SHAREHOLDER LETTER
Dear Shareholder:
This semiannual report for Franklin New York Tax-Free Trust covers the period
ended June 30, 2000.
BOND MARKET OVERVIEW
During the six months under review, the U.S. economy continued to strengthen, as
gross domestic product (GDP) rose an annualized 4.8% in the first quarter of
2000, consumer confidence remained strong and unemployment hit a 30-year low. In
the face of such economic expansion, inflation as measured by the Consumer Price
Index (CPI) was a modest 3.7% for the year ended June 30, 2000. Nevertheless,
the Federal Reserve Board (the Fed) boosted short-term interest rates in May for
the sixth time in one year, and the third time during the reporting period,
because of inflation fears. It was the first time during this aggressive
tightening cycle that the Fed raised the federal funds target rate by half a
percentage point, bringing it to 6.5%, the highest level in nine years. Recent
economic data indicate that the Fed's actions have begun to take hold and will
soon slow the economy to a more sustainable pace.
The first half of 2000 proved to be a volatile and eventful period for U.S.
Treasury markets. In February, the government announced it would sponsor 30-year
Treasury buybacks and reduce future issuance of long-term Treasuries. This
created a supply/demand imbalance and helped cause long-term Treasury bond
prices to rise sharply, resulting in an inverted yield curve. That is, rates on
long-term bonds declined below those of short-term bonds. The yield on the
30-year Treasury bond decreased from 6.48% at the beginning of the year to 5.90%
on June 30, 2000, reaching a low of 5.67% on April 10, 2000. At the end of the
period, the 10-year Treasury note's yield was 6.03% versus 6.44% where it began
the year.
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Shareholder Letter .............. 1
Fund Reports
Franklin New York Insured
Tax-Free Income Fund ............ 6
Franklin New York
Intermediate-Term
Tax-Free Income Fund ........... 12
Franklin New York
Tax-Exempt Money Fund .......... 16
Municipal Bond Ratings .......... 18
Financial Highlights &
Statements of Investments ....... 21
Financial Statements ............ 34
Notes to
Financial Statements ............ 39
</TABLE>
[FUND CATEGORY PYRAMID]
The municipal bond market did not experience the same level of volatility as the
Treasury bond market and rallied during most of the period. Municipal bond
yields slightly declined since January of this year due to steady demand and
reduced supply. During the six-month reporting period, the new issuance of
long-term municipal debt was approximately $92 billion, compared with $119
billion for the same time period in 1999. We expect this trend to continue for
the rest of the year. The yield on the Bond Buyer Municipal Bond Index (Bond
Buyer 40) declined from 6.22% to 5.91% for the same period, while its price rose
4.30%.(1) As yields decreased and municipal bond prices rose, municipal bond
funds generally increased in value. Despite the decrease in yields during the
first six months of 2000, municipal bonds, as measured by the Bond Buyer 40,
yielded as much as 103% of a comparable Treasury bond's yield. Historically,
this ratio is about 90%.(2) Because municipal bonds are tax-exempt, they
generally yield less than Treasuries, which are subject to federal income tax.
When municipals are yielding nearly the same as Treasuries, investors are able
to take advantage of the tax exemption at little extra cost.(3)
1. Source: The Bond Buyer, 6/00. The unmanaged Bond Buyer Municipal Bond 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.
2. Source: The Bond Buyer, 3/00.
3. Treasuries, if held to maturity, offer a fixed rate of return and fixed
principal value; their interest payments and principal are guaranteed.
NEW YORK UPDATE
As in the past several years, New York's financial performance improved during
the six-month reporting period due to a rebounding state economy, realistic
budgeting, tighter spending controls, and slow but steady economic growth
through which the state has now regained pre-recession employment levels.
Largely as a result of New York's continuing economic improvements, the state
maintained its A+ rating from Standard & Poor's(R), an independent credit rating
agency.(4) Besides reversing a long history of marginally balanced budgets and
large accumulated deficits, the Empire State operated well within its budget and
is expected to finish fiscal year 2000 with an extra $2.9 billion in its
coffers.(5) The state generated surpluses in seven of the past eight years while
slashing personal income tax by 20% and introducing 31 tax cuts in total since
1995, more than any other state in the nation.(6) Although unemployment fell
from 4.9% to 4.6% during the reporting period through May 31, 2000 -- the lowest
jobless rate since March 1989 -- it remains chronically higher than the national
unemployment rate, which fell to a 30-year low of 3.9% during the same time.(7)
New York's personal income growth, however, tracked the national average closely
as it approached 5% in fiscal 1999 and was expected to grow more than 4% in
2000.(4)
New York City fared better than the remainder of the state, fueled largely by
the remarkable performance and employment levels within the business and
financial services sectors. The improving economy in New York City not only
mirrored the nation's strong economic growth, but also resulted from effective
cost containment of social services and other expenses. Every industry in
4. Source: Standard & Poor's, Ratings Direct, 11/9/99. This does not indicate
Standard & Poor's rating of the Fund.
5. Source: Moody's Investors Service, 5/5/00.
6. Source: State of New York Executive Press Release, 5/5/00; www.state.ny.us.
7. Source: Bureau of Labor Statistics, 6/23/00.
New York City and state, except manufacturing, which has seen gradual declines
in recent years, experienced employment growth.
The outlook appears generally bullish for New York. The state's economic base is
deep, diverse and wealthy, although reliance on the financial services sector
continues to be a potential vulnerability. New Yorkers' average personal income
in fiscal 1999 was $31,734, or approximately 120% of the national average.(8)
This, coupled with significantly improved financial conditions, should keep
solid economic growth on track. Long-term risks for the state economy include
its debt levels and infrastructure needs, both of which are high by all
measures. New York's debt structure is complex and the burden on fiscal
resources remains moderate, although at $2,045 per capita and 6.4% of personal
income, this burden is above the national average.(8) Domestic consumption,
which has been a driving force behind the state's economic performance in recent
years, is expected to slow in the remainder of 2000 as consumer confidence
retreats from historic highs and the stock market ceases to provide added
stimulus to consumer spending.
