UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-04149
_Franklin Tax-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) |
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Registrant's telephone number, including area code: (650) 312-2000
Date of fiscal year end: _2/29
Date of reporting period: 2/29/20
Item 1. Reports to Stockholders.
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.
SHAREHOLDER LETTER
Dear Shareholder:
During the 12 months ended February 29, 2020, the U.S. economy continued to grow, but at a more moderate pace mainly due to concerns about trade. The U.S. Federal Reserve (Fed) lowered the federal funds rate by 0.25% at each of its July, September and October 2019 meetings, decreasing the rate from 2.50% to 1.75% by period-end, citing muted inflation pressures, some soft business indicators and the potential effects of global developments on the U.S. economy.
During the 12-month period, municipal bonds delivered positive total returns as investors were attracted to tax-free income in a declining interest-rate environment. Factors contributing to this positive investment environment for municipals included relatively low inflation, interest-rate declines, increased employment and the relative strength of the U.S. economy.
After the reporting period, the Fed, in efforts to maintain U.S. economic strength amid risks posed by the novel coronavirus (COVID-19) outbreak, lowered the federal funds rate by 0.50% on March 3 and further by 1.00% on March 15, decreasing the rate to 0.25%, while initiating quantitative easing. U.S. equity markets continued to sell off during the remainder of March, given the economic slowdown caused by COVID-19, and municipal bond valuations modestly declined overall.
Franklin Tax-Free Trust's annual report includes more detail about municipal bond market conditions and a discussion from the portfolio managers. In addition, on our website, franklintempleton.com, you can find updated commentary by our municipal bond experts. Municipal bonds provide tax-free income and diversification from equities. Despite periods of volatility, municipal bonds historically have had a solid long-term record of performance, driven mostly by their compounding tax-free income component. As you know, 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 in us and encourage you to contact us or your financial advisor when you have questions about your Franklin tax-free investment.
Sincerely,
Rupert H. Johnson, Jr.
Chairman
Franklin Tax-Free Trust
Sheila Amoroso
Senior Vice President and Director
Franklin Municipal Bond Department
This letter reflects our analysis and opinions as of February 29, 2020, 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.
Not FDIC Insured | May Lose Value | No Bank Guarantee
franklintempleton.com | Not part of the annual report | 1 |
Contents |
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Annual Report |
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Municipal Bond Market Overview . . . . . . . . . . . . . . . . . . . . . . | 3 |
Investment Strategy and Manager's Discussion . . . . . . . . | 5 |
Franklin Alabama Tax-Free Income Fund . . . . . . . . . . . . . . | 6 |
Franklin Florida Tax-Free Income Fund . . . . . . . . . . . . . . . . | 12 |
Franklin Georgia Tax-Free Income Fund . . . . . . . . . . . . . . . | 18 |
Franklin Kentucky Tax-Free Income Fund . . . . . . . . . . . . . . | 24 |
Franklin Louisiana Tax-Free Income Fund . . . . . . . . . . . . . | 30 |
Franklin Maryland Tax-Free Income Fund. . . . . . . . . . . . . . | 36 |
Franklin Missouri Tax-Free Income Fund. . . . . . . . . . . . . . . | 42 |
Franklin North Carolina Tax-Free Income Fund . . . . . . . . | 48 |
Franklin Virginia Tax-Free Income Fund. . . . . . . . . . . . . . . . | 54 |
Financial Highlights and Statements of Investments. . . . | 60 |
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 140 |
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . | 154 |
Report of Independent Registered |
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Public Accounting Firm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 174 |
Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 175 |
Board Members and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . | 176 |
Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 181 |
Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools.
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2 | Annual Report | franklintempleton.com |
ANNUAL REPORT
Municipal Bond Market Overview
The financial markets experienced volatility during the 12 months ended February 29, 2020. Trade disputes, uncertainties about the prospects for global economic growth and speculations on major central banks' future policy decisions weighed on financial markets throughout the period. U.S. equities experienced heightened volatility, most notably in the final two weeks of the period, as fears grew about a global outbreak of the novel coronavirus (COVID-19), which contributed to a flight to perceived quality that benefited high-quality fixed income assets such as municipal bonds and U.S. Treasuries. Municipal bonds posted positive returns in 11 of the 12 months under review. Overall, municipal bonds outperformed U.S. equities, but underperformed the U.S. Treasury and corporate bond markets.
Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, posted a +9.46% total return for the 12-month period, while U.S. Treasuries, as measured by the Bloomberg Barclays U.S. Treasury Index, posted a +12.15% total return, and investment-grade corporate bonds, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, posted a +15.81% total return.1 All three of these fixed income sectors outperformed U.S. stocks, as measured by the Standard & Poor's® 500 Index, which posted a +8.19% total return for the period.1
Municipal bonds with long maturities generally outperformed municipal bonds with shorter maturities during the 12-month period. The best-performing maturity group in the Bloomberg Barclays Municipal Bond Index was the long (22+ years) bond group, which posted a +14.00% total return for the period.1 Within investment- grade municipal bonds, lower-quality bonds posted stronger returns than their higher-quality counterparts. High-yield municipal bonds generally outperformed investment-grade municipal bonds, with the Bloomberg Barclays High Yield Municipal Bond Index posting a +14.40% total return, compared with a +9.46% total return for the Bloomberg Barclays Municipal Bond Index.1
Municipal issuance during the reporting period totaled approximately $438 billion, a 25% increase from total issuance for the preceding 12-month period.2 New issuance totaled approximately $68 billion during the first
two months of calendar-year 2020, a 32% increase from the same period in 2019.2 Over the period, taxable municipal bond issuance increased as issuers took advantage of historically low interest rates to advance tax-exempt debt refundings. In calendar-year 2019, taxable issuance totaled approximately $70 billion, a 135% increase from 2018.2
The Investment Company Institute reported positive municipal bond mutual fund flows during each month over the 12-month period under review. During the period, total net inflows recorded a robust total of approximately
$97 billion.3 Calendar-year 2019 ended as one of the strongest years on record for positive net inflows into the municipal bond asset class as investor demand for tax-exempt income surged. Given the global economic uncertainty and municipal bonds' generally high credit quality and favorable tax treatment, we expect investor demand to remain healthy.
The U.S. Federal Reserve (Fed) lowered its target range for the federal funds rate by 0.25%, three times over the period, at the July, September and October 2019 meetings. The target range for the federal funds rate was 1.50–1.75% at period-end. In its press release following the October decision, the Fed cited muted inflation pressures and global growth concerns as the primary catalysts for the decision. The Fed noted, however, that the labor market remained strong and economic activity rose at a moderate pace. On February 28, 2020, Fed Chair Jerome Powell indicated the Fed was prepared to use its tools as appropriate to support the U.S. economy amid the economic risks posed by the COVID-19 outbreak, although economic fundamentals remained robust.
At period-end, we maintained our positive view of the municipal bond market. We believe municipal bonds continue to be an attractive asset class among fixed income securities, and we intend to follow our disciplined approach of investing to maximize income, while seeking value in the municipal bond market.
1.Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
2.Source: The Bond Buyer, Thomson Reuters.
3.Source: Investment Company Institute. See
www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Annual Report | 3 |
FRANKL IN TAX-FREE TRUST
MUNICI PAL BOND MARK E T OVERVIEW
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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.
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4 | Annual Report | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Investment Strategy and Manager's Discussion
Investment Strategy
We use a consistent, disciplined strategy with the objective of maximizing tax-free income and capital preservation by focusing on credit selection. We seek to maintain exposure to securities that produce high tax-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.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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.
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 of tax-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 Franklin Tax-Free Trust. We look forward to serving your future investment needs.
franklintempleton.com | Annual Report | 5 |
Franklin Alabama Tax-Free Income Fund
This annual report for Franklin Alabama Tax-Free Income | Dividend Distributions* |
Fund covers the fiscal year ended February 29, 2020. | 3/1/19–2/29/20 |
| Dividend per Share (cents) |
Your Fund's Goal and Main Investments
| Class | Class |
| Advisor |
Month | A | A1 | Class C Class R6 | Class |
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* 2/29/20
| % of Total |
Ratings | Investments |
AAA | 7.88% |
| March | 2.5500 | 2.6900 | 2.1800 | 2.8100 | 2.7800 | |
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| April** | 4.2000 | 4.3400 | 3.8300 | 4.4600 | 4.4300 | |
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| May | 2.5942 | 2.7312 | 2.2485 | 2.8614 | 2.8248 | |
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| June | 2.2818 | 2.4050 | 1.9613 | 2.5173 | 2.4905 | |
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| July | 2.7097 | 2.8589 | 2.3400 | 2.9894 | 2.9595 | |
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| August | 2.4269 | 2.5622 | 2.0841 | 2.6822 | 2.6545 | |
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| September | 2.5380 | 2.6810 | 2.1897 | 2.8010 | 2.7723 |
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| October | 2.5540 | 2.6948 | 2.1994 | 2.8161 | 2.7904 |
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| November | 2.3622 | 2.4949 | 2.0348 | 2.6074 | 2.5839 |
AA | 76.76% | December | 2.5758 | 2.7195 | 2.2132 | 2.8434 | 2.8174 |
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A | 3.66% | January | 2.5429 | 2.6691 | 2.2270 | 2.7782 | 2.7552 |
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BBB | 4.03% | February | 2.2007 | 2.3406 | 1.8851 | 2.4430 | 2.4235 |
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Refunded | 7.67% | Total | 31.5362 | 33.1872 | 27.3931 | 34.6094 | 34.2820 |
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*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 $11.40 on February 29, 2020. The Fund's Class A shares paid dividends totaling 31.5362 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 2.23% based on an annualization of February's 2.2007 cents per share monthly dividend and the maximum offering price of $11.84 on February 29, 2020. An investor in the 2020 maximum
*The distribution amount is the sum of all net investment income distributions for the period shown. 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
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 4.11% from a taxable investment to match the Fund's Class A tax-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 recent month-end performance, go to franklintempleton.com or 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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 65.
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6 | Annual Report | franklintempleton.com |
State Update
During the 12 months under review, Alabama's economy grew, but the pace of growth slowed during much of the period and trailed the national average in the third quarter of 2019. The state's unemployment rate dropped from 3.5% in February 2019 to 2.7% at period-end, below the nation's 3.5% average.3 During Alabama's fiscal year (FY) 2019, which ended on September 30, 2019, tax collections contributing to the state's revenues exceeded those during FY 2018. Alabama's structurally balanced $8.6 billion budget included the state's largest Education Trust Fund budget since 2008. The state's FY 2020 budget enacted in May 2019 totaled approximately $9.3 billion. Alabama's net tax- supported debt was $877 per capita and 2.2% of personal income, compared with the $1,068 and 2.2% national medians, respectively.4 The independent credit rating agency Standard & Poor's (S&P) maintained the state's general obligations bonds' AA rating with a stable outlook.5 The AA rating reflected S&P's view of the state's strong financial management, budgetary controls and manageable debt profile, which have contributed to the state's improved finances and higher year-end cash balances over the past five fiscal years. Headwinds in S&P's view include the state's overall restrictive taxing structure,
and below-average economic metrics and pension-obligation funding.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Alabama Tax-Free Income Fund. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
F R A N K L IN ALABAMA TAX - FREE INCOME FUN D
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
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Utilities | 30.39% | |
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Tax-Supported | 15.35% | |
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Refunded** | 14.45% | |
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Higher Education | 14.39% | |
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General Obligation | 11.70% | |
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Hospital & Health Care | 8.00% | |
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Corporate-Backed | 2.59% | |
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Transportation | 2.15% | |
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Other Revenue | 0.98% |
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*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 7 |
F R A N K L IN ALABAMA TAX - FREE INCOME FUN D
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
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1-Year | +8.08% | +4.03% |
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5-Year | +16.01% | +2.23% |
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10-Year | +46.38% | +3.49% |
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Advisor5 |
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1-Year | +8.36% | +8.36% |
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5-Year | +16.59% | +3.12% |
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10-Year | +47.11% | +3.94% |
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| Distribution | Taxable Equivalent |
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Share Class | Rate6 | Distribution Rate7 | 30-Day Standardized Yield8 | 30-Day Standardized Yield7 | |
A | 2.23% | 4.11% | 0.67% | 1.24% |
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Advisor | 2.55% | 4.70% | 0.93% | 1.72% |
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Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 10 for Performance Summary footnotes.
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8 | Annual Report | franklintempleton.com |
FRANKL IN ALABAMA TAX-FREE INCOME FUN D
PERFORMANCE SUM M A RY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000 |
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| $15,538 |
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$14,000 |
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| $14,089 |
$12,000 |
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| $11,935 |
$10,000 |
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$8,000 |
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3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 |
Franklin Alabama | Bloomberg Barclays | Consumer Price Index10 | |||
Tax-Free Income Fund | Municipal Bond Index9 |
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Advisor Class (3/1/10–2/29/20) |
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$16,000 |
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| $15,538 |
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| $14,711 |
$14,000 |
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$12,000 |
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| $11,935 |
$10,000 |
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$8,000 |
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3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 |
Franklin Alabama | Bloomberg Barclays | Consumer Price Index10 | |||
Tax-Free Income Fund | Municipal Bond Index9 |
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See page 10 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 9 |
FRANKL IN ALABAMA TAX-FREE INCOME FUND
PERFORMANCE SUM M A RY
Distributions (3/1/19–2/29/20) |
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Share Class | Income |
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A | $0.315362 |
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A1 | $0.331872 |
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C | $0.273931 |
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R6 | $0.346094 |
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Advisor | $0.342820 |
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Total Annual Operating Expenses11 | |
Share Class |
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A | 0.91% |
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Advisor | 0.66% |
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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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 Rule 12b-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 Rule 12b-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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
7.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 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's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
9.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
10.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
11.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown. See www.franklintempletondatasources.com for additional data provider information.
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10 | Annual Report | franklintempleton.com |
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.
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| Actual | Hypothetical |
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| (actual return after expenses) | (5% annual return before expenses) |
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| Expenses |
| Net |
| Beginning | Ending | Expenses | Ending | Paid During | Annualized | |||
Share | Account | Account | Paid During | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | Period 9/1/19-2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | ||
A | $1,000 |
| $1,025.80 | $4.58 |
| $1,020.34 | $4.57 |
| 0.91% |
A1 | $1,000 |
| $1,025.70 | $3.83 |
| $1,021.08 | $3.82 | 0.76% | |
C | $1,000 |
| $1,023.70 | $6.59 |
| $1,018.35 | $6.57 | 1.31% | |
R6 | $1,000 |
| $1,027.30 | $3.18 |
| $1,021.73 | $3.17 | 0.63% | |
Advisor | $1,000 |
| $1,027.10 | $3.33 |
| $1,021.58 | $3.32 | 0.66% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Annual Report | 11 |
Franklin Florida Tax-Free Income Fund
This annual report for Franklin Florida Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
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AAA | 9.17% |
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AA | 31.54% |
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A | 35.72% |
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BBB | 9.55% |
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Below Investment Grade | 1.32% |
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Refunded | 11.94% |
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Not Rated | 0.76% |
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*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.
Dividend Distributions* 3/1/19–2/29/20
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| Dividend per Share (cents) |
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| Class | Class |
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| Advisor |
Month | A | A1 | Class C | Class R6 | Class |
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March | 3.0100 | 3.1400 | 2.6500 | 3.2500 | 3.2200 |
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April** | 4.1500 | 4.2800 | 3.7900 | 4.3900 | 4.3600 |
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May | 2.9588 | 3.0906 | 2.6550 | 3.2239 | 3.1878 |
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June | 2.6384 | 2.7581 | 2.3580 | 2.8760 | 2.8468 |
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July | 3.0826 | 3.2229 | 2.7544 | 3.3601 | 3.3264 |
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August | 2.7300 | 2.8597 | 2.4284 | 2.9855 | 2.9546 |
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September | 2.8255 | 2.9613 | 2.5179 | 3.0874 | 3.0577 |
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October | 2.7901 | 2.9255 | 2.4781 | 3.0514 | 3.0234 |
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November | 2.6239 | 2.7506 | 2.3191 | 2.8683 | 2.8420 |
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December | 2.8551 | 2.9922 | 2.5529 | 3.1254 | 3.0925 |
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January | 2.7757 | 2.9085 | 2.4645 | 3.0392 | 3.0066 |
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February | 2.4534 | 2.5786 | 2.1710 | 2.6995 | 2.6661 |
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Total | 34.8935 | 36.4680 | 31.1393 | 37.9567 | 37.5839 |
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*The distribution amount is the sum of all net investment income distributions for the period shown. 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.
annualization of February's 2.4534 cents per share monthly dividend and the maximum offering price of $11.25 on February 29, 2020. An investor in the 2020 maximum federal income tax bracket of 37.00% (plus 3.80% Medicare tax) would need to earn a distribution rate of 4.43% from a taxable investment to match the Fund's Class A tax-free distribution rate. For other performance data, please see the
Performance Overview
The Fund's Class A share price, as measured by net asset value, increased from $10.44 on February 28, 2019, to $10.83 on February 29, 2020. The Fund's Class A shares paid dividends totaling 34.8935 cents per share for the same period.2 The Performance Summary beginning on page 14 shows that at the end of this reporting period the Fund's Class A shares' distribution rate was 2.62% based on an
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
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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 73.
12 | Annual Report | franklintempleton.com |
FRANKLIN FLORIDA TAX-FREE INCOME FUND
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
State Update
During the 12 months under review, Florida's economy continued to grow but more slowly, similar to the national economy. The state economy benefited from employment and population growth, helped by tourism and in-migration. Florida's unemployment rate dropped from 3.4% in February 2019 to 2.8% at period-end, below the nation's 3.5% average.3 The state's net general revenue collections in fiscal year (FY) 2019, which ended June 30, 2019, rose strongly compared to FY 2018, partly a reflection of broad-based economic growth including tourism- and construction-related sales tax collections and corporate income tax collections. Appropriations under Florida's adopted fiscal year (FY) 2020 budget rose modestly with increases for Everglades restoration and water resources, education and tax relief. The state's net tax-supported debt was $812 per capita and 1.7% of personal income, below the $1,068 and 2.2% national medians, respectively.4 During the period, independent credit rating agency Standard & Poor's (S&P) maintained the state's general obligations bonds' AAA rating with a stable outlook.5 The rating reflected in part S&P's view of the state's strong employment, population and revenue growth and reserves, relatively well-funded pensions and moderate debt. The outlook also reflected S&P's assessment of Florida's strong economic growth and expectation the state would maintain structural budget balance.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Florida Tax-Free Income Fund. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
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Hospital & Health Care | 25.25% |
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Transportation | 21.49% |
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Utilities | 16.10% |
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Refunded** | 14.31% |
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General Obligation | 8.96% |
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Tax-Supported | 7.80% |
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Higher Education | 3.32% |
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Other Revenue | 1.65% |
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Housing | 1.12% |
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*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 13 |
FRANKLIN FLORIDA TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
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1-Year | +7.18% | +3.16% |
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5-Year | +14.51% | +1.96% |
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10-Year | +42.03% | +3.18% |
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Advisor5 |
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1-Year | +7.44% | +7.44% |
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5-Year | +15.37% | +2.90% |
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10-Year | +43.09% | +3.65% |
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| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate6 | Distribution Rate7 | 30-Day Standardized Yield8 | 30-Day Standardized Yield7 | |
A | 2.62% | 4.43% | 0.81% | 1.37% |
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Advisor | 2.95% | 4.98% | 1.09% | 1.84% |
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Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 16 for Performance Summary footnotes.
14 | Annual Report | franklintempleton.com |
FRANKLIN FLORIDA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$13,671
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Florida |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
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| Tax-Free Income Fund |
| Municipal Bond Index9 |
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Advisor Class (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$14,309
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Florida |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
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| Tax-Free Income Fund |
| Municipal Bond Index9 |
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See page 16 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 15 |
FRANKLIN FLORIDA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
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| Net Investment |
Share Class | Income |
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A | $0.348935 |
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A1 | $0.364680 |
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C | $0.311393 |
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R6 | $0.379567 |
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Advisor | $0.375839 |
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Total Annual Operating Expenses11 | |
Share Class |
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A | 0.85% |
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Advisor | 0.60% |
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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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 Rule 12b-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 Rule 12b-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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
7.Taxable equivalent distribution rate and yield assume the 2020 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
8.The Fund's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
9.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
10.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
11.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
16 | Annual Report | franklintempleton.com |
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.
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| (actual return after expenses) | (5% annual return before expenses) |
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| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
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| $1,020.10 | $4.22 |
| $1,020.69 | $4.22 |
| 0.84% |
A1 | $1,000 |
| $1,020.80 | $3.47 |
| $1,021.43 | $3.47 | 0.69% | ||
C | $1,000 |
| $1,017.90 | $6.22 |
| $1,018.70 | $6.22 | 1.24% | ||
R6 | $1,000 |
| $1,021.50 | $2.81 |
| $1,022.08 | $2.82 | 0.56% | ||
Advisor | $1,000 |
| $1,021.30 | $2.97 |
| $1,021.93 | $2.97 | 0.59% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements,for Class.
franklintempleton.com | Annual Report | 17 |
Franklin Georgia Tax-Free Income Fund
This annual report for Franklin Georgia Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
|
|
AAA | 9.60% |
|
|
AA | 66.52% |
|
|
A | 11.77% |
|
|
BBB | 4.13% |
|
|
Below Investment Grade | 0.85% |
|
|
Refunded | 6.49% |
|
|
Not Rated | 0.64% |
|
|
*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.
Dividend Distributions* 3/1/19–2/29/20
|
| Dividend per Share (cents) |
| ||
| Class | Class |
|
| Advisor |
Month | A | A1 | Class C | Class R6 | 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 |
|
|
|
|
|
|
September | 2.7502 | 2.9069 | 2.3882 | 3.0547 | 3.0074 |
|
|
|
|
|
|
October | 2.7021 | 2.8550 | 2.3311 | 3.0042 | 2.9580 |
|
|
|
|
|
|
November | 2.4707 | 2.6155 | 2.1275 | 2.7543 | 2.7113 |
|
|
|
|
|
|
December | 2.7415 | 2.8974 | 2.3617 | 3.0409 | 3.0025 |
|
|
|
|
|
|
January | 2.5801 | 2.7321 | 2.2082 | 2.8707 | 2.8346 |
|
|
|
|
|
|
February | 2.2919 | 2.4447 | 1.9651 | 2.5370 | 2.5355 |
|
|
|
|
|
|
Total | 34.5323 | 36.3393 | 30.1586 | 37.9638 | 37.5214 |
|
|
|
|
|
|
*The distribution amount is the sum of all net investment income distributions for the period shown. 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.
dividend and the maximum offering price of $12.66 on February 29, 2020. An investor in the 2020 maximum combined effective federal and Georgia personal income tax bracket of 46.30% (including 3.80% Medicare tax) would need to earn a distribution rate of 4.04% from a taxable investment to match the Fund's Class A tax-free distribution
Performance Overview
The Fund's Class A share price, as measured by net asset value, increased from $11.59 on February 28, 2019, to $12.19 on February 29, 2020. The Fund's Class A shares paid dividends totaling 34.5323 cents per share for the same period.2 The Performance Summary beginning on page 20 shows that at the end of this reporting period the Fund's Class A shares' distribution rate was 2.17% based on an annualization of February's 2.2919 cents per share monthly
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
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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 82.
18 | Annual Report | franklintempleton.com |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
State Update
During the 12 months under review, Georgia's diversified economy grew at a healthy pace, attracting businesses and jobs. Growing sectors during much of the period included information and professional, scientific and technical services. The state's real estate, rental and leasing sector also performed well early in the period. The state's unemployment rate dropped from 3.7% in February 2019 to 3.1% at period-end, below the nation's 3.5% average.3 The state closed fiscal year (FY) 2019 on June 30 with higher-than-expected revenues. The budget adopted for FY 2019 assumed growth of net revenues above the previous year's amended budget. The state's FY 2020 budget boosts spending for K-12 education with pay hikes for teachers and increases in public health care funding. The state's net tax-supported debt was $996 per capita and 2.3% of personal income, compared with the $1,068 and 2.2% national medians, respectively.4 During the period under review, independent credit rating agency Standard & Poor's (S&P) maintained the state's general obligations bonds' AAA rating with a stable outlook.5 The rating reflected S&P's view of the state's broad-based economic growth that outpaces the nation, strong financial monitoring, history of budget adjustments, growth in its revenue shortfall reserve, moderate debt and proactive management of long-term liabilities.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Georgia Tax-Free Income Fund. We believe our conser- vative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
|
|
|
Utilities | 23.18% |
|
|
|
|
Hospital & Health Care | 18.74% |
|
|
|
|
General Obligation | 16.02% |
|
|
|
|
Subject to Government Appropriations | 11.74% |
|
|
|
|
Higher Education | 7.26% |
|
|
|
|
Refunded** | 6.75% |
|
|
|
|
Tax-Supported | 6.37% |
|
|
|
|
Housing | 5.25% |
|
|
|
|
Transportation | 4.69% |
|
|
|
|
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 19 |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
|
|
|
1-Year | +8.27% | +4.21% |
|
|
|
|
|
5-Year | +15.39% | +2.12% |
|
|
|
|
|
10-Year | +46.44% | +3.49% |
|
|
|
|
|
Advisor5 |
|
|
|
1-Year | +8.63% | +8.63% |
|
|
|
|
|
5-Year | +16.16% | +3.04% |
|
|
|
|
|
10-Year | +47.36% | +3.95% |
|
|
|
|
|
| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate6 | Distribution Rate7 | 30-Day Standardized Yield8 | 30-Day Standardized Yield7 | |
A | 2.17% | 4.04% | 0.79% | 1.47% |
|
|
|
|
|
|
|
Advisor | 2.49% | 4.64% | 1.05% | 1.96% |
|
|
|
|
|
|
|
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 22 for Performance Summary footnotes.
20 | Annual Report | franklintempleton.com |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000
$15,538
$14,000 | $14,095 |
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Georgia |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
|
|
| ||||||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index9 |
|
|
|
Advisor Class (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$14,736
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Georgia |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index9 |
|
|
|
See page 22 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 21 |
FRANKLIN GEORGIA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
|
| Net Investment |
Share Class | Income |
|
|
A | $0.345323 |
|
|
A1 | $0.363393 |
|
|
C | $0.301586 |
|
|
R6 | $0.379638 |
|
|
Advisor | $0.375214 |
| |
Total Annual Operating Expenses11 | |
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 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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 Rule 12b-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 Rule 12b-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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
7.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 for the maximum combined effective federal and Georgia personal income tax rate of 46.30%, based on the federal income tax rate of 37.00% plus 3.80% Medicare tax.
8.The Fund's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
9.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
10.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
11.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
22 | Annual Report | franklintempleton.com |
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 | Hypothetical |
|
| ||
|
|
|
| (actual return after expenses) | (5% annual return before expenses) |
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
|
| $1,026.50 | $4.33 |
| $1,020.59 | $4.32 |
| 0.86% |
A1 | $1,000 |
| $1,027.30 | $3.58 |
| $1,021.33 | $3.57 | 0.71% | ||
C | $1,000 |
| $1,024.30 | $6.34 |
| $1,018.60 | $6.32 | 1.26% | ||
R6 | $1,000 |
| $1,028.00 | $2.87 |
| $1,022.03 | $2.87 | 0.57% | ||
Advisor | $1,000 |
| $1,027.80 | $3.08 |
| $1,021.83 | $3.07 | 0.61% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Annual Report | 23 |
Franklin Kentucky Tax-Free Income Fund
This annual report for Franklin Kentucky Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
|
|
AAA | 4.65% |
|
|
AA | 43.36% |
|
|
A | 29.78% |
|
|
BBB | 16.44% |
|
|
Refunded | 5.77% |
|
|
*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 $10.76 on February 28, 2019, to $11.24 on February 29, 2020. The Fund's Class A shares paid dividends totaling 30.8501 cents per share for the same period.2 The Performance Summary beginning on page 26 shows that at the end of this reporting period the Fund's Class A shares' distribution rate was 2.05% based on an annualization of February's 2.0000 cents per share monthly dividend and the maximum offering price of $11.68 on February 29, 2020. An investor in the 2020 maximum
Dividend Distributions* 3/1/19–2/29/20
| Dividend per Share (cents) | |||
| Class | Class |
| Advisor |
Month | A | A1 | Class R6 | 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 |
|
|
|
|
|
September | 2.4176 | 2.5588 | 2.6832 | 2.6520 |
|
|
|
|
|
October | 2.4483 | 2.5877 | 2.7130 | 2.6830 |
|
|
|
|
|
November | 2.2842 | 2.4154 | 2.5319 | 2.5039 |
|
|
|
|
|
December | 2.4348 | 2.5764 | 2.7053 | 2.6729 |
|
|
|
|
|
January | 2.2767 | 2.4150 | 2.5406 | 2.5096 |
|
|
|
|
|
February | 2.0000 | 2.1338 | 2.2509 | 2.2186 |
|
|
|
|
|
Total | 30.8501 | 32.4752 | 33.9577 | 33.5790 |
|
|
|
|
|
*The distribution amount is the sum of all net investment income distributions for the period shown. 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.
combined effective federal and Kentucky personal income tax bracket of 45.80% (including 3.80% Medicare tax) would need to earn a distribution rate of 3.78% from a taxable investment to match the Fund's Class A tax-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 recent month-end performance, go to franklintempleton.com or 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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 90.
24 | Annual Report | franklintempleton.com |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
Commonwealth Update
During the 12 months under review, Kentucky's economic growth steadily improved but remained notably below the nation's. Challenges that hindered Kentucky's economy include low population and income growth, low education levels and risks related to manufacturing. Kentucky's unemployment rate started the period at 4.2% in February 2019 and ended the period unchanged, remaining above the nation's 3.5% average.3 Kentucky's fiscal year (FY) 2019 general fund collections reached a record high. The commonwealth's adopted FY 2019–2020 biennium budget funded all required pension contributions for the first time in over a decade and increased other plan contributions and education funding. Kentucky cut most other expenditures while expanding sales taxes and simplifying income taxes. Kentucky's net tax-supported debt was $1,932 per capita and 4.8% of personal income, above the $1,068 and 2.2% national medians, respectively.4 During the period, independent credit rating agency Standard & Poor's (S&P) maintained the commonwealth's issuer credit A rating with a stable outlook.5 The rating reflected S&P's view of Kentucky's weak demographic profile, expenditure cuts, low reserves, moderately high debt and large unfunded pension liability. The outlook reflected Kentucky's increased contributions to its pension plans, a biennium budget that fully funds its required plan contributions, and Kentucky's better-than expected operating results.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Kentucky Tax-Free Income Fund. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
|
|
|
Utilities | 26.85% |
|
|
|
|
Subject to Government Appropriations | 23.42% |
|
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|
|
Higher Education | 21.41% |
|
|
|
|
Hospital & Health Care | 12.79% |
|
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|
|
Refunded** | 10.42% |
|
|
|
|
Housing | 2.98% |
|
|
|
|
Tax-Supported | 2.13% |
|
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|
|
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 25 |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
|
|
|
1-Year | +7.43% | +3.40% |
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5-Year | +14.99% | +2.05% |
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10-Year | +44.15% | +3.33% |
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|
Advisor5 |
|
|
|
1-Year | +7.70% | +7.70% |
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5-Year | +15.56% | +2.93% |
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|
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|
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10-Year | +44.87% | +3.78% |
|
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|
|
| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate6 | Distribution Rate7 | 30-Day Standardized Yield8 | 30-Day Standardized Yield7 | |
A | 2.05% | 3.78% | 0.82% | 1.51% |
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Advisor | 2.37% | 4.37% | 1.10% | 2.03% |
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Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 28 for Performance Summary footnotes.
26 | Annual Report | franklintempleton.com |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000
$15,538
$14,000 | $13,875 |
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Kentucky |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
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| ||||||
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| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index9 |
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|
Advisor Class (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$14,487
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Kentucky |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index9 |
|
|
|
franklintempleton.com | Annual Report | 27 |
FRANKLIN KENTUCKY TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
|
| Net Investment |
Share Class | Income |
|
|
A | $0.308501 |
|
|
A1 | $0.324752 |
|
|
R6 | $0.339577 |
|
|
Advisor | $0.335790 |
| |
Total Annual Operating Expenses11 | |
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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 Rule 12b-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 Rule 12b-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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
7.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 for the maximum combined effective federal and Kentucky 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's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
9.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
10.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
11.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
28 | Annual Report | franklintempleton.com |
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.
|
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|
| Actual | Hypothetical |
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| ||
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| (actual return after expenses) | (5% annual return before expenses) |
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| |||
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| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
|
| $1,022.60 | $4.83 |
| $1,020.09 | $4.82 |
| 0.96% |
A1 | $1,000 |
| $1,023.40 | $4.07 |
| $1,020.84 | $4.07 | 0.81% | ||
R6 | $1,000 |
| $1,024.10 | $3.42 |
| $1,021.48 | $3.42 | 0.68% | ||
Advisor | $1,000 |
| $1,023.90 | $3.57 |
| $1,021.33 | $3.57 | 0.71% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Annual Report | 29 |
Franklin Louisiana Tax-Free Income Fund
This annual report for Franklin Louisiana Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
|
|
AAA | 0.83% |
|
|
AA | 42.14% |
|
|
A | 39.63% |
|
|
BBB | 2.58% |
|
|
Below Investment Grade | 1.30% |
|
|
Refunded | 13.52% |
|
|
*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 $10.93 on February 28, 2019, to $11.55 on February 29, 2020. The Fund's Class A shares paid dividends totaling 31.6377 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 2.19% based on an annualization of February's 2.1885 cents per share monthly dividend and the maximum offering price of $12.00 on
Dividend Distributions* 3/1/19–2/29/20
|
| Dividend per Share (cents) |
| ||
| Class | Class |
|
| Advisor |
Month | A | A1 | Class C | Class R6 | Class |
|
|
|
|
|
|
March | 2.7500 | 2.8900 | 2.3800 | 3.0100 | 2.9800 |
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April** | 3.8700 | 4.0100 | 3.5000 | 4.1300 | 4.1000 |
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May | 2.6590 | 2.7992 | 2.3179 | 2.9293 | 2.8950 |
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June | 2.3625 | 2.4883 | 2.0453 | 2.6026 | 2.5759 |
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July | 2.7654 | 2.9187 | 2.4020 | 3.0520 | 3.0214 |
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August | 2.4604 | 2.5986 | 2.1216 | 2.7213 | 2.6931 |
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September | 2.5496 | 2.6961 | 2.2050 | 2.8222 | 2.7916 |
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October | 2.5310 | 2.6763 | 2.1806 | 2.8031 | 2.7742 |
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November | 2.3608 | 2.4967 | 2.0378 | 2.6145 | 2.5875 |
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December | 2.6156 | 2.7620 | 2.2580 | 2.8945 | 2.8619 |
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January | 2.5249 | 2.6676 | 2.1751 | 2.7969 | 2.7650 |
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February | 2.1885 | 2.3238 | 1.8700 | 2.4465 | 2.4124 |
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|
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Total | 31.6377 | 33.3273 | 27.4933 | 34.8229 | 34.4580 |
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*The distribution amount is the sum of all net investment income distributions for the period shown. 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.
February 29, 2020. An investor in the 2020 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 4.12% from a taxable investment to match the Fund's Class A tax-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
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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 98.
30 | Annual Report | franklintempleton.com |
FRANKLIN LOUISIANA TAX-FREE INCOME FUND
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
State Update
Over the 12 months under review, Louisiana's economy grew and its financial picture improved given more stable energy prices, although slow population growth, high poverty and low per-capita personal income compared to national averages constrained the state's economy. Louisiana's unemployment rate rose from 4.6% in February 2019 to 5.2% at period-end, remaining above the nation's 3.5% average.3 Louisiana's budget for its fiscal year (FY) 2019 that ended June 30, 2019, was balanced primarily through a higher revenue forecast. The state's FY 2019-2020 budget highlighted full funding for the Taylor Opportunity Program for Students, increased program spending, and pay hikes for school staff. The state's net tax-supported debt was $1,523 per capita and 3.5% of personal income, which was above the $1,068 and 2.2% national medians, respectively.4 Independent credit rating agency Moody's Investor Service (Moody's) maintained the state's general obligations bonds' Aa3 rating but revised its outlook from stable to positive.5 The rating reflected Moody's view of the state's large and diverse tax base, moderate debt and pension burden, and governance practices, which are somewhat offset by supermajority requirements for tax increases. The rating accounted for the state's vulnerability to energy sector volatility and its below-average socioeconomic profile.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Louisiana Tax-Free Income Fund. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
|
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Tax-Supported | 18.64% |
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Hospital & Health Care | 15.50% |
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Refunded** | 14.25% |
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Utilities | 13.28% |
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Higher Education | 12.42% |
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Transportation | 10.99% |
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General Obligation | 7.29% |
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Subject to Government Appropriations | 5.30% |
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Other Revenue | 1.82% |
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Housing | 0.51% |
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*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 31 |
FRANKLIN LOUISIANA TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
|
|
|
1-Year | +8.68% | +4.60% |
|
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5-Year | +17.25% | +2.45% |
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10-Year | +47.34% | +3.56% |
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Advisor5 |
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1-Year | +8.95% | +8.95% |
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5-Year | +17.94% | +3.36% |
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10-Year | +48.20% | +4.01% |
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| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate6 | Distribution Rate7 | 30-Day Standardized Yield8 | 30-Day Standardized Yield7 | |
A | 2.19% | 4.12% | 0.80% | 1.50% |
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Advisor | 2.51% | 4.72% | 1.08% | 2.03% |
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|
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 34 for Performance Summary footnotes.
32 | Annual Report | franklintempleton.com |
FRANKLIN LOUISIANA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000
$15,538
$14,000 | $14,182 |
| |
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Louisiana |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
|
|
| ||||||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index9 |
|
|
|
Advisor Class (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$14,820
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Louisiana |
| Bloomberg Barclays |
| Consumer Price Index10 | |||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index9 |
|
|
|
See page 34 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 33 |
FRANKLIN LOUISIANA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
|
| Net Investment |
Share Class | Income |
|
|
A | $0.316377 |
|
|
A1 | $0.333273 |
|
|
C | $0.274933 |
|
|
R6 | $0.348229 |
|
|
Advisor | $0.344580 |
| |
Total Annual Operating Expenses11 | |
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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 Rule 12b-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 Rule 12b-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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
7.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 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's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
9.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
10.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
11.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
34 | Annual Report | franklintempleton.com |
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 (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 | Hypothetical |
|
| ||
|
|
|
| (actual return after expenses) | (5% annual return before expenses) |
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
|
| $1,026.40 | $4.33 |
| $1,020.59 | $4.32 |
| 0.86% |
A1 | $1,000 |
| $1,027.20 | $3.58 |
| $1,021.33 | $3.57 | 0.71% | ||
C | $1,000 |
| $1,024.20 | $6.34 |
| $1,018.60 | $6.32 | 1.26% | ||
R6 | $1,000 |
| $1,027.90 | $2.92 |
| $1,021.98 | $2.92 | 0.58% | ||
Advisor | $1,000 |
| $1,027.70 | $3.08 |
| $1,021.83 | $3.07 | 0.61% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Annual Report | 35 |
Franklin Maryland Tax-Free Income Fund
This annual report for Franklin Maryland Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
|
|
AAA | 18.97% |
|
|
AA | 37.63% |
|
|
A | 25.84% |
|
|
BBB | 8.84% |
|
|
Below Investment Grade | 1.89% |
|
|
Refunded | 4.03% |
|
|
Not Rated | 2.80% |
|
|
*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.
