SEMI-ANNUAL REPORT
FRANKLIN NEW YORK TAX-FREE TRUST
JUNE 30, 1999
SHAREHOLDER LETTER
Dear Shareholder:
This semiannual report for Franklin New York Tax-Free Trust covers the period
ended June 30, 1999.
THE NATIONAL ECONOMY
During the six months under review, the U.S. economy grew at a healthy pace,
with gross domestic product (GDP) for the first and second quarters registering
gains of 4.3% and 2.3% respectively. Consumer spending drove the economy -- low
unemployment, a solid stock market and low interest rates kept consumer
confidence high. However, such strong growth raised fears of inflation,
especially as April's Consumer Price Index (CPI) jumped 0.7%, the largest
monthly increase since October 1990. Although a number of "one-time" price
increases such as for oil and tobacco helped explain the CPI's strength,
investors expected a tightening from the Federal Reserve Board (the Fed), which
pushed interest rates to their highest levels in more than a year. Indeed,
investors were right. In its late-June meeting, the Fed raised the federal funds
target rate 0.25% in an attempt to deter inflation. At the end of the reporting
period, the 30-year Treasury bond yield stood at 5.98%, compared with 5.09% on
December 31, 1998.
The municipal bond market remained relatively calm throughout the Treasury
market volatility. A decrease in new-issue supply certainly contributed to this
relative stability, but the municipal bond market also did not experience large
swings because the typical investors in this market tend to invest for tax-free
income. Hedge fund activity and overseas markets generally do not trigger
unusual buying or selling patterns in the municipal bond market. Furthermore,
the municipal bond market remained stable because it does not have many large,
institutional investors who frequently move in and out of the market.
CONTENTS
Shareholder Letter ......... 1
Fund Reports
Franklin New York Insured
Tax-Free Income Fund ....... 5
Franklin New York
Intermediate-Term
Tax-Free Income Fund ....... 10
Franklin New York
Tax-Exempt Money Fund ...... 13
Municipal Bond Ratings ..... 16
Financial Highlights &
Statement of Investments ... 19
Financial Statements ....... 32
Notes to
Financial Statements ....... 37
[FUND CATEGORY PYRAMID GRAPHIC]
These conditions led to attractive municipal bond yields, as municipal bond
prices lagged those of similar Treasury bonds. With the early 1999 rise in
Treasury yields, and the Bond Buyer 40 index showing an increase in yield to
5.55%, the municipal-to-Treasury yield ratio was 93% on June 30, 1999, still
above the historical average of 89%.(1) This relatively high ratio allowed
municipal investors to earn attractive yields compared with other fixed-income
opportunities.
NEW YORK UPDATE
New York's economy followed the stock market to higher ground, although it still
had to play catch-up to the rest of the nation. Financially, the state is in the
best condition in years, after producing large budget surpluses in the three
years ended 1998. Projections for fiscal 1999 point to a favorable budget, with
a surplus of $1.79 billion. Furthermore, the state generated these surpluses
while slashing the state personal income tax by 20% and introducing other tax
cuts. Although employment growth was a respectable 1.9% in 1998, the strongest
in the '90s, it lagged the 2.5% national average. Income growth in 1998 was
slightly below par, and at 4.9% nearly matched the nation's 5.0% growth rate.(2)
1. The unmanaged Bond Buyer Municipal 40 Index is composed of the Yield to
Maturity of 40 bonds. The index attempts to track the new-issue market as
closely as possible, so it changes bonds twice a month, adding all new bonds
that meet certain requirements and deleting an equivalent number according to
their secondary market trading activity. As a result, the average par call date,
average maturity date and average coupon rate change over time. The average
maturity generally has been about 29-30 years.
Typical of late, New York City fared better than the remainder of the state,
principally fueled by a strong securities industry and prudent public spending.
The city ended 1998 with a $2.1 billion surplus, on top of 1997's $1.4 billion
surplus. Overall job growth in 1998 was the highest in more than a decade, with
unemployment falling to 8.1% in January 1999. While this is down from 9% in the
year earlier period, it still was much higher than the national average.(3)
The future appears to be generally bullish for New York. A diverse economic
base, average income at 130% of the national average, and a significantly
improved financial condition should lead to continued solid growth. In addition,
the City and the state, and their many issuing authorities, are well on their
way to being fully Year 2000 compliant. However, a heavy reliance on the
historically volatile financial services industry, coupled with an expanding
debt burden, somewhat clouds this rosy scenario.
Municipal bonds continue to be an attractive investment for those investors
seeking tax-free income as well as an opportunity to diversify risk in their
portfolio. Generally, a taxable investment would need to offer a higher yield,
called the taxable equivalent yield, to match the yield on a tax-free
investment. 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. As always, we appreciate your support, welcome your
questions and comments and look forward to serving your investment needs in the
years ahead.
- --------------------------------------------------------------------------------
WHAT DOES "TAXABLE EQUIVALENT" MEAN FOR YOU?
For yield and distribution rate, taxable equivalent is the amount a taxable
investment would have to earn to match the income from a tax-free investment
such as a municipal bond. You can find your fund's taxable equivalent
distribution rate and yield in the Performance Summary of this report.
- --------------------------------------------------------------------------------
2. Source: Standard and Poor's(R), CreditWeek Municipal, March 1999.
3. Source: Moody's Investors Service, April 1999.
Sincerely,
/s/C. B. Johnson
Charles B. Johnson
Chairman
Franklin New York Tax-Free Trust
/s/Thomas J. Kenny
Thomas J. Kenny
Director
Franklin Municipal Bond Department
FRANKLIN NEW YORK INSURED
TAX-FREE INCOME FUND
- --------------------------------------------------------------------------------
Your Fund's Goal: 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)
- --------------------------------------------------------------------------------
Since our last report, the global economy moved from facing many uncertainties
to showing signs of strengthening. As this strengthening occurred, many foreign
investors who had bought U.S. securities and contributed to a substantial price
rise in the 30-year Treasury during the fourth quarter of 1998 began to sell
their U.S. securities in favor of other investments. The 30-year Treasury
reached its high in October 1998 when its yield hit 4.70%, but traded at a 5.98%
yield on June 30, 1999. As interest rates rise, bond prices fall. The domestic
economy, despite signs of slowing in the latter part of 1998, continued its
impressive run into and through the first quarter of 1999.
The municipal bond market showed remarkable stability during the six-month
reporting period, which resulted in a favorable municipal-to-Treasury yield
ratio. The Bond Buyer Municipal 40
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 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.
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.
PORTFOLIO BREAKDOWN
Franklin New York Insured
Tax-Free Income Fund
6/30/99
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
- ----------------------------------------
Education 20.2%
Utilities 19.8%
Transportation 17.9%
Prerefunded 13.0%
Hospitals 9.9%
Health Care 7.5%
General Obligation 6.4%
Other Revenue 4.5%
Certificates of Participation 0.8%
Index yield increased from 5.16% on December 31, 1998, to 5.55% on June 30,
1999, and municipal bonds yielded 93% of the 30-year Treasury yield at the close
of the reporting period. However, growing inflationary fears, and generally
rising interest rates adversely affected municipal bond funds, and the value of
their holdings decreased.
Our fund management philosophy remains constant, as we strive to provide
shareholders with the highest possible tax-free income while attempting to
maintain a steady share price. In managing for income, the fund typically
employs a buy-and-hold strategy, which usually results in low portfolio
turnover. The majority of the fund's turnover during the reporting period
resulted from the sale of prerefunded securities. In managing these securities,
we attempted to sell with approximately five years remaining to their call date.
This enabled the fund to capture a premium on the prerefunded bonds and use this
capital to invest in current coupon bonds. This extended call protection on the
fund, preserved the fund's income stream and helped stabilize the fund's share
price.
The fund maintained ample sector diversification during the six-month period.
Some of the fund's purchases include New York State Dormitory Authority Revenue
Bonds, Metropolitan Transportation Authority Dedicated Tax Fund Bonds and Long
Island Power Authority Electric Systems Revenue Bonds. It should be noted that
the market's insured sector represented some of the best value in the market
over the reporting period. In New York, credit spreads, or the difference in
interest paid for higher-versus lower-rated issues, remained narrow, and
investors typically were not paid for taking on the additional credit risk of a
lower-rated security.
Going forward, our outlook for the fund, the municipal bond market and for New
York remains positive. Both the City and the state of New York continue to enjoy
fiscal strength. Unemployment rates in the City and the state are at their
lowest levels in several years. Finally, the City and the state, along with
their many issuing authorities, should be fully Year 2000 compliant by year-end.
We expect the supply of New York municipals to remain stable for the remainder
of 1999 and this, coupled with a continued strong demand for New York bonds,
should keep New York an attractive investment.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1999, 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 historical
performance is no guarantee of future results, these insights may help you
understand our investment and management philosophy.
DIVIDEND DISTRIBUTIONS*
Franklin New York Insured Tax-Free Income Fund
1/1/99 - 6/30/99
DIVIDEND PER SHARE
---------------------
MONTH CLASS A CLASS C
- -----------------------------------------------------------------
January 4.7 cents 4.41 cents
February 4.7 cents 4.41 cents
March 4.6 cents 3.86 cents
April 4.6 cents 3.86 cents
May 4.6 cents 3.86 cents
June 4.6 cents 3.95 cents
- -----------------------------------------------------------------
TOTAL 27.8 CENTS 24.35 CENTS
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period. Distributions will vary based on the
earnings of the fund's portfolio, and past distributions are not predictive of
future trends.
