SEMI
ANNUAL
REPORT
June 30, 1998
Franklin New York Tax-Free Trust
Franklin New York Insured Tax-Free Income Fund
Franklin New York Intermediate-Term
Tax-Free Income Fund
Franklin New York Tax-Exempt Money Fund
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.
Charles B. Johnson
Chairman
Franklin New York
Tax-Free Trust
Thomas J. Kenny
Director
Franklin Municipal
Bond Department
CONTENTS
Shareholder Letter................................... 1
Fund Reports
Franklin New York
Tax-Exempt Money Fund............................... 4
Franklin New York Insured
Tax-Free Income Fund................................ 7
Franklin New York
Intermediate-Term
Tax-Free Income Fund................................ 13
Municipal Bond Ratings............................... 17
Financial Highlights &
Statement of Investments............................. 20
Financial Statements................................. 33
Notes to Financial
Statements........................................... 38
SHAREHOLDER LETTER
Standard & Poor's Credit Week Municipal. December 1, 1997.
Bond Buyer; April 4, 1998, & May 22, 1998.
Dear Shareholder:
It's a pleasure to bring you Franklin New York Tax-Free Trust's semiannual
report for the period ended June 30, 1998.
The National Economy
During much of the period under review, the U.S. economy continued its
remarkable expansion, demonstrating healthy growth with few signs of inflation.
Strong consumer demand for goods, services and housing stimulated growth.
However, by the period's end, the preliminary, second quarter, annualized Gross
Domestic Product gain of 1.4% reflected some economic slowdown due to the Asian
financial crisis. Thus far, the Asian crisis' impact on the U.S. economy has
been mixed -- it has slowed the economy through a decline in American exports,
while the U.S. dollar's resulting strength has helped keep inflation under
control through a decline in import prices. Although many of these Asian
countries are implementing reforms, it will likely take some time for their
economies to recover.
In May, President Clinton predicted a $39 billion federal budget surplus for the
government's fiscal year-end on September 30, 1998. This would be the first
annual surplus since the government finished $3.2 billion ahead in 1969. During
the fund's fiscal year, economic growth benefited employment without triggering
significant inflation. May's annualized, seasonally adjusted rate of 4.3% marked
a 28-year low in the nation's unemployment; at the same time, commodity prices
fell to their lowest levels since the early 1990s.
The combination of a strong economy and low inflation kept interest rates in a
narrow range. The healthy economy prevented a significant rate decline, while
low inflation prevented rates from rising. The bond market also benefited from
the dollar's strength relative to other currencies. The yield for the 30-year
U.S. Treasury bond stood at 5.62% on June 30, 1998, compared with 5.93% six
months earlier.
New York's Economy
Although lagging the national recovery, New York state's financial performance
has improved over the past several fiscal years as a result of a rebounding
economy, realistic budgeting and more stringent spending controls. New York's
annualized, seasonally adjusted, May unemployment rate was 5.7%, as opposed to a
national figure of 4.3%. Since the early 1990s' recession, the greatest job
growth took place in the state's services sector, which accounts for one-third
of total employment. In recent years, New York's overall economic prosperity has
increasingly become tied to the finance, insurance and real estate sectors.1
For the state's fiscal year ended March 31, 1998, comptroller H. Carl McCall put
the budget surplus at $2.17 billion. He attributed much of it to the "boom on
Wall Street." New York City comptroller Alan G. Hevesi also announced a record
$2.14 billion budget surplus for the city's fiscal year ending in June 1998.2
Anticipation of the state budget surplus was a contributing factor in Moody's
Investors Service's credit rating upgrade in February of this year. Moody's
upgraded New York City general obligation debt from Baa1 to A3, while Standard &
Poor's(R), which rates the debt BBB+, put it on credit watch for a possible
upgrade. Fitch IBCA currently rates the state's credit A-. (For definitions of
bond ratings, please see page 17.) What New York decides to do with this year's
surplus, in light of an accumulated budget deficit larger than that of most
other states, will most likely affect future ratings.
Our investment philosophy remains disciplined and focused, as we strive to offer
our shareholders high, tax-free income and preservation of principal. Looking
forward, the recent economic environment should be beneficial for New York
municipalities and municipal bonds.
We encourage you to discuss your financial goals with an investment
representative. He or she can address concerns about volatility and help you
diversify your investments and stay focused on the long term. Mutual funds offer
a level of diversification that is almost impossible for individual investors to
achieve on their own. Municipal bonds continue to be an attractive investment
for diversifying a heavily weighted stock portfolio. As always, we appreciate
your support, welcome your questions and comments, and look forward to serving
your investment needs in the years ahead.
Sincerely,
Charles B. Johnson
President
Franklin New York Tax-Free Trust
Thomas J. Kenny
Director
Franklin Municipal Bond Department
FRANKLIN NEW YORK
TAX-EXEMPT MONEY FUND
Money Market Acronyms
The report mentions the following acronyms often used in the short-term
municipal market.
TAN - Tax and Anticipation Note
TECP - Tax-Exempt Commercial Paper
VRDN - Variable-Rate Demand Note
1. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution. There is no guarantee that the
$1.00 per share price will be maintained.
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.
Your Fund's Objective: Franklin New York Tax-Exempt Money Fund seeks to provide
high, current income exempt from regular federal, New York state and New York
City personal income taxes while seeking 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
New York's fiscal 1998 budget surplus confirmed the state's improved financial
health. This positive financial condition was achieved despite employment that
lags the nation's, largely thanks to Wall Street profits and growth in personal
income tax revenues.
Franklin New York Tax-Exempt Money Fund sought to take advantage of the
favorable investment climate during the reporting period with such notable
purchases as Westchester County TANs, Half Hollow Hills Central School District
TANs, New York State general obligation TECP and Long Island Power Authority New
York Electric System Revenue Daily VRDNs.
As always, the fund's investment strategy emphasizes high quality and liquidity.
In an effort to provide safety and stability of principal, we manage the fund
more conservatively than required by SEC guidelines. For example, SEC guidelines
allow tax-exempt money funds to purchase both first- and second-tier securities.
Franklin Templeton purchases only first-tier securities for inclusion in its
tax-exempt money market portfolios. Also, even though SEC guidelines regulating
money market funds permit it, Franklin New York Tax-Exempt Money Fund does not
buy any derivatives. Instead, the fund purchases only plain vanilla,
variable-rate securities. The fund eliminated its exposure to Japanese bank
guarantees several years ago because of the problems these banks were having.
This is consistent with our philosophy of purchasing securities only from what
we believe are the most credit-worthy institutions.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1998, the end of the reporting period. However, market
and economic conditions are changing constantly, which can be expected to affect
our strategies and the fund's portfolio composition. Although historic
performance is no guarantee of future results, these insights may help you
understand our investment and management philosophy.
GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Tax-Exempt Money Fund
Period ended 6/30/98
Seven-day effective yield1 2.93%
Seven-day annualized yield 2.88%
Taxable equivalent yield2 5.38%
1. The seven-day effective yield assumes the compounding of daily dividends.
2. Taxable equivalent yield assumes the 1998 maximum combined federal, New York
state and New York City personal income tax bracket of 46.4%, based on the
federal income tax rate of 39.6%.
Annualized and effective yields are for the seven days ended June 30, 1998.
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 its management fees,
which reduces operating expenses and increases distribution rate, yield and
total return to shareholders. Without these reductions, the fund's annualized
and effective yields for the period would have been 2.66% and 2.69%,
respectively. The fee waiver may be discontinued at any time upon notice to the
fund's Board of Trustees.
FRANKLIN NEW YORK
INSURED TAX-FREE INCOME FUND
The Bond Buyer 40 covers the municipal bond market and is published daily by the
"Bond Buyer" newspaper. The index comprises 40 actively traded general
obligation and revenue issues from around the country, rated A or better, with
at least 19 years remaining to maturity, a first call date between 7 and 16
years, and at least one call at par before redemption.*
*Barron's Dictionary of Finance and Investment Terms, 1995.
Your Fund's Objective: Franklin New York Insured Tax-Free Income Fund seeks to
provide high, current income exempt from regular federal, New York state and New
York City personal income taxes while seeking preservation of capital by
investing primarily in a portfolio of insured New York municipal securities.1, 2
The municipal bond market registered a healthy showing for the six-months under
review. Despite some periods of volatility, interest rates trended slightly
lower. The Bond Buyer 40 began 1998 yielding 5.25%, reached a high of 5.44% on
April 29 and ended the reporting period yielding 5.22% on June 30.3
Municipalities continued to take advantage of this low interest-rate environment
by issuing a large supply of new bonds in the first half of 1998. These new
bonds were used to refinance outstanding debt, as well as to finance new
projects. In addition to falling rates and greater bond supply, two other trends
discussed in the last reporting period persisted -- narrowing credit quality
spreads between higher- and lower-rated issues and an increase in the amount of
insured municipal bonds on the market.
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.
2. Fund shares are not insured by any U.S. or other government agency, are
subject to market risk and will fluctuate in value. Insurance relates only to
the payment of principal and interest on the portfolio's insured securities, and
the terms of the insurance as outlined in the prospectus. No representation is
made as to any issuer's ability to meet its commitments.