Dividend Distributions* 3/1/19–2/29/20
|
| Dividend per Share (cents) |
| ||
| Class | Class |
|
| Advisor |
Month | A | A1 | Class C | Class R6 | 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 |
|
|
|
|
|
|
September | 2.3863 | 2.5317 | 2.0545 | 2.6698 | 2.6287 |
|
|
|
|
|
|
October | 2.4130 | 2.5576 | 2.0778 | 2.6972 | 2.6558 |
|
|
|
|
|
|
November | 2.2811 | 2.4157 | 1.9700 | 2.5452 | 2.5065 |
|
|
|
|
|
|
December | 2.5377 | 2.6824 | 2.1979 | 2.8289 | 2.7843 |
|
|
|
|
|
|
January | 2.4714 | 2.6151 | 2.1374 | 2.7553 | 2.7116 |
|
|
|
|
|
|
February | 2.1847 | 2.3191 | 1.8818 | 2.4514 | 2.4086 |
|
|
|
|
|
|
Total | 31.3984 | 33.0813 | 27.3958 | 34.7163 | 34.2176 |
|
|
|
|
|
|
*The distribution amount is the sum of all net investment income distributions for the period shown. 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.
dividend and the maximum offering price of $11.79 on February 29, 2020. An investor in the 2020 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 4.42% from a taxable investment to match the Fund's Class A tax-free distribution
Performance Overview
The Fund's Class A share price, as measured by net asset value, increased from $10.80 on February 28, 2019, to $11.35 on February 29, 2020. The Fund's Class A shares paid dividends totaling 31.3984 cents per share for the same period.2 The Performance Summary beginning on page 38 shows that at the end of this reporting period the Fund's Class A shares' distribution rate was 2.22% based on an annualization of February's 2.1847 cents per share monthly
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
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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 107.
36 | Annual Report | franklintempleton.com |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
State Update
During the 12 months under review, Maryland's economy grew slowly. Despite its strong wealth and income indicators, proximity to Washington, D.C., and job growth in the professional, business, education and health services sectors, constrained federal spending and lower federal employment have challenged economic growth. The state's unemployment rate dropped from 3.7% in February 2019 to 3.3% at period-end, below the nation's 3.5% average.3 The state concluded its fiscal year (FY) 2019 with a general fund surplus largely as a result of increased collections of personal income tax receipts. The state's adopted and larger FY 2020 budget is structurally balanced and prioritizes education, public health and human services. The governor's FY 2021 budget proposal is balanced and maintains key spending priorities. The state's net tax-supported debt was $2,343 per capita and 3.8% of personal income, above the $1,068 and 2.2% national medians, respectively.4 During the period, independent credit rating agency Standard & Poor's (S&P) maintained the state's general obligations bonds' AAA rating with a stable outlook.5 The rating reflected S&P's view of Maryland's slow-growing economy, long history of proactive financial and budget management, and well-developed debt-management practices. S&P's outlook reflects the state's focus on structural budget alignment and maintenance of healthy reserves.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Maryland Tax-Free Income Fund. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
|
|
|
Hospital & Health Care | 22.71% |
|
|
|
|
Utilities | 18.46% |
|
|
|
|
Housing | 14.04% |
|
|
|
|
General Obligation | 12.61% |
|
|
|
|
Higher Education | 11.78% |
|
|
|
|
Transportation | 7.45% |
|
|
|
|
Other Revenue | 5.24% |
|
|
|
|
Refunded** | 4.34% |
|
|
|
|
Subject to Government Appropriations | 3.37% |
|
|
|
|
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 37 |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
|
|
|
1-Year | +8.11% | +4.05% |
|
|
|
|
|
5-Year | +15.62% | +2.16% |
|
|
|
|
|
10-Year | +42.86% | +3.24% |
|
|
|
|
|
Advisor |
|
|
|
1-Year | +8.47% | +8.47% |
|
|
|
|
|
5-Year | +16.57% | +3.11% |
|
|
|
|
|
10-Year | +44.85% | +3.77% |
|
|
|
|
|
| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate5 | Distribution Rate6 | 30-Day Standardized Yield7 | 30-Day Standardized Yield6 | |
A | 2.22% | 4.42% | 0.92% | 1.83% |
|
|
|
|
|
|
|
Advisor | 2.54% | 5.05% | 1.19% | 2.37% |
|
|
|
|
|
|
|
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 40 for Performance Summary footnotes.
38 | Annual Report | franklintempleton.com |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000 | $15,538 |
| |
$14,000 | $13,750 |
| |
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Maryland |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
Advisor Class (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$14,485
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Maryland |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
See page 40 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 39 |
FRANKLIN MARYLAND TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
|
| Net Investment |
Share Class | Income |
|
|
A | $0.313984 |
|
|
A1 | $0.330813 |
|
|
C | $0.273958 |
|
|
R6 | $0.347163 |
|
|
Advisor | $0.342176 |
| |
Total Annual Operating Expenses10 | |
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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
6.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 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's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
8.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
9.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
10.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
40 | Annual 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.
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| Actual | Hypothetical |
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| (actual return after expenses) | (5% annual return before expenses) |
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| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
|
| $1,024.60 | $4.38 |
| $1,020.54 | $4.37 |
| 0.87% |
A1 | $1,000 |
| $1,025.40 | $3.63 |
| $1,021.28 | $3.62 | 0.72% | ||
C | $1,000 |
| $1,023.20 | $6.39 |
| $1,018.55 | $6.37 | 1.27% | ||
R6 | $1,000 |
| $1,026.10 | $2.92 |
| $1,021.98 | $2.92 | 0.58% | ||
Advisor | $1,000 |
| $1,025.90 | $3.12 |
| $1,021.78 | $3.12 | 0.62% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Annual Report | 41 |
Franklin Missouri Tax-Free Income Fund
This annual report for Franklin Missouri Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
|
|
AAA | 9.88% |
|
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AA | 47.98% |
|
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A | 23.13% |
|
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BBB | 8.95% |
|
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Below Investment Grade | 3.53% |
|
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Refunded | 6.34% |
|
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Not Rated | 0.19% |
|
|
*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.
Dividend Distributions* 3/1/19–2/29/20
|
| Dividend per Share (cents) |
| ||
| Class | Class |
|
| Advisor |
Month | A | A1 | Class C | Class R6 | Class |
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March | 2.8400 | 2.9900 | 2.4600 | 3.1200 | 3.0800 |
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April** | 4.1500 | 4.3000 | 3.7700 | 4.4300 | 4.3900 |
May | 2.7737 | 2.9206 | 2.4006 | 3.0601 | 3.0216 |
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June | 2.4805 | 2.5777 | 2.0806 | 2.7004 | 2.6702 |
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July | 2.8173 | 2.9749 | 2.4172 | 3.1172 | 3.0825 |
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August | 2.5254 | 2.6699 | 2.1565 | 2.8013 | 2.7693 |
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September | 2.5755 | 2.7279 | 2.1989 | 2.8588 | 2.8289 |
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October | 2.4644 | 2.6155 | 2.0824 | 2.7471 | 2.7180 |
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November | 2.3085 | 2.4493 | 1.9528 | 2.5720 | 2.5384 |
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December | 2.5924 | 2.7453 | 2.2012 | 2.8802 | 2.8444 |
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January | 2.5462 | 2.6956 | 2.1646 | 2.8260 | 2.7982 |
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February | 2.1598 | 2.3040 | 1.8157 | 2.4264 | 2.3937 |
|
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|
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Total | 32.2337 | 33.9707 | 27.7005 | 35.5395 | 35.1352 |
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*The distribution amount is the sum of all net investment income distributions for the period shown. 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.
dividend and the maximum offering price of $12.56 on February 29, 2020. An investor in the 2020 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 3.83% from a taxable investment to match the Fund's Class A tax-free distribution
Performance Overview
The Fund's Class A share price, as measured by net asset value, increased from $11.47 on February 28, 2019, to $12.09 on February 29, 2020. The Fund's Class A shares paid dividends totaling 32.2337 cents per share for the same period.2 The Performance Summary beginning on page 44 shows that at the end of this reporting period the Fund's Class A shares' distribution rate was 2.06% based on an annualization of February's 2.1598 cents per share monthly
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
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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 115.
42 | Annual Report | franklintempleton.com |
FRANKLIN MISSOURI TAX-FREE INCOME FUND
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
State Update
During the 12 months under review, Missouri's diverse economy improved, exceeding the national average in 2019's third quarter. The professional and business services sector was among the largest growth contributors during much of the period, and the information sector grew. The state's unemployment rate rose from 3.2% in February 2019 to
3.5% at period-end, matching the nation's 3.5% average.3 The state concluded fiscal year (FY) 2019 on June 30, 2019, with lower-than-expected revenue growth due to income tax cuts triggered by strong revenue in FY 2018. General revenue is growing so far in FY 2020. The governor's proposed FY 2021 budget creates a cash-operating expense fund that would be credit positive. The state's net tax-supported debt was $487 per capita and 1.1% of personal income, below the $1,068 and 2.2% national medians, respectively.4 During the period, independent credit rating agency Moody's Investor Service (Moody's) maintained the state's general obligation bonds' Aaa rating with a stable outlook.5 Moody's rating reflected its view of the state's history of solid reserves, sound fiscal management, conservative fiscal policies, below-average debt and pension burden, industrial diversity and low business costs. Moody's view noted weak demographics, a tight labor market and limited ability to increase revenue.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Missouri Tax-Free Income Fund. We believe our conser- vative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
|
|
|
Utilities | 28.99% |
|
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|
|
Hospital & Health Care | 20.54% |
|
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|
General Obligation | 15.25% |
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Transportation | 8.97% |
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Higher Education | 7.41% |
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Tax-Supported | 6.71% |
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Refunded** | 6.34% |
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Subject to Government Appropriations | 4.15% |
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Corporate-Backed | 1.07% |
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Housing | 0.57% |
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|
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 43 |
FRANKLIN MISSOURI TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
|
|
|
1-Year | +8.32% | +4.26% |
|
|
|
|
|
5-Year | +16.30% | +2.28% |
|
|
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|
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10-Year | +44.18% | +3.33% |
|
|
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|
|
Advisor |
|
|
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1-Year | +8.59% | +8.59% |
|
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5-Year | +17.05% | +3.20% |
|
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10-Year | +45.94% | +3.85% |
|
|
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|
| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate5 | Distribution Rate6 | 30-Day Standardized Yield7 | 30-Day Standardized Yield6 | |
A | 2.06% | 3.83% | 0.91% | 1.69% |
|
|
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|
|
|
Advisor | 2.38% | 4.42% | 1.19% | 2.21% |
|
|
|
|
|
|
|
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 46 for Performance Summary footnotes.
44 | Annual Report | franklintempleton.com |
FRANKLIN MISSOURI TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000
$15,538
$14,000 | $13,877 |
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Missouri |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
Advisor Class (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$14,594
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Missouri |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
See page 46 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 45 |
FRANKLIN MISSOURI TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
|
| Net Investment |
Share Class | Income |
|
|
A | $0.322337 |
|
|
A1 | $0.339707 |
|
|
C | $0.277005 |
|
|
R6 | $0.355395 |
|
|
Advisor | $0.351352 |
| |
Total Annual Operating Expenses10 | |
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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
6.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 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's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
8.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
9.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
10.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
46 | Annual Report | franklintempleton.com |
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.
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| Actual | Hypothetical |
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| (actual return after expenses) | (5% annual return before expenses) |
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| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
|
| $1,025.10 | $4.08 |
| $1,020.84 | $4.07 |
| 0.81% |
A1 | $1,000 |
| $1,026.70 | $3.33 |
| $1,021.58 | $3.32 | 0.66% | ||
C | $1,000 |
| $1,023.00 | $6.09 |
| $1,018.85 | $6.07 | 1.21% | ||
R6 | $1,000 |
| $1,027.40 | $2.67 |
| $1,022.23 | $2.66 | 0.53% | ||
Advisor | $1,000 |
| $1,026.40 | $2.82 |
| $1,022.08 | $2.82 | 0.56% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements,for Class R6.
franklintempleton.com | Annual Report | 47 |
Franklin North Carolina Tax-Free Income Fund
This annual report for Franklin North Carolina Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
|
|
AAA | 23.42% |
|
|
AA | 60.37% |
|
|
A | 7.50% |
|
|
BBB | 2.64% |
|
|
Below Investment Grade | 0.96% |
|
|
Refunded | 5.11% |
|
|
*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 $11.30 on February 28, 2019, to $11.84 on February 29, 2020. The Fund's Class A shares paid dividends totaling 29.7844 cents per share for the same period.2 The Performance Summary beginning on page 50 shows that at the end of this reporting period the Fund's Class A shares' distribution rate was 1.97% based on an annualization of February's 2.0212 cents per share monthly
Dividend Distributions* 3/1/19–2/29/20
|
| Dividend per Share (cents) |
| ||
| Class | Class |
|
| Advisor |
Month | A | A1 | Class C | Class R6 | Class |
|
|
|
|
|
|
March | 2.6200 | 2.7700 | 2.2400 | 2.8900 | 2.8600 |
|
|
|
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|
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April** | 3.5700 | 3.7200 | 3.1900 | 3.8400 | 3.8100 |
|
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May | 2.5618 | 2.7069 | 2.2078 | 2.8362 | 2.8046 |
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June | 2.1938 | 2.3259 | 1.8661 | 2.4416 | 2.4151 |
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July | 2.6014 | 2.7569 | 2.2197 | 2.8924 | 2.8614 |
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August | 2.3676 | 2.5089 | 2.0101 | 2.6335 | 2.6051 |
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September | 2.4444 | 2.5877 | 2.0796 | 2.7148 | 2.6860 |
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October | 2.3738 | 2.5223 | 2.0089 | 2.6497 | 2.6218 |
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November | 2.2381 | 2.3776 | 1.9017 | 2.4965 | 2.4703 |
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December | 2.4830 | 2.6341 | 2.1117 | 2.7664 | 2.7356 |
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January | 2.3093 | 2.4567 | 1.9452 | 2.5862 | 2.5559 |
|
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February | 2.0212 | 2.1593 | 1.6903 | 2.2778 | 2.2491 |
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|
|
Total | 29.7844 | 31.5263 | 25.4711 | 33.0251 | 32.6749 |
|
|
|
|
|
|
*The distribution amount is the sum of all net investment income distributions for the period shown. 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 $12.30 on February 29, 2020. An investor in the 2020 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 3.65% from a taxable investment to match the Fund's Class A tax-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
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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 126.
48 | Annual Report | franklintempleton.com |
FRANKLIN NORTH CAROLINA TAX-FREE INCOME FUND
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
State Update
During the 12 months under review, North Carolina's diverse economy grew, given strong employment and population growth helped by a favorable climate, affordable housing and in-migration. The professional and business services sector was among the largest growth contributors during much of the period. The state's unemployment rate dropped from 4.1% in February 2019 to 3.6% at period-end, above the nation's 3.5% average.3 North Carolina ended its fiscal year (FY) 2019 on June 30, 2019, with higher-than-expected revenues. The year was one of the state's strongest in terms of personal and corporate income tax and sales tax collections. The 2019-2021 biennial budget is still under review, while the state operates under the FY 2019 budget. The state's net tax-supported debt was $531 per capita and 1.2% of personal income, below the $1,068 and 2.2% national medians, respectively.4 During the period, independent credit rating agency Standard & Poor's (S&P) maintained the state's general obligations bonds' AAA rating with a stable outlook.5 The rating reflected S&P's view of the state's strong economic growth that is expected to surpass the nation's and is helped by a diverse economic base. Other positive factors include the state's prudent fiscal management, low-to-moderate debt, well-funded pension system and progress addressing other post-employment benefits.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin North Carolina Tax-Free Income Fund. We believe our conser- vative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
|
|
|
Higher Education | 21.66% |
|
|
|
|
Hospital & Health Care | 19.64% |
|
|
|
|
Refunded** | 18.82% |
|
|
|
|
Utilities | 14.40% |
|
|
|
|
Transportation | 10.64% |
|
|
|
|
General Obligation | 7.80% |
|
|
|
|
Housing | 4.73% |
|
|
|
|
Subject to Government Appropriations | 2.01% |
|
|
|
|
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.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 49 |
FRANKLIN NORTH CAROLINA TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
|
|
|
1-Year | +7.50% | +3.47% |
|
|
|
|
|
5-Year | +14.02% | +1.88% |
|
|
|
|
|
10-Year | +38.23% | +2.90% |
|
|
|
|
|
Advisor |
|
|
|
1-Year | +7.77% | +7.77% |
|
|
|
|
|
5-Year | +14.87% | +2.81% |
|
|
|
|
|
10-Year | +39.95% | +3.42% |
|
|
|
|
|
| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate5 | Distribution Rate6 | 30-Day Standardized Yield7 | 30-Day Standardized Yield6 | |
A | 1.97% | 3.65% | 0.70% | 1.30% |
|
|
|
|
|
|
|
Advisor | 2.28% | 4.23% | 0.96% | 1.78% |
|
|
|
|
|
|
|
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 52 for Performance Summary footnotes.
50 | Annual Report | franklintempleton.com |
FRANKLIN NORTH CAROLINA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$13,305
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin North Carolina |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
Advisor Class (3/1/10–2/29/20)
$16,000
$15,538
$14,000 | $13,995 |
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin North Carolina |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
See page 52 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 51 |
FRANKLIN NORTH CAROLINA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
|
| Net Investment |
Share Class | Income |
|
|
A | $0.297844 |
|
|
A1 | $0.315263 |
|
|
C | $0.254711 |
|
|
R6 | $0.330251 |
|
|
Advisor | $0.326749 |
| |
Total Annual Operating Expenses10 | |
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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
6.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 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's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
8.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
9.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
10.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
52 | Annual 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 | Hypothetical |
|
| ||
|
|
|
| (actual return after expenses) | (5% annual return before expenses) |
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
|
| $1,020.60 | $4.12 |
| $1,020.79 | $4.12 |
| 0.82% |
A1 | $1,000 |
| $1,022.20 | $3.37 |
| $1,021.53 | $3.37 | 0.67% | ||
C | $1,000 |
| $1,019.30 | $6.13 |
| $1,018.80 | $6.12 | 1.22% | ||
R6 | $1,000 |
| $1,022.90 | $2.72 |
| $1,022.18 | $2.72 | 0.54% | ||
Advisor | $1,000 |
| $1,022.70 | $2.87 |
| $1,022.03 | $2.87 | 0.57% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Annual Report | 53 |
Franklin Virginia Tax-Free Income Fund
This annual report for Franklin Virginia Tax-Free Income Fund covers the fiscal year ended February 29, 2020.
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* 2/29/20
| % of Total |
Ratings | Investments |
|
|
AAA | 23.75% |
|
|
AA | 55.01% |
|
|
A | 4.71% |
|
|
BBB | 4.85% |
|
|
Below Investment Grade | 1.70% |
|
|
Refunded | 9.18% |
|
|
Not Rated | 0.80% |
|
|
*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.
Dividend Distributions* 3/1/19–2/29/20
|
| Dividend per Share (cents) |
| ||
| Class | Class |
|
| Advisor |
Month | A | A1 | Class C | Class R6 | 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 |
|
|
|
|
|
|
September | 2.3638 | 2.5085 | 2.0205 | 2.6407 | 2.6045 |
|
|
|
|
|
|
October | 2.2480 | 2.3917 | 1.8972 | 2.5251 | 2.4897 |
|
|
|
|
|
|
November | 2.1319 | 2.2665 | 1.8085 | 2.3907 | 2.3577 |
|
|
|
|
|
|
December | 2.3466 | 2.4950 | 1.9920 | 2.6313 | 2.5950 |
|
|
|
|
|
|
January | 2.2613 | 2.4037 | 1.9129 | 2.5367 | 2.5012 |
|
|
|
|
|
|
February | 2.0220 | 2.1532 | 1.7028 | 2.2758 | 2.2428 |
|
|
|
|
|
|
Total | 29.7027 | 31.3914 | 25.5834 | 32.9184 | 32.5249 |
|
|
|
|
|
|
*The distribution amount is the sum of all net investment income distributions for the period shown. 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.
dividend and the maximum offering price of $11.86 on February 29, 2020. An investor in the 2020 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 3.84% from a taxable investment to match the Fund's Class A tax-free distribution
Performance Overview
The Fund's Class A share price, as measured by net asset value, increased from $10.92 on February 28, 2019, to $11.42 on February 29, 2020. The Fund's Class A shares paid dividends totaling 29.7027 cents per share for the same period.2 The Performance Summary beginning on page 56 shows that at the end of this reporting period the Fund's Class A shares' distribution rate was 2.05% based on an annualization of February's 2.0220 cents per share monthly
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
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 Form W-9 and non-U.S. investors on Form W-8BEN.
2.The distribution amount is the sum of all net investment income distributions for the period shown. 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 136.
54 | Annual Report | franklintempleton.com |
FRANKLIN VIRGINIA TAX-FREE INCOME FUND
figures shown. For most recent month-end performance, go
to franklintempleton.com or call (800) 342-5236.
Commonwealth Update
During the 12 months under review, Virginia's economic growth moderated but remained stable, helped by a sizable federal government presence. The professional, scientific and technical services sector ranked among the top contributors to economic growth during much of the period. The commonwealth's unemployment rate dropped from
3.0% in February 2019 to 2.6% at period-end, below the nation's 3.5% average.3 The commonwealth ended fiscal year (FY) 2019 on June 30, 2019, with a sizable budget surplus after strong revenue growth. The commonwealth's amended budget for the 2018–2020 biennium assumes lower general revenue fund growth in FY 2020 and increased funding for education, teacher and state employee salaries, Medicaid and reserves. The commonwealth's net tax-supported debt was $1,502 per capita and 2.7% of personal income, above the $1,068 and 2.2% national medians, respectively.4 During the period, independent credit rating agency Standard & Poor's (S&P) maintained Virginia's general obligations bonds' AAA rating with a stable outlook.5 The rating reflected S&P's view of Virginia's strong and diverse economy, strong financial policies and practices, history of proactive and conservative financial management, and moderate debt. The outlook reflected S&P's assumption Virginia will post healthy revenues in FY 2018–2020 and stay committed to structural budget solutions and rebuilding reserves.
Manager's Discussion
We used various investment strategies during the 12 months under review as we sought to maximize tax-free income for shareholders. Please read the Investment Strategy and Manager's Discussion on page 5 for more information.
Thank you for your continued participation in Franklin Virginia Tax-Free Income Fund. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
Portfolio Composition 2/29/20
| % of Total | |
| Investments* | |
|
|
|
Refunded** | 24.31% |
|
|
|
|
Hospital & Health Care | 17.60% |
|
|
|
|
Utilities | 16.55% |
|
|
|
|
Transportation | 16.35% |
|
|
|
|
Higher Education | 11.16% |
|
|
|
|
General Obligation | 6.92% |
|
|
|
|
Subject to Government Appropriations | 3.97% |
|
|
|
|
Housing | 1.58% |
|
|
|
|
Other Revenue | 1.56% |
|
|
|
|
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The foregoing information reflects our analysis, opinions and portfolio holdings as of February 29, 2020, 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 | Annual Report | 55 |
FRANKLIN VIRGINIA TAX-FREE INCOME FUND
Performance Summary as of February 29, 2020
The performance tables and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund's dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund's portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 2/29/20
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, visit franklintempleton.com.
| Cumulative | Average Annual | |
Share Class | Total Return1 | Total Return2 | |
A3,4 |
|
|
|
1-Year | +7.40% | +3.37% |
|
|
|
|
|
5-Year | +15.17% | +2.08% |
|
|
|
|
|
10-Year | +40.02% | +3.03% |
|
|
|
|
|
Advisor |
|
|
|
1-Year | +7.76% | +7.76% |
|
|
|
|
|
5-Year | +16.12% | +3.03% |
|
|
|
|
|
10-Year | +41.86% | +3.56% |
|
|
|
|
|
| Distribution | Taxable Equivalent |
| Taxable Equivalent | |
Share Class | Rate5 | Distribution Rate6 | 30-Day Standardized Yield7 | 30-Day Standardized Yield6 | |
A | 2.05% | 3.84% | 0.57% | 1.07% |
|
|
|
|
|
|
|
Advisor | 2.35% | 4.40% | 0.84% | 1.57% |
|
|
|
|
|
|
|
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 58 for Performance Summary footnotes.
56 | Annual Report | franklintempleton.com |
FRANKLIN VIRGINIA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
Class A (3/1/10–2/29/20)
$16,000
$14,000
$15,538
$13,477
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Virginia |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
Advisor Class (3/1/10–2/29/20)
$16,000
$15,538
$14,000 | $14,186 |
| |
$12,000 | $11,935 |
$10,000
$8,000
3/10 | 2/12 | 2/14 | 2/16 | 2/18 | 2/20 | |||
| Franklin Virginia |
| Bloomberg Barclays |
| Consumer Price Index9 | |||
|
|
| ||||||
| Tax-Free Income Fund |
| Municipal Bond Index8 |
|
|
|
See page 58 for Performance Summary footnotes.
franklintempleton.com | Annual Report | 57 |
FRANKLIN VIRGINIA TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions (3/1/19–2/29/20) |
|
| Net Investment |
Share Class | Income |
|
|
A | $0.297027 |
|
|
A1 | $0.313914 |
|
|
C | $0.255834 |
|
|
R6 | $0.329184 |
|
|
Advisor | $0.325249 |
| |
Total Annual Operating Expenses10 | |
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. Unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. The Fund's prospectus also includes a description of the main investment risks.
1.Cumulative total return represents the change in value of an investment over the periods indicated.
2.Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3.Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund's Class A1 performance that includes any Rule 12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class.
4.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 February dividend and the maximum offering price (NAV for Advisor Class) per share on 2/29/20.
6.Taxable equivalent distribution rate and yield assume the published rates as of 12/19/19 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's 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund's actual income distribution rate, which reflects the Fund's past dividends paid to shareholders.
8.Source: Morningstar. The Bloomberg Barclays Municipal Bond Index is a market value-weighted index engineered for the long-term tax-exempt bond market. To be included in the index, bonds must be fixed rate, have at least one year to final maturity and be rated investment grade (Baa3/BBB- or higher) by at least two of the following agencies: Moody's, S&P and Fitch.
9.Source: Bureau of Labor Statistics, bls.gov/cpi. The Consumer Price Index is a commonly used measure of the inflation rate.
10.Figures are as stated in the Fund's current prospectus and may differ from the expense ratios disclosed in the Your Fund's Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
58 | Annual Report | franklintempleton.com |
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 (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 | Hypothetical |
|
| ||
|
|
|
| (actual return after expenses) | (5% annual return before expenses) |
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
| Expenses |
| Net | |
| Beginning |
| Ending | Paid During | Ending | Paid During | Annualized | |||
Share | Account |
| Account | Period | Account | Period |
| Expense | ||
Class | Value 9/1/19 | Value 2/29/20 | 9/1/19–2/29/201, 2 | Value 2/29/20 | 9/1/19–2/29/201, 2 |
| Ratio2 | |||
A | $1,000 |
|
| $1,023.60 | $4.23 |
| $1,020.69 | $4.22 |
| 0.84% |
A1 | $1,000 |
| $1,024.40 | $3.47 |
| $1,021.43 | $3.47 | 0.69% | ||
C | $1,000 |
| $1,022.30 | $6.23 |
| $1,018.70 | $6.22 | 1.24% | ||
R6 | $1,000 |
| $1,026.00 | $2.77 |
| $1,022.13 | $2.77 | 0.55% | ||
Advisor | $1,000 |
| $1,024.90 | $2.97 |
| $1,021.93 | $2.97 | 0.59% |
1.Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/366 to reflect the one-half year period.
2.Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Annual Report | 59 |
F R A N K L IN TAX - FREE TRUS T
Financial Highlights
Franklin Alabama Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.85$10.79
0.300.15
0.570.06
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.870.21
(0.32)(0.15)
$11.40$10.85
8.08%1.98%
0.91%0.92%
2.70%2.91%
$16,423$7,334
4.87%8.57%
aFor the year ended February 29. bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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%.
|
|
|
|
60 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Alabama Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.84 | $10.88 | $11.16 | $11.35 | $11.55 |
|
|
|
|
|
0.32 | 0.33 | 0.35 | 0.39 | 0.42 |
0.55 | (0.04) | (0.27) | (0.20) | (0.20) |
|
|
|
|
|
0.87 | 0.29 | 0.08 | 0.19 | 0.22 |
|
|
|
|
|
(0.33) | (0.33) | (0.36) | (0.38) | (0.42) |
|
|
|
|
|
$11.38 | $10.84 | $10.88 | $11.16 | $11.35 |
|
|
|
|
|
8.16% | 2.76% | 0.72% | 1.69% | 1.99% |
0.76%e | 0.77%e | 0.74% | 0.72% | 0.71% |
2.85% | 3.06% | 3.16% | 3.38% | 3.73% |
$186,486 | $188,290 | $208,340 | $225,050 | $228,212 |
4.87% | 8.57% | 14.66% | 16.81% | 10.70% |
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. eBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 61 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Alabama Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.98 | $11.02 | $11.30 | $11.49 | $11.69 |
|
|
|
|
|
0.26 | 0.27 | 0.29 | 0.33 | 0.37 |
0.57 | (0.04) | (0.27) | (0.20) | (0.21) |
|
|
|
|
|
0.83 | 0.23 | 0.02 | 0.13 | 0.16 |
|
|
|
|
|
(0.27) | (0.27) | (0.30) | (0.32) | (0.36) |
|
|
|
|
|
$11.54 | $10.98 | $11.02 | $11.30 | $11.49 |
|
|
|
|
|
7.68% | 2.15% | 0.16% | 1.11% | 1.41% |
1.31%e | 1.32%e | 1.29% | 1.27% | 1.26% |
2.30% | 2.51% | 2.61% | 2.83% | 3.18% |
$31,175 | $30,641 | $45,422 | $55,619 | $54,075 |
4.87% | 8.57% | 14.66% | 16.81% | 10.70% |
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. eBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
62 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Alabama Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
$10.84 | $10.88 | $11.13 |
|
|
|
0.33 | 0.35 | 0.22 |
0.57 | (0.04) | (0.26) |
|
|
|
0.90 | 0.31 | (0.04) |
|
|
|
(0.35) | (0.35) | (0.21) |
|
|
|
$11.39 | $10.84 | $10.88 |
|
|
|
8.39% | 2.78% | (0.26)% |
0.65% | 0.65% | 0.66% |
0.63%g | 0.63%g | 0.61% |
2.98% | 3.20% | 3.29% |
$1,664 | $824 | $1,516 |
4.87% | 8.57% | 14.66% |
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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. | Annual Report | 63 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Alabama Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018 2017b
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.84 | $10.88 | $11.16 | $11.49 |
|
|
|
|
0.33 | 0.34 | 0.36 | 0.18 |
0.56 | (0.04) | (0.27) | (0.33) |
|
|
|
|
0.89 | 0.30 | 0.09 | (0.15) |
|
|
|
|
(0.34) | (0.34) | (0.37) | (0.18) |
|
|
|
|
$11.39 | $10.84 | $10.88 | $11.16 |
|
|
|
|
8.36% | 2.86% | 0.82% | (1.33)% |
0.66%g | 0.67%g | 0.64% | 0.62% |
2.95% | 3.16% | 3.26% | 3.48% |
$11,709 | $8,335 | $7,689 | $5,149 |
4.87% | 8.57% | 14.66% | 16.81% |
aFor the year ended February 29.
bFor the period September 15, 2016 (effective date) to February 28, 2017.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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%.
|
|
|
|
64 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Alabama Tax-Free Income Fund
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds 97.5% |
|
|
Alabama 97.5% |
|
|
Alabama Community College System Board of Trustees Revenue, Bishop State Community College, BAM |
|
|
Insured, 4.00%, 1/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 2,000,000 | $ 2,282,860 |
Alabama Federal Aid Highway Finance Authority Special Obligation Revenue, Series A, 5.00%, 6/01/37 . . . . | 4,130,000 | 5,195,168 |
Alabama Special Care Facilities Financing Authority Birmingham Revenue, Ascension Senior Credit Group, |
|
|
Refunding, Series B, 5.00%, 11/15/46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,585,030 |
Alabama State Port Authority Docks Facilities Revenue, Pre-Refunded, 6.00%, 10/01/40 . . . . . . . . . . . . . . . | 3,000,000 | 3,090,090 |
Anniston PBA Building Revenue, Judicial Center Project, AGMC Insured, Pre-Refunded, 5.00%, 3/01/43. . . . | 4,120,000 | 4,292,298 |
Auburn University General Fee Revenue, Refunding, Series A, 5.00%, 6/01/33 . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,994,025 |
Baldwin County Board of Education Revenue, |
|
|
Capital Outlay School wts., Refunding, 5.00%, 6/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,015,000 | 3,274,290 |
School wts., Refunding, 5.00%, 6/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,605,000 | 2,832,078 |
School wts., Refunding, 5.00%, 6/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,870,000 | 3,116,160 |
Bessemer Governmental Utility Services Corp. Water Supply Revenue, Refunding, BAM Insured, 5.00%, |
|
|
6/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 | 7,396,200 |
Bessemer Water Revenue, wts., Refunding, AGMC Insured, 5.00%, 1/01/47. . . . . . . . . . . . . . . . . . . . . . . . | 2,590,000 | 3,089,559 |
Birmingham GO, Convertible, Capital Appreciation, Series A, 5.00%, 3/01/43 . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,546,200 |
Birmingham Water Works Board Water Revenue, |
|
|
Senior, Refunding, Series A, 4.00%, 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,612,680 |
Series B, Pre-Refunded, 5.00%, 1/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,745,000 | 4,191,704 |
Subordinate, Refunding, Series B, 5.00%, 1/01/43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,160,400 |
Calhoun County Board of Education Special Tax School wts. Revenue, BAM Insured, 5.00%, 2/01/46. . . . . . | 6,000,000 | 7,041,600 |
Chatom IDB Gulf Opportunity Zone Revenue, |
|
|
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/30 . . . . . . . . . . | 5,250,000 | 5,334,787 |
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/37 . . . . . . . . . . | 5,000,000 | 5,080,750 |
Cullman Utilities Board Water Revenue, AGMC Insured, 5.00%, 9/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,058,290 |
DCH Health Care Authority Health Care Facilities Revenue, Refunding, 5.00%, 6/01/36 . . . . . . . . . . . . . . . . | 2,000,000 | 2,323,960 |
East Alabama Health Care Authority Health Care Facilities Revenue, Series A, 5.00%, 9/01/41 . . . . . . . . . . | 3,000,000 | 3,666,150 |
Elmore County Board of Education Revenue, School Tax Warrants, Refunding, 4.00%, 8/01/38 . . . . . . . . . . | 2,000,000 | 2,374,340 |
Homewood Educational Building Authority Revenue, |
|
|
Educational Facilities, Samford University, Refunding, Series A, 4.00%, 12/01/49 . . . . . . . . . . . . . . . . . | 2,500,000 | 2,836,775 |
Educational Facilities, Samford University, Series A, AGMC Insured, Pre-Refunded, 5.00%, 12/01/41 . . . | 10,000,000 | 11,129,100 |
Homewood GO, Capital Improvement wts., Pre-Refunded, 5.00%, 9/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,421,440 |
Huntsville GO, wts., Series B, 5.00%, 5/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,775,000 | 6,031,875 |
Huntsville Water System Revenue, wts., 5.00%, 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,779,360 |
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 | 3,486,090 |
Jacksonville State University Tuition and Fee Revenue, Refunding, AGMC Insured, 5.00%, 12/01/36 . . . . . . . | 5,000,000 | 6,217,950 |
Limestone County Water and Sewer Authority Water Revenue, Refunding, Series B, BAM Insured, 5.00%, |
|
|
12/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,920,000 | 6,901,240 |
Madison Board of Education Special Tax School wts., 4.00%, 2/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,525,450 |
Madison GO, wts., Series A, 5.00%, 4/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,590,000 | 3,053,351 |
Madison Water and Wastewater Board Water and Sewer Revenue, Refunding, 5.00%, 12/01/41. . . . . . . . . . | 4,610,000 | 5,565,192 |
Marshall County Board of Education Special Tax, School wts., AGMC Insured, 4.00%, 3/01/41 . . . . . . . . . . | 1,000,000 | 1,104,380 |
Mobile Water and Sewer Commissioners Water and Sewer Revenue, Refunding, 5.00%, 1/01/36 . . . . . . . . . | 10,000,000 | 11,041,500 |
Morgan County Board of Education Capital Outlay School wts. Revenue, |
|
|
Pre-Refunded, 5.00%, 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,300,000 | 4,727,120 |
Refunding, 5.00%, 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,720,000 | 2,964,256 |
franklintempleton.com | Annual Report | 65 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Alabama Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
Alabama (continued) |
|
|
|
Opelika Utilities Board Utility Revenue, Refunding, 4.00%, 6/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 2,000,000 | $ 2,279,440 | |
Oxford GO, wts., Series C, 5.00%, 10/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,435,000 | 1,576,864 | |
Pelham GO, wts., 5.00%, 2/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,635,000 | 3,022,714 | |
Phenix City GO, School wts., Series A, 5.00%, 8/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,358,350 | |
Phenix City Water and Sewer Revenue, wts., Series A, AGMC Insured, 5.00%, 8/15/40 . . . . . . . . . . . . . . . . | 2,000,000 | 2,035,360 | |
Selma IDBR, |
|
|
|
Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.80%, 5/01/34. . . . . . . . . . . . . . . . . | 3,000,000 | 3,022,740 |
|
Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.375%, 12/01/35 . . . . . . . . . . . . . . . | 3,000,000 | 3,217,800 |
|
Talladega County Board of Education Special Tax School wts. Revenue, Sales Tax, Refunding, BAM |
|
|
|
Insured, 5.00%, 11/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,436,640 | |
Troy Public Educational Building Authority Educational Facilities Revenue, |
|
|
|
AGMC Insured, 5.25%, 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 295,000 | 304,160 |
|
AGMC Insured, Pre-Refunded, 5.25%, 12/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,705,000 | 1,760,924 |
|
Trussville GO, |
|
|
|
wts., Series A, 4.00%, 8/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,518,130 | |
wts., Series B, 5.00%, 10/01/39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,895,000 | 2,143,472 | |
wts., Series B, Pre-Refunded, 5.00%, 10/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,105,000 | 1,266,673 |
|
Tuscaloosa City Board of Education School Tax wts. Revenue, 5.00%, 8/01/41. . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,820,120 | |
Tuscaloosa County Board of Education Special Tax, School wts., 4.00%, 2/01/47 . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,636,150 | |
University of Alabama at Birmingham Medicine Finance Authority Revenue, Refunding, Series B, 5.00%, |
|
|
|
9/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,248,150 | |
University of Alabama General Fee Revenue, Board of Trustees, University of Alabama in Huntsville, Series |
|
|
|
B-2, 5.00%, 9/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,317,650 | |
University of Alabama General Revenue, Board of Trustees, University of Alabama at Birmingham, |
|
|
|
Refunding, Series D-2, 5.00%, 10/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,520,000 | 8,489,102 | |
University of Montevallo Revenue, Refunding, BAM Insured, 5.00%, 5/01/42 . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 3,068,325 | |
University of South Alabama Revenue, University Facilities, Series A, BAM Insured, 5.00%, 4/01/49 . . . . . . . | 2,000,000 | 2,514,500 | |
Total Municipal Bonds before Short Term Investments (Cost $221,237,153) . . . . . |
|
|
|
| 241,360,962 |
| |
|
|
|
|
|
|
|
|
66 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Alabama Tax-Free Income Fund (continued)
Principal
AmountValue
Short Term Investments 1.4%
Municipal Bonds 1.4%
Alabama 1.4%
aColumbia IDB, PCR, Alabama Power Co. Project, Refunding, Series C, Daily VRDN and Put, 1.26%,
12/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 700,000 | $ | 700,000 |
aMobile IDB, PCR, Alabama Power Co. Barry Plant Project, First Series, Daily VRDN and Put, 1.26%,
6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 895,000 | 895,000 |
aMobile IDB Solid Waste Dispense Revenue, Alabama Power Company Barry Plant Project, Second Series,
Daily VRDN and Put, 1.25%, 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,800,000 | 1,800,000 |
Total Short Term Investments (Cost $3,395,000) |
|
|
| 3,395,000 | |
Total Investments (Cost $224,632,153) 98.9%. . . |
|
|
| 244,755,962 | |
Other Assets, less Liabilities 1.1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 2,700,726 |
Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| $247,456,688 | |
|
|
|
See Abbreviations on page 173.