To rein in debt while balancing the high magnitude of New York's capital needs,
the current administration is enacting the most sweeping and fundamental debt
reform in its history. Simultaneously, it is employing a fiscally responsible
budget that aims to cut $6.8 billion in taxes over the next five years while
tripling the debt reduction reserve fund and setting aside substantial resources
for future needs. Fiscal year 2000 budget goal highlights include investments to
improve transportation infrastructure, senior citizen programs, tuition
assistance, and the fourth consecutive record increase in school aid, which
would total $13.6 billion. Meanwhile, in another move seen as typical of the
prudent fiscal management exercised by Governor Pataki over the past five years,
more than $3 billion of the 2000 budget is to be left unspent to strengthen
reserves and protect New York's long-term fiscal stability.(6)
8. Source: Fitch IBCA, State of New York, 10/15/99.
We encourage you to discuss your financial goals with an investment
representative and maintain a long-term perspective. Municipal bond funds
provide an opportunity to diversify risk in investors' portfolios and continue
to be an attractive investment for those seeking tax-free income. Such an
investment offers a taxable equivalent yield that can be hard to match for a
taxable investment with the same relative level of risk. As always, we
appreciate your support, welcome your questions and look forward to serving your
investment needs in the years ahead.
Sincerely,
/s/ C B Johnson
Charles B. Johnson
Chairman
Franklin New York Tax-Free Trust
/s/ Sheila Amoroso
Sheila Amoroso
/s/ Rafael R. Costas Jr.
Rafael R. Costas Jr.
Senior Vice Presidents/Co-Directors
Franklin Municipal Bond Department
WHAT DOES "TAXABLE EQUIVALENT" MEAN FOR YOU?
For yield and distribution rate, the taxable equivalent is the amount a taxable
investment would have to earn to match a tax-free investment such as municipal
bonds.(9) You can find your Fund's taxable equivalent distribution rate and
yield in the Performance Summary that follows your Fund's report.
9. For investors subject to the federal alternative minimum tax, a portion of
this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.
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)
During the six months ended June 30, 2000, Treasury bond yields generally
declined, as mentioned in the Shareholder Letter. Bond yields and prices move in
opposite directions, and Franklin New York Insured Tax-Free Income Fund's Class
A share price rose 1.5%.
It is worth noting that your Fund offers a significant tax advantage over a
comparable taxable investment. On page 11, the Performance Summary shows that at
the end of this reporting period, the Fund's Class A shares' distribution rate
was 4.94%, based on an annualization of the current 4.70 cent ($0.0470) per
share dividend and the maximum offering price of $11.42 on June 30, 2000. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. An investor in the maximum combined federal and New York
state and City income tax bracket of 46.02% would need to earn 9.15% from a
taxable investment to match the Fund's tax-free distribution rate. The
Performance Summary also shows the distribution rate and taxable equivalent
distribution rate for Class C shares.
1. For investors subject to the federal 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. The insurance guarantees the scheduled payment of principal and interest on
the insured securities in the Fund's portfolio, but does not guarantee the
insured security's market value, the value of the Fund's shares, or the Fund's
distributions. Fund shares are not insured. No representation is made as to any
insurer's ability to meet its obligation to the Fund if called upon to do so.
The dollar value, number of shares or principal value, and complete legal titles
of all portfolio holdings are listed in the Fund's Statement of Investments
(SOI). The SOI begins on page 23.
We sold several lower yielding securities at a loss and reinvested the proceeds
at higher rates consistent with our management philosophy. These losses offset
any potential capital gains in the portfolio, possibly lowering shareholders'
future tax liabilities, and can be carried forward for several years. In this
lower interest-rate environment, we were able to, in some cases, reinvest the
proceeds from called bonds into securities with higher yields to protect the
level of the Fund's dividend payments and to improve the portfolio's call
protection.
When a bond is prerefunded, a new issue is brought to market with a lower
interest rate to pay off the older issue at its first call date. In most cases,
the proceeds from the sale of the new bonds are invested in U.S. Treasury
securities that mature on the first call date of the original bonds. Because of
the U.S. Treasury backing, prerefunded bonds usually experience a substantial
price increase, depending on their call date. We sold a number of prerefunded
securities over the course of the reporting period. In managing our prerefunded
security exposure, we typically look to sell bonds with approximately five years
remaining to their call date, at which time the premium often begins to decline
to the stated call price. In doing so, we were able to capture a premium on the
prerefunded bonds and used the proceeds to invest in current coupon bonds, thus
extending the Fund's call protection, preserving its income stream and helping
to stabilize the Fund's share price. Some issues we sold were Albany Municipal
Water Finance Authority Water and Sewer System Revenue Refunding, Niagara Falls
Bridge Commission Toll Revenue Refunding and New York State Thruway Authority
General Revenue.
PORTFOLIO BREAKDOWN
Franklin New York Insured
Tax-Free Income Fund
6/30/00
<TABLE>
<CAPTION>
% OF TOTAL
LONG-TERM
INVESTMENTS
-----------
<S> <C>
Utilities 22.9%
Hospital & Health Care 17.2%
Transportation 13.8%
Higher Education 12.4%
Prerefunded 11.2%
Other Revenue 10.8%
General Obligation 8.0%
Subject to Government
Appropriation 2.7%
Housing 1.0%
</TABLE>
DIVIDEND DISTRIBUTIONS*
Franklin New York Insured Tax-Free Income Fund
1/1/00 - 6/30/00
<TABLE>
<CAPTION>
DIVIDEND PER SHARE
MONTH CLASS A CLASS C
----- ------- -------
<S> <C> <C>
January 4.7 cents 4.21 cents
February 4.7 cents 4.21 cents
March 4.7 cents 4.24 cents
April 4.7 cents 4.24 cents
May 4.7 cents 4.24 cents
June 4.7 cents 4.20 cents
-----------------------------------------------------------------
TOTAL 28.2 CENTS 25.34 CENTS
</TABLE>
*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 include all accrued income earned by the Fund during the reporting
period.
The Fund maintained broad diversification during the period, as the table on
page 7 shows. On June 30, 2000, utilities was the Fund's largest security-type
weighting, making up 22.9% of total long-term investments, followed by hospital
& health care with 17.2%. Significant purchases during the first half of the
year included New York City Municipal Water Finance Authority Water and Sewer
System Revenue, New York State Dormitory Authority Revenues and Babylon IDA
Civic Facility Revenue.
Going forward, we will look to take advantage of the recent interest-rate
environment, as well as what we feel is the municipal bond market's overall
undervalued position. Additionally, our outlook for the Fund, the municipal bond
market and New York remains positive. We expect the supply of New York municipal
securities to remain stable for the remainder of the year 2000, and this,
coupled with a continued strong demand for New York bonds, should continue to
make such bonds attractive investments for investors seeking tax-free income.
