MESSAGE
FROM THE PRESIDENT
Table of Contents
Page
Message from the President 1
Manager's Discussion 3
Special Feature: 10
Interview with Tom Kenny,
Senior Vice-President
Franklin Municipal Bond Department
Statement of Investments 15
Financial Statements 30
Notes to Financial Statements 32
To reduce the volume of mail shareholders receive and to reduce expenses, only
one copy of most Fund reports, such as the Fund's annual and semi-annual
reports, may be mailed to a household. Additional reports may be obtained
without charge by calling Fund Information at 1-800/DIAL BEN (1-800/342-5236).
January 15, 1996
Dear Shareholders:
We're pleased to bring you the semi-annual report of the Franklin New York
Tax-Free Income Fund for the period ended November 30, 1995.
During the reporting period, the Federal Reserve Board (the Fed) appeared to
have achieved its much sought-after "soft landing." U.S. Gross Domestic Product
(GDP) fell from an annualized rate of 5.1% in the fourth quarter of 1994 to just
1.3% in the second quarter of 1995.* However, the slow growth of the second
fiscal quarter prompted the Fed to ease its monetary policy, lowering the
federal funds rate in July 1995 to 5.75% from 6.00%. Long-term bond yields, as
measured by the 30-year U.S. Treasury bond, jumped slightly to 6.86% following
the rate reduction, then resumed their downward course.
*Source: U.S. Commerce Department.
On November 30, 1995, the yield of the 30-year U.S. Treasury was 6.10%.** In
this environment, fixed-income markets improved as bond prices rose relative to
falling yields.
Of greater importance to our shareholders are the improved conditions in the
municipal bond market, which can be attributed to a couple of factors. First, a
declining interest-rate environment -- such as the one experienced over most of
the reporting period -- buoyed municipal prices. Second, the dramatically
curtailed supply of municipal issuance together with continued strong demand,
further contributed to higher prices. This recovery resulted in a 12 cent
increase in the fund's Class I net asset value price per share to $11.87 on
November 30, 1995, up from $11.75 on May 31, 1995.
On the other hand, the tax-free market has had to contend with the negative
press stemming from tax reform issues, including a flat tax proposal, a
consumption tax, a national sales tax, and a "Super" IRA. Each of these
proposals pose underlying questions for an investor -- Will there be any allowed
deductions? Will investments in tax-free municipal bonds continue to be
advantageous? We understand these issues raise important concerns and we
continue to watch for new developments. For more information on this topic,
please see page 10 for our interview with Tom Kenny, director of Franklin's
Municipal Bond Department.
As a Franklin shareholder, you receive the benefits of diversification,
professional management, and dedicated service. Should you have any questions
concerning the Franklin New York Tax-Free Income Fund, we would certainly
welcome the opportunity to answer them.
We appreciate your trust and support and look forward to serving your investment
needs in the years ahead.
Sincerely,
Charles B. Johnson
President
**Source: Micropal, December 18, 1995.
MANAGER'S DISCUSSION
Fund Objective:
Seeks to provide high current income exempt from regular federal, New York
state and New York City personal income taxes through a diversified portfolio
consisting primarily of municipal securities.*
Since the fund's fiscal year-end on May 31, 1995, the municipal bond market has
taken a rather erratic path. Through mid-August, municipal bond prices moved
lower as various tax reform proposals were brought to the public's attention.
Additional pressure on municipal prices came from the fear that the Federal
Reserve Board's efforts to achieve a "soft landing" had been too successful --
almost stagnating economic growth. Though the Fed reduced the federal funds rate
to 5.75% on July 6, 1995, more time was needed to show that growth had not been
entirely stifled. In mid-August, the municipal market began the recovery that
continues to this date.
New York Tax-Free Income Fund vs.
Bond Buyer 40 Average Dollar Price**
Class I Shares Price Change Comparison
from 5/31/95 - 11/30/95
Based on Net Asset Value
New York
Bond Tax-Free
Buyer 40 Income Fund
Price on 5/31/95 $101.13 $11.75
Price on 8/15/95 $ 93.41 $11.42
% change from
5/31 to 8/15 -7.63% -2.81%
Price on 11/30/95 $ 99.96 $11.87
% change from
5/31 to 11/30 -1.16% +1.02%
**As published daily in The Bond Buyer.
The chart above compares the price performance of the Bond Buyer 40 -- the
average dollar price of the 40 municipal bonds comprising the
index -- to your fund's net asset value price over the past six months.
*For investors subject to the federal alternative minimum tax, a small portion
of these dividends may be subject to such tax. Distributions of capital gains
and of ordinary income from accrued market discounts, if any, are generally
taxable.
This comparison brings some interesting factors into focus. It shows that the
fund's active management of bond coupons, maturity dates and credit quality help
to mitigate volatility in a down market without impairing its performance
potential. Please note, however, that the fund consists of municipal bonds
issued only by the state of New York and U.S. Territories, while the Bond Buyer
40 consists of municipal bonds issued from counties and states throughout the
country.
We remain conservative in the management of your fund. As always, we purchased
investment-grade bonds for the fund; that is, bonds whose credit quality ratings
at the time of purchase fell within Standard & Poor's and Moody's four highest
categories, or were judged to be of equal quality by the fund's managers+. As
the chart to the right indicates, over 50% of the securities held in the fund's
portfolio were rated A or better.
GRAPHIC MATERIAL 1 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
To reduce possible risk, we evaluate each issue on an individual basis, favoring
highly-rated "essential service" bonds. These securities tend to have a more
reliable income stream as they are typically generated from hospitals,
utilities, and transportation projects. Consequently, these bonds tend to be
less affected by budgetary and political changes, and are believed to be very
attractive in a municipal cost-cutting environment. Like all mutual funds,
however, the principal value of your fund's holdings, which directly affects the
price of its shares, will vary with market conditions.
+In the event the rating on an issue held in the fund's portfolio is lowered by
the rating services AFTER PURCHASE, such change will be considered by the fund
in its evaluation of the overall investment merits of that security, but such
change will not necessarily result in an automatic sale of the security.
We work to further reduce the fund's risk through diversification. On November
30, 1995, the fund held over 400 issues, spanning a broad range of cities and
counties throughout New York. Furthermore, we purchased, and continue to
purchase, securities from a variety of municipal sectors, as the table to the
right indicates.
New York's economy entered the recession earlier than the rest of the nation and
is rebounding more slowly. National employment is not expected to reach
pre-recession peaks until the end of 1998, and it is estimated that it will take
New York significantly longer to regain the more than 560,000 job losses
incurred during the recession.
Franklin New York Tax-Free Income Fund
Portfolio Breakdown on 11/30/95
Based on Total Net Assets
% of Total
Sector Net Assets
Hospitals 23.2%
Pre-Refunded 14.2%
Housing 12.7%
Utilities 9.7%
Transportation 8.2%
Education 7.8%
Health Care 6.8%
Other Revenue 6.0%
General Obligations 5.3%
Sales Tax 3.8%
Certificates of Participation 1.8%
Industria l0.3%
Miscellaneous 0.2%
For a complete list of portfolio holdings, please see page 15 of this report.
However, the outlook for the state is optimistic. New York began its financial
reform in fiscal year 1993, and -- for the last two years -- the state's budget
appears to be under control. While the 1995 budget was not approved on time, the
state continued to utilize conservative spending patterns to create a budget. As
a result, New York's mid-year financial reports reflected a positive financial
operation. These factors, combined with reduced new municipal issuance, lead us
to believe that the fiscal restructuring implemented in the last fiscal year
will benefit the long-term health of the Franklin New York Tax-Free Income Fund.
We believe that the municipal market is positioned to perform well in 1996, and
that long-term municipal bonds continue to be attractive investments. In such an
environment, your fund is well-positioned to fully participate in the continuing
economic recovery.
Performance Summary
Class I Shares
The price of the Franklin New York Tax-Free Income Fund's Class I shares, as
measured by net asset value, increased to $11.87 on November 30, 1995, from
$11.75 on May 31, 1995.
For the six-month period ended November 30, 1995, your Class I shares paid
monthly income dividends totaling 36.3 cents ($0.363) per share. Due to the fact
that higher coupon bonds were called in this declining interest rate
environment, your fund had to reinvest the proceeds of these bonds in lower
yielding bonds. Because of the lower income earned by your portfolio, it was
necessary to reduce the monthly dividend to 5.8 cents ($0.058) from 6.3 cents
($0.063) per share, effective with the September 1995 distribution. Dividends
will vary based on the earnings of the fund's portfolio, and past distributions
are not predictive of future trends.
GRAPHIC MATERIAL 2 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
At the end of the reporting period, your fund's Class I distribution rate was
5.61%, based on an annualization of the current monthly dividend of 5.8 cents
($0.058) per share and the maximum offering price of $12.40 on November 30,
1995. This tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal, New York state and New York City personal income tax bracket of 46.9%,
you would have to earn 10.56% from a taxable investment of the same quality to
match your fund's tax-free distribution rate.
Class II Shares
The price of the Franklin New York Tax-Free Income Fund's Class II shares, as
measured by net asset value, increased to $11.87 on November 30, 1995, from
$11.73 on May 31, 1995.
For the six-month period ended November 30, 1995, your Class II shares paid
monthly income distributions totaling 32.7 cents ($0.327) per share. Due to the
fact that higher coupon bonds were called in this declining interest rate
environment, your fund had to reinvest the proceeds of these bonds in lower
yielding bonds. Because of the lower income earned by your portfolio, it was
necessary to reduce the monthly dividend to 5.2 cents ($0.052) from 5.7 cents
($0.057) per share, effective with the September 1995 distribution. Dividends
will vary based on the earnings of the fund's portfolio, and past distributions
are not predictive of future results.
At the end of the reporting period, your fund's Class II distribution rate was
5.20%, based on an annualization of the current monthly dividend of 5.2 cents
($0.052) per share and the maximum offering price of $11.99 on November 30,
1995. This tax-free rate is generally higher than the after-tax return on a
comparable taxable investment. For example, if you are in the maximum combined
federal, New York state and New York City personal income tax bracket of 46.9%,
you would have to earn 9.79% from a taxable investment of the same quality to
match your fund's tax-free distribution rate.