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.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 67 |
F R A N K L IN TAX - FREE TRUS T
Financial Highlights
Franklin Florida Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsg
Expensesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.44$10.44
0.330.17
0.41—e
0.740.17
(0.35)(0.17)
$10.83$10.44
7.18%1.71%
0.85%0.85%
3.16%3.48%
$56,214$29,086
9.33%10.03%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding. eAmount rounds to less than $0.01 per share.
fTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable and is not annualized for periods less than one year. gRatios are annualized for periods less than one year.
hBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
68 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Florida Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.43 | $10.47 | $10.88 | $11.19 | $11.38 |
|
|
|
|
|
0.35 | 0.38 | 0.39 | 0.43 | 0.45 |
0.40 | (0.04) | (0.39) | (0.31) | (0.20) |
|
|
|
|
|
0.75 | 0.34 | — | 0.12 | 0.25 |
|
|
|
|
|
(0.36) | (0.38) | (0.41) | (0.43) | (0.44) |
|
|
|
|
|
$10.82 | $10.43 | $10.47 | $10.88 | $11.19 |
|
|
|
|
|
7.35% | 3.36% | (0.02)% | 1.05% | 2.32% |
0.70%e | 0.70%e | 0.67%f | 0.65% | 0.64% |
3.31% | 3.63% | 3.63% | 3.82% | 4.01% |
$437,316 | $462,869 | $536,099 | $635,594 | $689,641 |
9.33% | 10.03% | 10.10% | 13.84% | 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. eBenefit of expense reduction rounds to less than 0.01%.
fBenefit 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. | Annual Report | 69 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Florida Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.66 | $10.69 | $11.10 | $11.41 | $11.59 |
|
|
|
|
|
0.30 | 0.33 | 0.34 | 0.37 | 0.39 |
0.41 | (0.03) | (0.40) | (0.32) | (0.19) |
|
|
|
|
|
0.71 | 0.30 | (0.06) | 0.05 | 0.20 |
|
|
|
|
|
(0.31) | (0.33) | (0.35) | (0.36) | (0.38) |
|
|
|
|
|
$11.06 | $10.66 | $10.69 | $11.10 | $11.41 |
|
|
|
|
|
6.76% | 2.81% | (0.58)% | 0.46% | 1.81% |
1.25%e | 1.25%e | 1.22%f | 1.20% | 1.19% |
2.76% | 3.08% | 3.08% | 3.27% | 3.46% |
$35,481 | $39,117 | $73,237 | $90,754 | $88,734 |
9.33% | 10.03% | 10.10% | 13.84% | 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. eBenefit of expense reduction rounds to less than 0.01%. fBenefit of waiver and payments by affiliates rounds to less than 0.01%.
|
|
|
|
70 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Florida Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.46 | $10.49 | $10.82 |
|
|
|
0.37 | 0.39 | 0.24 |
0.40 | (0.02) | (0.33) |
|
|
|
0.77 | 0.37 | (0.09) |
|
|
|
(0.38) | (0.40) | (0.24) |
|
|
|
$10.85 | $10.46 | $10.49 |
|
|
|
7.47% | 3.57% | (0.88)% |
0.58% | 0.58% | 0.58% |
0.56%g | 0.56%g | 0.54% |
3.45% | 3.77% | 3.76% |
$3,338 | $2,343 | $2,387 |
9.33% | 10.03% | 10.10% |
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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. | Annual Report | 71 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Florida Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018 2017b
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.46 | $10.49 | $10.89 | $11.23 |
|
|
|
|
0.36 | 0.39 | 0.40 | 0.20 |
0.41 | (0.03) | (0.38) | (0.34) |
|
|
|
|
0.77 | 0.36 | 0.02 | (0.14) |
|
|
|
|
(0.38) | (0.39) | (0.42) | (0.20) |
|
|
|
|
$10.85 | $10.46 | $10.49 | $10.89 |
|
|
|
|
7.44% | 3.54% | 0.17% | (1.25)% |
0.60%g | 0.60%g | 0.57%h | 0.55% |
3.41% | 3.73% | 3.73% | 3.92% |
$31,477 | $25,472 | $20,467 | $10,916 |
9.33% | 10.03% | 10.10% | 13.84% |
aFor the year ended February 29. bFor the period September 15, 2016 (effective date) to February 28, 2017.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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%.
|
|
|
|
72 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Florida Tax-Free Income Fund
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds 96.7% |
|
|
|
Florida 96.0% |
|
|
|
Atlantic Beach Health Care Facilities Revenue, Fleet Landing Project, Refunding, Series A, 5.00%, 11/15/38 . | $ 1,105,000 | $ 1,303,414 |
|
Brevard County Health Facilities Authority Health Facilities Revenue, Health First Inc. Project, Refunding, |
|
|
|
5.00%, 4/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,694,800 | |
Broward County Port Facilities Revenue, Senior Bond, Series B, 4.00%, 9/01/44 . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,713,500 | |
Central Expressway Authority Revenue, |
|
|
|
senior lien, Refunding, Series B, 4.00%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,663,500 | |
senior lien, Refunding, Series B, 4.00%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,825,000 | 6,564,192 | |
senior lien, Series B, 5.00%, 7/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,339,900 |
|
Citizens Property Insurance Corp. Revenue, Personal Lines Account/Commercial Lines Account, senior |
|
|
|
secured, Series A-1, 5.00%, 6/01/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,451,050 | |
Collier County Educational Facilities Authority Revenue, Hodges University Inc. Project, 5.625%, 11/01/28 . . | 2,860,000 | 3,147,745 | |
Collier County IDA Health Care Facilities Revenue, NCH Healthcare System Project, 6.25%, 10/01/39 . . . . . | 5,000,000 | 5,267,850 | |
Escambia County Health Facilities Authority Health Facility Revenue, |
|
|
|
Baptist Hospital Inc. Project, Refunding, Series A, 5.75%, 8/15/29. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,195,000 | 7,327,964 |
|
Baptist Hospital Inc. Project, Series A, 6.00%, 8/15/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,000,000 | 11,211,530 |
|
Florida Higher Educational Facilities Financing Authority Revenue, |
|
|
|
Nova Southeastern University Project, 6.375%, 4/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,750,000 | 2,887,582 |
|
Rollins College Project, Pre-Refunded, 5.00%, 12/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,309,500 |
|
The University of Tampa Project, Refunding, Series A, 5.25%, 4/01/42 . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,172,100 |
|
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 | 6,180,249 |
|
Full Faith and Credit, Public Education Capital Outlay, Refunding, Series F, 4.00%, 6/01/37 . . . . . . . . . . | 8,000,000 | 9,189,120 |
|
Public Education Capital Outlay, Refunding, Series D, 6.00%, 6/01/23 . . . . . . . . . . . . . . . . . . . . . . . . . | 15,000,000 | 17,497,800 |
|
Public Education Capital Outlay, Series H, 5.00%, 6/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,295,000 | 7,371,014 |
|
Florida State Governmental Utility Authority Revenue, Lehigh Utility System, Pre-Refunded, 5.25%, 10/01/40. | 5,000,000 | 5,346,500 | |
Florida State Mid-Bay Bridge Authority Revenue, |
|
|
|
Exchangeable, Series D, ETM, 6.10%, 10/01/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,545,000 | 3,931,866 | |
first senior lien, Refunding, Series A, 5.00%, 10/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,833,200 |
|
Series A, ETM, 6.875%, 10/01/22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,905,000 | 4,262,425 |
|
Florida State Municipal Loan Council Revenue, Series D, AGMC Insured, 5.50%, 10/01/41 . . . . . . . . . . . . . | 3,750,000 | 4,000,687 | |
Fort Myers Utility System Revenue, Refunding, Series A, 4.00%, 10/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . | 7,000,000 | 8,165,080 | |
Fort Pierce Utilities Authority Revenue, |
|
|
|
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/20 . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,090,000 | 3,068,895 |
|
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/21 . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,585,000 | 2,535,109 |
|
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/22 . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,090,000 | 2,989,297 |
|
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/23 . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,060,000 | 2,916,027 |
|
Capital Appreciation, Series B, AMBAC Insured, zero cpn., 10/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,560,000 | 2,402,432 |
|
Gainesville Utilities System Revenue, Refunding, Series A, 5.00%, 10/01/47 . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,433,650 | |
Greater Orlando Aviation Authority Airport Facilities Revenue, |
|
|
|
Series A, 5.00%, 10/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,113,450 |
|
Series A, 4.00%, 10/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,863,400 |
|
Halifax Hospital Medical Center Hospital Revenue, |
|
|
|
Daytona Beach, Refunding, 5.00%, 6/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,250,000 | 4,852,565 |
|
Daytona Beach, Refunding and Improvement, 5.00%, 6/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,973,175 |
|
Hillsborough County Aviation Authority Revenue, |
|
|
|
Tampa International Airport, Customer Facility Charge, Series A, 5.00%, 10/01/44 . . . . . . . . . . . . . . . . | 5,000,000 | 5,780,400 |
|
Tampa International Airport, Series E, 5.00%, 10/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,228,850 |
|
franklintempleton.com | Annual Report | 73 |
FRANKL IN TAX-FREE TRUST
STATEMENT OF INVEST MENT S
Franklin Florida Tax-Free Income Fund (continued)
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds (continued) |
|
|
Florida (continued) |
|
|
Jacksonville Sales Tax Revenue, Better Jacksonville, Refunding, 5.00%, 10/01/30. . . . . . . . . . . . . . . . . . . . | $ 2,000,000 | $ 2,206,640 |
Lakeland Hospital Revenue, Lakeland Regional Health Systems, 5.00%, 11/15/45 . . . . . . . . . . . . . . . . . . . | 12,300,000 | 14,132,085 |
Lee County IDA Health Care Facilities Revenue, Shell Point-Alliance, Improvement, 5.00%, 11/15/44 . . . . . . | 5,000,000 | 6,007,600 |
Martin County Health Facilities Authority Hospital Revenue, Martin Memorial Medical Center, Pre-Refunded, |
|
|
5.50%, 11/15/42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,100,000 | 2,263,695 |
Melbourne Water and Sewer Improvement Revenue, Capital Appreciation, FGIC Insured, ETM, zero cpn., |
|
|
10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 | 1,393,755 |
Melbourne Water and Sewer Revenue, |
|
|
Capital Appreciation, Refunding, Series B, NATL Insured, zero cpn., 10/01/22 . . . . . . . . . . . . . . . . . . . | 1,785,000 | 1,735,698 |
Capital Appreciation, Refunding, Series B, NATL Insured, zero cpn., 10/01/26 . . . . . . . . . . . . . . . . . . . | 4,500,000 | 4,081,500 |
Miami Beach RDA Tax Increment Revenue, City Center/Historic Convention Village, Refunding, Series A, |
|
|
AGMC Insured, 5.00%, 2/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,738,000 |
Miami Beach Stormwater Revenue, 5.00%, 9/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,895,900 |
Miami Special Obligation Revenue, Parking, Marlins Stadium Project, Series A, AGMC Insured, Pre- |
|
|
Refunded, 5.25%, 7/01/35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,073,950 |
Miami-Dade County Aviation Revenue, |
|
|
Miami International Airport, Refunding, Series B, 5.00%, 10/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,681,600 |
Miami International Airport, Refunding, Series B, 5.00%, 10/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,171,500 |
Miami International Airport, Series A-1, Pre-Refunded, 5.375%, 10/01/35 . . . . . . . . . . . . . . . . . . . . . . | 7,500,000 | 7,698,675 |
Miami-Dade County Expressway Authority Toll System Revenue, Series A, 5.00%, 7/01/40 . . . . . . . . . . . . . | 18,770,000 | 19,023,958 |
Miami-Dade County Health Facilities Authority Hospital Revenue, |
|
|
Miami Children's Hospital Project, Series A, 6.125%, 8/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,055,000 | 1,075,119 |
Miami Children's Hospital Project, Series A, Pre-Refunded, 6.125%, 8/01/42 . . . . . . . . . . . . . . . . . . . . | 2,945,000 | 3,007,611 |
Nicklaus Children's Hospital Project, Refunding, 5.00%, 8/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,651,420 |
Nicklaus Children's Hospital Project, Refunding, 4.00%, 8/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 3,894,415 |
Miami-Dade County School District GO, School, 5.00%, 3/15/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,465,000 | 2,752,764 |
Miami-Dade County Seaport Revenue, Series A, 6.00%, 10/01/38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,740,900 |
Miami-Dade County Transit System Sales Surtax Revenue, |
|
|
5.00%, 7/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 15,000,000 | 16,312,050 |
5.00%, 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,546,700 |
4.00%, 7/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,749,500 |
Miami-Dade County Water and Sewer System Revenue, |
|
|
Assured Guaranty, Pre-Refunded, 5.00%, 10/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,246,300 |
Refunding, 5.00%, 10/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,332,950 |
Series A, Pre-Refunded, 5.00%, 10/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,074,800 |
North Sumter County Utility Dependent District Utility Revenue, |
|
|
5.75%, 10/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,143,250 |
BAM Insured, 5.00%, 10/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 5,077,560 |
Orange County Health Facilities Authority Revenue, |
|
|
Hospital, Orlando Health Inc., Series A, 5.00%, 10/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,660,500 |
Hospital, Orlando Health Obligated Group, Series A, 5.00%, 10/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,240,750 |
Presbyterian Retirement Communities Project, 5.00%, 8/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,659,150 |
Orlando-Orange County Expressway Authority Revenue, |
|
|
Refunding, Series A, 5.00%, 7/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,330,000 | 9,398,739 |
Series A, Pre-Refunded, 5.00%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,068,734 |
Series C, Pre-Refunded, 5.00%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,755,000 | 2,793,047 |
|
|
|
|
74 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Florida Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
Florida (continued) |
|
|
|
Palm Beach County Health Facilities Authority Revenue, Lifespace Communities Inc., Refunding, Series B, |
|
|
|
5.00%, 5/15/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 5,000,000 | $ 5,685,250 | |
Palm Beach GO, Underground Utility Project, 4.00%, 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,848,700 | |
a Polk County Utility System Revenue, Refunding, 4.00%, 10/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,600,000 | 5,557,076 | |
Sarasota County Health Facilities Authority Revenue, |
|
|
|
Retirement Facility, Improvement, Sunnyside Village Project, 5.00%, 5/15/33 . . . . . . . . . . . . . . . . . . . . | 600,000 | 701,442 |
|
Retirement Facility, Improvement, Sunnyside Village Project, 5.00%, 5/15/38 . . . . . . . . . . . . . . . . . . . . | 1,025,000 | 1,189,933 | |
Retirement Facility, Improvement, Sunnyside Village Project, 5.00%, 5/15/48 . . . . . . . . . . . . . . . . . . . . | 1,850,000 | 2,118,380 | |
Retirement Facility, Improvement, Village On The Isle Project, Series A, 5.00%, 1/01/37 . . . . . . . . . . . . | 2,350,000 | 2,631,835 | |
Retirement Facility, Improvement, Village On The Isle Project, Series A, 5.00%, 1/01/42 . . . . . . . . . . . . | 1,600,000 | 1,778,720 | |
Retirement Facility, Improvement, Village On The Isle Project, Series A, 5.00%, 1/01/47 . . . . . . . . . . . . | 2,450,000 | 2,712,248 | |
Sarasota County Public Hospital District Revenue, Hospital, Sarasota Memorial Hospital Project, 4.00%, |
|
|
|
7/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,347,800 |
|
South Lake County Hospital District Revenue, South Lake Hospital Inc., Pre-Refunded, 5.25%, 10/01/34 . . . . | 5,000,000 | 5,017,150 | |
South Miami Health Facilities Authority Hospital Revenue, |
|
|
|
Baptist Health South Florida, Refunding, 4.00%, 8/15/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,703,100 | |
Baptist Health South Florida, Refunding, 5.00%, 8/15/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,500,000 | 7,999,095 | |
Sunrise Utilities System Revenue, AMBAC Insured, Pre-Refunded, 5.20%, 10/01/22 . . . . . . . . . . . . . . . . . . | 520,000 | 533,099 |
|
Tampa Bay Water Regional Water Supply Authority Utility System Revenue, 5.00%, 10/01/38. . . . . . . . . . . . | 10,000,000 | 11,413,300 |
|
Tampa Hospital Revenue, H. Lee Moffitt Cancer Center Project, Refunding, Series B, 5.00%, 7/01/37 . . . . . . | 5,000,000 | 5,886,750 | |
Tampa Sports Authority Revenue, |
|
|
|
Guaranteed Package, Tampa Bay Arena Project, NATL Insured, 6.05%, 10/01/20. . . . . . . . . . . . . . . . . | 385,000 | 390,586 |
|
Guaranteed Package, Tampa Bay Arena Project, NATL Insured, 6.10%, 10/01/26. . . . . . . . . . . . . . . . . | 2,695,000 | 3,174,926 | |
Tampa-Hillsborough County Expressway Authority Revenue, 5.00%, 7/01/47 . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,099,850 | |
University of North Florida FICO Revenue, Capital Improvement, Housing Project, Refunding, AGMC |
|
|
|
Insured, 5.00%, 11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,089,200 | |
Volusia County Educational Facility Authority Revenue, |
|
|
|
Educational Facilities, Embry-Riddle Aeronautical University Inc. Project, Refunding, 5.00%, 10/15/42 . . | 1,500,000 | 1,841,835 | |
Educational Facilities, Embry-Riddle Aeronautical University Inc. Project, Refunding, 5.00%, 10/15/47 . . | 3,500,000 | 4,269,335 | |
Educational Facilities, Embry-Riddle Aeronautical University Inc. Project, Refunding, Series A, 5.00%, |
|
|
|
10/15/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,804,840 | |
|
|
| |
|
| 541,315,083 | |
U.S. Territories 0.7% |
|
|
|
|
|
| |
Puerto Rico 0.7% |
|
|
|
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 | 4,036,500 | |
Total Municipal Bonds before Short Term Investments (Cost $501,335,896) . . . . |
|
|
|
| 545,351,583 |
| |
|
|
|
|
franklintempleton.com | Annual Report | 75 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Florida Tax-Free Income Fund (continued)
| Principal |
|
|
|
| Amount |
| Value | |
|
|
|
|
|
Short Term Investments 3.3% |
|
|
|
|
Municipal Bonds 3.3% |
|
|
|
|
Florida 3.3% |
|
|
|
|
b Jacksonville PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 1.21%, 5/01/29. . . . | $ 900,000 | $ | 900,000 |
|
b Martin County PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 1.22%, 7/15/22 . . | 9,000,000 |
| 9,000,000 |
|
b St. Lucie County PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 1.23%, |
|
|
|
|
9/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,600,000 |
| 8,600,000 |
|
Total Short Term Investments (Cost $18,500,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
|
|
|
| 18,500,000 |
| |
Total Investments (Cost $519,835,896) 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| |
| 563,851,583 |
| ||
Other Assets, less Liabilities (0.0)%†. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (25,842) | |
.Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| $563,825,741 |
| |
|
|
|
|
|
See Abbreviations on page 173.
†Rounds to less than 0.1% of net assets.
aSecurity purchased on a when-issued basis. See Note 1(b).
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.
|
|
|
|
76 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Financial Highlights
Franklin Georgia Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.59$11.57
0.320.17
0.630.02
0.950.19
(0.35)(0.17)
$12.19$11.59
8.27%1.70%
0.86%0.87%
2.76%3.10%
$54,945$19,705
13.23%11.78%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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. | Annual Report | 77 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Georgia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.59 | $11.65 | $11.99 | $12.32 | $12.46 |
|
|
|
|
|
0.35 | 0.38 | 0.39 | 0.42 | 0.45 |
0.61 | (0.06) | (0.33) | (0.33) | (0.14) |
|
|
|
|
|
0.96 | 0.32 | 0.06 | 0.09 | 0.31 |
|
|
|
|
|
(0.36) | (0.38) | (0.40) | (0.42) | (0.45) |
|
|
|
|
|
$12.19 | $11.59 | $11.65 | $11.99 | $12.32 |
|
|
|
|
|
8.44% | 2.83% | 0.46% | 0.69% | 2.56% |
0.71%e | 0.72%e | 0.69%f | 0.67% | 0.67% |
2.91% | 3.25% | 3.25% | 3.36% | 3.67% |
$309,436 | $313,940 | $363,390 | $428,301 | $429,103 |
13.23% | 11.78% | 9.33% | 8.34% | 4.92% |
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. eBenefit of expense reduction rounds to less than 0.01%. fBenefit of waiver and payments by affiliates rounds to less than 0.01%.
|
|
|
|
78 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Georgia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.77 | $11.83 | $12.16 | $12.49 | $12.63 |
|
|
|
|
|
0.29 | 0.32 | 0.33 | 0.35 | 0.39 |
0.62 | (0.06) | (0.33) | (0.33) | (0.15) |
|
|
|
|
|
0.91 | 0.26 | — | 0.02 | 0.24 |
|
|
|
|
|
(0.30) | (0.32) | (0.33) | (0.35) | (0.38) |
|
|
|
|
|
$12.38 | $11.77 | $11.83 | $12.16 | $12.49 |
|
|
|
|
|
7.84% | 2.22% | (0.02)% | 0.12% | 1.97% |
1.26%e | 1.27%e | 1.24%f | 1.22% | 1.22% |
2.36% | 2.70% | 2.70% | 2.81% | 3.12% |
$62,426 | $72,542 | $109,722 | $128,544 | $126,117 |
13.23% | 11.78% | 9.33% | 8.34% | 4.92% |
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. eBenefit of expense reduction rounds to less than 0.01%. fBenefit 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. | Annual Report | 79 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Georgia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.59 | $11.66 | $11.94 |
|
|
|
0.36 | 0.39 | 0.24 |
0.63 | (0.06) | (0.29) |
|
|
|
0.99 | 0.33 | (0.05) |
|
|
|
(0.38) | (0.40) | (0.23) |
|
|
|
$12.20 | $11.59 | $11.66 |
|
|
|
8.67% | 2.86% | (0.40)% |
0.59% | 0.59% | 4.47% |
0.57%g | 0.57%g | 0.55% |
3.05% | 3.40% | 3.39% |
$4,981 | $3,786 | $5 |
13.23% | 11.78% | 9.33% |
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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%.
|
|
|
|
80 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Georgia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018 2017b
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.59 | $11.66 | $11.99 | $12.41 |
|
|
|
|
0.36 | 0.39 | 0.40 | 0.20 |
0.63 | (0.07) | (0.32) | (0.43) |
|
|
|
|
0.99 | 0.32 | 0.08 | (0.23) |
|
|
|
|
(0.38) | (0.39) | (0.41) | (0.19) |
|
|
|
|
$12.20 | $11.59 | $11.66 | $11.99 |
|
|
|
|
8.63% | 2.83% | 0.64% | (1.82)% |
0.61%g | 0.62%g | 0.59%h | 0.57% |
3.01% | 3.35% | 3.35% | 3.46% |
$53,789 | $40,142 | $35,389 | $21,454 |
13.23% | 11.78% | 9.33% | 8.34% |
aFor the year ended February 29.
bFor the period September 15, 2016 (effective date) to February 28, 2017.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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. | Annual Report | 81 |
F R A N K L IN TAX - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Georgia Tax-Free Income Fund
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds 96.7% |
|
|
Georgia 95.9% |
|
|
Athens Housing Authority Revenue, |
|
|
UGAREF East Campus Housing Phase II LLC Project, Refunding, 5.00%, 6/15/36 . . . . . . . . . . . . . . . . | $ 2,390,000 | $ 2,990,440 |
UGAREF Fraternity Row LLC Project, Refunding, 4.00%, 6/15/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,779,750 |
Athens-Clarke County Unified Government GO, |
|
|
4.00%, 12/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,720,000 | 3,480,403 |
4.00%, 12/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,350,000 | 3,054,436 |
Atlanta Airport General Revenue, |
|
|
Refunding, Series B, 5.00%, 1/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,135,500 |
Refunding, Series C, 6.00%, 1/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 | 6,260,940 |
Atlanta Airport Passenger Facility Charge Revenue, |
|
|
General, sub. lien, Refunding, Series A, 5.00%, 1/01/33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,005,000 | 4,575,552 |
General, sub. lien, Refunding, Series A, 5.00%, 1/01/34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,250,000 | 3,711,662 |
General, sub. lien, Series D, 4.00%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,500,000 | 5,349,330 |
Atlanta and Fulton County Recreation Authority Revenue, Park Improvement, Refunding, Series A, 5.00%, |
|
|
12/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,530,000 | 4,141,008 |
The Atlanta Development Authority Revenue, |
|
|
New Downtown Atlanta Stadium Project, senior lien, Series A-1, 5.25%, 7/01/40 . . . . . . . . . . . . . . . . . | 7,750,000 | 9,305,502 |
New Downtown Atlanta Stadium Project, senior lien, Series A-1, 5.25%, 7/01/44 . . . . . . . . . . . . . . . . . | 3,000,000 | 3,581,850 |
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/26 . . . . . . . . . . . . . . . | 2,555,000 | 2,980,586 |
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 | 2,282,200 |
Atlanta Tax Allocation, Beltline Project, Refunding, Series B, 5.00%, 1/01/31 . . . . . . . . . . . . . . . . . . . . . . . | 1,780,000 | 2,185,662 |
Atlanta Water and Wastewater Revenue, |
|
|
Refunding, 4.00%, 11/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,450,000 | 1,754,065 |
Refunding, 5.00%, 11/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,870,700 |
Refunding, Series B, 5.00%, 11/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,238,050 |
Series A, AGMC Insured, 5.50%, 11/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,272,400 |
Bainbridge PFAR, Decatur County Projects, AGMC Insured, 4.00%, 3/01/43. . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,653,680 |
a Baldwin 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 | 4,357,058 |
Bibb County Development Authority Revenue, Macon State College Foundation Real Estate II LLC Project, |
|
|
AGMC Insured, 5.00%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,421,650 |
Brookhaven Development Authority Revenue, Children's Healthcare of Atlanta, Series A, 4.00%, 7/01/44 . . . | 6,000,000 | 7,081,680 |
Brunswick and Glynn County Joint Water and Sewer Commission Revenue, Series C, AGMC Insured, |
|
|
Pre-Refunded, 5.00%, 6/01/33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,045,000 | 2,065,859 |
Buford GO, Refunding, Series C, 4.00%, 1/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,776,000 |
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 | 2,157,545 |
Burke County Development Authority PCR, Oglethorpe Power Corp. Vogtle Project, Refunding, Series D, |
|
|
4.125%, 11/01/45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 | 6,719,281 |
Carroll City-County Hospital Authority Revenue, |
|
|
Anticipation Certificates, Tanner Medical Center Inc. Project, 5.00%, 7/01/41 . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,330,660 |
Anticipation Certificates, Tanner Medical Center Inc. Project, Pre-Refunded, 5.00%, 7/01/40 . . . . . . . . . | 5,000,000 | 5,069,200 |
Carrollton Payroll Development Authority Revenue, UWG Athletic Complex LLC Project, Anticipation |
|
|
Certificates, Refunding, AGMC Insured, 5.00%, 6/15/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,140,000 | 3,696,942 |
|
|
|
|
82 | Annual Report | franklintempleton.com |
F RANKLIN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Georgia Tax-Free Income Fund (continued)
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds (continued) |
|
|
Georgia (continued) |
|
|
Cartersville Water and Sewer Revenue, Refunding, 5.00%, 6/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 4,000,000 | $ 4,991,520 |
City of Dalton GO, 5.00%, 2/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,731,940 |
Clayton County Development Authority Revenue, Tuff Archives LLC-Secretary of State of Georgia Project, |
|
|
Refunding, 5.00%, 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,445,800 |
Clayton County Development Authority Student Housing Revenue, CSU Foundation Real Estate II LLC |
|
|
Project, AGMC Insured, 5.00%, 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,149,700 |
Clayton County Hospital Authority Revenue, |
|
|
Anticipation Certificates, Southern Regional Medical Center Project, Series A, Pre-Refunded, 5.00%, |
|
|
8/01/30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,033,480 |
Anticipation Certificates, Southern Regional Medical Center Project, Series A, Pre-Refunded, 5.25%, |
|
|
8/01/35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,017,760 |
Clayton County Urban RDAR, Clayton County Project, Pre-Refunded, 5.00%, 2/01/28 . . . . . . . . . . . . . . . . . | 1,285,000 | 1,387,916 |
Cobb County Development Authority Revenue, Georgia Tech Cobb Research Campus, Series A, 4.00%, |
|
|
6/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,600,000 | 1,840,816 |
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 | 2,357,920 |
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 | 2,719,200 |
KSU SRAC Real Estate Foundation LLC Project, 5.00%, 7/15/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,713,700 |
Columbus Water and Sewerage Revenue, Series A, Pre-Refunded, 5.00%, 5/01/33 . . . . . . . . . . . . . . . . . . | 1,030,000 | 1,207,150 |
Coweta County Development Authority Revenue, Piedmont Healthcare Inc. Project, 5.00%, 6/15/40 . . . . . . . | 5,000,000 | 5,059,100 |
Coweta County Water and Sewage Authority Revenue, Refunding, 4.00%, 6/01/39 . . . . . . . . . . . . . . . . . . . | 1,500,000 | 1,789,590 |
Dalton-Whitfield County Joint Development Authority Revenue, Hamilton Health Care System Obligated |
|
|
Group, 4.00%, 8/15/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,426,810 |
Decatur Urban RDAR, City of Decatur Projects, Series A, 5.00%, 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . | 6,195,000 | 6,840,209 |
DeKalb County Water and Sewerage Revenue, |
|
|
Refunding, Series B, AGMC Insured, 5.00%, 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,655,000 | 13,320,881 |
Second Resolution, Series A, 5.25%, 10/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,425,000 | 12,194,474 |
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 | 5,422,850 |
Etowah Water and Sewer Authority Revenue, |
|
|
Refunding, BAM Insured, 4.00%, 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,450,000 | 1,702,532 |
Refunding, BAM Insured, 3.00%, 3/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,250,000 | 1,329,550 |
Fairburn GO, AGMC Insured, Pre-Refunded, 5.75%, 12/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,172,600 |
Floyd County Hospital Authority Revenue, Anticipation Certificates, Floyd Medical Center Project, Refunding, |
|
|
Series A, 4.00%, 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,735,000 | 8,760,042 |
Forsyth County School District GO, 5.00%, 2/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,650,000 | 3,393,987 |
Fulton County Development Authority Hospital Revenue, Anticipation Certificates, Wellstar Health |
|
|
System Inc. Project, Series A, 5.00%, 4/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,196,290 |
Fulton County Development Authority Revenue, |
|
|
AMC Campus Project I LLC Project, AGMC Insured, 5.00%, 6/15/37 . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,075,000 | 3,223,338 |
Georgia Tech Facilities, 4.00%, 3/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,318,780 |
Georgia Tech Facilities Inc. Project, Series A, 5.00%, 6/01/41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 3,533,775 |
Piedmont Healthcare Inc. Project, Refunding, Series A, 5.00%, 7/01/44 . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,365,100 |
Fulton County GO, Library Bond, 4.00%, 7/01/40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,858,850 |
Fulton County Residential Care Facilities Elderly Authority Retirement Facility Revenue, Lenbrook Square |
|
|
Foundation Inc. Project, Refunding, 5.00%, 7/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 | 6,664,500 |
franklintempleton.com | Annual Report | 83 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Georgia Tax-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 | $ 1,249,096 |
Anticipation Certificates, Northeast Georgia Health System Inc. Project, Refunding, Series A, 5.00%, |
|
|
2/15/42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,000,000 | 8,372,070 |
Georgia Municipal Electric Authority Revenue, Plant Vogtle Units 3 and 4 Project M, Series A, 4.00%, |
|
|
1/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,734,200 |
Georgia State GO, |
|
|
Series A, 4.00%, 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,985,650 |
Series A-2, 4.00%, 2/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,884,750 |
Georgia State HFAR, |
|
|
SFM, Refunding, Series A, 3.70%, 6/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,520,750 |
SFM, Series A, 3.80%, 12/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,248,400 |
SFM, Series A, 3.85%, 12/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,705,000 | 6,406,829 |
SFM, Series A, 3.95%, 12/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,337,290 |
SFM, Series B, 4.05%, 12/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,640,000 | 1,783,795 |
Georgia State Municipal Electric Authority Revenue, Power, Series GG, 5.00%, 1/01/39 . . . . . . . . . . . . . . . . | 7,000,000 | 7,702,660 |
Georgia State Municipal Gas Authority Revenue, |
|
|
Gas Portfolio III Project, Refunding, Series S, 5.00%, 10/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,763,325 |
Gas Portfolio III Project, Refunding, Series S, 5.00%, 10/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,759,950 |
Glynn-Brunswick Memorial Hospital Authority Revenue, Anticipation Certificates, Southeast Georgia Health |
|
|
System Project, 5.00%, 8/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,030,250 |
Gwinnett County Development Authority COP, |
|
|
Gwinnett County Public Schools Project, Refunding, NATL Insured, 5.25%, 1/01/22 . . . . . . . . . . . . . . . | 3,000,000 | 3,245,160 |
Gwinnett County Public Schools Project, Refunding, NATL Insured, 5.25%, 1/01/24 . . . . . . . . . . . . . . . | 2,000,000 | 2,334,660 |
Gwinnett County School District GO, 5.00%, 2/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,895,110 |
Henry County School District GO, 4.00%, 8/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,863,050 |
Hogansville Combined Public Utility System Revenue, Refunding, AGMC Insured, 6.00%, 10/01/23 . . . . . . . | 1,845,000 | 1,991,844 |
Lawrenceville Building Authority Revenue, 5.00%, 4/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,270,000 | 2,694,490 |
Macon Water Authority Revenue, Water and Sewer, 4.00%, 10/01/35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,810,000 | 3,270,840 |
Main Street Natural Gas Inc. Gas Supply Revenue, Series A, 5.00%, 5/15/38 . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 3,531,200 |
Main Street Natural Gas Inc. Revenue, Gas Project, Series A, 5.50%, 9/15/27 . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,407,650 |
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 | 5,085,750 |
Metropolitan Atlanta Rapid Transit Authority Sales Tax Revenue, Third Indenture Series, Series B, 5.00%, |
|
|
7/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,091,850 |
Moultrie-Colquitt County Development Authority Revenue, Philadelphia College of Osteopathic Medicine |
|
|
Project, 5.00%, 12/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,815,000 | 5,969,107 |
Paulding County Hospital Authority Revenue, Anticipation Certificates, Series A, 5.00%, 4/01/42 . . . . . . . . . | 3,500,000 | 3,728,935 |
Pierce County School District GO, 4.00%, 1/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,725,000 | 4,343,052 |
Private Colleges and Universities Authority Revenue, |
|
|
Emory University, Green Bonds, Refunding, Series B, 5.00%, 9/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . | 6,115,000 | 7,889,267 |
Emory University, Refunding, Series A, 5.00%, 9/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,695,000 | 9,184,355 |
Emory University, Refunding, Series A, 5.00%, 10/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,666,850 |
Richmond County Hospital Authority Revenue, Anticipation Certificates, University Health Services Inc. |
|
|
Project, Refunding, 4.00%, 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,000,000 | 8,976,240 |
Rockdale County Development Authority Revenue, Piedmont Health Care Composite Issue, Refunding, |
|
|
Series A, 4.00%, 7/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,859,400 |
|
|
|
|
84 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Georgia Tax-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 | $ 3,652,860 |
Savannah Hospital Authority Revenue, Anticipation Certificates, St. Joseph's/Candler Health System Inc., |
|
|
Series A, 4.00%, 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,752,300 |
Sinclair Water Authority Revenue, Refunding, AGMC Insured, 5.00%, 4/01/48 . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,544,460 |
Thomasville Hospital Authority Revenue, |
|
|
Anticipation Certificates, John D. Archbold Memorial Hospital Inc. Project, Pre-Refunded, 5.25%, |
|
|
11/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,029,330 |
Anticipation Certificates, John D. Archbold Memorial Hospital Inc. Project, Pre-Refunded, 5.375%, |
|
|
11/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,150,750 |
Tift County Hospital Revenue, Anticipation Certificates, Refunding, 5.00%, 12/01/38 . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,203,400 |
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 | 3,199,110 |
b Wheeler County School District GO, 4.00%, 8/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,555,000 | 1,833,485 |
Worth County School District GO, 5.00%, 12/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,220,400 |
|
|
|
|
| 465,843,716 |
U.S. Territories 0.8% |
|
|
|
| |
Puerto Rico 0.8% |
|
|
a Puerto Rico Electric Power Authority Power Revenue, Series XX-RSA-1, 5.25%, 7/01/40 . . . . . . . . . . . . . . . | 5,000,000 | 4,006,250 |
. . .Total Municipal Bonds before Short Term Investments (Cost $437,358,675) . . . |
| 469,849,966 |
|
|
|
Short Term Investments 2.9%
Municipal Bonds 2.9%
Georgia 2.9%
cAthens-Clarke County Unified Government Development Authority Revenue, University of Georgia Athletic
Assn. Project, Series B, LOC Wells Fargo Bank, Daily VRDN and Put, 1.19%, 7/01/35 . . . . . . . . . . . . . . . . | 5,365,000 | 5,365,000 |
cFulton County Development Authority Revenue, Children's Healthcare of Atlanta Inc. Project, Refunding,
SPA PNC Bank, Weekly VRDN and Put, 1.17%, 7/01/42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,600,000 | 8,600,000 |
Total Short Term Investments (Cost $13,965,000) |
|
|
| 13,965,000 | |
Total Investments (Cost $451,323,675) 99.6%. . . . |
|
|
| 483,814,966 | |
Other Assets, less Liabilities 0.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 1,761,492 |
Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| $485,576,458 | |
|
|
|
See Abbreviations on page 173.
aSee Note 7 regarding defaulted securities.
bSecurity purchased on a when-issued basis. See Note 1(b).
