CONTENTS
Shareholder Letter............................................. 1
Fund Reports
Franklin New York
Tax-Exempt Money Fund......................................... 3
Franklin New York Insured
Tax-Free Income Fund.......................................... 6
Franklin New York
Intermediate-Term Tax-Free
Income Fund................................................... 13
Glossary of
Investment Terms............................................... 17
Bond Ratings................................................... 19
Statement of Investments....................................... 22
Financial Statements........................................... 30
Notes to Financial
Statements..................................................... 34
SHAREHOLDER LETTER
Dear Shareholder:
It's a pleasure to bring you the Franklin New York Tax-Free Trust's semi-annual
report for the period ended June 30, 1997.
The U.S. economy continued its healthy expansion during the six months under
review. Although inflation remained under control, a growing sense of
nervousness from market participants and the Federal Reserve Board (the Fed)
overshadowed the stock market's meteoric rise over this reporting period. In a
move against potential inflationary pressures, the Fed raised the federal funds
rate (the rate banks charge each other for overnight loans) from 5.25% to 5.50%
in March. Since then, long-term interest rates have steadily declined.
Many investors expected the Fed to raise short-term rates in May. Recent data,
however, showed the economy was not overheating and inflation remained under
control, and they chose not to raise interest rates. The Fed will, no doubt,
watch for signs of increasing inflationary pressures and other indicators to
determine if additional action is necessary. While further Fed action could lead
to some volatility in the financial markets, we feel that -- over the long term
- -- municipal bonds should offer an excellent investment alternative, especially
for investors in a high federal income tax bracket.
The New York economy improved over the last six months: both the state of New
York and New York City ended their most recent fiscal years with budget
surpluses. Although much of the improvement is due to the continued record
performance of Wall Street, other sectors of the economy have also demonstrated
improvement. In New York City, for example, tourism has rebounded and, as a
result, hotel occupancy is near record highs. Strong tourism may also lead to
greater retail sales activity, which increases tax revenues both at state and
local levels. Although New York has lagged the U.S. economic recovery
in recent years, we feel the state's outlook is positive.
We stress a long-term investment perspective. The financial markets always have
been -- and probably always will be -- subject to daily fluctuation. No one can
predict the future performance of securities markets, but history has shown
that, over the long term, stocks and bonds have delivered impressive results
when income is left to compound. We also encourage periodic meetings with your
investment representative to focus on your long-term goals. If you have any
questions concerning the funds in the Franklin New York Tax-Free Trust, we
welcome the opportunity to answer them.
We appreciate your support, welcome new shareholders, and look forward to
serving your investment needs in the years ahead.
Sincerely,
Charles B. Johnson
Chairman
Franklin New York Tax-Free Trust
Tom Kenny
Director
Franklin Municipal Bond Department
FRANKLIN NEW YORK
TAX-EXEMPT MONEY FUND
Your Fund's Objective: Seeks to provide shareholders with a high level of
current income exempt from regular federal, New York state and New York City
personal income taxes, along with preservation of capital and liquidity, by
investing primarily in a portfolio of short-term municipal debt securities
issued in New York. The fund is managed to maintain a $1.00 share price.1
1. An investment in the fund is neither insured nor guaranteed by the U.S.
government. There is no assurance that the $1.00 per share price will be
maintained.
At its Federal Open Market Committee meeting on May 20th, the Federal Reserve
Board (the Fed) decided to leave short-term interest rates unchanged. Since that
date, there seems to be good balance in the markets and, at least for the near
term, we do not anticipate the Fed will feel pressured to change the federal
funds rate.
For the past six months, the national economy has performed well. Employment
moved up, interest rates remained low, and inflation appears to be in check. We
apparently achieved the Fed's much sought-after "soft landing." Against this
backdrop, the state of New York attained economic progress albeit at a more
moderate pace: State employment figures improved over the six-month reporting
period, and the legislature exercised restraint with regard to expenditures.
Looking forward, New York must soon deal with the transfer of the federal
welfare program to the state level. This may present a special challenge for New
York's fiscal policies.
GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT
On June 30, 1997, the fund's seven-day effective yield, which assumes the
compounding of daily dividends, was 3.45%, and the fund seven-day annualized
yield was 3.39%. This tax-free rate is generally higher than the after-tax
return on a comparable taxable investment. For example, an investor in the
maximum combined federal, New York state and New York City personal income tax
bracket would need to earn 6.25% from a taxable investment to match the fund's
tax-free yield. Likewise, an investor in the maximum combined federal and New
York state personal income tax bracket would need to earn 6.03% from a taxable
investment to match the fund's tax-free yield.
Looking forward, we believe the economy should maintain its present course and,
at least over the forseeable future, short-term interest rates will remain close
to the current level. Our investment strategy will continue to emphasize the
purchase of high quality liquid securities. Securities and Exchange Commission
guidelines currently allow tax-exempt money funds to purchase both first- and
second-tier securities. Franklin attempts to purchase only first-tier securities
for inclusion in its money market portfolios.
This discussion reflects our strategies for the fund and includes our opinions
at the close of the reporting period. Since economic and market conditions are
constantly changing, our strategies, evaluations, conclusions and decisions
regarding the portfolio holdings discussed in this report may change as new
circumstances arise. Although past performance of a specific investment or
sector cannot guarantee future performance, such information can help illustrate
how we analyze the securities we purchase for the fund.
Franklin New York Tax-Exempt Money Fund
Periods ended 6/30/97
Seven-day effective yield1 3.45%
Seven-day annualized yield 3.39%
Taxable Equivalent yield2 6.25%
1. The seven-day effective yield assumes the compounding of daily dividends.
2. Taxable equivalent yield assumes the 1997 maximum combined federal, New York
state and New York City personal income tax bracket of 45.791%, based on the
federal income tax rate of 39.6%.
Annualized and effective yields are for the seven days ended June 30, 1997.
Yields reflect fluctuations in interest rates on portfolio investments, as well
as fund expenses. Yields should be viewed in terms of the current, low rate of
inflation -- just as high inflation usually results in higher yields, low
inflation often brings the opposite.
The fund's manager agreed in advance to waive a portion of the management fees,
which reduces operating expenses and increases yield to shareholders. Without
these reductions, the fund's annualized and effective yields for the period
would have been 2.88% and 2.07%, respectively. The fee waiver may be
discontinued at any time upon notice to the fund's Board of Trustees.
Past performance is not predictive of future results.
FRANKLIN NEW YORK INSURED
TAX-FREE INCOME FUND
Your Fund's Objective: Seeks to provide shareholders with a high level of
current income exempt from regular federal, New York state and New York City
personal income taxes, and preservation of capital, consistent with prudent
investment management. The fund invests primarily in a portfolio of insured New
York municipal securities.1
1. For investors subject to the alternative minimum tax, a small 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.
The Franklin New York Insured Tax-Free Income Fund - Class I generated a
cumulative total return of +2.74% for the six-month period, as discussed in the
Performance Summary on page 9.
The reporting period witnessed continued strong revenue growth for New York City
- -- in part, as a result of the remarkable activity on Wall Street. This growth
helped maintain the city's general obligation bond credit rating of Baa1, as
rated by Moody's Investors Service. By contrast, other New York cities which
have traditionally enjoyed strong credit ratings are beginning to show signs of
fiscal distress. An example of this was the recent downgrading of Syracuse
general obligation bonds from A1 to A3 by Moody's.
Municipal bond yields during the last six months continued a general downward
trend, as measured by the 20-general obligation bond Bond Buyer Index and the
25-bond Revenue Bond Index. The Bond Buyer Index yield declined 13 basis points,
from 5.66% on December 26, 1996, to 5.53% on June 27, 1997. The Revenue Bond
Index's yield dropped from 5.92% to 5.82% for the same period, a decline of 10
basis points. Furthermore, as higher-coupon holdings and pre-refunded issues
were sold in order to capture premiums, we replaced them with issues providing
the lower current returns of today's market. We also continued to sell smaller,
early purchases that are now less suited to the investment objectives of the
fund, and purchased larger positions of such insured bonds as New York State
Dorm Authority for Millard Fillmore Hospital ($10 million), Dutchess County NY
($3.3 million), Bard College Project ($2.31 million), and New York State Dorm
Authority for Pace University ($4.5 million).
When a bond becomes pre-refunded, it means it will be paid off at its first call
date with the proceeds of a second bond issue carrying a lower interest rate.
This is a common practice in periods of relatively low interest rates, as
issuers replace debt that had been issued in a time of relatively higher
interest rates. (In the late 1980s, for instance, yields on insured and
high-quality bonds ranged between 7.5% and 9.0%. In comparison, for most of the
1990s, these bonds yielded at or below 6.0%.) In effect, a bond that was
supposed to pay interest for 30 years may actually make payments for 10 years or
less, before returning principal. To extend the fund's income-earning potential,
we may sell pre-refunded bonds whose call dates are approximately five years
away, and replace them with bonds that cannot be called for 10 or more years.
As you can see in the table on page 8, we maintained diversification in the
portfolio's holdings. Such diversification in a broad range of sectors can help
us reduce the fund's exposure to risk and market volatility.
One area of the New York municipal bond market we are watching with some degree
of interest is the Long Island Lighting Company. The prospect of financing the
proposed state takeover of this company is not to be taken lightly. It
represents a potential $4 to $7 billion in new issuance which could be enough
supply to pressure the borrowing needs of other traditional borrowers. However,
even with this proposed takeover looming in the foreground, the demand for New
York municipal bonds remains strong and yields continue to fall.
Looking forward, we intend to maintain our conservative management style by
avoiding interest-rate speculation and the use of derivatives. This discussion
reflects our strategies for the fund and includes our opinions at the close of
the reporting period. Since economic and market conditions are constantly
changing, our strategies, evaluations, conclusions and decisions regarding the
portfolio holdings discussed in this report may change as new circumstances
arise. Although past performance of a specific investment or sector cannot
guarantee future performance, such information can help illustrate how we
analyze the securities we purchase for the fund.
