SHAREHOLDER LETTER
Dear Shareholder:
This semiannual report for Franklin California Tax-Free Trust covers the period
ended December 31, 1999.
BOND MARKET OVERVIEW
During the six months under review, U.S. bond markets continued to experience
challenging times. The yield on the benchmark 30-year Treasury bond steadily
increased, from 5.96% at the beginning of the reporting period, to 6.48% on
December 31, 1999 -- reaching a high of 6.49% on December 23, 1999. For the same
period, the 30-year Treasury bond price dropped 7.8%, as bond prices and yields
move in opposite directions so that as yields rise, bond prices fall. Concerned
about domestic inflationary tendencies, the Federal Reserve Board (the Fed)
raised the federal funds target rate from 5.00% to 5.50% in two incremental
steps during the reporting period.
The economy's direction and its effect on inflationary pressures will contribute
to the level of volatility that impacts bond markets in the near future. During
the period under review, many investors reacted swiftly to new releases of
economic data or Fed announcements, and in many instances the market
overcorrected. Investors with short-term investment horizons may view such
instability as unfavorable.
CONTENTS
Shareholder Letter ......... 1
Special Feature:
Uncovering Tax-Free
Opportunities .............. 4
Fund Reports
Franklin California Insured
Tax-Free Income Fund ...... 10
Franklin California
Intermediate-Term
Tax-Free Income Fund ...... 16
Franklin California
Tax-Exempt Money Fund ..... 20
Municipal Bond Ratings ..... 23
Financial Highlights &
Statement of Investments ... 26
Financial Statements ....... 54
Notes to
Financial Statements ....... 59
[PYRAMID GRAPHIC]
However, we prefer to take a long-term approach toward investing, and we find
that recent market fluctuations afforded us opportunities not only to increase
the funds' income-earning potential, but also to enhance the portfolios' overall
structures.
CALIFORNIA UPDATE
In California, the six-month review period marked the state's sixth consecutive
year of economic expansion and fifth straight year in which the state's economic
growth and job creation exceeded the national average. Although the state's 4.8%
unemployment rate still topped the 4.1% national average in October, this rate
dropped faster than the national average during the reporting period.(1)
California's economic expansion also translated into a record year for its
housing market, with an estimated 8% increase in the median home price for
1999.(2) The state's diversified and growing economy, as well as its improved
fiscal management, contributed to Moody's decision to upgrade California's debt
to Aa3 on October 15.(3) This marked the first time in eight years that Standard
& Poor's(R), Moody's Investors Service and Fitch IBCA Inc., three independent
credit rating agencies, have all viewed California's credit as double-A.
California ended fiscal 1999 with $9.6 billion in available resources, due to
general and special fund surpluses, the largest amount the state has had in over
two decades. These sizable balances, which should help cushion the negative
impacts of any future recessions, and projections for further California
economic growth, albeit at a slower rate than that of the last two years,
underlie the state's rosy credit outlook.(3)
1. Source: Bureau of Labor Statistics, 12/16/99.
2. Source: California Association of REALTORS, PR Newswire, 10/20/99.
3. Source: Moody's Investors Service, 10/15/99. This does not indicate Moody's
rating of the fund.
Municipal bond funds provide an opportunity to diversify risk in investors'
portfolios and continue to be an attractive investment for those seeking
tax-free income. Such a tax-free investment offers a taxable equivalent yield
that can be hard to match for a taxable investment with the same relative level
of risk.
We encourage you to discuss your financial goals with an investment
representative. Mutual funds offer a level of diversification that is difficult
for individual investors to achieve on their own. As always, we appreciate your
support, welcome your questions and look forward to serving your investment
needs in the years ahead.
Sincerely,
/s/ C. B. Johnson
Charles B. Johnson
Chairman
Franklin California Tax-Free Trust
/s/ Sheila Amoroso
Sheila Amoroso
/s/ Rafael R. Costas Jr.
Rafael R. Costas Jr.
Senior Vice Presidents/Co-Directors
Franklin Municipal Bond Department
WHAT DOES "TAXABLE EQUIVALENT" MEAN FOR YOU?
For yield and distribution rate, the taxable equivalent is the amount a taxable
investment would have to earn to match a tax-free investment such as municipal
bonds.(4) You can find your fund's taxable equivalent distribution rate and
yield in the Performance Summary that follows your fund's report.
4. For investors subject to the federal or state alternative minimum tax, a
portion of this income may be subject to such tax. Distributions of capital
gains and of ordinary income from accrued market discount, if any, are generally
taxable.
UNCOVERING TAX-FREE OPPORTUNITIES
SPECIAL FEATURE
[PHOTO OF RAFAEL COSTAS]
Rafael Costas, Senior Vice President and Co-Director of Franklin's Municipal
Bond Department, discusses how research is an integral part of Franklin's
tax-free income funds' success.
Q: Could you provide an overview of Franklin's research department?
RAFAEL COSTAS: We have one of the industry's largest municipal research staffs,
allowing us to routinely analyze more than 2,000 debt issuers a year. The
research department analysts work closely with our portfolio managers, who rely
on these analysts when making buy and sell decisions. With a focus on in-depth
research and the discipline to buy when others are selling, we often are able to
find exciting opportunities, at temporarily depressed prices. Generally, we
concentrate on investment grade issues. Of course, for our high yield funds, we
also look for below investment-grade bonds that we feel offer appropriate
rewards for the increased risk.
Q: What are some advantages of Franklin's size and reputation?
RAFAEL: Today, Franklin is one of the nation's leading tax-free fund managers.
Our size, with approximately $45 billion of tax-free investments, often enables
us to purchase investments at advantageous prices, which in turn, can help keep
investment costs low. We pass on these savings to shareholders in the form of
higher tax-free yields.(1) In addition, our size often makes us a favorite of
new issuers, as many prefer to work with a minimum number of investors.
This page is not part of the shareholder report.
Q: What type of tax-free bonds do you favor?
RAFAEL: We typically look for investment-grade bonds, as we try to provide our
shareholders high, current income with a relatively low level of risk. Most of
our investment grade tax-free bond funds are composed of a high percentage of
securities rated AAA or AA, the highest ratings bonds can receive from
independent credit rating agencies.(2) In addition, many of our purchases are
insured because of the prevalence of insurance in the municipal bond marketplace
in the past few years. Insured securities normally are rated AAA, further
improving the quality of our funds. For our high yield funds, we look for bonds
which may be out of favor but, in our view, still have solid fundamentals and
the potential to be upgraded. In fact, we devote much of our research efforts to
finding such bonds in the low investment-grade, high yield sectors.
Q: How do you research a bond?
RAFAEL: We emphasize detailed, high-quality research, which often enables us to
uncover attractive investments that others may have overlooked. When presented
with an opportunity, our analysts carefully consider such factors as the bond's
purpose, who will repay the bond, if the projections are reasonable, the payment
schedule and the issuer's credit history. We incorporate all of the numerical
findings in our internal, proprietary databases and spreadsheets created by our
analysts. With the processed information and analysis, we meet with our
portfolio managers to discuss the merits of each individual issue. The portfolio
manager's decision to buy a security will depend largely on our analysis of the
bond's credit quality and price. We continue to monitor our investments closely
after the purchase, looking for signs of potential problems as well as
additional opportunities.
1. For investors subject to the federal or state alternative minimum tax, a
portion of this income may be subject to such tax. Distributions of capital
gains and of ordinary income from accrued market discount, if any, are generally
taxable.
2. Ratings can change.
This page is not part of the shareholder report.
Q: Do you feel it is important to personally meet management and municipal
officials?
RAFAEL: Very much so. Each year Franklin's analysts and portfolio managers visit
hundreds of sites to garner an understanding that can be obtained only through
personal inspection. They meet face-to-face with the project's management and
municipal officials to discuss firsthand any potential problems. Our analysts
also can use these meetings to discover new opportunities, often before they are
widely known.
Q: Do issuers and investment bankers ever come to Franklin?
RAFAEL: Our sizable presence in the municipal bond market frequently means that
issuers and their bankers come to us with new issues. In a typical day, we may
receive between 50 and 100 calls from brokers offering new and secondary issues.
Approximately three times a week, investment bankers visit our offices, usually
as part of an issue's road show. We view these as excellent opportunities not
only to buy issues at favorable prices, but also to propose changes to the
issue, enhancing its quality and appeal to our distinct standards.
This page is not part of the shareholder report.
Q: How can Franklin's research influence the portfolio managers' investment
decisions?
RAFAEL: Our extensive research allows us to use a contrarian approach to
investing, because we firmly believe that near-term volatility can create
opportunities for greater long-term yields. For example, when Moody's, Standard
& Poor's or Fitch, three independent rating agencies, downgrade a bond, many
investors sell the issue, sometimes reducing prices to what we believe are
attractive levels. As we evaluate our investments based on our internal
assessments, we can use these valuable opportunities to purchase what we believe
are high-quality issues at temporarily depressed prices.
External events can also lead to situations where bonds become undervalued. Over
the past few years, for example, Medicare reform negatively affected the
hospital bond sector, even for those hospitals in strong financial shape. As
many hospitals' credit profiles weakened, we were able to find value selectively
through our analysts' expertise. Seeking to take advantage of this, we
recommended such bonds to our portfolio managers who purchased them at a time
when the market seemed to be shunning these issues.
WHAT IS A ROAD SHOW?
Before a new issue is brought to the public, the issuer and its investment
bankers travel around the country making presentations to potential investors
concerning the issuer's financial information and outlook.
This page is not part of the shareholder report.
Q: Could you provide an example of a successful outcome of your research?
RAFAEL: Sure. A perfect example is Tucson Electric Power (TEP). It issued $579
million in tax-exempt debt in 1997-98. However, the utility had a long, troubled
history and its debt was rated below investment grade. So, Molly Butler, our
electric utility analyst, and I flew to Tucson and spent an entire day with
TEP's top executives and division heads. We discussed their history, current
position and future plans as well as challenged and questioned many of their
projections and assumptions. At the end of the day, we were satisfied that their
management team had a clear vision and a realistic plan for the future.
[Photo]
Municipal research analyst Molly Butler discusses a bond issue with portfolio
manager Stella Wong.
This page is not part of the shareholder report.
Q: How is TEP doing today?
RAFAEL: Since then, the rating agencies have raised TEP's credit rating and the
bonds have seen a significant increase in value. Of course, the ratings can
change again in the future. However, the bonds are still offering above-market
yields for our shareholders, because we were able to purchase the securities
when they were unpopular. We have an excellent relationship with management and
they often call Ms. Butler to discuss the latest releases of information.
THANK YOU, RAFAEL.
This page is not part of the shareholder report.
FRANKLIN CALIFORNIA INSURED
TAX-FREE INCOME FUND
Your Fund's Goal: Franklin California Insured Tax-Free Income Fund seeks to
provide high, current income exempt from regular federal and California state
personal income taxes while seeking preservation of capital by investing
primarily in a portfolio of insured California municipal securities.(1,2)
Domestic economic expansion and recovery abroad contributed to rising interest
rates during the six-month reporting period, even though this growth took place
with only moderate inflation. As interest rates increased, bond yields rose
accordingly. As of the reporting period's end, bond traders and investors feared
that continued economic growth, coupled with a tight labor market and rising
commodity prices, would lead to further Federal Reserve Board interest-rate
hikes. These fears resulted in negative sentiment toward the bond market, which
drove Treasury long-bond rates to their highest levels in two years.
1. For investors subject to the federal alternative minimum tax, a small portion
of this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.
2. The insurance guarantees the scheduled payment of principal and interest on
the insured securities in the fund's portfolio, but does not guarantee the
market value of the insured security, the value of the fund's shares, or the
fund's distributions. Shares of the fund are not insured. No representation is
made as to the ability of any insurer to meet its obligation to the fund if
called upon to do so.
You will find a complete listing of the fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 28 of
this report.
Such generally rising interest rates presented challenges for the municipal
bond market during the reporting period, as bond prices fall when interest rates
rise. For the six months ended December 31, 1999, Franklin California Insured
Tax-Free Income Fund's Class A share price was down 5.1%. Compared to the
broader fixed-income market, however, the fund performed quite well. Over the
same period, the 30-year Treasury bond price fell 7.8%, while the Bond Buyer 40,
a reasonable indicator of the municipal bond market, was off 9.0%.(3)
The portfolio's conservative buy-and-hold, income-oriented investment philosophy
contributed to its superior performance, relative to the entire fixed-
income market. The fund continued to hold a significant percentage of higher
coupon bonds from previous, higher interest-rate periods. Over time, this
strategy can lower share price volatility, reduce portfolio turnover and provide
greater current income.
During the reporting period, we were able to take advantage of the rising
interest rate environment to improve the portfolio structure, enabling the fund
to capture greater yields, improve call protection and book tax losses. These
losses can then be carried forward to help offset any current or future taxable
capital gains, possibly lowering shareholders' tax liabilities.
PORTFOLIO BREAKDOWN
Franklin California Insured Tax-Free Income Fund
12/31/99
<TABLE>
<CAPTION>
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
- -------------------------------------
<S> <C>
Utilities 19.9%
Tax-Supported 18.5%
Prerefunded 14.4%
Subject to Government
Appropriation 11.5%
General Obligation 10.0%
Hospital & Health Care 9.2%
Transportation 8.1%
Higher Education 4.5%
Housing 2.9%
Other Revenue 0.9%
Corporate-Backed 0.1%
</TABLE>
3. The unmanaged Bond Buyer Municipal Bond Index is composed of the Yield to
Maturity of 40 bonds. The index attempts to track the new-issue market as
closely as possible, so the composition of bonds in the index changes twice a
month, adding all new bonds that meet certain requirements and deleting an
equivalent number according to their secondary market trading activity. As a
result, the average par call date, average maturity date and average coupon rate
change over time. The average maturity generally has been about 29-30 years. One
cannot invest directly in an index.
In another trend characterizing the municipal bond market, bond insurance
remained prevalent, representing more than 65% of 1999's national new issuance.
Given the large amount of insured bonds on the market and the relatively small
difference in yields between higher- and lower-rated credits, we concentrated on
buying higher-grade, essential purpose issues. As of December 31, 1999, two of
the fund's largest holdings were California State General Obligation and
California Educational Facilities Authority Revenue for Stanford University
bonds, which represented 5.93% and 3.46% of the fund's total long-term
investments, respectively.
DIVIDEND DISTRIBUTIONS*
Franklin California Insured Tax-Free Income Fund
7/1/99 - 12/31/99
<TABLE>
<CAPTION>
DIVIDEND PER SHARE
-------------------------------
MONTH CLASS A CLASS C
- ---------------------------------------------------------
<S> <C> <C>
July 5.05 cents 4.48 cents
August 5.05 cents 4.48 cents
September 5.05 cents 4.51 cents
October 5.05 cents 4.51 cents
November 5.05 cents 4.51 cents
December 5.05 cents 4.52 cents
- ---------------------------------------------------------
TOTAL 30.30 CENTS 27.01 CENTS
</TABLE>
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period. Distributions will vary based on the
earnings of the fund's portfolio, and past distributions are not predictive of
future trends.
The reporting period comes near the close of two years with very large municipal
bond issuance for the U.S. In 1998, new supply nationally reached a near-record
$280 billion, while 1999 issuance followed at a solid pace, possibly reaching
$225 billion by year-end. Supply should stabilize looking forward, as the higher
interest-rate environment significantly reduces refunding opportunities.
Diminishing expectations for primary and secondary bond issuance should result
in continued solid demand for institutional and retail California municipal
bonds. With the California municipal bond-to-Treasury yield ratio above 91% at
the reporting period's end, we believe the fund is well-positioned to perform
favorably in the future.
This discussion reflects our views, opinions and portfolio holdings as of
December 31, 1999, the end of the reporting period. Our strategies and the
fund's portfolio composition will change depending on market and economic
conditions. Although historical performance is no guarantee of future results,
these insights may help you understand our investment and management philosophy.
FRANKLIN CALIFORNIA INSURED
TAX-FREE INCOME FUND
CLASS A (formerly Class I): Subject to the current, maximum 4.25% initial sales
charge. Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge; thus actual total returns may differ. Effective May 1, 1994, the fund
eliminated the sales charge on reinvested dividends and implemented a Rule 12b-1
plan, which affects subsequent performance.
CLASS C (formerly Class II): Subject to 1% initial sales charge and 1%
contingent deferred sales charge for shares redeemed within 18 months of
investment. These shares have higher annual fees and expenses than Class A
shares.
SIX-MONTH PERFORMANCE SUMMARY AS OF 12/31/99
Six-month total return does not include sales charges. Distributions will vary
based on earnings of the fund's portfolio and any profits realized from the sale
of the portfolio's securities. Past distributions are not indicative of future
trends. All total returns include reinvested distributions at net asset value.
<TABLE>
<S> <C> <C>
CLASS A
Six-Month Total Return -2.61%
Net Asset Value (NAV) (12/31/99) $11.50 (6/30/99) $12.12
Change in NAV -$0.62
Distributions (7/1/99-12/31/99) Dividend Income $0.3030
Long-Term Capital Gain $0.0016
-------------------------------------
Total $0.3046
</TABLE>
<TABLE>
<S> <C> <C>
CLASS C
Six-Month Total Return -2.86%
Net Asset Value (NAV) (12/31/99) $11.58 (6/30/99) $12.20
Change in NAV -$0.62
Distributions (7/1/99-12/31/99) Dividend Income $0.2701
Long-Term Capital Gain $0.0016
-------------------------------------
Total $0.2717
</TABLE>
Past performance does not guarantee future results.
ADDITIONAL PERFORMANCE
AS OF QUARTER ENDED 12/31/99
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR 10-YEAR (9/3/85)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) -3.56% +34.73% +84.65% +174.17%
Average Annual Total Return(2) -7.68% +5.23% +5.86% +6.97%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 3-YEAR (5/1/95)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) -4.01% +9.39% +23.02%
Average Annual Total Return(2) -5.90% +2.70% +4.31%
</TABLE>
<TABLE>
<CAPTION>
SHARE CLASS A C
- ------------------------------------------------------------
<S> <C> <C>
Distribution Rate(3) 5.05% 4.64%
Taxable Equivalent Distribution Rate(4) 9.22% 8.47%
30-Day Standardized Yield(5) 4.70% 4.30%
Taxable Equivalent Yield(4) 8.58% 7.85%
</TABLE>
1.Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, applicable,
maximum sales charge(s) for that class.
3. Distribution rate is based on an annualization of the respective class's
current monthly dividend and the maximum offering price per share on December
31, 1999.
4. Taxable equivalent distribution rate and yield assume the 1999 maximum
combined federal and California state personal income tax bracket of 45.22%,
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 December 31, 1999.
Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares
For updated performance figures, see "Prices and Performance" on the Internet at
www.franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
CREDIT QUALITY BREAKDOWN*
Franklin California Intermediate-Term
Tax-Free Income Fund
Based on Total Long-Term Investments
12/31/99
[PIE CHART]
<TABLE>
<CAPTION>
BELOW INVESTMENT
AAA AA A BBB GRADE
<S> <C> <C> <C> <C>
27.2% 9.4% 17.5% 45.8% 0.1%
</TABLE>
*Quality breakdown may include internal ratings for bonds not rated by an
independent rating agency.
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND
Your Fund's Goal: Franklin California Intermediate-Term Tax-Free Income Fund
seeks to provide high, current income exempt from regular federal and California
state personal income taxes while seeking preservation of capital. The fund
invests primarily in a portfolio of California municipal securities with an
average weighted maturity (the time in which the debt must be repaid) between
three and 10 years.(1)
Economic growth nationally revived the specter of inflation and prompted the
Federal Reserve Board to raise short-term interest rates. Demand by individuals
for shorter term municipal bonds, along with rising long-term interest rates
brought the previously flat yield curve back to its more typical shape. The
yield curve represents the difference in yield between long- and short-term
bonds. Normally, the curve is sloped, representing the higher yield compensation
that usually accompanies greater risk, long-term bonds.
1. For investors subject to the federal alternative minimum tax, a small portion
of this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.
You will find a complete listing of the fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 41 of
this report.
