N-Q 1 d330082.htm N-Q

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, 2017





ITEM 1. SCHEDULE OF INVESTMENTS




John Hancock

California Tax-Free Income Fund

Quarterly portfolio holdings 8/31/17

jhnq_logo.jpg



Fund’s investments




As of 8-31-17 (unaudited)

    Rate (%)     Maturity date     Par value^     Value
Municipal bonds 99.2%       $237,951,164
(Cost $219,943,703)      
California 99.2%       237,951,164
ABAG Finance Authority for Nonprofit Corps.      
Sharp HealthCare 6.250   08-01-39   1,000,000   1,091,930
ABAG Finance Authority for Nonprofit Corps.      
Sharp HealthCare, Series A 5.000   08-01-43   2,000,000   2,235,500
Anaheim Public Financing Authority      
Series A 5.000   05-01-46   1,000,000   1,137,860
Bay Area Toll Authority      
San Francisco Bay Area 4.000   04-01-42   3,500,000   3,708,425
California County Tobacco Securitization Agency      
Fresno County Funding Corp. 6.000   06-01-35   1,765,000   1,765,883
California County Tobacco Securitization Agency      
Kern County Tobacco Funding Corp., Series 2014 5.000   06-01-40   1,500,000   1,691,430
California County Tobacco Securitization Agency      
Public Improvements 5.250   06-01-21   3,020,000   3,089,128
California County Tobacco Securitization Agency      
Stanislaus Funding, Series A 5.500   06-01-33   250,000   253,188
California Educational Facilities Authority      
Pepperdine University 5.000   10-01-49   2,550,000   2,957,898
California Educational Facilities Authority      
University of Redlands, Series A 5.000   10-01-35   1,000,000   1,145,720
California Health Facilities Financing Authority      
Children’s Hospital, Series A 5.000   08-15-47   1,000,000   1,128,590
California Health Facilities Financing Authority      
El Camino Hospital 5.000   02-01-42   1,000,000   1,157,450
California Health Facilities Financing Authority      
El Camino Hospital 5.000   02-01-47   1,425,000   1,641,814
California Health Facilities Financing Authority      
Kaiser Permanente, Series A 5.000   11-01-47   1,000,000   1,309,340
California Health Facilities Financing Authority      
Lucile Packard Children’s Hospital 5.000   08-15-43   1,000,000   1,135,880
California Health Facilities Financing Authority      
Lucile Packard Children’s Hospital, Series B 5.000   08-15-55   1,000,000   1,145,690
California Health Facilities Financing Authority      
Sutter Health, Series A 5.000   08-15-43   3,000,000   3,443,970
California Municipal Finance Authority      
Channing House Project, Series A (A) 4.000   05-15-40   1,500,000   1,585,155
California Municipal Finance Authority      
Eisenhower Medical Center, Series A 4.000   07-01-42   1,750,000   1,813,263
California Municipal Finance Authority      
Eisenhower Medical Center, Series A 5.000   07-01-47   1,200,000   1,356,960
California Municipal Finance Authority      
Wineville School Project, Series A (A) 5.000   10-01-42   2,000,000   2,261,800
California Pollution Control Financing Authority      
Calplant I Project, AMT (B) 7.500   07-01-32   1,000,000   1,063,060
California Pollution Control Financing Authority      
Waste Management Inc., Series A3, AMT 4.300   07-01-40   4,500,000   4,741,065
California Public Finance Authority      
Henry Mayo Newhall Hospital 5.000   10-15-47   2,000,000   2,176,820
California School Finance Authority      
Aspire Public Schools (B) 5.000   08-01-46   1,025,000   1,119,956
California School Finance Authority      
Aspire Public Schools (B) 5.000   08-01-41   2,200,000   2,427,634
California State Public Works Board      
Various Capital Projects, Series A 5.000   04-01-37   1,000,000   1,125,250
California State Public Works Board      
Various Correctional Facilities, Series A 5.000   09-01-39   2,500,000   2,881,050