GRAPHIC MATERIAL 3 OMMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Tax-Free Income Fund
Periods ended November 30, 1995
<TABLE>
<CAPTION>
Since Since
Inception Inception
1-Year 5-Year 10-Year (09/13/82) (05/01/95)
Cumulative Total Return1
<S> <C> <C> <C> <C> <C>
Class I Shares 15.42% 53.14% 135.31% 234.59% --
Class II Shares -- -- -- -- 7.30%
Average Annual Total Return2
Class I Shares 10.48% 7.96% 8.47% 9.21% --
Aggregate Total Return2
Class II Shares -- -- -- -- 5.20%
Distribution Rate3 Equivalent Taxable Distribution Rate4
Class I Shares 5.61% Class I Shares 10.56%
Class II Shares 5.20% Class II Shares 9.79%
30-Day Standardized Yield5 Equivalent Taxable Yield4
Class I Shares 4.87% Class I Shares 9.17%
Class II Shares 4.46% Class II Shares 8.40%
</TABLE>
1. Cumulative total returns show the change in value of an investment over the
periods indicated and do not include the maximum 4.25% initial sales charge for
Class I shares or the 1.0% initial sales charge and 1.0% contingent deferred
sales charge (CDSC) for Class II shares, applicable to shares redeemed within
the first 18 months of investment. See note below.
2. Average annual total return represents the average annual change in value of
an investment and reflects the maximum 4.25% initial sales charge for Class I
shares. Aggregate total return includes the 1.0% initial sales charge and
represents the change in value of an investment since the inception date of the
fund's Class II shares. It also includes the 1.0% CDSC applicable to shares
redeemed within the first 18 months of investment. Since Class II shares have
existed for less than one year, average annual total returns are not provided.
See note below.
3. Class I shares distribution rate is based on an annualization of the fund's
current 5.8 cent per share monthly dividend and the maximum offering price of
$12.40 on November 30, 1995. Class II shares distribution rate is based on an
annualization of the fund's current 5.2 cent per share monthly dividend and the
maximum offering price of $11.99 on November 30, 1995.
4. Equivalent taxable distribution rate and yield assume the 1995 maximum
combined federal, New York state and New York City income tax bracket of 46.9%,
based on the 39.6% federal income tax rate. 5. Yield, calculated as required by
the SEC, is based on the earnings of the fund's portfolio for the 30 days ended
November 30, 1995.
Note: Prior to July 1, 1994, Class I fund shares were offered at a lower initial
sales charge, with dividends reinvested at the public offering price. Thus,
actual total returns for purchasers of shares during that period would have been
somewhat different than noted above. Effective May 1, 1994, the fund eliminated
the sales charge on reinvested dividends and implemented a plan of distribution
under Rule 12b-1, which will affect future performance. Class II shares, which
the fund began offering on May 1, 1995, are subject to different fees and
expenses which will affect their performance. Please see the prospectus for more
details regarding Class I and Class II shares.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. Investment return and principal value will fluctuate with
market conditions, and you may have a gain or loss when you sell your shares.
Past performance cannot guarantee future results.
SPECIAL FEATURE: INTERVIEW WITH TOM KENNY
Tom Kenny, Director
of Franklin's Municipal Bond Department,
discusses a number
of current topics,
including tax reform,
interest rates,
and his outlook for
the municipal bond market.
Tom Kenny
Senior Vice President
Director, Franklin Municipal
Bond Department
Tom, there's been a lot of press lately on the possibility of tax reform -- in
particular, a flat tax. What proposals are being considered?
There are three different flat tax proposals being discussed. And, these are in
addition to a number of other tax reform proposals, such as a consumption tax, a
national sales tax and a "Super" IRA. Basically, tax reform is a hot topic right
now, ever since President Clinton appeared on national TV in April after filling
out his tax forms and said, "You know, a flat tax doesn't sound so bad."
With numerous tax reform proposals being considered, do you think that one of
them is going to pass?
The support for tax reform seems to be waning in recent weeks as more details of
some of these proposals are released. Ten out of ten taxpayers will tell you
that taxes are too high and the current system is too complicated. There is
tremendous support for simplification. But when people realize that they would
lose their mortgage deduction -- which could cause their home value to decline
by 15 - 20% -- or that the wealthy would receive a large tax cut while the
middle class would have to pay more taxes under a flat tax system, their opinion
may change. So, I feel there is support for simplification but not necessarily
for radical reform.
However, I think something will happen. There's such a movement behind change
that it's not just going to disappear. With the election coming up, you're going
to continue hearing about tax reform, you're going to read about it, you're
going to see it on TV through next year and into 1997. But I don't think
anything will actually happen until '97, at the earliest.
Has the possibility of tax reform affected the municipal bond market at all?
The possibility of major tax reform has depressed municipal bond prices relative
to other fixed-income investments during the past few months; however, since we
have experienced a strong bond market, it hasn't been that noticeable. The
market has already somewhat priced the potential impact of tax reform, which
makes municipal yields very attractive today.
Depending on the state you live in and your tax bracket, the after-tax
equivalent yield available can be a very attractive 10%. Also, supply is down
25% in 1995 from 1994, and over 50% versus 1993. At the same time, we are
experiencing a record amount of bonds that are being called or redeemed and for
the second consecutive year, more bonds will be taken out of the muni market
than issued.
What is that in dollar terms?
The market may see about $130 to $140 billion in new issuance this year,
compared to $162 billion last year and $290 billion the year before. So new
issuance is down dramatically.
Did rising interest rates have anything to do with that?
Sure, but there are other reasons as well. One, voters simply aren't approving
as many bond issues today. Two, many governors that were elected last fall are
trying to implement tax cuts; in effect, they're reducing budgets and there's
just not a lot of debt capacity for increased debt service. And three, a big
reason we saw such high issuance in 1993 was because lower interest rates
resulted in an increase in refunding and pre-refunding issues -- just as many
homeowners refinanced their mortgages in '93 to take advantage of lower rates.
But because of tax code changes in 1986, issuers of municipal bonds can only
refund or pre-refund their bonds once. Those that could refund, did. As a
result, the potential inventory of refundable bonds is much lower than a few
years ago.
How will these factors affect prices of muni bonds?
It should be positive. The supply/demand fundamentals of the municipal market
are, in my opinion, promising, and the market has already partially discounted
the threat of tax reform. Over the long term, muni prices should improve on a
relative basis. From a historical perspective, munis are cheap today. Investors
can take advantage of this by dollar-cost averaging.
Another topic that's been a concern during the past year has been the bankruptcy
of Orange County, California. What's been the long-term impact on the municipal
bond market?
The biggest impact has been in investor perception. Historically, general
obligation bonds (those that are backed by the full faith and credit of the
issuer) have been perceived as the safest kind of municipal bond. But in a
bankruptcy situation, like in Orange County, the investments that are most
affected are general obligations. Revenue bonds, backed by dedicated revenue
streams -- such as those from airport authority, solid waste authority,
transportation and the like -- haven't really been impacted. Investors in
general have re-thought how they look at revenue bonds and general obligation
bonds.
We have also seen an increase in the use of bond insurance, especially in
California. This year, the percentage of bonds for the entire market is
approximately 44% of total issuance, while in California, 52% of all issues
obtained insurance.
Is that a big increase?
For the muni industry overall, it has increased from 37%; in California, it has
increased from 32%. In my opinion, that's a big jump. As a result, insured bonds
have become less expensive to purchase relative to uninsured bonds simply
because of the increased supply. And we have taken advantage of that by buying
more insured bonds this year.
What about interest rates? Have changes in interest rates affected your buying
decisions?
No. We don't try to second guess the market in terms of where we think rates are
headed or alter our fundamental approach because of economic changes. Many
portfolio managers attempt this in an effort to capture capital growth.
Our approach is very straight forward. We seek safety and income. I don't think
shareholders want the volatility you might generate by chasing capital growth.
We don't want to be number one in total return one year, and number 100 the
next. We use a consistent, conservative, "plain vanilla" approach. We manage our
funds for tax-free income and take a long-term approach. Over time, income will
drive total return. For example, as measured by the Lehman Brothers 20-Year
Municipal Bond Index, income has been responsible for over 99% of total return
of municipal bonds over the last five years.1 So, by investing for income, you
should generate good total return performance. We think our shareholders are
better served by the using this consistent approach. Investors in tax-free funds
want to maximize tax-free income.
How much research do you do before you buy a bond?
It really depends on the quality and type of bond. Lower-rated and non-rated
bonds will typically require more credit analysis than higher-rated bonds. Since
we purchase over 95% of our portfolio holdings in the new issue market, we spend
a lot of time up front performing site visits, addressing legal issues, and
structuring the issue to meet our credit and portfolio requirements. We have 23
analysts who spend much of their time researching new issues. They also monitor
these issues long after purchase.
1. Source: Lehman Brothers 20-Year Municipal Bond Index.
What are Franklin's total holdings in municipal bonds?
We currently have approximately $41 billion in municipal bonds in 42 tax-free
funds. Franklin is the largest buyer of municipal bonds in the country.
Does that size give you any advantages?
Sure. We get the attention of issuers and underwriters and try to capitalize on
that by encouraging them to visit us in San Mateo to discuss their issue. This
allows us to give our input on structuring a deal. They, of course, hope that we
buy their deal.
When you say input, does that commit you to purchasing?
No. You can have input from a bond structuring standpoint, from a pricing
standpoint (in terms of coupons and maturities). And all of that input can go to
the underwriter of the issue without any commitment on our part at all. But if
they make those changes to meet our needs, then we're more likely to buy it than
if they don't. So it can be to everyone's advantage. We end up with an issue
that meets our needs in terms of credit, price, coupon and maturity, and the
issuer ends up with a marketable product.
Where do you see the municipal bond market going through the end of the year,
and through the first six months of 1996?
I'd say the muni market is going to remain stable. We're going to see more of
the same, probably through the presidential election next fall. I think
uncertainty surrounding tax reform is going to continue to hold down munis for a
while longer. No matter what happens to the bond market, the economy or interest
rates, we'll do what we've always done: we'll do our homework, maximize tax-free
income for our shareholders, and maintain a long-term investment horizon.
Thanks, Tom.
It's been my pleasure.