In California, your fund was subject to the generally rising interest rates that
put pressure on bond prices. For the six months ended December 31, 1999,
Franklin California Intermediate-Term Tax-Free Income Fund's Class A share price
declined 2.6%. Compared to the broader fixed-income market, however, the fund
performed reasonably well. Over the same period, the 10-year Treasury bond price
fell 4.85%, while the fund's benchmark, the Lehman Brothers Muni 10-Year Bond
Index was off 2.51%.(2)
DIVIDEND DISTRIBUTIONS*
Franklin California Intermediate-Term
Tax-Free Income Fund - Class A
7/1/99 - 12/31/99
<TABLE>
<CAPTION>
DIVIDEND
MONTH PER SHARE
- -----------------------------------------------
<S> <C>
July 4.20 cents
August 4.20 cents
September 4.30 cents
October 4.30 cents
November 4.30 cents
December 4.33 cents
- -----------------------------------------------
TOTAL 25.63 CENTS
</TABLE>
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period. Distributions will vary based on the
earnings of the fund's portfolio, and past distributions are not predictive of
future trends.
PORTFOLIO BREAKDOWN
Franklin California Intermediate-Term
Tax-Free Income Fund
12/31/99
<TABLE>
<CAPTION>
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
- -------------------------------------
<S> <C>
Tax-Supported 38.4%
Subject to Government
Appropriation 17.9%
Utilities 14.9%
Hospital & Health Care 11.9%
Prerefunded 5.3%
Housing 3.6%
Transportation 3.2%
General Obligation 2.1%
Higher Education 1.8%
Other Revenue 0.8%
Corporate-Backed 0.1%
</TABLE>
2. Source: Lehman Brothers(R). Index is unmanaged and includes reinvested
dividends. One cannot invest directly in an index.
WHAT IS A PREREFUNDED BOND?
When a bond is prerefunded, a new issue is brought to market with a lower
interest rate to pay off an older, original issue at its first call date. In
most cases, the proceeds from the sale of the new bonds are invested in U.S.
Treasury securities that mature on the first call date of the original bonds.
Because of the U.S. Treasury backing, and thus lower risk, prerefunded bonds
usually experience a substantial price increase -- depending on their call date.
Generally, we look to sell prerefunded bonds as they approach five years to
their call date. At this point, the premium on prerefunded bonds often begins to
decline rapidly to the stated call price. Our strategy aims to capture the
bond's premium, increase the fund's call protection and protect its share value.
The reporting period was not a particularly active one for the fund. We sold
prerefunded bonds seeking to capture their premium and meet cash needs. At the
same time we also sold longer maturity, lower coupon bonds at a discount. In
this way, we offset the gains from selling higher coupon bonds and avoided some
capital gains taxes. The fund's purchases during the reporting period included
San Francisco City and County bonds, which offered an attractive yield and
insured status. Meanwhile, the rise in interest rates enabled the fund to
increase its dividend by three-hundredths of a cent per share in December.
Compared to 1998's near-record issuance, national municipal bond supply
decreased in 1999 and is expected to be approximately the same next year. With
reduced supply, plus institutional and retail demand that should remain strong,
the outlook is positive for the municipal bond market generally and the fund in
particular.
This discussion reflects our views, opinions and portfolio holdings as of
December 31, 1999, the end of the reporting period. Our strategies and the
fund's portfolio composition will change depending on market and economic
conditions. Although historical performance is no guarantee of future results,
these insights may help you understand our investment and management philosophy.
SIX-MONTH PERFORMANCE SUMMARY AS OF 12/31/99
Six-month total return does not include sales charges. Distributions will vary
based on earnings of the fund's portfolio and any profits realized from the sale
of the portfolio's securities. Past distributions are not indicative of future
trends. All total returns include reinvested distributions at net asset value.
<TABLE>
<CAPTION>
CLASS A
<S> <C> <C>
Six-Month Total Return -0.30%
Net Asset Value (NAV) (12/31/99) $10.73 (6/30/99) $11.02
Change in NAV -$0.29
Distributions (7/1/99-12/31/99) Dividend Income $0.2563
</TABLE>
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND
CLASS A: Subject to the maximum 2.25% initial sales charge. The fund's manager
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 and total return
would have been lower, and the yield for the period would have been 4.42%. The
fee waiver may be discontinued at any time upon notice to the fund's Board of
Directors.
ADDITIONAL PERFORMANCE
AS OF QUARTER ENDED 12/31/99
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR (9/21/92)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) -1.40% +38.46% +51.32%
Average Annual Total Return(2) -3.60% +6.23% +5.53%
Distribution Rate(3) 4.73%
Taxable Equivalent Distribution Rate(4) 8.63%
30-Day Standardized Yield(5) 4.55%
Taxable Equivalent Yield(4) 8.31%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the applicable, maximum
sales charge.
3. Distribution rate is based on an annualization of the current 4.33 cent per
share monthly dividend and the maximum offering price of $10.98 on December 31,
1999.
4. Taxable equivalent distribution rate and yield assume the 1999 maximum
combined federal and California state personal income tax bracket of 45.22%,
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 December 31, 1999.
Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
For updated performance figures, see "Prices and Performance" on the Internet at
www.franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
FRANKLIN CALIFORNIA
TAX-EXEMPT MONEY FUND
Your Fund's Goal: Franklin California Tax-Exempt Money Fund seeks to provide
high, current income exempt from regular federal and California state personal
income taxes while seeking preservation of capital and liquidity by investing
primarily in a portfolio of short-term municipal debt securities issued in
California. The fund is managed to maintain a $1.00 share price.(1)
For the six months under review, domestic economic growth accelerated well above
the Federal Reserve Board's (the Fed's) targeted 3% long-term growth rate. Real
gross domestic product (GDP) grew at blistering rates of 5.7% and 5.8% for the
third and fourth quarters of 1999, respectively. Higher equity and real estate
prices, increasing wages and a tight labor market spurred consumer spending,
while a rebound in the manufacturing sector and improving international economic
fundamentals also contributed to the expanding domestic economy.
1. There is no assurance that the fund's $1.00 per share price will be
maintained. An investment in the fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
You will find a complete listing of the fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 49 of
this report.
However, this growth led to a moderate rise in inflation during the third
quarter, as measured by the Consumer Price Index's (CPI's) increase from 2.00%
in June to 2.60% in September.
The Fed responded to this strong growth and slightly higher inflation by
increasing the federal funds target rate during the reporting period from 5.00%
to 5.50%. In turn, bond prices dropped, but yields increased, a positive outcome
for money market fund shareholders. In this environment, Franklin California
Tax-Exempt Money Fund's seven-day effective yield moved up, from 3.05% on June
30, 1999, to 3.51% on December 31, 1999.
The portfolio's investment strategy continues to emphasize high quality and
liquidity. We manage the fund more conservatively than SEC guidelines require,
seeking to ensure the safety and stability of the fund's principal. For example,
SEC guidelines allow tax-exempt money funds to purchase both first- and
second-tier securities. Franklin Templeton purchases only first-tier securities
for inclusion in its tax-exempt money market portfolios. Although also allowed
by the SEC for money market funds, we do not buy any derivative securities in
our tax-exempt money funds -- we purchase only plain vanilla, short-term
securities. We eliminated our exposure to Japanese bank guarantees several years
ago because of the problems these banks were having. This philosophy of
purchasing securities only from what we believe are the most creditworthy
institutions may result in lower returns compared to other money funds. However,
the fund managers believe that the increased yield offered by lower-rated and
less liquid securities does not justify the added risk to shareholders.
During the reporting period, the fund participated in several attractive deals
including Riverside County commercial paper, California State general obligation
bonds, Los Angeles Department of Water and Power Electric Plant Revenue
commercial paper and California State Economic Development Financing Authority
Revenue Independent System VRDNs.
This discussion reflects our views, opinions and portfolio holdings as of
December 31, 1999, the end of the reporting period. Our strategies and the
fund's portfolio composition will change depending on market and economic
conditions. Although historical performance is no guarantee of future results,
these insights may help you understand our investment and management philosophy.
FRANKLIN CALIFORNIA
TAX-EXEMPT MONEY FUND
PERFORMANCE SUMMARY
12/31/99
<TABLE>
<S> <C>
Seven-day effective yield(1) 3.51%
Seven-day annualized yield 3.45%
Taxable equivalent yield(2) 6.31%
</TABLE>
(1) The seven-day effective yield assumes the compounding of daily dividends.
(2) Taxable equivalent yield assumes the 1999 maximum combined federal and
California state personal income tax bracket of 45.22%, based on the federal
income tax rate of 39.6%.
Annualized and effective yields are for the seven-day period ended December 31,
1999. The fund's average weighted maturity was 40 days. Yield reflects
fluctuations in interest rates on portfolio investments, and fund expenses.
Past performance does not guarantee future results.
MUNICIPAL BOND RATINGS
MOODY'S
Aaa: Best quality. They carry the smallest degree of investment risk and
generally are referred to as "gilt-edged." Interest payments are protected by a
large or exceptionally stable margin, and principal is secure. Although the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa: High quality by all standards. Together with the Aaa group, they comprise
what generally are known as high-grade bonds. Aa bonds are rated lower than Aaa
because margins of protection may not be as large, fluctuation of protective
elements may be of greater amplitude, or there may be other elements which make
the long-term risks appear larger.
A: Possess many favorable investment attributes and are considered upper
medium-grade obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future.
Baa: Medium-grade obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Ba: Contain speculative elements. Often the protection of interest and principal
payments may be very moderate and, thereby, not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes bonds
in this class.
B: Generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small.
Caa: Poor standing. Such issues may be in default, or elements of danger with
respect to principal or interest may be present.
Ca: Obligations that are highly speculative. Such issues are often in default or
have other marked shortcomings.
C: Lowest-rated class of bonds. Issues rated C can be regarded as having
extremely poor prospects of ever attaining any real investment standing.
S&P(R)
AAA: The highest rating assigned by S&P to a debt obligation and indicates the
ultimate degree of protection as to principal and interest.
AA: Also qualify as high-grade obligations, and, in the majority of instances,
differ from AAA issues only in a small degree.
A: Generally regarded as upper medium-grade. They have considerable investment
strength but are not entirely free from adverse effects of changes in economic
and trade conditions. Interest and principal are regarded as safe.
BBB: Regarded as having an adequate capacity to pay principal and interest.
Whereas they normally exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay principal and interest for bonds in this category than for bonds
in the A category.
BB, B, CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligations. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While such bonds likely will have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
C: Reserved for income bonds on which no interest is being paid.
D: Debt rated D is in default and payment of interest and/or repayment of
principal is in arrears.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Highlights
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1999+ ---------------------------
(UNAUDITED) 1999+ 1998
----------- ----------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period $ 12.12 $ 12.47 $ 12.22
---------- ---------- ----------
Income from investment operations:
Net investment income .31 .61 .64
Net realized and unrealized gains (losses) (.62) (.26) .37
---------- ---------- ----------
Total from investment operations (.31) .35 1.01
---------- ---------- ----------
Less distributions from:
Net investment income (.31) (.62) (.64)
In excess of net investment income -- (.01) --
Net realized gains -- (a) (.07) (.12)
---------- ---------- ----------
Total distributions (.31) (.70) (.76)
---------- ---------- ----------
Net asset value, end of period $ 11.50 $ 12.12 $ 12.47
========== ========== ==========
Total return* (2.61%) 2.76% 8.38%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) $1,635,928 $1,775,212 $1,717,489
Ratios to average net assets:
Expenses .60%** .60% .60%
Net investment income 5.16%** 4.91% 5.11%
Portfolio turnover rate 20.30% 15.53% 21.66%
</TABLE>
<TABLE>
<CAPTION>
CLASS A
YEAR ENDED JUNE 30,
--------------------------------------------
1997 1996 1995
---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
<S> <C> <C> <C>
Net asset value, beginning of period $ 12.01 $ 11.95 $ 11.74
Income from investment operations:
Net investment income .66 .67 .68
Net realized and unrealized gains (losses) .21 .06 .20
---------- ---------- -----------
Total from investment operations .87 .73 .88
---------- ---------- -----------
Less distributions from:
Net investment income (.66) (.67) (.67)
In excess of net investment income -- -- --
Net realized gains -- -- --
---------- ---------- -----------
Total distributions (.66) (.67) (.67)
---------- ---------- -----------
Net asset value, end of period $ 12.22 $ 12.01 $ 11.95
========== ========== ===========
Total return* 7.41% 6.18% 7.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) $1,635,543 $1,588,631 $1,468,080
Ratios to average net assets:
Expenses .60% .60% .59%
Net investment income 5.41% 5.50% 5.77%
Portfolio turnover rate 20.40% 14.22% 11.85%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
**Annualized.
+Based on average shares outstanding.
(a)The fund made a capital gain distribution of $.0016.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Highlights (continued)
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND (CONT.)
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1999+ -----------------------------------------------------------
(UNAUDITED) 1999+ 1998 1997 1996 1995++
----------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period $ 12.20 $ 12.55 $ 12.29 $ 12.07 $ 11.99 $ 11.88
-------- -------- -------- -------- -------- -------
Income from investment operations:
Net investment income .27 .55 .58 .59 .60 .11
Net realized and unrealized gains (losses) (.62) (.27) .37 .22 .08 .10
-------- -------- -------- -------- -------- -------
Total from investment operations (.35) .28 .95 .81 .68 .21
-------- -------- -------- -------- -------- -------
Less distributions from:
Net investment income (.27) (.55) (.57) (.59) (.60) (.10)
In excess of net investment income -- (.01) -- -- -- --
Net realized gains --(a) (.07) (.12) -- -- --
-------- -------- -------- -------- -------- -------
Total distributions (.27) (.63) (.69) (.59) (.60) (.10)
-------- -------- -------- -------- -------- -------
Net asset value, end of period $ 11.58 $ 12.20 $ 12.55 $ 12.29 $ 12.07 $ 11.99
======== ======== ======== ======== ======== =======
Total return* (2.86%) 2.16% 7.80% 6.86% 5.70% 1.79%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) $ 72,191 $ 80,336 $ 55,371 $ 34,899 $ 18,458 $ 507
Ratios to average net assets:
Expenses 1.16%** 1.16% 1.16% 1.16% 1.17% 1.17%**
Net investment income 4.60%** 4.35% 4.55% 4.81% 4.96% 5.03%**
Portfolio turnover rate 20.30% 15.53% 21.66% 20.40% 14.22% 11.85%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
**Annualized.
+Based on average shares outstanding.
++For the period May 1, 1995 (effective date) to June 30, 1995.
(a)The fund made a capital gain distribution of $.0016
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------ ---------- -----
LONG TERM INVESTMENTS 97.3%
BONDS 95.4%
<S> <C> <C>
ABAG Finance Authority For Nonprofit Corps. COP,
Lincoln Child Center Inc., Insured, 6.125%, 11/01/24 .............................................. $ 2,055,000 $ 1,999,885
Lytton Gardens Inc., Insured, 6.00%, 2/15/30 ...................................................... 3,500,000 3,386,250
Odd Fellows Home, Insured, 6.00%, 8/15/24 ......................................................... 5,000,000 4,789,150
ABAG Revenue, Tax Allocation, RDA Pool, Series A2, FSA Insured, 6.60%, 12/15/24 ....................... 10,775,000 11,567,609
Alameda County COP, Municipal Custodial Receipts, Series 1, BIG Insured,
Pre-Refunded, 7.25%, 12/01/07 ..................................................................... 2,000,000 2,097,020
Alameda County Water District Revenue COP, Water Systems Project,
FGIC Insured, Pre-Refunded, 6.00%, 6/01/20 ........................................................ 1,000,000 1,068,680
Alhambra City Elementary School District, Series A, FSA Insured, 5.60%, 9/01/24 ....................... 2,065,000 1,971,972
Alhambra COP, Police Facilities AD No. 91-1, AMBAC Insured, 6.75%, 9/01/23 ............................ 10,730,000 11,232,164
Alvord USD, Series C, FSA Insured, 5.375%, 8/01/29 .................................................... 2,960,000 2,697,596
Anaheim PFA Revenue, Local Agency, CFD, Refunding, Series A, MBIA Insured, 5.75%, 9/01/14 ............. 3,790,000 3,833,471
Arcadia USD, GO, Series B, FGIC Insured, 5.875%, 7/01/20 .............................................. 1,985,000 1,976,782
Arcata Joint Powers Financing Authority Tax Allocation Revenue, Community Development Project Loan,
Series A, AMBAC Insured, 6.00%, 8/01/23 ............................................................. 5,690,000 5,708,037
Arcata Joint Powers Financing Authority Wastewater Revenue, FSA Insured, 5.80%, 12/01/22 .............. 1,080,000 1,062,461
Barstow RDA, Tax Allocation, Central Redevelopment Project, Series A, MBIA Insured, 6.25%, 9/01/22 .... 2,000,000 2,040,080
Beaumont USD, COP, Refunding, Series A, FSA Insured, 5.80%, 1/01/21 ................................... 1,500,000 1,478,520
Benicia COP, Water System Project, Refunding, AMBAC Insured, 6.125%, 11/01/17 ......................... 2,995,000 3,034,804
Benicia USD, Series A, AMBAC Insured, Pre-Refunded, 6.85%, 8/01/16 .................................... 5,900,000 6,231,816
Brea Olinda USD, GO, Series A, FGIC Insured, 5.60%, 8/01/20 ........................................... 1,000,000 963,320
Brea PFA Revenue, Tax Allocation, Redevelopment Project, Series A, MBIA Insured,
7.00%, 8/01/15 ..................................................................................... 1,520,000 1,599,146
6.75%, 8/01/22 ..................................................................................... 1,550,000 1,620,820
7.00%, 8/01/23 ..................................................................................... 11,965,000 12,554,516
Buellton USD, Series A, MBIA Insured, 6.375%, 7/01/17 ................................................. 2,155,000 2,252,341
Burbank RDA, Tax Allocation, City Center Redevelopment Project, Refunding, Series A, FSA Insured,
5.50%, 12/01/23 ...................................................................................... 1,000,000 938,090
Burbank Waste Disposal Revenue, Series B, AMBAC Insured, 6.00%, 5/01/22 ............................... 665,000 665,931
Calabasas COP, Public Facilities Project,
5.20%, 12/01/20 .................................................................................... 835,000 739,635
5.25%, 12/01/28 .................................................................................... 500,000 428,155
Calaveras County Water District Revenue COP, Water and Sewer System Improvement Project, Refunding,
AMBAC Insured, 6.00%, 5/01/16 ........................................................................ 3,950,000 4,015,965