Franklin New York Insured Tax-Free Income Fund
Portfolio Breakdown on 6/30/97
% of Total
Long-Term
Sector Investments
Utilities 29.4%
Education 20.6%
Transportation 18.1%
Hospitals 12.5%
General Obligations 5.9%
Health Care 4.4%
Other Revenue 4.4%
Pre-Refunded 2.6%
Sales Tax 0.9%
Industrial 0.8%
Certificates of
Participation 0.4%
For a complete list of portfolio holdings please see page 24 of this report.
PERFORMANCE SUMMARY
Class I
The Franklin New York Insured Tax-Free Income Fund - Class I share price, as
measured by net asset value, increased 1.0 cent, from $11.29 on December 31,
1996, to $11.30 on June 30, 1997.
At the end of the reporting period, your fund's distribution rate was 4.98%,
based on an annualization of June's monthly dividend of 4.9 cents ($0.049) per
share and the maximum offering price of $11.80 on June 30, 1997. This tax-free
rate is generally higher than the after-tax return on a comparable taxable
investment. For example, an investor in the maximum combined federal, New York
state and New York City personal income tax bracket would need to earn 9.19%
from a taxable investment to match your fund's tax-free distribution rate.
Likewise, an investor in the maximum combined federal and New York state
personal income tax bracket would need to earn 8.85% from a taxable investment
to match the fund's tax-free distribution rate.
The fund posted cumulative total returns of 2.74% and 7.68% for the six- and
12-month periods ended June 30, 1997, respectively. Total returns measure the
change in value of an investment, assuming reinvestment of all distributions,
and does not include the initial sales charge.
GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Insured Tax-Free Income Fund - Class I
Periods ended 6/30/97
Since
Inception
1-Year 5-Year (5/1/91)
- -----------------------------------------------------------------
Cumulative Total Return1 7.68% 38.83% 55.71%
Average Annual Total Return2 3.11% 5.86% 6.70%
Distribution Rate3 4.98%
Taxable Equivalent Distribution Rate4 9.19%
30-Day Standardized Yield5 4.59%
Taxable Equivalent Yield4 8.47%
1. Cumulative total returns measure the change in value of an investment over
the periods indicated and do not include the sales charge.
2. Average annual total returns measure the average annual change in value of an
investment over the periods indicated and include the current, maximum 4.25%
initial sales charge. See Note below.
3. Based on an annualization of June's 4.9 cent per share dividend and the
maximum offering price of $11.80 on June 30, 1997.
4. Taxable equivalent distribution rate and yield assume the 1997 maximum
combined federal, New York state and New York City personal income tax bracket
of 45.791%, 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 June 30, 1997.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge with dividends reinvested at the offering price. Thus, actual returns
would 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. Past expense reductions by the fund's manager increased the fund's
total return.
All total return calculations assume reinvestment of dividends and any capital
gains at net asset value. Investment return and principal value will fluctuate
with market conditions, and you may have a gain or loss when you sell your
shares.
Franklin New York Insured Tax-Free Income Fund
Class I
Dividend Distributions
1/1/97 - 6/30/97*
Dividend
Month per Share
- ------------------------------
January 4.9 cents
February 4.9 cents
March 4.9 cents
April 4.9 cents
May 4.9 cents
June 4.9 cents
- ------------------------------
Total 29.4 cents
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period. Distributions will vary based on the
earnings of the fund's portfolio, and past distributions are not predictive of
future trends.
Past performance is not predictive of future results.
Class II
The Franklin New York Insured Tax-Free Income Fund - Class II share price, as
measured by net asset value, increased 2.0 cents, from $11.37 on December 31,
1996, to $11.39 on June 30, 1997.
At the end of the reporting period, your fund's distribution rate was 4.55 %,
based on an annualization of June's monthly dividend of 4.36 cents ($0.0436) per
share and the offering price of $11.51 on June 30, 1997. This tax-free rate is
generally higher than the after-tax return on a comparable taxable investment.
For example, an investor in the maximum combined federal, New York state and New
York City personal income tax bracket would need to earn 8.39% from a taxable
investment to match your fund's tax-free distribution rate. Likewise, an
investor in the maximum combined federal and New York state personal income tax
bracket would need to earn 8.09% from a taxable investment to match the fund's
tax-free distribution rate.
The fund posted cumulative total returns of 2.51% and 7.24% for the six- and
12-month periods ended June 30, 1997, respectively. Total returns measure the
change in value of an investment, assuming reinvestment of all distributions,
and do not include sales charges.
GRAPHIC MATERIAL 3 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Insured Tax-Free Income Fund - Class II
Periods ended 6/30/97
Since
Inception
1-Year (5/1/95)
- ------------------------------------------------------------------
Cumulative Total Return1 7.24% 15.86%
Average Annual Total Return2 5.20% 6.54%
Distribution Rate3 4.55%
Taxable Equivalent Distribution Rate4 8.39%
30-Day Standardized Yield5 4.21%
Taxable Equivalent Yield4 7.77%
1. Cumulative total returns measure the change in value of an investment over
the periods indicated and do not include sales charges.
2. Average annual total returns measure the average annual change in value of an
investment over the periods indicated and include the 1.0% initial sales charge
and 1.0% contingent deferred sales charge, applicable to shares redeemed within
18 months of investment. See Note below.
3. Based on an annualization of June's 4.36 cent per share dividend and the
offering price of $11.51 on June 30, 1997.
4. Taxable equivalent distribution rate and yield assume the 1997 maximum
combined federal, New York state and New York City personal income tax bracket
of 45.791%, 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 June 30, 1997.
Note: All total return calculations assume reinvestment of dividends and capital
gains at net asset value. Investment return and principal value will fluctuate
with market conditions, and you may have a gain or loss when you sell your
shares.
Franklin New York Insured Tax-Free Income Fund
Class II
Dividend Distributions
1/1/97 - 6/30/97*
Dividend
Month per Share
- ------------------------------
January 4.33 cents
February 4.33 cents
March 4.33 cents
April 4.36 cents
May 4.36 cents
June 4.36 cents
- ------------------------------
Total 26.07 cents
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period. Distributions will vary based on the
earnings of the fund's portfolio, and past distributions are not predictive of
future trends.
Past performance is not predictive of future results.
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
Your Fund's Objective: Seeks to provide shareholders with a high level of
current income exempt from regular federal, New York state and New York City
personal income taxes, along with preservation of capital. The fund invests
primarily in a portfolio of New York municipal securities with an average
weighted maturity (the time in which debt must be repaid) between three and ten
years.1
1. For investors subject to the alternative minimum tax, a small 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.
New York's municipal market showed relatively strong performance during this
reporting period. The overall state economy improved, and New York City's
economy prospered primarily due to increased tourism and a record performance on
Wall Street.
While New York's bond supply increased compared with 1996, this was more than
offset by escalated demand for municipal bonds. Additionally, New York municipal
bonds were generally competetive with the Treasury market during the six months
under review. For example, on December 31, 1996, the 10-year U.S. Treasury note
closed at a yield of 6.43%, while the New York City General Obligation (NYC GO)
bonds (10-year bonds) traded at a price that produced a yield of 5.76% -- almost
89% of the Treasury note. On June 30, 1997, the 10-year Treasury closed slightly
higher at 6.51%. The NYC GO bond yielded 5.42% on the same date, or 83% of the
10-year Treasury's yield.
Portfolio trading was light over the reporting period. When we did find
securities suitable for purchase, we concentrated our efforts on
higher-yielding, investment grade bonds. As you can see from the bar chart
above, we increased our percentage bonds rated AA and A in the portfolio
throughout the last six months. Further, we maintained our conservative
management approach by purchasing essential service bonds, which unlike other
general obligation bonds, are backed by revenue from hospitals, utilities, and
transportation projects, and tend to generate a more reliable income stream.
Looking forward, we expect -- or should we say hope -- that, as we get into the
latter part of 1997 and early 1998, a substantial increase in the supply of new
issuance will be coming to market. We look for these new issues to finance
current refundings. Such an environment should produce some beneficial buying
opportunities.
GRAPHIC MATERIAL 4 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Intermediate-Term
Tax-Free Income Fund
Portfolio Breakdown on 6/30/97
% of Total
Long-Term
Sector Investments
- ---------------------------------------------------
General Obligations 27.9%
Other Revenue 14.5%
Hospitals 13.6%
Housing 10.6%
Transportation 9.5%
Certificates of 8.7%
Participation
Education 8.2%
Utilities 6.4%
Industrial 0.6%
For a complete list of portfolio holdings please see page 28 of this report.
PERFORMANCE SUMMARY
The Franklin New York Intermediate-Term Tax-Free Income Fund's share price, as
measured by net asset value, increased 6.0 cents from $10.28 on December 31,
1996, to $10.34 on June 30, 1997.
At the end of the reporting period, your fund's distribution rate was 5.22%,
based on an annualization of June's monthly dividend of 4.6 cents ($0.046) per
share and the maximum offering price of $10.58 on June 30, 1997. This tax-free
rate is generally higher than the after-tax return on a comparable taxable
investment. For example, an investor in the maximum combined federal, New York
state and New York City personal income tax bracket would need to earn 9.63%
from a taxable investment to match your fund's tax-free distribution rate.
Likewise, an investor in the maximum combined federal and New York state
personal income tax bracket would need to earn 9.28% from a taxable investment
to match the fund's tax-free distribution rate.
The fund posted cumulative total returns of 3.31% and 8.03% for the six- and
12-month periods ended June 30, 1997, respectively. Total returns measure the
change in value of an investment, assuming reinvestment of all distributions,
and does not include the initial sales charge.
GRAPHIC MATERIAL 5 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Intermediate-Term Tax-Free Income Fund
Periods ended 6/30/97
Since
Inception
1-Year 3-Year (9/23/92)
- ------------------------------------------------------------------
Cumulative Total Return1 8.03% 20.55% 31.31%
Average Annual Total Return2 5.63% 5.63% 5.38%
Distribution Rate3 5.22%
Taxable Equivalent Distribution Rate4 9.63%
30-Day Standardized Yield5 4.74%
Taxable Equivalent Yield4 8.74%
1. Cumulative total returns measure the change in value of an investment over
the periods indicated and do not include the sales charge.