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND
CLASS A (formerly Class I):
Subject to the current, maximum 4.25% initial sales charge. Prior to July 1,
1994, fund shares were offered at a lower initial sales charge; thus actual
total returns may differ. Effective May 1, 1994, the fund eliminated the sales
charge on reinvested dividends and implemented a Rule 12b-1 plan, which affects
subsequent performance.
CLASS C (formerly Class II):
Subject to 1% initial sales charge and 1% contingent deferred sales charge for
shares redeemed within 18 months of investment. These shares have higher annual
fees and expenses than Class A shares.
PERFORMANCE SUMMARY AS OF 6/30/99
Distributions will vary based on earnings of the fund's portfolio and any
profits realized from the sale of the portfolio's securities. Past distributions
are not indicative of future trends. All total returns include reinvested
distributions at net asset value.
PRICE AND DISTRIBUTION INFORMATION
CLASS A Change 6/30/99 12/31/98
- ---------------------------------------------------------------------
Net Asset Value -$0.38 $11.33 $11.71
Distributions (1/1/99 - 6/30/99)
------------------------------------
Dividend Income $0.278
Long-Term Capital Gain $0.004
TOTAL $0.282
CLASS C Change 6/30/99 12/31/98
- ---------------------------------------------------------------------
Net Asset Value -$0.38 $11.44 $11.82
Distributions (1/1/99 - 6/30/99)
------------------------------------
Dividend Income $0.2435
Long-Term Capital Gain $0.0040
TOTAL $0.2475
Past performance is not predictive of future results.
PERFORMANCE
INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR (5/1/91)
- --------------------------------------------------------------------------------
Cumulative Total Return(1) -0.83% +2.44% +38.12% +73.35%
Average Annual Total Return(2) -5.05% -1.93% +5.76% +6.41%
Distribution Rate(3) 4.67%
Taxable Equivalent Distribution Rate(4) 8.61%
30-Day Standardized Yield(5) 3.97%
Taxable Equivalent Yield(4) 7.32%
INCEPTION
CLASS C 6-MONTH 1-YEAR 5-YEAR (5/1/91)
- --------------------------------------------------------------------------------
Cumulative Total Return(1) -1.13% +1.89% +16.89% +27.70%
Average Annual Total Return(2) -3.08% -0.10% +5.00% +5.79%
Distribution Rate(3) 4.10%
Taxable Equivalent Distribution Rate(4) 7.56%
30-Day Standardized Yield(5) 3.55%
Taxable Equivalent Yield(4) 6.55%
1. Cumulative total return represents the change in value of an investment
over the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value
of an investment over the periods indicated and includes the current,
applicable, maximum sales charge(s) for that class. Six-month return has not
been annualized.
3. Distribution rate is based on an annualization of the respective class's
current monthly dividend and the maximum offering price per share on June 30,
1999.
4. Taxable equivalent distribution rate and yield assume the 1999 maximum
combined federal and New York state and New York City personal income tax
bracket of 45.8%, based on the federal income tax rate of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended June 30, 1999.
- --------------------------------------------------------------------------------
Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
- --------------------------------------------------------------------------------
Past performance is not predictive of future results.
CREDIT QUALITY BREAKDOWN*
Franklin New York Intermediate-Term
Tax-Free Income Fund
Based on Total Long-Term Investments
6/30/99
[PIE CHART]
AAA - 27.8%
AA - 1.3%
A - 38.9%
BBB - 32.0%
*Quality breakdowns may include internal ratings for bonds not rated by a
national rating agency.
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
- --------------------------------------------------------------------------------
Your Fund's Goal: 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)
- --------------------------------------------------------------------------------
Since our last report, the global economy moved from facing many uncertainties
to showing signs of strengthening. As this strengthening occurred, many foreign
investors who had bought U.S. securities and contributed to a substantial price
rise in the 30-year Treasury during the fourth quarter of 1998 began to sell
their U.S. securities in favor of other investments. The 30-year Treasury
reached its high in October 1998 when its yield hit 4.70%, but yielded 5.98% on
June 30, 1999. As interest rates rise, bond prices fall. The domestic economy,
despite signs of slowing in the latter part of 1998, continued its impressive
run into and through the first quarter of 1999.
The municipal bond market showed remarkable stability during the six-month
reporting period, which resulted in a favorable municipal-to-Treasury yield
ratio. The Bond Buyer Municipal 40 Index yield increased from 5.16% on December
31, 1998, to 5.55% on June 30, 1999, and municipal bonds yielded 93% of the
30-year Treasury yield at the close of the reporting period. However, growing
inflationary fears, and generally rising interest rates adversely affected
municipal bond funds, and the value of their holdings decreased.
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.
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 26 of
this report.
We looked for opportunities in the market to improve the fund's overall
position. The fund pursued its two main goals of providing shareholders with
high, tax-free income and preservation of capital. The fund bought and sold
bonds throughout the period in many different sectors, maintaining ample sector
diversification. Some of the fund's purchases during the period were revenue
bonds for New York City Transitional Finance Authority, New York State Dormitory
Authority and the Metropolitan Transportation Authority Service Contract.
Going forward, our outlook for the fund, the municipal bond market and for New
York remains positive. Both the City and the state of New York continue to enjoy
fiscal strength. Unemployment rates in the City and the state are at their
lowest levels in several years. Finally, the City and the state, along with
their many issuing authorities, should be fully Year 2000 compliant by year-end.
We expect the supply of New York municipals to remain stable for the remainder
of 1999 and this, coupled with a continued strong demand for New York bonds,
should keep New York an attractive investment.
We will continue to manage the fund with the intention of protecting its share
value and maintaining its competitive yield.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1999, 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 historical
performance is no guarantee of future results, these insights may help you
understand our investment and management philosophy.
PORTFOLIO BREAKDOWN
Franklin New York Intermediate-Term Tax-Free Income Fund
6/30/99
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
- ----------------------------------------
Hospitals 23.9%
General Obligation 19.2%
Other Revenue 17.5%
Utilities 8.3%
Prerefunded 8.0%
Housing 7.2%
Education 6.6%
Transportation 5.0%
Certificates of Participation 4.3%
DIVIDEND DISTRIBUTIONS*
Franklin New York Intermediate-Term Tax-Free Income Fund - Class A
1/1/99 - 6/30/99
DIVIDEND
MONTH PER SHARE
- ----------------------------
January 4.30 cents
February 4.30 cents
March 4.15 cents
April 4.15 cents
May 4.15 cents
June 4.15 cents
- ----------------------------
TOTAL 25.20 CENTS
*Assumes shares were purchased and held for the entire accrual period. Since
dividends accrue daily, your actual distributions will vary depending on the
date you purchased your shares and any account activity during the month. Income
distributions and total return calculations include all accrued income earned by
the fund during the reporting period. Distributions will vary based on the
earnings of the fund's portfolio, and past distributions are not predictive of
future trends.
FRANKLIN NEW YORK
INTERMEDIATE-TERM
TAX-FREE INCOME FUND
- -------------------------------------------------------------------------------
CLASS A (formerly Class I):
Subject to the maximum 2.25% initial sales charge. The fund's manager agreed in
advance to waive a portion of the management fees, which reduces operating
expenses and increases distribution rate, yield and total return to
shareholders. Without this waiver, the fund's distribution rate and total return
would have been lower, and the yield for the period would have been 3.87%. The
fee waiver may be discontinued at any time upon notice to the fund's Board of
Trustees.
- -------------------------------------------------------------------------------
1. Cumulative total return represents the change in value of an investment
over the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value
of an investment over the periods indicated and includes the applicable, maximum
sales charge. Six-month return has not been annualized.
3. Distribution rate is based on an annualization of the current 4.15 cent per
share monthly dividend and the maximum offering price of $10.63 on June 30,
1999.
4. Taxable equivalent distribution rate and yield assume the 1999 maximum
combined federal and New York state and New York City personal income tax
bracket of 45.8%, based on the federal income tax rate of 39.6%.
5. Yield, calculated as required by the SEC, is based on the earnings of the
fund's portfolio for the 30 days ended June 30, 1999.
- -------------------------------------------------------------------------------
Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
- -------------------------------------------------------------------------------
PERFORMANCE SUMMARY AS OF 6/30/99
Distributions will vary based on earnings of the fund's portfolio and any
profits realized from the sale of the portfolio's securities. Past distributions
are not indicative of future trends. All total returns include reinvested
distributions at net asset value.
PRICE AND DISTRIBUTION INFORMATION
CLASS A CHANGE 6/30/99 12/31/98
- -----------------------------------------------------------------
Net Asset Value -$0.38 $10.39 $10.77
DISTRIBUTIONS (1/1/99 - 6/30/99)
- -----------------------------------------------------------------
Dividend Income $0.252
PERFORMANCE
<TABLE>
<CAPTION>
INCEPTION
CLASS A 6-MONTH 1-YEAR 5-YEAR (9/23/92)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) -1.20% +2.42% +33.90% +46.04%
Average Annual Total Return(2) -3.44% +0.07% +5.53% +5.40%
Distribution Rate(3) 4.68%
Taxable Equivalent Distribution
Rate(4) 8.63%
30-Day Standardized Yield(5) 4.25%
Taxable Equivalent Yield(4) 7.84%
</TABLE>
Past performance is not predictive of future results.