Calexico CRDA Revenue, Tax Allocation, Merged Central Business and Residential, Refunding, FSA Insured,
5.85%, 8/01/15 ....................................................................................... 1,795,000 1,815,284
Calexico USD, CFD No. 1, Special Tax, Refunding, AMBAC Insured, 5.60%, 9/01/17 ........................ 2,930,000 2,871,869
California Educational Facilities Authority Revenue,
Pomona College, Series B, 5.50%, 7/01/29 .......................................................... 4,455,000 4,154,466
Pooled Facilities Program, MBIA Insured, 7.00%, 3/01/16 ........................................... 1,000,000 1,023,180
Santa Clara University, MBIA Insured, Pre-Refunded, 5.75%, 9/01/21 ................................ 2,575,000 2,742,736
Stanford University, Refunding, Series O, 5.125%, 1/01/31 ......................................... 14,830,000 12,882,969
Stanford University, Series N, 5.25%, 12/01/26 .................................................... 6,450,000 5,760,431
Stanford University, Series N, 5.35%, 6/01/27 ..................................................... 21,250,000 19,428,663
Stanford University, Series N, 5.20%, 12/01/27 .................................................... 6,780,000 5,999,283
Stanford University, Series P, 5.00%, 12/01/23 .................................................... 15,500,000 13,491,355
Student Loan Program, Series A, MBIA Insured 6.00%, 3/01/16 ....................................... 4,000,000 4,016,400
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California Health Facilities Financing Authority Revenue,
Adventist Health Systems West, Series A, MBIA Insured,
7.00%, 3/01/13 ...................................................... $ 3,000,000 $ 3,131,940
Adventist Health Systems West, Series B, MBIA Insured,
6.75%, 3/01/14 ...................................................... 5,065,000 5,267,853
Catholic Healthcare West, Refunding, Series A, MBIA Insured,
6.00%, 7/01/17 ...................................................... 5,000,000 5,056,250
Catholic Healthcare West, Series A, 5.00%, 7/01/28 .................. 25,000,000 18,308,250
Kaiser Permanente, Series A, 5.40%, 5/01/28 ......................... 15,400,000 13,060,894
Kaiser Permanente, Series B, 5.00%, 10/01/18 ........................ 5,000,000 4,184,150
Kaiser Permanente, Series B, 5.00%, 10/01/20 ........................ 5,500,000 4,534,475
Marin General Hospital, Series A, FSA Insured, Pre-Refunded,
7.00%, 8/01/15 ...................................................... 4,000,000 4,126,520
Northern California Presbyterian, 5.40%, 7/01/28 .................... 5,000,000 4,262,050
Orange County Health Facility, Series A, California Mortgage Insured,
6.20%, 11/01/24 ..................................................... 3,435,000 3,396,047
San Diego Hospital Association, Refunding, Series A, MBIA Insured,
6.20%, 8/01/20 ...................................................... 4,850,000 4,905,387
San Diego Hospital Association, Series A, MBIA Insured,
6.20%, 8/01/12 ...................................................... 2,425,000 2,547,244
San Fernando Health Facility, Series A, CHFCLP Insured,
5.25%, 6/01/23 ...................................................... 2,760,000 2,359,579
Scripps Memorial Hospital, Series A, MBIA Insured,
6.40%, 10/01/12 ..................................................... 3,500,000 3,700,480
Sharp Temecula Hospital, MBIA Insured, Pre-Refunded,
7.05%, 8/01/21 ...................................................... 3,000,000 3,177,750
Sutter Health, Series A, MBIA Insured, 5.00%, 8/15/19 ............... 1,700,000 1,496,527
Sutter Health, Series A, MBIA Insured, 5.00%, 8/15/38 ............... 4,000,000 3,318,880
The Help Group, CHFCLP Insured, 5.40%, 8/01/22 ...................... 5,000,000 4,445,100
California HFAR,
Home Mortgage, Series D, MBIA Insured, 6.15%, 8/01/28 ............... 5,250,000 5,200,860
Series A, MBIA Insured, 7.15%, 8/01/11 .............................. 1,315,000 1,367,284
Series A, MBIA Insured, 7.20%, 2/01/26 .............................. 3,450,000 3,578,099
Series B, MBIA Insured, 6.80%, 8/01/11 .............................. 1,815,000 1,886,620
Series B, MBIA Insured, 8.625%, 8/01/15 ............................. 220,000 221,784
Series K, AMBAC Insured, 6.25%, 8/01/27 ............................. 5,895,000 5,905,198
California PCFA, PCR, Southern California Edison Co.,
Refunding, Series A, MBIA Insured, 5.45%, 9/01/29 ................... 2,480,000 2,285,419
Series C, MBIA Insured, 5.55%, 9/01/31 .............................. 4,800,000 4,393,872
California Public Capital Improvement Financing Authority Revenue,
Pooled Projects, Series B, BIG Insured, 8.10%, 3/01/18 .............. 8,875,000 8,968,010
California Public School District Financing Authority Lease Revenue,
Southern Kern USD, Refunding, Series B, FSA Insured, 5.90%,
9/01/26 ............................................................. 235,000 232,798
Series B, FSA Insured, Pre-Refunded, 5.90%, 9/01/26 ................. 1,615,000 1,733,832
California State Department of Water Resources Central Valley Project
Water System Revenue, Refunding, Series Q, MBIA Insured, 5.375%,
12/01/27 ............................................................ 18,500,000 16,895,495
California State GO,
5.00%, 10/01/27 ..................................................... 30,790,000 26,319,908
AMBAC Insured, 6.30%, 9/01/06 ....................................... 9,000,000 9,734,040
FGIC Insured, 6.00%, 5/01/20 ........................................ 510,000 512,341
FGIC Insured, Pre-Refunded, 6.00%, 5/01/20 .......................... 2,990,000 3,192,782
FSA Insured, 5.50%, 9/01/29 ......................................... 34,500,000 32,030,145
MBIA Insured, 6.00%, 8/01/16 ........................................ 210,000 213,633
MBIA Insured, 6.00%, 10/01/21 ....................................... 65,000 65,205
MBIA Insured, 5.00%, 8/01/29 ........................................ 20,250,000 17,239,433
Refunding, FGIC Insured, 5.375%, 6/01/26 ............................ 5,000,000 4,575,850
Veterans Bonds, Series BH, FSA Insured, 5.40%, 12/01/16 ............. 5,000,000 4,739,650
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California State HFAR, Home Mortgage, Series L, MBIA Insured,
6.40%, 8/01/27 ..................................................... $ 7,865,000 $ 7,962,683
California State Local Government Finance Authority Revenue,
Marin Valley Mobile Country Club Park Acquisition,
Senior Series A, FSA Insured, 5.80%, 10/01/20 ...................... 4,275,000 4,218,741
California State University, Fresno, Auxiliary Residence Student
Project Revenue, MBIA Insured, 6.25%, 2/01/17 ...................... 1,500,000 1,547,190
California State University and Colleges Student Union Revenue,
Bakersfield, Series A, MBIA Insured, 6.30%, 11/01/22 ............... 1,310,000 1,346,484
San Bernardino, Series B, MBIA Insured, 6.30%, 2/01/22 ............. 2,375,000 2,444,231
California Statewide CDA,
COP, Children's Hospital, Los Angeles, 5.25%, 8/15/29 .............. 12,250,000 10,388,735
COP, FSA Insured, 5.50%, 8/15/31 ................................... 5,000,000 4,568,450
COP, Kaiser Permanente, 5.30%, 12/01/15 ............................ 10,000,000 9,059,800
COP, MBIA Insured, 5.00%, 4/01/18 .................................. 6,000,000 5,321,400
Water and Wastewater Revenue, Pooled Financing Program, Series B,
FSA Insured, 5.75%, 10/01/29 ....................................... 1,465,000 1,420,244
California Statewide CDA Revenue, COP, John Muir/Mt. Diablo
Health System, MBIA Insured,
5.125%, 8/15/22 .................................................... 5,000,000 4,405,900
5.25%, 8/15/27 ..................................................... 4,500,000 3,970,215
Cambria Community Services District Revenue COP, Wastewater
Treatment System Upgrade, MBIA Insured, 6.90%, 11/01/24 ............... 1,000,000 1,111,220
Cambria Community Services District Water and Wastewater
Revenue, Refunding, Series A, MBIA Insured, 6.00%, 5/01/15 ........ 1,330,000 1,364,686
Campbell COP, Civic Center Project, Refunding, MBIA Insured,
5.25%, 10/01/28 .................................................... 1,000,000 886,570
Campbell USD, Series C, FGIC Insured,
5.65%, 8/01/17 ..................................................... 1,000,000 985,720
5.75%, 6/01/22 ..................................................... 1,000,000 977,780
Carpinteria Sanitary District Capital Facilities Revenue, FGIC
Insured, 6.25%, 7/01/14 ............................................ 2,485,000 2,604,752
Central Coast Water Authority Revenue, State Water Project
Regional Facilities, AMBAC Insured, Pre-Refunded,
6.50%, 10/01/14 .................................................... 2,500,000 2,671,525
6.60%, 10/01/22 .................................................... 4,650,000 4,980,894
Chico PFA Revenue, Southeast Chico Redevelopment Project,
Series A, FGIC Insured, 6.625%, 4/01/21 ............................ 815,000 834,527
Chino Basin Regional Financing Authority Revenue, Municipal
Water District, Sewer System Project, Refunding, AMBAC Insured,
6.00%, 8/01/16 ..................................................... 2,000,000 2,034,600
Chino COP, RDA, Water System Improvement Project, Refunding,
AMBAC Insured, 6.20%, 9/01/18 ...................................... 3,590,000 3,681,868
Chula Visa Elementary School District COP, MBIA Insured,
6.60%, 8/01/16 ..................................................... 2,940,000 3,031,699
Chula Vista PFA, Local Agency Revenue, Series 1995-A, FSA
Insured, 6.125%, 9/02/14 ........................................... 3,875,000 4,069,641
Clovis PFA, Refuse Disposal Revenue, Landfill Improvement
Project, AMBAC Insured, 5.00%, 9/01/18 ............................. 1,000,000 890,630
Coachella Valley Recreation and Park District 1915 Act, Reassessment
District 9, Refunding, MBIA Insured, 6.20%, 9/02/16 ................ 1,500,000 1,555,215
Colton GO, Joint USD, CFD, Special Tax, Southridge Village,
Phase III, Refunding, FSA Insured, 5.90%, 9/01/14 .................. 45,000 45,031
Compton Sewer Revenue, Refunding, MBIA Insured, 5.375%, 9/01/23 ....... 2,000,000 1,845,320
Contra Costa Mosquito Abatement District COP, Public Improvements
Project, Refunding, FSA Insured, 6.25%, 2/01/06 .................... 1,695,000 1,730,748
Culver City USD, GO, MBIA Insured,
5.125%, 8/01/37 .................................................... 650,000 556,101
5.20%, 8/01/38 ..................................................... 4,285,000 3,709,225
Davis Joint USD, CFD, Special Tax, No. 1, Refunding, MBIA Insured,
5.50%, 8/15/21 ..................................................... 7,000,000 6,602,960
Del Norte County COP, Capital Improvement Program, MBIA Insured,
5.40%, 6/01/19 ..................................................... 2,150,000 2,007,799
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Delano USD,
COP, Refinancing Project, MBIA Insured, 5.125%, 1/01/22 ............ $ 1,620,000 $ 1,449,949
Series A, FSA Insured, Pre-Refunded, 6.10%, 5/01/17 ................ 1,105,000 1,120,890
Dinuba RDA, Tax Allocation, Redevelopment Project No. 2, Refunding,
Series A, MBIA Insured, 5.40%, 9/01/27 ............................. 3,190,000 2,885,291
Dublin-San Ramon Services District COP, AMBAC Insured, Pre-Refunded,
7.00%, 12/01/20 .................................................... 4,155,000 4,347,418
East Bay MUD,
Wastewater Treatment System Revenue, AMBAC Insured,
Pre-Refunded, 7.20%, 6/01/20 ....................................... 2,000,000 2,065,260
Water System Revenue, MBIA Insured, Pre-Refunded, 7.50%,
6/01/18 ............................................................ 5,000,000 5,169,150
Water System Revenue, Refunding, FGIC Insured, 6.00%, 6/01/20 ...... 6,900,000 6,923,322
East Side UHSD, Santa Clara County, Series D, FGIC Insured,
5.75%, 9/01/17 ..................................................... 1,200,000 1,195,944
Eastern Municipal Water District, Water and Sewer Revenue COP,
Refunding, Series A, FGIC Insured, 6.30%, 7/01/20 .................. 1,400,000 1,431,528
El Cerrito RDA, Tax Allocation, Redevelopment Project,
Series A, FSA Insured, Pre-Refunded, 6.80%, 7/01/19 ................ 5,960,000 6,158,945
El Dorado County Public Agency Financing Authority Revenue,
FGIC Insured, 5.50%,
2/15/16 ............................................................ 2,250,000 2,195,888
2/15/21 ............................................................ 3,500,000 3,303,790
El Monte Water Authority Revenue, Water System Project,
AMBAC Insured, 5.60%,
9/01/29 ............................................................ 3,000,000 2,846,280
9/01/34 ............................................................ 1,800,000 1,697,796
Emeryville PFA Revenue, Shellmound Park Redevelopment and
Housing Project, Series B, MBIA Insured,
5.00%, 9/01/19 .................................................... 5,500,000 4,869,700
Fairfield PFA Revenue, Municipal Park, ID No. 1, FGIC Insured,
Pre-Refunded, 6.30%, 7/01/23 ....................................... 4,750,000 5,034,193
Fillmore USD, Series A, FGIC Insured, 5.60%, 7/01/22 .................. 5,645,000 5,415,192
Folsom PFA Revenue, Refunding, AMBAC Insured, 6.00%,
10/01/08 ........................................................... 2,000,000 2,095,860
10/01/12 ........................................................... 1,000,000 1,047,140
10/01/19 ........................................................... 3,400,000 3,416,286
Fontana RDA, Tax Allocation, Southwest Industrial Park Project,
FGIC Insured, Pre-Refunded, 6.125%, 9/01/25 ........................ 5,850,000 6,245,694
Fresno COP, City Hall Refinancing Project, AMBAC Insured,
6.25%, 8/01/19 ..................................................... 1,000,000 1,016,590
Fresno USD, GO,
Refunding, Series C, MBIA Insured, 5.90%, 2/01/20 .................. 2,065,000 2,089,202
Refunding, Series C, MBIA Insured, 5.90%, 8/01/22 .................. 3,000,000 3,037,350
Series B, FSA Insured, 5.875%, 8/01/20 ............................. 1,405,000 1,399,113
Series B, FSA Insured, ETM, 5.875%, 8/01/20 ........................ 2,595,000 2,605,665
Fruitvale School District, Series B, MBIA Insured, 6.00%, 8/01/20 ..... 1,780,000 1,786,248
Glendale Hospital Revenue, Adventist Health, Refunding,
Series A, MBIA Insured, 6.75%, 3/01/13 ............................. 1,000,000 1,040,630
Glendale RDA, Tax Allocation, Central Glendale Redevelopment Project,
Refunding, AMBAC Insured, 6.00%, 12/01/20 .......................... 9,775,000 9,817,717
Glendale USD, Series C, FSA Insured, 5.50%, 9/01/24 ................... 2,750,000 2,573,945
Grossmont UHSD, COP, FSA Insured, 5.75%, 9/01/26 ...................... 2,250,000 2,184,165
Gustine USD, COP, FSA Insured, 5.00%, 2/01/29 ......................... 3,210,000 2,735,755
Hawthorne CDA, Tax Allocation, Project Area No 2, Refunding,
MBIA Insured, 5.00%, 9/01/18 ....................................... 2,265,000 2,017,277
Hemet USD, COP, Nutrition Center Project, FSA Insured, 5.875%,
4/01/27 ............................................................ 1,250,000 1,233,975
Hercules COP, Capital Improvement Projects, Refunding, AMBAC
Insured, 6.00%, 6/01/15 ............................................ 1,000,000 1,024,360
Hesperia Water District COP, Water Facilities Improvement Projects,
FGIC Insured, Pre-Refunded, 7.15%, 6/01/26 ......................... 3,425,000 3,620,842
Imperial Irrigation District COP,
California Water Systems Project, AMBAC Insured,
5.75%, 7/01/16 ..................................................... 5,050,000 5,056,666
Electric System Project, MBIA Insured, Pre-Refunded,
6.00%, 11/01/15 .................................................... 13,375,000 14,348,299
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Jurupa USD, COP, FSA Insured, 5.625%, 9/01/24 ......................... $ 1,600,000 $ 1,523,136
Kern County High School District, FSA Insured, ETM, 6.625%,
8/01/14 ............................................................ 1,535,000 1,699,966
8/01/15 ............................................................ 1,400,000 1,552,376
La Mirada RDA, Industrial Commercial Redevelopment Project,
Series A, MBIA Insured, 6.60%, 8/15/21 ............................. 3,080,000 3,173,201
La Quinta RDA, Tax Allocation, Redevelopment Project Areas
No. 1 and 2, MBIA Insured, 6.00%, 9/01/25 .......................... 6,650,000 6,665,561
Lake Arrowhead Community Services District COP,
FGIC Insured, 6.50%, 6/01/15 ....................................... 8,785,000 9,254,119
FGIC Insured, Pre-Refunded, 6.50%, 6/01/15 ......................... 5,215,000 5,543,701
Refunding, FGIC Insured, 6.125%, 6/01/05 ........................... 7,600,000 7,989,804
Lake Elsinore PFA, Tax Allocation Revenue, Lake Elsinore
Redevelopment Projects,
Series A, FGIC Insured, 6.25%, 2/01/19 ............................. 1,255,000 1,282,121
Series C, FGIC Insured, 6.625%, 2/01/17 ............................ 12,840,000 13,120,939
Lakewood PFA, Water Revenue, FGIC Insured, 5.70%, 4/01/16 ............. 2,485,000 2,476,949
Lakewood RDA, Tax Allocation, Redevelopment Project No.1,
Refunding, Series A, FSA Insured, 6.50%, 9/01/17 ................... 3,000,000 3,164,520
Lancaster RDA, Tax Allocation, Lancaster Redevelopment Project
No.5, Refunding, MBIA Insured, 6.85%, 2/01/19 ...................... 11,245,000 11,680,744
Lincoln USD, CFD No. 1, AMBAC Insured, Pre-Refunded,
6.90%, 9/01/21 ..................................................... 2,425,000 2,567,736
Lodi COP,
1996 Public Improvement Financing Project, MBIA Insured,
5.90%, 10/01/16 .................................................... 3,605,000 3,646,313
Wastewater Treatment Project, Refunding, AMBAC Insured,
6.70%, 8/01/26 ..................................................... 8,800,000 9,539,200
Lodi Electric System Revenue COP, Series A, MBIA Insured,
5.50%, 1/15/32 ..................................................... 4,000,000 3,674,360
Long Beach Harbor Revenue,
5.125%, 5/15/18 .................................................... 3,625,000 3,226,540
MBIA Insured, 5.25%, 5/15/25 ....................................... 25,000,000 21,780,750
Los Angeles COP,
Department of Public Social Services, Series B, AMBAC Insured,
5.85%, 8/01/31 ..................................................... 1,000,000 973,300
San Pedro Peninsula Hospital Project, Refunding, AMBAC Insured,
6.25%, 5/01/15 ..................................................... 5,825,000 6,032,545
Los Angeles County Capital Assets Leasing Corp. Leasehold Revenue,
Refunding, AMBAC Insured, 6.00%,
12/01/16 ........................................................... 3,000,000 3,040,410
Los Angeles County MTA, Sales Tax Revenue, Proposition A,
First Tier, Refunding, Senior Series A, MBIA Insured,
5.25%, 7/01/27 ..................................................... 9,370,000 8,325,901
Los Angeles County Transportation Commission Sales Tax Revenue,
Series B, FGIC Insured,
6.50%, 7/01/15 ..................................................... 5,025,000 5,231,829
Series B, FGIC Insured, 6.50%, 7/01/13 ............................. 2,740,000 2,859,628
Los Angeles Department of Water and Power Electric Plant Revenue,
FGIC Insured, 6.125%, 1/15/33 ...................................... 17,215,000 17,291,951
Refunding, FGIC Insured, 6.00%, 2/01/28 ............................ 3,500,000 3,507,665
Los Angeles Department of Water and Power Waterworks Revenue, Second
Issue, FGIC Insured, 6.40%, 11/01/31 ............................... 6,875,000 7,245,975
Los Angeles Harbor Department Revenue, Series B,
AMBAC Insured, 6.60%, 8/01/14 ...................................... 3,790,000 4,003,112
AMBAC Insured, 6.60%, 8/01/15 ...................................... 2,000,000 2,108,980
MBIA Insured, 6.20%, 8/01/25 ....................................... 2,500,000 2,516,350
Los Angeles Mortgage Revenue, Refunding, Series I, MBIA Insured, 6.50%,
7/01/22 ............................................................ 2,000,000 2,030,840
Los Angeles Wastewater System Revenue,
Refunding, Series A, FGIC Insured, 6.00%, 12/01/18 ................. 12,100,000 12,170,180
Series B, AMBAC Insured, 6.00%, 6/01/22 ............................ 3,250,000 3,258,483
Lucia Mar USD, GO, Series A, FGIC Insured, 5.40%, 8/01/22 ............. 3,290,000 3,036,012
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Lynwood PFA,
Tax Allocation, Area A Project, Series A, FSA Insured, 5.85%,
9/01/18 ............................................................ $ 1,765,000 $ 1,749,027
Water Revenue, Water System Improvement Project, MBIA Insured,
5.85%, 6/01/22 ..................................................... 665,000 650,350
Water Revenue, Water System Improvement Project, MBIA Insured,
5.90%, 6/01/29 ..................................................... 3,105,000 3,032,809
