SHAREHOLDER LETTER
Your Fund's Goal: Franklin New York Tax-Free Income Fund 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.(1)
Dear Shareholder:
This semiannual report for Franklin New York Tax-Free Income Fund covers the
period ended November 30, 1999. During the six months under review, U.S. bond
markets continued to experience challenging times. The yield on the benchmark
30-year Treasury bond steadily increased, from 5.83% on May 31, 1999, to 6.29%
on November 30, 1999 -- reaching a high of 6.38% on October 26, 1999. The strong
U.S. economy, improving global economies, and inflationary worries were driving
forces behind U.S. bond market uncertainty. Concerned about domestic
inflationary tendencies, the Federal Open Market Committee raised the federal
funds target rate from 4.75% to 5.50% in three incremental steps during the
reporting period.
1. 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 discount, if any, are generally
taxable.
You will find a complete listing of the fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 21 of
this report.
CONTENTS
Shareholder Letter ..................................................... 1
Performance Summary .................................................... 8
Special Feature:
Uncovering Tax-Free Opportunities ...................................... 10
Municipal Bond Ratings ................................................. 15
Financial Highlights & Statement of Investments ........................ 18
Financial Statements ................................................... 33
Notes to Financial Statements .......................................... 37
[PYRAMID GRAPH]
Credit Quality Breakdown*
Based on Total Long-Term Investments
11/30/99
[PIE CHART]
AAA--46.2%
AA--15.9%
A--19.5%
BBB--17.7%
Below Investment
Grade--0.7%
*Quality breakdowns may include
internal ratings for bonds not rated by
an independent rating agency.
The economy's direction and its effect on inflationary pressures will contribute
to the level of volatility that impacts bond markets in the near future. During
the period under review, many investors reacted swiftly to new releases of
economic data or Federal Reserve Board announcements, and in many instances the
market overcorrected. Investors with short-term investment horizons may view
such instability as unfavorable. However, we prefer to take a long-term approach
toward investing, and we find that recent market conditions afforded us
opportunities not only to increase the fund's income-earning potential, but also
to enhance the portfolio's overall structure.
NEW YORK UPDATE
During the six months under review, Standard & Poor's(R), an independent credit
rating agency, raised New York state's general obligation and
appropriation-backed bond ratings to A+.(2) The upgrade reflects fundamental
changes in fiscal discipline and management, as evidenced by improving reserves
and controlled spending during a period of revenue growth; slow but steady
economic growth through which the state regained pre-recession employment
levels; and some marginal success in reducing the pace of borrowings. In the
short term, the state was well-situated due to the health of its economy, having
recently completed four years of strong financial performance. In fiscal 1997
through 1999, the state finished the years with surpluses ranging from $1.4
billion to $2.1 billion.
2. Source: Standard & Poor's, CreditWire, 10/99. This does not indicate Standard
& Poor's rating of the fund.
A long-term risk for New York's economy is the state's high debt level. During
fiscal 1999, the state's net tax-supported debt level reached $36.9 billion,
yielding a debt per capita of $2,036, ranking New York fourth in the nation.(3)
Although the state's debt level is high, the credit outlook is stable, given
satisfactory economic performance, the ability to manage potential spending
pressures, and the continuance of fiscally responsible actions.(2)
PORTFOLIO NOTES
The general rise in interest rates during the six-month reporting period
presented challenges for fixed-income markets, as well as the fund's share
price, as bond prices fall when interest rates rise. Because the fund's share
price is representative of the market value of the portfolio's securities, the
rising rates resulted in declining share prices. However, the fund's
diversification among municipal bonds protected its shareholders relative to
owning individual bonds. At the end of the period, the fund held 440 positions,
and because we generally employ a buy-and-hold strategy, the fund is
well-seasoned with older, higher-coupon securities. Such holdings tend to
moderate volatility and provide higher current income compared with more
recently issued securities. For example, the total return on the 30-year
Treasury bond during the six-month period was -3.09%, while according to Lipper
Analytical Services, Inc., the average total return for funds in the general
municipal debt funds category was -3.59%.
3. Source: Moody's Investor Service, 10/99.
PORTFOLIO BREAKDOWN
11/30/99
<TABLE>
<CAPTION>
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
<S> <C>
Prerefunded 26.6%
Subject to Government Appropriation 24.1%
Hospital & Health Care 13.8%
Housing 9.2%
Transportation 7.9%
Utilities 7.5%
Other Revenue 4.7%
General Obligation 3.2%
Higher Education 1.9%
Tax-Supported Debt 1.1%
</TABLE>
By comparison, the fund's Class A shares delivered a -2.41% cumulative total
return for the six months under review.(4)
We took advantage of rising interest rates to book tax losses by selling some
lower yielding securities, and we reinvested the proceeds at current, higher
rates. The losses help to offset any potential capital gains in the portfolio
and can be carried forward for several years, potentially reducing shareholders'
tax liabilities. The higher reinvestment rates for called bonds helped to
protect the fund's dividend. Such an environment also presents opportunities to
improve the portfolio's call protection, which we will continue to pursue.
During the six months under review, we again sold prerefunded securities. In
managing our prerefunded exposure, we typically look to sell such holdings with
approximately five years remaining to their call date. In doing so, the fund
seeks to capture a premium on the prerefunded bonds and use this capital to
invest in current coupon bonds, thus extending the fund's call protection,
preserving its income stream, and stabilizing its share price. The fund's
portfolio remained broadly diversified, as we purchased bonds during the period
from many different sectors. For example, we added bonds issued by the following
entities: New York State Dormitory Authority, Metropolitan Transportation
Authority, and New York City Municipal Water Finance Authority Water and Sewer
System. It should be noted that of the fund's purchases during the period, most
were higher rated or insured securities because credit spreads in New York
remained suppressed, meaning that investors typically were not compensated for
taking on the additional credit risk of a lower-rated security.
4. Cumulative total return measures the change in value of an investment,
assuming reinvestment of all distributions and does not include the sales
charge. Sources: Standard & Poor's Micropal and Lipper Analytical Services, Inc.
The value of Treasuries is fixed; principal is guaranteed and interest is fixed.
Investment return and the share price of Franklin New York Tax-Free Income Fund
will fluctuate with market conditions. Lipper average includes 278 funds for the
six-month period ended 11/30/99. Lipper performance does not include sales
charges and results may have been different if such charges had been considered.
Municipal bonds represent one of the most undervalued sectors of the
fixed-income market. At the end of the reporting period, the Bond Buyer 40 Index
yielded 6.11% and the 30-year Treasury bond yielded 6.29%, resulting in a
municipal-to-Treasury ratio of 97%.(5) The average ratio over the past 10 years
is 89%, which means that municipal bonds were relatively inexpensive. Municipal
bonds have been at the cheaper end of the ratio throughout 1999 due to several
factors, most notably that as interest rates rose, many investors shunned the
market or moved money into other investments. Also contributing to this
situation was a municipal bond supply that, although nearly 20% below 1998
levels, was continuous amid lackluster demand. This created opportunities for us
to buy bonds at higher yields.
5. The unmanaged Bond Buyer Municipal 40 Index is composed of the Yield to
Maturity of 40 bonds. The index attempts to track the new-issue market as
closely as possible, so it changes bonds twice a month, adding all new bonds
that meet certain requirements and deleting an equivalent number according to
their secondary market trading activity. As a result, the average par call date,
average maturity date and average coupon rate change over time. The average
maturity generally has been about 29-30 years.
DIVIDEND DISTRIBUTIONS
6/1/99 - 11/30/99
<TABLE>
<CAPTION>
DIVIDEND PER SHARE
------------------------------------------------------------
MONTH CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
June 5.25 cents 4.70 cents 4.70 cents
July 5.25 cents 4.70 cents 4.70 cents
August 5.25 cents 4.70 cents 4.70 cents
September 5.25 cents 4.70 cents 4.71 cents
October 5.25 cents 4.70 cents 4.71 cents
November 5.25 cents 4.70 cents 4.71 cents
- --------------------------------------------------------------------------------
TOTAL 31.50 CENTS 28.20 CENTS 28.23 CENTS
</TABLE>
Going forward, our outlook for the fund, the municipal bond market and New York
remains positive. We will look to take advantage of the recently higher
interest-rate environment, as well as what we believe is the undervalued
position of the municipal bond market. We expect New York municipal bond supply
to remain stable for the remainder of 1999 and into the year 2000, and this,
coupled with a continued strong demand for the state's and City's bonds, should
keep New York an attractive investment.
As always, we appreciate your support, welcome your questions and comments and
look forward to serving your investment needs in the future.
Sincerely,
/s/ Charles B. Johnson
Charles B. Johnson
Chairman
Franklin New York Tax-Free Income Fund
/s/ Sheila Amoroso
Sheila Amoroso
/s/ Rafael R. Costas, Jr.
Rafael R. Costas, Jr.
Senior Vice Presidents and Co-Directors
Franklin Municipal Bond Department
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of November 30, 1999, the end of the reporting period. Our
strategies and the fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
SIX-MONTH PERFORMANCE SUMMARY AS OF 11/30/99
Six-month total return does not include sales charges. Distributions will vary
based on earnings of the fund's portfolio and any profits realized from the sale
of the portfolio's securities. Past distributions are not indicative of future
trends. All total returns include reinvested distributions at net asset value.
CLASS A (formerly Class I): Subject to the current, maximum 4.25% initial sales
charge. Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge; thus actual total returns may differ. Effective May 1, 1994, the fund
eliminated the sales charge on reinvested dividends and implemented a Rule 12b-1
plan, which affects subsequent performance.
CLASS B: Subject to no initial sales charge, but subject to a contingent
deferred sales charge (CDSC) declining from 4% to 0% over six years. These
shares have higher annual fees and expenses than Class A shares.
CLASS C (formerly Class II): Subject to 1% initial sales charge and 1% CDSC for
shares redeemed within 18 months of investment. These shares have higher annual
fees and expenses than Class A shares.
<TABLE>
<S> <C> <C>
CLASS A
Six-Month Total Return -2.41%
Net Asset Value (NAV) (11/30/99) $11.31 (5/31/99) $11.91
Change in NAV -$0.60
Distributions (6/1/99-11/30/99) Dividend Income $0.315
CLASS B
Six-Month Total Return -2.70%
Net Asset Value (NAV) (11/30/99) $11.29 (5/31/99) $11.89
Change in NAV -$0.60
Distributions (6/1/99-11/30/99) Dividend Income $0.282
CLASS C
Six-Month Total Return -2.69%
Net Asset Value (NAV) (11/30/99) $11.31 (5/31/99) $11.91
Change in NAV -$0.60
Distributions (6/1/99-11/30/99) Dividend Income $0.2823
</TABLE>
Past performance does not guarantee future results.
