FRANKLIN
NEW YORK
TAX-FREE
INCOME
FUND
Annual Report
May 31, 1996
CONTENTS
MESSAGE FROM 1
THE PRESIDENT
MANAGER'S DISCUSSION 2
PERFORMANCE SUMMARIES 5
STATEMENT OF INVESTMENTS 11
FINANCIAL STATEMENTS 20
NOTES TO FINANCIAL 22
STATEMENTS
REPORT OF 26
INDEPENDENT AUDITORS
PICTURE OMITTED
Charles B. Johnson
President
July 15, 1996
Dear Shareholder:
It's a pleasure to bring you the Franklin New York Tax-Free Income Fund's annual
report for the period ended May 31, 1996.
Market conditions during the first seven months of the fiscal year were
distinctly different from those of the last five months. Interest rates
gradually declined in the first seven months, and economic growth slowed to an
annual rate of only 0.5% heading into 1996. The yield of the 30-year U.S.
Treasury bond, which stood at 6.67% on May 31, 1995, declined to 5.96% on
December 31, 1995.
In mid-February 1996, however, rates began to rise in response to evidence of
renewed economic strength. Uncertainty and confusion followed a much
stronger-than-expected employment report released in early March. While
well-known economists disagreed on the market's direction, people reacted to the
mixed messages. Nervous investors, who feared inflation might take off, caused a
3% decline in bond prices and a short-lived 120-point drop in the Dow Jones
Industrial Average(R). Actually, later reports showed that the economy had grown
slowly, at a rate of approximately 2%, with roughly 2% inflation in the first
quarter of 1996. Nonetheless, the 30-year U.S. Treasury bond
finished the reporting period yielding 7.00%.*
* Source: Micropal
We expect that the securities held by Franklin New York Tax-Free Income Fund
should perform well if the economy maintains its slow growth pattern. Although
the economy appears stable at the moment, market uncertainties persist.
This uncertainty prompts us to continue encouraging individual investors to
maintain a long-term perspective based on reasonable financial goals. Stay
focused on your goals and periodically consult with your investment
representative to make sure your investments match those goals. If you are able
to concentrate on the long term, you may be able to overlook short-term market
volatility.
As a Franklin fund 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 support and look forward to serving your investment needs in
the years ahead.
Sincerely,
Charles B. Johnson
President
.
MANAGER'S DISCUSSION
Your Fund's 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.*
* 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.
Throughout this reporting period, fluctuating interest rates and a volatile New
York municipal market directly affected the securities in which your fund
invests. As discussed in the Performance Summary on page 5, your fund's Class I
share price, as measured by net asset value (NAV), declined by 29 cents over the
period, to $11.46 on May 31, 1996, from $11.75 a year earlier.
Using your fund's Class I NAV price per share as a proxy for the New York
municipal market, we can trace the market's erratic patterns through four
distinct moves during this reporting period:
1) The fund's NAV price declined 2.8% between May 31, 1995 ($11.75), and
August 15, 1995 ($11.42).
2) The fund's price rose over the next six months by roughly 4.5%, to $11.93
on February 13, 1996.
3) By April 8, the price had declined again, this time by 5%, to $11.33.
4) After that, the fund's NAV price partially recovered and reached $11.46 on
May 31, 1996-- roughly a 2% net loss from the same date last year.
GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT
The market activity previously described illustrates how difficult it is to
guess the direction of short-term interest rates when making investment
decisions. That's why we don't attempt to invest based on guesses as to
short-term moves. Rather, we try to react quickly and intelligently to changes
as they occur. For example, the following discussion of our investment activity
for the fund highlights two and one-half months of the fund's fiscal year, and
is included here to show how we've put our philosophy into action.
Most of the bond price declines early in the fiscal year were concentrated in
the first part of August 1995. Much of this downward price pressure came from
the large number of new municipal securities marketed right after the 1996 New
York state budget was belatedly approved.
At that time, we purchased roughly $160 million of the new offerings at what
subsequently proved to be very attractive prices. To fund the purchase, in early
August we sold over $100 million worth of bonds that had declined in value. This
sale benefited the fund in a couple of ways. First, we realized a tax loss,
which can be used to offset potential capital gains in the future. Second, we
sold bonds yielding 5.5% to 6.0% in return for those ranging between 6.2% and
6.375%, which should help maintain the fund's income.
Franklin New York
Tax-Free Income Fund
Portfolio Breakdown on 5/31/96
Based on Total Long Term Investments
% Total
Long-Term
Sector Investments
Hospitals 20.6%
Housing 13.9%
Pre-Refunded 11.8%
Utilities 10.8%
Transportation 10.0%
Education 8.2%
Health Care 6.8%
Other Revenue 6.3%
General Obligations 5.2%
Sales Tax 4.3%
Certificates of Participation 1.8%
Industrial 0.3%
For a complete list of portfolio holdings please see page 11 of this report.
Another notable change we made this fiscal year was to reduce the number of
pre-refunded bonds in the portfolio. Pre-refunding occurs when an
issuer refinances a bond by issuing a new, lower-yielding bond and using the
proceeds to pay off the original bonds. In some ways, pre-refunding is similar
to refinancing a home -- when interest rates fall, homeowners refinance to
secure a lower mortgage payment.
Pre-refunded bonds frequently rise in value because they are backed by U.S.
government securities, which enhances their credit quality. As such, we were
able to sell many of our pre- refunded holdings at increased prices and maintain
some of the gain in the fund's share value. In addition, we felt that holding
these bonds to maturity would result in paying higher prices for new issues
later on, when supply might be lower. By selling, we tried to maximize the
long-term earning power of the fund and protect against declines in share price.
We invested the proceeds in full coupon bonds (bonds paying interest rates at or
near the current market rate) that offered better call protection. The
portfolio's pre-refunded holdings dropped to 11.9% of total long-term
investments on May 31, 1996, down from 16.1% one year earlier.
We also continued to purchase highly rated "essential service" bonds. In
general, these securities provide a relatively stable income stream from sources
like hospitals, utilities, and transportation projects. Budgetary and political
changes tend to have a limited effect on these bonds, and we believe they are
very attractive investments, particularly in a municipal cost-cutting
environment.
The chart on the previous page illustrates that the fund is well-diversified
across several sectors, and contains bonds from a wide range of cities, counties
and other municipal entities throughout the state of New York.
Regardless of economic direction, we feel that the Franklin New York Tax-Free
Income Fund is positioned to perform well relative to the New York municipal
market. As a result, our outlook for the fund is positive.
PERFORMANCE SUMMARY
CLASS I
(Class II Performance Summary starts on page 8.)
The Franklin New York Tax-Free Income Fund's Class I share price, as measured by
net asset value, declined 29 cents, from $11.75 on May 31, 1995, to $11.46 on
May 31, 1996.
Since the fund earned less income during the reporting period, we reduced 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 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Tax-Free Income Fund
Class I
Dividend Distributions 6/01/95 - 5/31/96
Dividend
Month per Share
June 6.3 cents
July 6.3 cents
August 6.3 cents
September 5.8 cents
October 5.8 cents
November 5.8 cents
December 5.8 cents
January 5.8 cents
February 5.8 cents
March 5.8 cents
April 5.8 cents
May 5.8 cents
Total 71.1 cents
At the end of the reporting period, the distribution rate of Class I shares was
5.81%, based on an annualization of the current monthly dividend of 5.8 cents
($0.058) per share and the maximum offering price of $11.97 on May 31, 1996.
This tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. For example, an investor in the maximum combined federal,
New York state and New York City personal income tax bracket of 46.6% would need
to earn 10.88% from a taxable investment to match the fund's tax-free
distribution rate. Likewise, an investor in the maximum combined federal and New
York state personal income tax bracket of 43.9% would need to earn 10.36% from a
taxable investment to match the fund's tax-free distribution rate.
The chart to the right illustrates that for the 10 years ended May 31, 1996,
your fund's Class I shares have far outperformed the Consumer Price Index (CPI),
keeping your purchasing power well ahead of inflation -- a primary goal of any
investment. The fund's Class I shares generally followed the performance of the
unmanaged Lehman Brothers Municipal Bond Index. Of course, comparing a fund with
an unmanaged index is never an apples-to-apples comparison. Performance figures
reported by a general market index do not include various fees, sales charges
and operating expenses included in the fund's performance figures. If the fund's
costs had been applied to this index, the index's performance would have been
lower. Also, unlike indices, mutual funds are never fully invested because they
must have cash on hand to redeem shares. The index invests in municipal bonds
from across the country, while your fund invests primarily in New York state
municipal bonds. Please remember that an index is simply a measure of
performance and one cannot directly invest in an index. Past performance is not
predictive of future results.
GRAPHIC MATERIAL 3 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Tax-Free Income Fund
Class I
Periods ended May 31, 1996
Since
Inception
1-Year 5-Year 10-Year (9/13/82)
Cumulative
Total Return1 3.65% 45.31% 114.24% 232.76%
Average Annual
Total Return2 -0.74% 6.82% 7.45% 8.81%
Distribution Rate3 5.81%
Taxable Equivalent
Distribution Rate4 10.88%
30-Day Standardized Yield5 5.38%
Taxable Equivalent Yield4 9.59%
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the maximum 4.25% initial sales
charge. See Note below.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum 4.25% initial
sales charge. See Note below.
3. Based on an annualization of the current 5.8 cent per share monthly dividend
and the maximum offering price of $11.97 on May 31, 1996.
4. Taxable equivalent distribution rate and yield assume the 1996 maximum
combined federal, New York state and New York City personal income tax rate of
46.6%, based on the federal income tax rate of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended May 31, 1996.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge with dividends reinvested at the 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 affects subsequent performance. All total return calculations
assume reinvestment of dividend and capital gains at net asset value and reflect
12b-1 fees from the date of the plan's implementation. Your 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 is not predictive of
future results.
PERFORMANCE SUMMARY
CLASS II
Franklin New York Tax-Free Income Fund
Class II
Dividend Distributions 6/01/95 - 5/31/96
Dividend
Month per Share
June 5.70 cents
July 5.70 cents
August 5.70 cents
September 5.20 cents
October 5.20 cents
November 5.20 cents
December 5.20 cents
January 5.20 cents
February 5.20 cents
March 5.22 cents
April 5.22 cents
May 5.64 cents*
Total 64.38 cents
* The Class II share dividend for May 1996 reflects the reconciliation of the
12b-1 differential between Class I and Class II shares. Subsequent dividend
distributions may revert to the dividend prior to adjustment.
The Franklin New York Tax-Free Income Fund's Class II share price, as measured
by net asset value, declined 28 cents, from $11.73 on May 31, 1995, to $11.45 on
May 31, 1996.
