0000928816-13-000166.txt : 20130201 0000928816-13-000166.hdr.sgml : 20130201 20130201160325 ACCESSION NUMBER: 0000928816-13-000166 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20121130 FILED AS OF DATE: 20130201 DATE AS OF CHANGE: 20130201 EFFECTIVENESS DATE: 20130201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND CENTRAL INDEX KEY: 0000856671 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05979 FILM NUMBER: 13566752 BUSINESS ADDRESS: STREET 1: 601 CONGRESS STREET CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 617-663-3000 MAIL ADDRESS: STREET 1: C/O JOHN HANCOCK FUNDS STREET 2: 601 CONGRESS STREET CITY: BOSTON STATE: MA ZIP: 02210 FORMER COMPANY: FORMER CONFORMED NAME: JOHN HANCOCK CALIFORNIA TAX FREE INCOME FUND DATE OF NAME CHANGE: 20110214 FORMER COMPANY: FORMER CONFORMED NAME: HANCOCK JOHN CALIFORNIA TAX FREE INCOME FUND DATE OF NAME CHANGE: 19941227 FORMER COMPANY: FORMER CONFORMED NAME: TRANSAMERICA CALIFORNIA TAX FREE INCOME FUND DATE OF NAME CHANGE: 19920703 0000856671 S000000616 HANCOCK JOHN CALIFORNIA TAX FREE INCOME FUND C000001742 Class A TACAX C000001743 Class B TSCAX C000001744 Class C TCCAX N-CSRS 1 a_cataxfreeinc.htm JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND a_cataxfreeinc.htm
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
 
FORM N-CSR 
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED 
 
MANAGEMENT INVESTMENT COMPANIES 
 
Investment Company Act file number 811-5979 
 
John Hancock California Tax-Free Income Fund 
(Exact name of registrant as specified in charter) 
 
601 Congress Street, Boston, Massachusetts 02210 
(Address of principal executive offices) (Zip code) 
 
Salvatore Schiavone
Treasurer
 
601 Congress Street 
 
Boston, Massachusetts 02210 
 
(Name and address of agent for service) 
 
Registrant's telephone number, including area code: 617-663-4497 
 
Date of fiscal year end:  May 31 
 
Date of reporting period:  November 30, 2012 

 

ITEM 1. REPORTS TO STOCKHOLDERS.





A look at performance

Total returns for the period ended November 30, 2012

                    Tax 
  Average annual total    Cumulative total      SEC 30-day  SEC 30-day  equivalent 
  returns (%)      returns (%)      yield (%)  yield (%)  subsidized 
  with maximum sales charge  with maximum sales charge    subsidized  unsubsidized1  yield (%)2 

                as of  as of  as of 
  1-year  5-year  10-year  6-months  1-year  5-year  10-year  11-30-12  11-30-12  11-30-12 

Class A  8.14  4.98  4.62  –0.05  8.14  27.49  57.02  2.60  2.60  4.46 

Class B  7.49  4.76  4.38  –0.72  7.49  26.18  53.58  1.98  1.88  3.40 

Class C  11.39  5.07  4.22  3.28  11.39  28.07  51.21  1.98  1.88  3.40 

 

Performance figures assume all distributions are reinvested. Figures reflect maximum sales charges on Class A shares of 4.5% and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The returns for Class C shares have been adjusted to reflect the elimination of the front-end sales charge effective 7-15-04. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectus for the Fund and may differ from those disclosed in the Financial highlights tables in this report. The fee waivers and expense limitations are contractual at least until 9-30-13 for Class B and Class C shares. Had the fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:

  Class A  Class B  Class C 
Net (%)  0.86  1.61  1.61 
Gross (%)  0.86  1.71  1.71 

 

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For current to the most recent month end performance data, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares. Please note that a portion of the Fund’s income may be subject to taxes, and some investors may be subject to the Alternative Minimum Tax (AMT). Also note that capital gains are taxable. The Fund’s performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.

See the following page for footnotes.

6  California Tax-Free Income Fund | Semiannual report 

 




    Without  With maximum     
  Start date  sales charge  sales charge  Index 1  Index 2 

Class B3  11-30-02  $15,358  $15,358  $17,260  $17,005 

Class C3  11-30-02  15,121  15,121  17,260  17,005 

 

Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

The Class C shares investment with maximum sales charge has been adjusted to reflect the elimination of the front-end sales charge effective 7-15-04.

Barclays California Municipal Bond Index is an unmanaged index composed of California investment grade municipal bonds.

Barclays Municipal Bond Index is an unmanaged index representative of the tax-exempt bond market.

Prior to December 14, 2012, the Fund compared its performance solely to the Barclays Municipal Bond Index. After this date, the Fund added the Barclays California Municipal Bond Index as the primary benchmark index and retained the Barclays Municipal Bond Index as the secondary benchmark index to which the Fund compares its performance to better reflect the universe of investment opportunities based on the Fund’s investment strategy.

It is not possible to invest directly in an index. Index figures do not reflect sales charges or direct expenses, which would have resulted in lower values if they did.

Footnotes related to performance pages

1 Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers.

2 Tax equivalent yield is based on the maximum federal income tax rate of 35% and a state tax rate of 10.3%. Share classes will differ due to varying expenses.

3 No contingent deferred sales charge is applicable.

Semiannual report | California Tax-Free Income Fund  7 

 



Your expenses

These examples are intended to help you understand your ongoing operating expenses of investing in the Fund so you can compare these costs with the ongoing costs of investing in other mutual funds.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about the Fund’s actual ongoing operating expenses, and is based on the Fund’s actual return. It assumes an account value of $1,000.00 on June 1, 2012 with the same investment held until November 30, 2012.

  Account value  Ending value  Expenses paid during 
  on 6-1-12  on 11-30-12  period ended 11-30-121 

Class A  $1,000.00  $1,046.70  $4.31 

Class B  1,000.00  1,042.80  8.14 

Class C  1,000.00  1,042.80  8.14 

 

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at November 30, 2012, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

 

 
8  California Tax-Free Income Fund | Semiannual report 

 



Hypothetical example for comparison purposes

This table allows you to compare the Fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not the Fund’s actual return). It assumes an account value of $1,000.00 on June 1, 2012, with the same investment held until November 30, 2012. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

  Account value  Ending value  Expenses paid during 
  on 6-1-12  on 11-30-12  period ended 11-30-121 

Class A  $1,000.00  $1,020.90  $4.26 

Class B  1,000.00  1,017.10  8.04 

Class C  1,000.00  1,017.10  8.04 

 

Remember, these examples do not include any transaction costs, therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

1 Expenses are equal to the Fund’s annualized expense ratio of 0.84%, 1.59% and 1.59% for Class A, Class B and Class C shares, respectively, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

Semiannual report | California Tax-Free Income Fund  9 

 



Portfolio summary

Top 10 Holdings (26.4% of Net Assets on 11-30-12)1,2   

Golden State Tobacco Securitization Corp., 5.000%, 6-1-35  5.1% 

Santa Ana Financing Authority, 6.250%, 7-1-24  4.2% 

Foothill Eastern Transportation Corridor Agency, Zero Coupon, 1-15-36  2.6% 

Commonwealth of Puerto Rico, 6.500%, 7-1-15  2.3% 

State of California, 6.500%, 4-1-33  2.2% 

San Bernardino County, 5.500%, 8-1-17  2.2% 

Inglewood Unified School District, 5.250%, 10-15-26  2.0% 

California State Public Works Board, 5.000%, 12-1-19  2.0% 

San Joaquin Hills Transportation Corridor Agency, Zero Coupon, 1-1-22  1.9% 

Commonwealth of Puerto Rico, 5.750%, 7-1-41  1.9% 

 

Sector Composition1,3       

General Obligation Bonds  17.9%  Utilities  2.2% 

 
Revenue Bonds    Water & Sewer  1.9% 

 
Facilities  18.6%  Development  0.8% 

 
Tobacco  12.1%  Pollution  0.8% 

 
Transportation  12.0%  Other Revenue  16.4% 

 
Education  7.4%  Short-Term Investments & Other  4.6% 

 
Health Care  5.3%     

     

 

Quality Composition1,4   

AAA  4.2% 

AA  17.2% 

A  31.6% 

BBB  26.6% 

BB  4.8% 

B  3.3% 

Not Rated  7.7% 

Short-Term Investments & Other  4.6% 

 


1 As a percentage of net assets on 11-30-12.

2 Cash and cash equivalents not included.

3 The major risk factors in this Fund’s performance are interest-rate and credit risk. When interest rates rise, bond prices usually fall. Generally, an increase in the Fund’s average maturity will make it more sensitive to interest-rate risk. Investments in higher-yielding, lower-rated securities involve additional risks as these securities include a higher risk of default and loss of principal. Municipal bond prices can decline due to fiscal mismanagement or tax shortfalls, or if related projects become unprofitable. Investments focused on one sector may fluctuate more widely than investments diversified across sectors. Because the Fund may focus on particular sectors, its performance may depend on the performance of those sectors. If the Fund invests heavily in any one state or region, performance could be disproportionately affected by factors particular to that state or region.