2. Average annual total returns measure the average annual change in value of an
investment over the periods indicated and include the current, maximum 2.25%
initial sales charge. See Note below.
3. Based on an annualization of June's 4.6 cent per share dividend and the
maximum offering price of $10.58 on June 30, 1997.
4. Taxable equivalent distribution rate and yield assume the 1997 maximum
combined federal, New York state and New York City personal income tax bracket
of 45.791%, 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 June 30, 1997.
Note: All total return calculations assume reinvestment of dividends and any
capital gains at net asset value. Investment return and principal value will
fluctuate with market conditions, and you may have a gain or loss when you sell
your shares.
The fund's manager agreed in advance to waive a portion of the management fees,
which reduces operating expenses and increases distribution rate, yield and
total return to shareholders. Without this waiver, the fund's distribution rate
would have been lower, and yield for the period would have been 4.36%. The fee
waiver may be discontinued at any time upon notification to the fund's Board of
Trustees.
Franklin New York Intermediate-Term
Tax-Free Income Fund
Dividend Distributions
1/1/97 - 6/30/97*
Dividend
Month per Share
- ------------------------------
January 4.6 cents
February 4.6 cents
March 4.6 cents
April 4.6 cents
May 4.6 cents
June 4.6 cents
- ------------------------------
Total 27.6 cents
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period. Distributions will vary based on the
earnings of the fund's portfolio, and past distributions are not predictive of
future trends.
Past performance is not predictive of future results.
GLOSSARY OF INVESTMENT TERMS
Average Annual Total Return: The average annual change in value of an investment
over the periods indicated. Unless otherwise stated, figures shown in this
report include sales charges.
Call Date: Date on which a bond may be redeemed before maturity. If called, the
bond may be redeemed at par value or at a slight premium to par. For example, a
bond may be scheduled to mature in 20 years, but may have a provision that
allows it to be called in 10 years if it is advantageous for the issuer to
refinance it.
Coupon: A bond's interest rate that the issuer promises to pay to the holder
until the bond matures.
Cumulative Total Return: Measures the change in value of an investment over the
periods indicated. Unless otherwise stated, figures shown in this report exclude
sales charges.
Derivative: A financial product whose value can be based on the performance on
an underlying financial asset, index or other investment. Although derivatives
can be useful tools in portfolio management, they have caused large losses to
some mutual funds, municipalities, corporations and commercial banks when
unexpected movement in interest rates adversely affected their values.
Federal Open Market Committee: The committee that sets interest rates and credit
policies for the Federal Reserve System, the United States' central bank. The
Committee decides whether to increase or decrease interest rates through
open-market operations of buying or selling government securities.
High-Grade Bond/High-Quality Bond: A bond rated AAA or AA by Standard &
Poor's(R) or Aaa or Aa by Moody's Investors Service -- two national
credit-rating agencies.
Investment-Grade Bond: A bond with a rating of AAA to BBB-, usually within the
four highest rating categories assigned to bonds.
Maturity: The time at which a debt instrument is due and payable. If a bond is
due to mature on January 1, 2010, it will return the bondholder's principal and
make the final interest payment on that date.
Premium: Amount by which a bond sells above its face (par) value. For instance,
a bond with a $1,000 face value would sell for a $100 premium when it cost
$1,100.
Pre-Refunded Bond: A bond that will be paid off at its first call date with
proceeds of the sale of a second bond carrying a lower interest rate. The
proceeds of the second bond's sale are usually invested in U.S. Treasury
securities that will mature at the first bond's call date. When a bond is
pre-refunded its premium rises, and then falls to par value as the refunding
date approaches.
Par Value: The face value or amount at which a security will be redeemed at
maturity -- typically $1,000 for a bond.
Securities and Exchange Commission: The federal agency charged with
administering the rules that regulate securities markets.
MUNICIPAL BOND RATINGS
Moody's
Aaa: Best quality. They carry the smallest degree of investment risk. Interest
payments are protected by a large or exceptionally stable margin, and principal
is secure. While various protective elements may change, such changes are most
unlikely to impair the fundamentally strong position of these issues.
Aa: High quality by all standards. Together with the Aaa group, they comprise
what are generally 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: Considered upper-medium-grade obligations that possess many favorable
investment attributes. Security provisions 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 unreliable or lacking 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 these
bonds.
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 there may be present
elements of danger with respect to principal or interest.
Ca: Obligations which 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: This is 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 to 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 BBB-rated issues normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to weaken
the capacity to pay principal and interest for these bonds than those rated A.
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 will likely 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 TRUST
Statement of Investments in Securities and Net Assets, June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT Franklin New York Tax-Exempt Money Fund (NOTE1)
- -----------------------------------------------------------------------------------------------------------------
Investments 104.4%
$ 200,000 aBabylon, Town of, IDA, IDR, General Microwave Corp. Facility,
<S> <C>
Series 1984, Weekly VRDN and Put, 4.10%, 10/01/99 $ 200,000
2,000,000 Brentwood Unified Free School District TAN, 4.25%, 06/30/98 2,006,360
2,000,000 Erie County RAN, Series A, 4.50%, 06/25/98 2,013,255
1,500,000 aGreat Neck North, Water Authority System Revenue, Series A,
FGIC Insured, Weekly VRDN and Put, 4.05%, 01/01/20 1,500,000
600,000 aNassau IDA, Research Facility Revenue, Cold Spring Harbor
Laboratory Project, Daily VRDN and Put, 4.10%, 07/01/23 600,000
aNew York City GO,
500,000 Series B, Sub-Series B-3, Daily VRDN and Put, 4.15%, 08/15/04 500,000
800,000 Series B, Sub-Series B-10, Weekly VRDN and Put, 4.10%, 08/15/24 800,000
1,000,000 Series D, Weekly VRDN and Put, 4.20%, 02/01/20 1,000,000
100,000 Sub-Series A-5, Daily VRDN and Put, 4.15%, 08/01/16 100,000
600,000 Sub-Series A-5, Subordinated Lien, Daily VRDN and Put, 4.15%, 08/01/15 600,000
aNew York City HDC, Mortgage Revenue, Weekly VRDN and Put,
1,600,000 Columbus Apartments, Series A, 3.95%, 03/15/25 1,600,000
1,235,000 Parkgate Tower No. 1, 4.10%, 12/01/07 1,235,000
aNew York City Health & Hospital Corp., Revenue Health System,
Weekly VRDN and Put, 4.10%, 02/15/26
1,500,000 Series A 1,500,000
1,500,000 Series D 1,500,000
1,000,000 aNew York City IDA, IDR, Brooklyn Navy Yard, Cogeneration
Project, Series A, Weekly VRDN and Put, 4.20%, 07/01/29 1,000,000
aNew York City IDA, Various Civic Facilities,
1,000,000 American Civil Liberties, Weekly VRDN and Put, 4.25%, 07/02/12 1,000,000
1,100,000 Children's Oncology Society, Weekly VRDN and Put, 3.95%, 05/01/21 1,100,000
500,000 National Audobon Society, Daily VRDN and Put, 4.00%, 12/01/14 500,000
1,500,000 aNew York City Municipal Assistance Corp., Sub-Series K-2,
Weekly VRDN and Put, 4.05%, 07/01/08 1,500,000
aNew York City Municipal Water Finance Authority, Water
and Sewer Systems Revenue, FGIC Insured,
500,000 Series C, Daily VRDN and Put, 4.15%, 6/15/23 500,000
500,000 Series G, Daily VRDN and Put, 4.05%, 6/15/24 500,000
1,200,000 aNew York City Tri-Cultural Resources Revenue, American Museum
of Natural History, Series B, MBIA Insured, Weekly
VRDN and Put 4.05%, 04/01/21 1,200,000
New York Dormitory Authority Revenues,
300,000 a Cornell University, Series B, Daily VRDN and Put, 4.00%, 07/01/25 300,000
1,300,000 a Metropolitan Museum of Art, Series A, MBIA Insured, Weekly
VRDN and Put, 4.00%, 07/01/15 1,300,000
1,300,000 a Metropolitan Museum of Art, Series B, Weekly VRDN and Put, 4.00%, 07/01/23 1,300,000
1,395,000 Millard Fillmore Hospital, AMBAC Insured, 4.25%, 02/01/98 1,399,311
400,000 a New York Public Library, Series B, Weekly VRDN and Put, 4.00%, 07/01/22 400,000
1,000,000 a Oxford University Press, Inc., Daily VRDN and Put, 4.55%, 07/01/23 1,000,000
2,000,000 a Oxford University Press, Inc., Weekly VRDN and Put, 4.00%, 07/01/25 2,000,000
New York State Dormitory Authority, Sloan Kettering, TECP,
500,000 3.55%, 07/07/97 500,000
1,900,000 3.45%, 09/02/97 1,900,000
1,000,000 3.50%, 09/02/97 1,000,000
aNew York State Energy Research and Development Authority, PCR,
500,000 Central Hudson Gas & Electric Co. Project, Weekly VRDN and Put, 3.90%, 11/01/20 500,000
200,000 Niagara Mohawk Power Corp., Series A, DATES, Daily VRDN and Put, 5.45%, 07/01/15 200,000
500,000 Niagara Mohawk Power Corp., Series B, Daily VRDN and Put, 4.10%, 12/01/25 500,000
1,100,000 Refunding, Central Hudson Gas & Electric Co. Project, Series B,
Weekly VRDN and Put, 4.05%, 06/01/27 1,100,000
1,300,000 Refunding, New York Electric & Gas, Daily VRDN and Put, 4.00%, 02/01/29 1,300,000
1,000,000 Refunding, Orange and Rockland Project, Series A, FGIC Insured,
Weekly VRDN and Put, 4.05%, 10/01/14 1,000,000
1,350,000 Refunding, Orange and Rockland Utilities, Series A, AMBAC Insured,
Weekly VRDN and Put, 4.05%, 08/01/15 1,350,000
$1,000,000 New York State Environmental Facility Corp., TECP, 3.85%, 07/03/97 $ 1,000,000
2,100,000 aNew York State HFA, Normandie Court I Project, Weekly
VRDN and Put, 4.00%, 05/15/15 2,100,000
aNew York State Local Government Assistance Corp., Weekly VRDN and Put,
200,000 Series B, 4.05%, 04/01/23 200,000
500,000 Series F, 4.05%, 04/01/25 500,000
1,200,000 Series G, 4.05%, 04/01/25 1,200,000
New York State Medical Care Facilities, Finance Agency Revenue,
635,000 Mental Health Services Facilities, 7.70%, 02/15/98 662,653
2,330,000 a Pooled Equipment Loan Program II, Series A, Weekly VRDN and Put, 4.10%, 11/01/03 2,330,000
New York State, TECP,
1,800,000 3.80%, 07/24/97 1,800,000
1,000,000 3.70%, 07/25/97 1,000,000
1,000,000 New York State Tollway Authority, General Revenue,
Series C, FGIC Insured, 5.00%, 01/01/98 1,004,846
815,000 aNiagara County IDA, IDR, Pyron Corp. Project,
Weekly VRDN and Put, 4.20%, 11/01/04 815,000
800,000 aOnondaga County IDA, IDR, FRN, Pass & Seymour, Inc., Series B,
Monthly VRDN and Weekly Put, 3.80%, 11/13/98 800,000
900,000 aSeneca County IDA, Civic Facility Revenue, New York Chiropractic College,
Weekly VRDN and Put, 4.05%, 10/01/21 900,000
2,000,000 Suffolk County TAN, Series I, 4.00%, 08/14/97 2,001,656
1,000,000 Suffolk County TRAN, 4.50%, 09/11/97 1,001,042
1,500,000 aSuffolk County Water Authority BAN, Weekly VRDN and Put, 4.10%, 02/08/01 1,500,000
595,000 aSuffolk IDA, IDR, Refunding, Phototronics Corp. Facility, Daily VRDN
and Weekly Put, 4.00%, 01/01/98 595,000
400,000 aSyracuse IDA, Civic Facilities Revenue, Multi-Modal, Syracuse University Project,
Daily VRDN and Put, 4.00%, 03/01/23 400,000
2,500,000 aTriborough Bridge and Tunnel Authority, Special Obligation, FGIC Insured,
Weekly VRDN and Put, 4.15%, 01/01/24 2,500,000
2,500,000 Westchester County TAN, 3.47%, 12/11/97 2,500,206
--------------
Total Investments (Cost $64,314,329)104.4% 64,314,329
Liabilities in Excess of Other Assets(4.4%) (2,689,553)
--------------
Net Assets 100.0% $61,624,776
==============
</TABLE>
At June 30, 1997, there was no unrealized appreciation or depreciation for
financial statement or income tax purposes.