FRANKLIN NEW YORK
TAX-EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
Your Fund's Goal: 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)
- --------------------------------------------------------------------------------
During the six months under review, the domestic economy's strength combined
with tentative signs of an international recovery and the potential for higher
inflation put the Federal Reserve Board (the Fed) on alert for a possible
tightening. Indeed, the Fed raised the federal funds target rate 0.25%, to
5.00%, at its late-June meeting. The fund maintained a neutral position during
the latter part of the reporting period. The average maturity of securities held
by Franklin New York Tax-Exempt Money Fund was 44 days on June 30, 1999,
compared with 47 days on December 31, 1998.
Tax-exempt money market funds continued to increase assets during the period,
mainly because of increased investor wealth. The fund's total net assets
increased 4%, to $60.5 million on June 30, 1999, from $57.9 million on December
31, 1998. However, the domestic economy's strength left state and local
municipalities with cash surpluses and less need for short-term financing. Also,
variable-rate issuance declined since issuers took advantage of the low
interest-rate environment and issued long-term fixed-rate bonds instead. This
supply and demand imbalance put downward pressure on short-term rates. The fund
had a current seven-day yield of 2.90% on June 30, 1999, compared with 3.01% on
December 31, 1998.
1. There is no assurance that the fund's $1.00 per share price will be
maintained. An investment in the fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
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 29 of
this report.
The investment strategy driving Franklin New York Tax-Exempt Money Fund's
portfolio managers continues to emphasize high quality and liquidity. We manage
the fund more conservatively than SEC guidelines require, to ensure the safety
and stability of the fund's principal. 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. Although also allowed by the SEC for money
market funds, we do not buy any derivative securities in our tax-exempt money
funds -- we purchase only plain vanilla, short-term securities.
We eliminated our exposure to Japanese bank guarantees several years ago because
of the problems these banks were having, and we continue to follow our
philosophy of purchasing securities only from what we believe are the most
creditworthy institutions.
During the reporting period, the fund participated in several attractive deals
including Westchester County Tax and Anticipation Notes (TAN), New York State
Dormitory Authority for New York Public Library Weekly VRDN and Put (WV&P), and
New York City Housing Development Multi-Family Housing Revenue (MFHR) Brittany
Development WV&P.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of June 30, 1999, 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 historical
performance is no guarantee of future results, these insights may help you
understand our investment and management philosophy.
PERFORMANCE SUMMARY
6/30/99
- ------------------------------------------
Seven-day effective yield(1) 2.94%
Seven-day annualized yield 2.90%
Taxable equivalent yield(2) 5.35%
1. The seven-day effective yield assumes the compounding of daily dividends.
2. Taxable equivalent yield assumes the 1999 maximum combined federal and New
York state and New York City personal income tax bracket of 45.8%, based on the
federal income tax rate of 39.6%.
Annualized and effective yields are for the seven days ended June 30, 1999.
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.
Franklin Advisers, Inc., the fund's administrator and the manager of the fund's
underlying portfolio, has agreed in advance to waive a portion of its fees,
which reduces expenses and increases yield to shareholders. Without these
reductions, the fund's annualized and effective yields for the period would have
been 2.64% and 2.68% respectively. The fee waiver may be discontinued at any
time upon notice to the fund's Board of Directors.
Past performance is not predictive of future results.
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 INSURED TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ----------------------------------------------------------
(UNAUDITED)(4) 1998 1997 1996 1995 1994
-------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 11.71 $ 11.66 $ 11.29 $ 11.41 $ 10.16 $ 11.68
------------------------------------------------------------------------
Income from investment operations:
Net investment income ....................... .28 .57 .58 .59 .59 .59
Net realized and unrealized gains (losses) .. (.38) .11 .38 (.12) 1.25 (1.52)
------------------------------------------------------------------------
Total from investment operations ............. (.10) .68 .96 .47 1.84 (.93)
------------------------------------------------------------------------
Less distributions from:
Net investment income ....................... (.28)(2) (.57)(1) (.59) (.59) (.59) (.59)
Net realized gains .......................... -- (3) (.06) -- -- -- --
------------------------------------------------------------------------
Total distributions .......................... (.28) (.63) (.59) (.59) (.59) (.59)
------------------------------------------------------------------------
Net asset value, end of period ............... $ 11.33 $ 11.71 $ 11.66 $ 11.29 $ 11.41 $ 10.16
========================================================================
Total return* ................................ (.83%) 5.94% 8.77% 4.30% 18.46% (8.19%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $259,053 $270,435 $260,990 $261,068 $256,171 $225,061
Ratios to average net assets:
Expenses .................................... .72%** .72% .71% .65% .65% .56%
Expenses excluding waiver and payments
by affiliate .............................. .72%** .72% .71% .70% .73% .71%
Net investment income ....................... 4.82%** 4.84% 5.09% 5.25% 5.38% 5.48%
Portfolio turnover rate ...................... 2.81% 12.05% 26.85% 15.09% 22.99% 25.66%
</TABLE>
* Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year. Prior to
May 1, 1994, dividends from net investment income were reinvested at the
offering price.
**Annualized
(1) Includes distributions in excess of net investment income in the amount
of $.003.
(2) Includes distributions in excess of net investment income in the amount of
$.002.
(3) The fund distributed long term capital gains in the amount of $.004.
(4) Based on average shares outstanding.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Highlights (continued)
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND (CONT.)
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ------------------------------------------
(UNAUDITED)(4) 1998 1997 1996 1995(5)
----------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................. $ 11.82 $11.75 $11.37 $11.46 $ 10.85
--------------------------------------------------------
Income from investment operations:
Net investment income ............................... .25 .48 .52 .53(4) .36
Net realized and unrealized gains (losses) .......... (.38) .16 .38 (.10) .59
--------------------------------------------------------
Total from investment operations ..................... (.13) .64 .90 .43 .95
--------------------------------------------------------
Less distributions from:
Net investment income ............................... (.25)(6) (.51)(2) (.52) (.52) (.34)
Net realized gains .................................. -- (3) (.06) -- -- --
--------------------------------------------------------
Total distributions .................................. (.25) (.57) (.52) (.52) (.34)
--------------------------------------------------------
Net asset value, end of period ....................... $ 11.44 $11.82 $11.75 $11.37 $ 11.46
========================================================
Total return* ........................................ (1.13%) 5.55% 8.17% 3.87% 8.92%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .................... $11,843 $9,450 $5,601 $4,137 $ 696
Ratios to average net assets:
Expenses ............................................ 1.26%** 1.28% 1.27% 1.22% 1.23%**
Expenses excluding waiver and payments by affiliate.. 1.26%** 1.28% 1.27% 1.27% 1.30%**
Net investment income ............................... 4.28%** 4.27% 4.63% 4.69% 4.74%**
Portfolio turnover rate .............................. 2.81% 12.05% 26.85% 15.09% 22.99%
</TABLE>
* Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
**Annualized
(2) Includes distributions in excess of net investment income in the amount of
$.002.
(3) The fund distributed long term capital gains in the amount of $.004.
(4) Based on average shares outstanding.
(5) For the period May 1, 1995 (effective date) to December 31, 1995.