Lynwood PFA Revenue, Series A, AMBAC Insured, 5.75%, 9/01/18 .......... 4,000,000 3,963,560
Manteca Financing Authority Tax Allocation Revenue, MBIA Insured,
5.10%, 10/01/26 .................................................... 500,000 432,070
Menlo Park CDA, Tax Allocation, Las Pulgas Community Development
Project, Refunding, AMBAC Insured, 5.375%, 6/01/22 ................. 10,000,000 9,200,100
Mesa Construction Water District COP, Water Project, FGIC Insured,
Pre-Refunded, 6.40%, 3/15/18 ....................................... 5,600,000 5,921,104
Metropolitan Water District Revenue, Southern California Waterworks,
Series A, MBIA Insured,
5.50%, 7/01/25 ..................................................... 8,750,000 8,171,538
5.00%, 7/01/30 ..................................................... 7,025,000 5,969,494
Millbrae COP, Police Department Expansion, AMBAC Insured,
5.875%, 3/01/24 .................................................... 1,025,000 1,008,672
Modesto Health Facilities Revenue, Memorial Hospital Association,
Refunding, Series A, MBIA Insured, 6.00%, 6/01/18 .................. 5,565,000 5,595,162
Series 1991, MBIA Insured, Pre-Refunded, 6.875%, 6/01/21 ........... 1,500,000 1,580,310
Modesto Irrigation District COP, Refunding and Capital Improvement
Projects, Series A, MBIA Insured,
Pre-Refunded, 6.00%, 10/01/21 ...................................... 3,000,000 3,081,810
Modesto Irrigation District Financing Authority Revenue, Domestic
Water Project, Series C, AMBAC Insured,
Pre-Refunded, 5.75%, 9/01/22 ....................................... 2,500,000 2,658,325
Modesto Wastewater Treatment Facility Revenue, MBIA Insured,
5.75%, 11/01/22 .................................................... 14,375,000 14,052,281
Montclair RDA, Tax Allocation, Redevelopment Project, Area No. 3,
Refunding, AMBAC Insured, 5.40%, 12/01/17 .......................... 4,380,000 4,195,602
Montebello Community RDA, Tax Allocation,
Housing, Series A, FSA Insured, 5.45%, 9/01/19 ..................... 1,100,000 1,039,104
Montebello Hills Redevelopment Project, Refunding, MBIA Insured,
5.60%, 3/01/19 ..................................................... 2,460,000 2,381,255
Montebello USD, COP, Series B, MBIA Insured, Pre-Refunded, 7.25%,
6/01/10 ............................................................ 720,000 742,061
Moreno Valley PFA, Lease Revenue, AMBAC Insured, 5.50%, 11/01/22 ...... 1,000,000 940,560
Moulton Niguel Water District, AMBAC Insured, Pre-Refunded, 7.25%,
4/01/16 ............................................................ 1,420,000 1,459,391
Mount Diablo USD, CFD No. 1, Special Tax,
AMBAC Insured, 6.25%, 8/01/14 ...................................... 500,000 522,580
FSA Insured, 6.00%, 8/01/24 ........................................ 1,000,000 1,002,960
Refunding, AMBAC Insured, 5.75%, 8/01/15 ........................... 1,000,000 1,005,430
Refunding, AMBAC Insured, 5.75%, 8/01/16 ........................... 2,270,000 2,272,633
Refunding, AMBAC Insured, 5.375%, 8/01/19 .......................... 7,290,000 6,864,920
Mountain View COP, Capital Improvement Financing Authority
Revenue, City Hall/Community Theatre,
MBIA Insured, 6.50%, 8/01/16 ....................................... 1,500,000 1,566,420
Murrieta Water PFA, Special Tax Revenue, senior lien, Refunding,
Series A, FSA Insured,
5.60%, 10/01/15 .................................................... 1,235,000 1,227,232
5.70%, 10/01/21 .................................................... 2,630,000 2,559,490
National City Joint Powers Authority Lease Revenue, National City Police
Facilities Project, AMBAC Insured,
Pre-Refunded, 6.75%, 10/01/17 ...................................... 2,000,000 2,099,920
Nevada Irrigation District Revenue COP, Cascade Bench Flume Project,
MBIA Insured, 5.50%, 1/01/17 ....................................... 4,600,000 4,461,770
North City West School Facilities Financing Authority Special Tax,
Refunding, Series B, FSA Insured,
5.75%, 9/01/15 ..................................................... 1,260,000 1,267,573
6.00%, 9/01/19 ..................................................... 2,500,000 2,519,900
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Northern California Power Agency Multiple Capital Facilities Revenue,
Series A, MBIA Insured
6.50%, 8/01/12 ..................................................... $ 2,840,000 $ 3,010,627
Pre-Refunded, 6.50%, 8/01/12 ....................................... 2,160,000 2,302,258
Northern California Public Power Agency Revenue,
AMBAC Insured, Pre-Refunded, 7.50%, 7/01/23 ........................ 3,200,000 3,841,088
Hydroelectric Project No. 1, Refunding, Series A, MBIA Insured,
5.50%, 7/01/23 ..................................................... 4,000,000 3,740,240
Northern California Transmission Revenue, California/Oregon
Transmission Project, Series A, MBIA Insured,
6.25%, 5/01/10 ..................................................... 2,500,000 2,622,775
6.50%, 5/01/16 ..................................................... 4,000,000 4,204,600
6.00%, 5/01/24 ..................................................... 18,335,000 18,341,051
Pre-Refunded, 7.00%, 5/01/10 ....................................... 4,000,000 4,099,040
Norwalk Community Facilities Financing Authority Lease Revenue,
MBIA Insured, Pre-Refunded, 6.90%, 2/01/21 ......................... 5,810,000 5,935,728
Oakland Revenue, 1800 Harrison Foundation, Refunding, Series A,
AMBAC Insured, 6.00%, 1/01/29 ...................................... 10,000,000 10,022,200
Oceanside Community Development Commission COP, Public Parking
Project, FSA Insured, Pre-Refunded,
7.875%, 4/01/19 .................................................... 3,940,000 4,484,902
Oceanside COP,
Corporation Yard Project Financing, AMBAC Insured,
Pre-Refunded, 7.30%, 8/01/21 ....................................... 4,715,000 5,116,199
Oceanside Civic Center Project, Refunding, MBIA Insured,
5.75%, 8/01/15 ..................................................... 1,000,000 1,005,430
Waste Reuse Association Finance Project, Series A,
AMBAC Insured, Pre-Refunded, 6.50%, 10/01/17 ....................... 5,000,000 5,343,050
Ontario Redevelopment Financing Authority Revenue, Ontario
Redevelopment Project No. 1, MBIA Insured,
ETM, 5.80%, 8/01/23 ................................................ 10,000,000 10,213,900
Orange County COP, Juvenile Justice Center Facilities, Refunding,
AMBAC Insured,
6.375%, 6/01/11 .................................................... 4,770,000 5,029,202
6.00%, 6/01/17 ..................................................... 5,000,000 5,041,900
Orange County Financing Authority Tax Allocation Revenue, Refunding,
Series A, MBIA Insured, 6.50%, 9/01/22 ............................. 3,500,000 3,627,925
Oroville PFA, Tax Allocation Revenue, Oroville Redevelopment
Project No. 1, AMBAC Insured,
5.90%, 9/15/21 ..................................................... 1,245,000 1,241,850
6.10%, 9/15/23 ..................................................... 2,885,000 2,912,869
Oxnard COP, AMBAC Insured, 4.75%, 6/01/28 ............................. 1,545,000 1,242,134
Oxnard Financing Authority Solid Waste Revenue, AMBAC Insured,
6.00%, 5/01/16 ..................................................... 5,000,000 5,037,750
Oxnard UHSD, Series B, FSA Insured, ETM, 5.875%, 8/01/27 .............. 3,615,000 3,568,656
Pajaro Valley USD, COP, School Facilities Bridge Funding Program,
FSA Insured, 5.75%, 9/01/17 ........................................ 1,250,000 1,245,775
Palm Desert Financing Authority Tax Allocation Revenue, Project Area
No. 2, Series A, MBIA Insured,
5.95%, 8/01/24 ..................................................... 2,490,000 2,489,876
5.85%, 8/01/25 ..................................................... 1,380,000 1,360,128
Palm Springs USD,
Series C, MBIA Insured, 6.125%, 2/01/20 ............................ 500,000 504,625
Series D, FGIC Insured, 5.90%, 2/01/21 ............................. 1,000,000 997,560
Paramount USD, COP, Master Lease Program, FSA Insured,
6.30%, 9/01/26 ..................................................... 4,750,000 4,874,070
Parlier USD, Series B, AMBAC Insured, 6.00%, 6/01/16 .................. 1,130,000 1,153,832
Pasadena USD, GO, Series B, FGIC Insured, 5.25%, 7/01/24 .............. 1,000,000 896,140
Petaluma COP, Refunding, Series A, AMBAC Insured, 5.625%, 8/01/13 ..... 1,000,000 1,008,740
Pico Rivera PFAR, Water Enterprise Project, Series A, FGIC Insured,
Pre-Refunded, 6.00%, 12/01/17 ......................................... 8,000,000 8,463,600
Pinole RDA, Tax Allocation, Pinole Vista Redevelopment Project,
Series A, MBIA Insured, Pre-Refunded,
6.125%, 8/01/17 .................................................... 1,000,000 1,044,570
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Placer County COP,
Administrative and Emergency Services, MBIA Insured, 5.65%, 6/01/24 $ 4,000,000 $ 3,846,280
Jail Kitchen Project, MBIA Insured, Pre-Refunded, 6.90%, 10/01/21 .. 3,745,000 4,156,201
Placer County Water Agency COP, FSA Insured, 5.90%, 7/01/25 ........... 2,350,000 2,331,623
Pleasant Hill RDA, Tax Allocation, Pleasant Hill Commons Project, Refunding,
FSA Insured, 6.90%, 7/01/21 ........................................ 5,500,000 5,756,795
Porterville COP,
Refunding, AMBAC Insured, Sewer System Refining Project, 5.25%, 10/01/23 5,000,000 4,493,200
Sewer System and Improvement Project, Refunding, AMBAC Insured,
6.30%, 10/01/18 .................................................. 11,010,000 11,482,660
Rancho Cucamonga RDA, Tax Allocation, Rancho Redevelopment Project,
Housing Set Aside, MBIA Insured, 5.25%, 9/01/26 .................... 2,000,000 1,767,760
Refunding, FSA Insured, 5.25%, 9/01/20 ............................. 2,500,000 2,257,550
Redding Electrical System Revenue COP, Refunding, Series A, FGIC Insured,
5.50%, 6/01/11 ..................................................... 5,000,000 5,057,900
Redding Joint Powers Financing Authority Lease Revenue, Civic Center
Project, Series A, MBIA Insured,
5.75%, 3/01/19 ..................................................... 3,090,000 3,043,928
5.25%, 3/01/26 ..................................................... 75,000 66,803
Redding RDA, Tax Allocation, Hilltop Cypress Redevelopment Notes,
Series C, FSA Insured, 6.00%, 9/01/22 .............................. 2,120,000 2,126,848
Redlands USD, Series B, FSA Insured, 6.25%, 6/01/19 ................... 2,115,000 2,161,784
Redwood City PFA, Local Agency Revenue, Series A, AMBAC Insured,
6.50%, 7/15/11 ..................................................... 1,270,000 1,327,925
Pre-Refunded, 6.50%, 7/15/11 ....................................... 1,475,000 1,548,986
Richgrove Elementary School District COP, Construction and Refinancing
Project, FSA Insured, 5.30%, 12/01/28 ................................. 2,355,000 2,123,904
Riverside County COP, Historic Courthouse, MBIA Insured, 5.875%, 11/01/27 3,000,000 2,961,270
Riverside RDA, Lease Revenue, Series A, AMBAC Insured,
6.375%, 10/01/23 ................................................... 12,540,000 12,978,398
6.50%, 10/01/24 .................................................... 2,000,000 2,099,660
Romona Municipal Water District COP, Refunding, AMBAC Insured,
7.20%, 10/01/10 .................................................... 3,000,000 3,116,880
Rubidoux Community Services District COP, Water System Improvement
Project, AMBAC Insured, Pre-Refunded,
6.20%, 12/01/14 ................................................... 2,510,000 2,668,983
Sacramento Area Flood Control Agency Special Assessment,
Capital AD No. 2, FGIC Insured, 5.80%, 11/01/16 .................... 1,000,000 1,004,700
Capital AD No. 2, FGIC Insured, 5.375%, 10/01/25 ................... 1,000,000 917,260
Operation and Maintenance, FGIC Insured, 5.80%, 11/01/16 ........... 1,475,000 1,481,933
Operation and Maintenance, FGIC Insured, 5.90%, 11/01/25 ........... 2,690,000 2,668,588
Sacramento County Airport System Revenue, Series A, MBIA Insured,
6.00%, 7/01/17 ..................................................... 5,920,000 5,931,662
Sacramento MUD, Electric Revenue,
Series E, MBIA Insured, 5.75%, 5/15/22 ............................. 4,250,000 4,155,565
Series I, MBIA Insured, 6.00%, 1/01/24 ............................. 4,000,000 4,009,920
Series J, AMBAC Insured, 5.50%, 8/15/21 ............................ 8,485,000 8,003,731
Sacramento RDA, Tax Allocation,
Merged Downtown Redevelopment Project, Series A, MBIA Insured,
Pre-Refunded, 6.50%, 11/01/13 ...................................... 1,835,000 1,908,198
Series A, MBIA Insured, 6.50%, 11/01/13 ............................ 165,000 170,679
Saddleback Community College District COP, 1996 Capital Improvement
Financing Project, MBIA Insured, 5.50%, 6/01/15 .................... 3,200,000 3,147,648
Saddleback Valley USD, PFA, Special Tax Revenue, Refunding, Series A,
FSA Insured, 5.65%, 9/01/17 ........................................ 3,500,000 3,449,775
San Bernardino County COP, 1997 Public Improvement Financing Project,
MBIA Insured, 5.25%, 10/01/25 ...................................... 7,000,000 6,248,270
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
San Bernardino County Mortgage Revenue, Don Miguel Apartments
Project, Refunding, MBIA Insured, 6.40%, 3/01/25 ...................... $ 5,680,000 $ 5,753,045
San Bernardino Joint Powers Financing Authority Revenue, Tax Allocation,
Northwest Redevelopment Project, Series E, MBIA Insured, Pre-Refunded,
7.375%, 1/01/15 .................................................. 1,965,000 2,004,300
Southeast Industrial Park, Series F, MBIA Insured, Pre-Refunded,
7.375%, 3/01/14 .................................................. 3,515,000 3,603,613
San Bernardino Municipal Water Department COP, FGIC Insured,
6.25%, 2/01/17 ..................................................... 5,750,000 5,972,813
San Bernardino RDA, Capital Appreciation, Series B, AMBAC Insured,
7.70%, 1/10/09 ..................................................... 2,382,000 5,087,571
San Buenaventura COP, Water Project, AMBAC Insured, Pre-Refunded,
7.50%, 10/01/20 .................................................... 2,000,000 2,090,180
San Buenaventura Public Facilities Financing Authority Lease Revenue,
Refunding, FSA Insured, 5.75%, 6/01/14 ............................ 2,250,000 2,278,260
San Carlos School District GO, MBIA Insured, 5.50%, 10/01/24 .......... 2,110,000 1,974,686
San Diego Community College District COP, Series 1991, MBIA Insured,
6.50%, 12/01/12 .................................................... 2,000,000 2,102,140
San Diego IDR, San Diego Gas and Electric, Custodial Receipts, Series A,
AMBAC Insured, 6.40%, 9/01/18 ...................................... 1,650,000 1,725,917
San Diego Mortgage Revenue, University Canyon North, Refunding, Series A,
MBIA Insured, 5.125%, 7/01/03 ...................................... 155,000 155,470
San Diego Public Facilities Financing Authority Sewer Revenue, Series B,
FGIC Insured, 5.25%, 5/15/27 ....................................... 2,950,000 2,621,695
San Francisco BART District Sales Tax Revenue, FGIC Insured,
5.50%, 7/01/15 ..................................................... 2,000,000 1,967,260
5.50%, 7/01/26 ..................................................... 6,500,000 6,030,895
5.50%, 7/01/34 ..................................................... 12,000,000 11,048,640
Pre-Refunded, 6.60%, 7/01/12 ....................................... 2,580,000 2,711,193
San Francisco City and County Airport Commission International
Airport Revenue,
Issue 5, Second Series, FGIC insured, 6.50%, 5/01/24 ............... 6,900,000 7,118,799
Issue 8A, Second Series, FGIC Insured, 6.25%, 5/01/20 .............. 3,500,000 3,531,080
Issue 9B, Second Series, FGIC Insured, Pre-Refunded, 6.00%, 5/01/25 6,400,000 6,815,488
Issue 11, Second Series, FGIC Insured, 6.00%, 5/01/11 .............. 2,105,000 2,178,528
Issue 16A, Second Series, FSA Insured, 5.00%, 5/01/29 .............. 10,000,000 8,351,500
San Francisco City and County RDA, MFHR, 1045 Mission Apartments,
Series C, GNMA Secured, 5.35%, 12/20/40 ............................ 7,215,000 6,231,235
San Francisco City and County Sewer Revenue, Refunding, AMBAC Insured,
6.00%, 10/01/11 .................................................... 2,000,000 2,095,860
San Gabriel USD, COP, Facilities Development Program, Series A,
FSA Insured,
6.00%, 9/01/15 ..................................................... 1,000,000 1,030,180
San Jacinto USD, COP, Refunding Project, AMBAC Insured, 6.50%,
10/01/23 ........................................................... 3,000,000 3,205,830
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue,
Refunding, Series A, MBIA Insured,
5.375%, 1/15/29 .................................................... 8,500,000 7,751,915
5.25%, 1/15/30 ..................................................... 9,000,000 7,940,970
San Jose Financing Authority Revenue, Convention Project, Series C, FSA
Insured, 6.40%, 9/01/17 ............................................ 8,740,000 9,088,202
San Leandro COP, Library and Fire Stations Financing, AMBAC Insured,
5.75%, 11/01/29 .................................................... 5,000,000 4,847,150
San Luis Water Districts Revenue COP, Refunding and Capital Improvement
Project, AMBAC Insured, 5.50%, 11/01/16 ............................ 1,260,000 1,228,865
San Mateo County Joint Powers Financing Authority Lease Revenue, San Mateo
County Health Care Center,
Series A, FSA Insured, Pre-Refunded, 5.75%, 7/15/22 ................ 2,750,000 2,914,533
San Mateo-Foster City School District, FGIC Insured, 5.00%, 8/01/23 ... 1,000,000 867,860
San Ramon COP,
Capital Improvement Project, Refunding, AMBAC Insured, 7.05%, 3/01/21 12,070,000 12,582,492
Central Park Expansion Project, FSA Insured, Pre-Refunded,
7.20%, 2/01/25 ................................................... 5,110,000 5,719,265
Sanger PFA Revenue, Utility System Financing, Series A, AMBAC Insured,
5.70%, 1/01/22 ..................................................... 5,935,000 5,768,464
Sanger USD, Series A, FSA Insured, ETM, 5.60%, 8/01/14 ................ 1,000,000 1,013,300
Santa Ana COP, Parking Facilities Project, Refunding, Series A, AMBAC
Insured, 6.125%, 6/01/16 ........................................... 3,250,000 3,316,300
Santa Ana Financing Authority Water Revenue, MBIA Insured, 6.125%, 9/01/24 1,000,000 1,008,200
Santa Ana HMR, Series A, FGIC Insured, 8.875%, 6/01/17 ................ 5,000 5,173
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Santa Barbara COP,
Municipal Improvement Program, Refunding, AMBAC Insured,
6.15%, 8/01/17 ................................................... $ 3,575,000 $ 3,656,045
Water Systems Improvement Project, Refunding, AMBAC Insured,
6.70%, 4/01/27 ................................................... 6,500,000 6,830,070
Santa Clara County COP,
Board of Education Partners, Administration Building Project, Series A,
MBIA Insured, 6.00%, 4/01/25 ..................................... 1,555,000 1,557,597
Capital Project I, Refunding, AMBAC Insured, 6.25%, 10/01/16 ....... 4,500,000 4,662,405
Santa Clara Electric Revenue, Series A, MBIA Insured, Pre-Refunded,
6.50%, 7/01/21 ..................................................... 1,350,000 1,416,731
Santa Clara RDA, Tax Allocation, Bayshore North Project, AMBAC Insured,
7.50%, 6/01/08 ..................................................... 900,000 910,818
Santa Cruz County COP, Sub-Joint Wastewater Treatment Project, AMBAC
Insured, 6.20%, 9/01/19 ............................................ 475,000 482,686
Santa Fe Springs PFA, Water Revenue, Series A, MBIA Insured, 5.90%,
5/01/21 ............................................................ 900,000 897,750
5/01/26 ............................................................ 1,190,000 1,178,897
Santa Fe Springs RDA, Consolidated, Tax Allocation, Series A, MBIA Insured,
6.40%, 9/01/22 ..................................................... 4,255,000 4,422,392
Santa Margarita/Dana Point Authority Revenue, ID 3, 3A, 4, and 4A, Refunding,
Series B, MBIA Insured, 5.75%, 8/01/20 ............................. 38,500,000 37,770,040
Santa Monica Community College District, Series B, AMBAC Insured,
5.75%, 7/01/20 ..................................................... 1,495,000 1,466,789
Santa Rita USD, Series B, FSA Insured, 5.20%, 8/01/37 ................. 1,940,000 1,681,088
Santa Rosa High School District,
FGIC Insured, 5.90%, 5/01/16 ....................................... 1,000,000 1,011,460
Refunding, FSA Insured, 5.75%, 5/01/18 ............................. 1,050,000 1,040,519
Santa Rosa Wastewater Service Facilities District Revenue, Refunding
and Improvement, AMBAC Insured, 6.00%, 7/02/15 ..................... 2,000,000 2,086,340
Scotts Valley GO, USD, Series B, FGIC Insured, 5.40%, 8/01/22 ......... 3,005,000 2,797,505
Sebastopol GO, CDA, Tax Allocation, Community Development Project,
Refunding, MBIA Insured, 5.25%, 12/01/21 ........................... 2,250,000 2,035,508