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
BAN - Bond Anticipation Notes
DATES - Demand Adjustable Tax-Exempt Securities
FGIC - Financial Guaranty Insurance Co.
FRN - Floating Rate Notes
GO - General Obligation
HDC - Housing Development Corp.
HFA - Housing Finance Authority/Agency
IDA - Industrial Development Authority/Agency
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TECP - Tax-Exempt Commercial Paper
TRAN - Tax and Revenue Anticipation Notes
aVariable 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 upon
short notice prior to specified dates. The interest rate may change on specified
dates in relationship with changes in a designated rate (such as the prime
interest rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT Franklin New York Insured Tax-Free Income Fund (NOTE1)
- --------------------------------------------------------------------------------------------------------------------
Long Term Investments 99.7%
<S> <C>
$ 1,000,000 Albany County GO, FGIC Insured, 5.85%, 06/01/12 $ 1,038,600
Albany Municipal Water Finance Authority, Water and Sewer
System Revenue, Refunding, Series A, FGIC Insured,
2,505,000 5.95%, 12/01/12 2,598,712
8,990,000 5.50%, 12/01/22 8,892,369
2,555,000 Amsterdam HDC, Mortgage Revenue, Refunding, MBIA Insured, 6.25%, 01/01/25 2,604,030
200,000 Brookhaven GO, Series B, MBIA Insured, 7.00%, 05/01/09 234,588
1,000,000 Broome County COP, Public Safety Facilities, MBIA Insured, 5.25%, 04/01/22 957,210
4,000,000 Buffalo and Fort Erie Public Bridge Authority, Toll Bridge System
Revenue, MBIA Insured, 5.75%, 01/01/25 4,034,880
Buffalo GO, AMBAC Insured,
360,000 Series E, 6.70%, 12/01/17 400,115
385,000 Series E, 6.70%, 12/01/18 427,901
410,000 Series E, 6.70%, 12/01/19 455,686
Buffalo Municipal Water Finance Authority, Water System Revenue,
1,350,000 FGIC Insured, 6.10%, 07/01/26 1,410,480
2,500,000 FSA Insured, 5.75%, 07/01/19 2,519,075
100,000 Camden Central School District, AMBAC Insured, 7.10%, 06/15/07 116,728
Canandaigua City School District, AMBAC Insured,
500,000 6.40%, 06/01/08 558,290
550,000 6.50%, 06/01/11 617,232
Central Square School District, FGIC Insured,
900,000 6.50%, 06/15/08 1,008,702
900,000 6.50%, 06/15/09 1,007,388
Dutchess County IDA, Civic Facilities Revenue, Bard College Project, AMBAC Insured,
2,315,000 5.50%, 06/01/17 2,301,017
1,000,000 5.375%, 06/01/27 967,460
1,000,000 Erie County GO, Series B, FGIC Insured, 5.625%, 06/15/20 996,770
Greece Central School District, FGIC Insured,
950,000 6.00%, 06/15/16 998,545
950,000 6.00%, 06/15/17 994,099
950,000 6.00%, 06/15/18 995,277
1,340,000 Hempstead Town IDA, Civic Facilities Revenue, Hofstra University Project,
MBIA Insured, 5.80%, 07/01/15 1,375,054
210,000 Middle Country Central School District, New York Centereach,
AMBAC Insured, 6.90%, 12/15/06 242,145
985,000 Monroe County GO, Public Improvements, AMBAC Insured,
Pre-Refunded, 6.15%, 06/01/18 1,082,072
2,000,000 Monroe County IDA Revenue, Civic Facilities, Nazareth College,
MBIA Insured, 6.00%, 06/01/20 2,069,320
1,055,000 Mount Sinai Union Free School District, Refunding,
AMBAC Insured, 6.20%, 02/15/13 1,153,737
1,150,000 Nassau County IDA, Civic Facilities Revenue, Hofstra University Project,
AMBAC Insured, 6.75%, 08/01/11 1,251,948
New Rochelle GO, Series C, MBIA Insured,
390,000 6.25%, 03/15/22 409,695
530,000 6.25%, 03/15/23 556,765
555,000 6.25%, 03/15/24 583,028
1,540,000 New York City IDA, Civic Facilities Revenue, Riverdale Country
School Inc. Project, MBIA Insured, 5.25%, 06/01/17 1,490,058
New York City Municipal Water Finance Authority, Water and Sewer System Revenue,
505,000 Series A, FGIC Insured, 6.75%, 06/15/16 542,335
20,300,000 Series C, AMBAC Insured, 6.20%, 06/15/21 21,320,684
New York City Trust, Cultural Resource Revenue,
5,620,000 b American Museum of National History, Series A, MBIA Insured, 5.65%, 04/01/27 5,628,992
3,000,000 New York Botanical Garden, MBIA Insured, 5.75%, 07/01/16 3,040,920
250,000 Refunding, Museum of Modern Art, Series A, AMBAC Insured,
Pre-Refunded, 6.625%, 01/01/11 275,385
New York State Dormitory Authority Revenues,
$ 140,000 Associated Children's, Inc., MBIA Insured, 7.60%, 07/01/18 $ 147,232
2,460,000 Brooklyn Law School, CGIC Insured, 6.40%, 07/01/11 2,634,783
275,000 City University System, Series C, FGIC Insured, 7.00%, 07/01/14 300,413
2,445,000 Comsewogue Public Library, MBIA Insured, 6.05%, 07/01/24 2,541,602
750,000 Founding Charitable Corp., MBIA Insured, 6.50%, 07/01/12 772,028
1,000,000 Hamilton College, MBIA Insured, 6.50%, 07/01/21 1,071,250
1,000,000 Hartwick College, MBIA Insured, 6.25%, 07/01/12 1,058,500
1,000,000 Ithaca College, AMBAC Insured, 5.25%, 07/01/17 966,370
2,780,000 Judicial Lease Facilities, Series B, Suffolk County, MBIA Insured, 7.00%, 04/15/16 3,039,541
1,890,000 Leake and Watts Services, Inc., MBIA Insured, 6.00%, 07/01/23 1,959,042
1,500,000 Maimonides Medical Center, Series A, MBIA Insured, 5.75%, 08/01/24 1,508,175
10,000,000 b Millard Fillmore Hospital, AMBAC Insured, 5.375%, 06/01/32 9,510,900
1,000,000 New York Public Library, Series A, MBIA Insured, 5.875%, 07/01/22 1,012,840
1,000,000 New York University, FGIC Insured, 6.25%, 07/01/09 1,060,050
1,195,000 Oceanside Library, AMBAC Insured, 6.00%, 07/01/25 1,232,117
1,500,000 Refunding, Ithaca College, MBIA Insured, 6.25%, 07/01/21 1,566,105
1,000,000 Refunding, Marist College, MBIA Insured, 6.00%, 07/01/22 1,026,950
2,500,000 Refunding, Mount Sinai School of Medicine, MBIA Insured, 6.75%, 07/01/15 2,701,450
4,500,000 Refunding, Pace University, MBIA Insured, 5.75%, 07/01/26 4,546,575
2,000,000 Refunding, Siena College, MBIA Insured, 5.70%, 07/01/17 2,027,760
1,390,000 Refunding, Siena College, MBIA Insured, 5.75%, 07/01/26 1,403,191
1,000,000 Refunding, Wildwood Programs, Inc., MBIA Insured, 5.875%, 07/01/15 1,020,690
1,000,000 St. John's University, AMBAC Insured, 6.875%, 07/01/11 1,091,920
5,685,000 St. John's University, MBIA Insured, 5.70%, 07/01/26 5,735,824
5,000,000 St. Vincent's Hospital and Medical Center, AMBAC Insured, 6.00%, 08/01/28 5,132,800
1,220,000 University of Rochester, MBIA Insured, 6.50%, 07/01/09 1,254,502
2,355,000 University of Rochester, Strong Health Facilities, MBIA Insured, 5.90%, 07/01/17 2,406,033
New York State Energy Research and Development Authority,
Electric Facilities Revenue, Consolidated Edison Co.