SEE NOTES TO FUND’S INVESTMENTS QUARTERLY REPORT    |   JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND       2



Rate (%)       Maturity date     Par value^     Value
California (continued)    
California State University    
College and University Revenue, Series A 5.000 11-01-44   2,000,000   $2,301,540
California Statewide Communities Development Authority    
American Baptist Homes West 6.250 10-01-39   2,000,000   2,156,200
California Statewide Communities Development Authority    
CHF Irvine LLC 5.000 05-15-40   1,380,000   1,579,051
California Statewide Communities Development Authority    
Front Porch Communities and Services, Series A 5.000 04-01-47   1,500,000   1,706,430
California Statewide Communities Development Authority    
Infrastructure Program Revenue, Series B 5.000 09-02-44   1,000,000   1,058,570
California Statewide Communities Development Authority    
Kaiser Permanente, Series A 5.000 04-01-42   3,500,000   3,961,195
California Statewide Communities Development Authority    
Los Angeles Jewish Homes, Series S (A) 5.000 08-01-44   2,625,000   3,003,998
California Statewide Communities Development Authority    
Redlands Community Hospital OB 5.000 10-01-46   2,000,000   2,243,400
California Statewide Communities Development Authority    
Redwoods Project (A) 5.375 11-15-44   1,500,000   1,778,985
California Statewide Communities Development Authority    
Senior Living of Southern California (B) 7.250 11-15-41   1,700,000   1,881,084
California Statewide Communities Development Authority    
University of California, Irvine Campus 5.000 05-15-47   1,000,000   1,157,050
California Statewide Financing Authority    
Tobacco Settlement, Series A 6.000 05-01-37   2,500,000   2,555,050
California Statewide Financing Authority    
Tobacco Settlement, Series B 6.000 05-01-37   3,000,000   3,066,060
City of Atwater Wastewater Revenue    
Series A (A) 5.000 05-01-43   1,000,000   1,151,110
City of Belmont    
Library Project, Series A (A) 5.750 08-01-24   1,000,000   1,196,190
City of Irvine    
Community Facilities District 5.000 09-01-49   2,000,000   2,175,440
City of La Verne    
Brethren Hillcrest Homes 5.000 05-15-36   750,000   796,253
City of Long Beach    
Alamitos Bay Marina Project, Series 2015 5.000 05-15-45   1,000,000   1,096,800
City of Long Beach    
District 6-Pike Project 6.250 10-01-26   2,480,000   2,482,654
City of San Clemente    
Community Facilities District 5.000 09-01-46   1,995,000   2,190,251
City of San Francisco Public Utilities Commission    
Green Bonds, Series A 5.000 11-01-45   1,500,000   1,728,075
City of San Mateo    
Community Facilities District 5.500 09-01-44   2,000,000   2,200,760
County of Orange    
Series B 5.750 09-02-33   1,365,000   1,378,090
East Side Union High School District-Santa Clara County    
2012 Crossover, GO (A) 5.250 09-01-24   2,500,000   3,132,775
Folsom Public Financing Authority    
Series B 5.125 09-01-26   965,000   965,000
Foothill-Eastern Transportation Corridor Agency    
Highway Revenue Tolls, Series A 5.750 01-15-46   5,000,000   5,762,250
Foothill-Eastern Transportation Corridor Agency    
Highway Revenue Tolls, Series B-1 3.950 01-15-53   2,000,000   2,006,420
Golden State Tobacco Securitization Corp.    
Series A 5.000 06-01-40   8,250,000   9,485,685
Inland Valley Development Agency    
Series A 5.000 09-01-44   7,500,000   8,387,475
Lancaster School District    
School Improvements (A) 0.941 (C) 04-01-19   1,730,000   1,704,188