3. Source: Bloomberg.
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 25 of
this report.
GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT
As in the previous reporting period, the fund's exposure to prerefunded bonds
increased slightly. Our management of such bonds has not changed. We typically
look to sell prerefunded bonds with approximately five years remaining to their
call date. In doing so, the fund is usually able to capture a premium on these
bonds and use this capital to invest in current coupon bonds. We extend the
fund's call protection and preserve the fund's income earning potential in this
way, while seeking to maintain a stable share value.
The fund maintained solid sector diversification in its purchases during the
period, as shown in the chart to the left. Some notable purchases during the
period included bonds issued by Rochester University, the city of Buffalo, the
Long Island Power Authority, the Metropolitan Transportation Authority and the
New York State Dormitory Authority.
Going forward, we hold a positive outlook for New York in general, and the fund
in particular. We expect the supply of New York municipal bonds to remain stable
for the second half of 1998 and this, coupled with a continued strong demand for
New York bonds, should keep Franklin New York Insured Tax-Free Income Fund an
attractive investment.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1998, the end of the reporting period. However, market
and economic conditions are changing constantly, which can be expected to affect
our strategies and the fund's portfolio composition. Although historic
performance is no guarantee of future results, these insights may help you
understand our investment and management philosophy.
PERFORMANCE SUMMARY
Past performance is not predictive of future results.
Class I
Franklin New York Insured Tax-Free Income Fund - Class I share price, as
measured by net asset value, increased one cent, from $11.66 on December 31,
1997, to $11.67 on June 30, 1998. During the six-month reporting period,
shareholders received income distributions totaling 28.8 cents ($0.288) per
share. Distributions will vary based on the earnings of the fund's portfolio,
and past distributions are not predictive of future trends.
Based on an annualization of the current monthly per-share dividend of 4.7 cents
($0.047) and the maximum offering price of $12.19 on June 30, 1998, your fund's
distribution rate was 4.63%. 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 8.64% from a taxable investment to match the
fund's tax-free distribution rate. Likewise, an investor in the maximum combined
federal and New York state personal income tax bracket would need to earn 8.23%
from a taxable investment to match the fund's tax-free distribution rate.
GRAPHIC MATERIAL 3 OMITTED - SEE APPENDIX AT END OF DOCUMENT
GRAPHIC MATERIAL 4 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Insured Tax-Free Income Fund - Class I
Periods ended 6/30/98
Since
Inception
1-Year 5-Year (5/1/91)
Cumulative Total Return1 8.44% 34.64% 69.08%
Average Annual Total Return2 3.85% 5.21% 6.96%
Distribution Rate3 4.63%
Taxable Equivalent
Distribution Rate4 8.64%
30-Day Standardized Yield5 3.96%
Taxable Equivalent Yield4 7.39%
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, maximum 4.25%
initial sales charge. See Note below.
3. Distribution rate is based on an annualization of the current 4.7 cent per
share monthly dividend and the maximum offering price of $12.19 on June 30,
1998.
4. Taxable equivalent distribution rate and yield assume the 1998 maximum
combined federal, New York state and New York City personal income tax bracket
of 46.4%, 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, 1998.
Note: Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge with dividends reinvested at the offering price. Thus, actual total
returns 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.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. 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.
Class II
Franklin New York Insured Tax-Free Income Fund - Class II share price, as
measured by net asset value, increased three cents, from $11.75 on December 31,
1997, to $11.78 on June 30, 1998. During the six-month reporting period,
shareholders received income distributions totaling 25.44 cents ($0.2544) per
share. Distributions will vary based on the earnings of the fund's portfolio,
and past distributions are not predictive of future trends.
Based on an annualization of the current monthly per-share dividend of 4.14
cents ($0.0414) and the maximum offering price of $11.90 on June 30, 1998, your
fund's distribution rate was 4.17%. 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 7.78% from a taxable investment
to match the fund's tax-free distribution rate. Likewise, an investor in the
maximum combined federal and New York state personal income tax bracket would
need to earn 7.41% from a taxable investment to match the fund's tax-free
distribution rate.
GRAPHIC MATERIAL 5 OMITTED - SEE APPENDIX AT END OF DOCUMENT
GRAPHIC MATERIAL 6 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Insured Tax-Free Income Fund - Class II
Periods ended 6/30/98
Since
Inception
1-Year 3-Year (5/1/95)
Cumulative Total Return1 8.05% 22.59% 25.24%
Average Annual Total Return2 5.93% 6.67% 7.03%
Distribution Rate3 4.17%
Taxable Equivalent
Distribution Rate4 7.78%
30-Day Standardized Yield5 3.53%
Taxable Equivalent Yield4 6.59%
1. Cumulative total return measures 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 1.0% initial sales
charge and 1.0% contingent deferred sales charge (CDSC), applicable to shares
redeemed within 18 months of investment.
3. Distribution rate is based on an annualization of the current 4.14 cent per
share monthly dividend and the maximum offering price of $11.90 on June 30,
1998.
4. Taxable equivalent distribution rate and yield assume the 1998 maximum
combined federal, New York state and New York City personal income tax bracket
of 46.4%, 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, 1998.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. 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.
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
Your Fund's Objective: Franklin New York Intermediate-Term Tax-Free Income Fund
seeks to provide high, current income exempt from regular federal, New York
state and New York City personal income taxes while seeking preservation of
capital. The fund invests primarily in a portfolio of New York municipal
securities with an average weighted maturity (the time in which the debt must be
repaid) between three and 10 years.1
The municipal bond market registered a healthy showing for the six-month review
period. Despite some periods of volatility, interest rates trended slightly
lower. The Bond Buyer 40 began 1998 yielding 5.25%, reached a high of 5.44% on
April 29 and ended the reporting period yielding 5.22% on June 30.2
Municipalities continued to take advantage of this low interest-rate environment
by issuing a large supply of new bonds in the first half of 1998. These new
bonds were used to refinance outstanding debt, as well as to finance new
projects. In addition to falling rates and greater bond supply, two other trends
discussed in the last reporting period persisted -- narrowing credit quality
spreads between higher- and lower-rated issues and an increase in the amount of
insured municipal bonds on the market.
GRAPHIC MATERIAL 7 OMITTED - SEE APPENDIX AT END OF DOCUMENT
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.
2. Source: Bloomberg.
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 30 of
this report.
During the reporting period, the fund focused on purchasing 10- to 15-year
maturities, which we believe represented the best value. Some of the fund's
purchases during the period included bonds issued by the New York State Urban
Development Corporation, New York State Dormitory Authority St. Agnes Hospital
and New Rochelle Municipal Housing Authority.
Going forward, we hold a positive outlook for New York in general, and the fund
in particular. We expect the supply of New York municipal bonds to remain stable
for the second half of 1998 and this, coupled with a continued strong demand for
New York bonds, should keep Franklin New York Intermediate-Term Tax-Free Income
Fund an attractive investment.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1998, the end of the reporting period. However, market
and economic conditions are changing constantly, which can be expected to affect
our strategies and the fund's portfolio composition. Although historic
performance is no guarantee of future results, these insights may help you
understand our investment and management philosophy.
PERFORMANCE SUMMARY
Franklin New York Intermediate-Term Tax-Free Income Fund's share price, as
measured by net asset value, increased three cents, from $10.62 on December 31,
1997, to $10.65 on June 30, 1998. During the six-month reporting period,
shareholders received income distributions totaling 27.3 cents ($0.273) per
share. Distributions will vary based on the earnings of the fund's portfolio,
and past distributions are not predictive of future trends.
Based on an annualization of the current monthly per-share dividend of 4.5 cents
($0.045) and the maximum offering price of $10.90 on June 30, 1998, your fund's
distribution rate was 4.95%. 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 9.24% from a taxable investment to match the
fund's tax-free distribution rate. Likewise, an investor in the maximum combined
federal and New York state personal income tax bracket would need to earn 8.80%
from a taxable investment to match the fund's tax-free distribution rate.
GRAPHIC MATERIAL 8 OMITTED - SEE APPENDIX AT END OF DOCUMENT
GRAPHIC MATERIAL 9 OMITTED - SEE APPENDIX AT END OF DOCUMENT
Franklin New York Intermediate-Term Tax-Free Income Fund
Periods ended 6/30/98
Since
Inception
1-Year 5-Year (9/23/92)
Cumulative Total Return1 8.42% 32.74% 42.44%
Average Annual Total Return2 5.96% 5.35% 5.91%
Distribution Rate3 4.95%
Taxable Equivalent
Distribution Rate4 9.24%
30-Day Standardized Yield5 4.17%
Taxable Equivalent Yield4 7.78%
1. Cumulative total return measures the change in value of an investment over
the periods indicated and does not include the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum 2.25% initial
sales charge.
3. Distribution rate is based on an annualization of the current 4.5 cent per
share monthly dividend and the maximum offering price of $10.90 on June 30,
1998.
4. Taxable equivalent distribution rate and yield assume the 1998 maximum
combined federal, New York state and New York City personal income tax bracket
of 46.4%, 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, 1998.
