Water Revolving Fund, Series A,Pre-Refunded, 5.00%, 2/01/28 | 2,000,000 | 2,189,380 | ||||||
Wastewater and Drinking Water Revolving Fund, Series A,Pre-Refunded, 5.00%, 2/01/31 | 4,190,000 | 4,586,751 | ||||||
Kentucky State Municipal Power Agency Power System Revenue, | ||||||||
aPrairie State Project, Refunding, Series A, 4.00%, 9/01/45 | 2,000,000 | 2,183,500 | ||||||
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/36 | 3,000,000 | 3,522,780 | ||||||
Kentucky State Property and Buildings Commission Revenue, | ||||||||
Project No. 108, Refunding, Series A, 5.00%, 8/01/34 | 3,500,000 | 4,082,715 | ||||||
Project No. 115, 5.00%, 4/01/38 | 2,500,000 | 2,970,125 | ||||||
Kentucky State Turnpike Authority Economic Development Road Revenue, | ||||||||
Revitalization Projects, Refunding, Series A, 5.00%, 7/01/30 | 2,500,000 | 2,662,050 | ||||||
Revitalization Projects, Refunding, Series A, 5.00%, 7/01/36 | 550,000 | 671,072 | ||||||
Revitalization Projects, Refunding, Series A, 5.00%, 7/01/37 | 700,000 | 851,641 | ||||||
Revitalization Projects, Series A, 5.00%, 7/01/32 | 2,000,000 | 2,265,560 | ||||||
Revitalization Projects, Series A, 5.00%, 7/01/33 | 3,000,000 | 3,542,730 | ||||||
Lexington-Fayette Urban County Airport Board Revenue, General Airport, Refunding, Series B, 5.00%, 7/01/29 | 1,185,000 | 1,303,891 | ||||||
Lexington-Fayette Urban County Government Public Facilities Corp. Lease Revenue, Eastern State Hospital Project, Refunding, Series A, 5.25%, 6/01/32 | 3,000,000 | 3,159,690 | ||||||
Louisville and Jefferson County Metro Government Parking Authority Revenue, first mortgage, Series A,Pre-Refunded, 5.375%, 12/01/39 | 1,995,000 | 2,015,928 |
franklintempleton.com | Semiannual Report | 85 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin KentuckyTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Kentucky(continued) | ||||||||
Louisville and Jefferson County Metropolitan Sewer District Revenue, | ||||||||
Sewer and Drainage System, Refunding, Series A, 4.00%, 5/15/38 | $ | 5,000,000 | $ | 5,744,400 | ||||
Sewer and Drainage System, Series A, 4.00%, 5/15/48 | 2,750,000 | 3,038,392 | ||||||
Louisville/Jefferson County Metro Government Revenue, | ||||||||
College, Bellarmine University Project, Refunding and Improvement, Series A, 5.00%, 5/01/36 | 2,715,000 | 3,078,729 | ||||||
College, Improvement and Refunding, Bellarmine University Inc. Project, 5.00%, 5/01/31 | 2,000,000 | 2,227,940 | ||||||
Morehead State University General Receipts Revenue, Refunding, Series A, 5.00%, 10/01/28 | 1,910,000 | 2,206,738 | ||||||
Murray Hospital Facilities Revenue, Murray-Calloway County Public Hospital Corp. Project,Pre-Refunded, 6.375%, 8/01/40 | 2,500,000 | 2,616,250 | ||||||
Owen County Waterworks System Revenue, | ||||||||
American Water Co. Project, Series A, 6.25%, 6/01/39 | 2,000,000 | 2,007,040 | ||||||
American Water Co. Project, Series A, 5.375%, 6/01/40 | 2,000,000 | 2,058,260 | ||||||
American Water Co. Project, Series B, 5.625%, 9/01/39 | 2,000,000 | 2,006,160 | ||||||
Owensboro Electric Light and Power System Revenue, Refunding, 4.00%, 1/01/27 | 1,250,000 | 1,432,625 | ||||||
Owensboro Water Revenue, Refunding and Improvement, 4.00%, 9/15/45 | 5,000,000 | 5,559,750 | ||||||
Paducah Electric Plant Board Revenue, Refunding, Series A, AGMC Insured, 5.00%, 10/01/34 | 5,700,000 | 6,766,926 | ||||||
Pikeville Hospital Revenue, Pikeville Medical Center Inc. Project, Improvement and Refunding, 6.50%, 3/01/41 | 2,875,000 | 3,049,052 | ||||||
Princeton Electric Plant Board Revenue, Series A, Assured Guaranty, 5.00%, 11/01/37 | 1,500,000 | 1,508,130 | ||||||
Russell Revenue, Bon Secours Health System Inc.,Pre-Refunded, 5.00%, 11/01/26 | 4,000,000 | 4,473,600 | ||||||
Scott County School District Finance Corp. Revenue, School Building, 4.00%, 6/01/38 | 1,615,000 | 1,793,183 | ||||||
Shelby County School District Finance Corp. Revenue, School Building, 4.00%, 8/01/38 | 3,465,000 | 3,854,778 | ||||||
University of Kentucky General Receipts Revenue, | ||||||||
Series A, 4.00%, 10/01/32 | 4,000,000 | 4,567,520 | ||||||
Series A, 4.00%, 4/01/44 | 2,250,000 | 2,427,300 | ||||||
University of Louisville Revenue, | ||||||||
General Receipts, Series A, 5.00%, 9/01/28 | 2,220,000 | 2,374,090 | ||||||
General Receipts, Series D, 5.00%, 3/01/30 | 4,140,000 | 5,085,369 | ||||||
Warren County Hospital Facility Revenue, Bowling Green, Warren County, Series A, 5.00%, 10/01/33 | 1,000,000 | 1,096,610 | ||||||
Western Kentucky University Revenue, General Receipts, Series A, 5.00%, 5/01/32 | 1,625,000 | 1,773,785 | ||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $139,134,827) | 148,030,547 | |||||||
|
| |||||||
Short Term Investments 7.2% | ||||||||
Municipal Bonds 7.2% | ||||||||
Kentucky 7.2% | ||||||||
cBerea Educational Facilities Revenue, | ||||||||
Berea College Project, Series A, Daily VRDN and Put, 1.12%, 6/01/32 | 5,000,000 | 5,000,000 | ||||||
Berea College Project, Series B, Daily VRDN and Put, 1.12%, 6/01/29 | 2,240,000 | 2,240,000 |
86 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin KentuckyTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Short Term Investments(continued) | ||||||||
Municipal Bonds(continued) | ||||||||
Kentucky(continued) | ||||||||
cLouisville/Jefferson County Metro Government Health System Revenue, Norton Healthcare Inc., Series B, LOC PNC Bank, Daily VRDN and Put, 1.39%, 10/01/39 | $ | 3,670,000 | $ | 3,670,000 | ||||
|
| |||||||
Total Short Term Investments (Cost $10,910,000) | 10,910,000 | |||||||
|
| |||||||
Total Investments (Cost $150,044,827) 105.2% | 158,940,547 | |||||||
Other Assets, less Liabilities (5.2)% | (7,914,206 | ) | ||||||
|
| |||||||
Net Assets 100.0% | $ | 151,026,341 | ||||||
|
|
See Abbreviations on page 167.
aSecurity purchased on a when-issued basis. See Note 1(b).
bThe maturity date shown represents the mandatory put date.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 87 |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin Louisiana Tax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $10.93 | $10.85 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.15 | 0.16 | ||||||
Net realized and unrealized gains (losses) | 0.49 | 0.08 | ||||||
Total from investment operations | 0.64 | 0.24 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.17 | ) | (0.16 | ) | ||||
Net asset value, end of period | $11.40 | $10.93 | ||||||
Total returnd | 5.88% | 2.22% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.87% | 0.88% | ||||||
Net investment income | 2.77% | 3.06% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $33,038 | $18,110 | ||||||
Portfolio turnover rate | 2.35% | 9.46% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
88 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Louisiana Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.92 | $10.90 | $11.15 | $11.50 | $11.62 | $11.26 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.35 | 0.36 | 0.39 | 0.43 | 0.45 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.50 | 0.02 | (0.24 | ) | (0.34 | ) | (0.12 | ) | 0.37 | |||||||||||||||
Total from investment operations | 0.66 | 0.37 | 0.12 | 0.05 | 0.31 | 0.82 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.35 | ) | (0.37 | ) | (0.40 | ) | (0.43 | ) | (0.46 | ) | ||||||||||||
Net asset value, end of period | $11.40 | $10.92 | $10.90 | $11.15 | $11.50 | $11.62 | ||||||||||||||||||
Total returnd | 6.06% | 3.45% | 1.04% | 0.43% | 2.78% | 7.38% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.72% | f | 0.73% | f | 0.70% | 0.68% | 0.69% | 0.69% | ||||||||||||||||
Net investment income | 2.92% | 3.21% | 3.23% | 3.41% | 3.77% | 3.95% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $291,502 | $284,259 | $322,080 | $343,042 | $335,785 | $330,742 | ||||||||||||||||||
Portfolio turnover rate | 2.35% | 9.46% | 21.83% | 16.87% | 4.13% | 13.28% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 89 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Louisiana Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016a | 2015 | ||||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.10 | $11.07 | $11.32 | $11.67 | $11.79 | $11.41 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.14 | 0.29 | 0.30 | 0.33 | 0.37 | 0.40 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.50 | 0.03 | (0.25 | ) | (0.34 | ) | (0.12 | ) | 0.37 | |||||||||||||||
Total from investment operations | 0.64 | 0.32 | 0.05 | (0.01 | ) | 0.25 | 0.77 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.15 | ) | (0.29 | ) | (0.30 | ) | (0.34 | ) | (0.37 | ) | (0.39 | ) | ||||||||||||
Net asset value, end of period | $11.59 | $11.10 | $11.07 | $11.32 | $11.67 | $11.79 | ||||||||||||||||||
Total returnd | 5.78% | 2.92% | 0.46% | (0.13)% | 2.18% | 6.87% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 1.27% | f | 1.28% | f | 1.25% | 1.23% | 1.24% | 1.24% | ||||||||||||||||
Net investment income | 2.37% | 2.66% | 2.68% | 2.86% | 3.22% | 3.40% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $41,540 | $42,188 | $61,399 | $67,154 | $68,319 | $68,272 | ||||||||||||||||||
Portfolio turnover rate | 2.35% | 9.46% | 21.83% | 16.87% | 4.13% | 13.28% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
90 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Louisiana Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||
(unaudited) | 2019 | 2018a | ||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $10.93 | $10.90 | $11.18 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.17 | 0.36 | 0.22 | |||||||||
Net realized and unrealized gains (losses) | 0.48 | 0.03 | (0.28 | ) | ||||||||
Total from investment operations | 0.65 | 0.39 | (0.06 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.18 | ) | (0.36 | ) | (0.22 | ) | ||||||
Net asset value, end of period | $11.40 | $10.93 | $10.90 | |||||||||
Total returnd | 6.03% | 3.67% | (0.59)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.60% | 0.61% | 0.60% | |||||||||
Expenses net of waiver and payments by affiliates | 0.58% | f | 0.59% | f | 0.57% | |||||||
Net investment income | 3.06% | 3.35% | 3.36% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $4,687 | $3,865 | $3,683 | |||||||||
Portfolio turnover rate | 2.35% | 9.46% | 21.83% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 91 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Louisiana Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||
(unaudited) | 2019 | 2018 | 2017a | |||||||||||||
Advisor Class | ||||||||||||||||
Per share operating performance | ||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||
Net asset value, beginning of period | $10.93 | $10.90 | $11.15 | $11.54 | ||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment incomec | 0.17 | 0.36 | 0.37 | 0.19 | ||||||||||||
Net realized and unrealized gains (losses) | 0.48 | 0.03 | (0.24 | ) | (0.40 | ) | ||||||||||
Total from investment operations | 0.65 | 0.39 | 0.13 | (0.21 | ) | |||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.18 | ) | (0.36 | ) | (0.38 | ) | (0.18 | ) | ||||||||
Net asset value, end of period | $11.40 | $10.93 | $10.90 | $11.15 | ||||||||||||
Total returnd | 6.01% | 3.65% | 1.14% | (1.79)% | ||||||||||||
Ratios to average net assetse | ||||||||||||||||
Expenses | 0.62% | f | 0.63% | f | 0.60% | 0.58% | ||||||||||
Net investment income | 3.02% | 3.31% | 3.33% | 3.51% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) | $23,479 | $19,580 | $14,091 | $10,259 | ||||||||||||
Portfolio turnover rate | 2.35% | 9.46% | 21.83% | 16.87% |
aFor the period September 15, 2016 (effective date) to February 28, 2017.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
92 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin LouisianaTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 97.5% | ||||||||
Louisiana 96.2% | ||||||||
Alexandria Utilities Revenue, Series A, 5.00%, 5/01/38 | $ | 10,000,000 | $ | 11,212,700 | ||||
Bossier City Public Improvement Sales Tax Revenue, Series ST, 5.00%, 12/01/36 | 1,405,000 | 1,697,310 | ||||||
Bossier City Utilities Revenue, Refunding, 5.00%, 10/01/37 | 5,280,000 | 6,130,450 | ||||||
Calcasieu Parish Public Trust Authority Student Lease Revenue, McNeese State University Student Housing, Cowboy Facilities Inc. Project, Refunding, AGMC Insured, 5.00%, 5/01/29 | 2,050,000 | 2,236,653 | ||||||
Calcasieu Parish School District No. 23 GO, | ||||||||
aPublic Improvement, BAM Insured, 4.00%, 9/01/36 | 670,000 | 772,336 | ||||||
aPublic Improvement, BAM Insured, 4.00%, 9/01/37 | 600,000 | 689,652 | ||||||
aPublic Improvement, BAM Insured, 4.00%, 9/01/39 | 2,060,000 | 2,350,954 | ||||||
Refunding, Series A, 5.00%, 2/15/29 | 1,380,000 | 1,497,203 | ||||||
Calcasieu Parish School District No. 31 GO, | ||||||||
Public School Improvement, BAM Insured, 5.00%, 3/01/36 | 1,000,000 | 1,230,570 | ||||||
Public School Improvement, BAM Insured, 4.00%, 3/01/37 | 1,000,000 | 1,144,140 | ||||||
Public School Improvement, BAM Insured, 5.00%, 3/01/38 | 1,000,000 | 1,222,760 | ||||||
Public School Improvement, BAM Insured, 4.00%, 3/01/39 | 750,000 | 854,565 | ||||||
East Baton Rouge Mortgage Finance Authority SFMR, | ||||||||
MBS Program, Refunding, SeriesA-3, GNMA Secured, 5.00%, 10/01/28 | 275,000 | 275,580 | ||||||
MBS Program, SeriesA-2, GNMA Secured, 5.10%, 10/01/40 | 155,000 | 155,268 | ||||||
East Baton Rouge Sewerage Commission Revenue, | ||||||||
Refunding, Series B, 5.00%, 2/01/33 | 1,000,000 | 1,180,050 | ||||||
Refunding, Series B, 5.00%, 2/01/39 | 5,000,000 | 5,835,050 | ||||||
Greater New Orleans Expressway Commission Toll Revenue, sub. lien, AGMC Insured, 5.00%, 11/01/47 | 4,000,000 | 4,708,680 | ||||||
Jefferson Parish Hospital District No. 1 Hospital Revenue, Parish of Jefferson, West Jefferson Medical Center, Series A,Pre-Refunded, 6.00%, 1/01/39 | 3,105,000 | 3,299,839 | ||||||
Jefferson Sales Tax District Special Sales Tax Revenue, Parish of Jefferson, Series B, AGMC Insured, 5.00%, 12/01/42 | 2,250,000 | 2,733,165 | ||||||
Kenner Consolidated Sewerage District Revenue, AGMC Insured, 5.00%, 11/01/36 | 4,000,000 | 4,309,840 | ||||||
Kenner Sales Tax Revenue, Refunding, Series A, 5.00%, 6/01/33 | 8,605,000 | 9,703,514 | ||||||
Lafayette Communications System Revenue, | ||||||||
Refunding, AGMC Insured, 5.00%, 11/01/28 | 1,345,000 | 1,616,448 | ||||||
Refunding, AGMC Insured, 5.00%, 11/01/31 | 2,400,000 | 2,861,760 | ||||||
Lafayette Parish School Board Sales Tax Revenue, 5.00%, 4/01/48 | 6,000,000 | 7,188,540 | ||||||
Lafayette Public Improvement Sales Tax Revenue, | ||||||||
Pre-Refunded, 5.00%, 3/01/36 | 1,865,000 | 1,974,886 | ||||||
Series A, 5.00%, 5/01/44 | 4,350,000 | 5,395,087 | ||||||
Lafayette Public Trust Financing Authority Revenue, | ||||||||
Ragin’ Cajun Facilities Inc. Housing and Parking Project, AGMC Insured,Pre-Refunded, 5.25%, 10/01/30 | 4,000,000 | 4,178,640 | ||||||
Ragin’ Cajun Facilities Inc. Project, Assured Guaranty,Pre-Refunded, 5.75%, 10/01/29 | 750,000 | 752,625 | ||||||
Ragin’ Cajun Facilities Inc. Project, Assured Guaranty,Pre-Refunded, 6.00%, 10/01/34 | 1,750,000 | 1,756,440 | ||||||
Ragin’ Cajun Facilities Inc. Project, Assured Guaranty,Pre-Refunded, 6.00%, 10/01/38 | 1,335,000 | 1,339,913 | ||||||
Lafayette Utilities Revenue,Pre-Refunded, 5.00%, 11/01/33 | 5,000,000 | 5,226,150 | ||||||
Louisiana Local Government Environmental Facilities and CDA Revenue, | ||||||||
Airport, Monroe Regional Airport Terminal Project, Assured Guaranty,Pre-Refunded, 5.50%, 2/01/39 | 2,000,000 | 2,036,060 | ||||||
Denham Springs Sewer District No. 1 Project, Assured Guaranty,Pre-Refunded, 5.00%, 12/01/39 | 3,750,000 | 3,785,475 | ||||||
East Ascension Consolidated Gravity Drainage District No. 1 Project, Refunding, BAM Insured, 5.00%, 12/01/40 | 2,925,000 | 3,489,145 |
franklintempleton.com | Semiannual Report | 93 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LouisianaTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Louisiana(continued) | ||||||||
Louisiana Local Government Environmental Facilities and CDA Revenue, (continued) | ||||||||
East Baton Rouge Sewerage Commission Projects, sub. lien, Series A, 5.00%, 2/01/34 | $ | 2,550,000 | $ | 2,913,401 | ||||
East Baton Rouge Sewerage Commission Projects, sub. lien, Series A, 5.00%, 2/01/43 | 3,000,000 | 3,334,110 | ||||||
LCTCS Act 360 Project, 5.00%, 10/01/32 | 3,000,000 | 3,490,620 | ||||||
LCTCS Act 360 Project, 5.00%, 10/01/33 | 5,000,000 | 5,809,300 | ||||||
Louisiana Tech University Student Housing, Innovative Student Facilities Inc. Project, Series A, AGMC Insured, 4.00%, 10/01/33 | 800,000 | 900,512 | ||||||
Louisiana Tech University Student Housing, Innovative Student Facilities Inc. Project, Series A, AGMC Insured, 4.00%, 10/01/34 | 620,000 | 695,113 | ||||||
McNeese State University Student Parking, Cowboy Facilities Inc. Project, AGMC Insured, 5.00%, 3/01/36 | 1,800,000 | 1,960,434 | ||||||
Ragin’ Cajun Facilities Inc., Student Housing and Parking Project, AGMC Insured, 5.00%, 10/01/48 | 3,500,000 | 4,121,915 | ||||||
Ragin’ Cajun Facilities Inc., Student Housing and Parking Project, Refunding, AGMC Insured, 5.00%, 10/01/39 | 2,680,000 | 3,229,856 | ||||||
Southeastern Louisiana University Student Housing/University Facilities Inc. Project, Refunding, AGMC Insured, 4.00%, 8/01/34 | 1,000,000 | 1,136,900 | ||||||
Woman’s Hospital Foundation Project, Refunding, Series A, 5.00%, 10/01/44 | 5,000,000 | 5,933,450 | ||||||
Louisiana Public Facilities Authority Hospital Revenue, | ||||||||
Franciscan Missionaries of Our Lady Health System Project, Refunding, Series A, 5.00%, 7/01/35 | 4,965,000 | 5,743,015 | ||||||
Franciscan Missionaries of Our Lady Health System Project, Series A, 5.00%, 7/01/47 | 5,000,000 | 5,856,650 | ||||||
Franciscan Missionaries of Our Lady Health System Project, Series A,Pre-Refunded, 5.00%, 7/01/35 | 35,000 | 42,571 | ||||||
Lafayette General Medical Center Project, Refunding, 5.50%, 11/01/40 | 5,000,000 | 5,113,400 | ||||||
Louisiana Children’s Medical Center Project, Series A1, 5.00%, 6/01/45 | 10,000,000 | 12,030,000 | ||||||
Louisiana Public Facilities Authority Revenue, | ||||||||
Archdiocese of New Orleans Project, Refunding, 5.00%, 7/01/37 | 3,750,000 | 4,324,387 | ||||||
CHRISTUS Health, Series E, 5.00%, 7/01/48 | 5,000,000 | 6,049,400 | ||||||
Loyola University Project, 5.00%, 10/01/41 | 5,000,000 | 5,264,050 | ||||||
Loyola University Project,Pre-Refunded, 5.00%, 10/01/39 | 5,000,000 | 5,111,150 | ||||||
Ochsner Clinic Foundation Project,Pre-Refunded, 5.00%, 5/15/34 | 30,000 | 37,032 | ||||||
Ochsner Clinic Foundation Project,Pre-Refunded, 6.75%, 5/15/41 | 5,000,000 | 5,471,850 | ||||||
Ochsner Clinic Foundation Project,Pre-Refunded, 5.00%, 5/15/47 | 20,000 | 24,688 | ||||||
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/46 | 10,000,000 | 11,709,800 | ||||||
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/47 | 1,730,000 | 2,003,600 | ||||||
Ochsner Clinic Foundation Project, Series B, ETM, 5.75%, 5/15/23 | 2,500,000 | 2,913,075 | ||||||
Tulane University of Louisiana Project, Refunding, Series A, 5.00%, 12/15/41 | 3,000,000 | 3,579,870 | ||||||
Tulane University of Louisiana Project, Refunding, Series A, 4.00%, 12/15/50 | 2,000,000 | 2,218,320 | ||||||
Tulane University of Louisiana Project, Series B, 5.00%, 10/01/37 | 5,540,000 | 6,122,642 | ||||||
Louisiana State Gasoline and Fuels Tax Revenue, | ||||||||
first lien, Refunding, Series A, 5.00%, 5/01/41 | 3,000,000 | 3,529,020 | ||||||
second lien, Refunding, Series C, 5.00%, 5/01/40 | 5,000,000 | 6,136,400 | ||||||
second lien, Refunding, Series C, 5.00%, 5/01/45 | 10,000,000 | 12,148,000 | ||||||
second lien, Refunding, SeriesC-1, 5.00%, 5/01/43 | 5,000,000 | 5,595,300 | ||||||
Louisiana State GO, | ||||||||
Refunding, Series A, 5.00%, 9/01/36 | 5,000,000 | 6,072,850 | ||||||
Refunding, Series C, 5.00%, 8/01/27 | 7,200,000 | 8,476,704 | ||||||
Series A, 5.00%, 3/01/37 | 3,000,000 | 3,809,940 |
94 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin LouisianaTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Louisiana(continued) | ||||||||
Louisiana State Grant Anticipation Revenue, | ||||||||
Series A, 5.00%, 9/01/30 | $ | 2,000,000 | $ | 2,588,700 | ||||
Series A, 5.00%, 9/01/31 | 4,750,000 | 6,111,255 | ||||||
Louisiana State Highway Improvement Revenue, | ||||||||
Series A, 5.00%, 6/15/30 | 2,860,000 | 3,233,916 | ||||||
Series A, 5.00%, 6/15/32 | 9,850,000 | 11,410,240 | ||||||
Louisiana State Public Facilities Authority Lease Revenue, | ||||||||
Provident Group, Flagship Properties LLC, Louisiana State University Greenhouse District Project, 5.00%, 7/01/52 | 2,310,000 | 2,665,578 | ||||||
Provident Group, Flagship Properties LLC, Louisiana State University Nicholson Gateway Project, Series A, 5.00%, 7/01/46 | 6,500,000 | 7,547,800 | ||||||
Louisiana State Transportation Authority Revenue, Refunding, Series A, 5.00%, 8/15/38 | 4,500,000 | 5,130,225 | ||||||
Louisiana State Unclaimed Property Special Revenue,I-49 North Project, 5.00%, 9/01/33 | 5,860,000 | 6,630,590 | ||||||
Louisiana State University and Agricultural and Mechanical College Revenue, | ||||||||
Board of Supervisors, Auxiliary, 5.00%, 7/01/37 | 4,000,000 | 4,493,760 | ||||||
Board of Supervisors, Auxiliary, Refunding, 5.00%, 7/01/29 | 1,000,000 | 1,163,130 | ||||||
Board of Supervisors, Auxiliary, Refunding, 5.00%, 7/01/30 | 1,040,000 | 1,208,397 | ||||||
Board of Supervisors, Auxiliary, Refunding, 5.00%, 7/01/34 | 1,000,000 | 1,157,540 | ||||||
Board of Supervisors, Auxiliary, Refunding, Series A, 5.00%, 7/01/40 | 4,500,000 | 5,327,010 | ||||||
Board of Supervisors, Auxiliary, Series A,Pre-Refunded, 5.00%, 7/01/40 | 5,000,000 | 5,161,300 | ||||||
Natchitoches Parish School District No. 9 GO, School, AGMC Insured, 5.00%, 3/01/38 | 1,440,000 | 1,790,712 | ||||||
New Orleans Aviation Board Revenue, General Airport, North Terminal Project, Series A, 5.00%, 1/01/48 | 10,000,000 | 11,827,200 | ||||||
Port of New Orleans Board of Commissioners Port Facility Revenue, Series A, AGMC Insured, 5.00%, 4/01/48 | 2,750,000 | 3,324,392 | ||||||
Ruston Sales Tax Revenue, AGMC Insured, 5.00%, 6/01/35 | 1,085,000 | 1,286,159 | ||||||
Shreveport GO,Pre-Refunded, 5.00%, 8/01/29 | 4,790,000 | 5,140,820 | ||||||
Shreveport Limited Obligation Revenue, Independence Stadium Project, Refunding, BAM Insured, 5.00%, 3/01/27 | 1,500,000 | 1,848,645 | ||||||
Shreveport Water and Sewer Revenue, Series B, 5.00%, 12/01/41 | 4,000,000 | 4,746,000 | ||||||
St. Charles Parish School Board Sales and Use Tax Revenue, 4.00%, 8/01/38 | 805,000 | 930,765 | ||||||
St. Tammany Parish Hospital Service District No. 1 Hospital Revenue, St. Tammany Parish Hospital Project, Refunding, Series A, 5.00%, 7/01/48 | 5,000,000 | 5,985,850 | ||||||
St. Tammany Parish Utilities Revenue, | ||||||||
Series B,Pre-Refunded, 5.50%, 8/01/35 | 2,650,000 | 2,754,834 | ||||||
Series B,Pre-Refunded, 5.00%, 8/01/44 | 3,290,000 | 3,405,314 | ||||||
Terrebonne Levee and Conservation District Public Improvement Sales Tax Revenue, 5.00%, 7/01/38. | 2,000,000 | 2,254,400 | ||||||
Terrebonne Parish Sales and Use Tax Revenue, Morganza Levee Improvement, Series ST, AGMC Insured,Pre-Refunded, 5.00%, 4/01/32 | 2,265,000 | 2,404,003 | ||||||
|
| |||||||
379,279,308 | ||||||||
|
| |||||||
U.S. Territories 1.3% | ||||||||
Puerto Rico 1.3% | ||||||||
bPuerto Rico Electric Power Authority Power Revenue, SeriesWW-RSA-1, 5.25%, 7/01/33 | 6,450,000 | 5,176,125 | ||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $358,064,746) | 384,455,433 | |||||||
|
|
franklintempleton.com | Semiannual Report | 95 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Louisiana Tax-Free Income Fund (continued)
Principal Amount | Value | |||||||
Short Term Investments (Cost $9,500,000) 2.4% | ||||||||
Municipal Bonds 2.4% | ||||||||
Louisiana 2.4% | ||||||||
cEast Baton Rouge Parish PCR, Exxon Project, Refunding, Daily VRDN and Put, 1.30%, 11/01/19 | $ | 9,500,000 | $ | 9,500,000 | ||||
|
| |||||||
Total Investments (Cost $367,564,746) 99.9% | 393,955,433 | |||||||
Other Assets, less Liabilities 0.1%. | 290,412 | |||||||
|
| |||||||
Net Assets 100.0% | $ | 394,245,845 | ||||||
|
|
See Abbreviations on page 167.