Since the fund earned less during the reporting period, we reduced the monthly
dividend to 5.2 cents ($0.052) from 5.7 cents ($0.057) per share, effective with
the September 1995 distribution. However, we were able to increase the dividend
to 5.22 cents ($0.0522) per share, effective with the March 1996 distribution.
Dividends will vary based on the earnings of the fund's portfolio, and past
distributions are not predictive of future trends.
At the end of the reporting period, the distribution rate of Class II shares was
5.85%, based on an annualization of the 5.64 cents per share dividend and the
offering price of $11.57 on May 31, 1996. This tax-free rate is generally higher
than the after-tax return on a comparable taxable investment. For example, an
investor in the maximum combined federal, New York state and New York City
personal income tax bracket of 46.6% would need to earn 10.96% from a taxable
investment to match the fund's tax-free distribution rate. Likewise, an investor
in the maximum combined federal and New York state personal income tax bracket
of 43.9% would need to earn 10.43% from a taxable investment to match the fund's
tax-free distribution rate.
GRAPHIC MATERIAL 4 OMITTED - SEE APPENDIX AT END OF DOCUMENT
GRAPHIC MATERIAL 5 OMITTED - SEE APPENDIX AT END OF DOCUMENT
The chart on page 10 illustrates that since inception, your fund's Class II
shares have outperformed the Consumer Price Index (CPI), keeping your purchasing
power well ahead of inflation -- a primary goal of any investment. The fund's
Class II shares generally followed the performance of the unmanaged Lehman
Brothers Municipal Bond Index. Of course, comparing a fund with an unmanaged
index is never an apples-to-apples comparison. Performance figures reported by a
general market index do not include various fees, sales charges and operating
expenses included in the fund's performance figures. If the fund's costs had
been applied to this index, the index's perform- ance would have been lower.
Also, unlike indices, mutual funds are never fully invested because they must
have cash on hand to redeem shares. The index invests in municipal bonds from
across the country, while your fund invests primarily in New York state
municipal bonds. Please remember that an index is simply a measure of
performance and one cannot directly invest in an index. Past performance is not
predictive of future results.
Franklin New York Tax-Free Income Fund
Class II
Periods ended May 31, 1996
Since
Inception
1-Year (05/01/95)
Cumulative
Total Return1 3.14% 6.34%
Average Annual
Total Return2 1.13% 3.90%
Distribution Rate3 5.85%
Taxable Equivalent
Distribution Rate4 10.96%
30-Day Standardized Yield5 4.99%
Taxable Equivalent Yield4 8.90%
1. Cumulative total return measures the change in value of an investment over
the period indicated and does not include the 1.0% initial sales charge and 1.0%
contingent deferred sales charge (CDSC), applicable to shares redeemed within
the first 18 months of investment.
2. Average annual total return represents the average annual change in value of
an investment over the period indicated and includes the 1.0% initial sales
charge and 1.0% CDSC, applicable to shares redeemed within the first 18 months
of investment.
3. Based on an annualization of the 5.64 cent per share monthly dividend and the
offering price of $11.57 on May 31, 1996. The Class II share dividend for May
1996 reflects an adjustment to the Class II shares dividend, which reconciles
the 12b-1 differential between Class I and Class II shares. Subsequent dividend
distributions may revert to the dividend amount prior to adjustment.
4. Taxable equivalent distribution rate and yield assume the 1996 maximum
federal, New York state and New York City personal income tax rate of 46.6%,
based on the federal income tax rate of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended May 31, 1996.
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 is not predictive of future results.
STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS
Franklin New York Tax-Free Income Fund, Inc., May 31, 1996
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (NOTE1)
Long Term Investments 98.2%
Bonds 96.7%
<C> <S> <C>
$5,250,000 Albany Housing Authority, Limited Obligation, Refunding, 6.25%, 10/01/12 ................ $ 5,194,403
1,610,000 Albany Parking Authority Revenue, Refunding, Series A, 6.85%, 11/01/12 .................. 1,673,466
6,080,000 Auburn, IDA, MFR, Auburn Memorial Home, 6.50%, 02/01/34 ................................. 6,183,178
Babylon IDA, Resource Recovery Revenue, Ogden Martin System, Inc., Pre-Refunded,
8,090,000 Series A, 8.50%, 01/01/19 ............................................................. 8,978,525
2,845,000 Series C, 8.50%, 01/01/19 ............................................................. 3,157,466
10,750,000 Babylon IDA, Waste Facilities Revenue, Community Waste Management, Series A,
Pre-Refunded, 7.875%, 07/01/06 ......................................................... 12,000,118
1,000,000 Batavia Housing Authority Mortgage Revenue, Refunding, Washington Towers,
Series A, 6.50%, 01/01/23 .............................................................. 1,015,760
95,295,000 Battery Park City Authority Revenue, Refunding, Junior Lien, Series A, 5.80%, 11/01/22 .. 88,274,617
8,160,000 Bethany Retirement Home, Inc., Mortgage Loan Revenue, 7.50%, 02/01/34 ................... 9,101,827
1,440,000 Cattaraugus County COP, Olean Project Facility, Series A, Pre-Refunded, 8.50%, 08/01/09 . 1,590,955
5,375,000 Clinton County COP, Correctional Facilities Project, 8.125%, 08/01/17 ................... 6,308,584
6,400,000 Cortland County IDA, Civic Facilities Revenue, Cortland Memorial Hospital, Inc.
Project, 6.25%, 07/01/24 ............................................................... 6,029,632
5,475,000 Franklin County COP, Court House Redevelopment Project, 8.125%, 08/01/06 ................ 5,991,621
4,790,000 Franklin County IDA, Lease Revenue, County Correctional Facilities Project, 6.75%, 11/01/12 4,938,059
5,385,000 Guam Airport Authority Revenue, Series A, 6.50%, 10/01/23 ............................... 5,377,515
Guam Power Authority Revenue, Series A,
5,075,000 6.30%, 10/01/12 ....................................................................... 4,993,242
2,900,000 6.625%, 10/01/14 ...................................................................... 2,935,293
45,340,000 6.30%, 10/01/22 ....................................................................... 43,865,997
25,500,000 6.75%, 10/01/24 ....................................................................... 25,951,605
1,385,000 Hamilton Elderly Housing Corp., Mortgage Revenue, Hamilton Apartments
Project, 11.25%, 01/01/15 .............................................................. 1,468,363
1,915,000 Ilion Elderly Housing Corp., Mortgage Revenue, Section 8, Housing Assistance
Revenue, 7.25%, 07/01/09 ............................................................... 1,891,024
1,360,000 Lincoln Towers Housing Corp., Mortgage Revenue, Lincoln Towers Project, 11.25%, 01/01/15 1,431,101
35,620,000 bMetropolitan Transportation Authority, Commuter Facilities Revenue,
Series A, 6.50%, 07/01/24 .............................................................. 36,010,751
Metropolitan Transportation Authority, Service Contract Revenue,
12,255,000 Commuter Facilities, 6.00%, 07/01/21 .................................................. 11,690,167
4,235,000 Commuter Facilities, Series 3, 6.00%, 07/01/19 ........................................ 4,046,627
31,605,000 Commuter Facilities, Series 5, 7.00%, 07/01/12 ........................................ 33,664,382
9,785,000 Commuter Facilities, Series 6, 6.00%, 07/01/21 ........................................ 9,334,009
24,160,000 Refunding, Commuter Facilities, Series N, 7.125%, 07/01/09 ............................ 25,964,269
35,695,000 Refunding, Series 5, 6.50%, 07/01/16 .................................................. 36,176,169
7,725,000 Refunding, Series 5, 6.00%, 07/01/18 .................................................. 7,405,880
30,935,000 Refunding, Transit Facilities, Series 5, 7.00%, 07/01/12 .............................. 32,950,725
17,470,000 Refunding, Transit Facilities, Series 5, 6.50%, 07/01/16 .............................. 17,705,496
2,740,000 Refunding, Transit Facilities, Series 5, 6.00%, 07/01/18 .............................. 2,626,811
25,750,000 Refunding, Transit Facilities, Series 7, 5.625%, 07/01/16 ............................. 23,646,740
12,625,000 Refunding, Transit Facilities, Series N, 7.125%, 07/01/09 ............................. 13,567,835
2,000,000 Transit Facilities, Series 6, 7.00%, 07/01/09 ......................................... 2,137,600
7,335,000 Transit Facilities, Series P, 5.75%, 07/01/15 ......................................... 6,844,215
Metropolitan Transportation Authority, Transit Facilities Revenue, Series A, FSA Insured,
16,940,000 6.10%, 07/01/21 ....................................................................... 16,953,213
18,725,000 6.10%, 07/01/26 ....................................................................... 18,672,570
1,285,000 Monroe County IDA Revenue, Civic Facilities, De Paul Community Facilities, 6.50%, 02/01/24 1,332,391
New York City GO,
10,000,000 Custodial Receipts/Certificates, Series A, Pre-Refunded, 7.75%, 08/15/14 .............. 11,387,224
1,400,000 Custodial Receipts/Certificates, Series A, Pre-Refunded, 7.75%, 08/15/15 .............. 1,611,134
165,000 Series 1986-D, 8.50%, 08/01/02 ........................................................ 169,257
60,000 Series 1986-D, 8.50%, 08/01/11 ........................................................ 61,536
45,000 Series 1986-D, 8.50%, 08/01/14 ........................................................ 46,154
10,000 Series 1986-D, 8.50%, 08/01/16 ........................................................ 10,258
360,000 Series 1986-D, Pre-Refunded, 8.50%, 08/01/02 .......................................... 369,857
2,115,000 Series 1987-A, Pre-Refunded, 8.75%, 11/01/14 .......................................... 2,282,360
1,180,000 Series 1987-D, 8.50%, 08/01/08 ........................................................ 1,252,794
1,055,000 Series 1987-D, 8.50%, 08/01/09 ........................................................ 1,120,083
1,395,000 Series 1987-D, 8.50%, 08/01/10 ........................................................ 1,480,890
5,330,000 Series 1987-D, Pre-Refunded, 8.50%, 08/01/09 .......................................... 5,709,016
4,000,000 Series 1990-B, 7.00%, 06/01/13 ........................................................ 4,151,720
6,725,000 Series 1990-B, 7.00%, 06/01/14 ........................................................ 7,018,546
$4,250,000 Series 1990-B, 7.00%, 06/01/15 ........................................................ $ 4,495,268
2,000,000 Series 1991-A, 7.75%, 08/15/13 ........................................................ 2,207,100
2,000,000 Series 1991-B, 7.75%, 02/01/10 ........................................................ 2,175,960