ADDITIONAL PERFORMANCE
AS OF QUARTER ENDED 12/31/99
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR 10-YEAR (9/13/82)
<S> <C> <C> <C> <C>
Cumulative Total Return(1) -2.29% +34.98% +92.54% +300.71%
Average Annual Total Return(2) -6.48% +5.26% +6.31% +8.09%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS B 1-YEAR (1/1/99)
<S> <C> <C>
Cumulative Total Return(1) -2.94% -2.94%
Average Annual Total Return(2) -6.61% -6.61%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 3-YEAR (5/1/95)
<S> <C> <C> <C>
Cumulative Total Return(1) -2.85% +12.17% +24.86%
Average Annual Total Return(2) -4.72% +3.55% +4.63%
</TABLE>
AS OF 11/30/99
<TABLE>
<CAPTION>
SHARE CLASS A B C
<S> <C> <C> <C>
Distribution Rate(3) 5.33% 5.00% 4.95%
Taxable Equivalent Distribution Rate(4) 9.83% 9.22% 9.13%
30-Day Standardized Yield(5) 4.79% 4.44% 4.40%
Taxable Equivalent Yield(4) 8.51% 7.89% 7.82%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, applicable,
maximum sales charge(s) for that class.
3. Distribution rate is based on an annualization of the respective class's
current monthly dividend and the maximum offering price (net asset value price
for Class B) per share on November 30, 1999.
4. Taxable equivalent distribution rate and yield assume the 1999 maximum
combined federal and New York state and New York City personal income tax
bracket of 45.8%, 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 November 30, 1999.
Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
For updated performance figures, see "Prices and Performance" on the Internet at
www.franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
UNCOVERING TAX-FREE OPPORTUNITIES
[CIRCLE GRAPHIC "SPECIAL FEATURE"]
[PICTURE RAFAEL COSTAS]
Rafael Costas, Senior Vice President and Co-Director of Franklin's Municipal
Bond Department, discusses how research is an integral part of Franklin's
tax-free income funds' success.
Q: Could you provide an overview of Franklin's research department?
RAFAEL COSTAS: We have one of the industry's largest municipal research staffs,
allowing us to routinely analyze more than 2,000 debt issuers a year. The
research department analysts work closely with our portfolio managers, who rely
on these analysts when making buy and sell decisions. With a focus on in-depth
research and the discipline to buy when others are selling, we often are able to
find exciting opportunities at temporarily depressed prices. Generally, we
concentrate on investment-grade issues. Of course, for our high yield funds, we
also look for below investment-grade bonds that we feel offer appropriate
rewards for the increased risk.
Q: What are some advantages of Franklin's size and reputation?
RAFAEL: Today, Franklin is one of the nation's leading tax-free fund managers.
Our size, with approximately $50 billion of tax-free investments, often enables
us to purchase investments at advantageous prices, which in turn, can help keep
investment costs low. We pass on these savings to shareholders in the form of
higher tax-free yields.(1) In addition, our size often makes us a favorite of
new issuers, as many prefer to work with a minimum number of investors.
This page is not part of the shareholder report.
Q: What type of tax-free bonds do you favor?
RAFAEL: We typically look for investment-grade bonds, as we try to provide our
shareholders high, current income with a relatively low level of risk. Most of
our investment-grade tax-free bond funds are composed of a high percentage of
securities rated AAA or AA, the highest ratings bonds can receive from
independent credit rating agencies.(2) In addition, many of our purchases are
insured because of the prevalence of insurance in the municipal bond marketplace
in the past few years. Insured securities normally are rated AAA, further
improving the quality of our funds. For our high yield funds, we look for bonds
which may be out of favor but, in our view, still have solid fundamentals and
the potential to be upgraded. In fact, we devote much of our research efforts to
finding such bonds in the low investment-grade, high yield sectors.
Q: How do you research a bond?
RAFAEL: We emphasize detailed, high-quality research, which often enables us to
uncover attractive investments that others may have overlooked. When presented
with an opportunity, our analysts carefully consider such factors as the bond's
purpose, who will repay the bond, if the projections are reasonable, the payment
schedule and the issuer's credit history. We incorporate all of the numerical
findings in our internal, proprietary databases and spreadsheets created by our
analysts. With the processed information and analysis, we meet with our
portfolio managers to discuss the merits of each individual issue. The portfolio
manager's decision to buy a security will depend largely on our analysis of the
bond's credit quality and price. We continue to monitor our investments closely
after the purchase, looking for signs of potential problems as well as
additional opportunities.
1. For investors subject to the federal or state alternative minimum tax, a
portion of this income may be subject to such tax. Distributions of capital
gains and of ordinary income from accrued market discount, if any, are generally
taxable.
2. Ratings can change.
This page is not part of the shareholder report.
Q: Do you feel it is important to personally meet management and municipal
officials?
RAFAEL: Very much so. Each year Franklin's analysts and portfolio managers visit
hundreds of sites to garner an understanding that can be obtained only through
personal inspection. They meet face-to-face with the project's management and
municipal officials to discuss firsthand any potential problems. Our analysts
also can use these meetings to discover new opportunities, often before they are
widely known.
Q: Do issuers and investment bankers ever come to Franklin?
RAFAEL: Our sizable presence in the municipal bond market frequently means that
issuers and their bankers come to us with new issues. In a typical day, we may
receive between 50 and 100 calls from brokers offering new and secondary issues.
Approximately three times a week, investment bankers visit our offices, usually
as part of an issue's road show. We view these as excellent opportunities not
only to buy issues at favorable prices, but also to propose changes to the
issue, enhancing its quality and appeal to our distinct standards.
[PHOTO OF MOLLY BUTLER & STELLA WONG]
Municipal research analyst Molly Butler discusses a bond issue with portfolio
manager Stella Wong.
This page is not part of the shareholder report.
Q: How can Franklin's research influence the portfolio managers' investment
decisions?
RAFAEL: Our extensive research allows us to use a contrarian approach to
investing, because we firmly believe that near-term volatility can create
opportunities for greater long-term yields. For example, when Moody's, Standard
& Poor's or Fitch, three independent credit rating agencies, downgrade a bond,
many investors sell the issue, sometimes reducing prices to what we believe are
attractive levels. As we evaluate our investments based on our internal
assessments, we can use these valuable opportunities to purchase what we believe
are high-quality issues at temporarily depressed prices.
External events can also lead to situations where bonds become undervalued. Over
the past few years, for example, Medicare reform negatively affected the
hospital bond sector, even for those hospitals in strong financial shape. As
many hospitals' credit profiles weakened, we were able to find value selectively
through our analysts' expertise. Seeking to take advantage of this, we
recommended such bonds to our portfolio managers who purchased them at a time
when the market seemed to be shunning these issues.
WHAT IS A ROAD SHOW?
Before a new issue is brought to the public, the issuer and its investment
bankers travel around the country making presentations to potential investors
concerning the issuer's financial information and outlook.
This page is not part of the shareholder report.
Q: Could you provide an example of a successful outcome of your research?
RAFAEL: Sure. A perfect example is Tucson Electric Power (TEP). It issued $579
million in tax-exempt debt in 1997-98. However, the utility had a long, troubled
history and its debt was rated below investment grade. So, Molly Butler, our
electric utility analyst, and I flew to Tucson and spent an entire day with
TEP's top executives and division heads. We discussed their history, current
position and future plans as well as challenged and questioned many of their
projections and assumptions. At the end of the day, we were satisfied that their
management team had a clear vision and a realistic plan for the future.
Q: How is TEP doing today?
RAFAEL: Since then, the rating agencies have raised TEP's credit rating and the
bonds have seen a significant increase in value. Of course, the ratings can
change again in the future. However, the bonds are still offering above-market
yields for our shareholders, because we were able to purchase the securities
when they were unpopular. We have an excellent relationship with management and
they often call Ms. Butler to discuss the latest releases of information.
THANK YOU, RAFAEL.
This page is not part of the shareholder report.
MUNICIPAL BOND RATINGS
MOODY'S
Aaa: Best quality. They carry the smallest degree of investment risk and
generally are referred to as "gilt-edged." Interest payments are protected by a
large or exceptionally stable margin, and principal is secure. Although the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa: High quality by all standards. Together with the Aaa group, they comprise
what generally are known as high-grade bonds. Aa bonds are rated lower than Aaa
because margins of protection may not be as large, fluctuation of protective
elements may be of greater amplitude, or there may be other elements which make
the long-term risks appear larger.
A: Possess many favorable investment attributes and are considered upper
medium-grade obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future.
Baa: Medium-grade obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Ba: Contain speculative elements. Often the protection of interest and principal
payments may be very moderate and, thereby, not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes bonds
in this class.
B: Generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small.
Caa: Poor standing. Such issues may be in default, or elements of danger with
respect to principal or interest may be present.
Ca: Obligations that are highly speculative. Such issues are often in default or
have other marked shortcomings.
C: Lowest-rated class of bonds. Issues rated C can be regarded as having
extremely poor prospects of ever attaining any real investment standing.
S&P(R)
AAA: The highest rating assigned by S&P to a debt obligation and indicates the
ultimate degree of protection as to principal and interest.
AA: Also qualify as high-grade obligations, and, in the majority of instances,
differ from AAA issues only in a small degree.
A: Generally regarded as upper medium-grade. They have considerable investment
strength but are not entirely free from adverse effects of changes in economic
and trade conditions. Interest and principal are regarded as safe.
BBB: Regarded as having an adequate capacity to pay principal and interest.
Whereas they normally exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay principal and interest for bonds in this category than for bonds
in the A category.
BB, B, CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligations. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While such bonds likely will have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
C: Reserved for income bonds on which no interest is being paid.
D: Debt rated D is in default and payment of interest and/or repayment of
principal is in arrears.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MAY 31,
NOVEMBER 30, 1999------------------------------------------------------------------
(UNAUDITED)(1) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ...... $11.91 $12.08 $11.66 $11.46 $11.75 $11.72
-----------------------------------------------------------------------------------
Income from investment operations:
Net investment income .................... .32 .64 .66 .68 .70 .73
Net realized and unrealized gains (losses) (.61) (.08) .45 .23 (.28) .06
-----------------------------------------------------------------------------------
Total from investment operations .......... (.29) .56 1.11 .91 .42 .79
-----------------------------------------------------------------------------------
Less distributions from:
Net investment income .................... (.31) (.64) (.66) (.68) (.71) (.76)
Net realized gains ....................... -- (.09) (.03) (.03) -- --
-----------------------------------------------------------------------------------
Total distributions ....................... (.31) (.73) (.69) (.71) (.71) (.76)
-----------------------------------------------------------------------------------
Net asset value, end of period ............ $11.31 $11.91 $12.08 $11.66 $11.46 $11.75
-----------------------------------------------------------------------------------
Total return* ............................. (2.41%) 4.73% 9.83% 8.16% 3.65% 7.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ......... $4,495,639 $4,847,001 $4,824,135 $4,704,745 $4,709,483 $4,725,056
Ratios to average net assets:
Expenses ................................. .60%** .59% .58% .59% .58% .57%
Net investment income .................... 5.60%** 5.30% 5.57% 5.87% 5.99% 6.39%
Portfolio turnover rate ................... 18.82% 13.34% 18.51% 11.18% 28.34% 40.56%
</TABLE>
*Total return does not reflect sales commission or the contingent deferred sales
charge, and is not annualized for periods less than one year.