aSecurity purchased on a when-issued basis. See Note 1(b).
bSee Note 7 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
96 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin MarylandTax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $ 10.80 | $ 10.76 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.15 | 0.15 | ||||||
Net realized and unrealized gains (losses) | 0.44 | 0.04 | ||||||
Total from investment operations | 0.59 | 0.19 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.17 | ) | (0.15 | ) | ||||
Net asset value, end of period | $ 11.22 | $ 10.80 | ||||||
Total returnd | 5.51% | 1.84% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.87% | 0.88% | ||||||
Net investment income | 2.71% | 2.95% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $ 44,480 | $ 26,572 | ||||||
Portfolio turnover rate | 4.53% | 5.33% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 97 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Maryland Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $ 10.80 | $ 10.76 | $ 11.10 | $ 11.35 | $ 11.55 | $ 11.20 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.33 | 0.34 | 0.39 | 0.42 | 0.42 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.44 | 0.05 | (0.32 | ) | (0.24 | ) | (0.21 | ) | 0.35 | |||||||||||||||
Total from investment operations | 0.60 | 0.38 | 0.02 | 0.15 | 0.21 | 0.77 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.34 | ) | (0.36 | ) | (0.40 | ) | (0.41 | ) | (0.42 | ) | ||||||||||||
Net asset value, end of period | $ 11.22 | $ 10.80 | $ 10.76 | $ 11.10 | $ 11.35 | $ 11.55 | ||||||||||||||||||
Total returnd | 5.59% | 3.59% | 0.13% | 1.31% | 1.88% | 6.94% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.72% | f | 0.73% | f | 0.70% | 0.67% | 0.67% | 0.67% | ||||||||||||||||
Net investment income | 2.86% | 3.10% | 3.07% | 3.47% | 3.70% | 3.63% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $ 283,973 | $ 279,750 | $ 319,120 | $ 351,933 | $ 369,661 | $ 393,022 | ||||||||||||||||||
Portfolio turnover rate | 4.53% | 5.33% | 11.36% | 33.34% | 9.77% | 15.88% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
98 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Maryland Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.02 | $10.98 | $11.31 | $11.56 | $11.75 | $11.39 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.13 | 0.28 | 0.28 | 0.34 | 0.36 | 0.36 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.45 | 0.04 | (0.32 | ) | (0.25 | ) | (0.20 | ) | 0.35 | |||||||||||||||
Total from investment operations | 0.58 | 0.32 | (0.04 | ) | 0.09 | 0.16 | 0.71 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.15 | ) | (0.28 | ) | (0.29 | ) | (0.34 | ) | (0.35 | ) | (0.35 | ) | ||||||||||||
Net asset value, end of period | $11.45 | $11.02 | $10.98 | $11.31 | $11.56 | $11.75 | ||||||||||||||||||
Total returnd | 5.30% | 2.94% | (0.34)% | 0.72% | 1.38% | 6.33% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 1.27% | f | 1.28% | f | 1.25% | 1.22% | 1.22% | 1.22% | ||||||||||||||||
Net investment income | 2.31% | 2.55% | 2.52% | 2.92% | 3.15% | 3.08% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $50,931 | $56,323 | $92,553 | $115,011 | $117,167 | $125,328 | ||||||||||||||||||
Portfolio turnover rate | 4.53% | 5.33% | 11.36% | 33.34% | 9.77% | 15.88% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 99 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Maryland Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||
(unaudited) | 2019 | 2018a | ||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $10.82 | $10.78 | $11.05 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.17 | 0.35 | 0.21 | |||||||||
Net realized and unrealized gains (losses) | 0.44 | 0.04 | (0.27 | ) | ||||||||
Total from investment operations | 0.61 | 0.39 | (0.06 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.19 | ) | (0.35 | ) | (0.21 | ) | ||||||
Net asset value, end of period | $11.24 | $10.82 | $10.78 | |||||||||
Total returnd | 5.66% | 3.71% | (0.58)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.59% | 0.61% | 0.62% | |||||||||
Expenses net of waiver and payments by affiliates | 0.57% | f | 0.58% | f | 0.56% | |||||||
Net investment income | 3.01% | 3.25% | 3.21% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $2,736 | $1,753 | $1,376 | |||||||||
Portfolio turnover rate | 4.53% | 5.33% | 11.36% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
100 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Maryland Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.81 | $10.77 | $11.11 | $11.35 | $11.56 | $11.20 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.34 | 0.35 | 0.41 | 0.43 | 0.43 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.46 | 0.05 | (0.32 | ) | (0.24 | ) | (0.22 | ) | 0.36 | |||||||||||||||
Total from investment operations | 0.62 | 0.39 | 0.03 | 0.17 | 0.21 | 0.79 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.35 | ) | (0.37 | ) | (0.41 | ) | (0.42 | ) | (0.43 | ) | ||||||||||||
Net asset value, end of period | $11.24 | $10.81 | $10.77 | $11.11 | $11.35 | $11.56 | ||||||||||||||||||
Total returnd | 5.73% | 3.68% | 0.22% | 1.50% | 1.90% | 7.13% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.62% | f | 0.63% | f | 0.60% | 0.57% | 0.57% | 0.57% | ||||||||||||||||
Net investment income | 2.96% | 3.20% | 3.17% | 3.57% | 3.80% | 3.73% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $47,201 | $44,264 | $40,532 | $42,625 | $28,464 | $27,131 | ||||||||||||||||||
Portfolio turnover rate | 4.53% | 5.33% | 11.36% | 33.34% | 9.77% | 15.88% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 101 |
FRANKLIN TAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin MarylandTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 96.5% | ||||||||
Maryland 91.5% | ||||||||
Annapolis GO, Public Improvements,Pre-Refunded, 5.00%, 8/01/31 | $ | 1,250,000 | $ | 1,344,025 | ||||
Anne Arundel County GO, | ||||||||
Consolidated General Improvements, Refunding, 5.00%, 4/01/33 | 3,140,000 | 3,538,623 | ||||||
Consolidated Water and Sewer, 5.00%, 4/01/41 | 12,620,000 | 13,303,499 | ||||||
aAnne Arundel County MFHR, Glenview Gardens Apartments Project, Mandatory Put, 5.00%, 1/01/27 | 1,910,000 | 1,968,771 | ||||||
Baltimore County GO, | ||||||||
Metropolitan District, 78th Issue, Refunding, 5.00%, 2/01/39 | 2,900,000 | 3,492,412 | ||||||
Metropolitan District, 78th Issue, Refunding, 5.00%, 2/01/41 | 2,900,000 | 3,480,551 | ||||||
Baltimore Revenue, | ||||||||
Mayor and City Council of Baltimore, Wastewater Projects, Series A, 5.00%, 7/01/41 | 14,435,000 | 15,322,175 | ||||||
Mayor and City Council of Baltimore, Wastewater Projects, Subordinate, Series A, 5.00%, 7/01/46 | 5,000,000 | 6,023,750 | ||||||
Mayor and City Council of Baltimore, Water Projects, Refunding, Series B, 5.00%, 7/01/38 | 5,000,000 | 5,729,950 | ||||||
Mayor and City Council of Baltimore, Water Projects, Series A, 5.00%, 7/01/38 | 8,930,000 | 10,233,691 | ||||||
Mayor and City Council of Baltimore, Water Projects, Series A, 5.00%, 7/01/41 | 7,845,000 | 8,315,465 | ||||||
Howard County Housing Commission Revenue, | ||||||||
Gateway Village Apartments, 4.00%, 6/01/46 | 2,000,000 | 2,153,980 | ||||||
The Verona at Oakland Mills Project, 5.00%, 10/01/28 | 10,000,000 | 11,291,500 | ||||||
Woodfield Oxford Square Apartments, 5.00%, 12/01/46 | 5,000,000 | 5,913,350 | ||||||
Maryland CDA Department Housing and Community Development Revenue, Residential, Refunding, Series A, 3.85%, 9/01/33 | 5,000,000 | 5,533,100 | ||||||
Maryland Environmental Service Revenue,Mid-Shore II Regional Landfill Project, Refunding, 5.00%, 11/01/30 | 3,935,000 | 4,108,219 | ||||||
Maryland Stadium Authority Revenue, Baltimore City Public Schools, Construction and Revitalization Program, 5.00%, 5/01/46 | 10,085,000 | 11,969,685 | ||||||
Maryland State CDA Department Housing and Community Development Revenue, | ||||||||
Series D, 3.00%, 7/01/39 | 1,500,000 | 1,563,180 | ||||||
Series D, 3.20%, 7/01/44 | 1,000,000 | 1,043,350 | ||||||
Maryland State Community Development Administration Local Government Infrastructure Revenue, | ||||||||
Senior Obligations, SeriesA-1, 4.00%, 6/01/47 | 2,300,000 | 2,531,150 | ||||||
Senior Obligations, SeriesA-1, 5.00%, 6/01/48 | 1,310,000 | 1,593,838 | ||||||
Subordinate Obligations, SeriesA-2, 5.00%, 6/01/34 | 3,500,000 | 3,918,145 | ||||||
Maryland State EDC Student Housing Revenue, | ||||||||
Salisbury University Project, Refunding, 5.00%, 6/01/34 | 2,040,000 | 2,189,981 | ||||||
Senior, Frostburg State University Project, Refunding, 5.00%, 10/01/33 | 5,000,000 | 5,446,700 | ||||||
Senior, Morgan State University Project, Refunding, 5.00%, 7/01/27 | 4,750,000 | 5,070,767 | ||||||
Senior, Morgan State University Project, Refunding, 5.00%, 7/01/34 | 2,150,000 | 2,263,499 | ||||||
Senior, Towson University Project, 5.00%, 7/01/27 | 1,145,000 | 1,248,840 | ||||||
University of Maryland, College Park Projects, Refunding, AGMC Insured, 5.00%, 6/01/35 | 4,225,000 | 5,067,212 | ||||||
University of Maryland, College Park Projects, Refunding, AGMC Insured, 5.00%, 6/01/43 | 3,305,000 | 3,916,921 | ||||||
University Village at Sheppard Pratt, 5.00%, 7/01/27 | 1,500,000 | 1,617,480 | ||||||
University Village at Sheppard Pratt, 5.00%, 7/01/33 | 2,495,000 | 2,663,188 | ||||||
Maryland State GO, State and Local Facilities Loan of 2013, Bidding Group 2, Second Series A, 5.00%, 8/01/31 | 5,000,000 | 6,679,350 | ||||||
Maryland State Health and Higher Educational Facilities Authority Revenue, | ||||||||
Adventist HealthCare Issue, Series A, 5.50%, 1/01/46 | 8,000,000 | 9,507,600 | ||||||
Anne Arundel Health System Issue, Refunding, 5.00%, 7/01/39 | 10,000,000 | 11,415,900 | ||||||
Charlestown Community Issue, Refunding, Series A, 5.00%, 1/01/45 | 4,170,000 | 4,908,090 |
102 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin MarylandTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Maryland(continued) | ||||||||
Maryland State Health and Higher Educational Facilities Authority Revenue, (continued) | ||||||||
Goucher College Issue, Refunding, Series A, 5.00%, 7/01/34 | $ | 1,500,000 | $ | 1,630,005 | ||||
Goucher College Issue, Refunding, Series A, 5.00%, 7/01/44 | 7,470,000 | 8,804,291 | ||||||
Helix Health Issue, AMBAC Insured, ETM, 5.00%, 7/01/27 | 9,655,000 | 11,378,128 | ||||||
Johns Hopkins Medical Institutions Utilities Program Issue, Refunding, Series A, 5.00%, 5/15/37 | 10,000,000 | 11,958,400 | ||||||
The Johns Hopkins University Issue, Series A, 5.00%, 7/01/37 | 5,000,000 | 5,500,150 | ||||||
The Johns Hopkins University Issue, Series A, 5.00%, 7/01/41 | 15,000,000 | 16,491,750 | ||||||
The Johns Hopkins University Issue, Series B, 5.00%, 7/01/38 | 5,000,000 | 5,633,900 | ||||||
LifeBridge Health Issue, Refunding, 5.00%, 7/01/44 | 2,000,000 | 2,376,020 | ||||||
LifeBridge Health Issue, Refunding, 5.00%, 7/01/47 | 4,000,000 | 4,670,600 | ||||||
Loyola University Maryland, Refunding, 5.00%, 10/01/45 | 2,250,000 | 2,594,565 | ||||||
Loyola University Maryland, Refunding, Series A, 5.00%, 10/01/39 | 5,275,000 | 5,769,689 | ||||||
Maryland Institute College of Art Issue, Refunding, 5.00%, 6/01/29 | 1,000,000 | 1,100,220 | ||||||
Maryland Institute College of Art Issue, Refunding, 4.00%, 6/01/42 | 5,325,000 | 5,830,981 | ||||||
Medstar Health Issue, Series A, 5.00%, 8/15/38 | 5,000,000 | 5,568,200 | ||||||
Medstar Health Issue, Series A, 5.00%, 5/15/45 | 5,000,000 | 5,951,300 | ||||||
Meritus Medical Center Issue, Refunding, 5.00%, 7/01/45 | 8,535,000 | 9,748,506 | ||||||
Parking, The Johns Hopkins Medical Institutions Parking Facilities Issue, AMBAC Insured, 5.00%, 7/01/27 | 655,000 | 661,399 | ||||||
Parking, The Johns Hopkins Medical Institutions Parking Facilities Issue, AMBAC Insured, 5.00%, 7/01/34 | 5,000,000 | 5,048,900 | ||||||
Parking, The Johns Hopkins Medical Institutions Parking Facilities Issue, Refunding, Series B, AMBAC Insured, 5.00%, 7/01/38 | �� | 6,200,000 | 6,207,068 | |||||
Peninsula Regional Medical Center Issue, Refunding, 5.00%, 7/01/45 | 6,330,000 | 7,204,869 | ||||||
Trinity Health Credit Group, 5.00%, 12/01/46 | 1,680,000 | 2,021,074 | ||||||
University of Maryland Medical System Issue, Refunding, 5.00%, 7/01/35 | 2,100,000 | 2,447,844 | ||||||
University of Maryland Medical System Issue, Refunding, Series B, 5.00%, 7/01/39 | 10,000,000 | 11,968,000 | ||||||
University of Maryland Medical System Issue, Series D, 4.00%, 7/01/48 | 5,000,000 | 5,510,450 | ||||||
Maryland State Industrial Development Financing Authority EDR, | ||||||||
McDonogh School Facility, Refunding, 4.00%, 9/01/43 | 1,100,000 | 1,235,542 | ||||||
McDonogh School Facility, Refunding, 4.00%, 9/01/48 | 610,000 | 677,661 | ||||||
Montgomery County GO, | ||||||||
Consolidated Public Improvement, Refunding, Series A, 4.00%, 11/01/20 | 8,000,000 | 8,038,560 | ||||||
Consolidated Public Improvement, Refunding, Series A, 4.00%, 12/01/33 | 7,000,000 | 7,898,310 | ||||||
Montgomery County Revenue, | ||||||||
Department of Liquor Control, Refunding, Series A, 5.00%, 4/01/27 | 1,625,000 | 1,722,175 | ||||||
Department of Liquor Control, Refunding, Series A, 5.00%, 4/01/28 | 2,230,000 | 2,362,284 | ||||||
Department of Liquor Control, Refunding, Series A, 5.00%, 4/01/31 | 2,470,000 | 2,613,309 | ||||||
Department of Liquor Control, Series A, 5.00%, 4/01/30 | 1,935,000 | 2,047,907 | ||||||
Montgomery County Water Quality Protection Charge Revenue, | ||||||||
Series A, 5.00%, 4/01/30 | 1,855,000 | 1,895,587 | ||||||
Series A, 5.00%, 4/01/31 | 1,240,000 | 1,266,834 | ||||||
Prince George’s County COP, Public Safety Communications Center, 5.00%, 10/01/30 | 2,060,000 | 2,142,194 | ||||||
Prince George’s County GO, Consolidated Public Improvement, Series A, 4.00%, 7/15/35 | 11,405,000 | 13,373,731 |
franklintempleton.com | Semiannual Report | 103 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin MarylandTax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Maryland(continued) | ||||||||
Washington Suburban Sanitary District GO, | ||||||||
Montgomery and Prince George’s Counties, Consolidated Public Improvement, Second Series, 5.00%, 6/01/37 | $ | 5,000,000 | $ | 6,085,100 | ||||
Montgomery and Prince George’s Counties, Consolidated Public Improvement, Second Series, 4.00%, 6/01/43 | 8,070,000 | 9,015,320 | ||||||
|
| |||||||
|
392,818,760 |
| ||||||
|
| |||||||
District of Columbia 3.1% | ||||||||
Washington Metropolitan Area Transit Authority Gross Revenue, Transit, Series B, 5.00%, 7/01/42 | 11,000,000 | 13,429,680 | ||||||
|
| |||||||
U.S. Territories 1.9% | ||||||||
Puerto Rico 1.9% | ||||||||
bPuerto Rico Electric Power Authority Power Revenue, | ||||||||
SeriesWW-RSA-1, 5.50%, 7/01/38 | 5,000,000 | 4,012,500 | ||||||
SeriesXX-RSA-1, 5.25%, 7/01/40 | 5,000,000 | 4,012,500 | ||||||
|
| |||||||
|
8,025,000 |
| ||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $387,764,430) | 414,273,440 | |||||||
|
| |||||||
Short Term Investments 1.7% | ||||||||
Municipal Bonds 1.7% | ||||||||
Maryland 1.7% | ||||||||
cMaryland State Health and Higher Educational Facilities Authority Revenue, University of Maryland Medical System Issue, Refunding, Series D, LOC Toronto Dominion Bank, Daily VRDN and Put, 1.39%, 7/01/41 | 4,000,000 | 4,000,000 | ||||||
cMontgomery County GO, Consolidated Public Improvement, Series E, SPA US Bank National Association, Daily VRDN and Put, 1.36%, 11/01/37 | 3,325,000 | 3,325,000 | ||||||
|
| |||||||
Total Short Term Investments (Cost $7,325,000) | 7,325,000 | |||||||
|
| |||||||
Total Investments (Cost $395,089,430) 98.2% | 421,598,440 | |||||||
Other Assets, less Liabilities 1.8% | 7,722,372 | |||||||
|
| |||||||
Net Assets 100.0% | $ | 429,320,812 | ||||||
|
|
See Abbreviations on page 167.
aThe maturity date shown represents the mandatory put date.
