MESSAGE FROM THE CHAIRMAN
Table of Contents Page
Message from the Chairman .......................... 1
Manager's Discussion ............................... 4
Fund Reports
Franklin Arizona Tax-Free
Income Fund ........................................ 8
Franklin Colorado Tax-Free
Income Fund ........................................ 12
Franklin Connecticut Tax-Free
Income Fund ........................................ 16
Franklin Indiana Tax-Free
Income Fund ........................................ 20
Franklin New Jersey Tax-Free
Income Fund ........................................ 23
Franklin Oregon Tax-Free
Income Fund ........................................ 27
Franklin Pennsylvania Tax-Free
Income Fund ........................................ 31
Franklin Puerto Rico Tax-Free
Income Fund ........................................ 35
Franklin Federal Intermediate-Term
Tax-Free Income Fund ............................... 39
Franklin High Yield Tax-Free
Income Fund ........................................ 42
Statement of Investments ........................... 46
Financial Statements ...............................108
Notes to Financial Statements ......................116
October 16, 1995
Dear Shareholders:
It's a pleasure to bring you the semi-annual report of the Franklin Tax-Free
Trust for the period ended August 31, 1995.
To date, 1995 has been a welcome change from the economic uncertainty of 1994
with stock and bond markets enjoying strong performances. In February, the Dow
Jones Industrial Average(R) broke the 4,000 mark for the first time, and
finished the period above 4,600. As of August 31, 1995, the bond market, as
measured by the Lehman Brothers Aggregate Bond Index, rose 7.44% to $103.78 from
$96.59 on December 30, 1994.
Of more importance to Franklin Tax-Free Trust shareholders is the strength of
the municipal bond market in 1995. Although a municipal bond price rally was
sidetracked in early December by the municipal bankruptcy filing of Orange
County, California, the municipal market has strengthened in 1995. Of course,
there's no guarantee that this market will continue to rise.
At this time, we think yields from municipal securities are currently very
attractive relative to yields available from U.S. Treasuries and other
high-quality, taxable fixed-income securities. For instance, municipal bonds --
as represented by the Bond Buyer 40 -- demonstrated an average yield of 6.11% on
August 31, 1995. For investors in the maximum federal income tax bracket of
39.6%, this tax-free yield equals a taxable yield of 10.12%, whereas the average
20-year U.S. Treasury bond offered a taxable yield of 6.65% on August 31, 1995.1
We maintain a very conservative approach in seeking to achieve each fund's
objective. We strive to maximize shareholders' current tax-free income while
attempting to minimize risk. Our strategy is simple: we purchase securities
based on their income producing potential and avoid short-term trading in an
effort to capture taxable capital gains. In addition, we also purchase bonds as
close to par, or face value, as possible in the current marketplace. This
strategy has a number of beneficial side effects, including fairly low portfolio
turnover rates resulting in lower expenses. This approach also tends to protect
the funds from extreme price volatility. And, while our investment strategy
focuses on income rather than capital growth, we feel that the positive
performance of the municipal bond market in 1995 has enabled the funds to report
impressive total returns for the six-month reporting period.
There has been a tremendous amount of discussion in the press regarding tax
reform issues, including a flat tax proposal, a consumption tax, a national
sales tax and a "Super" IRA. Each of these proposals pose underlying questions
- -- Will there be any allowed deductions? Will I lose the benefit of investing in
tax-free municipal bonds? As you can imagine, a number of details need to be
fully considered. While it is probably too early to draw any conclusions on how
any of the proposed tax reform plans could impact the municipal bond market, we
understand that this topic raises important concerns. Our interview with Tom
Kenny, Director of Franklin's Municipal Bond Department, on page 4 should answer
some of your questions.
As you know, investment markets experience volatility, which is a normal part of
investing. That's why we've always encouraged our shareholders to focus on their
long-term investment goals. History has shown that, over the long term, stocks
and bonds have delivered impressive results.2 By concentrating on long-term
investment goals, you need not be unduly concerned with short-term market
fluctuations.
1. Source: Micropal.
You can also help minimize the effects of market fluctuations by diversifying
your investments. Mutual funds offer a level of diversification that would be
almost impossible for individual investors to achieve on their own. They also
provide full-time, professional management, and Franklin's Municipal Bond
Research Department is one of the largest in the industry.3 Our analysts
frequently make site visits to obtain invaluable first-hand information about
issuers and specific municipal projects. If you have questions, we would welcome
a chance to answer them.
As always, we appreciate your trust and support, and look forward to serving you
in the years to come.
Sincerely,
Charles B. Johnson
Chairman
2. Past performance cannot guarantee future results.
3. Source: Research and Ratings Review, Vol. II. Issue 8, Novem- ber 14, 1994.
Franklin's municipal research team ranks second out of 1,000 investment advisory
firms, in terms of municipal bond analysts, in a survey by TMS Holdings, Inc.
Professional Management
We remain conservative in our management of the Trust's funds. As always, we
purchase only investment-grade bonds for our funds; that is, bonds whose credit
quality ratings at the time of purchase fell within Standard & Poor's or Moody's
four highest categories, or were judged to be of equal quality by the funds'
managers. In addition, we evaluate each issue on an individual basis, favoring
highly rated "essential service" bonds. These securities tend to have a more
reliable income stream generated from hospitals, utilities, and transportation
projects, to name a few. As a result, these bonds tend to be less affected by
budgetary and political changes, and are believed to be very attractive in a
municipal cost-cutting environment. Please keep in mind, however, that the
principal value of each fund's holdings, as well as the price of its shares,
will fluctuate with market conditions.
MANAGER'S DISCUSSION
Tom Kenny, director of Franklin's Municipal Bond Department, discusses a number
of current topics, including tax reform, interest rates, and his outlook for the
municipal bond market.
FPO
Tom Kenny, Senior Vice President
Director, Franklin Municipal
Bond Department
Tom, there's been a lot of press lately on the possibility of tax reform -- in
particular, a flat tax. What proposals are being considered?
There are three different flat tax proposals being discussed. And, these are in
addition to a number of other tax reform proposals, such as a consumption tax, a
national sales tax and a "Super" IRA. Basically, tax reform is a hot topic right
now -- ever since President Clinton appeared on national TV in April after
filling out his tax forms and said, "You know, a flat tax doesn't sound so bad."
With numerous tax reform proposals being considered, do you think that one of
them is going to pass?
The support for tax reform seems to be waning in recent weeks as more details of
some of these proposals are released. Ten out of ten tax payers will tell you
that taxes are too high and the current system is too complicated. There is
tremendous support for simplification. But when people realize that they would
lose their mortgage deduction -- which could cause their home value to decline
by 15 - 20% -- or that the wealthy would receive a large tax cut while the
middle class would have to pay more taxes under a flat tax system, their opinion
may change. So, I feel there is support for simplification but not necessarily
for radical reform.
However, I think something will happen. There's such a movement behind change
that it's not just going to disappear. With the election coming up, you're going
to continue hearing about tax reform, you're going to read about it, you're
going to see it on TV through next year and into 1997. But I don't think
anything will actually happen until '97, at the earliest.
Has the possibility of tax reform affected the municipal bond market at all?
The possibility of major tax reform has depressed municipal bond prices relative
to other fixed-income investments during the past few months; however, since we
have experienced a strong bond market, it hasn't been that noticeable. The
market has already somewhat priced the potential impact of tax reform, which
makes municipal yields very attractive today.
Depending on the state you live in and your tax bracket, the after-tax
equivalent yield available can be a very attractive 10%. Also, supply is down
25% in 1995 from 1994, and over 50% versus 1993. At the same time, we are
experiencing a record amount of bonds that are being called or redeemed and for
the second consecutive year, more bonds will be taken out of the muni market
than issued.
What is that in dollar terms?
The market may see about $130 to $140 billion in new issuance this year,
compared to $162 billion last year and $290 billion the year before. So new
issuance is down dramatically.
Did rising interest rates have anything to do with that?
Sure, but there are other reasons as well. One, voters simply aren't approving
as many bond issues today. Two, many governors that were elected last fall are
trying to implement tax cuts; in effect, they're reducing budgets and there's
just not a lot of debt capacity for increased debt service. And three, a big
reason we saw such high issuance in 1993 was because lower interest rates
resulted in an increase in refunding and pre-refunding issues -- just as many
homeowners refinanced their mortgages in '93 to take advantage of lower rates.
But because of tax code changes in 1986, issuers of municipal bonds can only
refund or prerefund their bonds once. Those that could refund, did. As a result,
the potential inventory of refundable bonds is much lower than a few years ago.
How will these factors affect prices of muni bonds?
It should be positive. The supply/demand fundamentals of the municipal market
are, in my opinion, promising, and the market has already partially discounted
the threat of tax reform. Over the long term, muni prices should improve on a
relative basis. From a historical perspective, munis are cheap today. Investors
can take advantage of this by dollar-cost averaging.
Another topic that's been a concern during the past year has been the bankruptcy
of Orange County. What's been the long-term impact on the municipal bond market?
The biggest impact has been in investor perception. Historically, general
obligation bonds (those that are backed by the full faith and credit of the
issuer) have been perceived as the safest kind of municipal bond. But in a
bankruptcy situation, like in Orange County, the investments that are most
affected are general obligations. Revenue bonds, backed by dedicated revenue
streams -- such as those from airport authority, solid waste authority,
transportation and the like -- haven't really been impacted. Investors in
general have re-thought how they look at revenue bonds and general obligation
bonds.
We have also seen an increase in the use of bond insurance, especially in
California. This year, the percentage of insured bonds for the entire market is
approximately 44% of total issuance while in California, 52% of all issues
obtained insurance.
Is that a big increase?
For the muni industry overall, it has increased from 37%; in California, it has
increased from 32%. In my opinion, that's a big jump. As a result, insured bonds
have become less expensive to purchase relative to uninsured bonds simply
because of the increased supply. And we have taken advantage of that by buying
more insured bonds this year.
What about interest rates? Have changes in interest rates affected your buying
decisions?
No. We don't try to second guess the market in terms of where we think rates are
headed, or alter our fundamental approach because of economic changes. Many
portfolio managers attempt this in an effort to capture capital growth.
Our approach is very straight-forward. We seek safety and income. I don't think
shareholders want the volatility you might generate by chasing capital growth.
We don't want to be number one in total return one year, and number 100 the
next. We use a consistent, conservative, "plain vanilla" approach. We manage our
funds for tax-free income, and take a long-term approach. Over time, income will
drive total return. For example, as measured by the Lehman Brothers 20-Year
Municipal Bond Index, income has been responsible for over 99% of total return
of municipal bonds over the last five years.1 So, by investing for income, you
should generate good total return performance. We think our shareholders are
better served by using this consistent approach. Investors in the tax-free funds
want to maximize tax-free income.
1. Source: Lehman Brothers 20-Year Municipal Bond Index.
How much research do you do before you buy a bond?
It really depends on the quality and type of bond. Lower-rated and non-rated
bonds will typically require more credit analysis than higher-rated bonds. Since
we purchase over 95% of our portfolio holdings in the new issue market, we spend
a lot of time up front performing site visits, addressing legal issues, and
structuring the issue to meet our credit and portfolio requirements. We have 23
analysts who spend much of their time on new issues, but also monitoring these
issues after purchase.
What are Franklin's total holdings in municipal bonds?
We currently have approximately $41 billion in municipal bonds in 42 tax-free
funds. Franklin is the largest buyer of municipal bonds in the country.
Does that size give you any advantages?
Sure. We get the attention of issuers and underwriters and we try to capitalize
on that by encouraging them to visit us in San Mateo to discuss their issue.
This allows us to give our input on structuring a deal. They, of course, hope
that we buy their deal.
When you say input, does that commit you to purchasing?
No. You can have input from a structuring standpoint, the actual bond structure,
or you can have input from a pricing standpoint, in terms of coupons and
maturities, and all of that input can go to the underwriter of the issue without
any commitment on our part. But if they make those changes to meet our needs,
then we're more likely to buy it than if they don't. So it can be to everyone's
advantage. We end up with an issue that meets our needs in terms of credit,
price, coupon and maturity, and the issuer ends up with a marketable product.
Where do you see the municipal bond market going through the end of the year,
and through the first six months of 1996?
I'd say the muni market is going to remain stable. We're going to see more of
the same, probably through the election. I think uncertainty surrounding tax
reform is going to continue to hold down munis for a while longer. No matter
what happens to the bond market, the economy or interest rates, we'll do what
we've always done -- we'll do our homework, maximize tax-free income for our
shareholders, and maintain a long-term investment horizon.
Thanks, Tom.
It's been my pleasure.
FRANKLIN ARIZONA TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and Arizona
state personal income taxes through a diversified portfolio consisting primarily
of Arizona municipal bonds.*
During the first half of 1995, the education sector represented more than half
of the primary market issuance of Arizona municipal bonds. We participated in
the Glendale, Phoenix and Mesa school districts' issues, increasing our exposure
to the education sector by 1.6%, to 10.3% at the end of the reporting period.
Overall, municipal supply in Arizona declined 35.2% to $1.098 billion in the
first half of 1995 from $3.119 billion in the first half of 1994. Supply for the
remainder of the calendar year is likely to remain low, making Arizona municipal
bonds attractive investments.
GRAPHIC MATERIAL 1 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
+The ratings reflect Standard & Poor's or Moody's assessment of the
overall credit quality of the fund's portfolio, based primarily on the fund's
stated investment objectives. Non-rated bonds were judged to be of comparable
quality by the fund's managers. Ratings do not reflect the yield or market price
of the fund's shares, or approval by Standard & Poor's. Ratings are subject to
change.
Franklin Arizona Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Utilities 29.2%
Pre-refunded 23.7%
Education 10.3%
Hospitals 9.0%
Other Revenue 8.0%
Housing 6.2%
Transportation 6.0%
General Obligations 2.7%
Certificates of Participation 2.7%
Industria l0.8%
Miscellaneous 0.6%
Sales Tax 0.4%
Health Care 0.4%
For a complete list of portfolio holdings, please see page 46 of this report.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.
Performance Summary
Class I Shares
The Franklin Arizona Tax-Free Income Fund's Class I share price, as measured by
net asset value, increased to $11.32 on August 31, 1995, from $11.11 on February
28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 32.4 cents ($0.324) per share.**
We are pleased to report that the fund's monthly dividend was increased to 5.4
cents ($0.054) per share from 5.3 cents ($0.053), effective with the March 1995
distribution. Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.48%,
based on an annualization of the current monthly dividend of 5.4 cents ($0.054)
per share and the maximum offering price of $11.82 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maxi-mum combined
federal and Arizona state personal income tax bracket of 43.8%, you would have
to earn 9.75% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 2 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 11 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin Arizona Tax-Free Income Fund's Class II share price, as measured by
net asset value, increased to $11.36 on August 31, 1995, from $11.15 on its May
1, 1995 inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 17.8 cents ($0.178)
per share.** Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.02%,
based on an annualization of the current monthly dividend of 4.8 cents ($0.048)
per share and the maximum offering price of $11.47 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Arizona state personal income tax bracket of 43.8%, you would have
to earn 8.93% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 3 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 11 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin Arizona Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year (09/01/87) (05/01/95)
<S> <C> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares ............................................................... 7.31% 49.83% 86.69% --
Class II Shares .............................................................. -- -- -- 3.50%
Average Annual Total Return2
Class I Shares ............................................................... 2.72% 7.48% 7.52% --
Distribution Rate3 Taxable Equivalent Distribution Rate4
Class I Shares ............................ 5.48% Class I Shares .............................. 9.75%
Class II Shares ........................... 5.02% Class II Shares ............................. 8.93%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 4.68% Class I Shares .............................. 8.32%
Class II Shares ........................... 4.24% Class II Shares ............................. 7.54%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.4 cents per share monthly dividend and the maximum offering price of
$11.82 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 4.8 cents per share monthly dividend and the
maximum offering price of $11.47 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
combined federal and Arizona state income tax bracket of 43.8%, based on the
39.6% federal income tax rate.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
FRANKLIN COLORADO TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and Colorado
state personal income taxes through a diversified portfolio consisting primarily
of Colorado municipal bonds.*
Colorado's economy has moved away from dependence on the energy sector through
increased growth in its services, construction and trade sectors. Construction
employment and overall economic activity were enhanced by the construction of
the new Denver International Airport, which is now open to the public. A strong
housing market, as well as growth in other employment sectors, mitigated the
loss of construction jobs incurred when the Denver Airport project was
completed.
GRAPHIC MATERIAL 4 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
+The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
investment objectives. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares, or approval by Standard & Poor's. Ratings are subject to change.
Franklin Colorado Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Hospitals 20.0%
Pre-Refunded 12.7%
Housing 14.1%
Transportation 14.0%
Education 10.9%
Health Care 7.2%
Sales Tax 5.8%
Certificates of Participation 4.5%
Utilities 4.1%
Industrial 2.2%
Miscellaneous 1.7%
General Obligations 1.3%
Tax Allocation 0.9%
Other Revenue 0.6%
For a complete list of portfolio holdings, please see page 53 of this report.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.
Performance Summary
Class I Shares
The Franklin Colorado Tax-Free Income Fund's Class I share price, as measured by
net asset value, increased to $11.63 on August 31, 1995, from $11.38 on February
28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 33.0 cents ($0.33) per share.**
Dividends will vary based on the earnings of the fund's portfolio, and past
distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.43%,
based on an annualization of the current monthly dividend of 5.5 cents ($0.055)
per share and the maximum offering price of $12.15 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Colorado state personal income tax bracket of 42.6%, you would have
to earn 9.46% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 5 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 15 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin Colorado Tax-Free Income Fund's Class II share price, as measured
by net asset value, increased to $11.65 on August 31, 1995, from $11.40 on its
May 1, 1995 inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 18.2 cents ($0.182)
per share.** Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.00%,
based on an annualization of the current monthly dividend of 4.9 cents ($0.049)
per share and the maximum offering price of $11.77 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Colorado state personal income tax bracket of 42.6%, you would have
to earn 8.71% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 6 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 15 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin Colorado Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year (09/01/87) (05/01/95)
<S> <C> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares ............................................................... 8.17% 51.24% 90.48% --
Class II Shares .............................................................. -- -- -- 3.82%
Average Annual Total Return2
Class I Shares ............................................................... 3.54% 7.68% 7.79% --
Distribution Rate3 Taxable Equivalent Distribution Rate4
Class I Shares ............................ 5.43% Class I Shares ............................... 9.46%
Class II Shares ........................... 5.00% Class II Shares .............................. 8.71%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 4.98% Class I Shares ............................... 8.68%
Class II Shares ........................... 4.60% Class II Shares .............................. 8.01%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.5 cents per share monthly dividend and the maximum offering price of
$12.15 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 4.9 cents per share monthly dividend and the
maximum offering price of $11.77 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
combined federal and Colorado state income tax bracket of 42.6%, based on the
39.6% federal income tax rate.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
Past expense reductions by the fund's manager increased the fund's Class I total
returns.
FRANKLIN CONNECTICUT TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and Connecticut
state personal income taxes through a portfolio consisting primarily of
Connecticut municipal bonds.*
Connecticut's economic and financial recoveries continue, although more slowly
than regional and national trends. Several of its major industries -- such as
defense, manufacturing, finance, insurance and real estate -- continue to
downsize their operations. Despite a somewhat slower recovery, unemployment
remains below the national average and the state has retained its position as
having the highest per capita income in the country.**
GRAPHIC MATERIAL 7 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin Connecticut Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Housing 25.8%
Utilities 17.8%
General Obligations 16.7%
Hospitals 13.9%
Pre-refunded 10.8%
Education 8.6%
Health Care 2.8%
Transportation 2.2%
Industrial 1.4%
For a complete list of portfolio holdings, please see page 57 of this report.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.
**Source: Standard & Poor's Creditweek Municipal, March 20, 1995.
Performance Summary
Class I Shares
The Franklin Connecticut Tax-Free Income Fund's Class I share price, as measured
by net asset value, increased to $10.81 on August 31, 1995, from $10.64 on
February 28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 30.6 cents ($0.306) per share.
Dividends will vary based on the earnings of the fund's portfolio, and past
distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.42%,
based on an annualization of the current monthly dividend of 5.1 cents ($0.051)
per share and the maximum offering price of $11.29 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Connecticut state personal income tax bracket of 42.3%, you would
have to earn 9.39% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 8 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 19 for more information regarding the fund's
performance.
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin Connecticut Tax-Free Income Fund's Class II share price, as
measured by net asset value, increased to $10.84 on August 31, 1995, from $10.65
on its May 1, 1995 inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 16.9 cents ($0.169)
per share. Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 4.93%,
based on an annualization of the current monthly dividend of 4.5 cents ($0.045)
per share and the maximum offering price of $10.95 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Connecticut state personal income tax bracket of 42.3%, you would
have to earn 8.54% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 9 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 19 for more information regarding the fund's
performance.
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin Connecticut Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year (10/03/88) (05/01/95)
<S> <C> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares ............................................................... 6.47% 19.44% 62.10% --
Class II Shares .............................................................. -- -- -- 3.39%
Average Annual Total Return2
Class I Shares ............................................................... 1.91% 6.63% 6.57% --
Distribution Rate3 Taxable Equivalent Distribution Rate4
Class I Shares ............................ 5.42% Class I Shares ............................. 9.39%
Class II Shares ........................... 4.93% Class II Shares ............................ 8.54%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 5.08% Class I Shares ............................. 8.80%
Class II Shares ........................... 4.73% Class II Shares ............................ 8.20%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.1 cents per share monthly dividend and the maximum offering price of
$11.29 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 4.5 cents per share monthly dividend and the
maximum offering price of $10.95 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
combined federal and Connecticut state income tax bracket of 42.3%, based on the
39.6% federal income tax rate.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
Past expense reductions by the fund's manager increased the fund's Class I total
returns.
FRANKLIN INDIANA TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and Indiana
state personal income taxes through a diversified portfolio consisting primarily
of Indiana municipal bonds.*
Indiana's economy is dominated by the manufacturing of durable goods and by
agriculture. While the state remains vulnerable to the fluctuating economic
cycles, unemployment rates have remained below the national average.
Additionally, with only a minimal amount of outstanding debt for many years,
Indiana has become more active in debt financing.** Proceeds of bonds now
offered will be used to construct and equip additional facilities at the United
Airlines Maintenance Operations Center facility at the Indianapolis Airport. The
aircraft maintenance facility is a major economic development project for the
airport and surrounding areas.
GRAPHIC MATERIAL 10 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin Indiana Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Pre-refunded 29.5%
Hospitals 22.3%
Education 10.7%
Other Revenue 11.0%
Industrial 7.8%
Utilities 7.2%
Certificates of Participation 5.6%
Housing 3.5%
Transportation 2.3%
Tax Assessment Bonds 0.1%
For a complete list of portfolio holdings, please see page 60 of this report.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.
**Source: Moody's Municipal Credit Report, June 2, 1995.
Performance Summary
The Franklin Indiana Tax-Free Income Fund's share price, as measured by net
asset value, increased to $11.60 on August 31, 1995, from $11.40 on February 28,
1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 33.0 cents ($0.33) per share.
Dividends will vary based on the earnings of the fund's portfolio, and past
distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.45%,
based on an annualization of the current monthly dividend of 5.5 cents ($0.055)
per share and the maximum offering price of $12.11 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Indiana state personal income tax bracket of 41.7%, you would have
to earn 9.35% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 11 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary depending on the date
you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period.
Franklin Indiana Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since
Inception
1-Year 5-Year (09/01/87)
<S> <C> <C> <C> <C>
Cumulative Total Return1 ..................................... 6.65% 49.57% 91.56%
Average Annual Total Return2 ................................. 2.13% 7.45% 7.87%
Distribution Rate3 ................................... 5.45%
Taxable Equivalent Distribution Rate4 ................ 9.35%
30-Day Standardized Yield5 ........................... 4.89%
Taxable Equivalent Yield4 ............................ 8.38%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge stated in the prospectus. See note below.
2. Average annual total returns represent the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge. See note below.
3. Based on an annualization of the fund's current 5.5 cents per share monthly
dividend and the maximum offering price of $12.11 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
combined federal and Indiana state personal income tax bracket of 41.7%, based
on the federal income tax rate of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund implemented
a plan of distribution under Rule 12b-1 and eliminated the sale charge on
reinvested dividends, which will affect future performance. All total return
calculations assume reinvestment of dividends and capital gains at net asset
value. Investment return and principal value will fluctuate with market
conditions, and you may have a gain or loss when you sell your shares. Past
performance is not predictive of future results.
Past expense reductions by the fund's manager increased the fund's total
returns.
FRANKLIN NEW JERSEY TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and New Jersey
state personal income taxes through a diversified portfolio consisting primarily
of New Jersey municipal bonds.*
A slow economic recovery has contributed to lingering budgetary pressure in New
Jersey. Growth of sales taxes, income taxes, and other operating revenues has
been slow while demands for welfare and other economic relief have increased.
The state's fiscal 1995 budget -- the first under Governor Christine Todd
Whitman -- represented a change in approach to budgetary problems. Income taxes
were reduced by 15%, and appropriations were reduced from 1994 levels.** In part
to meet upcoming fiscal pressure, the state intends to pursue additional means
of curbing expenditures. New Jersey's recently adopted fiscal 1996 budget
represents just a 3% increase in spending from fiscal 1995, with most of the
increase attributable to school district aid, court functions, and general
obligation bond repayments.
GRAPHIC MATERIAL 12 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin New Jersey Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Utilities 21.4%
Pre-refunded 17.7%
Hospitals 14.9%
Transportation 10.5%
Housing 9.4%
Education 7.8%
Other Revenue 7.2%
Certificates of Participation 4.2%
General Obligations 2.4%
Health Care 2.3%
Industrial 2.2%
For a complete list of portfolio holdings, please see page 63 of this report.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.
The fund seeks to comply with state requirements for the pass through of
tax-exempt income dividends, including that at least 80% of the fund's total
assets are invested in New Jersey obligations. **Source: Standard & Poor's
Creditweek Municipal, July 24, 1995.
Performance Summary
Class I Shares
The Franklin New Jersey Tax-Free Income Fund's Class I share price, as measured
by net asset value, increased to $11.50 on August 31, 1995, from $11.28 on
February 28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 31.8 cents ($0.318) per share.
Dividends will vary based on the earnings of the fund's portfolio, and past
distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.30%,
based on an annualization of the current monthly dividend of 5.3 cents ($0.053)
per share and the maximum offering price of $12.01 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and New Jersey state personal income tax bracket of 43.6%, you would
have to earn 9.40% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 13 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 26 for more information regarding the fund's
performance.
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin New Jersey Tax-Free Income Fund's Class II share price, as measured
by net asset value, increased to $11.53 on August 31, 1995, from $11.30 on its
May 1, 1995 inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 17.6 cents ($0.176)
per share. Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 4.84%,
based on an annualization of the current monthly dividend of 4.7 cents ($0.047)
per share and the maximum offering price of $11.65 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and New Jersey state personal income tax bracket of 43.6%, you would
have to earn 8.58% from a taxable investment to match your fund's tax-free
distribution rate.
Please see the table on page 26 for more information regarding the fund's
performance.
GRAPHIC MATERIAL 14 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin New Jersey Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year (05/12/88) (05/01/95)
<S> <C> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares ............................................................... 7.45% 49.14% 80.20% --
Class II Shares .............................................................. -- -- -- 3.61%
Average Annual Total Return2
Class I Shares ............................................................... 2.90% 7.39% 7.75% --
Distribution Rate3 Taxable EquivalentDistribution Rate4
Class I Shares ............................ 5.30% Class I Shares ............................... 9.40%
Class II Shares ........................... 4.84% Class II Shares .............................. 8.58%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 4.85% Class I Shares ............................... 8.60%
Class II Shares ........................... 4.48% Class II Shares .............................. 7.94%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.3 cents per share monthly dividend and the maximum offering price of
$12.01 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 4.7 cents per share monthly dividend and the
maximum offering price of $11.65 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
combined federal and New Jersey state income tax bracket of 43.6%, based on the
39.6% federal income tax rate.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
FRANKLIN OREGON TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and Oregon
state personal income taxes through a diversified portfolio consisting primarily
of Oregon municipal bonds.*
Increasing education funding requirements resulting from Measure 5 have put
pressure on Oregon's budget. The state's replacement requirement, which was $492
million during the 1991-1993 biennium, escalated to $1.5 billion for the current
1993-1995 biennium.
Nevertheless, Oregon's continued economic strength has led to unexpected revenue
growth. High technology manufacturing continues to move forward, replacing the
historically significant wood products industry. In addition, Oregon's economy
has outperformed the nation since 1987, with total job count increasing 19% to
1.3 million in 1994.**
GRAPHIC MATERIAL 15 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin Oregon Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Hospitals 20.5%
Housing 15.1%
Utilities 15.0%
Pre-refunded 13.0%
General Obligations 9.3%
Education 9.3%
Transportation 6.9%
Industrial 4.0%
Certificates of Participation 3.1%
Other Revenue 1.6%
Health Care 1.3%
Tax Allocation Bonds 0.9%
For a complete list of portfolio holdings, please see page 68 of this report.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.
**Source: Standard & Poor's Creditweek Municipal, June 5, 1995.
Performance Summary
Class I Shares
The Franklin Oregon Tax-Free Income Fund's Class I share price, as measured by
net asset value, increased to $11.44 on August 31, 1995, from $11.22 on February
28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 31.2 cents ($0.312) per share.
Dividends will vary based on the earnings of the fund's portfolio, and past
distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.22%,
based on an annualization of the current monthly dividend of 5.2 cents ($0.052)
per share and the maximum offering price of $11.95 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Oregon state personal income tax bracket of 45.0%, you would have to
earn 9.49% from a taxable investment to match your fund's tax-free distribution
rate.
GRAPHIC MATERIAL 16 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 30 for more information regarding the fund's
performance.
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin Oregon Tax-Free Income Fund's Class II share price, as measured by
net asset value, increased to $11.48 on August 31, 1995, from $11.24 on its May
1, 1995, inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 17.2 cents ($0.172)
per share. Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 4.76%,
based on an annualization of the current monthly dividend of 4.6 cents ($0.046)
per share and the maximum offering price of $11.60 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Oregon state personal income tax bracket of 45.0%, you would have to
earn 8.65% from a taxable investment to match your fund's tax-free distribution
rate.
GRAPHIC MATERIAL 17 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 30 for more information regarding the fund's
performance.
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin Oregon Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year (09/01/87) (05/01/95)
<S> <C> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares ............................................................... 7.64% 47.51% 80.93% --
Class II Shares ............................................................... -- -- -- 3.69%
Average Annual Total Return2
Class I Shares ............................................................... 3.06% 7.15% 7.11% --
Distribution Rate3 Taxable Equivalent Distribution Rate4
Class I Shares ............................ 5.22% Class I Shares ............................... 9.49%
Class II Shares ........................... 4.76% Class II Shares .............................. 8.65%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 4.85% Class I Shares ............................... 8.82%
Class II Shares ........................... 4.44% Class II Shares .............................. 8.07%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.2 cents per share monthly dividend and the maximum offering price of
$11.95 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 4.6 cents per share monthly dividend and the
maximum offering price of $11.60 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
combined federal and Oregon state income tax bracket of 45.0%, based on the
39.6% federal income tax rate.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
FRANKLIN PENNSYLVANIA TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and
Pennsylvania state personal income taxes through a diversified portfolio
consisting primarily of Pennsylvania municipal bonds.* The fund's shares are
also free from Pennsylvania personal property taxes.
Our outlook for the fund is positive. Over the reporting period, we were able to
increase the amount of general obligation bonds in the portfolio to 4.6% by
August 31, 1995, from 2.7% on February 28, 1995. This is because Philadelphia's
general obligations were upgraded by Moody's in March and Standard & Poor's in
April. The upgrades were due mainly to the city's ability to bring its finances
under control during fiscal 1995.
Pennsylvania's budget is being stressed by many factors, including medical and
income assistance, public safety, and education. However, we anticipate the
commonwealth has the ability and political will to maintain adequate operations
while meeting service demands.
GRAPHIC MATERIAL 18 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin Pennsylvania Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Pre-refunded 24.1%
Utilities 23.9%
Hospitals 15.5%
Housing 15.0%
Education 7.5%
General Obligations 4.6%
Other Revenue 2.5%
Industrial 2.5%
Miscellaneous 2.4%
Health Care 1.4%
Transportation 0.6%
For a complete list of portfolio holdings, please see page 73 of this report.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discount, if any, are generally
taxable.
Performance Summary
Class I Shares
The Franklin Pennsylvania Tax-Free Income Fund's Class I share price, as
measured by net asset value, increased to $10.32 on August 31, 1995, from $10.16
on February 28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 31.2 cents ($0.312) per share.**
We are pleased to report that your fund's dividend was increased to 5.2 cents
($0.052) from 5.1 cents ($0.051) per share, effective with the March 1995
distribution. Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.79%,
based on an annualization of the current monthly dividend of 5.2 cents ($0.052)
per share and the maximum offering price of $10.78 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maxi- mum combined
federal and Pennsylvania state personal income tax bracket of 41.3%, you would
have to earn 9.86% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 19 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 34 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin Pennsylvania Tax-Free Income Fund's Class II share price, as
measured by net asset value, increased to $10.34 on August 31, 1995, from $10.17
on its May 1, 1995, inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 17.5 cents ($0.175)
per share.** Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.40%,
based on an annualization of the current monthly dividend of 4.7 cents ($0.047)
per share and the maximum offering price of $10.44 on August 31, 1995. This
double tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal and Pennsylvania state personal income tax bracket of 41.3%, you would
have to earn 9.20% from a taxable investment to match your fund's tax-free
distribution rate.
GRAPHIC MATERIAL 20 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 34 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin Pennsylvania Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year (12/01/86) (05/01/95)
<S> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares ............................................................... 8.00% 51.82% 84.69% --
Class II Shares .............................................................. -- -- -- 3.41%
Average Annual Total Return2
Class I Shares ............................................................... 3.42% 7.76% 6.73% --
Distribution Rate3 Taxable Equivalent Distribution Rate4
Class I Shares ............................ 5.79% Class I Shares ............................... 9.86%
Class II Shares ........................... 5.40% Class II Shares .............................. 9.20%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 4.92% Class I Shares ............................... 8.38%
Class II Shares ........................... 4.50% Class II Shares .............................. 7.66%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.2 cents per share monthly dividend and the maximum offering price of
$10.78 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 4.7 cents per share monthly dividend and the
maximum offering price of $10.44 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
combined federal and Pennsylvania state income tax bracket of 41.3%, based on
the 39.6% federal income tax rate.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
Past expense reductions by the fund's manager increased the fund's Class I total
returns.
FRANKLIN PUERTO RICO TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal and many
states' individual income taxes through a diversified portfolio consisting
primarily of Puerto Rico municipal bonds.*
Several municipal bond issues in Puerto Rico came to market in 1995. The
Electric Authority, the Public Building Authority, the Housing Authority, the
University of Puerto Rico, and the Hospital Authority all brought new municipal
issues to market, which we purchased for your fund. In addition, the
Commonwealth of Puerto Rico issued new general obligation bonds, allowing us to
increase the portion of general obligations held in the portfolio to 6.9% of
total net assets from 4.3% at the start of the reporting period.
GRAPHIC MATERIAL 21 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin Puerto Rico Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Utilities 33.7%
Transportation 12.4%
Pre-refunded 11.7%
Housing 9.5%
General Obligations 6.9%
Industrial 6.0%
Hospitals 5.0%
Miscellaneous 4.8%
Other Revenue 4.5%
Certificates of Participation 3.2%
Education 2.3%
For a complete list of portfolio holdings, please see page 79 of this report.
*For investors subject to the federal and state alternative minimum tax, a small
portion of these dividends may be subject to such tax. Distributions of capital
gains and of ordinary income from accrued market discount, if any, are generally
taxable.
Performance Summary
Class I Shares
The Franklin Puerto Rico Tax-Free Income Fund's Class I share price, as measured
by net asset value, increased to $11.47 on August 31, 1995, from $11.31 on
February 28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 33.6 cents ($0.336) per share.**
Due to reduced income earned by the fund, we were compelled to adjust the fund's
monthly dividend to 5.5 cents ($0.055) from 5.7 cents ($0.057) per share,
effective with the June 1995 distribution. Dividends will vary based on the
earnings of the fund's portfolio, and past distributions are not necessarily
predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.51%,
based on an annualization of the current monthly dividend of 5.5 cents ($0.055)
per share and the maximum offering price of $11.98 on August 31, 1995. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, if you are in the maximum federal income tax
bracket of 39.6%, you would have to earn 9.12% from a taxable investment to
match your fund's tax-free distribution rate. For shareholders residing in
states in which the fund's income is exempt from states taxes, you would be
receiving an even higher taxable eqivalent distribution rate.
GRAPHIC MATERIAL 22 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 38 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin Puerto Rico Tax-Free Income Fund's Class II share price, as
measured by net asset value, increased to $11.49 on August 31, 1995, from $11.32
on its May 1, 1995, inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 18.4 cents ($0.184)
per share.** Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.06%,
based on an annualization of the current monthly dividend of 4.9 cents ($0.049)
per share and the maximum offering price of $11.61 on August 31, 1995. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, if you are in the maximum federal income tax
bracket of 39.6%, you would have to earn 8.38% from a taxable investment to
match your fund's tax-free distribution rate. For shareholders in states in
which the fund's income is exempt from state taxes, you would be receiving an
even higher taxable eqivalent distribution rate.
GRAPHIC MATERIAL 23 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 38 for more information regarding the fund's
performance.
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin Puerto Rico Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year 10-Year (04/03/85) (05/01/95)
<S> <C> <C> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares.................................................... 7.17% 47.00% 118.53% 125.74% --
Class II Shares .................................................. -- -- -- -- 3.15%
Average Annual Total Return2
Class I Shares ................................................... 2.66% 7.08% 10.12% 7.68% --
Distribution Rate3 Taxable Equivalent Distribution Rate4
Class I Shares ............................ 5.51% Class I Shares .............................. 9.12%
Class II Shares ........................... 5.06% Class II Shares ............................. 8.38%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 4.84% Class I Shares .............................. 8.01%
Class II Shares ........................... 4.43% Class II Shares ............................. 7.33%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.5 cents per share monthly dividend and the maximum offering price of
$11.98 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 4.9 cents per share monthly dividend and the
maximum offering price of $11.61 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
federal income tax bracket of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
Past expense reductions by the fund's manager increased the fund's Class I total
returns.
FRANKLIN FEDERAL INTERMEDIATE-TERM TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal income taxes
and preservation of capital through a portfolio of municipal bonds with an
average weighted maturity (the time in which a debt must be repaid) between
three and ten years.*
The fund's credit quality changed slightly during the six-month period, with the
most notable change in the BB-rated bonds. One of our sizable portfolio holdings
in the hospital sector was downgraded to BB from a BBB rating by Standard &
Poor's, due to the hospital's financial difficulties and failure to reach
financial projections. The hospital's management has responded with cost-cutting
measures, and the outlook is stable. This downgrade caused the BB-rated category
to increase to 4.0% on August 31, 1995, from 0.6% at the start of the reporting
period.
GRAPHIC MATERIAL 24 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin Federal Intermediate-Term Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Hospitals 15.3%
Certificates of Participation 13.3%
Other Revenue 12.9%
Utilities 11.9%
Education 9.1%
Housing 7.6%
Industrial 7.2%
Marks-Roos Bonds 6.1%
General Obligations 6.0%
Special Assessment Bonds 5.6%
Transportation 5.0%
For a complete list of portfolio holdings, please see page 82 of this report.
*For investors subject to federal and state alternative minimum tax, a small
portion of these dividends may be subject to such tax. Distributions of capital
gains and of ordinary income from accrued market discounts, if any, are
generally taxable. These dividends are generally subject to state and local
income taxes, if any.
Performance Summary
The Franklin Federal Intermediate-Term Tax-Free Income Fund's share price, as
measured by net asset value, increased to $10.78 on August 31, 1995, from $10.48
on February 28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 27.1 cents ($0.271) per share.**
We are pleased to report that, due to increased income, we were able to increase
your fund's monthly dividend to 4.5 cents ($0.045) from 4.4 cents ($0.044) per
share in March, and increase it once again to 4.6 cents ($0.046) per share,
effective with the August 1995 distribution. Dividends will vary based on the
earnings of the fund's portfolio, and past distributions are not necessarily
predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.00%,
based on an annualization of the current monthly dividend of 4.6 cents ($0.046)
per share and the maximum offering price of $11.03 on August 31, 1995. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, if you are in the maximum federal income tax
bracket of 39.6%, you would have to earn 8.28% from a taxable investment to
match your fund's tax-free distribution rate.
GRAPHIC MATERIAL 25 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
**Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary depending on the date
you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period.
Franklin Federal Intermediate-Term Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since
Inception
1-Year (09/23/92)
<S> <C> <C> <C>
Cumulative Total Return1.......................................... 7.76% 23.48%
Average Annual Total Return2 ..................................... 5.36% 6.61%
Distribution Rate3 ....................................... 5.00%
Taxable Equivalent Distribution Rate4 .................... 8.28%
30-Day Standardized Yield5 ............................... 4.95%
Taxable Equivalent Yield4 ................................ 8.20%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 2.25% initial sales
charge. See note below.
2. Average annual total returns represent the average annual change in value of
an investment over the specified periods, and include the maximum 2.25% initial
sales charge. See note below.
3. Based on an annualization of the fund's current 4.6 cents per share monthly
dividend and the maximum offering price of $11.03 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
federal income tax rate of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: All total return calculations assume reinvestment of dividends and capital
gains at net asset value. Investment return and principal value will fluctuate
with market conditions, and you may have a gain or loss when you sell your
shares. Past performance is not predictive of future results.
The fund's manager has agreed in advance to waive a portion of the management
fees, which reduces operating expenses and increases distribution rate, yield
and total return to shareholders. Without this waiver, the fund's distribution
rate would have been lower, and yield for the period would have been 4.54%. The
fee waiver may be discontinued at any time upon advance notice to the fund's
Board of Trustees.
FRANKLIN HIGH YIELD TAX-FREE INCOME FUND
Fund Objective:
Seeks to provide high current income exempt from regular federal income tax
through a diversified portfolio consisting primarily of higher yielding, medium-
to lower-rated and non-rated municipal bonds.* As discussed in the fund's
prospectus, these securities entail greater risk than higher-rated municipal
securities.
Over the six-month reporting period, our focus for the Franklin High Yield
Tax-Free Income Fund was to add new non-rated securities, as well as high
quality securities, to the portfolio. When the quality spreads narrow, we are
able to purchase higher quality bonds without giving up much yield compared to
the lower quality bonds. The quality spreads between AAA- and BBB-rated
securities remained narrow in 1995, enabling us to slightly increase the AAA-
and AA-rated securities in the fund's portfolio to 13.9% and 3.4%, respectively,
from 10.5% and 2.5%, respectively, on February 28, 1995.
GRAPHIC MATERIAL 26 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
++The ratings reflect Standard & Poor's or Moody's assessment of the overall
credit quality of the fund's portfolio, based primarily on the fund's stated
objectives and policies. Non-rated bonds were judged to be of comparable quality
by the fund's managers. Ratings do not reflect the yield or market price of the
fund's shares or approval by Standard & Poor's. Ratings are subject to change.
Franklin High Yield Tax-Free Income Fund
Portfolio Breakdown on August 31, 1995
As a percentage of total net assets
% of total
Sector net assets
Utilities 18.9%
Transportation 13.1%
Pre-refunded 10.9%
Hospitals 10.2%
General Obligations 9.0%
Special Assessment Bonds 8.8%
Industrial 6.1%
Health Care 5.5%
Other Revenue 4.0%
Housing 3.7%
Mello-Roos Bonds 3.3%
Certificates of Participation 2.7%
Tax Allocation Bonds 1.6%
Sales Tax 1.1%
Education 0.8%
Marks-Roos Bonds 0.2%
Miscellaneous 0.1%
For a complete list of portfolio holdings, please see page 87 of this report.
*For investors subject to federal and state alternative minimum tax, a small
portion of these dividends may be subject to such tax. Distributions of capital
gains and of ordinary income from accrued market discounts, if any, are
generally taxable. These dividends are generally subject to state and local
income taxes, if any.
Performance Summary
Class I Shares
The Franklin High Yield Tax-Free Income Fund's Class I share price, as measured
by net asset value, increased to $11.02 on August 31, 1995, from $10.74 on
February 28, 1995.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the six-month period ended August 31, 1995, your
fund paid monthly income distributions totaling 36.6 cents ($0.366) per share.
Dividends will vary based on the earnings of the fund's portfolio, and past
distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 6.36%,
based on an annualization of the current monthly dividend of 6.1 cents ($0.061)
per share and the maximum offering price of $11.51 on August 31, 1995. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, if you are in the maximum federal income tax
bracket of 39.6%, you would have to earn 10.53% from a taxable investment to
match your fund's tax-free distribution rate.
GRAPHIC MATERIAL 27 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 45 for more information regarding the fund's
performance.
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Class II Shares
The Franklin High Yield Tax-Free Income Fund's Class II share price, as measured
by net asset value, increased to $11.06 on August 31, 1995, from $10.81 on its
May 1, 1995, inception date.
The fund continued to meet its investment objective of providing high current
income to shareholders. For the abbreviated four-month period ended August 31,
1995, your fund paid monthly income distributions totaling 20.6 cents ($0.206)
per share. Dividends will vary based on the earnings of the fund's portfolio,
and past distributions are not necessarily predictive of future results.
At the end of the reporting period, your fund's distribution rate was 5.91%,
based on an annualization of the current monthly dividend of 5.5 cents ($0.055)
per share and the maximum offering price of $11.17 on August 31, 1995. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, if you are in the maximum federal income tax
bracket of 39.6%, you would have to earn 9.78% from a taxable investment to
match your fund's tax-free distribution rate.
GRAPHIC MATERIAL 28 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Please see the table on page 45 for more information regarding the fund's
performance.
+Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distribution will vary, depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all income earned by the
fund during the reporting period.
Franklin High Yield Tax-Free Income Fund
Periods ended August 31, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year (03/18/86) (05/01/95)
<S> <C> <C> <C> <C> <C>
Cumulative Total Return1
Class I Shares ............................................................... 9.15% 54.06% 119.64% --
Class II Shares .............................................................. -- -- -- 4.24%
Average Annual Total Return2
Class I Shares ............................................................... 4.51% 8.08% 8.18% --
Distribution Rate3 Taxable Equivalent Distribution Rate4
Class I Shares ............................ 6.36% Class I Shares .............................. 10.53%
Class II Shares ........................... 5.91% Class II Shares.............................. 9.78%
30-Day Standardized Yield5 Taxable Equivalent Yield4
Class I Shares ............................ 5.93% Class I Shares .............................. 9.82%
Class II Shares ........................... 5.55% Class II Shares ............................. 9.19%
</TABLE>
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge for Class I shares, or the maximum 1.00% initial sales charge and 1.00%
Contingent Deferred Sales Charge (CDSC) for Class II shares, applicable to
shares redeemed within the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment over the specified periods. The figures reflect the maximum 4.25%
initial sales charge for Class I shares. See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 6.1 cents per share monthly dividend and the maximum offering price of
$11.51 on August 31, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 5.5 cents per share monthly dividend and the
maximum offering price of $11.17 on August 31, 1995.