(6) Includes distributions in excess of net investment income in the amount of
$.001.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 97.5%
Albany County GO, FGIC Insured, 5.85%, 6/01/12 ................................... $ 1,000,000 $ 1,058,620
Albany Municipal Water Finance Authority Water and Sewer System Revenue,
Refunding, Series A, FGIC Insured,
5.95%, 12/01/12 ............................................................... 2,505,000 2,651,442
5.50%, 12/01/22 ............................................................... 8,990,000 9,047,266
Amsterdam HDC, Mortgage Revenue, Refunding, MBIA Insured, 6.25%, 1/01/25 2,495,000 2,555,653
Battery Park City Authority Revenue, Series A, AMBAC Insured, 5.50%,
11/01/26 ....................................................................... 1,000,000 1,002,080
Brookhaven GO, Series B, MBIA Insured, 7.00%, 5/01/09 ............................ 200,000 231,732
Broome County COP, Public Safety Facilities, MBIA Insured, 5.25%, 4/01/22 ........ 2,125,000 2,077,931
Buffalo and Fort Erie Public Bridge Authority, Toll Bridge System Revenue,
MBIA Insured, 5.75%, 1/01/25 ................................................... 4,000,000 4,134,000
Buffalo GO,
General Improvement, Series A, FGIC Insured, 5.00%, 2/01/15 ................... 425,000 414,660
General Improvement, Series A, FGIC Insured, 5.00%, 2/01/16 ................... 425,000 412,862
General Improvement, Series A, FGIC Insured, 5.00%, 2/01/17 ................... 425,000 411,468
Refunding, Series C, FGIC Insured, 5.00%, 12/01/17 ............................ 415,000 401,405
Refunding, Series C, FGIC Insured, 5.00%, 12/01/18 ............................ 400,000 384,608
Refunding, Series C, FGIC Insured, 5.00%, 12/01/21 ............................ 150,000 142,623
Refunding, Series C, FGIC Insured, 5.00%, 12/01/22 ............................ 170,000 161,233
School, Series B, FGIC Insured, 5.00%, 2/01/15 ................................ 370,000 360,998
School, Series B, FGIC Insured, 5.00%, 2/01/17 ................................ 410,000 396,946
School, Series B, FSA Insured, 4.75%, 2/01/18 ................................. 500,000 464,945
School, Series B, FSA Insured, 4.75%, 2/01/19 ................................. 570,000 526,851
Series E, AMBAC Insured, Pre-Refunded, 6.70%, 12/01/17 ........................ 360,000 404,176
Series E, AMBAC Insured, Pre-Refunded, 6.70%, 12/01/18 ........................ 385,000 432,243
Series E, AMBAC Insured, Pre-Refunded, 6.70%, 12/01/19 ........................ 410,000 460,311
Buffalo Municipal Water Finance Authority, Water System Revenue, FGIC Insured,
Pre-Refunded, 6.10%, 7/01/26 .................................................. 1,350,000 1,485,203
Central Square GO, Central School District, FGIC Insured, 6.50%, 6/15/09 ......... 900,000 1,012,977
Dutchess County IDA, Civic Facilities Revenue, Bard College Project, AMBAC
Insured, 5.50%, 6/01/17 ....................................................... 2,315,000 2,348,405
5.375%, 6/01/27 ............................................................... 2,000,000 1,975,680
Erie County GO, Series B, FGIC Insured, 5.625%, 6/15/20 .......................... 1,000,000 1,020,160
Hempstead Town IDA, Civic Facilities Revenue, Hofstra University Project,
MBIA Insured, 5.80%, 7/01/15 ................................................. 1,340,000 1,413,847
Long Island Power Authority Electric System Revenue, Series A, FSA Insured,
5.125%, 12/01/22 .............................................................. 8,750,000 8,320,550
5.25%, 12/01/26 ............................................................... 1,500,000 1,426,800
Monroe County IDA Revenue, Civic Facilities, Nazareth College, MBIA Insured,
6.00%, 6/01/20 ................................................................ 2,000,000 2,081,460
Mount Sinai Union Free School District, Refunding, AMBAC Insured, 6.20%,
2/15/13 ....................................................................... 1,055,000 1,172,200
MTA Commuter Facilities Revenue, Series A, FSA Insured, 5.00%, 7/01/23 ........... 3,000,000 2,816,640
MTA Dedicated Tax Fund, Series A, FGIC Insured, 5.00%, 4/01/23 ................... 3,000,000 2,813,580
Nassau County IDA, Civic Facility Revenue, Hofstra University Project, AMBAC
Insured, Pre-Refunded, 6.75%, 8/01/11 ......................................... 1,150,000 1,232,168
New Rochelle GO, Series C, MBIA Insured, 6.25%,
3/15/22 ....................................................................... 390,000 414,964
3/15/23 ....................................................................... 530,000 563,697
3/15/24 ....................................................................... 555,000 590,048
New York City IDA Civic Facility Revenue GO, Polytechnic Prep Country
Day School, FSA Insured, 5.375%, 5/01/29 ...................................... 2,750,000 2,699,675
New York City Municipal Water Finance Authority Water and Sewer System Revenue,
Series A, FGIC Insured, 6.75%, 6/15/16 ........................................ 505,000 530,225
Series C, AMBAC Insured, Pre-Refunded, 6.20%, 6/15/21 ......................... 6,000,000 6,404,820
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
New York City Trust Cultural Resources Revenue,
American Museum of National History, Series A, MBIA Insured, 5.65%, 4/01/27 ........... $5,620,000 $5,682,382
New York Botanical Garden, MBIA Insured, 5.75%, 7/01/16 ............................... 3,000,000 3,118,620
New York State Dormitory Authority Revenues,
Associated Children's Inc., MBIA Insured, 7.60%, 7/01/18 .............................. 140,000 144,046
Brooklyn Law School, FSA Insured, 6.40%, 7/01/11 ...................................... 2,460,000 2,587,108
Children's Home, Series B, AMBAC Insured, 5.25%, 7/01/17 .............................. 1,000,000 981,740
Comsewogue Public Library, MBIA Insured, 6.05%, 7/01/24 ............................... 2,445,000 2,597,446
Culinary Institute of America, MBIA Insured, 5.00%, 7/01/28 ........................... 1,605,000 1,491,543
Hamilton College, MBIA Insured, 6.50%, 7/01/21 ........................................ 1,000,000 1,064,770
Hartwick College, MBIA Insured, 6.25%, 7/01/12 ........................................ 1,000,000 1,059,540
Hospital Special Surgery, MBIA Insured, 5.00%, 2/01/28 ................................ 2,250,000 2,079,653
Ithaca College, AMBAC Insured, 5.25%, 7/01/17 ......................................... 1,000,000 987,390
Judicial Lease Facilities, Suffolk County, Series B, MBIA Insured, 7.00%, 4/15/16 ..... 2,780,000 2,963,702
Leake and Watts Services Inc., MBIA Insured, 6.00%, 7/01/23 ........................... 1,890,000 1,985,502
Maimonides Medical Center, Series A, MBIA Insured, 5.75%, 8/01/24 ..................... 1,500,000 1,548,030
Marist College, Refunding, MBIA Insured, 6.00%, 7/01/22 ............................... 1,000,000 1,038,290
Mount Sinai School of Medicine, Refunding, MBIA Insured, 6.75%, 7/01/15 ............... 2,500,000 2,648,525
New York Presbyterian Hospital, Refunding, AMBAC Insured, 5.00%, 2/01/19 .............. 3,000,000 2,824,890
New York Public Library, Series A, MBIA Insured, 5.875%, 7/01/22 ...................... 1,000,000 1,063,630
New York University, FGIC Insured, 6.25%, 7/01/09 ..................................... 1,000,000 1,049,050
Oceanside Library, AMBAC Insured, 6.00%, 7/01/25 ...................................... 1,195,000 1,266,425
Pace University, Refunding, MBIA Insured, 5.75%, 7/01/26 .............................. 4,500,000 4,658,940
Rochester Institute of Technology, Refunding, MBIA Insured, 5.25%, 7/01/22 ............ 1,000,000 977,800
Rosalind and Joseph Nursing Home, AMBAC Insured, 5.60%, 2/01/27 ....................... 4,000,000 4,029,280
Siena College, Refunding, MBIA Insured, 5.70%, 7/01/17 ................................ 2,000,000 2,055,160
St. John's University, AMBAC Insured, 6.875%, 7/01/11 ................................. 1,000,000 1,060,580
St. John's University, MBIA Insured, 5.70%, 7/01/26 ................................... 5,000,000 5,105,650
St. Vincent's Hospital and Medical Center, AMBAC Insured, 6.00%, 8/01/28 .............. 5,000,000 5,274,150
University of Rochester, Refunding, Series A, MBIA Insured, 5.00%, 7/01/27 ............ 2,500,000 2,325,850
University of Rochester, Strong Health Facilities, MBIA Insured, 5.90%, 7/01/17 ....... 2,355,000 2,457,513
Wildwood Programs Inc., Refunding, MBIA Insured, 5.875%, 7/01/15 ...................... 1,000,000 1,060,480
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 5,315,700
Series A, MBIA Insured, 6.75%, 1/15/27 ................................................ 4,950,000 5,146,664
Series C, MBIA Insured, 7.25%, 11/01/24 ............................................... 210,000 211,598
New York State Energy Research and Development Authority Gas Facilities Revenue,
Brooklyn Union Gas Project, Series A, MBIA Insured, 6.75%, 2/01/24 .................... 2,240,000 2,392,970
New York State Energy Research and Development Authority PCR,