bSee Note 7 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
104 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin MissouriTax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $11.47 | $11.41 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.16 | 0.16 | ||||||
Net realized and unrealized gains (losses) | 0.49 | 0.06 | ||||||
Total from investment operations | 0.65 | 0.22 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.18 | ) | (0.16 | ) | ||||
Net asset value, end of period | $11.94 | $11.47 | ||||||
Total returnd | 5.67% | 1.98% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.82% | 0.84% | ||||||
Net investment income | 2.74% | 2.96% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $94,531 | $63,400 | ||||||
Portfolio turnover rate | 7.12% | 9.79% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 105 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Missouri Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 (unaudited) | ||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||
|
| |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016a | 2015 | ||||||||||||||||||||
| ||||||||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.46 | $11.38 | $11.74 | $12.05 | $12.21 | $11.88 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.17 | 0.35 | 0.36 | 0.42 | 0.45 | 0.47 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.48 | 0.09 | (0.34 | ) | (0.30 | ) | (0.18 | ) | 0.32 | |||||||||||||||
Total from investment operations | 0.65 | 0.44 | 0.02 | 0.12 | 0.27 | 0.79 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.36 | ) | (0.38 | ) | (0.43 | ) | (0.43 | ) | (0.46 | ) | ||||||||||||
Net asset value, end of period | $11.93 | $11.46 | $11.38 | $11.74 | $12.05 | $12.21 | ||||||||||||||||||
Total returnd | 5.75% | 3.90% | 0.12% | 0.94% | 2.26% | 6.80% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.67% | f | 0.69% | f | 0.66% | 0.65% | 0.64% | 0.63% | ||||||||||||||||
Net investment income | 2.89% | 3.11% | 3.05% | 3.52% | 3.72% | 3.87% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $716,314 | $700,839 | $793,226 | $873,204 | $880,848 | $890,228 | ||||||||||||||||||
Portfolio turnover rate | 7.12% | 9.79% | 20.04% | 11.66% | 7.97% | 4.73% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
106 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Missouri Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.58 | $11.49 | $11.86 | $12.17 | $12.32 | $11.98 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.14 | 0.29 | 0.29 | 0.36 | 0.38 | 0.40 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.49 | 0.09 | (0.35 | ) | (0.31 | ) | (0.17 | ) | 0.34 | |||||||||||||||
Total from investment operations | 0.63 | 0.38 | (0.06 | ) | 0.05 | 0.21 | 0.74 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.15 | ) | (0.29 | ) | (0.31 | ) | (0.36 | ) | (0.36 | ) | (0.40 | ) | ||||||||||||
Net asset value, end of period | $12.06 | $11.58 | $11.49 | $11.86 | $12.17 | $12.32 | ||||||||||||||||||
Total returnd | 5.50% | 3.37% | (0.53)% | 0.38% | 1.77% | 6.25% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 1.22% | f | 1.24% | f | 1.21% | 1.20% | 1.19% | 1.18% | ||||||||||||||||
Net investment income | 2.34% | 2.56% | 2.50% | 2.97% | 3.17% | 3.32% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $105,558 | $108,739 | $149,306 | $169,821 | $167,284 | $166,282 | ||||||||||||||||||
Portfolio turnover rate | 7.12% | 9.79% | 20.04% | 11.66% | 7.97% | 4.73% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 107 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Missouri Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||
(unaudited) | 2019 | 2018a | ||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $11.47 | $11.38 | $11.72 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.18 | 0.37 | 0.22 | |||||||||
Net realized and unrealized gains (losses) | 0.48 | 0.09 | (0.35 | ) | ||||||||
Total from investment operations | 0.66 | 0.46 | (0.13 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.19 | ) | (0.37 | ) | (0.21 | ) | ||||||
Net asset value, end of period | $11.94 | $11.47 | $11.38 | |||||||||
Total returnd | 5.82% | 4.12% | (1.11)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.54% | 0.55% | 0.55% | |||||||||
Expenses net of waiver and payments by affiliates | 0.53% | f | 0.54% | f | 0.53% | |||||||
Net investment income | 3.03% | 3.26% | 3.18% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $20,804 | $18,929 | $17,534 | |||||||||
Portfolio turnover rate | 7.12% | 9.79% | 20.04% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
108 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Missouri Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.47 | $11.38 | $11.75 | $12.06 | $12.22 | $11.88 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.18 | 0.37 | 0.37 | 0.44 | 0.46 | 0.48 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.48 | 0.09 | (0.35 | ) | (0.31 | ) | (0.18 | ) | 0.34 | |||||||||||||||
Total from investment operations | 0.66 | 0.46 | 0.02 | 0.13 | 0.28 | 0.82 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.37 | ) | (0.39 | ) | (0.44 | ) | (0.44 | ) | (0.48 | ) | ||||||||||||
Net asset value, end of period | $11.94 | $11.47 | $11.38 | $11.75 | $12.06 | $12.22 | ||||||||||||||||||
Total returnd | 5.80% | 4.09% | 0.12% | 1.04% | 2.37% | 7.00% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.57% | f | 0.59% | f | 0.56% | 0.55% | 0.54% | 0.53% | ||||||||||||||||
Net investment income | 2.99% | 3.21% | 3.15% | 3.62% | 3.82% | 3.97% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $68,831 | $60,117 | $72,460 | $83,686 | $46,051 | $37,626 | ||||||||||||||||||
Portfolio turnover rate | 7.12% | 9.79% | 20.04% | 11.66% | 7.97% | 4.73% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 109 |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin MissouriTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 99.0% | ||||||||
Missouri 95.6% | ||||||||
Bi-State Development Agency Missouri-Illinois Metropolitan District Mass Transit Sales Tax Appropriation Revenue, | ||||||||
combined lien, Refunding, Series A, 5.00%, 10/01/33 | $ | 14,425,000 | $ | 16,011,029 | ||||
combined lien, Refunding, Series A, 5.00%, 10/01/44 | 10,000,000 | 11,054,800 | ||||||
Metrolink Cross County Extension Project, Refunding, Assured Guaranty, 5.00%, 10/01/35 | 5,500,000 | 5,514,905 | ||||||
Metrolink Cross County Extension Project, Refunding, Assured Guaranty, 5.00%, 10/01/39 | 30,300,000 | 30,380,901 | ||||||
Cape Girardeau County IDA Health Facilities Revenue, | ||||||||
St. Francis Medical Center, Refunding, 5.00%, 6/01/39 | 5,110,000 | 6,026,121 | ||||||
St. Francis Medical Center, Refunding, Series A, 5.00%, 6/01/33 | 5,000,000 | 5,434,950 | ||||||
St. Francis Medical Center, Refunding, Series A, 5.00%, 6/01/37 | 11,000,000 | 11,858,550 | ||||||
Cape Girardeau County IDA Solid Waste Disposal Revenue, The Procter and Gamble Paper Products Co. Project, 5.30%, 5/15/28 | 6,875,000 | 6,891,981 | ||||||
Cape Girardeau County Reorganized School District No.R-2 GO, | ||||||||
Missouri Direct Deposit Program, JacksonR-2 School District, 4.00%, 3/01/32 | 1,000,000 | 1,175,240 | ||||||
Missouri Direct Deposit Program, JacksonR-2 School District, 4.00%, 3/01/33 | 1,000,000 | 1,171,500 | ||||||
Missouri Direct Deposit Program, JacksonR-2 School District, 5.00%, 3/01/38 | 2,195,000 | 2,738,043 | ||||||
Cape Girardeau School District No. 63 GO, | ||||||||
Missouri Direct Deposit Program, Refunding and Improvement, 4.00%, 3/01/38 | 650,000 | 753,773 | ||||||
Missouri Direct Deposit Program, Refunding and Improvement, 4.00%, 3/01/39 | 500,000 | 578,575 | ||||||
Clay County Public School District No. 53 Liberty GO, School Building, 4.00%, 3/01/37 | 4,500,000 | 5,016,105 | ||||||
Clay County Reorganization School District No.R-1 Kearney GO, | ||||||||
Direct Deposit Program, School Building, 3.00%, 3/01/34 | 1,670,000 | 1,737,034 | ||||||
Direct Deposit Program, School Building, 3.00%, 3/01/35 | 1,730,000 | 1,795,602 | ||||||
Direct Deposit Program, School Building, 3.00%, 3/01/36 | 1,540,000 | 1,595,301 | ||||||
Direct Deposit Program, School Building, 3.125%, 3/01/37 | 1,855,000 | 1,928,569 | ||||||
Curators of the University of Missouri System Facilities Revenue, Refunding, 5.00%, 11/01/27 | 1,065,000 | 1,151,372 | ||||||
Ferguson Reorganized School District No.R-2 GO, | ||||||||
St. Louis County, Missouri Direct Deposit Program, 4.00%, 5/01/32 | 1,000,000 | 1,147,880 | ||||||
St. Louis County, Missouri Direct Deposit Program, 5.00%, 5/01/38 | 2,250,000 | 2,740,387 | ||||||
Fort OsageR-1 School District Jackson County GO, School Building, Missouri Direct Deposit Program, Refunding, 5.50%, 3/01/38 | 3,010,000 | 3,922,030 | ||||||
Greene County Reorganized School District No. 2 GO, Willard, School Building, Missouri Direct Deposit Program, 4.00%, 3/01/30 | 1,000,000 | 1,165,570 | ||||||
Independence School District GO, | ||||||||
Missouri Direct Deposit Program, Refunding, Series A, 5.00%, 3/01/27 | 3,300,000 | 3,364,877 | ||||||
Missouri Direct Deposit Program, Refunding, Series A, 5.00%, 3/01/28 | 3,000,000 | 3,058,978 | ||||||
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/29 | 3,000,000 | 3,059,519 | ||||||
Jackson County Consolidated School District No. 2 Raytown GO, | ||||||||
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/37 | 1,650,000 | 2,120,267 | ||||||
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/38 | 2,500,000 | 3,200,250 | ||||||
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/39 | 2,250,000 | 2,868,322 | ||||||
Jackson County CSD No. 58 GO, | ||||||||
Missouri Direct Deposit Program, School Building, Refunding, Series A, 4.00%, 3/01/36 | 3,910,000 | 4,457,361 | ||||||
Missouri Direct Deposit Program, School Building, Refunding, Series A, 4.00%, 3/01/37 | 1,300,000 | 1,476,098 | ||||||
Missouri Direct Deposit Program, School Building, Refunding, Series A, 4.00%, 3/01/38 | 1,650,000 | 1,866,315 |
110 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Missouri Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Missouri(continued) | ||||||||
Jackson County Reorganized School District No. 4 Blue Springs GO, | ||||||||
School Building, Missouri Direct Deposit Program, Series A, 5.50%, 3/01/36 | $ | 3,000,000 | $ | 4,035,840 | ||||
School Building, Missouri Direct Deposit Program, Series A, 5.50%, 3/01/37 | 2,000,000 | 2,686,240 | ||||||
Jefferson City School District GO, Missouri Direct Deposit Program, 5.00%, 3/01/38 | 6,070,000 | 7,406,796 | ||||||
Joplin IDA Health Facilities Revenue, | ||||||||
Freeman Health System Project, 5.125%, 2/15/26 | 6,000,000 | 6,304,380 | ||||||
Freeman Health System Project, 5.00%, 2/15/28 | 1,150,000 | 1,205,614 | ||||||
Freeman Health System Project, 5.50%, 2/15/31 | 2,055,000 | 2,161,449 | ||||||
Freeman Health System Project, Refunding, 5.00%, 2/15/35 | 4,000,000 | 4,520,840 | ||||||
Joplin Schools GO, Direct Deposit Program, Refunding, 4.00%, 3/01/32 | 4,000,000 | 4,638,960 | ||||||
Kansas City IDA Airport Special Obligation Revenue, | ||||||||
Kansas City International Airport Terminal Modernization Project, Series B, 5.00%, 3/01/46 | 5,625,000 | 6,888,994 | ||||||
Kansas City International Airport Terminal Modernization Project, Series B, 5.00%, 3/01/54 | 14,885,000 | 18,008,915 | ||||||
Kansas City IDAR, | ||||||||
Downtown Redevelopment District, Refunding, Series A, 5.50%, 9/01/29 | 5,000,000 | 5,404,200 | ||||||
Downtown Redevelopment District, Refunding, Series A, 5.50%, 9/01/30 | 12,000,000 | 12,970,080 | ||||||
Downtown Redevelopment District, Refunding, Series A, 5.00%, 9/01/32 | 3,000,000 | 3,207,630 | ||||||
Kansas City Sanitary Sewer System Revenue, | ||||||||
Improvement, Series A, 4.00%, 1/01/35 | 1,500,000 | 1,737,060 | ||||||
Improvement and Refunding, Series A, 5.00%, 1/01/37 | 29,210,000 | 30,591,633 | ||||||
Sub Series A, 4.00%, 1/01/42 | 5,000,000 | 5,684,600 | ||||||
Kansas City Water Revenue, | ||||||||
Refunding and Improvement, Series A, 5.25%, 12/01/32 | 12,725,000 | 12,732,380 | ||||||
Series A, 4.00%, 12/01/41 | 4,970,000 | 5,587,125 | ||||||
Metropolitan St. Louis Sewer District Wastewater System Revenue, | ||||||||
Improvement and Refunding, Series A, 5.00%, 5/01/42 | 5,000,000 | 6,124,000 | ||||||
Improvement and Refunding, Series A, 5.00%, 5/01/47 | 10,000,000 | 12,162,800 | ||||||
Improvement and Refunding, Series B, 5.00%, 5/01/38 | 8,770,000 | 10,405,342 | ||||||
Improvement and Refunding, Series B, 5.00%, 5/01/45 | 5,000,000 | 5,883,850 | ||||||
Series C, 5.00%, 5/01/46 | 24,700,000 | 29,502,915 | ||||||
Missouri Joint Municipal Electric Utility Commission Power Supply System Revenue, | ||||||||
MoPEP Facilities, 5.00%, 12/01/43 | 2,000,000 | 2,405,180 | ||||||
MoPEP Facilities,Pre-Refunded, 5.00%, 1/01/32 | 3,600,000 | 3,783,636 | ||||||
MoPEP Facilities,Pre-Refunded, 5.00%, 1/01/37 | 3,400,000 | 3,573,434 | ||||||
Missouri State Board of Public Buildings Special Obligation Revenue, Refunding, Series A, 4.00%, 10/01/25 | 3,870,000 | 3,879,559 | ||||||
Missouri State Development Finance Board Revenue, Infrastructure Facilities, City of Independence, Electric System, Dogwood Project, Series A, 5.00%, 6/01/37 | 5,000,000 | 5,467,950 | ||||||
Missouri State Development Finance Board Solid Waste Disposal Revenue, The Procter and Gamble Paper Products Co. Project, 5.20%, 3/15/29 | 3,000,000 | 3,879,030 | ||||||
Missouri State Environmental Improvement and Energy Resources Authority Water Pollution Control and Drinking Water Revenue, | ||||||||
SRF Programs, Refunding, Series A, 5.00%, 1/01/23 | 12,485,000 | 12,646,056 | ||||||
SRF Programs, Refunding, Series A, 5.00%, 1/01/24 | 7,890,000 | 7,991,465 | ||||||
SRF Programs, Refunding, Series A, 5.00%, 1/01/26 | 2,315,000 | 2,654,935 | ||||||
SRF Programs, Refunding, Series B, 5.50%, 7/01/21 | 60,000 | 60,203 | ||||||
SRF Programs, Series A, 5.75%, 1/01/29 | 190,000 | 190,638 |
franklintempleton.com | Semiannual Report | 111 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Missouri Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Missouri(continued) | ||||||||
Missouri State Environmental Improvement and Energy Resources Authority Water Pollution Control and Drinking Water Revenue, (continued) | ||||||||
SRF Programs, Series A,Pre-Refunded, 5.00%, 1/01/23 | $ | 15,000 | $ | 15,191 | ||||
Missouri State Health and Educational Facilities Authority Health Facilities Revenue, | ||||||||
Bethesda Health Group Inc., 5.00%, 8/01/40 | 1,650,000 | 1,805,975 | ||||||
Bethesda Health Group Inc., 5.00%, 8/01/45 | 1,300,000 | 1,420,107 | ||||||
BJC Health System, 5.00%, 1/01/44 | 8,175,000 | 9,079,645 | ||||||
CoxHealth, Refunding, Series A, 5.00%, 11/15/39 | 17,000,000 | 19,556,460 | ||||||
CoxHealth, Series A, 5.00%, 11/15/38 | 11,680,000 | 13,017,594 | ||||||
CoxHealth, Series A, 4.00%, 11/15/44 | 5,000,000 | 5,614,300 | ||||||
CoxHealth, Series A, 5.00%, 11/15/44 | 2,760,000 | 3,036,414 | ||||||
Lake Regional Health System, Refunding, 5.00%, 2/15/24 | 4,000,000 | 4,060,800 | ||||||
Mercy Health, 4.00%, 11/15/42 | 8,000,000 | 8,403,520 | ||||||
Mercy Health, Refunding, Series C, 5.00%, 11/15/47 | 12,500,000 | 15,002,875 | ||||||
Mercy Health, Series F, 5.00%, 11/15/45 | 25,000,000 | 28,539,250 | ||||||
SSM Health, Series A, 5.00%, 6/01/48 | 5,000,000 | 5,999,900 | ||||||
SSM Health Care, Series B,Pre-Refunded, 5.00%, 6/01/30 | 16,150,000 | 16,612,536 | ||||||
SSM Health Care, Series B,Pre-Refunded, 5.00%, 6/01/34 | 7,000,000 | 7,200,480 | ||||||
St. Anthony’s Medical Center, Refunding, Series B, 5.00%, 2/01/45 | 6,870,000 | 7,916,026 | ||||||
St. Luke’s Health System Inc., Refunding, 5.00%, 11/15/35 | 3,950,000 | 4,705,714 | ||||||
St. Luke’s Health System Inc., Refunding, Series A, 5.00%, 11/15/43 | 2,000,000 | 2,415,560 | ||||||
Missouri State Health and Educational Facilities Authority Revenue, | ||||||||
Educational Facilities, A.T. Still University of Health Sciences, 5.00%, 10/01/26 | 3,095,000 | 3,319,945 | ||||||
Educational Facilities, A.T. Still University of Health Sciences, 5.25%, 10/01/31 | 1,200,000 | 1,292,808 | ||||||
Educational Facilities, A.T. Still University of Health Sciences, 5.00%, 10/01/39 | 1,250,000 | 1,409,025 | ||||||
Educational Facilities, A.T. Still University of Health Sciences, 5.25%, 10/01/41 | 4,500,000 | 4,863,105 | ||||||
Educational Facilities, Kansas City University Medicine and Biosciences, Refunding, Series A, 5.00%, 6/01/42 | 2,800,000 | 3,368,176 | ||||||
Educational Facilities, Kansas City University Medicine and Biosciences, Refunding, Series A, 5.00%, 6/01/47 | 4,875,000 | 5,827,331 | ||||||
Educational Facilities, Lake Regional Health System, Refunding, 5.00%, 2/15/34 | 7,000,000 | 7,459,620 | ||||||
Educational Facilities, Maryville University St. Louis Project, 5.00%, 6/15/44 | 5,000,000 | 5,621,750 | ||||||
Educational Facilities, Maryville University St. Louis Project, Series A, 5.00%, 6/15/45 | 4,000,000 | 4,746,680 | ||||||
Educational Facilities, St. Louis University, Series A, 5.00%, 10/01/38 | 10,000,000 | 11,796,400 | ||||||
Educational Facilities, St. Louis University, Series A, 5.00%, 10/01/46 | 5,775,000 | 7,154,301 | ||||||
Educational Facilities, St. Louis University, Series A, 5.00%, 10/01/47 | 15,000,000 | 17,901,150 | ||||||
Educational Facilities, University of Central Missouri, Series C, 5.00%, 10/01/34 | 5,000,000 | 5,696,600 | ||||||
Educational Facilities, The Washington University, Series B, 5.00%, 11/15/37 | 10,000,000 | 10,775,400 | ||||||
Educational Facilities, Webster University Project, Improvement,Pre-Refunded, 5.00%, 4/01/36 | 7,000,000 | 7,423,920 | ||||||
Lutheran Senior Services Projects, Refunding, Series B, 5.00%, 2/01/46 | 4,000,000 | 4,504,480 | ||||||
Senior Living Facilities, Lutheran Senior Services Projects, 5.75%, 2/01/31 | 1,900,000 | 2,001,707 | ||||||
Senior Living Facilities, Lutheran Senior Services Projects, 5.375%, 2/01/35 | 2,520,000 | 2,553,415 | ||||||
Senior Living Facilities, Lutheran Senior Services Projects, 6.00%, 2/01/41 | 4,250,000 | 4,474,442 | ||||||
Senior Living Facilities, Lutheran Senior Services Projects, 5.50%, 2/01/42 | 8,985,000 | 9,098,930 | ||||||
Senior Living Facilities, Lutheran Senior Services Projects, Series A, 5.00%, 2/01/46 | 11,575,000 | 13,034,839 |
112 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Missouri Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Missouri(continued) | ||||||||
Missouri State Housing Development Commission SFMR, | ||||||||
Homeownership Loan Program, First Place, Series B, 4.00%, 11/01/38 | $ | 1,410,000 | $ | 1,559,516 | ||||
Homeownership Loan Program, Series C, GNMA Secured, 5.00%, 3/01/32 | 145,000 | 145,000 | ||||||
Homeownership Loan Program, Series D, GNMA Secured, 4.70%, 3/01/35 | 970,000 | 972,299 | ||||||
Missouri State Joint Municipal Electric Utility Commission Power Project Revenue, | ||||||||
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/30 | 3,000,000 | 3,446,250 | ||||||
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/31 | 2,000,000 | 2,290,820 | ||||||
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/32 | 1,500,000 | 1,714,140 | ||||||
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/34 | 2,000,000 | 2,279,240 | ||||||
Iatan 2 Project, Series A, 5.00%, 12/01/35 | 7,335,000 | 8,626,840 | ||||||
Plum Point Project, Refunding, Series A, 5.00%, 1/01/32 | 10,000,000 | 11,694,000 | ||||||
Plum Point Project, Refunding, Series A, 5.00%, 1/01/33 | 7,500,000 | 8,756,100 | ||||||
Prairie State Project, Refunding, Series A, 5.00%, 12/01/30 | 4,000,000 | 4,755,800 | ||||||
Prairie State Project, Refunding, Series A, 5.00%, 12/01/31 | 6,000,000 | 7,111,380 | ||||||
Prairie State Project, Refunding, Series A, 5.00%, 12/01/40 | 27,950,000 | 33,141,992 | ||||||
Monarch-Chesterfield Levee District Special Tax, St. Louis County, Levee District, Refunding, 5.00%, 3/01/40 | 4,395,000 | 4,971,888 | ||||||
Move Rolla Transportation Development District Transportation Sales Tax Revenue, 4.75%, 6/01/47 | 5,000,000 | 5,495,900 | ||||||
Nixa Public Schools GO, | ||||||||
School Building, Direct Deposit Program, Refunding, 4.00%, 3/01/36 | 1,150,000 | 1,308,412 | ||||||
School Building, Direct Deposit Program, Refunding, 4.00%, 3/01/38 | 1,125,000 | 1,272,488 | ||||||
School Building, Direct Deposit Program, Refunding, 4.00%, 3/01/39 | 1,000,000 | 1,127,200 | ||||||
Peculiar Combined Waterworks and Sewerage System Revenue, | ||||||||
Assured Guaranty, 4.00%, 6/01/39 | 1,000,000 | 1,148,130 | ||||||
Assured Guaranty, 4.00%, 6/01/42 | 2,405,000 | 2,746,245 | ||||||
Riverside-Quindaro Bend Levee District Revenue, | ||||||||
Platte County, Levee District Improvement,L-385 Project, Refunding, 5.00%, 3/01/26 | 1,000,000 | 1,155,650 | ||||||
Platte County, Levee District Improvement,L-385 Project, Refunding, 5.00%, 3/01/29 | 2,585,000 | 2,986,037 | ||||||
Sikeston Electric Revenue, | ||||||||
Refunding, 5.00%, 6/01/20 | 5,000,000 | 5,125,100 | ||||||
Refunding, 5.00%, 6/01/21 | 13,130,000 | 13,837,576 | ||||||
Refunding, 5.00%, 6/01/22 | 12,570,000 | 13,567,304 | ||||||
Springfield School District No.R-XII GO, | ||||||||
School Building, 5.00%, 3/01/37 | 24,250,000 | 31,210,477 | ||||||
School Building, Missouri Direct Deposit Program, 5.00%, 3/01/33 | 1,000,000 | 1,127,730 | ||||||
Springfield Special Obligation Revenue, | ||||||||
Sewer System Improvements Project, 5.00%, 4/01/31 | 1,795,000 | 1,961,899 | ||||||
Sewer System Improvements Project, 5.00%, 4/01/32 | 1,885,000 | 2,059,268 | ||||||
St. Charles School District GO, Missouri Direct Deposit Program, 4.00%, 3/01/36 | 2,000,000 | 2,257,940 | ||||||
St. Louis Airport Revenue, | ||||||||
Lambert-St. Louis International Airport, Refunding, NATL Insured, 5.50%, 7/01/29 | 13,070,000 | 17,895,575 | ||||||
Series C, AGMC Insured, 5.00%, 7/01/42 | 3,930,000 | 4,782,142 | ||||||
Series C, AGMC Insured, 5.00%, 7/01/47 | 8,770,000 | 10,590,126 | ||||||
Series D, AGMC Insured, 5.00%, 7/01/33 | 1,000,000 | 1,223,410 | ||||||
Series D, AGMC Insured, 5.00%, 7/01/34 | 1,415,000 | 1,726,258 | ||||||
Series D, AGMC Insured, 5.00%, 7/01/36 | 1,125,000 | 1,364,456 | ||||||
Series D, AGMC Insured, 5.00%, 7/01/37 | 1,000,000 | 1,209,380 |
franklintempleton.com | Semiannual Report | 113 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Missouri Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Missouri(continued) | ||||||||
St. Louis Airport Revenue, (continued) | ||||||||
St. Louis Lambert International Airport, Series A, 5.00%, 7/01/44 | $ | 1,700,000 | $ | 2,131,341 | ||||
St. Louis Lambert International Airport, Series A, 5.00%, 7/01/49 | 1,400,000 | 1,741,222 | ||||||
St. Louis County IDA Senior Living Facilities Revenue, | ||||||||
Friendship Village, St. Louis Obligated Group, Refunding, 5.00%, 9/01/48 | 7,095,000 | 8,096,672 | ||||||
Friendship Village Chesterfield,Pre-Refunded, 5.00%, 9/01/42 | 3,165,000 | 3,520,366 | ||||||
Friendship Village Sunset Hills, Series A, 5.875%, 9/01/43 | 7,000,000 | 7,892,220 | ||||||
St. Louis County Pattonville School District No.R-3 GO, | ||||||||
Series A, 5.00%, 3/01/37 | 2,750,000 | 3,299,780 | ||||||
Series A, 5.00%, 3/01/38 | 1,000,000 | 1,196,610 | ||||||
St. Louis County School District No. 101 Affton GO, | ||||||||
Direct Deposit Program, Series A, 5.00%, 3/01/32 | 1,500,000 | 1,841,085 | ||||||
Direct Deposit Program, Series A, 5.00%, 3/01/33 | 1,595,000 | 1,950,972 | ||||||
Direct Deposit Program, Series A, 5.00%, 3/01/34 | 1,700,000 | 2,077,077 | ||||||
Direct Deposit Program, Series A, 5.00%, 3/01/35 | 1,810,000 | 2,205,485 | ||||||
Direct Deposit Program, Series A, 5.00%, 3/01/36 | 1,920,000 | 2,332,262 | ||||||
Washington School District GO, | ||||||||
Franklin County, Missouri Direct Deposit Program, 4.00%, 3/01/38 | 3,000,000 | 3,395,520 | ||||||
Franklin County, Missouri Direct Deposit Program, 4.00%, 3/01/39 | 1,500,000 | 1,693,005 | ||||||
WentzvilleR-IV School District GO, Missouri Direct Deposit Program, Refunding and Improvement, 4.00%, 3/01/38 | 15,400,000 | 17,510,416 | ||||||
|
| |||||||
|
961,900,306 |
| ||||||
|
| |||||||
U.S. Territories 3.4% | ||||||||
Guam 0.6% | ||||||||
Guam Power Authority Revenue, Refunding, Series A, AGMC Insured, 5.00%, 10/01/25 | 5,420,000 | 6,026,336 | ||||||
|
| |||||||
Puerto Rico 2.8% | ||||||||
aPuerto Rico Electric Power Authority Power Revenue, | ||||||||
SeriesWW-RSA-1, 5.50%, 7/01/38 | 19,320,000 | 15,504,300 | ||||||
SeriesXX-RSA-1, 5.75%, 7/01/36 | 6,000,000 | 4,845,000 | ||||||
SeriesXX-RSA-1, 5.25%, 7/01/40 | 10,000,000 | 8,025,000 | ||||||
|
| |||||||
|
28,374,300 |
| ||||||
|
| |||||||
Total U.S. Territories | ||||||||
34,400,636 | ||||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $940,886,387) | 996,300,942 | |||||||
|
|
114 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Missouri Tax-Free Income Fund(continued)
Principal | ||||||||
Amount | Value | |||||||
Short Term Investments 0.6% | ||||||||
Municipal Bonds 0.6% | ||||||||
Missouri 0.6% | ||||||||
bMissouri State Development Finance Board Revenue, Infrastructure Facilities, St. Louis Convention Center, Series C, LOC US Bank National Association, Daily VRDN and Put, 1.40%, 12/01/20 | $ | 700,000 | $ | 700,000 | ||||
bMissouri State Health and Educational Facilities Authority Educational Facilities Revenue, | ||||||||
The Washington University, Series B, SPA JPMorgan Chase Bank, Daily VRDN and Put, 1.36%, 3/01/40 | 4,310,000 | 4,310,000 | ||||||
The Washington University, Series B, SPA US Bank National Association, Daily VRDN and Put, 1.18%, 2/15/33 | 700,000 | 700,000 | ||||||
|
| |||||||
Total Short Term Investments (Cost $5,710,000) | 5,710,000 | |||||||
|
| |||||||
Total Investments (Cost $946,596,387) 99.6% | 1,002,010,942 | |||||||
Other Assets, less Liabilities 0.4% | 4,026,016 | |||||||
|
| |||||||
Net Assets 100.0% | $ | 1,006,036,958 | ||||||
|
|
See Abbreviations on page 167.