4. Taxable equivalent distribution rate and yield assume the 1995 maximum
federal income tax bracket of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended August 31, 1995.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge, with dividends reinvested at the public offering price. Thus, actual
total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses, which will affect their performance. Please see the prospectus for
more details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
Past expense reductions by the fund's manager increased the fund's Class I total
returns.
FRANKLIN TAX-FREE TRUST
<TABLE>
<CAPTION>
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Arizona Tax-Free Income Fund (Note 1)
Long Term Investments 99.6%...................................................................
Arizona Educational Loan Marketing Corp. Revenue,
<S> <C> <C>
$10,000,000 Senior Series, 6.375%, 09/01/05 ........................................................... $ 10,532,900
1,000,000 Series B, 7.00%, 03/01/03 ................................................................. 1,068,760
1,000,000 Series B, 7.00%, 03/01/05 ................................................................. 1,065,970
1,000,000 Series B, MBIA Insured, 7.35%, 09/01/04 ................................................... 1,085,630
775,000 Series B, MBIA Insured, 7.375%, 09/01/05 .................................................. 839,147
1,000,000 Sub-Series, 6.625%, 09/01/05 .............................................................. 1,049,520
Arizona Health Facilities Authority, Hospital System Revenue,
2,000,000 Phoenix Baptist Hospital, MBIA Insured, 6.25%, 09/01/11 ................................... 2,067,160
7,500,000 Refunding, Samaritan Health System, MBIA Insured, 5.625%, 12/01/15 ........................ 7,283,250
Arizona Health Facilities Authority Revenue,
770,000 Arizona Voluntary Hospital, Hospital Federal Pooled Loan Revenue, Series B, FGIC Insured,
7.75%, 10/01/07 ........................................................................... 858,442
5,000,000 Arizona Voluntary Hospital, Series B, FGIC Insured, 7.25%, 10/01/13 ....................... 5,404,250
5,000,000 Arizona State COP, Refunding, Series B, AMBAC Insured, 6.25%, 09/01/10 ........................ 5,226,950
5,000,000 Arizona State Department of Administration, COP, FSA Insured, 6.625%, 09/01/08 ................ 5,374,400
Arizona State Municipal Financing Program, COP,
1,350,000 Dysart School, Series 22, BIG Insured, Pre-Refunded, 7.875%, 08/01/05 ..................... 1,425,627
85,000 Flagstaff School, Series 15, BIG Insured, 8.75%, 08/01/07 ................................. 91,350
500,000 Peoria School, Series 19, BIG Insured, ETM, 7.75%, 08/01/04 ............................... 607,835
255,000 Phoenix Civic Improvement, Series 17, BIG Insured, Pre-Refunded, 8.125%, 08/01/12 ......... 267,309
825,000 Phoenix Water, Series 10, BIG Insured, Pre-Refunded, 7.90%, 08/01/17 ...................... 891,776
3,250,000 Series 20, BIG Insured, ETM 08/01/06, 7.625%, 08/01/06 .................................... 3,839,778
500,000 Series 25, BIG Insured, 7.875%, 08/01/04 .................................................. 623,460
2,500,000 Series 29, BIG Insured, Pre-Refunded, 7.125%, 08/01/14 .................................... 2,777,050
Arizona State Transportation Board, Excise Tax Revenue, Maricopa County Regional Area Road Fund,
4,515,000 MBIA Insured, 7.00%, 07/01/05 ............................................................. 4,961,082
2,485,000 MBIA Insured, Pre-Refunded, 7.00%, 07/01/05 ............................................... 2,765,706
1,750,000 Series A, Pre-Refunded, 7.60%, 07/01/05 ................................................... 1,942,570
Arizona State University System Revenue,
130,000 Series 1986-A, Pre-Refunded, 7.875%, 07/01/15 ............................................. 136,799
5,145,000 Series 1991, Pre-Refunded, 7.10%, 07/01/16 ................................................ 5,902,138
4,000,000 Arizona State Waste Management Authority, Financial Assistance Revenue, 6.80%, 07/01/11 ....... 4,347,320
700,000 Avondale Municipal Development Corp. Facilities Revenue, Series 1992, MBIA Insured, 6.625%,
07/01/11 ..................................................................................... 735,238
930,000 Casa Grande Excise Tax Revenue, Series 1995, 6.20%, 04/01/15 .................................. 955,603
Casa Grande IDA, PCR,
1,800,000 Frito Lay/Pepsico, 6.60%, 12/01/10 ........................................................ 1,922,706
500,000 Frito Lay/Pepsico, 6.65%, 12/01/14 ........................................................ 531,615
3,000,000 Central Arizona Water Conservation District Contract Revenue, Central Project, Series 1990-A,
Pre-Refunded, 7.65%, 11/01/09 ................................................................ 3,492,840
Chandler GO,
1,625,000 FGIC Insured, 6.85%, 07/01/14 ............................................................. 1,760,525
1,000,000 Refunding, Series 1991, FGIC Insured, Pre-Refunded 7.00%, 07/01/12 ........................ 1,091,450
1,750,000 Series 1994, FGIC Insured 6.80%, 07/01/13 ................................................. 1,896,283
4,055,000 Chandler IDA, MFHR, Refunding, Hacienda Apartments, Project A, 6.05%, 07/20/30 ................ 3,945,637
Chandler Street and Highway Revenue,
1,250,000 Series 1994, MBIA Insured, 6.85%, 07/01/13 ................................................ 1,349,725
2,200,000 Series 1994, MBIA Insured, 6.90%, 07/01/14 ................................................ 2,383,018
Chandler Water and Sewer Revenue, Refunding,
6,715,000 Series 1991, FGIC Insured, Pre-Refunded, 7.00%, 07/01/12 .................................. 7,329,087
2,165,000 Series 1992, FGIC Insured, 6.25%, 07/01/13 ................................................ 2,232,808
City of Bullhead, Municipal Property Corp., Facilities Revenue,
$ 2,125,000 Series 1990, MBIA Insured, 7.20%, 07/01/09 ................................................ $ 2,309,280
4,000,000 Series 1991, FGIC Insured, 7.20%, 07/01/10 ................................................ 4,403,880
Cochise County, Palominas Elementary School District No. 49, School Improvement, GO,
155,000 Series A, Pre-Refunded, 7.70%, 07/01/00 ................................................... 167,839
165,000 Series A, Pre-Refunded, 7.80%, 07/01/01 ................................................... 178,952
175,000 Series A, Pre-Refunded, 7.85%, 07/01/02 ................................................... 189,950
5,000,000 Cochise County USD No. 68, Sierra Vista, Series B, FGIC Insured, Pre-Refunded, 7.625%, 07/01/10 5,745,200
1,095,000 Coconino County, Flagstaff USD No. 1, AMBAC Insured, 6.20%, 07/01/06 .......................... 1,152,969
Coconino County USD No. 8, Page Elementary School Improvement Project, GO,
1,500,000 Pre-Refunded, 7.125%, 07/01/06 ............................................................ 1,644,180
1,250,000 Pre-Refunded, 7.125%, 07/01/07 ............................................................ 1,370,150
625,000 Series D, AMBAC Insured, Pre-Refunded, 7.00%, 07/01/06 .................................... 678,319
725,000 Series D, AMBAC Insured, Pre-Refunded, 7.05%, 07/01/07 .................................... 787,807
1,475,000 Eloy Municipal Property Corp., Facilities Revenue, Series 1989, 7.80%, 07/01/09 ............... 1,601,393
3,320,000 Gila County IDA, PCR, Refunding, ASARCO, Inc. Project, 8.90%, 07/01/06 ........................ 3,628,561
1,500,000 Gilbert Improvement District No. 11, FGIC Insured, 7.60%, 01/01/05 ............................ 1,560,945
Gilbert Water and Sewer Revenue, Refunding,
1,500,000 FGIC Insured, 6.50%, 07/01/12 ............................................................. 1,597,695
3,250,000 FGIC Insured, 6.50%, 07/01/22 ............................................................. 3,426,898
Glendale IDA, Educational Facilities Revenue, Refunding,
750,000 American Graduate School International, Connie Lee Insured, 6.75%, 07/01/09 ............... 817,560
1,000,000 American Graduate School International, Connie Lee Insured, 7.00%, 07/01/14 ............... 1,101,580
1,250,000 American Graduate School International, Connie Lee Insured, 7.125%, 07/01/20 .............. 1,388,588
750,000 Glendale IDA, Hospital Revenue, Northwest Development, Inc. Project, 8.875%, 01/01/16 ......... 783,128
2,400,000 Glendale Municipal Property Corp., Series 1991, MBIA Insured, 7.00%, 07/01/09 ................. 2,573,400
Guam Power Authority Revenue,
3,630,000 Series A, 6.30%, 10/01/12 ................................................................. 3,644,665
4,000,000 Series A, 6.30%, 10/01/22 ................................................................. 3,953,680
2,700,000 Lake Havasu City, Wastewater COP, FGIC Insured, 7.00%, 06/01/05 ............................... 2,980,773
8,000,000 Maricopa County COP, 6.00%, 06/01/04 .......................................................... 8,268,080
50,000 Maricopa County Hospital District No. 1, Facilities Revenue, East Valley Behavioral Health Facility,
FGIC Insured, Pre-Refunded, 7.80%, 06/01/14 .................................................. 54,129
1,195,000 Maricopa County IDA, SFMR, GNMA Secured, 8.00%, 09/01/09 ...................................... 1,254,726
5,000,000 Maricopa County IDAR, Citizens Utilities Co. Project, 6.20%, 05/01/30 ......................... 5,061,000
Maricopa County IDAR,
1,805,000 Mercy Health System, Series A, MBIA Insured, Pre-Refunded, 7.125%, 07/01/07 ............... 2,013,369
750,000 Mercy Health System, Series C, MBIA Insured, Pre-Refunded, 7.15%, 07/01/15 ................ 838,643
Maricopa County IDAR, Hospital Facility Revenues, Refunding,
2,750,000 John C. Lincoln Hospital, FSA Insured, 7.50%, 12/01/13 .................................... 3,050,300
17,800,000 Samaritan Hospital Health Services, Series A, MBIA Insured, 7.00%, 12/01/13 ............... 19,249,454
1,890,000 Samaritan Hospital Health Services, Series A, MBIA Insured, 7.00%, 12/01/16 ............... 2,179,907
Maricopa County School District, No. 4, Mesa Unified,
1,500,000 FGIC Insured, 5.65%, 07/01/11 ............................................................. 1,499,850
2,000,000 FGIC Insured, 5.70%, 07/01/12 ............................................................. 1,999,800
2,000,000 Maricopa County School District, No. 28, Kyrene Elementary, Series B, FGIC Insured, 6.00%, 07/01/14 2,027,120
500,000 Maricopa County UHSD No. 210, Phoenix, Series A, 5.70%, 07/01/15 .............................. 498,775
600,000 Maricopa County UHSD No. 216, Series A, Pre-Refunded, 7.80%, 07/01/07 ......................... 650,736
Maricopa County USD No. 8, Osborn School Improvement Project,
500,000 Series B, Pre-Refunded, 7.10%, 07/01/05 ................................................... 553,035
1,075,000 Series B, Pre-Refunded, 7.15%, 07/01/07 ................................................... 1,190,896
1,885,000 Series B, Pre-Refunded, 7.20%, 07/01/09 ................................................... 2,091,521
Maricopa County USD No. 11, Peoria,
$ 6,300,000 Refunding, AMBAC Insured, 6.10%, 07/01/10 ................................................. $ 6,645,051
2,800,000 Refunding, MBIA Insured, 7.00%, 07/01/10 .................................................. 3,093,132
Maricopa County USD No. 41,
850,000 Gilbert, Series C, FGIC Insured, Pre-Refunded, 7.125%, 07/01/01 ........................... 925,310
750,000 Gilbert, Series C, FGIC Insured, Pre-Refunded, 7.20%, 07/01/02 ............................ 817,935
5,000,000 Gilbert, Series D, FGIC Insured, Pre-Refunded, 7.00%, 07/01/05 ............................ 5,522,200
1,175,000 Maricopa County USD No. 65, Littleton School Improvement, Series B, FGIC Insured, 6.40%, 07/01/14 1,239,613
4,000,000 Maricopa County USD No. 68, Alhambra, Refunding & Improvement, AMBAC Insured, Pre-Refunded,
5.625%, 07/01/13 ............................................................................. 3,988,480
1,000,000 Maricopa County USD No. 69, Paradise Valley, Series A, 7.10%, 07/01/05 ........................ 1,137,990
1,600,000 Maricopa County USD No. 80, Chandler, FGIC Insured, 6.00%, 07/01/13 ........................... 1,633,808
Maricopa County USD No. 89,
240,000 Dysart, Refunding & Improvement, FGIC Insured, 6.70%, 07/01/05 ............................ 260,340
1,760,000 Dysart, Refunding & Improvement, FGIC Insured, 6.75%, 07/01/06 ............................ 1,905,024
Maricopa County USD No. 92, Pendergast Elementary School,
250,000 FGIC Insured, Pre-Refunded, 7.20%, 07/01/02 ............................................... 266,438
1,300,000 FGIC Insured, Pre-Refunded, 7.20%, 07/01/03 ............................................... 1,385,475
1,300,000 Maricopa County USD No. 98, Fountain Hills School, Improvement Bond, Refunding, FGIC Insured,
6.625%, 07/01/10 ............................................................................. 1,388,049
Maricopa County USD No. 214, Tolleson GO,
1,000,000 FGIC Insured, 5.75%, 07/01/14 ............................................................. 999,900
500,000 Pre-Refunded, 7.30%, 07/01/03 ............................................................. 537,940
2,000,000 Pre-Refunded, 7.35%, 07/01/04 ............................................................. 2,153,500
Mesa IDA, Health Care Facilities Revenue, Western Health Network,
750,000 Refunding, Series B-2, BIG Insured, 7.50%, 01/01/08 ....................................... 815,498
5,250,000 Series A-2, BIG Insured, 7.625%, 01/01/13 ................................................. 5,806,343
250,000 Series A-3, BIG Insured, 7.625%, 01/01/13 ................................................. 276,493
2,400,000 Series A-4, BIG Insured, 7.625%, 01/01/09 ................................................. 2,654,328
Mohave County, Hospital District No. 1, GO,
1,500,000 Kingman Regional Medical Center Project, FGIC Insured, 6.50%, 06/01/15 .................... 1,571,310
6,350,000 Kingman Regional Medical Center Project, Pre-Refunded, 8.375%, 06/01/15 ................... 7,512,177
Mohave County, IDA, Citizens Utilities Project,
4,100,000 Series 1994, 6.60%, 05/01/29 .............................................................. 4,267,977
10,000,000 Series A, 7.15%, 02/01/26 ................................................................. 10,591,200
5,000,000 Series B, 7.15%, 02/01/26 ................................................................. 5,295,600
Mohave County, IDA, Hospital Systems Revenue, Refunding,
1,595,000 Medical Environments, Inc., Phoenix Hospital and Medical Center, 5.80%, 07/01/99 .......... 1,630,967
1,700,000 Medical Environments, Inc., Phoenix Hospital and Medical Center, 7.00%, 07/01/16 .......... 1,688,712
50,000,000 Navajo County PCR, Arizona Public Service Co., Series A, 5.875%, 08/15/28 ..................... 47,259,500
Nogales Municipal Development Authority, Inc., Municipal Facilities Revenue, Refunding,
6,350,000 MBIA Insured, 7.20%, 06/01/08 ............................................................. 6,993,001
500,000 MBIA Insured, Pre-Refunded, 8.00%, 06/01/08 ............................................... 554,000
3,700,000 Northern Arizona University System Revenue, Pre-Refunded, 7.50%, 06/01/06 ..................... 4,104,262
2,750,000 Northern Arizona University System Revenue, Refunding, FGIC Insured, 6.40%, 06/01/07 .......... 2,941,758
Northern Mariana Islands, Commonwealth Ports Authority, Seaport Revenue, Series A, Saipan Harbor
Improvement,
310,000 5.35%, 10/01/98 ........................................................................... 310,592
330,000 5.45%, 10/01/99 ........................................................................... 330,818
345,000 5.55%, 10/01/00 ........................................................................... 346,038
365,000 5.65%, 10/01/01 ........................................................................... 366,281
385,000 5.75%, 10/01/02 ........................................................................... 386,532
7,150,000 6.85%, 10/01/25 ........................................................................... 7,059,767
$ 3,000,000 Peoria Municipal Development Authority, Inc., Municipal Facilities Revenue, MBIA Insured,
Pre-Refunded, 7.00%, 07/01/09 ................................................................ $ 3,214,740
1,000,000 Peoria Municipal Development Authority, Water and Sewer Revenue, Refunding, FGIC Insured,
6.625%, 07/01/06 ............................................................................. 1,068,650
Phoenix Airport Revenue,
700,000 Refunding, Series B, MBIA Insured, 6.20%, 07/01/10 ........................................ 721,063
1,680,000 Refunding, Series C, MBIA Insured, 6.30%, 07/01/10 ........................................ 1,750,745
1,785,000 Refunding, Series C, MBIA Insured, 6.40%, 07/01/11 ........................................ 1,867,056
570,000 Refunding, Series C, MBIA Insured, 6.40%, 07/01/12 ........................................ 593,883
1,800,000 Series D, MBIA Insured, 6.30%, 07/01/10 ................................................... 1,875,798
3,825,000 Series D, MBIA Insured, 6.40%, 07/01/11 ................................................... 4,000,835
820,000 Series D, MBIA Insured, 6.40%, 07/01/12 ................................................... 854,358
Phoenix Civic Improvement Corp.,
5,000,000 Airport Terminal Excise Tax Revenue, 7.80%, 07/01/11 ...................................... 5,318,800
3,500,000 Airport Terminal Excise Tax Revenue, 7.875%, 07/01/14 ..................................... 3,727,675
275,000 Airport Terminal Excise Tax Revenue, Refunding, Pre-Refunded, 8.375%, 07/01/09 ............ 306,636
1,000,000 Municipal Facilities Excise Tax Revenue, MBIA Insured, 6.90%, 07/01/21 .................... 1,081,520
4,210,000 Parking Facilities, Series B, FGIC Insured, Pre-Refunded, 7.50%, 07/01/09 ................. 4,547,937
4,300,000 Phoenix Civic Plaza Building Corp., 6.00%, 07/01/14 ........................................... 4,354,180
Phoenix GO,
5,000,000 Refunding, 6.375%, 07/01/13 ............................................................... 5,216,800
1,000,000 Refunding, Pre-Refunded, 7.15%, 07/01/08 .................................................. 1,096,780
1,000,000 Refunding, Pre-Refunded, 7.375%, 07/01/11 ................................................. 1,077,180
1,705,000 Refunding, Pre-Refunded, 7.375%, 07/01/12 ................................................. 1,836,592
5,000,000 Refunding, Series A, 5.50%, 07/01/15 ...................................................... 4,858,550
9,425,000 Series 1991, Pre-Refunded, 6.80%, 07/01/07 ................................................ 10,406,237
Phoenix HFC, Mortgage Revenue,
2,750,000 Refunding, Project A, MBIA Insured, 6.50%, 07/01/24 ....................................... 2,766,390
1,750,000 Refunding, Section 8 Project, Series A, MBIA Insured, 6.90%, 01/01/23 ..................... 1,791,090
2,260,000 Refunding, Section 8 Project, Series A, MBIA Insured, 7.25%, 01/01/23 ..................... 2,291,889
1,000,000 Phoenix IDA, SFMR, FNMA Insured, 6.30%, 12/01/12 .............................................. 1,003,160
Phoenix IDAR, Home Purchase Mortgage,
130,000 GNMA Secured, Series B, 7.70%, 10/01/11 ................................................... 133,650
1,880,000 GNMA Secured, Series B, 8.20%, 04/01/22 ................................................... 1,967,909
1,500,000 d Phoenix Municipal Housing Revenue, Refunding, Fillmore Gardens Project, 6.30%, 06/01/09 ....... 1,519,680
Phoenix Street and Highway Revenue,
5,000,000 Refunding, Series 1992, 6.60%, 07/01/07 ................................................... 5,464,550
1,000,000 Series 1987, ETM, 6.80%, 07/01/03 ......................................................... 1,136,000
1,000,000 Series 1989, Pre-Refunded, 7.375%, 07/01/05 ............................................... 1,077,180
3,310,000 Series 1989, Pre-Refunded, 7.375%, 07/01/06 ............................................... 3,565,466
2,000,000 Series 1989, Pre-Refunded, 7.375%, 07/01/08 ............................................... 2,154,360
4,665,000 Series 1990, Pre-Refunded, 7.125%, 07/01/10 ............................................... 5,119,931
Pima County IDA, Health Care Revenue,
65,000 Carondelet St. Joseph's and St. Mary's, 8.00%, 07/01/13 ................................... 71,139
2,250,000 Carondelet St. Joseph's and St. Mary's, MBIA Insured, 6.75%, 07/01/10 ..................... 2,388,398
535,000 Carondelet St. Joseph's and St. Mary's, Pre-Refunded, 8.00%, 07/01/13 ..................... 599,056
745,000 Pima County IDA, MFHR, Fountains La Cholla Project, FHA Mortgage Insured, 8.00%, 12/01/25 ..... 759,431
Pima County IDA, SFMR,
1,905,000 GNMA Secured, 8.00%, 09/01/09 ............................................................. 1,984,629
1,350,000 GNMA Secured, 6.40%, 11/01/09 ............................................................. 1,392,998
1,640,000 GNMA Secured, 8.125%, 09/01/20 ............................................................ 1,708,634
6,050,000 GNMA Secured, 6.750%, 11/01/27 ............................................................ 6,168,943
Pima County IDA, SFMR, (cont.)
$ 6,695,000 Refunding, Series A, 7.625%, 02/01/12 ..................................................... $ 6,983,822
1,000,000 Refunding, Series A, 6.50%, 02/01/17 ...................................................... 996,480
1,410,000 Pima County Sewer Revenue, Series 1991, FGIC Insured, 6.75%, 07/01/15 ......................... 1,500,381
Pima County USD No. 1,
21,000,000 Tucson Project, FGIC Insured, 5.875%, 07/01/14 ............................................ 21,089,670
10,000,000 Tucson School Improvement, Series B, Pre-Refunded, 7.20%, 07/01/10 ........................ 11,284,200
500,000 Pima County USD No. 10, Amphitheater School, Refunding & Improvement, Pre-Refunded, 7.70%,
07/01/03 ..................................................................................... 536,760
Pinal County USD No. 43, Apache Junction, Refunding & Improvement,
500,000 FGIC Insured, Pre-Refunded, 7.15%, 07/01/05 ............................................... 540,525
700,000 FGIC Insured, Pre-Refunded, 7.20%, 07/01/07 ............................................... 777,994
2,360,000 Prescott Muni Property, Series 1990-C, MBIA Insured, Pre-Refunded, 7.00%, 07/01/10 ............ 2,606,478
6,405,000 Price Elliott Resh Park, Inc. Revenue, Refunding, Arizona State University Research Park,
MBIA Insured, 7.00%, 07/01/21 ................................................................ 6,974,020
Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue,
75,000 Refunding, Series 1985-A, Pre-Refunded, 9.00%, 07/01/09 ................................... 97,705
6,000,000 Series 1988-A, 7.875%, 07/01/17 ........................................................... 6,663,420
2,315,000 Series 1988-A, 7.00%, 07/01/19 ............................................................ 2,460,382
750,000 Puerto Rico Commonwealth Highway Authority Revenue, Series P, Pre-Refunded, 8.125%, 07/01/13 .. 843,345
Puerto Rico Commonwealth Infrastructure Financing Authority, Special Tax Revenue,
9,215,000 Series 1988-A, 7.75%, 07/01/08 ............................................................ 10,132,998
2,000,000 Series 1988-A, 7.50%, 07/01/09 ............................................................ 2,186,160
Puerto Rico Commonwealth Public Improvement GO,
130,000 Pre-Refunded, 7.90%, 07/01/11 ............................................................. 138,195
3,190,000 Series 1987, Pre-Refunded, 7.25%, 07/01/12 ................................................ 3,435,152
Puerto Rico Electric Power Authority, Power Revenue,
3,745,000 Refunding, Series R, 6.25%, 07/01/17 ...................................................... 3,782,450
125,000 Refunding, Series 1987-L, Pre-Refunded, 8.40%, 07/01/15 ................................... 137,036
3,000,000 Refunding, Series 1988-M, Pre-Refunded, 8.00%, 07/01/08 ................................... 3,363,480
2,000,000 Refunding, Series 1989-N, 7.00%, 07/01/07 ................................................. 2,148,420
3,490,000 Refunding, Series 1989-N, Pre-Refunded, 7.125%, 07/01/14 .................................. 3,891,141
2,205,000 Refunding, Series 1989-N, Pre-Refunded, 7.125%, 07/01/14 .................................. 2,406,934
1,510,000 Series 1989-0, 7.125%, 07/01/14 ........................................................... 1,648,286
600,000 Series 1991-P, 7.00%, 07/01/11 ............................................................ 664,392
25,725,000 Series X, 6.125%, 07/01/21 ................................................................ 25,775,678
4,850,000 Puerto Rico GO, 6.50%, 07/01/23 ............................................................... 4,993,706
1,445,000 Puerto Rico HFC, MFMR, Portfolio A, Series I, 7.50%, 04/01/22 ................................. 1,522,741
40,000 Puerto Rico HFC Revenue, FHA Mortgage Insured, Section 8 Assisted, 6th Portfolio, Pre-Refunded,
7.75%, 12/01/26 .............................................................................. 47,702
1,255,000 Puerto Rico HFC, SFMR, Portfolio No. 1, Series 1988-B, GNMA Secured, 7.65%, 10/15/22 .......... 1,325,933
Puerto Rico Industrial, Tourist, Educational, Medical & Environmental Control Facilities, Financing
Authority, Hospital Revenue,
1,950,000 Auxilio Mutuo Obligation Group, Series A, MBIA Insured, 6.25%, 07/01/24 ................... 2,007,194
5,225,000 d Refunding, Dr. Pila Hospital, Series A, FHA Insured, 5.875%, 08/01/12 ..................... 5,266,487
Puerto Rico PBA, Guaranteed Public Education and Health Facilities,
1,000,000 Series F, Pre-Refunded, 8.00%, 07/01/12 ................................................... 1,063,590
1,000,000 Series H, Pre-Refunded, 7.875%, 07/01/16 .................................................. 1,087,720
3,555,000 Series J, Pre-Refunded, 7.25%, 07/01/17 ................................................... 3,902,572
1,500,000 Puerto Rico PBA Revenue, Guaranteed Government Facilities, Series A, AMBAC Insured, 5.75%,
07/01/22 ..................................................................................... 1,473,690
Salt River Project, Agricultural Improvement and Power District, Electric System Revenue,
$ 2,435,000 Refunding, Series A, 5.75%, 01/01/13 ...................................................... $ 2,405,853
6,000,000 Refunding, Series D, 6.25%, 01/01/27 ...................................................... 6,120,060
2,000,000 Series A, 6.50%, 01/01/22 ................................................................. 2,077,480
4,600,000 Series A, 6.00%, 01/01/31 ................................................................. 4,601,564
1,845,000 Series A, MBIA Insured, 6.00%, 01/01/31 ................................................... 1,846,458
2,500,000 Series A, Pre-Refunded, 7.875%, 01/01/28 .................................................. 2,755,000
9,975,000 Series B, 6.25%, 01/01/19 ................................................................. 10,207,418
5,925,000 Series C, 6.20%, 01/01/12 ................................................................. 6,122,421
2,250,000 Series C, 5.50%, 01/01/28 ................................................................. 2,093,040
110,000 Series E, Pre-Refunded, 8.25%, 01/01/13 ................................................... 120,043
625,000 Series E, Pre-Refunded, 8.25%, 01/01/28 ................................................... 682,063
3,245,000 San Luis Municipal Property Corp., Municipal Facilities Revenue, 8.125%, 07/01/19 ............. 3,441,777
8,000,000 Santa Cruz County IDAR, Citizens Utilities Co. Project, 6.60%, 05/01/29 ....................... 8,282,800
50,000 Scottsdale, City of, Municipal Property Corp., Refunding, Series 1987, Pre-Refunded, 7.75%,
07/01/05 ..................................................................................... 54,231
Scottsdale IDA, Hospital Revenue, Scottsdale Memorial Hospital,
180,000 Refunding, Series 1987-A, AMBAC Insured, 8.50%, 09/01/17 .................................. 196,538
1,660,000 Series A, AMBAC Insured, 7.05%, 09/01/18 .................................................. 1,729,189
2,750,000 Series B, AMBAC Insured, 7.00%, 09/01/08 .................................................. 2,939,503
Sedona Sewer Tax Revenue,
3,800,000 Refunding, Series 1992, 6.75%, 07/01/07 ................................................... 4,101,872
5,000,000 Refunding, Series 1992, 7.00%, 07/01/12 ................................................... 5,252,050
6,500,000 Series A, Pre-Refunded, 7.50%, 07/01/20 ................................................... 7,486,635
Tucson Airport Authority Revenue,
6,700,000 Refunding, MBIA Insured, 5.70%, 06/01/13 .................................................. 6,669,716
1,090,000 Series A, MBIA Insured, 6.875%, 06/01/20 .................................................. 1,154,877
1,175,000 Series B, MBIA Insured, 7.125%, 06/01/15 .................................................. 1,255,945
1,125,000 Series B, MBIA Insured, 7.25%, 06/01/20 ................................................... 1,208,250
1,940,000 Tucson IDA, MFHR, La Entrada, Refunding, 7.40%, 07/01/26 ...................................... 2,022,507
900,000 Tucson Local Development Corp., Leasehold Revenue, Series F, FGIC Insured, Pre-Refunded, 7.30%,
07/01/10 ..................................................................................... 980,460
Tucson Water Revenue,
5,500,000 1981 Project, Series 1986, Pre-Refunded, 7.70%, 07/01/15 .................................. 5,779,950
2,270,000 1984 Project, Series B, Pre-Refunded, 7.70%, 07/01/18 ..................................... 2,363,523
2,250,000 Refunding, MBIA Insured, 7.00%, 07/01/10 .................................................. 2,403,764
6,750,000 Series D, Pre-Refunded, 7.10%, 07/01/18 ................................................... 7,743,330
1,500,000 University of Arizona COP, Telecommunications System, Pre-Refunded, 7.60%, 07/15/03 ........... 1,623,540
University of Arizona Medical Center Corp., Hospital Revenue,
225,000 Series 1986, Pre-Refunded, 8.10%, 07/01/16 ................................................ 245,074
250,000 Series 1987, Pre-Refunded, 8.10%, 07/01/16 ................................................ 272,304
University of Arizona System Revenue,
1,700,000 Series 1988, Pre-Refunded, 7.625%, 06/01/11 ............................................... 1,881,525
6,405,000 Series 1990, Pre-Refunded, 7.00%, 06/01/15 ................................................ 7,213,566
2,600,000 Series 1990-B, Pre-Refunded, 6.90%, 06/01/16 .............................................. 2,917,225
1,000,000 Series 1994, 6.25%, 06/01/11 .............................................................. 1,039,530
1,300,000 Series 1994, 6.35%, 06/01/14 .............................................................. 1,345,890
6,450,000 University of Puerto Rico, University Revenues, Series M, MBIA Insured, 5.50%, 06/01/15 ....... 6,267,916
2,650,000 Williams Municipal Development Authority, Inc., Municipal Facilities Revenue, 7.625%, 07/01/05 2,778,842
1,500,000 Yavapai County, USD No. 22, Humboldt, Series A, FGIC Insured, 5.95%, 07/01/14 ................. 1,517,624
Yuma IDA, MFHR,
$ 1,000,000 Alexandrite Sands Apartments Project, FHA Insured, 7.60%, 12/01/15 ........................ $ 1,055,040
2,000,000 Alexandrite Sands Apartments Project, FHA Insured, 7.70%, 12/01/29 ........................ 2,063,740
-----------
Total Long Term Investments (Cost $690,799,763) ......................................... 733,812,256
-----------
e Short Term Investments .2%
800,000 Maricopa County IDA, Hospital Facilities Revenue, Samaritan Health Service Hospital, Series B-2,
MBIA Insured, Daily VRDN and Put, 3.45%, 12/01/08 ............................................ 800,000
300,000 Maricopa County PCR, Pollution Control Corp., Arizona Public Service Co., Series D, Refunding, Daily
VRDN and Put, 3.35%, 05/01/29 ................................................................ 300,000
100,000 Puerto Rico Commonwealth Government Development Bank, Refunding, Weekly VRDN and Put,
3.20%, 12/01/15 .............................................................................. 100,000
-----------
Total Short Term Investments (Cost $1,200,000)........................................... 1,200,000
-----------
Total Investments (Cost $691,999,763) 99.8% ........................................ 735,012,256
Other Assets and Liabilities, Net .2%............................................... 1,283,724
-----------
Net Assets 100.0% .................................................................. $736,295,980
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $692,012,673 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost .............................................................. $ 44,813,804
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value .............................................................. (1,814,221)
-----------
Net unrealized appreciation ................................................................. $ 42,999,583
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co.
COP - Certificate of Participation
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Agency
FNMA - Federal National Mortgage Association
FSA - Financial Security Assistance
GNMA - Government National Mortgage Association
GO - General Obligation
HFC - Housing Finance Corp.
IDA - Industrial Development Authority /Agency
IDAR - Industrial Development Authority /Agency Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MFHR - Multi-Family Housing Revenue
MFMR - Multi-Family Mortgage Revenue
PBA - Public Building Authority
PCR - Pollution Control Revenue
SFMR - Single Family Mortgage Revenue
UHSD - Unified High School District
USD - Unified School District
dSee Note 1(f) regarding securities issued on a when-issued basis.
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the principal balance plus accrued interest upon short notice prior to
specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Colorado Tax-Free Income Fund (Note 1)
Long Term Investments 98.5%....................................................................
<S> <C> <C>
$ 770,000 Adams County PCR, Refunding, Public Service Co. of Colorado Project, Series A, 7.375%, 11/01/09 $ 803,249
6,000,000 Arapahoe County Capital Improvements, Transportation Fund, Highway Revenue, Vehicle Registration,
Series A, MBIA Insured, 6.15%, 08/31/26 ....................................................... 6,129,179
400,000 Arapahoe County COP, Building Finance Corp., CGIC Insured, 7.50%, 12/01/10 ..................... 433,464
805,000 Arapahoe County COP, Refunding, CGIC Insured, 6.625%, 12/01/16 ................................. 864,803
500,000 Arapahoe County USD No. 5, Cherry Creek, 7.125%, 12/15/10 ...................................... 549,605
200,000 Arkansas River Power Authority Revenue, Pre-Refunded, 8.35%, 12/01/09 .......................... 208,070
5,000,000 Arvada Limited Sales and Use Tax Revenue, Pre-Refunded, 7.50%, 06/01/11 ........................ 5,736,800
1,000,000 Arvada MFHR, Refunding, Springwood Community Project, 6.35%, 08/20/16 .......................... 1,006,550
Auraria Higher Education Center,
2,500,000 Parking Facilities Revenue, Refunding, Pre-Refunded, 7.875%, 04/01/12 ...................... 2,850,400
2,000,000 Student Fee Revenue, Series A, AMBAC Insured, 6.50%, 11/01/16 .............................. 2,096,020
300,000 Student Fee Revenue, Series A, MBIA Insured, 7.35%, 05/01/09 ............................... 322,227
2,850,000 Aurora COP, Refunding, 6.25%, 12/01/09 ......................................................... 2,980,074
150,000 Aurora MFHR, Dayton Place Project, GNMA Secured, Series 1988-A, 8.25%, 01/20/29 ................ 155,891
750,000 Aurora Urban Renewal Authority, Tax Increment Revenue, 7.50%, 11/15/07 ......................... 809,168
1,000,000 Bayfield School District No. 10, MBIA Insured, 6.65%, 06/01/15 ................................. 1,068,590
1,000,000 Beaver Creek Metropolitan District GO, Unlimited Tax, Refunding, MBIA Insured, 7.25%, 12/01/09.. 1,049,160
Boulder County Hospital Revenue,
2,000,000 Longmont United Hospital Project, 5.80%, 12/01/13 .......................................... 1,906,820
1,285,000 Longmont United Hospital Project, 5.875%, 12/01/20 ......................................... 1,208,568
3,000,000 Longmont United Hospital Project, Pre-Refunded, 8.20%, 12/01/20 ............................ 3,539,190
1,250,000 Boulder GO, Refunding, 7.20%, 08/15/13 ......................................................... 1,355,188
2,900,000 Castle Pines Metropolitan District, Refunding & Improvement, CGIC Insured, 7.625%, 12/01/15 .... 3,238,778
1,750,000 Colorado Association of School Boards, COP, Pueblo School District No. 60, Project A, MBIA Insured,
7.25%, 12/01/09 ............................................................................... 1,880,760
Colorado Health Facilities Authority Revenue,
1,615,000 Birchwood Manor Project, Series A, GNMA Secured, 7.625%, 04/01/26 .......................... 1,672,946
954,000 Community Provider Pooled, CGIC Insured, 6.75%, 07/15/17 ................................... 1,010,458
6,570,000 Community Provider Pooled, Series A, CGIC Insured, 7.25%, 07/15/17 ......................... 7,103,483
1,750,000 Covenant Retirement Communities, 6.75%, 12/01/15 ........................................... 1,762,793
4,950,000 Covenant Retirement Communities, 6.75%, 12/01/25 ........................................... 4,942,922
1,250,000 Mercy Medical Center Durango, 6.20%, 11/15/15 .............................................. 1,257,675
420,000 Oakbrook I Manor, Series A, GNMA Secured, 7.25%, 04/01/11 .................................. 433,654
885,000 Oakbrook I Manor, Series A, GNMA Secured, 7.625%, 04/01/26 ................................. 923,418
6,000,000 PSL Health System Project, Series B, 8.50%, 02/15/21 ....................................... 7,065,839
775,000 Refunding, Porter Memorial Hospital Project, Series A, Pre-Refunded, 7.40%, 02/01/16 ....... 867,093
1,000,000 Sisters of Charity Health Care System, 5.25%, 05/15/14 ..................................... 930,100
3,000,000 Swedish Medical Center, Project A, 6.80%, 01/01/23 ......................................... 3,310,770
Colorado HFA, GO,
3,880,000 MF, Series A, 6.80%, 08/01/14 .............................................................. 3,967,960
6,315,000 MF, Series A, 6.85%, 08/01/24 .............................................................. 6,457,844
1,000,000 MF, Series A, 7.50%, 05/01/29 .............................................................. 1,045,940
2,495,000 MF, Series A, 6.875%, 08/01/30 ............................................................. 2,550,539
100,000 Series A, Pre-Refunded, 8.375%, 01/01/30 ................................................... 111,107
20,000 SFHR, Series C, 8.75%, 09/01/17 ............................................................ 20,830
485,000 SFMR Program, Series A-3, 7.90%, 08/01/21 .................................................. 507,620
1,150,000 SFMR, Series A-2, 7.70%, 02/01/23 .......................................................... 1,201,164
2,070,000 SFMR, Series C-2, 7.375%, 08/01/10 ......................................................... 2,157,602
295,000 SFMR, Series C-2, 7.85%, 02/01/21 .......................................................... 307,068
300,000 Colorado HFA, SFMR Program, Series A-1, 8.00%, 08/01/17 ........................................ 315,240
Colorado Post Secondary Educational Facilities Authority Revenue,
$1,000,000 d Auraria Foundation Project CGIC Insured, 6.00%, 09/01/15 .................................... $ 1,008,200
3,250,000 University of Denver Project, Connie Lee Insured, 6.625%, 06/01/13 ......................... 3,400,573
300,000 University of Denver Project, Series B, Pre-Refunded, 9.00%, 12/01/07 ...................... 336,687
Colorado Springs Hospital Revenue,
75,000 Memorial Hospital, Pre-Refunded, 8.75%, 12/15/07 ........................................... 83,809
5,575,000 Refunding, MBIA Insured, 6.00%, 12/15/15 ................................................... 5,603,210
5,955,000 Refunding, MBIA Insured, 6.00%, 12/15/24 ................................................... 5,921,771
Colorado Springs Utilities System Revenue,
295,000 Series 1988-A, Pre-Refunded, 8.00%, 11/15/20 ............................................... 313,939
2,000,000 Series A, 6.10%, 11/15/24 .................................................................. 2,014,860
1,090,000 Colorado State, Board of Community Colleges and Occupational Educational Revenue, Red Rocks
Community College Project, AMBAC Insured, 6.00%, 11/01/19 ..................................... 1,101,445
Colorado Water Resources and Power Development Authority Revenue,
1,765,000 Clean Water Revenue, Series A, 6.15%, 09/01/11 ............................................. 1,825,257
1,000,000 Clean Water Revenue, Series A, 6.30%, 09/01/14 ............................................. 1,041,020
750,000 Small Water Resources, Series A, FGIC Insured, 6.70%, 11/01/12 ............................. 800,273
65,000 Stagecoach Project, Pre-Refunded, 8.00%, 11/01/17 .......................................... 73,840
Denver City and County Airport System Revenue,
4,000,000 Series 1990-A, 8.50%, 11/15/23 ............................................................. 4,508,280
7,500,000 Series A, 7.50%, 11/15/12 .................................................................. 8,177,399
4,000,000 Series A, 7.50%, 11/15/23 .................................................................. 4,330,600
1,000,000 Series D, 7.75%, 11/15/13 .................................................................. 1,167,530
100,000 Denver City and County Excise Tax Revenue, BIG Insured, Pre-Refunded, 8.30%, 09/01/14 .......... 108,995
Denver City and County IDR,
1,880,000 University of Denver Project, 7.50%, 03/01/11 .............................................. 2,028,182
720,000 University of Denver Project, Pre-Refunded, 7.50%, 03/01/11 ................................ 835,250
3,400,000 Denver City and County Revenue, Children's Hospital Association Project, FGIC Insured, 6.00%,
10/01/15 ...................................................................................... 3,456,304
150,000 Denver City and County Revenue, Refunding, St. Anthony's Hospital, Sisters of Charity Health Care
System, Series A, MBIA Insured, 7.75%, 05/01/14 ............................................... 162,590
345,000 Denver City and County SFMR, Series A, GNMA Secured, 8.125%, 12/01/20 .......................... 358,503
2,000,000 Denver City and County Special Facilities Airport Revenue, United Airlines Project, Series A, 6.875%,
10/01/32 ...................................................................................... 2,016,600
1,000,000 Donala Colorado Water and Sanitary District, Improvement Series B, 6.50%, 12/01/14 ............. 1,036,610
4,100,000 Douglas County, School District No. 1, Douglas and Elbert Counties, Improvement Series A,
MBIA Insured, 6.50%, 12/15/16 ................................................................. 4,316,152
El Paso County,
185,000 HMR, Series A, GNMA Secured, 8.00%, 03/01/21 ............................................... 193,823
135,000 HMR, Series B, GNMA Secured, 8.125%, 11/01/13 .............................................. 141,973
100,000 Revenue, Refunding, St. Francis Hospital System, Sisters of Charity Health Care System, Series A,
MBIA Insured, Pre-Refunded, 7.75%, 05/01/14 ............................................... 110,740
El Paso County, School District No. 20, GO,
20,000 Series B, 8.00%, 12/01/06 .................................................................. 21,239
30,000 Series B, Pre-Refunded, 8.00%, 12/01/06 .................................................... 32,453
1,500,000 Estes Park Urban Renewal Authority, Tax Increment Revenue, Pre-Refunded, 7.625%, 05/15/08 ...... 1,678,530
1,035,000 Foothill Metropolitan Recreational and Park District, Golf Course Revenue, Series A, Pre-Refunded,
8.00%, 11/15/04 ............................................................................... 1,127,467
190,000 Fort Collins IDR, Vipont Pharmaceutical, Inc. Project, Pre-Refunded, 9.25%, 08/01/13 ........... 218,302
500,000 Fort Collins PCR, Anheuser-Busch Co. Project, Series 1984, 7.375%, 12/01/14 .................... 519,060
250,000 Frisco Fire Protection District, Refunding & Improvement, 7.20%, 12/01/05 ...................... 269,353
Guam Airport Authority Revenue, Refunding,
$ 400,000 Series A, 6.375%, 10/01/10 ................................................................. $ 405,160
800,000 Series A, 6.50%, 10/01/23 .................................................................. 802,872
1,000,000 Guam Power Authority Revenue, Series A, 6.375%, 10/01/08 ....................................... 1,025,170
Jefferson County, District Wide Sales Tax Revenue,
7,450,000 Local Improvement District, MBIA Insured, 6.30%, 06/01/22 .................................. 7,653,459
200,000 Local Improvement District, Pre-Refunded, 8.20%, 12/01/13 .................................. 223,436
1,000,000 Jefferson County School District No. R-001, AMBAC Insured, 6.25%, 12/15/12 ..................... 1,034,000
760,000 Jefferson County SFMR, Refunding, Series A, MBIA Insured, 8.875%, 10/01/13 ..................... 821,925
750,000 La Plata County School District No. 9-R, Durango COP, FGIC Insured, 7.40%, 11/15/07 ............ 810,480
1,235,000 Lakewood MFHR Mortgage, FHA Insured Mortgage, 6.65%, 10/01/25 .................................. 1,246,127
3,025,000 Lakewood MFHR Mortgage, FHA Insured Mortgage, 6.70%, 10/01/36 .................................. 3,039,702
250,000 Larimer County Health Care Facilities Revenue, Refunding, Western Health Network, Inc., BIG Insured,
7.625%, 01/01/12 .............................................................................. 269,118
735,000 Left Hand Water District, Boulder and Weld Counties Water Revenue Bonds, MBIA Insured,
Pre-Refunded, 7.40%, 11/15/09 ................................................................. 842,141
765,000 Logan County, SFMR, Refunding, Series A, 8.50%, 11/01/11 ....................................... 811,757
625,000 Louisville Sewer Revenue, Refunding, FGIC Insured, Pre-Refunded, 7.60%, 12/01/06 ............... 659,325
910,000 Louisville Water District GO, Refunding, FGIC Insured, 7.20%, 12/01/09 ......................... 968,741
350,000 Mesa County Sales Tax Revenue, Refunding, MBIA Insured, 7.75%, 12/01/13 ........................ 380,349
575,000 Metropolitan of Denver Revenue, Sewer Disposal District No. 1, Series A, MBIA Insured, Pre-Refunded,
7.60%, 04/01/14 ............................................................................... 630,723
1,850,000 Montrose County COP, 6.35%, 06/15/06 ........................................................... 1,915,120
450,000 Northern Colorado Water Conservancy District Revenue, Municipal Sub-District, Series D, 7.75%,
12/01/12 ...................................................................................... 473,936
2,150,000 Platte River Electric Power Authority Revenue, Series I, Pre-Refunded, 7.70%, 06/01/16 ......... 2,252,727
1,000,000 Pueblo County School District No.70, Pueblo Rural, GO, 6.40%, 12/01/14 ......................... 1,044,510
1,000,000 Pueblo Urban Renewal Authority Tax Increment Revenue, Refunding, AMBAC Insured, 6.10%,
12/01/15 ...................................................................................... 1,026,140
Puerto Rico Commonwealth, Aqueduct and Sewer Authority Revenue,
55,000 Refunding, Series 1985-A, FSA Insured, Pre-Refunded, 9.00%, 07/01/09 ....................... 71,650
490,000 Series 1988-A, 7.875%, 07/01/17 ............................................................ 544,179
1,000,000 Puerto Rico Commonwealth Highway Authority Revenue, Series G, Pre-Refunded, 8.00%, 07/01/18 .... 1,174,270
Puerto Rico Electric Power Authority Revenue,
50,000 Series 1987-L, Pre-Refunded, 8.40%, 07/01/15 ............................................... 54,815
155,000 Series N, 7.125%, 07/01/14 ................................................................. 169,195
180,000 Puerto Rico HFC, SFMR, Portfolio No. 1, Series 1988-A, GNMA Secured, 7.80%, 10/15/21 ........... 188,190
600,000 Puerto Rico Industrial, Medical and Environmental Facilities, PCFA, Baxter Travenol Labs, Inc., 8.00%,
09/01/12 ...................................................................................... 666,168
145,000 Puerto Rico Municipal Finance Agency, Series 1988-A, 8.25%, 07/01/08 ........................... 159,433
Regional Transportation District, Sales Tax Revenue,
1,080,000 Refunding, FGIC Insured, 6.25%, 11/01/12 ................................................... 1,124,194
100,000 Series 1988, Pre-Refunded, 8.00%, 11/01/08 ................................................. 110,854
840,000 Southwestern SFMR, Refunding, Series A, 7.375%, 09/01/11 ....................................... 873,524
245,000 Summit County SFMR, Series A, 7.50%, 12/01/11 .................................................. 256,086
2,750,000 Summit County Sports Facilities Revenue, Refunding, Keystone Resorts Project, Ralston Purina Co.,
7.875%, 09/01/08 .............................................................................. 3,216,015
2,000,000 Summit County USD No. 1, GO, FGIC Insured, 6.70%, 12/01/14 ..................................... 2,138,900
7,000,000 University of Colorado, Hospital Authority Revenue, Series A, AMBAC Insured, 6.40%, 11/15/22 ... 7,254,869
University of Colorado Revenue, Refunding,
1,000,000 Auxiliary Facility Systems, Boulder Campus, 7.05%, 06/01/15 ................................ 1,071,900
50,000 Recreations and Parking Facilities, Pre-Refunded, 7.90%, 05/01/06 .......................... 52,281
University of Puerto Rico Revenue, Refunding,
$ 400,000 Series J, Pre-Refunded, 7.75%, 06/01/07 .................................................... $ 419,560
250,000 Series L, Pre-Refunded, 7.75%, 06/01/07 .................................................... 262,225
2,000,000 Westminster City Sales and Use Tax Revenue, Refunding & Improvement, FGIC Insured, 7.00%,
12/01/08 ...................................................................................... 2,181,100
-----------
Total Long Term Investments (Cost $188,660,303) .......................................... 200,783,764
-----------
e Short Term Investments .4%
Colorado Health Facilities Authority Revenue,
600,000 Sisters of Charity Health, Weekly VRDN and Put, 3.55%, 05/15/22 ............................ 600,000
200,000 North Colorado Medical Center, MBIA Insured, Weekly VRDN and Put, 3.60%, 05/15/20 .......... 200,000
-----------
Total Short Term Investments (Cost $800,000).............................................. 800,000
-----------
Total Investments (Cost $189,460,303) 98.9%.......................................... 201,583,764
Other Assets and Liabilities, Net 1.1%............................................... 2,175,335
-----------
Net Assets 100.0%.................................................................... $203,759,099
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $189,461,191 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost................................................................ $ 12,285,631
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value ............................................................... (163,058)
-----------
Net unrealized appreciation................................................................... $ 12,122,573
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co.