The fund's manager has agreed in advance to waive a portion of its management
fees, which reduces expenses and increases distribution rate, total return and
yield to shareholders. Without these reductions, the fund's distribution rate
and total return would have been lower, and yield for the period would have been
3.82%. The fee waiver may be discontinued at any time upon notice to the fund's
Board of Trustees.
All total return calculations assume reinvestment of dividends and capital gains
at net asset value. 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.
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 TRUST
Financial Highlights
Franklin New York Tax-Exempt Money Fund
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998 Year Ended December 31,
(unaudited) 1997 1996 1995 1994 1993
--------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period .......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------------------------------------------------------
Income from investment operations:
Net investment income ......................... .01 .03 .03 .03 .02 .02
--------------------------------------------------------
Less distributions from:
Net investment income ......................... (.01) (.03) (.03) (.03) (.02) (.02)
--------------------------------------------------------
Net asset value, end of period ................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========================================================
Total return* ................................. 1.43% 3.01% 2.79% 3.11% 2.11% 1.67%
Ratios/supplemental data
Net assets, end of period (000's) ............. $58,433 $63,720 $59,178 $61,079 $64,835 $50,317
Ratios to average net assets:
Expenses ...................................... .59%** .60% .60% .60% .60% .63%
Expenses excluding waiver and payments by affiliate .83%** .81% .86% .85% .93% .97%
Net investment income ......................... 2.84%** 2.97% 2.75% 3.06% 2.12% 1.68%
*Total return is not annualized.
**Annualized
FRANKLIN NEW YORK TAX-FREE TRUST
Statement of Investments, June 30, 1998 (unaudited)
Franklin New York Tax-Exempt Money Fund AMOUNT VALUE
<S> <C> <C>
Investments 103.6%
a Babylon, Town of, IDA, IDR, General Microwave Corp. Facility,
Series 1984, Weekly VRDN and Put, 3.45%, 10/01/99 ...................................... $ 100,000 $ 100,000
Buffalo GO RAN, 4.40%, 8/05/98 .......................................................... 1,000,000 1,000,543
b Half Hollow Hills Central School District TAN, 3.90%, 6/25/99 ......................... 2,000,000 2,006,500
a Long Island Power Authority, Electric Systems Revenue, Sub-Series 5,
Daily VRDN and Put, 3.75%, 5/01/33 ..................................................... 2,000,000 2,000,000
Monroe County, TECP, 3.70%, 8/21/98 ..................................................... 2,000,000 2,000,000
a Nassau IDA, Research Facility Revenue, Cold Spring Harbor
Laboratory Project, Daily VRDN and Put, 3.95%, 7/01/23 ................................. 600,000 600,000
a New York City HDC, Mortgage Revenue, Weekly VRDN and Put, 3.20%,
Columbus Apartments, Series A, 3/15/25 .................................................. 1,500,000 1,500,000
Parkgate Tower No. 1, 12/01/07 .......................................................... 1,195,000 1,195,000
a New York City Health & Hospital Corp., Revenue Health System,
Series D, Weekly VRDN and Put, 3.20%, 2/15/26 .......................................... 1,500,000 1,500,000
a New York City IDA, Various Civic Facilities,
American Civil Liberties, Weekly VRDN and Put, 3.35%, 6/01/12 ........................... 905,000 905,000
National Audubon Society, Daily VRDN and Put, 3.85%, 12/01/14 ........................... 500,000 500,000
a New York City Municipal Assistance Corp., Weekly
VRDN and Put, 3.20%, 7/01/08
Sub-Series K-1 .......................................................................... 1,200,000 1,200,000
Sub-Series K-2 .......................................................................... 1,800,000 1,800,000
a New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue, FGIC Insured, Daily VRDN and Put,
Series G, 3.75%, 6/15/24 ................................................................ 2,000,000 2,000,000
Series 93-C, 4.00%, 6/15/22 ............................................................. 400,000 400,000
a New York City Tri-Cultural Resources Revenue,
American Museum of Natural History, Series B, MBIA Insured, Weekly
VRDN and Put 3.25%, 4/01/21 ............................................................ 1,100,000 1,100,000
New York Dormitory Authority Revenues,
a Cornell University, Series B, Daily VRDN and Put, 3.85%, 7/01/25 ...................... 2,200,000 2,200,000
a Metropolitan Museum of Art, Series A, MBIA Insured,
Weekly VRDN and Put, 3.20%, 7/01/15 .................................................... 1,300,000 1,300,000
a Metropolitan Museum of Art, Series B,
Weekly VRDN and Put, 3.20%, 7/01/23 ..................................................... 1,100,000 1,100,000
a New York Public Library, Series B, Weekly VRDN and Put, 3.20%, 7/01/22 ................ 400,000 400,000
a Oxford University Press, Inc., Weekly VRDN and Put, 3.20%, 7/01/25 .................... 1,000,000 1,000,000
State University Educational Facilities, Refunding, 5.00%, 7/01/99 ...................... 1,500,000 1,519,519
b New York Islip Airport Improvement, 4.25%, 1/15/99 .................................... 355,000 355,809
b New York Islip GO, 4.25%, 1/15/99 ..................................................... 160,000 160,528
New York State Dormitory Authority,
Sloan Kettering, TECP, 3.65%, 9/08/98 ................................................... 1,000,000 1,000,000
Sloan Kettering Memorial, TECP, 3.50%, 8/06/98 .......................................... 1,200,000 1,200,000
a New York State Energy, Research and Development Authority, PCR,
Central Hudson Gas & Electric Co. Project, Weekly VRDN
and Put, 3.50%, 11/01/20 ............................................................... 500,000 500,000
Niagara Mohawk Power Corp., Series B, Daily VRDN
and Put, 3.80%, 12/01/25 ............................................................... 1,200,000 1,200,000
Refunding, New York Electric & Gas, Daily VRDN and Put,
4.00%, 2/01/29 ......................................................................... 500,000 500,000
Refunding, Orange and Rockland Project, Series A,
FGIC Insured, Weekly VRDN and Put,
3.25%, 10/01/14 ........................................................................ 1,000,000 1,000,000
Refunding, Orange and Rockland Utilities, Series A,
AMBAC Insured, Weekly VRDN and Put,
3.25%, 8/01/15 ......................................................................... 1,350,000 1,350,000
Rochester Gas & Electric Corp., Series C, MBIA Insured,
Weekly VRDN and Put, 3.25%, 8/01/32 .................................................... 1,500,000 1,500,000
New York State Environmental Quality, TECP, 3.40%, 7/23/98 .............................. 2,000,000 2,000,000
a New York State HFA, Normandie Court I Project,
Weekly VRDN and Put, 3.20%, 5/15/15 .................................................... 2,100,000 2,100,000
a New York State Job Development Authority,
Guaranteed Special Purpose, Series A-1, Daily VRDN and Put,
3.85%, 3/01/07 ......................................................................... 2,300,000 2,300,000
a New York State Local Government Assistance Corp.,
Weekly VRDN and Put, 4/01/25,
Series D, 3.50% ......................................................................... 200,000 200,000
Series G, 3.25% ......................................................................... 800,000 800,000
a New York State Medical Care Facilities, Finance Agency
Revenue, Pooled Equipment Loan Program II, Series A,
Weekly VRDN and Put, 3.30%, 11/01/03 ................................................... $2,030,000 $ 2,030,000
New York State, TECP, 3.65%, 7/09/98 .................................................... 2,000,000 2,000,000
a Niagara County IDA, IDR, Pyron Corp. Project, Weekly
VRDN and Put, 3.55%, 11/01/04 .......................................................... 710,000 710,000
Puerto Rico Commonwealth, TRAN, 4.50%, 7/30/98 .......................................... 2,000,000 2,001,167
Suffolk County, TAN, 4.25%
9/10/98 ................................................................................. 1,000,000 1,000,805
Series RA-1, 8/13/98 .................................................................... 2,000,000 2,001,411
a Suffolk County Water Authority BAN, Weekly VRDN and Put, 3.35%, 2/08/01 ............... 1,400,000 1,400,000
a Syracuse IDA, Civic Facilities Revenue, Multi-Modal,
Syracuse University Project, Daily VRDN and Put, 3.85%, 3/01/23 ......................... 400,000 400,000
a Triborough Bridge and Tunnel Authority, Special Obligation,
FGIC Insured, Weekly VRDN and Put, 3.20%, 1/01/24 ...................................... 2,500,000 2,500,000
Westchester County, TAN, 3.59%, 12/29/98 ................................................ 3,000,000 3,000,278
------------
Total Investments (Cost $60,536,560) 103.6% ............................................. 60,536,560
Other Assets, less Liabilities (3.6%) ................................................... (2,103,599)
------------
Net Assets 100.0% ....................................................................... $58,432,961
============
See glossary of terms on page 32.