4 Ratings are from Moody’s Investors Service, Inc. If not available, we have used ratings from Standard & Poor’s Ratings Services. In the absence of ratings from these agencies, we have used Fitch, Inc. ratings. “Not Rated” securities are those with no ratings available from these agencies. All ratings are as of 11-30-12 and do not reflect subsequent downgrades or upgrades, if any.

10  California Tax-Free Income Fund | Semiannual report 

 



Fund’s investments

As of 11-30-12 (unaudited)

    Maturity     
  Rate (%)  date  Par value  Value 
 
Municipal Bonds 95.4%        $273,206,182 

(Cost $246,580,960)         
 
California 86.7%        248,089,498 

ABAG Finance Authority for Nonprofit Corps.         
Institute on Aging (D)  5.650  08-15-38  $1,000,000  1,094,500 

ABAG Finance Authority for Nonprofit Corps.         
Sharp Healthcare  6.250  08-01-39  1,000,000  1,205,810 

Anaheim Certificates of Participation         
Convention Center (D)(P)  11.574  07-16-23  2,000,000  2,017,960 

Anaheim Public Financing Authority         
Public Improvement Project, Series C (D)(Z)  Zero  09-01-18  3,000,000  2,571,060 

Antioch Public Financing Authority, Series B  5.850  09-02-15  820,000  822,239 

Bay Area Toll Authority         
San Francisco Bay Area  5.000  04-01-31  1,000,000  1,226,600 

Belmont Community Facilities         
Library Project, Series A (D)  5.750  08-01-24  1,000,000  1,291,120 

California County Tobacco         
Securitization Agency         
Fresno County Funding Corp.  6.000  06-01-35  1,765,000  1,765,000 

California County Tobacco         
Securitization Agency         
Kern County Corp., Series A  6.125  06-01-43  5,000,000  4,999,950 

California County Tobacco         
Securitization Agency         
Public Improvements  5.250  06-01-21  4,465,000  4,470,671 

California County Tobacco         
Securitization Agency         
Stanislaus Funding, Series A  5.500  06-01-33  785,000  762,463 

California Educational Facilities Authority         
College and University Financing Project  5.000  02-01-26  4,525,000  4,503,099 

California Educational Facilities Authority         
Woodbury University  5.000  01-01-25  1,800,000  1,839,600 

California Educational Facilities Authority         
Woodbury University  5.000  01-01-30  2,000,000  2,035,560 

California Health Facilities Financing         
Kaiser Permanente, Series A  5.250  04-01-39  2,500,000  2,761,100 

California Health Facilities Financing Authority         
Catholic Healthcare West, Series G  5.250  07-01-23  1,000,000  1,060,910 

California Health Facilities Financing Authority         
Providence Health and Services, Series C  6.500  10-01-33  1,000,000  1,231,180 

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  11 

 



    Maturity     
  Rate (%)  date  Par value  Value 
 
California (continued)         

California Health Facilities Financing Authority         
Scripps Health, Series A  5.000  11-15-36  $1,000,000  $1,122,080 

California Infrastructure & Economic         
Development Bank California         
Independent System Operator, Series A  6.250  02-01-39  2,000,000  2,193,400 

California Infrastructure & Economic         
Development Bank Performing Arts Center  5.000  12-01-27  500,000  550,320 

California Pollution Control Financing Authority         
Waste Management Inc., Series C, AMT (P)  5.125  11-01-23  2,000,000  2,185,660 

California State Public Works Board         
Department of Corrections, Series A (D)  5.000  12-01-19  5,000,000  5,724,700 

California State Public Works Board         
Department of Corrections, Series C  5.500  06-01-18  5,000,000  5,261,500 

California State Public Works Board         
Trustees California State University, Series D  6.250  04-01-34  2,000,000  2,470,860 

California State Public Works Board         
Various Capital Project, Series A  5.000  04-01-37  1,000,000  1,125,330 

California State Public Works Board         
Various Capital Project, Series G  5.000  11-01-37  1,000,000  1,131,940 

California State University Revenue         
College and University Revenue, Series A  5.250  11-01-34  1,000,000  1,153,810 

California Statewide Communities         
Development Authority American         
Baptist Homes West  6.250  10-01-39  2,000,000  2,221,240 

California Statewide Communities         
Development Authority Kaiser         
Permanente, Series A  5.000  04-01-42  2,000,000  2,323,520 

California Statewide Communities         
Development Authority Senior Living         
of Southern California  7.250  11-15-41  1,700,000  1,978,817 

California Statewide Communities         
Development Authority Thomas Jefferson         
School of Law, Series A (S)  7.250  10-01-38  2,000,000  2,045,400 

California Statewide Communities         
Development Authority University of         
California — Irvine  5.750  05-15-32  1,230,000  1,349,113 

California Statewide Financing Authority         
Tobacco Settlement, Series A  6.000  05-01-37  2,500,000  2,499,825 

California Statewide Financing Authority         
Tobacco Settlement, Series B  6.000  05-01-37  4,000,000  4,000,760 

Capistrano Unified School District         
No. 90-2 Talega  5.875  09-01-23  500,000  508,265 

Capistrano Unified School District         
No. 90-2 Talega  6.000  09-01-33  750,000  759,563 

Center Unified School District, Series C (D)(Z)  Zero  09-01-16  2,145,000  2,007,227 

Cloverdale Community Development Agency  5.500  09-01-38  3,000,000  2,695,830 

Contra Costa County Public Financing         
Authority, Series A (D)  5.000  06-01-28  1,230,000  1,232,226 

Corona Community Facilities District         
No. 97-2  5.875  09-01-23  975,000  979,631 

 

12  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



    Maturity     
  Rate (%)  date  Par value  Value 
 
California (continued)         

East Side Union High School District-Santa         
Clara County (D)  5.250  09-01-24  $2,500,000  $3,241,650 

Folsom Public Financing Authority, Series B  5.125  09-01-26  1,000,000  1,031,400 

Foothill Eastern Transportation Corridor Agency         
Highway Revenue Tolls (Z)  Zero  01-15-25  6,615,000  3,224,085 

Foothill Eastern Transportation Corridor Agency         
Highway Revenue Tolls (Z)  Zero  01-15-36  30,000,000  7,494,900 

Fresno Sewer Revenue, Series A–1 (D)  5.250  09-01-19  1,000,000  1,166,440 

Golden State Tobacco Securitization Corp.         
Escrowed to Maturity, Series 2003 A–1  6.250  06-01-33  1,495,000  1,538,101 

Golden State Tobacco Securitization Corp.,         
Series A (D)  5.000  06-01-35  13,750,000  14,572,113 

Inglewood Unified School District (D)  5.250  10-15-26  5,000,000  5,851,850 

Kern County, Capital Improvements Project,         
Series A (D)  5.750  08-01-35  1,000,000  1,152,570 

Laguna Salada Union School District,         
Series C (D)(Z)  Zero  08-01-26  1,000,000  584,290 

Lancaster School District         
School Improvements (D)(Z)  Zero  04-01-19  1,730,000  1,478,043 

Lancaster School District         
School Improvements (D)(Z)  Zero  04-01-22  1,380,000  1,018,771 

Lee Lake Water District Community Facilities         
District No: 2 Montecito Ranch  6.125  09-01-27  1,200,000  1,210,296 