5,000,000 Series 1991-B, 7.75%, 02/01/11 ........................................................ 5,419,950
500,000 Series 1991-B, 7.75%, 02/01/12 ........................................................ 550,795
1,875,000 Series 1991-B, 7.75%, 02/01/13 ........................................................ 2,026,875
10,950,000 Series 1991-B, 7.75%, 02/01/14 ........................................................ 11,907,906
22,610,000 Series 1991-B, 7.75%, 02/01/15 ........................................................ 24,576,618
1,485,000 Series 1991-B, 7.00%, 02/01/18 ........................................................ 1,548,113
110,000 Series 1991-D, 8.25%, 08/01/13 ........................................................ 125,186
65,000 Series 1991-D, 8.00%, 08/01/17 ........................................................ 73,157
4,710,000 Series 1991-D, Pre-Refunded, 8.25%, 08/01/13 .......................................... 5,499,208
3,615,000 Series 1991-D, Pre-Refunded, 8.00%, 08/01/17 .......................................... 4,179,880
12,750,000 Series 1992, Rite 1, 7.00%, 10/01/11 .................................................. 13,327,958
1,500,000 Series 1992-B, 6.75%, 10/01/15 ........................................................ 1,520,745
4,500,000 Series 1992-C, Sub-Series C, 7.00%, 08/01/16 .......................................... 4,712,580
2,500,000 Series 1992-D, 7.50%, 02/01/18 ........................................................ 2,680,525
10,000,000 Series 1992-H, 7.20%, 02/01/13 ........................................................ 10,517,300
4,000,000 Series 1992-H, 7.20%, 02/01/14 ........................................................ 4,226,440
4,600,000 Series 1992-H, 7.20%, 02/01/15 ........................................................ 4,858,152
2,500,000 Series 1992-H, 7.00%, 02/01/16 ........................................................ 2,612,425
6,500,000 Series 1992-H, 7.00%, 02/01/17 ........................................................ 6,776,250
4,225,000 Series 1992-H, 7.00%, 02/01/18 ........................................................ 4,404,563
2,000,000 Series 1994-B, Sub-series B-1, 7.00%, 08/15/16 ........................................ 2,093,780
10,000,000 Series 1994-B, Sub-series B-1, 7.50%, 08/15/20 ........................................ 10,824,400
4,000,000 Series 1995-C, 7.20%, 08/15/14 ........................................................ 4,162,240
22,745,000 Series 1995-C, 7.25%, 08/15/24 ........................................................ 23,706,886
7,000,000 Series 1995-F, 6.625%, 02/15/25 ....................................................... 7,007,000
17,000,000 Series A-1, 6.625%, 08/01/25 .......................................................... 17,017,850
5,000,000 Series C, Pre-Refunded, 7.00%, 02/01/12 ............................................... 5,119,203
4,500,000 Series D, 6.00%, 02/15/20 ............................................................. 4,183,245
345,000 Series D, Pre-Refunded, 8.50%, 08/01/13 ............................................... 354,035
730,000 Series D, Pre-Refunded, 8.50%, 08/01/15 ............................................... 749,424
6,800,000 Series F, 5.75%, 02/01/19 ............................................................. 6,132,036
7,500,000 Series F, Pre-Refunded, 8.40%, 11/15/08 ............................................... 8,866,239
3,350,000 Series F, Pre-Refunded, 8.40%, 11/15/09 ............................................... 3,960,355
5,000,000 Series K, 6.25%, 04/01/26 ............................................................. 4,803,900
New York City HDC, MFMR, Series A,
19,450,000 6.55%, 10/01/15 ....................................................................... 19,865,258
10,000,000 6.55%, 04/01/18 ....................................................................... 10,179,600
51,500,000 6.60%, 04/01/30 ....................................................................... 52,249,325
114,635,000 New York City Health & Hospital Authority, Local Government Revenue,
Refunding, Series A, 6.30%, 02/15/20................................................... 107,535,654
New York City IDA, Civic Facilities Revenue,
2,690,000 Federation Protestant Welfare, 6.95%, 11/01/11 ........................................ 2,704,553
4,000,000 New York Blood Center, Inc. Project, Pre-Refunded, 7.20%, 05/01/12 .................... 4,554,600
7,000,000 New York Blood Center, Inc. Project, Pre-Refunded, 7.25%, 05/01/22 .................... 7,993,090
2,500,000 St. Christopher Ottilie Project, 7.50%, 07/01/21 ...................................... 2,503,950
8,000,000 The Lighthouse, Inc. Project, 6.50%, 07/01/22 ......................................... 8,221,600
New York City Municipal Water Finance Authority, Water & Sewer System Revenue,
37,500,000 Refunding, Series A, 6.00%, 06/15/17 .................................................. 36,667,125
2,185,000 Series 1991-A, 7.00%, 06/15/15 ........................................................ 2,342,844
3,010,000 Series 1991-A, 6.75%, 06/15/16 ........................................................ 3,167,664
36,850,000 Series 1991-A, 6.75%, 06/15/17 ........................................................ 38,780,203
15,700,000 Series 1991-A, Pre-Refunded, 7.10%, 06/15/12 .......................................... 17,456,516
4,210,000 Series 1991-C, AMBAC Insured, 6.50%, 06/15/21 ......................................... 4,336,258
38,250,000 Series 1992-B, 6.375%, 06/15/22 ....................................................... 38,475,293
17,785,000 Series 1994-A, 7.10%, 06/15/12 ........................................................ 19,228,253
2,215,000 Series 1994-A, Pre-Refunded, 7.10%, 06/15/12 .......................................... 2,462,814
$ 690,000 Series 1994-A, Pre-Refunded, 7.00%, 06/15/15 .......................................... $ 764,147
1,000,000 Series A, 6.00%, 06/15/19 ............................................................. 968,480
29,015,000 Series A, 6.125%, 06/15/20 ............................................................ 28,708,311
19,000,000 Series A, 6.00%, 06/15/25 ............................................................. 18,465,720
26,900,000 Series B, 6.25%, 06/15/20 ............................................................. 26,941,695
13,185,000 Series B, 6.50%, 06/15/20 ............................................................. 13,473,488
3,075,000 Series C, AMBAC Insured, 6.20%, 06/15/21 .............................................. 3,151,721
New York Housing Corp. Revenue, Series A, Pre-Refunded,
70,065,000 9.00%, 11/01/17 ....................................................................... 76,228,618
4,000,000 MBIA Insured, 8.625%, 11/01/06 ........................................................ 4,331,560
New York State COP,
3,800,000 City University, John Jay College, Pre-Refunded, 7.25%, 08/15/07 ...................... 3,902,030
2,500,000 Commissioner's Office Mental Health, 8.25%, 09/01/07 .................................. 2,636,000
1,750,000 Commissioner's Office Mental Health, 8.30%, 09/01/12 .................................. 1,846,023
6,575,000 Hanson Redevelopment Project, 8.25%, 11/01/01 ......................................... 7,242,428
18,045,000 Hanson Redevelopment Project, 8.375%, 05/01/08 ........................................ 20,543,691
New York State Dormitory Authority Revenue,
2,545,000 Bishop Henry N. Hucles Nursing Home, 6.00%, 07/01/24 .................................. 2,461,142
26,605,000 City University System Consolidated, Series A, Pre-Refunded, 6.50%, 07/01/15 .......... 26,660,604
14,900,000 City University System Consolidated, Series C, 7.50%, 07/01/10 ........................ 16,911,202
12,550,000 City University System Consolidated, Series C, 6.00%, 07/01/16 ........................ 12,082,262
3,430,000 City University System Consolidated, Series D, 7.00%, 07/01/09 ........................ 3,721,241
40,000,000 City University System, Series F, Pre-Refunded, 7.875%, 07/01/17 ...................... 45,476,800
1,000,000 Crouse Irving Memorial Hospital, HIBI Insured, 10.50%, 07/01/17 ....................... 1,016,440
2,530,000 Department of Education, 7.75%, 07/01/21 .............................................. 2,787,681
14,725,000 Department of Health, 6.20%, 07/01/17 ................................................. 14,452,588
5,355,000 Department of Health, Rosewell Park Cancer Center, 6.625%, 07/01/15 ................... 5,565,452
9,175,000 Department of Health, Rosewell Park Cancer Center, 6.625%, 07/01/24 ................... 9,535,578
3,190,000 Department of Health, Veterans Home, 7.25%, 07/01/11 .................................. 3,425,167
8,480,000 Department of Health, Veterans Home, 6.25%, 07/01/20 .................................. 8,324,307
9,775,000 Department of Health, Veterans Home, 7.25%, 07/01/21 .................................. 10,446,738
2,115,000 Fashion Institute of Technology, 7.50%, 07/01/20 ...................................... 2,263,600
2,355,000 Genessee Valley, Series A, 6.90%, 02/01/32 ............................................ 2,438,061
2,425,000 Heritage House Nursing Center, 7.00%, 08/01/31 ........................................ 2,628,482
14,355,000 Long Island Jewish Medical Center, Series A, 7.75%, 08/15/27 .......................... 15,265,681
5,000,000 Long Island University, 6.25%, 09/01/23 ............................................... 4,979,900
5,375,000 New York Medical College, Asset Guaranty, 6.875%, 07/01/21 ............................ 5,735,824
2,000,000 Nursing Home, Mortgage, 6.05%, 08/01/35 ............................................... 1,958,720
2,000,000 Nursing Home, Wesley Garden, 6.125%, 08/01/35 ......................................... 1,980,720
1,000,000 Nyack Hospital, 6.25%, 07/01/13 ....................................................... 969,370
2,000,000 Our Lady of Consolation Geriatric Care Center, 6.05%, 08/01/35 ........................ 1,947,240
5,835,000 Our Lady of Mercy, Mortgage Revenue, FHA Insured, 6.30%, 08/01/32 ..................... 5,945,982
5,000,000 Refunding, City University, 7.625%, 07/01/14 .......................................... 5,114,150
2,000,000 Refunding, City University, Series C, 8.20%, 07/01/14 ................................. 2,168,740
2,885,000 Refunding, City University, Series U, 6.375%, 07/01/08 ................................ 2,923,803
5,405,000 Refunding, City University, Series U, 6.70%, 07/01/09 ................................. 5,665,035
10,215,000 Refunding, City University Systems - Consolidated, Second General, Series A, 6.00%, 07/01/17 9,813,551
23,185,000 Refunding, City University Systems - Consolidated, Third General, Series A, 6.00%, 07/01/16 22,295,392
19,390,000 Refunding, Manhattan College, 6.50%, 07/01/19 ......................................... 19,803,201
34,265,000 Refunding, Nursing Home, St. John's Health Care Corp., 6.25%, 02/01/36 ................ 34,430,157
12,505,000 Refunding, State University Educational Facilities, Series A, 6.00%, 05/15/16 ......... 12,081,706
17,670,000 Refunding, State University Educational Facilities, Series A, 6.25%, 05/15/19 ......... 17,457,077