of New York, Inc. Project,
5,000,000 Refunding, Series A, AMBAC Insured, 6.10%, 08/15/20 5,213,150
4,950,000 Series A, MBIA Insured, 6.75%, 01/15/27 5,275,463
210,000 Series C, MBIA Insured, 7.25%, 11/01/24 219,517
2,240,000 New York State Energy Research and Development Authority,
Gas Facilities Revenue, Brooklyn Union Gas,
Series A, MBIA Insured, 6.75%, 02/01/24 2,433,267
New York State Energy Research and Development Authority, PCR,
1,500,000 Refunding, Niagara Mohawk Power Corp., Series A, FGIC Insured, 6.625%, 10/01/13 1,624,155
5,000,000 Refunding, Niagara Mohawk Power Corp., Series A, FGIC Insured, 7.20%, 07/01/29 5,694,200
1,150,000 Refunding, Rochester Gas and Electric Project, Series A,
MBIA Insured, 6.35%, 05/15/32 1,207,857
1,000,000 Refunding, Rochester Gas and Electric Project, Series B,
MBIA Insured, 6.50%, 05/15/32 1,067,640
New York State Environmental Facilities Corp., Water Facilities Revenue,
Refunding, Spring Valley Water Co., Inc.
Project, AMBAC Insured,
2,000,000 Series A, 6.30%, 08/01/24 2,097,000
3,000,000 Series B, 6.15%, 08/01/24 3,113,820
1,140,000 New York State GO, AMBAC Insured, 5.50%, 03/01/27 1,113,826
2,500,000 New York State Local Government Assistance Corp., Refunding,
Series B, AMBAC Insured, 5.50%, 04/01/21 2,470,375
New York State Medical Care Facilities, Finance Agency Revenue,
$ 6,735,000 Long-Term Health Care, Series A, CGIC Insured, 6.80%, 11/01/14 $ 7,354,755
5,355,000 Long-Term Health Care, Series B, CGIC Insured, 6.45%, 11/01/14 5,680,477
4,245,000 Long-Term Health Care, Series C, CGIC Insured, 6.40%, 11/01/14 4,491,762
1,000,000 Our Lady of Victory Hospital, Series A, AMBAC Insured, 6.625%, 11/01/16 1,079,810
1,000,000 Refunding, Hospital and Nursing Home Mortgage, Series C,
MBIA Insured, 6.25%, 08/15/12 1,053,220
1,495,000 Refunding, St. Mary's Hospital Project, Series A, AMBAC Insured, 6.20%, 11/01/14 1,587,600
700,000 Sisters of Charity Hospital, Series A, AMBAC Insured, 6.60%, 11/01/10 760,627
1,500,000 Sisters of Charity Hospital, Series A, AMBAC Insured, 6.625%, 11/01/18 1,619,715
New York State Power Authority Revenue and General Purpose,
2,000,000 Refunding, Series Z, FGIC Insured, 6.50%, 01/01/19 2,154,800
3,000,000 Series AA, MBIA Insured, 6.25%, 01/01/23 3,146,460
3,255,000 Series Y, AMBAC Insured, 6.50%, 01/01/11 3,477,512
13,975,000 New York State Tollway Authority, General Revenue, Series C,
FGIC Insured, 6.00%, 01/01/25 14,413,396
Niagara County GO, Public Improvement, MBIA Insured,
500,000 6.00%, 07/15/18 520,485
510,000 6.00%, 07/15/19 530,895
610,000 6.00%, 07/15/20 634,992
645,000 6.00%, 07/15/21 671,426
7,500,000 Niagara Falls Bridge Commission Toll Revenue, Refunding,
Series B, FGIC Insured, 5.25%, 10/01/21 7,162,950
Niagara Falls Public Improvement, MBIA Insured,
1,000,000 6.85%, 03/01/19 1,122,870
500,000 6.90%, 03/01/20 561,320
500,000 6.90%, 03/01/21 561,320
1,200,000 Niagara Falls Water Treatment Plant, MBIA Insured, 7.00%, 11/01/12 1,334,904
Niagara Frontier Transportation Authority, Airport Revenue,
Greater Buffalo International Airport, AMBAC Insured,
1,000,000 Series A, 6.25%, 04/01/24 1,047,160
1,440,000 Series C, 6.00%, 04/01/24 1,500,466
North Hempstead GO, Refunding, FGIC Insured,
210,000 Series A, 6.40%, 02/01/11 232,579
1,065,000 Series B, 6.40%, 04/01/15 1,181,607
1,000,000 Series B, 6.40%, 04/01/16 1,100,620
Port Authority of New York and New Jersey,
1,000,000 Consolidated 71st Series, AMBAC Insured, 6.50%, 01/15/26 1,060,740
1,600,000 Consolidated 71st Series, MBIA Insured, 6.50%, 01/15/26 1,697,184
4,230,000 Consolidated 76th Series, AMBAC Insured, 6.50%, 11/01/26 4,504,569
1,355,000 Phelps-Clifton GO, Springs Central School District, AMBAC Insured, 5.65%, 06/15/13 1,374,837
2,000,000 Puerto Rico Electric Power Authority, Power Revenue,
Series R, FSA Insured, 6.25%, 07/01/17 2,099,220
810,000 Rensselear County GO, AMBAC Insured, 6.70%, 02/15/11 926,591
100,000 Schuylerville Central School District, MBIA Insured, 6.875%, 06/15/07 115,745
Suffolk County GO, Public Improvement, FGIC Insured,
500,000 Refunding, Series B, 6.20%, 05/01/11 528,970
500,000 Refunding, Series B, 6.20%, 05/01/13 526,035
365,000 Series 1989, Pre-Refunded, 6.50%, 07/15/13 372,614
1,000,000 Suffolk County Water Authority, Waterworks Revenue,
Refunding, AMBAC Insured, Pre-Refunded, 7.10%, 06/01/10 1,071,910
Sullivan County GO, Public Improvement, Refunding, MBIA Insured,
510,000 5.20%, 03/15/16 493,379
500,000 5.20%, 03/15/17 483,215
Triborough Bridge and Tunnel Authority Revenue,
$ 1,435,000 General Purpose, Series P, FGIC Insured, 5.50%, 01/01/19 $ 1,417,177
4,475,000 General Purpose, Series X, AMBAC Insured, 6.50%, 01/01/19 4,822,171
2,750,000 General Purpose, Series X, MBIA Insured, 6.50%, 01/01/19 2,963,345
1,500,000 Refunding, General Purpose, Series Q, AMBAC Insured, 6.00%, 01/01/13 1,522,125
740,000 Series S, Secured by U.S. Government Securities, Pre-Refunded, 7.00%, 01/01/21 810,966
1,100,000 Series T, MBIA Insured, Pre-Refunded, 7.00%, 01/01/20 1,210,220
750,000 Utica IDA, Civic Facility Revenue, Munson-Williams Facility,
Series A, MBIA Insured, 5.50%, 07/15/16 733,540
--------------
Total Long Term Investments (Cost $249,183,521) 261,134,486
--------------
a Short Term Investments 0.1%
New York City Municipal Water Finance Authority,
Water and Sewer System Revenue, FGIC Insured,
Daily VRDN and Put,
100,000 Series G, 4.05%, 06/15/24 100,000
200,000 Series 93-C, 4.15%, 06/15/22 200,000
--------------
Total Short Term Investments (Cost $300,000) 300,000
--------------
Total Investments (Cost $249,483,521)99.8% 261,434,486
Other Assets and Liabilities, Net0.2% 486,466
--------------
Net Assets 100.0% $261,920,952
==============
AtJune 30, 1997, the net unrealized appreciation based on the
cost of investments for income tax purposes of $249,483,521 was
as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost $ 12,214,066
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value (263,101)
--------------
Net unrealized appreciation $ 11,950,965
==============
</TABLE>
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
CGIC - Capital Guaranty Insurance Co. (Acquired by FSA in 1995 and no longer
does business under this name)
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Corp.
FSA - Financial Security Assistance
GO - General Obligation
HDC - Housing Development Corp.
IDA - Industrial Development Authority/Agency
MBIA - Municipal Bond Investors Assurance Corp.
PCR - Pollution Control Revenue
aVariable 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 upon
short notice prior to specified dates. The interest rate may change on specified
dates in relationship with changes in a designated rate (such as prime interest
rate or U.S. Treasury bills rate). bSee Note 1(g) regarding securities purchased
on a when-issued basis.