CGIC - Capital Guaranty Insurance Co.
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Agency/Authority
HFC - Housing Finance Corp.
HMR - Home Mortgage Revenue
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MF - Multi-Family
MFHR - Multi-Family Housing Revenue
PCFA - Pollution Control Financing Authority
PCR - Pollution Control Revenue
SFHR - Single Family Housing Revenue
SFMR - Single Family Mortgage Revenue
USD - Unified School District
dSee note 1(f) regarding securities purchased on a when-issued basis.
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the principal balance plus accrued interest upon short notice prior to
specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Connecticut Tax-Free Income Fund (Note 1)
Long Term Investments 98.6%...................................................................
Bridgeport GO,
<S> <C> <C>
$ 300,000 Series A, 7.25%, 06/01/00 ................................................................. $ 321,465
600,000 Series A, 7.625%, 01/15/09 ................................................................ 633,240
1,375,000 Series B, 7.55%, 11/15/00 ................................................................. 1,499,988
3,750,000 Series B, 7.75%, 11/15/10 ................................................................. 4,005,300
425,000 Series B, State Guaranteed, 7.30%, 01/15/09 ............................................... 455,796
750,000 Unlimited Tax, Series A, 7.30%, 03/01/99 .................................................. 796,673
Connecticut HFA, Housing Mortgage Finance, State Program,
250,000 Series A, 7.60%, 11/15/05 ................................................................. 259,565
270,000 Series A, 7.50%, 11/15/09 ................................................................. 283,541
1,540,000 Series A, Sub-Series 2, 7.20%, 11/15/08 ................................................... 1,635,542
545,000 Series B, 7.20%, 11/15/09 ................................................................. 564,958
17,485,000 Series B, 6.75%, 11/15/23 ................................................................. 18,112,012
940,000 Series B-1, 7.55%, 11/15/08 ............................................................... 1,009,184
1,640,000 Series C, 7.625%, 11/15/17 ................................................................ 1,674,046
500,000 Series C-1, 6.60%, 11/15/23 ............................................................... 512,740
6,000,000 Series C-2, 6.70%, 11/15/22 ............................................................... 6,052,380
3,900,000 d Series E, 6.30%, 05/15/17 ................................................................. 3,911,934
1,250,000 Sub-Series A-1, 6.10%, 05/15/17 ........................................................... 1,235,050
640,000 Sub-Series B-1, 6.50%, 05/15/18 ........................................................... 646,304
700,000 Sub-Series B-1, 6.30%, 05/15/25 ........................................................... 702,786
500,000 Sub-Series B-2, 6.75%, 05/15/22 ........................................................... 506,770
1,380,000 Sub-Series G-1, 6.20%, 11/15/16 ........................................................... 1,368,587
1,910,000 Sub-Series H-1, 6.00%, 05/15/14 ........................................................... 1,878,218
Connecticut Higher Education Supplemental Loan Authority,
910,000 Series A, 7.00%, 11/15/05 ................................................................. 959,076
265,000 Series A, 7.20%, 11/15/10 ................................................................. 280,044
450,000 Series A, 7.50%, 11/15/10 ................................................................. 474,854
1,020,000 Connecticut South Central Regional Water Authority, Water System Revenue, Refunding,
Pre-Refunded, 7.125%, 08/01/12 ............................................................... 1,069,949
5,800,000 Connecticut State Development Authority, Health Care Revenue, Masonic Charity of Connecticut,
6.50%, 08/01/20 .............................................................................. 6,024,518
750,000 Connecticut State Development Authority, PCR, New England Power Co., 7.25%, 10/15/15 .......... 805,913
2,000,000 Connecticut State Development Authority, Solid Waste Disposal Facilities Revenue, Pfizer, Inc. Project,
7.00%, 07/01/25 .............................................................................. 2,190,900
1,000,000 Connecticut State Development Authority, Water Facility Revenue, Refunding, Bridgeport Hydraulic Co.
Project, 7.25%, 06/01/20 ..................................................................... 1,093,620
Connecticut State Health and Educational Facilities Authority Revenue,
635,000 Capital Assets, Series B, 7.00%, 01/01/00 ................................................. 681,946
1,995,000 Capital Assets, Series C, 7.00%, 01/01/20 ................................................. 2,189,193
5,600,000 Choate Rosemary Hall, Series A, 7.00%, 07/01/25 ........................................... 6,144,880
1,395,000 Hartford University, Series C, Pre-Refunded, 8.00%, 07/01/18 .............................. 1,643,477
5,000,000 Hartford University, Series D, 6.80%, 07/01/22 ............................................ 4,908,650
1,250,000 Hebrew Home and Hospital, Series A, 7.00%, 08/01/30 ....................................... 1,286,725
1,000,000 Lawrence Memorial Hospital, Series B, MBIA Insured, Pre-Refunded, 7.00%, 07/01/20 ......... 1,130,270
500,000 Lutheran General Health Care System, ETM 07/01/05, 7.375%, 07/01/19 ....................... 593,645
1,000,000 New Britain Memorial Hospital, Series A, 7.75%, 07/01/22 .................................. 1,053,300
2,905,000 New Horizons Village Project, 7.30%, 11/01/16 ............................................. 3,218,943
1,000,000 Quinnipiac College, Series C, Pre-Refunded, 7.75%, 07/01/20 ............................... 1,160,180
615,000 Sacred Heart University, Series A, 6.85%, 07/01/22 ........................................ 628,782
100,000 St. Mary's Hospital, Series B, 7.50%, 07/01/02 ............................................ 106,129
1,000,000 St. Mary's Hospital, Series C, Pre-Refunded, 7.375%, 07/01/20 ............................. 1,018,830
275,000 St. Raphael Hospital, Series C, AMBAC Insured, Pre-Refunded, 7.50%, 07/01/14 .............. 304,538
Connecticut State Health and Educational Facilities Authority Revenue, (cont.)
$ 1,000,000 Taft School, Issue A, 7.375%, 07/01/20 .................................................... $ 1,144,060
12,350,000 Yale New Haven Hospital, Series F, MBIA Insured, 7.10%, 07/01/25 .......................... 13,614,023
220,000 Connecticut State Municipal Electric Energy, Coop Power Supply, MBIA Insured, Pre-Refunded,
6.875%, 01/01/08 ............................................................................. 226,556
Connecticut State Resource Recovery Authority Revenue,
200,000 American Refunding, Series A, 7.70%, 11/15/01 ............................................. 219,300
200,000 American Refunding, Series A, 8.10%, 11/15/15 ............................................. 221,248
835,000 Bridgeport Resco, Ltd. Partnership Project, Series A, 7.625%, 01/01/09 .................... 877,794
1,850,000 Connecticut System Bonds, Series B, MBIA Insured, 7.30%, 11/15/12 ......................... 1,960,778
205,000 Wallingford Recovery Project, Series A, 7.125%, 11/15/08 .................................. 212,218
Connecticut State Special Tax Obligation Revenue, Transportation Infrastructure Purpose,
900,000 Series A, Pre-Refunded, 7.30%, 02/15/08 ................................................... 983,637
2,000,000 Series A, Pre-Refunded, 7.20%, 02/01/09 ................................................... 2,223,020
200,000 East Haven Utah Bank Qualified GO, 7.00%, 09/15/07 ............................................ 214,992
200,000 Griswold GO, AMBAC Insured, 7.50%, 04/01/06 ................................................... 238,298
Guam Airport Authority Revenue,
250,000 Series 93-B, 6.60%, 10/01/10 .............................................................. 254,580
1,300,000 Series A, 6.70%, 10/01/23 ................................................................. 1,309,360
5,500,000 Guam Power Authority Revenue, Series A, 6.75%, 10/01/24 ....................................... 5,633,100
210,000 Montville Town GO, Pre-Refunded, 7.35%, 12/01/10 .............................................. 233,472
New Haven GO,
2,250,000 Series A, 7.10%, 03/01/97 ................................................................. 2,325,623
4,545,000 Series A, 7.40%, 03/01/12 ................................................................. 4,838,971
2,000,000 Series B, 6.75%, 12/01/05 ................................................................. 2,134,140
Plainfield GO,
150,000 Series 1988, 7.30%, 09/01/10 .............................................................. 161,790
335,000 Series 1991, 7.25%, 09/01/05 .............................................................. 372,118
335,000 Series 1991, 7.30%, 09/01/07 .............................................................. 369,880
335,000 Series 1991, 7.30%, 09/01/09 .............................................................. 362,209
100,000 Plainville GO, 7.20%, 06/15/08 ................................................................ 105,601
1,500,000 Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue, Series 1988-A, 7.00%, 07/01/19 . 1,594,200
1,000,000 Puerto Rico Commonwealth Highway Authority and Transportation Revenue, Series S, Pre-Refunded,
6.625%, 07/01/18 ............................................................................. 1,134,590
1,800,000 Puerto Rico Commonwealth Highway Authority Revenue, Refunding, Series R, 6.75%, 07/01/05 ...... 1,955,160
Puerto Rico Electric Power Authority Revenue,
700,000 Series P, 7.00%, 07/01/11 ................................................................. 775,124
2,950,000 Series P, 7.00%, 07/01/21 ................................................................. 3,260,281
5,000,000 Series R, 6.375%, 07/01/24 ................................................................ 5,087,350
1,250,000 Puerto Rico HFC, SFMR, Series C, GNMA Insured, 6.85%, 10/15/23 ................................ 1,297,037
5,000,000 Puerto Rico Municipal Finance Agency, Series A, 6.50%, 07/01/19 ............................... 5,224,650
Puerto Rico PBA, Guaranteed Public Education and Health Facilities,
1,000,000 Series H, Pre-Refunded, 7.25%, 07/01/17 ................................................... 1,097,770
700,000 Series J, Pre-Refunded, 7.25%, 07/01/17 ................................................... 768,438
1,130,000 Stratford GO, Unlimited Tax, Pre-Refunded, 7.30%, 03/01/12 .................................... 1,299,996
6,550,000 Virgin Islands Water and Power Authority, Electric System Revenue, 7.40%, 07/01/11 ............ 6,861,191
Waterbury GO,
785,000 Pre-Refunded, 7.25%, 03/01/03 ............................................................. 901,203
785,000 Pre-Refunded, 7.25%, 03/01/04 ............................................................. 901,203
780,000 Pre-Refunded, 7.50%, 03/01/07 ............................................................. 904,854
-----------
Total Long Term Investments (Cost $151,017,590) ......................................... 160,334,256
-----------
Short Term Investments 1.8%......................................................................
$ 1,800,000 e Connecticut State Development Authority, PCR, Refunding, Connecticut Light and Power Co. Project,
Series A, Weekly VRDN and Put, 3.55%, 09/01/28 .................................................. $ 1,800,000
1,100,000 New Haven GO, Series A, 7.00%, 03/01/96 ....................................................... 1,114,113
-----------
Total Short Term Investments (Cost $2,900,000) .......................................... 2,914,113
-----------
Total Investments (Cost $153,917,590) 100.4% ....................................... 163,248,369
Liabilities in Excess of Other Assets, Net (.4)% ................................... (709,538)
-----------
Net Assets 100.0% .................................................................. $162,538,831
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $153,963,462 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost .............................................................. $ 9,439,756
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value .............................................................. (154,849)
-----------
Net unrealized appreciation ................................................................. $ 9,284,907
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
ETM - Escrow to Maturity
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Agency
HFC - Housing Finance Corp.
MBIA - Municipal Bond Investors Assurance Corp.
PBA - Public Building Authority
PCR - Pollution Control Revenue
SFMR - Single Family Mortgage Revenue
dSee Note 1(f) regarding securities purchased on a when-issued basis.
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the principal balance plus accrued interest upon short notice prior to
specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Indiana Tax-Free Income Fund (Note 1)
Long Term Investments 97.4%......................................................................
<S> <C> <C>
$ 75,000 Allen County COP, Fort Wayne Memorial Coliseum, Pre-Refunded, 8.125%, 11/01/17 ................... $ 81,198
50,000 Beech Grove EDR, Westvaco Corp., 8.75%, 07/01/10 ................................................. 50,767
500,000 Boonville Junior High School Building Corp., Pre-Refunded, 7.25%, 07/15/09 ....................... 563,125
1,000,000 Carmel EDR, Refunding, Cool Creek Assoc., 6.50%, 09/01/15 ........................................ 1,006,550
75,000 Center Grove Central Elementary School Building Corp., First Mortgage, Pre-Refunded, 7.375%, 07/01/09 81,653
50,000 Chesterton Sewer Revenue, Pre-Refunded, 8.10%, 08/01/07 .......................................... 55,339
250,000 Clarke County Hospital Association, Refunding, First Mortgage, MBIA Insured, 7.50%, 09/01/07 ..... 273,723
Columbus Sewage Works Revenue,
710,000 MBIA Insured, 6.50%, 02/15/13 .................................................................. 744,904
260,000 Series 1990, 7.25%, 02/15/09 ................................................................... 277,654
500,000 Crawfordsville School Building Corp., First Mortgage, Pre-Refunded, 7.70%, 07/15/11 .............. 578,330
50,000 Crown Point Redevelopment District, Lake County Tax Increment, 8.10%, 02/01/07 ................... 52,230
1,750,000 Elkhart County, Hospital Authority Revenue, Goshen Hospital Association, Inc. Project, 7.35%, 07/01/12 1,755,338
500,000 Elwood Middle School Building Corp., Refunding, First Mortgage, 7.30%, 01/01/08 .................. 545,070
55,000 Flat Rock-Hawcreek Elementary School Building Corp., First Mortgage, Pre-Refunded, 8.30%, 01/01/09 61,863
1,000,000 Fort Wayne Hospital Authority Revenue, Parkview Memorial Hospital Project, Series A, FGIC Insured,
6.50%, 11/15/12 ................................................................................. 1,025,940
150,000 Franklin Community Elementary School Building Corp., First Mortgage, Pre-Refunded, 7.80%, 01/01/09 162,546
200,000 Franklin Township of Marion County, Multi-School Building Corp., First Mortgage, Pre-Refunded, 7.50%,
01/15/12 ........................................................................................ 223,600
50,000 Frankton-Lapel School Building Corp., First Mortgage, Pre-Refunded, 7.90%, 01/01/09 .............. 54,269
500,000 Hamilton Heights High School Building Corp., First Mortgage, Pre-Refunded, 7.375%, 07/15/10 ...... 574,315
125,000 Hamilton Southeastern Building Corp., Consolidated School Building Corp., First Mortgage, Pre-Refunded
8.40%, 01/01/15 ................................................................................. 140,926
3,000,000 Hammond Industrial Sewer and Solid Waste Disposal Revenue, American Maize-Products Co. Project,
Series A, 8.00%, 12/01/24 ....................................................................... 3,247,289
1,500,000 Hammond Multi-School Building Corp., Refunding, First Mortgage, Series A, 6.20%, 07/10/15 ........ 1,511,475
Hammond PCR,
55,000 Commonwealth Edison Co. of Indiana, Inc. Project, 9.125%, 06/15/10 ............................. 55,940
300,000 Stauffer Chemical Project, Guaranteed Imperial 82, 8.00%, 11/01/12 ............................. 340,206
Indiana Bond Bank, Special Program,
110,000 Series 1986-C, 8.00%, 08/01/11 ................................................................. 114,794
300,000 Series 1988-A, Pre-Refunded, 8.375%, 02/01/18 .................................................. 322,452
250,000 Series 1990-A, 7.50%, 02/01/20 ................................................................. 267,953
Indiana Health Facility Financing Authority, Hospital Revenue,
500,000 Bartholomew Indiana County Hospital, CGIC Insured, Pre-Refunded, 7.75%, 08/15/20 ............... 581,710
750,000 Community Hospitals of Indiana, MBIA Insured, 7.00%, 07/01/21 .................................. 797,138
1,250,000 Hancock Memorial Hospital Project, Series 1990, 8.30%, 08/15/20 ................................ 1,332,450
1,835,000 Jackson County Schneck Memorial Hospital, 7.50%, 02/15/22 ...................................... 1,856,542
1,280,000 Methodist Hospital, Inc., 6.75%, 09/15/09 ...................................................... 1,342,490
175,000 Refunding, Deaconess Hospital, Inc., Pre-Refunded, 7.75%, 03/01/15 ............................. 181,774
55,000 St. Anthony's Medical Center/Home, Inc., Pre-Refunded, 9.25%, 10/01/17 ......................... 61,538
1,000,000 St. Anthony's Medical Center/Home, Inc., Series A, 7.00%, 10/01/17 ............................. 1,045,750
50,000 Welborn Memorial Baptist Hospital Project, Pre-Refunded, 8.00%, 07/01/02 ....................... 54,328
Indiana Municipal Power Agency, Power Supply System Revenue, Refunding,
65,000 Series A, 5.75%, 01/01/18 ...................................................................... 61,708
1,000,000 Series A, AMBAC Insured, Pre-Refunded, 6.50%, 01/01/16 ......................................... 1,086,290
500,000 Series A, Pre-Refunded, 7.25%, 01/01/15 ........................................................ 515,325
Indiana State Educational Facilities Authority Revenue,
175,000 Anderson University Project, 8.40%, 10/01/08 ................................................... 193,415
175,000 Butler University Project No. 2, Series B, FGIC Insured, Pre-Refunded, 8.00%, 11/01/09 ......... 197,334
100,000 Refunding, Valparaiso University Project, BIG Insured, Pre-Refunded, 7.80%, 10/01/08 ........... 112,022
500,000 University of Evansville, 8.125%, 11/01/10 ..................................................... 551,000
Indiana State HFA, SFMR,
$ 25,000 Series A, 7.875%, 01/01/17 ..................................................................... $ 26,171
70,000 Series A, GNMA Secured, 8.125%, 07/01/06 ....................................................... 73,583
460,000 Series F-2, GNMA Secured, 7.75%, 07/01/22 ...................................................... 485,341
1,000,000 Indiana State Office Building Commission, Correctional Facilities Program Revenue, 6.375%, 07/01/16 1,010,600
95,000 Indiana State Vocational Technical College Building Facilities, Student Fee, Series B, MBIA Insured,
Pre-Refunded, 7.90%, 07/01/07 ................................................................... 104,630
100,000 Indiana Transportation Finance Authority, Highway Revenue, Series A, Pre-Refunded, 8.125%, 06/01/11 111,737
200,000 Indiana University Hospital Facilities Revenue, 7.30%, 01/01/03 .................................. 218,636
Indianapolis Airport Authority, Indianapolis International Airport Revenue,
85,000 BIG Insured, 8.30%, 07/01/18 ................................................................... 93,242
1,000,000 6.50%, 11/15/31 ................................................................................ 979,430
200,000 Indianapolis Gas Utility Revenue, Series A, FGIC Insured, Pre-Refunded, 7.10%, 06/01/20 .......... 208,694
Indianapolis Local Public Bank Improvement Bond,
2,300,000 Refunding, Series D, 6.75%, 02/01/20 ........................................................... 2,367,481
1,100,000 Refunding, Series D, 6.50%, 02/01/22 ........................................................... 1,103,773
225,000 Series D, Pre-Refunded, 8.50%, 02/01/18 ........................................................ 250,236
Indianapolis Resource Recovery Revenue, Ogden Martin System, Inc.,
100,000 Series A, 7.90%, 12/01/08 ...................................................................... 105,330
150,000 Series B, 7.90%, 12/01/08 ...................................................................... 157,995
500,000 Jasper County PCR, Refunding, Collateralized, Northern Indiana Public Service Co., MBIA Insured, 7.10%,
07/01/17 ........................................................................................ 535,495
300,000 Jefferson County Hospital Authority Facility Revenue, Refunding, King's Daughters' Hospital, 8.50%,
08/15/13 ........................................................................................ 320,877
50,000 Kendallville Sewage Works Revenue, GO, Pre-Refunded, 7.60%, 07/01/07 ............................. 54,682
Kokomo Hospital Authority Revenue, Refunding, St. Joseph's Hospital and Health Center of Kokomo,
300,000 Series A, Pre-Refunded, 8.75%, 02/15/13 ........................................................ 342,429
235,000 Series B, Pre-Refunded, 8.75%, 02/15/13 ........................................................ 268,236
Lake Central Industrial Multi-School Building,
2,100,000 First Mortgage, MBIA Insured, 6.50%, 01/15/14 .................................................. 2,178,455
755,000 First Mortgage, Pre-Refunded, 7.00%, 01/15/18 .................................................. 860,730
95,000 Madison County Authority, Anderson Hospital Revenue, Refunding, Series A, BIG Insured, 8.00%,
01/01/14 ........................................................................................ 102,765
100,000 Manchester Community, Elementary School Building Corp., First Mortgage, Pre-Refunded, 7.80%,
01/01/12 ....................................................................................... 111,248
Marion County Convention and Recreational Facilities Authority, Excise Tax Revenue,
250,000 Lease Rental, Series A, AMBAC Insured, 7.00%, 06/01/21 ......................................... 267,778
500,000 Lease Rental, Series B, AMBAC Insured, Pre-Refunded, 7.00%, 06/01/21 ........................... 570,275
375,000 Marion County Hospital Authority Facility Revenue, Refunding, Methodist Hospital of Indiana, Inc., Series A,
Pre-Refunded, 7.75%, 03/01/16 ................................................................... 389,610
1,000,000 Merrillville Multi-School Building Corp., First Mortgage, Pre-Refunded, 7.50%, 07/15/09 .......... 1,150,380
300,000 Monroe County, Hospital Authority Revenue, Bloomington Hospital Project, MBIA Insured, 6.70%, 05/01/12 320,511
250,000 Monroe-Gregg School Building Corp., First Mortgage, Pre-Refunded, 7.30%, 01/15/11 ................ 284,840
2,000,000 Muncies Edit Building Corp., Industrial First Mortgage, Series A, AMBAC Insured, 6.60%, 12/01/17 . 2,088,899
500,000 North Harrison High School Building Corp., First Mortgage, Pre-Refunded, 7.30%, 07/15/12 ......... 573,840
85,000 North Lawrence Community School, COP, Multi-School Building Corp., Pre-Refunded, 8.10%, 01/01/10 . 93,829
60,000 North Montgomery Elementary School Building Corp., COP, Pre-Refunded, 8.375%, 07/01/08 ........... 66,593
125,000 Northridge High School Additions, Building Corp., Middlebury, First Mortgage, Pre-Refunded, 8.00%,
12/30/08 ....................................................................................... 139,600
100,000 Perry Township Multi-School Building Corp. Revenue, First Mortgage, Pre-Refunded, 7.80%, 01/01/03 109,801
Peru Community School Building Corp., First Mortgage,
150,000 Series 1988, Pre-Refunded, 7.90%, 07/01/08 ..................................................... 169,130
100,000 Series 1989, Pre-Refunded, 7.80%, 01/01/11 ..................................................... 112,447
$1,000,000 Plymouth Industry Multi-School Building Corp., First Mortgage, AMBAC Insured, Pre-Refunded, 6.75%,
01/01/13 ....................................................................................... $ 1,140,550
Princeton PCR, Refunding, Public Service Co. of Indiana Project,
300,000 Series C, BIG Insured, 7.60%, 03/15/12 ......................................................... 316,782
250,000 Series C, MBIA Insured, 7.375%, 03/15/12 ....................................................... 270,680
205,000 South Bend Public Library, Pre-Refunded, 7.25%, 01/01/06 ......................................... 207,232
150,000 South Bend Redevelopment Authority Lease Revenue, Rental Parking Facility Project, Pre-Refunded,
7.90%, 02/01/07 ................................................................................. 162,728
225,000 Southern Hancock County Community School Corp., COP, AMBAC Insured, Pre-Refunded, 7.10%,
07/01/11 ....................................................................................... 250,778
500,000 Steuben County Metropolitan School District, COP, 6.90%, 01/01/08 ................................ 532,745
750,000 Sullivan Industrial PCR, Refunding, Hoosier Energy, Meron Project, 7.10%, 04/01/19 ............... 801,908
250,000 Twin Lakes School Building Improvement Corp., First Mortgage, Pre-Refunded, 7.50%, 01/15/08 ...... 279,083
50,000 Warsaw High School Building Corp., First Mortgage, Pre-Refunded, 8.10%, 01/01/09 ................. 56,047
-----------
Total Long Term Investments (Cost $43,533,291) ............................................. $46,568,125
-----------
e Short Term Investments 1.3%
200,000 Fort Wayne PCR, General Motors Corp. Project, Weekly VRDN and Put, 4.20%, 11/01/05 ............... 200,000
400,000 Indianapolis EDR, Jewish Federation Campus, Weekly VRDN and Put, 3.60%, 04/01/05 ................. 400,000
-----------
Total Short Term Investments (Cost $600,000)................................................ 600,000
-----------
Total Investments (Cost $44,133,291) 98.7%............................................. 47,168,125
Other Assets and Liabilities, Net 1.3%................................................. 626,374
-----------
Net Assets 100.0%...................................................................... $47,794,499
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $44,133,291 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost.................................................................. $ 3,034,834
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value ................................................................. --
-----------
Net unrealized appreciation..................................................................... $ 3,034,834
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co.
CGIC - Capital Guaranty Insurance Co.
COP - Certificate of Participation
EDR - Economic Development Revenue
FGIC - Financial Guaranty Insurance Co.
GNMA - Government National Mortgage Association
GO - General Obilgation
HFA - Housing Finance Agency/Authority
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
SFMR - Single Family Mortgage Revenue
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the principal balance plus accrued interest upon short notice prior to
specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin New Jersey Tax-Free Income Fund (Note 1)
Long Term Investments 98.6%
<S> <C> <C>
$ 1,000,000 Allamuchy Town Board of Education, COP, MBIA Insured, 6.00%, 11/01/14 ......................... $ 1,015,340
2,000,000 Atlantic City Municipal Utilities Authority Revenue, Water System, Pre-Refunded, 7.75%, 05/01/17 2,311,620
9,500,000 Atlantic County Improvement Authority, Luxury Tax Revenue, Convention Center Project, MBIA Insured,
ETM, 7.40%, 07/01/16 ......................................................................... 11,322,480
Atlantic County Utilities Authority, Solid Waste Revenue,
2,000,000 Series 1992, 7.00%, 03/01/08 .............................................................. 2,010,100
6,600,000 Series 1992, 7.125%, 03/01/16 ............................................................. 6,601,913
2,000,000 Bedminister Township Board of Education, COP, 7.125%, 09/01/10 ................................ 2,192,760
Bergen County Utility Authority, Solid Waste System Revenue,
1,325,000 Series A, FGIC Insured, 6.25%, 06/15/11 ................................................... 1,376,476
100,000 Series A, FGIC Insured, Pre-Refunded, 7.75%, 03/15/13 ..................................... 108,793
100,000 Bridgeview Manor Housing Corp. Revenue, Series A, Pre-Refunded, 8.20%, 12/01/08 ............... 110,537
5,400,000 Cape May County, IPC, Financing Authority Revenue, Refunding, Atlantic City Electric Co., Series A,
MBIA Insured, 6.80%, 03/01/21 ................................................................ 6,169,338
2,750,000 Carteret Board of Education, COP, MBIA Insured, 6.25%, 04/15/19 ............................... 2,834,178
1,890,000 Church Street Corp., Keansburg Elderly Housing Mortgage Revenue, Refunding, 5.625%, 03/01/11 .. 1,793,572
200,000 Delaware River, Joint Toll Bridge System Commission Revenue, Series I-78, Pre-Refunded, 7.875%,
07/01/18 ...................................................................................... 223,174
1,000,000 Delaware River Port Authority, Pennsylvania and New Jersey River Bridges Revenue, Refunding,
AMBAC Insured, 7.375%, 01/01/07 ............................................................... 1,110,470
Essex County Improvement Authority GO, Lease Revenue,
8,000,000 AMBAC Insured, Pre-Refunded, 7.00%, 12/01/20 .............................................. 9,110,160
6,000,000 Jail and Youth Housing Projects, AMBAC Insured, 7.00%, 12/01/24 ........................... 6,606,540
2,510,000 MBIA Insured, 6.00%, 12/01/17 ............................................................. 2,546,119
3,000,000 Evesham Municipal Utilities Authority Revenue, Series B, MBIA Insured, 7.00%, 07/01/10 ........ 3,239,220
3,675,000 Evesham Township Board of Education, COP, FGIC Insured, 6.875%, 09/01/11 ...................... 3,998,657
Gloucester County Improvement Authority Revenue,
1,000,000 Justice Complex Lease Project, Pre-Refunded, 7.50%, 12/15/10 .............................. 1,131,990
275,000 Solid Waste Resource Recovery, SES Gloucester Co., Limited Partnership Project, Series B,
8.375%, 07/01/10 ......................................................................... 293,400
2,000,000 Gloucester County PCR, Refunding, Mobil Oil Refinance Corp. Project, 5.625%, 12/01/28 ......... 1,892,300
4,670,000 Hamilton Township Board of Education, COP, Series B, FSA Insured, 7.00%, 12/15/15 ............. 5,029,730
95,000 Hillsborough Township School District, Board of Education, COP, Lease Purchase Agreement,
MBIA Insured, Pre-Refunded, 8.00%, 08/15/08 .................................................. 100,551
6,900,000 Hoboken Union City, Weehawken Sewerage Authority Revenue, MBIA Insured, Pre-Refunded, 7.25%,
08/01/19 ..................................................................................... 7,753,944
1,750,000 Howell Township, GO, Refunding, FGIC Insured, 6.80%, 01/01/14 ................................. 1,884,050
100,000 Howell Township Municipal Utilities Authority Revenue, Monmouth County, BIG Insured, Pre-Refunded,
7.375%, 01/01/14 ............................................................................. 110,411
Hudson County Correctional Facility, COP,
2,550,000 BIG Insured, Pre-Refunded, 7.60%, 12/01/21 ................................................ 2,858,244
4,000,000 Hudson County, MBIA Insured, Pre-Refunded, 7.25%, 12/01/21 ................................ 4,601,440
2,000,000 Hudson County Improvement Authorities Facilities Lease Revenue, Hudson County Lease Project,
FGIC Insured, 6.00%, 12/01/25 ................................................................ 2,013,860
1,685,000 Jersey City Sewer Authority Revenue, Refunding, FGIC Insured, Pre-Refunded, 7.00%, 01/01/19 ... 1,776,546
Lacey Municipal Utilities Authority, Water Revenue,
1,225,000 MBIA Insured, 6.125%, 12/01/14 ............................................................ 1,261,481
2,500,000 MBIA Insured, 6.10%, 12/01/23 ............................................................. 2,545,425
100,000 Lumberton Township School District, COP, Fiscal Funding of New Jersey, Inc., MBIA Insured,
Pre-Refunded, 7.70%, 10/01/13 ................................................................ 111,429
Mercer County Improvement Authority Revenue,
3,050,000 Guaranteed Social Services, School District, Pre-Refunded, 7.20%, 12/15/12 ................ 3,380,193
2,500,000 Library Systems, Series A, 6.00%, 12/01/14 ................................................ 2,530,225
Middlesex County COP,
$ 1,500,000 MBIA Insured, 6.00%, 08/15/14 ............................................................. $ 1,533,795
2,300,000 MBIA Insured, 6.125%, 02/15/19 ............................................................ 2,365,090
2,000,000 Middlesex County Improvement Authority Revenue, Guaranteed Educational Services, Commission
Project, 6.00%, 09/15/14 ..................................................................... 2,042,000
100,000 Monmouth County Improvement Authority Revenue, Wall and Keyport Projects, BIG Insured,
Pre-Refunded, 7.90%, 07/15/13 ................................................................ 109,981
2,000,000 New Brunswick Parking Authority Revenue, Series B, FGIC Insured, Pre-Refunded, 7.20%, 09/01/15 2,239,600
New Jersey EDA,
4,145,000 EDR, Series N, 6.90%, 12/01/11 ............................................................ 4,447,295
465,000 EDR, Series P, 6.90%, 12/01/11 ............................................................ 498,912
575,000 First Mortgage Gross Revenue, Mega Care, Inc. Project, Pre-Refunded, 8.625%, 08/01/07 ..... 633,547
6,370,000 Heating and Cooling Revenue, Trigen-Trenton Project, Series A, 6.20%, 12/01/10 ............ 6,270,692
3,375,000 Heating and Cooling Revenue, Trigen-Trenton Project, Series B, 6.10%, 12/01/04 ............ 3,375,068
2,720,000 Heating and Cooling Revenue, Trigen-Trenton Project, Series B, 6.20%, 12/01/07 ............ 2,683,035
550,000 Jersey Central Power and Light, 7.10%, 07/01/15 ........................................... 590,706
3,000,000 Market Transition Facilities Revenue, Series A, MBIA Insured, 5.875%, 07/01/11 ............ 3,022,380
8,200,000 Natural Gas Facilities Revenue, New Jersey Natural Gas Co. Project, Series A, AMBAC Insured,
6.25%, 08/01/24 .......................................................................... 8,409,510
7,810,000 Natural Gas Facilities Revenue, New Jersey Natural Gas Co. Project, Series B, 7.25%, 03/01/21 8,254,623
1,625,000 Performing Arts Center Site Revenue, 6.75%, 06/15/12 ...................................... 1,715,123
405,000 Series M, 7.90%, 12/01/08 ................................................................. 420,204
760,000 Series MM, 7.50%, 12/01/19 ................................................................ 760,707
7,440,000 Terminal GATX Corp. Project, 6.65%, 09/01/22 .............................................. 7,725,026
6,000,000 Water Facilities Revenue, Midddlesex Water Co. Project, 7.25%, 07/01/21 ................... 6,491,400
New Jersey Health Care Facilities Financing Authority Revenue,
2,500,000 Atlantic City Medical Center, Series C, 6.80%, 07/01/11 ................................... 2,643,925
3,380,000 Beth Israel Hospital Association Passaic, 7.80%, 07/01/04 ................................. 3,650,603
1,000,000 Beth Israel Hospital Association Passaic, Refunding, 7.875, 07/01/07 ...................... 1,082,590
9,610,000 Cathedral Health, Series A, FHA Insured, 7.25%, 02/15/10 .................................. 10,416,375
2,020,000 Cathedral Health, Series A, FHA Insured, 7.25%, 02/15/21 .................................. 2,168,874
1,000,000 Clara Maas Medical Center, Series B, 7.30%, 07/01/09 ...................................... 1,050,960
2,435,000 Clara Maas Medical Center, Series B, 7.25%, 07/01/19 ...................................... 2,526,800
100,000 Community Memorial Hospital Association, Series C, 8.00%, 07/01/14 ........................ 107,178
5,445,000 East Orange General Hospital, Series B, 7.75%, 07/01/20 ................................... 5,750,138
4,890,000 Elizabeth General Medical Center, Series C, 7.375%, 07/01/15 .............................. 5,073,082
3,150,000 Franciscan St. Mary's Hospital, 5.875%, 07/01/12 .......................................... 2,928,776
2,400,000 Hackensack Medical Center, FGIC Insured, 6.25%, 07/01/21 .................................. 2,440,608
4,000,000 Holy Name Hospital, Series B, AMBAC Insured, 7.00%, 07/01/08 .............................. 4,381,680
230,000 Kennedy Memorial Hospitals-University Medical Center, Inc., Series D, 7.875%, 07/01/09 .... 245,649
4,900,000 Monmouth Medical Center, Series C, CGIC Insured, 6.25%, 07/01/16 .......................... 5,086,837
8,250,000 Monmouth Medical Center, Series C, CGIC Insured, 6.25%, 07/01/24 .......................... 8,530,995
1,800,000 Morristown Memorial Hospital, Series C, 7.125%, 07/01/08 .................................. 1,933,812
4,150,000 Newcomb Medical Center, Series A, 7.875%, 07/01/03 ........................................ 4,513,208
130,000 New Jersey Geriatric Center of Workmen's Circle, Inc., Series A, FHA Mortgage Insured, 8.00%,
02/01/28 ................................................................................. 140,646
8,500,000 Overlook Hospital Association, Series E, FGIC Insured, 6.70%, 07/01/13 .................... 8,893,805
3,565,000 Pascack Valley Hospital, 6.90%, 07/01/21 .................................................. 3,616,051
10,000,000 Riverview Medical Center, 5.875%, 07/01/16 ................................................ 9,993,000
100,000 St. Claire's Riverside Medical Center, Series D, BIG Insured, Pre-Refunded, 7.75%, 07/01/14 108,462
1,940,000 Wayne General Hospital, Series B, 5.75%, 08/01/11 ......................................... 1,935,868
1,000,000 Wayne General Hospital, Series B, 5.875%, 08/01/18 ........................................ 991,850
475,000 Zurbrugg Memorial Hospital Issue, Series C, 8.50%, 07/01/12 ............................... 495,938
$ 1,850,000 New Jersey PBA, State Building Revenue, 7.20%, 06/15/13 ....................................... $ 2,009,378
New Jersey State Educational Facilities Authority Revenue,
4,000,000 Institute of Technology, Series A, MBIA Insured, 6.00%, 07/01/15 .......................... 4,072,880
2,000,000 Jersey State College, Series D, MBIA Insured, 6.125%, 07/01/22 ............................ 2,033,140
2,000,000 Princeton University, Series A, 5.875%, 07/01/18 .......................................... 2,015,520
500,000 Ramapo College, Series C, BIG Insured, Pre-Refunded, 7.70%, 07/01/13 ...................... 555,630
3,000,000 Rider College, Series D, AMBAC Insured, 6.20%, 07/01/17 ................................... 3,104,640
1,000,000 Seton Hall University Project, Series C, BIG Insured, 6.85%, 07/01/19 ..................... 1,081,520
4,400,000 Seton Hall University Project, Series D, 7.00%, 07/01/21 .................................. 4,670,908
4,780,000 Trenton State College, Series B, AMBAC Insured, 6.125%, 07/01/19 .......................... 4,891,470
7,845,000 Trenton State College, Series B, AMBAC Insured, 6.125%, 07/01/24 .......................... 7,996,409
New Jersey State Highway Authority,
5,000,000 Garden State Parkway, Senior Parkway Revenue, 6.20%, 01/01/10 ............................. 5,297,350
2,500,000 Garden State Parkway, Senior Parkway Revenue, 6.25%, 01/01/14 ............................. 2,566,525
2,900,000 Garden State Parkway, Senior Parkway Revenue, 6.00%, 01/01/16 ............................. 2,916,327
1,540,000 Garden State Parkway, Senior Parkway Revenue, 5.75%, 01/01/19 ............................. 1,512,696
5,950,000 Garden State Parkway, Senior Parkway Revenue, Pre-Refunded, 7.25%, 01/01/16 ............... 6,609,974
New Jersey State Housing and Mortgage Finance Agency,
850,000 Home Buyer Revenue, Series B, MBIA Insured, 7.90%, 10/01/22 ............................... 893,308
5,275,000 Home Buyer Revenue, Series D, MBIA Insured, 7.70%, 10/01/29 ............................... 5,539,489
5,000,000 Home Buyer Revenue, Series J, MBIA Insured, 6.20%, 10/01/25 ............................... 4,972,700
4,000,000 d Home Buyer Revenue, Series N, MBIA Insured, 6.35%, 10/01/27 ............................... 4,021,840
40,000 Home Mortgage Purchase Revenue, Series A, MBIA Insured, 7.875%, 10/01/17 .................. 42,097
2,220,000 MFHR, Montclarion Project, Series J, FHA Insured, 7.70%, 11/01/29 ......................... 2,318,635
450,000 MFHR, Regency Park Project, Series H, 7.70%, 11/01/30 ..................................... 467,739
12,400,000 MFHR, Section 8, Refunding, Series A, 6.95%, 11/01/13 ..................................... 12,854,708
5,000,000 MFHR Section 8, Refunding, Series 1, 6.70%, 11/01/28 ...................................... 5,151,000
4,670,000 Wastewater Treatment Trust Revenue, Series B, 7.00%, 07/01/11 ............................. 4,972,569
New Jersey State Sports and Expo Authority, State Contract,
6,800,000 Refunding, Series A, MBIA Insured, 6.25%, 07/01/20 ........................................ 6,989,312
8,000,000 Series A, MBIA Insured, 6.60%, 07/01/15 ................................................... 8,470,080
3,250,000 Newark Board of Education, MBIA Insured, 5.875%, 12/15/14 ..................................... 3,269,630
1,000,000 North Bergen Township Municipal Utility Authority Sewer Revenue, FGIC Insured, Pre-Refunded,
7.625%, 12/15/19 ............................................................................. 1,096,260
6,640,000 North Jersey District Water Supply Commission Revenue, Wanaque South Project, Series A,
Pre-Refunded, 7.375%, 07/01/16 ............................................................... 6,960,712
2,000,000 Northern Mariana Islands, Commonwealth Ports Authority, Seaport Revenue, Series A, Saipan Harbor
Improvement, 6.85%, 10/01/25 ................................................................. 1,974,760
100,000 Ocean Township Municipal Utilities Authority Revenue, Refunding, MBIA Insured, Pre-Refunded,
7.875%, 08/01/15 ............................................................................. 112,004
Passaic Valley Sewerage Commissioners, Sewer System,
6,500,000 Series C, AMBAC Insured, Pre-Refunded, 7.10%, 12/01/20 .................................... 7,045,350
7,400,000 Series D, AMBAC Insured, 5.80%, 12/01/18 .................................................. 7,404,440
5,000,000 Series D, AMBAC Insured, 5.875%, 12/01/22 ................................................. 5,011,800
1,000,000 Pine Hill Borough School District COP, Fiscal Funding of New Jersey, Inc., BIG Insured, Pre-Refunded,
7.60%, 12/30/09 .............................................................................. 1,072,610
Piscataway Township School District COP,
1,000,000 MBIA Insured, Pre-Refunded, 7.50%, 06/15/09 ............................................... 1,112,150
1,975,000 MBIA Insured, Pre-Refunded, 7.00%, 12/15/10 ............................................... 2,265,760
Port Authority of New York and New Jersey,
5,000,000 Delta Airlines, Inc., Special Project, Series 1R, 6.95%, 06/01/08 ......................... 5,287,400
500,000 Consolidated 62nd Series, 8.00%, 12/01/23 ................................................. 516,550
500,000 Consolidated 64th Series, 7.25%, 04/01/14 ................................................. 517,195
3,875,000 Consolidated 65th Series, 7.00%, 09/01/24 ................................................. 4,015,430
Port Authority of New York and New Jersey, (cont.)