<TABLE>
<CAPTION>
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
Statement of Investments in Securities and Net Assets, November 30, 1995 (unaudited)
Face Value
Amount (Note 1)
Long Term Investments 98.3%
Bonds 96.7%
<S> <C> <C>
$ 4,250,000 Albany Housing Authority, Limited Obligation, Refunding, 6.25%, 10/01/12 ... $ 4,338,570
1,610,000 Albany Parking Authority Revenue, Refunding, Series A, 6.85%, 11/01/12 ..... 1,732,167
6,100,000 Auburn, IDA, MFR, Auburn Memorial Home, 6.50%, 02/01/34 .................... 6,317,465
Babylon IDA, Resource Recovery Revenue, Ogden Martin System, Inc.,
8,090,000 Series A, Pre-Refunded, 8.50%, 01/01/19 ................................. 9,173,089
4,290,000 Series B, Pre-Refunded, 8.50%, 01/01/19 ................................. 4,864,345
2,845,000 Series C, Pre-Refunded, 8.50%, 01/01/19 ................................. 3,225,889
10,750,000 Babylon IDA, Waste Facilities Revenue, Community Waste Management, Series A,
Pre-Refunded, 7.875%, 07/01/06 ............................................ 12,251,883
1,000,000 Batavia Housing Authority Mortgage Revenue, Refunding, Washington Towers,
Series A, 6.50%, 01/01/23 ................................................. 1,030,620
Battery Park City Authority Revenue, Refunding,
89,045,000 Junior Lien, Series A, 5.80%, 11/01/22 .................................. 89,438,579
10,075,000 cSenior Lien, Series A, 5.25%, 11/01/17 .................................. 9,523,192
8,160,000 Bethany Retirement Home, Inc., Mortgage Loan Revenue, 7.50%, 02/01/34 ...... 9,465,274
1,440,000 Cattaraugus County COP, Olean Project Facility, Series A, Pre-Refunded, 8.50%,
08/01/09 .................................................................. 1,626,336
5,375,000 Clinton County COP, Correctional Facilities Project, 8.125%, 08/01/17 ...... 6,710,688
6,400,000 Cortland County IDA, Civic Facilities Revenue, Cortland Memorial Hospital, Inc.
Project, 6.25%, 07/01/24 .................................................. 6,492,800
5,475,000 Franklin County COP, Court House Redevelopment Project, 8.125%, 08/01/06 ... 6,128,222
4,790,000 Franklin County IDA, Lease Revenue, County Correctional Facilities Project,
6.75%, 11/01/12............................................................ 5,116,391
Glen Cove, Refunding,
200,000 Series 1993, 5.90%, 01/15/07 ............................................ 203,738
190,000 Series 1993, 5.95%, 01/15/08 ............................................ 193,766
185,000 Series 1993, 6.00%, 01/15/09 ............................................ 188,861
5,385,000 Guam Airport Authority Revenue, Series A, 6.50%, 10/01/23 .................. 5,399,809
Guam Government GO,
3,300,000 Series A, 5.70%, 09/01/23................................................. 3,316,104
5,480,000 Series A, 5.75%, 09/01/24 ................................................ 5,498,632
Guam Power Authority Revenue,
5,075,000 Series A, 6.30%, 10/01/12 ............................................... 5,160,209
2,900,000 Series A, 6.625%, 10/01/14 .............................................. 3,007,358
45,340,000 Series A, 6.30%, 10/01/22 ............................................... 45,792,493
25,500,000 Series A, 6.75%, 10/01/24 ............................................... 26,693,145
1,405,000 Hamilton Elderly Housing Corp. Mortgage Revenue, Hamilton Apartments Project,
11.25%, 01/01/15 .......................................................... 1,491,464
1,915,000 Ilion Elderly Housing Corp. Mortgage Revenue, Section 8, Housing Assistance
Revenue, 7.25%, 07/01/09 ................................................. 1,921,013
$ 1,380,000 Lincoln Towers Housing Corp. Mortgage Revenue, Lincoln Towers Project,
11.25%, 01/01/15 ......................................................... $ 1,453,996
33,120,000 Metropolitan Transportation Authority, Commuter Facilities Revenue, Series A,
6.50%, 07/01/24 .......................................................... 34,850,851
Metropolitan Transportation Authority, Service Contract Revenue,
12,255,000 Commuter Facilities, 6.00%, 07/01/21 .................................... 12,300,221
4,235,000 Commuter Facilities, Series 3, 6.00%, 07/01/19 .......................... 4,264,984
31,605,000 Commuter Facilities, Series 5, 7.00%, 07/01/12 .......................... 34,542,369
8,450,000 Commuter Facilities, Series 6, 6.00%, 07/01/21 .......................... 8,481,181
24,160,000 Refunding, Commuter Facilities, Series N, 7.125%, 07/01/09 .............. 26,935,742
35,695,000 Refunding, Series 5, 6.50%, 07/01/16 .................................... 37,362,313
7,725,000 Refunding, Series 5, 6.00%, 07/01/18 .................................... 7,789,890
30,935,000 Refunding, Transit Facilities, Series 5, 7.00%, 07/01/12 ................ 33,810,099
17,470,000 Refunding, Transit Facilities, Series 5, 6.50%, 07/01/16 ................ 18,286,024
2,740,000 Refunding, Transit Facilities, Series 5, 6.00%, 07/01/18 ................ 2,763,016
12,625,000 Refunding, Transit Facilities, Series N, 7.125%, 07/01/09 ............... 14,075,486
2,000,000 Transit Facilities, Series 6, 7.00%, 07/01/09 ........................... 2,203,180
7,185,000 Transit Facilities, Series P, 5.75%, 07/01/15 ........................... 7,118,036
Metropolitan Transportation Authority, Transit Facilities Revenue,
750,000 Series F, Pre-Refunded, 8.375%, 07/01/05 ................................ 784,853
28,540,000 Series H, Pre-Refunded, 8.50%, 07/01/11 ................................. 29,886,232
1,285,000 Monroe County IDAR, Civic Facilities, De Paul Community Facilities, 6.50%,
02/01/24 ................................................................ 1,386,965
New York City GO,
165,000 Series 1986-D, 8.50%, 08/01/02 .......................................... 172,902
5,000,000 Series 1986-D, 7.00%, 02/01/12 .......................................... 5,117,450
45,000 Series 1986-D, 8.50%, 08/01/14 .......................................... 46,986
320,000 Series 1986-D, 8.50%, 08/01/15 .......................................... 334,125
870,000 Series 1986-D, Pre-Refunded, 8.50%, 08/01/02 ............................ 914,126
1,650,000 Series 1986-D, Pre-Refunded, 8.50%, 08/01/11 ............................ 1,733,298
260,000 Series 1986-D, Pre-Refunded, 8.50%, 08/01/13 ............................ 272,451
2,455,000 Series 1986-D, Pre-Refunded, 8.50%, 08/01/14 ............................ 2,579,518
3,395,000 Series 1986-D, Pre-Refunded, 8.50%, 08/01/16 ............................ 3,567,166
2,115,000 Series 1987-A, Pre-Refunded, 8.75%, 11/01/14 ............................ 2,329,715
1,180,000 Series 1987-D, 8.50%, 08/01/08 .......................................... 1,274,317
1,055,000 Series 1987-D, 8.50%, 08/01/09 .......................................... 1,139,147
1,395,000 Series 1987-D, 8.50%, 08/01/10 .......................................... 1,505,805
5,720,000 Series 1987-D, Pre-Refunded, 8.50%, 08/01/08 ............................ 6,246,640
5,330,000 Series 1987-D, Pre-Refunded, 8.50%, 08/01/09 ............................ 5,820,733
6,815,000 Series 1987-D, Pre-Refunded, 8.50%, 08/01/10 ............................ 7,442,457
4,000,000 Series 1990-B, 7.00%, 06/01/13 .......................................... 4,212,720
New York City GO, (cont.)
$ 6,725,000 Series 1990-B, 7.00%, 06/01/14 .......................................... $ 7,072,952
4,250,000 Series 1990-B, 7.00%, 06/01/15 .......................................... 4,480,053
2,000,000 Series 1991-A, 7.75%, 08/15/13 .......................................... 2,278,180
10,000,000 Series 1991-A, 7.75%, 08/15/14 .......................................... 11,401,600
1,400,000 Series 1991-A, 7.75%, 08/15/15 .......................................... 1,588,790
2,000,000 Series 1991-B, 7.75%, 02/01/10 .......................................... 2,217,060
5,000,000 Series 1991-B, 7.75%, 02/01/11 .......................................... 5,542,650
500,000 Series 1991-B, 7.75%, 02/01/12 .......................................... 554,265
1,875,000 Series 1991-B, 7.75%, 02/01/13 .......................................... 2,078,494
10,950,000 Series 1991-B, 7.75%, 02/01/14 .......................................... 12,120,446
22,610,000 Series 1991-B, 7.75%, 02/01/15 .......................................... 25,026,783
1,485,000 Series 1991-B, 7.00%, 02/01/18 .......................................... 1,586,871
3,615,000 Series 1991-B, Pre-Refunded, 8.00%, 08/01/17 ............................ 4,306,405
110,000 Series 1991-D, 8.25%, 08/01/13 .......................................... 128,481
65,000 Series 1991-D, 8.00%, 08/01/17 .......................................... 75,199
4,710,000 Series 1991-D, Pre-Refunded, 8.25%, 08/01/13 ............................ 5,669,239
12,750,000 Series 1992, Rite 1, 7.00%, 10/01/11 .................................... 13,707,525
1,500,000 Series 1992-B, 6.75%, 10/01/15 .......................................... 1,569,750
4,500,000 Series 1992-C, Sub-Series C, 7.00%, 08/01/16 ............................ 4,824,855
2,500,000 Series 1992-D, 7.50%, 02/01/18 .......................................... 2,735,325
10,000,000 Series 1992-H, 7.20%, 02/01/13 .......................................... 10,804,300
4,000,000 Series 1992-H, 7.20%, 02/01/14 .......................................... 4,315,240
4,600,000 Series 1992-H, 7.20%, 02/01/15 .......................................... 4,962,526
2,500,000 Series 1992-H, 7.00%, 02/01/16 .......................................... 2,671,500
6,500,000 Series 1992-H, 7.00%, 02/01/17 .......................................... 6,945,900
4,225,000 Series 1992-H, 7.00%, 02/01/18........................................... 4,514,835
2,000,000 Series 1994-B, Sub-series B-1, 7.00%, 08/15/16 .......................... 2,151,300
10,000,000 Series 1994-B, Sub-series B-1, 7.50%, 08/15/20 .......................... 11,077,500
4,000,000 Series 1995-C, 7.20%, 08/15/14 .......................................... 4,206,520
22,745,000 Series 1995-C, 7.25%, 08/15/24 .......................................... 24,413,346
5,000,000 Series 1995-F, 6.625%, 02/15/25 ......................................... 5,214,200
17,000,000 Series A-1, 6.625%, 08/01/25 ............................................ 17,749,360
85,000 Series D, 8.50%, 08/01/13 ............................................... 89,311
410,000 Series D, Pre-Refunded, 8.50%, 08/01/15 ................................. 430,795
7,500,000 Series F, Pre-Refunded, 8.40%, 11/15/08 ................................. 9,126,360
3,350,000 Series F, Pre-Refunded, 8.40%, 11/15/09 ................................. 4,085,507
New York City HDC, MFMR,
19,450,000 Series A, 6.55%, 10/01/15 ............................................... 20,203,104
10,000,000 Series A, 6.55%, 04/01/18 ............................................... 10,351,100
51,500,000 Series A, 6.60%, 04/01/30 ............................................... 53,119,675