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Statement of Investments in Securities and Net Assets, June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT Franklin New York Intermediate-Term Tax-Free Income Fund (NOTE1)
- -------------------------------------------------------------------------------------------------------------------------
Long Term Investments 95.5%
<S> <C>
$ 100,000 Cortland County New York IDA, Civic Facility Revenue,
Cortland Memorial Hospital, Inc. Project, 6.15%, 07/01/02 $ 102,367
65,000 Franklin County IDA, Lease Revenue, County Correctional Facility Project, 6.375%, 11/01/02 68,078
260,000 Guam Airport Authority Revenue, Refunding, Series A, 6.00%, 10/01/03 270,101
1,300,000 Guam Power Authority Revenue, Series A, 6.00%, 10/01/04 1,349,270
500,000 Metropolitan Transportation Authority, New York Services Contract,
Transportation Facilities, Series O, 5.75%, 07/01/07 512,600
New York City, GO,
5,200,000 Refunding, Series A, 6.375%, 08/01/05 5,500,768
1,000,000 Refunding, Series B, 6.20%, 08/15/06 1,071,800
700,000 Refunding, Series F, 6.00%, 08/01/12 715,876
1,000,000 Series G, 5.75%, 10/15/10 1,011,320
3,500,000 Series H, 7.00%, 02/01/06 3,824,940
New York City IDA, Civic Facility Revenue,
260,000 New York Blood Center, Inc. Project, ETM, 6.80%, 05/01/02 273,684
1,875,000 USTA National Tennis Center Project, FSA Insured, 6.00%, 11/15/03 2,015,119
1,675,000 USTA National Tennis Center Project, FSA Insured, 6.10%, 11/15/04 1,816,219
2,000,000 New York Housing Corporate Revenue, Refunding, 5.50%, 11/01/10 2,005,120
4,010,000 New York State COP, Commissioner of General Services, Executive Department, 6.50%, 03/01/00
4,192,335
New York State Dormitory Authority Revenues,
690,000 Department of Health, 6.25%, 07/01/04 736,603
735,000 Department of Health, 6.30%, 07/01/05 787,824
100,000 Refunding, City University, Series U, 6.25%, 07/01/02 105,826
1,720,000 Refunding, City University, Series U, 6.35%, 07/01/04 1,849,327
2,000,000 Refunding, Nyack Hospital, 6.00%, 07/01/06 2,054,480
300,000 W.K. Nursing Home Corp., FHA Insured, 5.55%, 08/01/08 310,533
3,045,000 New York State HFA Revenue, Refunding, Health Facilities, Series A, 6.00%, 11/01/08 3,100,510
1,500,000 New York State Medical Care Facilities, Finance Agency Revenue, 5.70%, 02/15/05 1,592,055
475,000 New York State Medical Care Facilities, Finance Agency Revenue, Refunding,
Huntington Hospital Mortgage Project,
Series A, 5.90%, 11/01/04 491,202
1,900,000 New York State Tollway Authority, General Revenue, Series A, 5.80%, 01/01/06 1,981,263
New York State Urban Development Corp. Revenue,
500,000 Refunding, Correctional Facilities, 5.75%, 01/01/13 500,900
400,000 Youth Facilities, 5.70%, 04/01/10 405,760
1,500,000 Youth Facilities, 5.875%, 04/01/10 1,533,885
Northern Mariana Islands Commonwealth Ports Authority, Seaport Revenue, Series A,
410,000 5.85%, 10/01/03 412,296
430,000 5.95%, 10/01/04 432,713
460,000 6.05%, 10/01/05 463,206
485,000 6.15%, 10/01/06 488,681
125,000 Oneida-Herkimer New York Solid Waste Management Authority,
Solid Waste Systems Revenue, Refunding, 6.65%, 04/01/05 131,778
1,000,000 Puerto Rico Commonwealth, GO, 6.00%, 07/01/05 1,066,590
1,500,000 Puerto Rico Electric Power Authority Revenue, Series T, 6.00%, 07/01/04 1,594,890
2,000,000 Puerto Rico Industrial, Tourist, Educational, Medical, and Environmental
Control Facilities Financing Authority,
Hospital Revenue, Mennonite General Hospital Project, Series A, 6.375%, 07/01/06 2,061,340
Puerto Rico Municipal Finance Agency, Series A,
300,000 5.875%, 07/01/06 311,568
300,000 FSA Insured, 5.60%, 07/01/05 316,185
Suffolk County IDA, Civic Facilities Revenue, Dowling College Civic Facilities,
$ 100,000 6.10%, 06/01/03 $ 101,726
180,000 6.20%, 06/01/04 183,017
225,000 Refunding, 6.40%, 12/01/05 230,114
350,000 United Nations Development Corp. New York Revenue, Refunding, Series A, 5.70%, 07/01/02 363,839
------------
Total Long Term Investments (Cost $45,946,596) 48,337,708
------------
a Short Term Investments 1.6%
New York City Municipal Water Finance Authority, Water and Sewer Systems Revenue, FGIC Insured,
300,000 Series C, Daily VRDN and Put 4.15%, 06/15/23 300,000
500,000 Series G, Daily VRDN and Put 4.05%, 06/15/24 500,000
------------
Total Short Term Investments (Cost $800,000) 800,000
------------
Total Investments (Cost $46,746,596)97.1% 49,137,708
Others Assets and Liabilities, Net 2.9% 1,452,248
------------
Net Assets 100.0% $50,589,956
============
At June 30, 1997, the net unrealized appreciation based on the
cost of investments for income tax purposes of $46,746,596 was
as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost $ 2,391,112
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value --
------------
Net unrealized appreciation $ 2,391,112
============
</TABLE>
PORTFOLIO ABBREVIATIONS:
COP - Certificate of Participation
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Corp.
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance
GO - General Obligation
HFA - Housing Finance Authority/Agency
IDA - Industrial Development Authority/Agency
USTA - United States Tennis Association
aVariable 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 upon
short notice prior to specified dates. The interest rate may change on specified
dates in relationship with changes in a designated rate (such as prime interest
rate or U.S. Treasury bills rate).
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements
Statements of Assets and Liabilities
June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Franklin New York Franklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
- ---------------------------------------------------------------------------------------------------------------
Assets:
Investments in securities:
<S> <C> <C> <C>
At identified cost $64,314,329 $249,483,521 $46,746,596
====================================================
At value 64,314,329 261,434,486 49,137,708
Cash 225,910 178,338 530,208
Receivables:
Interest 593,878 4,977,315 1,020,131
Capital shares sold -- 322,881 84,798
Investment securities sold -- 11,234,050 --
----------------------------------------------------
Total assets 65,134,117 278,147,070 50,772,845
----------------------------------------------------
Liabilities:
Payables:
Investment securities purchased:
Regular delivery. 3,410,941 -- --
When-issued basis (Note 1) -- 15,161,501 --
Distributions to shareholders 5,781 365,983 78,806
Other payables to shareholders 47,841 459,224 57,628
Capital shares repurchased -- 71,427 10,606
Distribution fees -- 40,786 8,021
Shareholder servicing costs 6,862 1,986 1,708
Management fees 16,991 118,983 7,943
Accrued expenses and other liabilities 20,925 6,228 18,177
----------------------------------------------------
Total liabilities 3,509,341 16,226,118 182,889
----------------------------------------------------
Net assets, at value $61,624,776 $261,920,952 $50,589,956
====================================================
Net assets consist of:
Undistributed net investment income $ -- $ 84,025 $ 184,559
Unrealized appreciation on investments -- 11,950,965 2,391,112
Accumulated net realized loss from investments -- (1,905,428) (3,055,208)
Class I capital shares 61,624,776 247,318,690 51,069,493
Class II capital shares -- 4,472,700 --
----------------------------------------------------
Net assets, at value $61,624,776 $261,920,952 $50,589,956
====================================================
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
Statements of Assets and Liabilities (cont.)
June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Franklin New York Franklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
Class I Shares:
<S> <C> <C> <C>
Net assets, at value $61,624,776 $257,371,304 $50,589,956
===========================================================
Shares outstanding 61,624,776 22,766,103 4,891,825
===========================================================
Net asset value per share* $1.00 $11.31 $10.34
===========================================================
Class II Shares:
Net assets, at value $ 4,549,648
================
Shares outstanding 399,487
================
Net asset value per share* $11.39
================
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
Statements of Operations
for the six months ended June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Franklin New York Franklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
Investment income:
<S> <C> <C> <C>
Interest $1,060,010 $7,673,219 $1,350,919
----------------------------------------------------------
Expenses:
Management fees (Note 5) 187,473 710,620 146,191
Distribution fees- Class I (Note 5) -- 111,695 22,218
Distribution fees- Class II (Note 5) -- 13,669 --
Shareholder servicing costs (Note 5) 33,152 43,097 9,540
Reports to shareholders 26,830 22,647 4,730
Registration and filing fees 4,992 4,829 3,951
Professional fees 2,908 12,338 2,117
Custodian fees 304 1,292 222
Trustees' fees and expenses 616 2,664 549
Other 1,446 10,294 3,867
Management fees waived by manager (Note 5) (76,519) -- (89,964)
----------------------------------------------------------
Total expenses 181,202 933,145 103,421
----------------------------------------------------------
Net investment income 878,808 6,740,074 1,247,498
----------------------------------------------------------
Realized and unrealized gain (loss) from investments:
Net realized gain on investments -- 1,040,739 4,028
Net unrealized appreciation (depreciation) on investments -- (609,381) 288,603
---------------------------------------------------------
Net realized and unrealized gain from investments -- 431,358 292,631
---------------------------------------------------------
Net increase in net assets resulting from operations $ 878,808 $7,171,432 $1,540,129
=========================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
Statements of Changes in Net Assets for the six months ended June 30, 1997
(unaudited) and the year ended December 31, 1996
<TABLE>
<CAPTION>
Franklin New York
Franklin New York Franklin New York Insured Intermediate-Term
Tax-Exempt Money Fund Tax-Free Income Fund Tax-Free Income Fund
Six months Year ended Six months Year ended Six months Year ended
ended 6/30/97 12/31/96 ended 6/30/97 12/31/96 ended 6/30/97 12/31/96
Increase (decrease) in net assets:
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 878,808 $ 1,699,872 $ 6,740,074 $ 13,572,845 $ 1,247,498 $ 2,434,687
Net realized gain (loss) from
investments -- -- 1,040,739 879,382 4,028 (261,595)
Net unrealized appreciation
(depreciation) on
investments -- -- (609,381) (3,487,660) 288,603 (297,789)
------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations 878,808 1,699,872 7,171,432 10,964,567 1,540,129 1,875,303
Distributions to
shareholders from:
Undistributed net
investment income:
Class I (878,808) (1,699,872) (6,777,685) (13,462,392) (1,243,193) (2,429,089)
Class II -- -- (99,915) (122,614) -- --
Increase (decrease) in net
assets from capital share
transactions (Note 2) 2,447,196 (1,901,098) (3,577,911) 10,958,482 5,470,989 2,146,745
--------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets 2,447,196 (1,901,098) (3,284,079) 8,338,043 5,767,925 1,592,959
Net assets:
Beginning of period 59,177,580 61,078,678 265,205,031 256,866,988 44,822,031 43,229,072
--------------------------------------------------------------------------------------------
End of period $61,624,776 $59,177,580 $261,920,952 $265,205,031 $50,589,956 $44,822,031
============================================================================================
Undistributed net investment income included in net assets:
Beginning of period $ -- $ -- $ 221,551 $ 233,712 $ 180,254 $ 174,656
============================================================================================
End of period $ -- $ -- $ 84,025 $ 221,551 $ 184,559 $ 180,254
============================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Notes to Financial Statements (unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Franklin New York Tax-Free Trust (the Trust) is an open-end management
investment company (mutual fund), registered under the Investment Company Act of
1940, as amended. The Trust consists of three separate non-diversified funds
(the Funds): Franklin New York Tax-Exempt Money Fund (the Money Fund), Franklin
New York Insured Tax-Free Income Fund (the Insured Fund), and Franklin New York
Intermediate-Term Tax-Free Income Fund (the Intermediate-Term Fund). Each of the
Funds issues a separate series of the Trust's shares and maintains a totally
separate investment portfolio. Each fund seeks to provide tax-free income. The
Money Fund also seeks liquidity in its investments.