$ 2,500,000 Consolidated 67th Series, AMBAC Insured, 6.875%, 01/01/25 ................................. $ 2,634,325
750,000 Consolidated 67th Series, AMBAC Insured, 6.875%, 01/01/25 ................................. 785,603
2,500,000 Consolidated 71st Series, 6.50%, 01/15/26 ................................................. 2,571,725
12,000,000 Consolidated 72nd Series, 7.35%, 10/01/27 ................................................. 13,263,000
1,000,000 Consolidated 74th Series, 6.75%, 08/01/26 ................................................. 1,061,170
1,125,000 Consolidated 84th Series, 6.00%, 01/15/28 ................................................. 1,099,778
5,000,000 Consolidated 94th Series, 6.00%, 06/01/17 ................................................. 5,031,900
2,000,000 Consolidated 94th Series, 6.00%, 12/01/16 ................................................. 2,012,760
Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue,
6,500,000 Series A, 7.90%, 07/01/07 ................................................................. 7,217,470
2,000,000 Series A, 7.875%, 07/01/17 ................................................................ 2,221,140
1,945,000 Series A, 7.00%, 07/01/19 ................................................................. 2,067,146
Puerto Rico Commonwealth Highway and Transportation Authority, Highway Revenue,
275,000 Series P, Pre-Refunded, 8.125%, 07/01/13 .................................................. 309,227
8,000,000 Series Q, Pre-Refunded, 8.00%, 07/01/18 ................................................... 9,394,160
2,360,000 Series R, 7.25%, 07/01/02 ................................................................. 2,656,534
Puerto Rico Commonwealth Infrastructure Financing Authority, Special Tax Revenue,
350,000 Series 1988-A, 7.90%, 07/01/07 ............................................................ 386,435
5,500,000 Series 1988-A, 7.75%, 07/01/08 ............................................................ 6,047,910
250,000 Series 1988-A, 7.50%, 07/01/09 ............................................................ 273,270
Puerto Rico Commonwealth Public Improvement, GO,
5,000,000 6.45%, 07/01/17 ........................................................................... 5,148,550
100,000 Series A, Pre-Refunded, 7.75%, 07/01/13 ................................................... 111,542
1,000,000 Puerto Rico Commonwealth Urban Renewal and Housing Corp., Refunding, 7.875%, 10/01/04 ......... 1,132,460
Puerto Rico Electric Power Authority, Power Revenue,
590,000 Refunding, Series 1988-M, Pre-Refunded, 8.00%, 07/01/08 ................................... 661,484
2,355,000 Refunding, Series 1989-N, 7.125%, 07/01/14 ................................................ 2,570,671
10,535,000 Refunding, Series T, 6.00%, 07/01/16 ...................................................... 10,472,001
4,500,000 Refunding, Series U, 6.00%, 07/01/14 ...................................................... 4,474,440
5,000,000 d Series X, 6.125%, 07/01/21 ................................................................ 5,009,850
Puerto Rico HFC Revenue,
125,000 FHA Mortgage Insured, Section 8 Assisted, Sixth Portfolio, Pre-Refunded, 7.75%, 12/01/26 .. 149,069
5,000,000 MF, Portfolio A, Series 1, 7.50%, 04/01/22 ................................................ 5,269,000
1,345,000 SFM, Portfolio 1, Series A, GNMA Secured, 7.80%, 10/15/21 ................................. 1,406,197
1,400,000 SFM, Portfolio 1, Series B, GNMA Secured, 7.65%, 10/15/22 ................................. 1,479,127
2,000,000 Puerto Rico Industrial, Medical and Environmental Facilities, Financing Authority, PCR, Baxter Travenol
Labs, Series A, 8.00%, 09/01/12 .............................................................. 2,220,560
100,000 Puerto Rico Municipal Finance Agency, Series 1988-A, 8.25%, 07/01/08 .......................... 109,954
785,000 Puerto Rico PBA, Guaranteed Public Education and Health Facilities, Series H, Pre-Refunded, 7.25%,
07/01/17 ..................................................................................... 861,749
4,000,000 Puerto Rico PBA Revenue, Guaranteed Government Facilities, Series A, AMBAC Insured, 5.75%,
07/01/22 ..................................................................................... 3,929,840
2,000,000 Puerto Rico, University of, University Revenues, Series M, MBIA Insured, 5.50%, 06/01/15 ...... 1,943,540
Rutgers State University,
4,750,000 Pre-Refunded, 7.00%, 05/01/19 ............................................................. 5,268,747
4,250,000 Series A, 6.50%, 05/01/18 ................................................................. 4,461,522
1,160,000 Rutgers State University Revenues, Refunding, Series N, Pre-Refunded, 7.375%, 05/01/16 ........ 1,209,810
5,000,000 Salem County IPC, Financing Authority Revenue, Refunding, Public Services, Electric and Gas Co.,
Series D, MBIA Insured, 6.55%, 10/01/29 ...................................................... 5,174,800
1,980,000 Sayreville HDC, Mortgage Revenue, Refunding, Lakeview, Section 8, FHA Insured, 7.75%, 08/01/24 2,157,645
1,000,000 Stony Brook Regional Sewerage Authority Revenue, Series 1989-A, Pre-Refunded, 7.40%, 12/01/09 . 1,135,490
$ 100,000 Sussex County Municipal Utilities Authority, Solid Waste Revenue, Series A, BIG Insured,
Pre-Refunded, 7.875%, 12/01/13 ............................................................... $ 112,912
University of Medicine and Dentistry Revenue,
750,000 Series C, 7.20%, 12/01/09 ................................................................. 818,954
2,725,000 Series C, 7.20%, 12/01/19 ................................................................. 2,975,536
1,200,000 Warren Hills Regional School District COP, BIG Insured, Pre-Refunded, 7.375%, 12/15/09 ........ 1,329,407
1,000,000 West Morris Regional High School District COP, BIG Insured, Pre-Refunded, 7.50%, 03/15/09 ..... 1,103,890
100,000 Winslow Township GO, Camden County, Refunding, AMBAC Insured, Pre-Refunded, 7.80%, 07/01/18 ... 110,640
-----------
Total Long Term Investments (Cost $514,002,624) ......................................... 545,785,905
-----------
e Short Term Investments .3%
1,000,000 New Jersey EDA, El Dorado Terminal, Series 1984-A, Daily VRDN and Put, 3.35%, 05/01/01 ........ 1,000,000
700,000 New Jersey State Turnpike Authority Revenue, Series A, Weekly VRDN and Put, 3.05%, 01/01/18 ... 700,000
-----------
Total Short Term Investments (Cost $1,700,000) .......................................... 1,700,000
-----------
Total Investments (Cost $515,702,624) 98.9% ........................................ 547,485,905
Other Assets and Liabilities, Net 1.1% ............................................. 6,148,035
-----------
Net Assets 100.0% .................................................................. $553,633,940
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $515,702,624 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost .............................................................. $ 32,428,368
Aggregate gross unrealized depreciation for all investments in which there was an
excess tax cost over value ................................................................. (645,087)
-----------
Net unrealized appreciation ................................................................. $ 31,783,281
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co.
CGIC - Capital Guaranty Insurance Co.
COP - Certificate of Participation
EDA - Economic Development Authority
EDR - Economic Development Revenue
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance
GNMA - Government National Mortgage Association
GO - General Obligation
HDC - Housing Development Corp.
HFC - Housing Finance Corp.
IPC - Industrial Pollution Control
MBIA - Municipal Bond Investors Assurance Corp.
MF - Multi-Family
MFHR - Multi-Family Housing Revenue
PBA - Public Building Authority
PCR - Pollution Control Revenue
SFM - Single Family Mortgage
dSee Note 1(f) regarding securities purchased on a when-issued basis.
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the principal balance plus accrued interest upon short notice prior to
specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Oregon Tax-Free Income Fund (Note 1)
Long Term Investments 99.2%
<S> <C> <C>
$ 750,000 Albany Sewer Revenue, Series A, Pre-Refunded, 7.00%, 02/01/12 .................................. $ 840,908
1,000,000 Albany Water Revenue, Second Lien, Pre-Refunded, 7.25%, 08/01/09 ............................... 1,106,780
2,000,000 Bay Area Health District Hospital Facility Authority, Health Facilities Revenue, Evergreen Court Project,
7.25%, 10/01/14 ............................................................................... 2,141,980
Bear Creek Valley Sanitary Authority GO,
50,000 Series 1987, 7.70%, 05/01/07 ............................................................... 52,883
100,000 Series 1988, 7.30%, 06/01/05 ............................................................... 107,286
105,000 Series 1988, 7.35%, 06/01/06 ............................................................... 112,784
115,000 Series 1988, 7.40%, 06/01/07 ............................................................... 123,517
125,000 Series 1988, 7.40%, 06/01/08 ............................................................... 134,258
1,125,000 Benton County, Oregon Hospital Facilities Authority, Good Samaritan Hospital, Corvallis, 6.25%,
10/01/09 ..................................................................................... 1,132,661
1,000,000 Central Lincoln Utility District Electric Revenue, Pre-Refunded, 6.75%, 01/01/11 ............... 1,107,790
City of Bend, Urban Renewal Agency Tax Revenue,
600,000 Series A, 6.85%, 09/01/06 .................................................................. 618,690
750,000 Series A, 7.00%, 09/01/11 .................................................................. 773,310
4,000,000 City of Oregon, Sewer Revenue, Series 1994, 6.875%, 10/01/19 ................................... 4,218,320
4,945,000 Clackamas County Health Facilities Authority Hospital Revenue, Refunding, Adventist Health, Series A,
MBIA Insured, 6.35%, 03/01/09 ................................................................. 5,268,304
Clackamas County, Hospital Facilities Authority Revenue,
1,250,000 Elderly Housing, 7.00%, 11/15/11 ........................................................... 1,332,888
2,990,000 GNMA Secured, Jennings Lodge Project, 7.50%, 10/20/31 ...................................... 3,269,834
1,635,000 Kaiser Permanente, Series A, 6.50%, 04/01/11 ............................................... 1,710,341
4,950,000 Kaiser Permanente, Series A, 6.25%, 04/01/21 ............................................... 4,982,274
4,250,000 Refunding, Gross Willamette Falls, 5.75%, 04/01/15 ......................................... 3,939,410
110,000 Sisters of Providence Project, 8.125%, 10/01/07 ............................................ 117,407
4,000,000 Clackamas County USD No. 115, AMBAC Insured, 6.15%, 06/01/14 ................................... 4,149,160
1,125,000 Clairmont Water District Revenue, 6.50%, 02/01/12 .............................................. 1,150,031
50,000 Coos Bay Waste Water GO, MBIA Insured, Pre-Refunded, 7.50%, 09/01/06 ........................... 53,408
Deschutes County Hospital Facilities Authority, Hospital Revenue,
3,000,000 St. Charles Medical Center, 6.00%, 01/01/13 ................................................ 3,044,010
390,000 St. Charles Medical Center, Pre-Refunded, 7.50%, 01/01/08 .................................. 418,973
125,000 St. Charles Medical Center, Pre-Refunded, 7.60%, 01/01/13 .................................. 134,445
1,950,000 Douglas County, Hospital Facilities Authority Revenue, Catholic Health Facilities, Series B, MBIA Insured,
6.00%, 11/15/15 ............................................................................... 1,989,624
Emerald People's Utility District, Electric System Revenue, Refunding,
100,000 Series A, AMBAC Insured, Pre-Refunded, 7.20%, 11/01/06 ..................................... 103,457
55,000 Series A, AMBAC Insured, Pre-Refunded, 7.35%, 11/01/13 ..................................... 57,241
195,000 Series B, AMBAC Insured, 7.35%, 11/01/13 ................................................... 200,981
500,000 Series B, AMBAC Insured, Pre-Refunded, 7.30%, 11/01/11 ..................................... 558,465
Eugene Electric Utility System Revenue,
125,000 Series 1987, Pre-Refunded, 7.90%, 08/01/11 ................................................. 132,030
1,145,000 Series 1991, 6.65%, 08/01/08 ............................................................... 1,227,784
615,000 Series 1991, 6.65%, 08/01/09 ............................................................... 651,463
655,000 Series 1991, 6.65%, 08/01/10 ............................................................... 692,145
700,000 Series 1991, 6.70%, 08/01/11 ............................................................... 741,440
3,840,000 Eugene Trojan Nuclear Project Revenue, Refunding, 5.90%, 09/01/09 .............................. 3,839,923
70,000 Florence Improvement GO, Lane County, Pre-Refunded, 8.50%, 10/01/07 ............................ 76,150
Guam Airport Authority Revenue,
750,000 Series B, 6.60%, 10/01/10 .................................................................. 763,740
1,900,000 Series B, 6.70%, 10/01/23 .................................................................. 1,913,680
825,000 Guam Power Authority, Series A, 6.30%, 10/01/12 ................................................ 828,333
$ 1,000,000 Hermiston GO, AMBAC Insured, 6.00%, 08/01/15 ................................................... $ 1,019,260
1,280,000 Hillsboro Hospital Facility Authority, First Mortgage Revenue, Refunding, First Mortgage-Tuality
Community, Pre-Refunded, 7.60%, 10/01/12 ...................................................... 1,355,738
Klamath Falls Intercommunity Hospital Revenue,
1,500,000 Merle West Medical Center Project, 7.00%, 06/01/02 ......................................... 1,605,075
2,310,000 Merle West Medical Center Project, 7.25%, 06/01/06 ......................................... 2,471,400
1,000,000 Lane County COP, Fairground Project, 7.00%, 08/01/04 ........................................... 1,067,860
11,575,000 Lane County PCR, Refunding, Weyerhaeuser Co. Project, 6.50%, 07/01/09 .......................... 12,218,339
2,425,000 Lebanon Wastewater Revenue, Refunding, 5.875%, 06/01/20 ........................................ 2,355,500
495,000 Marion County Solid Waste and Electric Revenue, Ogden Martin System, Marion, Inc. Project,
AMBAC Insured, 7.70%, 10/01/09 ................................................................ 522,591
1,000,000 Marion County Union High School District No. 7J, 6.00%, 06/01/13 ............................... 1,029,410
4,475,000 Medford Hospital Facilities Authority Revenue, Gross Rogue Valley Health Services, MBIA Insured,
6.75%, 12/01/20 ............................................................................... 4,791,248
Metropolitan Service District,
4,865,000 Convention Center GO, Series A, 6.25%, 01/01/13 ............................................ 5,033,475
115,000 Convention Center GO, Unlimited Tax, Pre-Refunded, 7.60%, 12/01/10 ......................... 123,888
80,000 Convention Center GO, Unlimited Tax, Pre-Refunded, 7.65%, 12/01/11 ......................... 86,268
85,000 Convention Center GO, Unlimited Tax, Pre-Refunded, 7.65%, 12/01/12 ......................... 91,660
2,000,000 Waste Disposal System, Revenue Bonds, Pre-Refunded, 7.30%, 01/01/11 ........................ 2,267,340
175,000 Multnomah County School District COP, Series A, Pre-Refunded, 6.90%, 08/01/09 .................. 188,521
3,500,000 Northern Mariana Islands Commonwealth Ports Authority Revenue, Series A, Port of Saipan Harbor,
6.85%, 10/01/25 ............................................................................... 3,455,830
Oak Lodge Water District GO,
215,000 AMBAC Insured, 7.40%, 12/01/08 ............................................................. 255,414
215,000 AMBAC Insured, 7.50%, 12/01/09 ............................................................. 255,762
Ontario Hospital Facility Authority-Catholic Health Corp., Facilities Revenue,
1,500,000 Dominican Sisters of Ontario, Inc., Holy Rosary Hospital Project, 6.10%, 11/15/17 .......... 1,504,005
1,675,000 Dominican Sisters of Ontario, Inc., Holy Rosary Hospital Project, GNMA Secured, 7.00%, 06/01/12 1,738,767
1,610,000 Oregon State Bond Bank Revenue, EDR, Series 1991-B, Pre-Refunded, 6.80%, 01/01/11 .............. 1,769,004
Oregon State Department of General Services, COP,
750,000 Real Property Financing Program, Series A, AMBAC Insured, Pre-Refunded, 7.50%, 09/01/15 .... 868,808
4,110,000 Real Property Financing Program, Series A, MBIA Insured, Pre-Refunded, 7.20%, 01/15/15 ..... 4,647,095
2,000,000 Refunding, Series D, MBIA Insured, 5.80%, 03/01/15 ......................................... 2,014,440
150,000 Series B, MBIA Insured, Pre-Refunded, 7.20%, 01/15/15 ...................................... 169,602
3,150,000 Series F, AMBAC Insured, Pre-Refunded, 7.50%, 09/01/15 ..................................... 3,648,992
750,000 Series G, AMBAC Insured, 6.25%, 09/01/15 ................................................... 777,083
Oregon State Elderly and Disabled Housing Authority,
1,000,000 Series A, 6.00%, 08/01/15 .................................................................. 997,630
500,000 Series A, 6.00%, 08/01/21 .................................................................. 492,215
1,470,000 Series B, 6.10%, 08/01/17 .................................................................. 1,473,366
2,100,000 Series B, 6.25%, 08/01/23 .................................................................. 2,156,637
1,155,000 Series B, 6.375%, 08/01/24 ................................................................. 1,195,714
6,000,000 Series C, 6.50%, 08/01/22 .................................................................. 6,305,400
635,000 Oregon State Elderly Housing GO, Series A, 7.125%, 08/01/30 .................................... 698,684
Oregon State GO, Board of Higher Education,
750,000 Series 1991, 6.50%, 10/01/17 ............................................................... 781,943
60,000 Series A, Pre-Refunded, 8.125%, 10/01/17 ................................................... 64,891
300,000 Series A, Pre-Refunded, 7.50%, 05/01/18 .................................................... 325,368
400,000 Oregon State GO, Department of Energy, Series B, 6.80%, 01/01/17 ............................... 420,984
Oregon State GO, Department of Transportation Revenue, Regional Light Rail,
$ 2,000,000 Federal Westside Project, MBIA Insured, 6.10%, 06/01/07 .................................... $ 2,151,580
2,500,000 Federal Westside Project, MBIA Insured, 6.20%, 06/01/08 .................................... 2,688,525
1,750,000 Federal Westside Project, MBIA Insured, 6.25%, 06/01/09 .................................... 1,849,348
1,000,000 Oregon State GO, Series B, 6.875%, 12/01/13 .................................................... 1,084,850
5,665,000 Oregon State HFA, SFMR Program, Series 1991-A, 7.20%, 07/01/15 ................................. 5,968,191
1,445,000 Oregon State Higher Education GO, Series C, Pre-Refunded, 7.25%, 10/15/18 ...................... 1,574,284
Oregon State Housing and Community Service Department, Finance Housing Revenue,
6,710,000 Multi-Unit, Series A, 6.80%, 07/01/13 ...................................................... 6,938,945
180,000 Multi-Unit, Series C, 6.85%, 07/01/22 ...................................................... 185,571
3,850,000 SFM, Series A, 5.75%, 07/01/12 ............................................................. 3,820,971
3,250,000 SFM, Series A, 6.35%, 07/01/14 ............................................................. 3,315,878
1,500,000 SFM, Series A, 6.40%, 07/01/18 ............................................................. 1,512,630
3,100,000 SFM, Series A, 6.45%, 07/01/26 ............................................................. 3,197,991
12,000,000 SFM, Series B, 6.875%, 07/01/28 ............................................................ 12,592,429
2,500,000 d SFM, Series C, 6.20%, 07/01/15 ............................................................. 2,537,400
1,200,000 d SFM, Series C, 6.40%, 07/01/26 ............................................................. 1,217,748
1,750,000 SFM, Series D, 6.80%, 07/01/27 ............................................................. 1,828,418
500,000 SFM, Series E, 7.00%, 07/01/09 ............................................................. 532,350
2,970,000 SFM, Series E, 6.75%, 07/01/16 ............................................................. 3,122,213
2,000,000 SFM, Series E, 7.15%, 07/01/25 ............................................................. 2,096,460
2,810,000 SFM, Series F, 7.00%, 07/01/22 ............................................................. 2,899,920
645,000 SFM, Series G, 6.80%, 07/01/22 ............................................................. 673,025
Oregon State Housing, Educational and Cultural Facility Authority,
10,500,000 Lewis and Clark College Project, Series A, 6.125%,10/01/24 ................................. 10,749,480
2,100,000 Lewis and Clark College Project, Series A, MBIA Insured, Pre-Refunded, 7.125%, 07/01/20 .... 2,389,779
700,000 Reed College Project, 6.75%, 07/01/11 ...................................................... 743,960
1,250,000 Reed College Project, Series A, 6.75%, 07/01/21 ............................................ 1,320,450
2,500,000 Oregon State Veteran's Welfare GO, Series 73-A, 7.00%, 12/01/11 ................................ 2,725,350
750,000 Port of Astoria, GO, MBIA Insured, 6.60%, 09/01/11 ............................................. 781,905
2,200,000 Port of Morrow PCR, Idaho Power Co., Boardman Project, 7.25%, 08/01/08 ......................... 2,221,494
500,000 Port of Morrow Revenue, Refunding, Pre-Refunded, 8.00%, 12/01/11 ............................... 557,200
4,000,000 Port of Portland Special Obligation Revenue, Delta Airlines, Inc. Project, 6.20%, 09/01/22 ..... 3,828,600
1,500,000 Port of St. Helens PCR, Refunding, Boise Cascade Corp. Project, 7.375%, 11/01/04 ............... 1,571,790
320,000 Port of Umpqua PCR, International Paper Co. Project, Series A, 6.60%, 03/15/05 ................. 332,454
2,000,000 Portland COP, Refunding, PBA, Series A, Pre-Refunded, 7.25%, 04/01/08 .......................... 2,196,680
125,000 Portland EDR, Public Broadcasting, Series A, 7.20%, 06/01/09 ................................... 125,373
Portland Hospital Facilities Authority Hospital Revenue,
10,500,000 Legacy Health System, Series A, AMBAC Insured, 6.70%, 05/01/21 ............................. 11,269,230
10,475,000 Legacy Health System, Series B, AMBAC Insured, 6.70%, 05/01/21 ............................. 11,242,399
1,000,000 Portland Housing Authority Revenue, Series 1990, 7.10%, 07/01/15 ............................... 1,051,520
635,000 Portland Hydroelectric Power Revenue, Bull Run Project, Series C, 7.00%, 10/01/16 .............. 635,356
Portland International Airport,
1,500,000 Series 7-A, MBIA Insured, 6.75%, 07/01/09 .................................................. 1,619,385
3,000,000 Series 7-B, MBIA Insured, 7.10%, 07/01/21 .................................................. 3,267,210
500,000 Series 10, 5.75%, 07/01/25 ................................................................. 485,390
2,825,000 Portland, Oregon, Airport Way-Urban Renewal and Redevelopment Tax Increment, Sub-Series B-3,
FGIC Insured, Pre-Refunded, 7.60%, 06/01/10 ................................................... 3,200,951
170,000 Portland Parking Revenue, Pre-Refunded, 8.625%, 10/01/12 ....................................... 188,482
Portland Sewer System Revenue,
5,000,000 Series 1990, Pre-Refunded, 7.125%, 03/01/10 ................................................ 5,366,200
14,100,000 Series A, 6.25%, 06/01/15 .................................................................. 14,742,396
950,000 Series A, FGIC Insured, 6.00%, 10/01/12 .................................................... 976,686
Portland Urban Renewal and Redevelopment,
$ 125,000 Downtown Waterfront, Series H, Pre-Refunded, 8.25%, 12/01/07 ............................... $ 136,299
5,555,000 Refunding, Downtown Waterfront, Series A, 6.40%, 06/01/08 .................................. 5,925,907
1,000,000 Puerto Rico Commonwealth, GO, 6.45%, 07/01/17 .................................................. 1,029,710
75,000 Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue, Refunding, Series 1985-A,
FSA Insured, Pre-Refunded, 9.00%, 07/01/09 .................................................... 97,705
4,000,000 Puerto Rico Commonwealth Highway Authority Revenue, Series Q, Pre-Refunded, 8.00%, 07/01/18 .... 4,697,080
40,000 Puerto Rico Commonwealth IDC, General Purpose Revenue, 8.00%, 01/01/03 ......................... 40,012
2,400,000 Puerto Rico Commonwealth Infrastructure Financing Authority, Special Tax Revenue, Series 1988-A,
7.75%, 07/01/08 ............................................................................... 2,639,088
Puerto Rico Commonwealth Public Improvement GO,
355,000 Pre-Refunded, 7.90%, 07/01/11 .............................................................. 377,379
250,000 Series A, Pre-Refunded, 7.75%, 07/01/06 .................................................... 278,855
280,000 Series A, Pre-Refunded, 7.75%, 07/01/13 .................................................... 312,318
Puerto Rico Electric Power Authority Revenue, Refunding,
190,000 Series 1987-L, Pre-Refunded, 8.40%, 07/01/15 ............................................... 208,295
600,000 Series 1988-M, Pre-Refunded, 8.00%, 07/01/08 ............................................... 672,696
2,000,000 Series 1989-O, Pre-Refunded, 7.125%, 07/01/14 .............................................. 2,205,002
Puerto Rico HFC Revenue,
395,000 FHA Mortgage Insured, Section 8 Assisted, Sixth Portfolio, Pre-Refunded, 7.75%, 12/01/26 ... 471,057
730,000 Portfolio No. 1, Series 1988-A, GNMA Secured, 7.80%, 10/15/21 .............................. 763,215
675,000 Portfolio No. 1, Series 1988-B, GNMA Secured, 7.65%, 10/15/22 .............................. 713,151
500,000 Puerto Rico Housing Bank and Finance Agency, SFMR, Homeowner's Development Program,
5th Portfolio, Pre-Refunded, 7.50%, 12/01/15 .................................................. 566,705
205,000 Puerto Rico Municipal Finance Agency, Series 1988-A, 8.25%, 07/01/08 ........................... 225,406
90,000 Puerto Rico PBA, Guaranteed Public Education and Health Facilities, Refunding, Series G,
Pre-Refunded, 7.875%, 07/01/07 ................................................................ 97,895
1,100,000 Puerto Rico Telephone Authority Revenue, Refunding, Series L, 6.125%, 01/01/22 ................. 1,107,348
50,000 Redmond Improvement GO, Pre-Refunded, 7.80%, 05/01/17 .......................................... 53,047
Roseburg Urban Sanitary Authority, Improvement GO, Unlimited Tax,
60,000 Douglas County, 7.40%, 01/01/06 ............................................................ 63,633
230,000 Douglas County, 7.50%, 01/01/08 ............................................................ 244,688
1,250,000 Salem GO, Series A, 5.875%, 01/01/07 ........................................................... 1,288,438
Salem-Keizer School District No. 24J,
4,345,000 FGIC Insured, 6.00%, 06/01/13 .............................................................. 4,427,294
4,395,000 FGIC Insured, 6.00%, 06/01/14 .............................................................. 4,463,123
280,000 Springfield Improvement GO, Refunding, Pre-Refunded, 8.70%, 06/01/04 ........................... 289,982
2,765,000 Tillamook People Utilities District, 5.75%, 01/01/28 ........................................... 2,555,828
1,235,000 Tri-County, Metro Transportation District, COP, 7.50%, 12/15/02 ................................ 1,278,731
2,500,000 Tri-County, Metro Transportation District, Light Rail Extended, Series A, 6.00%, 07/01/12 ...... 2,552,850
1,375,000 Umatilla County Hospital Facility Authority, Hospital Revenue, Refunding, Good Shepherd Community
Hospital, 7.50%, 01/01/10 ..................................................................... 1,408,921
5,300,000 Umatilla County USD No. 16R, Pendletron Project, AMBAC Insured, 6.00%, 07/01/14 ................ 5,443,842
2,000,000 Wasco County Hospital Facility Authority Hospital Revenue, Pre-Refunded, 7.375%, 07/01/00 ...... 2,082,020
100,000 Washington County Building GO, Pre-Refunded, 7.75%, 12/01/06 ................................... 107,936
Washington County Unified Sewerage Agency, Sewer Revenue,
50,000 Pre-Refunded, 7.90%, 07/01/07 .............................................................. 53,476
2,700,000 Pre-Refunded, 7.00%, 11/01/09 .............................................................. 2,985,147
4,000,000 Refunding, Series A, 6.20%, 10/01/10 ....................................................... 4,186,040
1,000,000 Refunding, Series A, 6.125%, 10/01/12 ...................................................... 1,038,320
7,500,000 Sub Lien-Series One, AMBAC Insured, 6.125%, 10/01/12 ....................................... 7,787,400
1,000,000 Washington County USD No. 88J, 6.10%, 06/01/12 ................................................. 1,039,320
Western Lane Hospital District, Hospital Facilities Authority Revenue, Sister/St. Joseph Peace,
$ 4,400,000 Health and Hospital Services, MBIA Insured, 5.875%, 08/01/12 ............................... $ 4,511,892
6,000,000 Health and Hospital Services, MBIA Insured, 5.75%, 08/01/19 ................................ 6,018,900
2,700,000 Health and Hospital Services, MBIA Insured, Pre-Refunded, 7.125%, 08/01/17 ................. 3,027,321
5,000,000 Yamhill County USD No. 29J, 6.10%, 06/01/11 .................................................... 5,186,900
-----------
Total Long Term Investments (Cost $339,001,504) 99.2% .............................. 358,101,934
Other Assets and Liabilities, Net .8% ............................................... 2,712,058
-----------
Net Assets 100.0% .................................................................. $360,813,992
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $339,001,504 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost ............................................................... $ 19,771,875
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value ............................................................... (671,445)
-----------
Net unrealized appreciation .................................................................. $ 19,100,430
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
EDR - Economic Development Revenue
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Agency
FSA - Financial Security Assistance
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Agency/Authority
HFC - Housing Finance Corp.
IDC - Industrial Development Control
MBIA - Municipal Bond Investors Assurance Corp.
PBA - Public Building Authority
PCR - Pollution Control Revenue
SFM - Single Family Mortgage
SFMR - Single Family Mortgage Revenue
USD - Unified School District
dSee note 1(f) regarding securities purchased on a when-issued basis.
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Pennsylvania Tax-Free Income Fund (Note 1)
Long Term Investments 97.8%
Allegheny County Hospital Development Authority Revenue, Refunding,
<S> <C> <C>
$10,000,000 Allegheny General Hospital, Series A, MBIA Insured, 6.25%, 09/01/20 ......................... $ 10,194,200
500,000 Divine Providence Hospital, Series 1988-B, 8.75%, 01/01/14 .................................. 536,425
5,250,000 Southside Hospital, Pittsburg, Series 1987, 8.75%, 06/01/10 ................................. 5,468,029
1,000,000 Allegheny County IDA, Presbyterian University Hospital, Kaufmann Medical Project, Refunding,
Series A, MBIA Insured, 6.80%, 03/01/15 ...................................................... 1,064,880
3,270,000 Allegheny County RDAR, Refunding, Home Improvement, Series A, 5.90%, 02/01/11 ................. 3,176,445
Allegheny County Residential Finance Authority, SFMR,
2,495,000 GNMA Secured, 7.75%, 12/01/22 ............................................................... 2,599,640
3,890,000 Lemington Home, Series E, 7.125%, 02/01/27 .................................................. 3,968,539
70,000 Series D, FGIC Insured, 8.90%, 12/01/10 ..................................................... 73,417
1,400,000 Series D, GNMA Secured, 7.50%, 06/01/33 ..................................................... 1,450,750
1,470,000 Series H, GNMA Secured, 8.00%, 06/01/17 ..................................................... 1,524,772
2,945,000 Series J, GNMA Secured, 7.50%, 06/01/17 ..................................................... 3,034,086
1,540,000 Series M, GNMA Secured, 7.90%, 06/01/11 ..................................................... 1,614,721
835,000 Series T, GNMA Secured, 6.95%, 05/01/17 ..................................................... 867,523
1,200,000 Allegheny County Sanitary Authority, Sewer Revenue, Series A, FGIC Insured, Pre-Refunded, 7.45%,
12/01/09 ..................................................................................... 1,331,244
5,000,000 Beaver County Hospital Authority Revenue, Refunding, Medical Center Beaver County, Inc.,
AMBAC Insured, 6.625%, 07/01/10 .............................................................. 5,295,250
Beaver County IDA, PCR, Refunding,
4,400,000 Beaver Co., Ohio Edison/Pennsylvania Power Project, Series A, 7.15%, 09/01/21 ............... 4,620,088
6,475,000 Ohio Edison/Pennsylvania Power Project, Series A, 7.75%, 09/01/24 ........................... 6,822,967
800,000 Berks Montgomery Municipal Authority, Sewer Revenue, Pre-Refunded, 8.60%, 08/01/13 ............ 833,856
9,695,000 Berks County GO, FGIC Insured, Pre-Refunded, 7.25%, 11/15/20 .................................. 11,143,239
Berks County Municipal Authority Revenue,
4,000,000 FGIC Insured, Pre-Refunded, 7.00%, 05/15/18 ................................................. 4,301,000
1,000,000 Highlands Wyomissing Project, Series 1989-A, Pre-Refunded, 7.25%, 10/01/19 .................. 1,109,010
2,500,000 Bradford County IDA, Solid Waste Disposal Revenue, International Paper Co., 6.60%, 03/01/19.... 2,606,325
1,400,000 Butler County Hospital Authority, Hospital Revenue, Butler Memorial Hospital, 8.00%, 07/01/16 . 1,460,620
2,000,000 Butler County IDA, PCR, Refunding, Witco Corp. Project, 5.85%, 12/01/23 ....................... 1,919,840
Cambria County Hospital Development Authority Revenue, Refunding,
3,500,000 Conemaugh Valley Memorial Hospital, Series B, 6.375%, 07/01/18 .............................. 3,566,885
1,000,000 Conemaugh Valley Memorial Hospital, Series B, Pre-Refunded, 8.875%, 07/01/18 ................ 1,141,340
Cambria County IDA, Resource Recovery Revenue, Cambria Cogen Project,
4,000,000 Series F-1, 7.75%, 09/01/19 ................................................................. 4,184,440
2,715,000 Series F-2, 7.75%, 09/01/19 ................................................................. 2,840,189
1,200,000 Canon McMillan School District GO, AMBAC Insured, Pre-Refunded, 7.60%, 03/01/14 ............... 1,222,608
1,000,000 Charleroi Area School Authority Revenue, MBIA Insured, Pre-Refunded, 7.35%, 02/01/14 .......... 1,098,850
Chartiers Valley Industrial and Commercial Development Authority Revenue, Refunding,
1,000,000 First Mortgage, United Methodist Health Center, Series A, Pre-Refunded, 9.25%, 12/01/08 ..... 1,167,690
1,315,000 Friendship Village of South Hills Project, 9.25%, 08/15/08 .................................. 1,383,564
1,350,000 Chester County Hospital Authority Revenue, Paoli Memorial Hospital, Pre-Refunded, 7.625%, 10/01/13 1,430,231
Dauphin County General Authority Revenue,
750,000 11-15 Terminal School District, Central Fulton, Mandatory Tender 06/01/06, 7.70%, 06/01/26 .. 768,810
1,250,000 AA-13 Terminal School District, Pinecrest, Mandatory Tender 06/01/09, 7.875%, 06/01/26 ...... 1,261,263
1,000,000 College Revenue, Lebanon College Project, Pre-Refunded, 8.10%, 04/01/09 ..................... 1,024,060
4,500,000 Hapsco-Western Hospital Project, Series A, MBIA Insured, 6.50%, 07/01/12 .................... 4,717,755
5,000,000 Hapsco-Western Hospital Project, Series B, MBIA Insured, 6.25%, 07/01/16 .................... 5,104,650
1,000,000 Municipal Pooled Program, Downingtown, Series A, BIG Insured, 7.75%, 01/01/06 ............... 1,055,690
1,000,000 Northeast Bradford School, 7.50%, 06/01/26 .................................................. 1,063,260
2,000,000 Delaware County Authority Revenue Bond 1990, Elwyn, Inc. Project, 8.35%, 06/01/15 ............. 2,178,840
5,000,000 Delaware County IDAR, PCR, Philadelphia Electric Co. Project, 7.375%, 04/01/21 ................ 5,351,400
Delaware County IDAR, Resources Recovery, Refunding,
$ 1,000,000 Series A, 7.90%, 12/01/05 ................................................................... $ 1,047,600
6,000,000 Series A, 8.10%, 12/01/13 ................................................................... 6,287,760
450,000 Delaware River Joint Toll Bridge System Commission Revenue, Series I-78, Pre-Refunded, 7.875%,
07/01/18 ..................................................................................... 502,142
1,000,000 Delaware River Port Authority, Pennsylvania and New Jersey River Bridges Revenue, Refunding,
AMBAC Insured, 7.375%, 01/01/07 .............................................................. 1,110,470
400,000 Dubois Hospital Authority Revenue, Refunding, Dubois Regional Medical Center Project, Series 1987-A,
Pre-Refunded, 8.75%, 07/01/11 ................................................................ 432,896
250,000 Edinboro Municipal Authority Sewer Revenue, Guaranteed, Series 1987, Pre-Refunded, 8.25%,
08/01/07 ..................................................................................... 269,123
4,000,000 Elizabeth Forward School District GO, AMBAC Insured, Pre-Refunded, 7.25%, 01/15/10 ............ 4,455,720
7,000,000 Erie County Hospital Authority Revenue, St. Vincent Health Center Project, Series A, AMBAC Insured,
6.375%, 07/01/22 ............................................................................. 7,215,600
2,110,000 Erie County IDAR, Nursing Home-Sarah Reed Center Project, 8.625%, 07/01/14 .................... 2,233,456
3,000,000 Erie Higher Educational Building Authority, Gannon University, Series A, Pre-Refunded, 8.50%, 06/01/15 3,483,720
1,850,000 Erie Western Pennsylvania Port Authority GO, 8.625%, 06/15/10 ................................. 1,998,111
1,250,000 Fayette County Hospital Authority Revenue, Refunding, Uniontown Hospital Project, 7.625%, 07/01/15 1,271,150
4,275,000 Greater Johnston School District GO, MBIA Insured, 6.75%, 03/01/10 ............................ 4,612,725
2,000,000 Greensburg Salem School District GO, Westmoreland County, MBIA Insured, Pre-Refunded, 7.10%,
01/01/19 ..................................................................................... 2,177,800
1,310,000 Hampton Township, Municipal Authority Water Revenue, Series A, Pre-Refunded, 6.85%, 05/01/12 .. 1,440,712
4,000,000 Harrisburg Authority Water Revenue, FGIC Insured, Pre-Refunded, 7.00%, 07/15/15 ............... 4,520,640
800,000 Harrisburg RDAR, Capital Improvement, Series A, FGIC Insured, 7.875%, 11/02/16 ................ 841,096
4,000,000 Jeannette County Health Service Authority Hospital Revenue, Jeannette District Memorial Hospital,
8.625%, 01/01/18 ............................................................................. 4,408,880
1,250,000 Jeannette County Municipal Authority Sewer Revenue, 7.00%, 07/01/17 ........................... 1,321,638
1,000,000 Lancaster County Hospital Authority Revenue, Willow Valley Lakes Manor, Series B, 9.00%, 06/01/12 1,048,320
1,000,000 Lancaster County Solid Waste Management Authority, Resource Recovery System Revenue, Series A,
8.50%, 12/15/10 .............................................................................. 1,066,090
2,000,000 Langhorne Manor Borough Higher Education, Health Authority Hospital Revenue, Lower Bucks Hospital,
7.35%, 07/01/22 .............................................................................. 1,884,180
5,595,000 Lawrence County IDA, PCR, Refunding, Ohio Edison/Pennsylvania Power Co. , 7.15%, 03/01/17 ..... 5,866,302
2,500,000 Lebanon County, Good Samaritan Hospital Authority Revenue, Good Samaritan Hospital Project,
Refunding, 6.00%, 11/15/18 ................................................................... 2,276,050
Lehigh County General Purpose Authority Revenue,
1,000,000 Exempt Facility, FGIC Insured, Pre-Refunded, 7.25%, 01/01/10 ................................ 1,088,300
3,000,000 Good Shepherd Rehabilitation Hospital, 7.50%, 11/15/21 ...................................... 3,061,920
1,100,000 Horizon Health Systems, Inc., Pre-Refunded, 8.25%, 07/01/13 ................................. 1,190,772
1,000,000 Lehigh Valley Hospital, Inc., Series A, MBIA Insured, Refunding, 5.875%, 07/01/15 ........... 986,660
1,600,000 Muhlenburg Hospital, Series A, 8.00%, 07/15/01 .............................................. 1,775,040
5,800,000 Muhlenburg Hospital, Series A, 6.60%, 07/15/22 .............................................. 5,822,504
1,700,000 Muhlenburg Hospital, Series B, 8.00%, 07/15/01 .............................................. 1,885,980
Lehigh County IDA, PCR,
5,550,000 Pennsylvania Power & Light Co. Project, Series A, MBIA Insured, 6.15%, 08/01/29 ............. 5,648,013
5,000,000 Pennsylvania Power & Light Co. Project, Series A, MBIA Insured, 6.40%, 11/01/21 ............. 5,177,900
10,000,000 Pennsylvania Power & Light Co. Project, Series B, MBIA Insured, 6.40%, 09/01/29 ............. 10,367,100
2,185,000 Lower Providence Towership, Sewer Authority, Sewer Revenue, 6.75%, 05/01/22 ................... 2,294,359
Luzerne County IDA, Exempt Facilities Revenue,
4,750,000 Refunding, Gas and Water Co. Project, Series A, 6.05%, 01/01/19 ............................. 4,516,395
5,000,000 Refunding, Gas and Water Co. Project, Series A, AMBAC Insured, 7.00%, 12/01/17 .............. 5,543,550
1,000,000 McCandless IDA, Commercial Development, First Mortgage Revenue, Refunding, K-Mart Corp.,
Series A, 7.20%, 07/15/07 .................................................................... 1,048,520
$ 5,000,000 Montgomery County GO, Series A, 6.10%, 10/15/25 ............................................... $ 5,030,050
Montgomery County Higher Education and Health Authority, Hospital Revenue,
2,500,000 Bryn Mawr Hospital Project, Pre-Refunded, 7.375%, 12/01/19 .................................. 2,841,550
500,000 Bryn Mawr Hospital Project, Pre-Refunded, 9.375%, 12/01/19 .................................. 565,690
2,375,000 Holy Redeemer Hospital, Series A, AMBAC Insured, 7.625%, 02/01/20 ........................... 2,542,984
610,000 Jeanes Health System Project, Series 1987, 7.625%, 07/01/17 ................................. 617,973
10,000,000 Jeanes Health System Project, Series 1990, Pre-Refunded, 8.75%, 07/01/20 .................... 12,017,100
1,315,000 Pottstown Memorial Medical Center Project, 7.35%, 11/15/05 .................................. 1,428,774
1,750,000 St. Joseph's University, Series 1990, 6.50%, 12/15/22 ....................................... 1,813,858
5,500,000 St. Joseph's University, Series 1990, Pre-Refunded, 8.30%, 06/01/10 ......................... 6,489,175
2,530,000 Montgomery County IDAR, Refunding, PCR, Philadelphia Electric Co., Series A, 7.60%, 04/01/21 .. 2,708,314
10,000,000 Montgomery County IDAR, Resources Recovery, 7.50%, 01/01/12 ................................... 10,675,600
5,000,000 Montgomery County PCR, Philadelphia Electric Revenue, Series B, MBIA Insured, 6.70%, 12/01/21 . 5,314,300
2,305,000 Moon Township Municipal Authority, Allegheny County Water and Sewer, Series 1990, FGIC Insured,
Pre-Refunded, 7.20%, 12/01/09 ................................................................ 2,609,444
600,000 Moon Transportation Authority, Highway Improvement Revenue, 9.50%, 02/01/16 ................... 663,096
1,000,000 Neshaminy School District GO, FGIC Insured, 7.00%, 02/15/14 ................................... 1,079,160
6,600,000 North Allegheny School District GO, AMBAC Insured, Pre-Refunded, 7.60%, 05/01/13 .............. 7,494,168
600,000 North Eastern Pennsylvania Hospital Authority Revenue, Wilkes Barre General Hospital, Series B,
Pre-Refunded, 8.375%, 07/01/06 ............................................................... 656,394
North Eastern Pennsylvania Hospital and Educational Authority Revenue, Refunding,
1,000,000 Kings College Project, Series B, 6.00%, 07/15/11 ............................................ 955,630
1,000,000 Kings College Project, Series B, 6.00%, 07/15/18 ............................................ 932,930
5,000,000 Wilkes University, 6.125%, 10/01/11 ......................................................... 4,843,450
2,500,000 Wilkes University, 5.625%, 10/01/18 ......................................................... 2,199,700
400,000 North Eastern York County Sewer Authority Revenue, Series 1987, Pre-Refunded, 8.75%, 09/01/18 . 435,684
1,175,000 North Hampton Borough Municipal Authority, Water Revenue, Leigh and North Hampton Counties
Project, AMBAC Insured, Pre-Refunded, 7.00%, 09/01/14 ........................................ 1,269,846
6,100,000 North Hampton County IDA, PCR, Refunding, 6.10%, 07/15/21 ..................................... 6,181,679
5,000,000 Pennsylvania Convention Center Authority Revenue, Series A, Refunding, 6.60%, 09/01/09 ........ 5,101,650
Pennsylvania EDA,
3,000,000 MacMillian L.P. Project, 7.60%, 12/01/20 .................................................... 3,259,290
5,000,000 Resources Recovery Revenue, Colver Project, Series D, 7.125%, 12/01/15 ...................... 5,105,800
Pennsylvania HFA,
12,500,000 Refunding, Rental Housing, FNMA Insured, 5.75%, 07/01/14 .................................... 12,135,375
1,000,000 SFMR, Series 1986-K, 7.375%, 04/01/11 ....................................................... 1,024,530
2,785,000 SFMR, Series 1987-K, 7.125%, 10/01/13 ....................................................... 2,850,642
5,655,000 SFMR, Series 1987-K, 6.125%, 10/01/24 ....................................................... 5,508,762
50,000 SFMR, Series 1987-L, 7.125%, 04/01/14 ....................................................... 52,551
750,000 SFMR, Series 1987-P, 8.00%, 04/01/16 ........................................................ 777,975
2,500,000 SFMR, Series 1988-R, 8.125%, 10/01/19 ....................................................... 2,595,000
4,885,000 SFMR, Series 1988-U, 7.80%, 10/01/20 ........................................................ 5,124,560
1,965,000 SFMR, Series 1989-W, 7.80%, 10/01/20 ........................................................ 2,050,340
3,570,000 SFMR, Series 1989-Y, 7.45%, 04/01/16 ........................................................ 3,699,662
5,440,000 SFMR, Series 1990-27, 8.15%, 10/01/21 ....................................................... 5,718,854
5,715,000 SFMR, Series 1990-29, 7.375%, 10/01/16 ...................................................... 5,925,712
4,500,000 SFMR, Series 1991-30, 7.30%, 10/01/17 ....................................................... 4,655,250
5,000,000 SFMR, Series 1991-32, 7.15%, 04/01/15 ....................................................... 5,209,750
3,000,000 SFMR, Series 1992-34-A, 6.85%, 04/01/16 ..................................................... 3,085,800
6,000,000 SFMR, Series 1992-34-B, 7.00%, 04/01/24 ..................................................... 6,150,840
Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue, Philadelphia Funding
Project,
$ 6,400,000 FGIC Insured, 7.00%, 06/15/14 ............................................................... $ 7,006,144
8,190,000 FGIC Insured, 6.75%, 06/15/21 ............................................................... 8,775,995
12,565,000 Pennsylvania State Financial Authority Revenue, Refunding, 6.60%, 11/01/09 .................... 13,257,834
Pennsylvania State Higher Educational Facilities Authority, College and University Revenue,
1,000,000 Allegheny College Project, Series B, 6.125%, 11/01/13 ....................................... 981,130
1,500,000 Allegheny College Project, Series B, 6.00%, 11/01/22 ........................................ 1,423,035
2,000,000 Hahnemann University Project, MBIA Insured, 7.20%, 07/01/09 ................................. 2,153,000
5,350,000 Hahnemann University Project, MBIA Insured, 7.20%, 07/01/19 ................................. 5,759,275
1,000,000 Lycoming College, Pre-Refunded, 8.375%, 10/01/18 ............................................ 1,135,680
1,000,000 Medical College of Pennsylvania, Series A, 8.375%, 03/01/11 ................................. 1,094,930
3,135,000 Medical College of Pennsylvania, Series A, 7.50%, 03/01/14 .................................. 3,230,367
2,250,000 Philadelphia College of Textiles and Science, Pre-Refunded, 7.50%, 02/01/07 ................. 2,360,970
2,350,000 Refunding, Drexel University, 6.375%, 05/01/17 .............................................. 2,342,903
1,955,000 Temple University, 7.375%, 10/01/06 ......................................................... 2,056,562
4,505,000 Temple University, 7.40%, 10/01/10 .......................................................... 4,703,851
1,000,000 Widner University, AMBAC Insured, Pre-Refunded, 7.625%, 10/01/13 ............................ 1,099,140
2,220,000 Pennsylvania State Higher Educational Facilities Authority Revenue, State System of Higher Education,
Series L, AMBAC Insured, 6.20%, 06/15/19 ..................................................... 2,260,293
4,250,000 Pennsylvania State IDAR, Economic Revenue, AMBAC Insured, 6.00%, 01/01/12 ..................... 4,314,855
890,000 Pennsylvania State Pooled Finance Authority, Lease Revenue, Capital Improvement, Series B,
MBIA Insured, 8.00%, 11/01/09 ................................................................ 910,070
1,000,000 Pennsylvania State Public School, Building Authority, Revenue, Refunding, Shenandoah Valley School
District Project, AMBAC Insured, 7.375%, 09/15/10 ............................................ 1,073,170
Pennsylvania State Turnpike Commission Revenue,
1,000,000 Series A, Pre-Refunded, 7.875%, 12/01/15 .................................................... 1,068,380
1,000,000 Series C, FGIC Insured, Pre-Refunded, 7.625%, 12/01/17 ...................................... 1,121,630
1,000,000 Series H, FGIC Insured, Pre-Refunded, 7.40%, 12/01/17 ....................................... 1,157,320
2,500,000 Series K, MBIA Insured, Pre-Refunded, 7.50%, 12/01/12 ....................................... 2,853,550
1,900,000 Series K, Pre-Refunded, 7.50%, 12/01/19 ..................................................... 2,168,698
2,300,000 Pennsylvania State University, Pre-Refunded, 7.75%, 03/01/11 .................................. 2,389,608
Philadelphia City GO, Refunding,
2,000,000 Series 1986, Pre-Refunded, 8.25%, 02/15/09 .................................................. 2,078,460
3,000,000 Series 1987-B, Pre-Refunded, 8.125%, 08/01/17 ............................................... 3,281,190
Philadelphia Gas Works Revenue,
8,300,000 11th Series A, Pre-Refunded, 7.875%, 07/01/17 ............................................... 9,020,357
795,000 11th Series C, AMBAC Insured, Pre-Refunded, 7.25%, 01/01/10 ................................ 848,130
1,000,000 12th Series, MBIA Insured, ETM, 7.00%, 05/15/20 ............................................. 1,141,950
1,255,000 13th Series, Pre-Refunded, 7.70%, 06/15/11 .................................................. 1,476,520
2,745,000 13th Series, Pre-Refunded, 7.70%, 06/15/11 .................................................. 3,237,233
10,100,000 14th Series, 6.375%, 07/01/26 ............................................................... 10,064,953
205,000 Pre-Refunded, AMBAC, 7.25%, 01/01/10 ........................................................ 227,739
Philadelphia Hospitals and Higher Educational Facilities Authority, Hospital Revenue,
5,225,000 Albert Einstein Medical Center, 7.30%, 10/01/08 ............................................. 5,680,829
7,755,000 Albert Einstein Medical Center, 7.625%, 04/01/11 ............................................ 8,259,230
1,000,000 Children's Seashore House, Series A, 7.00%, 08/15/17 ........................................ 1,026,640
2,600,000 Children's Seashore House, Series B, 7.00%, 08/15/22 ........................................ 2,669,264
100,000 Presbyterian Medical Center, AMBAC Insured, Pre-Refunded, 8.00%, 07/01/13 ................... 108,841
2,750,000 Philadelphia Municipal Authority, Gas Works Lease Revenue, 7.625%, 05/01/14 ................... 2,946,130
Philadelphia Municipal Authority Revenue, Refunding,
$ 1,360,000 FGIC Insured, Pre-Refunded, 7.80%, 04/01/18 ................................................. $ 1,552,467
2,000,000 Lease, Series D, 6.30%, 07/15/17 ............................................................ 1,983,400
300,000 Series 1987, Pre-Refunded, 7.875%, 07/15/17 ................................................. 326,454
50,000 Philadelphia Parking Authority, Airport Revenue, Refunding, 7.30%, 09/01/03 ................... 50,552
185,000 Philadelphia RDA, Home Improvement Loan Revenue, Series A, FHA Mortgage Insured, 7.375%,
06/01/03 ..................................................................................... 187,949
Philadelphia RDA, Housing Revenue,
295,000 Sub-Series 2-B, 8.625%, 08/01/26 ............................................................ 298,959
500,000 Sub-Series 3-B, 8.00%, 08/01/13 ............................................................. 551,550
Philadelphia Water and Sewer Revenue,
6,940,000 Series 10, ETM 09/01/04, 7.35%, 09/01/04 .................................................... 8,000,224
600,000 Series 11, Pre-Refunded, 9.10%, 12/01/02 .................................................... 619,530
11,000,000 Series 16, 7.50%, 08/01/10 .................................................................. 12,893,870
10,000,000 Philadelphia Water and Wastewater Revenue, Refunding, 5.75%, 06/15/13 ......................... 9,487,300
330,000 Pittsburgh Public Parking Authority Revenue, Converted Option Bond, Pre-Refunded, 7.50%, 12/01/07 339,540
Pittsburgh Urban RDA, SFMR,
3,750,000 Series A, 7.15%, 10/10/27 ................................................................... 3,868,838
2,500,000 Series B, GNMA Secured, 7.375%, 12/01/16 .................................................... 2,608,900
1,250,000 Pittsburgh Water and Sewer Authority, Crossover System Revenue, Refunding, FGIC Insured, ETM,
7.25%, 09/01/14 .............................................................................. 1,430,263
Pottstown Borough Authority,
4,000,000 Sewer Revenue, 7.70%, 11/01/21 .............................................................. 4,298,120
1,000,000 Water Revenue, Pre-Refunded, 7.80%, 08/01/10 ................................................ 1,075,410
6,390,000 Schuylkill County, IDA, Resource Recovery Revenue, Refunding, Schuylkill Energy Resource, Inc.,
6.50%, 01/01/10 .............................................................................. 6,365,654
1,500,000 Schuylkill County, RDA Lease Revenue, Series A, FGIC Insured, Pre-Refunded, 7.125%, 06/01/13 .. 1,670,145
500,000 Scranton-Lackawanna Health and Welfare Authority, Health Facilities Revenue, Allied Services,
FHA Insured, Series C, Pre-Refunded, 8.125%, 01/15/28 ........................................ 561,465
750,000 Silver Spring Towership Authority, Sewer Revenue, FGIC Insured, 6.70%, 07/15/21 ............... 774,315
2,715,000 Southside Area School District, AMBAC Insured, Pre-Refunded, 7.00%, 04/15/10 .................. 2,907,711
1,975,000 Temple University, System of Higher Education, Pennsylvania Hospital Revenue, Series A, FHA Insured,
Pre-Refunded, 7.25%, 08/01/16 ................................................................ 2,143,507
100,000 Union County Higher Educational Facilities Financing Authority, University Revenue, Bucknell University,
MBIA Insured, Pre-Refunded, 7.75%, 04/01/07 .................................................. 105,489
3,000,000 Union School District GO, AMBAC Insured, Pre-Refunded, 7.25%, 04/01/15 ........................ 3,239,520
100,000 University of Pittsburgh Higher Education, University Capital Project, Series 1987-A, Pre-Refunded,
8.375%, 06/01/05 ............................................................................. 109,160
1,000,000 Venango County GO, AMBAC Insured, Pre-Refunded, 7.25%, 09/15/19 ............................... 1,109,900
1,000,000 Warren County GO, MBIA Insured, Pre-Refunded, 7.20%, 07/01/16 ................................. 1,139,540
2,000,000 Washington County, Authority Lease Revenue, Municipal Facilities Pool, Capital C, Shadyside Hospital,
Series A, AMBAC Insured, Pre-Refunded, 7.375%, 12/15/09 ...................................... 2,306,980
100,000 Washington County Hospital Authority Revenue, Washington Hospital, Series 1987, Pre-Refunded,
9.50%, 07/01/17 .............................................................................. 110,423
1,500,000 Westmoreland County IDAR, Refunding, Citizen's General Hospital Project, Series A, 8.25%, 07/01/13 1,590,315
3,000,000 Wilkes Barre Area School District, GO, FGIC Insured, 6.375%, 04/01/15 ......................... 3,115,890
750,000 Wyoming Valley Sanitary Authority, Sewer Revenue, BIG Insured, Pre-Refunded, 7.25%, 11/15/05 .. 848,063
York County Solid Waste and Refuse Authority, IDR, Resource Recovery Project,
105,000 Series B, 8.20%, 12/01/14 ................................................................... 115,163
900,000 Series C, 8.20%, 12/01/14 ................................................................... 987,111
-----------
Total Long Term Investments (Cost $562,476,082).......................................... 598,696,010
-----------
eShort Term Investments .5%....................................................................