Niagara Mohawk Power Corp., Refunding, Series A, FGIC Insured, 6.625%, 10/01/13 ....... 1,500,000 1,593,780
Niagara Mohawk Power Corp., Refunding, Series A, FGIC Insured, 7.20%, 7/01/29 ......... 5,000,000 5,660,250
Rochester Gas and Electric Project, Refunding, Series A, MBIA Insured, 6.35%, 5/15/32.. 1,150,000 1,214,228
Rochester Gas and Electric Project, Refunding, Series B, MBIA Insured, 6.50%, 5/15/32.. 1,000,000 1,060,080
New York State Environmental Facilities Corp. Water Facilities Revenue, Refunding,
Spring Valley Water Project,
Series A, AMBAC Insured, 6.30%, 8/01/24 ............................................... 2,000,000 2,128,600
Series B, AMBAC Insured, 6.15%, 8/01/24 ............................................... 3,000,000 3,168,480
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
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 $ 6,761,969
Long-Term Health Care, Series B, FSA Insured, 6.45%, 11/01/14 ................ 5,355,000 5,722,674
Long-Term Health Care, Series C, FSA Insured, 6.40%, 11/01/14 ................ 4,245,000 4,530,901
Our Lady of Victory Hospital, Series A, AMBAC Insured, 6.625%, 11/01/16 ...... 1,000,000 1,065,410
Refunding, Hospital and Nursing Home Mortgage, Series C,
MBIA Insured, 6.25%, 8/15/12 .............................................. 1,000,000 1,068,500
Refunding, St. Mary's Hospital Project, Series A, AMBAC Insured,
6.20%, 11/01/14 ........................................................... 1,495,000 1,617,097
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.60%, 11/01/10 ........ 700,000 744,765
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.625%, 11/01/18 ...... 1,500,000 1,594,680
New York State Power Authority Revenue and General Purpose,
Series AA, MBIA Insured, Pre-Refunded, 6.25%, 1/01/23 ........................ 2,000,000 2,130,920
Series Y, AMBAC Insured, Pre-Refunded, 6.50%, 1/01/11 ........................ 2,255,000 2,377,379
Series Z, FGIC Insured, Pre-Refunded, 6.50%, 1/01/19 ......................... 2,000,000 2,142,600
New York State Thruway Authority General Revenue, Series C, FGIC Insured,
Pre-Refunded, 6.00%, 1/01/25 ................................................. 11,500,000 12,481,176
Niagara County GO, Public Improvement, MBIA Insured, 6.00%,
7/15/18 ...................................................................... 500,000 529,305
7/15/19 ...................................................................... 510,000 538,346
7/15/20 ...................................................................... 610,000 643,538
7/15/21 ...................................................................... 645,000 679,682
Niagara Falls Bridge Commission Toll Revenue, Refunding, Series B, FGIC Insured,
5.25%, 10/01/21 .............................................................. 10,000,000 9,793,600
Niagara Falls Public Improvement, MBIA Insured,
6.85%, 3/01/19 ............................................................... 1,000,000 1,102,740
6.90%, 3/01/20 ............................................................... 500,000 552,180
6.90%, 3/01/21 ............................................................... 500,000 551,740
Niagara Falls Water Treatment Plant, MBIA Insured, 7.00%, 11/01/12 .............. 1,200,000 1,336,980
Niagara Frontier Transportation Authority Airport Revenue, Greater Buffalo
International Airport,
Series A, AMBAC Insured, 6.25%, 4/01/24 ...................................... 1,000,000 1,058,930
Series C, AMBAC Insured, 6.00%, 4/01/24 ...................................... 1,440,000 1,518,840
North Hempstead GO, Refunding, Series B, FGIC Insured, 6.40%,
4/01/15 ...................................................................... 1,065,000 1,209,734
4/01/16 ...................................................................... 1,000,000 1,137,770
Otsego County IDA, Civic Facilities Revenue, Bassett Healthcare Project,
Series A, MBIA Insured, 5.35%, 11/01/20 ...................................... 2,000,000 1,974,800
Phelps-Clifton GO, Springs Central School District, AMBAC Insured,
5.65%, 6/15/13 ............................................................... 1,355,000 1,403,997
Port Authority of New York and New Jersey Revenue,
Consolidated 71st Series, AMBAC Insured, 6.50%, 1/15/26 ...................... 1,000,000 1,044,670
Consolidated 71st Series, MBIA Insured, 6.50%, 1/15/26 ....................... 1,600,000 1,671,472
Consolidated 76th Series, AMBAC Insured, 6.50%, 11/01/26 ..................... 4,230,000 4,434,055
Rensselear County GO, AMBAC Insured, 6.70%, 2/15/11 ............................. 810,000 929,337
Schenectady IDA, Civic Facility Revenue, Union College Project, Series A, AMBAC
Insured, 5.45%, 12/01/29 ..................................................... 2,000,000 2,006,620
St. Lawrence County IDA, Civic Facility Revenue, St. Lawrence University Project,
Series A, MBIA Insured, 5.00%, 7/01/28 ....................................... 2,455,000 2,281,456
Suffolk County GO, Public Improvement, Refunding, Series B, FGIC Insured, 6.20%,
5/01/11 ...................................................................... 500,000 527,915
5/01/13 ...................................................................... 500,000 527,370
Triborough Bridge and Tunnel Authority Revenue,
General Purpose, Refunding, Series Q, AMBAC Insured, 6.00%, 1/01/13 .......... 1,500,000 1,509,165
General Purpose, Series B, MBIA Insured, 5.20%, 1/01/27 ...................... 9,110,000 8,737,310
General Purpose, Series X, AMBAC Insured, 6.50%, 1/01/19 ..................... 4,475,000 4,744,440
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
Triborough Bridge and Tunnel Authority Revenue, (cont.)
General Purpose, Series X, MBIA Insured, 6.50%, 1/01/19 ................... $ 2,750,000 $ 2,915,578
Series T, MBIA Insured, Pre-Refunded, 7.00%, 1/01/20 ...................... 1,100,000 1,167,562
Upper Mohawk Valley Regional Water Finance Authority Water System Revenue,
Refunding, Series A, FSA Insured, 5.125%, 10/01/26 ........................... 2,000,000 1,897,280
------------
Total Long Term Investments (Cost $254,078,630) .............................. 264,201,670
------------
(a)SHORT TERM INVESTMENTS .2%
New York City GO, Series B, Sub Series B-7, AMBAC Insured, Daily VRDN and
Put, 2.50%, 8/15/18 ........................................................ 200,000 200,000
New York City Municipal Water Finance Authority Water and Sewer System
Revenue, Series C, FGIC Insured, Daily VRDN and Put, 2.50%, 6/15/23 ........ 200,000 200,000
------------
TOTAL SHORT TERM INVESTMENTS (COST $400,000) ................................. 400,000
------------
TOTAL INVESTMENTS (COST $254,478,630) 97.7% .................................. 264,601,670
OTHER ASSETS, LESS LIABILITIES 2.3% .......................................... 6,294,547
------------
NET ASSETS 100.0% ............................................................ $270,896,217
============
</TABLE>
See glossary of terms on page 31.
(a) Variable rate demand notes (VRDNs) are tax-exempt obligations which contain
a floating or variable interest rate adjustment formula and an unconditional
right of demand to receive payment of the principal balance plus accrued
interest at specified dates.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Highlights
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 --------------------------------------------------
(UNAUDITED)(1) 1998 1997 1996 1995 1994
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ............... $ 10.77 $ 10.62 $ 10.28 $ 10.40 $ 9.60 $ 10.68
---------------------------------------------------------------------
Income from investment operations:
Net investment income ............................. .26 .51 .54 .56 .55 .55
Net realized and unrealized gains (losses) ........ (.38) .18 .35 (.12) .80 (1.10)
---------------------------------------------------------------------
Total from investment operations ................... (.12) .69 .89 .44 1.35 (.55)
Less distributions from net investment income ...... (.26) (.54) (.55) (.56) (.55) (.53)
---------------------------------------------------------------------
Net asset value, end of period ..................... $ 10.39 $ 10.77 $ 10.62 $ 10.28 $ 10.40 $ 9.60
=====================================================================
Total return* ...................................... (1.20%) 6.63% 8.89% 4.38% 14.31% (5.42%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .................. $74,836 $80,689 $58,916 $44,822 $43,229 $35,166
Ratios to average net assets:
Expenses .......................................... .45%** .45% .45% .37% .33% .05%
Expenses excluding waiver and payments by affiliate .83%** .83% .82% .83% .83% .80%
Net investment income ............................. 4.84%** 4.81% 5.26% 5.47% 5.51% 5.57%
Portfolio turnover rate ............................ 6.39% 10.46% 6.87% 24.67% 24.68% 188.38%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year. Prior to
May 1, 1994, dividends from net investment income were reinvested at the
offering price.