$114,635,000 New York City Health & Hospital Authority, Local Government Revenue,
Refunding, Series A, 6.30%, 02/15/20....................................... $ 115,335,420
New York City IDA, Civic Facilities Revenue,
2,690,000 Federation Protestant Welfare, 6.95%, 11/01/11 .......................... 2,878,219
4,000,000 New York Blood Center, Inc. Project, 7.20%, 05/01/12 .................... 4,333,320
7,000,000 New York Blood Center, Inc. Project, 7.25%, 05/01/22 .................... 7,582,190
2,500,000 St. Christopher Ottilie Project, 7.50%, 07/01/21 ........................ 2,540,775
8,000,000 The Lighthouse, Inc. Project, 6.50%, 07/01/22 ........................... 8,540,480
New York City Municipal Water Finance Authority, Water & Sewer System Revenue,
37,500,000 Refunding, Series A, 6.00%, 06/15/17 .................................... 38,124,000
6,660,000 Series 1987-A, BIG Insured, Pre-Refunded, 8.75%, 06/15/10 ............... 7,267,325
2,185,000 Series 1991-A, 7.00%, 06/15/15 .......................................... 2,431,599
3,010,000 Series 1991-A, 6.75%, 06/15/16 .......................................... 3,254,231
36,850,000 Series 1991-A, 6.75%, 06/15/17 .......................................... 39,821,953
15,700,000 Series 1991-A, Pre-Refunded, 7.10%, 06/15/12 ............................ 17,924,533
4,210,000 Series 1991-C, AMBAC Insured, 6.50%, 06/15/21 ........................... 4,364,633
13,185,000 Series 1992-B, 6.50%, 06/15/20 .......................................... 13,917,954
38,250,000 Series 1992-B, 6.375%, 06/15/22 ......................................... 39,799,125
17,785,000 Series 1994-A, 7.10%, 06/15/12 .......................................... 19,932,894
2,215,000 Series 1994-A, Pre-Refunded, 7.10%, 06/15/12 ............................ 2,528,843
690,000 Series 1994-A, Pre-Refunded, 7.00%, 06/15/15 ............................ 784,413
3,075,000 Series C, AMBAC Insured, 6.20%, 06/15/21 ................................ 3,222,293
New York Housing Corp. Revenue,
5,000,000 Series A, MBIA Insured, Pre-Refunded, 8.625%, 11/01/06 .................. 5,524,350
70,065,000 Series A, Pre-Refunded, 9.00%, 11/01/17 ................................. 77,890,560
New York State COP,
3,800,000 City University, John Jay College, 7.25%, 08/15/07 ...................... 3,944,248
2,500,000 Commissioner's Office of Mental Health, 8.25%, 09/01/07 ................. 2,692,800
1,750,000 Commissioner's Office of Mental Health, 8.30%, 09/01/12 ................. 1,888,845
6,575,000 Hanson Redevelopment Project, 8.25%, 11/01/01 ........................... 7,472,159
18,045,000 Hanson Redevelopment Project, 8.375%, 05/01/08 .......................... 21,388,197
New York State Dormitory Authority Revenue,
1,650,000 City University System Consolidated, Series A, 6.50%, 07/01/14 .......... 1,657,508
26,605,000 City University System Consolidated, Series A, 6.50%, 07/01/15 .......... 26,718,603
10,050,000 City University System Consolidated, Series A, 6.00%, 07/01/16 .......... 10,109,094
13,040,000 City University System Consolidated, Series A, 6.50%, 07/01/16 .......... 13,095,681
14,900,000 City University System Consolidated, Series C, 7.50%, 07/01/10 .......... 17,826,360
3,430,000 City University System Consolidated, Series D, 7.00%, 07/01/09 .......... 3,920,867
10,970,000 City University System Consolidated, Series E, 7.75%, 07/01/17 .......... 11,206,842
62,000,000 City University System, Series F, Pre-Refunded, 7.875%, 07/01/17 ........ 72,411,660
1,000,000 Crouse Irving Memorial Hospital, HIBI Insured, 10.50%, 07/01/17 ......... 1,060,610
New York State Dormitory Authority Revenue, (cont.)
$ 2,530,000 Department of Education, 7.75%, 07/01/21 ................................ $ 2,875,168
14,725,000 Department of Health, 6.20%, 07/01/17 ................................... 15,267,322
5,355,000 Department of Health, Rosewell Park Cancer Center, 6.625%, 07/01/15 ..... 5,827,097
9,175,000 Department of Health, Rosewell Park Cancer Center, 6.625%, 07/01/24 ..... 9,983,868
3,190,000 Department of Health, Veterans Home, 7.25%, 07/01/11 .................... 3,545,685
8,480,000 Department of Health, Veterans Home, 6.25%, 07/01/20 .................... 8,730,669
9,775,000 Department of Health, Veterans Home, 7.25%, 07/01/21 .................... 10,750,154
2,115,000 Fashion Institute of Technology, 7.50%, 07/01/20 ........................ 2,323,137
2,355,000 Genessee Valley, Series A, 6.90%, 02/01/32 .............................. 2,552,255
2,435,000 Heritage House Nursing Center, 7.00%, 08/01/31 .......................... 2,705,115
14,355,000 Long Island Jewish Medical Center, Series A, 7.75%, 08/15/27 ............ 15,610,058
5,375,000 New York Medical College, Asset Guaranty, 6.875%, 07/01/21............... 5,887,291
5,835,000 Our Lady of Mercy, FHA Insured, Mortgage Revenue, 6.30%, 08/01/32 ....... 6,173,080
5,000,000 Refunding, City University, 7.625%, 07/01/14 ............................ 5,210,700
2,000,000 Refunding, City University, Series C, 8.20%, 07/01/14 ................... 2,216,000
2,885,000 Refunding, City University, Series U, 6.375%, 07/01/08 .................. 3,029,394
5,405,000 Refunding, City University, Series U, 6.70%, 07/01/09 ................... 5,874,695
3,550,000 Refunding, City University Systems - Consolidated, Series A, 5.625%,
07/01/16................................................................ 3,505,093
10,215,000 cRefunding, City University Systems - Consolidated, Second General, Series A,
6.00%, 07/01/17 ........................................................ 10,324,811
16,185,000 cRefunding, City University Systems - Consolidated, Third General, Series A,
6.00%, 07/01/16 ........................................................ 16,358,989
19,390,000 Refunding, Manhattan College, 6.50%, 07/01/19 ........................... 20,348,836
17,670,000 Refunding, State University Educational Facilities, Series A, 6.25%, 05/15/19 18,363,017
6,100,000 Refunding, State University Educational Facilities, Series A, 6.00%, 05/15/25 6,182,777
2,970,000 Refunding, State University Educational Facilities, Series B, 6.00%, 05/15/17 2,993,998
2,565,000 State University Athletic Facilities, 7.25%, 07/01/12 ................... 2,840,481
4,750,000 State University Athletic Facilities, 7.25%, 07/01/21 ................... 5,235,925
5,000,000 State University Educational Facilities, Series A, Refunding, 5.875%, 05/15/17 5,126,050
23,230,000 State University Educational Facilities, Series B, 6.25%, 05/15/14 ...... 24,112,972
7,025,000 State University Educational Facilities, Series B, 7.35%, 05/15/14 ...... 7,738,880
7,995,000 State University Educational Facilities, Series B, 7.00%, 05/15/16 ...... 8,603,819
14,565,000 State University Educational Facilities, Series B, 5.75%, 05/15/24 ...... 14,233,646
55,945,000 State University Educational Facilities, Series B, 6.25%, 05/15/20 ...... 57,849,368
2,130,000 State University Educational Facilities, Series C, 6.125%, 05/15/20...... 2,149,213
4,000,000 The Highlands Living, 6.60%, 02/01/34 ................................... 4,320,680
6,910,000 Upstate Community Colleges, Series A, 6.20%, 07/01/15 ................... 7,070,036
5,725,000 Upstate Community Colleges, Series A, 5.70%, 07/01/21 ................... 5,671,471
23,810,000 Upstate Community Colleges, Series A, 6.25%, 07/01/25 ................... 24,360,011
New York State Dormitory Authority Revenue, (cont.)
$ 3,250,000 Upstate Community Colleges, Series A, Pre-Refunded, 7.60%, 07/01/20 ..... $ 3,751,573
1,000,000 Upstate Community Colleges, Series B, Pre-Refunded, 7.20%, 07/01/21 ..... 1,155,370
New York State Energy Research & Development Authority, Gas Facilities Revenue,
24,135,000 Brooklyn Union Gas Co. Project, 9.00%, 05/15/15 ......................... 24,630,974
4,010,000 Brooklyn Union Gas Co. Project, 8.75%, 07/01/15 ......................... 4,102,270
2,390,000 Brooklyn Union Gas Co. Project, Series I, 7.125%, 12/01/20 .............. 2,497,168
8,400,000 Brooklyn Union Gas Co. Project, Series II, 7.00%, 12/01/20 .............. 8,766,576
New York State Energy Research & Development Authority, PCR,
3,300,000 Long Island Projects, 7.80%, 12/01/09 ................................... 3,327,324
5,000,000 Long Island Projects, Series A, 7.50%, 12/01/06 ......................... 5,034,300
38,145,000 Niagara Mohawk Power Corp. Project, Series 1, 8.875%, 11/01/25 .......... 39,235,947
New York State Environmental Facilities Corp., Special Obligation,
3,000,000 PCR, New York City Municipal Water Finance Authority Project, Series E,
6.875%, 06/15/14 ....................................................... 3,375,990
4,000,000 Riverbank State Park, 7.25%, 04/01/07 ................................... 4,340,840
4,300,000 Riverbank State Park, 7.25%, 04/01/12 ................................... 4,654,535
28,525,000 Riverbank State Park, 7.375%, 04/01/22 .................................. 30,905,411
4,500,000 Water Facilities Revenue, Jamaica Water Supply Co. Project, 10.875%, 12/01/14 4,633,560
New York State HFA,
2,405,000 Henry Phipps Plaza, West Urban Project, Section 236, 8.00%, 05/01/18 .... 2,468,444
1,295,000 Urban Rentals, Series A, 8.25%, 11/01/19 ................................ 1,339,250
New York State HFA, Service Contract Obligation Revenue,
5,000,000 Refunding, Series C, 6.30%, 09/15/12 .................................... 5,183,400
4,000,000 Refunding, Series C, 6.00%, 09/15/21 .................................... 4,020,080
14,000,000 Series 1990-A, Pre-Refunded, 7.80%, 09/15/20 ............................ 16,389,520
30,000,000 Series 1991-A, Pre-Refunded, 7.80%, 09/15/20 ............................ 35,387,100
2,375,000 Series 1992-A, 7.25%, 09/15/12 .......................................... 2,662,993
30,320,000 Series 1992-C, 6.30%, 03/15/22 .......................................... 31,221,717
98,260,000 Series 1993-C, 6.125%, 03/15/20 ......................................... 99,655,292
28,330,000 Series 1994-A, 6.50%, 03/15/24 .......................................... 29,691,257
8,270,000 Series A, 6.50%, 03/15/25 ............................................... 8,671,674
New York State HFAR,
5,285,000 Children's Rescue Fund Housing, Series A, 7.625%, 05/01/18 .............. 5,636,664
2,040,000 FHA Insured, Adult Care, Series A, 7.85%, 02/15/30 ...................... 2,226,558
4,245,000 MF Housing, Second Mortgage, Series A, 7.00%, 08/15/23 .................. 4,549,833
2,500,000 MF Housing, Second Mortgage, Series D, 6.25%, 08/15/23 .................. 2,573,975
5,500,000 MF Housing, Second Mortgage, Series D, 6.60%, 08/15/27 .................. 5,769,665
7,180,000 MF Housing, Second Mortgage, Series E, 6.75%, 08/15/25 .................. 7,524,927
34,515,000 MF Mortgage, AMBAC Insured, Series 1984-B, 6.35%, 08/15/23 .............. 35,785,497
2,760,000 MF Mortgage, AMBAC Insured, Series B, 6.25%, 08/15/14 ................... 2,848,762
New York State HFAR, (cont.)