Long Beach Harbor Revenue, Series A, AMT (D)  6.000  05-15-18  2,660,000  3,287,308 

Long Beach Special Tax Community         
Community Facilities, District 6  6.250  10-01-26  2,480,000  2,482,703 

Los Angeles Community College District         
2008 Election, Series A  6.000  08-01-33  4,000,000  5,114,880 

Los Angeles Community Facilities District No: 3         
Cascades Business Park  6.400  09-01-22  655,000  659,166 

Los Angeles County Public Works         
Financing Authority         
Multiple Capital Projects II  5.000  08-01-42  1,000,000  1,149,540 

Los Angeles Department of Water & Power         
Power Systems, Series B  5.000  07-01-43  2,500,000  2,950,325 

Los Angeles Department of Water & Power,         
Series B  5.000  07-01-43  1,000,000  1,185,670 

M-S-R Energy Authority         
Natural Gas Revenue, Series B  6.500  11-01-39  2,500,000  3,588,050 

Modesto Community Facilities District No: 4-1  5.100  09-01-26  3,000,000  3,073,800 

Northern California Power Agency         
California — Oregon Transportation Project,         
Series A (D)  7.000  05-01-13  35,000  35,900 

Orange County Improvement Bond Act 1915,         
Series B  5.750  09-02-33  1,365,000  1,380,984 

Oxnard Community Facilities District: No. 3         
Seabridge  5.000  09-01-35  1,490,000  1,511,858 

Paramount Unified School District, Series B (D)(Z)  Zero  09-01-25  4,735,000  2,941,998 

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  13 

 



    Maturity     
  Rate (%)  date  Par value  Value 
 
California (continued)         

Pasadena California Certificates Participation         
Refunding Old Pasadena Parking         
Facility Project  6.250  01-01-18  $615,000  $694,802 

Ripon Redevelopment Agency         
Ripon Community Redevelopment Project (D)  4.750  11-01-36  1,540,000  1,540,616 

San Bernardino County         
Capital Facilities Project, Escrowed to         
Maturity, Series B  6.875  08-01-24  350,000  500,420 

San Bernardino County         
Medical Center Financial Project, Series B (D)  5.500  08-01-17  5,910,000  6,223,230 

San Bruno Park School District         
School Improvements, Series B (D)(Z)  Zero  08-01-21  1,015,000  793,395 

San Diego Public Facilities Financing Authority         
Lease Revenue  5.250  03-01-40  1,000,000  1,105,710 

San Diego Redevelopment Agency         
City Heights, Series A  5.750  09-01-23  1,000,000  1,001,040 

San Diego Redevelopment Agency         
City Heights, Series A  5.800  09-01-28  1,395,000  1,396,186 

San Diego Redevelopment Agency         
Public Improvements, Series B (Z)  Zero  09-01-17  1,600,000  1,335,040 

San Diego Redevelopment Agency         
Public Improvements, Series B (Z)  Zero  09-01-18  1,700,000  1,327,479 

San Diego Unified School District, Election         
of 1998, Series A (D)(Z)  Zero  07-01-21  2,500,000  1,926,250 

San Francisco City & County Redevelopment         
Agency Community Facilities, District No. 6,         
Series A  6.000  08-01-25  2,500,000  2,508,850 

San Francisco City & County Redevelopment         
Agency Department of General Services Lease,         
No. 6, Mission Bay South, Series A  5.150  08-01-35  1,250,000  1,272,663 

San Francisco City & County Redevelopment         
Agency Mission Bay South Redevelopment,         
Series D  7.000  08-01-41  1,000,000  1,169,990 

San Francisco City & County Redevelopment         
Financing Authority Mission Bay South         
Redevelopment, Series D  6.625  08-01-39  1,000,000  1,124,510 

San Francisco City & County Redevelopment         
Financing Authority San Francisco         
Redevelopment Projects, Series B  6.625  08-01-39  700,000  834,120 

San Francisco State Building Authority, Series A  5.000  10-01-13  475,000  485,844 

San Joaquin County         
County Administration Building (D)  5.000  11-15-29  2,965,000  3,197,990 

San Joaquin Hills Transportation Corridor         
Agency Highway Revenue Tolls, Escrowed to         
Maturity (Z)  Zero  01-01-14  5,000,000  4,978,900 

San Joaquin Hills Transportation Corridor         
Agency Highway Revenue Tolls, Escrowed         
to Maturity (Z)  Zero  01-01-22  6,500,000  5,573,295 

San Joaquin Hills Transportation Corridor         
Agency Highway Revenue Tolls, Series A  5.750  01-15-21  5,000,000  5,012,950 

San Mateo County Joint Power Authority (D)  5.000  07-01-21  1,815,000  2,157,527 

Santa Ana Financing Authority         
Police Administration & Holdings Facility,         
Series A (D)  6.250  07-01-19  1,790,000  2,141,180 

 

14  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



    Maturity     
  Rate (%)  date  Par value  Value 
 
California (continued)         

Santa Ana Financing Authority         
Police Administration & Holdings Facility,         
Series A (D)  6.250  07-01-24  $10,000,000  $11,896,100 

Santa Fe Springs Community Development         
Commission Construction Redevelopment         
Project, Series A (D)(Z)  Zero  09-01-20  1,275,000  945,043 

Southern California Public Power Authority         
Natural Gas Revenue, Series A  5.250  11-01-26  2,000,000  2,375,920 

State of California (D)  4.750  04-01-29  170,000  170,065 

State of California  5.000  02-01-38  3,000,000  3,488,190 

State of California  5.000  09-01-41  1,500,000  1,731,870 

State of California  5.000  10-01-41  2,000,000  2,311,740 

State of California  5.000  09-01-42  1,000,000  1,168,900 

State of California         
Public Improvements  5.125  04-01-23  2,000,000  2,121,140 

State of California         
Recreation Facilities and School Improvements  6.500  04-01-33  5,000,000  6,421,850 

State of California         
Water, Utility and Highway Improvements  5.250  03-01-30  2,000,000  2,436,740 

Torrance Hospital Revenue         
Torrance Memorial Medical Center, Series A  5.500  06-01-31  2,000,000  2,005,000 

Tuolumne Wind Project Authority         
Tuolumne County Project, Series A  5.625  01-01-29  1,000,000  1,186,250 

Vallejo Sanitation & Flood Control District (D)  5.000  07-01-19  1,742,000  1,823,647 

West Covina Redevelopment Agency         
Fashion Plaza  6.000  09-01-22  3,000,000  3,598,526 
 
Puerto Rico 8.7%        25,116,684 

Commonwealth of Puerto Rico  6.500  07-01-15  6,000,000  6,578,340 

Commonwealth of Puerto Rico         
Public Improvement, Series A  5.500  07-01-39  1,500,000  1,571,625 

Commonwealth of Puerto Rico         
Public Improvement, Series A  5.750  07-01-41  5,000,000  5,359,900 

Commonwealth of Puerto Rico, Series A  5.375  07-01-33  1,250,000  1,308,475 

Puerto Rico Aqueduct & Sewer Authority         
Water Revenue, Series A  6.125  07-01-24  1,750,000  2,033,745 

Puerto Rico Aqueduct & Sewer Authority         
Water Revenue, Series A  5.125  07-01-37  1,000,000  1,023,150 

Puerto Rico Highway &         
Transportation Authority         
Fuel Sales Tax Revenue, Series A (D)  5.000  07-01-38  80,000  80,002 

Puerto Rico Highway &         
Transportation Authority         
Prerefunded, Series Z (D)  6.250  07-01-14  940,000  1,027,956 

Puerto Rico Highway & Transportation Authority         
Unrefunded, Series Z (D)  6.250  07-01-14  2,310,000  2,462,506 

Puerto Rico Industrial Tourist Education         
Medical & Environment Authority         
Hospital de la Concepcion  6.500  11-15-20  500,000  502,535 

Puerto Rico Sales Tax Financing Corp.         
Sales Tax Revenue, Series A (Zero coupon         
steps up to 6.750% on 8-1-16)  Zero  08-01-32  3,000,000  3,168,450 

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  15 

 



  Par value  Value 
 
Short-Term Investments 3.1%    $8,830,000 

(Cost $8,830,000)     
 
Repurchase Agreement 3.1%     

Repurchase Agreement with State Street Corp. dated 11-30-12 at     
0.010% to be repurchased at $8,830,007 on 12-3-12, collateralized     
by $9,015,000 Cash Management Bill, 0.010% due 12-31-12     
(valued at $9,010,493)  $8,830,000  8,830,000 
 
Total investments (Cost $255,410,960)98.5%    $282,036,182 

 
Other assets and liabilities, net 1.5%    $4,161,691 

 
Total net assets 100.0%    $286,197,873 

 

The percentage shown for each investment category is the total value of that category as a percentage of the net assets of the Fund.