Allegheny County, Hospital Development Authority, Presbyterian Health Center, MBIA Insured,
$ 600,000 Series B, Weekly VRDN and Put, 3.60%, 03/01/20 .............................................. $ 600,000
200,000 Series C, Weekly VRDN and Put, 3.60%, 03/01/20 .............................................. 200,000
Sayre County, Health Facilities Authority, VHA Capital Finance Project, Series D, AMBAC Insured,
800,000 Series D, Weekly VRDN and Put, 3.50%, 12/01/20 .............................................. 800,000
600,000 Series H, Weekly VRDN and Put, 3.50%, 12/01/20 .............................................. 600,000
700,000 Schuylkill County, IDA, Westwood Energy Property, Daily VRDN and Put, 3.60%, 11/01/09 ......... 700,000
-----------
Total Short-Term Investments (Cost $2,900,000)........................................... 2,900,000
-----------
Total Investments (Cost $565,376,082) 98.3%......................................... 601,596,010
Other Assets and Liabilities, Net 1.7%.............................................. 10,304,637
-----------
Net Assets 100.0%................................................................... $611,900,647
===========
At August 31, 1995 the net unrealized appreciation based on the cost of investments
for income tax purposes of $565,376,082 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost .............................................................. $ 38,178,057
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value .............................................................. (1,958,129)
-----------
Net unrealized appreciation.................................................................. $ 36,219,928
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co.
EDA - Economic Development Authority
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Authority/Agency
IDA - Industrial Development Authority/Agency
IDR - Industrial Development Revenue
IDAR - Industrial Development Authority Revenue
L.P. - Limited Partnership
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
RDA - Redevelopment Agency
RDAR - Redevelopment Agency Revenue
SFMR - Single Family Mortgage Revenue
VHA - Volunteer Hospital of America
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the principal balance plus accrued interest upon short notice prior to
specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Puerto Rico Tax-Free Income Fund (Note 1)
Long Term Investments 98.3%...................................................................
Guam Airport Authority Revenue,
<S> <C> <C>
$ 1,675,000 Series B, 6.60%, 10/01/10 ................................................................. $ 1,705,686
5,800,000 Series B, 6.70%, 10/01/23 ................................................................. 5,841,760
Guam Government, GO, Series A,
4,775,000 5.90%, 09/01/05 ........................................................................... 4,771,371
1,085,000 6.00%, 09/01/06 ........................................................................... 1,080,671
5,590,000 Guam Government Limited Obligation Highway, Refunding, Series A, 6.30%, 05/01/12 .............. 5,827,743
Guam Power Authority Revenue,
7,190,000 GO, 6.30%, 10/01/22 ....................................................................... 7,106,740
2,680,000 Series A, 6.75%, 10/01/24 ................................................................. 2,744,856
5,000,000 Northern Mariana Islands, Commonwealth Ports Authority, Seaport Revenue, Port Saipan Harbor
Improvement, Series A, 6.85%, 10/01/25 ....................................................... 4,936,900
Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue,
4,340,000 Series 1988-A, 7.875%, 07/01/17 ........................................................... 4,819,874
3,620,000 Series 1988-A, 7.00%, 07/01/19 ............................................................ 3,847,336
Puerto Rico Commonwealth GO,
250,000 6.25%, 07/01/10 ........................................................................... 258,875
3,905,000 6.40%, 07/01/11 ........................................................................... 4,059,091
1,930,000 Pre-Refunded, 7.90%, 07/01/11 ............................................................. 2,051,667
1,515,000 Public Improvement, Series B, Pre-Refunded, 7.25%, 07/01/12 ............................... 1,631,428
2,000,000 Refunding, MBIA Insured, 5.75%, 07/01/24 .................................................. 1,961,180
400,000 Refunding, Series A, 6.00%, 07/01/14 ...................................................... 399,956
Puerto Rico Commonwealth Highway and Transportation Authority Revenue,
70,000 Refunding, Series N, Pre-Refunded, 8.00%, 07/01/03 ........................................ 78,481
3,925,000 Series P, Pre-Refunded, 8.125%, 07/01/13 .................................................. 4,413,506
350,000 Series Q, Pre-Refunded, 7.75%, 07/01/10 ................................................... 407,726
4,250,000 Series T, 6.625%, 07/01/18 ................................................................ 4,435,300
2,615,000 Puerto Rico Commonwealth IDC, General Purpose Revenue, 8.00%, 01/01/03 ........................ 2,615,811
Puerto Rico Commonwealth Infrastructure Financing Authority, Special Tax Revenue,
3,000,000 Series 1988-A, 7.90%, 07/01/07 ............................................................ 3,312,300
2,300,000 Series 1988-A, 7.75%, 07/01/08 ............................................................ 2,529,126
2,600,000 Series 1988-A, 7.50%, 07/01/09 ............................................................ 2,842,008
3,350,000 Puerto Rico Commonwealth Urban Renewal and Housing Corp., Refunding, 7.875%, 10/01/04 ......... 3,793,741
Puerto Rico Electric Power Authority Revenue,
500,000 Refunding, Series 1987-L, Pre-Refunded, 8.375%, 07/01/07 .................................. 547,925
2,160,000 Refunding, Series 1987-L, Pre-Refunded, 8.40%, 07/01/15 ................................... 2,367,986
3,850,000 Refunding, Series 1988-M, Pre-Refunded, 8.00%, 07/01/08 ................................... 4,316,466
2,115,000 Refunding, Series 1991-P, 7.00%, 07/01/11 ................................................. 2,341,982
1,445,000 Refunding, Series K, Pre-Refunded, 9.375%, 07/01/17 ....................................... 1,608,632
1,525,000 Series O, 7.125%, 07/01/14 ................................................................ 1,664,660
1,000,000 Series P, 7.00%, 07/01/21 ................................................................. 1,105,180
10,000,000 Series T, 6.375%, 07/01/24 ................................................................ 10,174,700
5,750,000 Series U, 6.00%, 07/01/14 ................................................................. 5,717,340
7,225,000 Series X, 6.125%, 07/01/21 ................................................................ 7,239,233
Puerto Rico HFC Revenue,
2,060,000 FHA Mortgage Insured, Section 8 Assisted, Sixth Portfolio, Pre-Refunded, 7.75%, 12/01/26 .. 2,456,653
500,000 GNMA, SFMR, Portfolio D-1, 6.85%, 10/15/24 ................................................ 518,815
3,750,000 GNMA, SFMR, Series C, 6.85%, 10/15/23 ..................................................... 3,891,113
420,000 MFMR, Portfolio A-1, 7.50%, 10/01/15 ...................................................... 443,743
1,750,000 MFMR, Portfolio A-1, 7.50%, 04/01/22 ...................................................... 1,844,150
380,000 MFMR, Series A, 8.25%, 06/01/11 ........................................................... 385,578
Puerto Rico Housing Bank and Finance Agency, SFMR, Homeownership Development Program,
$ 3,025,000 Affordable Housing Mortgage, First Portfolio, 6.25%, 04/01/29 ............................. $ 3,037,161
955,000 Fifth Portfolio, Pre-Refunded, 7.50%, 12/01/15 ............................................ 1,082,407
Puerto Rico Industrial, Educational, Medical and Environmental Control Facilities, Financing Authority,
Higher Educational Revenue, Polytechnic University of Puerto Rico Project,
1,000,000 Series A, 5.70%, 08/01/13 ................................................................. 925,960
1,500,000 Series A, 5.50%, 08/01/24 ................................................................. 1,314,225
5,810,000 Puerto Rico Industrial, Educational, Medical and Environmental Control Facilities, Hospital Auxilio
Mutuo Obligation Group, Series A, 6.25%, 07/01/24 ............................................ 5,980,407
Puerto Rico Industrial, Medical and Environmental Facilities, PCFA Revenue,
2,575,000 American Cyanamid Co. Project, 8.75%, 05/01/13 ............................................ 2,643,598
4,010,000 Baxter Travenol Labs., Series A, 8.00%, 09/01/12 .......................................... 4,452,223
140,000 Higher Citiproperties, Inc., 8.75%, 12/01/00 .............................................. 145,498
900,000 PepsiCo, Inc. Project, 6.25%, 11/15/13 .................................................... 957,285
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities, Financing
Authority, Hospital Revenue, Refunding,
2,500,000 d Dr. Pila Hospital Project, Series A, 6.125%, 08/01/25 ..................................... 2,515,550
500,000 d Dr. Pila Hospital Project, Series A, 6.25%, 08/01/32 ...................................... 504,140
Puerto Rico Municipal Finance Agency,
4,550,000 Series 1988-A, 8.25%, 07/01/08 ............................................................ 5,002,907
2,000,000 Series 1994-A, 6.50%, 07/01/19 ............................................................ 2,089,860
1,000,000 Puerto Rico PBA Revenue, Guaranteed, Government Facilities, Series A, AMBAC Insured, 5.75%,
07/01/22 ..................................................................................... 982,460
5,655,000 Puerto Rico Port Authority Revenue, Special Facilities, American Airlines, Series A, 6.30%, 06/01/23 5,610,326
Puerto Rico Telephone Authority Revenue,
6,450,000 Series 1992-L, 6.125%, 01/01/22 ........................................................... 6,493,086
500,000 Series 1993-N, 5.50%, 01/01/13 ............................................................ 480,005
1,885,000 Series 1993-N, 5.50%, 01/01/22 ............................................................ 1,763,228
University of Puerto Rico, University System Revenues,
245,000 Series J, Pre-Refunded, 6.50%, 06/01/13 ................................................... 260,378
2,000,000 Series M, MBIA Insured, 5.50%, 06/01/15 ................................................... 1,943,540
Virgin Islands HFA, SFR, Refunding,
950,000 Series A, 6.45%, 03/01/16 ................................................................. 949,981
2,250,000 Series A, 6.50%, 03/01/25 ................................................................. 2,249,954
5,600,000 Virgin Islands Water and Power Authority, Electric System Revenue, Series A, 7.40%, 07/01/11 .. 5,866,055
-----------
Total Long Term Investments (Cost $173,275,385) ......................................... 181,347,523
-----------
e Short Term Investment 1.8%
3,300,000 Puerto Rico Commonwealth, Government Development Bank, Refunding, Weekly VRDN and Put,
3.20%, 12/01/15 Cost ($3,300,000) ............................................................ 3,300,000
-----------
Total Investments (Cost $176,575,385) 100.1% ....................................... 184,647,523
Liabilities in Excess of Other Assets, Net (.1)% ................................... (261,919)
-----------
Net Assets 100.0% .................................................................. $184,385,604
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $176,608,509 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost .............................................................. $ 8,414,179
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value .............................................................. (375,165)
-----------
Net unrealized appreciation ................................................................. $ 8,039,014
===========
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
FHA - Federal Housing Authority/Agency
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Authority/Agency
HFC - Housing Finance Corp.
IDC - Industrial Development Corp.
MBIA - Municipal Bond Investors Assurance Corp.
MFMR - Multi-Family Mortgage Revenue
PBA - Public Building Authority
PCFA - Pollution Control Financing Authority
SFMR - Single Family Mortgage Revenue
SFR - Single Family Revenue
dSee note 1(f) regarding securities purchased on a when-issued basis.
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon short notice
prior to specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as
the prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin Federal Intermediate-Term Tax-Free Income Fund (Note 1)
Long Term Investments 98.1%
Alabama 1.4%
<S> <C> <C>
$1,000,000 Morgan County, Decatur Health Care Authority Revenue, Refunding, Connie Lee Insured, 5.80%,
03/01/04 ..................................................................................... $ 1,040,730
-----------
Alaska .9%
500,000 Alaska State HFC, Collateral, First Mortgage Program, 5.80%, 06/01/04 ........................... 510,245
200,000 Anchorage Parking Authority Lease Revenue, Refunding, 5th Avenue Garage, 6.50%, 12/01/02 ........ 213,012
-----------
723,257
-----------
Arizona 3.0%
2,000,000 Maricopa County COP, 5.625%, 06/01/00 ........................................................... 2,046,880
200,000 Mohave County IDA, Hospital System Revenue, Refunding, Medical Environment, Inc., Phoenix Baptist
Hospital and Medical Center, 6.00%, 07/01/00 ................................................... 205,528
75,000 Phoenix HFC, Mortgage Revenue, Project A, MBIA Insured, 6.00%, 07/01/02 ......................... 76,888
-----------
2,329,296
-----------
California 21.5%
100,000 ABAG Finance Corp., COP, Association XXVI, Series B, 6.30%, 10/01/02 ............................ 103,388
3,000,000 Bakersfield Public Financing Authority Revenue, Series A, 5.80%, 09/15/05 ....................... 2,979,690
1,500,000 California Educational Facilities Authority Revenue, College & University Financing, Refunding, Series B,
5.90%, 06/01/03 ................................................................................ 1,534,395
California Statewide CDA Revenue, Refunding, COP, Health Facilities, Barton Memorial Hospital,
200,000 Series B, 5.70%, 12/01/00 ..................................................................... 203,050
300,000 Series B, 6.40%, 12/01/05 ..................................................................... 314,445
300,000 Coalinga Public Financing Authority Revenue, Series B, 6.10%, 09/15/04 .......................... 301,149
2,600,000 Fresno Joint Powers Financing Authority, Local Agency Revenue, Refunding, Series A, 6.00%, 09/02/01 2,618,122
Hesperia Public Finance Authority Revenue,
505,000 Highway and Street Improvement, Series A, 4.75%, 10/01/96 ..................................... 505,712
555,000 Highway and Street Improvement, Series A, 5.00%, 10/01/97 ..................................... 557,031
605,000 Highway and Street Improvement, Series A, 5.25%, 10/01/98 ..................................... 609,060
100,000 Los Angeles County Transportation Commission, COP, Series B, 5.90%, 07/01/00 .................... 104,894
450,000 Merced Irrigation District COP, Water Facilities Project, 6.00%, 11/01/02 ....................... 462,852
500,000 New Haven USD, COP, Refunding, 5.30%, 07/01/01 .................................................. 508,465
200,000 Paso Robles USD, COP, Measure D, Capital Projects, Phase III, 5.75%, 08/01/02 ................... 204,440
100,000 San Diego County COP, Children's Center Project, 6.00%, 10/01/02 ................................ 101,362
100,000 San Diego Port Facilities Revenue, Refunding, National Steel and Shipbuilding Co., 6.60%, 12/01/02 92,973
145,000 San Francisco City and County RDA, Refunding, MBIA Insured, Series A, 6.125%, 07/01/02 .......... 145,552
200,000 San Francisco Downtown Parking Corp. Revenue, 6.25%, 04/01/04 ................................... 207,230
200,000 San Joaquin County COP, General Hospital Project, 5.90%, 09/01/03 ............................... 203,562
520,000 San Juan USD, COP, Golden River Elementary School Construction Project, 5.40%, 04/01/01 ......... 518,492
2,000,000 San Ramon Valley USD, COP, Measure A, Capital Project, Series A, 5.95%, 10/01/01 ................ 2,055,160
Snowline Joint USD, COP,
245,000 Series 1993, 5.50%, 07/01/00 .................................................................. 243,853
260,000 Series 1993, 5.60%, 07/01/01 .................................................................. 258,575
275,000 Series 1993, 5.70%, 07/01/02 .................................................................. 273,290
290,000 Series 1993, 5.80%, 07/01/03 .................................................................. 287,996
400,000 Solano County COP, Refunding, Justice Facility and Public Building Project, 5.875%, 10/01/05 .... 397,132
100,000 Southern California Rapid Transit District Revenue, Special Benefit AD A2, Series 92A, 6.00%, 09/01/02 105,653
Susanville Public Financing Authority Revenue, Water Facilities,
25,000 Series A, AMBAC Insured, 5.90%, 09/01/02 ...................................................... 26,682
100,000 Series A, AMBAC Insured, 6.00%, 09/01/03 ...................................................... 106,707
500,000 Tahoe City, Public Utilities District COP, Capital Facilities Project, Series B, 6.05%, 06/01/01 510,860
100,000 Tuolumne County COP, Multiple Facilities Project, 6.00%, 06/01/99 ............................... 101,456
-----------
16,643,228
-----------
Colorado 6.9%
Denver City and County Airport Revenue,
$3,000,000 Series A, 7.00%, 11/15/99 ..................................................................... $ 3,186,810
335,000 Series C, 6.25%, 11/15/00 ..................................................................... 348,939
1,500,000 Montrose County COP, 6.20%, 06/15/03 ............................................................ 1,558,815
255,000 Summit County Recreational Facilities Revenue, Refunding, Copper Mountain, Mandatory Put 10/01/99,
5.90%, 04/01/17 ................................................................................ 265,628
-----------
5,360,192
-----------
District of Columbia .9%
700,000 District of Columbia GO, Refunding, Series A, 5.875%, 06/01/05 .................................. 671,636
-----------
Florida 11.5%
250,000 Alachua County, HFA, Refunding, Santa Fe Health Care Facilities Project, 6.875%, 11/15/02 ....... 269,800
3,250,000 Gateway Service District Revenue, Transportation/Roadway Service Charges, 8.50%, 05/01/04 ....... 3,421,958
1,000,000 Hillsborough County Florida IDA, University Community Hospital, MBIA Insured, 5.375%, 08/15/04 .. 1,040,630
Northern Palm Beach County Water Control District, Unit Development Number 31,
405,000 Program 1, 6.60%, 11/01/03 .................................................................... 422,569
320,000 Program 2, 6.60%, 11/01/03 .................................................................... 333,882
795,000 Palm Bay Lease Revenue, Refunding, Florida Education and Reseach Foundation, Project A, 6.10%,
09/01/03 ....................................................................................... 806,559
2,700,000 Palm Beach County Solid Waste IDR, Okeelanta Power Project, Series A, 6.375%, 02/15/07 .......... 2,574,585
-----------
8,869,983
-----------
Georgia .2%
100,000 Fulton County Development Authority, Special Facilities Revenue, Delta Air Lines, Inc. Project, 6.85%,
11/01/07 ....................................................................................... 104,194
-----------
Guam 1.3%
1,000,000 Guam Government GO, Series 1995-A, 5.90%, 09/01/05 .............................................. 999,240
-----------
Illinois 1.6%
850,000 Illinois Educational Facilities Authority Revenue, Columbia College, 5.875%, 12/01/03............ 873,630
360,000 Illinois Housing Development Authority Revenue, Homeowner Mortgage, Sub-Series A-1, 6.10%, 02/01/05 371,671
-----------
1,245,301
-----------
Indiana 2.8%
2,000,000 Franklin City, EDR, Refunding, Hoover Universal, Inc. Project, Johnson Controls, 6.10%, 12/01/04 2,071,140
100,000 Indianapolis Local Public Improvement Bond, Series D, 6.10%, 02/01/02 ........................... 104,897
-----------
2,176,037
-----------
Iowa .3%
200,000 Iowa State Financial Authority Hospital, Facilities Revenue, Refunding, Trinity Regional Hospital Project,
6.50%, 07/01/00 ................................................................................ 208,866
-----------
Kentucky .8%
100,000 Kenton County Airport Board Revenue, Special Facilities, Delta Airlines, Inc. Project A, 6.75%, 02/01/02 104,472
500,000 Mt. Sterling Lease Revenue, Kentucky League Cities Funding, Series A, 5.625%, 03/01/03 .......... 510,855
-----------
615,327
-----------
Louisiana .8%
55,000 Calcasieu Parish, Public Transportation Authority Mortgage Revenue, Refunding, Series B, 6.375%,
11/01/02 ....................................................................................... 57,151
300,000 Louisiana State Correctional Facilities Corp. Lease Revenue, Refunding, FSA Insured, 5.25%, 12/15/00 308,736
$ 100,000 Louisiana State Offshore Terminal Authority, Deepwater Port Revenue, Refunding, First Stage, Loop, Inc.,
Series B, 6.20%, 09/01/03 ...................................................................... $ 106,536
100,000 Louisiana State Public Facility Authority Revenue, Student Loan, Series A-1, 6.20%, 03/01/01 .... 105,352
-----------
577,775
-----------
Maryland .3%
235,000 Baltimore EDR, Lease, Refunding, Armistead Partnership, Series A, 6.75%, 08/01/02 ............... 253,624
-----------
Massachusetts 1.6%
200,000 Massachusetts State Industrial Finance Agency, Resource Recovery Revenue, Refunding, Refusetech, Inc.
Project, Series A, 5.45%, 07/01/01 ............................................................. 208,164
New England Educational Loan Corp., Massachusetts Student Loan Revenue, Refunding,
600,000 Series B, 5.00%, 06/01/98 ..................................................................... 606,984
415,000 Series B, 5.60%, 06/01/02 ..................................................................... 426,906
1,242,054
Michigan 1.3%
1,000,000 Detroit GO, Refunding, Series B, 6.375%, 04/01/06 ............................................... 1,010,270
-----------
Minnesota .3%
200,000 Minneapolis CDA, Supported Development Revenue, Series 91-5A, 7.20%, 12/01/04 ................... 216,924
-----------
Mississippi 1.6%
1,250,000 Mississippi State Higher Education Assistant Corp., Student Loan Revenue, Series A, 4.80%, 09/01/99 1,259,450
-----------
Missouri 1.3%
1,000,000 St. Louis Municipal Finance Corp., Leasehold Revenue, Refunding, Series A, 5.375%, 07/15/03 ..... 1,014,320
-----------
Nebraska .4%
300,000 Nebraska Higher Education Loan Program, Inc. Revenue, Subject Lien, Series A-6, 6.70%, 12/01/02.. 319,377
-----------
New Jersey 1.5%
125,000 New Jersey EDA, Economic Growth, 2nd Revenue, Series F-1, 6.00%, 12/01/02 ....................... 128,153
1,000,000 New Jersey Health Care Facilities Financing Authority Revenue, Refunding, Monmouth Medical Center,
Series C, CGIC Insured, 5.80%, 07/01/04 ........................................................ 1,054,220
-----------
1,182,373
-----------
New York 5.6%
New York City GO,
515,000 Refunding, Series C, 6.50%, 08/01/04 .......................................................... 539,025
800,000 Refunding, Series D, 5.75%, 08/01/03 .......................................................... 801,456
100,000 Series B, 6.25%, 10/01/01 ..................................................................... 104,239
250,000 Series H, 7.00%, 02/01/05 ..................................................................... 266,088
2,500,000 New York City Health and Hospital Authority, Local Government Revenue, Refunding, Series A, 6.00%,
02/15/06 ....................................................................................... 2,424,550
90,000 New York City IDA, Civic Facilities Revenue, New York Blood Center, Inc. Project, 6.80%, 05/01/02 97,166
100,000 Oneida-Herkimer Solid Waste Management Authority, Solid Waste Systems Revenue, Refunding, 6.20%,
04/01/00 ....................................................................................... 104,222
-----------
4,336,746
-----------
Oklahoma 2.6%
2,020,000 Jackson County Memorial Hospital Authority Revenue, Refunding, Memorial Hospital Project, 6.75%,
08/01/04 ....................................................................................... 1,940,351
100,000 Tulsa Public Facilities Authority, Lease Payment Revenue, Refunding, Assembly Center, 5.80%, 07/01/01 103,224
-----------
2,043,575
-----------
Pennsylvania 5.0%
$ 500,000 Allegheny County Higher Education, Building Authority Revenue, Community College, Series A, 5.50%,
06/01/05 ....................................................................................... $ 510,915
100,000 Cambria County Hospital Development Authority, Revenue, Refunding & Improvement, Conemaugh Valley
Hospital, Series B, Connie Lee Insured, 5.90%, 07/01/03 ........................................ 104,965
100,000 Langhorne Manor Borough Higher Education and Health Authority Revenue, Lower Bucks Hospital,
6.75%, 07/01/02 ................................................................................ 99,879
Lebanon County Good Samaritan Hospital Authority Revenue, Refunding,
535,000 Good Samaritan Hospital Project, 5.25%, 11/15/01 .............................................. 523,893
615,000 Good Samaritan Hospital Project, 5.35%, 11/15/02 .............................................. 600,615
575,000 Good Samaritan Hospital Project, 5.50%, 11/15/03 .............................................. 561,988
Northeastern Hospital and Educational Authority Revenue,
390,000 Kings College, 5.50%, 07/15/02 ................................................................ 389,969
410,000 Kings College, 5.60%, 07/15/03 ................................................................ 409,967
Philadelphia Gas Works Revenue, Refunding,
300,000 Series A, 5.70%, 07/01/00 ..................................................................... 312,123
300,000 Series A, 5.80%, 07/01/01 ..................................................................... 314,274
-----------
3,828,588
-----------
Puerto Rico 2.1%
Puerto Rico Electric Power Authority Revenue,
100,000 Series Q, 5.90%, 07/01/01 ..................................................................... 106,092
1,345,000 Series T, 6.00%, 07/01/04 ..................................................................... 1,435,909
100,000 Puerto Rico Municipal Finance Agency, Series A, 5.30%, 07/01/00 ................................. 102,423
-----------
1,644,424
-----------
South Dakota 4.0%
1,000,000 South Dakota HDA, Homeownership Mortgage, Series B, 6.05%, 05/01/04 ............................. 1,045,790
2,000,000 South Dakota State Student Loan Finance Corp., 6.35%, 08/01/05 .................................. 2,075,200
-----------
3,120,990
-----------
Tennessee 1.0%
750,000 Metropolitan Government, Nashville & Davidson County IDBR, Refunding & Improvement,
Osco Treatment, Inc., 6.00%, 05/01/03 .......................................................... 748,560
-----------
Texas 1.6%
785,000 Abilene Higher Education Facilities Corp., Higher Education Revenue, Refunding & Improvement,
Abilene Christian Facility, 5.90%, 10/01/05 .................................................... 800,472
410,000 Houston HFC, SFMR, Refunding, Series A, FSA Insured, 5.45%, 06/01/03 ............................ 413,309
-----------
1,213,781
-----------
Utah 2.5%
2,000,000 Davis County Solid Waste Management and Energy Recovery Revenue, Refunding, Special Service
District, 5.50%, 06/15/00 ...................................................................... 1,935,480
-----------
Virginia 9.4%
2,800,000 Covington-Alleghany County, Refunding, Westvaco Corp. Project, 5.85%, 09/01/04 .................. 2,968,532
1,000,000 Virginia College Building Authority, Educational Facilities Revenue, Hampton University Project, 5.375%,
04/01/03 ....................................................................................... 1,023,350
Virginia State HDA, Commonwealth Mortgage,
1,695,000 Series C, Sub-Series 7, 5.60%, 01/01/03 ....................................................... 1,748,189
1,475,000 Series C, Sub-Series 7, 5.70%, 01/01/04 ....................................................... 1,526,197
-----------
7,266,268
-----------
Washington 2.1%
$ 600,000 Marysville Water and Sewer Revenue, Refunding, MBIA Insured, 5.75%, 12/01/05 .................... $ 623,454
Washington State Health Care Facilities Authority Revenue,
345,000 Spokane Heart Institute, Series A, 5.125%, 08/15/02 ........................................... 342,306
300,000 Spokane Heart Institute, Series A, 5.25%, 08/15/03 ............................................ 297,876
390,000 Spokane Heart Institute, Series A, 5.25%, 08/15/04 ............................................ 383,978
-----------
1,647,614
-----------
Total Long Term Investments (Cost $74,283,755) ............................................ 75,849,480
-----------
e Short Term Investment .4%
300,000 Jacksonville PCR, Refunding, Florida Power and Light Co. Project, Daily VRDN and Put, 3.35%, 05/01/29
(Cost $300,000) ................................................................................ 300,000
-----------
Total Investments (Cost $74,583,755) 98.5% ........................................... 76,149,480
Others Assets and Liabilities, Net 1.5% .............................................. 1,195,861
-----------
Net Assets 100.0% .................................................................... $77,345,341
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $74,583,755 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost ................................................................ 1,983,798
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value ................................................................ (418,073)
-----------
Net unrealized appreciation ................................................................... $ 1,565,725
===========
PORTFOLIO ABBREVIATIONS:
ABAG - Association of Bay Area Governments
AD - Assessment District
AMBAC - American Municipal Bond Assurance Corp.
CDA - Community Development Agency
CGIC - Capital Guaranty Insurance Co.
COP - Certificate of Participation
EDA - Economic Development Authority
EDR - Economic Development Revenue
FSA - Financial Security Assistance
GO - General Obligation
HDA - Housing Development Authority/Agency
HFA - Housing Finance Authority/Agency
HFC - Housing Finance Corp.