**Annualized.
(1)Based on average shares outstanding.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------
SIX MONTHS ENDED
NOVEMBER 30, 1999 YEAR ENDED
(UNAUDITED)(1) MAY 31, 1999(2)
---------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ................................... $11.89 $12.06
---------------------------------------------
Income from investment operations:
Net investment income ................................................. .29 .77
Net realized and unrealized losses .................................... (.61) (.70)
---------------------------------------------
Total from investment operations ....................................... (.32) .07
---------------------------------------------
Less distributions from net investment income .......................... (.28) (.24)
---------------------------------------------
Net asset value, end of period ......................................... $11.29 $11.89
=============================================
Total return* .......................................................... (2.70%) .62%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ...................................... $32,140 $19,059
Ratios to average net assets:
Expenses .............................................................. 1.17%** 1.16%**
Net investment income ................................................. 5.02%** 4.72%**
Portfolio turnover rate ................................................ 18.82% 13.34%
</TABLE>
*Total return does not reflect sales commission or the contingent deferred sales
charge, and is not annualized for periods less than one year.
**Annualized.
(1)Based on average shares outstanding.
(2)For the period January 1, 1999 (effective date) to May 31, 1999.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED MAY 31,
NOVEMBER 30, 1999 -------------------------------------------------------------
(UNAUDITED)(1) 1999 1998 1997 1996 1995(1,2)
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding
throughout the period)
Net asset value, beginning of period ...... $11.91 $12.07 $11.65 $11.45 $11.73 $11.50
---------------------------------------------------------------------------------
Income from investment operations:
Net investment income .................... .29 .62 .59 .63 .65 .05
Net realized and unrealized gains
(losses) ................................. (.61) (.12) .45 .21 (.29) .24
---------------------------------------------------------------------------------
Total from investment operations .......... (.32) .50 1.04 .84 .36 .29
---------------------------------------------------------------------------------
Less distributions from:
Net investment income .................... (.28) (.57) (.59) (.61) (.64) (.06)
Net realized gains ....................... -- (.09) (.03) (.03) -- --
---------------------------------------------------------------------------------
Total distributions ....................... (.28) (.66) (.62) (.64) (.64) (.06)
---------------------------------------------------------------------------------
Net asset value, end of period ............ $11.31 $11.91 $12.07 $11.65 $11.45 $11.73
=================================================================================
Total return* ............................. (2.69%) 4.20% 9.20% 7.52% 3.14% 2.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ......... $132,907 $139,756 $108,686 $74,195 $39,047 $1,913
Ratios to average net assets:
Expenses ................................. 1.17% 1.16% 1.16% 1.17% 1.16% 1.09%**
Net investment income .................... 5.02% 4.73% 4.98% 5.30% 5.43% 5.32%**
Portfolio turnover rate ................... 18.82% 13.34% 18.51% 11.18% 28.34% 40.56%
</TABLE>
*Total return does not reflect sales commission or the contingent deferred sales
charge, and is not annualized for periods less than one year.
**Annualized.
(1)Based on average shares outstanding.
(2)For the period May 1, 1995 (effective date) to May 31, 1995, the fund paid a
dividend to shareholders of record on the beginning of business, May 1,1995 in
the amount of $.06 per share. The net asset value per share includes this
dividend.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 99.1%
BONDS 97.0%
Albany Housing Authority Limited Obligation, Refunding, 6.25%, 10/01/12 ................ $5,250,000 $5,527,935
Albany IDA, Civic Facility Revenue, Albany Medical Center Project, 6.00%,
5/01/19 ............................................................................. 1,270,000 1,181,951
5/01/29 ............................................................................. 1,460,000 1,313,854
Albany Parking Authority Revenue, Refunding, Series A, 6.85%, 11/01/12 ................. 1,610,000 1,702,382
Appleridge Retirement Community Inc. Mortgage Revenue, Appleridge Project,
GNMA Secured,
5.60%, 9/01/21 ...................................................................... 2,150,000 2,081,566
5.70%, 9/01/31 ...................................................................... 3,000,000 2,876,760
Auburn IDA, MFR, Auburn Memorial Home, 6.50%, 2/01/34 .................................. 5,715,000 5,863,419
Batavia Housing Authority Mortgage Revenue, Washington Towers, Refunding, Series A,
6.50%, 1/01/23 .................................................................... 1,000,000 1,021,940
Battery Park City Authority Revenue, Refunding, Series A, 5.80%, 11/01/22 .............. 68,795,000 66,425,700
Bethany Retirement Home Inc. Mortgage Loan Revenue, 7.50%, 2/01/34 ..................... 8,160,000 8,934,710
Clinton County COP, Correctional Facilities Project, 8.125%, 8/01/17 ................... 5,375,000 6,442,959
Cortland County IDA, Civic Facilities Revenue, Cortland Memorial Hospital Inc. Project,
6.25%, 7/01/24 .................................................................... 6,400,000 6,091,712
Franklin County COP, Court House Redevelopment Project, 8.125%, 8/01/06 ................ 4,260,000 4,650,514
Franklin County IDA, Lease Revenue, County Correctional Facility Project,
6.75%, 11/01/12 ................................................................... 4,790,000 4,940,550
Guam Airport Authority Revenue, Series A, 6.50%, 10/01/23 .............................. 5,385,000 5,628,079
Guam Power Authority Revenue, Series A, Pre-Refunded,
6.625%, 10/01/14 .................................................................... 2,900,000 3,222,016
6.75%, 10/01/24 ..................................................................... 25,500,000 28,468,710
Hamilton Elderly Housing Corp. Mortgage Revenue, Hamilton Apartments Project,
11.25%, 1/01/15 .................................................................. 1,280,000 1,314,816
Ilion Elderly Housing Corp. Mortgage Revenue, Section 8 Housing Assistance Revenue,
7.25%, 7/01/09 .................................................................. 1,795,000 1,752,638
Long Island Power Authority Electric System Revenue, Refunding, Series A,
5.75%, 12/01/24 ..................................................................... 15,000,000 14,368,050
5.25%, 12/01/26 ..................................................................... 27,450,000 24,380,267
5.50%, 12/01/29 ..................................................................... 17,065,000 15,663,281
MBIA Insured, 5.25%, 12/01/26 ....................................................... 6,850,000 6,184,180
Monroe County IDAR, Civic Facilities, De Paul Community Facilities,
6.50%, 2/01/24 ................................................................... 1,285,000 1,354,005
MTA Commuter Facilities Revenue,
Series 8, 5.50%, 7/01/21 ............................................................ 5,000,000 4,670,800
Series A, 6.00%, 7/01/24 ............................................................ 4,450,000 4,421,476
Series A, 5.25%, 7/01/28 ............................................................ 18,300,000 16,050,930
Series A, 6.125%, 7/01/29 ........................................................... 9,625,000 9,634,721
Series A, FGIC Insured, 5.25%, 7/01/28 .............................................. 8,655,000 7,783,268
Series A, MBIA Insured, 5.625%, 7/01/27 ............................................. 8,000,000 7,607,840
Series A, Pre-Refunded, 6.50%, 7/01/24 .............................................. 35,620,000 38,709,679
Series C-1, FGIC Insured, 5.375%, 7/01/27 ........................................... 19,100,000 17,523,104
Series R, 5.50%, 7/01/17 ............................................................ 2,000,000 1,908,880
MTA Dedicated Tax Fund Revenue, Series A,
FSA Insured, 5.00%, 4/01/29 ......................................................... 25,800,000 22,131,240
MBIA Insured, 5.25%, 4/01/26 ........................................................ 13,000,000 11,748,230
MTA Service Contract Revenue,
Commuter Facilities, Refunding, Series 5, 6.50%, 7/01/16 ............................ 17,470,000 18,114,818
Commuter Facilities, Refunding, Series 5, 6.00%, 7/01/18 ............................ 2,740,000 2,741,863
Commuter Facilities, Refunding, Series N, 7.125%, 7/01/09 ........................... 24,160,000 25,963,544
Commuter Facilities, Series 5, 7.00%, 7/01/12 ....................................... 31,605,000 33,229,497
Transit Facilities, Refunding, Series 5, 7.00%, 7/01/12 ............................. 30,935,000 32,525,059
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
MTA Service Contract Revenue, (cont.)
Transit Facilities, Refunding, Series 5, 6.50%, 7/01/16 ............................... $40,495,000 $41,989,670
Transit Facilities, Refunding, Series 5, 6.00%, 7/01/18 ............................... 7,725,000 7,730,253
Transit Facilities, Refunding, Series N, 7.125%, 7/01/09 .............................. 12,625,000 13,567,456
Transit Facilities, Series 6, Pre-Refunded, 7.00%, 7/01/09 ............................ 2,000,000 2,121,680
MTA Transit Facilities Revenue, Series A,
6.00%, 7/01/24 ........................................................................ 7,000,000 6,955,130
6.125%, 7/01/29 ....................................................................... 11,595,000 11,606,711
FSA Insured, 5.50%, 7/01/22 ........................................................... 16,170,000 15,063,002
FSA Insured, 5.625%, 7/01/27 .......................................................... 14,440,000 13,510,930
FSA Insured, Pre-Refunded, 6.10%, 7/01/21 ............................................. 15,000,000 16,334,400
MBIA Insured, 5.625%, 7/01/25 ......................................................... 8,000,000 7,639,920
Nassau County Tabacco Settlement Corp., Asset Backed, Series A,
6.50%, 7/15/27 ..................................................................... 25,000,000 24,738,250
Nassau Health Care Corp. Health System Revenue, Nassau County Guaranteed,
FSA Insured, 5.75%, 8/01/29 ........................................................ 27,840,000 26,915,712
New Rochelle Municipal Housing Authority Revenue, Series A, 5.55%, 12/01/14 .............. 6,090,000 5,792,564
New York City GO,
Pre-Refunded, 7.00%, 2/01/17 .......................................................... 6,500,000 6,931,600
Refunding, Series F, 5.875%, 8/01/24 .................................................. 7,000,000 6,825,910
Series 1992, Rite 1, 7.00%, 10/01/11 .................................................. 12,750,000 13,611,135
Series A, 7.75%, 8/15/14 .............................................................. 135,000 143,258
Series A, 6.25%, 8/01/17 .............................................................. 2,675,000 2,739,334
Series A, Pre-Refunded, 7.75%, 8/15/13 ................................................ 2,000,000 2,142,740
Series A, Pre-Refunded, 7.75%, 8/15/14 ................................................ 9,865,000 10,569,065
Series A-1, 6.625%, 8/01/25 ........................................................... 13,360,000 13,934,881
Series A-1, Pre-Refunded, 6.625%, 8/01/25 ............................................. 3,640,000 4,008,623
Series B, 7.00%, 6/01/13 .............................................................. 10,000 10,452
Series B, 7.00%, 6/01/14 .............................................................. 20,000 20,889
Series B, 7.00%, 6/01/15 .............................................................. 10,000 10,433
Series B, 6.75%, 10/01/15 ............................................................. 15,000 15,822
Series B, 7.00%, 2/01/18 .............................................................. 1,245,000 1,306,852
Series B, 6.00%, 8/15/26 .............................................................. 6,780,000 6,699,250
Series B, Pre-Refunded, 7.75%, 2/01/10 ................................................ 2,000,000 2,163,380
Series B, Pre-Refunded, 7.75%, 2/01/11 ................................................ 5,000,000 5,408,450
Series B, Pre-Refunded, 7.75%, 2/01/12 ................................................ 500,000 540,845
Series B, Pre-Refunded, 7.75%, 2/01/13 ................................................ 1,875,000 2,028,169
Series B, Pre-Refunded, 7.75%, 2/01/14 ................................................ 10,950,000 11,844,506
Series B, Pre-Refunded, 7.00%, 6/01/14 ................................................ 6,705,000 7,072,702
Series B, Pre-Refunded, 7.75%, 2/01/15 ................................................ 22,610,000 24,457,011
Series B, Pre-Refunded, 7.00%, 6/01/15 ................................................ 4,240,000 4,472,522
Series B, Pre-Refunded, 6.75%, 10/01/15 ............................................... 1,485,000 1,596,004
Series B, Pre-Refunded, 7.00%, 2/01/18 ................................................ 240,000 255,936
Series B, Pre-Refunded, 6.00%, 8/15/26 ................................................ 915,000 986,096
Series B, Sub Series B-1, Pre-Refunded, 7.00%, 8/15/16 ................................ 2,000,000 2,219,460
Series B, Sub Series B-1, Pre-Refunded, 7.50%, 8/15/20 ................................ 10,000,000 11,284,000
Series C, 7.00%, 2/01/12 .............................................................. 705,000 707,630
Series C, 5.50%, 11/15/37 ............................................................. 18,545,000 16,881,514
Series C, Pre-Refunded, 7.20%, 8/15/14 ................................................ 4,000,000 4,193,880
Series C, Sub Series C-1, 7.00%, 8/01/16 .............................................. 10,000 10,585
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York City GO, (cont.)