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
at specified dates.
bSufficient collateral has been segregated for securities traded on a when-issued or delayed delivery basis.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Highlights
Franklin New York Insured Tax-Free Income Fund
Class I
------------------------------------------------------------
Six Months Ended
June 30, 1998 Year Ended December 31,
(unaudited) 1997 1996 1995 1994 1993
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period........... $11.66 $11.29 $11.41 $10.16 $11.68 $10.80
------------------------------------------------------------
Income from investment operations:
Net investment income.......................... .28 .58 .59 .59 .59 .60
Net realized and unrealized gains (losses)..... .01 .38 (.12) 1.25 (1.52) .88
------------------------------------------------------------
Total from investment operations............... .29 .96 .47 1.84 (.93) 1.48
------------------------------------------------------------
Less distributions from:
Net investment income.......................... (.28) (.59) (.59) (.59) (.59) (.60)
------------------------------------------------------------
Net asset value, end of period................. $11.67 $11.66 $11.29 $11.41 $10.16 $11.68
============================================================
Total return*.................................. 2.56% 8.77% 4.30% 18.46% (8.19%) 13.79%
Ratios/supplemental data
Net assets, end of period (000's).............. $266,392 $260,990 $261,068 $256,171 $225,061$263,647
Ratios to average net assets:
Expenses....................................... .71%** .71% .65% .65% .56% .50%
Expenses excluding waiver and payments by affiliate .71%** .71% .70% .73% .71% .65%
Net investment income.......................... 4.88%** 5.09% 5.25% 5.38% 5.48% 5.28%
Portfolio turnover rate........................ 10.45% 26.85% 15.09% 22.99% 25.66% 5.38%
*Total return does not reflect sales commissions or the contingent deferred sales charge, and is not annualized. Prior to
May 1, 1994, dividends from net investment income were reinvested at the offering price.
**Annualized
Class II
------------------------------------------
Six Months Ended
June 30, 1998 Year Ended December 31,
(unaudited) 1997 19962 19951,2
------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period ........................... $11.75 $11.37 $11.46 $10.85
------------------------------------------
Income from investment operations:
Net investment income .......................................... .30 .52 .533 .36
Net realized and unrealized gains (losses) ..................... (.02) .38 (.10) .59
------------------------------------------
Total from investment operations ............................... .28 .90 .43 .95
------------------------------------------
Less distributions from:
Net investment income .......................................... (.25) (.52) (.52) (.34)
------------------------------------------
Net asset value, end of period ................................. $11.78 $11.75 $11.37 $11.46
==========================================
Total return* .................................................. 2.42% 8.17% 3.87% 8.92%
Ratios/supplemental data
Net assets, end of period (000's) .............................. $6,312 $5,601 $4,137 $696
Ratios to average net assets:
Expenses ....................................................... 1.27%** 1.27% 1.22% 1.23%**
Expenses excluding waiver and payments by affiliate ............ 1.27%** 1.27% 1.27% 1.30%**
Net investment income .......................................... 4.35%** 4.63% 4.69% 4.74%**
Portfolio turnover rate ........................................ 10.45% 26.85% 15.09% 22.99%
*Total return does not reflect sales commissions or the contingent deferred sales charge, and is not annualized.
**Annualized
1For the period May 1, 1995 (effective date) to December 31, 1995.
2Ratio has been calculated using average daily net assets during the period.
3Ratio has been calculated using average daily outstanding shares during the period.
Statement of Investments, June 30, 1998 (unaudited)
PRINCIPAL
Franklin New York Insured Tax-Free Income Fund AMOUNT VALUE
<S> <C> <C>
Long Term Investments 98.4%
Albany County GO, FGIC Insured, 5.85%, 6/01/12 .......................................... $ 1,000,000 $ 1,072,760
Albany Municipal Water Finance Authority, Water and Sewer System Revenue,
Refunding, Series A, FGIC Insured,
5.95%, 12/01/12 ......................................................................... 2,505,000 2,681,778
5.50%, 12/01/22 ......................................................................... 8,990,000 9,231,202
Amsterdam HDC, Mortgage Revenue, Refunding, MBIA Insured, 6.25%, 1/01/25 ................ 2,515,000 2,622,567
Battery Park City Authority, Series A, AMBAC Insured, 5.50%, 11/01/26 ................... 1,000,000 1,032,510
Brookhaven GO, Series B, MBIA Insured, 7.00%, 5/01/09 ................................... 200,000 242,058
Broome County COP, Public Safety Facilities, MBIA Insured, 5.25%, 4/01/22 ............... 2,125,000 2,132,841
Buffalo and Fort Erie Public Bridge Authority, Toll Bridge
System Revenue, MBIA Insured, 5.75%, 1/01/25 ........................................... 4,000,000 4,188,920
Buffalo General Improvement, Series A, FGIC Insured, 5.00%,
2/01/15 ................................................................................. 425,000 426,092
2/01/16 ................................................................................. 425,000 423,997
2/01/17 ................................................................................. 425,000 422,442
Buffalo GO, FGIC Insured, 5.00%,
Refunding, Series C, 12/01/17 ........................................................... 415,000 412,431
Refunding, Series C, 12/01/18 ........................................................... 400,000 395,944
Refunding, Series C, 12/01/21 ........................................................... 150,000 148,158
Refunding, Series C, 12/01/22 ........................................................... 170,000 167,867
Series B, 2/01/15 ....................................................................... 370,000 370,951
Series B, 2/01/17 ....................................................................... 410,000 407,532
Buffalo GO, Series E, AMBAC Insured, 6.70%,
12/01/18 ................................................................................ 385,000 444,425
12/01/19 ................................................................................ 410,000 473,284
Pre-Refunded, 12/01/17 .................................................................. 360,000 415,566
Buffalo Municipal Water Finance Authority, Water System Revenue,
FGIC Insured, 6.10%, 7/01/26 ........................................................... 1,350,000 1,531,994
Central Square School District, FGIC Insured, 6.50%, 6/15/09 ............................ 900,000 1,052,451
Dutchess County IDA, Civic Facilities Revenue,
Bard College Project, AMBAC Insured,
5.50%, 6/01/17 .......................................................................... 2,315,000 2,427,139
5.375%, 6/01/27 ......................................................................... 2,000,000 2,030,400
Erie County GO, Series B, FGIC Insured, 5.625%, 6/15/20 ................................. 1,000,000 1,046,780
Hempstead Town IDA, Civic Facilities Revenue,
Hofstra University Project, MBIA Insured, 5.80%, 7/01/15 ............................... 1,340,000 1,437,606
Long Island Power Authority, Electric System Revenue, Series A,
b FSA Insured, 5.125%, 12/01/22 ......................................................... 5,500,000 5,428,060
5.25%, 12/01/26 ......................................................................... 1,500,000 1,480,290
Metropolitan Transportation Authority, Series A, 5.00%
Commuter Facilities Revenue, FSA Insured, 7/01/23 ....................................... 3,000,000 2,920,650
Dedicated Tax Fund, FGIC Insured, 4/01/23 ............................................... 3,000,000 2,920,830
Monroe County IDA Revenue, Civic Facilities,
Nazareth College, MBIA Insured, 6.00%, 6/01/20 ......................................... 2,000,000 2,118,580
Mount Sinai Union Free School District, Refunding,
AMBAC Insured, 6.20%, 2/15/13 ........................................................... 1,055,000 1,206,350
Nassau County IDA, Civic Facilities Revenue,
Hofstra University Project, AMBAC Insured, 6.75%, 8/01/11 .............................. 1,150,000 1,251,729
New Rochelle GO, Series C, MBIA Insured, 6.25%,
3/15/22 ................................................................................. 390,000 422,978
3/15/23 ................................................................................. 530,000 574,817
3/15/24 ................................................................................. 555,000 601,931
New York City Municipal Water Finance Authority, Water and Sewer Systems Revenue,
Series A, FGIC Insured, 6.75%, 6/15/16 .................................................. 505,000 542,557
Series C, AMBAC Insured, Pre-Refunded, 6.20%, 6/15/21 ................................... 10,000,000 10,896,100
New York City Trust, Cultural Resource Revenue, MBIA Insured,
American Museum of National History, Series A, 5.65%, 4/01/27 ........................... $ 5,620,000 $ 5,895,717
New York Botanical Garden, 5.75%, 7/01/16 ............................................... 3,000,000 3,170,130
New York State Dormitory Authority Revenues,
Associated Children's, Inc., MBIA Insured, 7.60%, 7/01/18 ............................... 140,000 143,150
Brooklyn Law School, FSA Insured, 6.40%, 7/01/11 ........................................ 2,460,000 2,637,292
Children's Home, Series B, AMBAC Insured, 5.25%, 7/01/17 ................................ 1,000,000 1,013,320
Comsewogue Public Library, MBIA Insured, 6.05%, 7/01/24 ................................. 2,445,000 2,636,933
Hamilton College, MBIA Insured, 6.50%, 7/01/21 .......................................... 1,000,000 1,076,010
Hartwick College, MBIA Insured, 6.25%, 7/01/12 .......................................... 1,000,000 1,075,760
Ithaca College, AMBAC Insured, 5.25%, 7/01/17 ........................................... 1,000,000 1,014,170