AMT Interest earned from these securities may be considered a tax preference item for purpose of the Federal Alternative Minimum Tax.

(D) Bond is insured by one of these companies:

Insurance coverage  As a % of total investments 

Ambac Financial Group, Inc.    2.9% 
Assured Guarantee Corp.    0.4% 
Assured Guaranty Municipal Corp.    6.1% 
California Mortgage Insurance    0.4% 
Financial Guaranty Insurance Company    5.2% 
National Public Finance Guarantee Insurance Company  16.1% 

 

(P) Variable rate obligation. The coupon rate shown represents the rate at period end.

(S) This security is exempt from registration under Rule 144A of the Securities Act of 1933. Such a security may be resold, normally to qualified institutional buyers, in transactions exempt from registration.

(Z) Zero coupon bonds are issued at a discount from their principal amount in lieu of paying interest periodically.

† At 11-30-12, the aggregate cost of investment securities for federal income tax purposes was $253,639,485. Net unrealized appreciation aggregated $28,396,697, of which $28,580,185 related to appreciated investment securities and $183,488 related to depreciated investment securities.

The Fund has the following sector composition as a percentage of total net assets on 11-30-12:

General Obligation Bonds  17.9% 
 
Revenue Bonds   
 
Facilities  18.6% 
Tobacco  12.1% 
Transportation  12.0% 
Education  7.4% 
Health Care  5.3% 
Utilities  2.2% 
Water & Sewer  1.9% 
Development  0.8% 
Pollution  0.8% 
Other Revenue  16.4% 
Short-Term Investments & Other  4.6% 

 

16  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



F I N A N C I A L   S T A T E M E N T S

Financial statements

Statement of assets and liabilities 11-30-12 (unaudited)

This Statement of assets and liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum offering price per share.

Assets   

Investments, at value (Cost $255,410,960)  $282,036,182 
Cash  834 
Receivable for fund shares sold  1,486,630 
Interest receivable  3,637,322 
Other receivables and prepaid expenses  40,526 
 
Total assets  287,201,494 
 
Liabilities   

Payable for fund shares repurchased  474,636 
Distributions payable  264,603 
Payable to affiliates   
Accounting and legal services fees  19,206 
Transfer agent fees  13,832 
Distribution and service fees  30,660 
Trustees’ fees  30,728 
Management fees  127,653 
Other liabilities and accrued expenses  42,303 
 
Total liabilities  1,003,621 
 
Net assets   

Paid-in capital  $258,235,238 
Undistributed net investment income  404,139 
Accumulated net realized gain (loss) on investments  933,274 
Net unrealized appreciation (depreciation) on investments  26,625,222 
 
Net assets  $286,197,873 
 
Net asset value per share   

Based on net asset values and shares outstanding — the Fund has an   
unlimited number of shares authorized with no par value   
Class A ($252,056,496 ÷ 22,300,498 shares)  $11.30 
Class B ($2,612,905 ÷ 231,055 shares)1  $11.31 
Class C ($31,528,472 ÷ 2,789,494 shares)1  $11.30 
 
Maximum offering price per share   

Class A (net asset value per share ÷ 95.5%)2  $11.83 

 

1 Redemption price is equal to net asset value less any applicable contingent deferred sales charge.

2 On single retail sales of less than $100,000. On sales of $100,000 or more and on group sales the offering price is reduced.

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  17 

 



F I N A N C I A L   S T A T E M E N T S

Statement of operations For the six-month period ended 11-30-12
(unaudited)

This Statement of operations summarizes the Fund’s investment income earned and expenses incurred in operating the Fund. It also shows net gains (losses) for the period stated.

Investment income   

Interest  $6,985,397 
 
Total investment income  6,985,397 
 
Expenses   

Investment management fees  765,213 
Distribution and service fees  347,793 
Accounting and legal services fees  29,217 
Transfer agent fees  81,758 
Trustees’ fees  8,457 
State registration fees  2,750 
Printing and postage  7,104 
Professional fees  24,072 
Custodian fees  23,652 
Registration and filing fees  6,669 
Other  15,222 
 
Total expenses  1,311,907 
Less expense reductions  (16,365) 
 
Net expenses  1,295,542 
 
Net investment income  5,689,855 
 
Realized and unrealized gain (loss)   

Net realized gain on investments  988,671 
Change in net unrealized appreciation (depreciation) of investments  5,982,945 
 
Net realized and unrealized gain  6,971,616 
 
Increase in net assets from operations  $12,661,471 

 

18  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



F I N A N C I A L   S T A T E M E N T S

Statements of changes in net assets

These Statements of changes in net assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

  Six months   
  ended  Year 
  11-30-12  ended 
  (Unaudited)  5-31-12 
 
Increase (decrease) in net assets     

 
From operations     
Net investment income  $5,689,855  $11,761,423 
Net realized gain  988,671  580,901 
Change in net unrealized appreciation (depreciation)  5,982,945  23,065,500 
 
Increase in net assets resulting from operations  12,661,471  35,407,824 
 
Distributions to shareholders     
From net investment income     
Class A  (5,054,132)  (10,448,639) 
Class B  (42,282)  (85,506) 
Class C  (508,055)  (1,028,477) 
 
Total distributions  (5,604,469)  (11,562,622) 
 
From Fund share transactions  5,523,522  (2,231,172) 
 
Total increase  12,580,524  21,614,030 
 
Net assets     

Beginning of period  273,617,349  252,003,319 
 
End of period  $286,197,873  $273,617,349 
 
Undistributed net investment income  $404,139  $318,753 

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  19 

 



Financial highlights

The Financial highlights show how the Fund’s net asset value for a share has changed during the period.

CLASS A SHARES Period ended  11-30-121  5-31-12  5-31-11  5-31-10  5-31-092  8-31-08  8-31-07 
 
Per share operating performance               

Net asset value, beginning               
of period  $11.02  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93 
Net investment income3  0.23  0.48  0.49  0.50  0.36  0.47  0.47 
Net realized and unrealized gain               
(loss) on investments  0.28  0.94  (0.26)  0.61  (0.65)  (0.25)  (0.32) 
Total from investment operations  0.51  1.42  0.23  1.11  (0.29)  0.22  0.15 
Less distributions               
From net investment income  (0.23)  (0.47)  (0.48)  (0.49)  (0.36)  (0.46)  (0.47) 
From net realized gain          (0.01)  (0.01)   
Total distributions  (0.23)  (0.47)  (0.48)  (0.49)  (0.37)  (0.47)  (0.47) 
Net asset value, end of period  $11.30  $11.02  $10.07  $10.32  $9.70  $10.36  $10.61 
Total return (%)4,5  4.676  14.43  2.29  11.69  (2.63)6  2.18  1.34 
 
Ratios and supplemental data               

Net assets, end of period               
(in millions)  $252  $243  $224  $250  $248  $294  $304 
Ratios (as a percentage of average               
net assets):               
Expenses before reductions  0.847  0.86  0.86  0.85  0.917,8  0.81  0.81 
Expenses net of fee waivers  0.847  0.86  0.86  0.85  0.917,8  0.81  0.81 
Net investment income  4.187  4.56  4.79  4.97  5.107  4.45  4.33 
Portfolio turnover (%)  4  9  2  9  26  22  41 

 

1 Six months ended 11-30-12. Unaudited
2 For the nine-month period ended 5-31-09. The Fund changed its fiscal year end from August 31 to May 31.
3 Based on the average daily shares outstanding.
4 Does not reflect the effect of sales charges, if any.
5 Total returns would have been lower had certain expenses not been reduced during the applicable periods shown.
6 Not annualized.
7 Annualized.
8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