34,925,000 Refunding, State University Educational Facilities, Series A, 6.00%, 05/15/25 ......... 33,313,561
2,970,000 Refunding, State University Educational Facilities, Series B, 6.00%, 05/15/17 ......... 2,853,665
2,565,000 State University Athletic Facilities, 7.25%, 07/01/12 ................................. 2,749,424
4,750,000 State University Athletic Facilities, 7.25%, 07/01/21 ................................. 5,087,203
5,000,000 State University Educational Facilities, Series A, Refunding, 5.875%, 05/15/17 ........ 4,839,050
27,730,000 State University Educational Facilities, Series B, 6.25%, 05/15/14 .................... 27,580,813
$7,025,000 State University Educational Facilities, Series B, 7.375%, 05/15/14 ................... $ 7,620,298
7,995,000 State University Educational Facilities, Series B, 7.00%, 05/15/16 .................... 8,393,471
57,795,000 State University Educational Facilities, Series B, 6.25%, 05/15/20 .................... 57,085,277
7,890,000 State University Educational Facilities, Series B, 5.75%, 05/15/24 .................... 7,235,603
2,565,000 State University Educational Facilities, Series C, 6.125%, 05/15/20 ................... 2,488,204
4,000,000 The Highlands Living, 6.60%, 02/01/34 ................................................. 4,177,040
12,910,000 Upstate Community Colleges, Series A, 6.20%, 07/01/15 ................................. 12,738,813
42,310,000 Upstate Community Colleges, Series A, 6.25%, 07/01/25 ................................. 42,194,917
3,250,000 Upstate Community Colleges, Series A, Pre-Refunded, 7.60%, 07/01/20 ................... 3,655,698
1,000,000 Upstate Community Colleges, Series B, Pre-Refunded, 7.20%, 07/01/21 ................... 1,124,990
New York State Energy Research & Development Authority,
Gas Facilities Revenue, Brooklyn Union Gas Co. Project,
2,390,000 Series I, 7.125%, 12/01/20 ............................................................ 2,461,557
8,400,000 Series II, 7.00%, 12/01/20 ............................................................ 8,646,456
New York State Energy Research & Development Authority, PCR,
3,300,000 Long Island Projects, 7.80%, 12/01/09 ................................................. 3,320,394
5,000,000 Long Island Projects, Series A, 7.50%, 12/01/06 ....................................... 5,023,800
38,145,000 Niagara Mohawk Power Corp. Project, Series 1, 8.875%, 11/01/25 ........................ 38,782,403
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 3,263,250
4,000,000 Riverbank State Park, 7.25%, 04/01/07 ................................................. 4,233,880
4,300,000 Riverbank State Park, 7.25%, 04/01/12 ................................................. 4,537,833
28,525,000 Riverbank State Park, 7.375%, 04/01/22 ................................................ 30,140,086
4,500,000 Water Facilities Revenue, Jamaica Water Supply Co. Project, 10.875%, 12/01/14 ......... 4,582,395
New York State HFA,
2,405,000 Henry Phipps Plaza, West Urban Project, Section 236, 8.00%, 05/01/18 .................. 2,465,269
1,295,000 Urban Rentals, Series A, 8.25%, 11/01/19 .............................................. 1,337,554
New York State HFA, Service Contract Obligation Revenue,
5,000,000 Refunding, Series C, 6.30%, 09/15/12 .................................................. 4,969,200
15,825,000 Refunding, Series C, 5.875%, 09/15/14 ................................................. 14,822,328
19,000,000 Refunding, Series C, 6.00%, 09/15/21 .................................................. 18,051,710
14,000,000 Series 1990-A, Pre-Refunded, 7.80%, 09/15/20 .......................................... 15,950,760
10,000,000 Series 1991-A, Pre-Refunded, 7.80%, 09/15/20 .......................................... 11,471,900
2,375,000 Series 1992-A, 7.25%, 09/15/12 ........................................................ 2,568,539
30,320,000 Series 1992-C, 6.30%, 03/15/22 ........................................................ 29,860,652
99,760,000 Series 1993-C, 6.125%, 03/15/20 ....................................................... 96,419,038
28,330,000 Series 1994-A, 6.50%, 03/15/24 ........................................................ 28,537,376
3,000,000 Series A, 5.50%, 09/15/22 ............................................................. 2,641,140
8,270,000 Series A, 6.50%, 03/15/25 ............................................................. 8,334,671
New York State HFA Revenue,
5,285,000 Children's Rescue Fund Housing, Series A, 7.625%, 05/01/18 ............................ 5,519,284
2,030,000 FHA Insured, Adult Care, Series A, 7.85%, 02/15/30 .................................... 2,176,972
4,245,000 MF Housing, Second Mortgage, Series A, 7.00%, 08/15/23 ................................ 4,469,306
2,500,000 MF Housing, Second Mortgage, Series D, 6.25%, 08/15/23 ................................ 2,525,225
5,500,000 MF Housing, Second Mortgage, Series D, 6.60%, 08/15/27 ................................ 5,665,935
7,180,000 MF Housing, Second Mortgage, Series E, 6.75%, 08/15/25 ................................ 7,401,934
34,515,000 MF Mortgage, AMBAC Insured, Series 1984-B, 6.35%, 08/15/23 ............................ 35,002,007
2,760,000 MF Mortgage, AMBAC Insured, Series B, 6.25%, 08/15/14 ................................. 2,786,606
12,575,000 MF Mortgage, Series 1985-B, FHA Insured, 8.50%, 05/15/28 .............................. 12,794,685
8,630,000 MF Mortgage, Series 1991-A, FHA Insured, 7.10%, 08/15/35 .............................. 9,110,001
4,885,000 MF Mortgage, Series 1992-A, FHA Insured, 7.00%, 08/15/22 .............................. 5,097,449
6,870,000 MF Mortgage, Series 1992-C, FHA Insured, 6.50%, 08/15/24 .............................. 7,071,085
11,200,000 Refunding, Health Facilities of New York City, Series A, 6.00%, 05/01/07 .............. 11,040,960
2,400,000 Refunding, Health Facilities of New York City, Series A, 6.00%, 11/01/08 .............. 2,342,496
96,650,000 Refunding, Health Facilities of New York City, Series A, Pre-Refunded, 8.00%, 11/01/08 110,387,488
1,000,000 Refunding, MF Mortgage, Series 1992-C, FHA Insured, 6.45%, 08/15/14 ................... 1,029,330
New York State Local Government Assistance Corp.,
10,120,000 Series 1991-B, 6.50%, 04/01/20 ........................................................ 10,548,076
39,935,000 Series 1991-C, 6.50%, 04/01/15 ........................................................ 41,193,352
$8,750,000 Series 1992-A, 6.875%, 04/01/19 ....................................................... $ 9,542,400
17,215,000 Series 1992-B, 6.00%, 04/01/18 ........................................................ 17,130,302
36,535,000 Series 1992-B, 6.25%, 04/01/21 ........................................................ 37,277,391
42,260,000 Series 1992-C, 6.25%, 04/01/18 ........................................................ 42,986,449
31,255,000 Series 1995-A, 6.00%, 04/01/24 ........................................................ 30,876,815
3,140,000 Series A, 6.00%, 04/01/16 ............................................................. 3,125,273
New York State Medical Care Facilities Finance Agency,
43,465,000 Albany Medical Center, Alice Hyde Project, Mortgage Revenue,
Series A, FHA Insured, 8.00%, 02/15/28 ............................................... 47,225,592
3,500,000 Buffalo General Hospital, Mortgage Revenue, Series C, FHA Insured,
Pre-Refunded, 7.70%, 02/15/22 ........................................................ 3,825,570
22,150,000 Catholic Medical Center of Brooklyn & Queens, Inc., Mortgage Revenue,
Series A, Pre-Refunded, FHA Insured, 8.30%, 02/15/22 ................................ 24,088,347
5,500,000 Hospital & Nursing Home, Methodist Medical Center, Series A, FHA Insured, 6.70%, 08/15/23 5,695,360
6,415,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.125%, 02/15/15 .... 6,382,476
8,330,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.20%, 02/15/21 ..... 8,318,588
9,000,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.30%, 08/15/23 ..... 8,929,440
12,235,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.25%, 02/15/27 ..... 12,134,428
26,910,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.20%, 02/15/28 ..... 26,759,035
28,750,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 7.45%, 08/15/31 ..... 30,872,900
7,940,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.375%, 08/15/33 .... 7,789,537
11,670,000 Hospital & Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.50%, 02/15/34 ..... 11,793,819
1,805,000 Hospital & Nursing Home, Mortgage Revenue, Series B, FHA Insured, 9.125%, 02/15/25 .... 1,838,681
12,265,000 Hospital & Nursing Home, Mortgage Revenue, Series B, FHA Insured, 8.875%, 08/15/27 .... 13,121,220
24,000,000 Hospital & Nursing Home, Mortgage Revenue, Series B, FHA Insured, 6.95%, 02/15/32 ..... 25,235,040
33,220,000 Hospital & Nursing Home, Mortgage Revenue, Series B, FHA Insured,
Pre-Refunded, 8.00%, 02/15/28 ........................................................ 35,946,033
8,000,000 Hospital & Nursing Home, Mortgage Revenue, Series C, FHA Insured, 6.50%, 08/15/21 ..... 8,276,160
21,540,000 Hospital & Nursing Home, Mortgage Revenue, Series C, FHA Insured, 6.20%, 08/15/23 ..... 21,258,903
2,610,000 Hospital & Nursing Home, Mortgage Revenue, Series C, FHA Insured, 9.00%, 02/15/26 ..... 2,657,972
78,865,000 Hospital & Nursing Home, Mortgage Revenue, Series C, FHA Insured, 6.375%, 08/15/29 .... 79,379,988
15,000,000 Hospital & Nursing Home, Mortgage Revenue, Series C, FHA Insured, 6.65%, 08/15/32 ..... 15,378,300
13,375,000 Hospital & Nursing Home, Mortgage Revenue, Series D, FHA Insured, 6.60%, 02/15/31 ..... 13,683,695
55,500,000 Hospital & Nursing Home, Mortgage Revenue, Series D, FHA Insured, 6.45%, 02/15/32 ..... 55,823,010
3,200,000 Hospital Mortgage, Series A, AMBAC Insured, 6.80%, 08/15/24 ........................... 3,441,408
5,125,000 Hospital Mortgage, Series A, AMBAC Insured, 6.50%, 08/15/29 ........................... 5,390,629
31,210,000 Hospital Mortgage, Series A, AMBAC Insured, 6.90%, 08/15/34 ........................... 33,784,513
4,000,000 Huntington Hospital Mortgage, Refunding, Project A, 6.50%, 11/01/14 ................... 3,991,160
2,670,000 Medina Memorial Hospital Project, Series A, 7.30%, 05/01/11 ........................... 2,857,861
64,110,000 Mental Health Services Facilities, Series A, 8.875%, 08/15/07 ......................... 68,210,475
7,405,000 Mental Health Services Facilities, Series A, 7.70%, 02/15/18 .......................... 7,807,980
3,800,000 Mortgage Revenue Project, Series A, 6.50%, 02/15/35 ................................... 3,831,540
23,775,000 Mortgage Revenue Project, Series B, 6.60%, 08/15/34 ................................... 24,231,005
10,200,000 Mortgage Revenue Project, Series C, 6.375%, 08/15/29 .................................. 10,210,506
6,250,000 Mortgage Revenue Project, Series D, FHA Insured, 6.20%, 02/15/35 ...................... 6,194,875
13,200,000 Mortgage Revenue Project, Series E, FHA Insured, 6.375%, 02/15/35 ..................... 13,151,292