Judicial Lease Facilities, Series B, Suffolk County, MBIA Insured, 7.00%, 4/15/16 ....... 2,780,000 3,032,702
Leake and Watts Services, Inc., MBIA Insured, 6.00%, 7/01/23 ............................ 1,890,000 2,021,941
Maimonides Medical Center, Series A, MBIA Insured, 5.75%, 8/01/24 ....................... 1,500,000 1,575,345
New York Public Library, Series A, MBIA Insured, 5.875%, 7/01/22 ........................ 1,000,000 1,040,580
New York University, FGIC Insured, 6.25%, 7/01/09 ....................................... 1,000,000 1,071,700
Oceanside Library, AMBAC Insured, 6.00%, 7/01/25 ........................................ 1,195,000 1,279,749
Refunding, Marist College, MBIA Insured, 6.00%, 7/01/22 ................................. 1,000,000 1,055,130
Refunding, Mount Sinai School of Medicine, MBIA Insured, 6.75%, 7/01/15 ................. 2,500,000 2,708,075
Refunding, New York Presbyterian Hospital, AMBAC Insured, 5.00%, 2/01/19 ................ 5,000,000 4,874,350
Refunding, Pace University, MBIA Insured, 5.75%, 7/01/26 ................................ 4,500,000 4,774,770
Refunding, Rochester Institute of Technology, MBIA Insured, 5.25%, 7/01/22 .............. 1,000,000 1,009,130
Refunding, Siena College, MBIA Insured, 5.70%, 7/01/17 .................................. 2,000,000 2,122,440
Refunding, University of Rochester, Series A, MBIA Insured, 5.00%, 7/01/27 .............. 2,500,000 2,432,825
Refunding, Wildwood Programs, Inc., MBIA Insured, 5.875%, 7/01/15 ....................... 1,000,000 1,077,080
Rosalind and Joseph Nursing Home, AMBAC Insured, 5.60%, 2/01/27 ......................... 4,000,000 4,165,000
St. John's University, AMBAC Insured, 6.875%, 7/01/11 ................................... 1,000,000 1,088,160
St. John's University, MBIA Insured, 5.70%, 7/01/26 ..................................... 5,000,000 5,284,550
St. Vincent's Hospital and Medical Center, AMBAC Insured, 6.00%, 8/01/28 ................ 5,000,000 5,334,500
University of Rochester, MBIA Insured, Pre-Refunded, 6.50%, 7/01/09 ..................... 250,000 254,063
University of Rochester, Strong Health Facilities, MBIA Insured, 5.90%, 7/01/17 ......... 2,355,000 2,502,682
New York State Energy Research and Development Authority,
Electric Facilities Revenue, Consolidated Edison Project,
Refunding, Series A, AMBAC Insured, 6.10%, 8/15/20 ...................................... 5,000,000 5,414,750
Series A, MBIA Insured, 6.75%, 1/15/27 .................................................. 4,950,000 5,264,474
Series C, MBIA Insured, 7.25%,11/01/24 .................................................. 210,000 214,253
New York State Energy Research and Development Authority,
Gas Facilities Revenue, Brooklyn Union Gas, Series A,
MBIA Insured, 6.75%, 2/01/24 ........................................................... 2,240,000 2,447,267
New York State Energy Research and Development Authority, PCR, Refunding,
Niagara Mohawk Power Corp., Series A, FGIC Insured, 6.625%, 10/01/13 .................... 1,500,000 1,628,415
Niagara Mohawk Power Corp., Series A, FGIC Insured, 7.20%, 7/01/29 ...................... 5,000,000 5,766,700
Rochester Gas and Electric Project, Series A, MBIA Insured, 6.35%, 5/15/32 .............. 1,150,000 1,236,653
Rochester Gas and Electric Project, Series B, MBIA Insured, 6.50%, 5/15/32 .............. 1,000,000 1,080,960
New York State Environmental Facilities Corp.,
Water Facilities Revenue, Refunding, Spring Valley Water Project,
AMBAC Insured, 8/01/24,
Series A, 6.30% ......................................................................... 2,000,000 2,159,840
Series B, 6.15% ......................................................................... 3,000,000 3,216,480
New York State Medical Care Facilities, Finance Agency Revenue,
Long-Term Health Care, Series A, FSA Insured, 6.80%, 11/01/14 ........................... 6,285,000 6,911,237
New York State Medical Care Facilities, Finance Agency Revenue, (cont.)
Long-Term Health Care, Series B, FSA Insured, 6.45%, 11/01/14 ........................... $ 5,355,000 $ 5,837,218
Long-Term Health Care, Series C, FSA Insured, 6.40%, 11/01/14 ........................... 4,245,000 4,619,876
Our Lady of Victory Hospital, Series A, AMBAC Insured, 6.625%, 11/01/16 ................. 1,000,000 1,089,470
Refunding, Hospital and Nursing Home Mortgage, Series C, MBIA Insured, 6.25%, 8/15/12 ... 1,000,000 1,087,480
Refunding, St. Mary's Hospital Project, Series A, AMBAC Insured, 6.20%, 11/01/14 ........ 1,495,000 1,647,251
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.60%, 11/01/10 ................... 700,000 762,545
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.625%, 11/01/18 .................. 1,500,000 1,631,760
New York State Power Authority Revenue and General Purpose,
Series AA, MBIA Insured, 6.25%, 1/01/23 ................................................. 3,000,000 3,262,680
Series Y, AMBAC Insured, 6.50%, 1/01/11 ................................................. 2,255,000 2,428,004
Series Z, FGIC Insured, Pre-Refunded, 6.50%, 1/01/19 .................................... 2,000,000 2,191,200
New York State Thruway Authority, General Revenue,
Series C, FGIC Insured, 6.00%, 1/01/25 .................................................. 13,975,000 15,519,238
Niagara County GO, Public Improvement, MBIA Insured, 6.00%,
7/15/18.................................................................................. 500,000 535,040
7/15/19 ................................................................................. 510,000 545,741
7/15/20 ................................................................................. 610,000 652,749
7/15/21 ................................................................................. 645,000 690,905
Niagara Falls Bridge Commission Toll Revenue, Refunding,
Series B, FGIC Insured, 5.25%, 10/01/21 ................................................. 10,000,000 10,034,900
Niagara Falls Public Improvement, MBIA Insured,
6.85%, 3/01/19 .......................................................................... 1,000,000 1,135,380
6.90%, 3/01/20 .......................................................................... 500,000 567,580
6.90%, 3/01/21 .......................................................................... 500,000 568,120
Niagara Falls Water Treatment Plant, MBIA Insured, 7.00%, 11/01/12 ...................... 1,200,000 1,360,812
Niagara Frontier Transportation Authority, Airport Revenue,
Greater Buffalo International Airport, AMBAC Insured, 4/01/24,
Series A, 6.25% ......................................................................... 1,000,000 1,076,640
Series C, 6.00% ......................................................................... 1,440,000 1,545,307
North Hempstead GO, Refunding, Series B, FGIC Insured, 6.40%,
4/01/15.................................................................................. 1,000,000 1,167,170
4/01/16 ................................................................................. 1,065,000 1,243,228
Otsego County Industrial Development Agency,
Civic Facilities Revenue, Bassett Healthcare Project, Series A,
MBIA Insured, 5.35%, 11/01/20 .......................................................... 2,000,000 2,030,520
Phelps-Clifton GO, Springs Central School District, AMBAC Insured, 5.65%, 6/15/13 ....... 1,355,000 1,437,452
Port Authority of New York and New Jersey, 6.50%,
Consolidated 71st Series, AMBAC Insured, 1/15/26 ........................................ 1,000,000 1,060,580
Consolidated 71st Series, MBIA Insured, 1/15/26 ......................................... 1,600,000 1,696,928
Consolidated 76th Series, AMBAC Insured, 11/01/26 ....................................... 4,230,000 4,528,342
Rensselear County GO, AMBAC Insured, 2/15/11 ............................................ 810,000 965,301
Suffolk County GO, Public Improvement, Refunding, Series B, FGIC Insured, 6.20%,
5/01/11 ................................................................................. 500,000 534,820
5/01/13 ................................................................................. 500,000 533,910
Suffolk County Water Authority, Waterworks Revenue,
AMBAC Insured, Pre-Refunded, 7.10%, 6/01/10 ............................................. 1,000,000 1,050,130
Triborough Bridge and Tunnel Authority Revenue,
General Purpose, Series P, FGIC Insured, 5.50%, 1/01/19 ................................. 1,435,000 1,438,100
General Purpose, Series X, AMBAC Insured, 6.50%, 1/01/19 ................................ 4,475,000 4,848,394
General Purpose, Series X, MBIA Insured, 6.50%, 1/01/19 ................................. 2,750,000 2,979,460
Refunding, General Purpose, Series Q, AMBAC Insured, 6.00%, 1/01/13 ..................... 1,500,000 1,531,110
Series B, General Purpose, MBIA Insured, 5.20%, 1/01/27 ................................. 9,110,000 9,153,728
Series T, MBIA Insured, Pre-Refunded, 7.00%, 1/01/20 .................................... 1,100,000 1,197,284
Upper Mohawk Valley Regional Water Finance Authority,
Water System Revenue, Refunding, Series A, FSA Insured,
5.125%, 1/01/26 ........................................................................ $ 2,000,000$ 2,000,672
------------
Total Long Term Investments (Cost $250,993,877) ......................................... 268,499,875
------------
a Short Term Investments .8%
Long Island Power Authority, Electric Systems Revenue,
Sub-Series 5, Daily VRDN and Put, 3.75%, 5/01/33 ....................................... 300,000 300,000
New York City GO, Series B, Sub-Series B-3, MBIA
Insured, Daily VRDN and Put, 4.00%, 8/15/04 ............................................. 600,000 600,000
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue, Series C, FGIC Insured,
Daily VRDN and Put, 4.00%, 6/15/23 ..................................................... 1,200,000 1,200,000
------------
Total Short Term Investments (Cost $2,100,000) .......................................... 2,100,000
------------
Total Investments (Cost $253,093,877) 99.2% ............................................. 270,599,875
Other Assets, less Liabilities .8% ...................................................... 2,104,130
------------
Net Assets 100.0% ....................................................................... $272,704,005
============
See glossary of terms on page 32.