The Insured Fund offers two classes of shares, Class I and Class II. Class I
shares are sold with a higher front-end sales charge than Class II shares. Each
class of shares may be subject to a contingent deferred sales charge and has the
same rights, except with respect to the effect of the respective sales charges,
the distribution fees borne by each class, voting rights on matters affecting a
single class and the exchange privilege of each class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
a. Security Valuations:
Tax-free bonds generally trade in the over-the-counter market rather than on a
national securities exchange. In the absence
of a sale or reported bid and asked prices, information with respect to bond and
note transactions, quotations from bond dealers, market transactions in
comparable securities, and various relationships between securities are used to
determine the value of a security. The Trust 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 (the Board).
Securities for which market quotations are not available are valued in
accordance with procedures established by the Board.
The securities in the Money Fund are valued at amortized cost, which
approximates value. The Money Fund must maintain a dollar weighted average
maturity of 90 days or less and only purchase instruments having remaining
maturities of 397 days or less. If the Fund's portfolio has a remaining weighted
average maturity of greater than 90 days, the portfolio will be stated at value
based on recorded closing sales on a national securities exchange or, in the
absence of a recorded sale, within the range of the most recent quoted bid and
asked prices. The Board has established procedures designed to stabilize, to the
extent reasonably possible, the Fund's price per share as computed for the
purpose of sales and redemptions at $1.00. b. Municipal Bonds or Notes with
"Puts":
The Funds have purchased municipal bonds or notes with the right to resell the
bonds or notes to the seller at an agreed upon price or yield on a specified
date or within a specified period (which will be prior to the maturity date of
the bonds or notes). Such a right to resell is commonly known as a "put". In
determining the weighted average to maturity of the Fund's portfolio, municipal
bonds and notes as to which the Fund holds a put will be deemed to mature on the
last day on which the put may be exercised.
c. Income Taxes:
The Funds intend to continue to qualify for the tax treatment applicable to
regulated investment companies under the Internal Revenue Code and to make the
requisite distributions to shareholders which will be sufficient to relieve the
Funds from income and excise taxes. Each Fund is treated as a separate entity in
the determination of compliance with the Internal Revenue Code.
d. Security Transactions:
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Realized gains and losses on security transactions are
determined on the basis of specific identification.
e. Investment Income, Expenses and Distributions:
For the Insured Fund and the Intermediate-Term Fund, distributions to
shareholders are recorded on the ex-dividend date. Interest income and estimated
expenses are accrued daily. Original issue discount and premium are amortized as
required by the Internal Revenue Code. For the Insured Fund, realized and
unrealized gains or losses and net investment income, other than class specific
expenses, are allocated daily to each class of shares based upon the relative
proportion of net assets of each class. The Funds normally declare dividends
from their net investment income daily and distribute monthly. Daily allocations
of net investment income will commence on the day following the receipt of an
investor's funds. Dividends are normally declared each day the New York Stock
Exchange is open for business and are equal to an amount per day set from time
to time by the Board, and are payable to shareholders of record at the beginning
of business on the ex-dividend date. Once each month, dividends are reinvested
in additional shares of the Funds, or paid in cash as requested by the
shareholders.
For the Money Fund, net investment income includes income, calculated on an
accrual basis, and estimated expenses which are accrued daily. The total
available for distributions is computed daily and includes the net investment
income, plus or minus any gains or losses on security transactions and any
changes in unrealized portfolio appreciation or depreciation. Distributions are
normally declared for each day the New York Stock Exchange is open for business,
equal to the total available for distributions (as defined above), and are
payable to shareholders of record as of the close of business on the same day.
Such distributions are automatically reinvested daily in additional shares of
the Fund at net asset value.
f. Expense Allocation:
Common expenses incurred by the Trust are allocated among the Funds based on the
ratio of net assets of each Fund to the combined net assets. In all other
respects, expenses are charged to each Fund as incurred on a specific
identification basis.
g. Securities Purchased on a When-Issued Basis or Delayed Delivery Basis:
The Funds may trade securities on a when-issued or delayed delivery basis, with
payment and delivery scheduled for a future date. These transactions are subject
to market fluctuations and are subject to the risk that the value at delivery
may be more or less than the trade date purchase price. Although the Funds will
generally purchase these securities with the intention of holding the
securities, they may sell the securities before the settlement date. These
securities are identified on the accompanying Statement of Investments in
Securities and Net Assets. The Funds have set aside sufficient investment
securities as collateral for these purchase commitments.
h. Insurance:
Each long-term municipal security in the Insured Fund is insured as to the
scheduled payments of interest and principal by either a mutual fund Portfolio
Insurance Policy, a Secondary Market Insurance Policy, a New Issue Insurance
Policy or collateral guaranteed by an agency of the U.S. government. The
providers of secondary market and new issue insurance are rated "AAA" by
Standard & Poor's.
Premiums for a mutual fund Portfolio Insurance Policy or a Secondary Market
Insurance Policy are paid from the Insured Fund's assets. Premiums for a mutual
fund Portfolio Insurance Policy (effective only so long as the Fund is in
existence, Financial Guaranty (the insurer) remains in business and the
municipal security insured under the policy continues to be held by the Fund)
will reduce the current income of the portfolio by the amount thereof. Premiums
paid by the Fund for a Secondary Market Insurance Policy (effective so long as
the security so insured is outstanding and the insurer remains in business) are
added to the cost basis of the municipal security insured and are not considered
an expense of the Fund. Premiums for a New Issue Insurance Policy (effective so
long as the security so insured is outstanding and the insurer remains in
business) are paid in advance by the insured security issuer or by another third
party prior to acquisition of the security by the Fund and are not considered an
expense of the Fund.
i. 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. TRUST SHARES
At June 30, 1997, there was an unlimited number of no par value shares of
beneficial interest authorized. Transactions in each of the Funds' shares for
the six months ended June 30, 1997 and the year ended December 31, 1996 were as
follows:
<TABLE>
<CAPTION>
Money Fund Insured Fund Intermediate-Term Fund
-------------------------------------------------------------------------
Amount Shares Amount Shares Amount
-------------------------------------------------------------------------
Class I Shares:
Six months ended June 30, 1997
<S> <C> <C> <C> <C> <C>
Shares sold $ 25,953,494 1,262,467 $ 14,136,895 1,069,286 $ 10,986,931
Shares issued in
reinvestment of distributions 878,058 346,950 3,891,222 72,493 745,404
Shares redeemed (24,384,356) (1,964,878) (22,006,375) (610,317) (6,261,346)
-------------------------------------------------------------------------
Net increase (decrease) $ 2,447,196 (355,461)$ (3,978,258) 531,462 $ 5,470,989
=========================================================================
Year ended December 31, 1996
Shares sold $ 52,382,787 3,298,042 $ 36,886,603 1,539,727 $ 15,773,201
Shares issued in
reinvestment of distributions 1,700,710 692,279 7,733,995 138,865 1,415,872
Shares redeemed (55,984,595) (3,323,568) (37,060,385) (1,473,947) (15,042,328)
------------------------------------------------------------------------
Net increase (decrease) $ (1,901,098) 666,753 $ 7,560,213 204,645 $ 2,146,745
========================================================================
</TABLE>
Insured Fund
------------------------
Shares Amount
------------------------
Class II Shares:
Six months ended June 30, 1997
Shares sold 105,776$ 1,190,782
Shares issued in reinvestment of distributions 6,979 78,888
Shares redeemed (77,161) (869,323)
------------------------
Net increase 35,594 $ 400,347
========================
Year ended December 31, 1996
Shares sold 366,427 $ 4,098,519
Shares issued in reinvestment of distributions 8,021 90,093
Shares redeemed (71,226) (790,343)
------------------------
Net increase 303,222 $ 3,398,269
========================
3. DISTRIBUTIONS AND CAPITAL LOSS CARRYOVERS
At December 31, 1996, for tax purposes, the Funds had capital loss carryovers as
follows:
Intermediate-
Insured Fund Term Fund
-----------------------------
Capital loss carryovers expiring in:
2001 $ -- $ 94,629
2002 1,264,207 2,703,012
2003 1,681,960 --
2004 -- 261,595
----------------------------
$2,946,167 $3,059,236
============================
For tax purposes, the aggregate cost of securities and unrealized appreciation
of the Funds are the same as for financial reporting purposes at June 30, 1997.