Series C, Sub Series C-1, Pre-Refunded, 7.00%, 8/01/16 .............................. $4,490,000 $4,844,486
Series D, 8.00%, 8/01/17 ............................................................ 5,000 5,314
Series D, 7.50%, 2/01/18 ............................................................ 40,000 42,518
Series D, 5.25%, 8/01/21 ............................................................ 14,500,000 13,028,105
Series D, Pre-Refunded, 8.25%, 8/01/13 .............................................. 4,820,000 5,196,297
Series D, Pre-Refunded, 8.00%, 8/01/17 .............................................. 3,675,000 3,947,318
Series D, Pre-Refunded, 7.50%, 2/01/18 .............................................. 160,000 172,427
Series F, Pre-Refunded, 8.40%, 11/15/08 ............................................. 7,500,000 8,185,875
Series F, Pre-Refunded, 8.40%, 11/15/09 ............................................. 3,350,000 3,656,358
Series F, Pre-Refunded, 6.625%, 2/15/25 ............................................. 11,240,000 12,304,316
Series G, 6.00%, 10/15/26 ........................................................... 9,815,000 9,698,005
Series G, Pre-Refunded, 6.00%, 10/15/26 ............................................. 85,000 91,503
Series H, 7.20%, 2/01/13 ............................................................ 800,000 847,016
Series H, 7.20%, 2/01/15 ............................................................ 430,000 454,093
Series H, 7.00%, 2/01/16 ............................................................ 300,000 315,216
Series H, 7.00%, 2/01/18 ............................................................ 160,000 167,949
Series H, Pre-Refunded, 7.20%, 2/01/13 .............................................. 9,200,000 9,848,416
Series H, Pre-Refunded, 7.20%, 2/01/14 .............................................. 4,000,000 4,281,920
Series H, Pre-Refunded, 7.20%, 2/01/15 .............................................. 4,170,000 4,463,902
Series H, Pre-Refunded, 7.00%, 2/01/16 .............................................. 2,200,000 2,346,080
Series H, Pre-Refunded, 7.00%, 2/01/18 .............................................. 4,065,000 4,339,266
Series I, 6.25%, 4/15/27 ............................................................ 4,940,000 4,991,821
Series I, Pre-Refunded, 6.25%, 4/15/27 .............................................. 4,560,000 4,962,511
Series J, MBIA Insured, 5.125%, 5/15/29 ............................................. 4,600,000 4,023,804
Series K, Pre-Refunded, 6.25%, 4/01/26 .............................................. 9,000,000 9,793,890
Unlimited, Series A, Pre-Refunded, 7.75%, 8/15/15 ................................... 1,400,000 1,499,918
Unlimited, Series B, Pre-Refunded, 7.00%, 6/01/13 ................................... 350,000 369,194
New York City HDC, MFMR,
Refunding, Series A, FHA Insured, 6.55%, 10/01/15 ................................... 19,450,000 20,057,229
Series A, FHA Insured, 6.55%, 4/01/18 ............................................... 10,000,000 10,279,600
Series A, FHA Insured, 6.60%, 4/01/30 ............................................... 51,500,000 53,034,700
New York City Health and Hospital Corp. Revenue, Series A, Pre-Refunded,
6.30%, 2/15/20 .................................................................. 84,635,000 90,641,546
New York City IDA, Civic Facility Revenue,
College of New Rochelle, 5.80%, 9/01/26 ............................................. 1,500,000 1,420,095
Federation Protestant Welfare, 6.95%, 11/01/11 ...................................... 2,300,000 2,348,231
The Lighthouse Inc. Project, Pre-Refunded, 6.50%, 7/01/22 ........................... 8,000,000 8,535,680
New York Blood Center Inc. Project, Pre-Refunded, 7.20%, 5/01/12 .................... 4,000,000 4,390,640
New York Blood Center Inc. Project, Pre-Refunded, 7.25%, 5/01/22 .................... 7,000,000 7,712,040
St. Christopher Ottilie Project, 7.50%, 7/01/21 ..................................... 2,500,000 2,636,675
New York City Municipal Water Finance Authority Water and Sewer System
Revenue, Refunding, 6.75%, 6/15/17 .................................................. 18,100,000 18,783,637
Refunding, Series A, 7.10%, 6/15/12 ................................................. 5,700,000 5,966,019
Refunding, Series A, 6.75%, 6/15/16 ................................................. 1,400,000 1,452,878
Refunding, Series A, 6.25%, 6/15/21 ................................................. 990,000 999,880
Refunding, Series A, 5.75%, 6/15/30 ................................................. 37,190,000 35,445,045
Refunding, Series A, AMBAC Insured, 5.125%, 6/15/22 ................................. 6,145,000 5,527,182
Refunding, Series B, FGIC Insured, 5.125%, 6/15/30 .................................. 4,000,000 3,517,560
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York City Municipal Water Finance Authority Water and
Sewer System Revenue, (cont.)
Refunding, Series B, FSA Insured, 5.00%, 6/15/29 .................................... $25,875,000 $22,346,168
Refunding, Series B, FSA Insured, 5.25%, 6/15/29 .................................... 5,000,000 4,522,150
Refunding, Series D, FGIC Insured, 4.75%, 6/15/25 ................................... 8,000,000 6,665,120
Refunding, Series D, FSA Insured, 4.75%, 6/15/25 .................................... 12,000,000 9,997,680
Refunding, Series D, MBIA Insured, 4.75%, 6/15/25 ................................... 21,500,000 17,912,510
Series A, FGIC Insured, 5.75%, 6/15/31 .............................................. 19,315,000 18,660,994
Series A, FGIC Insured, 5.50%, 6/15/32 .............................................. 6,025,000 5,604,214
Series A, Pre-Refunded, 7.10%, 6/15/12 .............................................. 30,000,000 31,555,200
Series A, Pre-Refunded, 7.00%, 6/15/15 .............................................. 2,875,000 3,018,153
Series B, 5.75%, 6/15/26 ............................................................ 18,455,000 17,704,066
Series B, 5.875%, 6/15/26 ........................................................... 10,250,000 10,001,028
Series B, MBIA Insured, 5.50%, 6/15/27 .............................................. 29,420,000 27,674,806
Series B, Pre-Refunded, 6.25%, 6/15/20 .............................................. 10,000,000 10,895,700
Series B, Pre-Refunded, 6.375%, 6/15/22 ............................................. 20,000,000 21,111,000
New York City Transitional Finance Authority Revenue, Future Tax Secured, Series A,
5.00%, 8/15/27 ..................................................................... 26,915,000 22,977,874
6.00%, 8/15/29 ..................................................................... 25,000,000 24,963,000
New York City Transportation Authority MTA, Triborough COP, Series A,
AMBAC Insured, 5.25%, 1/01/29 ................................................... 75,565,000 67,904,220
New York Housing Corp. Revenue, Series A, 5.50%, 11/01/20 .............................. 2,200,000 2,035,286
New York State Commissioner General Services People of the State of New York
Certificate of Lease Assignment, 5.70%, 3/01/29 ................................. 80,551,860 72,059,278
(b)5.75%, 3/01/29 ..................................................................... 38,067,255 34,301,262
New York State COP, Hanson Redevelopment Project,
8.25%, 11/01/01 ..................................................................... 3,685,000 3,832,289
8.375%, 5/01/08 ..................................................................... 18,045,000 20,497,135
New York State Dormitory Authority Lease Revenue,
Municipal Health Facilities Improvement Program, Series 1,
FSA Insured, 4.75%, 1/15/29 ..................................................... 6,500,000 5,341,505
State University Dormitory Facilities, Series B, MBIA Insured,
5.125%, 7/01/28 ................................................................. 4,800,000 4,234,944
State University Dormitory Facilities, Series C, MBIA Insured,
5.50%, 7/01/29 .................................................................. 5,250,000 4,929,698
New York State Dormitory Authority Revenue,
Bishop Henry B. Hucles Nursing Home, 6.00%, 7/01/24 ................................. 2,545,000 2,519,041
Buena Vida Nursing Home, Series A, 5.25%, 7/01/28 ................................... 4,730,000 4,142,960
City University System Consolidated, Second General, Refunding,
Series A, 6.00%, 7/01/17 ........................................................ 10,215,000 10,263,726
City University System Consolidated, Series 1, MBIA Insured,
5.125%, 7/01/27 ................................................................. 6,680,000 5,904,452
City University System Consolidated, Series C, 7.50%, 7/01/10 ....................... 14,900,000 16,838,937
City University System Consolidated, Series C, 6.00%, 7/01/16 ....................... 8,900,000 8,906,497
City University System Consolidated, Series D, 7.00%, 7/01/09 ....................... 3,430,000 3,748,338
City University System Consolidated, Third General, Refunding,
Series A, 6.00%, 7/01/16 ........................................................ 23,185,000 23,379,986
City University System Consolidated, Third General, Series 1,
5.50%, 7/01/29 .................................................................. 38,375,000 36,033,741
City University System, Refunding, Series U, 6.375%, 7/01/08 ........................ 1,140,000 1,202,312
(b)City University System, Series F, Pre-Refunded, 7.875%, 7/01/17 ..................... 40,000,000 41,682,400
City University System, Series U, Pre-Refunded, 6.375%, 7/01/08 ..................... 1,745,000 1,861,008
City University System, Series U, Pre-Refunded, 6.70%, 7/01/09 ...................... 5,405,000 5,792,971
City University System, Third General, 6.00%, 7/01/20 ............................... 13,000,000 12,968,800
City University System, Third General, Residence 2, 6.20%, 7/01/22 .................. 8,565,000 8,643,798
City University System, Third General, Residence 2, Pre-Refunded,
6.20%, 7/01/22 .................................................................. 19,990,000 21,820,684
City University System, Third General, Series 2, 6.00%, 7/01/26 ..................... 6,020,000 5,933,131
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State Dormitory Authority Revenue, (cont.)