 

20  California Tax-Free Income Fund | Semiannual report  See notes to financial statements 

 



CLASS B SHARES Period ended  11-30-121  5-31-12  5-31-11  5-31-10  5-31-092  8-31-08  8-31-07 
 
Per share operating performance               

Net asset value, beginning               
of period  $11.03  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93 
Net investment income3  0.19  0.40  0.40  0.41  0.30  0.38  0.38 
Net realized and unrealized gain               
(loss) on investments  0.28  0.95  (0.26)  0.61  (0.65)  (0.25)  (0.32) 
Total from investment operations  0.47  1.35  0.14  1.02  (0.35)  0.13  0.06 
Less distributions               
From net investment income  (0.19)  (0.39)  (0.39)  (0.40)  (0.30)  (0.37)  (0.38) 
From net realized gain          (0.01)  (0.01)   
Total distributions  (0.19)  (0.39)  (0.39)  (0.40)  (0.31)  (0.38)  (0.38) 
Net asset value, end of period  $11.31  $11.03  $10.07  $10.32  $9.70  $10.36  $10.61 
Total return (%)4,5  4.286  13.67  1.43  10.75  (3.25)6  1.31  0.48 
 
Ratios and supplemental data               

Net assets, end of period               
(in millions)  $3  $2  $2  $4  $7  $10  $15 
Ratios (as a percentage of average               
net assets):               
Expenses before reductions  1.697  1.71  1.71  1.70  1.767,8  1.66  1.66 
Expenses net of fee waivers  1.597  1.62  1.71  1.70  1.767,8  1.66  1.66 
Net investment income  3.437  3.79  3.92  4.12  4.257  3.59  3.47 
Portfolio turnover (%)  4  9  2  9  26  22  41 

 

1 Six months ended 11-30-12. Unaudited
2 For the nine-month period ended 5-31-09. The Fund changed its fiscal year end from August 31 to May 31.
3 Based on the average daily shares outstanding.
4 Does not reflect the effect of sales charges, if any.
5 Total returns would have been lower had certain expenses not been reduced during the applicable periods shown.
6 Not annualized.
7 Annualized.
8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

 

CLASS C SHARES Period ended  11-30-121  5-31-12  5-31-11  5-31-10  5-31-092  8-31-08  8-31-07 
 
Per share operating performance               

Net asset value, beginning               
of period  $11.02  $10.07  $10.32  $9.70  $10.36  $10.61  $10.93 
Net investment income3  0.19  0.40  0.40  0.41  0.30  0.38  0.37 
Net realized and unrealized gain               
(loss) on investments  0.28  0.94  (0.26)  0.61  (0.65)  (0.25)  (0.31) 
Total from investment operations  0.47  1.34  0.14  1.02  (0.35)  0.13  0.06 
Less distributions               
From net investment income  (0.19)  (0.39)  (0.39)  (0.40)  (0.30)  (0.37)  (0.38) 
From net realized gain          (0.01)  (0.01)   
Total distributions  (0.19)  (0.39)  (0.39)  (0.40)  (0.31)  (0.38)  (0.38) 
Net asset value, end of period  $11.30  $11.02  $10.07  $10.32  $9.70  $10.36  $10.61 
Total return (%)4,5  4.286  13.56  1.43  10.76  (3.25)6  1.31  0.48 
 
Ratios and supplemental data               

Net assets, end of period               
(in millions)  $32  $29  $26  $25  $17  $14  $10 
Ratios (as a percentage of average               
net assets):               
Expenses before reductions  1.697  1.71  1.71  1.70  1.767,8  1.66  1.66 
Expenses net of fee waivers  1.597  1.62  1.71  1.70  1.767,8  1.66  1.66 
Net investment income  3.437  3.79  3.95  4.11  4.227  3.60  3.47 
Portfolio turnover (%)  4  9  2  9  26  22  41 

 

1 Six months ended 11-30-12. Unaudited
2 For the nine-month period ended 5-31-09. The Fund changed its fiscal year end from August 31 to May 31.
3 Based on the average daily shares outstanding.
4 Does not reflect the effect of sales charges, if any.
5 Total returns would have been lower had certain expenses not been reduced during the applicable periods shown.
6 Not annualized.
7 Annualized.
8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

 

See notes to financial statements  Semiannual report | California Tax-Free Income Fund  21 

 



Notes to financial statements
(unaudited)

Note 1 — Organization

John Hancock California Tax-Free Income Fund (the Fund) is an open-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act). The investment objective of the Fund is to seek a high level of current income, consistent with preservation of capital, that is exempt from federal and California personal income taxes.

The Fund may offer multiple classes of shares. The shares currently offered are detailed in the Statement of assets and liabilities. Class A, Class B and Class C shares are offered to all investors. Shareholders of each class have exclusive voting rights to matters that affect that class. The distribution and service fees, if any, and transfer agent fees for each class may differ. Class B shares convert to Class A shares eight years after purchase.

Note 2 — Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:

Security valuation. Investments are stated at value as of the close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. In order to value the securities, the Fund uses the following valuation techniques: Debt obligations are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, taking into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Certain securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Certain short-term securities are valued at amortized cost. Other portfolio securities and assets, where reliable market quotations are not available, are valued at fair value as determined in good faith by the Fund’s Pricing Committee following procedures established by the Board of Trustees, which include price verification procedures. The frequency with which these fair valuation procedures are used cannot be predicted.

The Fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the Fund’s own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy.

22  California Tax-Free Income Fund | Semiannual report 

 



As of November 30, 2012, all investments are categorized as Level 2 under the hierarchy described above.

Repurchase agreements. The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement, it receives collateral which is held in a segregated account by the Fund’s custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline.

Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.

Line of credit. The Fund may borrow from banks for temporary or emergency purposes, including meeting redemption requests that otherwise might require the untimely sale of securities. Pursuant to the custodian agreement, the custodian may loan money to the Fund to make properly authorized payments. The Fund is obligated to repay the custodian for any overdraft, including any related costs or expenses. The custodian may have a lien, security interest or security entitlement in any Fund property that is not otherwise segregated or pledged, to the maximum extent permitted by law, to the extent of any overdraft.

In addition, the Fund and other affiliated funds have entered into an agreement with Citibank N.A. which enables them to participate in a $100 million unsecured committed line of credit. A commitment fee, payable at the end of each calendar quarter, based on the average daily unused portion of the line of credit, is charged to each participating fund on a pro rata basis and is reflected in other expenses on the Statement of operations. Commitment fees for the six months ended November 30, 2012 were $834. For the six months ended November 30, 2012, the Fund had no borrowings under the line of credit.

Expenses. Within the John Hancock Funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund’s relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Class allocations. Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the net assets of the class. Class-specific expenses, such as distribution and service fees, if any, and transfer agent fees, are calculated daily for each class, based on the net asset value of the class and the applicable specific expense rates.

Federal income taxes. The Fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.

Semiannual report | California Tax-Free Income Fund  23 

 



Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Any losses incurred during those taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

For federal income tax purposes, the Fund has a capital loss carryforward of $1,911,149 available to offset future net realized capital gains as of May 31, 2012.

The following table details the capital loss carryforward available as of May 31, 2012:

CAPITAL LOSS CARRYFORWARD EXPIRING AT MAY 31,  NO EXPIRATION DATE 
2017  2018  SHORT-TERM  LONG-TERM 

$1,568,548  $206,417  $136,184   

 

As of May 31, 2012, the Fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The Fund’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.

Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The Fund generally declares dividends daily and pays them monthly. Capital gain distributions, if any, are distributed annually.

Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and in the same amount, except for the effect of class level expenses that may be applied differently to each class.

Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to accretion on debt securities and distributions payable.

New accounting pronouncement. In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update No. 2011-11 (ASU 2011-11), Disclosures about Offsetting Assets and Liabilities. The update creates new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of assets and liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. ASU 2011-11 may result in additional disclosure relating to the presentation of derivatives and certain other financial instruments.

Note 3 — Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote.

24  California Tax-Free Income Fund | Semiannual report 

 



Note 4 — Fees and transactions with affiliates

John Hancock Advisers, LLC (the Adviser) serves as investment adviser for the Fund. John Hancock Funds, LLC (the Distributor), an affiliate of the Adviser, serves as principal underwriter of the Fund. The Adviser and the Distributor are indirect, wholly owned subsidiaries of Manulife Financial Corporation (MFC).