aSee Note 7 regarding defaulted securities.
bVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 115 |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin North CarolinaTax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $ 11.30 | $ 11.26 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.15 | 0.15 | ||||||
Net realized and unrealized gains (losses) | 0.45 | 0.04 | ||||||
Total from investment operations | 0.60 | 0.19 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.16 | ) | (0.15 | ) | ||||
Net asset value, end of period | $ 11.74 | $ 11.30 | ||||||
Total returnd | 5.33% | 1.77% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.82% | 0.83% | ||||||
Net investment income | 2.55% | 2.86% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $76,532 | $49,192 | ||||||
Portfolio turnover rate | 7.52% | 11.61% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
116 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin North Carolina Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.30 | $11.28 | $11.70 | $11.97 | $12.15 | $11.95 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.34 | 0.35 | 0.41 | 0.43 | 0.46 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.44 | 0.03 | (0.40 | ) | (0.27 | ) | (0.19 | ) | 0.21 | |||||||||||||||
Total from investment operations | 0.60 | 0.37 | (0.05 | ) | 0.14 | 0.24 | 0.67 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.17 | ) | (0.35 | ) | (0.37 | ) | (0.41 | ) | (0.42 | ) | (0.47 | ) | ||||||||||||
Net asset value, end of period | $11.73 | $11.30 | $11.28 | $11.70 | $11.97 | $12.15 | ||||||||||||||||||
Total returnd | 5.32% | 3.32% | (0.45 | )% | 1.19% | 2.01% | 5.70% | |||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.67% | f | 0.68% | f | 0.66% | 0.64% | 0.64% | 0.63% | ||||||||||||||||
Net investment income | 2.70% | 3.01% | 3.00% | 3.41% | 3.62% | 3.84% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $576,627 | $577,052 | $660,167 | $756,109 | $794,675 | $841,737 | ||||||||||||||||||
Portfolio turnover rate | 7.52% | 11.61% | 10.07% | 18.38% | 7.23% | 6.94% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 117 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin North Carolina Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.49 | $11.46 | $11.88 | $12.15 | $12.33 | $12.12 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.13 | 0.28 | 0.29 | 0.35 | 0.37 | 0.40 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.45 | 0.03 | (0.41 | ) | (0.27 | ) | (0.20 | ) | 0.21 | |||||||||||||||
Total from investment operations | 0.58 | 0.31 | (0.12 | ) | 0.08 | 0.17 | 0.61 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.14 | ) | (0.28 | ) | (0.30 | ) | (0.35 | ) | (0.35 | ) | (0.40 | ) | ||||||||||||
Net asset value, end of period | $11.93 | $11.49 | $11.46 | $11.88 | $12.15 | $12.33 | ||||||||||||||||||
Total returnd | 5.05% | 2.78% | (1.00 | )% | 0.61% | 1.43% | 5.13% | |||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 1.22% | f | 1.23% | f | 1.21% | 1.19% | 1.19% | 1.18% | ||||||||||||||||
Net investment income | 2.15% | 2.46% | 2.45% | 2.86% | 3.07% | 3.29% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $100,957 | $105,371 | $159,556 | $197,705 | $206,283 | $217,985 | ||||||||||||||||||
Portfolio turnover rate | 7.52% | 11.61% | 10.07% | 18.38% | 7.23% | 6.94% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
118 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin North Carolina Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||
(unaudited) | 2019 | 2018a | ||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $11.29 | $11.27 | $11.59 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.16 | 0.35 | 0.22 | |||||||||
Net realized and unrealized gains (losses) | 0.46 | 0.03 | (0.33 | ) | ||||||||
Total from investment operations | 0.62 | 0.38 | (0.11 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.18 | ) | (0.36 | ) | (0.21 | ) | ||||||
Net asset value, end of period | $11.73 | $11.29 | $11.27 | |||||||||
Total returnd | 5.49% | 3.45% | (0.97)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.56% | 0.56% | 0.56% | |||||||||
Expenses net of waiver and payments by affiliates | 0.54%f | 0.54% | f | 0.53% | ||||||||
Net investment income | 2.83% | 3.15% | 3.13% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $9,570 | $7,776 | $9,117 | |||||||||
Portfolio turnover rate | 7.52% | 11.61% | 10.07% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 119 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin North Carolina Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.30 | $11.28 | $11.70 | $11.97 | $12.15 | $11.95 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.35 | 0.36 | 0.42 | 0.45 | 0.48 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.44 | 0.03 | (0.40 | ) | (0.26 | ) | (0.20 | ) | 0.20 | |||||||||||||||
Total from investment operations | 0.60 | 0.38 | (0.04 | ) | 0.16 | 0.25 | 0.68 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.17 | ) | (0.36 | ) | (0.38 | ) | (0.43 | ) | (0.43 | ) | (0.48 | ) | ||||||||||||
Net asset value, end of period | $11.73 | $11.30 | $11.28 | $11.70 | $11.97 | $12.15 | ||||||||||||||||||
Total returnd | 5.38% | 3.42% | (0.36 | )% | 1.29% | 2.12% | 5.81% | |||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.57% | f | 0.58% | f | 0.56% | 0.54% | 0.54% | 0.53% | ||||||||||||||||
Net investment income | 2.80% | 3.11% | 3.10% | 3.51% | 3.72% | 3.94% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $94,386 | $84,506 | $80,819 | $109,365 | $89,119 | $76,935 | ||||||||||||||||||
Portfolio turnover rate | 7.52% | 11.61% | 10.07% | 18.38% | 7.23% | 6.94% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
120 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin North CarolinaTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 98.6% | ||||||||
North Carolina 95.7% | ||||||||
Buncombe County Limited Obligation Revenue, Refunding, 5.00%, 6/01/34 | $ | 3,000,000 | $ | 3,571,770 | ||||
Cape Fear Public Utility Authority Water and Sewer System Revenue, | ||||||||
Pre-Refunded, 5.00%, 8/01/36 | 8,000,000 | 8,593,840 | ||||||
Refunding, 5.00%, 6/01/40 | 2,250,000 | 2,587,545 | ||||||
Cary Combined Enterprise System Revenue, | ||||||||
5.00%, 12/01/41 | 1,710,000 | 2,087,773 | ||||||
Pre-Refunded, 5.00%, 12/01/42 | 10,000,000 | 11,265,800 | ||||||
Refunding, Series B, 4.00%, 12/01/42 | 8,000,000 | 9,110,080 | ||||||
Charlotte Airport Revenue, | ||||||||
Charlotte Douglas International Airport, Refunding, Series A, 5.50%, 7/01/34 | 3,765,000 | 3,897,453 | ||||||
Charlotte Douglas International Airport, Refunding, Series A, 4.00%, 7/01/44 | 3,550,000 | 4,106,782 | ||||||
Charlotte Douglas International Airport, Series A, 5.00%, 7/01/39 | 3,000,000 | 3,085,710 | ||||||
Charlotte Douglas International Airport, Series A, 5.00%, 7/01/41 | 10,000,000 | 10,597,800 | ||||||
Charlotte Douglas International Airport, Series B, 4.00%, 7/01/44 | 3,515,000 | 3,986,572 | ||||||
Charlotte COP, | ||||||||
Convention Facility Projects, Refunding, Series A, 5.00%, 6/01/44 | 8,250,000 | 10,427,835 | ||||||
Transit Projects, Phase II, Refunding, Series A, 5.00%, 6/01/33 | 2,500,000 | 2,506,925 | ||||||
Charlotte Storm Water Fee Revenue, Refunding, 5.00%, 12/01/39 | 7,970,000 | 9,307,605 | ||||||
Charlotte Water and Sewer System Revenue, | ||||||||
Refunding, 4.00%, 7/01/37 | 5,000,000 | 5,860,050 | ||||||
Refunding, 5.00%, 7/01/40 | 10,000,000 | 11,904,700 | ||||||
Refunding, Series B, 5.00%, 7/01/38 | 10,000,000 | 10,313,400 | ||||||
The Charlotte-Mecklenburg Hospital Authority Revenue, | ||||||||
Atrium Health, Health Care, Refunding, Series A, 5.00%, 1/15/36 | 5,000,000 | 6,282,000 | ||||||
Carolinas HealthCare System, Refunding, Series A, 5.00%, 1/15/40 | 20,000,000 | 23,423,800 | ||||||
Carolinas HealthCare System, Series A, 5.125%, 1/15/37 | 4,000,000 | 4,200,280 | ||||||
Carolinas HealthCare System, Series A, 5.25%, 1/15/42 | 10,000,000 | 10,503,600 | ||||||
Columbus County Industrial Facilities and PCFA Revenue, Recovery Zone Facility, International Paper Co. Projects, Series A, 5.70%, 5/01/34 | 2,500,000 | 2,571,375 | ||||||
Dare County Utilities Systems Revenue,Pre-Refunded, 5.00%, 2/01/41 | 5,000,000 | 5,278,250 | ||||||
Durham County GO, | ||||||||
Refunding, 4.00%, 6/01/36 | 500,000 | 592,020 | ||||||
Refunding, 4.00%, 6/01/37 | 450,000 | 530,950 | ||||||
Refunding, 4.00%, 6/01/39 | 700,000 | 821,275 | ||||||
Durham Utility System Revenue,Pre-Refunded, 5.00%, 6/01/41 | 4,000,000 | 4,274,800 | ||||||
Fayetteville Public Works Commission Revenue, Refunding, 4.00%, 3/01/41 | 4,015,000 | 4,554,576 | ||||||
Greensboro GO, Public Improvement, Refunding, Series B, 5.00%, 10/01/29 | 5,000,000 | 6,618,600 | ||||||
Greenville Utilities Commission Combined Enterprise System Revenue, 5.00%, 8/01/44 | 4,750,000 | 6,036,775 | ||||||
Guilford County GO, Public Improvement, Series B, 4.00%, 5/01/33. | 5,000,000 | 5,831,400 | ||||||
Mecklenburg County GO, | ||||||||
Public Improvement, Series A, 4.00%, 4/01/30 | 5,000,000 | 5,916,000 | ||||||
School, Series A, 5.00%, 4/01/28 | 5,000,000 | 6,041,000 | ||||||
Nash Health Care System Health Care Facilities Revenue, | ||||||||
5.00%, 11/01/41 | 5,000,000 | 5,317,300 | ||||||
AGMC Insured, 5.00%, 11/01/30 | 2,250,000 | 2,255,422 |
franklintempleton.com | Semiannual Report | 121 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin North Carolina Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
North Carolina(continued) | ||||||||
New Hanover County Hospital Revenue, | ||||||||
New Hanover Regional Medical Center, Refunding, 5.00%, 10/01/42 | $ | 5,000,000 | $ | 5,905,150 | ||||
New Hanover Regional Medical Center, Refunding, 5.00%, 10/01/47 | 13,565,000 | 15,919,477 | ||||||
New Hanover Regional Medical Center Project, Series B, AGMC Insured,Pre-Refunded, 5.00%, 10/01/27 | 3,500,000 | 3,510,150 | ||||||
New Hanover Regional Medical Center Project, Series B, AGMC Insured,Pre-Refunded, 5.125%, 10/01/31 | 8,385,000 | 8,410,071 | ||||||
North Carolina Capital Facilities Finance Agency Educational Facilities Revenue, | ||||||||
Wake Forest University, 4.00%, 1/01/48 | 20,000,000 | 22,631,600 | ||||||
Wake Forest University, 5.00%, 1/01/48 | 13,500,000 | 16,536,690 | ||||||
Wake Forest University, Refunding, 4.00%, 1/01/35 | 5,000,000 | 5,684,400 | ||||||
Wake Forest University, Refunding, 4.00%, 1/01/38 | 5,500,000 | 6,196,850 | ||||||
Wake Forest University, Refunding, 4.00%, 1/01/39 | 5,250,000 | 5,903,415 | ||||||
North Carolina Capital Facilities Finance Agency Revenue, | ||||||||
Davidson College, 5.00%, 3/01/40 | 4,000,000 | 4,314,120 | ||||||
Davidson College, 5.00%, 3/01/45 | 3,500,000 | 3,773,070 | ||||||
Duke University Project, Refunding, Series B, 5.00%, 10/01/41 | 13,585,000 | 16,287,192 | ||||||
Duke University Project, Refunding, Series B, 5.00%, 7/01/42 | 10,000,000 | 12,196,000 | ||||||
Duke University Project, Refunding, Series B, 4.00%, 10/01/44 | 5,085,000 | 5,703,336 | ||||||
Duke University Project, Refunding, Series B, 5.00%, 10/01/44 | 11,000,000 | 13,378,420 | ||||||
aNorth Carolina HFA Home Ownership Revenue, | ||||||||
Series 42, 2.45%, 7/01/34 | 1,000,000 | 1,001,210 | ||||||
Series 42, 2.625%, 7/01/39 | 4,000,000 | 4,000,440 | ||||||
Series 42, 2.85%, 1/01/43 | 3,500,000 | 3,525,655 | ||||||
North Carolina Municipal Power Agency No. 1 Catawba Electric Revenue, | ||||||||
Refunding, Series A, 5.00%, 1/01/26 | 800,000 | 802,240 | ||||||
Refunding, Series A, 5.00%, 1/01/30 | 1,400,000 | 1,403,724 | ||||||
Refunding, Series A, 5.00%, 1/01/32 | 4,200,000 | 5,074,692 | ||||||
Refunding, Series B, 5.00%, 1/01/21 | 5,000,000 | 5,062,850 | ||||||
North Carolina State Capital Improvement Limited Obligation Revenue, Series C,Pre-Refunded, 5.00%, 5/01/29 | 10,000,000 | 10,654,400 | ||||||
North Carolina State GO, | ||||||||
Public Improvement, Series A,Pre-Refunded, 5.00%, 5/01/23 | 10,000,000 | 10,261,000 | ||||||
Public Improvement, Series A,Pre-Refunded, 5.00%, 5/01/24 | 10,000,000 | 10,261,000 | ||||||
Refunding, Series A, 5.00%, 6/01/25 | 4,000,000 | 4,884,160 | ||||||
North Carolina State HFA Home Ownership Revenue, | ||||||||
Series 41, GNMA Insured, 3.55%, 7/01/44 | 6,500,000 | 6,912,880 | ||||||
Series 41, GNMA Insured, 3.625%, 7/01/49 | 10,000,000 | 10,645,500 | ||||||
North Carolina State Medical Care Commission Health Care Facilities Revenue, | ||||||||
Appalachian Regional Healthcare System, Series A,Pre-Refunded, 6.50%, 7/01/31 | 5,000,000 | 5,479,700 | ||||||
Appalachian Regional Healthcare System, Series A,Pre-Refunded, 6.625%, 7/01/34 | 6,000,000 | 6,589,140 | ||||||
Duke University Health System, Refunding, Series D, 4.00%, 6/01/42 | 7,000,000 | 7,812,630 | ||||||
Duke University Health System, Series A, 5.00%, 6/01/42 | 10,000,000 | 10,900,800 | ||||||
Duke University Health System, Series A,Pre-Refunded, 5.00%, 6/01/42 | 8,150,000 | 8,380,319 | ||||||
Novant Health Obligated Group, Refunding, Series A, 5.00%, 11/01/46 | 20,000,000 | 21,744,600 | ||||||
Presbyterian Homes, Refunding, Series C, 5.00%, 10/01/31 | 5,000,000 | 5,857,750 | ||||||
Rex Healthcare, Refunding, Series A, 5.00%, 7/01/30 | 5,000,000 | 5,136,150 |
122 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin North Carolina Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
North Carolina(continued) | ||||||||
North Carolina State Medical Care Commission Health Care Facilities Revenue, (continued) | ||||||||
Scotland Memorial Hospital Project, Assured Guaranty, 5.50%, 10/01/19 | $ | 85,000 | $ | 85,259 | ||||
Scotland Memorial Hospital Project, Assured Guaranty, 5.50%, 10/01/29 | 1,220,000 | 1,224,209 | ||||||
Vidant Health, 5.00%, 6/01/40 | 5,000,000 | 5,814,700 | ||||||
Vidant Health, Refunding, Series A, 5.00%, 6/01/36 | 5,000,000 | 5,408,350 | ||||||
Wake Forest Baptist Obligated Group, Series A, 5.00%, 12/01/32 | 1,000,000 | 1,255,390 | ||||||
Wake Forest Baptist Obligated Group, Series A, 5.00%, 12/01/33 | 1,000,000 | 1,253,080 | ||||||
WakeMed Project, Refunding, Series A, 5.00%, 10/01/38 | 5,000,000 | 5,454,800 | ||||||
North Carolina State Medical Care Commission Hospital Revenue, North Carolina Baptist Hospital, Refunding, 5.00%, 6/01/34 | 10,000,000 | 10,271,300 | ||||||
North Carolina State Medical Care Commission Retirement Facilities First Mortgage Revenue, | ||||||||
The Pines at Davidson Project, Series A, 5.00%, 1/01/49 | 5,000,000 | 5,656,500 | ||||||
The United Methodist Retirement Homes, Refunding, Series A, 5.00%, 10/01/37 | 1,200,000 | 1,353,288 | ||||||
The United Methodist Retirement Homes, Refunding, Series A, 5.00%, 10/01/42 | 1,250,000 | 1,400,100 | ||||||
The United Methodist Retirement Homes, Refunding, Series A, 5.00%, 10/01/47 | 2,540,000 | 2,836,215 | ||||||
North Carolina State Ports Authority Port Facilities Revenue, senior lien, Refunding, Series A, 5.25%, 2/01/40 | 6,000,000 | 6,088,380 | ||||||
North Carolina State University at Raleigh Revenue, | ||||||||
General, Refunding, Series A, 5.00%, 10/01/33 | 5,595,000 | 6,368,117 | ||||||
General, Refunding, Series A, 5.00%, 10/01/42 | 8,980,000 | 10,163,744 | ||||||
North Carolina Turnpike Authority Revenue, | ||||||||
Monroe Connector System, State Appropriation, 5.00%, 7/01/41 | 5,000,000 | 5,307,300 | ||||||
Monroe Expressway Toll, Refunding, Series A, 5.00%, 7/01/47 | 2,500,000 | 2,885,000 | ||||||
Triangle Expressway System, Appropriation, Refunding, Series A, 4.00%, 1/01/36 | 9,875,000 | 11,411,945 | ||||||
Triangle Expressway System, Appropriation, Refunding, Series A, 4.00%, 1/01/39 | 9,815,000 | 11,234,740 | ||||||
Triangle Expressway System, senior lien, Refunding, AGMC Insured, 5.00%, 1/01/31 | 1,000,000 | 1,220,700 | ||||||
Triangle Expressway System, senior lien, Refunding, AGMC Insured, 5.00%, 1/01/39 | 1,200,000 | 1,434,468 | ||||||
Oak Island Enterprise System Revenue, AGMC Insured, Refunding, 5.00%, 6/01/33 | 1,000,000 | 1,235,990 | ||||||
Pitt County Revenue, Limited Obligation, Assured Guaranty,Pre-Refunded, 5.00%, 4/01/34 | 1,000,000 | 1,022,810 | ||||||
Raleigh Combined Enterprise System Revenue, | ||||||||
Pre-Refunded, 5.00%, 3/01/40 | 11,915,000 | 12,617,032 | ||||||
Refunding, Series A, 5.00%, 3/01/43 | 10,000,000 | 11,117,800 | ||||||
Refunding, Series B, 4.00%, 3/01/34 | 1,000,000 | 1,156,620 | ||||||
Series A, 4.00%, 3/01/46 | 5,000,000 | 5,638,600 | ||||||
Raleigh GO, Refunding, Series A, 5.00%, 9/01/26 | 5,000,000 | 6,333,050 | ||||||
Raleigh-Durham Airport Authority Airport Revenue, | ||||||||
Refunding, Series A, 5.00%, 5/01/27 | 350,000 | 422,384 | ||||||
Refunding, Series A, 5.00%, 5/01/29 | 1,000,000 | 1,198,610 | ||||||
Refunding, Series A, 5.00%, 5/01/30 | 550,000 | 657,184 | ||||||
Refunding, Series A, 5.00%, 5/01/36 | 10,785,000 | 11,036,183 | ||||||
Union County Enterprise Systems Revenue, | ||||||||
5.00%, 6/01/34 | 1,000,000 | 1,207,070 | ||||||
Series A, 4.00%, 6/01/41 | 3,200,000 | 3,733,664 | ||||||
Series A, 4.00%, 6/01/44 | 2,325,000 | 2,693,791 |
franklintempleton.com | Semiannual Report | 123 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin North Carolina Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
North Carolina(continued) | ||||||||
University of North Carolina at Charlotte Revenue, | ||||||||
General, Board of Governors, 5.00%, 4/01/43 | $ | 5,000,000 | $ | 5,734,800 | ||||
General, Board of Governors, 5.00%, 4/01/45 | 9,450,000 | 11,048,562 | ||||||
General, Board of Governors, Refunding, 5.00%, 10/01/47 | 10,000,000 | 12,274,700 | ||||||
General, Board of Governors, Refunding, Series A, 4.00%, 10/01/40 | 2,250,000 | 2,538,720 | ||||||
General, Board of Governors, Series A,Pre-Refunded, 5.00%, 4/01/37 | 12,995,000 | 14,292,031 | ||||||
General, Board of Governors, Series A,Pre-Refunded, 5.00%, 4/01/41 | 18,000,000 | 19,796,580 | ||||||
University of North Carolina at Greensboro Revenue, | ||||||||
General, Board of Governors, 5.00%, 4/01/39 | 3,500,000 | 4,035,430 | ||||||
General, Board of Governors, 5.00%, 4/01/43 | 2,500,000 | 3,101,325 | ||||||
General, Board of Governors, Refunding, 4.00%, 4/01/35 | 1,205,000 | 1,388,377 | ||||||
General, Board of Governors, Refunding, 4.00%, 4/01/36 | 1,000,000 | 1,147,250 | ||||||
University of North Carolina at Wilmington Revenue, Student Housing Projects, Limited Obligation, Refunding, 5.00%, 6/01/37 | 3,000,000 | 3,524,580 | ||||||
University of North Carolina Hospitals at Chapel Hill Revenue, Board of Governors, 5.00%, 2/01/46 | 4,265,000 | 5,013,380 | ||||||
University of North Carolina System Pool Revenue, Series A, Assured Guaranty, 5.00%, 10/01/33 | 160,000 | 160,387 | ||||||
Wake County GO, | ||||||||
Public Improvement, Refunding, Series A, 5.00%, 3/01/30 | 8,000,000 | 10,400,720 | ||||||
Public Improvement, Refunding, Series A, 5.00%, 3/01/32 | 7,870,000 | 10,389,502 | ||||||
Wake County Limited Obligation Revenue, 4.00%, 9/01/38 | 5,250,000 | 6,172,635 | ||||||
Wake County Revenue, | ||||||||
Limited Obligation,Pre-Refunded, 5.00%, 1/01/33 | 10,820,000 | 10,959,578 | ||||||
Limited Obligation,Pre-Refunded, 5.00%, 1/01/37 | 12,000,000 | 12,154,800 | ||||||
Wilmington Storm Water Fee Revenue, Refunding, AMBAC Insured, 5.00%, 6/01/33 | 225,000 | 225,653 | ||||||
Winston-Salem City Water and Sewer System Revenue, | ||||||||
4.00%, 6/01/47 | 10,000,000 | 11,246,300 | ||||||
Refunding, Series A, 5.00%, 6/01/33 | 2,350,000 | 2,729,337 | ||||||
Refunding, Series A, 4.00%, 6/01/34 | 1,350,000 | 1,545,979 | ||||||
Refunding, Series A, 4.00%, 6/01/37 | 5,000,000 | 5,684,400 | ||||||
820,765,243 | ||||||||
U.S. Territories 2.9% | ||||||||
Puerto Rico 2.9% | ||||||||
bPuerto Rico Electric Power Authority Power Revenue, | ||||||||
SeriesWW-RSA-1, 5.25%, 7/01/33 | 6,500,000 | 5,216,250 | ||||||
SeriesWW-RSA-1, 5.50%, 7/01/38 | 5,200,000 | 4,173,000 | ||||||
SeriesXX-RSA-1, 5.25%, 7/01/40 | 19,135,000 | 15,355,838 | ||||||
24,745,088 | ||||||||
Total Municipal Bonds before Short Term Investments (Cost $802,805,064) |
|
845,510,331 |
|
124 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin North Carolina Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Short Term Investments 1.4% | ||||||||
Municipal Bonds 1.4% | ||||||||
North Carolina 1.4% | ||||||||
cThe Charlotte-Mecklenburg Hospital Authority Revenue, | ||||||||
Carolinas HealthCare System, Refunding, Series B, SPA JPMorgan Chase Bank, Daily VRDN and Put, 1.36%, 1/15/38 | $ | 3,190,000 | $ | 3,190,000 | ||||
Carolinas HealthCare System, Refunding, Series C, SPA JPMorgan Chase Bank, Daily VRDN and Put, 1.36%, 1/15/37 | 8,000,000 | 8,000,000 | ||||||
Carolinas HealthCare System, Series E, LOC TD Bank National Association, Daily VRDN and Put, 1.39%, 1/15/44 | 1,100,000 | 1,100,000 | ||||||
Total Short Term Investments (Cost $12,290,000) | 12,290,000 | |||||||
Total Investments (Cost $815,095,064) 100.0% | 857,800,331 | |||||||
Other Assets, less Liabilities 0.0%† | 270,398 | |||||||
Net Assets 100.0% | $ | 858,070,729 |
See Abbreviations on page 167.