Selma PFA Revenue, Series A, MBIA Insured,
5.80%, 9/15/11 ..................................................... 145,000 145,819
5.80%, 9/15/12 ..................................................... 125,000 125,596
5.875%, 9/15/22 .................................................... 2,400,000 2,383,416
Sequoia UHSD, GO, FSA Insured, 5.70%, 7/01/24 ......................... 4,885,000 4,728,533
Soledad RDA, Tax Allocation, Soledad Redevelopment Project, Refunding,
Series A, MBIA Insured, 5.35%, 12/01/28 ............................ 1,000,000 908,680
Sonoma CDA, COP, Sonoma Creek Senior Housing Project, Refunding, AMBAC
Insured, 6.75%, 2/01/13 ............................................ 1,325,000 1,353,249
Sonoma Valley USD, GO, FSA Insured, 6.00%, 7/15/21 .................... 2,400,000 2,411,472
South Gate PFA Revenue, Tax Allocation, South Gate Redevelopment
Project No. 1, AMBAC Insured, 5.875%, 9/01/24 ...................... 5,000,000 4,951,350
South Orange County PFA, Special Tax Revenue, senior lien, Refunding,
Series A, MBIA Insured,
6.20%, 9/01/13 ..................................................... 13,500,000 14,217,660
6.00%, 9/01/18 ..................................................... 3,250,000 3,276,000
South San Francisco COP, 5.00%, 4/01/29 ............................... 2,000,000 1,642,960
Stanislaus County Board of Education COP, FSA Insured, 5.70%, 9/01/24 . 2,000,000 1,935,580
Stockton COP, Wastewater System Project, Refunding, AMBAC Insured,
5.75%, 9/01/23 ..................................................... 6,500,000 6,343,545
Stockton Port District Port Facilities Revenue, Refunding and Improvement,
Series B, FSA Insured, 5.90%, 7/01/12 .............................. 3,955,000 4,064,830
Stockton Revenue COP, Wastewater System Project, Refunding, Series A,
MBIA Insured, 5.00%, 9/01/23 ....................................... 6,500,000 5,639,465
Suisun City RDA, Tax Allocation, Suisun City Redevelopment Project, Refunding,
MBIA Insured, 5.625%, 10/01/13 ..................................... 4,260,000 4,303,580
Sulfur Springs USD, COP, Series 1991, AMBAC Insured, Pre-Refunded,
7.20%, 2/01/21 ..................................................... 800,000 834,248
Sunnyvale RDA, Tax Allocation, Central Core Project, Refunding, AMBAC
Insured, 6.50%, 10/01/22 ........................................... 2,785,000 2,861,588
Susanville PFA Revenue, Series A, AMBAC Insured, 6.30%, 9/01/17 ....... 4,000,000 4,110,760
Tahoe Truckee USD, GO, Improvement District No. 2, Series A, FGIC Insured,
5.75%, 8/01/20 ..................................................... 4,340,000 4,257,714
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Tahoe-Truckee Joint USD,
Series A, FGIC Insured, Pre-Refunded, 6.00%, 9/01/17 ................ $ 5,000,000 $ 5,317,400
Series B, FGIC Insured, 5.95%, 9/01/20 .............................. 3,620,000 3,629,376
Tehachapi Water and Sewer Revenue, Refunding, MBIA Insured,
6.75%, 11/01/20 ..................................................... 2,000,000 2,165,320
Thousand Oaks RDA, Tax Allocation, Thousand Oaks Boulevard
Redevelopment, Refunding, MBIA Insured, 5.375%, 12/01/25 ............ 2,390,000 2,191,797
Tri-City Hospital District Revenue,
MBIA Insured, 6.00%, 2/01/22 ........................................ 2,350,000 2,350,776
Refunding, Series A, MBIA Insured, 5.625%, 2/15/17 .................. 2,750,000 2,689,280
Turlock Auxiliary Organization Revenue COP, California State University,
Stanislaus Foundation, MBIA Insured, 5.875%, 6/01/22 ................ 2,000,000 1,986,320
Turlock PFA, Sewer Revenue, FGIC Insured, 5.50%, 9/15/29 ............... 6,855,000 6,363,975
Union City CRDA, Tax Allocation, Community Redevelopment Project, AMBAC
Insured, 5.75%
10/01/22 ............................................................ 6,200,000 6,060,995
10/01/32 ............................................................ 14,100,000 13,615,382
University of California Revenues, Multi Purpose Projects, Series H,
FGIC Insured,
5.375%, 9/01/25 ..................................................... 2,480,000 2,275,101
5.50%, 9/01/28 ...................................................... 2,500,000 2,323,300
Upland COP,
Police Building Project, Refunding, AMBAC Insured, 6.60%, 8/01/16 ... 3,985,000 4,214,057
Water System Improvement Project, FGIC Insured, 6.60%, 8/01/16 ...... 2,385,000 2,522,090
Vacaville PFA, Tax Allocation Revenue, Vacaville Redevelopment Projects,
MBIA Insured, 6.35%, 9/01/22 ........................................ 1,355,000 1,388,684
Vallejo Revenue, Water Improvement Project, Refunding, Series A, FSA Insured,
5.875%, 5/01/26 ..................................................... 12,500,000 12,342,124
Walnut Valley Water District COP, Badillo Grand Transmission Project, FGIC
Insured, Pre-Refunded, 6.125%, 2/01/18 .............................. 2,200,000 2,283,577
Washington Township Hospital District Revenue, HealthCare District Revenue,
5.00%, 7/01/18 ...................................................... 2,000,000 1,679,880
5.125%, 7/01/23 ..................................................... 1,000,000 827,200
Waugh School District Special Tax GO, Corona/Ely CFD No. 1, AMBAC
Insured, 5.80%, 9/01/26 ............................................. 5,640,000 5,512,366
West and Central Basin Financing Authority Revenue, Central Basin
Project, Refunding, Series A,
AMBAC Insured, 5.375%, 8/01/17 ..................................... 4,330,000 4,137,877
West Basin Municipal Water District Revenue COP, 1992 Project, Refunding,
Series A, AMBAC Insured, 5.50%, 8/01/17 ............................. 3,370,000 3,266,574
West Sacramento Financing Authority Revenue,
MBIA Insured, Pre-Refunded, 6.25%, 9/01/16 .......................... 4,185,000 4,525,993
Water System Improvement Project, FGIC Insured, 5.50%, 8/01/15 ...... 4,500,000 4,425,929
West Sacramento RDA, Tax Allocation, West Sacramento Redevelopment
Project, MBIA Insured, Pre-Refunded, 6.25%, 9/01/21 ................ 3,340,000 3,499,551
Western Placer Unified School COP, 1998 Refunding and Capital Project,
AMBAC Insured, 5.00%, 6/01/18 ....................................... 5,455,000 4,862,968
William S. Hart Joint School Financing Authority Special Tax Revenue,
Community Facilities, Refunding, FSA Insured, 6.60%, 9/01/18 ....... 1,285,000 1,386,026
William S. Hart USD, COP, School Project, MBIA Insured, 6.00%, 9/01/30 . 7,015,000 6,927,101
Windsor Joint Powers Financing Authority Wastewater Revenue, Refunding,
Series A, AMBAC Insured, 6.125%, 12/15/12 ........................... 750,000 800,670
Yucaipa-Sweetwater School Facilities Financing Authority Special Tax Revenue,
Sweetwater, Series A, MBIA Insured, 5.70%, 9/01/19 ................. 5,000,000 4,895,500
--------------
TOTAL BONDS (COST $1,640,975,538) ..................................... 1,629,543,293
--------------
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
ZERO COUPON BONDS 1.9%
California Housing Finance Revenue, Home Mortgage, Series N,
AMBAC Insured, 8/01/31 ............................................. $ 5,000,000 $ 2,586,850
Foothill/Eastern Corridor Agency Toll Road Revenue, Capital
Appreciation, Refunding, MBIA Insured,
1/15/17 ............................................................ 20,000,000 7,071,200
1/15/18 ............................................................ 25,000,000 8,243,250
1/15/19 ............................................................ 5,970,000 1,833,984
Neward USD, GO, Capital Appreciation, Series B, FGIC Insured, 8/01/24 . 9,905,000 2,096,591
San Bernardino County SFMR, Series A, GNMA Secured, ETM, 5/01/22 ...... 28,405,000 6,856,399
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue,
Capital Appreciation, Refunding, Series A,
MBIA Insured, 1/15/26 .............................................. 8,675,000 1,730,663
Southern Kern USD, COP, Convertible Capital Appreciation Building
Program, Series B, FSA Insured, 9/01/26 ............................ 2,250,000 1,419,975
Union Elementary School District GO, Capital Appreciation, Series A,
FGIC Insured, 9/01/24 .............................................. 2,000,000 436,480
--------------
TOTAL ZERO COUPON BONDS (COST $33,573,442) ............................ 32,275,392
--------------
TOTAL LONG TERM INVESTMENTS (COST $1,674,548,980) ..................... 1,661,818,685
--------------
(a)SHORT-TERM INVESTMENTS 1.4%
California PCFA, PCR Southern California Edison Co., Series C,
Daily VRDN and Put, 4.10%, 2/28/08 ................................. 6,050,000 6,050,000
California State Economic Development Financing Authority Revenue,
Independent System B, Weekly VRDN and
Put, 4.80%, 4/01/08 ................................................ 5,000,000 5,000,000
Irvine 1915 Act,
AD No. 87-8, Daily VRDN and Put, 4.20%, 9/02/24 .................... 5,534,000 5,534,000
AD No. 94-13, Daily VRDN and Put, 4.20%, 9/02/22 ................... 1,385,000 1,385,000
AD No. 97-16, Daily VRDN and Put, 4.20%, 9/02/22 ................... 308,000 308,000
Irvine Ranch Water District GO, No. 105, 140, 240 and 250, Daily
VRDN and Put, 4.30%, 1/01/21 ....................................... 1,100,000 1,100,000
Irvine Ranch Water District Revenue,
Joint Powers Agency, Consolidated Bonds, DATES, Series C, Daily
VRDN and Put, 4.20%, 10/01/10 ...................................... 700,000 700,000
No. 102, 103, 105, and 106, Refunding, Daily VRDN and Put,
4.20%, 9/01/06 ..................................................... 800,000 800,000
No. 140, 105, 240, and 250, Daily VRDN and Put, 4.20%, 4/01/33 ..... 200,000 200,000
Orange County Apartment Development Revenue, Aliso Creek
Project B, Weekly VRDN and Put, 4.85%, 11/01/22 ..................... 3,300,000 3,300,000
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $24,377,000) ....................... 24,377,000
--------------
TOTAL INVESTMENTS (COST $1,698,925,980) 98.7% ......................... 1,686,195,685
OTHER ASSETS, LESS LIABILITIES 1.3% ................................... 21,923,452
--------------
NET ASSETS 100.0% ..................................................... $1,708,119,137
--------------
</TABLE>
See glossary of terms on page 53.
(a) Variable rate demand notes (VRDNs) are tax-exempt obligations which
contain a floating or variable interest rate adjustment formula and an
unconditional right of demand to receive payment of the principal
balance plus accrued interest at specified dates.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Highlights
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1999+ ----------------------------------------------------------------------
(UNAUDITED) 1999+ 1998 1997 1996 1995
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout
the period)
Net asset value, beginning of period . $ 11.02 $ 11.24 $ 10.93 $ 10.67 $ 10.38 $ 10.20
--------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ............... .26 .51 .53 .53 .53 .54
Net realized and unrealized gains
(losses) ........................... (.29) (.21) .31 .26 .29 .17
--------------------------------------------------------------------------------------------
Total from investment operations ..... (.03) .30 .84 .79 .82 .71
--------------------------------------------------------------------------------------------
Less distributions from net investment
income ............................. (.26) (.52) (.53) (.53) (.53) (.53)
--------------------------------------------------------------------------------------------
Net asset value, end of period ....... $ 10.73 $ 11.02 $ 11.24 $ 10.93 $ 10.67 $ 10.38
============================================================================================
Total return* ........................ (.30%) 2.63% 7.76% 7.58% 7.96% 7.19%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .... $186,406 $192,547 $155,664 $117,666 $101,199 $88,785
Ratios to average net assets:
Expenses ............................ .60%** .60% .52% .47% .45% .33%
Expenses excluding waiver and
payments by affiliate .............. .74%** .75% .78% .80% .81% .83%
Net investment income ............... 4.74%** 4.50% 4.76% 4.96% 4.99% 5.34%
Portfolio turnover rate .............. 5.23% 5.48% 9.58% 6.29% 10.13% 10.90%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
**Annualized.
+Based on average shares outstanding.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 98.7%
BONDS 97.7%
ABAG Finance Authority for Nonprofit Corps. COP,
5.75%, 8/01/03 ..................................................... $ 580,000 $ 594,425
Easter Seal Society for the Redwood Coast, Insured, 5.50%, 6/01/03 . 295,000 300,661
North County Health Project, 5.50%, 3/01/06 ........................ 1,025,000 1,039,330
Rhoda Haas Goldman Plaza, Insured, 5.125%, 5/15/15 ................. 3,000,000 2,708,010
ABAG Finance Corp. COP, ABAG XXVI,
Refunding, Series A, 5.90%, 6/01/02 ................................ 100,000 102,170
Series B, 6.40%, 10/01/03 .......................................... 100,000 104,780
ABAG Revenue, Refunding, Series A-E,
5.00%, 9/15/06 ..................................................... 610,000 587,113
5.05%, 9/15/07 ..................................................... 620,000 591,412
5.40%, 9/15/14 ..................................................... 2,455,000 2,242,814
ABAG Water and Wastewater Revenue, Pooled Financing Program,
Series A, FSA Insured, 5.00%, 10/01/10 ................................ 3,035,000 2,970,628
Alameda County COP, Series 1994,
5.70%, 4/01/02 ..................................................... 395,000 403,019
5.80%, 4/01/03 ..................................................... 420,000 432,680
5.90%, 4/01/04 ..................................................... 440,000 456,790
Antioch PFA, Reassessment Revenue, sub. lien, Series B,
5.00%, 9/02/03 ..................................................... 1,900,000 1,865,078
5.20%, 9/02/05 ..................................................... 2,100,000 2,043,720
5.40%, 9/02/07 ..................................................... 1,170,000 1,126,605
Auburn COP, Civic Center Project, Refunding,
5.30%, 9/01/00 ..................................................... 65,000 65,491
5.45%, 9/01/01 ..................................................... 70,000 70,744
5.60%, 9/01/02 ..................................................... 75,000 76,287
5.70%, 9/01/03 ..................................................... 80,000 81,898
5.75%, 9/01/04 ..................................................... 80,000 82,158
Bakersfield Central District Revenue RDA, Tax Allocation, Downtown
Bakersfield Redevelopment, ETM,
6.00%, 4/01/01 ..................................................... 295,000 300,608
6.10%, 4/01/02 ..................................................... 310,000 319,759
6.20%, 4/01/03 ..................................................... 330,000 344,682
Bakersfield Hospital Revenue, Bakersfield Memorial Hospital,
Series A, 5.70%, 1/01/00 .............................................. 100,000 100,000
Brentwood Infrastructure Financing Authority Infrastructure
Revenue, CIFP 94-1,
5.30%, 9/02/08 ..................................................... 990,000 937,886
5.35%, 9/02/09 ..................................................... 765,000 718,733
5.40%, 9/02/10 ..................................................... 990,000 922,225
5.45%, 9/02/11 ..................................................... 995,000 910,425
5.50%, 9/02/12 ..................................................... 990,000 901,395
California Educational Facilities Authority Revenue,
Pooled College and University Financing, Refunding,
Series B, 5.80%, 6/01/02 ........................................... 1,000,000 1,018,320
Pooled College and University Financing, Refunding,
Series B, 5.90%, 6/01/03 ........................................... 1,105,000 1,134,680
Pooled College and University Projects, Series B, 6.125%, 4/01/13 .. 1,000,000 1,010,770
California Health Facilities Financing Authority Revenue,
San Diego Hospital Association, Series B, MBIA Insured,
5.60%, 8/01/03 ....................................................... 100,000 103,322
California HFA, SFM Purchase, Class III, Series A-1, MBIA Insured,
5.70%, 8/01/11 ........................................................ 2,175,000 2,188,659
California State Department of Water Resources Central Valley Project
Revenue, Water Systems, Refunding,
Series T, 5.125%, 12/01/12 ........................................... 1,250,000 1,226,238
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
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LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
California State Public Works Board Lease Revenue,
Department of Corrections, Coalinga State Prison, Series B,
MBIA Insured, 5.50%, 12/01/08 ...................................... $ 1,000,000 $ 1,025,240
Department of Forestry and Fire Protection, Series A, 4.875%, 10/01/18 1,325,000 1,134,518
Various Community College Projects, Refunding, Series C, 5.50%, 9/01/09 1,555,000 1,588,153
California Statewide CDA Revenue, COP, Health Facilities, Barton
Memorial Hospital, Refunding, Series B,
5.70%, 12/01/00 .................................................... 200,000 202,080
6.40%, 12/01/05 .................................................... 450,000 467,177
California Statewide CDA, COP, California Lutheran Homes, ETM,
5.375%, 11/15/06 ...................................................... 1,000,000 1,008,220
California Statewide Communities Development Corp. COP, Pacific
Homes, Series A, Pre-Refunded, 5.50%, 4/01/04 ......................... 585,000 595,109
Campbell COP, Civic Center Project, Refunding, 5.60%, 10/01/03 ........ 350,000 359,692
Carson RDA, Project Area No. 1, Refunding, 6.10%, 10/01/02 ............ 200,000 206,064
Central Valley Financing Authority Cogeneration Project Revenue,
Carson Ice General Project, Refunding,
MBIA Insured, 5.00%, 7/01/17 ......................................... 2,000,000 1,799,200
Chaffey Community College District COP, 5.10%, 9/01/13 ................ 1,860,000 1,751,581
Clovis COP, Water System Improvement Project, AMBAC Insured,
5.90%, 3/01/03 ........................................................ 100,000 104,129
Coastside County Water District 1915 Act GO, Crystal Springs
Project, Refunding,
5.10%, 9/02/03 ..................................................... 530,000 526,825
5.20%, 9/02/04 ..................................................... 1,090,000 1,081,923
5.40%, 9/02/06 ..................................................... 635,000 628,663
Colma 1915 Act, Local ID No. 1, Refunding,
5.00%, 9/02/01 ..................................................... 465,000 464,312
5.10%, 9/02/02 ..................................................... 485,000 483,303
5.20%, 9/02/03 ..................................................... 515,000 512,595
5.30%, 9/02/04 ..................................................... 545,000 540,754
5.40%, 9/02/05 ..................................................... 570,000 562,049
Colton GO, Joint USD, CFD, Special Tax, Southridge Village, Phase III,
Refunding, FSA Insured,
5.65%, 9/01/09 ..................................................... 15,000 15,008
5.75%, 9/01/10 ..................................................... 20,000 20,012
Commerce Joint Powers Financing Authority Water Facilities Lease Revenue,
Refunding, Series A,
5.50%, 10/01/02 .................................................... 340,000 345,314
5.625%, 10/01/03 ................................................... 360,000 367,801
5.75%, 10/01/04 .................................................... 470,000 482,873
Compton COP, Civic Center and Capital Improvement, Refunding, Series A,
5.00%, 9/01/08 ..................................................... 4,340,000 4,177,380
5.50%, 9/01/15 ..................................................... 1,180,000 1,078,024
Compton Sewer Revenue, ETM,
5.70%, 7/01/00 ..................................................... 130,000 131,039
5.80%, 7/01/01 ..................................................... 140,000 142,694
5.90%, 7/01/02 ..................................................... 150,000 154,536
6.00%, 7/01/03 ..................................................... 155,000 161,414
Concord RDA, Tax Allocation, Central Concord Redevelopment Project,
Refunding, Sub Series A,
5.50%, 7/01/02 ..................................................... 625,000 633,244
5.625%, 7/01/03 .................................................... 655,000 667,327
Contra Costa County MFHR, Byron Park Project, Series C, GNMA
Secured, 6.00%, 7/20/03 ............................................... 425,000
Danville Financing Authority Revenue, Sycamore Valley, Reassessment
District No. 93-2,
5.40%, 9/02/01 ..................................................... 285,000 286,368
5.60%, 9/02/02 ..................................................... 450,000 454,379
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Danville Financing Authority Revenue, Sycamore Valley, Reassessment
District No. 93-2, (cont.)
