N-Q 1 a_cataxfreeincome.htm JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND a_cataxfreeincome.htm
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
 
FORM N-Q 
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS 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:  August 31, 2014 

ITEM 1. SCHEDULE OF INVESTMENTS




California Tax-Free Income Fund
As of 8-31-14 (Unaudited)

    Maturity     
  Rate (%)  date  Par value  Value 
 
Municipal Bonds 99.9%        $254,054,237 
(Cost $231,122,248)         
 
California 98.7%        251,119,027 
ABAG Finance Authority for Nonprofit Corps.         
Institute on Aging (D)  5.650  08/15/38  $1,000,000  1,086,030 
ABAG Finance Authority for Nonprofit Corps.         
Sharp Healthcare  6.250  08/01/39  1,000,000  1,167,590 
ABAG Finance Authority for Nonprofit Corps.         
Sharp HealthCare, Series A  5.000  08/01/43  2,000,000  2,212,000 
Anaheim Certificates of Participation         
Convention Center (D) (P) (S)  11.883  07/16/23  1,800,000  1,817,676 
Anaheim Public Financing Authority         
Public Improvement Project, Series C (D) (Z)  1.215  09/01/18  3,000,000  2,851,945 
Belmont Community Facilities         
Library Project, Series A (D)  5.750  08/01/24  1,000,000  1,240,280 
California County Tobacco Securitization Agency         
Fresno County Funding Corp.  6.000  06/01/35  1,765,000  1,764,894 
California County Tobacco Securitization Agency         
Kern County Corp., Series A  6.125  06/01/43  5,000,000  5,000,000 
California County Tobacco Securitization Agency         
Public Improvements  5.250  06/01/21  3,425,000  3,416,814 
California County Tobacco Securitization Agency         
Stanislaus Funding, Series A  5.500  06/01/33  515,000  501,734 
California Educational Facilities Authority         
Prerefunded College and University Funding Program  5.000  02/01/26  1,130,000  1,254,673 
California Educational Facilities Authority         
Woodbury University  5.000  01/01/25  1,800,000  1,803,330 
California Health Facilities Financing Authority         
Catholic Healthcare West, Series G  5.250  07/01/23  1,000,000  1,003,860 
California Health Facilities Financing Authority         
Kaiser Permanente, Series A  5.250  04/01/39  2,500,000  2,592,100 
California Health Facilities Financing Authority         
Lucile Salter Packard ChildrenLucile Salter Packard         
Children  5.000  08/15/43  1,000,000  1,126,120 
California Health Facilities Financing Authority         
Providence Health and Services, Series C  6.500  10/01/33  1,000,000  1,232,000 
California Health Facilities Financing Authority         
Scripps Health, Series A  5.000  11/15/36  1,000,000  1,113,200 
California Infrastructure & Economic Development Bank         
California Independent System Operator, Series A  6.250  02/01/39  2,000,000  2,051,720 
California Pollution Control Financing Authority         
Waste Management Inc., Series C, AMT (P)  5.125  11/01/23  2,000,000  2,096,680 
California State Public Works Board         
Department of Corrections, Series A (D)  5.000  12/01/19  5,000,000  5,532,850 
California State Public Works Board         
Series A  5.000  09/01/39  2,500,000  2,823,275 
California State Public Works Board         
Trustees California State University, Series D  6.250  04/01/34  2,000,000  2,370,920 
California State Public Works Board         
Various Capital Projects, Series A  5.000  04/01/37  1,000,000  1,106,910 
California State University  5.000  11/01/44  2,000,000  2,291,680 
California State University         
College and University Revenue, Series A  5.250  11/01/34  1,000,000  1,146,200 
California Statewide Communities Development Authority  5.000  08/01/44  2,250,000  2,499,300 
California Statewide Communities Development Authority         
American Baptist Homes West  6.250  10/01/39  2,000,000  2,167,920 

 

1 

 


California Tax-Free Income Fund
As of 8-31-14 (Unaudited)