†Rounds to less than 0.1% of net assets.
aSecurity purchased on a when-issued basis. See Note 1(b).
bSee Note 7 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 125 |
FRANKLINTAX-FREE TRUST
Financial Highlights
Franklin VirginiaTax-Free Income Fund
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019a | |||||||
Class A | ||||||||
Per share operating performance | ||||||||
(for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $10.92 | $10.87 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.15 | 0.15 | ||||||
Net realized and unrealized gains (losses) | 0.38 | 0.05 | ||||||
Total from investment operations | 0.53 | 0.20 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.16 | ) | (0.15 | ) | ||||
Net asset value, end of period | $11.29 | $10.92 | ||||||
Total returnd | 4.92% | 1.90% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.84% | 0.84% | ||||||
Net investment income | 2.68% | 3.01% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $60,028 | $39,565 | ||||||
Portfolio turnover rate | 9.60% | 9.60% |
aFor the period September 10, 2018 (effective date) to February 28, 2019.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
126 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Virginia Tax-Free Income Fund(continued)
Six Months Ended August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.91 | $10.91 | $11.31 | $11.54 | $11.65 | $11.42 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.34 | 0.35 | 0.40 | 0.42 | 0.44 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.39 | — | d | (0.39 | ) | (0.23 | ) | (0.11 | ) | 0.23 | ||||||||||||||
Total from investment operations | 0.55 | 0.34 | (0.04 | ) | 0.17 | 0.31 | 0.67 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.17 | ) | (0.34 | ) | (0.36 | ) | (0.40 | ) | (0.42 | ) | (0.44 | ) | ||||||||||||
Net asset value, end of period | $11.29 | $10.91 | $10.91 | $11.31 | $11.54 | $11.65 | ||||||||||||||||||
Total returne | 5.09% | 3.22% | (0.34)% | 1.51% | 2.72% | 5.97% | ||||||||||||||||||
Ratios to average net assetsf | ||||||||||||||||||||||||
Expenses | 0.69%g | 0.69%g | 0.68%h | 0.65% | 0.65% | 0.65% | ||||||||||||||||||
Net investment income | 2.83% | 3.16% | 3.15% | 3.46% | 3.65% | 3.82% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $404,989 | $402,739 | $454,423 | $509,170 | $540,857 | $558,068 | ||||||||||||||||||
Portfolio turnover rate | 9.60% | 9.60% | 9.87% | 17.44% | 5.30% | 8.16% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
gBenefit of expense reduction rounds to less than 0.01%.
hBenefit of waiver and payments by affiliates rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 127 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Virginia Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.10 | $11.09 | $11.49 | $11.72 | $11.82 | $11.58 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.13 | 0.29 | 0.30 | 0.34 | 0.36 | 0.38 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.39 | — | d | (0.40 | ) | (0.23 | ) | (0.11 | ) | 0.24 | ||||||||||||||
Total from investment operations | 0.52 | 0.29 | (0.10 | ) | 0.11 | 0.25 | 0.62 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.14 | ) | (0.28 | ) | (0.30 | ) | (0.34 | ) | (0.35 | ) | (0.38 | ) | ||||||||||||
Net asset value, end of period | $11.48 | $11.10 | $11.09 | $11.49 | $11.72 | $11.82 | ||||||||||||||||||
Total returne | 4.74% | 2.68% | (0.89)% | 0.92% | 2.20% | 5.39% | ||||||||||||||||||
Ratios to average net assetsf | ||||||||||||||||||||||||
Expenses | 1.24% | g | 1.24% | g | 1.23% | h | 1.20% | 1.20% | 1.20% | |||||||||||||||
Net investment income | 2.28% | 2.61% | 2.60% | 2.91% | 3.10% | 3.27% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $58,267 | $62,041 | $90,666 | $107,936 | $110,753 | $116,566 | ||||||||||||||||||
Portfolio turnover rate | 9.60% | 9.60% | 9.87% | 17.44% | 5.30% | 8.16% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dAmount rounds to less than $0.01 per share.
eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
fRatios are annualized for periods less than one year.
gBenefit of expense reduction rounds to less than 0.01%.
hBenefit of waiver and payments by affiliates rounds to less than 0.01%.
128 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Virginia Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||
|
| |||||||||||
(unaudited) | 2019 | 2018a | ||||||||||
| ||||||||||||
Class R6 | ||||||||||||
Per share operating performance | ||||||||||||
(for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $10.92 | $10.91 | $11.25 | |||||||||
|
| |||||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.17 | 0.36 | 0.22 | |||||||||
Net realized and unrealized gains (losses) | 0.38 | 0.01 | (0.35) | |||||||||
|
| |||||||||||
Total from investment operations | 0.55 | 0.37 | (0.13) | |||||||||
|
| |||||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.18 | ) | (0.36 | ) | (0.21) | |||||||
|
| |||||||||||
Net asset value, end of period | $11.29 | $10.92 | $10.91 | |||||||||
|
| |||||||||||
Total returnd | 5.07% | 3.44% | (1.14)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expenses before waiver and payments by affiliates | 0.56% | 0.57% | 0.57% | |||||||||
Expenses net of waiver and payments by affiliates | 0.55% | f | 0.55% | f | 0.54% | |||||||
Net investment income | 2.97% | 3.30% | 3.29% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $5,586 | $4,947 | $5,028 | |||||||||
Portfolio turnover rate | 9.60% | 9.60% | 9.87% |
aFor the period August 1, 2017 (effective date) to February 28, 2018.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing ofsales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 129 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
Franklin Virginia Tax-Free Income Fund(continued)
Six Months Ended | ||||||||||||||||||||||||
August 31, 2019 | Year Ended February 28, | |||||||||||||||||||||||
|
| |||||||||||||||||||||||
(unaudited) | 2019 | 2018 | 2017 | 2016a | 2015 | |||||||||||||||||||
| ||||||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $10.92 | $10.92 | $11.31 | $11.54 | $11.65 | $11.42 | ||||||||||||||||||
|
| |||||||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec | 0.16 | 0.35 | 0.36 | 0.41 | 0.43 | 0.46 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.40 | 0.01 | (0.38 | ) | (0.22 | ) | (0.11 | ) | 0.22 | |||||||||||||||
|
| |||||||||||||||||||||||
Total from investment operations | 0.56 | 0.36 | (0.02 | ) | 0.19 | 0.32 | 0.68 | |||||||||||||||||
|
| |||||||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.36 | ) | (0.37 | ) | (0.42 | ) | (0.43 | ) | (0.45) | |||||||||||||
|
| |||||||||||||||||||||||
Net asset value, end of period | $11.30 | $10.92 | $10.92 | $11.31 | $11.54 | $11.65 | ||||||||||||||||||
|
| |||||||||||||||||||||||
Total returnd | 5.14% | 3.32% | (0.15)% | 1.60% | 2.82% | 6.07% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses | 0.59%f | 0.59%f | 0.58%g | 0.55% | 0.55% | 0.55% | ||||||||||||||||||
Net investment income | 2.93% | 3.26% | 3.25% | 3.56% | 3.75% | 3.92% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $98,961 | $84,880 | $85,293 | $87,359 | $52,952 | $46,724 | ||||||||||||||||||
Portfolio turnover rate | 9.60% | 9.60% | 9.87% | 17.44% | 5.30% | 8.16% |
aFor the year ended February 29.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
130 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Statement of Investments, August 31, 2019 (unaudited)
Franklin VirginiaTax-Free Income Fund
Principal Amount | Value | |||||||
Municipal Bonds 98.5% | ||||||||
Virginia 87.4% | ||||||||
Bristol Utility System Revenue, AGMC Insured, ETM, 5.00%, 7/15/21 | $ | 530,000 | $ | 555,217 | ||||
Chesapeake Hospital Authority Facility Revenue, | ||||||||
Chesapeake Regional Medical Center, Refunding, 4.00%, 7/01/39 | 1,000,000 | 1,141,790 | ||||||
Chesapeake Regional Medical Center, Refunding, 4.00%, 7/01/43 | 4,000,000 | 4,502,120 | ||||||
Chesterfield County EDA Revenue, | ||||||||
Bon Secours Health System Inc., SeriesC-1, AGMC Insured,Pre-Refunded, 5.00%, 11/01/42 | 2,250,000 | 2,346,435 | ||||||
Bon Secours Health System Inc., SeriesC-2, Assured Guaranty,Pre-Refunded, 5.00%, 11/01/42 | 8,000,000 | 8,342,880 | ||||||
Fairfax County EDA Residential Care Facilities Mortgage Revenue, | ||||||||
Goodwin House Inc., Refunding, Series A, 4.00%, 10/01/42 | 1,500,000 | 1,590,135 | ||||||
Goodwin House Inc., Refunding, Series A, 5.00%, 10/01/42 | 5,840,000 | 6,575,139 | ||||||
Fairfax County EDA Revenue, Metrorail Parking System Project, 5.00%, 4/01/42. | 5,085,000 | 6,181,224 | ||||||
Fairfax County EDA Transportation District Improvement Revenue, Silver Line Phase I Project, Pre- Refunded, 5.00%, 4/01/36 | 10,000,000 | 10,228,100 | ||||||
Fairfax County IDAR, | ||||||||
Health Care, Inova Health System Project, Series A, 5.00%, 5/15/44 | 2,500,000 | 2,840,275 | ||||||
Health Care, Inova Health System Project, Series A, 4.00%, 5/15/48 | 5,000,000 | 5,606,100 | ||||||
Fairfax County Sewer Revenue, 5.00%, 7/15/37 | 2,760,000 | 3,462,944 | ||||||
Fairfax County Water Authority Revenue, | ||||||||
Refunding, 5.00%, 4/01/43 | 3,510,000 | 4,312,772 | ||||||
Refunding, 5.00%, 4/01/47 | 5,000,000 | 6,130,250 | ||||||
Farmville IDA Facilities Revenue, Educational Facilities, Longwood University Student Housing Projects, Refunding, Series A, 5.00%, 1/01/48 | 5,000,000 | 5,765,250 | ||||||
Hampton Roads Sanitation District Wastewater Revenue, | ||||||||
Refunding, Subordinate, Series A, 5.00%, 8/01/31 | 6,200,000 | 7,667,354 | ||||||
Refunding, Subordinate, Series A, 5.00%, 8/01/33 | 5,115,000 | 6,291,399 | ||||||
Refunding, Subordinate, Series A, 5.00%, 8/01/43 | 11,840,000 | 14,274,067 | ||||||
Hampton Roads Transportation Accountability Commission Revenue, Transportation Fund, senior lien, Series A, 5.00%, 7/01/48 | 20,000,000 | 24,672,400 | ||||||
Henrico County EDA Revenue, Bon Secours Health System Inc.,Pre-Refunded, 5.00%, 11/01/30 | 7,000,000 | 7,840,420 | ||||||
Hopewell Sewer System Revenue, Refunding, Series A, 5.00%, 7/15/42 | 4,850,000 | 5,165,929 | ||||||
Lexington IDA Educational Facilities Revenue, | ||||||||
Washington and Lee University, 5.00%, 1/01/43 | 10,000,000 | 10,852,900 | ||||||
Washington and Lee University, Refunding, Series A, 5.00%, 1/01/35 | 1,105,000 | 1,391,317 | ||||||
Washington and Lee University, Refunding, Series A, 5.00%, 1/01/48 | 1,500,000 | 1,855,515 | ||||||
Lexington IDA Residential Care Facility Revenue, | ||||||||
Kendal at Lexington, Series A, 5.00%, 1/01/42 | 1,000,000 | 1,086,300 | ||||||
Kendal at Lexington, Series A, 5.00%, 1/01/48 | 1,250,000 | 1,355,375 | ||||||
Loudoun County Sanitation Authority Water and Sewer Revenue, Refunding, 5.00%, 1/01/29 | 4,770,000 | 5,731,823 | ||||||
Lynchburg EDA Hospital Revenue, Centra Health Obligated Group, Refunding, Series A, 5.00%, 1/01/47 | 4,500,000 | 5,320,890 | ||||||
Norfolk Airport Authority Revenue, | ||||||||
5.00%, 7/01/37 | 1,000,000 | 1,283,260 | ||||||
5.00%, 7/01/39 | 800,000 | 1,020,200 | ||||||
5.00%, 7/01/43 | 2,925,000 | 3,692,988 | ||||||
Norfolk GO, | ||||||||
Capital Improvement, 5.00%, 8/01/44 | 3,995,000 | 4,992,152 | ||||||
Capital Improvement, Series A,Pre-Refunded, 5.00%, 8/01/32 | 5,845,000 | 6,734,024 | ||||||
Capital Improvement, Series A,Pre-Refunded, 5.00%, 10/01/41 | 1,040,000 | 1,311,305 |
franklintempleton.com | Semiannual Report | 131 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Virginia Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Virginia(continued) | ||||||||
Norfolk GO, (continued) | ||||||||
Capital Improvement, Series A,Pre-Refunded, 5.00%, 10/01/46 | $ | 2,500,000 | $ | 3,152,175 | ||||
Capital Improvement, Series C,Pre-Refunded, 5.00%, 10/01/42 | 7,825,000 | 8,311,558 | ||||||
Norfolk Water Revenue, | ||||||||
5.00%, 11/01/43 | 6,920,000 | 8,561,009 | ||||||
5.00%, 11/01/47 | 6,925,000 | 8,543,649 | ||||||
Northern Virginia Transportation Authority Transportation Special Tax Revenue, 5.00%, 6/01/33 | 3,000,000 | 3,499,800 | ||||||
Portsmouth GO, | ||||||||
Public Utility, Refunding, Series A, 5.00%, 7/15/41 | 4,010,000 | 4,402,298 | ||||||
Public Utility, Series A,Pre-Refunded, 5.00%, 7/15/41 | 5,990,000 | 6,653,932 | ||||||
Prince Edward County IDA Educational Facilities Revenue, Hampden-Sydney College Project, 5.00%, 9/01/48 | 2,050,000 | 2,471,521 | ||||||
Prince William County IDA Health Care Facilities Revenue, Novant Health Obligated Group, Prince William Hospital, Refunding, Series B, 5.00%, 11/01/46 | 10,000,000 | 10,872,300 | ||||||
Prince William County IDA Revenue, George Mason University Foundation, Prince William Life Sciences Lab LLC Project, Series AA,Pre-Refunded, 5.125%, 9/01/41 | 3,200,000 | 3,452,384 | ||||||
Richmond Public Utility Revenue, | ||||||||
Refunding, Series A, 5.00%, 1/15/33 | 10,000,000 | 12,138,200 | ||||||
Refunding, Series A, 5.00%, 1/15/43 | 10,000,000 | 11,215,100 | ||||||
Riverside Regional Jail Authority Jail Facility Revenue, Refunding, 5.00%, 7/01/31 | 6,215,000 | 7,478,261 | ||||||
Roanoke EDA Hospital Revenue, Carilion Clinic Obligated Group, Refunding, 5.00%, 7/01/33 | 10,615,000 | 10,926,232 | ||||||
Roanoke IDA Hospital Revenue, | ||||||||
Carilion Health System Obligated Group, Series B, AGMC Insured, 5.00%, 7/01/38 | 3,950,000 | 4,049,975 | ||||||
Carilion Health System Obligated Group, Series B, Assured Guaranty,Pre-Refunded, 5.00%, 7/01/38 | 50,000 | 51,592 | ||||||
Smyth County GO, Public Improvement, Series A,Pre-Refunded, 5.00%, 11/01/31 | 4,145,000 | 4,487,874 | ||||||
Stafford County and Staunton IDAR, Virginia Municipal League Assn. of Counties Finance Program, XLCA Insured, 5.00%, 8/01/37 | 960,000 | 961,507 | ||||||
Suffolk GO, | ||||||||
Pre-Refunded, 5.00%, 2/01/41 | 7,395,000 | 7,795,809 | ||||||
Pre-Refunded, 5.00%, 2/01/41 | 2,605,000 | 2,749,968 | ||||||
Pre-Refunded, 5.00%, 6/01/42 | 10,000,000 | 10,687,000 | ||||||
University of Virginia Revenue, | ||||||||
General, Pledge, Refunding, Series A, 5.00%, 6/01/43 | 15,000,000 | 17,005,350 | ||||||
General, Pledge, Refunding, Series A, 5.00%, 4/01/47 | 9,630,000 | 11,852,797 | ||||||
Upper Occoquan Sewage Authority Regional Sewerage Revenue, Refunding, Series B, 4.00%, 7/01/35 | 6,165,000 | 7,030,073 | ||||||
Virginia Beach Development Authority Residential Care Facility Revenue, | ||||||||
Westminster-Canterbury on Chesapeake Bay, Refunding, 5.00%, 9/01/40 | 1,750,000 | 2,050,073 | ||||||
Westminster-Canterbury on Chesapeake Bay, Refunding, 5.00%, 9/01/44 | 2,215,000 | 2,580,342 | ||||||
Virginia College Building Authority Educational Facilities Revenue, 21st Century College and Equipment Programs, Series A, 4.00%, 2/01/30 | 7,000,000 | 8,076,530 | ||||||
21st Century College and Equipment Programs, Series A, 4.00%, 2/01/34 | 5,000,000 | 5,916,850 | ||||||
Liberty University Projects, 5.25%, 3/01/29 | 2,860,000 | 2,914,769 | ||||||
Liberty University Projects, 5.00%, 3/01/41 | 26,855,000 | 27,323,083 | ||||||
Public Higher Education Financing Program, Refunding, Series A, 5.00%, 9/01/27 | 4,000,000 | 5,023,240 | ||||||
Washington and Lee University, Refunding, Series A, 5.00%, 1/01/40 | 5,000,000 | 5,839,450 | ||||||
Virginia Public School Authority Revenue, Special Obligation School Financing Bonds, Prince William County, 4.00%, 3/01/33 | 5,795,000 | 6,828,770 |
132 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Virginia Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Virginia(continued) | ||||||||
Virginia Small Business Financing Authority Revenue, | ||||||||
senior lien, 95 Express Lanes LLC Project, 5.00%, 7/01/49 | $ | 5,000,000 | $ | 5,335,450 | ||||
Transform 66 P3 Project, 5.00%, 12/31/47 | 1,600,000 | 1,864,000 | ||||||
Virginia State Commonwealth Transportation Board Revenue, | ||||||||
Federal Transportation Grant Anticipation Notes, 5.00%, 9/15/30 | 2,260,000 | 2,821,294 | ||||||
Federal Transportation Grant Anticipation Notes, 5.00%, 9/15/31 | 4,000,000 | 4,966,520 | ||||||
Transportation Capital Projects, 4.00%, 5/15/40 | 13,060,000 | 15,274,584 | ||||||
Virginia State HDA Revenue, | ||||||||
Rental Housing, Series B, 5.00%, 6/01/45 | 3,050,000 | 3,078,487 | ||||||
Rental Housing, Series F, 5.00%, 4/01/45 | 2,125,000 | 2,130,653 | ||||||
Virginia State PBA Public Facilities Revenue, Series A, 4.00%, 8/01/35 | 1,250,000 | 1,482,513 | ||||||
Virginia State Public School Authority Revenue, | ||||||||
School Financing, 1997 Resolution, Refunding, Series B, 5.00%, 8/01/24 | 10,000,000 | 11,893,400 | ||||||
School Financing, 1997 Resolution, Series A, 5.00%, 8/01/30 | 3,535,000 | 4,730,254 | ||||||
School Financing, 1997 Resolution, Series A, 5.00%, 8/01/31 | 2,625,000 | 3,489,465 | ||||||
School Financing, 1997 Resolution, Series B, 5.00%, 8/01/30 | 5,280,000 | 6,895,627 | ||||||
Virginia State Resources Authority Infrastructure Revenue, | ||||||||
State Moral Obligation, Virginia Pooled Financing Program, Refunding, Series C, 5.00%, 11/01/48 | 7,655,000 | 9,675,920 | ||||||
State Moral Obligation, Virginia Pooled Financing Program, Series B,Pre-Refunded, 5.00%, 11/01/41 | 9,410,000 | 10,198,934 | ||||||
Virginia Pooled Financing Program, Refunding, 5.00%, 11/01/45 | 5,255,000 | 6,364,593 | ||||||
Virginia Pooled Financing Program, Senior Series A, 5.00%, 11/01/38 | 135,000 | 135,378 | ||||||
Virginia Pooled Financing Program, Series A, 5.00%, 11/01/38 | 5,165,000 | 6,250,993 | ||||||
Virginia State Small Business Financing Authority Healthcare Facilities Revenue, Sentara Healthcare, Refunding, 5.00%, 11/01/40 | 23,000,000 | 23,551,080 | ||||||
Virginia State Small Business Financing Authority Private Activity Revenue, Transform 66 P3 Project, 5.00%, 12/31/49 | 5,000,000 | 5,805,850 | ||||||
Winchester EDA Hospital Revenue, Valley Health System Obligated Group, Refunding, 5.00%, 1/01/44 | 5,000,000 | 5,781,800 | ||||||
|
| |||||||
548,750,515 | ||||||||
|
| |||||||
District of Columbia 9.3% | ||||||||
Metropolitan Washington Airports Authority Airport System Revenue, | ||||||||
Refunding, Series A, 5.00%, 10/01/35 | 12,000,000 | 12,451,200 | ||||||
Refunding, Series A, 5.00%, 10/01/49 | 5,000,000 | 6,208,750 | ||||||
Refunding, Series B, BHAC Insured, 5.00%, 10/01/29 | 3,000,000 | 3,008,820 | ||||||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue, | ||||||||
Dulles Metrorail and Capital Improvement Projects, first senior lien, Series A, 5.00%, 10/01/39 | 10,000,000 | 10,029,400 | ||||||
Dulles Metrorail and Capital Improvement Projects, first senior lien, Series A, 5.25%, 10/01/44 | 12,000,000 | 12,037,440 | ||||||
Washington Metropolitan Area Transit Authority Gross Revenue, Transit, Series B, 5.00%, 7/01/42 | 12,060,000 | 14,723,813 | ||||||
|
| |||||||
58,459,423 | ||||||||
|
| |||||||
U.S. Territories 1.8% | ||||||||
Puerto Rico 1.8% | ||||||||
aPuerto Rico Electric Power Authority Power Revenue, | ||||||||
SeriesWW-RSA-1, 5.50%, 7/01/38 | 5,200,000 | 4,173,000 | ||||||
SeriesXX-RSA-1, 5.25%, 7/01/40 | 8,400,000 | 6,741,000 | ||||||
|
| |||||||
10,914,000 | ||||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $583,058,380) | 618,123,938 | |||||||
|
|
franklintempleton.com | Semiannual Report | 133 |
FRANKLIN TAX-FREE TRUST
STATEMENT OF INVESTMENTS (UNAUDITED)
Franklin Virginia Tax-Free Income Fund(continued)
Principal Amount | Value | |||||||
Short Term Investments 0.5% | ||||||||
Municipal Bonds 0.5% | ||||||||
Virginia 0.5% | ||||||||
bAlbemarle County EDA Hospital Facilities Revenue, Sentara Martha Jefferson Hospital, Refunding, Series B, SPA TD Bank National Association, Daily VRDN and Put, 1.41%, 10/01/48 | $ | 2,375,000 | $ | 2,375,000 | ||||
bVirginia College Building Authority Educational Facilities Revenue, University of Richmond Project, SPA Wells Fargo Bank, Daily VRDN and Put, 1.38%, 11/01/36 | 800,000 | 800,000 | ||||||
|
| |||||||
Total Short Term Investments (Cost $3,175,000) | 3,175,000 | |||||||
|
| |||||||
Total Investments (Cost $586,233,380) 99.0% | 621,298,938 | |||||||
Other Assets, less Liabilities 1.0% | 6,532,624 | |||||||
|
| |||||||
Net Assets 100.0% | $ | 627,831,562 | ||||||
|
|
See Abbreviations on page 167.