$ 12,575,000 MF Mortgage, FHA Insured, Series 1985-B, 8.50%, 05/15/28................. $ 12,934,771
8,630,000 MF Mortgage, FHA Insured, Series 1991-A, 7.10%, 08/15/35 ................ 9,247,649
4,885,000 MF Mortgage, FHA Insured, Series 1992-A, 7.00%, 08/15/22 ................ 5,201,353
6,870,000 MF Mortgage, FHA Insured, Series 1992-C, 6.50%, 08/15/24 ................ 7,189,249
1,000,000 Refunding, MF Mortgage, FHA Insured, Series 1992-C, 6.45%, 08/15/14 ..... 1,050,050
96,650,000 Refunding, New York City Health Facilities, Series A, 8.00%, 11/01/08 ... 110,227,392
New York State Local Government Assistance Corp.,
10,120,000 Series 1991-B, 6.50%, 04/01/20 .......................................... 10,770,716
39,935,000 Series 1991-C, 6.50%, 04/01/15 .......................................... 41,901,799
8,750,000 Series 1992-A, 6.875%, 04/01/19 ......................................... 9,747,063
5,000,000 Series 1992-B, 6.00%, 04/01/18 .......................................... 5,107,750
36,535,000 Series 1992-B, 6.25%, 04/01/21 .......................................... 37,921,503
42,260,000 Series 1992-C, 6.25%, 04/01/18 .......................................... 44,006,183
30,665,000 Series 1995-A, 6.00%, 04/01/24 .......................................... 31,447,571
New York State Medical Care Facilities Finance Agency,
43,465,000 Albany Medical Center, Alice Hyde Project, FHA Insured, Mortgage Revenue,
Series A, 8.00%, 02/15/28............................................... 48,427,834
3,500,000 Buffalo General Hospital, FHA Insured, Mortgage Revenue, Series C,
Pre-Refunded, 7.70%, 02/15/22 .......................................... 3,899,805
22,150,000 Catholic Medical Center of Brooklyn & Queens, Inc., FHA Insured, Mortgage
Revenue, Series A, Pre-Refunded, 8.30%, 02/15/22 ....................... 24,545,966
9,060,000 FHA Insured, Mortgage Revenue, Series B, 6.15%, 02/15/25 ................ 9,415,877
2,200,000 FHA Insured, Mortgage Revenue, Series B, 6.15%, 02/15/35 ................ 2,277,176
6,415,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A,
6.125%, 02/15/15 ....................................................... 6,610,850
8,330,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A, 6.20%,
02/15/21 ............................................................... 8,680,526
9,000,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A, 6.30%,
08/15/23................................................................ 9,433,800
12,235,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A, 6.25%,
02/15/27................................................................ 12,787,043
26,910,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A, 6.20%,
02/15/28................................................................ 27,784,306
28,750,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A, 7.45%,
08/15/31 ............................................................... 31,669,850
7,940,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A, 6.375%,
08/15/33................................................................ 8,295,474
12,340,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series B, 8.875%,
08/15/27 ............................................................... 13,517,606
New York State Medical Care Facilities Finance Agency, (cont.)
$ 24,000,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series B, 6.95%,
02/15/32................................................................ $ 26,040,720
1,805,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series B,
Pre-Refunded, 9.125%, 02/15/25 ........................................ 1,840,649
33,220,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series B,
Pre-Refunded, 8.00%, 02/15/28 ......................................... 36,868,885
8,000,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series C, 6.50%,
08/15/21 ............................................................. 8,639,440
21,540,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series C, 6.20%,
08/15/23 ............................................................. 22,188,354
2,610,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series C, 9.00%,
02/15/26 .............................................................. 2,660,817
78,865,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series C, 6.375%,
08/15/29 .............................................................. 82,797,209
15,000,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series C, 6.65%,
08/15/32 .............................................................. 15,954,000
13,375,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series D, 6.60%,
02/15/31 .............................................................. 14,215,886
55,500,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series D, 6.45%,
02/15/32............................................................... 58,889,385
11,670,000 Hospital & Nursing Home, FHA Insured, Mortgage Revenue, Series A, 6.50%,
02/15/34 .............................................................. 12,346,043
5,500,000 Hospital & Nursing Home, Methodist Medical Center, FHA Insured, Series A,
6.70%, 08/15/23 ....................................................... 5,909,310
3,200,000 Hospital Mortgage, AMBAC Insured, Series A, 6.80%, 08/15/24 ............. 3,530,688
5,125,000 Hospital Mortgage, AMBAC Insured, Series A, 6.50%, 08/15/29 ............. 5,517,524
31,210,000 Hospital Mortgage, AMBAC Insured, Series A, 6.90%, 08/15/34 ............. 34,419,324
4,000,000 Huntington Hospital Mortgage, Refunding, Project A, 6.50%, 11/01/14 ..... 4,164,600
68,050,000 Long Island College Hospital, FHA Insured, Mortgage Revenue, Series B,
Pre-Refunded, 8.10%, 02/15/22............................................ 75,127,200
2,670,000 Medina Memorial Hospital Project, Series A, 7.30%, 05/01/11 ............. 2,941,005
64,110,000 Mental Health Services Facilities, Series A, 8.875%, 08/15/07............ 70,028,635
7,405,000 Mental Health Services Facilities, Series A, 7.70%, 02/15/18............. 7,978,295
57,100,000 Mental Health Services Facilities, Series A, Pre-Refunded, 8.875%, 08/15/07 62,847,686
2,210,000 Mercy Community Hospital Project, Sisters of Mercy, Series A, 9.80%, 11/01/16 2,229,559
3,800,000 Mortgage Revenue Project, Series A, 6.50%, 02/15/35 ..................... 3,994,294
23,775,000 Mortgage Revenue Project, Series B, 6.60%, 08/15/34 ..................... 25,330,836
10,200,000 Mortgage Revenue Project, Series C, 6.375%, 08/15/29 .................... 10,719,792
6,250,000 Mortgage Revenue Project, FHA Insured, Series D, 6.20%, 02/15/35 ........ 6,540,625
New York State Medical Care Facilities Finance Agency, (cont.)
$ 13,200,000 Mortgage Revenue Project, FHA Insured, Series E, 6.375%, 02/15/35 ....... $ 13,847,988
7,650,000 Mortgage Revenue Project, FHA Insured, Series F, 6.30%, 08/15/25 ........ 8,023,779
18,400,000 Mortgage Revenue Project, FHA Insured, Series F, 6.375%, 08/15/34 ....... 19,295,344
5,380,000 North General Hospital, Series 1989-A, 7.35%, 08/15/09 .................. 5,736,479
9,145,000 Refunding, Beth Israel Medical Center Project, Series A, 7.20%, 11/01/14 9,420,265
25,000,000 Refunding, Columbia Presbyterian Hospital, FHA Insured, Mortgage Revenue,
Series A, Pre-Refunded, 8.00%, 02/15/25 ................................ 27,161,250
10,730,000 Refunding, FHA Insured, Hospital Mortgage, Series A, 7.25%, 02/15/12 .... 11,482,710
1,185,000 Refunding, Good Samaritan Hospital Project Revenue, Series A, 8.00%, 11/01/13 1,273,484
5,050,000 Refunding, Hospital and Nursing Home, FHA Insured, Mortgage Revenue,
Series A, 6.20%, 02/15/23 .............................................. 5,264,928
4,745,000 Refunding, Hospital and Nursing Home, FHA Insured, Mortgage Revenue,
Series B, 6.25%, 02/15/35 .............................................. 4,940,352
17,700,000 Refunding, Hospital and Nursing Home, Series B, 6.20%, 08/15/22 ......... 18,176,130
20,000,000 Refunding, Hospital and Nursing Home, Series B, 6.125%, 08/15/24 ........ 20,671,600
4,005,000 Refunding, John T. Mather Memorial Hospital Project, 7.00%, 11/01/15 .... 4,125,430
6,400,000 Refunding, Nyack Hospital Project Revenue, Series A, 8.30%, 11/01/13 .... 6,982,144
9,900,000 Refunding, Vassar Brothers Hospital Project Revenue, Series A, 8.25%, 11/01/13 10,612,305
1,665,000 Saranac Lake General Hospital Project Revenue, Series A, 7.875%, 11/01/10 1,864,634
1,410,000 Second Mortgage, Health Care Project Revenue, Series B, 6.35%, 11/01/14 . 1,484,857
62,770,000 Secured Hospital Revenue, Bronx, Lebanon and The Jamaica Hospital,
Series A, 7.10%, 02/15/27 .............................................. 64,774,874
72,180,000 Secured Hospital Revenue, North General Hospital, Series A, 7.40%, 02/15/19 76,808,182
22,150,000 Secured Hospital Revenue, Series A, 7.35%, 08/15/11 ..................... 23,865,739
55,225,000 Secured Hospital Revenue, Series A, 7.40%, 08/15/21 ..................... 59,661,777
15,200,000 Secured Hospital Revenue, Series A, 6.25%, 02/15/24 ..................... 15,255,024
19,700,000 Security Mortgage Program Revenue, Adult Day Care, 6.375%, 11/15/20 ..... 20,613,489
32,450,000 St. Vincent's Hospital, FHA Insured, Mortgage Revenue, Series A, 8.00%,
02/15/27 ............................................................... 35,154,383
36,650,000 The Hospital for Special Surgery Revenue, Series A, 6.45%, 08/15/34 ..... 38,614,440
New York State Mortgage Agency, HMR,
285,000 5th Series, 9.75%, 10/01/10 ............................................. 293,895
70,000 7th Series, 8.50%, 10/01/04 ............................................. 71,638
655,000 7th Series, 8.625%, 04/01/11 ............................................ 670,871
9,670,000 8th Series C, 8.40%, 10/01/17 ........................................... 10,131,162
6,235,000 8th Series D, 8.375%, 10/01/17 .......................................... 6,576,865
4,885,000 8th Series E, 8.10%, 10/01/17 ........................................... 5,163,689
3,975,000 10th Series A, 8.10%, 04/01/14 .......................................... 4,213,301
New York State Mortgage Agency, HMR, (cont.)