    Maturity     
  Rate (%)  date  Par value  Value 
 
California (continued)         
California Statewide Communities Development Authority         
Insured-Redwoods Project (D)  5.375  11/15/44  $1,500,000  $1,692,645 
California Statewide Communities Development Authority         
Senior Living of Southern California  7.250  11/15/41  1,700,000  1,968,685 
California Statewide Communities Development Authority         
University of California - Irvine  5.750  05/15/32  1,230,000  1,329,470 
California Statewide Financing Authority         
Tobacco Settlement, Series A  6.000  05/01/37  2,500,000  2,493,600 
California Statewide Financing Authority         
Tobacco Settlement, Series B  6.000  05/01/37  4,000,000  3,989,760 
Center Unified School District, Series C (D)(Z)  1.090  09/01/16  2,145,000  2,097,445 
City of Irvine CA  5.000  09/01/49  2,000,000  2,148,220 
City of La Verne CA  5.000  05/15/36  750,000  779,790 
City of San Mateo         
Community Facilities District  5.500  09/01/44  2,000,000  2,195,160 
Cloverdale Community Development Agency  5.500  09/01/38  3,000,000  2,601,630 
Contra Costa County Public Financing Authority, Series A (D)  5.000  06/01/28  1,230,000  1,234,416 
Corona Community Facilities District         
No. 97-2  5.875  09/01/23  910,000  910,282 
East Side Union High School District-Santa Clara County (D)  5.250  09/01/24  2,500,000  3,132,900 
Folsom Public Financing Authority, Series B  5.125  09/01/26  965,000  1,001,902 
Foothill-Eastern Transportation Corridor Agency, Series A  5.750  01/15/46  5,000,000  5,682,550 
Fresno Sewer System Revenue, Series A-1 (D)  5.250  09/01/19  1,000,000  1,106,020 
Golden State Tobacco Securitization Corp., Series A (D)  5.000  06/01/35  10,000,000  10,265,600 
Inglewood Unified School District (D)  5.250  10/15/26  5,000,000  5,981,550 
Inland Valley Development Agency         
Series A  5.000  09/01/44  7,500,000  8,156,250 
Kern County, Capital Improvements Project, Series A (D)  5.750  08/01/35  1,000,000  1,152,890 
Laguna Salada Union School District, Series C (D)(Z)  2.667  08/01/26  1,000,000  677,510 
Lancaster School District         
School Improvements (D) (Z)  1.190  04/01/19  1,730,000  1,634,245 
Lancaster School District         
School Improvements (D) (Z)  1.865  04/01/22  1,380,000  1,181,929 
Long Beach Harbor Revenue, Series A, AMT (D)  6.000  05/15/18  2,660,000  3,148,243 
Long Beach Special Tax Community Facilities         
District 6-Pike Project  6.250  10/01/26  2,480,000  2,483,373 
Los Angeles Community College District         
2008 Election, Series A  6.000  08/01/33  4,000,000  4,804,640 
Los Angeles Community Facilities District No: 3         
Cascades Business Park  6.400  09/01/22  605,000  614,468 
Los Angeles County Regional Financing Authority (D)  5.000  11/15/44  1,355,000  1,478,684 
M-S-R Energy Authority         
Natural Gas Revenue, Series A  6.500  11/01/39  1,000,000  1,347,560 
M-S-R Energy Authority         
Natural Gas Revenue, Series B  6.500  11/01/39  3,500,000  4,716,460 
Modesto Community Facilities District No: 4-1  5.100  09/01/26  3,000,000  3,060,810 
Morgan Hill Redevelopment Agency Successor Agency         
Series A  5.000  09/01/33  1,750,000  1,977,238 
Oakland Unified School District/Alameda County  6.625  08/01/38  1,000,000  1,203,550 
Orange County Improvement Bond Act 1915, Series B  5.750  09/02/33  1,365,000  1,377,422 
Paramount Unified School District, Series B (D)(Z)  2.861  09/01/25  4,735,000  3,222,736 
Pasadena California Certificates Participation Refunding Old         
Pasadena Parking Facility Project  6.250  01/01/18  430,000  469,109 
Ripon Redevelopment Agency         
Ripon Community Redevelopment Project (D)  4.750  11/01/36  1,530,000  1,537,956 
Riverside County Transportation Commission, Series A  5.750  06/01/48  1,000,000  1,134,770 

 

2 

 


California Tax-Free Income Fund
As of 8-31-14 (Unaudited)