5.70%, 9/02/03 ..................................................... $ 215,000 $ 217,453
5.80%, 9/02/04 ..................................................... 880,000 892,082
Dinuba RDA, Tax Allocation, subordinated notes,
Merged City, sub. lien, Refunding, Series A, 6.10%, 12/01/04 ....... 1,500,000 1,489,335
Merged City Redevelopment Project, sub. lien, 5.20%, 4/01/03 ....... 2,500,000 2,460,375
Duarte RDA, Tax Allocation, Merged Redevelopment Project Area,
Refunding, 5.125%, 10/01/16 ........................................... 4,930,000 4,330,956
Eden Township Hospital District Health Facilities Revenue COP, Eden
Hospital Health Services Corp., Refunding,
5.75%, 7/01/12 ....................................................... 1,195,000 1,196,099
Foster City PFA Revenue, Community Development Project, Series A,
5.60%, 9/01/03 ........................................................ 1,150,000 1,177,336
Fresno Joint Powers Financing Authority Local Agency Revenue, Refunding,
Series A, 6.20%, 9/02/03 .............................................. 1,000,000 1,021,830
Galt Capital Improvements Authority Lease Revenue, Culture and Recreation
Improvement Project, 5.00%, 4/01/12 ................................... 2,390,000 2,196,338
Galt Middle School Joint Powers Authority Special Tax, CFD No. 1, Refunding,
5.40%, 9/01/12 ........................................................ 1,955,000 1,846,889
Garden Grove GO, CDA, Tax Allocation, Garden Grove Community Project,
Refunding, 5.40%, 10/01/04 ............................................ 1,425,000 1,443,269
Glendale Parking Facilities Joint Powers Authority Revenue, Series A,
5.30%, 3/01/03 ........................................................ 125,000 125,603
Goleta Water District Revenue COP, Goleta Reclamation Project, Refunding,
FGIC Insured, 5.50%, 12/01/08 ......................................... 750,000 768,930
Hayward RDA, Tax Allocation, Downtown Hayward Redevelopment Project,
Refunding, 5.70%, 3/01/14 ............................................. 1,500,000 1,486,950
Hesperia PFA Revenue, Series A, 5.80%, 10/01/03 ....................... 3,275,000 3,365,292
Hi Desert Memorial Health Care District Revenue, Refunding,
5.10%, 10/01/06 .................................................... 615,000 573,641
5.125%, 10/01/07 ................................................... 650,000 600,340
Hollister RDA, Tax Allocation, Community Development Project, Series 1994,
5.35%, 10/01/03 .................................................... 525,000 540,824
5.45%, 10/01/04 .................................................... 550,000 566,764
5.55%, 10/01/05 .................................................... 585,000 602,714
Imperial COP,
Wastewater System Refining Program, Refunding, Series B, 5.40%, 10/15/06 865,000 873,226
Water System Refining Program, Refunding, Series A, 5.40%, 10/15/06 1,250,000 1,261,888
Imperial County Local Transportation Authority Sales Tax Revenue,
Series 1993, 5.50%,
5/01/04 ............................................................ 490,000 495,287
5/01/05 ............................................................ 515,000 518,991
Inland Empire Solid Waste Financing Authority Revenue, Landfill
Improvement Financing Project, Series B,
FSA Insured, 6.25%, 8/01/11 .......................................... 1,000,000 1,066,000
La Palma Community Development Commission Tax Allocation, La Palma
Community Development Project No. 1, Refunding,
5.20%, 6/01/00 ..................................................... 125,000 125,519
5.40%, 6/01/01 ..................................................... 130,000 131,095
5.50%, 6/01/02 ..................................................... 135,000 136,719
5.60%, 6/01/03 ..................................................... 145,000 147,549
5.70%, 6/01/04 ..................................................... 150,000 153,266
5.80%, 6/01/05 ..................................................... 160,000 164,162
La Quinta RDA, Tax Allocation, Redevelopment Project Areas No. 1 and 2,
MBIA Insured, 5.40%, 9/01/07 .......................................... 560,000 575,859
Lake Elsinore PFA, Tax Allocation Revenue, Lake Elsinore Redevelopment
Projects, Series A, FSA Insured, 5.40%,
9/01/08 .............................................................. 1,500,000 1,521,765
Lake Elsinore Public Financing Authority Tax Allocation Revenue,
Series A, 5.00%, 9/01/09 .............................................. 2,680,000 2,485,512
Lake Elsinore School Financing Authority Revenue, Refunding,
6.00%, 9/01/11 ........................................................ 1,000,000 1,009,980
Lancaster COP, School District Project, Refunding, FSA Insured,
5.125%, 4/01/14 ....................................................... 2,000,000 1,903,680
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
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LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Lancaster RDA, Tax Allocation,
Central Business District Redevelopment, Refunding, 5.25%, 8/01/00 . $ 35,000 $ 35,224
Central Business District Redevelopment, Refunding, 5.375%, 8/01/01 40,000 40,301
Central Business District Redevelopment, Refunding, 5.50%, 8/01/02 . 40,000 40,447
Central Business District Redevelopment, Refunding, 5.60%, 8/01/03 . 45,000 45,607
Central Business District Redevelopment, Refunding, 5.70%, 8/01/04 . 45,000 45,648
Central Business District Redevelopment, Refunding, 5.70%, 8/01/05 . 50,000 50,518
Fox Field Redevelopment Project Area, Refunding, 5.25%, 8/01/00 .... 55,000 55,353
Fox Field Redevelopment Project Area, Refunding, 5.375%, 8/01/01 ... 60,000 60,451
Fox Field Redevelopment Project Area, Refunding, 5.50%, 8/01/02 .... 65,000 65,726
Fox Field Redevelopment Project Area, Refunding, 5.60%, 8/01/03 .... 65,000 65,877
Fox Field Redevelopment Project Area, Refunding, 5.70%, 8/01/04 .... 70,000 71,007
Fox Field Redevelopment Project Area, Refunding, 5.70%, 8/01/05 .... 75,000 75,776
Lemon Grove CDA, Tax Allocation, 1998 Refunding,
5.00%, 8/01/06 ..................................................... 885,000 866,548
5.10%, 8/01/07 ..................................................... 205,000 200,588
5.20%, 8/01/08 ..................................................... 215,000 209,913
Lemon Grove MFHR, Hillside Terrace Apartments, Refunding, 5.375%, 1/01/19 970,000 977,779
Loma Linda Hospital Revenue, Loma Linda University Medical Center,
Refunding, Series A, AMBAC Insured,
4.85%, 12/01/10 .................................................... 5,000,000 4,803,200
4.95%, 12/01/11 .................................................... 7,000,000 6,737,500
Los Angeles County Transport Commission COP, Series B,
5.90%, 7/01/00 ..................................................... 100,000 100,920
6.00%, 7/01/01 ..................................................... 200,000 204,590
Lynwood PFA Revenue, Water System Improvement Project, 6.15%, 6/01/08 . 565,000 585,323
Madera COP, Madera Community Hospital, Refunding, 5.10%, 3/01/03 ...... 515,000 517,498
Mammoth Lakes COP, Refunding,
5.70%, 6/01/10 ..................................................... 850,000 849,286
5.75%, 6/01/11 ..................................................... 250,000 248,953
Merced Irrigation District COP, Water Facilities Project, 6.125%, 11/01/03 540,000 560,282
Mid-Peninsula Regional Open Space District COP, Special District
Association Finance Corp., Series 1993, 5.20%,
9/01/03 .............................................................. 530,000 535,581
Mojave GO, Water Agency, ID M, Morongo Basin, ETM, 6.20%, 9/01/01 ..... 100,000 102,917
Morgan Hill RDA, Tax Allocation, Refunding, 5.70%, 3/01/01 ............ 100,000 100,484
Mt. Diablo Hospital District Revenue, Series A, AMBAC Insured, ETM,
5.10%, 12/01/03 ....................................................... 100,000 101,764
Murrieta COP, Road Improvement Project, 6.00%,
4/01/07 ............................................................ 235,000 241,916
4/01/08 ............................................................ 245,000 250,562
New Haven USD, COP, Refunding, 5.30%, 7/01/01 ......................... 500,000 505,195
Newark USD, COP, 5.75%, 9/01/02 ....................................... 300,000 306,168
North City West School Facilities Financing Authority Special Tax, Refunding,
Series B, FSA Insured, 5.625%, 9/01/08 ................................ 500,000 521,700
Ontario Redevelopment Financing Authority Local Agency Revenue, Community
Facility, AD No.1, senior lien,
Series A, FSA Insured, 5.60%, 9/02/03 ................................ 950,000 979,640
Orange County CFD, No. 86-2 Special Tax, Rancho Santa Margarita, Refunding,
Series A, 5.375%, 8/15/12 ............................................. 1,500,000 1,415,250
Orange County Development Agency Tax Allocation, Santa Ana Heights Area
Project, Refunding, 5.90%, 9/01/04 .................................... 800,000 824,824
Orange County Local Transportation Authority Sales Tax Revenue, First Senior
Measure M, 6.00%, 2/15/06 ............................................. 500,000 530,610
Orange County MFHR, Villa Santiago Rehabilitation Project, FNMA Insured,
5.60%, 10/01/27 ....................................................... 500,000 503,275
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
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LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Orange County Recovery COP, Series A, MBIA Insured, 6.00%, 7/01/08 .... $ 1,500,000 $ 1,602,720
Oroville Hospital Revenue, Oroville Hospital, Series A, CHFCLP Insured,
5.125%, 12/01/12 ...................................................... 1,435,000 1,356,491
Palm Desert Financing Authority Lease Revenue, Blythe County Administrative
Project, 6.375%, 8/01/11 .............................................. 855,000 873,896
Paramount RDA, Tax Allocation, Redevelopment Project Area No. 1, Refunding,
6.05%, 8/01/05 ........................................................ 1,515,000 1,610,233
Paso Robles Union School District COP, 5.75%, 8/01/03 ................. 1,635,000 1,689,151
Pleasant Hill RDA, RMR, Pre-Refunded, 5.40%, 2/01/05 .................. 670,000 682,147
Pomona RDA, Tax Allocation, Mountain Meadows Redevelopment Project,
Refunding, Series X, 5.35%, 12/01/16 .................................. 1,000,000 907,780
Poway RDA, Tax Allocation, Paguay Redevelopment Project, sub. notes,
4.75%, 12/15/03 ....................................................... 1,950,000 1,900,061
Rialto RDA, Tax Allocation, Industrial Redevelopment, Sub Areas A and B,
Series A, ETM,
5.40%, 9/01/02 ..................................................... 270,000 275,324
5.50%, 9/01/03 ..................................................... 280,000 287,426
Richmond Joint Powers Financing Authority Revenue, Multiple Redevelopment
Projects, Refunding, Series B, 5.35%, 5/15/13 ......................... 2,000,000 1,924,140
Riverside County Asset Leasing Corp. Leasehold Revenue, Riverside County
Hospital Project, Series A,
5.90%, 6/01/02 ..................................................... 200,000 204,340
6.00%, 6/01/04 ..................................................... 200,000 206,772
Riverside County Housing Authority MFHR, Brandon Place Apartments,
Series B, FNMA Insured, 5.625%, 7/01/29 ............................... 995,000 1,004,821
Sacramento MUD, Electric Revenue, Series E, 5.25%, 5/15/03 ............ 1,000,000 1,014,370
San Bernardino County COP, Medical Center Financing Project, Refunding,
6.00%, 8/01/09 ........................................................ 2,000,000 2,054,080
San Bernardino County Mortgage Revenue, Don Miguel Apartments Project,
Refunding, MBIA Insured, 6.00%, 9/01/03 ............................... 100,000 102,157
San Clemente 1915 Act, AD No. 8, Refunding,
5.00%, 9/02/02 ..................................................... 415,000 414,768
5.10%, 9/02/03 ..................................................... 435,000 434,682
5.20%, 9/02/04 ..................................................... 460,000 458,652
San Diego Mortgage Revenue, Mariners Cove, Refunding, Series B-1,
5.125%, 9/01/03 ....................................................... 275,000 276,664
San Diego Port Facilities Revenue, National Steel and Shipbuilding Co.,
Refunding, 6.60%, 12/01/02 ............................................ 100,000 102,775
San Francisco City and County Public Utilities Commission Water Revenue,
Refunding, Series A, 5.00%, 11/01/17 .................................. 5,000,000 4,431,750
San Francisco City and County RDA,
Hotel Tax Revenue, FSA Insured, 5.80%, 7/01/01 ..................... 300,000 306,552
Hotel Tax Revenue, FSA Insured, 5.90%, 7/01/02 ..................... 245,000 253,399
Mortgage Revenue, Refunding, Series A, MBIA Insured, 6.125%, 7/01/02 5,000 5,002
San Francisco City and County, Refunding, Series 1, FGIC Insured, 5.00%,
6/15/12 ............................................................... 3,650,000 3,525,243
San Gorgonio Memorial Health Care District Health Facility Revenue, Pre-
Refunded, 6.375%, 6/01/08 ............................................. 750,000 800,348
San Joaquin County COP, General Hospital Project, ETM, 5.90%, 9/01/03 . 400,000 416,604
San Jose Financing Authority Revenue, Convention Center Project, Refunding,
Series C, 5.75%, 9/01/03 .............................................. 300,000 311,325
San Juan USD, COP, Gold River Elementary School Project, 5.65%, 4/01/03 600,000 601,206
San Ramon COP, Capital Improvements Project,
5.20%, 3/01/01 ..................................................... 85,000 85,591
5.30%, 3/01/02 ..................................................... 90,000 91,034
5.40%, 3/01/03 ..................................................... 95,000 96,700
5.50%, 3/01/04 ..................................................... 100,000 102,074
5.60%, 3/01/05 ..................................................... 105,000 107,632
Santa Barbara RDA, Tax Allocation, Central City Redevelopment Project,
6.00%, 3/01/03 ........................................................ 985,000 1,012,482
Santa Clara 1915 Act, Reassessment District 187, Refunding, Series
1, 5.25%, 9/02/11 ..................................................... 1,720,000 1,610,040
Santa Monica Parking Authority Lease Revenue, Refunding, 6.00%, 7/01/03 100,000 104,530
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Sebastopol COP,
5.70%, 6/01/05 .................................................... $ 240,000 $ 245,693
Refunding, Series 1994, 5.50%, 6/01/03 ............................ 200,000 203,210
Refunding, Series 1994, 5.60%, 6/01/04 ............................ 215,000 219,268
Selma PFA Revenue, Series A, MBIA Insured,
5.25%, 9/15/02 .................................................... 100,000 100,548
5.50%, 9/15/04 .................................................... 115,000 115,582
5.60%, 9/15/05 .................................................... 120,000 120,769
5.65%, 9/15/06 .................................................... 125,000 125,809
5.70%, 9/15/07 .................................................... 135,000 135,902
5.70%, 9/15/08 .................................................... 140,000 140,745
5.75%, 9/15/09 .................................................... 150,000 150,777
5.75%, 9/15/10 .................................................... 155,000 155,708
Shafter Joint Powers Financing Authority Lease Revenue, Community
Correctional Facility Project, Series A, 5.50%,
1/01/06 ............................................................ 1,500,000 1,520,580
Shasta Joint Powers Financing Authority Lease Revenue, Courthouse
Improvement Project, Series A, ETM, 5.80%, 6/01/00 .................. 100,000 100,718
Solana Beach COP, City Hall Project, 5.80%, 10/01/02 ................ 50,000 51,589
South Gate PFA Water Revenue, Refunding, Series A, FGIC Insured,
5.35%, 10/01/07 ................................................... 995,000 1,023,467
5.45%, 10/01/08 ................................................... 1,040,000 1,072,718
b South Gate PFAR, Tax Allocation, Redevelopment Project No. 1,
Refunding, 6.10%, 9/01/03 ........................................... 1,000,000 994,200
South San Francisco Capital Improvements Financing Authority Revenue,
South San Francisco Conference Center, Refunding,
5.70%, 9/01/02 .................................................... 195,000 198,438
5.80%, 9/01/03 .................................................... 205,000 210,195
5.90%, 9/01/04 .................................................... 215,000 221,671
Southern California Rapid Transit District Revenue, Special Benefit
AD A2, 5.80%, 9/01/01 ............................................... 100,000 101,534
Stockton Health Facilities Revenue, Dameron Hospital Association,
Refunding, Series A, 5.35%, 12/01/09 ................................ 385,000 367,044
Stockton Port District Port Facilities Revenue, Refunding and
Improvement, Series A, FSA Insured, 5.75%, 7/01/11 .................. 1,295,000 1,347,810
Sunline Transport Agency COP, Transport Finance Corp., Series B,
5.50%, 7/01/03 .................................................... 450,000 460,296
5.75%, 7/01/06 .................................................... 445,000 459,124
Susanville PFA Revenue, Series A, AMBAC Insured, 5.90%, 9/01/02 ..... 100,000 102,909
Tahoe City PUD, COP, Capital Facilities Project, Series B,
6.05%, 6/01/01 .................................................... 290,000 294,776
6.15%, 6/01/02 .................................................... 835,000 856,844
6.30%, 6/01/04 .................................................... 545,000 567,432
Tehachapi Cummings County Water District Revenue COP, Capital
Improvement Project, MBIA Insured, Pre-Refunded,
5.50%, 8/01/04 .................................................... 280,000 291,712
5.60%, 8/01/05 .................................................... 300,000 313,272
5.75%, 8/01/06 .................................................... 320,000 335,309
Temecula RDAR, Tax Allocation, Temecula Redevelopment Project No. 1,
Series A, 5.40%, 2/01/04 ............................................ 600,000 606,054
Temecula Valley USD, Series E, FSA Insured, 5.65%, 9/01/07 .......... 370,000 387,512
Travis USD, COP, Foxboro Elementary School Construction Project,
ETM, 6.30%, 9/01/02 ................................................. 200,000 208,394
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Trinity County PUD, COP, Electric District Facilities, Refunding,
Series 1993,
5.80%, 4/01/01 .................................................... $ 340,000 $ 342,955
5.90%, 4/01/02 .................................................... 360,000 365,075
6.00%, 4/01/03 .................................................... 380,000 387,557
Ventura USD, COP, Series A,
5.90%, 4/01/04 .................................................... 305,000 314,097
6.00%, 4/01/05 .................................................... 320,000 329,525
6.10%, 4/01/06 .................................................... 340,000 350,886
6.20%, 4/01/07 .................................................... 365,000 377,029
6.30%, 4/01/08 .................................................... 385,000 397,908
6.40%, 4/01/09 .................................................... 410,000 423,381
Virgin Islands PFA Revenue, senior lien, Refunding, Series A,
5.30%, 10/01/11 ................................................... 1,000,000 943,930
5.40%, 10/01/12 ................................................... 4,150,000 3,905,358
Virgin Islands Water and Power Authority Water System Revenue,
Refunding,
5.00%, 7/01/03 .................................................... 3,540,000 3,484,457
4.875%, 7/01/06 ................................................... 2,000,000 1,890,780
5.00%, 7/01/09 .................................................... 2,000,000 1,845,960
Watsonville RDA, GO, Tax Allocation, Watsonville Redevelopment
Project, Series 1993,
6.00%, 8/01/02 .................................................... 510,000 510,346
6.10%, 8/01/03 .................................................... 540,000 540,366
------------
TOTAL BONDS ($185,155,706) .......................................... 182,047,335
------------
ZERO COUPON BONDS 1.0%
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue,
senior lien, Refunding, Series A,1/15/16 ............................ 3,000,000 1,870,800
------------
TOTAL ZERO COUPON BONDS ($2,036,494) ................................ 1,870,800
------------
TOTAL LONG TERM INVESTMENTS ($187,192,200) .......................... 183,918,135
------------
(a) SHORT-TERM INVESTMENTS .1%
California PCFA, PCR, Southern California Edison, Series D, Daily
VRDN and Put, 4.10%, 2/28/08 ........................................ 100,000 100,000
Irvine 1915 Act, AD No. 87-8, Daily VRDN and Put, 4.20%, 9/02/24 .... 200,000 200,000
------------
TOTAL SHORT-TERM INVESTMENTS ($300,000) ............................. 300,000
------------
TOTAL INVESTMENTS (COST $187,492,200) 98.8% ......................... 184,218,135
OTHER ASSETS, LESS LIABILITIES 1.2% ................................. 2,187,753
------------
NET ASSETS 100.0% ................................................... $186,405,888
============
</TABLE>
See glossary of terms on page 53.