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
at specified dates.
bSufficient collateral has been segregated for securities traded on a when-issued or delayed delivery basis.
Financial Highlights
Franklin New York Intermediate Term Tax-Free Income Fund
Six Months Ended
June 30, 1998 Year Ended December 31,
(unaudited) 1997 1996 1995 1994 1993
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period .......... $10.62 $10.28 $10.40 $9.60 $10.68 $10.21
----------------------------------------------------------
Income from investment operations:
Net investment income ......................... .26 .54 .56 .55 .55 .48
Net realized and unrealized gains (losses) .... .04 .35 (.12) .80 (1.10) .54
----------------------------------------------------------
Total from investment operations .............. .30 .89 .44 1.35 (.55) 1.02
----------------------------------------------------------
Less distributions from:
Net investment income ......................... (.27) (.55) (.56) (.55) (.53) (.55)
----------------------------------------------------------
Net asset value, end of period ................ $10.65 $10.62 $10.28 $10.40 $9.60 $10.68
==========================================================
Total return* ................................. 2.86% 8.89% 4.38% 14.31% (5.42%) 10.18%
Ratios/supplemental data
Net assets, end of period (000's) ............. $66,271 $58,916 $44,822 $43,229 $35,166 $31,162
Ratios to average net assets:
Expenses ...................................... .45%** .45% .37% .33% .05% --
Expenses excluding waiver and payments by affiliate .82%** .82% .83% .83% .80% .73%
Net investment income ......................... 4.92%** 5.26% 5.47% 5.51% 5.57% 4.96%
Portfolio turnover rate ....................... 11.45% 6.87% 24.67% 24.68% 188.38% 30.95%
*Total return does not reflect sales commissions or the contingent deferred sales charge, and is not annualized. Prior to
May 1, 1994, dividends from net investment income were reinvested at the offering price.
**Annualized
Statement of Investments, June 30, 1998 (unaudited)
PRINCIPAL
Franklin New York Intermediate-Term Tax-Free Income Fund AMOUNT VALUE
<S> <C> <C>
a Long Term Investments 93.8%
Cortland County New York IDA, Civic Facility Revenue,
Cortland Memorial Hospital, Inc. Project, 6.15%, 7/01/02 ............................... $ 100,000 $ 104,512
Franklin County IDA, Lease Revenue, County Correctional
Facility Project, 6.375%, 11/01/02 ..................................................... 55,000 58,317
Guam Airport Authority Revenue, Refunding, Series A, 6.00%, 10/01/03 .................... 260,000 277,118
Guam Power Authority Revenue, Series A, 6.00%, 10/01/04 ................................. 1,300,000 1,388,868
Metropolitan Transportation Authority, New York Service Contract,
Transportation Facilities, Series O, 5.75%, 7/01/07 ..................................... 500,000 543,845
New Rochelle Municipal Housing Authority Revenue,
Series A, 5.55%, 12/01/14 .............................................................. 2,000,000 2,012,480
New York City, GO,
Refunding, Series A, 6.375%, 8/01/05 .................................................... 5,200,000 5,653,704
Refunding, Series B, 6.20%, 8/15/06 ..................................................... 1,000,000 1,101,970
Refunding, Series F, 6.00%, 8/01/12 ..................................................... 700,000 756,427
Series A, 5.25%, 8/01/10 ................................................................ 600,000 618,786
Series D, 5.40%, 8/01/11 ................................................................ 4,250,000 4,400,323
Series G, 5.75%, 10/15/10 ............................................................... 1,000,000 1,074,460
Series H, 7.00%, 2/01/06 ................................................................ 340,000 372,429
New York City IDA, Civic Facility Revenue,
New York Blood Center, Inc. Project, ETM, 6.80%, 5/01/02 ................................ 210,000 221,556
USTA National Tennis Center Project, FSA Insured, 6.00%, 11/15/03 ....................... 1,875,000 2,034,375
USTA National Tennis Center Project, FSA Insured, 6.10%, 11/15/04 ....................... 1,675,000 1,844,979
New York State COP, Commissioner of General Services,
Executive Department, 6.50%, 3/01/00 .................................................... 3,010,000 3,126,517
New York State Dormitory Authority Revenue,
Department of Health, 5.125%, 7/01/13 ................................................... 1,410,000 1,380,686
Department of Health, 6.25%, 7/01/04 .................................................... 690,000 758,434
Department of Health, 6.30%, 7/01/05 .................................................... 735,000 815,872
Refunding, City University, Series U, 6.25%, 7/01/02 .................................... 100,000 107,451
Refunding, City University, Series U, 6.35%, 7/01/04 .................................... 1,720,000 1,899,568
Refunding, North General Hospital, 5.20%, 2/15/13 ....................................... 2,000,000 1,999,880
Refunding, Nyack Hospital, 6.00%, 7/01/06 ............................................... 2,000,000 2,124,920
Refunding, State University Educational Facilities,
Series A, 5.25%, 5/15/15 ............................................................... 2,000,000 2,067,920
St. Agnes Hospital, Series A, 5.30%, 2/15/13 ............................................ 1,380,000 1,391,827
State Service Contract, Albany County, 5.25%, 4/01/12 ................................... 500,000 505,200
W.K. Nursing Home Corp., FHA Insured, 5.55%, 8/01/08 .................................... 300,000 321,003
New York State HFA Revenue, Refunding,
Health Facilities, Series A, 6.00%, 11/01/08 ........................................... 3,045,000 3,289,361
New York State Medical Care Facilities, Finance Agency Revenue,
5.70%, 2/15/05 .......................................................................... 1,500,000 1,599,180
Refunding, Huntington Hospital Mortgage Project,
Series A, 5.90%, 11/01/04 .............................................................. 475,000 509,571
New York State Thruway Authority,
General Revenue, Series A, 5.80%, 1/01/06 ............................................... 1,900,000 2,035,622
Service Contract Revenue, Refunding,
Local Highway & Bridge, 5.25%, 4/01/10 ................................................. 550,000 566,341
New York State Urban Development Corp. Revenue,
5.00%, 1/01/12 .......................................................................... 2,000,000 1,978,720
Refunding, Correctional Facilities, 5.75%, 1/01/13 ...................................... 500,000 521,390
Youth Facilities, 5.75%, 4/01/10 ........................................................ 400,000 434,004
Youth Facilities, 5.875%, 4/01/10 ....................................................... 1,500,000 1,624,380
Oneida-Herkimer New York Solid Waste Management Authority,
Solid Waste Systems Revenue, Refunding,
6.65%, 4/01/05 ......................................................................... 125,000 140,071
Puerto Rico Commonwealth, GO, 6.00%, 7/01/05 ............................................ 1,000,000 1,107,210
Puerto Rico Electric Power Authority Revenue,
Series T, 6.00%, 7/01/04 ................................................................ 1,500,000 1,630,830
Puerto Rico Industrial, Tourist, Educational, Medical,
and Environmental Control Facilities Financing
Authority, Hospital Revenue, Mennonite General
Hospital Project, Series A, 6.375%, 7/01/06 ............................................ $1,830,000 $ 1,970,288
Puerto Rico Municipal Finance Agency, Series A,
5.875%, 7/01/06 ......................................................................... 300,000 320,148
FSA Insured, 5.60%, 7/01/05 ............................................................. 300,000 326,145
United Nations Development Corp. New York Revenue,
ETM, Refunding, Series A, 5.70%, 7/01/02 ................................................ 350,000 370,794
Virgin Islands Public Finance Authority Revenue,
Refunding, Series A, 5.30%, 10/01/11 .................................................... 3,000,000 3,040,200
Virgin Islands Water and Power Authority,
Electric Systems Revenue, Refunding, 5.125%, 7/01/13 ................................... 1,775,000 1,752,154
------------
Total Long Term Investments (Cost $58,580,815) .......................................... 62,179,836
------------
a Short Term Investments 4.8%
Long Island Power Authority, Electric Systems Revenue,
Sub-Series 5, Daily VRDN and Put, 3.75%, 5/01/33 ....................................... 200,000 200,000
New York and New Jersey Port Authority, Special Obligation Revenue,
Series 2, VRDN and Put, 4.00%, 5/01/19 ................................................. 100,000 100,000
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue, FGIC Insured, Daily VRDN and Put,
Series 93-C, 4.00%, 6/15/22 ............................................................. 100,000 100,000
Series C, 4.00%, 6/15/23 ................................................................ 2,400,000 2,400,000
Series G, 3.75%. 6/15/24 ................................................................ 400,000 400,000
------------
Total Short Term Investments (Cost $3,200,000) .......................................... 3,200,000
------------
Total Investments (Cost $61,780,815) 98.6% .............................................. 65,379,836
Other Assets, less Liabilities 1.4% ..................................................... 891,507
------------
Net Assets 100.0% ....................................................................... $66,271,343
============
See glossary of terms on page 32.