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 85 |
F R A N K L IN TAX - FREE TRUS T
Financial Highlights
Franklin Kentucky Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.76$10.68
0.290.15
0.500.08
0.790.23
(0.31)(0.15)
$11.24$10.76
7.43%2.16%
0.97%0.97%
2.63%3.00%
$8,986$2,785
13.74%18.61%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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%.
|
|
|
|
86 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Kentucky Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.75 | $10.77 | $11.01 | $11.31 | $11.52 |
|
|
|
|
|
0.31 | 0.34 | 0.37 | 0.40 | 0.41 |
0.49 | (0.02) | (0.24) | (0.30) | (0.21) |
|
|
|
|
|
0.80 | 0.32 | 0.13 | 0.10 | 0.20 |
|
|
|
|
|
(0.32) | (0.34) | (0.37) | (0.40) | (0.41) |
|
|
|
|
|
$11.23 | $10.75 | $10.77 | $11.01 | $11.31 |
|
|
|
|
|
7.60% | 3.01% | 1.20% | 0.86% | 1.82% |
0.82%e | 0.82%e | 0.79% | 0.77% | 0.76% |
2.78% | 3.15% | 3.40% | 3.51% | 3.61% |
$127,889 | $130,267 | $150,182 | $165,613 | $173,093 |
13.74% | 18.61% | 13.90% | 9.14% | 5.91% |
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. eBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 87 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Kentucky Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.75 | $10.77 | $10.98 |
|
|
|
0.32 | 0.35 | 0.23 |
0.50 | (0.02) | (0.22) |
|
|
|
0.82 | 0.33 | 0.01 |
|
|
|
(0.34) | (0.35) | (0.22) |
|
|
|
$11.23 | $10.75 | $10.77 |
|
|
|
7.74% | 3.13% | 0.07% |
0.71% | 0.70% | 0.70% |
0.68%g | 0.67%g | 0.65% |
2.92% | 3.30% | 3.54% |
$2,164 | $1,843 | $2,085 |
13.74% | 18.61% | 13.90% |
aFor the year ended February 29.
cThe amountbFor theshownperiodforAugusta share1, outstanding2017 (effectivethroughoutdate) to theFebruaryperiod28,may2018not.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.
dBased on average daily shares outstanding.
eTotal return 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%.
|
|
|
|
88 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Kentucky Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018 2017b
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.75 | $10.77 | $11.01 | $11.35 |
|
|
|
|
0.32 | 0.35 | 0.38 | 0.19 |
0.50 | (0.02) | (0.24) | (0.35) |
|
|
|
|
0.82 | 0.33 | 0.14 | (0.16) |
|
|
|
|
(0.34) | (0.35) | (0.38) | (0.18) |
|
|
|
|
$11.23 | $10.75 | $10.77 | $11.01 |
|
|
|
|
7.70% | 3.10% | 1.30% | (1.36)% |
0.72%g | 0.72%g | 0.69% | 0.67% |
2.88% | 3.25% | 3.50% | 3.61% |
$12,168 | $9,298 | $7,438 | $6,896 |
13.74% | 18.61% | 13.90% | 9.14% |
aFor the year ended February 29.
bFor the period September 15, 2016 (effective date) to February 28, 2017.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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. | Annual Report | 89 |
F R A N K L IN TAX - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Kentucky Tax-Free Income Fund
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds 96.4% |
|
|
Kentucky 96.4% |
|
|
Boyle County Revenue, Educational Facilities, Centre College of Kentucky, Refunding, 5.00%, 6/01/37 . . . . | $2,000,000 | $ 2,428,640 |
Campbell and Kenton Counties Sanitation District No. 1 Revenue, Refunding, 4.00%, 8/01/34. . . . . . . . . . . | 5,310,000 | 6,192,734 |
a Caroll County Pollution Control Revenue, Kentucky Utilities Co. Project, Refunding, Series A, Mandatory |
|
|
Put, 1.55%, 9/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,058,420 |
Eastern Kentucky University General Receipts Revenue, Series A, 4.00%, 10/01/37 . . . . . . . . . . . . . . . . . | 1,540,000 | 1,771,462 |
Fayette County School District Finance Corp. Revenue, |
|
|
School Building, Series A, 4.00%, 5/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,129,050 |
School Building, Series D, 5.00%, 8/01/34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,985,000 | 2,365,127 |
Glasgow Healthcare Revenue, T.J. Samson Community Hospital Project, 6.45%, 2/01/41 . . . . . . . . . . . . . . | 2,000,000 | 2,110,160 |
Greater Kentucky Housing Assistance Corp. Mortgage Revenue, Section 8 Assisted Projects, Refunding, |
|
|
Series A, NATL Insured, 6.10%, 1/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 135,000 | 135,478 |
Jefferson County School District Finance Corp. School Building Revenue, Refunding, Series B, 4.00%, |
|
|
12/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 4,146,205 |
Kentucky Bond Development Corp. Industrial Building Revenue, City of Stamping Ground, Transylvania |
|
|
University Project, Series B, 4.00%, 3/01/49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,745,700 |
Kentucky Bond Development Corp. Transient Room Tax Revenue, Lexington Center Corp. Project, |
|
|
Refunding, Series A, 5.00%, 9/01/48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 3,067,725 |
Kentucky Economic Development Finance Authority Revenue, |
|
|
CommonSpirit Health, Refunding, Series A-2, 5.00%, 8/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,165,000 | 5,151,564 |
Hospital, Baptist Healthcare System Obligated Group, 5.25%, 8/15/46 . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,256,750 |
Kentucky Rural Water Finance Corp. Public Project Revenue, |
|
|
Multimodal, Flexible Term Program, Series A, 5.00%, 2/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 485,000 | 486,557 |
Multimodal, Flexible Term Program, Series I, 5.00%, 2/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,010,000 | 1,012,656 |
Kentucky State Housing Corp. Conduit MFHR, |
|
|
Collateral Mortgage Loan, Country Place Apartments Project, GNMA Secured, 5.00%, 4/20/40 . . . . . . | 2,280,000 | 2,290,921 |
Collateral Mortgage Loan, Country Place Apartments Project, GNMA Secured, 5.25%, 4/20/45 . . . . . . | 1,850,000 | 1,858,713 |
Kentucky State Infrastructure Authority Revenue, |
|
|
Wastewater and Drinking Water Revolving Fund, Series A, Pre-Refunded, 5.00%, 2/01/28 . . . . . . . . . . | 2,000,000 | 2,161,760 |
Wastewater and Drinking Water Revolving Fund, Series A, Pre-Refunded, 5.00%, 2/01/31 . . . . . . . . . . | 4,190,000 | 4,528,887 |
Kentucky State Municipal Power Agency Power System Revenue, |
|
|
Prairie State Project, Refunding, Series A, 4.00%, 9/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,211,200 |
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/36 . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,643,200 |
Kentucky State Property and Buildings Commission Revenue, |
|
|
Project No. 108, Refunding, Series A, 5.00%, 8/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 4,142,145 |
Project No. 115, 5.00%, 4/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 3,031,875 |
Kentucky State Turnpike Authority Economic Development Road Revenue, |
|
|
Revitalization Projects, Refunding, Series A, 5.00%, 7/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,629,175 |
Revitalization Projects, Refunding, Series A, 5.00%, 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 550,000 | 679,850 |
Revitalization Projects, Refunding, Series A, 5.00%, 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 700,000 | 863,303 |
Revitalization Projects, Series A, 5.00%, 7/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,255,400 |
Revitalization Projects, Series A, 5.00%, 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,555,480 |
Lexington-Fayette Urban County Airport Board Revenue, General Airport, Series B, Pre-Refunded, 5.00%, |
|
|
7/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,185,000 | 1,300,123 |
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 | 3,137,760 |
Louisville and Jefferson County Metropolitan Sewer District Revenue, |
|
|
Sewer and Drainage System, Refunding, Series A, 4.00%, 5/15/38 . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,859,950 |
Sewer and Drainage System, Series A, 4.00%, 5/15/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,750,000 | 3,084,730 |
|
|
|
|
90 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Kentucky Tax-Free Income Fund (continued)
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds (continued) |
|
|
Kentucky (continued) |
|
|
b Louisville/Jefferson County Metro Government Health System Revenue, Norton Healthcare Inc., Series A, |
|
|
4.00%, 10/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $1,500,000 | $ 1,773,795 |
Louisville/Jefferson County Metro Government Revenue, |
|
|
College, Bellarmine University Project, Refunding and Improvement, Series A, 5.00%, 5/01/36 . . . . . . . | 2,715,000 | 3,126,540 |
College, Improvement and Refunding, Bellarmine University Inc. Project, 5.00%, 5/01/31 . . . . . . . . . . . | 2,000,000 | 2,240,480 |
Morehead State University General Receipts Revenue, Refunding, Series A, 5.00%, 10/01/28 . . . . . . . . . . | 1,910,000 | 2,207,998 |
Murray Hospital Facilities Revenue, Murray-Calloway County Public Hospital Corp. Project, Pre-Refunded, |
|
|
6.375%, 8/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,555,700 |
Owen County Waterworks System Revenue, American Water Co. Project, Series A, 5.375%, 6/01/40 . . . . . | 2,000,000 | 2,020,520 |
Owensboro Electric Light and Power System Revenue, Refunding, 4.00%, 1/01/27 . . . . . . . . . . . . . . . . . . | 1,250,000 | 1,444,950 |
Owensboro Water Revenue, Refunding and Improvement, 4.00%, 9/15/45 . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,656,200 |
Paducah Electric Plant Board Revenue, Refunding, Series A, AGMC Insured, 5.00%, 10/01/34 . . . . . . . . . . | 5,700,000 | 6,975,090 |
Pikeville Hospital Revenue, Pikeville Medical Center Inc. Project, Improvement and Refunding, 6.50%, |
|
|
3/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,875,000 | 2,999,430 |
Russell Revenue, Bon Secours Health System Inc., Pre-Refunded, 5.00%, 11/01/26 . . . . . . . . . . . . . . . . . | 4,000,000 | 4,432,480 |
Scott County School District Finance Corp. Revenue, School Building, 4.00%, 6/01/38 . . . . . . . . . . . . . . . . | 1,615,000 | 1,818,716 |
Shelby County School District Finance Corp. Revenue, School Building, 4.00%, 8/01/38. . . . . . . . . . . . . . . | 3,465,000 | 3,911,985 |
University of Kentucky General Receipts Revenue, |
|
|
Series A, 4.00%, 10/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,611,400 |
Series A, 4.00%, 4/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,441,205 |
University of Louisville Revenue, |
|
|
General Receipts, Series A, 5.00%, 9/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,220,000 | 2,340,524 |
General Receipts, Series D, 5.00%, 3/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,140,000 | 5,105,489 |
Warren County Hospital Facility Revenue, Bowling Green, Warren County, Series A, 5.00%, 10/01/33 . . . . . | 1,000,000 | 1,088,710 |
Western Kentucky University Revenue, General Receipts, Series A, 5.00%, 5/01/32. . . . . . . . . . . . . . . . . . | 1,625,000 | 1,758,608 |
Total Municipal Bonds before Short Term Investments (Cost $135,428,721) . . . . . |
|
|
| 145,802,520 | |
Short Term Investments 3.8% |
|
|
|
| |
Municipal Bonds 3.8% |
|
|
Kentucky 3.8% |
|
|
c Berea Educational Facilities Revenue, |
|
|
Berea College Project, Series A, Daily VRDN and Put, 1.16%, 6/01/32. . . . . . . . . . . . . . . . . . . . . . . . | 3,700,000 | 3,700,000 |
Berea College Project, Series B, Daily VRDN and Put, 1.16%, 6/01/29 . . . . . . . . . . . . . . . . . . . . . . . . | 1,900,000 | 1,900,000 |
franklintempleton.com | Annual Report | 91 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Kentucky Tax-Free Income Fund (continued)
Principal
AmountValue
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, 1.22%, 10/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $100,000 | $ 100,000 |
| |
Total Short Term Investments (Cost $5,700,000) |
|
|
|
|
| 5,700,000 |
| ||
Total Investments (Cost $141,128,721) 100.2% . . |
|
|
|
|
| 151,502,520 |
| ||
Other Assets, less Liabilities (0.2)%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| (295,922) | ||
Net Assets 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
|
|
| $151,206,598 |
| ||
|
|
|
|
|
See Abbreviations on page 173.
aThe maturity date shown represents the mandatory put date. bSecurity purchased on a when-issued basis. See Note 1(b).
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.
|
|
|
|
92 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Financial Highlights
Franklin Louisiana Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.93$10.85
0.300.16
0.640.08
0.940.24
(0.32)(0.16)
$11.55$10.93
8.68%2.22%
0.86%0.88%
2.70%3.06%
$48,032$18,110
4.83%9.46%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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. | Annual Report | 93 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Louisiana Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.92 | $10.90 | $11.15 | $11.50 | $11.62 |
|
|
|
|
|
0.32 | 0.35 | 0.36 | 0.39 | 0.43 |
0.64 | 0.02 | (0.24) | (0.34) | (0.12) |
|
|
|
|
|
0.96 | 0.37 | 0.12 | 0.05 | 0.31 |
|
|
|
|
|
(0.33) | (0.35) | (0.37) | (0.40) | (0.43) |
|
|
|
|
|
$11.55 | $10.92 | $10.90 | $11.15 | $11.50 |
|
|
|
|
|
8.94% | 3.45% | 1.04% | 0.43% | 2.78% |
0.71%e | 0.73%e | 0.70% | 0.68% | 0.69% |
2.85% | 3.21% | 3.23% | 3.41% | 3.77% |
$289,744 | $284,259 | $322,080 | $343,042 | $335,785 |
4.83% | 9.46% | 21.83% | 16.87% | 4.13% |
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. eBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
94 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Louisiana Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.10 | $11.07 | $11.32 | $11.67 | $11.79 |
|
|
|
|
|
0.26 | 0.29 | 0.30 | 0.33 | 0.37 |
0.65 | 0.03 | (0.25) | (0.34) | (0.12) |
|
|
|
|
|
0.91 | 0.32 | 0.05 | (0.01) | 0.25 |
|
|
|
|
|
(0.27) | (0.29) | (0.30) | (0.34) | (0.37) |
|
|
|
|
|
$11.74 | $11.10 | $11.07 | $11.32 | $11.67 |
|
|
|
|
|
8.34% | 2.92% | 0.46% | (0.13)% | 2.18% |
1.26%e | 1.28%e | 1.25% | 1.23% | 1.24% |
2.30% | 2.66% | 2.68% | 2.86% | 3.22% |
$38,066 | $42,188 | $61,399 | $67,154 | $68,319 |
4.83% | 9.46% | 21.83% | 16.87% | 4.13% |
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. eBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 95 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Louisiana Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.93 | $10.90 | $11.18 |
|
|
|
0.33 | 0.36 | 0.22 |
0.64 | 0.03 | (0.28) |
|
|
|
0.97 | 0.39 | (0.06) |
|
|
|
(0.35) | (0.36) | (0.22) |
|
|
|
$11.55 | $10.93 | $10.90 |
|
|
|
8.99% | 3.67% | (0.59)% |
0.60% | 0.61% | 0.60% |
0.58%g | 0.59%g | 0.57% |
2.98% | 3.35% | 3.36% |
$5,383 | $3,865 | $3,683 |
4.83% | 9.46% | 21.83% |
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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%.
|
|
|
|
96 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Louisiana Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018 2017b
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.93 | $10.90 | $11.15 | $11.54 |
|
|
|
|
0.33 | 0.36 | 0.37 | 0.19 |
0.63 | 0.03 | (0.24) | (0.40) |
|
|
|
|
0.96 | 0.39 | 0.13 | (0.21) |
|
|
|
|
(0.34) | (0.36) | (0.38) | (0.18) |
|
|
|
|
$11.55 | $10.93 | $10.90 | $11.15 |
|
|
|
|
8.95% | 3.65% | 1.14% | (1.79)% |
0.61%g | 0.63%g | 0.60% | 0.58% |
2.95% | 3.31% | 3.33% | 3.51% |
$27,945 | $19,580 | $14,091 | $10,259 |
4.83% | 9.46% | 21.83% | 16.87% |
aFor the year ended February 29.
bFor the period September 15, 2016 (effective date) to February 28, 2017.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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. | Annual Report | 97 |
F R A N K L IN TAX - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Louisiana Tax-Free Income Fund
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds 97.2% |
|
|
Louisiana 95.9% |
|
|
Alexandria Utilities Revenue, Series A, 5.00%, 5/01/38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $10,000,000 | $ 11,198,700 |
Bossier City Public Improvement Sales Tax Revenue, Series ST, 5.00%, 12/01/36 . . . . . . . . . . . . . . . . . . . . | 1,405,000 | 1,734,725 |
Bossier City Utilities Revenue, Refunding, 5.00%, 10/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,280,000 | 6,147,029 |
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 | 2,220,396 |
Calcasieu Parish School District No. 23 GO, |
|
|
Public Improvement, BAM Insured, 4.00%, 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 670,000 | 801,313 |
Public Improvement, BAM Insured, 4.00%, 9/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 600,000 | 714,744 |
Public Improvement, BAM Insured, 4.00%, 9/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,060,000 | 2,436,465 |
Series A, Pre-Refunded, 5.00%, 2/15/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,380,000 | 1,492,484 |
Calcasieu Parish School District No. 31 GO, |
|
|
Public School Improvement, BAM Insured, 5.00%, 3/01/36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,263,120 |
Public School Improvement, BAM Insured, 4.00%, 3/01/37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,205,390 |
Public School Improvement, BAM Insured, 5.00%, 3/01/38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,254,710 |
Public School Improvement, BAM Insured, 4.00%, 3/01/39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 750,000 | 898,620 |
East Baton Rouge Mortgage Finance Authority SFMR, |
|
|
MBS Program, Refunding, Series A-3, GNMA Secured, 5.00%, 10/01/28. . . . . . . . . . . . . . . . . . . . . . . | 260,000 | 260,632 |
MBS Program, Series A-2, GNMA Secured, 5.10%, 10/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 155,000 | 155,398 |
East Baton Rouge Parish Sewerage Commission Revenue, Refunding, Series A, 4.00%, 2/01/40 . . . . . . . . . | 1,500,000 | 1,774,470 |
East Baton Rouge Sewerage Commission Revenue, |
|
|
Refunding, Series A, 4.00%, 2/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,849,650 |
Refunding, Series B, 5.00%, 2/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,186,950 |
Refunding, Series B, 5.00%, 2/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,903,250 |
Greater New Orleans Expressway Commission Toll Revenue, sub. lien, AGMC Insured, 5.00%, 11/01/47 . . . | 4,000,000 | 4,738,320 |
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 | 3,234,479 |
Jefferson Sales Tax District Special Sales Tax Revenue, |
|
|
Parish of Jefferson, Series B, AGMC Insured, 5.00%, 12/01/42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,792,183 |
Parish of Jefferson, Series B, Assured Guaranty, 4.00%, 12/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,925,200 |
Kenner Consolidated Sewerage District Revenue, AGMC Insured, Pre-Refunded, 5.00%, 11/01/36 . . . . . . . . | 4,000,000 | 4,275,240 |
Kenner Sales Tax Revenue, Refunding, Series A, 5.00%, 6/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,605,000 | 9,689,058 |
Lafayette Communications System Revenue, |
|
|
Refunding, AGMC Insured, 5.00%, 11/01/28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,345,000 | 1,631,942 |
Refunding, AGMC Insured, 5.00%, 11/01/31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,400,000 | 2,898,624 |
Lafayette Parish School Board Sales Tax Revenue, 5.00%, 4/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 | 7,273,080 |
Lafayette Public Improvement Sales Tax Revenue, |
|
|
Pre-Refunded, 5.00%, 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,865,000 | 1,943,945 |
Series A, 5.00%, 5/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,350,000 | 5,491,571 |
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 | 4,103,080 |
Lafayette Utilities Revenue, Pre-Refunded, 5.00%, 11/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,139,150 |
Louisiana Local Government Environmental Facilities and CDA Revenue, |
|
|
East Ascension Consolidated Gravity Drainage District No. 1 Project, Refunding, BAM Insured, 5.00%, |
|
|
12/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,925,000 | 3,513,569 |
East Baton Rouge Sewerage Commission Projects, sub. lien, Series A, 5.00%, 2/01/34 . . . . . . . . . . . . | 2,550,000 | 2,917,124 |
East Baton Rouge Sewerage Commission Projects, sub. lien, Series A, 5.00%, 2/01/43 . . . . . . . . . . . . | 3,000,000 | 3,319,320 |
LCTCS Act 360 Project, 5.00%, 10/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,491,700 |
|
|
|
|
98 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Louisiana Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
Louisiana (continued) |
|
|
|
Louisiana Local Government Environmental Facilities and CDA Revenue, (continued) |
|
|
|
LCTCS Act 360 Project, 5.00%, 10/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 5,000,000 | $ 5,812,350 |
|
Louisiana Tech University Student Housing, Innovative Student Facilities Inc. Project, Series A, AGMC |
|
|
|
Insured, 4.00%, 10/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 800,000 | 911,920 |
|
Louisiana Tech University Student Housing, Innovative Student Facilities Inc. Project, Series A, AGMC |
|
|
|
Insured, 4.00%, 10/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 620,000 | 704,866 |
|
McNeese State University Student Parking, Cowboy Facilities Inc. Project, AGMC Insured, 5.00%, |
|
|
|
3/01/36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,800,000 | 1,942,722 | |
Ragin' Cajun Facilities Inc., Student Housing and Parking Project, AGMC Insured, 5.00%, 10/01/48 . . . . | 3,500,000 | 4,182,640 |
|
Ragin' Cajun Facilities Inc., Student Housing and Parking Project, Refunding, AGMC Insured, 5.00%, |
|
|
|
10/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,680,000 | 3,274,102 | |
Southeastern Louisiana University Student Housing/University Facilities Inc. Project, Refunding, AGMC |
|
|
|
Insured, 4.00%, 8/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,161,510 |
|
Woman's Hospital Foundation Project, Refunding, Series A, 5.00%, 10/01/44. . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,042,400 |
|
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 | 5,861,232 |
|
Franciscan Missionaries of Our Lady Health System Project, Series A, 5.00%, 7/01/47 . . . . . . . . . . . . . | 5,000,000 | 5,985,950 |
|
Franciscan Missionaries of Our Lady Health System Project, Series A, Pre-Refunded, 5.00%, 7/01/35 . . | 35,000 | 42,550 |
|
Lafayette General Medical Center Project, Refunding, 5.50%, 11/01/40 . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,029,850 |
|
Louisiana Children's Medical Center Project, Series A1, 5.00%, 6/01/45 . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,216,600 |
|
Louisiana Public Facilities Authority Revenue, |
|
|
|
Archdiocese of New Orleans Project, Refunding, 5.00%, 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,750,000 | 4,398,300 |
|
CHRISTUS Health, Series E, 5.00%, 7/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,218,200 |
|
Loyola University Project, 5.00%, 10/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,230,500 |
|
Loyola University Project, Pre-Refunded, 5.00%, 10/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,016,200 |
|
Ochsner Clinic Foundation Project, Pre-Refunded, 5.00%, 5/15/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 30,000 | 37,115 |
|
Ochsner Clinic Foundation Project, Pre-Refunded, 6.75%, 5/15/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,352,000 |
|
Ochsner Clinic Foundation Project, Pre-Refunded, 5.00%, 5/15/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 20,000 | 24,743 |
|
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,131,200 |
|
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,730,000 | 2,062,056 |
|
Ochsner Clinic Foundation Project, Series B, ETM, 5.75%, 5/15/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,882,450 |
|
Tulane University of Louisiana Project, Refunding, Series A, 5.00%, 12/15/41 . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,620,430 |
|
Tulane University of Louisiana Project, Refunding, Series A, 4.00%, 12/15/50 . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,258,880 |
|
Tulane University of Louisiana Project, Series B, 5.00%, 10/01/37. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,540,000 | 6,145,688 |
|
Louisiana State Gasoline and Fuels Tax Revenue, |
|
|
|
first lien, Refunding, Series A, 5.00%, 5/01/41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,543,870 | |
second lien, Refunding, Series C, 5.00%, 5/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,295,350 | |
second lien, Refunding, Series C, 5.00%, 5/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,474,100 | |
second lien, Refunding, Series C-1, 5.00%, 5/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,615,550 |
|
Louisiana State GO, |
|
|
|
Refunding, Series A, 5.00%, 9/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,187,050 |
|
Refunding, Series C, 5.00%, 8/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,200,000 | 8,466,192 |
|
Series A, 5.00%, 3/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,893,490 |
|
Louisiana State Grant Anticipation Revenue, |
|
|
|
Series A, 5.00%, 9/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,644,400 |
|
Series A, 5.00%, 9/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,750,000 | 6,253,137 |
|
franklintempleton.com | Annual Report | 99 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Louisiana Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
Louisiana (continued) |
|
|
|
Louisiana State Highway Improvement Revenue, |
|
|
|
Series A, 5.00%, 6/15/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 2,860,000 | $ 3,231,829 | |
Series A, 5.00%, 6/15/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 9,850,000 | 11,439,002 |
|
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 | 2,747,560 |
|
Provident Group-Flagship Properties LLC, Louisiana State University Nicholson Gateway Project, Series |
|
|
|
A, 5.00%, 7/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,500,000 | 7,658,040 |
|
Louisiana State Transportation Authority Revenue, Refunding, Series A, 5.00%, 8/15/38 . . . . . . . . . . . . . . . | 4,500,000 | 5,114,250 |
|
Louisiana State Unclaimed Property Special Revenue, I-49 North Project, 5.00%, 9/01/33 . . . . . . . . . . . . . . | 5,860,000 | 6,648,404 |
|
Louisiana State University and Agricultural and Mechanical College Revenue, |
|
|
|
Board of Supervisors, Auxiliary, Pre-Refunded, 5.00%, 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,551,960 |
|
Board of Supervisors, Auxiliary, Refunding, 5.00%, 7/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,163,570 |
|
Board of Supervisors, Auxiliary, Refunding, 5.00%, 7/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,040,000 | 1,208,584 |
|
Board of Supervisors, Auxiliary, Refunding, 5.00%, 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,157,980 | |
Board of Supervisors, Auxiliary, Refunding, Series A, 5.00%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . | 4,500,000 | 5,388,930 |
|
Board of Supervisors, Auxiliary, Series A, Pre-Refunded, 5.00%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,069,050 |
|
Natchitoches Parish School District No. 9 GO, School, AGMC Insured, 5.00%, 3/01/38 . . . . . . . . . . . . . . . . | 1,440,000 | 1,824,638 |
|
New Orleans Aviation Board Revenue, General Airport, North Terminal Project, Series A, 5.00%, 1/01/48 . . . | 10,000,000 | 12,018,100 |
|
Parish of East Baton Rouge Capital Improvements District Movebr Sales Tax Revenue, |
|
|
|
4.00%, 8/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 | 1,758,255 |
|
5.00%, 8/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 4,469,220 |
|
Port of New Orleans Board of Commissioners Port Facility Revenue, Series A, AGMC Insured, 5.00%, |
|
|
|
4/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,750,000 | 3,375,350 |
|
Ruston Sales Tax Revenue, AGMC Insured, 5.00%, 6/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,085,000 | 1,306,752 |
|
Shreveport GO, Pre-Refunded, 5.00%, 8/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,790,000 | 5,070,311 |
|
Shreveport Limited Obligation Revenue, Independence Stadium Project, Refunding, BAM Insured, 5.00%, |
|
|
|
3/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 | 1,873,305 |
|
Shreveport Water and Sewer Revenue, Series B, 5.00%, 12/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,803,440 |
|
St. Charles Parish School Board Sales and Use Tax Revenue, 4.00%, 8/01/38 . . . . . . . . . . . . . . . . . . . . . . | 805,000 | 953,378 |
|
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 | 6,086,100 |
|
St. Tammany Parish Utilities Revenue, |
|
|
|
Series B, Pre-Refunded, 5.50%, 8/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,650,000 | 2,700,774 |
|
Series B, Pre-Refunded, 5.00%, 8/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,290,000 | 3,346,292 |
|
Terrebonne Levee and Conservation District Public Improvement Sales Tax Revenue, 5.00%, 7/01/38. . . . . . | 2,000,000 | 2,248,300 |
|
Terrebonne Parish Sales and Use Tax Revenue, Morganza Levee Improvement, Series ST, AGMC Insured, |
|
|
|
Pre-Refunded, 5.00%, 4/01/32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,265,000 | 2,367,627 |
|
|
|
|
|
|
| 392,376,225 | |
|
|
|
|
|
|
|
|
100 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Louisiana Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount |
| Value |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
U.S. Territories 1.3% |
|
|
|
Puerto Rico 1.3% |
|
|
|
a Puerto Rico Electric Power Authority Power Revenue, Series WW-RSA-1, 5.25%, 7/01/33 . . . . . . . . . . . . . . | $6,450,000 | $ 5,168,062 | |
. . . . . . . . . . . . . .Total Municipal Bonds (Cost $365,888,858) 97.2% . . . . . . . . . . . . . . . . |
|
| 397,544,287 |
Other Assets, less Liabilities 2.8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 11,625,090 | |
Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
|
| $409,169,377 | ||
|
|
|
|
See Abbreviations on page 173.
aSee Note 7 regarding defaulted securities.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 101 |
F R A N K L IN TAX - FREE TRUS T
Financial Highlights
Franklin Maryland Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.80$10.76
0.290.15
0.570.04
0.860.19
(0.31)(0.15)
$11.35$10.80
8.11%1.84%
0.88%0.88%
2.65%2.95%
$60,104$26,572
7.50%5.33%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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%.
|
|
|
|
102 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Maryland Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.80 | $10.76 | $11.10 | $11.35 | $11.55 |
|
|
|
|
|
0.31 | 0.33 | 0.34 | 0.39 | 0.42 |
0.58 | 0.05 | (0.32) | (0.24) | (0.21) |
|
|
|
|
|
0.89 | 0.38 | 0.02 | 0.15 | 0.21 |
|
|
|
|
|
(0.33) | (0.34) | (0.36) | (0.40) | (0.41) |
|
|
|
|
|
$11.36 | $10.80 | $10.76 | $11.10 | $11.35 |
|
|
|
|
|
8.27% | 3.59% | 0.13% | 1.31% | 1.88% |
0.73%e | 0.73%e | 0.70% | 0.67% | 0.67% |
2.80% | 3.10% | 3.07% | 3.47% | 3.70% |
$270,309 | $279,750 | $319,120 | $351,933 | $369,661 |
7.50% | 5.33% | 11.36% | 33.34% | 9.77% |
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. eBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 103 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Maryland Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.02 | $10.98 | $11.31 | $11.56 | $11.75 |
|
|
|
|
|
0.25 | 0.28 | 0.28 | 0.34 | 0.36 |
0.59 | 0.04 | (0.32) | (0.25) | (0.20) |
|
|
|
|
|
0.84 | 0.32 | (0.04) | 0.09 | 0.16 |
|
|
|
|
|
(0.27) | (0.28) | (0.29) | (0.34) | (0.35) |
|
|
|
|
|
$11.59 | $11.02 | $10.98 | $11.31 | $11.56 |
|
|
|
|
|
7.75% | 2.94% | (0.34)% | 0.72% | 1.38% |
1.28%e | 1.28%e | 1.25% | 1.22% | 1.22% |
2.25% | 2.55% | 2.52% | 2.92% | 3.15% |
$45,502 | $56,323 | $92,553 | $115,011 | $117,167 |
7.50% | 5.33% | 11.36% | 33.34% | 9.77% |
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. eBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
104 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Maryland Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.82 | $10.78 | $11.05 |
|
|
|
0.32 | 0.35 | 0.21 |
0.58 | 0.04 | (0.27) |
|
|
|
0.90 | 0.39 | (0.06) |
|
|
|
(0.35) | (0.35) | (0.21) |
|
|
|
$11.37 | $10.82 | $10.78 |
|
|
|
8.41% | 3.71% | (0.58)% |
0.60% | 0.61% | 0.62% |
0.58%g | 0.58%g | 0.56% |
2.95% | 3.25% | 3.21% |
$3,642 | $1,753 | $1,376 |
7.50% | 5.33% | 11.36% |
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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. | Annual Report | 105 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Maryland Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.81 | $10.77 | $11.11 | $11.35 | $11.56 |
|
|
|
|
|
0.32 | 0.34 | 0.35 | 0.41 | 0.43 |
0.58 | 0.05 | (0.32) | (0.24) | (0.22) |
|
|
|
|
|
0.90 | 0.39 | 0.03 | 0.17 | 0.21 |
|
|
|
|
|
(0.34) | (0.35) | (0.37) | (0.41) | (0.42) |
|
|
|
|
|
$11.37 | $10.81 | $10.77 | $11.11 | $11.35 |
|
|
|
|
|
8.47% | 3.68% | 0.22% | 1.50% | 1.90% |
0.63%d | 0.63%d | 0.60% | 0.57% | 0.57% |
2.90% | 3.20% | 3.17% | 3.57% | 3.80% |
$54,079 | $44,264 | $40,532 | $42,625 | $28,464 |
7.50% | 5.33% | 11.36% | 33.34% | 9.77% |
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.
dBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
106 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Maryland Tax-Free Income Fund
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds 98.1% |
|
|
Maryland 93.1% |
|
|
Annapolis GO, Public Improvements, Pre-Refunded, 5.00%, 8/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 1,250,000 | $ 1,324,975 |
Anne Arundel County GO, |
|
|
Consolidated General Improvements, Refunding, 5.00%, 4/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,140,000 | 3,526,251 |
Consolidated Water and Sewer, 5.00%, 4/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 12,620,000 | 13,159,757 |
a Anne Arundel County MFHR, Glenview Gardens Apartments Project, Mandatory Put, 5.00%, 1/01/27 . . . . . | 1,900,000 | 1,943,130 |
Baltimore County GO, |
|
|
Metropolitan District, 78th Issue, Refunding, 5.00%, 2/01/39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,900,000 | 3,547,251 |
Metropolitan District, 78th Issue, Refunding, 5.00%, 2/01/41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,900,000 | 3,535,709 |
Baltimore Revenue, |
|
|
Mayor and City Council of Baltimore, Wastewater Projects, Series A, 5.00%, 7/01/41 . . . . . . . . . . . . . . | 14,435,000 | 15,155,306 |
Mayor and City Council of Baltimore, Wastewater Projects, Subordinate, Series A, 5.00%, 7/01/46. . . . . | 5,000,000 | 6,084,800 |
Mayor and City Council of Baltimore, Water Projects, Refunding, Series B, 5.00%, 7/01/38 . . . . . . . . . . | 5,000,000 | 5,724,100 |
Mayor and City Council of Baltimore, Water Projects, Series A, 5.00%, 7/01/38 . . . . . . . . . . . . . . . . . . | 8,930,000 | 10,223,243 |
Mayor and City Council of Baltimore, Water Projects, Series A, 5.00%, 7/01/41 . . . . . . . . . . . . . . . . . . | 7,845,000 | 8,236,465 |
Howard County Housing Commission Revenue, |
|
|
Gateway Village Apartments, 4.00%, 6/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,185,960 |
The Verona at Oakland Mills Project, 5.00%, 10/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,241,200 |
Woodfield Oxford Square Apartments, 5.00%, 12/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,001,350 |
Maryland CDA Department Housing and Community Development Revenue, Residential, Refunding, Series |
|
|
A, 3.85%, 9/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,697,800 |
Maryland Environmental Service Revenue, Mid-Shore II Regional Landfill Project, Refunding, 5.00%, |
|
|
11/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,935,000 | 4,041,048 |
Maryland Stadium Authority Revenue, Baltimore City Public Schools, Construction and Revitalization |
|
|
Program, 5.00%, 5/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,085,000 | 12,209,809 |
Maryland State CDA Department Housing and Community Development Revenue, |
|
|
Series D, 3.00%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 | 1,598,925 |
Series D, 3.20%, 7/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,067,930 |
Maryland State Community Development Administration Local Government Infrastructure Revenue, |
|
|
Senior Obligations, Series A-1, 4.00%, 6/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,300,000 | 2,600,035 |
Senior Obligations, Series A-1, 5.00%, 6/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,310,000 | 1,630,177 |
Senior Obligations, Series B-1, 4.00%, 6/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,527,490 |
Subordinate Obligations, Series A-2, 5.00%, 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 3,917,060 |
Maryland State Department of Transportation, Consolidated Transportation Revenue, 4.00%, 10/01/32 . . . . | 5,000,000 | 6,003,050 |
Maryland State EDC Student Housing Revenue, |
|
|
Salisbury University Project, Refunding, 5.00%, 6/01/34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,040,000 | 2,249,732 |
Senior, Frostburg State University Project, Refunding, 5.00%, 10/01/33 . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,583,300 |
Senior, Morgan State University Project, Refunding, 5.00%, 7/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,750,000 | 5,150,758 |
Senior, Morgan State University Project, Refunding, 5.00%, 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,150,000 | 2,314,841 |
Senior, Towson University Project, 5.00%, 7/01/27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,145,000 | 1,249,893 |
University of Maryland, College Park Projects, Refunding, AGMC Insured, 5.00%, 6/01/35 . . . . . . . . . . | 4,225,000 | 5,124,967 |
University of Maryland, College Park Projects, Refunding, AGMC Insured, 5.00%, 6/01/43 . . . . . . . . . . | 3,305,000 | 3,991,184 |
University Village at Sheppard Pratt, 5.00%, 7/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 | 1,626,555 |
University Village at Sheppard Pratt, 5.00%, 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,495,000 | 2,688,462 |
Maryland State Health and Higher Educational Facilities Authority Revenue, |
|
|
Adventist HealthCare Issue, Series A, 5.50%, 1/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,000,000 | 9,749,120 |
Anne Arundel Health System Issue, Refunding, 5.00%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,514,000 |
Charlestown Community Issue, Refunding, Series A, 5.00%, 1/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . | 4,170,000 | 4,952,375 |
franklintempleton.com | Annual Report | 107 |
F RANKLIN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Maryland Tax-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 | $ 1,626,855 |
Goucher College Issue, Refunding, Series A, 5.00%, 7/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,470,000 | 8,920,973 |
Helix Health Issue, AMBAC Insured, ETM, 5.00%, 7/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 9,655,000 | 11,322,515 |
Johns Hopkins Medical Institutions Utilities Program Issue, Refunding, Series A, 5.00%, 5/15/37 . . . . . . | 10,000,000 | 12,041,300 |
The Johns Hopkins University Issue, Series A, 5.00%, 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,453,050 |
The Johns Hopkins University Issue, Series A, 5.00%, 7/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 15,000,000 | 16,333,650 |
The Johns Hopkins University Issue, Series B, 5.00%, 7/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,602,050 |
LifeBridge Health Issue, Refunding, 5.00%, 7/01/44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,471,000 |
LifeBridge Health Issue, Refunding, 5.00%, 7/01/47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,819,560 |
Loyola University Maryland, Refunding, 5.00%, 10/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,612,543 |
Loyola University Maryland, Refunding, Series A, 5.00%, 10/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,553,860 |
Loyola University Maryland, Series A, Pre-Refunded, 5.00%, 10/01/39 . . . . . . . . . . . . . . . . . . . . . . . . | 5,275,000 | 5,827,662 |
Maryland Institute College of Art Issue, Refunding, 5.00%, 6/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,088,960 |
Maryland Institute College of Art Issue, Refunding, 4.00%, 6/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,325,000 | 5,911,975 |
Medstar Health Issue, Series A, 5.00%, 8/15/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,578,850 |
Medstar Health Issue, Series A, 5.00%, 5/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,048,950 |
Meritus Medical Center Issue, Refunding, 5.00%, 7/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,535,000 | 9,895,906 |
Parking, The Johns Hopkins Medical Institutions Parking Facilities Issue, AMBAC Insured, 5.00%, |
|
|
7/01/27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 655,000 | 661,779 |
Parking, The Johns Hopkins Medical Institutions Parking Facilities Issue, AMBAC Insured, 5.00%, |
|
|
7/01/34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,052,000 |
Parking, The Johns Hopkins Medical Institutions Parking Facilities Issue, Refunding, Series B, AMBAC |
|
|
Insured, 5.00%, 7/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,200,000 | 6,208,866 |
Peninsula Regional Medical Center Issue, Refunding, 5.00%, 7/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . | 6,330,000 | 7,239,558 |
Trinity Health Credit Group, 5.00%, 12/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,680,000 | 2,063,342 |
University of Maryland Medical System Issue, Refunding, 5.00%, 7/01/35 . . . . . . . . . . . . . . . . . . . . . . | 2,100,000 | 2,462,586 |
University of Maryland Medical System Issue, Refunding, Series B, 5.00%, 7/01/39 . . . . . . . . . . . . . . . | 10,000,000 | 12,138,900 |
University of Maryland Medical System Issue, Series D, 4.00%, 7/01/48 . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,617,700 |
Maryland State Industrial Development Financing Authority EDR, |
|
|
McDonogh School Facility, Refunding, 4.00%, 9/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,100,000 | 1,299,023 |
McDonogh School Facility, Refunding, 4.00%, 9/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 610,000 | 715,408 |
Montgomery County GO, |
|
|
Consolidated Public Improvement, Refunding, Series A, 4.00%, 11/01/20 . . . . . . . . . . . . . . . . . . . . . . | 8,000,000 | 8,019,600 |
Consolidated Public Improvement, Refunding, Series A, 4.00%, 12/01/33 . . . . . . . . . . . . . . . . . . . . . . | 7,000,000 | 7,976,080 |
Montgomery County Revenue, |
|
|
Department of Liquor Control, Refunding, Series A, 5.00%, 4/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,625,000 | 1,696,468 |
Department of Liquor Control, Refunding, Series A, 5.00%, 4/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,230,000 | 2,327,340 |
Department of Liquor Control, Refunding, Series A, 5.00%, 4/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,470,000 | 2,575,642 |
Department of Liquor Control, Series A, 5.00%, 4/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,935,000 | 2,018,186 |
Montgomery County Water Quality Protection Charge Revenue, |
|
|
Series A, 5.00%, 4/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,855,000 | 1,860,862 |
Series A, 5.00%, 4/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,240,000 | 1,243,881 |
Prince George's County COP, Public Safety Communications Center, 5.00%, 10/01/30 . . . . . . . . . . . . . . . . | 2,060,000 | 2,107,462 |
Prince George's County GO, Consolidated Public Improvement, Series A, 4.00%, 7/15/35 . . . . . . . . . . . . . . | 11,405,000 | 13,862,321 |
|
|
|
|
108 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Maryland Tax-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 | $ 6,198,300 | |
Montgomery and Prince George's Counties, Consolidated Public Improvement, Second Series, 4.00%, |
|
|
|
6/01/43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,070,000 | 9,188,825 | |
Washington Suburban Sanitary District Revenue, Green Bond, Second Series, 3.00%, 6/01/44 . . . . . . . . . . | 2,350,000 | 2,551,254 | |
|
|
| |
|
| 403,573,050 | |
District of Columbia 3.2% |
|
|
|
|
|
| |
Washington Metropolitan Area Transit Authority Gross Revenue, Transit, Series B, 5.00%, 7/01/42 . . . . . . . . | 11,000,000 | 13,749,780 |
|
U.S. Territories 1.8% |
|
|
|
|
|
| |
Puerto Rico 1.8% |
|
|
|
b Puerto Rico Electric Power Authority Power Revenue, |
|
|
|
Series WW-RSA-1, 5.50%, 7/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 4,018,750 | |
Series XX-RSA-1, 5.25%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 4,006,250 | |
|
|
|
|
|
| 8,025,000 | |
Total Municipal Bonds before Short Term Investments (Cost $393,700,211) . . . . . |
|
|
|
| 425,347,830 |
| |
|
|
|
|
Short Term Investments 0.9%
Municipal Bonds 0.9%
Maryland 0.9%
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, 1.19%, 7/01/41 . . . | 2,400,000 | 2,400,000 |
cMontgomery County GO, Consolidated Public Improvement, Series E, SPA US Bank National Association,
Daily VRDN and Put, 1.17%, 11/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,600,000 | 1,600,000 |
Total Short Term Investments (Cost $4,000,000) |
|
|
| 4,000,000 | |
Total Investments (Cost $397,700,211) 99.0%. . . |
|
|
| 429,347,830 | |
Other Assets, less Liabilities 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 4,287,645 |
Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| $433,635,475 | |
|
|
|
See Abbreviations on page 173.