**Annualized
(1)Based on average shares outstanding.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 95.6%
Albany County Airport Authority Revenue, Series B, FSA Insured, 4.75%, 12/15/13 .................. $1,850,000 $1,766,121
Albany IDA, Civic Facility Revenue, Albany Medical
Center Project, 5.75%, 5/01/09 ................................................................... 1,010,000 1,005,415
Cortland County IDA, Civic Facility Revenue, Cortland Memorial
Hospital Inc. Project, 6.15%, 7/01/02 ......................................................... 65,000 66,940
Erie County GO, FGIC Insured,
4.70%, 11/01/12 ............................................................................... 700,000 673,778
4.75%, 11/01/13 ............................................................................... 525,000 504,389
Franklin County IDA, Lease Revenue, County Correctional Facility Project, 6.375%, 11/01/02 ....... 45,000 47,063
Guam Airport Authority Revenue, Refunding, Series A, 6.00%, 10/01/03 ............................. 260,000 271,505
Guam Power Authority Revenue, Series A, 6.00%, 10/01/04 .......................................... 1,300,000 1,389,960
MTA Service Contract Revenue, Transit Facilities, Refunding, Series O, 5.75%, 7/01/07 ............ 500,000 527,805
New Rochelle Municipal Housing Authority Revenue, Series A, 5.55%, 12/01/14 ...................... 2,000,000 1,975,440
New York City GO,
Refunding, Series A, 6.375%, 8/01/05 .......................................................... 3,455,000 3,674,634
Refunding, Series B, 6.20%, 8/15/06 ........................................................... 1,000,000 1,081,340
Refunding, Series D, 5.40%, 8/01/11 ........................................................... 4,250,000 4,299,173
Refunding, Series F, 6.00%, 8/01/12 ........................................................... 700,000 740,474
Series A, Pre-Refunded, 6.375%, 8/01/05 ....................................................... 1,745,000 1,872,542
Series G, 5.75%, 10/15/10 ..................................................................... 1,000,000 1,043,740
Series H, 7.00%, 2/01/06 ...................................................................... 340,000 364,171
New York City Health and Hospital Corp. Revenue, Health System, Refunding, Series A, AMBAC Insured,
4.60%, 2/15/12 ................................................................................ 1,625,000 1,532,700
New York City IDA, Civic Facility Revenue,
New York Blood Center Inc. Project, ETM, 6.80%, 5/01/02 ....................................... 110,000 114,228
USTA National Tennis Center Project, FSA Insured, 6.00%, 11/15/03 ............................. 1,875,000 1,993,444
USTA National Tennis Center Project, FSA Insured, 6.10%, 11/15/04 ............................. 1,675,000 1,802,066
New York City Transitional Finance Authority Revenue, Future Tax Secured, Series A,
4.75%, 11/15/13 ............................................................................... 1,000,000
948,020
New York State COP, Commissioner of General Services, Executive Department, 6.50%, 3/01/00 ....... 3,010,000 3,061,712
New York State Dormitory Authority Revenues,
City University, Refunding, Series U, 6.25%, 7/01/02 .......................................... 100,000 105,095
City University, Refunding, Series U, 6.35%, 7/01/04 .......................................... 1,720,000 1,851,167
Department of Health, 6.25%, 7/01/04 .......................................................... 690,000 739,577
Department of Health, 6.30%, 7/01/05 .......................................................... 735,000 794,145
Department of Health, Refunding, 5.125%, 7/01/13 .............................................. 1,410,000 1,361,524
North General Hospital, Refunding, Series G, 5.20%, 2/15/13 ................................... 2,000,000 1,954,160
Nyack Hospital, Refunding, 6.00%, 7/01/06 ..................................................... 2,000,000 2,065,520
St. Agnes Hospital, Series A, 5.30%, 2/15/13 .................................................. 1,380,000 1,361,508
State Service Contract, Albany County, 5.25%, 4/01/12 ......................................... 500,000 495,380
State University Dormitory Facilities, Series A, AMBAC Insured, 4.80%, 7/01/13 ................ 1,840,000 1,755,158
State University Educational Facilities, Refunding, Series A, 5.25%, 5/15/15 .................. 1,000,000 993,550
W.K. Nursing Home Corp., FHA Insured, 5.55%, 8/01/08 .......................................... 300,000 309,912
New York State HFAR,
Health Facilities of New York City, Refunding, Series A, 6.00%, 11/01/08 ...................... 3,045,000 3,199,930
Nursing Home and Health Care Project, Series A, 5.10%, 11/01/12 ............................... 1,975,000 1,952,307
New York State Medical Care Facilities Finance Agency Revenue,
Hospital and Nursing Home, Refunding, FHA Insured, 5.70%, 2/15/05 ............................. 1,500,000 1,565,610
Huntington Hospital Mortgage Project, Refunding, Series A, 5.90%, 11/01/04 .................... 475,000 499,463
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
New York State Thruway Authority General Revenue, Series A, Pre-Refunded, 5.80%, 1/01/06 .............. $1,900,000 $ 1,999,769
New York State Thruway Authority Service Contract Revenue, Local Highway and Bridge,
Refunding, 5.25%, 4/01/10 .......................................................................... 550,000 554,543
New York State Urban Development Corp. Revenue,
Correctional Facilities, Refunding, 5.75%, 1/01/13 ................................................. 500,000 510,825
Correctional Facility Service Contract, Series A, 5.00%, 1/01/12 ................................... 2,000,000 1,936,820
Youth Facilities, 5.75%, 4/01/10 ................................................................... 400,000 417,536
Youth Facilities, 5.875%, 4/01/10 .................................................................. 1,500,000 1,566,585
Oneida-Herkimer Solid Waste Management Authority Solid Waste Systems Revenue, Refunding,
6.65%, 4/01/05 ..................................................................................... 125,000 136,480
Puerto Rico Commonwealth GO, 6.00%, 7/01/05 ........................................................... 1,000,000 1,083,470
Puerto Rico Electric Power Authority Revenue, Series T, 6.00%, 7/01/04 ................................ 1,500,000 1,602,930
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 1,913,210
Puerto Rico Municipal Finance Agency GO, Series A,
5.875%, 7/01/06 .................................................................................... 300,000 314,421
FSA Insured, 5.60%, 7/01/05 ........................................................................ 300,000 319,413
United Nations Development Corp. Revenue, senior lien, Refunding, Series A, ETM, 5.70%, 7/01/02 ....... 350,000 364,388
Virgin Islands PFA Revenue, senior lien, Refunding, Series A, 5.30%, 10/01/11 ......................... 3,000,000 2,944,200
Virgin Islands Water and Power Authority Electric System Revenue, Refunding, 5.125%, 7/01/13 .......... 1,775,000 1,712,306
Virgin Islands Water and Power Authority Water System Revenue, Refunding,
4.875%, 7/01/06 .................................................................................... 1,985,000 1,908,260
5.00%, 7/01/09 ..................................................................................... 520,000 490,676
-----------
TOTAL LONG TERM INVESTMENTS (COST $69,836,880) ........................................................ 71,536,498
-----------
(a)SHORT TERM INVESTMENTS 1.2%
New York City Municipal Water Finance Authority Water and Sewer System Revenue,
Series C, FGIC Insured, Daily
VRDN and Put, 3.70%, 6/15/23 ........................................................................ 300,000 300,000
Port Authority of New York and New Jersey Special Obligation Revenue, Versatile
Structure, Series 2, Daily VRDN and Put, 3.60%, 5/01/19 ............................................. 100,000 100,000
Puerto Rico Commonwealth Highway and Transportation Authority Revenue, Series A,
AMBAC Insured, Weekly VRDN and Put, 3.10%, 7/01/28 .................................................. 500,000 500,000
-----------
TOTAL SHORT TERM INVESTMENTS (COST $900,000) .......................................................... 900,000
-----------
TOTAL INVESTMENTS (COST $70,736,880) 96.8% ............................................................ 72,436,498
OTHER ASSETS, LESS LIABILITIES 3.2% ................................................................... 2,399,525
-----------
NET ASSETS 100.0% ..................................................................................... $74,836,023
===========
</TABLE>
See glossary of terms on page 31.
(a)Variable rate demand notes (VRDNs) are tax-exempt obligations which contain
a floating or variable interest rate adjustment formula and an unconditional
right of demand to receive payment of the principal balance plus accrued
interest at specified dates.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Highlights
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 --------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
--------------------------------------------------------------------
<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 .03 .02
Less distributions from net investment income .............. (.01) (.03) (.03) (.03) (.03) (.02)
-----------------------------------------------------------------
Net asset value, end of period ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=================================================================
Total return* .............................................. 1.20% 2.79% 3.01% 2.79% 3.11% 2.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .......................... $60,454 $57,878 $63,720 $59,178 $61,079 $64,835
Ratios to average net assets:
Expenses .................................................. .60%** .60% .60% .60% .60% .60%
Expenses excluding waiver and payments by affiliate ....... .85%** .83% .81% .86% .85% .93%
Net investment income ..................................... 2.38%** 2.75% 2.97% 2.75% 3.06% 2.12%
</TABLE>
*Total return is not annualized for periods less than one year.