City University System, Third General, Series 2, Pre-Refunded,
6.00%, 7/01/26 ................................................................. $11,300,000 $12,208,746
Department of Education, Pre-Refunded, 7.75%, 7/01/21 .............................. 2,530,000 2,710,566
Department of Health, 6.625%, 7/01/15 .............................................. 760,000 809,886
Department of Health, 6.20%, 7/01/17 ............................................... 7,650,000 7,764,827
Department of Health, 5.50%, 7/01/25 ............................................... 48,600,000 44,845,164
Department of Health, Pre-Refunded, 6.625%, 7/01/15 ................................ 4,595,000 5,090,525
Department of Health, Rosewell Park Cancer Center, Pre-Refunded,
6.625%, 7/01/24 ................................................................. 9,175,000 10,164,432
Department of Health, Veterans Home, 5.50%, 7/01/21 ................................ 7,000,000 6,539,120
Department of Health, Veterans Home, Pre-Refunded, 7.25%, 7/01/11 .................. 3,190,000 3,393,586
Department of Health, Veterans Home, Pre-Refunded, 7.25%, 7/01/21 .................. 9,775,000 10,398,841
Fashion Institute of Technology, 7.50%, 7/01/20 .................................... 2,115,000 2,183,632
Genessee Valley, Series A, FHA Insured, 6.90%, 2/01/32 ............................. 2,355,000 2,459,538
Good Samaritan Hospital Medical Center, Series A, MBIA Insured,
5.50%, 7/01/24 .................................................................. 5,000,000 4,704,950
Heritage House Nursing Center, 7.00%, 8/01/31 ...................................... 2,330,000 2,430,143
The Highlands Living, FHA Insured, 6.60%, 2/01/34 .................................. 3,745,000 3,872,742
Interfaith Medical Center, Series D, 5.40%, 2/15/28 ................................ 16,525,000 14,149,531
Long Island University, Asset Guaranteed, 5.125%, 9/01/23 .......................... 1,800,000 1,571,022
Long Island University, Asset Guaranteed, 5.25%, 9/01/28 ........................... 1,500,000 1,320,645
Long Island University, Pre-Refunded, 6.25%, 9/01/23 ............................... 5,495,000 5,997,298
Manhattan College, Refunding, 6.50%, 7/01/19 ....................................... 19,390,000 20,343,988
Mental Health Services Facilities, Refunding, 6.00%, 8/15/21 ....................... 1,800,000 1,793,322
Mental Health Services Facilities, Refunding, Series B, 5.75%, 8/15/12 ............. 2,165,000 2,205,031
Mental Health Services Facilities, Series A, 5.75%, 8/15/22 ........................ 1,390,000 1,340,405
Mental Health Services Facilities, Series A, 5.75%, 2/15/27 ........................ 9,370,000 8,948,256
(b)Mental Health Services Facilities, Series B, 5.00%, 2/15/29 ........................ 10,000,000 8,424,400
Mental Health Services Facilities Improvement, Series D, 5.25%, 2/15/17 ............ 1,355,000 1,249,500
Mental Health Services Facilities Improvement, Series D, 5.25%, 8/15/17 ............ 1,395,000 1,284,586
Mental Health Services Facilities Improvement, Series D, 5.25%, 2/15/18 ............ 1,430,000 1,310,581
Mental Health Services Facilities Improvement, Series D, 5.25%, 8/15/18 ............ 1,465,000 1,340,827
Montefiore Medical Center, AMBAC Insured, 5.45%, 8/01/29 ........................... 4,700,000 4,349,474
New York Hospital Medical Center, AMBAC Insured, 5.60%, 2/15/39 .................... 5,000,000 4,670,600
New York Medical College, Asset Guaranteed, Pre-Refunded, 6.875%, 7/01/21 .......... 5,375,000 5,783,500
Nursing Home, Arden Hill, FHA Insured, 5.85%, 8/01/26 .............................. 4,820,000 4,705,188
Nursing Home, Center for Nursing, FHA Insured, 5.55%, 8/01/37 ...................... 8,435,000 7,683,948
Nursing Home, St. John's Health Care Corp., Refunding, FHA Insured,
6.25%, 2/01/36 .................................................................. 34,265,000 34,522,330
Nursing Home, Wesley Garden, FHA Insured, 6.125%, 8/01/35 .......................... 2,000,000 1,984,020
Nyack Hospital, 6.25%, 7/01/13 ..................................................... 3,000,000 3,003,750
Our Lady of Mercy, Mortgage Revenue, FHA Insured, 6.30%, 8/01/32 ................... 5,835,000 6,012,034
Second Hospital, St. Clare's Hospital, Series B, 5.40%, 2/15/25 .................... 6,500,000 5,618,795
St. Agnes Hospital, Series A, 5.40%, 2/15/25 ....................................... 2,000,000 1,728,860
St. Francis Hospital, Series A, MBIA Insured, 5.50%, 7/01/29 ....................... 1,000,000 932,420
St. Lukes Home Residential Health, Series A, FHA Insured, 6.375%, 8/01/35 .......... 5,200,000 5,356,416
State University Athletic Facilities, Pre-Refunded, 7.25%, 7/01/12 ................. 2,565,000 2,728,698
State University Athletic Facilities, Pre-Refunded, 7.25%, 7/01/21 ................. 4,750,000 5,053,145
State University Educational Facilities, 5.75%, 5/15/16 ............................ 3,000,000 2,971,590
State University Educational Facilities, 5.125%, 5/15/21 ........................... 39,000,000 34,525,530
State University Educational Facilities, Series A, MBIA Insured,
4.75%, 5/15/25 .................................................................. 20,450,000 17,042,212
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State Dormitory Authority Revenue, (cont.)
State University Educational Facilities, Series B, 7.375%, 5/15/14 .................. $7,025,000 $7,242,283
State University Educational Facilities, Series B, 7.00%, 5/15/16 ................... 7,995,000 8,223,337
State University Educational Facilities, Series B, 4.75%, 5/15/28 ................... 8,050,000 6,480,331
State University Educational Facilities, Series B, MBIA Insured,
4.75%, 5/15/28 ...................................................................... 8,100,000 6,669,135
State University Educational Facilities, Series B, Pre-Refunded,
6.25%, 5/15/20 ...................................................................... 15,000,000 16,249,350
State University Educational Facilities, Series B, Pre-Refunded,
5.75%, 5/15/24 ...................................................................... 5,500,000 5,758,500
Upstate Community Colleges, Series A, 5.00%, 7/01/19 ................................ 7,230,000 6,365,509
Upstate Community Colleges, Series A, 6.00%, 7/01/22 ................................ 7,000,000 6,948,270
Upstate Community Colleges, Series A, 5.00%, 7/01/28 ................................ 25,675,000 21,662,511
Upstate Community Colleges, Series A, Pre-Refunded, 7.60%, 7/01/20 .................. 3,250,000 3,380,683
Upstate Community Colleges, Series A, Pre-Refunded, 6.125%, 7/01/27 ................. 11,845,000 12,902,166
Upstate Community Colleges, Series B, Pre-Refunded, 7.20%, 7/01/21 .................. 1,000,000 1,063,070
W.K. Nursing Home Corp, FHA Insured, 6.05%, 2/01/26 ................................. 6,800,000 6,728,872
New York State Energy Research and Development Authority
Electric Facilities Revenue, Consolidated Edison
Project, Refunding, Series A, 6.10%, 8/15/20 ........................................ 11,820,000 11,883,355
New York State Energy Research and Development Authority PCR,
Long Island Projects, 7.80%, 12/01/09 ............................................... 3,300,000 3,300,000
Series A, 7.50%, 12/01/06 ........................................................... 4,715,000 4,715,000
New York State Environmental Facilities Corp. Special Obligation PCR,
New York City Municipal Water Finance Authority Project,
Pre-Refunded, 6.875%, 6/15/14 ....................................................... 1,810,000 1,997,263
Series E, 6.875%, 6/15/14 ........................................................... 1,190,000 1,295,267
New York State Environmental Facilities Corp. Special Obligation,
Riverbank State Park, Pre-Refunded,
7.25%, 4/01/07 ...................................................................... 4,000,000 4,325,280
7.25%, 4/01/12 ...................................................................... 4,300,000 4,649,676
7.375%, 4/01/22 ..................................................................... 5,000,000 5,420,300
New York State HFA, Service Contract Obligation Revenue,
Refunding, Series C, 6.00%, 9/15/21 ................................................. 19,310,000 19,191,823
Refunding, Series C, 5.50%, 9/15/22 ................................................. 9,000,000 8,328,600
Series A, 7.25%, 9/15/12 ............................................................ 225,000 239,240
Series A, 6.375%, 9/15/15 ........................................................... 5,000,000 5,177,500
Series A, 5.50%, 9/15/22 ............................................................ 3,000,000 2,776,200
Series A, 6.50%, 3/15/24 ............................................................ 330,000 338,491
Series A, 6.50%, 3/15/25 ............................................................ 860,000 883,641
Series A, 6.00%, 3/15/26 ............................................................ 16,725,000 16,376,953
Series A, Pre-Refunded, 7.25%, 9/15/12 .............................................. 2,150,000 2,322,430
Series A, Pre-Refunded, 7.80%, 9/15/20 .............................................. 24,000,000 25,327,760
Series A, Pre-Refunded, 6.50%, 3/15/24 .............................................. 28,000,000 30,747,080
Series A, Pre-Refunded, 6.50%, 3/15/25 .............................................. 10,410,000 11,524,286
Series C, 6.30%, 9/15/12 ............................................................ 310,000 323,448
Series C, 6.125%, 3/15/20 ........................................................... 99,760,000 100,013,390
Series C, 6.30%, 3/15/22 ............................................................ 1,985,000 2,000,205
Series C, 5.50%, 3/15/25 ............................................................ 17,015,000 15,603,776
New York State HFAR,
Adult Care, Series A, FHA Insured, Pre-Refunded, 7.85%, 2/15/30 ..................... 1,935,000 2,022,714
Children's Rescue Fund Housing, Series A, 7.625%, 5/01/18 ........................... 5,285,000 5,460,356
Health Facilities of New York City, Refunding, Series A, 6.00%, 11/01/08 ............ 2,400,000 2,458,704
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State HFAR, (cont.)