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.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 109 |
F R A N K L IN TAX - FREE TRUS T
Financial Highlights
Franklin Missouri Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.47$11.41
0.310.16
0.630.06
0.940.22
(0.32)(0.16)
$12.09$11.47
8.32%1.98%
0.81%0.84%
2.62%2.96%
$122,845$63,400
14.83%9.79%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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%.
|
|
|
|
110 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Missouri Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.46 | $11.38 | $11.74 | $12.05 | $12.21 |
|
|
|
|
|
0.33 | 0.35 | 0.36 | 0.42 | 0.45 |
0.64 | 0.09 | (0.34) | (0.30) | (0.18) |
|
|
|
|
|
0.97 | 0.44 | 0.02 | 0.12 | 0.27 |
|
|
|
|
|
(0.34) | (0.36) | (0.38) | (0.43) | (0.43) |
|
|
|
|
|
$12.09 | $11.46 | $11.38 | $11.74 | $12.05 |
|
|
|
|
|
8.58% | 3.90% | 0.12% | 0.94% | 2.26% |
0.66%e | 0.69%e | 0.66% | 0.65% | 0.64% |
2.77% | 3.11% | 3.05% | 3.52% | 3.72% |
$708,399 | $700,839 | $793,226 | $873,204 | $880,848 |
14.83% | 9.79% | 20.04% | 11.66% | 7.97% |
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. eBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 111 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Missouri Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.58 | $11.49 | $11.86 | $12.17 | $12.32 |
|
|
|
|
|
0.26 | 0.29 | 0.29 | 0.36 | 0.38 |
0.65 | 0.09 | (0.35) | (0.31) | (0.17) |
|
|
|
|
|
0.91 | 0.38 | (0.06) | 0.05 | 0.21 |
|
|
|
|
|
(0.28) | (0.29) | (0.31) | (0.36) | (0.36) |
|
|
|
|
|
$12.21 | $11.58 | $11.49 | $11.86 | $12.17 |
|
|
|
|
|
7.92% | 3.37% | (0.53)% | 0.38% | 1.77% |
1.21%e | 1.24%e | 1.21% | 1.20% | 1.19% |
2.22% | 2.56% | 2.50% | 2.97% | 3.17% |
$104,721 | $108,739 | $149,306 | $169,821 | $167,284 |
14.83% | 9.79% | 20.04% | 11.66% | 7.97% |
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. eBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
112 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Missouri Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.47 | $11.38 | $11.72 |
|
|
|
0.34 | 0.37 | 0.22 |
0.65 | 0.09 | (0.35) |
|
|
|
0.99 | 0.46 | (0.13) |
|
|
|
(0.36) | (0.37) | (0.21) |
|
|
|
$12.10 | $11.47 | $11.38 |
|
|
|
8.71% | 4.12% | (1.11)% |
0.54% | 0.55% | 0.55% |
0.53%g | 0.54%g | 0.53% |
2.90% | 3.26% | 3.18% |
$23,700 | $18,929 | $17,534 |
14.83% | 9.79% | 20.04% |
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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. | Annual Report | 113 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Missouri Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.47 | $11.38 | $11.75 | $12.06 | $12.22 |
|
|
|
|
|
0.34 | 0.37 | 0.37 | 0.44 | 0.46 |
0.63 | 0.09 | (0.35) | (0.31) | (0.18) |
|
|
|
|
|
0.97 | 0.46 | 0.02 | 0.13 | 0.28 |
|
|
|
|
|
(0.35) | (0.37) | (0.39) | (0.44) | (0.44) |
|
|
|
|
|
$12.09 | $11.47 | $11.38 | $11.75 | $12.06 |
|
|
|
|
|
8.59% | 4.09% | 0.12% | 1.04% | 2.37% |
0.56%d | 0.59%d | 0.56% | 0.55% | 0.54% |
2.87% | 3.21% | 3.15% | 3.62% | 3.82% |
$82,970 | $60,117 | $72,460 | $83,686 | $46,051 |
14.83% | 9.79% | 20.04% | 11.66% | 7.97% |
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.
dBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
114 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Missouri Tax-Free Income Fund
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds 96.7% |
|
|
|
Missouri 94.2% |
|
|
|
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 | $ 15,889,859 | |
combined lien, Refunding, Series A, 5.00%, 10/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,961,800 | |
combined lien, Refunding, Series A, 5.00%, 10/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,995,000 | 14,156,942 | |
combined lien, Refunding, Series A, 4.00%, 10/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,809,600 |
|
Cape Girardeau County IDA Health Facilities Revenue, |
|
|
|
St. Francis Medical Center, Refunding, 5.00%, 6/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,110,000 | 6,087,952 |
|
St. Francis Medical Center, Refunding, Series A, 5.00%, 6/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,414,900 |
|
St. Francis Medical Center, Refunding, Series A, 5.00%, 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,000,000 | 11,859,320 |
|
Cape Girardeau County IDA Solid Waste Disposal Revenue, The Procter and Gamble Paper Products Co. |
|
|
|
Project, 5.30%, 5/15/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,875,000 | 6,893,906 | |
Cape Girardeau County Reorganized School District No. R-2 GO, |
|
|
|
Missouri Direct Deposit Program, Jackson R-2 School District, 4.00%, 3/01/32 . . . . . . . . . . . . . . . . . | 1,000,000 | 1,193,370 |
|
Missouri Direct Deposit Program, Jackson R-2 School District, 4.00%, 3/01/33 . . . . . . . . . . . . . . . . . | 1,000,000 | 1,189,880 |
|
Missouri Direct Deposit Program, Jackson R-2 School District, 5.00%, 3/01/38 . . . . . . . . . . . . . . . . . | 2,195,000 | 2,801,369 |
|
a Cape Girardeau County Reorganized School District R-II GO, Series A, 4.00%, 4/01/39 . . . . . . . . . . . . . . | 1,150,000 | 1,322,454 | |
Cape Girardeau School District No. 63 GO, |
|
|
|
Missouri Direct Deposit Program, Refunding and Improvement, 4.00%, 3/01/38 . . . . . . . . . . . . . . . . . | 650,000 | 764,881 |
|
Missouri Direct Deposit Program, Refunding and Improvement, 4.00%, 3/01/39 . . . . . . . . . . . . . . . . . | 500,000 | 587,305 |
|
Clay County Public School District No. 53 Liberty GO, School Building, 4.00%, 3/01/37 . . . . . . . . . . . . . . . | 4,500,000 | 5,083,290 | |
Clay County Reorganization School District No. R-1 Kearney GO, |
|
|
|
Direct Deposit Program, School Building, 3.00%, 3/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,670,000 | 1,776,730 |
|
Direct Deposit Program, School Building, 3.00%, 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,730,000 | 1,838,540 |
|
Direct Deposit Program, School Building, 3.00%, 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,540,000 | 1,634,279 |
|
Direct Deposit Program, School Building, 3.125%, 3/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,855,000 | 1,976,911 |
|
Curators of the University of Missouri System Facilities Revenue, Refunding, 5.00%, 11/01/27 . . . . . . . . . | 1,065,000 | 1,137,761 | |
Ferguson Reorganized School District No. R-2 GO, |
|
|
|
St. Louis County, Missouri Direct Deposit Program, 4.00%, 5/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,163,460 |
|
St. Louis County, Missouri Direct Deposit Program, 5.00%, 5/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,774,363 |
|
Fort Osage R-1 School District Jackson County GO, School Building, Missouri Direct Deposit Program, |
|
|
|
Refunding, 5.50%, 3/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,010,000 | 3,971,244 | |
Greene County Reorganized School District No. 2 GO, Willard, School Building, Missouri Direct Deposit |
|
|
|
Program, 4.00%, 3/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,204,410 | |
Independence School District GO, |
|
|
|
Missouri Direct Deposit Program, Refunding, Series A, 5.00%, 3/01/27 . . . . . . . . . . . . . . . . . . . . . . . | 3,300,000 | 3,300,000 |
|
Missouri Direct Deposit Program, Refunding, Series A, 5.00%, 3/01/28 . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,000,000 |
|
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,000,000 |
|
Jackson County Consolidated School District No. 2 Raytown GO, |
|
|
|
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,650,000 | 2,143,037 |
|
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 3,227,825 |
|
Missouri Direct Deposit Program, Series A, 5.00%, 3/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,896,470 |
|
Jackson County CSD No. 58 GO, |
|
|
|
Missouri Direct Deposit Program, School Building, Refunding, Series A, 4.00%, 3/01/36 . . . . . . . . . . . | 3,910,000 | 4,529,813 |
|
Missouri Direct Deposit Program, School Building, Refunding, Series A, 4.00%, 3/01/37 . . . . . . . . . . . | 1,300,000 | 1,502,397 |
|
Missouri Direct Deposit Program, School Building, Refunding, Series A, 4.00%, 3/01/38 . . . . . . . . . . . | 1,650,000 | 1,899,975 |
|
franklintempleton.com | Annual Report | 115 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
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 | $ | 4,098,030 |
School Building, Missouri Direct Deposit Program, Series A, 5.50%, 3/01/37 . . . . . . . . . . . . . . . . . . . | 2,000,000 |
| 2,730,100 |
Jefferson City School District GO, Missouri Direct Deposit Program, 5.00%, 3/01/38 . . . . . . . . . . . . . . . . . | 6,070,000 |
| 7,519,334 |
Joplin IDA Health Facilities Revenue, |
|
|
|
Freeman Health System Project, Pre-Refunded, 5.125%, 2/15/26. . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 |
| 6,243,900 |
Freeman Health System Project, Pre-Refunded, 5.00%, 2/15/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,150,000 |
| 1,195,391 |
Freeman Health System Project, Pre-Refunded, 5.50%, 2/15/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,055,000 |
| 2,145,810 |
Freeman Health System Project, Refunding, 5.00%, 2/15/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 |
| 4,524,440 |
Joplin Schools GO, Direct Deposit Program, Refunding, 4.00%, 3/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 |
| 4,696,040 |
Kansas City IDA Airport Special Obligation Revenue, |
|
|
|
Kansas City International Airport Terminal Modernization, Series A, 5.00%, 3/01/44. . . . . . . . . . . . . . | 5,315,000 |
| 6,633,651 |
Kansas City International Airport Terminal Modernization Project, Series B, 5.00%, 3/01/46 . . . . . . . . | 15,625,000 |
| 19,445,781 |
Kansas City International Airport Terminal Modernization Project, Series B, 5.00%, 3/01/54 . . . . . . . . | 14,885,000 |
| 18,372,555 |
Kansas City IDAR, |
|
|
|
Downtown Redevelopment District, Refunding, Series A, 5.50%, 9/01/29 . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
| 5,336,100 |
Downtown Redevelopment District, Refunding, Series A, 5.50%, 9/01/30 . . . . . . . . . . . . . . . . . . . . . | 12,000,000 |
| 12,806,640 |
Downtown Redevelopment District, Refunding, Series A, 5.00%, 9/01/32 . . . . . . . . . . . . . . . . . . . . . | 3,000,000 |
| 3,178,530 |
Kansas City Sanitary Sewer System Revenue, |
|
|
|
Improvement, Series A, 4.00%, 1/01/35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 |
| 1,767,360 |
Improvement and Refunding, Series A, 5.00%, 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 29,210,000 |
| 30,160,493 |
Sub Series A, 4.00%, 1/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
| 5,790,150 |
Kansas City Water Revenue, Series A, 4.00%, 12/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,970,000 |
| 5,671,168 |
a Lindbergh School District GO, St. Louis County, 3.00%, 3/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,815,000 |
| 6,356,900 |
Metropolitan St. Louis Sewer District Wastewater System Revenue, |
|
|
|
Improvement, Series B, Pre-Refunded, 5.00%, 5/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,390,000 |
| 4,041,965 |
Improvement, Series B, Pre-Refunded, 5.00%, 5/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,610,000 |
| 1,946,667 |
Improvement and Refunding, Series A, 5.00%, 5/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
| 6,251,650 |
Improvement and Refunding, Series A, 5.00%, 5/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 |
| 12,428,000 |
Improvement and Refunding, Series B, 5.00%, 5/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,770,000 |
| 10,555,221 |
Series B, 5.00%, 5/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 |
| 4,531,135 |
Series B, 5.00%, 5/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,290,000 |
| 8,097,369 |
Series C, 5.00%, 5/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 24,700,000 |
| 30,181,177 |
Missouri Joint Municipal Electric Utility Commission Power Supply System Revenue, |
|
|
|
MoPEP Facilities, 5.00%, 12/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 |
| 2,428,500 |
MoPEP Facilities, Pre-Refunded, 5.00%, 1/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,600,000 |
| 3,723,840 |
MoPEP Facilities, Pre-Refunded, 5.00%, 1/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,400,000 |
| 3,516,960 |
Missouri State Board of Public Buildings Special Obligation Revenue, Refunding, Series A, 4.00%, |
|
|
|
10/01/25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,870,000 |
| 3,879,365 |
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 |
| 5,429,000 |
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 |
| 3,920,130 |
|
|
|
|
116 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
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, |
|
|
SRF Programs, Refunding, Series A, 5.00%, 1/01/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $12,485,000 | $ 12,514,589 |
SRF Programs, Refunding, Series A, 5.00%, 1/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,890,000 | 7,908,699 |
SRF Programs, Refunding, Series A, 5.00%, 1/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,315,000 | 2,636,831 |
SRF Programs, Refunding, Series B, 5.50%, 7/01/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 60,000 | 60,224 |
SRF Programs, Series A, 5.75%, 1/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 190,000 | 190,699 |
Missouri State Health and Educational Facilities Authority Health Facilities Revenue, |
|
|
Bethesda Health Group Inc., 5.00%, 8/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,650,000 | 1,835,312 |
Bethesda Health Group Inc., 5.00%, 8/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,300,000 | 1,439,230 |
BJC Health System, 5.00%, 1/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,175,000 | 9,093,052 |
CoxHealth, Refunding, Series A, 5.00%, 11/15/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 17,000,000 | 19,839,000 |
CoxHealth, Series A, 5.00%, 11/15/38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,680,000 | 13,212,533 |
CoxHealth, Series A, 4.00%, 11/15/44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,794,650 |
CoxHealth, Series A, 5.00%, 11/15/44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,760,000 | 3,109,361 |
Mercy Health, 4.00%, 11/15/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,000,000 | 8,485,920 |
Mercy Health, Refunding, Series C, 5.00%, 11/15/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 12,500,000 | 15,476,250 |
Mercy Health, Series F, 5.00%, 11/15/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 25,000,000 | 28,944,500 |
SSM Health, Series A, 5.00%, 6/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,097,850 |
SSM Health Care, Series B, Pre-Refunded, 5.00%, 6/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 16,150,000 | 16,314,245 |
SSM Health Care, Series B, Pre-Refunded, 5.00%, 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,000,000 | 7,071,190 |
St. Anthony's Medical Center, Refunding, Series B, 5.00%, 2/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . | 6,870,000 | 7,965,353 |
St. Luke's Health System Inc., Refunding, 5.00%, 11/15/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,950,000 | 4,789,809 |
St. Luke's Health System Inc., Refunding, Series A, 5.00%, 11/15/43 . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,453,820 |
Missouri State Health and Educational Facilities Authority Revenue, |
|
|
Educational Facilities, A.T. Still University of Health Sciences, Pre-Refunded, 5.00%, 10/01/26 . . . . . . | 3,095,000 | 3,297,382 |
Educational Facilities, A.T. Still University of Health Sciences, Pre-Refunded, 5.25%, 10/01/31 . . . . . . | 1,200,000 | 1,283,160 |
Educational Facilities, A.T. Still University of Health Sciences, Pre-Refunded, 5.00%, 10/01/39 . . . . . . | 1,250,000 | 1,432,888 |
Educational Facilities, A.T. Still University of Health Sciences, Pre-Refunded, 5.25%, 10/01/41 . . . . . . | 4,500,000 | 4,811,850 |
Educational Facilities, Kansas City University Medicine and Biosciences, Refunding, Series A, 5.00%, |
|
|
6/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,800,000 | 3,410,960 |
Educational Facilities, Kansas City University Medicine and Biosciences, Refunding, Series A, 5.00%, |
|
|
6/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,875,000 | 5,899,481 |
Educational Facilities, Lake Regional Health System, Refunding, 5.00%, 2/15/34 . . . . . . . . . . . . . . . . | 7,000,000 | 7,416,150 |
Educational Facilities, Maryville University St. Louis Project, 5.00%, 6/15/44 . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,661,900 |
Educational Facilities, Maryville University St. Louis Project, Series A, 5.00%, 6/15/45 . . . . . . . . . . . . | 4,000,000 | 4,828,640 |
Educational Facilities, St. Louis University, Series A, 5.00%, 10/01/38 . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,906,600 |
Educational Facilities, St. Louis University, Series A, 5.00%, 10/01/46 . . . . . . . . . . . . . . . . . . . . . . . . | 5,775,000 | 7,281,466 |
Educational Facilities, St. Louis University, Series A, 5.00%, 10/01/47 . . . . . . . . . . . . . . . . . . . . . . . . | 15,000,000 | 18,112,800 |
Educational Facilities, University of Central Missouri, Series C, 5.00%, 10/01/34 . . . . . . . . . . . . . . . . | 5,000,000 | 5,685,050 |
Educational Facilities, The Washington University, Series B, 5.00%, 11/15/37 . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,665,600 |
Educational Facilities, Webster University Project, Improvement, Pre-Refunded, 5.00%, 4/01/36 . . . . . | 7,000,000 | 7,313,250 |
Lutheran Senior Services Projects, Refunding, Series B, 5.00%, 2/01/46. . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,597,760 |
Lutheran Senior Services Projects, Series C, 5.00%, 2/01/48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 | 2,466,940 |
Senior Living Facilities, Lutheran Senior Services Projects, 5.75%, 2/01/31 . . . . . . . . . . . . . . . . . . . . | 1,900,000 | 1,980,161 |
Senior Living Facilities, Lutheran Senior Services Projects, 6.00%, 2/01/41 . . . . . . . . . . . . . . . . . . . . | 4,250,000 | 4,441,675 |
Senior Living Facilities, Lutheran Senior Services Projects, Series A, 5.00%, 2/01/46 . . . . . . . . . . . . . | 11,575,000 | 13,304,768 |
franklintempleton.com | Annual Report | 117 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Missouri Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount |
| Value |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
Missouri (continued) |
|
|
|
Missouri State Housing Development Commission SFMR, |
|
|
|
First Place Homeownership Loan Program, Series C, GNMA Secured, 3.00%, 11/01/44. . . . . . . . . . . | $ 4,000,000 | $ | 4,202,720 |
Homeownership Loan Program, First Place, Series B, 4.00%, 11/01/38 . . . . . . . . . . . . . . . . . . . . . . | 1,385,000 |
| 1,569,925 |
Missouri State Joint Municipal Electric Utility Commission Power Project Revenue, |
|
|
|
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 |
| 3,442,260 |
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 |
| 2,294,140 |
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 |
| 1,720,035 |
Iatan 2 Project, Refunding, Series A, 5.00%, 1/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,000,000 |
| 2,291,020 |
Iatan 2 Project, Series A, 5.00%, 12/01/35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,335,000 |
| 8,748,308 |
Plum Point Project, Refunding, Series A, 5.00%, 1/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 |
| 11,757,900 |
Plum Point Project, Refunding, Series A, 5.00%, 1/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,500,000 |
| 8,814,225 |
Prairie State Project, Refunding, Series A, 5.00%, 12/01/30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 |
| 4,787,520 |
Prairie State Project, Refunding, Series A, 5.00%, 12/01/31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 |
| 7,173,840 |
Prairie State Project, Refunding, Series A, 5.00%, 12/01/40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 27,950,000 |
| 33,598,136 |
Monarch-Chesterfield Levee District Special Tax, St. Louis County, Levee District, Refunding, 5.00%, |
|
|
|
3/01/40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,395,000 |
| 4,979,447 |
Move Rolla Transportation Development District Transportation Sales Tax Revenue, 4.75%, 6/01/47. . . . . . | 5,000,000 |
| 5,535,850 |
Nixa Public Schools GO, School Building, Direct Deposit Program, Refunding, 4.00%, 3/01/39 . . . . . . . . . | 1,000,000 |
| 1,157,890 |
Peculiar Combined Waterworks and Sewerage System Revenue, |
|
|
|
Assured Guaranty, 4.00%, 6/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
| 1,164,960 |
Assured Guaranty, 4.00%, 6/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,405,000 |
| 2,784,677 |
Riverside-Quindaro Bend Levee District Revenue, |
|
|
|
Platte County, Levee District Improvement, L-385 Project, Refunding, 5.00%, 3/01/26. . . . . . . . . . . . . | 1,000,000 |
| 1,161,760 |
Platte County, Levee District Improvement, L-385 Project, Refunding, 5.00%, 3/01/29. . . . . . . . . . . . . | 2,585,000 |
| 3,007,906 |
Sikeston Electric Revenue, |
|
|
|
Refunding, 5.00%, 6/01/20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
| 5,046,600 |
Refunding, 5.00%, 6/01/21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 13,130,000 |
| 13,737,656 |
Refunding, 5.00%, 6/01/22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 12,570,000 |
| 13,592,695 |
Springfield School District No. R-XII GO, |
|
|
|
School Building, 5.00%, 3/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 24,250,000 |
| 31,734,520 |
School Building, Missouri Direct Deposit Program, 5.00%, 3/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
| 1,119,920 |
Springfield Special Obligation Revenue, |
|
|
|
Sewer System Improvements Project, 5.00%, 4/01/31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,795,000 |
| 1,943,877 |
Sewer System Improvements Project, 5.00%, 4/01/32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,885,000 |
| 2,040,927 |
St. Charles School District GO, Missouri Direct Deposit Program, 4.00%, 3/01/36. . . . . . . . . . . . . . . . . . . | 2,000,000 |
| 2,284,900 |
St. Louis Airport Revenue, |
|
|
|
Lambert-St. Louis International Airport, Refunding, NATL Insured, 5.50%, 7/01/29 . . . . . . . . . . . . . . . | 13,070,000 |
| 18,102,473 |
Series C, AGMC Insured, 5.00%, 7/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,930,000 |
| 4,863,061 |
Series C, AGMC Insured, 5.00%, 7/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,770,000 |
| 13,238,807 |
Series D, AGMC Insured, 5.00%, 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
| 1,238,650 |
Series D, AGMC Insured, 5.00%, 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,415,000 |
| 1,749,789 |
Series D, AGMC Insured, 5.00%, 7/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,125,000 |
| 1,386,225 |
Series D, AGMC Insured, 5.00%, 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
| 1,229,410 |
St. Louis Lambert International Airport, Series A, 5.00%, 7/01/44. . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,700,000 |
| 2,178,057 |
St. Louis Lambert International Airport, Series A, 5.00%, 7/01/49. . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,400,000 |
| 1,782,046 |
|
|
|
|
118 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Missouri Tax-Free Income Fund (continued)
| Principal |
|
|
|
|
| Amount |
|
| Value | |
|
|
|
|
|
|
Municipal Bonds (continued) |
|
|
|
|
|
Missouri (continued) |
|
|
|
|
|
St. Louis County IDA Senior Living Facilities Revenue, |
|
|
|
|
|
Friendship Village, St. Louis Obligated Group, Refunding, 5.00%, 9/01/48 . . . . . . . . . . . . . . . . . . . . . | $ 7,095,000 | $ | 8,159,179 | ||
Friendship Village Chesterfield, Pre-Refunded, 5.00%, 9/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,165,000 |
|
| 3,486,026 | |
Friendship Village Sunset Hills, Series A, 5.875%, 9/01/43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,000,000 |
|
| 7,840,630 | |
St. Louis County Pattonville School District No. R-3 GO, |
|
|
|
|
|
Series A, 5.00%, 3/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,750,000 |
|
| 3,334,018 | |
Series A, 5.00%, 3/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
|
| 1,209,890 | |
St. Louis County School District No. 101 Affton GO, |
|
|
|
|
|
Direct Deposit Program, Series A, 5.00%, 3/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 |
|
| 1,905,345 | |
Direct Deposit Program, Series A, 5.00%, 3/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,595,000 |
|
| 2,018,377 | |
Direct Deposit Program, Series A, 5.00%, 3/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,700,000 |
|
| 2,147,610 | |
Direct Deposit Program, Series A, 5.00%, 3/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,810,000 |
|
| 2,280,510 | |
Direct Deposit Program, Series A, 5.00%, 3/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,920,000 |
|
| 2,410,176 | |
a St. Louis Municipal Library District COPS, |
|
|
|
|
|
Refunding, 4.00%, 3/15/44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,750,000 |
|
| 4,409,888 | |
Refunding, 4.00%, 3/15/48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 |
|
| 2,913,600 | |
Washington School District GO, |
|
|
|
|
|
Franklin County, Missouri Direct Deposit Program, 4.00%, 3/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 |
|
| 3,450,240 | |
Franklin County, Missouri Direct Deposit Program, 4.00%, 3/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 |
|
| 1,720,935 | |
Wentzville R-IV School District GO, Missouri Direct Deposit Program, Refunding and Improvement, 4.00%, |
|
|
|
|
|
3/01/38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 15,400,000 |
|
| 17,788,078 |
|
|
|
|
|
|
|
|
|
|
| 982,165,627 | |
U.S. Territories 2.5% |
|
|
|
|
|
|
|
|
|
| |
Guam 0.6% |
|
|
|
|
|
Guam Power Authority Revenue, Refunding, Series A, AGMC Insured, 5.00%, 10/01/25 . . . . . . . . . . . . . . | 5,420,000 |
|
| 5,976,417 | |
Puerto Rico 1.9% |
|
|
|
|
|
|
|
|
|
| |
b Puerto Rico Electric Power Authority Power Revenue, |
|
|
|
|
|
Series WW-RSA-1, 5.50%, 7/01/38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 19,320,000 |
|
| 15,528,450 | |
Series XX-RSA-1, 5.25%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
|
| 4,006,250 | |
|
|
|
|
|
|
|
|
|
| 19,534,700 | |
|
|
|
|
|
|
Total U.S. Territories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| 25,511,117 |
|
Total Municipal Bonds before Short Term Investments (Cost $937,207,426) . . . . . |
|
|
|
| |
| 1,007,676,744 |
| |||
|
|
|
|
|
|
Short Term Investments 3.5%
Municipal Bonds 3.5%
Missouri 3.5%
cMissouri State Development Finance Board Revenue, Infrastructure Facilities, St. Louis Convention Center,
Series C, LOC US Bank National Association, Daily VRDN and Put, 1.16%, 12/01/20 . . . . . . . . . . . . . . . | 1,415,000 | 1,415,000 |
c Missouri State health and Educational Facilities Authority Revenue, |
|
|
Educational Facilities, St. Louis University, SPA US Bank National Association, Daily VRDN & Put, |
|
|
1.18%, 7/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 780,000 | 780,000 |
Educational Facilities, The Washington University, Series D, SPA Wells Fargo Bank, 1.18%, Daily |
|
|
VRDN and Put, 9/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 700,000 | 700,000 |
franklintempleton.com | Annual Report | 119 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Missouri Tax-Free Income Fund (continued)
| Principal |
|
|
|
| Amount |
| Value | |
|
|
|
|
|
Short Term Investments (continued) |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
|
Missouri (continued) |
|
|
|
|
c Missouri State Health and Educational Facilities Authority Revenue, |
|
|
|
|
Educational Facilities, The Washington University, Series B, SPA JPMorgan Chase Bank One, Daily |
|
|
|
|
VRDN and Put, 1.19%, 3/01/40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $19,800,000 | $ | 19,800,000 |
|
Educational Facilities, The Washington University, Series B, SPA US Bank National Association, Daily |
|
|
|
|
VRDN and Put, 1.18%, 2/15/33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,750,000 |
| 11,750,000 |
|
St. Louis University, Refunding, Series B-2, LOC Wells Fargo Bank, Daily VRDN and Put, 1.18%, |
|
|
|
|
10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,535,000 |
| 2,535,000 | |
Total Short Term Investments (Cost $36,980,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
|
|
|
| 36,980,000 |
| |
Total Investments (Cost $974,187,426) 100.2% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| |
| 1,044,656,744 |
| ||
Other Assets, less Liabilities (0.2)% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (2,021,841) | |
Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| |
| $1,042,634,903 |
| ||
|
|
|
|
|
See Abbreviations on page 173.
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.
|
|
|
|
120 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Financial Highlights
Franklin North Carolina Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.30$11.26
0.280.15
0.560.04
0.840.19
(0.30)(0.15)
$11.84$11.30
7.50%1.77%
0.82%0.83%
2.48%2.86%
$101,981$49,192
15.22%11.61%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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. | Annual Report | 121 |
FRANKLIN TAX-FREE TRUST
FINANCIAL HIGHLIGHT S
Franklin North Carolina Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.30 | $11.28 | $11.70 | $11.97 | $12.15 |
|
|
|
|
|
0.30 | 0.34 | 0.35 | 0.41 | 0.43 |
0.56 | 0.03 | (0.40) | (0.27) | (0.19) |
|
|
|
|
|
0.86 | 0.37 | (0.05) | 0.14 | 0.24 |
|
|
|
|
|
(0.32) | (0.35) | (0.37) | (0.41) | (0.42) |
|
|
|
|
|
$11.84 | $11.30 | $11.28 | $11.70 | $11.97 |
|
|
|
|
|
7.66% | 3.32% | (0.45)% | 1.19% | 2.01% |
0.67%e | 0.68%e | 0.66% | 0.64% | 0.64% |
2.63% | 3.01% | 3.00% | 3.41% | 3.62% |
$567,825 | $577,052 | $660,167 | $756,109 | $794,675 |
15.22% | 11.61% | 10.07% | 18.38% | 7.23% |
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. eBenefit of expense reduction rounds to less than 0.01%.
|
|
|
|
122 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin North Carolina Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returnd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.49 | $11.46 | $11.88 | $12.15 | $12.33 |
|
|
|
|
|
0.24 | 0.28 | 0.29 | 0.35 | 0.37 |
0.56 | 0.03 | (0.41) | (0.27) | (0.20) |
|
|
|
|
|
0.80 | 0.31 | (0.12) | 0.08 | 0.17 |
|
|
|
|
|
(0.25) | (0.28) | (0.30) | (0.35) | (0.35) |
|
|
|
|
|
$12.04 | $11.49 | $11.46 | $11.88 | $12.15 |
|
|
|
|
|
7.07% | 2.78% | (1.00)% | 0.61% | 1.43% |
1.22%e | 1.23%e | 1.21% | 1.19% | 1.19% |
2.08% | 2.46% | 2.45% | 2.86% | 3.07% |
$90,244 | $105,371 | $159,556 | $197,705 | $206,283 |
15.22% | 11.61% | 10.07% | 18.38% | 7.23% |
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. eBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 123 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin North Carolina Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.29 | $11.27 | $11.59 |
|
|
|
0.32 | 0.35 | 0.22 |
0.56 | 0.03 | (0.33) |
|
|
|
0.88 | 0.38 | (0.11) |
|
|
|
(0.33) | (0.36) | (0.21) |
|
|
|
$11.84 | $11.29 | $11.27 |
|
|
|
7.90% | 3.45% | (0.97)% |
0.55% | 0.56% | 0.56% |
0.54%g | 0.54%g | 0.53% |
2.76% | 3.15% | 3.13% |
$10,948 | $7,776 | $9,117 |
15.22% | 11.61% | 10.07% |
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
The 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.
dBased on average daily shares outstanding.
eTotal return 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%.
|
|
|
|
124 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin North Carolina Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.30 | $11.28 | $11.70 | $11.97 | $12.15 |
|
|
|
|
|
0.31 | 0.35 | 0.36 | 0.42 | 0.45 |
0.56 | 0.03 | (0.40) | (0.26) | (0.20) |
|
|
|
|
|
0.87 | 0.38 | (0.04) | 0.16 | 0.25 |
|
|
|
|
|
(0.33) | (0.36) | (0.38) | (0.43) | (0.43) |
|
|
|
|
|
$11.84 | $11.30 | $11.28 | $11.70 | $11.97 |
|
|
|
|
|
7.77% | 3.42% | (0.36)% | 1.29% | 2.12% |
0.57%d | 0.58%d | 0.56% | 0.54% | 0.54% |
2.73% | 3.11% | 3.10% | 3.51% | 3.72% |
$105,851 | $84,506 | $80,819 | $109,365 | $89,119 |
15.22% | 11.61% | 10.07% | 18.38% | 7.23% |
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.
dBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 125 |
F R A N K L IN TAX - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin North Carolina Tax-Free Income Fund
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds 95.2% |
|
|
North Carolina 94.3% |
|
|
Buncombe County Limited Obligation Revenue, Refunding, 5.00%, 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . | $ 3,000,000 | $ 3,613,770 |
Cape Fear Public Utility Authority Water & Sewerage System Revenue, Refunding, Series A, 4.00%, 8/01/44 . | 8,000,000 | 9,505,760 |
Cape Fear Public Utility Authority Water and Sewer System Revenue, |
|
|
Pre-Refunded, 5.00%, 8/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,000,000 | 8,474,000 |
Pre-Refunded, 5.00%, 6/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,644,605 |
Cary Combined Enterprise System Revenue, |
|
|
5.00%, 12/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,710,000 | 2,113,355 |
Pre-Refunded, 5.00%, 12/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,158,000 |
Refunding, Series B, 4.00%, 12/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,000,000 | 9,399,680 |
Charlotte Airport Revenue, |
|
|
Charlotte Douglas International Airport, Refunding, Series A, 5.50%, 7/01/34. . . . . . . . . . . . . . . . . . . . | 3,765,000 | 3,821,739 |
Charlotte Douglas International Airport, Refunding, Series A, 4.00%, 7/01/44. . . . . . . . . . . . . . . . . . . . | 3,550,000 | 4,216,725 |
Charlotte Douglas International Airport, Series A, 5.00%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,038,820 |
Charlotte Douglas International Airport, Series A, 5.00%, 7/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,531,700 |
Charlotte Douglas International Airport, Series A, 5.00%, 7/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,460,000 | 5,721,199 |
Charlotte Douglas International Airport, Series B, 4.00%, 7/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,515,000 | 6,473,176 |
Charlotte COP, |
|
|
Convention Facility Projects, Refunding, Series A, 5.00%, 6/01/44. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,250,000 | 10,642,005 |
Transit Projects, Phase II, Refunding, Series A, 5.00%, 6/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,507,675 |
Charlotte Storm Water Fee Revenue, Refunding, 5.00%, 12/01/39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,970,000 | 9,353,512 |
Charlotte Water and Sewer System Revenue, |
|
|
Refunding, 4.00%, 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,978,700 |
Refunding, 5.00%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,033,100 |
Refunding, Series B, 5.00%, 7/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,133,100 |
The Charlotte-Mecklenburg Hospital Authority Revenue, |
|
|
Atrium Health, Health Care, Refunding, Series A, 5.00%, 1/15/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,394,350 |
Carolinas HealthCare System, Refunding, Series A, 5.00%, 1/15/40 . . . . . . . . . . . . . . . . . . . . . . . . . . | 20,000,000 | 23,633,400 |
Carolinas HealthCare System, Series A, 5.125%, 1/15/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,137,040 |
Carolinas HealthCare System, Series A, 5.25%, 1/15/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,344,500 |
Columbus County Industrial Facilities and PCFA Revenue, Recovery Zone Facility, International Paper Co. |
|
|
Projects, Series A, 5.70%, 5/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,518,550 |
Dare County Utilities Systems Revenue, Pre-Refunded, 5.00%, 2/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,193,950 |
Durham County GO, |
|
|
Refunding, 4.00%, 6/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 500,000 | 608,815 |
Refunding, 4.00%, 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 450,000 | 544,284 |
Refunding, 4.00%, 6/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 700,000 | 841,764 |
Durham Utility System Revenue, Pre-Refunded, 5.00%, 6/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,211,680 |
Fayetteville Public Works Commission Revenue, Refunding, 4.00%, 3/01/41. . . . . . . . . . . . . . . . . . . . . . . . | 4,015,000 | 4,674,624 |
Greensboro GO, Public Improvement, Refunding, Series B, 5.00%, 10/01/29 . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,672,350 |
Greenville Utilities Commission Combined Enterprise System Revenue, 5.00%, 8/01/44 . . . . . . . . . . . . . . . | 4,750,000 | 6,143,650 |
Guilford County GO, Public Improvement, Series B, 4.00%, 5/01/33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,943,450 |
Mecklenburg County GO, |
|
|
Public Improvement, Series A, 4.00%, 4/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,994,150 |
School, Series A, 5.00%, 4/01/28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,028,150 |
Nash Health Care System Health Care Facilities Revenue, |
|
|
5.00%, 11/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,307,000 |
AGMC Insured, 5.00%, 11/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,256,075 |
|
|
|
|
126 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
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 | $ 5,924,200 |
New Hanover Regional Medical Center, Refunding, 5.00%, 10/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . | 13,565,000 | 15,967,090 |
North Carolina Capital Facilities Finance Agency Educational Facilities Revenue, |
|
|
Wake Forest University, 4.00%, 1/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 20,000,000 | 23,040,000 |
Wake Forest University, 5.00%, 1/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 13,500,000 | 16,762,410 |
Wake Forest University, Refunding, 4.00%, 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,754,800 |
Wake Forest University, Refunding, 4.00%, 1/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,500,000 | 6,282,045 |
Wake Forest University, Refunding, 4.00%, 1/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,250,000 | 5,985,525 |
North Carolina Capital Facilities Finance Agency Revenue, |
|
|
Davidson College, 5.00%, 3/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,296,320 |
Davidson College, 5.00%, 3/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 3,749,970 |
Duke University Project, Refunding, Series B, 5.00%, 10/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 13,585,000 | 16,371,555 |
Duke University Project, Refunding, Series B, 5.00%, 7/01/42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,375,400 |
Duke University Project, Refunding, Series B, 4.00%, 10/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,085,000 | 5,864,988 |
Duke University Project, Refunding, Series B, 5.00%, 10/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,000,000 | 13,589,400 |
North Carolina HFA Home Ownership Revenue, |
|
|
Series 42, 2.45%, 7/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,040,670 |
Series 42, 2.625%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,133,800 |
Series 42, 2.85%, 1/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 3,623,025 |
North Carolina Municipal Power Agency No. 1 Catawba Electric Revenue, Refunding, Series A, 5.00%, |
|
|
1/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,200,000 | 5,088,468 |
North Carolina State Capital Improvement Limited Obligation Revenue, Series C, Pre-Refunded, 5.00%, |
|
|
5/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,493,900 |
North Carolina State GO, |
|
|
Public Improvement, Series A, Pre-Refunded, 5.00%, 5/01/23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,068,700 |
Public Improvement, Series A, Pre-Refunded, 5.00%, 5/01/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,068,700 |
Refunding, Series A, 5.00%, 6/01/25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,866,840 |
North Carolina State HFA Home Ownership Revenue, |
|
|
Series 41, GNMA Secured, 3.55%, 7/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,480,000 | 7,083,742 |
Series 41, GNMA Secured, 3.625%, 7/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 9,970,000 | 10,857,230 |
Series 43, GNMA Secured, 2.80%, 1/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,000,000 | 6,312,660 |
Series 43, GNMA Secured, 2.95%, 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,750,000 | 2,901,910 |
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 | 5,369,350 |
Appalachian Regional Healthcare System, Series A, Pre-Refunded, 6.625%, 7/01/34 . . . . . . . . . . . . . . | 6,000,000 | 6,453,120 |
Duke University Health System, Refunding, Series D, 4.00%, 6/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . | 7,000,000 | 7,929,320 |
Duke University Health System, Series A, Pre-Refunded, 5.00%, 6/01/42 . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,937,000 |
Duke University Health System, Series A, Pre-Refunded, 5.00%, 6/01/42 . . . . . . . . . . . . . . . . . . . . . . | 8,150,000 | 8,231,907 |
Rex Healthcare, Refunding, Series A, 4.00%, 7/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,000,000 | 13,042,810 |
Novant Health Obligated Group, Refunding, Series A, 5.00%, 11/01/46 . . . . . . . . . . . . . . . . . . . . . . . . | 20,000,000 | 21,628,200 |
Presbyterian Homes, Refunding, Series C, 5.00%, 10/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,923,300 |
Rex Healthcare, Refunding, Series A, 5.00%, 7/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,058,550 |
Scotland Memorial Hospital Project, Assured Guaranty, 5.50%, 10/01/29 . . . . . . . . . . . . . . . . . . . . . . . | 1,220,000 | 1,224,612 |
Vidant Health, 5.00%, 6/01/40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,843,100 |
Vidant Health, Series A, Pre-Refunded, 5.00%, 6/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,468,500 |
Wake Forest Baptist Obligated Group, Series A, 5.00%, 12/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,274,010 |
franklintempleton.com | Annual Report | 127 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
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) |
|
|
Wake Forest Baptist Obligated Group, Series A, 5.00%, 12/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 1,000,000 | $ 1,272,250 |
WakeMed Project, Refunding, Series A, 5.00%, 10/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,419,700 |
North Carolina State Medical Care Commission Hospital Revenue, North Carolina Baptist Hospital, |
|
|
Refunding, 5.00%, 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,098,500 |
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 | 5,677,800 |
The United Methodist Retirement Homes, Refunding, Series A, 5.00%, 10/01/37 . . . . . . . . . . . . . . . . . | 1,200,000 | 1,365,156 |
The United Methodist Retirement Homes, Refunding, Series A, 5.00%, 10/01/42 . . . . . . . . . . . . . . . . . | 1,250,000 | 1,414,450 |
The United Methodist Retirement Homes, Refunding, Series A, 5.00%, 10/01/47 . . . . . . . . . . . . . . . . . | 2,540,000 | 2,865,425 |
North Carolina State University at Raleigh Revenue, |
|
|
General, Refunding, Series A, 5.00%, 10/01/33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,595,000 | 6,364,424 |
General, Refunding, Series A, 5.00%, 10/01/42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,980,000 | 10,117,048 |
North Carolina Turnpike Authority Revenue, |
|
|
Monroe Connector System, State Appropriation, 5.00%, 7/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,249,500 |
Monroe Expressway Toll, Refunding, Series A, 5.00%, 7/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,930,025 |
Triangle Expressway System, Appropriation, Refunding, Series A, 4.00%, 1/01/36 . . . . . . . . . . . . . . . . | 9,875,000 | 11,667,312 |
Triangle Expressway System, Appropriation, Refunding, Series A, 4.00%, 1/01/39 . . . . . . . . . . . . . . . . | 9,815,000 | 11,503,376 |
Triangle Expressway System, senior lien, AGMC Insured, 5.00%, 1/01/49 . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 4,477,025 |
Triangle Expressway System, senior lien, Refunding, AGMC Insured, 5.00%, 1/01/31 . . . . . . . . . . . . . . | 1,000,000 | 1,239,630 |
Triangle Expressway System, senior lien, Refunding, AGMC Insured, 5.00%, 1/01/39 . . . . . . . . . . . . . . | 1,200,000 | 1,465,620 |
Oak Island Enterprise System Revenue, AGMC Insured, Refunding, 5.00%, 6/01/33 . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,247,910 |
Pitt County Revenue, Limited Obligation, Assured Guaranty, Pre-Refunded, 5.00%, 4/01/34 . . . . . . . . . . . . . | 1,000,000 | 1,003,320 |
Raleigh Combined Enterprise System Revenue, |
|
|
Pre-Refunded, 5.00%, 3/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,915,000 | 12,419,362 |
Refunding, Series B, 4.00%, 3/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,179,140 |
Series A, 4.00%, 3/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,768,200 |
Series A, Pre-Refunded, 5.00%, 3/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,259,300 |
Raleigh GO, Refunding, Series A, 5.00%, 9/01/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,335,200 |
Raleigh-Durham Airport Authority Airport Revenue, |
|
|
Refunding, Series A, 5.00%, 5/01/27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 350,000 | 420,361 |
Refunding, Series A, 5.00%, 5/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,192,140 |
Refunding, Series A, 5.00%, 5/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 550,000 | 653,851 |
a Refunding, Series A, 5.00%, 5/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,250,000 | 1,670,500 |
Refunding, Series A, 5.00%, 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,785,000 | 10,858,230 |
a Refunding, Series A, 5.00%, 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,280,000 | 1,706,227 |
Union County Enterprise Systems Revenue, |
|
|
5.00%, 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,223,550 |
Series A, 4.00%, 6/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,200,000 | 3,822,816 |
Series A, 4.00%, 6/01/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,325,000 | 2,756,287 |
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 | 11,086,740 |
General, Board of Governors, Refunding, 5.00%, 10/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,427,400 |
General, Board of Governors, Refunding, Series A, 4.00%, 10/01/40. . . . . . . . . . . . . . . . . . . . . . . . . . | 2,250,000 | 2,586,713 |
General, Board of Governors, Refunding, Series A, 4.00%, 10/01/40. . . . . . . . . . . . . . . . . . . . . . . . . . | 290,000 | 345,268 |
General, Board of Governors, Refunding, Series A, 4.00%, 10/01/45. . . . . . . . . . . . . . . . . . . . . . . . . . | 1,415,000 | 1,666,290 |
|
|
|
|
128 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin North Carolina Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
North Carolina (continued) |
|
|
|
University of North Carolina at Charlotte Revenue, (continued) |
|
|
|
General, Board of Governors, Refunding, Series A, 4.00%, 10/01/49. . . . . . . . . . . . . . . . . . . . . . . . . . | $ 1,300,000 | $ 1,522,638 | |
General, Board of Governors, Series A, Pre-Refunded, 5.00%, 4/01/37 . . . . . . . . . . . . . . . . . . . . . . . . | 12,995,000 | 14,122,966 |
|
General, Board of Governors, Series A, Pre-Refunded, 5.00%, 4/01/41 . . . . . . . . . . . . . . . . . . . . . . . . | 18,000,000 | 19,562,400 |
|
University of North Carolina at Greensboro Revenue, |
|
|
|
General, Board of Governors, 5.00%, 4/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,500,000 | 4,035,885 |
|
General, Board of Governors, 5.00%, 4/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 3,146,225 |
|
General, Board of Governors, Refunding, 4.00%, 4/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,205,000 | 1,414,586 |
|
General, Board of Governors, Refunding, 4.00%, 4/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 | 1,169,760 |
|
University of North Carolina at Wilmington Revenue, Student Housing Projects, Limited Obligation, |
|
|
|
Refunding, 5.00%, 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,000,000 | 3,544,620 |
|
University of North Carolina Hospitals at Chapel Hill Revenue, Board of Governors, 5.00%, 2/01/46 . . . . . . . | 4,265,000 | 5,061,489 |
|
University of North Carolina System Pool Revenue, Series A, Assured Guaranty, 5.00%, 10/01/33 . . . . . . . . | 160,000 | 160,434 |
|
Wake County GO, |
|
|
|
Public Improvement, Refunding, Series A, 5.00%, 3/01/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,000,000 | 10,466,960 |
|
Public Improvement, Refunding, Series A, 5.00%, 3/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,870,000 | 10,514,320 |
|
Wake County Limited Obligation Revenue, 4.00%, 9/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,250,000 | 6,335,962 |
|
Wilmington Storm Water Fee Revenue, Refunding, AMBAC Insured, 5.00%, 6/01/33 . . . . . . . . . . . . . . . . . . | 225,000 | 225,709 |
|
Winston-Salem City Water and Sewer System Revenue, |
|
|
|
4.00%, 6/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,574,000 |
|
Refunding, Series A, 5.00%, 6/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,350,000 | 2,725,577 |
|
Refunding, Series A, 4.00%, 6/01/34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,350,000 | 1,575,221 |
|
Refunding, Series A, 4.00%, 6/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,775,450 |
|
|
|
|
|
|
| 827,120,578 | |
U.S. Territories 0.9% |
|
|
|
|
|
| |
Puerto Rico 0.9% |
|
|
|
b Puerto Rico Electric Power Authority Power Revenue, Series XX-RSA-1, 5.25%, 7/01/40 . . . . . . . . . . . . . . . | 10,000,000 | 8,012,500 | |
.Total Municipal Bonds before Short Term Investments (Cost $779,831,170) . . . . . |
| 835,133,078 | |
Short Term Investments 4.5% |
|
|
|
|
|
| |
Municipal Bonds 4.5% |
|
|
|
North Carolina 4.5% |
|
|
|
c The Charlotte-Mecklenburg Hospital Authority Revenue, |
|
|
|
Atrium Health, Health Care, Series H, SPA JPMorgan Chase Bank, Daily VRDN and Put, 1.19%, |
|
|
|
1/15/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,595,000 | 6,595,000 | |
Carolinas HealthCare System, Refunding, Series B, SPA JPMorgan Chase Bank, Daily VRDN and Put, |
|
|
|
1.19%, 1/15/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,585,000 | 2,585,000 | |
Carolinas HealthCare System, Refunding, Series C, SPA JPMorgan Chase Bank, Daily VRDN and Put, |
|
|
|
1.19%, 1/15/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,325,000 | 2,325,000 | |
Carolinas HealthCare System, Series E, LOC TD Bank National Association, Daily VRDN and Put, |
|
|
|
1.19%, 1/15/44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 2,500,000 | |
c North Carolina State Medical Care Commission Hospital Revenue, Moses Cone Health System, Series B, |
|
|
|
SPA Bank of Montreal, Daily VRDN and Put, 1.16%, 10/01/35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 22,045,000 | 22,045,000 |
|
franklintempleton.com | Annual Report | 129 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin North Carolina Tax-Free Income Fund (continued)
Principal
AmountValue
Short Term Investments (continued)
Municipal Bonds (continued)
North Carolina (continued)
cRaleigh-Durham Airport Authority Airport Revenue, Refunding, Series C, LOC TD Bank National Association,
Weekly VRDN and Put, 1.10%, 5/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $2,985,000 | $ | 2,985,000 |
Total Short Term Investments (Cost $39,035,000) |
|
|
|
|
| 39,035,000 | |
Total Investments (Cost $818,866,170) 99.7%. . . . |
|
|
|
|
| 874,168,078 | |
Other Assets, less Liabilities 0.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 2,681,056 |
Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| |
| $876,849,134 | ||
|
|
|
|
See Abbreviations on page 173.
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.
|
|
|
|
130 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Financial Highlights
Franklin Virginia Tax-Free Income Fund
Year Ended February 28,
2020a2019b
Class A
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expensesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.92$10.87
0.280.15
0.520.05
0.800.20
(0.30)(0.15)
$11.42$10.92
7.40%1.90%
0.84%0.84%
2.54%3.01%
$77,058$39,565
14.44%9.60%
aFor the year ended February 29.
bFor the period September 10, 2018 (effective date) to February 28, 2019.
cThe 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.
dBased on average daily shares outstanding.
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. | Annual Report | 131 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Virginia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class A1
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.91 | $10.91 | $11.31 | $11.54 | $11.65 |
|
|
|
|
|
0.30 | 0.34 | 0.35 | 0.40 | 0.42 |
0.52 | —d | (0.39) | (0.23) | (0.11) |
0.82 | 0.34 | (0.04) | 0.17 | 0.31 |
|
|
|
|
|
(0.31) | (0.34) | (0.36) | (0.40) | (0.42) |
|
|
|
|
|
$11.42 | $10.91 | $10.91 | $11.31 | $11.54 |
|
|
|
|
|
7.66% | 3.22% | (0.34)% | 1.51% | 2.72% |
0.69%f | 0.69%f | 0.68%g | 0.65% | 0.65% |
2.69% | 3.16% | 3.15% | 3.46% | 3.65% |
$398,547 | $402,739 | $454,423 | $509,170 | $540,857 |
14.44% | 9.60% | 9.87% | 17.44% | 5.30% |
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. fBenefit of expense reduction rounds to less than 0.01%.
gBenefit of waiver and payments by affiliates rounds to less than 0.01%.
|
|
|
|
132 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Virginia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Class C
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11.10 | $11.09 | $11.49 | $11.72 | $11.82 |
|
|
|
|
|
0.24 | 0.29 | 0.30 | 0.34 | 0.36 |
0.54 | —d | (0.40) | (0.23) | (0.11) |
0.78 | 0.29 | (0.10) | 0.11 | 0.25 |
|
|
|
|
|
(0.26) | (0.28) | (0.30) | (0.34) | (0.35) |
|
|
|
|
|
$11.62 | $11.10 | $11.09 | $11.49 | $11.72 |
|
|
|
|
|
7.07% | 2.68% | (0.89)% | 0.92% | 2.20% |
1.24%f | 1.24%f | 1.23%g | 1.20% | 1.20% |
2.14% | 2.61% | 2.60% | 2.91% | 3.10% |
$52,357 | $62,041 | $90,666 | $107,936 | $110,753 |
14.44% | 9.60% | 9.87% | 17.44% | 5.30% |
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. 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. | Annual Report | 133 |
FRANKLIN TAX-FREE TRUST
FINANCIA L HIGHLIGHT S
Franklin Virginia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a2019 2018b
Class R6
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsc:
Net investment incomed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total returne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assetsf
Expenses before waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses net of waiver and payments by affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.92 | $10.91 | $11.25 |
|
|
|
0.32 | 0.36 | 0.22 |
0.52 | 0.01 | (0.35) |
|
|
|
0.84 | 0.37 | (0.13) |
|
|
|
(0.33) | (0.36) | (0.21) |
|
|
|
$11.43 | $10.92 | $10.91 |
|
|
|
7.80% | 3.44% | (1.14)% |
0.56% | 0.57% | 0.57% |
0.55%g | 0.55%g | 0.54% |
2.83% | 3.30% | 3.29% |
$5,829 | $4,947 | $5,028 |
14.44% | 9.60% | 9.87% |
aFor the year ended February 29.
bFor the period August 1, 2017 (effective date) to February 28, 2018.
cThe 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.
dBased on average daily shares outstanding.
eTotal return 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%.
|
|
|
|
134 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TAX-FREE TRUS T
FINANCIA L HIGHLIGHT S
Franklin Virginia Tax-Free Income Fund (continued)
Year Ended February 28,
2020a | 2019 | 2018 | 2017 | 2016a |
Advisor Class
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from investment operationsb:
Net investment incomec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less distributions from:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ratios to average net assets
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental data
Net assets, end of year (000's) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10.92 | $10.92 | $11.31 | $11.54 | $11.65 |
|
|
|
|
|
0.31 | 0.35 | 0.36 | 0.41 | 0.43 |
0.53 | 0.01 | (0.38) | (0.22) | (0.11) |
|
|
|
|
|
0.84 | 0.36 | (0.02) | 0.19 | 0.32 |
|
|
|
|
|
(0.33) | (0.36) | (0.37) | (0.42) | (0.43) |
|
|
|
|
|
$11.43 | $10.92 | $10.92 | $11.31 | $11.54 |
|
|
|
|
|
7.76% | 3.32% | (0.15)% | 1.60% | 2.82% |
0.59%d | 0.59%d | 0.58%e | 0.55% | 0.55% |
2.79% | 3.26% | 3.25% | 3.56% | 3.75% |
$109,844 | $84,880 | $85,293 | $87,359 | $52,952 |
14.44% | 9.60% | 9.87% | 17.44% | 5.30% |
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.
dBenefit of expense reduction rounds to less than 0.01%.
eBenefit 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. | Annual Report | 135 |
F R A N K L IN TAX - FREE TRUS T
Statement of Investments, February 29, 2020
Franklin Virginia Tax-Free Income Fund
| Principal |
|
|
| Amount |
| Value |
|
|
|
|
Municipal Bonds 99.8% |
|
|
|
Virginia 92.9% |
|
|
|
Bristol Utility System Revenue, AGMC Insured, ETM, 5.00%, 7/15/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 530,000 | $ | 547,766 |
Chesapeake Hospital Authority Facility Revenue, |
|
|
|
Chesapeake Regional Medical Center, Refunding, 4.00%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
| 1,170,010 |
Chesapeake Regional Medical Center, Refunding, 4.00%, 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 |
| 4,623,720 |
Chesterfield County EDA Revenue, |
|
|
|
Bon Secours Health System Inc., Series C-1, AGMC Insured, Pre-Refunded, 5.00%, 11/01/42. . . . . . . . | 2,250,000 |
| 2,309,580 |
Bon Secours Health System Inc., Series C-2, Assured Guaranty, Pre-Refunded, 5.00%, 11/01/42 . . . . . | 8,000,000 |
| 8,211,840 |
Fairfax County EDA Residential Care Facilities Mortgage Revenue, |
|
|
|
Goodwin House Inc., Refunding, Series A, 4.00%, 10/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 |
| 1,642,350 |
Goodwin House Inc., Refunding, Series A, 5.00%, 10/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,840,000 |
| 6,758,106 |
Fairfax County EDA Revenue, Metrorail Parking System Project, 5.00%, 4/01/42. . . . . . . . . . . . . . . . . . . . . | 5,085,000 |
| 6,252,058 |
Fairfax County EDA Transportation District Improvement Revenue, Silver Line Phase I Project, Pre- |
|
|
|
Refunded, 5.00%, 4/01/36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 |
| 10,033,200 |
Fairfax County IDAR, |
|
|
|
Health Care, Inova Health System Project, Series A, 5.00%, 5/15/44 . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 |
| 2,885,675 |
Health Care, Inova Health System Project, Series A, 4.00%, 5/15/48 . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
| 5,820,000 |
Fairfax County Sewer Revenue, 5.00%, 7/15/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,760,000 |
| 3,505,421 |
Fairfax County Water Authority Revenue, |
|
|
|
Refunding, 5.00%, 4/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,510,000 |
| 4,358,929 |
Refunding, 5.00%, 4/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
| 6,193,450 |
Farmville IDA Facilities Revenue, Educational Facilities, Longwood University Student Housing Projects, |
|
|
|
Refunding, Series A, 5.00%, 1/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 |
| 5,940,650 |
Hampton Roads Sanitation District Wastewater Revenue, |
|
|
|
Subordinate, Series A, Pre-Refunded, 5.00%, 8/01/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,200,000 |
| 7,828,554 |
Subordinate, Series A, Pre-Refunded, 5.00%, 8/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,115,000 |
| 6,458,557 |
Subordinate, Series A, Pre-Refunded, 5.00%, 8/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 11,840,000 |
| 14,950,013 |
Hampton Roads Transportation Accountability Commission Revenue, Transportation Fund, senior lien, |
|
|
|
Series A, 5.00%, 7/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 20,000,000 |
| 25,037,000 |
Henrico County EDA Revenue, Bon Secours Health System Inc., Pre-Refunded, 5.00%, 11/01/30 . . . . . . . . | 7,000,000 |
| 7,766,640 |
Hopewell Sewer System Revenue, Refunding, Series A, 5.00%, 7/15/42 . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,850,000 |
| 5,107,196 |
Lexington IDA Educational Facilities Revenue, |
|
|
|
Washington and Lee University, Pre-Refunded, 5.00%, 1/01/43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 |
| 10,764,300 |
Washington and Lee University, Refunding, Series A, 5.00%, 1/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . | 1,105,000 |
| 1,409,195 |
Washington and Lee University, Refunding, Series A, 5.00%, 1/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . | 1,500,000 |
| 1,879,980 |
Lexington IDA Residential Care Facility Revenue, |
|
|
|
Kendal at Lexington, Series A, 5.00%, 1/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
| 1,091,140 |
Kendal at Lexington, Series A, 5.00%, 1/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,250,000 |
| 1,358,163 |
Loudoun County Sanitation Authority Water and Sewer Revenue, Refunding, 5.00%, 1/01/29 . . . . . . . . . . . . | 4,770,000 |
| 5,722,140 |
Lynchburg EDA Hospital Revenue, Centra Health Obligated Group, Refunding, Series A, 5.00%, 1/01/47 . . . | 4,500,000 |
| 5,380,650 |
Montgomery County EDA Revenue, |
|
|
|
Technology Foundation, Refunding, Series A, 4.00%, 6/01/36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,200,000 |
| 1,449,636 |
Technology Foundation, Refunding, Series A, 4.00%, 6/01/37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 500,000 |
| 602,370 |
Technology Foundation, Refunding, Series A, 4.00%, 6/01/38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,750,000 |
| 2,101,015 |
Norfolk Airport Authority Revenue, |
|
|
|
5.00%, 7/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,000,000 |
| 1,298,370 |
5.00%, 7/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 800,000 |
| 1,032,928 |
5.00%, 7/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,925,000 |
| 3,743,795 |
|
|
|
|
136 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Virginia Tax-Free Income Fund (continued)
| Principal |
|
| Amount | Value |
|
|
|
Municipal Bonds (continued) |
|
|
Virginia (continued) |
|
|
Norfolk GO, |
|
|
Capital Improvement, Pre-Refunded, 5.00%, 8/01/44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 3,995,000 | $ 5,326,573 |
Capital Improvement, Series A, Pre-Refunded, 5.00%, 8/01/32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,845,000 | 6,682,179 |
Capital Improvement, Series A, Pre-Refunded, 5.00%, 10/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,040,000 | 1,320,103 |
Capital Improvement, Series A, Pre-Refunded, 5.00%, 10/01/46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,500,000 | 3,173,325 |
Capital Improvement, Series C, Pre-Refunded, 5.00%, 10/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,825,000 | 8,183,854 |
Norfolk Water Revenue, |
|
|
5.00%, 11/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,920,000 | 8,691,658 |
5.00%, 11/01/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,925,000 | 8,656,665 |
Northern Virginia Transportation Authority Transportation Special Tax Revenue, 5.00%, 6/01/33 . . . . . . . . . . | 3,000,000 | 3,504,150 |
Portsmouth GO, |
|
|
Public Utility, Refunding, Series A, 5.00%, 7/15/41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,010,000 | 4,364,564 |
Public Utility, Series A, Pre-Refunded, 5.00%, 7/15/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,990,000 | 6,581,572 |
Prince Edward County IDA Educational Facilities Revenue, Hampden-Sydney College Project, 5.00%, |
|
|
9/01/48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,050,000 | 2,513,731 |
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 | 10,814,100 |
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 | 3,404,192 |
Richmond Public Utility Revenue, |
|
|
Refunding, Series A, 5.00%, 1/15/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 12,273,800 |
Refunding, Series A, 5.00%, 1/15/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,147,700 |
Riverside Regional Jail Authority Jail Facility Revenue, Refunding, 5.00%, 7/01/31 . . . . . . . . . . . . . . . . . . . | 6,215,000 | 7,510,392 |
Roanoke EDA Hospital Revenue, |
|
|
Carilion Clinic Obligated Group, Refunding, 5.00%, 7/01/33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,615,000 | 10,761,593 |
a Carilion Clinic Obligated Group, Refunding, Series A, 4.00%, 7/01/51 . . . . . . . . . . . . . . . . . . . . . . . . . | 6,500,000 | 7,733,570 |
Roanoke IDA Hospital Revenue, |
|
|
Carilion Health System Obligated Group, Series B, AGMC Insured, 5.00%, 7/01/38 . . . . . . . . . . . . . . . | 3,950,000 | 4,003,878 |
Carilion Health System Obligated Group, Series B, Assured Guaranty, Pre-Refunded, 5.00%, 7/01/38. . . | 50,000 | 50,674 |
Salem EDA Educational Facilities Revenue, Roanoke College, Refunding, 5.00%, 4/01/49 . . . . . . . . . . . . . . | 925,000 | 1,171,235 |
Smyth County GO, Public Improvement, Series A, Pre-Refunded, 5.00%, 11/01/31 . . . . . . . . . . . . . . . . . . . | 4,145,000 | 4,433,782 |
Stafford County and Staunton IDAR, Virginia Municipal League Assn. of Counties Finance Program, XLCA |
|
|
Insured, 5.00%, 8/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 960,000 | 961,805 |
Suffolk GO, |
|
|
Pre-Refunded, 5.00%, 2/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,395,000 | 7,674,975 |
Pre-Refunded, 5.00%, 2/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,605,000 | 2,706,048 |
Pre-Refunded, 5.00%, 6/01/42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 10,529,200 |
University of Virginia Revenue, |
|
|
General, Pledge, Refunding, Series A, 5.00%, 4/01/47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 9,630,000 | 12,001,965 |
General, Pledge, Refunding, Series B, 5.00%, 9/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 13,012,800 |
General, Pledge, Series A, Pre-Refunded, 5.00%, 6/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 15,000,000 | 17,044,650 |
Upper Occoquan Sewage Authority Regional Sewerage Revenue, Refunding, Series B, 4.00%, 7/01/35 . . . . | 6,165,000 | 7,118,109 |
Virginia Beach Development Authority Residential Care Facility Revenue, |
|
|
Westminster-Canterbury on Chesapeake Bay, Refunding, 5.00%, 9/01/40 . . . . . . . . . . . . . . . . . . . . . . | 1,750,000 | 2,067,975 |
Westminster-Canterbury on Chesapeake Bay, Refunding, 5.00%, 9/01/44 . . . . . . . . . . . . . . . . . . . . . . | 2,215,000 | 2,603,777 |
franklintempleton.com | Annual Report | 137 |
FRANKL IN TAX-FREE TRUST
STATEMEN T OF INVEST MENT S
Franklin Virginia Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
Virginia (continued) |
|
|
|
Virginia College Building Authority Educational Facilities Revenue, |
|
|
|
21st Century College and Equipment Programs, Series A, 4.00%, 2/01/30. . . . . . . . . . . . . . . . . . . . . . | $ 7,000,000 | $ 8,121,750 | |
21st Century College and Equipment Programs, Series A, 4.00%, 2/01/34. . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,081,300 |
|
Liberty University Projects, 5.25%, 3/01/29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,860,000 | 2,860,000 |
|
Liberty University Projects, 5.00%, 3/01/41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 26,855,000 | 26,855,000 |
|
Public Higher Education Financing Program, Refunding, Series A, 5.00%, 9/01/27 . . . . . . . . . . . . . . . . | 4,000,000 | 5,050,480 |
|
Washington and Lee University, Refunding, Series A, 5.00%, 1/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,826,550 | |
Virginia Small Business Financing Authority, senior Lien, Private Activity Revenue, Transform 66 P3 Project, |
|
|
|
5.00%, 12/31/49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,960,850 |
|
Virginia Small Business Financing Authority Revenue, |
|
|
|
senior lien, 95 Express Lanes LLC Project, 5.00%, 7/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 5,323,600 |
|
Transform 66 P3 Project, 5.00%, 12/31/47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,600,000 | 1,911,072 |
|
Virginia State Commonwealth Transportation Board Revenue, |
|
|
|
Federal Transportation Grant Anticipation Notes, 5.00%, 9/15/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,260,000 | 2,841,521 |
|
Federal Transportation Grant Anticipation Notes, 5.00%, 9/15/31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 5,012,200 |
|
Transportation Capital Projects, 4.00%, 5/15/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 13,060,000 | 15,632,298 |
|
Virginia State HDA Revenue, Rental Housing, Series D, 3.80%, 10/01/43 . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,805,000 | 4,196,002 |
|
Virginia State PBA Public Facilities Revenue, Series A, 4.00%, 8/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,250,000 | 1,535,900 |
|
Virginia State Public School Authority Revenue, |
|
|
|
School Financing, 1997 Resolution, Refunding, Series B, 5.00%, 8/01/24 . . . . . . . . . . . . . . . . . . . . . . | 10,000,000 | 11,829,900 |
|
School Financing, 1997 Resolution, Series A, 5.00%, 8/01/30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,535,000 | 4,777,765 |
|
School Financing, 1997 Resolution, Series A, 5.00%, 8/01/31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,625,000 | 3,530,231 |
|
School Financing, 1997 Resolution, Series B, 5.00%, 8/01/30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,280,000 | 6,957,614 |
|
Special Obligation , School Financing, Prince William County, 4.00%, 3/01/33 . . . . . . . . . . . . . . . . . . . | 5,795,000 | 6,933,949 |
|
Special Obligation School Financing, Prince William Company, Series A, 3.00%, 10/01/38. . . . . . . . . . . | 5,455,000 | 6,058,378 |
|
Virginia State Resources Authority Infrastructure Revenue, |
|
|
|
State Moral Obligation, Virginia Pooled Financing Program, Refunding, Series C, 5.00%, 11/01/48 . . . . . | 7,655,000 | 9,785,157 |
|
State Moral Obligation, Virginia Pooled Financing Program, Series B, Pre-Refunded, 5.00%, 11/01/41 . . | 9,410,000 | 10,065,595 |
|
Virginia Pooled Financing Program, Refunding, 5.00%, 11/01/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,255,000 | 6,396,491 |
|
Virginia Pooled Financing Program, Senior Series A, 5.00%, 11/01/38. . . . . . . . . . . . . . . . . . . . . . . . . | 135,000 | 135,421 |
|
Virginia Pooled Financing Program, Series A, 5.00%, 11/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,165,000 | 6,294,999 |
|
Virginia State Small Business Financing Authority Healthcare Facilities Revenue, |
|
|
|
Sentara Healthcare, Refunding, 4.00%, 11/01/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,845,000 |
|
Sentara Healthcare, Refunding, 4.00%, 11/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,000,000 | 4,826,880 |
|
Sentara Healthcare, Refunding, 4.00%, 11/01/39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,750,000 | 5,713,157 |
|
Sentara Healthcare, Refunding, 5.00%, 11/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 23,000,000 | 23,156,170 |
|
Winchester EDA Hospital Revenue, Valley Health System Obligated Group, Refunding, 5.00%, 1/01/44. . . . . | 5,000,000 | 5,829,850 |
|
|
|
|
|
|
| 597,604,071 | |
District of Columbia 5.2% |
|
|
|
|
|
| |
Metropolitan Washington Airports Authority Airport System Revenue, |
|
|
|
Refunding, Series A, 5.00%, 10/01/35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 12,000,000 | 12,291,960 | |
Refunding, Series A, 5.00%, 10/01/49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,000,000 | 6,349,450 | |
Washington Metropolitan Area Transit Authority Gross Revenue, Transit, Series B, 5.00%, 7/01/42 . . . . . . . . | 12,060,000 | 15,074,759 | |
|
|
| |
|
| 33,716,169 | |
|
|
|
|
|
|
|
|
138 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
S TAT EMEN T OF INVEST MENT S
Franklin Virginia Tax-Free Income Fund (continued)
| Principal |
|
|
| Amount | Value | |
|
|
|
|
Municipal Bonds (continued) |
|
|
|
U.S. Territories 1.7% |
|
|
|
Puerto Rico 1.7% |
|
|
|
b Puerto Rico Electric Power Authority Power Revenue, |
|
|
|
Series WW-RSA-1, 5.50%, 7/01/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 5,200,000 | $ 4,179,500 | |
Series XX-RSA-1, 5.25%, 7/01/40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,400,000 | 6,730,500 | |
|
|
|
|
|
| 10,910,000 | |
Total Municipal Bonds before Short Term Investments (Cost $600,302,607) |
|
|
|
| 642,230,240 |
| |
|
|
|
|
Short Term Investments (Cost $2,995,000) 0.4%
Municipal Bonds 0.4%
Virginia 0.4%
cVirginia College Building Authority Educational Facilities Revenue, University of Richmond Project, SPA
Wells Fargo Bank, Daily VRDN and Put, 1.19%, 11/01/36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,995,000 | 2,995,000 |
Total Investments (Cost $603,297,607) 100.2% |
|
|
| 645,225,240 | |
Other Assets, less Liabilities (0.2)% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| (1,589,407) |
Net Assets 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . |
|
|
| $643,635,833 | |
|
|
|
See Abbreviations on page 173.
aSecurity purchased on a when-issued basis. See Note 1(b). bSee Note 7 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the principal balance plus accrued interest at specified dates. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 139 |
FRANKL IN TAX-FREE TRUST
FINANCIA L STATEMENT S
Statements of Assets and Liabilities
February 29, 2020
Franklin | Franklin | Franklin | |
Alabama | Florida | Georgia | |
Tax-Free | Tax-Free | Tax-Free | |
Income Fund | Income Fund | Income Fund | |
|
|
|
|
Assets:
Investments in securities:
Cost - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Value - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables:
Capital shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Payables:
Investment securities purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets consist of:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total distributable earnings (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$224,632,153 | $519,835,896 | $451,323,675 |
| |
|
|
|
|
|
$244,755,962 | $563,851,583 | $483,814,966 |
| |
101,338 | 233,180 | 76,115 |
| |
313,097 | 419,620 | 920,752 |
| |
2,847,238 | 6,523,470 | 4,478,405 | ||
304 | 696 | 595 |
| |
|
|
|
|
|
248,017,939 | 571,028,549 | 489,290,833 |
| |
|
|
|
|
|
| — | 5,442,444 | 1,828,105 | |
316,257 | 1,134,793 | 1,431,919 | ||
113,432 | 232,166 | 202,829 | ||
33,927 | 63,798 | 67,390 | ||
24,413 | 63,241 | 54,436 | ||
51,143 | 226,488 | 93,948 | ||
22,079 | 39,878 | 35,748 | ||
|
|
|
| |
561,251 | 7,202,808 | 3,714,375 | ||
|
|
|
| |
$247,456,688 | $563,825,741 | $485,576,458 | ||
|
|
|
| |
$244,876,363 | $587,224,067 | $475,735,220 | ||
2,580,325 | (23,398,326) | 9,841,238 | ||
|
|
|
| |
$247,456,688 | $563,825,741 | $485,576,458 | ||
|
|
|
|
|
|
|
|
|
140 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINANCIA L S TAT EMENTS
Statements of Assets and Liabilities (continued)
February 29, 2020
|
| Franklin |
| Franklin |
| Franklin | |
|
| Alabama |
| Florida |
| Georgia | |
|
| Tax-Free |
| Tax-Free |
| Tax-Free | |
| Income Fund | Income Fund | Income Fund | ||||
|
|
|
|
|
|
|
|
Class A: |
|
|
|
|
|
|
|
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 16,423,467 | $ | 56,213,697 | $ | 54,944,769 | |
|
|
|
|
|
|
|
|
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 1,441,010 |
| 5,189,100 |
| 4,506,759 |
|
|
|
|
|
|
|
|
|
Net asset value per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| $11.40 |
| $10.83 |
| $12.19 |
|
Maximum offering price per share (net asset value per share ÷ 96.25%) . . . . . . . . . |
| $11.84 |
| $11.25 |
| $12.66 |
|
Class A1: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $186,485,829 | $437,316,134 | $309,436,024 |
| |||
|
|
|
|
|
|
|
|
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 16,380,914 |
| 40,407,445 |
| 25,381,422 |
|
|
|
|
|
|
|
|
|
Net asset value per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| $11.38 |
| $10.82 |
| $12.19 |
|
Maximum offering price per share (net asset value per share ÷ 96.25%) . . . . . . . . . |
| $11.82 |
| $11.24 |
| $12.66 |
|
Class C: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 31,174,560 | $ | 35,480,889 | $ | 62,426,352 |
|
|
|
|
|
|
|
|
|
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 2,701,873 |
| 3,206,993 |
| 5,042,391 |
|
|
|
|
|
|
|
|
|
Net asset value and maximum offering price per sharea. . . . . . . . . . . . . . . . . . . . . |
| $11.54 |
| $11.06 |
| $12.38 |
|
Class R6: |
|
|
|
|
|
|
|
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . . . .
Advisor Class:
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . . . .
$ 1,663,593 | $ 3,337,954 | $ 4,980,764 |
|
|
|
146,117 | 307,603 | 408,425 |
|
|
|
$11.39 | $10.85 | $12.20 |
|
|
|
$ 11,709,239 | $ 31,477,067 | $ 53,788,549 |
|
|
|
1,028,376 | 2,901,551 | 4,410,231 |
|
|
|
$11.39 | $10.85 | $12.20 |
|
|
|
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 141 |
FRANKL IN TAX-FREE TRUST
FINANCIA L STATEMENT S
Statements of Assets and Liabilities (continued)
February 29, 2020
Franklin | Franklin | Franklin |
Kentucky | Louisiana | Maryland |
Tax-Free | Tax-Free | Tax-Free |
Income Fund | Income Fund | Income Fund |
|
|
|
Assets:
Investments in securities:
Cost - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Value - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables:
Capital shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Payables:
Investment securities purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets consist of:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total distributable earnings (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$141,128,721 | $365,888,858 | $397,700,211 |
| |
|
|
|
|
|
$151,502,520 | $397,544,287 | $429,347,830 |
| |
78,792 | 7,357,081 | 325,433 |
| |
10,323 | 711,089 | 1,722,323 | ||
1,650,140 | 4,663,762 | 4,045,971 | ||
187 | 500 | 532 |
| |
|
|
|
|
|
153,241,962 | 410,276,719 | 435,442,089 |
| |
|
|
|
|
|
1,759,815 | — | — | ||
145,552 | 773,267 | 1,384,447 | ||
73,357 | 174,022 | 183,364 | ||
11,899 | 51,733 | 56,468 | ||
14,544 | 42,379 | 58,083 | ||
11,202 | 35,232 | 93,071 | ||
18,995 | 30,709 | 31,181 | ||
|
|
|
| |
2,035,364 | 1,107,342 | 1,806,614 | ||
|
|
|
| |
$151,206,598 | $409,169,377 | $433,635,475 | ||
|
|
|
| |
$150,628,120 | $404,864,722 | $443,771,490 | ||
578,478 | 4,304,655 | (10,136,015) | ||
|
|
|
| |
$151,206,598 | $409,169,377 | $433,635,475 | ||
|
|
|
|
|
|
|
|
|
142 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINANCIA L S TAT EMENTS
Statements of Assets and Liabilities (continued)
February 29, 2020
Franklin | Franklin | Franklin |
Kentucky | Louisiana | Maryland |
Tax-Free | Tax-Free | Tax-Free |
Income Fund | Income Fund | Income Fund |
|
|
|
Class A:
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum offering price per share (net asset value per share ÷ 96.25%) . . . . . . . . .