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
at specified dates.
Glossary of Terms
AMBAC - American Municipal Bond Assurance Corp.
BAN - Bond Anticipation Notes
COP - Certificate of Participation
ETM - Escrow To Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance
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
USTA - United States Tennis Association
Financial Statements
Statements of Assets and Liabilities
June 30, 1998 (unaudited)
Franklin New York Franklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
-------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities:
Cost .................................................... $60,536,560 $253,093,877 $61,780,815
-------------------------------------------------------
Value ................................................... 60,536,560 270,599,875 65,379,836
Cash .................................................... 140,159 70,130 29,307
Receivables:
Investment securities sold .............................. -- 20,000 170,000
Capital shares sold ..................................... -- 281,560 29,795
Interest ................................................ 514,198 5,090,380 1,172,844
-------------------------------------------------------
Total assets ............................................ 61,190,917 276,061,945 66,781,782
-------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased ......................... 2,523,263 2,498,879 --
Capital shares redeemed ................................. -- 273,756 --
Affiliates .............................................. 27,825 178,579 27,324
Shareholders ............................................ 184,232 172,231 398,166
Distributions to shareholders ........................... 4,986 234,020 69,892
Other liabilities ....................................... 17,650 475 15,057
-------------------------------------------------------
Total liabilities ....................................... 2,757,956 3,357,940 510,439
-------------------------------------------------------
Net assets, at value .................................... $58,432,961 $272,704,005 $66,271,343
=======================================================
Net assets consist of:
Undistributed net investment income .....................$ --$ -- $ 130,908
Accumulated distributions
in excess of net investment income ...................... -- (8,967) --
Net unrealized appreciation ............................. -- 17,505,998 3,599,021
Accumulated net realized gain (loss) .................... -- 1,069,513 (2,559,609)
Capital shares .......................................... 58,432,961 254,137,461 65,101,023
-------------------------------------------------------
Net assets, at value .................................... $58,432,961 $272,704,005 $66,271,343
=======================================================
Franklin New York Franklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income FundTax-Free Income Fund
-------------------------------------------------------
<S> <C> <C> <C>
Class I:
Net assets, at value .................................... $58,432,961 $266,391,968 $66,271,343
=======================================================
Shares outstanding ...................................... 58,432,961 22,824,133 6,225,140
=======================================================
Net asset value per share* .............................. $1.00 $11.67 $10.65
=======================================================
Maximum offering price per share
(net asset value per share / 100%, 95.75%,
97.75%, respectively) .................................. $1.00 $12.19 $10.90
=======================================================
Class II:
Net assets, at value .................................... -- $ 6,312,037 --
=======================================================
Shares outstanding ...................................... -- 535,781 --
=======================================================
Net asset value per share* .............................. -- $11.78 --
=======================================================
Maximum offering price per share
(net asset value per share / 99%) ...................... -- $11.90 --
=======================================================
*Redemption price is equal to net asset value less any applicable contingent deferred sales charge.
Statements of Operations
for the six months ended June 30, 1998 (unaudited)
Franklin New York Franklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
---------------------------------------------------------
<S> <C> <C> <C>
Investment income:
Interest ................................................ $1,064,428 $7,543,541 $1,609,729
---------------------------------------------------------
Expenses:
Management fees (Note 3) ................................ 192,397 732,735 188,041
Distribution fees (Note 3)
Class I ................................................. -- 114,250 29,748
Class II ................................................ -- 19,253 --
Transfer agent fees (Note 3) ............................ 35,193 51,260 11,091
Custodian fees .......................................... 558 1,266 269
Reports to shareholders ................................. 20,412 19,516 5,529
Registration and filing fees ............................ 3,486 9,653 4,037
Professional fees ....................................... 3,261 13,095 2,022
Trustees' fees and expenses ............................. 630 2,257 894
Other ................................................... 1,170 13,630 1,528
---------------------------------------------------------
Total expenses .......................................... 257,107 976,915 243,159
Expenses waived/paid by affiliate (Note 3) .............. (72,568) -- (109,371)
---------------------------------------------------------
Net expenses ............................................ 184,539 976,915 133,788
---------------------------------------------------------
Net investment income ................................... 879,889 6,566,626 1,475,941
---------------------------------------------------------
Realized and unrealized gains (losses):
Net realized gain from investments ...................... -- 1,572,243 262,017
Net unrealized appreciation
(depreciation) on investments ........................... -- (1,237,147) 108
---------------------------------------------------------
Net realized and unrealized gain ........................ -- 335,096 262,125
---------------------------------------------------------
Net increase in net assets resulting from operations .... $ 879,889 $6,901,722 $1,738,066
=========================================================
Statements of Changes in Net Assets
for the six months ended June 30, 1998 (unaudited)
and the year ended December 31, 1997
Franklin New York Franklin New York Insured
Tax-Exempt Money Fund Tax-Free Income Fund
-----------------------------------------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 1998 December 31, 1997 June 30, 1998 December 31, 1997
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................... $ 879,889 $ 1,851,246 $ 6,566,626 $ 13,357,463
Net realized gain from investments ...... -- -- 1,572,243 2,443,437
Net unrealized appreciation
(depreciation) on investments .......... -- -- (1,237,147) 6,182,799
-----------------------------------------------------------------------
Net increase in net assets
resulting from operations ............. 879,889 1,851,246 6,901,722 21,983,699
Distributions to shareholders from:
Net investment income:
Class I ................................ (879,889) (1,851,246) (6,442,053) (13,364,273)
Class II ................................ -- -- (123,630) (214,741)
In excess of net investment income:
Class I ................................ (8,798) (928)
Class II ................................ -- -- (169) (15)
-----------------------------------------------------------------------
Total distributions to shareholders .... (879,889) (1,851,246) (6,574,650) (13,579,957)
Capital share transactions: (Note 2)
Class I ................................ (5,286,804) 4,542,185 5,089,310 (8,309,946)
Class II ................................ -- -- 696,261 1,292,535
-----------------------------------------------------------------------
Total capital share transactions ....... (5,286,804) 4,542,185 5,785,571 (7,017,411)
Net increase (decrease) in net assets .. (5,286,804) 4,542,185 6,112,643 1,386,331
Net assets:
Beginning of period .................... 63,719,765 59,177,580 266,591,362 265,205,031
-----------------------------------------------------------------------
End of period ........................... $58,432,961 $63,719,765 $272,704,005 $266,591,362
=======================================================================
Accumulated distributions excess of net investment
income included in net assets:
End of period ........................... $ -- $ -- $ (8,967) $ (943)
Franklin New York
Intermediate-Term
Tax-Free Income Fund
---------------------------------
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
---------------------------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income ...................................................... $ 1,475,941 $ 2,643,481
Net realized gain from investments ......................................... 262,017 237,610
Net unrealized appreciation on investments ................................. 108 1,496,404
---------------------------------
Net increase in net assets resulting from operations ...................... 1,738,066 4,377,495
Distributions to shareholders from:
Net investment income:
Class I ................................................................... (1,521,936) (2,646,832)
Capital share transactions: (Note 2)
Class I ................................................................... 7,139,011 12,363,508
Net increase in net assets ................................................ 7,355,141 14,094,171
Net assets:
Beginning of period ....................................................... 58,916,202 44,822,031
---------------------------------
End of period .............................................................. $66,271,343 $58,916,202
=================================
Undistributed net investment income included in net assets:
End of period ..............................................................$ 130,908 $ 176,903
=================================
</TABLE>
Notes to Financial Statements
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Franklin New York Tax-Free Trust (the Trust) is registered under the Investment
Company Act of 1940 as an open-end, non-diversified investment company,
consisting of three series (the Funds). The Funds' investment objectives are to
provide tax-free income. The Franklin New York Tax-Exempt Money Fund (Money
Fund) also seeks liquidity in its investments. The following summarizes the
Funds' significant accounting policies.
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 Franklin New York Insured Tax-Free Income Fund
(Insured Fund) and the Franklin New York Intermediate-Term Tax-Free Income Fund
(Intermediate-Term 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.
Securities in the Money Fund are valued at amortized cost which approximates
value.