(a) Variable rate demand notes (VRDNs) are tax-exempt obligations which
contain a floating or variable interest rate adjustment formula and an
unconditional right of demand to receive payment of the principal
balance plus accrued interest at specified dates.
(b) Sufficient collateral has been segregated for securities traded on a
when-issued or delayed delivery basis.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Highlights
FRANKLIN CALIFORNIA TAX-EXEMPT MONEY FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1999 -------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout
the period)
Net asset value, beginning of period . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------------------------------------------------------------------------------------
Income from investment operations -
net investment income ............... .01 .02 .03 .03 .03 .03
Less distributions from net
investment income .................. (.01) (.02) (.03) (.03) (.03) (.03)
---------------------------------------------------------------------------------------
Net asset value, end of period ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=======================================================================================
Total return* ........................ 1.24% 2.39% 2.85% 2.85% 2.85% 2.94%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .... $795,086 $706,877 $656,725 $639,791 $597,819 $642,157
Ratios to average net assets:
Expenses ............................ .58%** .59% .60% .60% .63% .64%
Net investment income ............... 2.48%** 2.36% 2.82% 2.83% 2.83% 2.88%
</TABLE>
*Total return is not annualized for periods less than one year.
**Annualized.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA TAX-EXEMPT MONEY FUND AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS 99.1%
a Alameda-Contra Costa School Financing Authority COP, Capital Improvement Financing Projects,
Series A, Weekly VRDN and Put, 4.70%, 6/01/22 ............................................. $ 2,000,000 $ 2,000,000
Series C, Weekly VRDN and Put, 4.70%, 7/01/25 ............................................. 1,400,000 1,400,000
a Anaheim COP,
1993 Partnership Project, Refunding, AMBAC Insured, Weekly VRDN and
Put, 4.85%, 8/01/19 ....................................................................... 4,400,000 4,400,000
Police Facilities Refinancing Project, AMBAC Insured, Weekly VRDN and
Put, 4.85%, 8/01/08 ....................................................................... 5,050,000 5,050,000
a Big Bear Lake Industrial Revenue, Southwest Gas Corp. Project, Series A,
Weekly VRDN and Put, 5.00%, 12/01/28 ....................................................... 2,700,000 2,700,000
a Butte County Housing Authority MFR, Pine Tree Apartment Project, Weekly
VRDN and Put, 5.00%, 12/01/10 .............................................................. 2,382,000 2,382,000
a California Community College Financing Authority TRAN, Series A,
4.00%, 6/30/00 ............................................................................. 5,000,000 5,021,819
California Health Facilities Financing Authority Revenue,
a Children's Hospital, MBIA Insured, Weekly VRDN and Put, 4.90%,
11/01/21 .................................................................................. 2,500,000 2,500,000
a Scripps Health, Series A, MBIA Insured, Weekly VRDN and Put, 4.95%,
10/01/22 .................................................................................. 5,000,000 5,000,000
a Sutter Health, Series B, AMBAC Insured, Daily VRDN and Put, 4.20%,
7/01/12 ................................................................................... 1,400,000 1,400,000
Valley Presbyterian Hospital, Refunding, MBIA Insured, 5.25%, 5/01/00 ..................... 2,340,000 2,357,777
a California PCFA Revenue,
Occidental Geo/Santa Fe Geothermal, Monthly VRDN and Put, 3.50%,
9/01/13 ................................................................................... 4,700,000 4,700,000
Pacific Gas and Electric Co., Refunding, Series B, Daily VRDN and Put, 4.45%,
11/01/26 .................................................................................. 10,000,000 10,000,000
Reynolds Metals Co. Project, Weekly VRDN and Put, 4.50%, 12/01/15 ......................... 1,000,000 1,000,000
Southern California Edison, Series D, Daily VRDN and Put, 4.10%, 2/28/08 .................. 1,500,000 1,500,000
Solid Waste Disposal Revenue, Colmac Energy Project, Series A, Weekly
VRDN and Put, 4.95%, 12/01/16 ............................................................. 900,000 900,000
a California Public Capital Improvement Financing Authority Revenue, Pooled
Projects, Series C, Quarterly VRDN and Put, 3.70%, 6/01/28 ................................. 19,500,000 19,500,000
California School Cash Reserve Program Authority Revenue, Series A,
AMBAC Insured, 4.00%, 7/03/00 .............................................................. 45,000,000 45,172,510
a California School Facilities Financing Corp. COP, Capital Improvement
Financing Projects,
Series A, Weekly VRDN and Put, 5.05%, 7/01/22 ............................................. 2,050,000 2,050,000
Refunding, Series C, Weekly VRDN and Put, 5.05%, 7/01/22 .................................. 12,095,000 12,095,000
a California State Economic Development Financing Authority Revenue,
Independent System B, Weekly VRDN and Put, 4.80%, 4/01/08 ................................. 24,400,000 24,400,000
Independent System C, Weekly VRDN and Put, 4.70%, 4/01/08 ................................. 11,025,000 11,025,000
KQED Inc. Project, Refunding, Weekly VRDN and Put, 4.45%, 4/01/20 ......................... 2,050,000 2,050,000
California State GO, 6.00%, 9/01/00 ........................................................ 14,200,000 14,442,434
California State RAN, Series A, 4.00%, 6/30/00 ............................................. 17,000,000 17,057,482
a California Statewide Communities Development Corp. Revenue,
Industrial Development, American Kleaner Manufacturing Co., Series C,
Weekly VRDN and Put, 5.50%, 12/01/19 ...................................................... 2,550,000 2,550,000
Industrial Development, Karcher Property Project, Series C, Weekly VRDN
and Put, 4.85%, 12/01/19 .................................................................. 1,700,000 1,700,000
COP, Sutter Health Obligated Group, AMBAC Insured, Daily VRDN and
Put, 4.20%, 7/01/15 ....................................................................... 1,000,000 1,000,000
COP, North California Retired Officers, Daily VRDN and Put, 4.35%, 6/01/26 ................ 8,000,000 8,000,000
a Chico MFMR, Webb Homes Project, Weekly VRDN and Put,
3.70%, 1/01/10 ............................................................................. 2,170,000 2,170,000
a Concord MFMR,
Arcadian Facility, Series A, Weekly VRDN and Put, 5.00%, 7/15/18 .......................... 7,900,000 7,900,000
Bel Air Apartments, Issue A, Weekly VRDN and Put, 4.50%, 12/01/16 ......................... 500,000 500,000
a Duarte RDA, Johnson Duarte Project, Weekly VRDN and Put, 4.90%,
12/01/14 ................................................................................... 900,000 900,000
a Dublin Housing Authority MFHR, Park Sierra Housing, Series A, Weekly
VRDN and Put, 5.00%, 6/01/28 ............................................................... 1,100,000 1,100,000
a Fresno MFHR, Heron Pointe Apartments, Series A, Weekly VRDN and
Put, 4.90%, 6/01/07 ........................................................................ 1,000,000 1,000,000
a Irvine 1915 Act,
AD No. 94-13, Daily VRDN and Put, 4.20%, 9/02/22 .......................................... 9,500,000 9,500,000
AD No. 94-15, Daily VRDN and Put, 4.20%, 9/02/20 .......................................... 6,400,000 6,400,000
AD No. 97-16, Daily VRDN and Put, 4.20%, 9/02/22 .......................................... 21,176,000 21,176,000
AD No. 97-17, Daily VRDN and Put, 4.20%, 9/02/23 .......................................... 22,747,000 22,747,000
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA TAX-EXEMPT MONEY FUND AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS (CONT.)
a Irvine Ranch Public Facilities and Infrastructure Authority Lease Revenue,
Capital Improvement Project,
Weekly VRDN and Put, 5.10%, 11/01/10 ....................................................... $ 4,700,000 $ 4,700,000
a Irvine Ranch Water District, Construction Bonds , Refunding, Series B, Daily
VRDN and Put, 4.00%, 8/01/09 ............................................................... 2,400,000 2,400,000
a Irvine Ranch Water District COP, Capital Improvement Project, Daily
VRDN and Put, 4.30%, 8/01/16 ............................................................... 13,500,000 13,500,000
a Irvine Ranch Water District GO, No. 105, 140, 240 and 250, Daily
VRDN and Put, 4.30%, 1/01/21 ............................................................... 9,500,000 9,500,000
a Irvine Ranch Water District Revenue,
Consolidated District Nos.105, 250 and 290, Daily VRDN and Put,
4.20%, 8/01/16 ............................................................................ 3,400,000 3,400,000
Construction Bonds, Daily VRDN and Put, 4.20%, 10/01/05 ................................... 1,500,000 1,500,000
ID No.182, Series A, Daily VRDN and Put, 4.30%, 11/15/13 .................................. 3,000,000 3,000,000
ID No. 284, Series A, Daily VRDN and Put, 4.30%, 11/15/13 ................................. 4,200,000 4,200,000
ID Nos.102, 103, 105, 106, Refunding, Daily VRDN and Put, 4.20%, 9/01/06 .................. 3,000,000 3,000,000
ID Nos. 140, 105, 240 and 250, Daily VRDN and Put, 4.20%, 4/01/33 ......................... 11,000,000 11,000,000
a Kern County COP, Kern Public Facilities Project, Series A, Weekly
VRDN and Put, 5.00%, 8/01/06 ............................................................... 1,700,000 1,700,000
a Lancaster RDA, MFHR, Westwood Park Apartments, Series 1985-K, Weekly
VRDN and Put, 4.40%, 12/01/07 .............................................................. 900,000 900,000
a Livermore Housing Authority MFR, Richards Manor, Refunding, Series A,
Weekly VRDN and Put, 4.30%, 12/01/22 ....................................................... 6,070,000 6,070,000
Los Angeles County GO, TRAN, 4.00%, 6/30/00 ................................................ 13,500,000 13,543,916
a Los Angeles County Housing Authority MFHR, Sand Canyon Ranch Project,
Series F, Weekly VRDN and Put, 4.75%, 11/01/06 ............................................. 4,500,000 4,500,000
Los Angeles County MTA Revenue TECP, 3.55%, 2/22/00 ........................................ 7,000,000 7,000,000
a Los Angeles County MTA, Sales Tax Revenue, Proposition C, Refunding,
Second Series A, MBIA Insured, Weekly VRDN and Put, 4.90%, 7/01/20 ......................... 6,000,000 6,000,000
a Los Angeles County Pension Obligation, Refunding,
Series 96A, AMBAC Insured, Weekly VRDN and Put, 4.85%, 6/30/07 ............................ 2,500,000 2,500,000
Series B, Weekly VRDN and Put, 4.85%, 6/30/07 ............................................. 6,600,000 6,600,000
Los Angeles County Schools Pooled Financing Program COP, Pooled
Transportation, Series A, FSA Insured, 4.00%, 6/30/00 ...................................... 5,000,000 5,020,852
a Los Angeles County Transportation Commission Sales Tax Revenue,
Refunding, Weekly VRDN and Put, 4.85%, 7/01/12 ............................................ 12,000,000 12,000,000
a Los Angeles CRDA,
COP, Baldwin Hill Park, Weekly VRDN and Put, 4.95%, 12/01/14 ............................ 1,000,000 1,000,000
MFHR, Grand Promenade Project, Weekly VRDN and Put, 4.40%, 12/01/10 ..................... 1,300,000 1,300,000
Los Angeles Department of Water and Power Electric Plant Revenue TECP
3.35%, 1/18/00 .......................................................................... 10,100,000 10,100,000
3.15%, 2/24/00 .......................................................................... 5,000,000 5,000,000
a Los Angeles MFR,
Casden Project, Series K, Weekly VRDN and Put, 3.75%, 7/01/10 ........................... 3,300,000 3,300,000
Lucas Studios Project, Series D, Weekly VRDN and Put, 5.30%, 12/01/21 ................... 1,200,000 1,200,000
Masselin Manor, Weekly VRDN and Put, 4.95%, 7/01/15 ..................................... 2,400,000 2,400,000
Los Angeles USD, TRAN, Series A, 4.00%, 6/30/00 ............................................ 2,500,000 2,510,786
Los Angeles Wastewater Systems Revenue, Series D, Pre-Refunded, 6.70%, 12/01/00 ............ 4,350,000 4,547,016
a Metropolitan Water District Revenue, Southern California Waterworks,
Refunding, Series A, AMBAC Insured, Weekly VRDN and Put, 4.90%, 6/01/23 .................... 8,160,000 8,160,000
a Monterey County IDA, VPS Company Inc. Project, Series A, Weekly VRDN
and Put, 5.40%, 9/01/20 .................................................................... 4,180,000 4,180,000
M-S-R Public Power Agency, San Juan Project Revenue,
Refunding, Series G, MBIA Insured, 5.25%, 7/01/00 ....................................... 1,000,000 1,009,938
a Sub.lien, Refunding, Series D, Weekly VRDN and Put, 5.10%, 7/01/18 ...................... 7,600,000 7,600,000
a Sub.lien, Series E, MBIA Insured, Weekly VRDN and Put, 4.80%, 7/01/22 ................... 20,200,000 20,200,000
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA TAX-EXEMPT MONEY FUND AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS (CONT.)
Northern California Transmission Revenue,
Oregon Transmission Project, Series A, MBIA Insured, Pre-Refunded,
7.00%, 5/01/00 ........................................................................... $ 1,835,000 $ 1,885,919
TECP, 3.55%, 2/08/00 ..................................................................... 10,000,000 10,000,000
a Oakland COP, Capital Equipment Project, Weekly VRDN and Put,
5.15%, 12/01/15 ............................................................................. 7,500,000 7,500,000
a Orange County Apartment Development Revenue, Frost Project, Issue B,
Weekly VRDN and Put, 4.95%, 3/01/09 ......................................................... 100,000 100,000
a Orange County Sanitation District COP,
Nos. 1-3, 5-7, 11, 13 and 14, Daily VRDN and Put, 4.20%, 8/01/15 ......................... 23,000,000 23,000,000
Nos. 1-3, 5-7 and 11, Refunding, AMBAC Insured, Daily VRDN and
Put, 4.20%, 8/01/16 ...................................................................... 14,900,000 14,900,000
a Oxnard RDA, COP, Channel Islands Business Center, Weekly VRDN and
Put, 5.1961%, 7/01/05 ....................................................................... 390,000 390,000
a Pico Rivera RDA, COP, Weekly VRDN and Put, 4.75%, 12/01/10 .................................. 1,500,000 1,500,000
a Pleasanton MFMR, Valley Plaza, Series A, Weekly VRDN and Put,
5.00%, 7/15/18 .............................................................................. 4,660,000 4,660,000
Puerto Rico Commonwealth Government Development Bank,
a Refunding, MBIA Insured, Weekly VRDN and Put, 4.95%, 12/01/15 ............................ 700,000 700,000
TECP, 3.50%, 1/19/00 ..................................................................... 9,338,000 9,338,000
TECP, 3.65%, 1/19/00 ..................................................................... 7,900,000 7,900,000
TECP, 3.50%, 1/24/00 ..................................................................... 4,500,000 4,500,000
a Redwood City COP, City Hall Project, Weekly VRDN and Put, 4.75%, 7/01/21 .................... 2,400,000 2,400,000
a Riverside County CFD, Special Tax, No 89-5, Refunding, AMBAC
Insured, Weekly VRDN and Put, 5.10%, 9/01/28 ................................................ 8,000,000 8,000,000
a Riverside County Housing Authority MFMR, Emeritus Park, Series B,
FNMA Insured, Weekly VRDN and
Put, 5.00%, 7/15/18 ......................................................................... 3,050,000 3,050,000
a Riverside County IDA Revenue, Calavo Growers, Weekly VRDN and
Put, 4.40%, 9/01/05 ......................................................................... 1,500,000 1,500,000
Riverside County Teeter Plan TECP,
3.50%, 1/24/00 ............................................................................ 7,608,000 7,608,000
3.50%, 1/27/00 ............................................................................ 15,000,000 15,000,000
a Sacramento County COP, Administration Center and Courthouse Project,
Weekly VRDN and Put, 4.70%, 6/01/20 ......................................................... 7,955,000 7,955,000
a Sacramento MFHR, Smoketree, Series A, Weekly VRDN and Put,
5.00%, 4/15/10 .............................................................................. 6,750,000 6,750,000
a San Bernardino County MFHR, Refunding, Quality A, FNMA Insured,
Weekly VRDN and Put, 5.00%, 7/01/14 ......................................................... 4,350,000 4,350,000
San Diego Area Local Government COP, TRAN, Series A, 4.00%, 6/30/00 ......................... 5,000,000 5,020,356
a San Diego County MFHR, Nationwide, Series C, Weekly VRDN and Put,
5.00%, 4/15/05 .............................................................................. 1,400,000 1,400,000
San Diego Gas and Electric TECP, 3.55%, 2/09/00 ............................................. 5,500,000 5,500,000
a San Diego MFHR, University Town Center Apartments, Refunding,
Weekly VRDN and Put, 4.30%, 10/01/15 ........................................................ 4,900,000 4,900,000
a San Dimas RDA, Commercial Development Revenue, San Dimas
Commercial Center, Monthly VRDN and Put, 3.55%, 12/01/13 ................................... 900,000 900,000
a San Francisco City and County MFHR, Weekly VRDN and Put,
4.75%, 6/01/06 .............................................................................. 4,400,000 4,400,000
a San Francisco City and County RDA, MFR,
Refunding, Fillmore Center, Series B-2, Weekly VRDN and Put,
5.00%, 12/01/17 .......................................................................... 1,000,000 1,000,000
3rd and Mission, Series C, Weekly VRDN and Put, 5.05%, 7/01/34 .............................. 11,000,000 11,000,000
San Joaquin County Transportation Authority Sales Tax Revenue TECP,
3.45%, 3/13/00 .............................................................................. 12,600,000 12,600,000
a San Jose MFMR, Somerset Park Apartment Project, Series A, Weekly
VRDN and Put, 4.50%, 11/01/17 ............................................................... 1,000,000 1,000,000
a San Jose-Santa Clara Water Financing Authority, Sewer Revenue,
Series B, FGIC Insured, Weekly VRDN and
Put, 4.85%, 11/15/11 ........................................................................ 1,200,000 1,200,000
a San Mateo County MFHR, Pacific Oaks Apartment Project, Series A,
Weekly VRDN and Put, 5.05%, 7/01/17 ......................................................... 2,950,000 2,950,000
a Santa Ana Housing Authority MFHR, Vintage Apartments, Refunding,
Series A, Weekly VRDN and Put,
4.50%, 12/01/22 ............................................................................. 3,450,000 3,450,000
a Santa Clara County Financing Authority, Lease Revenue, VMC Facility
Replacement Project, Series B,
Weekly VRDN and Put, 5.05%, 11/15/25 ........................................................ 5,125,000 5,125,000
Santa Clara County Housing Authority MFHR, Benton Park Central
Apartments, Refunding, Series A,
a Weekly VRDN and Put, 4.90%, 12/15/25 ................................................... 5,000,000 5,000,000
Sonoma County TRAN, 3.50%, 2/01/00 ....................................................... 19,000,000 19,008,699
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN CALIFORNIA TAX-EXEMPT MONEY FUND AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS (CONT.)
a South San Francisco MFHR, Magnolia Plaza Apartments, Series A,
Weekly VRDN and Put, 5.05%, 5/01/17 ......................................................... $ 500,000 $ 500,000
a Southern California Public Power Authority Power Project Revenue,
Palo Verde Project, Refunding,
Series B, AMBAC Insured, Weekly VRDN and Put, 4.85%, 7/01/09 .............................. 2,000,000 2,000,000
Series C, AMBAC Insured, Weekly VRDN and Put, 4.85%, 7/01/17 .............................. 500,000 500,000
a Southern California Public Power Authority Transmission Project Revenue,
Southern Transmission, Refunding,
AMBAC Insured, Weekly VRDN and Put, 4.85%, 7/01/19 ........................................ 27,000,000 27,000,000
Series B, FSA Insured, Weekly VRDN and Put, 5.00%, 7/01/23 ................................ 6,600,000 6,600,000
Stockton East Water District COP, Project 1990, Series A, AMBAC Insured,
Pre-Refunded, 7.30%, 4/01/00 ................................................................ 4,490,000 4,624,732
a Suisun City Housing Authority MFR, Village Green, Series A, Weekly VRDN
and Put, 5.00%, 6/15/18 ..................................................................... 8,600,000 8,600,000
a Tustin 1915 Act, Reassessment District No 95-2, Series A, Daily VRDN and
Put, 4.20%, 9/02/13 ......................................................................... 15,322,000 15,322,000
a Vallecitos Water District Revenue COP, Twin Oaks Reservoir Project, Weekly
VRDN and Put, 5.00%, 7/01/30 ................................................................ 2,600,000 2,600,000
a Vallejo City USD, COP, Capital Improvement Financing Projects, Series E,
Weekly VRDN and Put, 3.60%, 7/01/25 ......................................................... 2,500,000 2,500,000
a West Basin Municipal Water District Revenue COP, Recycled Water Project,
Series C, Weekly VRDN and
Put, 4.80%, 8/01/27 ......................................................................... 1,900,000 1,900,000
a Western Riverside County Regional Wastewater Treatment Authority Revenue,
Daily VRDN and Put, 4.20%, 4/01/28 .......................................................... 7,000,000 7,000,000
------------
TOTAL INVESTMENTS (COST $787,877,236) 99.1% ................................................. 787,877,236
OTHER ASSETS, LESS LIABILITIES .9% .......................................................... 7,208,857
------------
NET ASSETS 100.0% ........................................................................... $795,086,093
============
</TABLE>
See glossary of terms on page 53.