Health Facilities of New York City, Refunding, Series A, 8.00%, 11/01/08 .............. $16,240,000 $17,040,794
Health Facilities of New York City, Series A, 6.00%, 5/01/07 .......................... 11,200,000 11,481,680
Health Facilities of New York City, Series A,
Pre-Refunded, 8.00%, 11/01/08 ..................................................... 80,410,000 84,888,837
(b)Housing Project Mortgage, Refunding, Series A, FSA Insured,
6.10%, 11/01/15 ................................................................... 25,650,000 26,326,391
(b)Housing Project Mortgage, Refunding, Series A, FSA Insured,
6.125%, 11/01/20 .................................................................. 31,145,000 31,705,610
MFHR, Second Mortgage, Series A, 7.00%, 8/15/23 ....................................... 4,245,000 4,410,597
MFHR, Second Mortgage, Series C, 6.60%, 8/15/27 ....................................... 5,500,000 5,705,535
MFHR, Second Mortgage, Series D, 6.25%, 8/15/23 ....................................... 2,500,000 2,554,700
MFHR, Second Mortgage, Series E, 6.75%, 8/15/25 ....................................... 6,820,000 7,153,566
MFMR, Refunding, Series C, FHA Insured, 6.45%, 8/15/14 ................................ 1,000,000 1,039,610
MFMR, Series A, FHA Insured, 7.00%, 8/15/22 ........................................... 4,885,000 5,160,465
MFMR, Series A, FHA Insured, 7.10%, 8/15/35 ........................................... 8,630,000 9,007,563
MFMR, Series B, AMBAC Insured, 6.25%, 8/15/14 ......................................... 2,715,000 2,821,700
MFMR, Series B, AMBAC Insured, 6.35%, 8/15/23 ......................................... 33,960,000 35,133,318
MFMR, Series B, FHA Insured, 8.50%, 5/15/28 ........................................... 12,575,000 12,598,767
MFMR, Series C, FHA Insured, 6.50%, 8/15/24 ........................................... 6,870,000 7,105,366
New York State Local Government Assistance Corp., Series A, 6.00%, 4/01/24 ............... 11,200,000 11,198,880
New York State Medical Care Facilities Finance Agency Revenue,
Beth Israel Medical Center Project, Refunding, Series A, 7.20%, 11/01/14 .............. 9,145,000 9,166,582
Hospital and Nursing, Series B, FHA Insured, 6.95%, 2/15/32 ........................... 19,915,000 20,886,653
Hospital and Nursing, Series B, Pre-Refunded, 6.95%, 2/15/32 .......................... 4,085,000 4,378,630
Hospital and Nursing, Series C, FHA Insured, 6.65%, 8/15/32 ........................... 14,310,000 14,903,865
Hospital and Nursing, Series C, FHA Insured, Pre-Refunded,
6.65%, 8/15/32 ..................................................................... 690,000 742,061
Hospital and Nursing Home, Insured Mortgage, Series A, FHA Insured,
Pre-Refunded, 6.20%, 2/15/21 ....................................................... 4,915,000 5,298,911
Hospital and Nursing Home, Methodist Medical Center, Series A,
FHA Insured, Pre-Refunded, 6.70%, 8/15/23 .......................................... 5,500,000 5,914,590
Hospital and Nursing Home, Mortgage Revenue, Refunding, Series A,
FHA Insured, 6.20%, 2/15/23 ........................................................ 5,050,000 5,120,953
Hospital and Nursing Home, Mortgage Revenue, Refunding, Series B,
FHA Insured, 6.25%, 2/15/25 ........................................................ 2,635,000 2,699,320
Hospital and Nursing Home, Mortgage Revenue, Refunding, Series B,
FHA Insured, 6.25%, 2/15/35 ........................................................ 4,745,000 4,831,406
Hospital and Nursing Home, Mortgage Revenue, Series A,
FHA Insured, 6.125%, 2/15/15 ....................................................... 6,415,000 6,546,957
Hospital and Nursing Home, Mortgage Revenue, Series A,
FHA Insured, 6.30%, 8/15/23 ........................................................ 9,000,000 9,046,350
Hospital and Nursing Home, Mortgage Revenue, Series A,
FHA Insured, 6.25%, 2/15/27 ........................................................ 12,235,000 12,485,083
Hospital and Nursing Home, Mortgage Revenue, Series A,
FHA Insured, 6.20%, 2/15/28 ........................................................ 26,910,000 27,343,520
Hospital and Nursing Home, Mortgage Revenue, Series A,
FHA Insured, 6.375%, 8/15/33 ....................................................... 7,940,000 7,989,546
Hospital and Nursing Home, Mortgage Revenue, Series A,
FHA Insured, 6.50%, 2/15/34 ........................................................ 10,885,000 11,258,682
Hospital and Nursing Home, Mortgage Revenue, Series C,
FHA Insured, 6.50%, 8/15/21 ........................................................ 8,000,000 8,342,400
Hospital and Nursing Home, Mortgage Revenue, Series C,
FHA Insured, 6.20%, 8/15/23 ........................................................ 21,540,000 21,813,558
Hospital and Nursing Home, Mortgage Revenue, Series C,
FHA Insured, 9.00%, 2/15/26 ........................................................ 1,795,000 1,857,466
Hospital and Nursing Home, Mortgage Revenue, Series C,
FHA Insured, 6.375%, 8/15/29 ....................................................... 86,865,000 90,707,908
Hospital and Nursing Home, Mortgage Revenue, Series D,
FHA Insured, Pre-Refunded, 6.45%, 2/15/32 .......................................... 55,500,000 59,684,700
Hospital and Nursing Home, Refunding, Series B,
FHA Insured, 6.125%, 8/15/24 ....................................................... 25,000,000 25,004,000
The Hospital for Special Surgery Revenue, Series A,
Pre-Refunded, 6.375%, 8/15/24 ..................................................... 6,025,000 6,577,252
The Hospital for Special Surgery Revenue, Series A,
Pre-Refunded, 6.45%, 8/15/34 ...................................................... 36,650,000 40,124,420
Hospital Mortgage, Series A, AMBAC Insured, Pre-Refunded, 6.80%, 8/15/24 .............. 3,200,000 3,561,504
Hospital Mortgage, Series A, AMBAC Insured, Pre-Refunded, 6.50%, 8/15/29 .............. 5,125,000 5,633,759
Hospital Mortgage, Series A, AMBAC Insured, Pre-Refunded, 6.90%, 8/15/34 .............. 31,210,000 34,878,423
Huntington Hospital Mortgage, Project A, Refunding, 6.50%, 11/01/14 ................... 4,000,000 4,127,480
Medina Memorial Hospital Project, Series A, 7.30%, 5/01/11 ............................ 2,670,000 2,789,643
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State Medical Care Facilities Finance Agency Revenue, (cont.)
Mental Health Services Facilities, Series A, 8.875%, 8/15/07 ........................ $25,960,000 $26,114,462
Mental Health Services Facilities, Series A, 7.70%, 2/15/18 ......................... 3,370,000 3,389,108
Mortgage Revenue Project, Series A, FHA Insured, 6.50%, 2/15/35 ..................... 3,800,000 3,931,746
Mortgage Revenue Project, Series B, 6.60%, 8/15/34 .................................. 23,775,000 24,562,904
Mortgage Revenue Project, Series B, FHA Insured, 6.15%, 2/15/25 ..................... 9,060,000 9,079,841
Mortgage Revenue Project, Series B, FHA Insured, 6.15%, 2/15/35 ..................... 2,200,000 2,190,320
Mortgage Revenue Project, Series C, FHA Insured, 6.375%, 8/15/29 .................... 10,200,000 10,401,960
Mortgage Revenue Project, Series D, FHA Insured, 6.20%, 2/15/35 ..................... 6,250,000 6,314,000
Mortgage Revenue Project, Series E, FHA Insured, 6.375%, 2/15/35 .................... 13,200,000 13,475,748
Mortgage Revenue Project, Series F, FHA Insured, 6.30%, 8/15/25 ..................... 16,400,000 16,687,984
Mortgage Revenue Project, Series F, FHA Insured, 6.375%, 8/15/34 .................... 21,050,000 21,489,735
Saranac Lake General Hospital Project Revenue, Series A,
Pre-Refunded, 7.875%, 11/01/10 ................................................... 1,305,000 1,372,247
Second Mortgage, Health Care Project Revenue, Series B, 6.35%, 11/01/14 ............. 1,410,000 1,461,310
Secured Hospital Revenue, Series A, 6.25%, 2/15/24 .................................. 16,770,000 16,319,893
Secured Hospital Revenue, Series A, Pre-Refunded, 7.35%, 8/15/11 .................... 22,150,000 23,690,311
Secured Hospital Revenue, Series A, Pre-Refunded, 7.40%, 8/15/21 .................... 55,225,000 59,110,079
Security Mortgage Program Revenue, Adult Day Care, 6.375%, 11/15/20 ................. 18,930,000 19,810,813
Series A, FHA Insured, 7.45%, 8/15/31 ............................................... 20,180,000 21,385,957
Series A, FHA Insured, Pre-Refunded, 7.45%, 8/15/31 ................................. 7,875,000 8,435,385
Series D, FHA Insured, 6.60%, 2/15/31 ............................................... 6,665,000 6,936,999
Series D, FHA Insured, Pre-Refunded, 6.60%, 2/15/31 ................................. 6,710,000 7,245,592
New York State Mortgage Agency Revenue,
8th Series A, 6.875%, 4/01/17 ....................................................... 11,750,000 11,748,238
29th Series B, 6.45%, 4/01/15 ....................................................... 17,250,000 17,608,283
Homeowners Mortgage, 37th Series A, 6.375%, 10/01/14 ................................ 6,225,000 6,406,210
Homeowners Mortgage, 37th Series A, 6.45%, 10/01/17 ................................. 9,000,000 9,273,600
Homeowners Mortgage, Series 27, 6.90%, 4/01/15 ...................................... 5,000,000 5,229,650
Homeowners Mortgage, Series 41, 6.50%, 10/01/17 ..................................... 9,880,000 10,206,732
Homeowners Mortgage, Series 43, MBIA Insured, 6.45%, 10/01/17 ....................... 3,800,000 3,992,014
Homeowners Mortgage, Series 45, 7.20%, 10/01/17 ..................................... 23,730,000 24,950,671
Homeowners Mortgage, Series 47, 6.375%, 10/01/17 .................................... 26,780,000 27,486,456
Homeowners Mortgage, Series 51, 6.40%, 10/01/17 ..................................... 9,945,000 10,274,378
Homeowners Mortgage, Series 57, 6.25%, 10/01/15 ..................................... 10,000,000 10,320,600
Homeowners Mortgage, Series 57, 6.30%, 10/01/17 ..................................... 7,330,000 7,559,502
Homeowners Mortgage, Series 57, 6.375%, 10/01/27 .................................... 8,590,000 8,803,032
Homeowners Mortgage, Series 61, 5.90%, 4/01/27 ...................................... 4,040,000 4,017,901
New York State Tollway Authority General Revenue,
Refunding, Series E, 5.00%, 1/01/25 ................................................. 3,360,000 2,899,747
Series D, 5.375%, 1/01/27 ........................................................... 10,975,000 10,061,880
New York State Tollway Authority Service Contract Revenue,
Local Highway and Bridge, 5.75%, 4/01/19 ......................................... 20,000,000 19,187,800
Pre-Refunded, 7.25%, 1/01/10 ........................................................ 750,000 788,490
Pre-Refunded, 6.25%, 4/01/14 ........................................................ 23,970,000 26,051,795
New York State Urban Development Corp. Revenue,
Cornell Center Project, 6.00%, 1/01/14 .............................................. 4,500,000 4,558,545
Correctional Capital Facilities, Series 4, 5.375%, 1/01/23 .......................... 11,210,000 10,210,068
Correctional Capital Facilities, Series 5, Pre-Refunded, 6.25%, 1/01/20 ............. 81,350,000 88,191,535
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State Urban Development Corp. Revenue, (cont.)