This discussion reflects our views, opinions and portfolio holdings as of June
30, 2000, the end of the reporting period. The information provided is not a
complete analysis of every aspect of any industry, security or the Fund. Our
strategies and the Fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND
CLASS A: Subject to the current, maximum 4.25% initial sales charge. Prior to
7/1/94, Fund shares were offered at a lower initial sales charge; thus actual
total returns may differ. Effective 5/1/94, the Fund eliminated the sales charge
on reinvested dividends and implemented a Rule 12b-1 plan, which affects
subsequent performance.
CLASS C: 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.
SIX-MONTH PERFORMANCE SUMMARY AS OF 6/30/00
Six-month total return does not include sales charges. Distributions will vary
based on earnings of the Fund's portfolio and any profits realized from the sale
of the portfolio's securities, as well as the level of operating expenses for
each class. Past distributions are not indicative of future trends. All total
returns include reinvested distributions at net asset value.
<TABLE>
<CAPTION>
CLASS A
<S> <C> <C>
Six-Month Total Return +4.14%
Net Asset Value (NAV) $10.93 (6/30/00) $10.77 (12/31/99)
Change in NAV +$0.16
Distributions (1/1/00-6/30/00) Dividend Income $0.2820
CLASS C
Six-Month Total Return +3.93%
Net Asset Value (NAV) $11.05 (6/30/00) $10.88 (12/31/99)
Change in NAV +$0.17
Distributions (1/1/00-6/30/00) Dividend Income $0.2534
</TABLE>
Past performance does not guarantee future results.
ADDITIONAL PERFORMANCE
AS OF 6/30/00
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR (5/1/91)
------- ------ ------ --------
<S> <C> <C> <C>
Cumulative Total Return(1) +1.55% +29.06% +76.03%
Average Annual Total Return(2) -2.75% +4.32% +5.86%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 5-YEAR (5/1/95)
------- ------ ------ --------
<S> <C> <C> <C>
Cumulative Total Return(1) +1.04% +26.14% +29.03%
Average Annual Total Return(2) -0.96% +4.55% +4.85%
</TABLE>
<TABLE>
<CAPTION>
SHARE CLASS A C
----------- - -
<S> <C> <C> <C>
Distribution Rate(3) 4.94% 4.52%
Taxable Equivalent Distribution Rate(4) 9.15% 8.37%
30-Day Standardized Yield(5) 4.78% 4.41%
Taxable Equivalent Yield(4) 8.86% 8.17%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, applicable,
maximum sales charge(s) for that class.
3. Distribution rate is based on an annualization of the respective class's
current monthly dividend and the maximum offering price per share on 6/30/00.
4. Taxable equivalent distribution rate and yield assume the published rates as
of 6/16/00 for the maximum combined federal and New York state and City personal
income tax bracket of 46.02%, 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 6/30/00.
Bond prices, and thus the Fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
For updated performance figures, see "Prices and Performance" at
franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
CREDIT QUALITY BREAKDOWN*
Franklin New York Intermediate-Term
Tax-Free Income Fund
Based on Total Long-Term Investments
6/30/00
[PIE CHART]
<TABLE>
<S> <C>
AAA 39.9%
AA 5.5%
A 27.25
BBB 27.4%
</TABLE>
*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 by
investing primarily in a portfolio of New York municipal securities with an
average weighted maturity (the time at which debt must be repaid) between 3 and
10 years.(1)
For the six months ended June 30, 2000, Franklin New York Intermediate-Term
Tax-Free Income Fund - Class A share price increased 1.1%, from $10.08 on
December 31, 1999, to $10.19 at period-end.
It is worth noting that your Fund offers a significant tax advantage over a
comparable taxable investment. The Performance Summary on page 15 shows that at
the end of this reporting period, the Fund's Class A shares' distribution rate
was 5.18%, based on an annualization of the current 4.50 cent ($0.0450) per
share dividend and the maximum offering price of $10.42 on June 30, 2000. This
tax-free rate is generally higher than the after-tax return on a comparable
taxable investment. An investor in the maximum combined federal and New York
state and City income tax bracket of 46.02% would need to earn 9.60% from a
taxable investment to match the Fund's tax-free distribution rate.
1. For investors subject to the federal alternative minimum tax, a small portion
of this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.
The dollar value, number of shares or principal value, and complete legal titles
of all portfolio holdings are listed in the Fund's Statement of Investments
(SOI). The SOI begins on page 28.
We sought to take advantage of several opportunities to increase the Fund's
income-earning potential, enhance its overall structure, as well as improve the
Fund's call protection. Our ability to reinvest proceeds from called bonds into
securities with higher yields helped to protect the dividend payment, and was a
factor that contributed to raising the Fund's dividend in March.
When a bond is prerefunded, a new issue is brought to market with a lower
interest rate to pay off the older issue at its first call date. In most cases,
the proceeds from the sale of the new bonds are invested in U.S. Treasury
securities that mature on the first call date of the original bonds. Because of
the U.S. Treasury backing, prerefunded bonds usually experience a substantial
price increase, depending on their call date. In managing our prerefunded
exposure, we typically looked to sell such holdings with approximately five
years remaining to their call date, at which time the premium often begins to
decline to the stated call price. In doing so, the Fund sought to capture a
premium on the prerefunded bonds and use this capital to invest in current
coupon bonds, thus extending the Fund's call protection, preserving its income
stream, and stabilizing its share price.
The majority of the purchases made during the period were higher-rated or
insured securities, which improved the Fund's overall credit profile. This
mainly resulted from credit spreads in New York, which typically did not pay
investors for taking on the additional credit risk of lower-rated securities. As
of June 30, 2000, 45.4% of total long-term investments were AAA and AA, the two
highest credit ratings.
We continued to pursue high, current tax-free income while maintaining a
relatively stable share price. At the end of the period, the Fund had 61
positions, with an average coupon of slightly more than 5.74%, an average
maturity of 9.0 years and a weighted average life to first call of 6.61 years.