7,650,000 Mortgage Revenue Project, Series F, FHA Insured, 6.30%, 08/15/25 ...................... 7,618,712
18,400,000 Mortgage Revenue Project, Series F, FHA Insured, 6.375%, 08/15/34 ..................... 18,319,224
9,060,000 Mortgage Revenue, Series B, FHA Insured, 6.15%, 02/15/25 .............................. 8,903,171
2,200,000 Mortgage Revenue, Series B, FHA Insured, 6.15%, 02/15/35 .............................. 2,142,800
5,380,000 North General Hospital, Series 1989-A, 7.35%, 08/15/09 ................................ 5,616,559
9,145,000 Refunding, Beth Israel Medical Center Project, Series A, 7.20%, 11/01/14 .............. 9,294,795
1,185,000 Refunding, Good Samaritan Hospital Project Revenue, Series A, 8.00%, 11/01/13 ......... 1,248,054
5,050,000 Refunding, Hospital and Nursing Home, Mortgage Revenue, Series A,
FHA Insured, 6.20%, 02/15/23 ......................................................... 5,042,880
1,000,000 Refunding, Hospital and Nursing Home, Mortgage Revenue, Series B, 6.25%, 02/15/25 ..... 991,970
4,745,000 Refunding, Hospital and Nursing Home, Mortgage Revenue, Series B,
FHA Insured, 6.25%, 02/15/35 ......................................................... 4,683,078
30,000,000 Refunding, Hospital and Nursing Home, Series B, 6.125%, 08/15/24 ...................... 29,738,100
10,730,000 Refunding, Hospital Mortgage, Series A, FHA Insured, 7.25%, 02/15/12 .................. 11,257,701
4,005,000 Refunding, John T. Mather Memorial Hospital Project, Pre-Refunded, 7.00%, 11/01/15 .... 4,136,324
6,400,000 Refunding, Nyack Hospital Project Revenue, Series A, Pre-Refunded, 8.30%, 11/01/13 .... 7,086,464
9,900,000 Refunding, Vassar Brothers Hospital Project Revenue, Series A, 8.25%, 11/01/13 ........ 10,407,474
$1,665,000 Saranac Lake General Hospital Project Revenue, Series A, 7.875%, 11/01/10 ............. $ 1,810,421
1,410,000 Second Mortgage, Health Care Project Revenue, Series B, 6.35%, 11/01/14 ............... 1,426,455
61,770,000 Secured Hospital Revenue, Bronx, Lebanon and The Jamaica Hospital,
Series A, 7.10%, 02/15/27 ............................................................ 62,724,964
72,180,000 Secured Hospital Revenue, North General Hospital, Series A, 7.40%, 02/15/19 ........... 75,091,741
22,150,000 Secured Hospital Revenue, Series A, 7.35%, 08/15/11 ................................... 23,502,036
55,225,000 Secured Hospital Revenue, Series A, 7.40%, 08/15/21 ................................... 57,875,800
15,200,000 Secured Hospital Revenue, Series A, 6.25%, 02/15/24 ................................... 14,269,304
19,700,000 Security Mortgage Program Revenue, Adult Day Care, 6.375%, 11/15/20 ................... 19,706,895
32,450,000 St. Vincent's Hospital, Mortgage Revenue, Series A, FHA Insured, 8.00%, 02/15/27 ...... 34,348,650
36,650,000 The Hospital for Special Surgery Revenue, Series A, 6.45%, 08/15/34 ................... 36,944,666
New York State Mortgage Agency, HMR,
9,670,000 8th Series C, 8.40%, 10/01/17 ......................................................... 10,020,538
6,235,000 8th Series D, 8.375%, 10/01/17 ........................................................ 6,496,496
4,885,000 8th Series E, 8.10%, 10/01/17 ......................................................... 5,099,207
3,975,000 10th Series A, 8.10%, 04/01/14 ........................................................ 4,158,407
17,250,000 29th Series B, 6.45%, 04/01/15 ........................................................ 17,523,758
6,225,000 37th Series A, 6.375%, 10/01/14 ....................................................... 6,459,994
9,000,000 37th Series A, 6.45%, 10/01/17 ........................................................ 9,321,390
9,945,000 Series 51, 6.40%, 10/01/17 ............................................................ 10,290,290
6,560,000 Series BB-2, 7.95%, 10/01/15 .......................................................... 6,800,818
3,405,000 Series EE-1, 8.05%, 04/01/16 .......................................................... 3,630,854
2,835,000 Series FF, 7.95%, 10/01/14 ............................................................ 2,955,941
12,340,000 Series OO, 8.05%, 10/01/11 ............................................................ 13,383,470
14,650,000 Series RR, 7.75%, 10/01/17 ............................................................ 15,573,390
New York State Mortgage Agency Revenue,
13,685,000 8th Series A, 6.875%, 04/01/17 ........................................................ 13,886,170
5,000,000 Homeowners Mortgage, Series 27, 6.90%, 04/01/15 ....................................... 5,302,700
9,880,000 Homeowners Mortgage, Series 41-A, 6.50%, 10/01/17 ..................................... 10,307,310
3,800,000 Homeowners Mortgage, Series 43, MBIA Insured, 6.45%, 10/01/17 ......................... 3,864,980
23,730,000 Homeowners Mortgage, Series 45, 7.20%, 10/01/17 ....................................... 25,098,746
26,780,000 Homeowners Mortgage, Series 47, 6.375%, 10/01/17 ...................................... 27,627,587
New York State Tollway Authority, Service Contract Revenue, Local Highway & Bridge,
12,630,000 6.20%, 04/01/10 ....................................................................... 12,444,465
18,430,000 6.00%, 01/01/11 ....................................................................... 17,686,350
21,865,000 6.375%, 04/01/12 ...................................................................... 22,036,422
23,970,000 6.25%, 04/01/14 ....................................................................... 23,764,098
1,300,000 Pre-Refunded, 7.25%, 01/01/10 ......................................................... 1,450,228
New York State Urban Development Corp. Revenue,
4,500,000 Cornell Center Project, 6.00%, 01/01/14 ............................................... 4,376,070
81,350,000 Correctional Capital Facilities, Series 5, 6.25%, 01/01/20 ............................ 80,063,857
28,325,000 Refunding, Onondaga County Convention Project, 6.25%, 01/01/20 ........................ 28,081,688
1,500,000 Syracruse University Center, Pre-Refunded, 7.875%, 01/01/17 ........................... 1,614,630
8,500,000 Youth Facilities, 6.00%, 04/01/15 ..................................................... 8,229,360
Niagara Falls GO, Public Improvement, Pre-Refunded,
805,000 Refunding, 8.15%, 04/01/04 ............................................................ 856,085
790,000 Refunding, 8.15%, 04/01/05 ............................................................ 840,133
775,000 Refunding, 8.15%, 04/01/06 ............................................................ 824,182
755,000 Refunding, 8.15%, 04/01/07 ............................................................ 802,912
1,000,000 Series A, 8.15%, 12/01/04 ............................................................. 1,088,440
1,000,000 Series A, 8.15%, 12/01/05 ............................................................. 1,088,440
1,000,000 Series A, 8.15%, 12/01/06 ............................................................. 1,088,440
1,000,000 Series A, 8.15%, 12/01/07 ............................................................. 1,088,440
1,000,000 Series A, 8.15%, 12/01/08 ............................................................. 1,088,440
1,000,000 Series A, 8.15%, 12/01/09 ............................................................. 1,088,440
1,000,000 Series A, 8.15%, 12/01/10 ............................................................. 1,088,440
1,000,000 Series A, 8.15%, 12/01/11 ............................................................. 1,088,440
11,305,000 North County Development Authority, Solid Waste Systems Revenue,
Pre-Refunded, 6.75%, 07/01/12 .......................................................... 12,081,291
2,155,000 Oneida Health Care Corp., Mortgage Revenue, Oneida Health Care, Series A, 7.20%, 08/01/31 2,227,516
Oneida-Herkimer, Solid Waste Management Authority, Solid Waste Systems Revenue,
$1,390,000 6.20%, 04/01/00 ....................................................................... $ 1,423,958
1,035,000 6.30%, 04/01/01 ....................................................................... 1,059,447
1,930,000 6.40%, 04/01/02 ....................................................................... 1,978,674
2,075,000 6.50%, 04/01/03 ....................................................................... 2,134,490
1,115,000 6.65%, 04/01/05 ....................................................................... 1,153,154
20,755,000 6.75%, 04/01/14 ....................................................................... 20,834,283
Port Authority of New York and New Jersey Revenue,
1,675,000 Consolidated 67th Series, 6.875%, 01/01/25 ............................................ 1,779,251
4,400,000 Consolidated 74th Series, 6.75%, 08/01/26 ............................................. 4,650,447
17,000,000 Port Authority of New York and New Jersey, Delta Air Lines Special Project,
Series 1, 6.95%, 06/01/08 .............................................................. 17,859,010
14,645,000 Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue, Series A,
Pre-Refunded, 7.875%, 07/01/17 ......................................................... 15,985,750
4,000,000 Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue, Series Y, 5.00%, 07/01/36 ............................................. 3,333,160
8,000,000 Puerto Rico Commonwealth Infrastructure Financing Authority,
Special Tax Revenue, Series A, 7.90%, 07/01/07 ......................................... 8,559,200
8,100,000 Puerto Rico Commonwealth Urban Renewal and Housing Corp., Refunding, 7.875%, 10/01/04 ... 8,925,551
Puerto Rico Electric Power Authority Revenue,
28,435,000 Refunding, Series 1987-K, Pre-Refunded, 9.375%, 07/01/17 .............................. 30,629,897
7,740,000 Series 1992-R, 6.25%, 07/01/17 ........................................................ 7,797,972
15,565,000 Series 1994-T, 6.375%, 07/01/24 ....................................................... 15,847,504
6,575,000 Series T, 6.00%, 07/01/16 ............................................................. 6,551,790
6,940,000 Series X, 5.50%, 07/01/25 ............................................................. 6,382,301
Puerto Rico Industrial, Medical & Environmental Facilities, PCFA,
1,000,000 Baxter Travenol Labs, Series A, 8.00%, 09/01/12 ....................................... 1,090,660
21,015,000 Special Facilities, American Airlines Corp., Series A, 8.75%, 12/01/25 ................ 21,726,147
Puerto Rico Municipal Finance Agency, Series A,
14,760,000 8.25%, 07/01/08 ....................................................................... 15,873,790
11,000,000 6.50%, 07/01/19 ....................................................................... 11,486,640
Rensselaer Municipal Leasing Corp., Leasehold Mortgage Revenue,
Rensselaer County Nursing Home,
10,000,000 Series A, 6.90%, 06/01/24 ............................................................. 10,021,300
3,345,000 Series B, 6.90%, 06/01/24 ............................................................. 3,352,124
4,230,000 Schenectady Municipal Housing Authority Revenue, Annie Schaffer Senior Center, Inc.