(a) Variable Rate demand notes (VRDNs) are tax-exempt obligations which
contain a floating or variable interest rate adjustment formula and an
unconditional right of demand to receive payment of the principal
balance plus accrued interest at specified dates.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
GLOSSARY OF TERMS
- -------------------------------------------------------------------------------------------
<S> <C>
1915 ACT - Improvement Bond Act of 1915
ABAG - The Association of Bay Area Governments
AD - Assessment District
AMBAC - American Municipal Bond Assurance Corp.
BART - Bay Area Rapid Transit
BIG - Bond Investor Guaranty Insurance Co.
CDA - Community Development Authority/Agency
CFD - Community Facilities District
CHFCLP - California Health Facilities Construction Loan Program
CIFP - Capital Improvement Financing Program
COP - Certificate of Participation
CRDA - Community Redevelopment Authority/Agency
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FNMA - Federal National Mortgage Association
FSA - Financial Security Assistance
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Authority/Agency
HFAR - Housing Authority/Agency Revenue
HMR - Home Mortgage Revenue
IDA - Industrial Development Authority/Agency
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MFHR - Multi-Family Housing Revenue
MFMR - Multi-Family Mortgage Revenue
MFR - Multi-Family Revenue
MTA - Metropolitan Transportation Authority
MUD - Municipal Utility District
PCFA - Pollution Control Financing Authority
PCR - Pollution Control Revenue
PFA - Public Financing Authority
PFAR - Public Financing Authority Revenue
PUD - Public Utility District
RAN - Revenue Anticipation Notes
RDA - Redevelopment Agency
RDAR - Redevelopment Agency Revenue
RMR - Residential Mortgage Revenue
SFM - Single Family Mortgage
SFMR - Single Family Mortgage Revenue
TECP - Tax-Exempt Commercial Paper
TRAN - Tax and Revenue Anticipation Notes
UHSD - Unified High School District
USD - Unified School District
VRDN - Variable Rate Demand Notes
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN FRANKLIN CALIFORNIA FRANKLIN
CALIFORNIA INTERMEDIATE-TERM CALIFORNIA
INSURED TAX-FREE TAX-FREE TAX-EXEMPT
INCOME FUND INCOME FUND MONEY FUND
------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities:
Cost ...................................................... $ 1,698,925,980 $ 187,492,200 $787,877,236
============================================================
Value ..................................................... 1,686,195,685 184,218,135 787,877,236
Cash ....................................................... 25,513 16,829 2,686,112
Receivables:
Capital shares sold ....................................... 896,979 1,394,762 4,099,953
Interest .................................................. 29,333,325 2,785,263 4,837,780
------------------------------------------------------------
Total assets .......................................... 1,716,451,502 188,414,989 799,501,081
------------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased ........................... -- 999,541 --
Capital shares redeemed ................................... 3,292,930 498,618 3,648,991
Affiliates ................................................ 1,053,904 109,756 348,307
Shareholders .............................................. 474,357 22,298 84,158
Distributions to shareholders ............................... 3,318,320 327,420 102,072
Other liabilities ........................................... 192,854 51,468 231,460
------------------------------------------------------------
Total liabilities ..................................... 8,332,365 2,009,101 4,414,988
------------------------------------------------------------
Net assets, at value ................................. $ 1,708,119,137 $ 186,405,888 $795,086,093
============================================================
Net assets consist of:
Undistributed net investment income ........................ $ -- $ 274,897 $ --
Accumulated distributions in excess of net investment income (2,157,298) -- --
Net unrealized depreciation ................................ (12,730,295) (3,274,065) --
Accumulated net realized loss .............................. (17,461,056) (257,039) --
Capital shares ............................................. 1,740,467,786 189,662,095 795,086,093
------------------------------------------------------------
Net assets, at value .................................. $ 1,708,119,137 $ 186,405,888 $795,086,093
============================================================
</TABLE>
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRANKLIN FRANKLIN CALIFORNIA FRANKLIN
CALIFORNIA INTERMEDIATE-TERM CALIFORNIA
INSURED TAX-FREE TAX-FREE TAX-EXEMPT
INCOME FUND INCOME FUND MONEY FUND
----------------------------------------------------------
<S> <C> <C> <C>
CLASS A:
Net assets, at value ....................................... $ 1,635,927,793 $ 186,405,888 $795,086,093
==========================================================
Shares outstanding ......................................... 142,248,886 17,379,134 795,086,093
==========================================================
Net asset value per share* ................................. $11.50 $10.73 $1.00
==========================================================
Maximum offering price per share (net asset value
per share / 95.75%, 97.75%, 100%, respectively) ........... $12.01 $10.98 $1.00
==========================================================
CLASS C:
Net assets, at value ....................................... $ 72,191,344 -- --
==========================================================
Shares outstanding ......................................... 6,235,141 -- --
==========================================================
Net asset value per share* ................................. $11.58 -- --
==========================================================
Maximum offering price per share (net asset value
per share / 99%) .......................................... $11.70 -- --
==========================================================
</TABLE>
*Redemption price is equal to net asset value less any applicable contingent
deferred sales charge.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN FRANKLIN CALIFORNIA FRANKLIN
CALIFORNIA INTERMEDIATE-TERM CALIFORNIA
INSURED TAX-FREE TAX-FREE TAX-EXEMPT
INCOME FUND INCOME FUND MONEY FUND
----------------------------------------------------------
<S> <C> <C> <C>
Investment income:
Interest ................................................... $ 51,436,063 $ 5,069,168 $ 11,292,638
----------------------------------------------------------
Expenses:
Management fees (Note 3) ................................... 4,112,508 535,172 1,803,425
Distribution fees (Note 3)
Class A ................................................... 799,717 95,756 --
Class C ................................................... 249,363 -- --
Transfer agent fees (Note 3) ............................... 245,608 32,387 192,804
Custodian fees ............................................. 9,921 1,164 6,272
Reports to shareholders .................................... 75,962 14,301 54,837
Registration and filing fees ............................... 1,289 845 2,427
Professional fees .......................................... 30,319 3,836 11,137
Trustees' fees and expenses ................................ 22,809 2,419 8,741
Other ...................................................... 41,794 18,885 52,332
----------------------------------------------------------
Total expenses ........................................ 5,589,290 704,765 2,131,975
Expenses waived/paid by affiliate (Note 3) ............ -- (131,399) --
----------------------------------------------------------
Net expenses ......................................... 5,589,290 573,366 2,131,975
----------------------------------------------------------
Net investment income ............................... 45,846,773 4,495,802 9,160,663
----------------------------------------------------------
Realized and unrealized losses:
Net realized loss from investments ......................... (17,337,496) (154,399) --
Net unrealized depreciation on investments ................. (76,095,279) (4,937,398) --
----------------------------------------------------------
Net realized and unrealized loss ............................ (93,432,775) (5,091,797) --
----------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ (47,586,002) $ (595,995) $ 9,160,663
==========================================================
</TABLE>
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
AND THE YEAR ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
FRANKLIN CALIFORNIA INSURED FRANKLIN CALIFORNIA INTERMEDIATE-TERM
TAX-FREE INCOME FUND TAX-FREE INCOME FUND
-------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999 DECEMBER 31, 1999 JUNE 30, 1999
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income .................... $ 45,846,773 $ 91,205,201 $ 4,495,802 $ 8,310,124
Net realized gain (loss) from investments (17,337,496) 954,544 (154,399) 93,006
Net unrealized depreciation on investments (76,095,279) (43,645,378) (4,937,398) (4,475,770)
-------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ........... (47,586,002) 48,514,367 (595,995) 3,927,360
Distributions to shareholders from:
Net investment income:
Class A ................................. (44,106,600) (88,563,323) (4,500,687) (8,423,741)
Class C ................................. (1,740,173) (3,006,211) -- --
In excess of net investment income:
Class A ................................. (163,646) (1,921,957) -- --
Class C ................................. (6,456) (65,239) -- --
Net realized gains:
Class A ................................. (230,555) (9,565,776) -- --
Class C ................................. (10,029) (360,118) -- --
-------------------------------------------------------------------------
Total distributions to shareholders ....... (46,257,459) (103,482,624) (4,500,687) (8,423,741)
Capital share transactions: (Note 2)
Class A .................................. (49,458,057) 110,241,197 (1,044,328) 41,379,720
Class C .................................. (4,127,763) 27,415,008 -- --
-------------------------------------------------------------------------
Total capital share transactions .......... (53,585,820) 137,656,205 (1,044,328) 41,379,720
Net increase (decrease) in net
assets ............................ (147,429,281) 82,687,948 (6,141,010) 36,883,339
Net assets
Beginning of period ....................... 1,855,548,418 1,772,860,470 192,546,898 155,663,559
-------------------------------------------------------------------------
End of period ............................. $ 1,708,119,137 $ 1,855,548,418 $ 186,405,888 $ 192,546,898
=========================================================================
Undistributed net investment income
(accumulated distributions in excess of
net investment income) included in
net assets:
End of period ............................ $ (2,157,298) $ (1,987,196) $ 274,897 $ 279,782
=========================================================================
</TABLE>
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
AND THE YEAR ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
FRANKLIN CALIFORNIA
TAX-EXEMPT MONEY FUND
-----------------------------------
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
-----------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income .................................. $ 9,160,663 $ 15,536,781
Net realized loss from investments ..................... -- (11,084)
-----------------------------------
Net increase in net assets resulting from operations 9,160,663 15,525,697
Distributions to shareholders from net investment income: (9,160,663) (15,525,697)*
Capital share transactions: (Note 2) .................... 88,208,835 50,152,692
-----------------------------------
Net increase in net assets ......................... 88,208,835 50,152,692
Net assets (there is no undistributed net investment
income at beginning or end of period):
Beginning of period ................................... 706,877,258 656,724,566
-----------------------------------
End of period ......................................... $ 795,086,093 $ 706,877,258
===================================
</TABLE>
*Distributions were decreased by net realized loss from security transactions of
$11,084 in year ended June 1999.
See notes to financial statements.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Franklin California Tax-Free Trust (the Trust) is registered under the
Investment Company Act of 1940 as an open-end investment company, consisting of
three series (the Funds). All Funds are diversified except the Franklin
California Intermediate-Term Tax-Free Income Fund (Intermediate-Term Fund). The
Funds' investment objectives are to provide tax-free income. The Franklin
California Tax-Exempt Money Fund (Money Fund) also seeks to provide high current
income consistent with capital preservation and liquidity.
The following summarizes the Funds' significant accounting policies.
a. SECURITY VALUATION
Tax-free bonds generally trade in the over-the-counter market and are valued
within the range of the latest quoted bid and asked prices. In the absence of a
sale or reported bid and asked 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. Securities for
which market quotations are not readily available are valued at fair value as
determined by management in accordance with procedures established by the Board
of Trustees.
Securities in the Money Fund are valued at amortized cost which approximates
value.
b. INCOME TAXES
No provision has been made for income taxes because each Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its taxable income.
c. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Bond discount and
premium are amortized on an income tax basis. For the Franklin California
Insured Tax-Free Income Fund (Insured Fund) and the Intermediate-Term Fund,
dividends from net investment income are normally declared daily and distributed
monthly to shareholders. Other distributions are recorded on the ex-dividend
date. For the Money Fund, dividends from net investment income and capital gains
or losses are normally declared daily. Such distributions are reinvested in
additional shares of the Fund.
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. Other expenses are
charged to each Fund on a specific identification basis.
Realized and unrealized gains and 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 for the Insured Fund.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. INSURANCE
The scheduled payments of interest and principal for each long-term municipal
security in the Insured Fund is insured by either a new issue insurance policy,
a portfolio insurance policy, a secondary insurance policy, or by collateral
guaranteed by an agency of the U.S. government.
Depending on the type of coverage, premiums for insurance are either added to
the cost basis of the security, included as an expense of the fund, or paid by a
third party.
e. ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The classes of shares offered within each of the funds are indicated below.
Effective January 1, 1999, Class I and Class II were renamed Class A and Class
C, respectively. Each class of shares differs by its initial sales load,
distribution fees, voting rights on matters affecting a single class and the
exchange privilege.
<TABLE>
CLASS A CLASS A & CLASS C
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Franklin California Intermediate-Term Tax-Free Income Fund Franklin California Insured Tax-Free Income Fund
Franklin California Tax-Exempt Money Fund
</TABLE>
At December 31, 1999, there were an unlimited number of shares authorized (no
par value). Transactions in the Funds' shares were as follows:
<TABLE>
<CAPTION>
FRANKLIN
FRANKLIN CALIFORNIA FRANKLIN CALIFORNIA CALIFORNIA
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
-------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT AMOUNT
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES:
Six months ended December 31, 1999
Shares sold ........................ 13,220,350 $154,983,872 2,948,159 $32,169,304 $ 603,832,747
Shares issued in reinvestment of
distributions .................... 1,680,321 19,798,509 240,581 2,627,301 9,152,980
Shares redeemed .................... (19,122,207) (224,240,438) (3,285,303) (35,840,933) (524,776,892)
-------------------------------------------------------------------------------
Net increase (decrease) ............ (4,221,536) $(49,458,057) (96,563) $(1,044,328) $ 88,208,835
===============================================================================
Year ended June 30, 1999
Shares sold ........................ 29,553,520 $370,514,398 7,753,731 $88,121,907 $1,033,213,640
Shares issued in reinvestment of
distributions .................... 3,539,619 44,284,162 446,478 5,064,927 15,576,778
Shares redeemed .................... (24,337,250) (304,557,363) (4,571,261) (51,807,114) (998,637,726)
-------------------------------------------------------------------------------
Net increase ....................... 8,755,889 $110,241,197 3,628,948 $41,379,720 $ 50,152,692
===============================================================================
</TABLE>
FRANKLIN CALIFORNIA TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
2. SHARES OF BENEFICIAL INTEREST (CONT.)
<TABLE>
<CAPTION>
FRANKLIN CALIFORNIA
INSURED TAX-FREE
INCOME FUND
-------------------------------------
SHARES AMOUNT
-------------------------------------
<S> <C> <C>
CLASS C SHARES:
Six months ended December 31, 1999
Shares sold ........................... 797,852 $ 9,466,367
Shares issued in reinvestment of
distributions ....................... 99,670 1,182,959
Shares redeemed ....................... (1,247,219) (14,777,089)
-------------------------------------
Net decrease .......................... (349,697) $ (4,127,763)
Year ended June 30, 1999
=====================================
Shares sold ........................... 2,862,343 $36,108,219
Shares issued in reinvestment of
distributions ....................... 187,570 2,360,890
Shares redeemed ....................... (878,664) (11,054,101)
-------------------------------------
Net increase .......................... 2,171,249 $27,415,008
=====================================
</TABLE>
3. TRANSACTIONS WITH AFFILIATES
Certain officers and trustees of the Funds are also officers or trustees of
Franklin Advisers, Inc. (Advisers), Franklin Templeton Services, Inc. (FT
Services), Franklin/Templeton Distributors, Inc. (Distributors), and
Franklin/Templeton Investor Services, Inc. (Investor Services), the Funds'
principal investment manager, administrative manager, principal underwriter, and
transfer agent, respectively.
The Insured Fund and the Intermediate-Term Fund pay investment management fees
to Advisers based on the month-end net assets of each fund, and the Money Fund
pays an investment management fee to Advisers based on the average daily net
assets of the fund as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE NET ASSETS
--------------------------------------------------------------
<S> <C>
.625% First $100 million
.50% Over $100 million, up to and including $250 million
.45% In excess of $250 million
</TABLE>
Under an agreement with Advisers, FT Services provides administrative services
to the Funds. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Funds.
Advisers agreed in advance to waive management fees for the Intermediate-Term
Fund, as noted in the Statement of Operations.
The Intermediate-Term Fund reimburses Distributors up to .10% per year of its
average daily net assets, and the Insured Fund reimburses Distributors up to
.10% and .65% per year of the average daily net assets of Class A and Class C,
respectively, for costs incurred in marketing the Funds' shares.
FRANKLIN CALIFORNIA TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES (CONT.)
Distributors paid net commissions on sales of the Funds' shares, and received
contingent deferred sales charges for the period as follows:
<TABLE>
<CAPTION>
FRANKLIN FRANKLIN
CALIFORNIA CALIFORNIA
INSURED INTERMEDIATE-
TAX-FREE TERM TAX-FREE
INCOME FUND INCOME FUND
---------------------------------
<S> <C> <C>
Net commissions paid ............... $122,875 $15,861
Contingent deferred sales charges... $ 66,309 $ 1,644
</TABLE>
The Funds paid transfer agent fees of $470,799 of which $416,227 was paid to
Investor Services.
4. INCOME TAXES
At June 30, 1999, the Intermediate-Term Fund and the Money Fund had tax basis
capital losses which may be carried over to offset future capital gains. Such
losses expire as follows:
<TABLE>
<CAPTION>
FRANKLIN
CALIFORNIA FRANKLIN
INTERMEDIATE- CALIFORNIA
TERM TAX-FREE TAX-EXEMPT
INCOME FUND MONEY FUND
---------------------------
<S> <C> <C>
Capital loss carryovers expiring in:
2003 ................................... $102,640 $14,563
2005 ................................... -- 1,444
2006 ................................... -- 9,957
2007 ................................... -- 4,593
---------------------------
$102,640 $30,557
===========================
</TABLE>
At June 30, 1999, the Money Fund had deferred capital losses occurring
subsequent to October 31, 1998 of $9,293. For tax purposes, such losses will be
reflected in the year ending June 30, 2000.
Distributions of income to shareholders may not equal net investment income due
to differing treatments of dividend distributions for book and tax purposes.
Net realized capital gains differ for financial statement and tax purposes
primarily due to differing treatment of wash sales.
62
FRANKLIN CALIFORNIA TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
4. INCOME TAXES (CONT.)
At December 31, 1999, the net unrealized depreciation based on the cost of
investments for income tax purposes was as follows:
<TABLE>
<CAPTION>
FRANKLIN FRANKLIN
CALIFORNIA CALIFORNIA
INSURED INTERMEDIATE-
TAX-FREE TERM TAX-FREE
INCOME FUND INCOME FUND
--------------------------------------
<S> <C> <C>
Investments at cost ....... $ 1,699,305,381 $ 187,492,200
======================================
Unrealized appreciation ... $ 37,602,317 $ 2,060,841
Unrealized depreciation ... (50,712,013) (5,334,906)
======================================
Net unrealized depreciation $ (13,109,696) $ (3,274,065)
======================================
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
FRANKLIN FRANKLIN
CALIFORNIA CALIFORNIA
INSURED INTERMEDIATE-
TAX-FREE TERM TAX-FREE
INCOME FUND INCOME FUND
-------------------------------------
<S> <C> <C>
Purchases... $352,718,018 $10,009,907
Sales ...... $411,792,276 $26,000,669
</TABLE>
6. CREDIT RISK
The Funds have investments in excess of 10% of their total net assets in the
state of California. Such concentration may subject the Funds more significantly
to economic changes occurring within that state.
7. CREDIT FACILITY
Certain Franklin Templeton Funds, including Insured Fund and Intermediate-Term
Fund, are participants in a $750 million senior unsecured credit agreement for
temporary or emergency purposes. The termination date of the agreement is March
1, 2000. Interest is calculated on the Funds' borrowing at market rates. At
December 31, 1999, the Funds had not utilized this credit facility.
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