The Fund
PORTFOLIO BREAKDOWN
Franklin New York
Intermediate-Term
Tax-Free Income Fund
6/30/00
<TABLE>
<CAPTION>
% OF TOTAL
LONG-TERM
INVESTMENTS
-----------
<S> <C>
General Obligation 20.2%
Subject to Government
Appropriation 15.3%
Utilities 14.3%
Hospital & Health Care 13.5%
Transportation 8.1%
Tax-Supported Debt 7.1%
Other Revenue 7.0%
Housing 5.3%
Prerefunded 5.0%
Higher Education 4.2%
</TABLE>
DIVIDEND DISTRIBUTIONS*
Franklin New York
Intermediate-Term
Tax-Free Income Fund - Class A
1/1/00 - 6/30/00
<TABLE>
<CAPTION>
DIVIDEND
MONTH PER SHARE
----- ---------
<S> <C>
January 4.40 cents
February 4.40 cents
March 4.50 cents
April 4.50 cents
May 4.50 cents
June 4.50 cents
-----------------------------
TOTAL 26.80 CENTS
</TABLE>
*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 include all accrued income earned by the Fund during the reporting
period.
maintained broad diversification during the first half of the year, as
the table on page 13 shows. On June 30, 2000, general obligation bonds was the
Fund's largest security-type weighting, making up 20.2% of total long-term
investments, followed by bonds subject to government appropriation with 15.3%.
Some of the Fund's purchases over the period included bonds issued by the
following: New York State Environmental Facilities Corp. State Clean Water and
Drinking Water Revenue, New York State Thruway Authority Highway and Bridge
Trust Fund and New York State Dormitory Authority Lease Revenue.
Additionally, we sold lower yielding securities at a loss and reinvested the
proceeds at higher rates. These losses helped offset any potential capital gains
in the portfolio, possibly lowering shareholders' future tax liabilities, and
can be carried forward for several years. Among bonds we sold were New York
State Urban Development Corp. Revenue, New York State Dormitory Authority
Revenue and New York City General Obligation.
Going forward, we will look to take advantage of the recent interest-rate
environment, as well as what we feel is the municipal bond market's overall
undervalued position. Additionally, our outlook for the Fund, the municipal
market and New York remains positive. We expect the supply of New York municipal
securities to remain stable for the remainder of the year 2000, and this,
coupled with a continued strong demand for New York bonds, should continue to
make such bonds attractive investments for investors seeking tax-free income.
This discussion reflects our views, opinions and portfolio holdings as of June
30, 2000, the end of the reporting period. The information provided is not a
complete analysis of every aspect of any industry, security or the Fund. Our
strategies and the Fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
SIX-MONTH PERFORMANCE SUMMARY
AS OF 6/30/00
Six-month total return does not include the sales charge. Distributions
will vary based on earnings of the Fund's portfolio and any profits realized
from the sale of the portfolio's securities, as well as the level of the Fund's
operating expenses. Past distributions are not indicative of future trends. All
total returns include reinvested distributions at net asset value.
<TABLE>
<CAPTION>
CLASS A
<S> <C> <C>
Six-Month Total Return +3.82%
Net Asset Value (NAV) $10.19 (6/30/00) $10.08 (12/31/99)
Change in NAV +$0.11
Distributions (1/1/00-6/30/00) Dividend Income $0.2680
</TABLE>
ADDITIONAL PERFORMANCE
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR (9/21/92)
------- ------ ------ ---------
<S> <C> <C> <C>
Cumulative Total Return(1) +3.30% +31.31% +50.86%
Average Annual Total Return(2) +0.97% +5.12% +5.13%
</TABLE>
<TABLE>
<CAPTION>
SHARE CLASS A
----------- -
<S> <C>
Distribution Rate(3) 5.18%
Taxable Equivalent Distribution Rate(4) 9.60%
30-Day Standardized Yield(5) 4.91%
Taxable Equivalent Yield(4) 9.10%
</TABLE>
FRANKLIN NEW YORK
INTERMEDIATE-TERM
TAX-FREE INCOME FUND
CLASS A: Subject to the maximum 2.25% initial sales charge. The Fund's manager
has agreed in advance to waive a portion of its management fees. If the manager
had not taken this action, the Fund's distribution rate and total return would
have been lower, and the yield for the period would have been 4.52%. 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 the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum sales charge.
3. Distribution rate is based on an annualization of the current 4.50 cent per
share monthly dividend and the maximum offering price of $10.42 per share on
6/30/00.
4. Taxable equivalent distribution rate and yield assume the published rates as
of 6/16/00 for the maximum combined federal and New York state and City personal
income tax bracket of 46.02%, 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 6/30/00.
Bond prices, and thus the Fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
For updated performance figures, see "Prices and Performance" at
franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee 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 and 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)
For the six months under review, the U.S. economy expanded for the ninth year in
a row, well above the Federal Reserve Board's (the Fed's) long-term sustainable
target growth rate of 3.0%. Real gross domestic product (GDP) grew at a
staggering annualized pace of 5.5% in the first quarter of 2000. However, this
growth led to a moderate rise in inflation during the period, as measured by the
Consumer Price Index's (CPI's) increase from 2.7% in December 1999 to 3.7% in
June 2000.
Seeking to curb growth to a more sustainable level, the Fed raised the federal
funds target rate during the reporting period from 5.5% to 6.5%. The Fed's
actions seemed to have had an effect as economic indicators over the past three
months started to display some signs of a slowing economy.
The Fund's investment strategy continues to emphasize high quality and
liquidity. We manage the Fund more conservatively than SEC guidelines require,
seeking 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. We choose not to purchase
second-tier securities such as Japanese bank letters of credit and derivative
products because we do not believe that the increased yield offered by
lower-rated and less liquid securities justifies the added risk to shareholders.
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.
The dollar value, number of shares or principal value, and complete legal titles
of all portfolio holdings are listed in the Fund's Statement of Investments
(SOI). The SOI begins on page 31.
During the reporting period, the Fund participated in several attractive deals
including New York City Transitional Finance Authority tax-exempt commercial
paper, Triborough Bridge and Tunnel Authority variable rate demand notes, New
York City Multi-family Housing weekly floaters and New York State General
Obligation mandatory puts.
PERFORMANCE SUMMARY
6/30/00
<TABLE>
<CAPTION>
<S> <C>
Seven-day effective yield(1) 3.78%
Seven-day annualized yield 3.71%
Taxable equivalent yield(2) 6.87%
</TABLE>
1. The seven-day effective yield assumes the compounding of daily dividends.
2. Taxable equivalent yield assumes the published rates as of 6/16/00 for the
maximum combined federal and New York state and City personal income tax bracket
of 46.02%, based on the federal income tax rate of 39.6%.
Annualized and effective yields are for the seven-day period ended 6/30/00. The
Fund's average weighted maturity was 30 days. Yields reflect fluctuations in
interest rates on portfolio investments and Fund expenses.
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.
Without these reductions, the Fund's annualized and effective yields for the
period would have been 3.48% and 3.54%, respectively. The fee waiver may be
discontinued at any time upon notice to the Fund's Board of Trustees.
Past performance does not guarantee future results.