IDA - Industrial Development Authority/Agency
IDBR - Industrial Development Board Revenue
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
PCR- Pollution Control Revenue
RDA - Redevelopment Agency
SFMR - Single Family Mortgage Revenue
USD - Unified School District
eVariable rate demand notes (VRDNs) are tax exempt obligations which contain a
floating or variable interest rate adjustment formula and an unconditional right
of demand to receive payment of the principal balance plus accrued interest upon
short notice prior to specified dates. The interest rate may change on
speicified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, August 31, 1995 (unaudited)
Face Value
Amount Franklin High Yield Tax-Free Income Fund (Note 1)
Long Term Investments 97.2%
Bonds 94.9%
Alabama .6%
<S> <C> <C>
$ 7,055,000 Homewood Special Care Facilities Financing Authority, Hospital Revenue, Lakeshore Hospital
Project, Series B, Pre-Refunded, 8.25%, 02/01/04 .......................................... $ 8,042,771
Marshall County Health Care Authority, Hospital Revenue,
5,000,000 Guntersville, Arab Medical Center, Pre-Refunded, 10.25%, 10/01/13 ...................... 5,758,200
3,300,000 Refunding, Boaz-Albertville Medical Center, 6.20%, 01/01/08 ............................ 3,274,425
500,000 Marshall County Hospital Board Revenue, Refunding, Boaz-Albertville Medical Center,
Pre-Refunded, 8.875%, 01/01/05 ............................................................ 540,600
2,500,000 Prichard Water Works and Sewer Board Revenue, Pre-Refunded, 9.50%, 11/15/14 ................ 2,950,700
700,000 f Wedowee Utilities Board, COP, Consolidated Financial Services, Inc., Pre-Refunded, 10.50%,
01/15/11 .................................................................................. 679,000
-----------
21,245,696
-----------
Alaska .3%
Alaska Industrial Development and Export Revenue,
4,000,000 American President Lines Project, 8.00%, 11/01/09 ...................................... 4,369,280
985,000 Revolving Fund, Series A, 6.20%, 04/01/10 .............................................. 1,001,991
5,000,000 Alaska State HFC, Mortgage Program, First Series, 5.90%, 12/01/33 .......................... 4,670,750
1,705,000 Palmer Golf Course Lease, COP, 10.25%, 07/01/08 ............................................ 1,833,574
-----------
11,875,595
-----------
Arizona 1.2%
950,000 Gila County IDA, PCR, Refunding, ASARCO, Inc. Project, 8.90%, 07/01/06 ..................... 1,038,293
8,500,000 Maricopa County PCR, Refunding, Public Services, Palo Verde, Series A, 6.375%, 08/15/23 .... 8,142,235
4,000,000 Maricopa County Rural Road ID, 8.625%, 07/01/07 ............................................ 4,429,160
16,785,000 Red Hawk Canyon Community Facility, 7.625%, 06/01/05 ....................................... 16,595,330
7,900,000 Salt River Project, Agricultural Improvement and Power District Electric System Revenue, Series A,
6.00%, 01/01/31 ........................................................................... 7,902,686
2,285,000 Tempe IDA, Residential Care Facilities Revenue, Volunteers of America Care Facilities, 9.00%,
06/01/18 .................................................................................. 2,418,627
-----------
40,526,331
-----------
Arkansas .6%
2,400,000 Baxter County IDR, Refunding, Aeroquip/Trinova Corp. Project, 5.80%, 10/01/13 .............. 2,329,344
1,000,000 Conway Hospital Revenue, Refunding, Series 1990, 8.375%, 07/01/11 .......................... 1,072,170
Independence County PCR,
4,275,000 Mississippi Power and Light Co. Project, Series A, 9.00%, 07/01/13 ..................... 4,788,599
1,185,000 Mississippi Power and Light Co. Project, Series B, 9.00%, 07/01/13 ..................... 1,327,366
200,000 Mississippi Power and Light Co. Project Series C, 9.50%, 07/01/14 ...................... 227,360
5,000,000 Refunding, Arkansas Power and Light Co. Project, 6.25%, 01/01/21 ....................... 5,024,900
750,000 Little Rock Sewer Revenue, Refunding, 5.40%, 08/01/10 ...................................... 731,970
6,925,000 Pope County PCR, Arkansas Power and Light Co. Project, 11.00%, 12/01/15 .................... 7,150,478
-----------
22,652,187
-----------
California 13.0%
20,350,000 Adelanto Improvement Agency Tax Allocation, Refunding & Improvement Project, Series C, 7.75%,
12/01/29 .................................................................................. 17,704,500
13,400,000 Alameda County MFHR, Refunding, Claremont House Project, Series A, 8.00%, 12/01/23 ......... 13,608,504
Antioch 1915 Act, AD No. 27, Lone Tree,
11,080,000 Series C, 7.70%, 09/02/17 .............................................................. 11,427,026
4,480,000 Series D, 7.30%, 09/02/13 .............................................................. 4,547,379
22,515,000 Arroyo Grande Hospital System COP, Vista Hospital Systems, Refunding, Series A, 9.50%,
07/01/20 .................................................................................. 23,490,575
$ 2,850,000 Azusa RDA, Tax Allocation, Refunding, Merged Area Project, Series A, 6.75%, 08/01/23 ....... $ 2,863,623
4,575,000 Beaumont Public Financing Authority Revenue, Sewer Enterprise Project, Series A, 6.90%,
09/01/23 .................................................................................. 4,442,737
Benicia 1915 Act, Refunding,
205,000 Fleetside Industrial Park Assessment, 4.50%, 09/02/96 .................................. 204,371
215,000 Fleetside Industrial Park Assessment, 4.80%, 09/02/97 .................................. 213,710
225,000 Fleetside Industrial Park Assessment, 5.00%, 09/02/98 .................................. 223,031
235,000 Fleetside Industrial Park Assessment, 5.25%, 09/02/99 .................................. 232,340
250,000 Fleetside Industrial Park Assessment, 5.50%, 09/02/00 .................................. 247,318
265,000 Fleetside Industrial Park Assessment, 5.65%, 09/02/01 .................................. 261,693
275,000 Fleetside Industrial Park Assessment, 5.80%, 09/02/02 .................................. 271,125
290,000 Fleetside Industrial Park Assessment, 5.90%, 09/02/03 .................................. 285,473
310,000 Fleetside Industrial Park Assessment, 6.00%, 09/02/04 .................................. 304,727
325,000 Fleetside Industrial Park Assessment, 6.10%, 09/02/05 .................................. 319,053
345,000 Fleetside Industrial Park Assessment, 6.20%, 09/02/06 .................................. 338,279
370,000 Fleetside Industrial Park Assessment, 6.30%, 09/02/07 .................................. 362,393
390,000 Fleetside Industrial Park Assessment, 6.40%, 09/02/08 .................................. 381,599
415,000 Fleetside Industrial Park Assessment, 6.50%, 09/02/09 .................................. 405,696
440,000 Fleetside Industrial Park Assessment, 6.60%, 09/02/10 .................................. 429,788
470,000 Fleetside Industrial Park Assessment, 6.70%, 09/02/11 .................................. 458,758
305,000 Fleetside Industrial Park Assessment, 6.80%, 09/02/12 .................................. 300,474
3,000,000 California Educational Facilities Authority Revenue, Pooled College and University Financing,
Series B, 6.125%, 06/01/09 ................................................................ 2,973,570
1,125,000 California Special Districts, Association Financial Corp. COP, Santa Cruz Port Authority, Series B,
7.50%, 05/01/13 .......................................................................... 1,140,525
California State Health Facilities Hospital Revenue, Summit Medical Center, Refunding,
5,070,000 Series A, 7.50%, 05/01/09 .............................................................. 4,913,945
2,155,000 Series A, 7.60%, 05/01/15 .............................................................. 2,096,944
6,095,000 Series B, 7.50%, 05/01/09 .............................................................. 5,907,396
3,500,000 California State Higher Education Loan Authority, Inc., Student Loan Revenue, Refunding,
Junior Lien, Series B, 9.00%, 07/03/97 .................................................... 3,579,170
Capistrano USD, CFD,
285,000 Special Tax No. 92-1, 6.60%, 09/01/05 .................................................. 275,119
280,000 Special Tax No. 92-1, 6.70%, 09/01/06 .................................................. 269,693
325,000 Special Tax No. 92-1, 6.80%, 09/01/07 .................................................. 312,406
260,000 Special Tax No. 92-1, 6.90%, 09/01/08 .................................................. 249,473
1,000,000 Special Tax No. 92-1, 7.00%, 09/01/18 .................................................. 926,090
3,740,000 Colton Community Facilities District, Special Tax No. 90-1, 9.00%, 09/01/20 ................ 3,419,445
Contra Costa County Public Financing Authority Revenue,
2,515,000 Refunding, 6.625%, 09/02/10 ............................................................ 2,464,750
2,970,000 Refunding, 6.875%, 09/02/16 ............................................................ 2,948,794
Corona COP,
9,655,000 Corona Community Hospital Project, Pre-Refunded ETM, 9.425%, 09/01/06 .................. 11,974,903
8,820,000 Corona Community Hospital Project, Pre-Refunded, 9.425%, 09/01/20 ...................... 11,992,201
7,700,000 Vista Hospital Systems, Series B, Refunding, 9.00%, 01/01/01 ........................... 7,729,876
10,885,000 Vista Hospital Systems, Series B, Refunding, 9.50%, 07/01/20 ........................... 11,438,393
4,845,000 Eden Township Hospital District Health Facilities Revenue, COP, Refunding, Insured Eden Hospital
Health Services Corp., 5.85%, 07/01/18 .................................................... 4,429,590
Emeryville RDA, MFHR, Emerybay Apartments,
230,000 Series 1991, 8.75%, 12/01/02 ........................................................... 235,619
3,770,000 Series 1991, 8.75%, 12/01/21 ........................................................... 3,815,278
$37,675,000 Foothill Eastern Transportation Corridor Agency, California Toll Road Revenue, Series A, 6.50%,
01/01/32 .................................................................................. $ 36,798,680
4,175,000 Hawthorne CRDA, Refunding, Hawthorne Plaza Project, 8.50%, 07/01/20 ........................ 4,264,679
8,900,000 Hesperia Public Financing Authority Revenue, Series B, 7.375%, 10/01/23 .................... 8,800,498
6,000,000 Lake Elsinore 1915 Act, AD No. 93-1, Series A, 7.90%, 09/02/24 ............................. 6,072,780
100,000 a,b,f Long Beach IDR, Kress Rehabilitation Project, 9.75%, 12/01/16 ........................... 12,500
3,065,000 Long Beach Special Tax CFD No. 2, West Long Beach, 7.50%, 09/01/11 ......................... 3,127,066
1,530,000 Long Beach Special Tax CFD No. 3, Pine Ave., 6.25%, 09/01/07 ............................... 1,512,221
30,400,000 Los Angeles County, CFD No. 4, Special Tax Improvement, Calabassas Area B, Series A, 9.25%,
09/01/22 .................................................................................. 30,998,576
Los Angeles MFR, Refunding,
255,000 Series J-1A, 7.125%, 01/01/24 .......................................................... 245,239
675,000 Series J-1B, 7.125%, 01/01/24 .......................................................... 649,161
1,435,000 Series J-1C, 7.125%, 01/01/24 .......................................................... 1,380,068
1,380,000 Series J-2A, 8.50%, 01/01/24 ........................................................... 1,310,710
3,345,000 Series J-2B, 8.50%, 01/01/24 ........................................................... 3,177,048
7,120,000 Series J-2C, 8.50%, 01/01/24 ........................................................... 6,762,505
Los Angeles Regional Airports Improvement Corp., Lease Revenue,
9,500,000 Refunding, United Airlines, Inc., 6.875%, 11/15/12 ..................................... 9,689,715
2,100,000 Sub-Lease Revenue, Continental Airlines, Inc., Terminal Facilities, 9.00%, 08/01/08 .... 2,237,067
7,775,000 Sub-Lease Revenue, Continental Airlines, Inc., Terminal Facilities, 9.00%, 08/01/17 .... 8,282,474
4,445,000 Needles Public Financing Authority, Local Agency Revenue, Series A, 10.00%, 10/01/24 ....... 4,650,670
2,975,000 Orinda 1915 Act, AD No. 94-1, Oak Springs, 8.25%, 09/02/19 ................................. 3,018,019
Palmdale California Special Tax Community Facility, Ritter Ranch,
23,500,000 Series A, 8.50%, 09/01/24 .............................................................. 23,499,530
4,500,000 Series A, 8.50%, 09/01/25 .............................................................. 4,499,910
Perris Public Financing Authority, Local Agency Revenue,
2,035,000 Series B, 7.125%, 08/15/15 ............................................................. 1,997,760
4,095,000 Series B, 7.25%, 08/15/23 .............................................................. 4,046,433
5,425,000 Richmond Joint Power Finance Authority Improvement Bond, 1915 Act, Improvement Districts
Nos. 851 and 853, Series B, 8.50%, 09/02/19 ............................................... 5,598,220
Riverside County COP, Airforce Village Project,
7,160,000 Series 1992, 8.125%, 06/15/07 .......................................................... 7,410,099
5,290,000 Series 1992, 8.125%, 06/15/12 .......................................................... 5,440,659
12,000,000 Roseville Special Tax, North Center Community Facility District, 8.60%, 11/01/17 ........... 12,408,600
Sacramento County 1915 Act, Refunding,
1,020,000 Sunrise/US Corridor Assessment, 6.10%, 09/02/01 ........................................ 1,020,092
1,125,000 Sunrise/US Corridor Assessment, 6.30%, 09/02/02 ........................................ 1,125,045
1,515,000 Sunrise/US Corridor Assessment, 6.50%, 09/02/03 ........................................ 1,487,306
1,620,000 Sunrise/US Corridor Assessment, 6.60%, 09/02/04 ........................................ 1,587,811
1,725,000 Sunrise/US Corridor Assessment, 6.70%, 09/02/05 ........................................ 1,688,223
1,840,000 Sunrise/US Corridor Assessment, 6.80%, 09/02/06 ........................................ 1,798,342
1,970,000 Sunrise/US Corridor Assessment, 6.90%, 09/02/07 ........................................ 1,923,035
2,100,000 Sunrise/US Corridor Assessment, 7.00%, 09/02/08 ........................................ 2,047,668
2,165,000 Sunrise/US Corridor Assessment, 7.00%, 09/02/09 ........................................ 2,108,623
San Bernardino County Finance Authority Revenue, Refunding, Public Improvement, AD,
1,460,000 Series A, 6.00%, 09/02/01 .............................................................. 1,435,560
1,285,000 Series A, 6.50%, 09/02/04 .............................................................. 1,281,531
2,720,000 Series A, 7.00%, 09/02/17 .............................................................. 2,707,869
15,000,000 San Francisco City and County RDA, Pre-Refunded, 7.75%, 09/01/06 ........................... 16,042,500
San Francisco Downtown Parking Corp. Revenue,
$ 1,800,000 Series 1993, 6.55%, 04/01/12 ........................................................... $ 1,838,340
2,150,000 Series 1993, 6.65%, 04/01/18 ........................................................... 2,195,580
San Joaquin Hills Transportation, Corridor Agency Toll Road Revenue,
10,850,000 Sr. Lien, 6.75%, 01/01/32 .............................................................. 10,893,183
5,765,000 Sr. Lien, 5.00%, 01/01/33 .............................................................. 4,497,219
1,500,000 San Jose MFHR, Timberwood Apartments, Series B, 9.25%, 02/01/10 ............................ 1,554,450
San Ramon 1915 Act,
1,005,000 Fostoria Parkway Reassessment District No. 93-1, 6.30%, 09/02/03 ....................... 1,005,613
2,585,000 Fostoria Parkway Reassessment District No. 93-1, 6.80%, 09/02/15 ....................... 2,601,854
Santa Rosa 1915 Act, Fountaingrove Parkway,
3,340,000 Extension, 7.40%, 09/02/13 ............................................................. 3,376,439
3,450,000 Extension, 7.625%, 09/02/19 ............................................................ 3,491,849
2,000,000 South San Francisco RDA, Tax Allocation, Gateway Redevelopment Project, 7.60%, 09/01/18 .... 2,077,680
Vallejo Special Tax,
7,500,000 CFD No. 1988-1, 8.90%, 08/01/21 ........................................................ 7,833,375
12,000,000 CFD No. 1991-1, 8.80%, 10/01/21 ........................................................ 12,712,560
-----------
454,639,986
-----------
Colorado 5.0%
2,485,000 Arvada Limited Sales and Use Tax Revenue, Pre-Refunded, 7.50%, 06/01/11 .................... 2,851,190
3,000,000 Arvada MFHR, Springwood Community, Project A, 6.45%, 02/20/26 .............................. 3,041,640
Auraria Higher Educational Center, Parking Facilities Revenue, Refunding,
1,600,000 Pre-Refunded, 7.875%, 04/01/12 ......................................................... 1,824,256
3,450,000 Pre-Refunded, 7.75%, 04/01/09 .......................................................... 3,915,888
12,800,000 Colorado Health Facilities Authority, Beneficial Living System, Inc., Series A, 10.125%, 10/01/20 13,722,752
Colorado HFA,
655,000 SF Program, Issue A-2, 9.375%, 08/01/02 ................................................ 687,495
550,000 SF Program, Series A-2, 9.25%, 08/01/01 ................................................ 576,257
710,000 SF Program, Series B-1, 8.70%, 08/01/01 ................................................ 738,996
735,000 SFMR, Series B-3, 9.75%, 08/01/02 ...................................................... 746,642
1,170,000 SFMR, Series C, 9.20%, 08/01/02 ........................................................ 1,219,971
1,255,000 Colorado HFA, SFMR, Series 1991-C, 9.075%, 08/01/03 ........................................ 1,309,630
Denver City and County Airport System Revenue,
5,830,000 Series A, 7.50%, 11/15/12 .............................................................. 6,356,566
5,840,000 Series A, 8.25%, 11/15/12 .............................................................. 6,517,732
11,065,000 Series A, 8.00%, 11/15/17 .............................................................. 11,705,995
31,800,000 Series A, 8.50%, 11/15/23 .............................................................. 35,840,826
30,950,000 Series A, 7.25%, 11/15/25 .............................................................. 33,085,241
145,000 Series A, 8.00%, 11/15/25 .............................................................. 159,204
500,000 Series D, 7.75%, 11/15/13 .............................................................. 583,765
4,190,000 Series D, 7.75%, 11/15/21 .............................................................. 4,553,985
Eagle County Sports Facilities Revenue, Refunding,
19,600,000 Beaver Creek Association Project, 8.00%, 08/01/09 ...................................... 20,777,372
21,600,000 Vail Association Project, 8.00%, 08/01/09 .............................................. 22,897,512
300,000 Fort Collins IDR, Vipont Pharmaceutical, Inc. Project, Pre-Refunded, 9.25%, 08/01/13 ....... 344,688
3,000,000 h Village Castle Rock Metropolitan District No. 4, 8.50%, 06/01/31 ........................... 637,500
-----------
174,095,103
-----------
Connecticut .1%
$ 2,905,000 Connecticut Development Authority, First Mortgage Revenue, East Hill Gladeview Health Project 86,
9.75%, 12/15/16 ........................................................................ $ 3,204,767
-----------
3,204,767
-----------
District of Columbia 1.5%
District of Columbia Hospital Revenue,
4,305,000 Hadley Memorial Hospital, Series A, 9.50%, 05/01/17 .................................... 4,309,736
2,000,000 Washington Hospital Center, Series A, 7.00%, 08/15/05 .................................. 2,082,040
4,500,000 Washington Hospital Center, Series A, 7.125%, 08/15/19 ................................. 4,441,230
15,450,000 Washington Hospital Center, Series A, Pre-Refunded, 9.00%, 01/01/08 .................... 18,759,854
3,750,000 Washington Hospital Center, Series A, Pre-Refunded, 8.75%, 01/01/15 .................... 4,499,888
Washington DC, GO,
7,800,000 Series A, 5.875%, 06/01/05 ............................................................. 7,483,944
11,775,000 Series A, 6.00%, 06/01/07 .............................................................. 11,258,078
-----------
52,834,770
-----------
Florida 8.8%
1,075,000 Bay County Resource Recovery Revenue, Series 1984, Pre-Refunded, 8.00%, 07/01/12 ......... 1,150,433
20,565,000 Broward County Resource Recovery Revenue, Broward Waste Energy Co., L. P., North Project,
Series 1984, 7.95%, 12/01/08 ............................................................ 22,942,725
12,500,000 Cape Coral Health Facilities Authority, Revenue, Refunding, First Mortgage, Gulf Care, Inc. Project,
Pre-Refunded, 11.00%, 10/01/17 .......................................................... 16,093,500
Capron Trails Community Development District,
2,170,000 Series 1990, 9.375%, 12/01/01 .......................................................... 2,278,044
5,795,000 Series 1990, 9.50%, 12/01/10 ........................................................... 6,152,204
East County Water Control District, Lee County Drain,
3,200,000 Series 1991, Pre-Refunded, 8.75%, 09/01/01 ............................................. 3,595,488
10,565,000 Series 1991, Pre-Refunded, 8.625%, 09/01/11 ............................................ 12,724,486
1,640,000 Escambia County Health Facilities Authority Revenue, Refunding, Baptist Hospital, Inc., Series A,
8.70%, 10/01/14 .......................................................................... 1,817,956
2,980,000 Flagler County IDA, First Mortgage Revenue, RHA, South Florida Properties, Inc. Projects, 10.50%,
12/01/18 .................................................................................. 2,994,900
Florida Board of Education, Outlay Public Education,
5,000,000 Series B, 5.875%, 06/01/23 ............................................................. 4,935,450
5,000,000 Series B, 5.875%, 06/01/24 ............................................................. 4,900,900
Florida State, Mid Bay Bridge Authority,
3,200,000 Series 1991-B, Pre-Refunded, 8.50%, 10/01/08 ........................................... 3,616,192
15,400,000 Series 1991-B, Pre-Refunded, 8.50%, 10/01/22 ........................................... 17,402,924
Indian Trace Community Development District, Refunding,
13,225,000 d Water Management Special Benefit, Sub-Series B, 8.25%, 05/01/05 ........................ 13,419,672
12,760,000 d Water Management Special Benefit, Sub-Series B, 8.25%, 05/01/11 ........................ 12,971,178
1,765,000 Lake Clarke Shores Utility System Revenue, Pre-Refunded, 8.75%, 10/01/18 ................... 2,026,096
12,000,000 Lakeland Retirement Community First Mortgage Revenue, Carpenters Home Estates Project,
9.75%, 09/01/18 .......................................................................... 12,538,320
6,500,000 Manatee County IDR, Manetee Hospital and Health Systems, Inc., 9.25%, 03/01/21 .............. 7,118,280
Meadow Pointe Community Development District,
5,750,000 Capital Improvement Revenue, 6.25%, 07/01/98 ........................................... 5,765,468
7,870,000 Capital Improvement Revenue, 6.875%, 07/01/99 .......................................... 7,960,741
Mount Dora County Club Community Development District,
4,790,000 Special Assessment Revenue, 6.75%, 05/01/03 ............................................ 4,599,119
4,110,000 Special Assessment Revenue, 7.125%, 05/01/05 ........................................... 4,057,433
3,650,000 Special Assessment Revenue, 7.75%, 05/01/13 ............................................ 3,560,539
North Springs ID, Water Management,
$ 2,000,000 Series A, 8.20%, 05/01/24 .............................................................. $ 2,121,040
1,755,000 Series B, 8.30%, 05/01/24 .............................................................. 1,860,704
6,000,000 Palm Beach County Health Facility Authority Revenue, Refunding, Abbey del Ray Project,
Series 1992, 8.25%, 10/01/15 .............................................................. 6,440,700
Pelican Marsh CDA, Special Assessment Revenue,
8,540,000 Series A, 8.25%, 05/01/16 .............................................................. 9,155,563
6,180,000 Series B, 8.25%, 05/01/16 .............................................................. 6,625,454
2,480,000 Port Orange Lease Finance Corp., Recreation Facilities Lease Revenue, Pre-Refunded, 8.75%,
10/01/12 .................................................................................. 2,931,608
Riverwood Community Development, Special AD,
5,250,000 Series A, 6.75%, 05/01/04 .............................................................. 5,202,015
3,165,000 Series A, 7.75%, 05/01/14 .............................................................. 3,121,576
5,000,000 St. Lucie County Reserve, Storm Water Management, 8.25%, 05/01/14 .......................... 5,141,550
St. Lucie West Services District Revenue, Refunding,
20,720,000 Port St. Lucie, 7.875%, 05/01/20 ....................................................... 21,594,384
23,480,000 Port St. Lucie, 8.25%, 12/01/23 ........................................................ 24,575,342
Santa Rosa County Health Facilities Authority Revenue,
300,000 Gulf Breeze Hospital, Inc., 8.60%, 10/01/02 ............................................ 324,459
835,000 Gulf Breeze Hospital, Inc., Pre-Refunded, 8.70%, 10/01/14 .............................. 954,722
Tampa Capital Improvement Program Revenue,
3,085,000 Series A, 8.25%, 10/01/18 .............................................................. 3,338,803
8,900,000 Series B, 8.375%, 10/01/18 ............................................................. 9,553,883
10,000,000 Tampa Revenue, Aquarium, Inc. Project, 7.55%, 05/01/12 ..................................... 10,451,700
Village Community Development, District No. 1,
5,960,000 Capital Improvement Revenue, 6.75%, 05/01/02 ........................................... 6,181,772
4,730,000 Capital Improvement Revenue, 8.40%, 05/01/12 ........................................... 5,089,433
4,215,000 Capital Improvement Revenue, 8.00%, 05/01/15 ........................................... 4,434,264
4,155,000 West Volusia Hospital Authority Revenue, Series 1986-B, Pre-Refunded, 9.375%, 09/01/16 ..... 4,500,156
-----------
308,221,176
-----------
Georgia .1%
735,000 Burke County Development Authority, PCR, Georgia Power Co., Plant Vogtle Project, 8.375%,
07/01/17 .................................................................................. 791,580
155,000 Fulton County Residential Care Facilities, Elderly Authority Revenue, Refunding, Lenbrook Square
Foundation, Inc. Project, Series 1987, 9.75%, 01/01/17 .................................... 159,703
1,405,000 Tift County IDAR, Beverly Enterprises, 10.125%, 09/01/10 ................................... 1,602,318
-----------
2,553,601
-----------
Hawaii .4%
6,500,000 Hawaii Department of Transportation Special Revenue, Continental Airlines, Inc., 9.70%, 06/01/20 7,011,355
5,125,000 Hawaii State Special AD No. 17, AMBAC Insured, 9.50%, 08/01/11 ............................. 5,413,025
1,315,000 Hawaiian Home Lands Department Revenue, 7.60%, 07/01/08 .................................... 1,429,484
-----------
13,853,864
-----------
Illinois 4.3%
9,150,000 Alton Hospital Facilities Revenue, Refunding, St. Anthony's Health Center Project, 8.375%, 09/01/14 9,756,188
5,690,000 Aurora MFMR, Fox Valley Two-Oxford, 8.50%, 12/01/08 ........................................ 5,608,576
Chicago O'Hare Airport Special Facility,
7,830,000 Refunding, American Airlines, Inc. Project, 8.20%, 12/01/24 ............................ 9,042,867
3,755,000 United Airlines, Inc. Revenue, 8.85%, 05/01/18 ......................................... 4,282,653
15,725,000 United Airlines, Inc., Series 1984-A, 8.85%, 05/01/18 .................................. 17,934,677
Chicago Wastewater Transmission Revenue,
$ 2,810,000 FGIC Insured, Pre-Refunded, 6.35%, 01/01/22 ............................................ $ 3,134,105
4,780,000 MBIA Insured, 6.375%, 01/01/24 ......................................................... 4,889,701
7,000,000 Illinois Development Financial Authority PCR, Refunding, Commonwealth Edison Co. Project,
7.25%, 06/01/11 .......................................................................... 7,449,820
Illinois Educational Facilities Authority Revenues,
4,330,000 Osteopathic Health Systems, 7.125%, 05/15/11 ........................................... 4,406,425
11,695,000 Osteopathic Health Systems, 7.25%, 05/15/22 ............................................ 11,828,206
Illinois Health Facilities Authority Revenue,
3,000,000 Bensenville Home Society, Series B, 8.20%, 02/15/19 .................................... 3,219,420
6,500,000 Northwestern Medical Center, 6.625%, 11/15/25 .......................................... 6,773,065
3,000,000 Refunding, Westlake Community Hospital, 7.875%, 01/01/13 ............................... 3,151,200
2,000,000 Sarah Bush Lincoln Health Center, 7.25%, 05/15/12 ...................................... 2,064,680
3,000,000 Servantcor, Series 1989-B, Pre-Refunded, 7.875%, 08/15/19 .............................. 3,429,780
19,120,000 Illinois Health Facilities Authority Revenue, Revolving Fund, Pooled Financing, Thorek Hospital and
Medical Center, Series H, 9.50%, 08/01/15 ................................................. 20,356,108
6,500,000 Lombard, Village of, Revenue, Refunding, Beacon Hill Project, 9.30%, 02/15/18 .............. 6,719,180
17,500,000 Robbins Resources Recovery Revenue, Series B, 9.25%, 10/15/16 .............................. 19,231,975
1,365,000 Sterling First Mortgage Revenue, Hoosier Care Project, Series A, 9.75%, 08/01/19 ........... 1,450,053
-----------
144,728,679
-----------
Indiana .9%
5,000,000 Crawfordsville Industrial EDR, Refunding, Kroger Co., 7.70%, 11/01/12 ...................... 5,291,750
3,000,000 Indiana Health Facility Authority, Hancock Memorial Hospital University Project, 8.30%, 08/15/20 3,197,880
1,000,000 Indiana State Educational Facilities Authority Revenue, Anderson University Project, 8.40%,
10/01/08 .................................................................................. 1,105,230
12,500,000 Indianapolis Local Public Improvement Bond, Series C, 6.00%, 01/10/18 ...................... 12,525,375
2,500,000 Jefferson County Hospital Authority Facility Revenue, Refunding, King's Daughters Hospital, 8.50%,
08/15/13 .................................................................................. 2,673,975
Kokomo Hospital Authority Revenue, Refunding, St. Joseph's Hospital and Health Center of
Kokomo,
2,505,000 Series A, Pre-Refunded, 8.75%, 02/15/13 ................................................ 2,859,282
3,700,000 Series B, Pre-Refunded, 8.75%, 02/15/13 ................................................ 4,223,291
-----------
31,876,783
-----------
Iowa .3%
500,000 Clinton Hospital Facilities Revenue, Jane Lamb Health Center Project, Pre-Refunded, 8.75%,
08/01/03 .................................................................................. 571,430
9,135,000 Des Moines General Hospital, 10.125%, 12/01/11 ............................................. 9,171,266
-----------
9,742,696
-----------
Kansas .2%
5,730,000 Prairie Village Revenue, Claridge Court Project, Series A, 8.75%, 08/15/23 ................. 5,961,435
-----------
5,961,435
-----------
Kentucky 1.4%
900,000 Danville Multi-City Lease Revenue, Sewer and Drain System, Series G, MBIA Insured,
Pre-Refunded, 6.75%, 03/01/11 ............................................................. 1,020,843
960,000 Florence Housing Facilities Revenue, Bluegrass Retirement Housing Foundation Project, 9.50%,
07/01/17 .................................................................................. 959,971
3,300,000 Jefferson County, Health Facilities Revenue, Beverly Project, 10.125%, 08/01/07 ............ 3,623,499
Kenton County Airport Revenue, Special Facilities,
$11,000,000 Delta Airlines, Inc. Project, 8.10%, 12/01/15 .......................................... $ 11,775,170
11,230,000 Delta Airlines, Inc. Project, Series A, 7.50%, 02/01/20 ................................ 11,850,794
3,595,000 Delta Airlines, Inc. Project, Series B, 7.25%, 02/01/22 ................................ 3,767,165
1,040,000 Powderly IDR, First Mortgage Revenue, Kroger Co., Refunding, 7.375%, 09/01/06 .............. 1,102,639
Russell County, Franciscan Health System Revenue,
2,000,000 Series B, 8.10%, 07/01/01 .............................................................. 2,210,800
7,500,000 Series B, 8.10%, 07/01/15 .............................................................. 8,477,325
1,000,000 Stanford Health Facilities Revenue, Refunding, Beverly Project, 10.375%, 11/01/09 .......... 1,150,180
3,350,000 Winchester Hospital Revenue, Refunding, Clark County Hospital Project, 7.75%, 04/01/13 ..... 3,428,926
-----------
49,367,312
-----------
Louisiana 3.4%
3,045,000 Calcasieu Parish, SFMR, Series 1991-A, 7.75%, 06/01/12 ..................................... 3,226,543
705,000 Iberville Parish Consolidated School District No. 5, GO, Unlimited Tax, Pre-Refunded, 8.00%,
10/01/06 .................................................................................. 792,032
35,000,000 Lake Charles Harbor and Terminal District Port Facilities Revenue, Refunding, Trunkline Co. Project,
7.75%, 08/15/22 .......................................................................... 38,644,900
4,850,000 Pointe Coupee Parish, PCR, Refunding, Gulf States Utilities Co. Project, 6.70%, 03/01/13 ... 4,830,164
St. Charles Parish PCR,
25,500,000 Lousiana Power and Light Co. Project, 8.25%, 06/01/14 .................................. 28,158,375
13,525,000 Lousiana Power and Light Co. Project, 8.00%, 12/01/14 .................................. 14,758,074
West Feliciana PCR,
17,200,000 Refunding, Gulf System Utilities Co. Project, 8.00%, 12/01/24 .......................... 18,231,484
8,740,000 Series B, 7.50%, 05/01/15 .............................................................. 9,147,896
-----------
117,789,468
-----------
Maine .1%
5,000,000 Maine State Finance Authority Solid Waste Disposal Revenue, Boise Cascade Corp. Project,
7.90%, 06/01/15 .......................................................................... 5,234,850
4,800,000 Rumford PCR, Boise Cascade Corp. Project, Refunding, 6.625%, 07/01/20 ...................... 4,844,448
-----------
10,079,298
-----------
Maryland 1.1%
Gaithersberg Hospital Facilities Revenue, Refunding, Shady Grove Adventist Hospital,
2,055,000 Nursing Home, Series 1992-A, Pre-Refunded, 9.00%, 09/01/22 ............................. 2,196,425
3,675,000 Nursing Home, Series 1992-B, Pre-Refunded, 8.50%, 09/01/22 ............................. 4,556,522
6,755,000 Series 1992-B, 8.50%, 09/01/03 ......................................................... 7,003,652
5,340,000 Series 1992-B, 8.50%, 09/01/07 ......................................................... 5,794,167
5,000,000 Series C, 6.00%, 09/01/21 .............................................................. 5,004,150
Takoma Park, Hospital Facilities Revenue, Washington Adventist Hospital Project,
7,020,000 Series B, 8.50%, 09/01/03 .............................................................. 7,207,996
6,975,000 Series B, 8.50%, 09/01/07 .............................................................. 7,550,438
-----------
39,313,350
-----------
Massachusetts 2.1%
2,000,000 Bay Transit Authority, General Transportation System, Series A, 7.00%, 03/01/21 ............ 2,291,020
4,500,000 Cape Cod Health Systems, Massachusetts Industry Finance Authority, BIG Insured, Pre-Refunded,
8.50%, 11/15/20 .......................................................................... 5,412,330
Massachusetts Municipal Wholesale, Electric Co. Power Supply System Revenue,
4,435,000 Series A, 6.75%, 07/01/11 .............................................................. 4,635,019
3,170,000 Series B, 6.75%, 07/01/17 .............................................................. 3,301,999
$ 2,000,000 Massachusetts State Health and Educational Facilitity Revenue, Framingham, Union Hospital,
Pre-Refunded, 8.50%, 07/01/10 ............................................................. $ 2,377,140
Massachusetts State Industrial Finance Agency,
15,490,000 Semass Project, Series 1991-A, 9.00%, 07/01/15 ......................................... 17,258,803
20,590,000 Semass Project, Series 1991-B, 9.25%, 07/01/15 ......................................... 23,025,797
Massachusetts State Industrial Finance Agency, First Mortgage Revenue,
3,000,000 Berkshire Retirement Community, Lenox, Pre-Refunded, 9.875%, 07/01/18 .................. 3,260,910
2,000,000 Brookhaven at Lexington Retirement Project, Pre-Refunded, 10.25%, 01/01/18 ............. 2,319,000
Massachusetts State Water Resources Authority,
1,000,000 Series A, 6.00%, 04/01/20 .............................................................. 989,800
8,000,000 Series A, Pre-Refunded, 7.00%, 04/01/18 ................................................ 8,983,280
-----------
73,855,098
-----------
Michigan 2.0%
6,470,000 City of Cadillac, Local Development Financial Authority, Tax Increment Revenue, Refunding, 8.50%,
03/01/10 .................................................................................. 6,904,784
Detroit GO,
5,160,000 d Series A, 6.80%, 04/01/15 .............................................................. 5,221,404
7,535,000 Series B, Refunding, 6.375%, 04/01/07 .................................................. 7,586,615
2,750,000 Dickinson County, Memorial Hospital System Revenue, 8.125%, 11/01/24 ....................... 2,886,373
6,605,000 Michigan State Hospital, Finance Authority Revenue, Refunding, Detroit Osteopathic Hospital,
Series A, 7.50%, 11/01/10 .............................................................. 6,452,491
7,825,000 Michigan State Strategic Funding Obligation, 6.20%, 08/15/25 ............................... 7,996,837
12,000,000 Midland County EDC, PCR, Refunding, 9.50%, 07/23/09 ........................................ 12,962,160
3,500,000 Muskegon, Hospital Finance Authority, Muskegon General Hospital, 8.25%, 02/15/11 ........... 3,721,375
2,140,000 Tawas City HFA, Hospital Revenue, Tawas St. Joseph's Hospital Project, Series A, 8.50%, 03/15/12 2,237,648
1,900,000 Wayne County, Downriver Systems Sewer Disposal, Series A, 7.00%, 11/01/13 .................. 1,944,802
4,500,000 Wayne County, Michigan Building Authority IDA, Pre-Refunded, 8.00%, 03/01/17 ............... 5,408,143
5,000,000 Wayne County, South Huron Valley Wastewater Control, Refunding, 7.875%, 05/01/02 ........... 5,618,100
Wyandotte Tax Increment Finance Authority, Central Development Area Project,
500,000 Pre-Refunded, 7.875%, 06/01/08 ......................................................... 539,135
500,000 Pre-Refunded, 7.875%, 06/01/09 ......................................................... 565,300
500,000 Pre-Refunded, 7.875%, 06/01/10 ......................................................... 565,300
-----------
70,610,467
-----------
Minnesota 3.7%
Burnsville Solid Waste Revenue,
575,000 Freeway Transfer, Inc. Project, 9.00%, 10/01/00 ........................................ 636,715
1,500,000 Freeway Transfer, Inc. Project, 9.00%, 04/01/10 ........................................ 1,653,975
6,675,000 Edina MFHR, Refunding Mortgage, Vernon Terrace Project, 5.00%, 07/01/22 .................... 6,684,078
Minneapolis CDA, Limited Tax, Supported Development Revenue,
3,155,000 Series 2, 8.40%, 12/01/12 .............................................................. 3,370,581
600,000 Series 3-A, 8.375%, 12/01/19 ........................................................... 659,220
295,000 Minneapolis CDR, Selwyn/Lavin Project, 9.00%, 12/01/11 ..................................... 298,997
40,000 Minnetonka Housing and Redevelopment Authority, Tax Increment Revenue, The Cliffs at Ridgedale
Project, Phase II, 11.00%, 02/01/02 ....................................................... 40,894
1,360,000 Northfield First Mortgage Nursing Home Revenue, Minnesota Odd Fellows Home Project, 8.75%,
10/01/03 .................................................................................. 1,437,738
5,165,000 Northwest Multi-County RDA, Governmental Housing Revenue Pooled Housing Project, 7.40%,
07/01/26 .................................................................................. 4,947,450
4,110,000 Robbinsdale, MFHR, Refunding, Copperfield Phase II Apartments, 9.00%, 03/01/25 ............. 4,137,907
10,000,000 South Central Multi-County Housing and RDA, Pooled Housing, 8.00%, 02/01/25 ................ 10,407,100
$ 5,995,000 St. Cloud, IDR, Nahan Printing, 9.75%, 06/01/20 ............................................ $ 6,378,740
St. Paul Housing and RDA, Hospital Facility Revenue, Healtheast Project,
4,535,000 Series A, Pre-Refunded, 9.75%, 11/01/17 ................................................ 4,981,879
410,000 Series B, Pre-Refunded, 9.75%, 11/01/17 ................................................ 445,088
670,000 Series C, Pre-Refunded, 9.75%, 11/01/17 ................................................ 736,022
3,365,000 Series D, 9.75%, 11/01/17 .............................................................. 3,696,587
1,610,000 St. Paul Housing and RDA, Housing Tax, 8.625%, 09/01/07 .................................... 1,817,320
595,000 St. Paul Port Authority Commercial Development, Theole Printing Project, 9.00%, 10/01/21 ... 614,147
4,915,000 St. Paul Port Authority Energy Park, Tax Increment Revenue, Refunding, Pre-Refunded, 8.00%,
12/01/07 .................................................................................. 5,563,289
St. Paul Port Authority GO, Mears Park Center Building Project,
6,060,000 Series 1989-1, 8.25%, 09/01/09 ......................................................... 6,505,410
9,510,000 Series 1989-1, 8.50%, 09/01/18 ......................................................... 10,304,656
St. Paul Port Authority, IDR,
1,610,000 SDA Enterprises, Series K, 10.25%, 10/01/10 ............................................ 1,614,025
40,000 Series 1979-2, 7.50%, 10/01/09 ......................................................... 38,067
1,300,000 Series 1982-N, 10.75%, 10/01/02 ........................................................ 1,303,250
4,505,000 Series 1983-C, 10.00%, 12/01/06 ........................................................ 4,493,738
3,100,000 Series 1983-C, 9.875%, 12/01/08 ........................................................ 3,076,750
2,805,000 Series 1983-U, 10.75%, 12/01/13 ........................................................ 2,812,013
485,000 Series 1984-I, 10.75%, 12/01/13 ........................................................ 486,213
1,585,000 Series 1984-L, 9.75%, 12/01/14 ......................................................... 1,557,263
1,535,000 Series 1984-N, 10.00%, 12/01/14 ........................................................ 1,538,838
1,500,000 Series 1985-J, 9.50%, 12/01/11 ......................................................... 1,441,875
1,110,000 Series 1985-L, 9.50%, 12/01/14 ......................................................... 1,075,313
1,395,000 Series 1985-S, 9.625%, 12/01/14 ........................................................ 1,354,894
975,000 Series 1985-T, 9.625%, 12/01/14 ........................................................ 946,969
1,100,000 Series 1989-F, 8.00%, 09/01/19 ......................................................... 903,375
1,330,000 Series 1991 A-I, 8.50%, 12/01/01 ....................................................... 1,241,888
4,560,000 Series 1991 A-I, 9.00%, 12/01/12 ....................................................... 4,200,900
1,305,000 Series 1991 A-II, 8.50% 12/01/01 ....................................................... 1,218,544
4,490,000 Series 1991 A-II, 9.00%, 12/01/12 ...................................................... 4,136,413
1,370,000 Series 1991 A-III, 8.50%, 12/01/01 ..................................................... 1,279,238
4,695,000 Series 1991 A-III, 9.00%, 12/01/12 ..................................................... 4,325,269
1,045,000 Series 1991 A-IV, 8.50%, 12/01/01 ...................................................... 975,769
3,580,000 Series 1991 A-IV, 9.00%, 12/01/12 ...................................................... 3,298,075
9,365,000 Washington County Housing and RDA, MFHR, Season Villas, 9.00%, 12/01/22 .................... 9,449,753
-----------
128,086,225
-----------
Mississippi 1.8%
Claiborne County PCR, Middle South Energy, Inc. Project,
10,680,000 Series A, 9.50%, 12/01/13 .............................................................. 12,215,998
9,750,000 Series B, 8.25%, 06/01/14 .............................................................. 10,721,880
10,000,000 Series C, 9.875%, 12/01/14 ............................................................. 11,544,800
19,975,000 Series E, 9.50%, 04/01/16 .............................................................. 21,056,846
2,500,000 Claiborne County PCR, System Energy Resources Inc., 7.30%, 05/01/25 ........................ 2,591,350
4,250,000 Lowndes County, Golden Triangle Medical Center, 8.50%, 02/01/10 ............................ 4,563,650
720,000 Mississippi Hospital Equipment and Facilities Authority Revenue, Refunding, Mississippi Methodist
Hospital and Rehabilitation Center, Pre-Refunded, 9.375%, 05/01/12 ........................ 832,284
-----------
63,526,808
-----------
Missouri 2.0%
$ 8,900,000 Missouri Health and Educational Facilities Authority, Health Facility Marshall, IDA, John Fitzgibbons
Hospital, Series 1990, 10.00%, 05/01/20 .................................................... $ 9,937,117
7,300,000 Missouri State Revenue, Refunding and Improvement, Heartland Health Systems Project, 8.125%,
10/01/10 .................................................................................. 8,133,222
200,000 Moberly IDA, Hospital Revenue, Refunding, Moberly Regional Medical Center, Inc. Project,
Pre-Refunded, 8.75%, 03/01/16 ............................................................. 219,444
1,570,000 Newton County IDA, Health Facilities Revenue, Beverly Enterprises, 10.375%, 11/01/08 ....... 1,773,142
1,900,000 Perry Co., Perry Memorial Hospital, Series 1990, 9.125%, 06/01/11 .......................... 2,026,464
1,000,000 St. Louis County IDA, Health Facilities Revenue, Refunding and Improvement, First Mortgage,
Normandy Osteopathic Hospitals Project, 9.125%, 08/01/13 .................................. 1,054,900
St. Louis County IDA, Refunding,
8,000,000 Kiel Center, 7.625%, 12/01/09 .......................................................... 8,373,360
5,175,000 Kiel Center, 7.75%, 12/01/13 ........................................................... 5,442,082
6,000,000 Kiel Center, 7.875%, 12/01/24 .......................................................... 6,297,600
St. Louis Municipal Financial Corp. Leasehold Revenue, Refunding,
13,310,000 Series A, 5.85%, 07/15/09 .............................................................. 13,507,920
14,250,000 Series A, 6.00%, 07/15/13 .............................................................. 14,407,178
-----------
71,172,429
-----------
Montana 1.1%
570,000 Montana State Board of Housing, SFM, Senior Bonds, Series B-2, 8.90%, 10/01/00 ............. 589,973
2,500,000 Montana State Board of Investments EDR, Refunding, Bozeman Holiday Inn Project, 11.00%,
12/01/07 .................................................................................. 2,663,575
35,000,000 Montana State Board of Investments, Resource Recovery Revenue, Yellowstone Energy Project,
7.00%, 12/31/19 .......................................................................... 33,463,850
815,000 Montana State SFMR, Series 1991-A, 8.275%, 10/01/03 ........................................ 854,731
-----------
37,572,129
-----------
Nebraska .1%
2,100,000 Scotts Bluff County, Hospital No. 1, Hospital Revenue, 6.375%, 12/15/08 .................... 2,176,314
-----------
2,176,314
-----------
Nevada 2.5%
Henderson Local Improvement,
6,980,000 District No. 2, 9.50%, 08/01/11 ........................................................ 7,338,283
45,990,000 District No. T-1, Series A, 8.50%, 08/01/13 ............................................ 46,112,793
10,980,000 District No. T-4, Series A, 8.50%, 11/01/12 ............................................ 11,344,316
2,000,000 Las Vegas Downtown RDA, Tax Increment Revenue, Fremont Street Project, Series A, 6.10%,
06/15/14 .................................................................................. 1,905,380
8,430,000 Las Vegas Special ID No. 505, Elkhorn Springs, 8.00%, 09/15/13 ............................. 8,429,663
Nevada Housing Division,
380,000 SF Program, Subordinated, FI/GML, Series A, 9.30%, 10/01/00 ............................ 393,684
325,000 SF Program, Subordinated, FI/GML, Series A-1, 8.75%, 10/01/04 .......................... 339,284
435,000 SF Program, Subordinated, FI/GML, Series A-2, 9.375%, 10/01/00 ......................... 451,987
650,000 SF Program, Subordinated, FI/GML, Series A-2, 8.65%, 10/01/01 .......................... 672,737
445,000 SF Program, Subordinated, FI/GML, Series A-3, 9.20%, 10/01/00 .......................... 459,218
600,000 SF Program, Subordinated, FI/GML, Series B, 9.50%, 10/01/01 ............................ 624,450
770,000 SF Program, Subordinated, FI/GML, Series B-1, 7.90%, 10/01/05 .......................... 804,150
1,000,000 SF Program, Subordinated, FI/GML, Series C-1, 7.55%, 10/01/05 .......................... 1,034,080
Nevada Housing Finance Division Subordinate,
$ 395,000 Series 1989 B-2, 9.65%, 10/01/02 ....................................................... $ 413,000
440,000 Series 1990 C-1, 9.60%, 10/01/02 ....................................................... 440,880
6,310,000 White Pine County, School District Building, 6.75%, 06/01/18 ............................... 6,421,624
-----------
87,185,529
-----------
New Hampshire 1.8%
New Hampshire Higher Education and Health Facility Authority Revenue,
18,950,000 Hillcrest Terrace, 7.50%, 07/01/24 ..................................................... 17,124,547
9,865,000 Kendal at Hanover Project, 8.00%, 10/01/19 ............................................. 10,142,798
New Hampshire IDA, PCR,
8,835,000 Public Service Co., Project A, 7.65%, 05/01/21 ......................................... 9,345,221
21,930,000 Public Service Co., Project C, 7.65%, 05/01/21 ......................................... 23,196,458
500,000 United Illuminating Co., 10.75%, 10/01/12 .............................................. 565,275
3,000,000 New Hampshire State Business Financial Authority, PCR, Refunding, Illuminating Co., Series A,
5.875%, 10/01/33 .......................................................................... 2,682,930
-----------
63,057,229
-----------
New Jersey .4%
4,000,000 New Jersey EDA, EDR, Refunding, Stolt Terminals, Series 1988-A, 10.50%, 01/15/18 ........... 4,500,760
2,100,000 New Jersey Health Care Facilities Financing Authority Revenue, Lutheran Home, Series A, 8.40%,
07/01/19 .................................................................................. 2,198,490
8,500,000 New Jersey State Educational Facilities Authority, Refunding, Fairleigh Dickinson University,
Series C, 6.625%, 07/01/23 ................................................................ 8,070,920
-----------
14,770,170
-----------
New Mexico 1.7%
Farmington PCR, Refunding, Public Service of New Mexico Co.,
37,350,000 San Juan Project, Series A, 6.40%, 08/15/23 ............................................ 35,312,184
2,900,000 San Juan Project, Series X, 5.90%, 04/01/07 ............................................ 2,777,997
10,755,000 Los Alamos County, Inc., Utility System Revenue, Refunding, Series 1986-A, Pre-Refunded, 7.75%,
01/01/15 .................................................................................. 11,478,704
New Mexico Mortgage Finance Authority,
2,245,000 SFM Program, Refunding Series A-1, 7.90%, 07/01/04 ..................................... 2,334,508
610,000 SFM Program, Series A, FHA Insured, 8.80%, 09/01/01 .................................... 635,773
680,000 SFM Program, Series 1988-A, 9.50%, 09/01/00 ............................................ 702,603
475,000 SFM Program, Series 1988-B, 9.30%, 09/01/00 ............................................ 490,794
1,145,000 SFMR, Series 1991-A, 9.10%, 09/01/03 ................................................... 1,199,582
1,110,000 SFMR, Sub-Series 1990-A, 9.55%, 09/01/02 ............................................... 1,165,089
3,620,000 Rio Rancho Water and Wastewater Revenue, Series A, 5.90%, 05/15/15 ......................... 3,602,950
-----------
59,700,184
-----------
New York 11.3%
8,440,000a,b,f Babylon IDA, Recycling Facilities Revenue, Babylon Recycling Center, Inc., Series A, 8.875%,
03/01/11 .................................................................................. 4,220,000
Babylon IDA, Resource Recovery Revenue, Inc., Ogden Martin System,
3,920,000 Babylon, Inc., 8.50%, 01/01/19 ......................................................... 4,279,582
1,000,000 Babylon, Inc., Series B, 8.50%, 01/01/19 ............................................... 1,091,730
Metropolitan Transportation Authority, Service Contract, Refunding,
3,860,000 Commuter Facilities, Series 5, 6.50%, 07/01/16 ......................................... 3,932,838
3,330,000 Commuter Facilities, Series N, 6.80%, 07/01/04 ......................................... 3,625,005
3,050,000 Commuter Facilities, Series N, 6.90%, 07/01/05 ......................................... 3,319,163
$ 2,330,000 Transportation Facilities, Series N, 6.80%, 07/01/04 ................................... $ 2,536,415
2,470,000 Transportation Facilities, Series N, 6.90%, 07/01/05 ................................... 2,687,978
7,830,000 Transportation Facilities, Series N, 7.125%, 07/01/09 .................................. 8,605,718
New York City GO,
10,190,000 Refunding, Series A, 6.125%, 08/01/06 .................................................. 10,193,261
10,000,000 Refunding, Series A, 6.25%, 08/01/08 ................................................... 10,022,700
1,795,000 Refunding, Series G, 5.75%, 08/01/10 ................................................... 1,697,029
10,000,000 Series A, 7.25%, 03/15/20 .............................................................. 10,706,000
1,200,000 Series A, 6.25%, 08/01/21 .............................................................. 1,169,880
4,500,000 Series B, 7.625%, 02/01/13 ............................................................. 4,907,295
17,070,000 Series B, 7.00%, 08/15/16 .............................................................. 17,831,663
4,090,000 Series B, 7.00%, 02/01/18 .............................................................. 4,241,863
5,000,000 Series B, 7.50%, 02/01/18 .............................................................. 5,500,800
5,000,000 Series B, 7.00%, 02/01/19 .............................................................. 5,175,800
5,745,000 Series B, 7.00%, 02/01/20 .............................................................. 5,946,990
5,000,000 Series B, Sub Series B-1, 7.25%, 08/15/19 .............................................. 5,296,640
4,250,000 Series C, 6.75%, 10/01/15 .............................................................. 4,344,988
4,800,000 Series C, 7.00%, 08/01/17 .............................................................. 4,986,140
11,050,000 Series C, 7.25%, 08/15/24 .............................................................. 11,708,570
1,000,000 Series C, Sub Series C-1, 7.00%, 08/01/16 .............................................. 1,038,780
4,875,000 Series C, Sub Series C-1, 7.50%, 08/01/21 .............................................. 5,389,800
3,500,000 Series D, 7.70%, 02/01/11 .............................................................. 3,828,580
5,000,000 Series D, 7.625%, 02/01/13 ............................................................. 5,452,550
9,000,000 Series D, 7.625%, 02/01/14 ............................................................. 9,814,590
5,000,000 Series D, 7.50%, 02/01/19 .............................................................. 5,500,800
525,000 Series E, 7.50%, 02/01/18 .............................................................. 577,585
4,500,000 Series F, 7.625%, 02/01/14 ............................................................. 4,907,295
400,000 Series F, 7.625%, 02/01/15 ............................................................. 436,204
8,545,000 Series F, 7.50%, 02/01/22 .............................................................. 9,400,867
8,625,000 Series F, 6.625%, 02/15/25 ............................................................. 8,696,760
840,000 Series G, 7.50%, 02/01/22 .............................................................. 924,134
5,000,000 Series H, 7.20%, 02/01/14 .............................................................. 5,341,300
12,600,000 Series H, 7.20%, 02/01/15 .............................................................. 13,460,076
12,000,000 Series H, 7.00%, 02/01/19 .............................................................. 12,421,920
2,925,000 Series H, 7.00%, 02/01/20 .............................................................. 3,027,843
350,000 Series H, 7.00%, 02/01/22 .............................................................. 362,306
6,970,000 New York City IDA, Civic Facility Revenue, Amboy Corp. Project, Series 1990, 9.625%, 06/01/15 7,837,277
5,900,000 New York City Municipal Water Financing Authority, Water and Sewer System Revenue, Series A,
6.00%, 06/15/17 .......................................................................... 5,821,707
New York State Dormitory Authority Revenue, City University System,
1,000,000 Series B, Pre-Refunded, 7.20%, 07/01/21 ................................................ 1,155,020
1,000,000 Series F, Pre-Refunded, 7.875%, 07/01/07 ............................................... 1,170,320
8,500,000 Series F, Pre-Refunded, 7.875%, 07/01/17 ............................................... 9,927,405
New York State Dormitory Authority Revenue, State University Educational Facilities,
270,000 Series B, Pre-Refunded, 7.25%, 05/15/15 ................................................ 307,913
2,070,000 Series B, Pre-Refunded, 7.25%, 05/15/15 ................................................ 2,360,669
730,000 Series B, Pre-Refunded, 7.125%, 05/15/17 ............................................... 814,775
5,000,000 New York State Environmental Facility Corp., PCR, State Water Revenue, New York Municipal
Water, Refunding, Series A, 5.875%, 06/15/14 .............................................. 4,968,550
$ 1,000,000 New York State Environmental Facility Corp., Water Facility Revenue, Long Island Water Corp.