Project, 6.45%, 05/01/24 ............................................................... 4,383,083
Suffolk County IDA, Civic Facilities Revenue, Dowling College,
4,695,000 8.25%, 12/01/20 ....................................................................... 5,138,442
2,000,000 6.625%, 06/01/24 ...................................................................... 2,037,240
1,325,000 Sunnybrook Elderly Housing Corp. Mortgage Revenue,
Sunnybrook Apartments Project, 11.25%, 12/01/14 ........................................ 1,384,664
2,000,000 Syracuse IDA, Civic Facility Revenue, St. Joseph's Hospital Health
Center Project, 7.50%, 06/01/18......................................................... 2,099,460
8,620,000 Ulster County Resource Recovery Agency, Solid Waste Systems Revenue, 6.00%, 03/01/14 .... 8,151,761
United Nations Development Corp. Revenue, Refunding, Sub-Lien,
39,575,000 Series A, 6.00%, 07/01/26 ............................................................. 38,394,477
15,370,000 Series B, 6.25%, 07/01/26 ............................................................. 15,400,585
3,100,000 Virgin Islands Water and Power Authority Electric System, Series A, 7.40%, 07/01/11 ..... 3,213,366
41,000,000 Warren and Washington Counties IDA Revenue, Refunding, Adirondack
Resource Recovery Project, Series A, 7.90%, 12/15/07 .................................. 41,603,930
Yonkers GO, Series A,
500,000 9.20%, 02/01/01 ....................................................................... 574,350
1,090,000 9.20%, 02/01/03 ....................................................................... 1,283,518
1,095,000 9.20%, 02/01/04 ....................................................................... 1,307,418
1,095,000 9.20%, 02/01/05 ....................................................................... 1,327,084
-------------
Total Bonds (Cost $4,444,828,308).................................................. 4,590,810,029
-------------
Zero Coupon/Step-Up Bonds 1.5%
1,120,000 Erie County Water Authority, Water Revenue, Refunding, Fourth Resolution,
AMBAC Insured, (original accretion rate 7.30%), 12/01/17 .............................. 239,915
Metropolitan Transportation Authority, Refunding,
7,590,000 Commuter Facilities Revenue, Series 7, (original accretion rate 5.80%), 07/01/11 ...... 2,945,375
2,065,000 Commuter Facilities Revenue, Series 7, (original accretion rate 5.85%), 07/01/13 ...... 700,923
4,750,000 Commuter Facilities Revenue, Series 7, (original accretion rate 5.85%), 07/01/14 ...... 1,510,785
13,125,000 Transit Facilities Revenue, Series 7, (original accretion rate 5.75%), 07/01/09 ....... 5,885,775
16,500,000 Transit Facilities Revenue, Series 7, (original accretion rate 5.80%), 07/01/10 ....... 6,911,685
21,200,000 Transit Facilities Revenue, Series 7, (original accretion rate 5.80%), 07/01/11 ....... $ 8,226,872
13,190,000 Transit Facilities Revenue, Series 7, (original accretion rate 5.85%), 07/01/12 ....... 4,799,445
7,935,000 Transit Facilities Revenue, Series 7, (original accretion rate 5.85%), 07/01/13 ....... 2,693,377
3,500,000 Transit Facilities Revenue, Series 7, (original accretion rate 5.546%), 07/01/14 ...... 1,113,210
New York City GO,
8,875,000 Citysavers, Series B, (original accretion rate 8.25%), 08/01/09 ....................... 3,825,569
1,030,000 Citysavers, Series B, (original accretion rate 8.66%), 06/01/12 ....................... 365,259
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/12 ....................... 353,609
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/13 ....................... 340,652
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/13 ....................... 329,734
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/14 ....................... 319,166
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/14 ....................... 308,938
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/15 ....................... 298,494
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/15 ....................... 288,915
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/16 ....................... 278,564
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/16 ....................... 269,603
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/17 ....................... 259,344
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/17 ....................... 250,960
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/18 ....................... 242,328
1,005,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/18 ....................... 228,798
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/19 ....................... 226,899
1,030,000 Citysavers, Series B, (original accretion rate 8.50%), 12/01/19 ....................... 219,555
10,000,000 Citysavers, Series B, (original accretion rate 8.50%), 06/01/20 ....................... 2,062,600
2,500,000 M-Raes, Series 29, zero coupon to 03/15/00, (original accretion rate 8.00%),
8.00% thereafter, 03/15/12 ........................................................... 2,117,300
3,875,000 M-Raes, Series 30, zero coupon to 03/15/00, (original accretion rate 8.00%),
8.00% thereafter, 03/15/13 ........................................................... 3,281,815
17,400,000 M-Raes, Series 36, zero coupon to 10/01/02, (original accretion rate 7.00%),
7.00% thereafter, 10/01/14 ........................................................... 11,543,508
2,690,000 Series A-2, (original accretion rate 5.95%), 08/01/10 ................................. 1,078,771
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 .................................................................. 2,555,431
21,625,000 Triborough Bridge and Tunnel Authority, Convention Center Project,
Series E, (original accretion rate 7.50%), 01/01/12 ................................... 8,181,603
-------------
Total Zero Coupon/Step-Up Bonds, (Cost $72,682,867)................................ 74,254,777
-------------
Total Long Term Investments (Cost $4,517,511,175).................................. 4,665,064,806
-------------
aShort Term Investments .1%
New York City Municipal Water Finance Authority, Water and Sewer System Revenue, Daily VRDN and Put,
2,600,000 Series C, 3.60%, 06/15/23 ............................................................. 2,600,000
1,500,000 Series G, 3.70%, 06/15/24 ............................................................. 1,500,000
-------------
Total Short Term Investments (Cost $4,100,000)..................................... 4,100,000
-------------
Total Investments (Cost $4,521,611,175) 98.3%................................. 4,669,164,806
Other Assets and Liabilities, Net 1.7%........................................ 79,364,982
-------------
Net Assets 100.0%............................................................. $4,748,529,788
=============
At May 31, 1996, the net unrealized appreciation based on the cost
of investments for income tax purposes of $4,523,104,008 was as
follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost........................................................... $ 174,029,585
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value .......................................................... (27,968,787)
-------------
Net unrealized appreciation............................................................ $ 146,060,798
=============
</TABLE>
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance
GO - General Obligation
HDC - Housing Development Corp.
HFA - Housing Finance Authority/Agency
HIBI - Health Industry Bond Insurance
HMR - Home Mortgage Revenue
IDA - Industrial Development Authority/Agency
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). bSee Note 1(e) regarding securities
purchased on a when-issued basis.
FINANCIAL STATEMENTS
Franklin New York Tax-Free Income Fund, Inc.
Statement of Assets and Liabilities
May 31, 1996
Assets:
Investments in securities, at value
(identified cost $4,521,611,175) $4,669,164,806
Cash 222,013
Receivables:
Interest 86,274,220
Investment securities sold 3,809,390
Capital shares sold 3,819,089
--------------
Total assets 4,763,289,518
--------------
Liabilities:
Payables:
Investment securities purchased:
Regular Delivery 6,545,584
When-issued basis (Note 1) 2,588,125
Capital shares repurchased 3,039,508
Management fees 1,801,668
Distribution fees 467,849
Shareholder servicing costs 116,000
Accrued expenses and other liabilities 200,996
--------------
Total liabilities 14,759,730
--------------
Net assets, at value $4,748,529,788
==============
Net assets consist of:
Undistributed net investment income $ 2,622,929
Net unrealized appreciation on investments 147,553,631
Net realized gain 9,258,390
Class I capital shares 4,549,286,953
Class II capital shares 39,807,885
--------------
Net assets, at value $4,748,529,788
==============
Class I Shares:
Net assets, at value $4,709,482,605
==============
Shares outstanding 410,969,338
==============
Net asset value per share* $11.46
==============
Maximum offering price per share
(100/95.75 of net asset value per share) $11.97
==============
Class II Shares:
Net assets, at value $ 39,047,183
==============
Shares outstanding 3,409,918
==============
Net asset value per share* $11.45
==============
Maximum offering price per share
(100/99 of net asset value per share) $11.57
==============
Statement of Operations for the year ended May 31, 1996
Investment income:
Interest (Note 1) $ 314,324,092
Expenses:
Management fees (Note 5) $21,810,902
Distribution fees-Class l (Note 5) 3,162,428
Distribution fees-Class ll (Note 5) 133,675
Shareholder servicing costs (Note 5) 1,254,383
Reports to shareholders 766,148
Custodian fees 310,686
Professional fees 133,327
Directors' fees and expenses 63,306
Registration and filing fees 22,355
Other 100,566
--------------
Total expenses 27,757,776
--------------
Net investment income 286,566,316
--------------
Realized and unrealized gain (loss)
on investments:
Net realized gain 16,081,912
Net unrealized depreciation (129,808,598)
--------------
Net realized and unrealized gain (loss)
on investments (113,726,686)
--------------
Net increase in net assets resulting
from operations $ 172,839,630
==============
*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
Statements of Changes in Net Assets
for the years ended May 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
Increase (decrease) in net assets:
Operations:
<S> <C> <C>
Net investment income............................................................. $ 286,566,316 $ 291,384,881
Net realized gain from security transactions...................................... 16,081,912 45,909,121
Net unrealized depreciation on investments........................................ (129,808,598) (27,550,974)
------------ ------------
Net increase in net assets resulting from operations.......................... 172,839,630 309,743,028
Distributions to shareholders:
From undistributed net investment income:
Class l (Note 8):................................................................. (289,772,039) (300,084,670)
Class ll (Note 8):................................................................ (1,035,919) (1)
Increase in net assets from capital share transactions (Note 3)..................... 139,529,436 107,311,550
------------ ------------
Net increase in net assets.................................................... 21,561,108 116,969,907
Net assets:
Beginning of year.................................................................. 4,726,968,680 4,609,998,773
------------ ------------
End of year (including undistributed net investment income of $2,622,929 - 1996 and
$6,864,571 - 1995)................................................................. $4,748,529,788 $4,726,968,680
============ ============
</TABLE>
NOTES TO FINANCIAL STATEMENTS
Franklin New York Tax-Free Income Fund, Inc.