SEE NOTES TO FUND’S INVESTMENTS QUARTERLY REPORT    |   JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND       3



Rate (%)       Maturity date     Par value^     Value
California (continued)    
Lancaster School District    
School Improvements (A) 1.272 (C) 04-01-22   1,380,000   $1,301,257
Los Angeles Community College District    
2008 Election, Series A, GO 6.000 08-01-33   1,000,000   1,096,990
Los Angeles Community Facilities District No: 3    
Cascades Business Park 6.400 09-01-22   440,000   443,736
Los Angeles County Public Works Financing Authority    
Series D 5.000 12-01-45   3,000,000   3,446,640
Los Angeles County Regional Financing Authority    
Montecedro Incorporated Project, Series A (A) 5.000 11-15-44   1,355,000   1,545,134
Los Angeles Department of Water & Power    
Power Systems, Series D 5.000 07-01-44   1,000,000   1,151,760
Los Angeles Unified School District    
Election 2008, Series A, GO 4.000 07-01-40   1,000,000   1,061,320
Marin Healthcare District    
Election of 2013 4.000 08-01-45   1,000,000   1,041,950
Morgan Hill Redevelopment Agency Successor Agency    
Series A 5.000 09-01-33   1,750,000   2,041,568
M-S-R Energy Authority    
Natural Gas Revenue, Series B 6.500 11-01-39   3,500,000   5,074,370
Norman Y Mineta San Jose International Airport SJC    
Series A, AMT 5.000 03-01-47   3,000,000   3,449,400
Northern California Transmission Agency    
California-Oregon Transmission Project 5.000 05-01-36   2,500,000   2,943,075
Oakland Unified School District/Alameda County    
Election of 2012, GO 6.625 08-01-38   1,000,000   1,215,620
Oakland Unified School District/Alameda County    
Series A, GO 5.000 08-01-40   1,500,000   1,737,075
Pacifica School District    
Series C, GO (A) 2.346 (C) 08-01-26   1,000,000   810,780
Paramount Unified School District    
Series B, GO (A) 2.334 (C) 09-01-25   4,735,000   3,925,978
Port of Los Angeles    
Series A, AMT 5.000 08-01-44   2,000,000   2,275,720
River Islands Public Financing Authority    
Community Facilities District, 2003-1 5.500 09-01-45   2,000,000   2,151,180
Riverside County Transportation Commission    
Senior Lien, Series A 5.750 06-01-48   1,000,000   1,119,260
San Bruno Park Elementary School District    
School Improvements, Series B, GO (A) 1.617 (C) 08-01-21   1,015,000   952,314
San Diego County Regional Airport Authority    
Consol Rental Car Facilities, Series A 5.000 07-01-44   4,925,000   5,544,368
San Diego Public Facilities Financing Authority    
Lease Revenue, Series A 5.250 03-01-40   1,000,000   1,106,630
San Diego Public Facilities Financing Authority    
Series A 5.000 10-15-44   1,000,000   1,139,880
San Diego Unified School District    
Series I, GO 4.007 (C) 07-01-39   1,250,000   523,538
San Diego Unified School District, Election of 1998    
Series A, GO (A) 1.370 (C) 07-01-21   2,500,000   2,371,175
San Francisco City & County Airports Commission    
San Francisco International Airport, Series B 5.000 05-01-44   3,390,000   3,835,310
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   1,252,675
San Francisco City & County Redevelopment Agency    
Mission Bay Project, Series A 5.000 08-01-43   1,000,000   1,125,160
San Francisco City & County Redevelopment Agency    
Mission Bay South Redevelopment, Series D 6.625 08-01-39   1,000,000   1,109,770
San Francisco City & County Redevelopment Agency    
Mission Bay South Redevelopment, Series D 7.000 08-01-41   1,000,000   1,203,210

SEE NOTES TO FUND’S INVESTMENTS QUARTERLY REPORT    |   JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND       4



Rate (%)       Maturity date     Par value^     Value
California (continued)    
San Francisco City & County Redevelopment Agency    
San Francisco Redevelopment Projects, Series B 6.625 08-01-39   700,000   $768,985
San Joaquin Hills Transportation Corridor Agency    
Highway Revenue Tolls, Escrowed to Maturity 1.191 (C) 01-01-22   6,500,000   6,169,995
San Joaquin Hills Transportation Corridor Agency    
Highway Revenue Tolls, Series A 5.000 01-15-44   2,500,000   2,779,000
San Mateo Foster City School District    
Election 2015, Series A, GO 4.000 08-01-40   1,405,000   1,486,926
San Mateo Foster City School District    
Election 2015, Series A, GO 4.000 08-01-45   1,875,000   1,966,931
San Mateo Joint Powers Financing Authority    
Capital Projects Program (A) 5.000 07-01-21   1,815,000   2,016,374
Santa Ana Financing Authority    
Police Administration & Holding Facility (A) 6.250 07-01-24   5,000,000   5,974,250
Santa Ana Financing Authority    
Prerefunded, Police Administration & Holding Facility (A) 6.250 07-01-24   5,000,000   6,142,250
Santa Fe Springs Community Development Commission    
Construction Redevelopment Project, Series A (A) 1.732 (C) 09-01-20   1,275,000   1,210,001
Santa Margarita Water District    
Community Facilities District 5.625 09-01-43   775,000   860,591
South Orange County Public Financing Authority    
Series A 5.000 08-15-33   1,000,000   1,090,620
South Orange County Public Financing Authority    
Series A 5.000 08-15-34   450,000   489,722
Southern California Public Power Authority    
Natural Gas Revenue, Series A 5.250 11-01-26   2,000,000   2,411,060
Southern California Public Power Authority    
Series A 5.000 07-01-38   1,000,000   1,166,730
State of California, GO    
Various Purpose 5.000 04-01-43   6,500,000   7,482,085
State of California, GO    
Various Purpose 6.500 04-01-33   2,000,000   2,173,480
Stockton Public Financing Authority    
Delta Water Supply Project, Series A 6.250 10-01-40   1,150,000   1,423,574
Sweetwater Union High School District    
Election of 2006, Series 2016 B, GO 4.000 08-01-42   500,000   521,755
West Covina Redevelopment Agency    
Fashion Plaza 6.000 09-01-22   3,390,000   3,813,140
William S Hart Union High School District    
Community Facilities District 5.000 09-01-47   1,000,000   1,127,114
Yield* (%) Maturity date   Par value^   Value
Short-term investments 0.3%     $664,000
(Cost $664,000)    
U.S. Government Agency 0.0%     91,000
Federal Agricultural Mortgage Corp. Discount Note 0.898 09-01-17   91,000   91,000
  Par value^   Value
Repurchase agreement 0.3%     573,000
Barclays Tri-Party Repurchase Agreement dated 8-31-17 at 1.050% to be    
repurchased at $311,009 on 9-1-17, collateralized by $321,100 U.S. Treasury    
Notes, 1.250% due 10-31-21 (valued at $317,288, including interest)   311,000   311,000
Repurchase Agreement with State Street Corp. dated 8-31-17 at 0.340% to be    
repurchased at $262,002 on 9-1-17, collateralized by $270,000 U.S. Treasury    
Notes, 1.875% due 10-31-17 (valued at $272,062, including interest)   262,000   262,000
Total investments (Cost $220,607,703) 99.5%     $238,615,164
Other assets and liabilities, net 0.5%     1,210,014
Total net assets 100.0%     $239,825,178