aSee Note 7 regarding defaulted securities.
bVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
134 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Statements of Assets and Liabilities
August 31, 2019 (unaudited)
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost - Unaffiliated issuers | $ | 223,211,119 | $ | 536,492,479 | $ | 448,516,484 | ||||||
|
| |||||||||||
Value - Unaffiliated issuers | $ | 240,449,718 | $ | 574,361,059 | $ | 474,972,195 | ||||||
Cash | 95,978 | 28,021 | 62,716 | |||||||||
Receivables: | ||||||||||||
Capital shares sold | 204,887 | 386,085 | 678,308 | |||||||||
Interest | 2,921,170 | 6,755,092 | 4,670,163 | |||||||||
Other assets | 120 | 283 | 228 | |||||||||
|
| |||||||||||
Total assets | 243,671,873 | 581,530,540 | 480,383,610 | |||||||||
|
| |||||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | — | 9,033,840 | 5,146,920 | |||||||||
Capital shares redeemed | 286,756 | 1,099,118 | 484,953 | |||||||||
Management fees | 111,566 | 234,585 | 198,344 | |||||||||
Distribution fees | 35,517 | 68,356 | 70,978 | |||||||||
Transfer agent fees | 27,572 | 67,486 | 59,131 | |||||||||
Trustees’ fees and expenses | 108 | 357 | 278 | |||||||||
Professional fees | 29,325 | 34,113 | 27,636 | |||||||||
Distributions to shareholders | 64,747 | 269,661 | 120,482 | |||||||||
Accrued expenses and other liabilities | 11,391 | 25,445 | 29,827 | |||||||||
|
| |||||||||||
Total liabilities | 566,982 | 10,832,961 | 6,138,549 | |||||||||
|
| |||||||||||
Net assets, at value | $ | 243,104,891 | $ | 570,697,579 | $ | 474,245,061 | ||||||
|
| |||||||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 243,440,790 | $ | 596,552,077 | $ | 470,740,745 | ||||||
Total distributable earnings (loss) | (335,899 | ) | (25,854,498 | ) | 3,504,316 | |||||||
|
| |||||||||||
Net assets, at value | $ | 243,104,891 | $ | 570,697,579 | $ | 474,245,061 | ||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 135 |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities(continued)
August 31, 2019 (unaudited)
Franklin Alabama Tax-Free Income Fund | Franklin Florida | Franklin Georgia Tax-Free Income Fund | ||||||||||
Class A: | ||||||||||||
Net assets, at value | $ 10,901,811 | $ 42,830,627 | $ 35,049,368 | |||||||||
Shares outstanding | 967,978 | 3,971,952 | 2,912,659 | |||||||||
Net asset value per sharea | $ 11.26 | $ 10.78 | $ 12.03 | |||||||||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $ 11.70 | $ 11.20 | $ 12.50 | |||||||||
Class A1: | ||||||||||||
Net assets, at value | $188,661,442 | $456,381,596 | $314,902,856 | |||||||||
Shares outstanding | 16,770,207 | 42,363,180 | 26,170,500 | |||||||||
Net asset value per sharea | $ 11.25 | $ 10.77 | $ 12.03 | |||||||||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $ 11.69 | $ 11.19 | $ 12.50 | |||||||||
Class C: | ||||||||||||
Net assets, at value | $ 31,311,945 | $ 37,631,479 | $ 66,937,786 | |||||||||
Shares outstanding | 2,746,113 | 3,416,994 | 5,478,027 | |||||||||
Net asset value and maximum offering price per sharea | $ 11.40 | $ 11.01 | $ 12.22 | |||||||||
Class R6: | ||||||||||||
Net assets, at value | $ 1,005,689 | $ 3,191,794 | $ 4,687,581 | |||||||||
Shares outstanding | 89,380 | 295,486 | 389,451 | |||||||||
Net asset value and maximum offering price per share | $ 11.25 | $ 10.80 | $ 12.04 | |||||||||
Advisor Class: | ||||||||||||
Net assets, at value | $ 11,224,004 | $ 30,662,083 | $ 52,667,470 | |||||||||
Shares outstanding | 997,572 | 2,839,451 | 4,375,246 | |||||||||
Net asset value and maximum offering price per share | $ 11.25 | $ 10.80 | $ 12.04 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
136 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities(continued)
August 31, 2019 (unaudited)
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost - Unaffiliated issuers | $ | 150,044,827 | $ | 367,564,746 | $ | 395,089,430 | ||||||
Value - Unaffiliated issuers | $ | 158,940,547 | $ | 393,955,433 | $ | 421,598,440 | ||||||
Cash | 853,805 | 49,831 | 4,136,485 | |||||||||
Receivables: | ||||||||||||
Capital shares sold | 46,315 | 251,504 | 360,096 | |||||||||
Interest | 1,699,039 | 4,615,963 | 3,967,364 | |||||||||
Other assets | 73 | 187 | 206 | |||||||||
Total assets | 161,539,779 | 398,872,918 | 430,062,591 | |||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 10,234,106 | 3,799,452 | — | |||||||||
Capital shares redeemed | 129,355 | 471,420 | 294,924 | |||||||||
Management fees | 73,256 | 168,483 | 181,501 | |||||||||
Distribution fees | 12,334 | 54,207 | 61,394 | |||||||||
Transfer agent fees | 17,665 | 41,848 | 54,719 | |||||||||
Trustees’ fees and expenses | 103 | 332 | 268 | |||||||||
Professional fees | 22,939 | 29,540 | 31,047 | |||||||||
Distributions to shareholders | 12,564 | 38,021 | 100,211 | |||||||||
Accrued expenses and other liabilities | 11,116 | 23,770 | 17,715 | |||||||||
Total liabilities | 10,513,438 | 4,627,073 | 741,779 | |||||||||
Net assets, at value | $ | 151,026,341 | $ | 394,245,845 | $ | 429,320,812 | ||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $ | 151,945,029 | $ | 395,306,188 | $ | 444,466,144 | ||||||
Total distributable earnings (loss) | (918,688 | ) | (1,060,343 | ) | (15,145,332 | ) | ||||||
Net assets, at value | $ | 151,026,341 | $ | 394,245,845 | $ | 429,320,812 |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 137 |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities(continued)
August 31, 2019 (unaudited)
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||
Class A: | ||||||||||||
Net assets, at value | $ 6,033,440 | $ 33,037,947 | $ 44,479,595 | |||||||||
|
| |||||||||||
Shares outstanding | 542,290 | 2,896,850 | 3,964,710 | |||||||||
|
| |||||||||||
Net asset value per sharea | $11.13 | $11.40 | $11.22 | |||||||||
|
| |||||||||||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $11.56 | $11.84 | $11.66 | |||||||||
|
| |||||||||||
Class A1: | ||||||||||||
Net assets, at value | $131,378,312 | $291,501,739 | $283,972,667 | |||||||||
|
| |||||||||||
Shares outstanding | 11,819,388 | 25,573,488 | 25,304,044 | |||||||||
|
| |||||||||||
Net asset value per sharea | $11.12 | $11.40 | $11.22 | |||||||||
|
| |||||||||||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $11.55 | $11.84 | $11.66 | |||||||||
|
| |||||||||||
Class C: | ||||||||||||
Net assets, at value | $ 41,539,860 | $ 50,931,291 | ||||||||||
|
| |||||||||||
Shares outstanding | 3,584,681 | 4,446,229 | ||||||||||
|
| |||||||||||
Net asset value and maximum offering price per sharea | $11.59 | $11.45 | ||||||||||
|
| |||||||||||
Class R6: | ||||||||||||
Net assets, at value | $ 1,961,906 | $ 4,687,492 | $ 2,736,256 | |||||||||
|
| |||||||||||
Shares outstanding | 176,417 | 411,124 | 243,445 | |||||||||
|
| |||||||||||
Net asset value and maximum offering price per share | $11.12 | $11.40 | $11.24 | |||||||||
|
| |||||||||||
Advisor Class: | ||||||||||||
Net assets, at value | $ 11,652,683 | $ 23,478,807 | $ 47,201,003 | |||||||||
|
| |||||||||||
Shares outstanding | 1,047,875 | 2,058,756 | 4,201,006 | |||||||||
|
| |||||||||||
Net asset value and maximum offering price per share | $11.12 | $11.40 | $11.24 | |||||||||
|
|
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
138 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities(continued)
August 31, 2019 (unaudited)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina | Franklin Virginia Tax-Free Income Fund | ||||||||||
Assets: | ||||||||||||
Investments in securities: | ||||||||||||
Cost - Unaffiliated issuers | $ 946,596,387 | $815,095,064 | $586,233,380 | |||||||||
|
| |||||||||||
Value - Unaffiliated issuers | $1,002,010,942 | $857,800,331 | $621,298,938 | |||||||||
Cash | 96,662 | 276,769 | 77,100 | |||||||||
Receivables: | ||||||||||||
Capital shares sold | 509,937 | 689,953 | 500,483 | |||||||||
Interest | 12,335,157 | 10,075,458 | 7,115,973 | |||||||||
Other assets | 481 | 415 | 299 | |||||||||
|
| |||||||||||
Total assets | 1,014,953,179 | 868,842,926 | 628,992,793 | |||||||||
|
| |||||||||||
Liabilities: | ||||||||||||
Payables: | ||||||||||||
Investment securities purchased | 5,922,026 | 8,500,000 | — | |||||||||
Capital shares redeemed | 2,063,390 | 1,472,865 | 545,139 | |||||||||
Management fees | 397,801 | 342,214 | 255,975 | |||||||||
Distribution fees | 138,112 | 120,121 | 78,482 | |||||||||
Transfer agent fees | 118,329 | 84,237 | 70,972 | |||||||||
Trustees’ fees and expenses | 513 | 473 | 268 | |||||||||
Professional fees | 45,498 | 35,801 | 39,299 | |||||||||
Distributions to shareholders | 171,160 | 172,899 | 143,382 | |||||||||
Accrued expenses and other liabilities | 59,392 | 43,587 | 27,714 | |||||||||
|
| |||||||||||
Total liabilities | 8,916,221 | 10,772,197 | 1,161,231 | |||||||||
|
| |||||||||||
Net assets, at value | $1,006,036,958 | $858,070,729 | $627,831,562 | |||||||||
|
| |||||||||||
Net assets consist of: | ||||||||||||
Paid-in capital | $1,022,520,298 | $904,082,293 | $646,954,987 | |||||||||
Total distributable earnings (loss) | (16,483,340 | ) | (46,011,564 | ) | (19,123,425 | ) | ||||||
|
| |||||||||||
Net assets, at value | $1,006,036,958 | $858,070,729 | $627,831,562 | |||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 139 |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities(continued)
August 31, 2019 (unaudited)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
| ||||||||||||
Class A: | ||||||||||||
Net assets, at value | $ 94,530,772 | $ 76,531,616 | $ 60,028,003 | |||||||||
|
| |||||||||||
Shares outstanding | 7,917,888 | 6,521,378 | 5,317,375 | |||||||||
|
| |||||||||||
Net asset value per sharea | $11.94 | $11.74 | $11.29 | |||||||||
|
| |||||||||||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $12.41 | $12.20 | $11.73 | |||||||||
|
| |||||||||||
Class A1: | ||||||||||||
Net assets, at value | $716,314,309 | $576,626,521 | $404,989,485 | |||||||||
|
| |||||||||||
Shares outstanding | 60,036,841 | 49,151,556 | 35,880,045 | |||||||||
|
| |||||||||||
Net asset value per sharea | $11.93 | $11.73 | $11.29 | |||||||||
|
| |||||||||||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $12.39 | $12.19 | $11.73 | |||||||||
|
| |||||||||||
Class C: | ||||||||||||
Net assets, at value | $105,557,667 | $100,956,706 | $ 58,267,259 | |||||||||
|
| |||||||||||
Shares outstanding | 8,755,172 | 8,464,257 | 5,073,748 | |||||||||
|
| |||||||||||
Net asset value and maximum offering price per sharea | $12.06 | $11.93 | $11.48 | |||||||||
|
| |||||||||||
Class R6: | ||||||||||||
Net assets, at value | $ 20,803,687 | $ 9,570,164 | $ 5,585,552 | |||||||||
|
| |||||||||||
Shares outstanding | 1,741,924 | 816,068 | 494,530 | |||||||||
|
| |||||||||||
Net asset value and maximum offering price per share | $11.94 | $11.73 | $11.29 | |||||||||
|
| |||||||||||
Advisor Class: | ||||||||||||
Net assets, at value | $ 68,830,523 | $ 94,385,722 | $ 98,961,263 | |||||||||
|
| |||||||||||
Shares outstanding | 5,764,924 | 8,044,491 | 8,759,554 | |||||||||
|
| |||||||||||
Net asset value and maximum offering price per share | $11.94 | $11.73 | $11.30 | |||||||||
|
|
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
140 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the six months ended August 31, 2019 (unaudited)
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||
Investment income: | ||||||||||||
Interest: | ||||||||||||
Unaffiliated issuers | $ | 4,389,195 | $11,569,713 | $ | 8,671,718 | |||||||
|
| |||||||||||
Expenses: | ||||||||||||
Management fees (Note 3a) | 661,664 | 1,393,881 | 1,163,900 | |||||||||
Distribution fees: (Note 3c) | ||||||||||||
Class A | 11,622 | 44,465 | 33,658 | |||||||||
Class A1 | 94,893 | 230,282 | 157,958 | |||||||||
Class C | 100,561 | 126,133 | 228,439 | |||||||||
Transfer agent fees: (Note 3e) | ||||||||||||
Class A | 3,096 | 12,099 | 9,660 | |||||||||
Class A1 | 63,074 | 156,253 | 112,983 | |||||||||
Class C | 10,284 | 13,159 | 25,128 | |||||||||
Class R6 | 237 | 699 | 792 | |||||||||
Advisor Class | 3,295 | 9,797 | 16,347 | |||||||||
Custodian fees (Note 4) | 980 | 2,370 | 1,908 | |||||||||
Reports to shareholders | 9,296 | 17,951 | 12,049 | |||||||||
Registration and filing fees | 8,118 | 16,294 | 7,601 | |||||||||
Professional fees | 25,179 | 45,680 | 29,799 | |||||||||
Trustees’ fees and expenses | 885 | 2,195 | 1,765 | |||||||||
Other | 9,512 | 24,472 | 16,693 | |||||||||
|
| |||||||||||
Total expenses | 1,002,696 | 2,095,730 | 1,818,680 | |||||||||
Expense reductions (Note 4) | (644 | ) | (1,555 | ) | (1,238 | ) | ||||||
Expenses waived/paid by affiliates (Note 3f) | (97 | ) | (282 | ) | (142 | ) | ||||||
|
| |||||||||||
Net expenses | 1,001,955 | 2,093,893 | 1,817,300 | |||||||||
|
| |||||||||||
Net investment income | 3,387,240 | 9,475,820 | 6,854,418 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 15,696 | 279,007 | 212,444 | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 9,246,772 | 18,536,851 | 17,800,649 | |||||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 9,262,468 | 18,815,858 | 18,013,093 | |||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $12,649,708 | $28,291,678 | $24,867,511 | |||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 141 |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Operations(continued)
for the six months ended August 31, 2019 (unaudited)
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||||||||||
Investment income: | ||||||||||||||||||||
Interest: | ||||||||||||||||||||
Unaffiliated issuers | $2,750,265 | $ 6,941,688 | $ 7,482,164 | |||||||||||||||||
|
| |||||||||||||||||||
Expenses: | ||||||||||||||||||||
Management fees (Note 3a) | 433,121 | 982,472 | 1,062,548 | |||||||||||||||||
Distribution fees: (Note 3c) | ||||||||||||||||||||
Class A | 6,179 | 30,428 | 42,707 | |||||||||||||||||
Class A1 | 65,747 | 144,782 | 141,377 | |||||||||||||||||
Class C | — | 134,179 | 172,034 | |||||||||||||||||
Transfer agent fees: (Note 3e) | ||||||||||||||||||||
Class A | 1,689 | 8,103 | 13,115 | |||||||||||||||||
Class A1 | 44,811 | 95,842 | 108,165 | |||||||||||||||||
Class C | — | 13,668 | 20,241 | |||||||||||||||||
Class R6 | 562 | 1,105 | 597 | |||||||||||||||||
Advisor Class | 3,524 | 7,260 | 17,378 | |||||||||||||||||
Custodian fees (Note 4) | 618 | 1,562 | 1,745 | |||||||||||||||||
Reports to shareholders | 7,755 | 13,211 | 13,170 | |||||||||||||||||
Registration and filing fees | 3,411 | 7,310 | 7,840 | |||||||||||||||||
Professional fees | 23,158 | 31,683 | 36,143 | |||||||||||||||||
Trustees’ fees and expenses | 581 | 1,552 | 1,608 | |||||||||||||||||
Other | 9,257 | 17,718 | 13,236 | |||||||||||||||||
|
| |||||||||||||||||||
Total expenses | 600,413 | 1,490,875 | 1,651,904 | |||||||||||||||||
Expense reductions (Note 4) | (393 | ) | (997 | ) | (1,115 | ) | ||||||||||||||
Expenses waived/paid by affiliates (Note 3f) | (276 | ) | (460 | ) | (252 | ) | ||||||||||||||
|
| |||||||||||||||||||
Net expenses | 599,744 | 1,489,418 | 1,650,537 | |||||||||||||||||
|
| |||||||||||||||||||
Net investment income | 2,150,521 | 5,452,270 | 5,831,627 | |||||||||||||||||
|
| |||||||||||||||||||
Realized and unrealized gains (losses): | ||||||||||||||||||||
Net realized gain (loss) from: | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Unaffiliated issuers | 89,246 | 197,908 | 157,107 | |||||||||||||||||
|
| |||||||||||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Unaffiliated issuers | 5,157,191 | 16,387,966 | 16,615,684 | |||||||||||||||||
|
| |||||||||||||||||||
Net realized and unrealized gain (loss) | 5,246,437 | 16,585,874 | 16,772,791 | |||||||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $7,396,958 | $22,038,144 | $22,604,418 | |||||||||||||||||
|
|
142 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Operations(continued)
for the six months ended August 31, 2019 (unaudited)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
Investment income: | ||||||||||||
Interest: | ||||||||||||
Unaffiliated issuers | $17,531,342 | $14,166,464 | $10,816,384 | |||||||||
|
| |||||||||||
Expenses: | ||||||||||||
Management fees (Note 3a) | 2,335,253 | 2,011,335 | 1,505,429 | |||||||||
Distribution fees: (Note 3c) | ||||||||||||
Class A | 100,060 | 78,255 | 61,258 | |||||||||
Class A1 | 356,663 | 289,344 | 202,930 | |||||||||
Class C | 350,083 | 333,072 | 194,848 | |||||||||
Transfer agent fees: (Note 3e) | ||||||||||||
Class A | 26,967 | 19,868 | 16,428 | |||||||||
Class A1 | 239,715 | 183,316 | 135,606 | |||||||||
Class C | 36,192 | 32,466 | 20,027 | |||||||||
Class R6 | 3,540 | 1,981 | 1,173 | |||||||||
Advisor Class | 21,697 | 28,242 | 31,473 | |||||||||
Custodian fees (Note 4) | 4,060 | 3,490 | 1,724 | |||||||||
Reports to shareholders | 30,255 | 23,651 | 15,657 | |||||||||
Registration and filing fees | 9,340 | 9,395 | 9,603 | |||||||||
Professional fees | 62,228 | 54,646 | 45,459 | |||||||||
Trustees’ fees and expenses | 3,670 | 3,181 | 2,241 | |||||||||
Other | 25,457 | 21,679 | 19,166 | |||||||||
|
| |||||||||||
Total expenses | 3,605,180 | 3,093,921 | 2,263,022 | |||||||||
Expense reductions (Note 4) | (2,600 | ) | (2,238 | ) | (1,604 | ) | ||||||
Expenses waived/paid by affiliates (Note 3f) | (579 | ) | (679 | ) | (380 | ) | ||||||
|
| |||||||||||
Net expenses | 3,602,001 | 3,091,004 | 2,261,038 | |||||||||
|
| |||||||||||
Net investment income | 13,929,341 | 11,075,460 | 8,555,346 | |||||||||
|
| |||||||||||
Realized and unrealized gains (losses): | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 503,328 | 292,111 | 172,764 | |||||||||
|
| |||||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Investments: | ||||||||||||
Unaffiliated issuers | 40,151,701 | 31,981,871 | 21,109,619 | |||||||||
|
| |||||||||||
Net realized and unrealized gain (loss) | 40,655,029 | 32,273,982 | 21,282,383 | |||||||||
|
| |||||||||||
Net increase (decrease) in net assets resulting from operations | $54,584,370 | $43,349,442 | $29,837,729 | |||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 143 |
FRANKLINTAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | |||||||||||||||
|
| |||||||||||||||
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | |||||||||||||
| ||||||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 3,387,240 | $ | 7,394,560 | $ | 9,475,820 | $ | 21,195,929 | ||||||||
Net realized gain (loss) | 15,696 | (245,943 | ) | 279,007 | (1,619,441 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | 9,246,772 | (820,370 | ) | 18,536,851 | (289,840 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 12,649,708 | 6,328,247 | 28,291,678 | 19,286,648 | ||||||||||||
|
| |||||||||||||||
Distributions to shareholders: | ||||||||||||||||
Class A | (138,298 | ) | (71,237 | ) | (611,923 | ) | (329,988 | ) | ||||||||
Class A1 | (3,008,644 | ) | (6,142,736 | ) | (8,364,213 | ) | (18,447,866 | ) | ||||||||
Class C | (402,018 | ) | (968,360 | ) | (592,771 | ) | (1,777,517 | ) | ||||||||
Class R6 | (15,242 | ) | (34,300 | ) | (51,494 | ) | (87,569 | ) | ||||||||
Advisor Class | (159,769 | ) | (251,020 | ) | (533,633 | ) | (863,827 | ) | ||||||||
|
| |||||||||||||||
Total distributions to shareholders | (3,723,971 | ) | (7,467,653 | ) | (10,154,034 | ) | (21,506,767 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | ||||||||||||||||
Class A | 3,218,632 | 7,207,817 | 12,597,185 | 28,783,460 | ||||||||||||
Class A1 | (6,652,030 | ) | (19,123,204 | ) | (21,228,659 | ) | (71,237,247 | ) | ||||||||
Class C | (478,671 | ) | (14,470,387 | ) | (2,730,483 | ) | (33,649,094 | ) | ||||||||
Class R6 | 147,233 | (686,600 | ) | 759,263 | (38,437 | ) | ||||||||||
Advisor Class | 2,519,820 | 667,839 | 4,275,644 | 5,059,211 | ||||||||||||
|
| |||||||||||||||
Total capital share transactions | (1,245,016 | ) | (26,404,535 | ) | (6,327,050 | ) | (71,082,107 | ) | ||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 7,680,721 | (27,543,941 | ) | 11,810,594 | (73,302,226 | ) | ||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 235,424,170 | 262,968,111 | 558,886,985 | 632,189,211 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 243,104,891 | $ | 235,424,170 | $ | 570,697,579 | $ | 558,886,985 | ||||||||
|
|
144 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets(continued)
Franklin Georgia Tax-Free Income Fund | Franklin Kentucky Tax-Free Income Fund | |||||||||||||||
|
| |||||||||||||||
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | |||||||||||||
| ||||||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 6,854,418 | $ | 15,028,084 | $ | 2,150,521 | $ | 4,785,088 | ||||||||
Net realized gain (loss) | 212,444 | (5,447 | ) | 89,246 | 323,254 | |||||||||||
Net change in unrealized appreciation (depreciation) | 17,800,649 | (2,671,987 | ) | 5,157,191 | (737,766 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 24,867,511 | 12,350,650 | 7,396,958 | 4,370,576 | ||||||||||||
|
| |||||||||||||||
Distributions to shareholders: | ||||||||||||||||
Class A | (422,157 | ) | (192,559 | ) | (74,805 | ) | (12,224 | ) | ||||||||
Class A1 | (5,293,112 | ) | (11,209,388 | ) | (2,130,610 | ) | (4,448,044 | ) | ||||||||
Class C | (980,637 | ) | (2,473,306 | ) | — | — | ||||||||||
Class R6 | (74,871 | ) | (106,905 | ) | (32,102 | ) | (68,197 | ) | ||||||||
Advisor Class | (781,971 | ) | (1,254,420 | ) | (170,636 | ) | (266,773 | ) | ||||||||
|
| |||||||||||||||
Total distributions to shareholders | (7,552,748 | ) | (15,236,578 | ) | (2,408,153 | ) | (4,795,238 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | ||||||||||||||||
Class A | 14,324,520 | 19,439,689 | 3,078,463 | 2,774,394 | ||||||||||||
Class A1 | (10,852,736 | ) | (47,287,178 | ) | (3,293,415 | ) | (19,454,667 | ) | ||||||||
Class C | (8,225,951 | ) | (36,380,438 | ) | — | — | ||||||||||
Class R6 | 739,443 | 3,796,257 | 54,276 | (236,052 | ) | |||||||||||
Advisor Class | 10,830,004 | 4,927,052 | 2,004,718 | 1,830,270 | ||||||||||||
|
| |||||||||||||||
Total capital share transactions | 6,815,280 | (55,504,618 | ) | 1,844,042 | (15,086,055 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 24,130,043 | (58,390,546 | ) | 6,832,847 | (15,510,717 | ) | ||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 450,115,018 | 508,505,564 | 144,193,494 | 159,704,211 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 474,245,061 | $ | 450,115,018 | $ | 151,026,341 | $ | 144,193,494 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 145 |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets(continued)
Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | |||||||||||||||
|
| |||||||||||||||
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | |||||||||||||
| ||||||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 5,452,270 | $ | 11,937,605 | $ | 5,831,627 | $ | 12,906,957 | ||||||||
Net realized gain (loss) | 197,908 | 167,552 | 157,107 | 400,316 | ||||||||||||
Net change in unrealized appreciation (depreciation) | 16,387,966 | 508,448 | 16,615,684 | 986,079 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 22,038,144 | 12,613,605 | 22,604,418 | 14,293,352 | ||||||||||||
|
| |||||||||||||||
Distributions to shareholders: | ||||||||||||||||
Class A | (361,600 | ) | (145,782 | ) | (516,218 | ) | (235,272 | ) | ||||||||
Class A1 | (4,567,698 | ) | (9,716,656 | ) | (4,584,452 | ) | (9,540,479 | ) | ||||||||
Class C | (534,248 | ) | (1,385,099 | ) | (709,625 | ) | (1,920,744 | ) | ||||||||
Class R6 | (70,127 | ) | (125,604 | ) | (37,780 | ) | (50,070 | ) | ||||||||
Advisor Class | (355,088 | ) | (561,923 | ) | (756,857 | ) | (1,348,549 | ) | ||||||||
|
| |||||||||||||||
Total distributions to shareholders | (5,888,761 | ) | (11,935,064 | ) | (6,604,932 | ) | (13,095,114 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | ||||||||||||||||
Class A | 13,869,076 | 17,853,886 | 16,560,209 | 26,196,177 | ||||||||||||
Class A1 | (4,997,054 | ) | (38,269,400 | ) | (6,584,310 | ) | (40,101,404 | ) | ||||||||
Class C | (2,398,996 | ) | (19,119,366 | ) | (7,411,529 | ) | (36,146,346 | ) | ||||||||
Class R6 | 641,167 | 176,147 | 896,535 | 372,355 | ||||||||||||
Advisor Class | 2,980,587 | 5,429,362 | 1,198,071 | 3,562,182 | ||||||||||||
|
| |||||||||||||||