Management fee. The Fund has an investment management agreement with the Adviser under which the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.550% of the first $500,000,000 of the Fund’s average daily net assets, (b) 0.500% of the next $500,000,000, (c) 0.475% of the next $1,000,000,000 and (d) 0.450% of the Fund’s average daily net assets in excess of $2,000,000,000. The Adviser has a subadvisory agreement with John Hancock Asset Management a division of Manulife Asset Management (US) LLC, an indirectly owned subsidiary of MFC and an affiliate of the Adviser. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the six months ended November 30, 2012 were equivalent to a net annual effective rate of 0.550% of the Fund’s average daily net assets.

Accounting and legal services. Pursuant to the Accounting and Legal Services Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services to the Fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These expenses are allocated to each share class based on its relative net assets at the time the expense was incurred. These accounting and legal services fees incurred for the six months ended November 30, 2012 amounted to an annual rate of 0.02% of the Fund’s average daily net assets.

Distribution and service plans. The Fund has a distribution agreement with the Distributor. The Fund has adopted distribution and service plans with respect to Class A, Class B and Class C shares pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for services provided as the distributor of shares of the Fund. The Fund may pay up to the following contractual rates of distribution and service fees under these arrangements, expressed as an annual percentage of average daily net assets for each class of the Fund’s shares.

CLASS  12b-1 FEE 

Class A  0.15% 
Class B  1.00% 
Class C  1.00% 

 

The Distributor has contractually agreed to waive 0.10% of the distribution and service fees for Class B and Class C shares. The current waiver agreement expires on September 30, 2013, unless renewed by mutual agreement of the Fund and the Distributor based upon a determination that this is appropriate under the circumstances at that time.

Accordingly, these fee limitations amounted to $1,257 and $15,108 for Class B and Class C shares, respectively, for the six months ended November 30, 2012.

Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $214,983 for the six months ended November 30, 2012. Of this amount, $1,454 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $206,874 was paid as sales commissions to broker-dealers and $6,655 was paid as sales commissions to sales personnel of Signator Investors, Inc., a broker-dealer affiliate of the Adviser.

Semiannual report | California Tax-Free Income Fund  25 

 



Class B and Class C shares are subject to contingent deferred sales charges (CDSCs). Class B shares that are redeemed within six years of purchase are subject to CDSCs, at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a 1.00% CDSC on the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from CDSCs are used to compensate the Distributor for providing distribution-related services in connection with the sale of these shares. During the six months ended November 30, 2012, CDSCs received by the Distributor amounted to $677 for Class B shares.

Transfer agent fees. The Fund has a transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an affiliate of the Adviser. The transfer agent fees paid to Signature Services are determined based on the cost to Signature Services (Signature Services Cost) of providing recordkeeping services. The Signature Services Cost includes a component of allocated John Hancock corporate overhead for providing transfer agent services to the Fund and to all other John Hancock affiliated funds. It also includes out-of-pocket expenses that are comprised of payments made to third-parties for recordkeeping services provided to their clients who invest in one or more John Hancock funds. In addition, Signature Services Cost may be reduced by certain fees that Signature Services receives in connection with retirement and small accounts. Signature Services Cost is calculated monthly and allocated, as applicable, to four categories of share classes: Institutional Share Classes, Retirement Share Classes, Municipal Bond Classes and all other Retail Share Classes. Within each of these categories, the applicable costs are allocated to the affected John Hancock affiliated funds and/or classes, based on the relative average daily net assets.

Class level expenses. Class level expenses for the six months ended November 30, 2012 were:

  DISTRIBUTION AND  TRANSFER 
CLASS  SERVICE FEES  AGENT FEES 

Class A  $184,147  $72,141 
Class B  12,563  738 
Class C  151,083  8,879 
 
Total  $347,793  $81,758 

 

Trustee expenses. The Fund compensates each Trustee who is not an employee of the Adviser or its affiliates. Under the John Hancock Group of Funds Deferred Compensation Plan (the Plan) which was terminated in November 2012, these Trustees could have elected, for tax purposes, to defer receipt of this compensation. Any deferred amounts were invested in various John Hancock funds. The investment of deferred amounts and the offsetting liability are included within Other receivables and prepaid expenses and Payable to affiliates — Trustees’ fees, respectively, in the accompanying Statement of assets and liabilities. Plan assets will be liquidated in accordance with the Plan documents.

 

26  California Tax-Free Income Fund | Semiannual report 

 



Note 5 — Fund share transactions

Transactions in Fund shares for the six months ended November 30, 2012 and for the year ended May 31, 2012 were as follows:

  Six months ended 11-30-12  Year ended 5-31-12 
  Shares  Amount  Shares  Amount 
Class A shares         

Sold  1,430,984  $15,901,736  2,252,330  $23,781,930 
Distributions reinvested  334,427  3,719,476  680,924  7,213,593 
Repurchased  (1,473,000)  (16,355,991)  (3,179,921)  (33,579,890) 
 
Net increase (decrease)  292,411  $3,265,221  (246,667)  ($2,584,367) 
 
Class B shares         

Sold  17,947  $199,792  61,476  $648,780 
Distributions reinvested  2,691  29,941  5,011  53,125 
Repurchased  (10,706)  (119,398)  (69,935)  (730,853) 
 
Net increase (decrease)  9,932  $110,335  (3,448)  ($28,948) 
 
Class C shares         

Sold  294,434  $3,272,982  429,795  $4,520,556 
Distributions reinvested  22,505  250,334  47,072  498,358 
Repurchased  (123,646)  (1,375,350)  (436,227)  (4,636,771) 
 
Net increase  193,293  $2,147,966  40,640  $382,143 
 
Net increase (decrease)  495,636  $5,523,522  (209,475)  ($2,231,172) 

 

Note 6 — Purchase and sale of securities

Purchases and sales of securities, other than short-term securities, aggregated $10,664,960 and $15,046,825, respectively, for the six months ended November 30, 2012.

Semiannual report | California Tax-Free Income Fund  27 

 



Board Consideration of and Continuation of Investment Advisory Agreement and Subadvisory Agreement

The Board of Trustees (the Board, the members of which are referred to as Trustees) of John Hancock California Tax-Free Income Fund (the Fund), the sole series of John Hancock California Tax-Free Income Fund (the Trust), met in-person on May 6–8 and June 3–5, 2012 to consider the approval of the Fund’s investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser), the Fund’s investment adviser. The Board also considered the approval of the investment subadvisory agreement (the Subadvisory Agreement) among the Adviser, Manulife Asset Management (US) LLC (the Subadviser) and the Trust on behalf of the Fund. The Advisory Agreement and the Subadvisory Agreement are referred to as the Agreements.

Activities and composition of the Board

On June 3–5, 2012, the Board consisted of nine individuals, seven of whom were Independent Trustees. Independent Trustees are generally those individuals who are not employed by or have any significant business or professional relationship with the Adviser or the Subadviser. The Trustees are responsible for the oversight of operations of the Fund and perform various duties required of directors of investment companies by the Investment Company Act of 1940, as amended (the 1940 Act). The Independent Trustees have independent legal counsel to assist them in connection with their duties. The Board has appointed an Independent Trustee as Chairman. On June 3–5, 2012, the Board had four standing committees that were composed entirely of Independent Trustees: the Audit Committee; the Compliance Committee; the Nominating, Governance and Administration Committee; and the Contracts & Operations Committee. Additionally, on June 3–5, 2012, Investment Performance Committee A was a standing committee of the Board composed of Independent Trustees and one Trustee who is affiliated with the Adviser. Investment Performance Committee A was responsible for overseeing and monitoring matters relating to the investment performance of the Fund. The Board also designated an Independent Trustee as Vice Chairman to serve in the absence of the Chairman. The Board also designates working groups or ad hoc committees as it deems appropriate.

The approval process

Under the 1940 Act, the Board is required to consider the continuation of the Agreements each year. Throughout the year, the Board, acting directly and through its committees, regularly reviews and assesses the quality of the services that the Fund receives under these Agreements. The Board reviews reports of the Adviser at least quarterly, which include Fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year. The Board considers at each of its meetings factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by the Adviser and Subadviser to the Fund and its shareholders.