SEE NOTES TO FUND’S INVESTMENTS QUARTERLY REPORT    |   JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND       5



The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund.
^All par values are denominated in U.S. dollars unless otherwise indicated.
Security Abbreviations and Legend
AMT Interest earned from these securities may be considered a tax preference item for purpose of the Federal Alternative Minimum Tax.
GO General Obligation
(A) Bond is insured by one or more of the companies listed in the insurance coverage table below.
(B) 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.
(C) Zero coupon bonds are issued at a discount from their principal amount in lieu of paying interest periodically. Rate shown is the effective yield at period end.
* Yield represents either the annualized yield at the date of purchase, the stated coupon rate or, for floating rate securities, the rate at period end.

At 8-31-17, the aggregate cost of investments for federal income tax purposes was $219,007,640. Net unrealized appreciation aggregated to $19,607,524, of which $19,629,990 related to gross unrealized appreciation and $22,466 related to gross unrealized depreciation.

      As a % of total
Insurance coverage investments
National Public Finance Guarantee Corp. 8.1
Assured Guaranty Municipal Corp. 4.6
California Mortgage Insurance 3.3
Build America Mutual Assurance Company 0.9
Ambac Financial Group, Inc. 0.5
TOTAL 17.4
 
The fund had the following sector composition as a percentage of net assets on 8-31-17:
 
General obligation bonds 12.9%
Revenue bonds 86.3%
Health care 16.9%
Other revenue 14.1%
Facilities 13.8%
Transportation 10.4%
Tobacco 9.2%
Development 5.9%
Airport 5.3%
Education 5.1%
Utilities 2.9%
Water and sewer 1.5%
Housing 1.2%
Short-term investments and other 0.8%
TOTAL 100.0%

SEE NOTES TO FUND’S INVESTMENTS QUARTERLY REPORT    |   JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND       6


Notes to Fund's investments (unaudited)

Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. In case of emergency or other disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures.

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.

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 and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy

As of August 31, 2017, 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, or for tri-party repurchase agreements, collateral is held at a third-party custodian bank in a segregated account for the benefit of the fund. 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, assets and liabilities resulting from repurchase agreements are not offset. 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.

       7


More information

     
How to contact us
Internet www.jhinvestments.com  
Mail Regular mail:
John Hancock Signature Services, Inc.
P.O. Box 55913
Boston, MA 02205-5913
Express mail:
John Hancock Signature Services, Inc.
30 Dan Road
Canton, MA 02021
Phone Customer service representatives
EASI-Line
TDD line
800-225-5291
800-338-8080
800-231-5469

     
  53Q1 08/17
This report is for the information of the shareholders of John Hancock California Tax-Free Income Fund.   10/17



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 30, 2017
   

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 30, 2017
 
 
By: /s/ Charles A. Rizzo
Charles A. Rizzo
Chief Financial Officer
 
 
Date: October 30, 2017