Total capital share transactions | 10,094,780 | (33,929,371 | ) | 4,658,976 | (46,117,036 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 26,244,163 | (33,250,830 | ) | 20,658,462 | (44,918,798 | ) | ||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 368,001,682 | 401,252,512 | 408,662,350 | 453,581,148 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 394,245,845 | $ | 368,001,682 | $ | 429,320,812 | $ | 408,662,350 | ||||||||
|
|
146 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets(continued)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | |||||||||||||||
|
| |||||||||||||||
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | |||||||||||||
| ||||||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 13,929,341 | $ | 30,065,935 | $ | 11,075,460 | $ | 25,049,632 | ||||||||
Net realized gain (loss) | 503,328 | (300,848 | ) | 292,111 | (2,252,420 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) | 40,151,701 | 7,181,548 | 31,981,871 | 4,246,848 | ||||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 54,584,370 | 36,946,635 | 43,349,442 | 27,044,060 | ||||||||||||
|
| |||||||||||||||
Distributions to shareholders: | ||||||||||||||||
Class A | (1,177,306 | ) | (581,911 | ) | (848,309 | ) | (388,161 | ) | ||||||||
Class A1 | (11,178,963 | ) | (23,445,068 | ) | (8,395,746 | ) | (19,060,559 | ) | ||||||||
Class C | (1,389,997 | ) | (3,310,311 | ) | (1,198,403 | ) | (3,390,144 | ) | ||||||||
Class R6 | (321,846 | ) | (589,965 | ) | (130,763 | ) | (262,721 | ) | ||||||||
Advisor Class | (1,038,036 | ) | (2,227,907 | ) | (1,331,806 | ) | (2,600,985 | ) | ||||||||
|
| |||||||||||||||
Total distributions to shareholders | (15,106,148 | ) | (30,155,162 | ) | (11,905,027 | ) | (25,702,570 | ) | ||||||||
|
| |||||||||||||||
Capital share transactions: (Note 2) | ||||||||||||||||
Class A | 27,907,918 | 62,711,301 | 24,984,656 | 48,618,185 | ||||||||||||
Class A1 | (13,096,151 | ) | (97,285,055 | ) | (22,025,643 | ) | (83,901,262 | ) | ||||||||
Class C | (7,486,039 | ) | (41,216,598 | ) | (8,245,170 | ) | (54,000,034 | ) | ||||||||
Class R6 | 1,080,276 | 1,262,268 | 1,467,347 | (1,346,043 | ) | |||||||||||
Advisor Class | 6,129,210 | (12,766,616 | ) | 6,548,416 | 3,525,600 | |||||||||||
|
| |||||||||||||||
Total capital share transactions | 14,535,214 | (87,294,700 | ) | 2,729,606 | (87,103,554 | ) | ||||||||||
|
| |||||||||||||||
Net increase (decrease) in net assets | 54,013,436 | (80,503,227 | ) | 34,174,021 | (85,762,064 | ) | ||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 952,023,522 | 1,032,526,749 | 823,896,708 | 909,658,772 | ||||||||||||
|
| |||||||||||||||
End of period | $ | 1,006,036,958 | $ | 952,023,522 | $ | 858,070,729 | $ | 823,896,708 | ||||||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 147 |
FRANKLIN TAX-FREE TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets(continued)
Franklin Virginia Tax-Free Income Fund | ||||||||
|
| |||||||
Six Months Ended August 31, 2019 (unaudited) | Year Ended February 28, 2019 | |||||||
| ||||||||
Increase (decrease) in net assets: | ||||||||
Operations: | ||||||||
Net investment income | $ | 8,555,346 | $ | 18,737,635 | ||||
Net realized gain (loss) | 172,764 | 180,288 | ||||||
Net change in unrealized appreciation (depreciation) | 21,109,619 | 174,495 | ||||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 29,837,729 | 19,092,418 | ||||||
|
| |||||||
Distributions to shareholders: | ||||||||
Class A | (708,851 | ) | (324,073 | ) | ||||
Class A1 | (6,254,235 | ) | (13,569,976 | ) | ||||
Class C | (754,761 | ) | (1,994,776 | ) | ||||
Class R6 | (84,567 | ) | (173,726 | ) | ||||
Advisor Class | (1,484,735 | ) | (2,703,347 | ) | ||||
|
| |||||||
Total distributions to shareholders | (9,287,149 | ) | (18,765,898 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | ||||||||
Class A | 18,791,222 | 39,139,953 | ||||||
Class A1 | (11,292,549 | ) | (51,675,061 | ) | ||||
Class C | (5,766,928 | ) | (28,437,045 | ) | ||||
Class R6 | 461,268 | (82,877 | ) | |||||
Advisor Class | 10,916,237 | (509,044 | ) | |||||
|
| |||||||
Total capital share transactions | 13,109,250 | (41,564,074 | ) | |||||
|
| |||||||
Net increase (decrease) in net assets | 33,659,830 | (41,237,554 | ) | |||||
Net assets: | ||||||||
Beginning of period | 594,171,732 | 635,409,286 | ||||||
|
| |||||||
End of period | $ | 627,831,562 | $ | 594,171,732 | ||||
|
|
148 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLINTAX-FREE TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
FranklinTax-Free Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as anopen-end management investment company, consisting oftwenty-two separate funds, nine of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). The classes of shares offered within each of the Funds are indicated below. Class C shares automatically convert to Class A shares after they have been held for 10 years. Each class of shares may differ by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees due to differing arrangements for distribution and transfer agent fees.
Class A, Class A1, Class R6 & Advisor Class
Franklin KentuckyTax-Free Income Fund
Class A, Class A1, Class C, Class R6 & Advisor Class
Franklin AlabamaTax-Free Income Fund
Franklin FloridaTax-Free Income Fund
Franklin GeorgiaTax-Free Income Fund
Franklin LouisianaTax-Free Income Fund
Franklin MarylandTax-Free Income Fund
Franklin MissouriTax-Free Income Fund
Franklin North CarolinaTax-Free Income Fund
Franklin VirginiaTax-Free Income Fund
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Funds’ 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 Funds calculate the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize
independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Debt securities generally trade in theover-the-counter market rather than on a securities exchange. The Funds’ 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 Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ 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.
b. Securities Purchased on a When-Issued Basis
Certain or all Funds purchase securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Funds will generally purchase these securities with the intention of holding the securities, they may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
franklintempleton.com | Semiannual Report | 149 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies(continued)
c. Income Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each 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.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of August 31, 2019, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
d. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividends from net investment income are normally declared daily; these dividends may be reinvested or paid monthly to shareholders. Distributions from realized capital gains and other distributions, if any, are recorded on theex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of
number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.
Realized and unrealized gains and losses and net investment income, excluding class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions by class are generally due to differences in class specific expenses.
e. Insurance
The scheduled payments of interest and principal for each insured municipal security in the Trust are insured by either a new issue insurance policy or a secondary insurance policy. Some municipal securities in the Funds 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 Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
150 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest
At August 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | |||||||||||||||||||
|
| |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
| ||||||||||||||||||||
Class A Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares solda | 395,854 | $ | 4,369,815 | 1,441,402 | $ | 15,315,371 | ||||||||||||||
Shares issued in reinvestment of distributions | 11,550 | 128,018 | 55,043 | 585,594 | ||||||||||||||||
Shares redeemed | (115,388 | ) | (1,279,201 | ) | (310,279 | ) | (3,303,780) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 292,016 | $ | 3,218,632 | 1,186,166 | $ | 12,597,185 | ||||||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019b | ||||||||||||||||||||
Shares solda | 790,658 | $ | 8,444,521 | 3,137,170 | $ | 32,435,068 | ||||||||||||||
Shares issued in reinvestment of distributions | 6,200 | 66,900 | 30,204 | 314,181 | ||||||||||||||||
Shares redeemed | (120,896 | ) | (1,303,604 | ) | (381,588 | ) | (3,965,789) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 675,962 | $ | 7,207,817 | 2,785,786 | $ | 28,783,460 | ||||||||||||||
|
| |||||||||||||||||||
Class A1 Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares sold | 196,932 | $ | 2,170,903 | 508,001 | $ | 5,378,188 | ||||||||||||||
Shares issued in reinvestment of distributions | 237,735 | 2,629,250 | 632,761 | 6,720,027 | ||||||||||||||||
Shares redeemed | (1,037,623 | ) | (11,452,183 | ) | (3,149,427 | ) | (33,326,874) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (602,956 | ) | $ | (6,652,030 | ) | (2,008,665 | ) | $ | (21,228,659) | |||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||
Shares sold | 801,040 | $ | 8,658,277 | 1,920,172 | $ | 20,024,152 | ||||||||||||||
Shares issued in reinvestment of distributions | 497,039 | 5,370,959 | 1,416,101 | 14,755,224 | ||||||||||||||||
Shares redeemed | (3,071,377 | ) | (33,152,440 | ) | (10,186,874 | ) | (106,016,623) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (1,773,298 | ) | $ | (19,123,204 | ) | (6,850,601 | ) | $ | (71,237,247) | |||||||||||
|
| |||||||||||||||||||
Class C Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares sold | 194,537 | $ | 2,177,624 | 385,541 | $ | 4,181,918 | ||||||||||||||
Shares issued in reinvestment of distributions | 32,943 | 369,294 | 48,530 | 526,856 | ||||||||||||||||
Shares redeemeda | (270,985 | ) | (3,025,589 | ) | (685,752 | ) | (7,439,257) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (43,505 | ) | $ | (478,671 | ) | (251,681 | ) | $ | (2,730,483) | |||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||
Shares sold | 128,398 | $ | 1,407,713 | 477,035 | $ | 5,072,186 | ||||||||||||||
Shares issued in reinvestment of distributions | 80,163 | 878,076 | 150,924 | 1,607,536 | ||||||||||||||||
Shares redeemeda | (1,539,197 | ) | (16,756,176 | ) | (3,810,382 | ) | (40,328,816) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (1,330,636 | ) | $ | (14,470,387 | ) | (3,182,423 | ) | $ | (33,649,094) | |||||||||||
|
|
franklintempleton.com | Semiannual Report | 151 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest(continued)
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | |||||||||||||||||||
|
| |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
| ||||||||||||||||||||
Class R6 Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares sold | 16,677 | $ | 184,175 | 90,382 | $ | 960,364 | ||||||||||||||
Shares issued in reinvestment of distributions | 1,377 | 15,242 | 4,782 | 50,961 | ||||||||||||||||
Shares redeemed | (4,689 | ) | (52,184 | ) | (23,738 | ) | (252,062) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 13,365 | $ | 147,233 | 71,426 | $ | 759,263 | ||||||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||
Shares sold | 29,919 | $ | 323,892 | 80,448 | $ | 839,303 | ||||||||||||||
Shares issued in reinvestment of distributions | 3,171 | 34,300 | 8,384 | 87,569 | ||||||||||||||||
Shares redeemed | (96,388 | ) | (1,044,792 | ) | (92,303 | ) | (965,309) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (63,298 | ) | $ | (686,600 | ) | (3,471 | ) | $ | (38,437) | |||||||||||
|
| |||||||||||||||||||
Advisor Class Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares sold | 291,943 | $ | 3,219,535 | 813,040 | $ | 8,620,474 | ||||||||||||||
Shares issued in reinvestment of distributions | 12,841 | 142,167 | 37,072 | 394,978 | ||||||||||||||||
Shares redeemed | (76,133 | ) | (841,882 | ) | (446,862 | ) | (4,739,808) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 228,651 | $ | 2,519,820 | 403,250 | $ | 4,275,644 | ||||||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||
Shares sold | 393,159 | $ | 4,236,806 | 1,225,819 | $ | 12,789,690 | ||||||||||||||
Shares issued in reinvestment of distributions | 19,945 | 215,429 | 57,503 | 600,268 | ||||||||||||||||
Shares redeemed | (350,895 | ) | (3,784,396 | ) | (798,662 | ) | (8,330,747) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 62,209 | $ | 667,839 | 484,660 | $ | 5,059,211 | ||||||||||||||
|
| |||||||||||||||||||
aMay include a portion of Class C shares that were automatically converted to Class A. bFor the period September 10, 2018 (effective date) to February 28, 2019. |
| |||||||||||||||||||
Franklin Georgia Tax-Free Income Fund | Franklin Kentucky Tax-Free Income Fund | |||||||||||||||||||
|
| |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
| ||||||||||||||||||||
Class A Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares solda | 1,378,970 | $ | 16,299,761 | 293,829 | $ | 3,191,632 | ||||||||||||||
Shares issued in reinvestment of distributions | 33,586 | 397,816 | 6,684 | 73,234 | ||||||||||||||||
Shares redeemed | (200,297 | ) | (2,373,057 | ) | (17,187 | ) | (186,403) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 1,212,259 | $ | 14,324,520 | 283,326 | $ | 3,078,463 | ||||||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019b | ||||||||||||||||||||
Shares solda | 1,785,538 | $ | 20,419,130 | 259,208 | $ | 2,777,024 | ||||||||||||||
Shares issued in reinvestment of distributions | 16,072 | 185,389 | 1,128 | 12,114 | ||||||||||||||||
Shares redeemed | (101,210 | ) | (1,164,830 | ) | (1,372 | ) | (14,744) | |||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 1,700,400 | $ | 19,439,689 | 258,964 | $ | 2,774,394 | ||||||||||||||
|
|
152 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin Georgia Tax-Free Income Fund | Franklin Kentucky Tax-Free Income Fund | |||||||||||||||||
|
| |||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||
| ||||||||||||||||||
Class A1 Shares: | ||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||
Shares sold | 620,322 | $ | 7,312,156 | 327,922 | $ | 3,585,554 | ||||||||||||
Shares issued in reinvestment of distributions | 396,052 | 4,685,431 | 187,396 | 2,049,183 | ||||||||||||||
Shares redeemed | (1,936,700 | ) | (22,850,323 | ) | (817,131 | ) | (8,928,152 | ) | ||||||||||
Net increase (decrease) | (920,326 | ) | $ | (10,852,736 | ) | (301,813 | ) | $ | (3,293,415 | ) | ||||||||
Year ended February 28, 2019 | ||||||||||||||||||
Shares sold | 2,598,688 | $ | 30,034,712 | 877,756 | $ | 9,404,287 | ||||||||||||
Shares issued in reinvestment of distributions | 852,923 | 9,872,292 | 399,392 | 4,276,740 | ||||||||||||||
Shares redeemed | (7,543,306 | ) | (87,194,182 | ) | (3,103,629 | ) | (33,135,694 | ) | ||||||||||
Net increase (decrease) | (4,091,695 | ) | $ | (47,287,178 | ) | (1,826,481 | ) | $ | (19,454,667 | ) | ||||||||
Class C Shares: | ||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||
Shares sold | 230,575 | $ | 2,769,652 | |||||||||||||||
Shares issued in reinvestment of distributions | 72,747 | 873,540 | ||||||||||||||||
Shares redeemeda | (990,120 | ) | (11,869,143 | ) | ||||||||||||||
Net increase (decrease) | (686,798 | ) | $ | (8,225,951 | ) | |||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||
Shares sold | 391,513 | $ | 4,597,846 | |||||||||||||||
Shares issued in reinvestment of distributions | 186,922 | 2,196,607 | ||||||||||||||||
Shares redeemeda | (3,690,195 | ) | (43,174,891 | ) | ||||||||||||||
Net increase (decrease) | (3,111,760 | ) | $ | (36,380,438 | ) | |||||||||||||
Class R6 Shares: | ||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||
Shares sold | 76,826 | $ | 906,007 | 16,778 | $ | 183,732 | ||||||||||||
Shares issued in reinvestment of distributions | 6,325 | 74,870 | 2,935 | 32,102 | ||||||||||||||
Shares redeemed | (20,292 | ) | (241,434 | ) | (14,744 | ) | (161,558 | ) | ||||||||||
Net increase (decrease) | 62,859 | $ | 739,443 | 4,969 | $ | 54,276 | ||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||
Shares sold | 434,824 | $ | 5,054,522 | 51,507 | $ | 551,091 | ||||||||||||
Shares issued in reinvestment of distributions | 9,235 | 106,822 | 6,370 | 68,194 | ||||||||||||||
Shares redeemed | (117,886 | ) | (1,365,087 | ) | (80,004 | ) | (855,337 | ) | ||||||||||
Net increase (decrease) | 326,173 | $ | 3,796,257 | (22,127 | ) | $ | (236,052 | ) | ||||||||||
franklintempleton.com | Semiannual Report | 153 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest(continued)
Franklin Georgia Tax-Free Income Fund | Franklin Kentucky Tax-Free Income Fund | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Advisor Class Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares sold | 1,152,467 | $ | 13,664,865 | 209,766 | $ | 2,295,513 | ||||||||||||||
Shares issued in reinvestment of distributions | 57,103 | 675,948 | 14,958 | 163,719 | ||||||||||||||||
Shares redeemed | (297,053 | ) | (3,510,809 | ) | (41,605 | ) | (454,514 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 912,517 | $ | 10,830,004 | 183,119 | $ | 2,004,718 | ||||||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||
Shares sold | 2,251,858 | $ | 26,024,538 | 615,453 | $ | 6,557,198 | ||||||||||||||
Shares issued in reinvestment of distributions | 89,994 | 1,041,218 | 23,387 | 250,291 | ||||||||||||||||
Shares redeemed | (1,915,126 | ) | (22,138,704 | ) | (464,526 | ) | (4,977,219 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 426,726 | $ | 4,927,052 | 174,314 | $ | 1,830,270 | ||||||||||||||
|
| |||||||||||||||||||
aMay include a portion of Class C shares that were automatically converted to Class A. bFor the period September 10, 2018 (effective date) to February 28, 2019. |
| |||||||||||||||||||
Franklin Louisiana Tax-Free Income Fund | Franklin MarylandTax-Free Income Fund | |||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Class A Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares solda | 1,504,027 | $ | 16,804,383 | 1,752,914 | $ | 19,303,383 | ||||||||||||||
Shares issued in reinvestment of distributions | 32,083 | 359,401 | 44,777 | 494,309 | ||||||||||||||||
Shares redeemed | (296,356 | ) | (3,294,708 | ) | (294,376 | ) | (3,237,483 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 1,239,754 | $ | 13,869,076 | 1,503,315 | $ | 16,560,209 | ||||||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019b | ||||||||||||||||||||
Shares solda | 1,701,505 | $ | 18,331,952 | 2,623,165 | $ | 27,929,306 | ||||||||||||||
Shares issued in reinvestment of distributions | 13,389 | 145,490 | 20,786 | 223,261 | ||||||||||||||||
Shares redeemed | (57,798 | ) | (623,556 | ) | (182,556 | ) | (1,956,390 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | 1,657,096 | $ | 17,853,886 | 2,461,395 | $ | 26,196,177 | ||||||||||||||
|
| |||||||||||||||||||
Class A1 Shares: | ||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||
Shares sold | 839,396 | $ | 9,371,897 | 813,229 | $ | 8,944,583 | ||||||||||||||
Shares issued in reinvestment of distributions | 391,207 | 4,375,669 | 363,551 | 4,010,208 | ||||||||||||||||
Shares redeemed | (1,678,966 | ) | (18,744,620 | ) | (1,777,456 | ) | (19,539,101 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (448,363 | ) | $ | (4,997,054 | ) | (600,676 | ) | $ | (6,584,310 | ) | ||||||||||
|
| |||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||
Shares sold | 1,892,989 | $ | 20,558,941 | 2,463,802 | $ | 26,510,261 | ||||||||||||||
Shares issued in reinvestment of distributions | 859,229 | 9,331,241 | 773,948 | 8,318,557 | ||||||||||||||||
Shares redeemed | (6,283,089 | ) | (68,159,582 | ) | (6,982,741 | ) | (74,930,222 | ) | ||||||||||||
|
| |||||||||||||||||||
Net increase (decrease) | (3,530,871 | ) | $ | (38,269,400 | ) | (3,744,991 | ) | $ | (40,101,404 | ) | ||||||||||
|
|
154 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Class C Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares sold | 330,431 | $ | 3,755,211 | 333,127 | $ | 3,740,911 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 45,016 | 511,736 | 57,107 | 642,673 | ||||||||||||||||||||||||
Shares redeemeda | (589,832 | ) | (6,665,943 | ) | (1,054,119 | ) | (11,795,113 | ) | ||||||||||||||||||||
Net increase (decrease) | (214,385 | ) | $ | (2,398,996 | ) | (663,885 | ) | $ | (7,411,529 | ) | ||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||||||||||
Shares sold | 192,802 | $ | 2,127,054 | 333,994 | $ | 3,664,867 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 121,088 | 1,336,324 | 160,859 | 1,764,128 | ||||||||||||||||||||||||
Shares redeemeda | (2,059,946 | ) | (22,582,744 | ) | (3,815,966 | ) | (41,575,341 | ) | ||||||||||||||||||||
Net increase (decrease) | (1,746,056 | ) | $ | (19,119,366 | ) | (3,321,113 | ) | $ | (36,146,346 | ) | ||||||||||||||||||
Class R6 Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares sold | 83,762 | $ | 936,003 | 95,580 | $ | 1,053,373 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 6,123 | 68,541 | 3,416 | 37,780 | ||||||||||||||||||||||||
Shares redeemed | (32,508 | ) | (363,377 | ) | (17,654 | ) | (194,618 | ) | ||||||||||||||||||||
Net increase (decrease) | 57,377 | $ | 641,167 | 81,342 | $ | 896,535 | ||||||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||||||||||
Shares sold | 92,259 | $ | 1,002,367 | 83,757 | $ | 901,840 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 11,318 | 122,910 | 4,653 | 50,070 | ||||||||||||||||||||||||
Shares redeemed | (87,754 | ) | (949,130 | ) | (54,028 | ) | (579,555 | ) | ||||||||||||||||||||
Net increase (decrease) | 15,823 | $ | 176,147 | 34,382 | $ | 372,355 | ||||||||||||||||||||||
Advisor Class Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares sold | 435,918 | $ | 4,863,207 | 493,689 | $ | 5,445,944 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 27,790 | 311,040 | 58,683 | 648,153 | ||||||||||||||||||||||||
Shares redeemed | (196,479 | ) | (2,193,660 | ) | (445,430 | ) | (4,896,026 | ) | ||||||||||||||||||||
Net increase (decrease) | 267,229 | $ | 2,980,587 | 106,942 | $ | 1,198,071 | ||||||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||||||||||
Shares sold | 1,022,146 | $ | 11,096,020 | 2,198,524 | $ | 23,599,465 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 46,978 | 510,214 | 99,616 | 1,071,788 | ||||||||||||||||||||||||
Shares redeemed | (570,123 | ) | (6,176,872 | ) | (1,966,014 | ) | (21,109,071 | ) | ||||||||||||||||||||
Net increase (decrease) | 499,001 | $ | 5,429,362 | 332,126 | $ | 3,562,182 | ||||||||||||||||||||||
aMay include a portion of Class C shares that were automatically converted to Class A.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
franklintempleton.com | Semiannual Report | 155 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest(continued)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Class A Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares solda | 2,535,199 | $ | 29,630,155 | 2,397,376 | $ | 27,606,472 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 98,950 | 1,161,355 | 67,318 | 777,657 | ||||||||||||||||||||||||
Shares redeemed | (245,825 | ) | (2,883,592 | ) | (295,922 | ) | (3,399,473 | ) | ||||||||||||||||||||
Net increase (decrease) | 2,388,324 | $ | 27,907,918 | 2,168,772 | $ | 24,984,656 | ||||||||||||||||||||||
Year ended February 28, 2019b | ||||||||||||||||||||||||||||
Shares solda | 5,694,257 | $ | 64,576,708 | 4,783,138 | $ | 53,438,165 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 50,375 | 573,922 | 31,986 | 359,667 | ||||||||||||||||||||||||
Shares redeemed | (215,068 | ) | (2,439,329 | ) | (462,518 | ) | (5,179,647 | ) | ||||||||||||||||||||
Net increase (decrease) | 5,529,564 | $ | 62,711,301 | 4,352,606 | $ | 48,618,185 | ||||||||||||||||||||||
Class A1 Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares sold | 1,716,679 | $ | 20,066,944 | 1,161,875 | $ | 13,389,437 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 883,452 | 10,353,539 | 649,013 | 7,486,260 | ||||||||||||||||||||||||
Shares redeemed | (3,720,632 | ) | (43,516,634 | ) | (3,731,837 | ) | (42,901,340 | ) | ||||||||||||||||||||
Net increase (decrease) | (1,120,501 | ) | $ | (13,096,151 | ) | (1,920,949 | ) | $ | (22,025,643 | ) | ||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||||||||||