This discussion reflects our views, opinions and portfolio holdings as of June
30, 2000, the end of the reporting period. The information provided is not a
complete analysis of every aspect of any industry, security or the Fund. Our
strategies and the Fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
MUNICIPAL BOND RATINGS
MOODY'S(R)
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: 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: 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, 2000 --------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period .......... $ 10.77 $ 11.71 $ 11.66 $ 11.29 $ 11.41 $ 10.16
----------------------------------------------------------------------------
Income from investment operations:
Net investment income(b) ..................... .28 .56 .57 .58 .59 .59
Net realized and unrealized gains (losses) ... .16 (.94) .11 .38 (.12) 1.25
----------------------------------------------------------------------------
Total from investment operations .............. .44 (.38) .68 .96 .47 1.84
----------------------------------------------------------------------------
Less distributions from:
Net investment income ........................ (.28) (.56) (.57)(d) (.59) (.59) (.59)
Net realized gains ........................... -- --(e) (.06) -- -- --
----------------------------------------------------------------------------
Total distributions ........................... (.28) (.56) (.63) (.59) (.59) (.59)
----------------------------------------------------------------------------
Net asset value, end of period ................ $ 10.93 $ 10.77 $ 11.71 $ 11.66 $ 11.29 $ 11.41
============================================================================
Total return(a)................................ 4.14% (3.31%) 5.94% 8.77% 4.30% 18.46%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............. $227,950 $242,067 $270,435 $260,990 $261,068 $256,171
Ratios to average net assets:
Expenses ..................................... .73%(c) .72% .72% .71% .65% .65%
Expenses excluding waiver and payments
by affiliate ................................. .73%(c) .72% .72% .71% .70% .73%
Net investment income ........................ 5.25%(c) 4.96% 4.84% 5.09% 5.25% 5.38%
Portfolio turnover rate ....................... 15.36% 15.23% 12.05% 26.85% 15.09% 22.99%
</TABLE>
(a) Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(b) Based on average shares outstanding, effective year ended December 31,1999.
(c) Annualized
(d) Includes distributions in excess of net investment income in the amount of
$.003.
(e) The fund distributed capital gains in the amount of $.004.
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, 2000 --------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(f)
----------- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the
period)
Net asset value, beginning of period ...... $ 10.88 $ 11.82 $ 11.75 $ 11.37 $ 11.46 $ 10.85
-----------------------------------------------------------------------------
Income from investment operations:
Net investment income(b).................. .26 .49 .48 .52 .53 .36
Net realized and unrealized gains
(losses) ................................ .16 (.94) .16 .38 (.10) .59
-----------------------------------------------------------------------------
Total from investment operations .......... .42 (.45) .64 .90 .43 .95
-----------------------------------------------------------------------------
Less distributions from:
Net investment income .................... (.25) (.49) (.51)(d) (.52) (.52) (.34)
Net realized gains ....................... -- --(e) (.06) -- -- --
-----------------------------------------------------------------------------
Total distributions ....................... (.25) (.49) (.57) (.52) (.52) (.34)
-----------------------------------------------------------------------------
Net asset value, end of period ............ $ 11.05 $ 10.88 $ 11.82 $ 11.75 $ 11.37 $ 11.46
=============================================================================
Total return(a)............................ 3.93% (3.87%) 5.55% 8.17% 3.87% 8.92%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ......... $10,964 $12,309 $ 9,450 $ 5,601 $ 4,137 $ 696
Ratios to average net assets:
Expenses ................................. 1.28%(c) 1.27% 1.28% 1.27% 1.22% 1.23%(c)
Expenses excluding waiver and payments
by affiliate ............................. 1.28%(c) 1.27% 1.28% 1.27% 1.27% 1.30%(c)
Net investment income .................... 4.70%(c) 4.42% 4.27% 4.63% 4.69% 4.74%(c)
Portfolio turnover rate ................... 15.36% 15.23% 12.05% 26.85% 15.09% 22.99%
</TABLE>
(a) Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(b) Based on average shares outstanding, effective year ended December 31, 1999
and for the year ended December 31, 1996.
(c) Annualized
(d) Includes distributions in excess of net investment income in the amount of
$.002.
(e) The fund distributed long term capital gains in the amount of $.004.
(f) For the period May 1, 1995 (effective date) to December 31, 1995.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
------ -----
<S> <C> <C>
LONG TERM INVESTMENTS 99.9%
Albany County GO, FGIC Insured, 5.85%, 6/01/12 .................................. $ 1,000,000 $ 1,030,060
Albany Municipal Water Finance Authority Water and Sewer System
Revenue, Refunding, Series A, FGIC Insured, 5.95%, 12/01/12 .................... 2,505,000 2,616,322
Amsterdam HDC, Mortgage Revenue, Refunding, MBIA Insured, 6.25%,
1/01/25 ........................................................................ 2,455,000 2,477,856
Babylon IDA, Civic Facility Revenue, WSNCHS East Inc. Project,
Series A, AMBAC Insured, 6.00%, 8/01/24 ........................................ 4,020,000 4,089,667
Battery Park City Authority Revenue, Series A, AMBAC Insured,
5.50%, 11/01/26 ................................................................ 1,000,000 959,670
Brookhaven GO, Series B, MBIA Insured, 7.00%, 5/01/09 ........................... 200,000 226,550
Broome County COP, Public Safety Facilities, MBIA Insured,
5.25%, 4/01/22 ................................................................. 2,125,000 1,974,019
Buffalo GO, Series E, AMBAC Insured, Pre-Refunded, 6.70%,
12/01/17 ....................................................................... 360,000 394,787
12/01/18 ....................................................................... 385,000 422,203
12/01/19 ....................................................................... 410,000 449,618
Buffalo Municipal Water Finance Authority, Water System Revenue,
FSA Insured, 6.00%,
7/01/26 ........................................................................ 1,185,000 1,219,566