Prior to the May 6–8, 2012 meeting, the Board requested and received materials specifically relating to the Agreements. The materials provided in connection with the May meeting included information compiled and prepared by Lipper, a Thomson Reuters company (Lipper), on Fund fees and expenses, and the investment performance of the Fund. This Fund information is assembled in a format that permits comparison with similar information from a Category and a subset of the Category referred to as the Expense Group, each as determined by Lipper, and with the Fund’s benchmark index. The Category includes all funds that invest similarly to the way the Fund invests. The Expense Group represents funds of similar size, excluding passively managed funds and funds-of-funds. The Fund’s benchmark index is an unmanaged index of securities that is provided as a basis for comparison with the Fund’s performance. Other material provided for the Fund review included (a) information on the profitability of the Agreements to the Adviser and a discussion of any additional benefits to the Adviser or Subadviser or their affiliates that result from being the Adviser or Subadviser to the Fund; (b) a general analysis provided by the

28  California Tax-Free Income Fund | Semiannual report 

 



Adviser and the Subadviser concerning investment advisory fees charged to other clients, such as institutional clients and other investment companies, having similar investment mandates, as well as the performance of those other clients and a comparison of the services provided to those other clients and the services provided to the Fund; (c) the impact of economies of scale; (d) a summary of aggregate amounts paid by the Fund to the Adviser; and (e) sales and redemption data regarding the Fund’s shares.

At an in-person meeting held on May 6–8, 2012, the Board reviewed materials relevant to its consideration of the Agreements. As a result of the discussions that occurred during the May 6–8, 2012 meeting, the Board asked the Adviser for additional information on certain matters. The Adviser provided the additional information and the Board also considered this information as part of its consideration of the Agreements.

At an in-person meeting held on June 3–5, 2012, the Board, including the Independent Trustees, formally considered the continuation of the Advisory Agreement and the Subadvisory Agreement, each for an additional one-year term. The Board considered what it believed were key relevant factors that are described under separate headings presented below.

The Board also considered other matters important to the approval process, such as payments made to and by the Adviser or its affiliates relating to the distribution of Fund shares and other services. The Board reviewed services related to the valuation and pricing of Fund portfolio holdings. Other important matters considered by the Board were the direct and indirect benefits to the Adviser, the Subadviser and their affiliates from their relationship with the Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review.

Nature, extent and quality of services

The Board reviewed the nature, extent and quality of services provided by the Adviser and the Subadviser, including the investment advisory services and the resulting performance of the Fund.

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. It considered the background and experience of senior management and investment professionals responsible for managing the Fund. The Board considered the investment philosophy, research and investment decision-making processes of the Subadviser responsible for the daily investment activities of the Fund, including, among other things, portfolio trading capabilities, use of technology, commitment to compliance and approach to training and retaining portfolio managers and other research, advisory and management personnel.

The Board considered the Subadviser’s history and experience providing investment services to the Fund. The Board considered the Adviser’s investment manager analytical capabilities, market and economic knowledge and execution of its Subadviser oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs, record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions and with the applicable Code of Ethics, and the responsibilities of the Adviser’s and Subadviser’s compliance departments.

In addition to advisory services, the Board considered the quality of the administrative and non-investment advisory services provided to the Fund by the Adviser under separate agreements. The Board noted that the Adviser and its affiliates provide the Fund with certain administrative, transfer agency, shareholder and other services (in addition to any such services provided to the Fund by third parties) and officers and other personnel as are necessary for the operations of the Fund. The Board reviewed the structure and duties of the Adviser’s administration, accounting, legal and compliance departments and its affiliate’s transfer agency operations and considered the

Semiannual report | California Tax-Free Income Fund  29 

 



Adviser’s and its affiliates’ policies and procedures for assuring compliance with applicable laws and regulations.

The Board also received information about the nature, extent and quality of services provided by and fee rates charged by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board reviewed a general analysis provided by the Adviser and the Subadviser concerning investment advisory fees charged to other clients having similar investment mandates, the services provided to those other clients as compared to the services provided to the Fund, the performance of those other clients as compared to the performance by the Fund and other factors relating to those other clients. The Board considered the significant differences between the Adviser’s and Subadviser’s services to the Fund and the services they provide to other clients. For other clients that are not mutual funds, the differences in services relate to the greater share purchase and redemption activity in a mutual fund, the generally higher turnover of mutual fund portfolio holdings, the more burdensome regulatory and legal obligations of mutual funds and the higher marketing costs for mutual funds. When compared to all clients including mutual funds, the Adviser has greater oversight and supervisory responsibility for the Fund and undertakes greater entrepreneurial risk as the sponsor of the Fund.

Fund performance

The Board was provided with reports, independently prepared by Lipper, which included a comprehensive analysis of the Fund’s performance. The Board also examined materials discussing Fund performance and the Fund’s investment objective, strategies and outlook. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by the Adviser, which analyzed various factors that may affect the Lipper rankings. The Board reviewed information regarding the investment performance of the Fund as compared to its Lipper Category as well as its benchmark index (see chart below). The Board was provided with a description of the methodology used by Lipper to select the funds in the Category. The Board also considered updated performance information provided by the Adviser at its May and June 2012 meetings. The Board regularly reviews the performance of the Fund throughout the year and attaches more importance to performance over relatively longer periods of time, typically three to five years.

Set forth below is the performance of the Fund over certain time periods ended December 31, 2011 and that of its Category average and benchmark index over the same periods:

  1 YEAR  3 YEAR  5 YEAR  10 YEAR 

California Tax-Free Income Fund Class A Shares  12.05%  10.97%  4.07%  4.59% 
California Municipal Debt Category Average  11.72%  10.23%  3.62%  4.39% 
Barclay Muni Bond TR Index  10.70%  8.57%  5.22%  5.38% 

 

The Board noted that the Fund outperformed its Category average performance for all periods shown. The Board also noted that the Fund outperformed its benchmark index’s performance over the one and three year periods, but underperformed its benchmark index’s performance over the five and ten year periods. The Board was aware that the benchmark is composed of securities that materially differ from the Fund’s investment focus on California issuers.

Expenses and fees

The Board, including the Independent Trustees, reviewed the Fund’s contractual advisory fee rate payable by the Fund to the Adviser as compared with the other funds in its Expense Group. The Board also received information about the investment subadvisory fee rate pay’able by the Adviser to the Subadviser for investment subadvisory services. The Board considered the services provided and the fees charged by the Adviser and the Subadviser to other clients with similar investment mandates, including other registered investment companies, institutional investors and separate accounts.

30  California Tax-Free Income Fund | Semiannual report 

 



In addition, the Board considered the cost of the services provided to the Fund by the Adviser. The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution fees and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, administration fees and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Expense Group median. The Board also considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio) and, if different, the Fund’s total operating expense ratio after taking into account any fee waiver or expense waiver agreement by the Adviser (Net Expense Ratio). The Board considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Expense Group median.

The Board noted that the Fund’s advisory fee ratio was seven basis points above the Expense Group median advisory fee ratio. The Board noted the following information about the Fund’s Gross and Net Expense Ratios for Class A shares contained in the Fund’s 2011 financial statements in relation with the Fund’s Expense Group median provided by Lipper in April 2012:

  FUND — CLASS A SHARES  EXPENSE GROUP MEDIAN 

Advisory Fee Ratio  0.55%  0.48% 
Gross Expense Ratio  0.85%  0.85% 
Net Expense Ratio  0.85%  0.83% 

 

The Board received and reviewed statements relating to the Adviser’s financial condition and was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by the Adviser for services under the Advisory Agreement, as well as from other relationships between the Fund and the Adviser and its affiliates. The Board reviewed the Adviser’s profitability with respect to the Fund and other funds the Board currently oversees for the year ended December 31, 2011 compared to available aggregate profitability data provided for the year ended December 31, 2010. The Board reviewed the Adviser’s profitability with respect to other fund complexes managed by the Adviser and/or its affiliates. The Board reviewed the Adviser’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products.

The Board also considered a comparison of the Adviser’s profitability to that of a limited number of other investment advisers whose profitability information is publicly available. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Adviser, the types of funds managed, expense allocations and business mix, and therefore comparability of profitability is limited.