$ 17,250,000 29th Series B, 6.45%, 04/01/15 .......................................... $ 17,878,935
6,225,000 37th Series A, 6.375%, 10/01/14 ......................................... 6,463,604
9,000,000 37th Series A, 6.45%, 10/01/17 .......................................... 9,361,530
9,945,000 Series 51, 6.40%, 10/01/17 .............................................. 10,343,596
6,560,000 Series BB-2, 7.95%, 10/01/15 ............................................ 6,877,176
3,405,000 Series EE-1, 8.05%, 04/01/16 ............................................ 3,690,441
2,835,000 Series FF, 7.95%, 10/01/14 .............................................. 2,995,234
13,100,000 Series OO, 8.05%, 10/01/11 .............................................. 14,473,797
14,650,000 Series RR, 7.75%, 10/01/17 .............................................. 15,838,555
New York State Mortgage Agency Revenue,
13,685,000 8th Series A, 6.875%, 04/01/17 .......................................... 14,007,829
5,000,000 Homeowners Mortgage, Series 27, 6.90%, 04/01/15 ......................... 5,341,450
9,880,000 Homeowners Mortgage, Series 41-A, 6.50%, 10/01/17 ....................... 10,409,766
3,800,000 Homeowners Mortgage, Series 43, MBIA Insured, 6.45%, 10/01/17 ........... 3,951,772
23,730,000 Homeowners Mortgage, Series 45, 7.20%, 10/01/17 ......................... 25,950,891
26,780,000 Homeowners Mortgage, Series 47, 6.375%, 10/01/17 ........................ 27,766,575
New York State Tollway Authority, Service Contract Revenue,
1,300,000 Local Highway & Bridge, 7.25%, 01/01/10 ................................ 1,487,577
12,630,000 Local Highway & Bridge, 6.20%, 04/01/10 ................................ 13,126,359
18,430,000 Local Highway & Bridge, 6.00%, 01/01/11 ................................ 18,621,119
21,865,000 Local Highway & Bridge, 6.375%, 04/01/12 ............................... 22,670,069
New York State Urban Development Corp. Revenue,
79,600,000 Correctional Capital Facilities, Series 5, 6.25%, 01/01/20 .............. 81,902,032
13,575,000 Refunding, Onondaga County Convention Project, 6.25%, 01/01/20 .......... 14,159,132
7,250,000 Refunding, State Facilities, 5.70%, 04/01/20 ............................ 7,230,353
2,045,000 cRefunding, University Facilities Grants, 5.875%, 01/01/21 ............... 2,045,000
1,500,000 Syracruse University Center, 7.875%, 01/01/17 ........................... 1,615,200
Niagara Falls GO, Public Improvement,
805,000 Refunding, Pre-Refunded, 8.15%, 04/01/04 ................................ 871,767
790,000 Refunding, Pre-Refunded, 8.15%, 04/01/05 ................................ 855,523
775,000 Refunding, Pre-Refunded, 8.15%, 04/01/06 ................................ 839,279
755,000 Refunding, Pre-Refunded, 8.15%, 04/01/07 ................................ 817,620
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/04 ................................. 1,107,730
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/05 ................................. 1,107,730
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/06 ................................. 1,107,730
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/07 ................................. 1,107,730
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/08 ................................. 1,107,730
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/09 ................................. 1,107,730
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/10 ................................. 1,107,730
1,000,000 Series A, Pre-Refunded, 8.15%, 12/01/11 ................................. 1,107,730
$ 11,305,000 North County, Development Authority, Solid Waste Systems Revenue, Pre-Refunded,
6.75%, 07/01/12............................................................ $ 12,316,684
2,155,000 Oneida Health Care Corp., Mortgage Revenue, Oneida Health Care, Series A,
7.20%, 08/01/31............................................................ 2,301,648
Oneida-Herkimer, Solid Waste Management Authority,
1,390,000 Solid Waste Systems Revenue, 6.20%, 04/01/00 ............................ 1,458,388
1,035,000 Solid Waste Systems Revenue, 6.30%, 04/01/01 ............................ 1,091,169
1,930,000 Solid Waste Systems Revenue, 6.40%, 04/01/02 ............................ 2,045,781
2,075,000 Solid Waste Systems Revenue, 6.50%, 04/01/03 ............................ 2,215,207
1,115,000 Solid Waste Systems Revenue, 6.65%, 04/01/05 ............................ 1,196,494
20,755,000 Solid Waste Systems Revenue, 6.75%, 04/01/14 ............................ 21,551,576
Port Authority of New York and New Jersey,
1,675,000 Consolidated 67th Series, Revenue, 6.875%, 01/01/25 ..................... 1,787,727
4,400,000 Consolidated 74th Series, Revenue, 6.75%, 08/01/26 ...................... 4,753,980
17,000,000 Port Authority of New York and New Jersey, Delta Air Lines Special Project,
Series 1, 6.95%, 06/01/08 ................................................. 18,452,310
14,645,000 Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue, Series A,
7.875%, 07/01/17 ......................................................... 16,263,857
16,000,000 Puerto Rico Commonwealth Highway Authority Revenue, Series P, Pre-Refunded,
8.125%, 07/01/13 ......................................................... 17,936,640
8,000,000 Puerto Rico Commonwealth Infrastructure Financing Authority, Special Tax
Revenue, Series A, 7.90%, 07/01/07 ....................................... 8,804,240
8,100,000 Puerto Rico Commonwealth Urban Renewal and Housing Corp., Refunding,
7.875%, 10/01/04 ......................................................... 9,235,214
Puerto Rico Electric Power Authority, Revenue,
28,435,000 Refunding, Series 1987-K, Pre-Refunded, 9.375%, 07/01/17 ................ 31,399,063
4,000,000 Refunding, Series 1987-L, Pre-Refunded, 8.375%, 07/01/07 ................ 4,353,240
4,740,000 Series 1992-R, 6.25%, 07/01/17 .......................................... 4,937,421
15,565,000 Series 1994-T, 6.375%, 07/01/24 ......................................... 16,478,510
Puerto Rico Industrial, Medical & Environmental Facilities, PCFA,
1,000,000 Baxter Travenol Labs, Series A, 8.00%, 09/01/12 ......................... 1,116,800
21,015,000 Special Facilities, American Airlines Corp., Series A, 8.75%, 12/01/25 .. 21,884,391
Puerto Rico Municipal Finance Agency,
14,760,000 Series A, 8.25%, 07/01/08 ............................................... 16,276,737
11,000,000 Series A, 6.50%, 07/01/19 ............................................... 11,799,920
Rensselaer Municipal Leasing Corp., Leasehold Mortgage Revenue, Rensselaer
County Nursing Home,
10,000,000 Series A, 6.90%, 06/01/24 ............................................... 10,431,900
3,345,000 Series B, 6.90%, 06/01/24 ............................................... 3,489,471
4,230,000 Schenectady Municipal Housing Authority Revenue, Annie Schaffer Senior Center,
Inc. Project, 6.45%, 05/01/24 .............................................. 4,565,776
Suffolk County IDA, Civic Facilities Revenue,
$ 4,695,000 Dowling College, 8.25%, 12/01/20 ........................................ $ 5,264,174
2,000,000 Dowling College, 6.625%, 06/01/24 ....................................... 2,117,000
1,325,000 Sunnybrook Elderly Housing Corp. Mortgage Revenue, Sunnybrook Apartments
Project, 11.25%, 12/01/14 ................................................. 1,387,951
2,000,000 Syracuse IDA, Civic Facility Revenue, St. Joseph's Hospital Health Center Project,
7.50%, 06/01/18 ........................................................... 2,161,580
8,620,000 cUlster County Resource Recovery Agency, Solid Waste Systems Revenue, 6.00%,
03/01/14 .................................................................. 8,590,605
United Nations Development Corp. Revenue, Refunding,
27,325,000 Sub-Lien, Series A, 6.00%, 07/01/26 ..................................... 28,309,246
15,370,000 Sub-Lien, Series B, 6.25%, 07/01/26 ..................................... 16,206,434
3,100,000 Virgin Islands Water and Power Authority Electric System, Series A, 7.40%, 07/01/11 3,322,982
41,000,000 Warren and Washington Counties IDAR, Refunding, Adirondack Resource
Recovery Project, Series A, 7.90%, 12/15/07 ................................ 42,429,260
Yonkers GO,
500,000 Series A, 9.20%, 02/01/01 ............................................... 591,104
1,090,000 Series A, 9.20%, 02/01/03 ............................................... 1,332,284
1,095,000 Series A, 9.20%, 02/01/04 ............................................... 1,359,881
1,095,000 Series A, 9.20%, 02/01/05 ............................................... 1,383,236
-------------
Total Bonds (Cost $4,383,529,343) .................................... 4,701,174,022
-------------
bZero Coupon/Step-Up Bonds 1.6%
1,120,000 Erie County Water Authority, Water Revenue, Refunding, Fourth Resolution,
AMBAC Insured, Pre-Refunded, (original accretion rate 7.30%), 12/01/17 ..... 231,470
Metropolitan Transportation Authority,
7,590,000 Refunding, Commuter Facilities Revenue, Series 7, (original accretion rate 5.80%),
07/01/11................................................................ 3,129,964
2,065,000 Refunding, Commuter Facilities Revenue, Series 7, (original accretion rate 5.85%),
07/01/13 ............................................................... 745,857
4,750,000 Refunding, Commuter Facilities Revenue, Series 7, (original accretion rate 5.85%),
07/01/14 ............................................................... 1,621,935
8,205,000 Refunding, Transit Facilities Revenue, Series 7, (original accretion rate 5.75%),
07/01/09................................................................ 3,816,392
16,500,000 Refunding, Transit Facilities Revenue, Series 7, (original accretion rate 5.80%),
07/01/10 ............................................................... 7,253,730
21,200,000 Refunding, Transit Facilities Revenue, Series 7, (original accretion rate 5.80%),
07/01/11 ............................................................... 8,742,456
13,190,000 Refunding, Transit Facilities Revenue, Series 7, (original accretion rate 5.85%),
07/01/12................................................................ 5,097,276
bZero Coupon/Step-Up Bonds (cont.)