7/01/29 ........................................................................ 3,000,000 3,067,800
Central Square GO, Central School District, FGIC Insured, 6.50%,
6/15/09 ........................................................................ 900,000 995,661
Dutchess County IDA, Civic Facilities Revenue, Bard College Project,
AMBAC Insured,
5.50%, 6/01/17 ................................................................. 1,865,000 1,850,714
5.375%, 6/01/27 ................................................................ 2,000,000 1,869,340
Hempstead Town IDA, Civic Facilities Revenue, Hofstra University
Project, MBIA Insured, 5.80%, 7/01/15 .......................................... 1,340,000 1,371,771
Long Island Power Authority Electric System Revenue,
MBIA Insured, 5.75%, 12/01/24 .................................................. 1,540,000 1,535,888
Series A, FSA Insured, 5.125%, 12/01/22 ........................................ 7,000,000 6,358,240
Mount Sinai Union Free School District, Refunding, AMBAC Insured,
6.20%, 2/15/13 ................................................................. 1,055,000 1,147,524
MTA, Commuter Facilities Revenue, Series A, FSA Insured, 5.00%,
7/01/23 ........................................................................ 3,000,000 2,680,260
MTA, Dedicated Tax Fund Revenue, Series A, FGIC Insured, 6.00%,
4/01/30 ........................................................................ 2,500,000 2,553,325
Nassau County,
GO, Public Improvement, Series E, FSA Insured, 6.00%, 3/01/20 .................. 1,510,000 1,523,062
IDA, Civic Facility Revenue, Hofstra University Project, AMBAC
Insured, Pre-Refunded, 6.75%, 8/01/11 .......................................... 1,150,000 1,201,325
Nassau Health Care Corp. Health System Revenue, Nassau County
Guaranty, FSA Insured, 5.75%, 8/01/29 .......................................... 2,655,000 2,596,218
New Rochelle GO, Series C, MBIA Insured, 6.25%,
3/15/22 ........................................................................ 390,000 400,070
3/15/23 ........................................................................ 530,000 543,430
3/15/24 ........................................................................ 555,000 568,520
New York City GO, Series A, MBIA Insured, 6.00%, 5/15/30 ........................ 2,000,000 2,033,780
New York City IDA, Civic Facility Revenue, Polytechnic Prep
Country Day School, FSA Insured, 5.375%, 5/01/29 ............................... 2,750,000 2,558,023
New York City Municipal Water Finance Authority Water and Sewer
System Revenue,
Series A, FGIC Insured, ETM, 6.75%, 6/15/16 .................................... 505,000 516,049
Series A, FSA Insured, 5.375%, 6/15/26 ......................................... 3,000,000 2,829,930
Series B, MBIA Insured, 5.75%, 6/15/26 ......................................... 1,900,000 1,892,305
Series B, MBIA Insured, 5.50%, 6/15/27 ......................................... 5,000,000 4,790,050
Series C, AMBAC Insured, Pre-Refunded, 6.20%, 6/15/21 .......................... 6,000,000 6,266,520
New York City Transportation Authority MTA,
Triborough Bridge Tunnel Authority, COP, AMBAC Insured, 5.75%,
1/01/20 ........................................................................ 3,000,000 3,009,330
Triborough COP, Series A, AMBAC Insured, 5.25%, 1/01/29 ........................ 3,500,000 3,214,960
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (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 Natural History, Series A, AMBAC Insured, 5.25%,
7/01/19 ........................................................................ $ 1,585,000 $ 1,504,656
American Museum of Natural History, Series A, MBIA Insured, 5.65%,
4/01/27 ........................................................................ 4,000,000 3,923,920
New York Botanical Garden, MBIA Insured, 5.75%, 7/01/16 ........................ 2,000,000 2,029,820
New York State Dormitory Authority Revenues,
853 Schools Program, Issue 2, Series E, AMBAC Insured, 5.75%, 7/01/19 .......... 1,340,000 1,349,755
Associated Children's Inc., MBIA Insured, 7.60%, 7/01/18 ....................... 140,000 141,820
Brooklyn Law School, FSA Insured, 6.40%, 7/01/11 ............................... 2,460,000 2,535,965
Comsewogue Public Library, MBIA Insured, 6.05%, 7/01/24 ........................ 2,445,000 2,500,795
Department of Health, MBIA Insured, 5.50%, 7/01/25 ............................. 2,000,000 1,908,660
Good Samaritan Hospital Medical Center, Series A, MBIA Insured, 5.50%,
7/01/24 ........................................................................ 2,000,000 1,900,460
Hamilton College, MBIA Insured, Pre-Refunded, 6.50%, 7/01/21 ................... 1,000,000 1,040,390
Hartwick College, MBIA Insured, 6.25%, 7/01/12 ................................. 1,000,000 1,038,970
Judicial Lease Facilities, Suffolk County, Series B, MBIA Insured,
7.00%, 4/15/16 ................................................................. 2,780,000 2,885,362
Maimonides Medical Center, Series A, MBIA Insured, 5.75%, 8/01/24 .............. 1,500,000 1,486,425
Mental Health Services, Refunding, Series B, MBIA Insured, 5.00%, 2/15/24 ...... 2,260,000 1,978,879
Mount Sinai School of Medicine, Refunding, MBIA Insured, 6.75%, 7/01/15 ........ 2,500,000 2,582,075
New York University, FGIC Insured, 6.25%, 7/01/09 .............................. 1,000,000 1,038,000
Pace University, MBIA Insured, 6.00%, 7/01/29 .................................. 3,000,000 3,061,680
(b)Pace University, Refunding, MBIA Insured, 5.75%, 7/01/26 .................... 6,500,000 6,473,870
Siena College, Refunding, MBIA Insured, 5.70%, 7/01/17 ......................... 2,000,000 2,020,980
St. John's University, AMBAC Insured, Pre-Refunded, 6.875%, 7/01/11 ............ 1,000,000 1,036,370
St. Vincent's Hospital and Medical Center, AMBAC Insured, 6.00%, 8/01/28 ....... 5,000,000 5,068,650
University of Rochester, Refunding, Series A, MBIA Insured, 5.00%, 7/01/27 ..... 2,000,000 1,763,020
University of Rochester, Strong Health Facilities, MBIA Insured, 5.90%,
7/01/17 ........................................................................ 2,355,000 2,396,472
Wildwood Programs Inc., Refunding, MBIA Insured, 5.875%, 7/01/15 ............... 1,000,000 1,028,520
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 5,148,650
Series A, MBIA Insured, 6.75%, 1/15/27 ......................................... 4,950,000 5,030,636
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 2,321,200
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 1,553,460
Niagara Mohawk Power Corp., Refunding, Series A, FGIC Insured, 7.20%,