Class A1:
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum offering price per share (net asset value per share ÷ 96.25%) . . . . . . . . .
Class C:
$ 8,986,070 | $ 48,032,236 | $ 60,104,054 |
|
|
|
799,590 | 4,156,840 | 5,294,797 |
|
|
|
$11.24 | $11.55 | $11.35 |
|
|
|
$11.68 | $12.00 | $11.79 |
|
|
|
$127,888,696 | $289,744,048 | $270,308,518 |
|
|
|
11,390,561 | 25,089,240 | 23,805,155 |
|
|
|
$11.23 | $11.55 | $11.36 |
|
|
|
$11.67 | $12.00 | $11.80 |
|
|
|
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value and maximum offering price per sharea. . . . . . . . . . . . . . . . . . . . .
Class R6:
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . . . .
Advisor Class:
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . . . .
| $ 38,065,809 | $ 45,501,570 |
|
|
|
| 3,242,176 | 3,925,755 |
|
|
|
| $11.74 | $11.59 |
|
|
|
$ 2,163,566 | $ 5,382,670 | $ 3,642,261 |
|
|
|
192,607 | 465,962 | 320,258 |
|
|
|
$11.23 | $11.55 | $11.37 |
|
|
|
$ 12,168,266 | $ 27,944,614 | $ 54,079,072 |
|
|
|
1,083,311 | 2,418,554 | 4,757,013 |
|
|
|
$11.23 | $11.55 | $11.37 |
|
|
|
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 143 |
FRANKL IN TAX-FREE TRUST
FINANCIA L STATEMENT S
Statements of Assets and Liabilities (continued)
February 29, 2020
Franklin | Franklin | Franklin | |
Missouri | North Carolina | Virginia | |
Tax-Free | Tax-Free | Tax-Free | |
Income Fund | Income Fund | Income Fund | |
|
|
|
|
Assets:
Investments in securities:
Cost - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Value - Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables:
Capital shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Payables:
Investment securities purchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets consist of:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total distributable earnings (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 974,187,426 | $818,866,170 | $603,297,607 |
| |
|
|
|
|
|
$1,044,656,744 | $874,168,078 | $645,225,240 |
| |
26,012 | 4,899,197 | 66,838 |
| |
1,661,010 | 1,088,019 | 172,131 |
| |
13,015,759 | 9,682,527 | 6,824,849 | ||
1,278 | 1,081 | 794 |
| |
|
|
|
|
|
1,059,360,803 | 889,838,902 | 652,289,852 |
| |
|
|
|
|
|
14,702,853 | 10,350,457 | 7,490,600 | ||
1,169,974 | 1,896,120 | 584,867 | ||
411,081 | 349,473 | 261,953 | ||
133,769 | 111,697 | 73,766 | ||
100,940 | 84,146 | 72,491 | ||
145,596 | 139,871 | 131,663 | ||
61,687 | 58,004 | 38,679 | ||
|
|
|
| |
16,725,900 | 12,989,768 | 8,654,019 | ||
|
|
|
| |
$1,042,634,903 | $876,849,134 | $643,635,833 | ||
|
|
|
| |
$1,045,764,688 | $914,767,660 | $655,328,461 | ||
(3,129,785) | (37,918,526) | (11,692,628) | ||
|
|
|
| |
$1,042,634,903 | $876,849,134 | $643,635,833 | ||
|
|
|
|
|
|
|
|
|
144 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINANCIA L S TAT EMENTS
Statements of Assets and Liabilities (continued)
February 29, 2020
| Franklin | Franklin |
| Franklin | |
| Missouri | North Carolina |
| Virginia | |
| Tax-Free | Tax-Free |
| Tax-Free | |
| Income Fund | Income Fund | Income Fund | ||
|
|
|
|
|
|
Class A: |
|
|
|
|
|
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $122,844,737 | $101,981,177 | $ | 77,058,023 |
|
|
|
|
|
|
|
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,157,829 | 8,610,019 |
| 6,747,426 |
|
|
|
|
|
|
|
Net asset value per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $12.09 | $11.84 |
| $11.42 |
|
Maximum offering price per share (net asset value per share ÷ 96.25%) . . . . . . . | $12.56 | $12.30 |
| $11.86 |
|
Class A1: |
|
|
|
|
|
|
|
|
|
| |
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $708,398,690 | $567,825,404 | $398,547,260 |
| |
|
|
|
|
|
|
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 58,614,755 | 47,956,306 |
| 34,903,516 |
|
|
|
|
|
|
|
Net asset value per sharea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $12.09 | $11.84 |
| $11.42 |
|
Maximum offering price per share (net asset value per share ÷ 96.25%) . . . . . . . | $12.56 | $12.30 |
| $11.86 |
|
Class C: |
|
|
|
|
|
|
|
|
|
| |
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $104,721,375 | $ 90,243,873 | $ | 52,357,341 |
|
|
|
|
|
|
|
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,574,902 | 7,496,585 |
| 4,506,686 |
|
|
|
|
|
|
|
Net asset value and maximum offering price per sharea . . . . . . . . . . . . . . . . . . | $12.21 | $12.04 |
| $11.62 |
|
Class R6: |
|
|
|
|
|
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . .
Advisor Class:
Net assets, at value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net asset value and maximum offering price per share . . . . . . . . . . . . . . . . . . .
$ 23,700,479 | $ 10,948,004 | $ 5,829,243 |
|
|
|
1,959,131 | 924,983 | 510,171 |
|
|
|
$12.10 | $11.84 | $11.43 |
|
|
|
$ 82,969,622 | $105,850,676 | $109,843,966 |
|
|
|
6,860,120 | 8,938,668 | 9,611,020 |
|
|
|
$12.09 | $11.84 | $11.43 |
|
|
|
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 145 |
FRANKL IN TAX-FREE TRUST
FINANCIA L STATEMENT S
Statements of Operations
for the year ended February 29, 2020
Franklin | Franklin | Franklin |
Alabama | Florida | Georgia |
Tax-Free | Tax-Free | Tax-Free |
Income Fund | Income Fund | Income Fund |
|
|
|
Investment income: Interest:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses:
Management fees (Note 3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution fees: (Note 3c)
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer agent fees: (Note 3e)
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class R6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Custodian fees (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustees' fees and expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense reductions (Note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses waived/paid by affiliates (Note 3f) . . . . . . . . . . . . . . . . . . . . . . . . .
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realized and unrealized gains (losses): Net realized gain (loss) from:
Investments:
Unaffiliated issuers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in unrealized appreciation (depreciation) on: Investments:
Unaffiliated issuers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . .
$ | 8,668,525 | $22,494,643 | $16,830,539 |
|
|
|
|
|
|
|
|
| 1,329,146 | 2,777,297 | 2,354,392 |
|
|
| 28,680 | 104,615 | 88,725 |
|
|
| 187,180 | 450,724 | 311,625 |
|
|
| 199,506 | 241,571 | 434,099 |
|
|
| 7,001 | 27,319 | 24,287 |
| |
| 114,222 | 294,167 | 213,215 |
| |
| 18,728 | 24,251 | 45,692 |
| |
| 542 | 1,546 | 2,117 |
| |
| 6,458 | 19,543 | 33,381 |
| |
| 1,741 | 4,064 | 3,377 |
| |
| 16,792 | 30,805 | 21,559 |
| |
| 18,299 | 32,594 | 18,838 |
| |
| 45,385 | 85,893 | 59,042 |
| |
| 1,591 | 3,739 | 3,071 |
| |
| 21,935 | 47,280 | 38,190 |
| |
|
|
|
|
| |
| 1,997,206 | 4,145,408 | 3,651,610 |
| |
| (935) | (2,249) | (1,799) | ||
| (207) | (652) | (767) | ||
|
|
|
|
| |
| 1,996,064 | 4,142,507 | 3,649,044 |
| |
|
|
|
|
| |
| 6,672,461 | 18,352,136 | 13,181,495 |
| |
|
|
|
|
| |
| 46,250 | (3,433,019) | 508,055 |
| |
|
|
|
|
| |
| 12,131,982 | 24,683,958 | 23,836,229 |
| |
|
|
|
|
| |
| 12,178,232 | 21,250,939 | 24,344,284 |
| |
|
|
|
| ||
$18,850,693 | $39,603,075 | $37,525,779 |
| ||
|
|
|
|
|
|
|
|
|
|
146 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINANCIA L S TAT EMENTS
Statements of Operations (continued)
for the year ended February 29, 2020
Franklin | Franklin | Franklin |
Kentucky | Louisiana | Maryland |
Tax-Free | Tax-Free | Tax-Free |
Income Fund | Income Fund | Income Fund |
|
|
|
Investment income: Interest:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses:
Management fees (Note 3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution fees: (Note 3c)
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer agent fees: (Note 3e)
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class R6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Custodian fees (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustees' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense reductions (Note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses waived/paid by affiliates (Note 3f) . . . . . . . . . . . . . . . . . . . . . . . . .
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realized and unrealized gains (losses): Net realized gain (loss) from:
Investments:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in unrealized appreciation (depreciation) on: Investments:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gain (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . .
$ 5,345,961 | $13,787,060 | $14,787,090 |
|
|
|
|
|
|
|
869,135 | 1,997,978 | 2,145,412 |
|
|
15,365 | 79,274 | 105,842 |
|
|
129,770 | 288,130 | 279,034 |
|
|
— | 258,418 | 324,962 |
|
|
4,024 | 20,505 | 31,946 |
| |
84,939 | 186,167 | 210,392 |
| |
— | 25,691 | 37,698 |
| |
1,222 | 2,378 | 1,345 |
| |
7,205 | 15,018 | 35,418 |
| |
1,078 | 2,822 | 3,052 |
| |
14,258 | 24,257 | 24,350 |
| |
10,003 | 14,798 | 19,482 |
| |
49,299 | 59,772 | 67,976 |
| |
981 | 2,534 | 2,772 |
| |
19,321 | 36,027 | 29,223 |
| |
|
|
|
| |
1,206,600 | 3,013,769 | 3,318,904 |
| |
(569) | (1,461) | (1,618) | ||
(630) | (1,004) | (544) | ||
|
|
|
| |
1,205,401 | 3,011,304 | 3,316,742 |
| |
|
|
|
| |
4,140,560 | 10,775,756 | 11,470,348 |
| |
|
|
|
| |
109,195 | 294,951 | 17,272 |
| |
|
|
|
| |
6,635,270 | 21,652,708 | 21,754,293 |
| |
|
|
|
| |
6,744,465 | 21,947,659 | 21,771,565 |
| |
|
|
|
| |
$10,885,025 | $32,723,415 | $33,241,913 |
| |
|
|
|
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 147 |
FRANKL IN TAX-FREE TRUST
FINANCIA L STATEMENT S
Statements of Operations (continued)
for the year ended February 29, 2020
Franklin | Franklin | Franklin | |
Missouri | North Carolina | Virginia | |
Tax-Free | Tax-Free | Tax-Free | |
Income Fund | Income Fund | Income Fund | |
|
|
|
|
Investment income: Interest:
Unaffiliated issuers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses:
Management fees (Note 3a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution fees: (Note 3c)
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer agent fees: (Note 3e)
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Custodian fees (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reports to shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustees' fees and expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expense reductions (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses waived/paid by affiliates (Note 3f) . . . . . . . . . . . . . . . . . . . . . . . .
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realized and unrealized gains (losses): Net realized gain (loss) from:
Investments:
Unaffiliated issuers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in unrealized appreciation (depreciation) on: Investments:
Unaffiliated issuers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . .
$34,117,504 | $27,865,705 | $20,956,398 |
|
|
|
|
|
|
|
4,740,573 | 4,067,030 | 3,049,822 |
|
|
232,320 | 190,007 | 147,682 |
|
|
707,539 | 571,353 | 400,919 |
|
|
685,374 | 634,266 | 369,226 |
|
|
58,198 | 47,204 | 39,805 |
| |
443,044 | 354,838 | 270,038 |
| |
66,030 | 60,601 | 38,255 |
| |
7,494 | 4,126 | 2,426 |
| |
44,069 | 58,222 | 66,709 |
| |
7,473 | 6,198 | 4,549 |
| |
52,182 | 48,076 | 31,496 |
| |
20,899 | 21,066 | 23,594 |
| |
112,480 | 110,360 | 74,021 |
| |
6,529 | 5,576 | 4,075 |
| |
56,975 | 48,921 | 37,284 |
| |
|
|
|
| |
7,241,179 | 6,227,844 | 4,559,901 |
| |
(3,779) | (3,264) | (2,341) | ||
(1,326) | (1,311) | (790) | ||
|
|
|
| |
7,236,074 | 6,223,269 | 4,556,770 |
| |
|
|
|
| |
26,881,430 | 21,642,436 | 16,399,628 |
| |
|
|
|
| |
(1,223,912) | (4,208,612) | 726,360 |
| |
|
|
|
| |
55,206,464 | 44,578,512 | 27,971,694 |
| |
|
|
|
| |
53,982,552 | 40,369,900 | 28,698,054 |
| |
|
|
|
| |
$80,863,982 | $62,012,336 | $45,097,682 |
| |
|
|
|
|
|
|
|
|
|
148 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINANCIA L S TAT EMENTS
Statements of Changes in Net Assets
|
|
| Franklin Alabama |
| Franklin Florida | ||||
|
|
| Tax-Free Income Fund |
| Tax-Free Income Fund | ||||
|
|
|
|
|
|
| |||
|
|
| Year Ended February 28, |
| Year Ended February 28, | ||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2020a |
| 2019 |
| 2020a | 2019 |
|
Increase (decrease) in net assets: |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 6,672,461 | $ | 7,394,560 | $ | 18,352,136 | $ 21,195,929 |
| |
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 46,250 |
| (245,943) |
| (3,433,019) | (1,619,441) | |
Net change in unrealized appreciation (depreciation) . . . . . . . . . |
|
| 12,131,982 |
| (820,370) |
| 24,683,958 | (289,840) | |
Net increase (decrease) in net assets resulting from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 18,850,693 |
| 6,328,247 |
| 39,603,075 | 19,286,648 |
|
Distributions to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (317,567) |
| (71,237) |
| (1,344,456) | (329,988) | |
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (5,589,570) |
| (6,142,736) |
| (15,447,317) | (18,447,866) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (744,996) |
| (968,360) |
| (1,065,910) | (1,777,517) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (34,140) |
| (34,300) |
| (104,819) | (87,569) | |
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (322,459) |
| (251,020) |
| (1,046,757) | (863,827) | |
|
|
|
|
|
|
|
|
| |
Total distributions to shareholders. . . . . . . . . . . . . . . . . . . . . . . . |
|
| (7,008,732) |
| (7,467,653) |
| (19,009,259) | (21,506,767) | |
Capital share transactions: (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 8,513,207 |
| 7,207,817 |
| 25,615,355 | 28,783,460 | |
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (10,994,521) |
| (19,123,204) |
| (42,082,463) | (71,237,247) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (974,330) |
| (14,470,387) |
| (5,016,824) | (33,649,094) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 778,923 |
| (686,600) |
| 890,154 | (38,437) | |
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 2,867,278 |
| 667,839 |
| 4,938,718 | 5,059,211 | |
|
|
|
|
|
|
|
|
| |
Total capital share transactions . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 190,557 |
| (26,404,535) |
| (15,655,060) | (71,082,107) | |
|
|
|
|
|
|
|
|
| |
Net increase (decrease) in net assets . . . . . . . . . . . . . . . . |
|
| 12,032,518 |
| (27,543,941) |
| 4,938,756 | (73,302,226) | |
Net assets: |
|
|
|
|
|
|
|
|
|
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 235,424,170 |
| 262,968,111 |
| 558,886,985 | 632,189,211 | |
|
|
|
|
|
| ||||
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $247,456,688 | $235,424,170 | $563,825,741 | $558,886,985 | |||||
|
|
|
|
|
|
|
|
|
|
aFor the year ended February 29.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 149 |
FRANKL IN TAX-FREE TRUST
FINANCIA L STATEMENT S
Statements of Changes in Net Assets (continued)
|
|
| Franklin Georgia |
| Franklin Kentucky | ||||
|
|
| Tax-Free Income Fund |
| Tax-Free Income Fund | ||||
|
|
|
|
|
|
| |||
|
|
| Year Ended February 28, |
| Year Ended February 28, | ||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2020a | 2019 |
| 2020a |
| 2019 |
|
Increase (decrease) in net assets: |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 13,181,495 | $ 15,028,084 | $ | 4,140,560 | $ | 4,785,088 |
| |
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 508,055 | (5,447) |
| 109,195 |
| 323,254 |
|
Net change in unrealized appreciation (depreciation) . . . . . . . . . |
|
| 23,836,229 | (2,671,987) |
| 6,635,270 |
| (737,766) | |
Net increase (decrease) in net assets resulting from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 37,525,779 | 12,350,650 |
| 10,885,025 |
| 4,370,576 |
|
Distributions to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (990,716) | (192,559) |
| (166,370) |
| (12,224) | |
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (9,536,034) | (11,209,388) |
| (3,839,796) |
| (4,448,044) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (1,680,955) | (2,473,306) |
| — |
| — | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (142,672) | (106,905) |
| (60,797) |
| (68,197) | |
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (1,523,717) | (1,254,420) |
| (332,091) |
| (266,773) | |
|
|
|
|
|
|
|
|
| |
Total distributions to shareholders. . . . . . . . . . . . . . . . . . . . . . . . |
|
| (13,874,094) | (15,236,578) |
| (4,399,054) |
| (4,795,238) | |
Capital share transactions: (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 33,354,372 | 19,439,689 |
| 5,918,655 |
| 2,774,394 | |
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (20,279,178) | (47,287,178) |
| (8,020,923) |
| (19,454,667) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (13,498,201) | (36,380,438) |
| — |
| — | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 967,492 | 3,796,257 |
| 232,390 |
| (236,052) | |
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 11,265,270 | 4,927,052 |
| 2,397,011 |
| 1,830,270 | |
|
|
|
|
|
|
|
|
| |
Total capital share transactions . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 11,809,755 | (55,504,618) |
| 527,133 |
| (15,086,055) | |
|
|
|
|
|
|
|
|
| |
Net increase (decrease) in net assets . . . . . . . . . . . . . . . . |
|
| 35,461,440 | (58,390,546) |
| 7,013,104 |
| (15,510,717) | |
Net assets: |
|
|
|
|
|
|
|
|
|
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 450,115,018 | 508,505,564 |
| 144,193,494 |
| 159,704,211 | |
|
|
|
|
|
| ||||
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $485,576,458 | $450,115,018 | $151,206,598 | $144,193,494 | |||||
|
|
|
|
|
|
|
|
|
|
aFor the year ended February 29.
|
|
|
|
150 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINA NCIA L S TAT EMENTS
Statements of Changes in Net Assets (continued)
|
|
| Franklin Louisiana |
| Franklin Maryland | |||
|
|
| Tax-Free Income Fund |
| Tax-Free Income Fund | |||
|
|
|
|
|
|
| ||
|
|
| Year Ended February 28, |
| Year Ended February 28, | |||
|
|
|
|
|
|
|
|
|
|
|
| 2020a | 2019 |
| 2020a | 2019 |
|
Increase (decrease) in net assets: |
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 10,775,756 | $ 11,937,605 | $ | 11,470,348 | $ 12,906,957 |
| |
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 294,951 | 167,552 |
| 17,272 | 400,316 |
|
Net change in unrealized appreciation (depreciation) . . . . . . . . . |
|
| 21,652,708 | 508,448 |
| 21,754,293 | 986,079 |
|
Net increase (decrease) in net assets resulting from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 32,723,415 | 12,613,605 |
| 33,241,913 | 14,293,352 |
|
Distributions to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (868,582) | (145,782) |
| (1,162,390) | (235,272) | |
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (8,535,152) | (9,716,656) |
| (8,328,834) | (9,540,479) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (958,351) | (1,385,099) |
| (1,220,752) | (1,920,744) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (140,907) | (125,604) |
| (81,311) | (50,070) | |
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (706,042) | (561,923) |
| (1,439,823) | (1,348,549) | |
|
|
|
|
|
|
|
| |
Total distributions to shareholders. . . . . . . . . . . . . . . . . . . . . . . . |
|
| (11,209,034) | (11,935,064) |
| (12,233,110) | (13,095,114) | |
Capital share transactions: (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 28,141,868 | 17,853,886 |
| 31,400,326 | 26,196,177 | |
Class A1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (10,470,379) | (38,269,400) |
| (23,272,391) | (40,101,404) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (6,326,360) | (19,119,366) |
| (13,320,361) | (36,146,346) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 1,259,432 | 176,147 |
| 1,755,413 | 372,355 | |
Advisor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 7,048,753 | 5,429,362 |
| 7,401,335 | 3,562,182 | |
|
|
|
|
|
|
|
| |
Total capital share transactions . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 19,653,314 | (33,929,371) |
| 3,964,322 | (46,117,036) | |
|
|
|
|
|
|
|
| |
Net increase (decrease) in net assets . . . . . . . . . . . . . . . . |
|
| 41,167,695 | (33,250,830) |
| 24,973,125 | (44,918,798) | |
Net assets: |
|
|
|
|
|
|
|
|
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 368,001,682 | 401,252,512 |
| 408,662,350 | 453,581,148 | |
|
|
|
|
|
| |||
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $409,169,377 | $368,001,682 | $433,635,475 | $408,662,350 | ||||
|
|
|
|
|
|
|
|
|
aFor the year ended February 29.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 151 |
FRANKL IN TAX-FREE TRUST
FINANCIA L STATEMENT S
Statements of Changes in Net Assets (continued)
|
|
| Franklin Missouri |
| Franklin North Carolina | ||||
|
|
| Tax-Free Income Fund |
| Tax-Free Income Fund | ||||
|
|
|
|
|
|
| |||
|
|
| Year Ended February 28, |
| Year Ended February 28, | ||||
|
|
|
|
|
|
|
|
|
|
|
|
| 2020a |
| 2019 |
| 2020a | 2019 |
|
Increase (decrease) in net assets: |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 26,881,430 | $ | 30,065,935 | $ | 21,642,436 | $ 25,049,632 |
| |
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (1,223,912) |
| (300,848) |
| (4,208,612) | (2,252,420) | |
Net change in unrealized appreciation (depreciation) . . . . . . |
|
| 55,206,464 |
| 7,181,548 |
| 44,578,512 | 4,246,848 |
|
Net increase (decrease) in net assets resulting from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 80,863,982 |
| 36,946,635 |
| 62,012,336 | 27,044,060 |
|
Distributions to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (2,479,973) |
| (581,911) |
| (1,909,150) | (388,161) | |
Class A1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (20,398,654) |
| (23,445,068) |
| (15,553,662) | (19,060,559) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (2,461,941) |
| (3,310,311) |
| (2,120,789) | (3,390,144) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (617,229) |
| (589,965) |
| (265,318) | (262,721) | |
Advisor Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (2,074,408) |
| (2,227,907) |
| (2,625,964) | (2,600,985) | |
|
|
|
|
|
|
|
|
| |
Total distributions to shareholders . . . . . . . . . . . . . . . . . . . . . |
|
| (28,032,205) |
| (30,155,162) |
| (22,474,883) | (25,702,570) | |
Capital share transactions: (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 54,466,241 |
| 62,711,301 |
| 49,292,923 | 48,618,185 | |
Class A1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (29,874,112) |
| (97,285,055) |
| (35,901,046) | (83,901,262) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (9,631,476) |
| (41,216,598) |
| (19,677,843) | (54,000,034) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 3,668,315 |
| 1,262,268 |
| 2,734,581 | (1,346,043) | |
Advisor Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 19,150,636 |
| (12,766,616) |
| 16,966,358 | 3,525,600 | |
|
|
|
|
|
|
|
|
| |
Total capital share transactions . . . . . . . . . . . . . . . . . . . . . . . |
|
| 37,779,604 |
| (87,294,700) |
| 13,414,973 | (87,103,554) | |
|
|
|
|
|
|
|
|
| |
Net increase (decrease) in net assets . . . . . . . . . . . . . |
|
| 90,611,381 |
| (80,503,227) |
| 52,952,426 | (85,762,064) | |
Net assets: |
|
|
|
|
|
|
|
|
|
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 952,023,522 |
| 1,032,526,749 |
| 823,896,708 | 909,658,772 | |
|
|
|
|
|
|
| |||
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $1,042,634,903 | $ | 952,023,522 | $876,849,134 | $823,896,708 | ||||
|
|
|
|
|
|
|
|
|
|
aFor the year ended February 29.
|
|
|
|
152 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
FINANCIA L S TAT EMENTS
Statements of Changes in Net Assets (continued)
Franklin Virginia
Tax-Free Income Fund
Year Ended February 28,
|
|
| 2020a |
| 2019 |
|
Increase (decrease) in net assets: |
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 16,399,628 | $ | 18,737,635 |
| |
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 726,360 |
| 180,288 |
|
Net change in unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 27,971,694 |
| 174,495 |
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations. . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 45,097,682 |
| 19,092,418 |
|
Distributions to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (1,530,613) |
| (324,073) | |
Class A1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (11,282,511) |
| (13,569,976) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (1,289,215) |
| (1,994,776) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (160,098) |
| (173,726) | |
Advisor Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (2,853,868) |
| (2,703,347) | |
|
|
|
|
|
| |
Total distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (17,116,305) |
| (18,765,898) | |
Capital share transactions: (Note 2) |
|
|
|
|
|
|
|
|
|
|
|
| |
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 34,825,054 |
| 39,139,953 | |
Class A1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (22,227,828) |
| (51,675,061) | |
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| (12,220,357) |
| (28,437,045) | |
Class R6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 636,021 |
| (82,877) | |
Advisor Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 20,469,834 |
| (509,044) | |
|
|
|
|
|
| |
Total capital share transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 21,482,724 |
| (41,564,074) | |
|
|
|
|
|
| |
Net increase (decrease) in net assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 49,464,101 |
| (41,237,554) | |
Net assets: |
|
|
|
|
|
|
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
|
| 594,171,732 |
| 635,409,286 | |
|
|
|
| |||
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $643,635,833 | $594,171,732 | ||||
|
|
|
|
|
|
|
aFor the year ended February 29.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 153 |
F R A N K L IN TAX - FREE TRUS T
Notes to Financial Statements
1. Organization and Significant Accounting Policies
Franklin Tax-Free Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of twenty-three 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 Kentucky Tax-Free Income Fund
Class A, Class A1, Class C, Class R6 & Advisor Class
Franklin Alabama Tax-Free Income Fund
Franklin Florida Tax-Free Income Fund
Franklin Georgia Tax-Free Income Fund
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
Franklin Virginia Tax-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 the over-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 transac- tions, 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.
|
|
|
|
154 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T NOTE S TO FINANCIA L STAT EMEN TS
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 February 29, 2020, 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 the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
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.
franklintempleton.com | Annual Report | 155 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
2. Shares of Beneficial Interest
At February 29, 2020, there were an unlimited number of shares authorized (without par value). Transactions in the Funds' shares were as follows:
| Franklin Alabama | Franklin Florida | |||||
| Tax-Free Income Fund | Tax-Free Income Fund | |||||
|
|
|
|
|
|
|
|
| Shares |
| Amount | Shares |
| Amount | |
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares solda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 966,960 | $ | 10,761,934 | 2,882,742 | $ | 30,728,486 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . | 26,545 |
| 296,269 | 121,001 |
| 1,291,705 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (228,457) |
| (2,544,996) | (600,429) |
| (6,404,836) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 765,048 | $ | 8,513,207 | 2,403,314 | $ | 25,615,355 |
|
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 589,102 | $ | 6,558,582 | 889,592 | $ | 9,456,567 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . | 439,394 |
| 4,887,742 | 1,168,026 |
| 12,442,917 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (2,020,745) |
| (22,440,845) | (6,022,018) |
| (63,981,947) |
|
|
|
|
|
|
|
| |
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (992,249) | $(10,994,521) | (3,964,400) | $ | (42,082,463) |
| |
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 408,310 | $ | 4,602,069 | 729,079 | $ | 7,937,140 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . | 60,928 |
| 686,946 | 86,952 |
| 946,802 |
|
Shares redeemeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (556,983) |
| (6,263,345) | (1,277,713) |
| (13,900,766) |
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (87,745) | $ | (974,330) | (461,682) | $ | (5,016,824) | |
|
|
|
|
|
|
|
|
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) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
156 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
|
| Franklin Alabama | Franklin Florida |
| ||||
|
| Tax-Free Income Fund | Tax-Free Income Fund |
| ||||
|
| Shares |
| Amount | Shares |
| Amount |
|
|
|
|
|
|
|
|
|
|
Class R6 Shares: |
|
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 76,244 | $ | 847,722 | 127,110 | $ | 1,354,069 |
| |
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . | 3,062 |
| 34,140 | 9,755 |
| 104,287 |
| |
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (9,204) |
| (102,939) | (53,322) |
| (568,202) |
| |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 70,102 | $ | 778,923 | 83,543 | $ | 890,154 |
| |
|
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 397,535 | $ | 4,401,410 | 1,156,586 | $ | 12,298,645 |
| |
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . | 25,890 |
| 288,344 | 74,003 |
| 790,857 |
| |
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (163,970) |
| (1,822,476) | (765,239) |
| (8,150,784) |
| |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 259,455 | $ | 2,867,278 | 465,350 | $ | 4,938,718 |
| |
|
|
|
|
|
|
|
|
|
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 | Franklin Kentucky |
| ||||
|
| Tax-Free Income Fund | Tax-Free Income Fund |
| ||||
|
| Shares |
| Amount | Shares |
| Amount |
|
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
|
Shares solda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,117,046 |
| $ 37,050,467 | 607,556 | $ | 6,652,693 |
| |
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 78,603 |
| 937,031 | 14,806 |
| 163,090 |
| |
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (389,290) |
| (4,633,126) | (81,736) |
| (897,128) |
| |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,806,359 |
| $ 33,354,372 | 540,626 | $ | 5,918,655 |
| |
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 |
| |
|
|
|
|
|
|
|
|
|
franklintempleton.com | Annual Report | 157 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
2. Shares of Beneficial Interest (continued)
| Franklin Georgia | Franklin Kentucky | |||||
| Tax-Free Income Fund | Tax-Free Income Fund | |||||
|
|
|
|
|
|
|
|
| Shares |
| Amount | Shares |
| Amount | |
|
|
|
|
|
|
|
|
Class A1 Shares: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,294,228 | $ | 15,366,072 | 495,361 | $ | 5,434,664 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 711,725 |
| 8,463,585 | 336,026 |
| 3,691,035 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (3,715,357) |
| (44,108,835) | (1,562,027) |
| (17,146,622) | |
|
|
|
|
|
| ||
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,709,404) | $(20,279,178) | (730,640) | $ | (8,020,923) | ||
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 626,977 | $ | 7,578,333 |
|
|
|
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 124,153 |
| 1,498,211 |
|
|
|
|
Shares redeemeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,873,564) |
| (22,574,745) |
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,122,434) | $(13,498,201) |
|
|
|
| |
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 131,588 | $ | 1,560,954 | 34,215 | $ | 375,727 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 11,981 |
| 142,606 | 5,531 |
| 60,797 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (61,736) |
| (736,068) | (18,587) |
| (204,134) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 81,833 | $ | 967,492 | 21,159 | $ | 232,390 |
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
158 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
| Franklin Georgia | Franklin Kentucky | |||||
| Tax-Free Income Fund | Tax-Free Income Fund |
| ||||
| Shares |
| Amount | Shares |
| Amount | |
|
|
|
|
|
|
|
|
Advisor Class Shares: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,735,463 | $ | 20,636,393 | 312,689 | $ | 3,431,829 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 111,515 |
| 1,327,560 | 28,939 |
| 318,227 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (899,476) |
| (10,698,683) | (123,073) |
| (1,353,045) | |
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 947,502 | $ | 11,265,270 | 218,555 | $ | 2,397,011 |
|
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 | Franklin Maryland | |||||
| Tax-Free Income Fund | Tax-Free Income Fund | |||||
|
|
|
|
|
|
|
|
| Shares |
| Amount | Shares |
| Amount | |
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares solda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,078,405 | $ | 34,636,302 | 3,248,038 | $ | 35,986,403 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 76,182 |
| 859,627 | 100,259 |
| 1,113,665 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (654,843) |
| (7,354,061) | (514,895) |
| (5,699,742) | |
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,499,744 | $ | 28,141,868 | 2,833,402 | $ | 31,400,326 |
|
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,455,238 | $ | 16,330,759 | 1,367,506 | $ | 15,119,476 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 726,822 |
| 8,179,032 | 659,493 |
| 7,313,403 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (3,114,671) |
| (34,980,170) | (4,126,564) |
| (45,705,270) | |
|
|
|
|
| |||
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (932,611) | $(10,470,379) | (2,099,565) | $(23,272,391) | |||
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) | |||
|
|
|
|
|
|
|
|
franklintempleton.com | Annual Report | 159 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
2. Shares of Beneficial Interest (continued)
| Franklin Louisiana | Franklin Maryland | |||||
| Tax-Free Income Fund | Tax-Free Income Fund | |||||
|
|
|
|
|
|
|
|
| Shares |
| Amount | Shares |
| Amount | |
|
|
|
|
|
|
|
|
Class C Shares: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 615,322 | $ | 7,034,147 | 593,992 | $ | 6,706,256 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 80,192 |
| 916,973 | 97,844 |
| 1,106,804 |
|
Shares redeemeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,252,404) |
| (14,277,480) | (1,876,195) |
| (21,133,421) | |
Net increase (decrease). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (556,890) | $ | (6,326,360) | (1,184,359) | $(13,320,361) | ||
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 168,764 | $ | 1,897,182 | 182,503 | $ | 2,025,389 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 12,230 |
| 137,806 | 7,272 |
| 80,894 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (68,779) |
| (775,556) | (31,620) |
| (350,870) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 112,215 | $ | 1,259,432 | 158,155 | $ | 1,755,413 |
|
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 913,327 | $ | 10,262,374 | 1,502,504 | $ | 16,698,457 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . . . . | 55,037 |
| 620,131 | 111,097 |
| 1,234,116 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (341,337) |
| (3,833,752) | (950,652) |
| (10,531,238) | |
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 627,027 | $ | 7,048,753 | 662,949 | $ | 7,401,335 |
|
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.
|
|
|
|
160 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
| Franklin Missouri | Franklin North Carolina |
| ||||
| Tax-Free Income Fund | Tax-Free Income Fund |
| ||||
|
|
|
|
|
|
|
|
| Shares |
| Amount | Shares |
| Amount |
|
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares solda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,063,615 | $ | 59,608,062 | 4,908,463 | $ | 56,828,039 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 206,689 |
| 2,441,913 | 151,353 |
| 1,757,797 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (642,039) |
| (7,583,734) | (802,403) |
| (9,292,913) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,628,265 | $ | 54,466,241 | 4,257,413 | $ | 49,292,923 |
|
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,283,944 | $ | 38,647,918 | 2,625,053 | $ | 30,414,867 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 1,604,137 |
| 18,909,993 | 1,199,025 |
| 13,898,015 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (7,430,668) |
| (87,432,023) | (6,940,277) |
| (80,213,928) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (2,542,587) | $ | (29,874,112) | (3,116,199) | $ | (35,901,046) |
|
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,144,383 | $ | 13,628,985 | 1,143,114 | $ | 13,458,607 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 194,287 |
| 2,312,905 | 163,687 |
| 1,928,202 |
|
Shares redeemeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (2,153,940) |
| (25,573,366) | (2,983,622) |
| (35,064,652) |
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (815,270) | $ | (9,631,476) | (1,676,821) | $ | (19,677,843) |
|
|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
franklintempleton.com | Annual Report | 161 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
2. Shares of Beneficial Interest (continued)
|
| Franklin Missouri | Franklin North Carolina | |||||||
|
| Tax-Free Income Fund | Tax-Free Income Fund | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Shares |
| Amount | Shares |
| Amount | |||
|
|
|
|
|
|
|
|
|
|
|
Class R6 Shares: |
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
|
| |
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 595,581 | $ | 7,036,125 | 389,272 | $ | 4,506,054 |
| |||
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 49,797 |
| 587,912 | 21,785 |
| 252,631 |
| |||
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (336,455) |
| (3,955,722) | (174,599) |
| (2,024,104) |
| |||
|
|
|
|
|
|
|
|
|
| |
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 308,923 | $ | 3,668,315 | 236,458 | $ | 2,734,581 |
| |||
|
|
|
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
|
| |
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,353,795 | $ | 27,823,124 | 2,697,429 | $ | 31,273,316 |
| |||
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 135,586 |
| 1,601,095 | 213,326 |
| 2,474,576 |
| |||
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (871,698) |
| (10,273,583) | (1,450,578) |
| (16,781,534) |
| |||
|
|
|
|
|
|
|
|
|
| |
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,617,683 | $ | 19,150,636 | 1,460,177 | $ | 16,966,358 |
| |||
|
|
|
|
|
|
|
|
|
|
|
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: |
|
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
|
|
|
|
| |
Shares solda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,764,847 | $ 41,985,187 |
|
|
|
|
|
| ||
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 117,098 |
| 1,309,573 |
|
|
|
|
|
| |
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (758,950) |
| (8,469,706) |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| ||
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,122,995 | $ 34,825,054 |
|
|
|
|
|
| ||
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 |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
| Franklin Virginia |
| ||
| Tax-Free Income Fund |
| ||
|
|
|
|
|
| Shares |
| Amount |
|
|
|
|
|
|
Class A1 Shares: |
|
|
|
|
Year ended February 29, 2020 |
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,495,566 | $ | 16,675,015 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 895,337 |
| 9,993,023 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (4,386,693) |
| (48,895,866) |
|
|
|
|
| |
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,995,790) | $(22,227,828) |
| |
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: |
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 503,199 | $ | 5,718,840 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 101,156 |
| 1,148,068 |
|
Shares redeemeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,684,958) |
| (19,087,265) |
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,080,603) | $(12,220,357) |
| |
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: |
|
|
|
|
|
|
|
| |
Year ended February 29, 2020 |
|
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 128,959 | $ | 1,437,831 |
|
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 14,193 |
| 158,609 |
|
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (85,930) |
| (960,419) |
|
|
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 57,222 | $ | 636,021 |
|
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) |
|
|
|
|
|
|
franklintempleton.com | Annual Report | 163 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
2. Shares of Beneficial Interest (continued)
| Franklin Virginia | ||
| Tax-Free Income Fund | ||
|
|
|
|
| Shares |
| Amount |
|
|
|
|
Advisor Class Shares: |
|
|
|
Year ended February 29, 2020 |
|
|
|
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,076,522 | $ | 34,243,736 |
Shares issued in reinvestment of distributions . . . . . . . . . . . . . . . . | 238,524 |
| 2,666,520 |
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | (1,473,833) | (16,440,422) | |
|
|
|
|
Net increase (decrease) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,841,213 | $ | 20,469,834 |
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 the month-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 |
|
|
|
|
|
|
164 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
For the year ended February 29, 2020, each Fund's gross effective investment management fee rate based on average daily net assets was as follows:
Franklin | Franklin | Franklin | Franklin | Franklin |
Alabama | Florida | Georgia | Kentucky | Louisiana |
Tax-Free | Tax-Free | Tax-Free | Tax-Free | Tax-Free |
Income Fund | Income Fund | Income Fund | Income Fund | Income Fund |
|
|
|
|
|
0.553% | 0.495% | 0.505% | 0.585% | 0.517% |
Franklin | Franklin | Franklin | Franklin | |
Maryland | Missouri | North Carolina | Virginia | |
Tax-Free | Tax-Free | Tax-Free | Tax-Free | |
Income Fund | Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
0.511% | 0.477% | 0.481% | 0.492% |
|
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 Rule 12b-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 | Franklin | Franklin | |
| Alabama | Florida | Georgia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | 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% |
|
franklintempleton.com | Annual Report | 165 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
3. Transactions with Affiliates (continued) c. Distribution Fees (continued)
| Franklin | Franklin | Franklin | |
| Kentucky | Louisiana | Maryland | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | 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 | Franklin | Franklin | |
| Missouri | North Carolina | Virginia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | 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 year:
| Franklin | Franklin | Franklin | |
| Alabama | Florida | Georgia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Sales charges retained net of commissions paid to |
|
|
|
|
unaffiliated brokers/dealers . . . . . . . . . . . . . . . . . . . | $12,666 | $11,941 | $18,719 | |
CDSC retained . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 4,594 | $ 5,868 | $ 1,057 | |
| Franklin | Franklin | Franklin | |
| Kentucky | Louisiana | Maryland | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Sales charges retained net of commissions paid to |
|
|
|
|
unaffiliated brokers/dealers . . . . . . . . . . . . . . . . . . . | $9,054 | $20,964 | $12,892 | |
CDSC retained . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $2,715 | $ 1,896 | $ 4,309 |
|
|
|
|
166 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
| Franklin | Franklin | Franklin | |
| Missouri | North Carolina | Virginia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Sales charges retained net of commissions paid to |
|
|
|
|
unaffiliated brokers/dealers . . . . . . . . . . . . . . . . . . . | $49,725 | $34,707 | $22,538 | |
CDSC retained . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 2,032 | $19,839 | $13,897 |
Effective March 1, 2019, certain front-end sales charges on Class A and A1 shares 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 year ended February 29, 2020, the Funds paid transfer agent fees as noted in the Statements of Operations of which the following amounts were retained by Investor Services:
| Franklin | Franklin | Franklin | |
| Alabama | Florida | Georgia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . | $71,063 | $182,750 | $143,494 |
|
| Franklin | Franklin | Franklin | |
| Kentucky | Louisiana | Maryland | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . | $44,422 | $109,646 | $140,792 |
|
| Franklin | Franklin | Franklin | |
| Missouri | North Carolina | Virginia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . | $289,048 | $244,123 | $194,712 |
|
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.