Income Taxes:
No provision has been made for income taxes because each Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income. 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. Dividends from net
investment income and capital gains or losses are normally declared daily for
the Money Fund. Such distributions are reinvested in additional shares of the
Fund. Distributions to shareholders are recorded on the ex-dividend date for the
Insured Fund and the Intermediate-Term Fund.
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 for the Insured Fund.
Insurance:
The scheduled payments of interest and principal for each long-term municipal
security in the Insured Fund are insured by either a new issue insurance policy,
a portfolio insurance policy, a secondary insurance policy, or by collateral
guaranteed by an agency of the U.S. government.
Depending on the type of coverage, premiums for insurance are either added to
the cost basis of the security, included as an expense of the Fund, or paid by a
third party.
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.
SHARES OF BENEFICIAL INTEREST
The Insured Fund offers two classes of shares: Class I and Class II. The shares
have the same rights except for their initial sales load, distribution fees,
voting rights on matters affecting a single class and the exchange privilege of
each class.
At June 30, 1998, there were an unlimited number of shares authorized (no par
value). Transactions in the Funds' shares ($1.00 per share for the Money Fund)
were as follows:
<TABLE>
<CAPTION>
Franklin New York Franklin New York Franklin New York
Tax-Exempt Insured Tax-Free Intermediate-Term
Money Fund Income Fund Tax-Free Income Fund
-----------------------------------------------------------------------
Amount Shares Amount Shares Amount
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I Shares
Six months ended June 30, 1998
Shares sold .........................$ 27,738,524 1,509,540 $ 17,562,925 1,834,313 $ 19,433,253
Shares issued in
reinvestment of distributions........ 880,622 303,420 3,534,396 90,362 960,675
Shares redeemed ..................... (33,905,950) (1,378,183) (16,008,011) (1,246,808) (13,254,917)
-----------------------------------------------------------------------
Net increase (decrease) .............$ (5,286,804) 434,777$ 5,089,310 677,867$ 7,139,011
=======================================================================
Year ended December 31, 1997
Shares sold .........................$ 52,257,638 2,143,970 $ 24,240,358 2,234,707 $ 23,236,717
Shares issued in
reinvestment of distributions....... 1,850,557 666,814 7,568,139 154,882 1,611,794
Shares redeemed ..................... (49,566,010) (3,542,992) (40,118,443) (1,202,679) (12,485,003)
-----------------------------------------------------------------------
Net increase (decrease) .............$ 4,542,185 (732,208)$ (8,309,946) 1,186,910 $ 12,363,508
=======================================================================
Class II Shares
Six months ended June 30, 1998
Shares sold .......................................... 109,406$ 1,285,960
Shares issued in reinvestment of distributions ....... 7,700 90,586
Shares redeemed ...................................... (58,194) (680,285)
-------------------------
Net increase ......................................... 58,912$ 696,261
=========================
Year ended December 31, 1997
Shares sold .......................................... 197,439$ 2,247,696
Shares issued in reinvestment of distributions ....... 14,217 162,739
Shares redeemed ...................................... (98,680) (1,117,900)
-------------------------
Net increase ......................................... 112,976$ 1,292,535
=========================
</TABLE>
TRANSACTIONS WITH AFFILIATES
Certain officers and trustees of the Trust are also officers or trustees 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 Funds'
investment manager, administrative manager, principal underwriter, and transfer
agent, respectively.
The Funds pay an investment management fee to Advisers based on the month-end
net assets of the Insured Fund and the Intermediate-Term Fund and on the average
daily net assets of the Money Fund as follows:
Annualized
Fee Rate Net Assets
- ------------------------------------------------------------------
.625% First $100 million
.500% Over $100 million, up to and including $250 million
.450% In excess of $250 million
Advisers agreed in advance to waive management fees for the Money Fund and the
Intermediate-Term Fund, as noted in the Statement of Operations.
Under an agreement with Advisers, FT Services provides administrative services
to the Funds. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Funds.
The Intermediate-Term Fund reimburses Distributors up to .10% per year of its
average daily net assets and the Insured Fund reimburses Distributors up to .10%
and .65% per year of the average daily net assets of Class I and Class II,
respectively, for costs incurred in marketing the Funds' shares.
Distributors paid net commissions on sales of the Funds' shares, and received
contingent deferred sales charges for the period as follows:
Franklin New York Franklin New York
Insured Tax-Free Intermediate-Term
Income Fund Tax-Free Income Fund
--------------------------------------
Net commissions
paid $46,134 $78,021
Contingent deferred
sales charge $1,458 $ --
The Funds paid transfer agent fees of $97,544, of which $87,274 was paid to
Investor Services.
INCOME TAXES
At December 31, 1997, the Funds had tax basis capital losses which may be
carried over to offset future capital gains. Such losses expire as follows:
Franklin
Franklin New York
New York Intermediate-
Insured Tax-Free Term Tax-Free
Income Fund Income Fund
------------------------------
Capital loss carryovers
expiring in:
2002......................... $ -- $2,560,031
2003......................... 502,730 --
2004......................... -- 261,595
------------------------------
$502,730 $2,821,626
==============================
At June 30, 1998, the net unrealized appreciation based on the cost of
investments for income tax purposes was as follows:
<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
---------------------------------------------------------
<S> <C> <C> <C>
Investments at cost ..................... $60,536,560 $253,093,877 $61,780,815
---------------------------------------------------------
Unrealized appreciation ................. -- $ 17,562,054 $ 3,602,832
Unrealized depreciation ................. -- (56,056) (3,811)
---------------------------------------------------------
Net unrealized appreciation ............. -- $ 17,505,998 $ 3,599,021
=========================================================
</TABLE>
INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended June 30, 1998, were as follows:
Franklin
Franklin New York
New York Intermediate-
Insured Tax-Free Term Tax-Free
Income Fund Income Fund
Purchases ................ $35,175,051 $13,435,378
Sales .................... $27,857,572 $ 6,416,090
CREDIT RISK
The Funds have investments in excess of 10% of their total net assets in the
state of New York and in U.S. territories and possessions. Such concentration
may subject the Funds more significantly to economic changes occurring within
that state and those U.S. territories and possessions.
Franklin New York Tax-Free Trust
Semiannual Report
June 30, 1998
APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING (PURSUANT TO ITEM
304 (a) OF REGULATION S-T)
GRAPHIC MATERIAL (1)
This chart shows in bar format the comparison between Franklin New York
Tax-Exempt Money Fund's distribution rate of 2.88% and the taxable equivalent
rate of 5.13% for New York State Residents and 5.38% for New York City
Residents on 6/30/98.
GRAPHIC MATERIAL (2)
This chart shows the portfolio breakdown by sector and percent of total
long-term investments for the Franklin New York Insured Tax-Free Income Fund
on 6/30/98
Transportation 24.4%
Utilities 19.0%
Education 18.5%
Hospitals 9.1%
Prerefunded 8.9%
Health Care 8.3%
General Obligation 6.0%
Certificates of Participation 0.8%
Other Revenue 5.0%
GRAPHIC MATERIAL (3)
This chart shows in bar format the comparison between the Franklin New York
Insured Tax-Free Income Fund Class I distribution rate of 4.63% and the
taxable equivalent rate of 8.23% for New York State Residents and 8.64% for
New York City Residents on 6/30/98.
GRAPHIC MATERIAL (4)
This chart shows the dividend distributions for Franklin New York Insured
Tax-Free Income Fund Class I shares from 1/1/98 to 6/30/98.
January 4.9 cents
February 4.9 cents
March 4.9 cents
April 4.7 cents
May 4.7 cents
June 4.7 cents
Total 28.8 cents
GRAPHIC MATERIAL (5)
This chart shows in bar format the comparison between the Franklin New York
Insured Tax-Free Income Fund Class II distribution rate of 4.17% and the
taxable equivalent rate of 7.41% for New York State Residents and 7.78% for
New York City Residents on 6/30/98.
GRAPHIC MATERIAL (6)
This chart shows the dividend distributions for Franklin New York Insured
Tax-Free Income Fund Class II shares from 1/1/98 to 6/30/98.
January 4.34 cents
February 4.34 cents
March 4.34 cents
April 4.14 cents
May 4.14 cents
June 4.14 cents
Total 25.44 cents
GRAPHIC MATERIAL (7)
This chart shows in pie format the credit quality breakdown of the Franklin
New York Intermediate-Term Tax-Free Income Fund based on total long-term
investments as of 6/30/98.
AAA 13.3%
AA 3.3%
A 49.0%
BBB 34.4%
GRAPHIC MATERIAL (8)
This chart shows in bar format the comparison between Franklin New York
Intermediate-Term Tax-Free Income Fund's distribution rate of 4.95% and the
taxable equivalent rate of 8.80% for New York State Residents and 9.24% for
New York City Residents on 6/30/98.
GRAPHIC MATERIAL (9)
This chart shows the dividend distributions for Franklin New York
Intermediate-Term Tax-Free Income Fund's shares from 1/1/98 to 6/30/98.
January 4.6 cents
February 4.6 cents
March 4.6 cents
April 4.5 cents
May 4.5 cents
June 4.5 cents
Total 27.3 cents