7/01/29 ........................................................................ 5,000,000 5,473,300
Rochester Gas and Electric Project, Refunding, Series A, MBIA Insured,
6.35%, 5/15/32 ................................................................. 1,150,000 1,176,255
Rochester Gas and Electric Project, Refunding, Series B, MBIA Insured,
6.50%, 5/15/32 ................................................................. 1,000,000 1,033,200
New York State Environmental Facilities Corp., Water Facilities Revenue,
Refunding, Spring Valley Water Facilities,
Series A, AMBAC Insured, 6.30%, 8/01/24 ........................................ 2,000,000 2,062,800
Series B, AMBAC Insured, 6.15%, 8/01/24 ........................................ 3,000,000 3,079,110
New York State Medical Care Facilities Finance Agency Revenue,
Hospital and Nursing Home Mortgage, Refunding, Series C, MBIA Insured,
Pre-Refunded, 6.25%, 8/15/12 ................................................... 1,000,000 1,039,000
Long-Term Health Care, Series A, FSA Insured, 6.80%, 11/01/14 .................. 6,285,000 6,563,488
Long-Term Health Care, Series B, FSA Insured, 6.45%, 11/01/14 .................. 5,355,000 5,560,204
Long-Term Health Care, Series C, FSA Insured, 6.40%, 11/01/14 .................. 4,245,000 4,404,018
Our Lady of Victory Hospital, Series A, AMBAC Insured, 6.625%,
11/01/16 ....................................................................... 1,000,000 1,034,200
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.60%,
11/01/10 ....................................................................... 700,000 725,998
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.625%,
11/01/18 ....................................................................... 1,500,000 1,548,780
St. Mary's Hospital Project, Refunding, Series A, AMBAC Insured,
6.20%, 11/01/14 ................................................................ 1,495,000 1,555,114
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (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 Power Authority Revenue and General Purpose,
Series Y, AMBAC Insured, Pre-Refunded, 6.50%, 1/01/11 ................. $ 2,255,000 $ 2,322,988
Series Z, FGIC Insured, Pre-Refunded, 6.50%, 1/01/19 .................. 2,000,000 2,093,420
Series AA, MBIA Insured, Pre-Refunded, 6.25%, 1/01/23 ................. 2,000,000 2,086,320
New York State Tollway Authority General Revenue,
Series C, FGIC Insured, Pre-Refunded, 6.00%, 1/01/25 .................. 6,400,000 6,836,864
New York State Urban Development Corp. Revenue,
Correctional Capital Facility, Series 6, AMBAC Insured, 5.375%, 1/01/25 2,480,000 2,343,054
Correctional Facilities Service Contract, Series C,
AMBAC Insured, 6.00%, 1/01/29 ......................................... 11,200,000 11,427,024
Niagara County GO, Public Improvement, MBIA Insured, 6.00%,
7/15/18 ............................................................... 500,000 509,590
7/15/19 ............................................................... 510,000 518,221
7/15/20 ............................................................... 610,000 618,900
Niagara Falls Public Improvement, MBIA Insured,
6.85%, 3/01/19 ........................................................ 1,000,000 1,074,900
6.90%, 3/01/20 ........................................................ 500,000 537,580
6.90%, 3/01/21 ........................................................ 500,000 537,230
Niagara Falls Water Treatment Plant, MBIA Insured, 7.00%, 11/01/12 ....... 1,200,000 1,318,368
Niagara Frontier Transportation Authority Airport Revenue,
Greater Buffalo International Airport,
Series A, AMBAC Insured, 6.25%, 4/01/24 ............................... 1,000,000 1,027,460
Series C, AMBAC Insured, 6.00%, 4/01/24 ............................... 1,440,000 1,461,442
North Hempstead GO, Refunding, Series B, FGIC Insured, 6.40%,
4/01/15 ............................................................... 1,065,000 1,181,362
4/01/16 ............................................................... 1,000,000 1,106,140
Port Authority of New York and New Jersey Revenue,
Consolidated 71st Series, AMBAC Insured, 6.50%, 1/15/26 ............... 1,000,000 1,015,270
Consolidated 71st Series, MBIA Insured, 6.50%, 1/15/26 ................ 1,600,000 1,624,432
Consolidated 76th Series, AMBAC Insured, 6.50%, 11/01/26 .............. 4,230,000 4,324,244
Rensselear County GO, AMBAC Insured, 6.70%, 2/15/11 ...................... 810,000 915,122
St. Lawrence County IDA, Civic Facility Revenue, St.
Lawrence University Project, Series A, MBIA Insured,
5.00%, 7/01/28 ........................................................ 2,455,000 2,151,366
Suffolk County GO, Public Improvement, Refunding, Series B, FGIC
Insured, 6.20%,
5/01/11 ............................................................... 500,000 518,700
5/01/13 ............................................................... 500,000 517,950
Triborough Bridge and Tunnel Authority Revenue,
General Purpose, Series B, MBIA Insured, 5.20%, 1/01/27 ............... 5,000,000 4,521,550
General Purpose, Series X, AMBAC Insured, 6.50%, 1/01/19 .............. 4,475,000 4,599,897
General Purpose, Series X, MBIA Insured, 6.50%, 1/01/19 ............... 2,750,000 2,826,752
Series T, MBIA Insured, Pre-Refunded, 7.00%, 1/01/20 .................. 1,100,000 1,135,782
Upper Mohawk Valley Regional Water Finance Authority Water Systems
Revenue, AMBAC Insured, 5.75%, 8/01/29 ................................ 550,000 545,368
Refunding, Series A, FSA Insured, 5.125%, 10/01/26 .................... 2,000,000 1,816,500
-----------
TOTAL LONG TERM INVESTMENTS (COST $234,186,480) .......................... 238,753,136
-----------
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPLE
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
---------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENT .2%
(a)Puerto Rico Commonwealth Government Development
Bank, Refunding, MBIA Insured, Weekly VRDN and Put,
3.05%, 12/01/15 ...................................... $ 400,000 $ 400,000
-------------
TOTAL SHORT TERM INVESTMENT (COST $400,000) ............ 400,000
-------------
TOTAL INVESTMENTS (COST $234,586,480) 100.1% ........... 239,153,136
-------------
OTHER ASSETS, LESS LIABILITIES (.1%) ................... (239,185)
-------------
NET ASSETS 100.0% $ 238,913,951
=============
</TABLE>
See Glossary of Terms on page 33.
(a) Variable rate demand notes (VRDNs) are tax-exempt obligations which
contain a floating or variable interest rate adjustment formula and an
unconditional right of demand to receive payment of the principal
balance plus accrued interest at specified dates.