**Annualized
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS 99.2%
Erie County GO, RAN, 4.00%, 10/13/99 ............................................................ $1,000,000 $1,002,766
(a)Long Island Power Authority Electric System Revenue, sub. lien,
Sub Series 2, Weekly VRDN and Put, 3.25%, 5/01/33 ............................................ 600,000 600,000
Sub Series 5, Daily VRDN and Put, 3.40%, 5/01/33 ............................................. 1,700,000 1,700,000
Metropolitan Transportation Authority, TECP, 3.20%, 7/08/99 ................................... 500,000 500,000
(a)New York and New Jersey Port Authority, Special Obligation Revenue, Versatile
Structure Obligation Series 2, Daily VRDN and Put, 3.60%, 5/01/19 ............................. 700,000 700,000
(a)New York City GO,
Series B, Sub Series B-3, MBIA Insured, Daily VRDN and Put, 3.70%, 8/15/04 ................... 300,000 300,000
Series B, Sub Series B-7, AMBAC Insured, Daily VRDN and Put, 3.70%, 8/15/18 .................. 2,500,000 2,500,000
Sub Series A-5, Daily VRDN and Put, 3.70%, 8/01/16 ........................................... 900,000 900,000
(a)New York City HDC, Mortgage Revenue, Columbus Apartments, Series A, Weekly VRDN and Put,
3.20%, 03/15/25 .............................................................................. 1,500,000 1,500,000
(a)New York City HDC, MF Rental Housing Revenue,
One Columbus Development, Series A, Weekly VRDN and Put, 3.35%, 11/15/28 ..................... 1,000,000 1,000,000
Brittany Development, Series A, Weekly VRDN and Put, 3.35%, 6/15/29 .......................... 1,500,000 1,500,000
(a)New York City IDA, Civic Facility Revenue,
American Civil Liberties, Weekly VRDN And Put, 3.35%, 6/01/12 ................................ 900,000 900,000
National Audubon Society Daily VRDN And Put, 3.35%,12/01/14 .................................. 500,000 500,000
New York City Municipal Water Finance Authority Water and Sewer System Revenue,
(a)Series 93C, FGIC Insured, Daily VRDN and Put, 3.70%, 6/15/22 .................................. 1,800,000 1,800,000
Series A, 6.00%, 6/15/00 ..................................................................... 3,630,000 3,723,136
(a)Series G, FGIC Insured, Daily VRDN and Put, 3.40%, 6/15/24 .................................... 1,550,000 1,550,000
New York City Trust Cultural Resources Revenue,
(a)Museum of Broadcasting, Weekly VRDN and Put, 3.25%, 5/01/14 ................................... 2,000,000 2,000,000
Museum of Modern Art, Series 1, AMBAC Insured, 5.00%,1/01/00 .................................. 1,325,000 1,338,710
(a)Series B, MBIA Insured, Weekly VRDN and Put, 3.10%, 04/01/21 .................................. 1,100,000 1,100,000
New York State Dormitory Authority Revenues,
(a)New York Public Library, Series B, Refunding, MBIA Insured, Weekly VRDN and Put, 3.25%, 7/01/28 2,200,000 2,200,000
(a)Oxford University Press Inc., Weekly VRDN and Put, 3.30%, 7/01/25 ............................. 700,000 700,000
(a)Sloan Kettering Memorial, Daily VRDN and Put, 3.50%, 7/01/19 .................................. 2,500,000 2,500,000
State University Dormitory, Facilities-A, Refunding, AMBAC Insured, 5.00%, 7/01/99 ............ 1,500,000 1,500,000
(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, 3.45%, 12/01/25 .................... 1,200,000 1,200,000
Orange and Rockland Project, Refunding, Series A, FGIC Insured, Weekly VRDN and
Put, 3.10%, 10/01/14 ....................................................................... 1,000,000 1,000,000
Orange and Rockland Utilities, Refunding, Series A, AMBAC Insured, Weekly VRDN and
Put, 3.10%, 8/01/15 ........................................................................ 1,350,000 1,350,000
Rochester Gas & Electric Corp. Series C, MBIA Insured, Weekly VRDN and Put, 3.10%, 8/01/32 ... 1,500,000 1,500,000
New York State Environmental Facilities Corp. TECP, 3.15%, 7/13/99 ............................ 2,000,000 2,000,000
New York State GO, TECP, 3.15%, 7/22/99 ....................................................... 2,000,000 2,000,000
(a)New York State HFAR, 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 Revenue, State Guaranteed, Special Purpose,
Series A, Daily VRDN and Put, 3.50%, 3/01/07 ................................................. 1,060,000 1,060,000
(a)New York State Local Government Assistance Corp.,
Series B, Weekly VRDN and Put, 3.25%, 4/01/23 ................................................ 500,000 500,000
Series D, Weekly VRDN and Put, 3.25%, 4/01/25 ................................................ 200,000 200,000
Series F, Weekly VRDN and Put, 3.20%, 4/01/25 ................................................ 2,200,000 2,200,000
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS (CONT.)
(a)New York State Medical Care Facilities Finance Agency Revenue, Pooled Equipment
Loan Program 2A, Weekly VRDN and Put, 3.15%, 11/01/03 ............................................. $ 1,930,000 $ 1,930,000
(a)Niagara County New York IDA, IDR, Pyron Corp. Project, Weekly VRDN and Put, 3.45%, 11/01/04 ....... 595,000 595,000
(a)Puerto Rico Commonwealth Highway and Transportation Authority Revenue, Series A,
AMBAC Insured, Weekly VRDN and Put, 3.10%, 7/1/28 ................................................. 2,400,000 2,400,000
Puerto Rico Commonwealth Tax and Revenue, TRAN, Series A, 3.50%, 7/30/99 .......................... 2,000,000 2,001,139
Suffolk County TAN, Series II,
3.75% 9/09/99 .................................................................................. 1,000,000 1,000,778
4.00%, 9/09/99 ................................................................................. 1,500,000 1,501,807
(a)Syracuse IDA Civic Facilities Revenue, Multi-Modal-Syracuse University Project, Daily VRDN and
Put, 3.40%, 3/01/23 ............................................................................. 400,000 400,000
Westchester County TAN, 2.83%, 12/30/99 ........................................................... 2,500,000 2,500,355
-----------
TOTAL INVESTMENTS (COST $59,953,691) 99.2% ........................................................ 59,953,691
OTHER ASSETS, LESS LIABILITIES .8% ................................................................ 500,575
-----------
NET ASSETS 100.0% ................................................................................. $60,454,266
===========
</TABLE>
See glossary of terms on page 31.
(a)Variable rate demand notes (VRDNs) are tax-exempt obligations which contain a
floating or variable interest rate adjustment formula and an unconditional
right of demand to receive payment of the principal balance plus accrued
interest at specified dates.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 1999 (UNAUDITED) (CONT.)
GLOSSARY OF TERMS
- --------------------------------------------------------------------------------
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance (Some of the securities shown as FSA
Insured were originally insured by Capital Guaranty Insurance Co.
(CGIC) which was acquired by FSA in 1995 and no longer does business
under this name).
GO - General Obligation
HDC - Housing Development Corp.
HFAR - Housing Finance Authority Revenue
IDA - Industrial Development Authority/Agency
IDR - Industrial Development Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MF - Multi-Family
MTA - Metropolitan Transit Authority
PCR - Pollution Control Revenue
PFA - Public Financing Authority
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TECP - Tax-Exempt Commercial Paper
TRAN - Tax and Revenue Anticipation Notes
USTA - United States Tennis Association
VRDN - Variable Rate Demand Notes
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities:
Cost .................................... $ 254,478,630 $ 70,736,880 $ 59,953,691
=======================================================================
Value ................................... 264,601,670 72,436,498 59,953,691
Cash ..................................... 184,441 87,311 210,422
Receivables:
Investment securities sold .............. -- 20,000 --
Capital shares sold ..................... 1,947,079 1,133,442 170,981
Interest ................................ 5,074,728 1,360,613 369,249
-----------------------------------------------------------------------
Total assets ........................ 271,807,918 75,037,864 60,704,343
-----------------------------------------------------------------------
Liabilities:
Payables:
Capital shares redeemed ................. 145,252 944 161,534
Affiliates .............................. 188,484 38,235 27,800
Shareholders ............................ 153,841 30,253 41,525
Distributions to shareholders ............ 394,406 115,674 --
Other liabilities ........................ 29,718 16,735 19,218
-----------------------------------------------------------------------
Total liabilities ................... 911,701 201,841 250,077
-----------------------------------------------------------------------
Net assets, at value ............... $ 270,896,217 $ 74,836,023 $ 60,454,266
=======================================================================
Net assets consist of:
Undistributed net investment income ...... $ -- $ 77,416 $ --
Accumulated distributions in excess of net
investment income ...................... (113,156) -- --
Net unrealized appreciation .............. 10,123,040 1,699,618 --
Accumulated net realized gain (loss) ..... 292,720 (2,633,045) --
Capital shares ........................... 260,593,613 75,692,034 60,454,266
-----------------------------------------------------------------------
Net assets, at value ............... $ 270,896,217 $ 74,836,023 $ 60,454,266
=======================================================================
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
--------------------------------------------------------------
<S> <C> <C> <C>
CLASS A:
Net assets, at value .................................. $ 259,053,126 $ 74,836,023 $60,454,266
==============================================================
Shares outstanding .................................... 22,871,458 7,205,271 60,454,266
==============================================================
Net asset value per share* ............................ $ 11.33 $ 10.39 $ 1.00
==============================================================
Maximum offering price per share (net asset
value per share divided by 95.75%, 97.75%,
100.00% respectively)................................ $ 11.83 $ 10.63 $ 1.00
==============================================================
CLASS C:
Net assets, at value .................................. $ 11,843,091 -- --
==============================================================
Shares outstanding .................................... 1,035,547 -- --
==============================================================
Net asset value per share* ............................ $ 11.44 -- --
==============================================================
Maximum offering price per share (net asset value per
share divided by 99.00%) ............................ $ 11.56 -- --
==============================================================
</TABLE>
*Redemption price is equal to net asset value less any applicable contingent
deferred sales charge.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME MONEY FUND
-------------------------------------------------------------
<S> <C> <C> <C>
Investment income:
Interest .............................................. $ 7,706,931 $ 2,123,210 $ 860,892
-------------------------------------------------------------
Expenses:
Management fees (Note 3) .............................. 751,588 252,179 179,130
Distribution fees: (Note 3)
Class A .............................................. 122,109 39,860 --
Class C .............................................. 34,132 -- --
Transfer agent fees (Note 3) .......................... 59,776 19,643 37,764
Custodian fees ........................................ 1,372 371 567
Reports to shareholders ............................... 20,381 5,856 15,648
Registration and filing fees .......................... 12,973 5,513 6,171
Professional fees ..................................... 13,004 3,222 3,252
Trustees' fees and expenses ........................... 8,637 2,265 1,713
Other ................................................. 13,057 3,637 678
-------------------------------------------------------------
Total expenses ................................... 1,037,029 332,546 244,923