The Board considered limited profitability information with respect to the Subadviser, which is affiliated with the Adviser. In addition, as noted above, the Board considered basic assumptions and methodology for allocating expenses in the Subadviser’s profitability analysis.

Economies of scale

The Board, including the Independent Trustees, considered the extent to which economies of scale might be realized as the assets of the Fund increase. Possible changes in the advisory fee rate or structure in order to enable the Fund to participate in these economies of scale (e.g., through the use of breakpoints in the advisory fee at higher asset levels) are periodically discussed. The Board also considered the Adviser’s overall operations and its ongoing investment in its business in order to expand the scale of, and improve the quality of, its operations that benefit the Fund.

The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual funds, but rather are incurred across a variety of products and services. To ensure that any

Semiannual report | California Tax-Free Income Fund  31 

 



economies are reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the contractual advisory fee rate.

Other benefits to the Adviser and the Subadviser

The Board understands that the Adviser, the Subadviser or their affiliates may derive other ancillary benefits from their relationship with the Fund, both tangible and intangible, such as their ability to leverage investment professionals who manage other portfolios, an increase in their profile in the investment advisory community and the engagement of their affiliates and/or significant shareholders as service providers to the Fund, including for administrative, transfer agency and distribution services. The Board believes that certain of these benefits are difficult to quantify. The Board also was informed that the Subadviser may use third-party research obtained by soft dollars generated by certain mutual fund transactions to assist itself in managing all or a number of its other client accounts.

Board determination

The Board unanimously approved the continuation of the Advisory Agreement and the Subadvisory Agreement each for an additional one-year term. Based upon its evaluation of relevant factors in their totality, the Board was satisfied that the terms of the Agreements, including the advisory and subadvisory fee rates, were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Agreements, the Board did not identify any single factor or any group of factors as all-important or controlling, but considered all factors together. Different Trustees may have attributed different weights to the various factors considered. The Independent Trustees were also assisted by independent legal counsel in making this determination. The Trustees’ conclusions may be based in part on their consideration of these arrangements in prior years and on their ongoing regular review of Fund performance and operations throughout the year.

32  California Tax-Free Income Fund | Semiannual report 

 



Special Shareholder Meeting

On November 15, 2012, a Special Meeting of the Shareholders of John Hancock California Tax-Free Income Fund was held at 601 Congress Street, Boston, Massachusetts, for the purpose of considering and voting on the following proposal:

Proposal: Election of thirteen (13) Trustees as members of the Board of Trustees of John Hancock California Tax-Free Income Fund.

  TOTAL VOTES  TOTAL VOTES WITHHELD 
  FOR THE NOMINEE  FROM THE NOMINEE 

Independent Trustees     
Charles L. Bardelis  15,323,942.23  270,720.67 
Peter S. Burgess  15,304,349.55  290,313.35 
William H. Cunningham  15,332,886.41  261,776.49 
Grace K. Fey  15,333,885.84  260,777.07 
Theron S. Hoffman  15,333,885.84  260,777.07 
Deborah C. Jackson  15,335,192.00  259,470.90 
Hassell H. McClellan  15,294,387.63  300,275.27 
James M. Oates  15,294,387.63  300,275.27 
Steven R. Pruchansky  15,332,886.41  261,776.49 
Gregory A. Russo  15,334,192.19  260,470.71 
Non-Independent Trustees     
James R. Boyle  15,295,693.41  298,969.49 
Craig Bromley  15,334,192.19  260,470.71 
Warren A. Thomson  15,334,192.19  260,470.71 

 

Semiannual report | California Tax-Free Income Fund  33 

 



More information

Trustees  Investment adviser 
James M. Oates, Chairman  John Hancock Advisers, LLC 
Charles L. Bardelis*   
James R. Boyle  Subadviser 
Craig Bromley  John Hancock Asset Management a division of 
Peter S. Burgess*  Manulife Asset Management (US) LLC 
William H. Cunningham   
Grace K. Fey  Principal distributor 
Theron S. Hoffman*  John Hancock Funds, LLC 
Deborah C. Jackson   
Hassell H. McClellan  Custodian 
Steven R. Pruchansky, Vice Chairman  State Street Bank and Trust Company 
Gregory A. Russo   
Warren A. Thomson  Transfer agent 
  John Hancock Signature Services, Inc. 
Officers   
Hugh McHaffie  Legal counsel 
President  K&L Gates LLP 
 
Andrew G. Arnott   
Executive Vice President   
 
Thomas M. Kinzler   
Secretary and Chief Legal Officer   
 
Francis V. Knox, Jr.   
Chief Compliance Officer   
 
Charles A. Rizzo   
Chief Financial Officer   
 
Salvatore Schiavone   
Treasurer   
 
*Member of the Audit Committee   
†Non-Independent Trustee   

 

The Fund’s proxy voting policies and procedures, as well as the Fund’s proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) Web site at www.sec.gov or on our Web site.

The Fund’s complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The Fund’s Form N-Q is available on our Web site and the SEC’s Web site, www.sec.gov, and can be reviewed and copied (for a fee) at the SEC’s Public Reference Room in Washington, DC. Call 1-202-551-8090 to receive information on the operation of the SEC’s Public Reference Room.

We make this information on your fund, as well as monthly portfolio holdings, and other fund details available on our Web site at www.jhfunds.com or by calling 1-800-225-5291.

You can also contact us:     
1-800-225-5291  Regular mail:  Express mail: 
jhfunds.com  John Hancock Signature Services, Inc.  John Hancock Signature Services, Inc. 
  P.O. Box 55913  Mutual Fund Image Operations 
  Boston, MA 02205-5913  30 Dan Road 
    Canton, MA 02021 

 

34  California Tax-Free Income Fund | Semiannual report 

 




1-800-225-5291
1-800-554-6713 (TDD)
1-800-338-8080 EASI-Line
www.jhfunds.com


   
This report is for the information of the shareholders of John Hancock California Tax-Free Income Fund.  53SA 11/12 
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.  1/13 

 


ITEM 2. CODE OF ETHICS.

Not applicable at this time.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable at this time.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable at this time.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable at this time.

ITEM 6. SCHEDULE OF INVESTMENTS.

(a) Not applicable.
(b) Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.



(a) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.

(c)(1) Contact person at the registrant.



SIGNATURES 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

John Hancock California Tax-Free Income Fund 
 
 
By:  /s/ Hugh McHaffie 
  ------------------------------- 
  Hugh McHaffie 
  President 
 
 
Date:  January 22, 2013 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  /s/ Hugh McHaffie 
  ------------------------------- 
Hugh McHaffie 
  President 
 
 
Date:  January 22, 2013 
 
 
By:  /s/ Charles A. Rizzo 
  -------------------------------- 
Charles A. Rizzo 
  Chief Financial Officer 
 
 
Date:  January 22, 2013 

 

EX-99.906 CERT 2 b_californiataxfreecerts.htm CERTIFICATION b_californiataxfreecerts.htm

CERTIFICATION

I, Hugh McHaffie, certify that:

1. I have reviewed this report on Form N-CSR of the John Hancock California Tax-Free Income Fund (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 22, 2013  /s/ Hugh McHaffie 
-------------------------------
  Hugh McHaffie 
  President 

 



CERTIFICATION

I, Charles A. Rizzo, certify that:

1. I have reviewed this report on Form N-CSR of the John Hancock California Tax-Free Income Fund (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 22, 2013  s/ Charles A. Rizzo 
-------------------------------
  Charles A. Rizzo 
  Chief Financial Officer 

 

EX-99.906 CERT 3 c_californiataxfreenoscerts.htm 906 CERTIFICATION c_californiataxfreenoscerts.htm
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of 
the Sarbanes-Oxley Act of 2002

 

In connection with the attached Report of John Hancock California Tax-Free Income Fund (the “registrant”) on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.

/s/ Hugh McHaffie
-------------------------------- 
Hugh McHaffie
President 
 
 
Dated: January 22, 2013 
 
 
/s/ Charles A. Rizzo 
------------------------------- 
Charles A. Rizzo
Chief Financial Officer 
 
 
Dated: January 22, 2013 

 

A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

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