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 seeks to provide investors
with as high a level of income exempt from federal income taxes as is consistent
with prudent investing, while seeking preservation of shareholders' capital.
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. In the absence of a sale or reported bid and asked
prices, information with respect to bond and note transactions, quotations from
bond dealers, market transactions in comparable securities, and various
relationships between securities are used to determine the value of a 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 (the Board). Securities for which market quotations
are not available are valued in accordance with procedures established by the
Board.
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 to make the
requisite distributions to its shareholders which will be sufficient to relieve
it from income and excise taxes.
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.
d. Investment Income, Expenses and Distributions:
Distributions to shareholders are recorded on the ex-dividend date. Interest
income and estimated expenses are accrued daily. Bond discount and premium 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.
e. Securities Purchased on a When-Issued Basis or Delayed Delivery Basis:
The Fund may purchase 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 holding the
securities, it may sell the 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.
f. Accounting Estimates:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. NET REALIZED CAPITAL GAINS - TAX BASIS
At May 31, 1996, for tax purposes, the Fund had accumulated net realized gains
of $10,751,223.
For tax purposes, the aggregate cost of securities is higher ( and unrealized
appreciation is lower) than for financial statement purposes at May 31, 1996 by
$1,492,833.
3. CAPITAL STOCK
At May 31, 1996, there were 2,500,000,000 Class I and 2,500,000,000 Class II
shares of $0.01 par value capital stock authorized. Transactions in the Fund's
shares were as follows:
Class I Shares:
<TABLE>
<CAPTION>
Year Ended May 31,
1996 1995
----------------------- -----------------------
Shares Amount Shares Amount
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold ............................................. 40,645,245 $ 474,291,793 46,260,529 $ 529,975,074
Shares issued in reinvestment of distributions .......... 11,218,379 130,789,081 11,609,779 132,502,096
Shares redeemed ......................................... (43,189,318) (503,461,711) (48,966,125) (557,063,232)
---------- ----------- ---------- -----------
Net increase ............................................. 8,674,306 $ 101,619,163 8,904,183 $ 105,413,938
========== =========== ========== ===========
Class II Shares:
Year Ended Period
May 31, 1996 May 31, 1995 *
----------------------- -----------------------
Shares Amount Shares Amount
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold ............................................. 3,404,484 $ 39,730,816 163,023 $ 1,897,611
Shares issued in reinvestment of distributions .......... 51,428 599,454 -- 1
Shares redeemed ......................................... (209,017) (2,419,997) -- --
---------- ----------- ---------- -----------
Net increase ............................................. 3,246,895 $ 37,910,273 163,023 $ 1,897,612
========== =========== ========== ===========
</TABLE>
*For the period May 1, 1995 (effective date) to May 31, 1995.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding purchases and sales of short-term
securities) for the year ended May 31, 1996, aggregated $1,479,863,556 and
$1,336,873,250, respectively.
5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
a. Management Agreement:
Under the terms of 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 of the month as follows:
Annualized Fee Rate Month End Net Assets
------------ -------------------------------------
0.625% First $100 million
0.50% Over $100 million, up to and including $250 million
0.45% Over $250 million, up to and including $10 billion
Fees are further reduced on net assets over $10 billion. The terms of the
management agreement provide that annual aggregate 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 year ended May 31, 1996, the Fund's
expenses did not exceed these limitations.
b. Shareholder Services Agreement:
Under the terms of a shareholder services agreement with Franklin/Templeton
Investor Services, Inc. (Investor Services), the Fund pays costs on a per
shareholder account basis. Shareholder servicing costs incurred by the Fund for
the year ended May 31, 1996, aggregated $1,254,383, of which $1,103,822 was paid
to Investor Services.
c. Distribution Plans and Underwriting Agreement:
Under the terms of distribution plans pursuant to Rule 12b-1 of the Investment
Company Act of 1940 (the Plans), 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, of the average daily net
assets of each class for costs incurred in the promotion, offering and marketing
of the Fund's shares. The Plans do not permit nor require payments of excess
costs after termination. Fees incurred by the Fund under the Plans aggregated
$3,296,103 for the year ended May 31, 1996.
In its capacity as underwriter for the shares of the Fund, Distributors receives
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 the Fund's shares.
Commissions received by Distributors and the amounts paid to other dealers for
the year ended May 31, 1996, amounted to:
Class l Class ll
--------- -------
Total commissions received............... $12,858,137 $403,984
========= =======
Paid to other dealers.................... $12,271,977 $778,731
========= =======
Distributors also received contingent deferred sales charges relating to
transactions in the Fund of $35,153 and $19,139, for Class l and Class ll,
respectively.
d. Other Affiliated Parties and Transactions:
During the year ended May 31, 1996, legal fees of $29,969 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. SUBSEQUENT EVENTS
On May 14, 1996 and June 18, 1996, the Board declared distributions per share as
follows:
From
Undistributed
Record Payment Net Investment
Date Date Income
------ ------ ---------
Class I.......................... 5/31/96 6/14/96 $.058
Class II......................... 5/31/96 6/14/96 .0522
Class I.......................... 6/28/96 7/15/96 .058
Class II......................... 6/28/96 7/15/96 .0524
7. CREDIT RISK
Although the Fund has a diversified portfolio, substantially all of its
investments are in the securities of issuers in Guam, New York, and Puerto Rico.
Such concentration may subject the Fund more significantly to economic changes
occurring within such state and territories.
8. FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout each year are
as follows:
<TABLE>
<CAPTION>
Year Ended May 31,
Class I Shares: 1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
Per Share Operating Performance
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period................. $11.75 $11.72 $12.07 $11.45 $10.94
-------- -------- -------- -------- --------
Net investment income................................. 0.70 0.73 0.75 0.77 0.78
Net realized and unrealized gain (loss) on securities. (0.279) 0.056 (0.338) 0.630 0.523
-------- -------- -------- -------- --------
Total from investment operations....................... 0.421 0.786 0.412 1.400 1.303
-------- -------- -------- -------- --------
Distributions from net investment income............... (0.711) (0.756) (0.762) (0.780) (0.793)
-------- -------- -------- -------- --------
Net asset value at end of period....................... $11.46 $11.75 $11.72 $12.07 $11.45
======== ======== ======== ======== ========
Total Return*.......................................... 3.65% 7.10% 3.18% 12.35% 12.05%
8. FINANCIAL HIGHLIGHTS (cont.)
Year Ended May 31,
Class I Shares: 1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Net assets at end of period (in 000's)................ $4,709,483 $4,725,056 $4,609,999 $4,339,249 $3,570,851
Ratio of expenses to average net assets............... 0.58% 0.57% 0.52% 0.52% 0.51%
Ratio of net investment income to average net assets.. 5.99% 6.39% 6.19% 6.56% 7.01%
Portfolio turnover rate............................... 28.34% 40.56% 25.67% 12.28% 19.37%
</TABLE>
Class II Shares: 1996 19951,2
-------- --------
Per Share Operating Performance
Net asset value at beginning of period................. $11.73 $11.50+
-------- --------
Net investment income................................. 0.65 0.05
Net realized and unrealized gain (loss) on securities. (0.286) 0.243
-------- --------
Total from investment operations....................... 0.364 0.293
-------- --------
Distributions from net investment income............... (0.644) (0.063)
-------- --------
Net asset value at end of period....................... $11.45 $11.73
======== ========
Total Return*.......................................... 3.14% 2.56%
Ratios/Supplemental Data
Net assets at end of period (in 000's)................ $39,047 $1,913
Ratio of expenses to average net assets............... 1.16% 1.09%**
Ratio of net investment income to average net assets.. 5.43% 5.32%**
Portfolio turnover rate............................... 28.34% 40.56%
*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 contingent deferred sales charge, and assumes reinvestment of
dividends and capital gains at net asset value. Prior to May 1, 1994, dividends
were reinvested at the maximum offering price, and capital gains at net asset
value. Effective May 1, 1994, with the implementation of the Rule 12b-1
distribution plan for Class I shares, the sales charge on reinvested dividends
was eliminated.
**Annualized
+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 beginning of period includes this dividend.
1Per share amounts have been calculated using the daily average shares
outstanding during the period.
2For the period May 1, 1995 (effective date) to May 31, 1995.
During the year ended May 31, 1996, the Fund paid distributions from
undistributed net investment income in the amounts shown in the Statement of
Changes in Net Assets. The Fund hereby designates the total amount of these
distributions as exempt-interest dividends under Section 852(b)(5) of the
Internal Revenue Code.
REPORT OF INDEPENDENT AUDITORS
Franklin New York Tax-Free Income Fund, Inc.
To the Shareholders and Board of Directors
of Franklin New York Tax-Free Income Fund, Inc.
We have audited the accompanying statement of assets and liabilities of the
Franklin New York Tax-Free Income Fund, Inc., including the Fund's statement of
investments in securities and net assets, as of May 31, 1996, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund as of May 31, 1996, and the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and its financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 28, 1996
Franklin New York Tax-Free Income Fund Annual Report 5/31/96.
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'securities breakdown by sector as
a percentage of the fund's total net assets.