Project, Series 1987-A, 10.00%, 10/01/17 .................................................. $ 1,085,600
9,715,000 New York State HFA, Service Contract Obligation Revenue, Series A, Pre-Refunded, 7.80%,
09/15/20 .................................................................................. 11,393,655
10,000,000 New York State HFA, Service Contract Obligation Revenue, Series A, 6.50%, 03/15/25 ......... 10,149,700
New York State Local Government Assistance Corp.,
15,000,000 Series B, 7.25%, 04/01/05 .............................................................. 16,811,100
10,000,000 Series B, 7.25%, 04/01/06 .............................................................. 11,150,600
9,800,000 Series B, Pre-Refunded, 7.50%, 04/01/20 ................................................ 11,439,540
6,850,000 Series D, Pre-Refunded, HFC, 7.80%, 09/15/10 ........................................... 8,033,612
3,500,000 Series D, Pre-Refunded, 7.00%, 04/01/18 ................................................ 4,044,985
4,000,000 New York State Medical Care Facilities Finance Agency Revenue, St. Luke's Nursing Home
Mortgage Insured, Series B, 6.95%, 02/15/32 ............................................... 4,218,880
2,500,000 New York State Medical Care Facilities Finance Agency Revenue, Security Hospital, Series A,
7.35%, 08/15/11 .......................................................................... 2,647,550
Port Authority of New York and New Jersey, Special Obligation Revenue,
10,000,000 Continental Airlines, Inc., Eastern Project, La Guardia, 9.00%, 12/01/10 ............... 11,104,100
27,650,000 Continental Airport Project, Eastern Project, La Guardia, 9.125%, 12/01/15 ............. 30,852,976
Troy IDA, Lease Revenue,
5,000,000 City of Troy, 8.00%, 03/15/12 .......................................................... 5,000,000
5,500,000 City of Troy, 8.00%, 03/15/22 .......................................................... 5,500,000
1,500,000 Warren and Wash Counties IDAR, Refunding, Resource Recovery, Series A, 7.90%, 12/15/07 ..... 1,543,380
-----------
397,948,752
-----------
North Dakota .1%
4,600,000 Mercer County PCR, Basin Electric Power Co., Series 1984-C, 7.70%, 01/01/19 ................ 4,763,484
420,000 Whapeton IDR, Auburn Apartments Project, 11.00%, 12/01/15 .................................. 429,173
-----------
5,192,657
-----------
Ohio 5.2%
2,710,000 Allen County Nursing Home, First Mortgage Revenue, Volunteers of America Care Facilities Project,
9.00%, 03/01/18 .......................................................................... 2,860,215
21,235,000 Cleveland Airport Special Revenue, Continental Airlines, Inc. Project, 9.00%, 12/01/19 ..... 21,628,272
Montgomery County Health Systems Revenue, Franciscan,
1,400,000 Series B, 8.10%, 07/01/01 .............................................................. 1,546,832
9,600,000 Series B, 8.10%, 07/01/18 .............................................................. 10,589,856
1,300,000 Series B-1, 8.10%, 07/01/01 ............................................................ 1,436,344
6,300,000 Series B-1, 8.10%, 07/01/18 ............................................................ 6,873,489
6,500,000 Series B-2, 8.10%, 07/01/18 ............................................................ 7,133,425
5,265,000 Ohio State Air Quality Authority, Toledo Edison, Series B, 8.00%, 05/15/19 ................. 5,602,223
10,300,000 Ohio State HFA, Chagrin Fall, Retirement Rental Housing Revenue, 10.375%, 04/01/09 ......... 11,531,571
Ohio State Water Development Authority,
27,700,000 PCR, Refunding, Cleveland Electric, Series A, 8.00%, 10/01/23 .......................... 29,260,341
6,200,000 Toledo Edison, Series A, 8.00%, 05/15/19 ............................................... 6,597,110
20,000,000 Perry Local School District COP, 8.15%, 07/01/99 ........................................... 20,186,000
500,000 Pike County Hospital Facilities Revenue, National Church Residences, Series 1987, 9.875%,
07/01/17 .................................................................................. 545,910
3,870,000 Seneca County Nursing HMR, Refunding and Improvement, Volunteers of America Care Facilities,
9.00%, 01/01/13 .......................................................................... 4,075,420
Toledo-Lucas County Port Authority Airport Revenue, Burlington Air Express,
7,540,000 Project 1, 7.00%, 04/01/04 ............................................................. 7,819,282
1,450,000 Series 1991-1, 9.125%, 09/15/01 ........................................................ 1,555,256
5,875,000 Series 1991-1, 9.125%, 09/15/13 ........................................................ 6,260,694
Toledo-Lucas County Port Authority Airport Revenue, Burlington Air Express, (cont.)
$ 5,385,000 Series 1994-1, 7.25%, 04/01/09 ......................................................... $ 5,593,992
8,200,000 Series 1994-1, 7.375%, 04/01/14 ........................................................ 8,531,936
14,365,000 Series 1994-1, 7.50%, 04/01/19 ......................................................... 14,970,341
Toledo-Lucas County Port Authority Development Revenue, Nortwest Ohio Bond Fund,
2,405,000 Series 1989-B, 9.00%, 11/15/08 ......................................................... 2,591,099
1,305,000 Series 1990-A, 8.625%, 05/15/10 ........................................................ 1,396,363
3,045,000 Series 1990-D, 8.25%, 05/15/20 ......................................................... 3,179,132
-----------
181,765,103
-----------
Oklahoma .7%
6,335,000 Jackson County Memorial Hospital Authority Revenue, Refunding, Jackson County Memorial
Hospital Project, Pre-Refunded, 9.00%, 08/01/15 ........................................... 7,029,316
12,845,000 Tulsa Municipal Airport Transportation Revenue, American Airlines, Inc., 7.375%, 12/01/20 .. 13,371,260
2,500,000 Washington County Medical Authority Revenue, Bartlesville, Refunding, Jane Phillips Hospital,
Series A, 8.50%, 11/01/10 ................................................................. 2,686,900
-----------
23,087,476
-----------
Pennsylvania 7.0%
Chartiers Valley Industrial and Commercial Development Authority Revenue, Refunding,
4,750,000 Asbury Health Center Project, 7.40%, 12/01/15 .......................................... 4,796,075
6,000,000 First Mortgage, United Methodist Health Center, Series A, 9.50% 12/01/15 ............... 7,051,020
2,000,000 Friendship Village of South Hills Project, 9.25%, 08/15/08 ............................. 2,104,280
4,000,000 Friendship Village of South Hills Project, 9.50%, 08/15/18 ............................. 4,217,560
5,000,000 Delaware County IDAR, Refunding, Resource Recovery Project, Series A, 8.10%, 12/01/13 ...... 5,239,800
980,000 Fayette County Hospital Authority Revenue, Refunding, Uniontown Hospital Project, 7.625%,
07/01/15 .................................................................................. 996,582
Franklin County IDA, Health Facilities Revenue,
650,000 Encore Nursing Center, Beverly, 10.375%, 07/01/11 ...................................... 746,571
3,100,000 Encore Nursing Center, Beverly, 10.375%, 07/01/11 ...................................... 3,553,158
3,300,000 Gettysburg IDA, Health Facilities Revenue, Refunding, Encore Nursing Center, 10.375%, 07/01/11 3,796,584
4,000,000 Lehigh County IDA, PCR, Refunding, Power and Light Project, Series A, 6.15%, 08/01/29....... 4,070,640
Montgomery County Higher Education and Health Authority Hospital Revenue, United Hospital,
200,000 Series A, 8.375%, 11/01/11 ............................................................. 207,572
3,560,000 Series A, 7.50%, 11/01/12 .............................................................. 3,479,046
750,000 Series A, 7.50%, 11/01/13 .............................................................. 732,488
600,000 Series A, 7.50%, 11/01/14 .............................................................. 585,648
3,940,000 Series B, 7.50%, 11/01/14 .............................................................. 3,845,755
1,600,000 Series B, 7.50%, 11/01/15 .............................................................. 1,560,880
Montgomery County Higher Education and Health Authority Revenue,
1,925,000 First Mortgage, Holy Redeemer Long-Term Care, Series A, 8.20%, 06/01/06 ................ 1,997,322
3,500,000 First Mortgage, Holy Redeemer Long-Term Care, Series A, 8.00%, 06/01/22 ................ 3,534,265
5,000,000 St. Joseph's University, Series 1990, Pre-Refunded, 8.30%, 06/01/10 .................... 5,899,250
10,000,000 Montgomery County IDA, PCR, Series 1991, 7.50%, 01/01/12 ................................... 10,675,600
Pennsylvania Convention Center Authority Revenue, Refunding,
6,430,000 Series A, 5.75%, 09/01/99 .............................................................. 6,500,473
5,000,000 Series A, 6.25%, 09/01/04 .............................................................. 5,177,000
16,000,000 Series A, 6.60%, 09/01/09 .............................................................. 16,325,280
20,760,000 Series A, 6.70%, 09/01/14 .............................................................. 21,179,975
15,800,000 Series A, 6.75%, 09/01/19 .............................................................. 16,056,908
1,200,000 Pennsylvania State Higher Educational Facilities Authority, College and University Revenue,
Medical College of Pennsylvania, 8.375%, 03/01/11 ......................................... 1,313,916
$ 1,825,000 Pennsylvania State Pooled Finance Authority, Lease Revenue, Capital Improvement, Series B,
MBIA Insured, 8.00%, 11/01/09 ............................................................. $ 1,866,154
10,000,000 Philadelphia Financing EDA, Resource Recovery Revenue, Colver Project, Series D, 7.125%,
12/01/15 .................................................................................. 10,211,600
Philadelphia Gas Works Revenue,
3,850,000 Series A, 6.375%, 07/01/14 ............................................................. 3,870,444
2,850,000 Series A, 6.375%, 07/01/26 ............................................................. 2,840,111
3,080,000 Philadelphia GO, Refunding, Series A, 6.00%, 05/15/05 ...................................... 3,077,413
Philadelphia Municipal Authority Revenue, Justice Lease,
4,000,000 Sub-Series C, 8.625%, 11/15/16 ......................................................... 4,390,560
25,500,000 Sub-Series C, Pre-Refunded, 8.625%, 11/15/16 ........................................... 31,545,030
3,000,000 Sub-Series D, 6.25%, 07/15/13 .......................................................... 2,977,410
1,750,000 Sub-Series D, 6.30%, 07/15/17 .......................................................... 1,735,475
14,485,000 Philadelphia Water and Sewer Revenue, 10th Series, Pre-Refunded ETM, 7.35%, 09/01/04 ....... 16,697,873
Philadelphia Water and Sewer Revenue, 11th Series,
2,500,000 Sub-Series A, Pre-Refunded, 8.70%, 12/01/98 ............................................ 2,579,050
3,000,000 Sub-Series A, Pre-Refunded, 8.90%, 12/01/00 ............................................ 3,096,270
9,750,000 Philadelphia Water and Sewer Revenue, 16th Series, Pre-Refunded, 7.00%, 08/01/18 ........... 11,027,640
9,100,000 South Wayne County, Water and Sewer Authority Revenue, Refunding, 8.20%, 04/15/13 .......... 9,272,627
100,000 Washington County Hospital Authority Revenue, Washington Hospital, Series 1987, Pre-Refunded,
9.50%, 07/01/17 .......................................................................... 110,423
5,025,000 Washington County IDA, PCR, West Pennsylvania Power Company, 6.05%, 04/01/14 ............... 5,037,161
-----------
245,978,889
-----------
Puerto Rico .1%
1,875,000 Puerto Rico Commonwealth Infrastructure Financing Authority, Special Tax Revenue, Series 1988-A,
7.75%, 07/01/08 .......................................................................... 2,061,788
-----------
2,061,788
-----------
Rhode Island .4%
5,000,000 Rhode Island HFC, Homeownership Opportunity, Series 17-A, 6.25%, 04/01/17 .................. 4,970,400
6,000,000 Rhode Island State Health and Educational Building Corp., Hospital Financing Revenue, Landmark
Medical Center Assessment, 5.875%, 10/01/19 ............................................... 5,728,680
West Warwick GO,
2,005,000 Series A, 6.80%, 07/15/98 .............................................................. 2,053,200
915,000 Series A, 7.30%, 07/15/08 .............................................................. 968,125
-----------
13,720,405
-----------
South Carolina .1%
3,805,000 Charleston County Hospital Facilities, First Mortgage Revenue, Sandpiper Village, Inc., 7.00%,
11/01/13 .................................................................................. 3,429,903
-----------
3,429,903
-----------
South Dakota .2%
3,500,000 South Dakota State Health and Educational Facilities Authority Revenue, Refunding, Prairie Lakes
Health Care, 7.25%, 04/01/22 .............................................................. 3,509,275
3,000,000 Watertown Hospital Facilities Revenue, Prairie Lakes Health Care System Project, Pre-Refunded,
9.125%, 04/01/13 .......................................................................... 3,407,700
-----------
6,916,975
-----------
Tennessee .5%
$ 3,130,000 Knox County Health, Educational and Housing Facilities Board, MFHR, GNMA Insured, Eastown
Village Project, 8.20%, 07/01/28 .......................................................... $ 3,269,661
Memphis-Shelby County Airport Authority, Special Facilities and Project Revenue,
3,250,000 Federal Express Corp., Series 1982-B, 8.30%, 09/01/12 .................................. 3,378,278
6,000,000 Federal Express Corp., Series 1984, 7.875%, 09/01/09 ................................... 6,611,700
1,770,000 Scott County IDB, IDR, Fruehauf Corp. Project, 10.75%, 01/01/09 ............................ 1,915,972
3,000,000 Shelby County, Health and Education Housing Facility Revenue, Beverly Enterprise, 10.125%,
12/01/11 .................................................................................. 3,396,360
200,000 Tennessee HDA, Financial Mortgage, Series A, 6.90%, 07/01/25 ............................... 207,224
-----------
18,779,195
-----------
Texas 2.8%
10,000,000 Alliance Airport Authority, Special Facilities Revenue, Series 1990, 7.50%, 12/01/29 ....... 10,545,100
Brazos River Authority, PCR,
16,000,000 Houston Lighting and Power Co., 8.25%, 05/01/19 ........................................ 17,452,480
1,675,000 Texas Utilities Electric Co. Project, Collateralized, Series 1988-A, 9.25%, 03/01/18 ... 1,840,272
4,780,000 Coppell Special Assessment Gateway Project, 8.70%, 03/01/12 ................................ 4,926,411
5,626,000 Copperas Cove Health Facilities Development Corp., Hospital Revenue, First Mortgage, Metroplex
Health, Series B, Pre-Refunded, 9.125%, 12/01/19 .......................................... 6,616,289
6,950,000 El Paso County, SFMR, HFC, Series 1991-A, 8.75%, 10/01/11 .................................. 7,290,064
500,000 Harris County Hospital District Mortgage Revenue, Refunding, Pre-Refunded, 8.50%, 04/01/15 . 522,935
18,160,000 Harris County Toll Road, Multiple Mode, Senior Lien Revenue, Series D, Pre-Refunded, 8.30%,
08/15/17 .................................................................................. 20,692,412
4,550,000 Matagorda County Navigation District No. 1, PCR, Collateralized, Refunding, Houston Lighting and
Power Co., Series B, 7.70%, 02/01/19 ...................................................... 4,856,443
Metropolitan Health Facilities Development Corp., Hospital Revenue, Refunding & Improvement,
2,770,000 Wilson N. Jones Memorial Hospital Project, Pre-Refunded, 7.75%, 01/01/05 ............... 2,958,249
7,500,000 Wilson N. Jones Memorial Hospital Project, Pre-Refunded, 7.875%, 01/01/14 .............. 8,021,700
2,000,000 Midland County Hospital District Revenue, Series 1989, Pre-Refunded, 8.375%, 06/01/02 ...... 2,229,680
5,300,000 National Research Laboratory Commission Financing Corp. Lease Revenue, Pre-Refunded, 7.10%,
12/01/21 .................................................................................. 6,121,871
250,000 Port of Corpus Christi IDC Revenue, Refunding, Valero Refining, Series A, 10.25%, 06/01/17 . 277,285
4,000,000 Texas State Water Development Board Revenue, 6.00%, 07/15/13 ............................... 4,054,480
-----------
98,405,671
-----------
United States Territories .4%
2,505,000 American Samoa EDA, Executive Office Building Revenue, 10.125%, 09/01/08 ................... 2,701,242
14,000,000 Virgin Island Public Finance Authority Revenue, Refunding, Matching Fund Loan Notes, Series A,
7.25%, 10/01/18 .......................................................................... 14,700,280
Virgin Island Water and Power Authority,
400,000 Electric Services, Series A, 7.40%, 07/01/11 ........................................... 419,004
4,000,000 Water Power Revenue, Series B, 7.60%, 01/01/12 ......................................... 4,233,560
-----------
22,054,086
-----------
Utah .9%
2,000,000 Box Elder County PCR, Nucor Corp. Project, 6.90%, 05/15/17 ................................. 2,130,080
11,800,000 Davis County Solid Waste Management Energy Recovery Revenue, Refunding, Special Services
District, 6.125%, 06/15/09 ................................................................ 10,807,384
11,000,000 Utah Assessed Municipal Power Systems Revenue, San Juan Project, 6.375%, 06/01/22 .......... 11,277,970
Utah State HFA, SFM,
160,000 Series 1988-A, 9.625%, 07/01/00 ........................................................ 167,280
190,000 Series 1988-B, 9.50%, 07/01/00 ......................................................... 197,722
$ 115,000 Series 1988-B, 9.60%, 07/01/00 ......................................................... $ 118,180
350,000 Series 1988-C-1, 9.375%, 07/01/00 ...................................................... 362,523
140,000 Series 1988-E, 9.50%, 07/01/00 ......................................................... 145,690
125,000 Series 1988-F, 9.60%, 07/01/00 ......................................................... 130,566
125,000 Series 1988-G-2, 9.30%, 07/01/00 ....................................................... 126,415
170,000 Series 1989-B, 9.25%, 07/01/01 ......................................................... 174,549
125,000 Series 1990-A-2, 9.625%, 07/01/02 ...................................................... 128,446
190,000 Series 1990-B-2, 9.50%, 07/01/02 ....................................................... 194,815
445,000 Series 1991-A-2, 9.45%, 07/01/03 ....................................................... 460,023
455,000 Series 1991-B-2, 9.45%, 07/01/03 ....................................................... 471,025
440,000 Series 1991-C-2, 9.05%, 07/01/03 ....................................................... 460,926
860,000 Series 1991-D-2, 9.00%, 07/01/03 ....................................................... 900,781
635,000 Series 1991-E-1, 8.70%, 07/01/03 ....................................................... 665,220
775,000 Sub-Series B-2, 8.70%, 07/01/04 ........................................................ 810,201
630,000 Sub-Series D, 8.45%, 07/01/04 .......................................................... 646,972
-----------
30,376,768
-----------
Washington 1.1%
2,370,000 Chelan County PUD No. 1, Columbia River Rock, First Hydro Electric System Revenue, 6.375%,
06/01/29 .................................................................................. 2,392,207
2,675,000 Washington State Health Care Facilities Authority Revenue, Swedish Hospital Medical Center
Empire Health Service, Spokane, AMBAC Insured, 6.30%, 11/15/22 ............................ 2,719,432
5,000,000 Washington State Public Power Supply System Revenue, Nuclear Project No. 1, Refunding,
Series C, Pre-Refunded, 8.00%, 07/01/17 ................................................... 5,847,500
Washington State Public Power Supply System Revenue, Nuclear Project No. 2, Refunding,
2,000,000 Series A, 5.45%, 07/01/00 .............................................................. 2,052,600
20,300,000 Series A, 6.00%, 07/01/12 .............................................................. 19,794,733
3,000,000 d Series A, 6.50%, 07/01/15 .............................................................. 3,023,640
1,000,000 Yakima-Tieton Irrigation District Revenue, Refunding, Pre-Refunded, 8.40%, 06/01/18 ........ 1,107,930
-----------
36,938,042
-----------
West Virginia .5%
1,415,000 Beckley First Mortgage Revenue, Refunding, Pine Lodge Health Care Center, 10.25%, 08/01/12 . 1,472,973
10,000,000 West Virginia State Hospital Finance Authority, Hospital Revenue, 7.25%, 07/01/20 .......... 9,918,900
West Virginia State Water Development Authority Revenue,
1,550,000 Loan Program II, Series A, Pre-Refunded, 8.625%, 11/01/28 .............................. 1,773,634
2,790,000 Loan Program II, Series A, Pre-Refunded, 8.125%, 11/01/29 .............................. 3,151,835
2,540,000 Solid Waste Management, Series C, 8.125%, 08/01/15 ..................................... 2,771,292
19,088,634
Wisconsin 1.0%
2,500,000 Wisconsin Housing EDA, Home Ownership Revenue, Series C, 6.15%, 09/01/17 ................... 2,473,250
Wisconsin State Health and Educational Facilities Authority Revenue,
1,000,000 Bethany Lutheran Home of La Crosse, 8.75%, 12/01/06 .................................... 1,036,530
9,510,000 Franciscan Health System, Inc. Project, 6.25%, 11/15/20 ................................ 9,573,432
6,000,000 Franciscan Health System, Inc. Project, Pre-Refunded, 8.375%, 03/01/05 ................. 7,025,160
6,000,000 Franciscan Health System, Inc. Project, Pre-Refunded 8.50%, 03/01/20 ................... 7,055,340
5,000,000 Refunding, Felician Health Care, Series A, AMBAC Insured, 7.00%, 01/01/15 .............. 5,355,450
1,670,000 Wisconsin State Health Facilities Authority Revenue, Refunding, Franciscan Health Advisory, 7.80%,
03/01/14 .................................................................................. 1,727,314
-----------
34,246,476
-----------
Wyoming .1%
$ 1,575,000 Natrona County Health Care Facility Revenue, Luthercare, Inc. Project, 9.25%, 07/15/08 ..... $ 1,646,017
1,000,000 Wyoming CDA Revenue, Series 1, 6.15%, 06/01/17 ............................................. 988,080
-----------
2,634,097
-----------
Total Bonds (Cost $3,148,402,968)..................................................... 3,328,899,592
-----------
c Zero Coupon Bonds 2.3%
San Francisco City and County RDA, Lease Revenue, George Moscone Center,
3,750,000 (original accretion rate 7.00%), 07/01/09 .............................................. 1,636,465
4,500,000 (original accretion rate 7.00%), 07/01/10 .............................................. 1,822,995
4,500,000 (original accretion rate 7.05%), 07/01/12 .............................................. 1,574,730
4,250,000 (original accretion rate 7.05%), 07/01/13 .............................................. 1,385,245
2,250,000 (original accretion rate 7.05%), 07/01/14 .............................................. 682,403
San Joaquin Hills Transportation, Corridor Agency Toll Road Revenue, Jr. Lien,
7,400,000 (original accretion rate 8.50%), 01/01/04 .............................................. 3,934,136
8,000,000 (original accretion rate 8.75%), 01/01/05 .............................................. 3,942,080
9,000,000 (original accretion rate 8.60%), 01/01/06 .............................................. 4,069,890
9,400,000 (original accretion rate 8.60%), 01/01/07 .............................................. 3,936,156
10,400,000 (original accretion rate 8.60%), 01/01/08 .............................................. 4,032,600
21,900,000 (original accretion rate 8.75%), 01/01/09 .............................................. 7,862,976
15,000,000 (original accretion rate 8.75%), 01/01/10 .............................................. 4,987,050
30,100,000 (original accretion rate 8.50%), 01/01/12 .............................................. 8,513,484
52,700,000 (original accretion rate 9.00%), 01/01/24 .............................................. 5,368,549
45,200,000 (original accretion rate 9.00%), 01/01/25 .............................................. 4,247,896
131,900,000 (original accretion rate 9.00%), 01/01/26 .............................................. 11,434,411
139,100,000 (original accretion rate 9.00%), 01/01/27 .............................................. 11,125,218
-----------
Total Zero Coupon Bonds (Cost $66,680,617)............................................ 80,556,284
-----------
Total Long Term Investments (Cost $3,215,083,583)..................................... 3,409,455,876
-----------
Short Term Investments .6%
100,000 e Arkansas State Development Finance Authority, Higher Education Capital Asset, Series A, Weekly
VRDN and Put, 3.60%, 12/1/15............................................................... 100,000
200,000 e Baltimore County Housing Revenue, Refunding, Spring Hill, Weekly VRDN and Put, 3.60%, 9/20/28 200,000
189,000 Benicia, California, 1915 ACT, Refunding, Fleetside Industrial Park Assessment, 4.00%, 09/02/95 188,996
100,000 e Bexar County, Texas, Health Facility Development Corporation Revenue Refunding, Incarnate Word
Health, Weekly VRDN and Put, 3.55%, 11/15/23 .............................................. 100,000
200,000 e Bradley County, Tennessee Industrial Development, Board Industrial Revenue Refunding, Olin
Corp. Project, Series C, Daily VRDN and Put, 3.40%, 11/01/17 .............................. 200,000
400,000 e Crossett, Arkansas, PCR, Georgia Pacific Corp., Weekly VRDN and Put, 3.60%, 10/01/07 ....... 400,000
800,000 e Dade County, Florida, Water And Sewer System Revenue, Weekly VRDN and Put, 3.45%, 10/05/22 . 800,000
100,000 e Duluth Minnesota Tax Incremental Revenue, Lake Superior Paper, Weekly VRDN and Put, 3.65%,
09/01/10 .................................................................................. 100,000
200,000 e Fayetteville, Arkansas, IDR, Amcast Industrial Corp., Weekly VRDN and Put, 3.70%, 12/01/04 . 200,000
100,000 e Kentucky EDA, Pooled Loan Program, Series A, FGIC Insured, Weekly VRDN and Put, 3.80%,
12/01/15 .................................................................................. 100,000
400,000 e Harris County, Texas, Health, Facilities Development Corp., Special Facility Revenue Texas Medical
Center Project, Daily VRDN and Put, 3.55%, 02/15/22 ....................................... 400,000
280,000 e Indiana State Employment Development CDR, Triangle Ventures Project, Weekly VRDN and Put,
3.95%, 01/01/24 .......................................................................... 280,000
3,000,000 e Irvine Ranch, California Water District, Series B, Daily VRDN and Put, 3.45%, 10/01/05...... 3,000,000
2,000,000 e Irvine Ranch, California Water District, Daily VRDN and Put, 3.45%, 10/01/10................ 2,000,000
2,400,000 e Irvine Ranch, California Water District, Daily VRDN and Put, 3.60%, 5/01/09................. 2,400,000
$ 2,500,000 e Irvine Ranch, California, Water District, Daily VRDN and Put, 3.45%, 10/1/00................ $ 2,500,000
200,000 e Minnetonka, Minnesota, MFHR, Cliffs at Ridgedale, Weekly VRDN and Put, 3.65%, 03/01/09 ..... 200,000
1,100,000 e Montgomery, Alabama, Special Care Facility, Finance Authority Revenue, Series A, Weekly VRDN
and Put, 3.55%, 12/01/30 .................................................................. 1,100,000
200,000 e Montgomery, Alabama, Special Care Facility, Finance Authority Revenue, Series C, Weekly VRDN
and Put, 3.55%, 12/01/30 .................................................................. 200,000
700,000 e Montgomery, Alabama, Special Care Facility, Finance Authority Revenue, Series E, Weekly VRDN
and Put, 3.55%, 12/01/30 .................................................................. 700,000
2,700,000 e North Carolina Medical Care Community Hospital Revenue, Series A, Daily VRDN and Put 3.40%,
10/01/20 .................................................................................. 2,700,000
1,400,000 e Orange County, California, Partner Office and Courthouse Project, Orange County Public Facility
Corp., Daily VRDN and Put, 3.45%, 12/01/15 ................................................ 1,400,000
1,300,000 e Orange County, Florida, Housing Finance Authority Revenue, Sutton Place Project, Series B, Weekly
VRDN and Put, 3.60%, 10/01/08 ............................................................. 1,300,000
100,000 e Oregon State Veteran Welfare Bond, Series 73E, Weekly VDRN and Put, 3.60%, 12/01/16 ........ 100,000
1,750,000 e Peninsula Ports Authority, Revenue, Virginia, Refunding Port Facility, Shell Oil Co., Daily VRDN and
Put, 3.40%, 12/01/05 ...................................................................... 1,750,000
500,000 e Puerto Rico Government Development Bank, Refunding, Weekly VRDN and Put, 3.20%, 12/01/15 ... 500,000
400,000 e Wake County, North Carolina PCR, Weekly VRDN and Put, 3.65%, 9/01/15 ....................... 400,000
300,000 e Washington State Health Care Facilities Authority Revenue, Sisters Providence, Series B, Daily
VRDN and Put 3.35%, 10/01/05 .............................................................. 300,000
-----------
Total Short Term Investments (Cost $23,619,000) ...................................... 23,618,996
-----------
Total Investments (Cost $3,238,702,583) 97.8% ................................... 3,433,074,872
Other Assets and Liabilities, Net 2.2%........................................... 75,425,244
-----------
Net Assets 100.0% ............................................................... $3,508,500,116
===========
At August 31, 1995, the net unrealized appreciation based on the cost of investments
for income tax purposes of $3,238,710,458 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost ........................................................... $ 217,357,279
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value ........................................................... (22,992,865)
-----------
Net unrealized appreciation............................................................... $ 194,364,414
===========
PORTFOLIO ABBREVIATIONS:
1915 ACT - Improvement Bond Act of 1915
AD - Assessment District
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co.
CDA - Community Development Agency
CDR - Community Development Revenue
CFD - Community Facilities District
CRDA - Community Redevelopment Agency
COP - Certificate of Participation
EDA - Economic Development Authority
EDC - Economic Development Corp.
EDR - Economic Development Revenue
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FI/GML - Federally Insured or Guaranteed Mortgage Loans
GNMA - Government National Mortgage Association
GO - General Obligation
HDA - Housing Development Authority/Agency
HFA - Housing Finance Authority/Agency
HFC - Housing Finance Corp.
HMR - Home Mortgage Revenue
ID - Improvement District
IDA - Industrial Development Authority/Agency
IDAR - Industrial Development Authority/Agency Revenue
IDB - Industrial Development Board
IDC - Industrial Development Corp.
IDR - Industrial Development Revenue
L.P. - Limited Partnership
MBIA - Municipal Bond Investors Assurance Corp.
MFHR - Multi-Family Housing Revenue
MFMR - Multi-Family Mortgage Revenue
MFR - Multi-Family Revenue
PCR - Pollution Control Revenue
PUD - Public Utility District
RDA - Redevelopment Agency
RHA - Resource Housing of America
SF - Single Family
SFM - Single Family Mortgage
SFMR - Single Family Mortgage Revenue
USD - Unified School District
aNon-income producing.
bSee Note 6 regarding defaulted securities.
cZero coupon bonds. The current effective yield may vary. The original accretion rate by securities will remain constant.
dSee Note 1 (f) regarding securities purchased on a when-issued basis.
eVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula
and an unconditional right of demand to receive payment of the principal balance plus accrued interest upon short notice prior to
specified dates. The interest rate may change on specified dates in relationship with changes in a designated rate (such as the
prime interest rate or U.S. Treasury bills rate).
fSee Note 1(a) regarding securities valued by The Board of Trustees.
hThe bond pays interest based upon the issuer's ability to pay which may be less than the stated interest rate.
The accompanying notes are an integral part of these financial statements.
</TABLE>
FRANKLIN TAX-FREE TRUST
Financial Statements
Statements of Assets and Liabilities
August 31, 1995 (unaudited)
<TABLE>
<CAPTION>
Franklin Franklin Franklin Franklin Franklin
Arizona Colorado Connecticut Indiana New Jersey
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
---------- ---------- ---------- --------- ----------
Assets:
Investments in securities:
<S> <C> <C> <C> <C> <C>
At identified cost................................... $691,999,763 $189,460,303 $153,917,590 $44,133,291 $515,702,624
========== ========== ========== ========= ==========
At value............................................. 735,012,256 201,583,764 163,248,369 47,168,125 547,485,905
Cash.................................................. 84,409 72,847 467,951 39,192 125,536
Receivables:
Interest............................................. 9,322,417 3,249,716 2,610,220 614,014 8,513,162
Capital shares sold.................................. 351,763 196,383 516,500 78,798 457,202
Investment securities sold........................... 8,169,506 160,985 -- -- 7,150,251
---------- ---------- ---------- --------- ----------
Total assets..................................... 752,940,351 205,263,695 166,843,040 47,900,129 563,732,056
---------- ---------- ---------- --------- ----------
Liabilities:
Payables:
Investment securities purchased:
Regular delivery.................................... 8,156,550 -- -- -- --
When-issued basis (Note 1).......................... 6,717,378 984,683 3,900,000 -- 8,914,920
Distributions payable to shareholders................ 1,169,974 321,068 229,629 67,901 764,206
Capital shares repurchased........................... 195,364 65,177 70,320 1,189 62,810
Management fees...................................... 297,023 95,334 77,996 24,893 228,448
Distribution fees.................................... 71,909 22,927 14,919 5,215 62,446
Shareholder servicing costs.......................... 6,497 4,020 1,139 1,000 8,670
Accrued expenses and other liabilities................ 29,676 11,387 10,206 5,432 56,616
---------- ---------- ---------- --------- ----------
Total liabilities................................ 16,644,371 1,504,596 4,304,209 105,630 10,098,116
---------- ---------- ---------- --------- ----------
Net assets, at value................................... $736,295,980 $203,759,099 $162,538,831 $47,794,499 $553,633,940
========== ========== ========== ========= ==========
Net assets consist of:
Undistributed net investment income................... $ 1,105,892 $ 345,228 $ 234,846 $ 69,734 $ 758,716
Unrealized appreciation on investments................ 43,012,493 12,123,461 9,330,779 3,034,834 31,783,281
Accumulated net realized gain (loss).................. 3,981,196 (2,302,972) (6,147,630) (1,215,963) (10,543,374)
Class I capital shares................................ 687,740,179 193,183,597 158,710,857 45,905,894 530,659,112
Class II capital shares............................... 456,220 409,785 409,979 -- 976,205
---------- ---------- ---------- --------- ----------
Net assets, at value................................... $736,295,980 $203,759,099 $162,538,831 $47,794,499 $553,633,940
========== ========== ========== ========= ==========
Class I Shares:
Net assets, at value.................................. $735,838,721 $203,345,413 $162,127,072 $47,794,499 $552,653,950
========== ========== ========== ========= ==========
Shares outstanding.................................... 64,984,557 17,486,127 14,991,382 4,121,235 48,070,814
========== ========== ========== ========= ==========
Net asset value per share*............................ $11.32 $11.63 $10.81 $11.60 $11.50
========== ========== ========== ========= ==========
Maximum offering price per share (100/95.75 of net asset
value per share.)..................................... $11.82 $12.15 $11.29 $12.11 $12.01
========== ========== ========== ========= ==========
Class II Shares:
Net assets, at value.................................. $ 457,259 $ 413,686 $ 411,759 -- $ 979,990
========== ========== ========== ========= ==========
Shares outstanding.................................... 40,250 35,512 37,987 -- 85,011
========== ========== ========== ========= ==========
Net asset value per share*............................ $11.36 $11.65 $10.84 -- $11.53
========== ========== ========== ========= ==========
Maximum offering price per share (100/99 of net asset
value per share)...................................... $11.47 $11.77 $10.95 -- $11.65
========== ========== ========== ========= ==========
*Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST Financial Statements (cont.)
Statements of Assets and Liabilities (cont.)
August 31, 1995 (unaudited)
Franklin
Franklin Franklin Franklin Federal Franklin
Oregon Pennsylvania Puerto Rico Intermediate- High Yield
Tax-Free Tax-Free Tax-Free Term Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
---------- ---------- ---------- --------- -----------
Assets:
Investments in securities:
<S> <C> <C> <C> <C> <C>
At identified cost.................................. $339,001,504 $565,376,082 $176,575,385 $74,583,755 $3,238,702,583
========== ========== ========== ========= ===========
At value............................................ 358,101,934 601,596,010 184,647,523 76,149,480 3,433,074,872
Cash................................................. 403,299 106,502 249,748 18,252 1,283,314
Receivables:
Interest............................................ 5,775,985 11,406,017 2,857,773 1,185,727 67,849,884
Capital shares sold................................. 215,026 337,193 113,199 182,374 7,989,494
Investment securities sold.......................... 796,869 35,000 -- -- 12,453,245
---------- ---------- ---------- --------- -----------
Total assets.................................... 365,293,113 613,480,722 187,868,243 77,535,833 3,522,650,809
---------- ---------- ---------- --------- -----------
Liabilities:
Payables:
Investment securities purchased:
Regular delivery................................... -- -- -- -- 1,004,309
When-issued basis (Note 1)......................... 3,723,180 -- 2,985,642 -- 4,630,582
Distributions payable to shareholders............... 491,229 1,028,896 294,359 109,800 5,804,291
Capital shares repurchased.......................... 57,210 176,641 62,918 27,922 939,529
Management fees..................................... 156,134 250,250 87,188 27,588 1,336,310
Distribution fees................................... 33,222 68,513 20,484 6,762 385,347
Shareholder servicing costs......................... 6,181 9,966 3,895 1,330 50,325
Accrued expenses and other liabilities............... 11,965 45,809 28,153 17,090 --
---------- ---------- ---------- --------- -----------
Total liabilities............................... 4,479,121 1,580,075 3,482,639 190,492 14,150,693
---------- ---------- ---------- --------- -----------
Net assets, at value.................................. $360,813,992 $611,900,647 $184,385,604 $77,345,341 $3,508,500,116
========== ========== ========== ========= ===========
Net assets consist of:
Undistributed net investment income.................. $ 1,008,308 $ 768,957 $ 8,939 $ 189,063 $ 3,293,527
Unrealized appreciation on investments............... 19,100,430 36,219,928 8,072,138 1,565,725 194,372,289
Accumulated net realized gain (loss)................. (5,477,528) (4,118,610) 262,713 (1,081,008) (54,469,520)
Class I capital shares............................... 345,600,735 578,262,866 175,930,537 76,671,561 3,350,858,047
Class II capital shares.............................. 582,047 767,506 111,277 -- 14,445,773
---------- ---------- ---------- --------- -----------
Net assets, at value.................................. $360,813,992 $611,900,647 $184,385,604 $77,345,341 $3,508,500,116
========== ========== ========== ========= ===========
Class I Shares:
Net assets, at value................................. $360,229,493 $611,131,143 $184,273,820 $77,345,341 $3,493,973,187
========== ========== ========== ========= ===========
Shares outstanding................................... 31,485,558 59,240,379 16,064,256 7,176,135 317,123,434
========== ========== ========== ========= ===========
Net asset value per share*........................... $11.44 $10.32 $11.47 $10.78 $11.02
========== ========== ========== ========= ===========
Maximum offering price per share (100/95.75 of net
asset value per share.).............................. $11.95 $10.78 $11.98 $11.03 $11.51
========== ========== ========== ========= ===========
Class II Shares:
Net assets, at value................................. $ 584,499 $ 769,504 $ 111,784 -- $ 14,526,929
========== ========== ========== ========= ===========
Shares outstanding................................... 50,934 74,426 9,728 -- 1,313,779
========== ========== ========== ========= ===========
Net asset value per share*........................... $11.48 $10.34 $11.49 -- $11.06
========== ========== ========== ========= ===========
Maximum offering price per share (100/99 of net asset
value per share)..................................... $11.60 $10.44 $11.61 -- $11.17
========== ========== ========== ========= ===========
*Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
+The maximum offering price for Franklin Federal Intermediate-Term Tax-Free Income Fund is calculated at 100/97.75 of $10.78.
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST Financial Statements (cont.)
Statements of Operations
for the six months ended August 31, 1995 (unaudited)
Franklin Franklin Franklin Franklin Franklin
Arizona Colorado Connecticut Indiana New Jersey
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
--------- --------- --------- -------- ----------
Investment income:
<S> <C> <C> <C> <C> <C> <C>
Interest (Note 1)...................................... $23,288,119 $ 6,532,465 $5,171,819 $1,562,704 $17,416,225
--------- --------- --------- -------- ----------
Expenses:
Management fees, net (Note 5).......................... 1,770,340 563,786 461,393 146,567 1,356,045
Distribution fees Class I (Note 5)..................... 267,627 75,473 62,727 17,029 210,239
Distribution fees Class II (Note 5).................... 626 395 232 -- 950
Shareholder servicing costs............................ 58,296 22,311 14,577 6,954 62,757
Reports to shareholders................................ 63,254 22,638 13,039 6,401 82,799
Custodian fees......................................... 31,818 8,714 7,349 2,174 26,309
Registration and filing fees........................... 17,731 7,688 7,818 2,422 25,056
Professional fees...................................... 9,993 3,986 3,062 883 8,243
Trustees' fees and expenses............................ 5,911 1,472 1,493 436 4,569
Other.................................................. 25,362 9,222 9,210 6,552 16,169
--------- --------- --------- -------- ----------
Total expenses.................................... 2,250,958 715,685 580,900 189,418 1,793,136
--------- --------- --------- -------- ----------
Net investment income............................ 21,037,161 5,816,780 4,590,919 1,373,286 15,623,089
--------- --------- --------- -------- ----------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss)............................... 5,431,751 1,459,398 (42,344) 11,004 (23,081)
Net unrealized appreciation............................ 8,800,115 2,829,841 2,581,636 790,806 10,065,429
--------- --------- --------- -------- ----------
Net realized and unrealized gain on investments......... 14,231,866 4,289,239 2,539,292 801,810 10,042,348
--------- --------- --------- -------- ----------
Net increase in net assets resulting from operations.... $35,269,027 $10,106,019 $7,130,211 $2,175,096 $25,665,437
========= ========= ========= ======== ==========
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST Financial Statements (cont.)
Statements of Operations (cont.)
for the six months ended August 31, 1995 (unaudited)
Franklin
Franklin Franklin Franklin Federal Franklin
Oregon Pennsylvania Puerto Rico Intermediate- High Yield
Tax-Free Tax-Free Tax-Free Term Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
--------- --------- -------- --------- ----------
Investment income:
<S> <C> <C> <C> <C> <C>
Interest (Note 1).................................... $11,071,035 $20,102,330 $5,939,550 $2,224,855 $126,384,639
--------- --------- -------- --------- ----------
Expenses:
Management fees, net (Note 5)........................ 925,097 1,479,584 518,149 139,127 7,810,276
Distribution fees Class I (Note 5)................... 123,893 228,819 68,750 40,378 1,334,875
Distribution fees Class II (Note 5).................. 611 834 86 -- 15,738
Shareholder servicing costs.......................... 34,980 70,353 25,974 8,343 349,848
Reports to shareholders.............................. 36,345 91,024 21,096 14,917 322,756
Custodian fees....................................... 14,943 26,567 8,469 3,857 143,196
Registration and filing fees......................... 11,029 24,293 15,760 25,156 158,196
Professional fees.................................... 4,230 8,457 3,439 1,949 42,353
Trustees' fees and expenses.......................... 2,294 4,701 1,520 379 26,299
Other................................................ 12,155 19,976 6,238 10,476 83,172
--------- --------- -------- --------- ----------
Total expenses.................................. 1,165,577 1,954,608 669,481 244,582 10,286,709
--------- --------- -------- --------- ----------
Net investment income.......................... 9,905,458 18,147,722 5,270,069 1,980,273 116,097,930
--------- --------- -------- --------- ----------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss)............................. (60,190) 707,629 1,057,398 14,464 1,930,907
Net unrealized appreciation.......................... 6,950,849 8,993,934 1,652,127 2,094,606 82,254,417
--------- --------- -------- --------- ----------
Net realized and unrealized gain on investments....... 6,890,659 9,701,563 2,709,525 2,109,070 84,185,324
--------- --------- -------- --------- ----------
Net increase in net assets resulting from operations.. $16,796,117 $27,849,285 $7,979,594 $4,089,343 $200,283,254
========= ========= ======== ========= ==========
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST Financial Statements (cont.)