Expenses waived/paid by affiliate (Note 3) ....... -- (152,669) (72,947)
-------------------------------------------------------------
Net expenses .................................... 1,037,029 179,877 171,976
-------------------------------------------------------------
Net investment income .......................... 6,669,902 1,943,333 688,916
-------------------------------------------------------------
Realized and unrealized gains (losses):
Net realized gain (loss) from investments ............. 294,749 (73,514) --
Net unrealized depreciation on investments ............ (9,326,946) (2,761,276) --
-------------------------------------------------------------
Net realized and unrealized loss ....................... (9,032,197) (2,834,790) --
-------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............................ $(2,362,295) $ (891,457) $ 688,916
=============================================================
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FRANKLIN NEW YORK
FRANKLIN NEW YORK INSURED INTERMEDIATE-TERM
TAX-FREE INCOME FUND TAX-FREE INCOME FUND
--------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998 JUNE 30, 1999 DECEMBER 31, 1998
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................................ $ 6,669,902 $ 13,181,749 $ 1,943,333 $ 3,209,507
Net realized gain (loss) from investments ............ 294,749 1,939,615 (73,514) 262,095
Net unrealized appreciation (depreciation)
on investments .................................... (9,326,946) 706,841 (2,761,276) 861,981
-------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ...................... (2,362,295) 15,828,205 (891,457) 4,333,583
Distributions to shareholders from:
Net investment income:
Class A ............................................. (6,444,639) (12,887,618) (1,931,134) (3,321,193)
Class C ............................................. (225,263) (294,131) -- --
In excess of net investment income:
Class A ............................................. (34,922) (74,373) -- --
Class C ............................................. (1,221) (1,697) -- --
Net realized gains:
Class A ............................................. (90,756) (1,299,492) -- --
Class C ............................................. (4,126) (44,540) -- --
-------------------------------------------------------------------------
Total distributions to shareholders ................... (6,800,927) (14,601,851) (1,931,134) (3,321,193)
Capital share transactions: (Note 2)
Class A .............................................. (2,596,624) 8,241,153 (3,030,475) 20,760,497
Class C .............................................. 2,771,111 3,826,083 -- --
-------------------------------------------------------------------------
Total capital share transactions ...................... 174,487 12,067,236 (3,030,475) 20,760,497
Net increase (decrease) in net assets ............ (8,988,735) 13,293,590 (5,853,066)
21,772,887
Net assets
Beginning of period ................................... 279,884,952 266,591,362 80,689,089 58,916,202
-------------------------------------------------------------------------
End of period ......................................... $ 270,896,217 $ 279,884,952 $ 74,836,023 $ 80,689,089
========================================================================
Undistributed net investment income (accumulated
distributions in excess of net investment income)
included in net assets:
End of period ........................................ $ (113,156) $ (77,013) $ 77,416 $ 65,217
========================================================================
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FRANKLIN NEW YORK
TAX-EXEMPT MONEY FUND
--------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
--------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income .......................................... $ 688,916 $ 1,656,684
--------------------------------------
Distributions to shareholders from net investment income ........ (688,916) (1,656,684)
Capital share transactions (Note 2) ............................. 2,576,286 (5,841,785)
--------------------------------------
Net increase (decrease) in net assets ...................... 2,576,286 (5,841,785)
Net assets (there is no undistributed net investment income
at beginning or end of period):
Beginning of period ............................................. 57,877,980 63,719,765
--------------------------------------
End of period ................................................... $ 60,454,266 $ 57,877,980
======================================
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Notes to Financial Statements (unaudited)
1. 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 seek to provide tax-free
income. The Franklin New York Tax-Exempt Money Fund (Money Fund) also seeks
capital preservation and liquidity in its investments. The following summarizes
the Funds' significant accounting policies.
a. SECURITY VALUATION:
Tax-free bonds generally trade in the over-the-counter market and are valued
within the range of the latest quoted bid and asked prices. In the absence of a
sale or reported bid and asked prices, information with respect to bond and note
transactions, quotations from bond dealers, market transactions in comparable
securities, and various relationships between securities are used to determine
the value of the security. The Trust may utilize a pricing service, bank or
broker/dealer experienced in such matters to perform any of the pricing
functions under procedures approved by the Board of Trustees. 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.
b. 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 substantially all of its taxable income.
c. SECURITY TRANSACTIONS INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Bond discount and
premium are amortized on an income tax basis. 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 from net investment income are normally declared daily and
distributed monthly to shareholders for 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). Other distributions are recorded on the
ex-dividend date.
Common expenses incurred by the Trust are allocated among the Funds based on the
ratio of net assets of each Fund to the combined net assets. Other expenses are
charged to each Fund on a specific identification basis.
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.
d. 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.
FRANKLIN NEW YORK TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (cont.)
d. INSURANCE: (CONT.)
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.
e. 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 amount of income and expense during the reporting
period. Actual results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The classes of shares offered within each of the funds are indicated below.
Effective January 1, 1999, Class I and Class II were renamed Class A and C,
respectively. Each class of shares differ by their initial sales load,
distribution fees, voting rights on matters affecting a single class and the
exchange privilege.
CLASS A CLASS A & CLASS C
- --------------------------------------------------------------------------------
Franklin New York Intermediate-Term Tax-Free Franklin New York Insured
Income Fund Tax-Free Income Fund
Franklin New York Tax-Exempt Money Fund
At June 30, 1999, there were an unlimited number of shares authorized (no par
value). Transactions in the Funds' shares were as follows:
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
---------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES/AMOUNT
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES:
Six months ended June 30, 1999
Shares sold ................. 1,467,379 $ 17,035,123 1,237,426 $ 13,248,680 $ 26,385,512
Shares issued in reinvestment
of distributions .......... 308,863 3,586,655 101,296 1,083,502 691,307
Shares redeemed ............. (1,997,096) (23,218,402) (1,623,769) (17,362,657) (24,500,533)
---------------------------------------------------------------------------
Net increase (decrease) . (220,854) $ (2,596,624) (285,047) $ (3,030,475) $ 2,576,286
===========================================================================
Year ended December 31, 1998
Shares sold ................. 2,627,781 $ 30,700,744 3,890,300 $ 41,529,693 $ 51,502,356
Shares issued in reinvestment
of distributions .......... 679,637 7,946,653 189,172 2,019,473 1,656,994
Shares redeemed ............. (2,604,462) (30,406,244) (2,136,427) (22,788,669) (59,001,135)
---------------------------------------------------------------------------
Net increase (decrease) . 702,956 $ 8,241,153 1,943,045 $ 20,760,497 $ (5,841,785)
===========================================================================
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
2. SHARES OF BENEFICIAL INTEREST (cont.)
FRANKLIN NEW YORK
INSURED TAX-FREE
INCOME FUND
------------------------
SHARES AMOUNT
------------------------
CLASS C SHARES:
Six months ended June 30, 1999
Shares sold .................................. 267,212 $ 3,138,502
Shares issued in reinvestment of distributions 14,561 170,542
Shares redeemed .............................. (45,887) (537,933)
------------------------
Net increase ............................. 235,886 $ 2,771,111
========================
Year ended December 31, 1998
Shares sold .................................. 410,496 $ 4,858,484
Shares issued in reinvestment of distributions 21,224 250,668
Shares redeemed .............................. (108,928) (1,283,069)
------------------------
Net increase ............................. 322,792 $ 3,826,083
========================
3. TRANSACTIONS WITH AFFILIATES
Certain officers and trustees of the Funds are also officers and/or directors of
Franklin Advisers, Inc. (Advisers), Franklin Templeton Services, Inc. (FT
Services), Franklin/Templeton Distributors, Inc. (Distributors), and
Franklin/Templeton Investor Services, Inc. (Investor Services), the 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, 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 A and Class C,
respectively, for costs incurred in marketing the Funds' shares.
FRANKLIN NEW YORK TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
3. TRANSACTIONS WITH AFFILIATES (CONT.)
Distributors paid net commissions on sales of the Funds' shares, and received
contingent deferred sales charges for the year as follows:
FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM
INCOME FUND TAX-FREE INCOME FUND
---------------------------------------
Net commis-
sions paid ....... $55,653 $12,037
Contingent deferred
sales charges .... $ 690 $24,153
The Funds paid transfer agent fees of $117,183 of which $94,888 was paid to
Investor Services.
4. INCOME TAXES
At December 31, 1998, the Intermediate-Term Fund had tax basis capital losses of
$2,559,531 which may be carried over to offset future capital gains. Such losses
expire as follows:
FRANKLIN NEW YORK
INTERMEDIATE-TERM
TAX-FREE INCOME FUND
--------------------
Capital loss carryovers expiring in:
2002 ................................. $2,297,936
2003 ................................. --
2004 ................................. 261,595
--------------------
$2,559,531
====================
At June 30, 1999, the net unrealized appreciation based on the cost of
investments for income tax purposes was as follows:
FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM
INCOME FUND TAX-FREE INCOME FUND
----------------------------------------------
Investments at cost ... $ 254,478,630 $ 70,736,880
==============================================
Unrealized appreciation $ 11,475,325 $ 2,321,526
Unrealized depreciation (1,352,285) (621,908)
----------------------------------------------
Net unrealized
appreciation ......... $ 10,123,040 $ 1,699,618
==============================================
FRANKLIN NEW YORK TAX-FREE TRUST
Notes to Financial Statements (unaudited) (continued)
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended June 30, 1999, were as follows:
FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM
INCOME FUND TAX-FREE INCOME FUND
------------------------------------------
Purchases $ 7,678,629 $ 4,960,486
Sales $10,105,222 $ 8,962,403
6. CREDIT RISK
The Funds have investments in excess of 10% of their total net assets in the
state of New York. Such concentration may subject the Funds more significantly
to economic changes occurring within that state.