Quality Breakdown on 5/31/96
AAA 22.0%
AA 15.5%
A 15.2%
BBB 45.4%
Below Investment Grade 1.9%
GRAPHIC MATERIAL (2)
This bar chart shows the comparison between the fund's disribution rate of
5.81%,the taxable equivalent distribution rate of 10.36% (maximum combined rate
for federal and New York state), and the taxable equivalent distribution rate of
10.88% (maximum combined rate for federal, New York state and New York City) for
Class I shares.
GRAPHIC MATERIAL (3)
The following line graph hypothetically compares the performance of the fund's
Class I Shares with the Consumer Price Index (CPI) and the Lehman Brothers
Municipal Bond Index, based on a $10,000 investment from 6/1/86 to 5/31/96.
Period Ending Fund Index Index
6/1/86 9,572 10000 10000
6/30/86 9,650 0.95% 10,095 0.55% 10,055
7/31/86 9,702 0.61% 10,157 0.00% 10,055
8/31/86 10,139 4.48% 10,612 0.18% 10,073
9/30/86 10,165 0.25% 10,638 0.46% 10,119
10/31/86 10,448 1.73% 10,822 0.09% 10,129
11/30/86 10,564 1.98% 11,036 0.09% 10,138
12/31/86 10,618 -0.28% 11,006 0.09% 10,147
1/31/87 10,850 3.01% 11,337 0.63% 10,211
2/28/87 10,945 0.49% 11,392 0.36% 10,247
3/31/87 10,929 -1.06% 11,272 0.45% 10,294
4/30/87 10,287 -5.02% 10,706 0.54% 10,349
5/31/87 10,101 -0.50% 10,652 0.35% 10,385
6/30/87 10,285 2.94% 10,965 0.35% 10,422
7/31/87 10,392 1.02% 11,077 0.26% 10,449
8/31/87 10,474 0.22% 11,102 0.53% 10,504
9/30/87 9,878 -3.69% 10,692 0.52% 10,559
10/31/87 9,917 0.35% 10,729 0.26% 10,586
11/30/87 10,234 2.61% 11,009 0.09% 10,596
12/31/87 10,414 1.45% 11,169 0.00% 10,596
1/31/88 10,847 3.56% 11,567 0.26% 10,623
2/29/88 11,018 1.06% 11,689 0.26% 10,651
3/31/88 10,773 -1.16% 11,554 0.43% 10,697
4/30/88 10,825 0.76% 11,642 0.52% 10,752
5/31/88 10,876 -0.29% 11,608 0.34% 10,789
6/30/88 11,084 1.46% 11,777 0.43% 10,835
7/31/88 11,126 0.65% 11,854 0.42% 10,881
8/31/88 11,199 0.09% 11,864 0.42% 10,927
9/30/88 11,432 1.81% 12,079 0.67% 11,000
10/31/88 11,678 1.76% 12,292 0.33% 11,036
11/30/88 11,566 -0.92% 12,179 0.08% 11,045
12/31/88 11,703 1.02% 12,303 0.17% 11,064
1/31/89 11,883 2.07% 12,558 0.50% 11,119
2/28/89 11,802 -1.14% 12,414 0.41% 11,165
3/31/89 11,798 -0.24% 12,385 0.58% 11,229
4/30/89 12,070 2.37% 12,678 0.65% 11,302
5/31/89 12,322 2.08% 12,942 0.57% 11,367
6/30/89 12,474 1.36% 13,118 0.24% 11,394
7/31/89 12,594 1.36% 13,296 0.24% 11,421
8/31/89 12,544 -0.98% 13,166 0.16% 11,440
9/30/89 12,482 -0.30% 13,126 0.32% 11,476
10/31/89 12,546 1.22% 13,287 0.48% 11,531
11/30/89 12,715 1.75% 13,519 0.24% 11,559
12/31/89 12,826 0.82% 13,630 0.16% 11,578
1/31/90 12,740 -0.47% 13,566 1.03% 11,697
2/28/90 12,911 0.89% 13,687 0.47% 11,752
3/31/90 12,871 0.03% 13,691 0.55% 11,816
4/30/90 12,807 -0.72% 13,592 0.16% 11,835
5/31/90 13,006 2.18% 13,889 0.23% 11,862
6/30/90 13,157 0.88% 14,011 0.54% 11,927
7/31/90 13,371 1.48% 14,218 0.38% 11,972
8/31/90 13,220 -1.45% 14,012 0.92% 12,082
9/30/90 13,178 0.06% 14,020 0.84% 12,184
10/31/90 13,234 1.81% 14,274 0.60% 12,257
11/30/90 13,465 2.01% 14,561 0.22% 12,284
12/31/90 13,435 0.44% 14,625 0.00% 12,284
1/31/91 13,631 1.34% 14,821 0.60% 12,357
2/28/91 13,754 0.87% 14,950 0.15% 12,376
3/31/91 13,852 0.04% 14,956 0.15% 12,394
4/30/91 14,027 1.34% 15,156 0.15% 12,413
5/31/91 14,113 0.89% 15,291 0.30% 12,450
6/30/91 14,187 -0.10% 15,276 0.29% 12,486
7/31/91 14,405 1.22% 15,462 0.15% 12,505
8/31/91 14,611 1.32% 15,666 0.29% 12,541
9/30/91 14,885 1.30% 15,870 0.44% 12,596
10/31/91 15,000 0.90% 16,013 0.15% 12,615
11/30/91 15,090 0.28% 16,058 0.29% 12,652
12/31/91 15,261 2.15% 16,403 0.07% 12,661
1/31/92 15,257 0.23% 16,441 0.15% 12,680
2/29/92 15,276 0.03% 16,446 0.36% 12,725
3/31/92 15,405 0.04% 16,452 0.51% 12,790
4/30/92 15,616 0.89% 16,599 0.14% 12,808
5/31/92 15,859 1.18% 16,795 0.14% 12,826
6/30/92 16,144 1.68% 17,077 0.36% 12,872
7/31/92 16,669 3.00% 17,589 0.21% 12,899
8/31/92 16,507 -0.98% 17,417 0.28% 12,936
9/30/92 16,585 0.65% 17,530 0.28% 12,972
10/31/92 16,335 -0.98% 17,358 0.35% 13,017
11/30/92 16,729 1.79% 17,669 0.14% 13,035
12/31/92 16,952 1.02% 17,849 -0.07% 13,026
1/31/93 17,176 1.16% 18,056 0.49% 13,090
2/28/93 17,620 3.62% 18,710 0.35% 13,136
3/31/93 17,554 -1.06% 18,511 0.35% 13,182
4/30/93 17,649 1.01% 18,698 0.28% 13,219
5/31/93 17,864 0.56% 18,803 0.14% 13,237
6/30/93 18,154 1.67% 19,117 0.14% 13,256
7/31/93 18,161 0.13% 19,142 0.00% 13,256
8/31/93 18,499 2.08% 19,540 0.28% 13,293
9/30/93 18,700 1.14% 19,763 0.21% 13,321
10/31/93 18,735 0.19% 19,800 0.41% 13,375
11/30/93 18,588 -0.88% 19,626 0.07% 13,385
12/31/93 18,976 2.11% 20,040 0.00% 13,385
1/31/94 19,150 1.14% 20,269 0.27% 13,421
2/28/94 18,814 -2.59% 19,744 0.34% 13,467
3/31/94 18,274 -4.07% 18,940 0.34% 13,512
4/30/94 18,311 0.85% 19,101 0.14% 13,531
5/31/94 18,474 0.87% 19,267 0.07% 13,541
6/30/94 18,430 -0.61% 19,150 0.34% 13,587
7/31/94 18,674 1.83% 19,500 0.27% 13,623
8/31/94 18,775 0.35% 19,568 0.40% 13,678
9/30/94 18,554 -1.47% 19,281 0.27% 13,715
10/31/94 18,284 -1.78% 18,938 0.07% 13,725
11/30/94 17,867 -1.81% 18,595 0.13% 13,742
12/31/94 18,296 2.20% 19,004 0.00% 13,742
1/31/95 18,680 2.86% 19,547 0.40% 13,797
2/28/95 19,082 2.91% 20,116 0.40% 13,853
3/31/95 19,220 1.15% 20,348 0.33% 13,898
4/30/95 19,259 0.12% 20,372 0.33% 13,944
5/31/95 19,786 3.19% 21,022 0.20% 13,972
6/30/95 19,621 -0.87% 20,839 0.20% 14,000
7/31/95 19,729 0.95% 21,037 0.00% 14,000
8/31/95 19,939 1.27% 21,304 0.26% 14,036
9/30/95 20,039 0.63% 21,438 0.20% 14,064
10/31/95 20,329 1.45% 21,749 0.33% 14,111
11/30/95 20,621 1.66% 22,110 -0.07% 14,101
12/31/95 20,792 0.96% 22,323 -0.07% 14,091
1/31/96 20,876 0.76% 22,492 0.59% 14,174
2/29/96 20,696 -0.68% 22,339 0.32% 14,220
3/31/96 20,533 -1.28% 22,053 0.52% 14,293
4/30/96 20,493 -0.28% 21,992 0.39% 14,349
5/31/96 20,508 -0.04% 21,983 0.19% 14,377
Total Return 105.08% 119.83% 43.77%
GRAPHIC MATERIAL (4)
This bar chart shows the comparison between the fund's disribution rate of
5.85%, the taxable equivalent distribution rate of 10.43% (maximum combined
federal and New York state) and the taxable equivalent distribution rate of
10.96% (maximum combined federal, New York state and New York City) for Class II
shares.
GRAPHIC MATERIAL (5)
The following line graph hypothetically compares the performance of the fund's
Class II Shares with the Consumer Price Index (CPI) and the Lehman Brothers
Municipal Bond Index, based on a $10,000 investment from 5/1/95 to 5/31/96.
Period Ending Fund Index Index
5/1/95 9896 $10,000 $10,000
5/31/95 10,203 3.19% 10,319 0.20% 10,020
6/30/95 10,122 -0.87% 10,229 0.20% 10,040
7/31/95 10,180 0.95% 10,326 0.00% 10,040
8/31/95 10,275 1.27% 10,458 0.26% 10,066
9/30/95 10,330 0.63% 10,523 0.20% 10,086
10/31/95 10,465 1.45% 10,676 0.33% 10,120
11/30/95 10,619 1.66% 10,853 -0.07% 10,112
12/31/95 10,693 0.96% 10,957 -0.07% 10,105
1/31/96 10,730 0.76% 11,041 0.59% 10,165
2/29/96 10,642 -0.68% 10,966 0.32% 10,198
3/31/96 10,543 -1.28% 10,825 0.52% 10,251
4/30/96 10,518 -0.28% 10,795 0.39% 10,291
5/31/96 10,425 -0.04% 10,791 0.19% 10,310
Total Return 4.25% 7.91% 3.10%