4. PURCHASES AND SALES OF SECURITIES
Aggregate purchases and sales of securities (excluding purchases and sales of
short-term securities) for the six months ended June 30, 1997 were as follows:
Intermediate-
Money Fund Insured Fund Term Fund
-------------------------------------------
Purchases $ -- $45,672,655 $5,057,823
Sales $ -- $46,557,629 $ 603,680
5. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
a. Management Agreement:
Under the terms of a management agreement, Franklin Advisers, Inc. (Advisers),
provides investment advice and receives fees computed monthly based on the net
assets on the last day of the month of the Insured Fund and the
Intermediate-Term Fund and computed daily based on the net assets of the Money
Fund as follows:
Annualized Fee Rate Net Assets
- -----------------------------------------------------------------------------
0.625% First $100 million
0.50% Over $100 million, up to and including $250 million
0.45% In excess of $250 million
Advisers agreed in advance to waive a portion of its management fees for the
Money Fund and Intermediate Fund, as stated in the Statement of Operations for
the period ended June 30, 1997.
Under an agreement with Advisers, Franklin Templeton Services, Inc. (FT
Services) provides administrative services and facilities for the Funds. The fee
is paid by Advisers and computed monthly based on average daily net assets. It
is not a separate expense of the Funds.
b. Shareholder Services Agreement:
Under the terms of a shareholder services agreement with Franklin/Templeton
Investor Services, Inc. (Investor Services), the Funds pay costs on a per
shareholder account basis. Shareholder servicing costs incurred by the Funds for
the period ended June 30, 1997 aggregated $85,789, of which $82,385 was paid to
Investor Services.
c. Distribution Plans and Underwriting Agreement:
Under the terms of distribution plans pursuant to Rule 12b-1 of the Investment
Company Act of 1940 (the Plans), the Insured Fund reimburses Franklin/Templeton
Distributors, Inc. (Distributors) in an amount up to a maximum of 0.10% per
annum for Class I and 0.65% per annum for Class II, of the average daily net
assets of such class of the Fund, and the Intermediate-Term Fund reimburses
Distributors up to a maximum of 0.10% per annum of the Fund's average daily net
assets, for costs incurred in the promotion, offering and marketing of the
Funds' shares. The Plans do not permit nor require payments of excess costs
after termination. Fees incurred by the Funds under the Plans aggregated
$147,582 for the six months ended June 30, 1997.
In its capacity as underwriter for the shares of the Insured Fund and the
Intermediate-Term Fund, Distributors receives commissions on sales of the Funds'
shares of beneficial interest. Commissions are deducted from the gross proceeds
received from the sale of the shares of the Funds, and as such are not expenses
of the Funds. Distributors may also make payments, out of its own resources, to
the dealers for certain sales of the Funds' shares. Commissions received by
Distributors, and the amounts paid to other dealers, and any applicable
contingent deferred sales charges (CDSC) for the six months ended June 30, 1997
were as follows:
Intermediate-
Insured Fund Term Fund
---------------------------
Total commissions received
including CDSC $330,994 $67,472
Paid to other dealers $335,584 $81,851
CDSC $ 5,915 --
d. Other Affiliates and Related Party Transaction:
Certain officers and trustees of the Trust are also officers and/or directors of
Distributors, Advisers, FT Services, and Investor Services, all wholly-owned
subsidiaries of Franklin Resources, Inc. (Resources).
6. CREDIT RISK
All of the Funds' investments are in the securities of issuers in the state of
New York and U.S. territories and possessions. Such concentration may subject
the Funds more significantly to economic changes occuring within that state and
U.S. territories and possessions.
7. FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period by Fund are as follows:
<TABLE>
<CAPTION>
Per Share Operating Performance Ratios/Supplemental Data
Ratio of Ratio of Net
Net Asset Net Realized Distributions Expenses Investment
Year Value at Net & Unrealized Total From From Net Net Asset Net Assets at to Average Income to Portfolio
Ended Beginning Investment Gain (Loss) Investment Investment Value at End Total End of Period Net Assets Average Turnover
Dec. 31,of Period Income on Securities Operations Income of Period Return+ (in 000's) (See Note 5)++Net Assets Rate
Money Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1992 $1.00 $.021 $ -- $ .021$ (.021) $ 1.00 2.10% $ 54,122 .65% 2.12% --%
1993 1.00 .017 -- .017 (.017) 1.00 1.67 50,317 .63 1.68 --
1994 1.00 .021 -- .021 (.021) 1.00 2.11 64,835 .60 2.12 --
1995 1.00 .031 -- .031 (.031) 1.00 3.11 61,079 .60 3.06 --
1996 1.00 .028 -- .028 (.028) 1.00 2.79 59,178 .60 2.75 --
1997** 1.00 .014 -- .014 (.014) 1.00 1.46 61,625 .60* 2.90* --
Insured Fund
Class I Shares:
1992 10.46 .620 .369 .989 (.649) 10.80 9.49 149,054 .33 5.80 3.39
1993 10.80 .600 .880 1.480 (.600) 11.68 13.79 263,647 .50 5.28 5.38
1994 11.68 .590 (1.525) (.935) (.585) 10.16 (8.19) 225,061 .56 5.48 25.66
1995 10.16 .590 1.248 1.838 (.588) 11.41 18.46 256,171 .65 5.38 22.99
1996 11.41 .590 (.121) .469 (.589) 11.29 4.30 261,068 .65 5.25 15.09
1997** 11.29 .290 .024 .314 (.294) 11.31 2.74 257,371 .71* 5.18* 21.16
Class II Shares:
19952,3 10.85 .357 .596 .953 (.343) 11.46 8.92 696 1.23* 4.74* 22.99
19963 11.46 .5274 (.101) .426 (.516) 11.37 3.87 4,137 1.22 4.69 15.09
1997** 11.37 .270 .011 .281 (.261) 11.39 2.51 4,550 1.30* 4.97* 21.16
Intermediate-Term Fund
19921 10.00 .090 .135 .225 (.015) 10.21 2.25 3,459 -- 4.41* 20.80
1993 10.21 .480 .536 1.016 (.546) 10.68 10.18 31,162 -- 4.96 30.95
1994 10.68 .550 (1.104) (.554) (.526) 9.60 (5.42) 35,166 .05 5.57 188.38
1995 9.60 .550 .795 1.345 (.545) 10.40 14.31 43,229 .33 5.51 24.68
1996 10.40 .560 (.124) .436 (.556) 10.28 4.38 44,822 .37 5.47 24.67
1997** 10.28 .270 .066 .336 (.276) 10.34 3.31 50,590 .45* 5.36* 1.34
</TABLE>
*Annualized
**For six months ended June 30, 1997.
1For the period September 21, 1992 (effective date) to December 31, 1992.
2For the period May 1, 1995 (effective date) to December 31, 1995.
3Ratio has been calculated using daily average net assets during the period.
4Ratio has been calculated using daily average outstanding shares during the
period.
+Total return measures the change in value of an investment over the periods
indicated. It is not annualized. It does not include the maximum front-end sales
charge or the contingent deferred sales charge, and assumes reinvestment of
dividends and capital gains at net asset value. Prior to May 1, 1994, dividends
were reinvested at the offering price, and capital gains, at net asset value.
Effective May 1, 1994, with the implementation of the Rule 12b-1 distribution
plan for Class I shares, the sales charge on reinvested dividends was
eliminated. The total return may differ from that reported in the Manager's
Discussion due to differences between the net asset values quoted and the net
asset values calculated for financial reporting purposes.
7. FINANCIAL HIGHLIGHTS (cont.)
++During the periods indicated, Advisers agreed in advance to waive a portion of
its management fees and made payments of other expenses incurred by the Funds.
Had such action not been taken, the ratio of operating expenses to average net
assets would have been as follows:
Ratio of Expenses to
Average Net Assets
Money Fund:
1992 .89%
1993 .97
1994 .93
1995 .85
1996 .86
1997** .86*
Ratio of Expenses to
Average Net Assets
Insured Income Fund:
Class I:
1992 .74%
1993 .65
1994 .71
1995 .73
1996 .70
Insured Income Fund:
Class II:
19952,3 1.30*
19963 1.27
Ratio of Expenses to
Average Net Assets
Intermediate-Term
Income Fund:
19921 1.76%*
1993 .73
1994 .80
1995 .83
1996 .83
1997** .84*
Franklin New York Tax-Free Trust Semi-Annual Report June 30, 1997.
APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING (PURSUANT TO ITEM
304 (a)OF REGULATION S-T)
GRAPHIC MATERIAL (1)
This bar chart shows the comparison between the fund's Seven-Day annualized
yield of 3.39%, the taxable equivalent yield (New York State residents)of
6.03%, and the taxable equivalent yield (New York City residents) of 6.25%.
GRAPHIC MATERIAL (2)
This bar chart shows the comparison between the fund's Class I distribution
rate of 4.98%, the taxable equivalent distribution rate (New York State
residents)of 8.85%, and the taxable equivalent distribution rate (New York
City residents) of 9.19%.
GRAPHIC MATERIAL (3)
This bar chart shows the comparison between the fund's Class II distribution
rate of 4.55%, the taxable equivalent distribution rate (New York State
residents)of 8.09%, and the taxable equivalent distribution rate (New York
City residents) of 8.39%.
GRAPHIC MATERIAL (4)
This chart shows in bar format the credit quality breakdown of the fund's
holdings on 12/31/96 and 6/30/97, based on total long-term investments.
Credit Quality Breakdown
AAA 15.1% 12.6%
AA 0.0% 8.2%
A 8.5% 38.4%
BBB 76.4% 40.8%
GRAPHIC MATERIAL (5)
This bar chart shows the comparison between the fund's distribution rate of
5.22%, the taxable equivalent distribution rate (New York State residents)of
9.28%, and the taxable equivalent distribution rate (New York City residents)
of 9.63%.