Correctional Capital Facilities, Series 6, 5.375%, 1/01/25 .......................... $14,260,000 $12,889,329
Correctional Capital Facilities, Series 7, 5.70%, 1/01/16 ........................... 3,000,000 2,950,290
Correctional Capital Facilities, Series 7, 5.70%, 1/01/27 ........................... 40,000,000 37,839,600
Correctional Facilities Service Contract, Series A, 5.00%, 1/01/28 .................. 14,000,000 11,826,500
Correctional Facilities Service Contract, Series B, 5.00%, 1/01/25 .................. 21,055,000 17,954,862
Correctional Facilities Service Contract, Series B, AMBAC Insured,
4.75%, 1/01/28 .................................................................. 2,000,000 1,646,120
Correctional Facilities Service Contract, Series C, AMBAC Insured,
6.00%, 1/01/29 .................................................................. 34,135,000 34,158,553
Onondaga County Convention Project, Refunding, 6.25%, 1/01/20 ....................... 28,325,000 28,735,146
Youth Facilities, 6.00%, 4/01/15 .................................................... 8,500,000 8,599,535
Niagara Falls City School District COP, High School Facilities, 5.375%,
6/15/28 ......................................................................... 10,000,000 8,745,900
Oneida Health Care Corp. Mortgage Revenue, Oneida Health Care, Series A,
FHA Insured, 7.20%, 8/01/31 ..................................................... 2,155,000 2,222,947
Oneida-Herkimer Solid Waste Management Authority
Solid Waste Systems Revenue, Refunding,
6.20%, 4/01/00 ...................................................................... 1,390,000 1,400,203
6.30%, 4/01/01 ...................................................................... 1,035,000 1,061,900
6.40%, 4/01/02 ...................................................................... 1,930,000 2,011,774
6.50%, 4/01/03 ...................................................................... 2,075,000 2,196,512
6.65%, 4/01/05 ...................................................................... 1,115,000 1,204,579
6.75%, 4/01/14 ...................................................................... 655,000 665,428
Pre-Refunded, 6.75%, 4/01/14 ........................................................ 20,100,000 21,808,701
Otsego County IDA, Civic Facility Revenue, Hartwick College Project,
Series A, 5.50%, 7/01/19 ......................................................... 3,400,000 3,128,476
Port Authority of New York and New Jersey Revenue,
Consolidated 67th Series, 6.875%, 1/01/25 ........................................... 1,675,000 1,694,681
Consolidated 74th Series, 6.75%, 8/01/26 ............................................ 4,400,000 4,552,856
Delta Air Lines Special Project, Series 1, 6.95%, 6/01/08 ........................... 17,000,000 17,957,950
Port Jervis IDA, Mercy Community Hospital Revenue,
Franciscan Health Partnership, 5.50%, 11/01/16 .................................. 1,000,000 898,240
Puerto Rico Commonwealth Highway and Transportation Authority Revenue,
Series A, 5.00%, 7/01/38 ............................................................ 12,000,000 10,094,760
Series Y, 5.00%, 7/01/36 ............................................................ 4,000,000 3,409,840
Puerto Rico Commonwealth Urban Renewal and Housing Corp. ...............................
Commonwealth Appropriation, Refunding, 7.875%, 10/01/04 ......................... 8,100,000 8,275,770
Puerto Rico Electric Power Authority Revenue, Series T,
6.00%, 7/01/16 ...................................................................... 5,575,000 5,680,646
Pre-Refunded, 6.375%, 7/01/24 ....................................................... 15,565,000 17,033,869
Puerto Rico Industrial Medical and Environmental Pollution Control
Facilities Financing Authority Revenue, 6.45%, 12/01/25 ........................ 21,015,000 21,465,351
Puerto Rico Municipal Finance Agency, Series A, 6.50%, 7/01/19 ......................... 11,000,000 11,850,300
Rensselaer Municipal Leasing Corp. Leasehold Mortgage Revenue,
Rensselaer County Nursing Home,
Series A, 6.90%, 6/01/24 ............................................................ 10,000,000 10,407,400
Series B, 6.90%, 6/01/24 ............................................................ 3,345,000 3,481,275
St. Lawrence County IDA, Civic Facility Revenue,
Clarkson University Project, Series A, 5.50%, 7/01/29 ........................... 6,000,000 5,448,600
Suffolk County IDA Civic Facilities Revenue,
Dowling College, Pre-Refunded, 8.25%, 12/01/20 .................................. 4,500,000 4,773,915
Suffolk County Judicial Facilities Agency Service
Agreement Revenue, John P Cohalan Complex, AMBAC Insured,
5.00%, 4/15/16 .................................................................. 2,720,000 2,510,750
Sunnybrook Elderly Housing Corp. Mortgage Revenue, Sunnybrook
Apartments Project, 11.25%, 12/01/14 ............................................ 1,250,000 1,282,413
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Syracuse IDA, Civic Facility Revenue,
Crouse Health Hospital Inc., Project A, 5.25%, 1/01/16 ................................ $4,000,000 $3,487,560
Crouse Health Hospital Inc., Project A, 5.375%, 1/01/23 ............................... 4,760,000 4,058,709
St. Joseph's Hospital Health Center Project, Pre-Refunded, 7.50%, 6/01/18 ............. 2,000,000 2,130,420
Triborough Bridge and Tunnel Authority Revenue, General Purpose, Series B,
5.20%, 1/01/27 ........................................................................ 15,000,000 13,311,450
5.50%, 1/01/30 ........................................................................ 32,185,000 29,912,095
MBIA Insured, 5.20%, 1/01/27 .......................................................... 4,110,000 3,662,298
TSASC Inc. New York, Series 1, 6.25%,
7/15/27 ............................................................................... 35,000,000 34,298,250
7/15/34 ............................................................................... 40,000,000 38,894,000
Ulster County Resource Recovery Agency Solid Waste System Revenue,
6.00%, 3/01/14 ..................................................................... 8,620,000 8,610,863
Utica IDA, Civic Facility Revenue, Munson Williams Proctor Institute,
Series A, 5.50%, 7/15/29 ........................................................... 9,915,000 9,192,791
Virgin Islands PFA Revenue, Fund Loan Notes, senior lien, Refunding, Series A,
5.50%, 10/01/15 ....................................................................... 2,500,000 2,315,400
5.50%, 10/01/18 ....................................................................... 2,500,000 2,258,100
Virgin Islands Water and Power Authority Electric System Revenue,
Series A, Pre-Refunded, 7.40%, 7/01/11 ............................................. 2,750,000 2,925,698
Warren and Washington Counties IDAR, Adirondack Resource Recovery Project,
Refunding, Series A, 7.90%, 12/15/07 .............................................. 34,270,000 34,587,340
Yonkers GO, Series A, 9.20%,
2/01/01 ............................................................................... 500,000 523,805
2/01/03 ............................................................................... 1,090,000 1,216,800
2/01/04 ............................................................................... 1,095,000 1,253,348
2/01/05 ............................................................................... 1,095,000 1,280,657
-------------
TOTAL BONDS (COST $4,464,227,120) 4,520,202,204
=============
ZERO COUPON BONDS 2.1%
MTA Service Contract Revenue,
Commuter Facilities, Refunding, Series 7, 7/1/10 ...................................... 7,500,000 4,259,774
Commuter Facilities, Refunding, Series 7, 7/1/11 ...................................... 7,590,000 4,040,611
Commuter Facilities, Refunding, Series 7, 7/1/13 ...................................... 2,065,000 961,463
Transit Facilities, Refunding, Series 7, 7/1/09 ....................................... 13,125,000 7,908,205
Transit Facilities, Refunding, Series 7, 7/1/10 ....................................... 9,000,000 5,111,729
Transit Facilities, Refunding, Series 7, 7/1/11 ....................................... 21,200,000 11,286,031
Transit Facilities, Refunding, Series 7, 7/1/12 ....................................... 15,380,000 7,659,547
Transit Facilities, Refunding, Series 7, 7/1/13 ....................................... 7,935,000 3,694,535
New York City GO,
Citysavers, Series B, 8/1/09 .......................................................... 8,875,000 5,359,168
Citysavers, Series B, 6/1/12 .......................................................... 1,030,000 519,098
Citysavers, Series B, 12/1/12 ......................................................... 1,030,000 505,060
Citysavers, Series B, 6/1/13 .......................................................... 1,030,000 484,995
Citysavers, Series B, 12/1/13 ......................................................... 1,030,000 471,646
Citysavers, Series B, 6/1/14 .......................................................... 1,030,000 452,251
Citysavers, Series B, 12/1/14 ......................................................... 1,030,000 439,583
Citysavers, Series B, 6/1/15 .......................................................... 1,030,000 422,166
Citysavers, Series B, 12/1/15 ......................................................... 1,030,000 410,187
Citysavers, Series B, 6/1/16 .......................................................... 1,030,000 394,737
</TABLE>
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
ZERO COUPON BONDS (CONT.)
New York City GO, (cont.)
Citysavers, Series B, 12/1/16 .......................................................... $ 1,030,000 $ 383,428
Citysavers, Series B, 6/1/17 ........................................................... 1,030,000 369,914
Citysavers, Series B, 12/1/17 .......................................................... 1,030,000 359,243
Citysavers, Series B, 6/1/18 ........................................................... 1,030,000 344,525
Citysavers, Series B, 12/1/18 .......................................................... 1,005,000 326,354
Citysavers, Series B, 6/1/19 ........................................................... 1,030,000 322,884
Citysavers, Series B, 12/1/19 .......................................................... 1,030,000 313,419
Citysavers, Series B, 6/1/20 ........................................................... 10,000,000 2,936,100
M-Raes, Series 29, Pre-Refunded, zero cpn. to 3/15/00, 8.00% thereafter, 3/15/12 ....... 2,500,000 2,508,425
M-Raes, Series 30, Pre-Refunded, zero cpn. to 3/15/00, 8.00% thereafter, 3/15/13 ....... 3,875,000 3,888,059
M-Raes, Series 36, zero cpn. to 10/01/02, 8.00% thereafter, 10/01/14 ................... 17,400,000 14,991,491
Series A-2,8/1/10 ...................................................................... 2,690,000 1,530,556
Orangetown Housing Authority Facilities Revenue, Senior Housing Center Project, Refunding,
MBIA Insured, 4/01/30 ..................................................................... 21,170,000 3,411,969
Triborough Bridge and Tunnel Authority Revenue, Convention Center Project, Series E, 1/01/12 21,625,000 11,072,216
--------------
TOTAL ZERO COUPON BONDS (COST $60,606,072) ................................................. 97,139,369
--------------
TOTAL LONG TERM INVESTMENTS (COST $4,524,833,192) .......................................... 4,617,341,573
--------------
(a)SHORT-TERM INVESTMENTS .6%
Long Island Power Authority Electric System Revenue, Sub Series 5, Daily VRDN and Put,
3.60%, 5/01/33 ............................................................................ 8,700,000 8,700,000
New York City Municipal Water Finance Authority Water and Sewer System Revenue,
Series C, FGIC Insured, Daily VRDN and Put, 3.80%, 6/15/22 ............................. 2,050,000 2,050,000
Series C, FGIC Insured, Daily VRDN and Put, 3.80%, 6/15/23 ............................. 14,100,000 14,100,000
Series G, FGIC Insured, Daily VRDN and Put, 3.60%, 6/15/24 ............................. 2,900,000 2,900,000
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $27,750,000) ............................................ 27,750,000
--------------
TOTAL INVESTMENTS (COST $4,552,583,192) 99.7% .............................................. 4,645,091,573
OTHER ASSETS, LESS LIABILITIES .3% ......................................................... 15,594,387
--------------
NET ASSETS 100.0% .......................................................................... $4,660,685,960
==============
</TABLE>
See glossary of terms on page 32.