    Maturity     
  Rate (%)  date  Par value  Value 
 
California (continued)         
San Bernardino County         
Capital Facilities Project, Escrowed to Maturity, Series B  6.875  08/01/24  $350,000  $473,120 
San Bernardino County         
Medical Center Financing Project, Series B (D)  5.500  08/01/17  3,740,000  4,008,121 
San Bruno Park School District         
School Improvements, Series B (D) (Z)  2.296  08/01/21  1,015,000  851,423 
San Diego County Regional Airport Authority, Series A  5.000  07/01/44  4,925,000  5,474,532 
San Diego County Regional Transportation Commission  5.000  04/01/44  3,000,000  3,461,550 
San Diego Public Facilities Financing Authority         
Lease Revenue  5.250  03/01/40  1,000,000  1,082,230 
San Diego Redevelopment Agency         
City Heights, Series A  5.750  09/01/23  1,000,000  1,001,460 
San Diego Redevelopment Agency         
City Heights, Series A  5.800  09/01/28  1,395,000  1,396,423 
San Diego Redevelopment Agency         
Public Improvements, Series B (Z)  3.847  09/01/17  1,600,000  1,412,432 
San Diego Redevelopment Agency         
Public Improvements, Series B (Z)  4.236  09/01/18  1,700,000  1,407,532 
San Diego Unified School District, Election of 1998, Series A         
(D)(Z)  2.154  07/01/21  2,500,000  2,126,600 
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  1,264,013 
San Francisco City & County Redevelopment Agency         
Mission Bay South Redevelopment, Series D  7.000  08/01/41  1,000,000  1,150,070 
San Francisco City & County Redevelopment Financing         
Authority         
Mission Bay South Redevelopment, Series D  6.625  08/01/39  1,000,000  1,163,220 
San Francisco City & County Redevelopment Financing         
Authority         
San Francisco Redevelopment Projects, Series B  6.625  08/01/39  700,000  792,687 
San Joaquin County         
County Administration Building (D)  5.000  11/15/29  2,965,000  3,110,789 
San Joaquin Hills Transportation Corridor Agency         
Highway Revenue Tolls, Escrowed to Maturity (Z)  1.681  01/01/22  6,500,000  5,686,590 
San Joaquin Hills Transportation Corridor Agency         
Highway Revenue Tolls, Series A  5.750  01/15/21  5,000,000  5,005,800 
San Mateo County Joint Power Authority (D)  5.000  07/01/21  1,815,000  2,133,514 
Santa Ana Financing Authority (D)  6.250  07/01/19  895,000  1,103,517 
Santa Ana Financing Authority (D)  6.250  07/01/19  895,000  1,079,674 
Santa Ana Financing Authority (D)  6.250  07/01/24  5,000,000  6,334,750 
Santa Ana Financing Authority (D)  6.250  07/01/24  5,000,000  5,983,850 
Santa Fe Springs Community Development Commission         
Construction Redevelopment Project, Series A (D) (Z)  2.323  09/01/20  1,275,000  1,094,562 
Santa Margarita Water District         
Community Facilities District  5.625  09/01/43  775,000  841,363 
South Orange County Public Financing Authority         
Series A  5.000  08/15/33  1,000,000  1,096,560 
South Orange County Public Financing Authority         
Series A  5.000  08/15/34  450,000  491,414 
Southern California Public Power Authority         
Natural Gas Revenue, Series A  5.250  11/01/26  2,000,000  2,346,560 
Southern California Public Power Authority         
Series A  5.000  07/01/38  1,000,000  1,149,950 
State of California  5.000  09/01/41  1,500,000  1,668,240 
State of California  5.000  10/01/41  2,000,000  2,226,660 

 

3 

 


California Tax-Free Income Fund
As of 8-31-14 (Unaudited)

    Maturity     
  Rate (%)  date  Par value  Value 
 
California (continued)         
State of California  5.000  04/01/43  $5,000,000  $5,599,300 
State of California  5.000  11/01/43  2,000,000  2,253,600 
State of California  5.250  03/01/30  2,000,000  2,307,940 
State of California  6.500  04/01/33  5,000,000  6,109,500 
Stockton Public Financing Authority         
Delta Water Supply Project, Series A  6.250  10/01/40  1,150,000  1,333,897 
Successor Agency To The San Francisco City & County         
Redevelopment Agency         
Mission Bay Project, Series A  5.000  08/01/43  1,000,000  1,096,660 
Torrance Hospital Revenue         
Torrance Memorial Medical Center, Series A  5.500  06/01/31  2,000,000  2,004,140 
Tuolumne Wind Project Authority         
Tuolumne County Project, Series A  5.625  01/01/29  1,000,000  1,173,090 
University of California  5.000  05/15/44  4,000,000  4,571,600 
Vallejo Sanitation & Flood Control District (D)  5.000  07/01/19  1,303,000  1,406,185 
West Covina Redevelopment Agency         
Fashion Plaza  6.000  09/01/22  3,000,000  3,580,740 
 