Statements of Changes in Net Assets for the six months ended August 31, 1995 (unaudited)
and the year ended February 28, 1995
Franklin Arizona Franklin Colorado
Tax-Free Income Fund Tax-Free Income Fund
--------------------- ---------------------
Six months Six months
ended Year ended ended Year ended
8/31/95 2/28/95 8/31/95 2/28/95
---------- ---------- ---------- ----------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C>
Net investment income............................................. $ 21,037,161 $ 43,542,081 $ 5,816,780 $ 11,401,755
Net realized gain (loss) from security transactions............... 5,431,751 (958,178) 1,459,398 (3,447,577)
Net unrealized appreciation (depreciation) on investments......... 8,800,115 (33,237,886) 2,829,841 (6,337,878)
---------- ---------- ---------- ----------
Net increase in net assets resulting from operations.......... 35,269,027 9,346,017 10,106,019 1,616,300
Distributions to shareholders from undistributed net investment income:
Class I............................................................ (21,324,723) (43,002,825) (5,799,695) (11,268,015)
Class II........................................................... (4,606) -- (3,111) --
Increase (decrease) in net assets from capital share transactions
(Note 2)........................................................... 1,555,213 (42,380,232) 4,891,935 2,057,974
---------- ---------- ---------- ----------
Net increase (decrease) in net assets......................... 15,494,911 (76,037,040) 9,195,148 (7,593,741)
Net assets:
Beginning of period................................................ 720,801,069 796,838,109 194,563,951 202,157,692
---------- ---------- ---------- ----------
End of period...................................................... $736,295,980 $720,801,069 $203,759,099 $194,563,951
========== ========== ========== ==========
Undistributed net investment income included in net assets:
Beginning of period................................................ $ 1,398,060 $ 858,804 $ 331,254 $ 197,514
========== ========== ========== ==========
End of period...................................................... $ 1,105,892 $ 1,398,060 $ 345,228 $ 331,254
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
for the six months ended August 31, 1995 (unaudited)
and the year ended February 28, 1995
Franklin Connecticut Franklin Indiana
Tax-Free Income Fund Tax-Free Income Fund
--------------------- --------------------
Six months Six months
ended Year ended ended Year ended
8/31/95 2/28/95 8/31/95 2/28/95
---------- ---------- --------- ----------
Increase (decrease) in net assets:
Operations:
Net investment income................................................ $ 4,590,919 $ 8,985,952 $ 1,373,286 $ 2,671,679
Net realized gain (loss) from security transactions.................. (42,344) (5,843,688) 11,004 (1,083,250)
Net unrealized appreciation (depreciation) on investments............ 2,581,636 (2,866,190) 790,806 (1,368,046)
---------- ---------- --------- ----------
Net increase in net assets resulting from operations............. 7,130,211 276,074 2,175,096 220,383
Distributions to shareholders from undistributed net investment income:
Class I............................................................... (4,589,053) (8,897,480) (1,361,018) (2,657,277)
Class II.............................................................. (1,729) -- -- --
Increase in net assets from capital share transactions (Note 2)........ 4,375,963 1,194,454 396,604 1,150,812
---------- ---------- --------- ----------
Net increase (decrease) in net assets............................ 6,915,392 (7,426,952) 1,211,042 (1,286,082)
Net assets:
Beginning of period................................................... 155,623,439 163,050,391 46,583,457 47,869,539
---------- ---------- --------- ----------
End of period......................................................... $162,538,831 $155,623,439 $47,794,499 $46,583,457
========== ========== ========= ==========
Undistributed net investment income included in net assets:
Beginning of period................................................... $ 234,709 $ 146,237 $ 57,106 $ 42,704
========== ========== ========= ==========
End of period......................................................... $ 234,846 $ 234,709 $ 69,734 $ 57,106
========== ========== ========= ==========
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
for the six months ended August 31, 1995 (unaudited)
and the year ended February 28, 1995
Franklin New Jersey Franklin Oregon Franklin Pennsylvania
Tax-Free Income Fund Tax-Free Income Fund Tax-Free Income Fund
--------------------- --------------------- ---------------------
Six months Six months Six months
ended Year ended ended Year ended ended Year ended
8/31/95 2/28/95 8/31/95 2/28/95 8/31/95 2/28/95
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income................ $ 15,623,089 $ 31,257,817 $ 9,905,458 $ 20,160,822 $ 18,147,722 $ 36,064,964
Net realized gain (loss) from security
transactions.......................... (23,081) (9,684,159) (60,190) (5,072,515) 707,629 (4,262,862)
Net unrealized appreciation
(depreciation) on investments......... 10,065,429 (17,099,995) 6,950,849 (11,526,013) 8,993,934 (20,108,962)
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations............. 25,665,437 4,473,663 16,796,117 3,562,294 27,849,285 11,693,140
Distributions to shareholders from
undistributed net investment income:
Class I.............................. (15,402,298) (30,972,890) (9,891,483) (19,631,598) (18,493,107) (35,690,544)
Class II............................. (6,826) -- (4,424) -- (6,740) --
Increase (decrease) in net assets from
capital share transactions (Note 2)... 9,440,799 (693,692) 4,455,900 (10,156,638) 15,185,215 (4,182,136)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net
assets................................ 19,697,112 (27,192,919) 11,356,110 (26,225,942) 24,534,653 (28,179,540)
Net assets:
Beginning of period................... 533,936,828 561,129,747 349,457,882 375,683,824 587,365,994 615,545,534
---------- ---------- ---------- ---------- ---------- ----------
End of period......................... $553,633,940 $533,936,828 $360,813,992 $349,457,882 $611,900,647 $587,365,994
========== ========== ========== ========== ========== ==========
Undistributed net investment income
included in net assets:
Beginning of period.................. $ 544,751 $ 259,824 $ 998,757 $ 469,533 $ 1,121,082 $ 746,662
========== ========== ========== ========== ========== ==========
End of period........................ $ 758,716 $ 544,751 $ 1,008,308 $ 998,757 $ 768,957 $ 1,121,082
========== ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
for the six months ended August 31, 1995 (unaudited)
and the year ended February 28, 1995
Franklin
Franklin Puerto Rico Federal Intermediate-Term Franklin High Yield
Tax-Free Income Fund Tax-Free Income Fund Tax-Free Income Fund
--------------------- -------------------- ------------------------
Six months Six months Six months
ended Year ended ended Year ended ended Year ended
8/31/95 2/28/95 8/31/95 2/28/95 8/31/95 2/28/95
---------- ---------- --------- --------- ------------ ------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income............. $ 5,270,069 $ 10,269,086 $ 1,980,273 $ 3,802,962 $ 116,097,930 $ 225,321,624
Net realized gain (loss) from
security transactions.............. 1,057,398 (429,424) 14,464 (1,082,205) 1,930,907 (23,498,580)
Net unrealized appreciation
(depreciation) on investments...... 1,652,127 (7,065,161) 2,094,606 (1,170,078) 82,254,417 (130,650,901)
---------- ---------- --------- --------- ------------ ------------
Net increase in net assets
resulting from operations.......... 7,979,594 2,774,501 4,089,343 1,550,679 200,283,254 71,172,143
Distributions to shareholders from
undistributed net investment income:
Class I........................... (5,412,181) (10,528,194) (1,955,597) (3,704,591) (115,193,781) (225,313,301)
Class II.......................... (653) -- -- -- (136,084) --
Increase in net assets from capital
share transactions (Note 2)........ 4,931,343 9,605,221 1,234,303 8,528,230 136,277,091 68,877,600
---------- ---------- --------- --------- ------------ ------------
Net increase in net assets.... 7,498,103 1,851,528 3,368,049 6,374,318 221,230,480 (85,263,558)
Net assets:
Beginning of period................ 176,887,501 175,035,973 73,977,292 67,602,974 3,287,269,636 3,372,533,194
---------- ---------- --------- --------- ------------ ------------
End of period...................... $184,385,604 $176,887,501 $77,345,341 $73,977,292 $3,508,500,116 $3,287,269,636
========== ========== ========= ========= ============ ============
Undistributed net investment income
included in net assets:
Beginning of period................ $ 151,704 $ 410,812 $ 164,387 $ 66,016 $ 2,525,462 $ 2,517,139
========== ========== ========= ========= ============ ============
End of period...................... $ 8,939 $ 151,704 $ 189,063 $ 164,387 $ 3,293,527 $ 2,525,462
========== ========== ========= ========= ============ ============
The accompanying notes are an integral part of these financial statements.
FRANKLIN TAX-FREE TRUST
Notes to Financial Statements (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Franklin Tax-Free Trust (the Trust) is an open-end, management investment company (mutual fund), registered under the Investment
Company Act of 1940 as amended. The Trust currently consists of twenty-seven separate funds (the Funds). This report pertains only
to the ten Funds included in the accompanying financial statements. Each of the Funds issues a separate series of the Trust's shares
and maintains a totally separate investment portfolio. The Trust's Franklin Connecticut Tax-Free Income Fund and the Franklin
Federal Intermediate-Term Tax-Free Income Fund are non-diversified, although all other Funds included in this report are
diversified.
Each Fund, except Franklin Indiana Tax-Free Income Fund and Franklin Federal Intermediate-Term Tax-Free Income Fund offers two
classes of shares, Class I and Class II. Class I shares are sold with a higher front-end sales charge than Class II shares. Each
class of shares may be subject to a contingent deferred sales charge and has the same rights, except with respect to the effect of
the respective sales charges, the distribution fees borne by each class, voting rights on matters affecting a single class and the
exchange privilege of each class.
The offering of Class II shares began May 1, 1995, at which time all previously outstanding shares became Class I shares. Realized
and unrealized gains or losses and net investment income, other than class specific expenses, are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their
financial statements. The policies are in conformity with generally accepted accounting principles for investment companies.
a. Security Valuations:
Tax-Free bonds generally trade in the over-the-counter market rather than on a national securities exchange. Often there are no
transactions in a particular security on any given day. In the absence of a recorded sale or reported bid and ask prices,
information with respect to bond and note transactions, quotations from bond dealers, market transactions in comparable securities
and various relationships between securities are used to determine the value of the security. The Trust may utilize a pricing
service, bank, or broker/dealer experienced in such matters to perform any of the pricing functions, under procedures approved by
the Board of Trustees. Other securities for which market quotations are not available, if any, are valued in accordance with
procedures established by the Board of Trustees.
b. Municipal Bonds or Notes with "Puts":
The Trust has purchased municipal bonds or notes with the right to resell the bonds or notes to the seller at an agreed upon price
or yield on a specified date or within a specified period (which will be prior to the maturity date of the bonds or notes). Such a
right to resell is commonly known as a "put." In determining the weighted average maturity of the Fund's portfolio, municipal bonds
and notes as to which the Fund holds a put are deemed to mature on the first day on which the put may be exercisable.
c. Income Taxes:
The Trust intends to continue to qualify for the tax treatment applicable to regulated investment companies under the Internal
Revenue Code and to make the requisite distributions to its shareholders which will be sufficient to relieve it from income and
excise taxes. Therefore, no income tax provision is required. Each Fund is treated as a separate entity in the determination of
compliance with the Internal Revenue Code.
d. Security Transactions:
Security transactions are accounted for on the date the securities are purchased or sold (trade date). Realized gains and losses on
security transactions are determined on the basis of specific identification for both financial statement and income tax purposes.
e. Investment Income, Expenses and Distributions:
Distributions to shareholders are recorded on the ex-dividend date. Interest income and estimated expenses are accrued daily. Bond
discount and premium, if any, are amortized as required by the Internal Revenue Code. The Funds normally declare dividends from
their net investment income daily and distribute monthly. Daily allocations of net investment income will commence on the date
following receipt of an investor's funds. Dividends are normally declared each day the New York Stock Exchange is open for business
and are equal to an amount per day set from time to time by the Board of Trustees, and are payable to shareholders of record at the
beginning of business on the ex-date. Once each month, dividends are reinvested in additional shares of the Funds or paid in cash as
requested by the shareholders.
Net investment income differs for financial statement and tax purposes primarily due to differing treatments of defaulted securities
- - see Note 6.
Net realized capital gains (losses) differ for financial statement and tax purposes primarily due to differing treatment of wash
sale transactions.
f. Securities Purchased on a When-Issued or Delayed Delivery Basis:
The Funds may trade securities on a when-issued or delayed delivery basis, with payment and delivery scheduled for a future date.
These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less
than the trade date purchase price. Although the Funds will generally purchase these securities with the intention of acquiring such
securities, it may sell such securities before the settlement date. These securities are identified on the accompanying Statement of
Investments in Securities and Net Assets. The Funds have set aside sufficient investment securities as collateral for these purchase
commitments.
g. Expense Allocation:
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. In all other respects, expenses are charged to each Fund as incurred on a specific identification basis.
2. TRUST SHARES
At August 31, 1995, there was an unlimited number of no par value shares of beneficial interest authorized. Transactions in each of
the Funds' shares were as follows:
Franklin Arizona Franklin Colorado Franklin Connecticut
Tax-Free Income Fund Tax-Free Income Fund Tax-Free Income Fund
-------------------- ------------------- -------------------
Class I Shares: Shares Amount Shares Amount Shares Amount
-------- ----------- -------- ---------- -------- ----------
Six months ended August 31, 1995
<S> <C> <C> <C> <C> <C> <C>
Shares sold .................................. 2,812,386 $ 31,645,900 1,078,812 $12,417,462 974,340 $10,455,359
Shares issued in reinvestment of distributions . 707,657 7,951,478 237,643 2,732,074 194,547
2,086,153
Shares redeemed .............................. (3,304,416) (37,162,495) (1,073,928) (12,373,481) (783,360) (8,405,977)
Changes from exercise of exchange privilege:
Shares sold ................................. 745,813 8,372,990 350,859 4,038,315 222,162 2,382,638
Shares redeemed ............................. (862,574) (9,708,880) (202,705) (2,332,220) (237,539) (2,552,189)
-------- ----------- -------- ---------- -------- ----------
Net increase .................................. 98,866 $ 1,098,993 390,681 $ 4,482,150 370,150 $ 3,965,984
======== =========== ======== ========== ======== ==========
Year ended February 28, 1995
Shares sold................................... 5,646,769 $ 62,441,554 1,955,372 $ 22,063,990 1,666,535 $17,694,383
Shares issued in reinvestment of distributions 1,384,253 15,228,881 455,423 5,103,940 375,978
3,969,521
Shares redeemed............................... (9,414,765) (103,131,385) (2,107,989) (23,560,686) (1,845,431) (19,542,325)
Changes from exercise of exchange privilege:
Shares sold.................................... 2,264,505 24,916,493 657,508 7,362,556 557,731 5,870,205
Shares redeemed................................ (3,821,650) (41,835,775) (799,379) (8,911,826) (648,275) (6,797,330)
-------- ----------- -------- ---------- -------- ----------
Net increase (decrease)........................ (3,940,888) $ (42,380,232) 160,935 $ 2,057,974 106,538 $ 1,194,454
======== =========== ======== ========== ======== ==========
Class II Shares:
Period ended August 31, 1995*
Shares sold .................................. 46,827 $530,266 35,292 $ 407,258 37,926 $ 409,318
Shares issued in reinvestment of distributions 220 2,483 220 2,527 61
661
Changes from exercise of exchange privilege:
Shares sold ................................. 93 1,062 -- -- -- --
Shares redeemed ............................. (6,890) (77,591) -- -- -- --
-------- ----------- -------- ---------- -------- ----------
Net increase .................................. 40,250 $ 456,220 35,512 $ 409,785 37,987 $ 409,979
======== =========== ======== ========== ======== ==========
*For the period May 1, 1995 to August 31, 1995
Franklin Indiana Franklin New Jersey Franklin Oregon Franklin Pennsylvania
Tax-Free Income Fund Tax-Free Income Fund Tax-Free Income Fund Tax-Free Income Fund
----------------- ------------------- ------------------- -------------------
Class I Shares: Shares Amount Shares Amount Shares Amount Shares Amount
------- --------- -------- ---------- -------- ---------- -------- ---------
Six months ended
August 31, 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold ........... 166,071 $ 1,914,154 2,690,747 $ 30,713,924 1,325,547 $15,039,244 3,484,239 $35,735,138
Shares issued in
reinvestment of
distributions .......... 64,246 739,358 674,624 7,698,539 478,729 5,427,878 733,632 7,519,741
Shares redeemed ....... (140,099) (1,611,992) (2,594,610) (29,633,611) (1,589,136) (18,029,859) (2,743,031) (28,161,310)
Changes from exercise
of exchange privilege:
Shares sold ......... 60,877 699,171 583,036 6,652,497 474,457 5,377,620 419,505 4,299,325
Shares redeemed ..... (117,418) (1,344,087) (609,807) (6,966,755) (346,795) (3,941,030) (484,659) (4,975,185)
------- --------- -------- ---------- -------- ---------- -------- ---------
Net increase ............ 33,677 $ 396,604 743,990 $ 8,464,594 342,802 $ 3,873,853 1,409,686 $14,417,709
======= ========= ======== ========== ======== ========== ======== =========
Year ended
February 28,1995
Shares sold............ 479,238 $5,481,873 5,599,603 $62,811,165 2,739,651 $ 30,534,821 5,893,160 $59,562,177
Shares issued in
reinvestment of
distributions........... 123,848 1,403,344 1,350,479 15,038,104 958,138 10,573,320 1,390,042 13,969,534
Shares redeemed......... (381,926) (4,328,500) (6,523,437) (72,511,291) (4,406,311) (48,518,404) (7,598,699) (76,334,718)
Changes from exercise
of exchange privilege:
Shares sold........... 240,554 2,738,742 1,372,794 15,366,322 1,036,928 11,489,741 1,148,739 11,498,117
Shares redeemed....... (361,248) (4,144,647) (1,930,232) (21,397,992) (1,297,824) (14,236,116) (1,274,014) (12,877,246)
------- --------- -------- ---------- -------- ---------- -------- ---------
Net increase (decrease).. 100,466 $1,150,812 (130,793) $ (693,692) (969,418) $(10,156,638) (440,772)$ (4,182,136)
======= ========= ======== ========== ======== ========== ======== =========
Class II Shares:
Period ended
August 31, 1995*
Shares sold ........... -- -- 84,635 $ 971,905 51,384 $ 587,138 77,013 $ 794,440
Shares issued in
reinvestment of
distributions .......... -- -- 376 4,300 246 2,800 434 4,461
Shares redeemed ....... -- -- -- -- (696) (7,891) (2,780) (28,895)
Changes from exercise
of exchange privilege:
Shares redeemed ..... -- -- -- -- -- -- (241) (2,500)
------- --------- -------- ---------- -------- ---------- -------- ---------
Net increase ............ -- -- 85,011 $ 976,205 50,934 $ 582,047 74,426 $ 767,506
======= ========= ======== ========== ======== ========== ======== =========
*For the period May 1, 1995 to August 31, 1995.
Franklin Federal
Franklin Puerto Rico Intermediate-Term Franklin High Yield
Tax-Free Income Fund Tax-Free Income Fund Tax-Free Income Fund
------------------- ------------------- ----------------------
Class I Shares: Shares Amount Shares Amount Shares Amount
-------- ---------- -------- ---------- --------- -----------
Six months ended August 31, 1995
<S> <C> <C> <C> <C> <C> <C>
Shares sold ................................. 917,709 $10,468,904 674,049 $ 7,167,361 22,134,785 $241,819,184
Shares issued in reinvestment of distributions 221,773 2,526,378 101,140 1,074,762 3,890,152
42,461,613
Shares redeemed ............................. (698,337) (7,958,104) (613,468) (6,534,070) (15,121,673) (165,180,570)
Changes from exercise of exchange privilege:
Shares sold ................................ 237,906 2,709,471 341,698 3,638,701 4,412,085 48,160,897
Shares redeemed ............................ (256,133) (2,926,583) (387,461) (4,112,451) (4,163,412) (45,429,806)
-------- ---------- -------- ---------- --------- -----------
Net increase ................................. 422,918 $ 4,820,066 115,958 $ 1,234,303 11,151,937 $121,831,318
======== ========== ======== ========== ========= ===========
Year ended February 28, 1995
Shares sold.................................. 1,906,311 $ 21,445,195 2,003,138 $20,888,755 36,186,846 $387,896,565
Shares issued in reinvestment of distributions 430,325 4,807,107 194,246 2,014,030 7,406,651
78,941,613
Shares redeemed.............................. (1,389,460) (15,447,536) (1,474,415) (15,261,079) (35,286,473) (374,860,989)
Changes from exercise of exchange privilege:
Shares sold................................. 562,606 6,169,049 2,030,746 21,044,664 16,990,981 180,683,638
Shares redeemed............................. (670,010) (7,368,594) (1,953,247) (20,158,140) (19,190,861) (203,783,227)
-------- ---------- -------- ---------- --------- -----------
Net increase.................................. 839,772 $ 9,605,221 800,468 $ 8,528,230 6,107,144 $ 68,877,600
======== ========== ======== ========== ========= ===========
Class II Shares:
Period ended August 31, 1995*
Shares sold ................................. 9,702 $ 110,980 -- -- 1,318,230 $ 14,494,486
Shares issued in reinvestment of distributions 27 308 -- -- 5,275
57,915
Shares redeemed ............................. (1) (11) -- -- (1,862) (20,578)
Changes from exercise of exchange privilege:
Shares sold ................................ -- -- -- -- 3,370 36,965
Shares redeemed ............................ -- -- -- -- (11,234) (123,015)
-------- ---------- -------- ---------- --------- -----------
Net increase ................................. 9,728 $ 111,277 -- -- 1,313,779 $ 14,445,773
======== ========== ======== ========== ========= ===========
*For the Period May 1, 1995 to August 31, 1995
3. DISTRIBUTIONS AND CAPITAL LOSS CARRYOVERS
At February 28, 1995, for tax purposes, the Funds had accumulated net capital loss carryovers as follows:
Franklin Franklin Franklin Franklin Franklin
Arizona Colorado Connecticut Indiana New Jersey
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
-------- -------- -------- -------- ---------
Capital loss carryovers
<S> <C> <C> <C> <C> <C>
Expiring in: 1997 ........................................ $-- $-- $-- $ 3,344 $--
1999 ..................................................... -- 31,579 -- 24,809 --
2001 ..................................................... 479,467 224,977 261,598 -- --
2002 ..................................................... -- 57,349 -- 115,564 836,134
2003 ..................................................... 958,178 3,447,577 5,817,978 1,083,250 9,684,159
-------- -------- -------- -------- ---------
$1,437,645 $3,761,482 $6,079,576 $1,226,967 $10,520,293
======== ======== ======== ======== =========
Franklin Franklin Franklin Franklin Franklin
Oregon Pennsylvania Puerto Rico Intermediate- High Yield
Tax-Free Tax-Free Tax-Free Term Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
-------- -------- -------- --------- ---------
Capital loss carryovers
Expiring in: 1996 ....................................... $-- $-- $138,864 $-- $--
1997 .................................................... -- -- 47,310 -- --
1999 .................................................... 24,807 132,175 25,692 -- --
2000 .................................................... -- 122,364 -- -- --
2001 .................................................... 262,334 308,838 -- -- --
2002 .................................................... 54,202 -- 120,112 13,267 32,890,733
2003 .................................................... 5,075,995 4,262,862 429,583 1,082,205 23,501,819
-------- -------- -------- --------- ---------
$5,417,338 $4,826,239 $761,561 $1,095,472 $56,392,552
======== ======== ======== ========= =========
For tax purposes, the aggregate cost of securities is higher (and unrealized appreciation is lower) than for financial reporting
purposes at August 31, 1995, by $12,910 in the Franklin Arizona Tax-Free Income Fund, $888 in the Franklin Colorado Tax-Free Income
Fund, $45,872 in the Franklin Connecticut Tax-Free Income Fund, $33,124 in the Franklin Puerto Rico Tax-Free Income Fund and $7,875
in the Franklin High Yield Tax-Free Income Fund.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding purchases and sales of short-term securities) for the period ended August 31, 1995,
were as follows:
Franklin Franklin Franklin Franklin Franklin
Arizona Colorado Connecticut Indiana New Jersey
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
---------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Purchases.............................................. $118,172,163 $34,512,229 $12,261,274 $1,962,500 $23,969,990
========== ========= ========= ======== =========
Sales.................................................. $111,468,009 $28,788,517 $ 3,193,025 -- $10,560,230
========== ========= ========= ======== =========
Franklin
Franklin Franklin Franklin Federal Franklin
Oregon Pennsylvania Puerto Rico Intermediate- High Yield
Tax-Free Tax-Free Tax-Free Term Tax-Free Tax-Free
Income Fund Income Fund Income Fund Income Fund Income Fund
--------- --------- --------- --------- ----------
Purchases............................................ $17,378,492 $42,774,640 $40,611,446 $3,564,312 $255,110,995
========= ========= ========= ========= ==========
Sales................................................ $ 9,708,006 $30,495,046 $35,929,830 $1,033,247 $140,808,461
========= ========= ========= ========= ==========
5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Franklin Advisers, Inc., under the terms of a management agreement, provides investment advice, administrative services, office
space and facilities to each Fund, and receives fees computed monthly based on the net assets of each Fund on the last day of the
month at an annualized rate of 5/8 of 1% of the first $100 million of net assets, 1/2 of 1% of net assets in excess of $100 million
up to and including $250 million, 45/100 of 1% of net assets in excess of $250 million. The terms of the management agreement
provide that aggregate annual expenses of each Fund be limited to the extent necessary to comply with the limitations set forth in
the laws, regulations and administrative interpretations of the states in which each Fund's shares are registered. For the period
ended August, 31, 1995, the Funds' expenses did not exceed these limitations; however, Franklin Advisers, Inc., agreed in advance to
waive $98,245 of the management fees for the Franklin Federal Intermediate-Term Tax-Free Income Fund.
In its capacity as underwriter for the shares of the Funds, Franklin/Templeton Distributors, Inc., receives commissions on sales of
the Funds' shares. Commissions are deducted from the gross proceeds received from the sale of each Funds' shares, and as such are
not expenses of the Funds. Franklin/Templeton Distributors, Inc., may also make payments, out of its own resources, to the dealers
for certain sales of Class I and Class II shares. Commissions received by Franklin/Templeton Distributors, Inc., and the amounts
paid to other dealers for the six months ended August 31, 1995, were as follows:
Franklin Franklin Franklin Franklin Franklin
Arizona Colorado Connecticut Indiana New Jersey
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Class I Income Fund Income Fund Income Fund Income Fund Income Fund
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total commissions received................................. $1,034,866 $445,727 $369,174 $70,880 $1,119,743
======== ======== ======== ======== ========
Paid to other dealers...................................... $ 990,128 $415,896 $345,110 $66,585 $1,051,840
======== ======== ======== ======== ========
Class II
Total commissions received................................. $ 5,273 $ 4,234 $ 4,171 -- $ 10,068
======== ======== ======== ======== ========
Paid to other dealers...................................... $ 10,706 $ 8,210 $ 8,222 -- $ 20,636
======== ======== ======== ======== ========
Franklin
Franklin Franklin Franklin Federal Franklin
Oregon Pennsylvania Puerto Rico Intermediate- High Yield
Tax-Free Tax-Free Tax-Free Term Tax-Free Tax-Free
Class I Income Fund Income Fund Income Fund Income Fund Income Fund
-------- -------- -------- --------- --------
Total commissions received................................ $518,026 $1,228,655 $379,382 $102,884 $8,000,160
======== ======== ======== ========= ========
Paid to other dealers..................................... $494,137 $1,172,432 $355,402 $ 96,310 $7,616,954
======== ======== ======== ========= ========
Class II
Total commissions received................................ $ 5,978 $ 8,051 $ 1,143 -- $ 145,139
======== ======== ======== ========= ========
Paid to other dealers..................................... $ 11,565 $ 14,928 $ 2,129 -- $ 290,412
======== ======== ======== ========= ========
Franklin/Templeton Distributors, Inc. also received contingent deferred sales charges of $9,615 and $9,828, respectively, relating
to transactions in the Franklin Pennsylvania Tax-Free Income Fund and the Franklin High Yield Tax-Free Income Fund for Class I
shares and $78, $289 and $162, respectively, relating to transactions in the Franklin Oregon Tax-Free Income Fund, the Franklin
Pennsylvania Tax-Free Income Fund and the Franklin High Yield Tax-Free Income Fund for Class II shares.
Under the terms of a shareholder service agreement with Franklin/Templeton Investor Services, Inc., the Trust pays costs on a per
shareholder account basis. Shareholder servicing costs incurred by the ten Funds for the six months ended August 31, 1995,
aggregated $654,393, of which $607,169, was paid to Franklin/Templeton Investor Services, Inc.
Under the terms of a Distribution Plan pursuant to Rule 12b-1 of the Investment Company Act of 1940, which was effective for the
Franklin Federal Intermediate-Term Tax-Free Income Fund prior to March 1, 1994 and which became effective for the other funds on May
1, 1994, for Class I shares, and which became effective for Class II shares on May 1, 1995, the Funds will reimburse
Franklin/Templeton Distributors, Inc., in an amount up to a maximum of 0.10% and 0.65% per annum, respectively, of the average daily
net assets of each class for costs incurred in the promotion, offering and marketing of the Class I and II shares. Fees incurred by
the Funds under the agreement aggregated $2,449,282 for the period ended August 31, 1995.
Certain officers and trustees of the Trust are also officers and/or directors of Franklin/Templeton Distributors, Inc., Franklin
Advisers, Inc., and Franklin/Templeton Investor Services, Inc., all wholly-owned subsidiaries of Franklin Resources, Inc.
6. CREDIT RISK
Although each of the Funds, other than the Franklin Connecticut Tax-Free Income Fund and the Franklin Federal Intermediate-Term
Tax-Free Income Fund, has a diversified investment portfolio, all of their investments are in the securities of issuers within their
respective states and US territories and possessions except for the Franklin Federal Intermediate-Term Tax-Free Income Fund and the
Franklin High Yield Tax-Free Income Fund. The Franklin Federal Intermediate-Term Tax-Free Income Fund has investments in excess of
10% of its total net assets in the states of California and Florida. The Franklin High Yield Tax-Free Income Fund has investments in
excess of 10% of its total net assets in the states of California and New York. Such concentration may subject these Funds more
significantly to economic changes occurring within those states and US territories and possessions.
Although the Franklin High Yield Tax-Free Income Fund has a diversified portfolio, the Fund has 31.9% of its portfolio invested in
lower rated and comparable quality unrated high yield securities. Investments in higher yield securities are accompanied by a
greater degree of credit risk and such lower quality securities tend to be more sensitive to economic conditions than higher rated
securities.
The risk of loss due to default by the issuer may be significantly greater for the holders of high yielding securities, because such
securities are generally unsecured and are often subordinated to other creditors of the issuer. At August 31, 1995, the Franklin
High Yield Tax-Free Income Fund held two defaulted securities issued by two separate entities, with a value aggregating $4,232,500,
representing 0.12% of the Fund's net assets. For more information as to the specific securities, see the accompanying Statement of
Investments in Securities and Net Assets.
For financial reporting purposes, it is the Fund's accounting practice to discontinue accrual of income and provide an estimate for
probable losses due to unpaid interest income on defaulted bonds for the current reporting period.
7. FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding throughout the years, by Fund, are as follows:
Per Share Operating Performance Ratios/Supplemental Data
---------------------------------------------------- ----------------------------
Net Distri- Distri- Ratio of Net
Net Asset Net Realized & butions butions Net Asset Ratio of Investment
Year Value at Invest- Unrealized Total From From Net From Total Value Net Assets at Expenses Income Portfolio
Ended Beginning ment Gain (Loss) Investment InvestmentCapitalDistri- at End Total End of Year to Average to Average Turnover
Feb.28 of Year Income on SecuritiesOperations Income Gains butions of Year Return++(in 000's) Net Assets** Net Assets Rate
- ------------------------------------------------------------------------------------------------------------------------------------
Franklin Arizona Tax-Free Income Fund:
Class I Shares:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1991 $10.51 $.70 $ .128 $ .828 $(.768) $-- $(.768) $10.57 7.92% $ 412,912 .59% 6.58% 4.13%
1992 10.57 .67 .308 .978 (.728) -- (.728) 10.82 9.45 585,986 .56 6.37 1.56
1993 10.82 .68 .733 1.413 (.663) -- (.663) 11.57 13.22 707,702 .55 6.11 5.67
1994 11.57 .66 .020 .680 (.670) -- (.670) 11.58 5.76 796,838 .54 5.65 14.17
1995 11.58 .65 (.481) .169 (.639) -- (.639) 11.11 1.63 720,801 .60 5.86 18.65
19952 11.11 .32 .219 .539 (.329) -- (.329) 11.32 4.90 735,839 .62* 5.77* 15.44
Class II Shares:
19953 11.15 .21 .194 .404 (.194) -- (.194) 11.36 3.65 457 1.27* 5.56* 15.44
Franklin Colorado Tax-Free Income Fund:
Class I Shares:
1991 10.70 .70 .056 .756 (.756) -- (.756) 10.70 7.07 69,715 .74 6.54 17.72
1992 10.70 .68 .361 1.041 (.741) -- (.741) 11.00 9.93 110,085 .70 6.44 21.46
1993 11.00 .70 .845 1.545 (.695) -- (.695) 11.85 14.26 159,280 .67 6.20 5.66
1994 11.85 .68 .100 .780 (.690) -- (.690) 11.94 6.49 202,158 .64 5.69 10.85
1995 11.94 .67 (.568) .102 (.662) -- (.662) 11.38 1.05 194,564 .70 5.94 28.83
19952 11.38 .33 .255 .585 (.335) -- (.335) 11.63 5.21 203,345 .72* 5.83* 14.71
Class II Shares:
19953 11.40 .20 .248 .448 (.198) -- (.198) 11.65 3.96 414 1.25* 5.05* 14.71
Franklin Connecticut Tax-Free Income Fund:
Class I Shares:
1991 10.36 .64 .024 .664 (.684) -- (.684) 10.34 6.39 48,035 .71 6.10 8.65
1992 10.34 .62 .211 .831 (.681) -- (.681) 10.49 8.16 88,184 .71 6.11 28.28
1993 10.49 .64 .664 1.304 (.634) -- (.634) 11.16 12.60 126,816 .69 5.97 28.52
1994 11.16 .62 .080 .700 (.630) -- (.630) 11.23 6.16 163,050 .65 5.54 5.54
1995 11.23 .62 (.597) .023 (.613) -- (.613) 10.64 .37 155,623 .71 5.83 75.72
19952 10.64 .31 .170 .480 (.310) -- (.310) 10.81 4.57 162,127 .73* 5.78* 2.06
Class II Shares:
19953 10.65 .19 .183 .373 (.183) -- (.183) 10.84 3.52 412 1.29* 5.35* 2.06
Franklin Indiana Tax-Free Income Fund:
Class I Shares:
1991 10.77 .74 .096 .836 (.776) -- (.776) 10.83 7.78 14,946 .51 6.91 24.60
1992 10.83 .69 .325 1.015 (.775) -- (.775) 11.07 9.53 23,914 .50 6.60 .03
1993 11.07 .71 .828 1.538 (.708) -- (.708) 11.90 14.10 37,367 .59 6.16 7.98
1994 11.90 .68 .108 .788 (.678) -- (.678) 12.01 6.53 47,870 .71 5.62 16.12
1995 12.01 .66 (.608) .052 (.662) -- (.662) 11.40 .58 46,583 .81 5.84 26.49
19952 11.40 .34 .195 .535 (.335) -- (.335) 11.60 4.75 47,794 .81* 5.86* --
Per Share Operating Performance Ratios/Supplemental Data
---------------------------------------------------- ----------------------------
Net Distri- Distri- Ratio of Net
Net Asset Net Realized & butions butions Net Asset Ratio of Investment
Year Value at Invest- Unrealized Total From From Net From Total Value Net Assets at Expenses Income Portfolio
Ended Beginning ment Gain (Loss) Investment InvestmentCapital Distri- at End Total End of Year to Average to Average Turnover
Feb.28 of Year Income on SecuritiesOperations Income Gains butions of Year Return++(in 000's) Net Assets** Net Assets Rate
- ------------------------------------------------------------------------------------------------------------------------------------
Franklin New Jersey Tax-Free Income Fund:
Class I Shares:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1991 $10.68 $.69 $.238 $ .928 $(.768) $-- $(.768) $10.84 8.79% $ 258,514 .65% 6.40% 1.84%
1992 10.84 .68 .348 1.028 (.708) -- (.708) 11.16 9.65 332,536 .60 6.30 3.66
1993 11.16 .69 .694 1.384 (.688) (.006) (.694) 11.85 12.55 433,702 .59 6.06 14.12
1994 11.85 .67 (.016) .654 (.684) -- (.684) 11.82 5.39 561,130 .57 5.60 4.16
1995 11.82 .66 (.550) .110 (.650) -- (.650) 11.28 1.12 533,937 .63 5.86 31.05
19952 11.28 .33 .213 .543 (.323) -- (.323) 11.50 4.86 552,654 .66* 5.73* 1.98
Class II Shares:
19953 11.30 .20 .220 .420 (.190) -- (.190) 11.53 3.74 980 1.20* 5.03* 1.98
Franklin Oregon Tax-Free Income Fund:
Class I Shares:
1991 10.59 .68 .148 .828 (.708) -- (.708) 10.71 7.87 123,486 .70 6.40 10.74
1992 10.71 .63 .384 1.014 (.704) -- (.704) 11.02 9.61 208,972 .65 6.09 4.65
1993 11.02 .66 .702 1.362 (.652) -- (.652) 11.73 12.52 303,719 .62 5.87 7.78
1994 11.73 .64 (.021) .619 (.649) -- (.649) 11.70 5.15 375,684 .58 5.47 9.42
1995 11.70 .63 (.493) .137 (.617) -- (.617) 11.22 1.36 349,458 .65 5.71 26.44
19952 11.22 .32 .216 .536 (.316) -- (.316) 11.44 4.84 360,229 .66* 5.59* 2.78
Class II Shares:
19953 11.24 .19 .236 .426 (.186) -- (.186) 11.48 3.81 584 1.21* 3.31* 2.78
Franklin Pennsylvania Tax-Free Income Fund:
Class I Shares:
1991 9.65 .65 (.090) .560 (.720) -- (.720) 9.49 5.76 305,592 .62 6.82 5.23
1992 9.49 .64 .380 1.020 (.670) -- (.670) 9.84 10.99 391,301 .59 6.71 4.44
1993 9.84 .64 .703 1.343 (.633) -- (.633) 10.55 13.84 505,845 .58 6.34 5.87
1994 10.55 .63 .014 .644 (.634) -- (.634) 10.56 5.99 615,546 .56 5.90 4.73
1995 10.56 .62 (.406) .214 (.614) -- (.614) 10.16 2.22 587,366 .63 6.15 12.91
19952 10.16 .31 .166 .476 (.316) -- (.316) 10.32 4.75 611,131 .65* 6.05* 5.17
Class II Shares:
19953 10.17 .19 .171 .361 (.191) -- (.191) 10.34 3.57 770 1.19* 5.09* 5.17
Franklin Puerto Rico Tax-Free Income Fund:
Class I Shares:
1991 10.76 .76 .040 .800 (.720) -- (.720) 10.84 7.45 91,601 .70 7.08 6.09
1992 10.84 .69 .301 .991 (.711) -- (.711) 11.12 9.31 112,714 .70 6.45 15.01
1993 11.12 .70 .673 1.373 (.683) -- (.683) 11.81 12.48 144,806 .69 6.18 10.37
1994 11.81 .68 .034 .714 (.694) -- (.694) 11.83 5.95 175,036 .66 5.77 5.10
1995 11.83 .67 (.504) .166 (.686) -- (.686) 11.31 1.60 176,888 .73 5.95 18.30
19952 11.31 .33 .170 .500 (.340) -- (.340) 11.47 4.48 184,274 .74* 5.81* 20.08
Class II Shares:
19953 11.32 .20 .170 .370 (.200) -- (.200) 11.49 3.30 112 1.23* 4.66* 20.08
Franklin Federal Intermediate-Term Tax-Free Income Fund:
Class I Shares:
19931 10.00 .14 .499 .639 (.099) -- (.099) 10.54 14.77* 9,192 -- 5.49* 22.54
1994 10.54 .52 .289 .809 (.549) -- (.549) 10.80 7.82 67,603 .30 4.93 28.76
1995 10.80 .54 (.331) .209 (.529) -- (.529) 10.48 (.20) 73,977 .56 5.25 38.46
19952 10.48 .28 .295 .575 (.275) -- (.275) 10.78 5.55 77,345 .65* 5.23* 1.41
Per Share Operating Performance Ratios/Supplemental Data
---------------------------------------------------- ----------------------------
Net Distri- Distri- Ratio of Net
Net Asset Net Realized & butions butions Net Asset Ratio of Investment
Year Value at Invest- Unrealized Total From From Net From Total Value Net Assets at Expenses Income Portfolio
Ended Beginning ment Gain (Loss) Investment InvestmentCapital Distri- at End Total End of Year to Average to Average Turnover
Feb.28 of Year Income on SecuritiesOperations Income Gains butions of Year Return++(in 000's) Net Assets** Net Assets Rate
- ------------------------------------------------------------------------------------------------------------------------------------
Franklin High Yield Tax-Free Income Fund:
Class I Shares:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1991 $10.54 $.82 $(.210) $ .610 $(.840) $-- $(.840) $10.31 5.71% $1,718,082 .52% 7.90% 70.60%
1992 10.31 .78 .230 1.010 (.840) -- (.840) 10.48 9.97 2,110,055 .53 7.73 102.57
1993 10.48 .79 .624 1.414 (.784) (.010) (.794) 11.10 13.72 2,742,765 .54 7.45 33.46
1994 11.10 .76 .169 .929 (.779) -- (.779) 11.25 8.33 3,372,533 .53 6.79 16.09
1995 11.25 .74 (.509) .231 (.741) -- (.741) 10.74 2.28 3,287,270 .60 6.92 15.89
19952 10.74 .37 .281 .651 (.371) -- (.371) 11.02 6.14 3,493,973 .60 6.84* 4.27
Class II Shares:
19953 10.81 .23 .243 .473 (.223) -- (.223) 11.06 4.40 14,527 1.16* 6.16* 4.27
*Annualized
1For the period September 21, 1992 (effective date of registration) to February 28, 1993.
2For the six months ended August 31, 1995.
3For the period May 1, 1995 to August 31, 1995.
**During the periods indicated below, Franklin Advisers, Inc., the investment manager, agreed in advance to waive a portion of its
management fees and made payments of other expenses incurred by the Funds. Had such action not been taken, ratios of operating
expenses to average net assets would have been as follows:
Ratio of expenses
to average net assets
--------------
Franklin Connecticut Tax-Free Income Fund
<S> <C>
1991........................................... 0.72%
Franklin Indiana Tax-Free Income Fund
1991........................................... 0.74
1992........................................... 0.74
1993........................................... 0.73
Franklin Federal Intermediate-Term Tax-Free Income Fund
19931.......................................... 1.60*
1994........................................... 0.89
1995........................................... 0.84
19952.......................................... 0.91*
+Ratios have been calculated using the daily average net assets during the period.
++Total return measures the change in value of an investment over the periods indicated. It is not annualized. It does not include
the maximum initial sales charge or the deferred contingent sales charge. The total return for Class I also assumes reinvestment of
dividends at net asset value for the Franklin Federal Intermediate-Term Tax-Free Income Fund, and at the maximum offering price for
the other funds, and of capital gains, if any, at net asset value. Effective May 1, 1994, with the implementation of the Rule 12b-1
distribution plan, for Class I shares, as discussed in Note 5, the Funds' existing sales charge on reinvested dividends has been
eliminated.
</TABLE>
Franklin Tax-Free Trust #3 Semi-Annual Report
APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING
(PURSUANT TO ITEM 304 (a) OF REGULATION S-T)
GRAPHIC MATERIAL (1)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 64.3%
AA 10.2%
A 10.4%
BBB 15.1%
</TABLE>
GRAPHIC MATERIAL (2)
This bar chart shows the comparison between the fund's disribution rate of 5.48%
and the taxable equivalent distribution rate of 9.75%, for Class I shares.
GRAPHIC MATERIAL (3)
This bar chart shows the comparison between the fund's disribution rate of 5.02%
and the taxable equivalent distribution rate of 8.93%, for Class II shares.
GRAPHIC MATERIAL (4)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 55.5%
AA 6.7%
A 13.3%
BBB 24.5%
</TABLE>
GRAPHIC MATERIAL (5)
This bar chart shows the comparison between the fund's disribution rate of 5.43%
and the taxable equivalent distribution rate of 9.46%, for Class I shares.
GRAPHIC MATERIAL (6)
This bar chart shows the comparison between the fund's disribution rate of 5.00%
and the taxable equivalent distribution rate of 8.71%, for Class II shares.
GRAPHIC MATERIAL (7)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 31.8%
AA 28.2%
A 15.2%
BBB 20.3%
BB 4.5%
</TABLE>
GRAPHIC MATERIAL (8)
This bar chart shows the comparison between the fund's disribution rate of 5.42%
and the taxable equivalent distribution rate of 9.39%, for Class I shares.
GRAPHIC MATERIAL (9)
This bar chart shows the comparison between the fund's disribution rate of 4.93
and the taxable equivalent distribution rate of 8.54%, for Class II shares.
GRAPHIC MATERIAL (10)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 50.1%
AA 8.0%
A 19.8%
BBB 22.1%
</TABLE>
GRAPHIC MATERIAL (11)
This bar chart shows the comparison between the fund's distribution rate of
5.45% and the taxable equivalent distribution rate of 9.35%.
GRAPHIC MATERIAL (12)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 52.6%
AA 15.6%
A 17.8%
BBB 11.5%
BB 2.5%
</TABLE>
GRAPHIC MATERIAL (13)
This bar chart shows the comparison between the fund's distribution rate of
5.30% and the taxable equivalent distribution rate of 9.40%, for Class I shares.
GRAPHIC MATERIAL (14)
This bar chart shows the comparison between the fund's distribution rate of
4.84% and the taxable equivalent distribution rate of 8.58%, for Class II
shares.
GRAPHIC MATERIAL (15)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 46.8%
AA 22.7%
A 21.3%
BBB 7.7%
BB 1.5%
</TABLE>
GRAPHIC MATERIAL (16)
This bar chart shows the comparison between the fund's distribution rate of
5.22% and the taxable equivalent distribution rate of 9.49%, for Class I shares.
GRAPHIC MATERIAL (17)
This bar chart shows the comparison between the fund's distribution rate of
4.76% and the taxable equivalent distribution rate of 8.65%, for Class II
shares.
GRAPHIC MATERIAL (18)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 51.6%
AA 11.4%
A 14.2%
BBB 22.5%
BB .3%
</TABLE>
GRAPHIC MATERIAL (19)
This bar chart shows the comparison between the fund's distribution rate of
5.79% and the taxable equivalent distribution rate of 9.86, for Class I shares.
GRAPHIC MATERIAL (20)
This bar chart shows the comparison between the fund's distribution rate of
5.40% and the taxable equivalent distribution rate of 9.20%, for Class II
shares.
GRAPHIC MATERIAL (21)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 28.4%
AA 1.3%
A 38.9%
BBB 31.4%
</TABLE>
GRAPHIC MATERIAL (22)
This bar chart shows the comparison between the fund's distribution rate of
5.51% and the taxable equivalent distribution rate of 9.12%, for Class I shares.
GRAPHIC MATERIAL (23)
This bar chart shows the comparison between the fund's distribution rate of
5.06% and the taxable equivalent distribution rate of 8.38%, for Class II
shares.
GRAPHIC MATERIAL (24)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 9.3%
AA 10.5%
A 26.1%
BBB 50.1%
BB 4.0%
</TABLE>
GRAPHIC MATERIAL (25)
This bar chart shows the comparison between the fund's distribution rate of
5.00% and the taxable equivalent distribution rate of 8.28%.
GRAPHIC MATERIAL (26)
This chart shows in pie chart format the fund'securities breakdown by sector as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 08/31/95
<S> <C>
AAA 13.9%
AA 3.4%
A 5.1%
BBB 45.7%
BELOW INVESMENT GRADE 31.9%
</TABLE>
GRAPHIC MATERIAL (27)
This bar chart shows the comparison between the fund's distribution rate of
6.36% and the taxable equivalent distribution rate of 10.53%, for Class I
shares.
GRAPHIC MATERIAL (28)
This bar chart shows the comparison between the fund's distribution rate of
5.91% and the taxable equivalent distribution rate of 9.78%, for Class II
shares.