franklintempleton.com | Annual Report | 167 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
3. Transactions with Affiliates (continued)
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 year ended February 29, 2020, were as follows:
| Franklin | Franklin | Franklin | |
| Alabama | Florida | Georgia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $6,900,000 | $39,900,000 | $32,290,000 |
|
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $6,795,000 | $10,800,000 | $30,090,000 |
|
| Franklin | Franklin | Franklin | |
| Kentucky | Louisiana | Maryland | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund |
|
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $8,350,000 | $2,900,000 | $9,925,000 | |
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $6,800,000 | $5,500,000 | $9,900,000 | |
| Franklin | Franklin | Franklin | |
| Missouri | North Carolina | Virginia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $58,075,000 | $13,585,000 | $173,425,000 |
|
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $55,235,000 | $18,400,000 | $ 93,000,000 |
|
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 year ended February 29, 2020, 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 29, 2020, the capital loss carryforwards were as follows:
|
| Franklin | Franklin |
| Franklin |
|
| Alabama | Florida |
| Georgia |
|
| Tax-Free | Tax-Free |
| Tax-Free |
| Income Fund | Income Fund | Income Fund | ||
|
|
|
|
|
|
Capital loss carryforwards not subject to expiration: |
|
|
|
|
|
Short term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 2,907,539 | $11,263,015 | $ | 3,076,374 |
Long term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 14,691,100 | 57,125,139 |
| 19,831,161 |
|
|
|
| ||
Total capital loss carryforwards . . . . . . . . . . . . . . . . | $17,598,639 | $68,388,154 | $22,907,535 | ||
|
|
|
|
|
|
|
|
|
|
168 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
| Franklin | Franklin | Franklin |
| Kentucky | Louisiana | Maryland |
| Tax-Free | Tax-Free | Tax-Free |
| Income Fund | Income Fund | Income Fund |
|
|
|
|
Capital loss carryforwards not subject to expiration: |
|
|
|
Short term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $2,281,514 | $10,920,503 | $11,616,079 |
Long term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 7,531,516 | 16,500,561 | 30,325,201 |
|
|
|
|
Total capital loss carryforwards . . . . . . . . . . . . . . . . | $9,813,030 | $27,421,064 | $41,941,280 |
|
|
|
|
| Franklin | Franklin | Franklin |
| Missouri | North Carolina | Virginia |
| Tax-Free | Tax-Free | Tax-Free |
| Income Fund | Income Fund | Income Fund |
|
|
|
|
Capital loss carryforwards not subject to expiration: |
|
|
|
Short term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $10,034,577 | $23,575,835 | $16,243,505 |
Long term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 64,224,169 | 70,664,337 | 37,629,164 |
|
|
|
|
Total capital loss carryforwards . . . . . . . . . . . . . . . . | $74,258,746 | $94,240,172 | $53,872,669 |
|
|
|
|
During the year ended February 29, 2020, the following Funds utilized capital loss carryforwards as follows:
Franklin | Franklin | Franklin | Franklin | |
Alabama | Kentucky | Louisiana | Virginia | |
Tax-Free | Tax-Free | Tax-Free | Tax-Free | |
Income Fund | Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
$46,250 | $118,146 | $295,020 | $525,197 |
|
The tax character of distributions paid during the years ended February 29, 2020 and February 28, 2019, was as follows:
|
| Franklin Alabama | Franklin Florida | Franklin Georgia | |||
|
| Tax-Free Income Fund | Tax-Free Income Fund | Tax-Free Income Fund | |||
|
|
|
|
|
|
|
|
|
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
|
|
|
|
|
|
|
|
Distributions paid from tax exempt |
|
|
|
|
|
|
|
income . . . . . . . . . . . . . . . . . . . . . . | $ | 7,008,732 | $ 7,467,653 | $19,009,259 | $21,506,767 | $13,874,094 | $15,236,578 |
|
|
|
|
| |||
|
| Franklin Kentucky | Franklin Louisiana | Franklin Maryland | |||
|
| Tax-Free Income Fund | Tax-Free Income Fund | Tax-Free Income Fund | |||
|
|
|
|
|
|
|
|
|
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
|
|
|
|
|
|
|
|
Distributions paid from tax exempt |
|
|
|
|
|
|
|
income . . . . . . . . . . . . . . . . . . . . . . | $ | 4,399,054 | $ 4,795,238 | $11,209,034 | $11,935,064 | $12,233,110 | $13,095,114 |
|
|
|
|
| |||
|
| Franklin Missouri | Franklin North Carolina | Franklin Virginia | |||
|
| Tax-Free Income Fund | Tax-Free Income Fund | Tax-Free Income Fund | |||
|
|
|
|
|
|
|
|
|
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
|
|
|
|
|
|
|
|
Distributions paid from tax exempt |
|
|
|
|
|
|
|
income . . . . . . . . . . . . . . . . . . . . . . | $28,032,205 | $30,155,162 | $22,474,883 | $25,702,570 | $17,116,305 | $18,765,898 | |
|
|
|
|
|
|
|
|
franklintempleton.com | Annual Report | 169 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
5. Income Taxes (continued)
At February 29, 2020, the cost of investments, net unrealized appreciation (depreciation) and undistributed tax exempt income for income tax purposes were as follows:
|
| Franklin |
| Franklin |
| Franklin |
|
| Alabama |
| Florida |
| Georgia |
|
| Tax-Free |
| Tax-Free |
| Tax-Free |
| Income Fund | Income Fund | Income Fund | |||
|
|
|
| |||
Cost of investments . . . . . . . . . . . . . . . . . . . . . . . . . | $224,632,352 | $519,727,117 | $451,429,622 | |||
|
|
|
|
|
|
|
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . | $ | 20,123,809 | $ | 44,124,466 | $ | 38,059,778 |
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . |
| (199) |
| — |
| (5,674,434) |
|
|
|
|
|
|
|
Net unrealized appreciation (depreciation) . . . . . . . . . | $ | 20,123,610 | $ | 44,124,466 | $ | 32,385,344 |
Distributable earnings: |
|
|
|
|
|
|
|
|
|
|
|
| |
Undistributed tax exempt income . . . . . . . . . . . . . . . . | $ | 106,496 | $ | 1,091,847 | $ | 457,378 |
|
|
|
|
|
|
|
|
| Franklin |
| Franklin |
| Franklin |
|
| Kentucky |
| Louisiana |
| Maryland |
|
| Tax-Free |
| Tax-Free |
| Tax-Free |
| Income Fund | Income Fund | Income Fund | |||
|
|
|
| |||
Cost of investments . . . . . . . . . . . . . . . . . . . . . . . . . | $141,129,082 | $366,133,733 | $398,015,394 | |||
|
|
|
|
|
|
|
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . | $ | 10,373,799 | $ | 32,875,263 | $ | 33,594,854 |
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . |
| (361) |
| (1,464,709) |
| (2,262,418) |
|
|
|
|
|
|
|
Net unrealized appreciation (depreciation) . . . . . . . . . | $ | 10,373,438 | $ | 31,410,554 | $ | 31,332,436 |
Distributable earnings: |
|
|
|
|
|
|
|
|
|
|
|
| |
Undistributed tax exempt income . . . . . . . . . . . . . . . . | $ | 29,276 | $ | 350,398 | $ | 565,899 |
|
|
|
|
|
|
|
|
| Franklin |
| Franklin |
| Franklin |
|
| Missouri | North Carolina |
| Virginia | |
|
| Tax-Free |
| Tax-Free |
| Tax-Free |
| Income Fund | Income Fund | Income Fund | |||
|
|
|
| |||
Cost of investments . . . . . . . . . . . . . . . . . . . . . . . . . | $975,102,747 | $819,205,457 | $603,691,112 | |||
|
|
|
|
|
|
|
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . | $ | 75,207,995 | $ | 57,179,054 | $ | 44,574,152 |
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . |
| (5,653,998) |
| (2,216,433) |
| (3,040,024) |
|
|
|
|
|
|
|
Net unrealized appreciation (depreciation) . . . . . . . . . | $ | 69,553,997 | $ | 54,962,621 | $ | 41,534,128 |
Distributable earnings: |
|
|
|
|
|
|
|
|
|
|
|
| |
Undistributed tax exempt income . . . . . . . . . . . . . . . . | $ | 1,720,567 | $ | 1,498,892 | $ | 777,571 |
|
|
|
|
|
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of defaulted securities, bond discounts and premiums and bond workout expenditures.
|
|
|
|
170 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the year ended February 29, 2020, were as follows:
| Franklin | Franklin | Franklin | |
| Alabama | Florida | Georgia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $11,527,940 | $51,606,934 | $63,156,992 |
|
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $12,785,590 | $69,838,351 | $60,389,004 |
|
| Franklin | Franklin | Franklin | |
| Kentucky | Louisiana | Maryland | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
|
|
|
|
|
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $19,500,929 | $38,681,180 | $37,323,934 |
|
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $19,692,135 | $18,365,088 | $30,743,355 |
|
| Franklin | Franklin | Franklin | |
| Missouri | North Carolina | Virginia | |
| Tax-Free | Tax-Free | Tax-Free | |
| Income Fund | Income Fund | Income Fund | |
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $169,345,116 | $146,400,243 | $126,836,624 |
|
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $145,288,416 | $125,928,288 | $ 87,853,040 |
|
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 February 29, 2020, the aggregate value of these securities was as follows:
|
| Percentage of | |
| Value | Net Assets |
|
Franklin Georgia Tax-Free Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 4,006,295 | 0.8% | |
Franklin Louisiana Tax-Free Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5,168,062 | 1.3% | |
Franklin Maryland Tax-Free Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,025,000 | 1.8% | |
Franklin Missouri Tax-Free Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 19,534,700 | 1.9% | |
Franklin North Carolina Tax-Free Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8,012,500 | 0.9% | |
Franklin Virginia Tax-Free Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10,910,000 | 1.7% |
|
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
franklintempleton.com | Annual Report | 171 |
F R A N K L IN TAX - FREE TRUS T
NOTE S TO FINANCIA L STATEMEN T S
8. Concentration of Risk (continued)
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 5, 2021. 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 year ended February 29, 2020, 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
•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 February 29, 2020, 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, except for the following:
Subsequent to February 29, 2020, there has been a global outbreak of a novel coronavirus disease (COVID-19), which the World Health Organization has declared a pandemic. Unexpected events like COVID-19 can cause adverse effects on many companies, sectors, nations, regions and the market in general, in ways that cannot be foreseen. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
|
|
|
|
172 | Annual Report | franklintempleton.com |
FRANKL IN TAX-FREE TRUS T
NOTE S TO FINANCIA L STAT EMEN TS
Abbreviations
Selected Portfolio
AGMC | Assured Guaranty Municipal Corp. |
AMBAC | American Municipal Bond Assurance Corp. |
BAM | Build America Mutual Assurance Co. |
CDA | Community Development Authority/Agency |
COP | Certificate of Participation |
CSD | Central School District |
EDA | Economic Development Authority |
EDC | Economic Development Corp. |
EDR | Economic Development Revenue |
ETM | Escrow to Maturity |
FGIC | Financial Guaranty Insurance Co. |
FICO | Financing Corp. |
GNMA | Government National Mortgage Association |
GO | General Obligation |
HDA | Housing Development Authority/Agency |
HFA | Housing Finance Authority/Agency |
HFAR | Housing Finance Authority Revenue |
IDA | Industrial Development Authority/Agency |
IDAR | Industrial Development Authority Revenue |
IDB | Industrial Development Bond/Board |
IDBR | Industrial Development Board Revenue |
LOC | Letter of Credit |
MBS | Mortgage-Backed Security |
MFHR | Multi-Family Housing Revenue |
NATL | National Public Financial Guarantee Corp. |
PBA | Public Building Authority |
PCFA | Pollution Control Financing Authority |
PCR | Pollution Control Revenue |
PFAR | Public Financing Authority Revenue |
RDA | Redevelopment Agency/Authority |
RDAR | Redevelopment Agency Revenue |
SFM | Single Family Mortgage |
SFMR | Single Family Mortgage Revenue |
SPA | Standby Purchase Agreement |
SRF | State Revolving Fund |
XLCA | XL Capital Assurance |
franklintempleton.com | Annual Report | 173 |
F R A N K L IN TAX - FREE TRUS T
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Tax-Free Trust and Shareholders of 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, Franklin Maryland Tax-Free Income Fund, Franklin Missouri Tax-Free Income Fund, Franklin North Carolina Tax-Free Income Fund and Franklin Virginia Tax-Free Income Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the statements of investments, of 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, Franklin Maryland Tax-Free Income Fund, Franklin Missouri Tax-Free Income Fund, Franklin North Carolina Tax-Free Income Fund and Franklin Virginia Tax-Free Income Fund (the "Funds") as of February 29, 2020, the related statements of operations for the year ended February 29, 2020, the statements of changes in net assets for each of the two years in the period ended February 29, 2020, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of February 29, 2020, the results of each of their operations for the year then ended, the changes in each of their
net assets for each of the two years in the period ended February 29, 2020 and each of the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds' financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 29, 2020 by correspon- dence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
San Francisco, California
April 16, 2020
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
|
|
|
|
174 | Annual Report | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Tax Information (unaudited)
Under Section 852(b)(5)(A) of the Internal Revenue Code, the Funds hereby report 100% of the distributions paid from net investment income as exempt-interest dividends for the fiscal year ended February 29, 2020. A portion of the Funds' exempt-interest dividends may be subject to the federal alternative minimum tax. By mid-February 2021, shareholders will be notified of amounts for use in preparing their 2020 income tax returns.
franklintempleton.com | Annual Report | 175 |
F R A N K L IN TAX - FREE TRUS T
Board Members and Officers
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton Investments fund complex, are shown below. Generally, each board member serves until that person's successor is elected and qualified.
Independent Board Members
|
|
| Number of Portfolios in |
|
Name, Year of Birth |
| Length of | Fund Complex Overseen | Other Directorships Held |
and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
|
|
|
|
|
Harris J. Ashton (1932) | Trustee | Since 1984 | 131 | Bar-S Foods (meat packing company) |
One Franklin Parkway |
|
|
| (1981-2010). |
San Mateo, CA 94403-1906 |
|
|
|
|
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998).
Terrence J. Checki (1945) | Trustee | Since 2017 | 110 | Hess Corporation (exploration of oil |
One Franklin Parkway |
|
|
| and gas) (2014-present). |
San Mateo, CA 94403-1906 |
|
|
|
|
Principal Occupation During at Least the Past 5 Years:
Member of the Council on Foreign Relations (1996-present); Member of the National Committee on U.S.-China Relations (1999-present); member of the Board of Trustees of the Economic Club of New York (2013-present); member of the Board of Trustees of the Foreign Policy Association (2005-present) and member of various other boards of trustees and advisory boards; and formerly, Executive Vice President of the Federal Reserve Bank of New York and Head of its Emerging Markets and Internal Affairs Group and Member of Management Committee (1995-2014); and Visiting Fellow at the Council on Foreign Relations (2014).
Mary C. Choksi (1950) | Trustee | Since 2014 | 131 | Avis Budget Group Inc. (car rental) |
One Franklin Parkway |
|
|
| (2007-present), Omnicom Group Inc. |
San Mateo, CA 94403-1906 |
|
|
| (advertising and marketing |
|
|
|
| communications services) |
(2011-present) and White Mountains Insurance Group, Ltd. (holding company) (2017-present).
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Founder and Senior Advisor, Strategic Investment Group (investment management group) (2015-2017); Founding Partner and Senior Managing Director, Strategic Investment Group (1987–2015); Founding Partner and Managing Director, Emerging Markets Management LLC (investment management firm) (1987-2011); and Loan Officer/Senior Loan Officer/Senior Pension Investment Officer, World Bank Group (international financial institution) (1977-1987).
Edith E. Holiday (1952) | Lead | Trustee since 1998 131 | Hess Corporation (exploration of oil |
One Franklin Parkway | Independent | Lead | and gas) (1993-present), Canadian |
San Mateo, CA 94403-1906 | Trustee | Independent | National Railway (railroad) |
|
| Trustee since | (2001-present), White Mountains |
|
| March 2019 | Insurance Group, Ltd. (holding |
|
|
| company) (2004-present), Santander |
|
|
| Consumer USA Holdings, Inc. |
|
|
| (consumer finance) (2016-present), |
|
|
| RTI International Metals, Inc. |
|
|
| (manufacture and distribution of |
|
|
| titanium) (1999-2015) and H.J. Heinz |
|
|
| Company (processed foods and allied |
|
|
| products) (1994-2013). |
Principal Occupation During at Least the Past 5 Years:
Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant Secretary for Public Affairs and Public Liaison–United States Treasury Department (1988-1989).
|
|
|
|
176 | Annual Report | franklintempleton.com |
F R A N K L IN TA X - FREE TRUS T
Independent Board Members (continued)
|
|
| Number of Portfolios in |
|
Name, Year of Birth |
| Length of | Fund Complex Overseen | Other Directorships Held |
and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
|
|
|
|
|
J. Michael Luttig (1954) | Trustee | Since 2009 | 131 | Boeing Capital Corporation (aircraft |
One Franklin Parkway |
|
|
| financing) (2006-2010). |
San Mateo, CA 94403-1906 |
|
|
|
|
Principal Occupation During at Least the Past 5 Years:
Private investor; and formerly, Counselor and Senior Advisor to the Chairman, CEO, and Board of Directors, of The Boeing Company (aerospace company), and member of the Executive Council (May 2019-January 1, 2020); Executive Vice President, General Counsel and member of the Executive Council, The Boeing Company (2006-2019); and Federal Appeals Court Judge, United States Court of Appeals for the Fourth Circuit (1991-2006).
Larry D. Thompson (1945) | Trustee | Since 2007 | 131 | The Southern Company (energy |
One Franklin Parkway |
|
|
| company) (2014-present; previously |
San Mateo, CA 94403-1906 |
|
|
| 2010-2012), Graham Holdings |
|
|
|
| Company (education and media |
|
|
|
| organization) (2011-present) and |
|
|
|
| Cbeyond, Inc. (business |
|
|
|
| communications provider) |
|
|
|
| (2010-2012). |
Principal Occupation During at Least the Past 5 Years:
Director of various companies; Counsel, Finch McCranie, LLP (law firm) (2015-present); Independent Compliance Monitor and Auditor, Volkswagen AG (manufacturer of automobiles and commercial vehicles) (2017-present); John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; previously 2011-2012); and formerly, Executive Vice President - Government Affairs, General Counsel and Corporate Secretary, PepsiCo, Inc. (consumer products) (2012-2014); Senior Vice President - Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and Deputy Attorney General, U.S. Department of Justice (2001-2003).
Interested Board Members and Officers
|
|
| Number of Portfolios in |
|
Name, Year of Birth |
| Length of | Fund Complex Overseen | Other Directorships Held |
and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
|
|
|
|
|
**Gregory E. Johnson (1961) | Trustee | Since 2007 | 142 | None |
One Franklin Parkway |
|
|
|
|
San Mateo, CA 94403-1906 |
|
|
|
|
Principal Occupation During at Least the Past 5 Years:
Executive Chairman, Chairman of the Board and Director, Franklin Resources, Inc.; officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 39 of the investment companies in Franklin Templeton; Vice Chairman, Investment Company Institute; and formerly, Chief Executive Officer (2013-2020) and President (1994-2015), Franklin Resources, Inc.
**Rupert H. Johnson, Jr. (1940) | Chairman of | Since 2013 | 131 | None |
One Franklin Parkway | the Board and |
|
|
|
San Mateo, CA 94403-1906 | Trustee |
|
|
|
Principal Occupation During at Least the Past 5 Years:
Director (Vice Chairman), Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 37 of the investment companies in Franklin Templeton.
Sheila Amoroso (1959) | Vice President Since 1999 | Not Applicable | Not Applicable |
One Franklin Parkway |
|
|
|
San Mateo, CA 94403-1906 |
|
|
|
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Advisers, Inc.; and officer of seven of the investment companies in Franklin Templeton.
franklintempleton.com | Annual Report | 177 |
F R A N K L IN TAX - FREE TRUS T
Interested Board Members and Officers (continued)
|
|
| Number of Portfolios in |
|
Name, Year of Birth |
| Length of | Fund Complex Overseen | Other Directorships Held |
and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
|
|
|
|
|
Alison E. Baur (1964) | Vice President | Since 2012 | Not Applicable | Not Applicable |
One Franklin Parkway |
|
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|
|
San Mateo, CA 94403-1906 |
|
|
|
|
Principal Occupation During at Least the Past 5 Years:
Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton.
Breda M. Beckerle (1958) | Interim Chief | Since January | Not Applicable | Not Applicable |
280 Park Avenue | Compliance | 2020 |
|
|
New York, NY 10017 | Officer |
|
|
|
Principal Occupation During at Least the Past 5 Years:
Chief Compliance Officer, Fiduciary Investment Management International, Inc., Franklin Advisers, Inc., Franklin Advisory Services, LLC, Franklin Mutual Advisers, LLC, Franklin Templeton Institutional, LLC; and officer of 41 of the investment companies in Franklin Templeton.
Sonal Desai, Ph.D. (1963) | President and Since 2018 | Not Applicable | Not Applicable |
One Franklin Parkway | Chief Executive |
|
|
San Mateo, CA 94403-1906 | Officer – |
|
|
| Investment |
|
|
| Management |
|
|
Principal Occupation During at Least the Past 5 Years:
Director and Executive Vice President, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC; and officer of 17 of the investment companies in Franklin Templeton.
Gaston Gardey (1967) | Treasurer, Chief Since 2009 | Not Applicable | Not Applicable |
One Franklin Parkway | Financial |
|
|
San Mateo, CA 94403-1906 | Officer, and |
|
|
| Chief |
|
|
| Accounting |
|
|
| Officer |
|
|
Principal Occupation During at Least the Past 5 Years:
Treasurer, U.S. Fund Administration & Reporting and officer of 24 of the investment companies in Franklin Templeton.
Steven J. Gray (1955) | Vice President | Vice President | Not Applicable | Not Applicable |
One Franklin Parkway | and Co- | since 2009 and |
|
|
San Mateo, CA 94403-1906 | Secretary | Co-Secretary |
|
|
|
| since |
|
|
|
| 2019 |
|
|
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton; Vice President, Franklin Templeton Distributors, Inc. and FASA, LLC; and officer of 41 of the investment companies in Franklin Templeton.
Matthew T. Hinkle (1971) | Chief Executive Since 2017 | Not Applicable | Not Applicable |
One Franklin Parkway | Officer – |
|
|
San Mateo, CA 94403-1906 | Finance and |
|
|
| Administration |
|
|
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Templeton Services, LLC; officer of 41 of the investment companies in Franklin Templeton; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017).
|
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F R A N K L IN TA X - FREE TRUS T
Interested Board Members and Officers (continued)
|
|
| Number of Portfolios in |
|
Name, Year of Birth |
| Length of | Fund Complex Overseen | Other Directorships Held |
and Address | Position | Time Served | by Board Member* | During at Least the Past 5 Years |
|
|
|
|
|
Robert Lim (1948) | Vice President | Since 2016 | Not Applicable | Not Applicable |
One Franklin Parkway | – AML |
|
|
|
San Mateo, CA 94403-1906 | Compliance |
|
|
|
Principal Occupation During at Least the Past 5 Years:
Vice President, Franklin Templeton Companies, LLC; Chief Compliance Officer, Franklin Templeton Distributors, Inc. and Franklin Templeton Investor Services, LLC; and officer of 41 of the investment companies in Franklin Templeton.
|
| Not Applicable |
|
|
| Not Applicable |
|
Navid J. Tofigh (1972) | Vice President Since 2015 | Not Applicable | Not Applicable |
One Franklin Parkway |
|
|
|
San Mateo, CA 94403-1906 |
|
|
|
Principal Occupation During at Least the Past 5 Years:
Associate General Counsel and officer of 41 of the investment companies in Franklin Templeton.
Craig S. Tyle (1960) | Vice President Since 2005 | Not Applicable | Not Applicable |
One Franklin Parkway |
|
|
|
San Mateo, CA 94403-1906 |
|
|
|
Principal Occupation During at Least the Past 5 Years:
General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton.
Thomas Walsh (1961) | Vice President Since 1999 | Not Applicable | Not Applicable |
One Franklin Parkway |
|
|
|
San Mateo, CA 94403-1906 |
|
|
|
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Advisers, Inc.; and officer of seven of the investment companies in Franklin Templeton.
Lori A. Weber (1964) | Vice President | Vice President | Not Applicable | Not Applicable |
300 S.E. 2nd Street | and Co- | since 2011 and |
|
|
Fort Lauderdale, FL 33301-1923 | Secretary | Co-Secretary |
|
|
|
| since |
|
|
|
| 2019 |
|
|
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of 41 of the investment companies in Franklin Templeton.
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund's investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director and major shareholder of Resources.
Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson. Note 2: Effective March 12, 2019, John B. Wilson ceased to be a
trustee of the Trust. Note 3: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund's Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund's Board has determined that there is at least one such financial expert on the Audit Committee and has designated Mary C. Choksi as its audit committee financial expert. The Board believes that Ms.
Choksi qualifies as such an expert in view of her extensive business background and experience. She currently serves as a director of Avis Budget Group, Inc. (2007-present) and formerly, Founder and Senior Advisor, Strategic Investment Group (1987 to 2017). Ms. Choksi has been a Member of the
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F R A N K L IN TAX - FREE TRUST
Fund's Audit Committee since 2014. As a result of such background and experience, the Board believes that Ms. Choksi has acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Ms. Choksi is an independent Board member as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
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Shareholder Information
Board Approval of Investment
Management Agreements
FRANKLIN TAX-FREE TRUST
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
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
(each a Fund)
At an in-person meeting held on February 25, 2020 (Meeting), the Board of Trustees (Board) of Franklin Tax-Free Trust (Trust), including a majority of the trustees who are not "interested persons" as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisers, Inc. (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from the Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited
F R A N K L IN TA X - FREE TRUS T
to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of each Fund; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and
(v)whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board's determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager, as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses and shareholder services; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management's explanation of differences among accounts where relevant. The Board also reviewed and considered an annual report on payments made by Franklin Templeton (FT) or the Funds to financial intermediaries, as well as a memorandum relating to third-party servicing arrangements, which included discussion of the changing distribution landscape for the Funds. The Board noted management's continuing efforts and expenditures in establishing effective business continuity plans and developing strategies to address areas of heightened concern in the mutual fund industry, such as cybersecurity and liquidity risk management.
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is
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FRANKL IN TAX-FREE TRUST SHAREHOLDE R INFORMATIO N
part of the FT family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager's parent, and its commitment to the mutual fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT's commitment to enhancing services and controlling costs, as reflected in its plan to outsource certain administrative functions, and growth opportunities, as evidenced by its upcoming acquisition of the Legg Mason companies. The Board acknowledged the change in leadership at FRI and the opportunity to hear from Jennifer Johnson, President and Chief Executive Officer of FRI, about goals she has for the company that will benefit the Funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund over various time periods ended December 31, 2019. The Board considered the performance returns for each Fund in comparison to the performance returns of mutual funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. A summary of each Fund's performance results is below.
Franklin Alabama Tax-Free Income Fund and Franklin Georgia Tax-Free Income Fund - The Performance Universe for each Fund included the Fund and all retail and institutional "other states" municipal debt funds. The Board noted that the Funds' annualized income returns for the one-, three-, five- and 10-year periods were above the medians of their respective Performance Universes. The Board also noted that the Funds' annualized total returns for the three- and five- year periods were below the medians of their respective Performance Universes, but for the one-and 10-year periods were above the medians of their respective Performance Universes. Given the Funds' income-oriented
investment objectives, the Board concluded that the Funds' performance was satisfactory.
Franklin Florida Tax-Free Income Fund and Franklin North Carolina Tax-Free Income Fund - The Performance Universe for each Fund included the Fund and all retail and institutional "other states" municipal debt funds. The Board noted that the Funds' annualized income returns for the
one-, three-, five- and 10-year periods were above the medians of their respective Performance Universes. The Board also noted that the Funds' annualized total returns for the one-, three-, five- and 10-year periods were below the medians of their respective Performance Universes. Given the Funds' income-oriented investment objectives, the Board concluded that the Funds' performance was satisfactory.
Franklin Kentucky Tax-Free Income Fund - The Performance Universe for the Fund included the Fund and all retail and institutional "other states" municipal debt funds. The Board noted that the Fund's annualized income return for the one-, three-, five- and 10-year periods was above the median of its Performance Universe. The Board also noted that the Fund's annualized total return for the one-, three- and five-year periods was below the median of its Performance Universe, but for the 10-year period was above the median of its Performance Universe. Given the Fund's income-oriented investment objective, the Board concluded that the Fund's performance was satisfactory.
Franklin Louisiana Tax-Free Income Fund - The Perfor- mance Universe for the Fund included the Fund and all retail and institutional "other states" municipal debt funds. The Board noted that the Fund's annualized income return and annualized total return for the one-, three-, five- and 10-year periods were above the medians of its Performance Universe. The Board concluded that the Fund's performance was satisfactory.
Franklin Maryland Tax-Free Income Fund - The Performance Universe for the Fund included the Fund and all retail and institutional Maryland municipal debt funds. The Board noted that the Fund's annualized income return for the one-, three-, five- and 10-year periods was above the median of its Performance Universe. The Board also noted that the Fund's annualized total return for the three- and five- year periods was below the median of its Performance Universe, but for the one- and 10-year periods was equal to the median of its Performance Universe. Given the Fund's income-oriented investment objective, the Board concluded that the Fund's performance was satisfactory.
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FRANKL IN TAX-FREE TRUS T SHAREHOLDE R INFORMATIO N
Franklin Missouri Tax-Free Income Fund - The Performance Universe for the Fund included the Fund and all retail and institutional "other states" municipal debt funds. The Board noted that the Fund's annualized income return for the one-, three-, five- and 10-year periods was above the median of its Performance Universe. The Board also noted that the Fund's annualized total return for the three-year period was below the median of its Performance Universe, but for the one-, five- and 10-year periods was above the median of its Performance Universe. The Board concluded that the Fund's performance was satisfactory.
Franklin Virginia Tax-Free Income Fund - The Performance Universe for the Fund included the Fund and all retail and institutional Virginia municipal debt funds. The Board noted that the Fund's annualized income return for the one-, three-, five- and 10-year periods was above the median of its Performance Universe. The Board also noted that the Fund's annualized total return for the one-, three-, and five-year periods was below the median of its Performance Universe, but for the 10-year period was equal to the median of its Performance Universe. Given the Fund's income-oriented investment objective, the Board concluded that the Fund's performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund's actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board also noted the quarterly and annual reports it receives on all marketing support payments made by FT to financial intermediaries. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other mutual funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund's most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis
conducted by Broadridge to be an appropriate measure of
comparative fees and expenses. The Broadridge Management Rate includes administrative charges, and the actual total expense ratio, for comparative consistency, was shown for Class A1 for each Fund and for Class A shares for each other fund in the applicable Expense Group. The Board received a description of the methodology used by Broadridge to select the mutual funds included in an Expense Group.
Franklin Alabama Tax-Free Income Fund, Franklin Florida Tax-Free Income Fund, Franklin Georgia Tax-Free Income Fund and Franklin Louisiana Tax-Free Income Fund - The Expense Group for each Fund included the Fund and nine other "other states" municipal debt funds. The Board noted that the Management Rates for the Funds were equal to the medians of their respective Expense Groups, but their actual total expense ratios were below the medians of their respective Expense Groups. The Board concluded that the Management Rates charged to the Funds are reasonable.
Franklin Kentucky Tax-Free Income Fund - The Expense Group for this Fund included the Fund and nine other "other states" municipal debt funds. The Board noted that the Management Rate and actual total expense ratio for the Fund were slightly above the medians of its Expense Group. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin Maryland Tax-Free Income Fund - The Expense Group for the Fund included the Fund, one Virginia municipal debt fund, one Massachusetts municipal debt fund, six New York municipal debt funds, four California municipal debt funds, two Pennsylvania municipal debt funds, one New Jersey municipal debt fund and two "other states" municipal debt funds. The Board noted that the Management Rate for the Fund was above the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board concluded that the Management Rate charged to the Fund is reasonable. In doing so, the Board noted that the Fund's Management Rate was less than one basis point higher than the median of its Expense Group.
Franklin Missouri Tax-Free Income Fund, Franklin North Carolina Tax-Free Income Fund and Franklin Virginia Tax-Free Income Fund - The Expense Group for each of the Franklin Missouri Tax-Free Income Fund and Franklin North Carolina Tax-Free Income Fund included the Fund and nine other "other states" municipal debt funds. The Franklin Virginia Tax-Free Income Fund included the Fund, two other Virginia municipal debt funds, two Minnesota municipal debt
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FRANKL IN TAX-FREE TRUST SHAREHOLDE R INFORMATIO N
funds, one Massachusetts municipal debt fund, seven New York municipal debt funds, one California municipal debt fund, two Pennsylvania municipal debt funds, one New Jersey municipal debt fund and one "other states" municipal debt fund. The Board noted that the Management Rates and actual total expense ratios for the Funds were below the medians of their respective Expense Groups. The Board concluded that the Management Rates charged to the Funds are reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis provided by the Manager that addresses the overall profitability of FT's US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2019, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds' profitability report presentations from prior years. Additionally, PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, was engaged by the Manager to review and assess the allocation methodologies to be used solely by the Funds' Board with respect to the profitability analysis.
The Board noted management's belief that costs incurred in establishing the infrastructure necessary for the type of mutual fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered the initiative currently underway to outsource certain operations, which effort would require considerable up front expenditures by the Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management's expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent SEC and other regulatory requirements, notably in the area of cybersecurity protections.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund's management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints, which operate generally to share any economies of scale with a Fund's shareholders by reducing the Fund's effective management fees as the Fund grows in size. The Board considered the Manager's view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board noted that the Franklin Alabama Tax-Free Income Fund and Franklin Kentucky Tax-Free Income Fund do not have asset sizes that would likely enable the Funds to achieve economies of scale and that each other Fund had experienced a decrease in assets and would not be expected to demonstrate additional economies of scale in the near term. The Board concluded that to the extent economies of scale may be realized by the Manager and its affiliates, each Fund's management fee structure provided a sharing of benefits with the Fund and its shareholders as the Fund grows.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
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
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FRANKL IN TAX-FREE TRUS T
SHAREHOLDE R INFORMATIO N
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 recent 12-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 Form N-PORT. Shareholders may view the filed Form N-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.
Householding of Reports and
Prospectuses
You will receive each Fund's financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called "house- holding," will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.
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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.
Annual Report and Shareholder Letter
Franklin Tax-Free Trust
Investment Manager | Distributor | Shareholder Services |
Franklin Advisers, Inc. | Franklin Templeton Distributors, Inc. | (800) 632-2301 |
| (800) DIAL BEN® / 342-5236 |
|
| franklintempleton.com |
|
© 2020 Franklin Templeton Investments. All rights reserved. |
| TF2 A 04/20 |
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 she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. Principal Accountant Fees and Services.
(a)Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $833,662 for the fiscal year ended February 29, 2020 and $843,959 for the fiscal year ended February 28, 2019.
(b)Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph
(a) of Item 4.
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.
(c)Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $10,000 for the fiscal year ended February 29, 2020 and $15,000 for the fiscal year ended February 28, 2019. The services for which these fees were paid included professional fees in connection with tax treatment of equipment lease transactions, professional fees in connection with an Indonesia withholding tax refund claim and tax consulting services related to the operating agreement and term sheet for the launch of a new fund.
(d)All Other Fees
There were no fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant, other than the services reported in paragraphs (a)-(c) of Item 4 were $10,032 for the fiscal year ended February 29, 2020 and $9,865 for the fiscal year ended February 28, 2019. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under
common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $190,144 for the fiscal year ended February 29, 2020 and $16,500 for the fiscal year ended February 28, 2019. The services for which these fees were paid included professional fees in connection with determining the feasibility of a U.S. direct lending structure, valuation services related to a fair value engagement, for the issuance of an Auditor's Certificate for South Korean regulatory shareholders disclosures, benchmarking services in connection with the ICI TA Survey and assets under management certification.
(e)(1) The registrant's audit committee is directly responsible for approving the services to be provided by the auditors, including:
(i)pre-approval of all audit and audit related services;
(ii)pre-approval of all non-audit related services to be provided to the Fund by the auditors;
(iii)pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant's investment adviser or to any entity that controls, is controlled by or is under common control with the registrant's investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
(iv)establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs
(ii)and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of
(ii)through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(e)(2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
(f)No disclosures are required by this Item 4(f).
(g)The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $210,176 for the fiscal year ended February 29, 2020 and $41,365 for the fiscal year ended February 28, 2019.
(h)The registrant's audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants. | N/A | |
Item 6. | Schedule of Investments. | N/A |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed- | |
End Management Investment Companies. | N/A | |
Item 8. | Portfolio Managers of Closed-End Management Investment | |
Companies. | N/A | |
Item 9. | Purchases of Equity Securities by Closed-End Management | |
Investment Company and Affiliated Purchasers. | N/A |
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures.
(a)Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective.
(b)Changes in Internal Controls. There have been no changes in the Registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-end
Management Investment Company. | N/A |
Item 13. Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FRANKLIN TAX-FREE TRUST
By S\MATTHEW T. HINKLE_______________________
Matthew T. Hinkle
Chief Executive Officer – Finance and Administration
Date April 30, 2020
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 April 30, 2020
By S\GASTON GARDEY______________________
Gaston Gardey
Chief Financial Officer and Chief Accounting Officer
Date April 30, 2020