Puerto Rico 1.2%        2,935,210 
Puerto Rico Highway & Transportation Authority         
Fuel Sales Tax Revenue, Series A (D)  5.000  07/01/38  80,000  71,310 
Puerto Rico Industrial Tourist Education Medical &         
Environment Authority         
Hospital de la Concepcion  6.500  11/15/20  500,000  502,600 
Puerto Rico Sales Tax Financing Corp.,         
Sales Tax Revenue, Series A (0.000% to 6.750% on 8-1-         
16)  0.000  08/01/32  3,000,000  2,361,300 
 
      Par value  Value 
 
Short-Term Investments 0.3%        $771,000 
(Cost $771,000)         
 
Repurchase Agreement 0.3%         
Repurchase Agreement with State Street Corp. dated 8-29-14 at       
0.000% to be repurchased at $771,000 on 9-2-14, collateralized by       
$800,000 U.S. Treasury Notes, 0.625% due 11-30-17 (valued at       
$788,792, including interest)      $771,000  771,000 
 
Total investments (Cost $231,893,248)† 100.2%        $254,825,237 
 
Other assets and liabilities, net (0.2%)        ($399,953) 
 
Total net assets 100.0%        $254,425,284 
 

 

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.

4 

 


California Tax-Free Income Fund
As of 8-31-14 (Unaudited)

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

Insurance Coverage  As a % of total investments 
National Public Finance Guarantee Corp.  15.6% 
Assured Guaranty Municipal Corp.  7.1% 
Financial Guaranty Insurance Company  4.0% 
Ambac Financial Group, Inc.  3.1% 
California Mortgage Insurance  1.7% 
Assured Guaranty Corp.  0.5% 
 
Total  32.0% 

 

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

(S) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities 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. Rate shown is the annualized yield at period end.

† At 8-31-14, the aggregate cost of investment securities for federal income tax purposes was $230,057,948. Net unrealized appreciation aggregated $24,767,289, of which $25,042,966 related to appreciated investment securities and $275,677 related to depreciated investment securities.

The fund had the following sector composition as a percentage of total net assets on 8-31-14:

General Obligation  15.0% 
Revenue Bonds   
Other Revenue  22.8% 
Facilities  16.2% 
Tobacco  10.8% 
Health Care  9.7% 
Transportation  8.1% 
Education  7.6% 
Development  3.2% 
Airport  2.2% 
Utilities  1.7% 
Water & Sewer  1.3% 
Pollution  0.8% 
Housing  0.5% 
Short-Term Investments & Other  0.1% 

 

5 

 


California Tax-Free Income Fund
As of 8-31-14 (Unaudited)

Notes to Portfolio of Investments

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 vendor or from broker-dealers. Independent pricing vendors utilize matrix pricing which takes 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, as well as broker supplied prices. Certain short-term securities with maturities of 60 days or less at the time of purchase are valued at amortized cost. Other portfolio securities and assets, for which reliable market quotations are not readily 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. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready market for such securities existed.

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 other 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.

As of August 31, 2014, 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 that 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. Collateral received by the fund for repurchase agreements is disclosed in the fund’s investments as part of the caption related to the repurchase agreement.

Repurchase agreements are typically governed by the terms and conditions of the Master Repurchase Agreement and/or Global Master Repurchase Agreement (collectively, MRA). Upon an event of default, the non-defaulting party may close out all transactions traded under the MRA and net amounts owed. Absent an event of default, the MRA does not result in an offset of the net amounts owed. 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 or the counterparty may have insufficient assets to pay back claims resulting from close-out of the transactions.

For additional information on the fund’s significant accounting policies, please refer to the fund’s most recent semiannual or annual shareholder report.

6 

 




ITEM 2. 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-Q, the registrant's principal executive officer and principal accounting 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 last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 3. EXHIBITS.

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


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/ Andrew Arnott 
  ------------------------------ 
Andrew Arnott
  President 
 
 
Date:  October 10, 2014 

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/ Andrew Arnott 
  ------------------------------ 
Andrew Arnott
  President 
 
 
Date:  October 10, 2014 
 
 
By:  /s/ Charles A. Rizzo 
  ------------------------------- 
Charles A. Rizzo
  Chief Financial Officer 
 
 
 
Date:  October 10, 2014