$ 7,935,000 Refunding, Transit Facilities Revenue, Series 7, (original accretion rate 5.85%),
07/01/13 .................................................................. $ 2,885,642
3,500,000 Refunding, Transit Facilities Revenue, Series 7, (original accretion rate 5.546%),
07/01/14 ................................................................. 1,195,110
5,160,000 Series E, Transit Facilities Revenue, (original accretion rate 6.40%), 05/15/19 1,244,231
New York City GO,
8,875,000 Citysavers, Series B, (original accretion rate 8.25%), 08/01/09 ......... 3,927,454
1,030,000 Citysavers, Series B, (original accretion rate 8.66%), 06/01/12 ......... 380,585
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/12 ......... 369,265
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/13 ......... 358,286
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/13 ......... 347,635
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/14 ......... 335,481
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/14 ......... 325,459
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/15 ......... 315,736
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/15 ......... 306,301
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/16 ......... 297,145
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/16 ......... 288,266
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/17 ......... 279,655
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/17 ......... 271,302
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/18 ......... 263,196
1,005,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/18 ......... 249,129
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/19 ......... 247,694
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/19 ......... 240,299
10,000,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/20 ......... 2,252,500
2,500,000 M-Raes, Series 29, zero coupon to 03/15/00, (original accretion rate 8.50%),
8.00% thereafter, 03/15/12.............................................. 2,106,425
3,875,000 M-Raes, Series 30, zero coupon to 03/15/00, (original accretion rate 8.50%),
8.00% thereafter, 03/15/13.............................................. 3,264,959
17,400,000 M-Raes, Series 36, zero coupon to 10/01/02, (original accretion rate 7.00%),
7.00% thereafter, 10/01/14.............................................. 11,563,518
2,690,000 Series A-2, (original accretion rate 5.95%), 08/01/10 ................... 1,110,298
21,170,000 Orangetown Housing Authority, Housing Facilities Revenue, Refunding, Orangetown
Senior Housing Center Project, MBIA Insured (original accretion rate 6.60%),
04/01/30................................................................. 2,647,309
21,625,000 Triborough Bridge and Tunnel Authority, Convention Center Project, Series E,
(original accretion rate 7.50%), 01/01/12 .................................. 8,667,733
-------------
Total Zero Coupon/Step-Up Bonds, (Cost $69,729,980) .................. 76,379,693
-------------
Total Long Term Investments (Cost $4,453,259,323) .................... 4,777,553,715
-------------
New York City Municipal Water Finance Authority, Water and Sewer System Revenue,
$ 11,800,000 Series C, Daily VRDN and Put, 3.80%, 06/15/23 ........................... $ 11,800,000
4,000,000 Series G, Daily VRDN and Put, 3.70%, 06/15/24 ........................... 4,000,000
-------------
Total Short Term Investments (Cost $15,800,000) ...................... 15,800,000
-------------
Total Investments (Cost $4,469,059,323) 98.6% ................... 4,793,353,715
Other Assets and Liabilities, Net 1.4% ........................... 67,464,634
-------------
Net Assets 100.0% ............................................... $4,860,818,349
=============
At November 30, 1995, the net unrealized appreciation based on the cost of
investments for income tax purposes of $4,470,207,181 was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost ............................................. $ 323,468,784
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value.............................................. (322,250)
-------------
Net unrealized appreciation .............................................. $ 323,146,534
=============
</TABLE>
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BIG - Bond Investors Guaranty Insurance Co.
COP - Certificate of Participation
FHA - Federal Housing Authority/Agency
GO - General Obligation
HDC - Housing Development Corp.
HFA - Housing Finance Authority/Agency
HFAR - Housing Finance Authority/Agency Revenue
HIBI - Health Industry Bond Insurance
HMR - Home Mortgage Revenue
IDA - Industrial Development Authority/Agency
IDAR - Industrial Development Authority/Agency Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MF - Multi-Family
MFMR - Multi-Family Mortgage Revenue
MFR - Multi-Family Revenue
PCFA - Pollution Control Financing Authority
PCR - Pollution Control Revenue
aVariable rate demand notes (VRDN's) are tax-exempt obligations which contain a
floating or variable interest rate adjustment formula and an unconditional right
of demand to receive payment of the principal balance plus accrued interest upon
short notice prior to specified dates. The interest rate may change on specified
dates in relationship with changes in a designated rate (such as the prime
interest rate or U.S. Treasury bills rate).
bZero coupon/step-up bonds. The current effective yield may vary. The original
accretion rate will remain constant.
cSee Note 1(e) regarding securities purchased on a when-issued basis.
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
Financial Statements
Statement of Assets and Liabilities
November 30, 1995 (unaudited)
Assets:
Investment in securities, at value
(identified cost $4,469,059,323) $4,793,353,715
Cash 715,357
Receivables:
Interest 87,319,983
Investment securities sold 24,678,251
Capital shares sold 5,534,636
--------------
Total assets 4,911,601,942
--------------
Liabilities:
Payables:
Investment securities purchased:
Regular delivery 16,559,888
When-issued basis (Note 1) 30,202,095
Capital shares repurchased 1,372,166
Management fees 1,843,321
Distribution fees 470,199
Shareholder servicing costs 8,774
Accrued expenses and other liabilities 327,150
--------------
Total liabilities 50,783,593
--------------
Net assets, at value $4,860,818,349
==============
Net assets consist of:
Undistributed net investment income $ 2,962,308
Net unrealized appreciation on
investments 324,294,392
Undistributed net realized gain 2,422,146
Class I capital shares 4,078,640
Class II capital shares 15,981
Additional paid-in capital 4,527,044,882
--------------
Net assets, at value $4,860,818,349
==============
Class I Shares:
Net assets, at value $4,841,856,115
==============
Shares outstanding 407,863,980
==============
Net asset value per share* $11.87
==============
Class II Shares:
Net assets, at value $ 18,962,234
==============
Shares outstanding 1,598,135
==============
Net asset value per share* $11.87
==============
Statement of Operations
for the six months ended November 30, 1995 (unaudited)
Investment income:
Interest (Note 1) $157,404,362
Expenses:
Management fees (Note 5) $10,838,895
Distribution fees - Class I
(Note 5) 1,597,248
Distribution fees - Class II
(Note 5) 35,374
Shareholder servicing costs
(Note 5) 484,905
Reports to shareholders 460,760
Custodian fees 196,074
Professional fees (Note 5) 59,153
Directors' fees and expenses 30,252
Other 71,123
--------------
Total expenses 13,773,784
--------------
Net investment
income 143,630,578
--------------
Realized and unrealized gain on investments:
Net realized gain 9,245,668
Net unrealized appreciation 46,932,163
--------------
Net realized and unrealized
gain on investments 56,177,831
--------------
Net increase in net assets
resulting from operations $199,808,409
==============
*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge. The accompanying notes are an integral part of
these financial statements.
<TABLE>
<CAPTION>
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
Financial Statements (cont.)
Statements of Changes in Net Assets for the six months ended November 30,1995
(unaudited) and the year ended May 31, 1995
Six months Year
ended ended
November 30, 1995 May 31,1995
----------- -----------
Increase (decrease) in net assets:
Operations:
<S> <C> <C>
Net investment income..................................................... $ 143,630,578 $ 291,384,881
Net realized gain from security transactions.............................. 9,245,668 45,909,121
Net unrealized appreciation (depreciation) on investments................. 46,932,163 (27,550,974)
----------- -----------
Net increase in net assets resulting from operations.................. 199,808,409 309,743,028
Distributions to shareholders from undistributed net investment income
Class I.................................................................... (147,266,046) (300,084,670)
Class II................................................................... (266,795) (1)
Increase in net assets from capital share transactions (Note 3)............. 81,574,101 107,311,550
----------- -----------
Net increase in net assets............................................ 133,849,669 116,969,907
Net assets:
Beginning of period........................................................ 4,726,968,680 4,609,998,773
----------- -----------
End of period (including undistributed net investment
income of $2,962,308 - 11/30/95 and $6,864,571 - 5/31/95).................. $4,860,818,349 $4,726,968,680
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND, INC.
Notes to Financial Statements (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Franklin New York Tax-Free Income Fund, Inc., (the Fund) is an open-end
diversified management investment company (mutual fund), registered under the
Investment Company Act of 1940 as amended.
The Fund offers two classes of shares, Class I and Class II. Class I shares are
sold with a higher front-end sales charge than Class II shares. Each class of
shares may be subject to a contingent deferred sales charge and has the same
rights, except with respect to the effect of the respective sales charges, the
distribution fees borne by each class, voting rights on matters affecting a
single class, and the exchange privilege of each class.
The offering of Class II shares began May 1, 1995, at which time all previously
outstanding shares became Class I shares. Realized and unrealized gains or
losses and net investment income, other than class specific expenses, are
allocated daily to each class of shares based upon the relative proportion of
net assets of each class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Security Valuations:
Tax-free bonds generally trade in the over-the-counter market rather than on a
national securities exchange. There are often no transactions in a particular
security on any given day. In the absence of a recorded sale or reported bid and
asked prices, information with respect to bond and note transactions, quotations
from bond dealers, market transactions in comparable securities, and various
relationships between securities are used to determine the value of the
security. The Fund may utilize a pricing service, bank or broker/dealer
experienced in such matters to perform any of the pricing functions, under
procedures approved by the Board of Directors. Other securities for which market
quotations are not available, if any, are valued in accordance with procedures
established by the Board of Directors.
b. Income Taxes:
The Fund intends to continue to qualify for the tax treatment applicable to
regulated investment companies under the Internal Revenue Code and make the
requisite distributions to its shareholders which will be sufficient to relieve
it from income and excise taxes. Therefore, no income tax provision is required.
c. Security Transactions:
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Realized gains and losses on security transactions are
determined on the basis of specific identification for both financial statement
and income tax purposes.
d. Investment Income, Expense and Distributions:
Distributions to shareholders are recorded on the ex-dividend date. Interest
income and estimated expenses are accrued daily. Bond discount and premium, if
any, are amortized as required by the Internal Revenue Code. Net realized
capital gains and losses differ for financial statement and tax purposes
primarily due to differing treatment of wash sale transactions.