Shares sold | 4,178,015 | $ | 47,558,768 | 3,658,607 | $ | 41,138,207 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 1,908,645 | 21,736,730 | 1,490,792 | 16,759,421 | ||||||||||||||||||||||||
Shares redeemed | (14,654,167 | ) | (166,580,553 | ) | (12,625,503 | ) | (141,798,890 | ) | ||||||||||||||||||||
Net increase (decrease) | (8,567,507 | ) | $ | (97,285,055 | ) | (7,476,104 | ) | $ | (83,901,262 | ) | ||||||||||||||||||
Class C Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares sold | 501,460 | $ | 5,931,715 | 637,815 | $ | 7,482,612 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 110,510 | 1,308,062 | 92,687 | 1,086,942 | ||||||||||||||||||||||||
Shares redeemeda | (1,246,970 | ) | (14,725,816 | ) | (1,439,651 | ) | (16,814,724 | ) | ||||||||||||||||||||
Net increase (decrease) | (635,000 | ) | $ | (7,486,039 | ) | (709,149 | ) | $ | (8,245,170 | ) | ||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||||||||||
Shares sold | 650,002 | $ | 7,473,133 | 892,002 | $ | 10,185,507 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 271,070 | 3,118,779 | 266,815 | 3,049,710 | ||||||||||||||||||||||||
Shares redeemeda | (4,523,316 | ) | (51,808,510 | ) | (5,910,353 | ) | (67,235,251 | ) | ||||||||||||||||||||
Net increase (decrease) | (3,602,244 | ) | $ | (41,216,598 | ) | (4,751,536 | ) | $ | (54,000,034 | ) | ||||||||||||||||||
156 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Class R6 Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares sold | 251,003 | $ | 2,939,754 | 204,359 | $ | 2,354,763 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 26,062 | 305,764 | 10,647 | 122,833 | ||||||||||||||||||||||||
Shares redeemed | (185,349 | ) | (2,165,242 | ) | (87,463 | ) | (1,010,249 | ) | ||||||||||||||||||||
Net increase (decrease) | 91,716 | $ | 1,080,276 | 127,543 | $ | 1,467,347 | ||||||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||||||||||
Shares sold | 692,387 | $ | 7,883,385 | 283,860 | $ | 3,187,376 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 47,558 | 542,086 | 20,667 | 232,267 | ||||||||||||||||||||||||
Shares redeemed | (629,895 | ) | (7,163,203 | ) | (424,996 | ) | (4,765,686 | ) | ||||||||||||||||||||
Net increase (decrease) | 110,050 | $ | 1,262,268 | (120,469 | ) | $ | (1,346,043 | ) | ||||||||||||||||||||
Advisor Class Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares sold | 824,343 | $ | 9,655,351 | 1,199,731 | $ | 13,833,162 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 66,801 | 783,710 | 108,151 | 1,248,235 | ||||||||||||||||||||||||
Shares redeemed | (368,657 | ) | (4,309,851 | ) | (741,882 | ) | (8,532,981 | ) | ||||||||||||||||||||
Net increase (decrease) | 522,487 | $ | 6,129,210 | 566,000 | $ | 6,548,416 | ||||||||||||||||||||||
Year ended February 28, 2019 | ||||||||||||||||||||||||||||
Shares sold | 1,626,184 | $ | 18,527,100 | 2,678,876 | $ | 30,113,227 | ||||||||||||||||||||||
Shares issued in reinvestment of distributions | 152,450 | 1,736,979 | 213,149 | 2,396,522 | ||||||||||||||||||||||||
Shares redeemed | (2,901,432 | ) | (33,030,695 | ) | (2,581,091 | ) | (28,984,149 | ) | ||||||||||||||||||||
Net increase (decrease) | (1,122,798 | ) | $ | (12,766,616 | ) | 310,934 | $ | 3,525,600 | ||||||||||||||||||||
aMay include a portion of Class C shares that were automatically converted to Class A. |
| |||||||||||||||||||||||||||
bFor the period September 10, 2018 (effective date) to February 28, 2019. | ||||||||||||||||||||||||||||
Franklin Virginia Tax-Free Income Fund | ||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Class A Shares: | ||||||||||||||||||||||||||||
Six Months ended August 31, 2019 | ||||||||||||||||||||||||||||
Shares solda | 1,894,218 | $ | 21,018,223 | |||||||||||||||||||||||||
Shares issued in reinvestment of distributions | 54,734 | 608,194 | ||||||||||||||||||||||||||
Shares redeemed | (256,008 | ) | (2,835,195 | ) | ||||||||||||||||||||||||
Net increase (decrease) | 1,692,944 | $ | 18,791,222 | |||||||||||||||||||||||||
Year ended February 28, 2019b | ||||||||||||||||||||||||||||
Shares solda | 3,750,653 | $ | 40,505,541 | |||||||||||||||||||||||||
Shares issued in reinvestment of distributions | 25,782 | 280,124 | ||||||||||||||||||||||||||
Shares redeemed | (152,004 | ) | (1,645,712 | ) | ||||||||||||||||||||||||
Net increase (decrease) | 3,624,431 | $ | 39,139,953 | |||||||||||||||||||||||||
franklintempleton.com | Semiannual Report | 157 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest(continued)
Franklin Virginia Tax-Free Income Fund | ||||||||
Shares |
Amount | |||||||
Class A1 Shares: | ||||||||
Six Months ended August 31, 2019 | ||||||||
Shares sold | 774,558 | $ | 8,595,378 | |||||
Shares issued in reinvestment of distributions | 500,061 | 5,550,475 | ||||||
Shares redeemed | (2,293,880 | ) | (25,438,402 | ) | ||||
|
|
| ||||||
Net increase (decrease) | (1,019,261 | ) | $ | (11,292,549 | ) | |||
|
|
| ||||||
Year ended February 28, 2019 | ||||||||
Shares sold | 2,263,579 | $ | 24,620,541 | |||||
Shares issued in reinvestment of distributions | 1,110,144 | 12,066,860 | ||||||
Shares redeemed | (8,136,741 | ) | (88,362,462 | ) | ||||
|
|
| ||||||
Net increase (decrease) | (4,763,018 | ) | $ | (51,675,061 | ) | |||
|
|
| ||||||
Class C Shares: | ||||||||
Six Months ended August 31, 2019 | ||||||||
Shares sold | 264,416 | $ | 2,985,605 | |||||
Shares issued in reinvestment of distributions | 59,671 | 673,662 | ||||||
Shares redeemeda | (837,628 | ) | (9,426,195 | ) | ||||
|
|
| ||||||
Net increase (decrease) | (513,541 | ) | $ | (5,766,928 | ) | |||
|
|
| ||||||
Year ended February 28, 2019 | ||||||||
Shares sold | 334,165 | $ | 3,691,239 | |||||
Shares issued in reinvestment of distributions | 164,176 | 1,815,093 | ||||||
Shares redeemeda | (3,087,329 | ) | (33,943,377 | ) | ||||
|
|
| ||||||
Net increase (decrease) | (2,588,988 | ) | $ | (28,437,045 | ) | |||
|
|
| ||||||
Class R6 Shares: | ||||||||
Six Months ended August 31, 2019 | ||||||||
Shares sold | 73,399 | $ | 814,062 | |||||
Shares issued in reinvestment of distributions | 7,538 | 83,745 | ||||||
Shares redeemed | (39,356 | ) | (436,539 | ) | ||||
|
|
| ||||||
Net increase (decrease) | 41,581 | $ | 461,268 | |||||
|
|
| ||||||
Year ended February 28, 2019 | ||||||||
Shares sold | 205,369 | $ | 2,230,301 | |||||
Shares issued in reinvestment of distributions | 15,838 | 172,212 | ||||||
Shares redeemed | (229,022 | ) | (2,485,390 | ) | ||||
|
|
| ||||||
Net increase (decrease) | (7,815 | ) | $ | (82,877 | ) | |||
|
|
|
158 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin Virginia Tax-Free Income Fund | ||||||||
Shares | Amount | |||||||
Advisor Class Shares: | ||||||||
Six Months ended August 31, 2019 | ||||||||
Shares sold | 1,670,781 | $ | 18,470,426 | |||||
Shares issued in reinvestment of distributions | 125,256 | 1,392,156 | ||||||
Shares redeemed | (806,290 | ) | (8,946,345 | ) | ||||
Net increase (decrease) | 989,747 | $ | 10,916,237 | |||||
Year ended February 28, 2019 | ||||||||
Shares sold | 2,570,856 | $ | 27,896,895 | |||||
Shares issued in reinvestment of distributions | 231,856 | 2,522,353 | ||||||
Shares redeemed | (2,846,090 | ) | (30,928,292 | ) | ||||
Net increase (decrease) | (43,378 | ) | $ | (509,044 | ) | |||
aMay include a portion of Class C shares that were automatically converted to Class A.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Trust 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 Funds pay an investment management fee to Advisers based on themonth-end net assets of each of the Funds 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 |
franklintempleton.com | Semiannual Report | 159 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates(continued)
a. Management Fees(continued)
For the period ended August 31, 2019, each Fund’s annualized gross effective investment management fee rate based on average daily net assets was as follows:
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | ||||||||||
0.550% | 0.493% | 0.503% | 0.583% | 0.516% |
Franklin Maryland Tax-Free Income Fund | Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | |||||||
0.509% | 0.474% | 0.478% | 0.491% |
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on each of the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Distribution Fees
The Board has adopted distribution plans for each share class, with the exception of Class R6 and Advisor Class shares, pursuant to Rule12b-1 under the 1940 Act. Under the Funds’ Class A and A1 reimbursement distribution plans, the Funds reimburse Distributors for costs incurred in connection with the servicing, sale and distribution of each Fund’s shares up to the maximum annual plan rate for each class. Under the Class A and A1 reimbursement distribution plans, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Funds’ Class C compensation distribution plans, the Funds pay Distributors for costs incurred in connection with the servicing, sale and distribution of each Fund’s shares up to the maximum annual plan rate. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31 for each Fund.
The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||
Reimbursement Plans: | ||||||||||||
Class A | 0.25% | 0.25% | 0.25% | |||||||||
Class A1 | 0.10% | 0.10% | 0.10% | |||||||||
Compensation Plans: | ||||||||||||
Class C | 0.65% | 0.65% | 0.65% |
160 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||
Reimbursement Plans: | ||||||||||||
Class A | 0.25% | 0.25% | 0.25% | |||||||||
Class A1 | 0.10% | 0.10% | 0.10% | |||||||||
Compensation Plans: | ||||||||||||
Class C | — | 0.65% | 0.65% | |||||||||
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
Reimbursement Plans: | ||||||||||||
Class A | 0.25% | 0.25% | 0.25% | |||||||||
Class A1 | 0.10% | 0.10% | 0.10% | |||||||||
Compensation Plans: | ||||||||||||
Class C | 0.65% | 0.65% | 0.65% |
d. Sales Charges/Underwriting Agreements
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Funds. 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 Funds of the following commission transactions related to the sales and redemptions of the Funds’ shares for the period:
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||
Sales charges retained net of commissions paid to unaffiliated brokers/dealers | $5,849 | $5,405 | $8,987 | |||||||||
CDSC retained | $1,671 | $1,643 | $ 116 | |||||||||
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||
Sales charges retained net of commissions paid to unaffiliated brokers/dealers | $4,575 | $10,194 | $5,340 | |||||||||
CDSC retained | $ 38 | $ 752 | $1,322 | |||||||||
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
Sales charges retained net of commissions paid to unaffiliated brokers/dealers | $23,281 | $17,013 | $11,341 |
franklintempleton.com | Semiannual Report | 161 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates(continued)
d. Sales Charges/Underwriting Agreements(continued)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
CDSC retained | $576 | $3,729 | $3,449 |
Effective March 1, 2019, certainfront-end sales charges on Class A and A1 shares, if any, were lowered. Further details are disclosed in the Funds’ Prospectus.
e. Transfer Agent Fees
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. The fees are based on an annualized asset based fee of 0.02% plus a transaction based fee. In addition, each class reimburses Investor Services for out of pocket expenses incurred and, except for Class R6, reimburses shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.
For the period ended August 31, 2019, the Funds paid transfer agent fees as noted in the Statements of Operations of which the following amounts were retained by Investor Services:
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||
Transfer agent fees | $35,646 | $91,571 | $71,293 | |||||||||
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||
Transfer agent fees | $21,639 | $53,524 | $69,543 | |||||||||
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
Transfer agent fees | $142,506 | $120,860 | $96,498 |
f. Waiver and Expense Reimbursements
Investor Services has contractually agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.03% based on the average net assets of the class until June 30, 2020.
162 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
g. Interfund Transactions
Certain or all Funds engaged in purchases and sales of investments with funds or other accounts that have common investment managers (or affiliated investment managers), directors, trustees or officers. These purchases and sales for the period ended August 31, 2019, were as follows:
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | Franklin Kentucky Tax-Free Income Fund | |||||||||||||||||||||||||||||
Purchases | $100,000 | $ | 12,700,000 | $ | 6,500,000 | $ | 4,240,000 | |||||||||||||||||||||||||
Sales | $300,000 | $ | 7,800,000 | $ | 10,600,000 | $ | 200,000 | |||||||||||||||||||||||||
Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | |||||||||||||||||||||||||||||
Purchases | $ | 1,900,000 | $ | 3,925,000 | $ | 22,885,000 | $ | 5,990,000 | ||||||||||||||||||||||||
Sales | $ | 5,500,000 | $ | 2,600,000 | $ | 40,035,000 | $ | 13,200,000 | ||||||||||||||||||||||||
Franklin Virginia Tax-Free Income Fund | ||||||||||||||||||||||||||||||||
Purchases | $ | 10,400,000 | ||||||||||||||||||||||||||||||
Sales | $ | 2,700,000 |
4. Expense Offset Arrangement
The Funds have entered into an arrangement with their custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Funds’ custodian expenses. During the period ended August 31, 2019, the custodian fees were reduced as noted in the Statements of Operations.
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains.
At February 28, 2019, the capital loss carryforwards were as follows:
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||||||||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||||||||||||||
Short term | $ 2,932,301 | $11,277,278 | $ 3,073,256 | |||||||||||||||||||||||||
Long term | 14,712,588 | 51,043,457 | 19,666,927 | |||||||||||||||||||||||||
Total capital loss carryforwards | $17,644,889 | $62,320,735 | $22,740,183 |
franklintempleton.com | Semiannual Report | 163 |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Income Taxes(continued)
Franklin Kentucky Tax-Free Income Fund |
| Franklin Louisiana Tax-Free Income Fund |
| Franklin Maryland Tax-Free Income Fund | ||||||||||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||||||||||
Short term | $2,281,513 | $10,920,503 | $11,476,244 | |||||||||||||||||||||
Long term | 7,649,663 | 16,795,581 | 30,266,741 | |||||||||||||||||||||
Total capital loss carryforwards | $ | 9,931,176 | $ | 27,716,084 | $ | 41,742,985 | ||||||||||||||||||
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||||||||||
Short term | $10,021,941 | $23,575,835 | $16,243,110 | |||||||||||||||||||||
Long term | 60,673,761 | 64,095,578 | 38,154,756 | |||||||||||||||||||||
Total capital loss carryforwards | $ | 70,695,702 | $ | 87,671,413 | $ | 54,397,866 | ||||||||||||||||||
At August 31, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: |
| |||||||||||||||||||||||
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||||||||||||||
Cost of investments | $ | 223,211,303 | $ | 538,978,878 | $ | 449,296,637 | ||||||||||||||||||
Unrealized appreciation | $ | 17,238,599 | $ | 41,648,690 | $ | 32,010,905 | ||||||||||||||||||
Unrealized depreciation | (184 | ) | (6,266,509 | ) | (6,335,347 | ) | ||||||||||||||||||
Net unrealized appreciation (depreciation) | $ | 17,238,415 | $ | 35,382,181 | $ | 25,675,558 | ||||||||||||||||||
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||||||||||||||
Cost of investments | $ | 150,045,173 | $ | 367,794,047 | $ | 395,600,355 | ||||||||||||||||||
Unrealized appreciation | $ | 8,895,720 | $ | 27,602,528 | $ | 28,455,688 | ||||||||||||||||||
Unrealized depreciation | (346 | ) | (1,441,142 | ) | (2,457,603 | ) | ||||||||||||||||||
Net unrealized appreciation (depreciation) | $ | 8,895,374 | $ | 26,161,386 | $ | 25,998,085 |
164 | Semiannual Report | franklintempleton.com |
FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
Cost of investments | $ | 949,770,401 | $817,722,718 | $586,803,046 | ||||||||
Unrealized appreciation | $ | 62,073,407 | $ 48,620,162 | $ 37,700,374 | ||||||||
Unrealized depreciation | (9,832,866 | ) | (8,542,549 | ) | (3,204,482) | |||||||
Net unrealized appreciation (depreciation) | $ | 52,240,541 | $ 40,077,613 | $ 34,495,892 | ||||||||
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, wash sales and bond workout expenditures.
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the period ended August 31, 2019, were as follows: | ||||||||||||
Franklin Alabama Tax-Free Income Fund | Franklin Florida Tax-Free Income Fund | Franklin Georgia Tax-Free Income Fund | ||||||||||
Purchases | $3,340,270 | $20,662,840 | $24,450,238 | |||||||||
Sales | $4,779,180 | $20,215,550 | $18,739,004 | |||||||||
Franklin Kentucky Tax-Free Income Fund | Franklin Louisiana Tax-Free Income Fund | Franklin Maryland Tax-Free Income Fund | ||||||||||
Purchases | $15,214,321 | $19,858,635 | $18,272,500 | |||||||||
Sales | $12,185,000 | $ 8,757,930 | $19,216,625 | |||||||||
Franklin Missouri Tax-Free Income Fund | Franklin North Carolina Tax-Free Income Fund | Franklin Virginia Tax-Free Income Fund | ||||||||||
Purchases | $90,810,198 | $97,139,819 | $77,196,100 | |||||||||
Sales | $68,989,120 | $61,635,500 | $57,655,000 |
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
7. Defaulted Securities
Certain or all Funds held defaulted securities and/or other securities for which the income has been deemed uncollectible. The Funds discontinue accruing income on securities for which income has been deemed uncollectible and provide an estimate for losses on interest receivable. The securities have been identified in the accompanying Statements of Investments. At August 31, 2019, the aggregate value of these securities was as follows:
Value | Percentage of Net Assets | |||||
Franklin FloridaTax-Free Income Fund | $ | 16,025,000 | 2.8% | |||
Franklin GeorgiaTax-Free Income Fund | 4,012,545 | 0.9% | ||||
Franklin LouisianaTax-Free Income Fund | 5,176,125 | 1.3% | ||||
Franklin MarylandTax-Free Income Fund | 8,025,000 | 1.9% | ||||
Franklin MissouriTax-Free Income Fund | 28,374,300 | 2.8% | ||||
Franklin North CarolinaTax-Free Income Fund | 24,745,088 | 2.9% | ||||
Franklin VirginiaTax-Free Income Fund | 10,914,000 | 1.8% |
8. Concentration of Risk
Certain or all Funds invest a large percentage of their total assets in obligations of issuers within their respective state, U.S. territories, and the District of Columbia. Such concentration may subject the Funds to risks associated with industrial or regional matters, and economic, political or legal developments occurring within those states, U.S. territories, and the District of Columbia. Investing in Puerto Rico securities may expose the Funds to heightened risks due to recent adverse economic and market changes, credit downgrades and ongoing restructuring discussions. In addition, investments in these securities are sensitive to interest rate changes and credit risk of the issuer and may subject the Funds to increased market volatility. The market for these investments may be limited, which may make them difficult to buy or sell.
9. Credit Facility
The Funds, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which, matures on February 7, 2020. 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 Funds shall, in addition to interest charged on any borrowings made by the Funds and other costs incurred by the Funds, pay their share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon their relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statements of Operations. During the period ended August 31, 2019, the Funds did not use the Global Credit Facility.
10. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• | Level 1 – quoted prices in active markets for identical financial instruments |
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FRANKLIN TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
• | 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 Funds’ 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.
At August 31, 2019, all of the Funds’ investments in financial instruments carried at fair value were valued using Level 2 inputs.
11. Subsequent Events
The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Abbreviations
Selected Portfolio
AGMC | Assured Guaranty Municipal Corp. | IDAR | Industrial Development Authority Revenue | |||
AMBAC | American Municipal Bond Assurance Corp. | IDB | Industrial Development Bond/Board | |||
BAM | Build America Mutual Assurance Co. | IDBR | Industrial Development Board Revenue | |||
BHAC | Berkshire Hathaway Assurance Corp. | LOC | Letter of Credit | |||
CDA | Community Development Authority/Agency | MBS | Mortgage-Backed Security | |||
COP | Certificate of Participation | MFHR | Multi-Family Housing Revenue | |||
CSD | Central School District | NATL | National Public Financial Guarantee Corp. | |||
EDA | Economic Development Authority | PBA | Public Building Authority | |||
EDC | Economic Development Corp. | PCFA | Pollution Control Financing Authority | |||
EDR | Economic Development Revenue | PCR | Pollution Control Revenue | |||
ETM | Escrow to Maturity | PFAR | Public Financing Authority Revenue | |||
FGIC | Financial Guaranty Insurance Co. | RDA | Redevelopment Agency/Authority | |||
FICO | Financing Corp. | RDAR | Redevelopment Agency Revenue | |||
GNMA | Government National Mortgage Association | SFM | Single Family Mortgage | |||
GO | General Obligation | SFMR | Single Family Mortgage Revenue | |||
HDA | Housing Development Authority/Agency | SPA | Standby Purchase Agreement | |||
HFA | Housing Finance Authority/Agency | SRF | State Revolving Fund | |||
HFAR | Housing Finance Authority Revenue | XLCA | XL Capital Assurance | |||
IDA | Industrial Development Authority/Agency |
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Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’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 Trust’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 recent12-month period ended June 30.
Quarterly Statement of Investments
The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on FormN-PORT. Shareholders may view the filed FormN-PORT 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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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
Semiannual Report and Shareholder Letter FranklinTax-Free Trust | ||||||
Investment Manager Franklin Advisers, Inc. | Distributor Franklin Templeton Distributors, Inc. (800) DIAL BEN® /342-5236 franklintempleton.com | Shareholder Services (800)632-2301 |
© 2019 Franklin Templeton Investments. All rights reserved. | TF2 S 10/19 |
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 13(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 Mary C. Choksi, 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 forClosed-End Management Investment Companies. | N/A | |||
Item 8. Portfolio Managers ofClosed-End Management Investment Companies. | N/A | |||
Item 9. Purchases of Equity Securities byClosed-End Management Investment Company and Affiliated Purchasers. | N/A | |||
Item 10. Submission of Matters to a Vote of Security Holders. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report onForm N-CSRS, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-end Management Investment Company. | N/A |
Item 13. Exhibits.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer – Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer – Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FRANKLINTAX-FREE TRUST
By | S\ MATTHEW T. HINKLE | |
Matthew T. Hinkle | ||
Chief Executive Officer – Finance and Administration |
Date October 31, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By | S\ MATTHEW T. HINKLE | |
Matthew T. Hinkle | ||
Chief Executive Officer – Finance and Administration |
Date October 31, 2019
By | S\ GASTON GARDEY | |
Gaston Gardey | ||
Chief Financial Officer and Chief Accounting Officer |
Date October 31, 2019