(a) Variable rate demand notes (VRDNs) 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 at specified dates.
(b) Sufficient collateral has been segregated for securities traded on a
when-issued or delayed delivery basis.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS, NOVEMBER 30, 1999 (UNAUDITED) (CONT.)
GLOSSARY OF TERMS
- --------------------------------------------------------------------------------
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance (some of the securities shown as FSA
Insured were originally insured by Capital Guaranty Insurance Co. (CGIC)
which was acquired by FSA in 1995 and no longer does business under this
name).
GNMA - Government National Mortgage Association
GO - General Obligation
HDC - Housing Development Corp.
HFA - Housing Finance Authority/Agency
HFAR - Housing Finance Authority/Agency Revenue
IDA - Industrial Development Authority/Agency
IDAR - Industrial Development Authority/Agency Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MFHR - Multi-Family Housing Revenue
MFMR - Multi-Family Mortgage Revenue
MFR - Multi-Family Revenue
MTA - Metropolitan Transportation Authority
PFA - Public Financing Authority
PCR - Pollution Control Revenue
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities:
Cost ................................................ $ 4,552,583,192
===============
Value ............................................... 4,645,091,573
Receivables:
Investment securities sold .......................... 24,071,150
Capital shares sold ................................. 2,521,219
Dividends and interest .............................. 82,529,585
---------------
Total assets .................................... 4,754,213,527
---------------
Liabilities:
Payables:
Investment securities purchased ..................... 81,692,241
Capital shares redeemed ............................. 8,319,824
Affiliates .......................................... 2,651,591
Shareholders ........................................ 796,191
Funds advanced by custodian .......................... 8,498
Other liabilities .................................... 59,222
---------------
Total liabilities ............................... 93,527,567
---------------
Net assets, at value ........................... $ 4,660,685,960
===============
Net assets consist of:
Undistributed net investment income .................. $ 5,499,449
Net unrealized appreciation .......................... 92,508,381
Accumulated net realized loss ........................ (6,457,007)
Capital shares ....................................... 4,569,135,137
---------------
Net assets, at value ............................ $ 4,660,685,960
===============
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Financial Statements (continued)
STATEMENT OF ASSETS AND LIABILITIES (CONT.)
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<S> <C>
CLASS A:
Net assets, at value .............................................................. $4,495,638,803
==============
Shares outstanding ................................................................ 397,495,171
==============
Net asset value per share* ........................................................ $11.31
==============
Maximum offering price per share (net asset value per share / 95.75%, respectively) $11.81
==============
CLASS B:
Net assets, at value .............................................................. $ 32,140,003
==============
Shares outstanding ................................................................ 2,845,651
==============
Net asset value and maximum offering price per share* ............................. $ 11.29
==============
CLASS C:
Net assets, at value .............................................................. $ 132,907,154
==============
Shares outstanding ................................................................ 11,754,491
==============
Net asset value per share* ........................................................ $11.31
==============
Maximum offering price per share (net asset value per share / 99.00%, respectively) $11.42
==============
</TABLE>
*Redemption price is equal to net asset value less any applicable contingent
deferred sales charge.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest .......................................... $ 148,830,369
-------------
Expenses:
Management fees (Note 3) .......................... 10,902,974
Distribution fees (Note 3)
Class A .......................................... 1,822,867
Class B .......................................... 86,010
Class C .......................................... 446,238
Transfer agent fees (Note 3) ...................... 1,076,863
Custodian fees .................................... 29,607
Reports to shareholders ........................... 200,096
Registration and filing fees ...................... 31,295
Professional fees (Note 3) ........................ 58,904
Trustees' fees and expenses ....................... 42,218
Other ............................................. 73,028
-------------
Total expenses ............................... 14,770,100
-------------
Net investment income ....................... 134,060,269
-------------
Realized and unrealized losses:
Net realized loss from investments ................ (32,597,549)
Net unrealized depreciation on investments ........ (221,436,490)
-------------
Net realized and unrealized loss ................... (254,034,039)
-------------
Net decrease in net assets resulting from operations $(119,973,770)
=============
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
AND THE YEAR ENDED MAY 31, 1999
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1999 MAY 31, 1999
-----------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ............................................. $ 134,060,269 $ 264,335,642
Net realized gain (loss) from investments ......................... (32,597,549) 34,770,841
Net unrealized depreciation on investments ........................ (221,436,490) (68,274,888)
---------------------------------
Net increase (decrease) in net assets resulting from operations (119,973,770) 230,831,595
Distributions to shareholders from:
Net investment income:
Class A .......................................................... (127,443,839) (259,311,860)
Class B .......................................................... (620,136) (144,441)
Class C .......................................................... (3,334,062) (5,976,311)
Net realized gains:
Class A .......................................................... -- (34,522,709)
Class C .......................................................... -- (912,969)
---------------------------------
Total distributions to shareholders ................................ (131,398,037) (300,868,290)
Capital share transactions: (Note 2)
Class A ........................................................... (108,343,586) 90,794,689
Class B ........................................................... 14,333,975 19,219,023
Class C ........................................................... 252,207 33,016,833
---------------------------------
Total capital share transactions ................................... (93,757,404) 143,030,545
Net increase (decrease) in net assets ......................... (345,129,211) 72,993,850
Net assets
Beginning of period ................................................ 5,005,815,171 4,932,821,321
---------------------------------
End of period ...................................................... $4,660,685,960 $5,005,815,171
=================================
Undistributed net investment income included in net assets:
End of period ...................................................... $ 5,499,449 $ 2,837,217
=================================
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Notes to Financial Statements (unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Franklin New York Tax-Free Income (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company. The Fund
seeks to provide investors with as high a level of income exempt from federal,
New York state and New York City income taxes as is consistent with prudent
investing, while seeking preservation of shareholders' capital.
The following summarizes the Fund's significant accounting policies.
a. SECURITY VALUATION
Tax-free bonds generally trade in the over-the-counter market and are valued
within the range of the latest quoted bid and asked prices. 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 the security. The Fund may utilize a pricing service, bank or
broker/dealer experienced in such matters to perform any of the pricing
functions under procedures approved by the Board of Trustees. Securities for
which market quotations are not readily available are valued at fair value as
determined by management in accordance with procedures established by the Board
of Trustees.
b. INCOME TAXES
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its taxable income.
c. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Bond discount and
premium are amortized on an income tax basis. Distributions to shareholders are
recorded on the ex-dividend date.
Realized and unrealized gains and 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.
d. 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. SHARES OF BENEFICIAL INTEREST
The Fund offers three classes of shares: Class A, Class B, and Class C.
Effective January 1, 1999, Class I and Class II were renamed Class A and Class
C, respectively, and the Fund began offering a new class of shares, Class B.
Each class of shares differs by its initial sales load, distribution fees,
voting rights on matters affecting a single class and its exchange privilege.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Notes to Financial Statements (unaudited) (continued)
2. SHARES OF BENEFICIAL INTEREST (CONT.)
At November 30, 1999, there were an unlimited number of shares authorized ($.01
par value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1999 MAY 31, 1999
------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold .................................. 15,936,863 $ 183,889,498 36,317,861 $ 438,090,167
Shares issues in reinvestment of distributions 5,163,167 59,475,155 11,562,080 139,259,975
Shares redeemed .............................. (30,584,529) (351,708,239) (40,360,181) (486,555,453)
------------------------------------------------------------
Net increase (decrease) ...................... (9,484,499) $(108,343,586) 7,519,760 $ 90,794,689
============================================================
CLASS B SHARES:
Shares sold .................................. 1,295,077 $ 14,930,149 1,616,584 $ 19,388,622
Shares issues in reinvestment of distributions 36,769 421,965 9,201 110,109
Shares redeemed .............................. (88,499) (1,018,139) (23,481) (279,708)
------------------------------------------------------------
Net increase ................................. 1,243,347 $ 14,333,975 1,602,304 $ 19,219,023
============================================================
CLASS C SHARES:
Shares sold .................................. 1,125,245 $ 12,974,578 4,034,431 $ 48,699,164
Shares issues in reinvestment of distributions 176,934 2,038,018 359,822 4,333,718
Shares redeemed .............................. (1,284,960) (14,760,389) (1,660,553) (20,016,049)
------------------------------------------------------------
Net increase ................................. 17,219 $ 252,207 2,733,700 $ 33,016,833
============================================================
</TABLE>
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers and trustees of the Fund are also officers and/or directors of
Franklin Advisers, Inc. (Advisers), Franklin Templeton Services, Inc. (FT
Services), Franklin/Templeton Distributors, Inc. (Distributors), and
Franklin/Templeton Investor Services, Inc. (Investor Services), the Fund's
investment manager, administrative manager, principal underwriter, and transfer
agent, respectively.
The Fund pays an investment management fee to Advisers based on the average net
assets of the Fund as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE MONTH-END NET ASSETS
---------------------------------------------------------------
<S> <C>
.625% First $100 million
.500% Over $100 million up to and including $250 million
.450% Over $250 million up to and including $10 billion
</TABLE>
Fees are further reduced on net assets over $10 billion.
Under an agreement with Advisers, FT Services provides administrative services
to the Fund. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Fund.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
The Fund reimburses Distributors, up to .10%, .65%, and .65% per year of its
average daily net assets of Class A, Class B, and Class C, respectively, for
costs incurred in marketing the Fund's shares.
Distributors paid net commissions on sales of the Fund's shares, and received
contingent deferred sales charges for the year of $537,968 and $53,999,
respectively.
The Fund paid shareholder servicing fees of $1,076,863, of which $837,503 was
paid to Investor Services.
Included in professional fees are legal fees of $12,800 that were paid to a law
firm in which a partner is an officer of the Fund.
4. INCOME TAXES
At November 30, 1999, the net unrealized appreciation based on the cost of
investments for income tax purposes of $4,553,784,750 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation ........ $175,217,014
Unrealized depreciation ........ (83,910,191)
------------
Net unrealized appreciation .... $ 91,306,823
============
</TABLE>
Net realized capital gains differ for financial statement and tax purposes
primarily due to differing treatment of wash sales.
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended November 30, 1999 aggregated $897,203,858 and $967,927,750,
respectively.
6. CREDIT RISK
The Fund has investments in excess of 10% of its total net assets in the state
of New York. Such concentration may subject the Fund more significantly to
economic changes occurring within that state.
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