1. SIGNIFICANT ACCOUNTING POLICIES (cont.)
e. Securities Purchased on a When-Issued or Delayed Delivery Basis:
The Fund may trade securities on a when-issued or delayed delivery basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Fund will
generally purchase these securities with the intention of acquiring such
securities, it may sell such securities before the settlement date. These
securities are identified on the accompanying Statement of Investments in
Securities and Net Assets. The Fund has set aside sufficient investment
securities as collateral for these purchase commitments.
2. DISTRIBUTIONS AND CAPITAL LOSS CARRYOVERS
At May 31, 1995, for tax purposes, the Fund had capital loss carryovers of
$5,828,863 expiring in 2002.
For tax purposes, the aggregate cost of securities is higher (and unrealized
appreciation is lower) than for financial reporting purposes at November 30,
1995 by $1,147,858.
3. CAPITAL STOCK
At November 30, 1995, there were 2,500,000,000 Class I shares and 2,500,000,000
Class II shares of $0.01 par value capital stock authorized, and paid-in capital
aggregated $4,512,549,456 and $18,590,047 respectively. Transactions in the
Fund's Class I and Class II shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
November 30, 1995 May 31,1995
---------------------- ----------------------
Class I Shares: Shares Amount Shares Amount
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold ..................................... 18,082,545 $ 210,639,985 34,595,936 $ 397,060,751
Shares issued in reinvestment of distributions .. 5,696,634 66,154,377 11,609,779 132,502,096
Shares redeemed ................................. (16,099,610) (187,310,990) (33,675,983) (383,309,501)
Changes from exercise of exchange privilege:
Shares sold .................................... 3,221,974 37,552,500 11,664,593 132,914,323
Shares redeemed ................................ (5,332,595) (62,154,206) (15,290,142) (173,753,731)
--------- ----------- --------- -----------
Net increase .................................... 5,568,948 $ 64,881,666 8,904,183 $ 105,413,938
========= =========== ========= ===========
Six Months Ended Period ended
November 30, 1995 May 31,1995*
---------------------- ----------------------
Class II Shares: Shares Amount Shares Amount
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold ..................................... 1,438,638 $ 16,733,594 163,023 $ 1,897,611
Shares issued in reinvestment of distributions .. 13,585 158,009 - 1
Shares redeemed ................................. (14,982) (174,772) - -
Changes from exercise of exchange privilege:
Shares redeemed ................................ (2,129) (24,396) - -
--------- ----------- --------- -----------
Net increase .................................... 1,435,112 $ 16,692,435 163,023 $ 1,897,612
========= =========== ========= ===========
*For the period May 1, 1995 (effective date) to May 31, 1995.
</TABLE>
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding purchases and sales of short-term
securities) for the six months ended November 30, 1995 aggregated $575,147,502
and $486,624,706, respectively.
5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to a management agreement, Franklin Advisers, Inc., (Advisers) provides
investment advice, administrative services, office space and facilities to the
Fund, and receives fees computed monthly based on the net assets of the Fund on
the last day at an annualized rate of 5/8 of 1% of the first $100 million of net
assets, 1/2 of 1% of net assets in excess of $100 million up to and including
$250 million and 45/100 of 1% of net assets in excess of $250 million up to and
including $10 billion. Fees are reduced further on net assets over $10 billion.
The terms of the management agreement provide that aggregate annual expenses of
the Fund be limited to the extent necessary to comply with the limitations set
forth in the laws, regulations and administrative interpretations of the states
in which the Fund's shares are registered. For the six months ended November 30,
1995, the Fund's expenses did not exceed these limitations.
Under the terms of Distribution Plans pursuant to Rule 12b-1 of the Investment
Company Act of 1940, the Fund will reimburse Franklin/Templeton Distributors,
Inc. (Distributors) in an amount up to a maximum of 0.10% per annum for Class I
and 0.65% per annum for Class II's average daily net assets, for costs incurred
in the promotion, offering and marketing of the Fund's shares. Fees incurred
under the agreements aggregated $1,632,622 for the six months ended November 30,
1995.
In its capacity as underwriter for the capital stock of the Fund, Distributors
received commissions on sales of the Fund's capital stock. Commissions are
deducted from the gross proceeds received from the sale of the capital stock of
the Fund and as such are not expenses of the Fund. Distributors may also make
payments, out of its own resources, to dealers for certain sales of Class I and
Class II shares.
Commissions received by Distributors and the amounts paid to other dealers for
the six months ended November 30, 1995 were as follows:
<TABLE>
<CAPTION>
Class I Class II
-------- -------
<S> <C> <C>
Total commissions received ......................... $6,794,260 $172,452
======== =======
Paid to other dealers .............................. $6,518,198 $336,037
======== =======
</TABLE>
Distributors also received contingent deferred sales charges relating to
transactions in the Fund in the amounts of $14,738 and $969 for Class I and
Class II, respectively.
Under the terms of a shareholder service agreement, the Fund pays
Franklin/Templeton Investor Services, Inc., (Investor Services) costs on a per
shareholder account basis. Such costs incurred for the six months ended November
30, 1995 aggregated $484,905.
During the six months ended November 30, 1995, legal fees of $15,476 were
incurred to a law firm in which Brian E. Lorenz, Secretary of the Fund, is a
partner.
Certain officers and directors of the Fund are also officers and/or directors of
Distributors, Advisers, and Investor Services, all wholly-owned subsidiaries of
Franklin Resources, Inc.
6. CREDIT RISK
Although the Fund has a diversified portfolio, substantially all of its
investments are in the securities of issuers in New York, Guam, and Puerto Rico.
Such concentration may subject the Fund more significantly to economic changes
occurring within that state and the territories.
7. FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout each year
are as follows:
<TABLE>
<CAPTION>
Six months Year Ended May 31,
ended
Class I Shares: November 30, 1995 1995 1994 1993 1992 1991
------------ -------- -------- -------- -------- --------
Per Share Operating
Performance
Net asset value at beginning
<S> <C> <C> <C> <C> <C> <C>
of year ...................... $11.75 $11.72 $12.07 $11.45 $10.94 $10.85
------------ -------- -------- -------- -------- --------
Net investment income ........ 0.35 0.73 0.75 0.77 0.78 0.80
Net realized and unrealized
gain (loss) on securities .... 0.133 0.056 (0.338) 0.630 0.523 0.086
------------ -------- -------- -------- -------- --------
Total from investment operations 0.483 0.786 0.412 1.400 1.303 0.886
Distributions from net
investment income ............ (0.363) (0.756) (0.762) (0.780) (0.793) (0.796)
------------ -------- -------- -------- -------- --------
Net asset value at end of year $11.87 $11.75 $11.72 $12.07 $11.45 $10.94
============ ======== ======== ======== ======== ========
Total return* ................. 4.22% 7.10% 3.18% 12.35% 12.05% 8.20%
Ratios/Supplemental Data
Net assets at end of year
(in 000's) ................... $4,841,856 $4,725,056 $4,609,999 $4,339,249 $3,570,851 $3,108,151
Ratio of expenses to average
net assets ................... 0.58%a 0.57% 0.52% 0.52% 0.51% 0.50%
Ratio of net investment income
to average net assets ........ 6.06%a 6.39% 6.19% 6.56% 7.01% 7.34%
Portfolio turnover rate ....... 10.38% 40.56% 25.67% 12.28% 19.37% 18.62%
7. FINANCIAL HIGHLIGHTS (cont.)
Six months Period
ended ended
Class II Shares: November 30, 1995 May 31, 1995+
------------ ----------
Per Share Operating Performance**
<S> <C> <C>
Net asset value at beginning of year.......................................... $11.73 $11.50++
------------ ----------
Net investment income ........................................................ 0.33 0.05
Net realized and unrealized gain on securities ............................... 0.137 0.243
------------ ----------
Total from investment operations ............................................. 0.467 0.293
Distributions from net investment income ..................................... (0.327) (0.063)
------------ ----------
Net asset value at end of year................................................ $11.87 $11.73
============ ==========
Total return* ................................................................ 4.08% 2.56%
Ratios/Supplemental Data
Net assets at end of period (in 000's) ....................................... $18,962 $1,913
Ratio of expenses to average net assets ...................................... 1.17%a 1.09%a
Ratio of net investment income to average net assets ......................... 5.50%a 5.32%a
Portfolio turnover rate ...................................................... 10.38% 40.56%
</TABLE>
*Total return measures the change in value of an investment over the periods
indicated. It is not annualized. It does not include the maximum front-end sales
charge or the deferred contingent sales charge and assumes reinvestment of
dividends and capital gains, if any, at net asset value. Prior to May 1,1994,
dividends were reinvested at the maximum offering price.
**Per share amounts
have been calculated using the daily average shares outstanding during the
period.
+For the period May 1, 1995 (effective date) to May 31, 1995.
aAnnualized.
++The Fund paid a dividend to shareholders of record on the beginning
of business, May 1, 1995 in the amount of $0.063 per share. The net asset value
per share at the beginning of period includes this dividend.
Franklin New York Tax-Free Income Fund
APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING
(PURSUANT TO ITEM 304 (a) OF REGULATION S-T)
GRAPHIC MATERIAL (1)
This chart shows in pie chart format the fund's securities quality breakdown, as
a percentage of the fund's total net assets.
<TABLE>
<CAPTION>
Quality Breakdown on 11/30/95
<S> <C>
AAA 24.2%
AA 15.6%
A 15.7%
BBB 41.8%
Below Investment Grade 2.7%
</TABLE>
GRAPHIC MATERIAL (2)
This bar chart shows the comparison between the fund's distribution rate of
5.61% and the equivalent taxable distribution rate of 10.56%, for the Class I
shares.
GRAPHIC MATERIALS (3)
This bar chart shows the comparison between the fund's distribution rate of
5.20% and the equivalent taxable distribution rate of 9.79%, for the Class II
shares.