(b) Sufficient collateral has been segregated for securities traded on a
when-issued or delayed delivery basis.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 --------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout
the period)
Net asset value, beginning
of period ............................... $ 10.08 $ 10.77 $ 10.62 $ 10.28 $ 10.40 $ 9.60
----------------------------------------------------------------------------------
Income from investment operations:
Net investment income(b) ................... .26 .52 .51 .54 .56 .55
Net realized and unrealized gains
(losses) ................................ .12 (.70) .18 .35 (.12) .80
----------------------------------------------------------------------------------
Total from investment operations .......... .38 (.18) .69 .89 .44 1.35
----------------------------------------------------------------------------------
Less distributions from net
investment income ....................... (.27) (.51) (.54) (.55) (.56) (.55)
----------------------------------------------------------------------------------
Net asset value, end of period ............ $ 10.19 $ 10.08 $ 10.77 $ 10.62 $ 10.28 $ 10.40
==================================================================================
Total return(a) ............................. 3.82% (1.69%) 6.63% 8.89% 4.38% 14.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ......... $69,109 $66,941 $80,689 $58,916 $44,822 $43,229
Ratios to average net assets:
Expenses ................................. .45%(c) .45% .45% .45% .37% .33%
Expenses excluding waiver and
payments by affiliate ................... .84%(c) .82% .83% .82% .83% .83%
Net investment income .................... 5.26%(c) 4.95% 4.81% 5.26% 5.47% 5.51%
Portfolio turnover rate ................... 16.88% 17.98% 10.46% 6.87% 24.67% 24.68%
</TABLE>
(a) Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(b) Based on average shares outstanding, effective year ended December 31, 1999.
(c) Annualized
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 98.6%
Albany County Airport Authority Revenue, Series B, FSA Insured, 4.75%,
12/15/13 ................................................................ $1,850,000 $1,721,166
Albany IDA, Civic Facility Revenue,
Albany Medical Center Project, 5.75%, 5/01/09 ........................... 1,010,000 929,715
Buffalo GO, Series E, FSA Insured, 5.35%, 12/01/12 ...................... 880,000 883,678
Cortland County IDA, Civic Facility Revenue, Cortland Memorial
Hospital Inc. Project, 6.15%, 7/01/02 .................................. 65,000 64,975
Erie County GO,
FGIC Insured, 4.70%, 11/01/12 ........................................ 700,000 657,041
FGIC Insured, 4.75%, 11/01/13 ........................................ 525,000 489,211
Public Improvement, Series A, FGIC Insured, 5.625%, 10/01/12 ......... 1,335,000 1,382,700
Franklin County IDA, Lease Revenue, County Correctional
Facility Project, 6.375%, 11/01/02 ..................................... 35,000 35,716
Guam Airport Authority Revenue, Refunding, Series A, 6.00%, 10/01/03 .... 260,000 267,345
Guam Power Authority Revenue, Series A, ETM, 6.00%, 10/01/04 ............ 1,300,000 1,377,428
Long Island Power Authority Electric System Revenue,
MBIA Insured, 5.125%, 4/01/11 ........................................ 1,410,000 1,401,272
MTA Transportation Facilities Revenue, Series A, 6.00%, 7/01/15 ......... 1,500,000 1,546,170
Nassau County,
GO, Combined Sewage District, Refunding, Series F, 6.50%, 3/01/04 .... 760,000 787,056
Refunding, Series A, FGIC Insured, 6.00%, 7/01/11 .................... 1,000,000 1,060,290
Nassau Health Care Corp. Health System Revenue,
Nassau County Guaranteed, FSA Insured, 6.00%, 8/01/10 ................... 1,000,000 1,063,670
New Rochelle Municipal Housing Authority Revenue,
Series A, 5.55%, 12/01/14 .......................................... 2,000,000 1,896,380
New York City GO,
Refunding, Series A, 6.375%, 8/01/05 ................................. 3,455,000 3,605,742
Refunding, Series B, 6.20%, 8/15/06 .................................. 1,000,000 1,061,220
Refunding, Series F, 6.00%, 8/01/12 .................................. 700,000 729,939
Series A, Pre-Refunded, 6.375%, 8/01/05 .............................. 1,745,000 1,829,929
Series H, 7.00%, 2/01/06 ............................................. 200,000 209,350
Series H, Pre-Refunded, 7.00%, 2/01/06 ............................... 140,000 147,024
New York City Health and Hospital Corp. Revenue,
Health System, Refunding, Series A, AMBAC Insured,
4.60%, 2/15/12 .......................................................... 1,625,000 1,495,926
New York City IDA, Civic Facility Revenue,
New York Blood Center Inc. Project, ETM, 6.80%, 5/01/02 .............. 60,000 61,302
USTA National Tennis Center Project, FSA Insured, 6.00%, 11/15/03 .... 1,875,000 1,949,194
USTA National Tennis Center Project, FSA Insured, 6.10%, 11/15/04 .... 1,675,000 1,762,284
New York City Transitional Finance Authority Revenue, Future Tax Secured,
Series A, 4.75%, 11/15/13 ............................................ 1,000,000 928,330
Series B, 6.00%, 11/15/13 ............................................ 1,000,000 1,061,480
New York State Dormitory Authority Lease Revenue, State University
Dormitory Facilities, Series A, 5.50%,
7/01/12 ................................................................ 1,815,000 1,830,845
New York State Dormitory Authority Revenue,
City University, Refunding, Series F, FGIC Insured, 5.75%, 7/01/09 ... 1,000,000 1,042,640
City University, Refunding, Series U, 6.25%, 7/01/02 ................. 100,000 102,658
City University, Refunding, Series U, 6.35%, 7/01/04 ................. 1,720,000 1,804,865
Department of Health, 6.25%, 7/01/04 ................................. 690,000 721,574
Department of Health, 6.30%, 7/01/05 ................................. 735,000 775,381
Nyack Hospital, Refunding, 6.00%, 7/01/06 ............................ 2,000,000 1,993,040
St. Agnes Hospital, Series A, 5.30%, 2/15/13 ......................... 1,380,000 1,346,480
(b)New York State Environmental Facilities Corp., State Clean Water
and Drinking Water Revenue, Revolving Funds-Pooled
Loan project, Series B, 5.80%, 1/15/162 ............................... 2,500,000 2,559,900
New York State HFAR, Health facilities of
New York City, Refunding, Series A, 6.00%, 11/01/08 ................... 3,045,000 3,191,647
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED) (CONT.)
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
PRINCIPLE
AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
New York State Medical Care Facilities Finance Agency Revenue,
Hospital and Nursing Home, Refunding, FHA Insured, 5.70%, 2/15/05 ............. $ 1,500,000 $ 1,523,550
Huntington Hospital Mortgage Project, Refunding, Series A,
5.90%, 11/01/04 ............................................................... 475,000 482,173
New York State Mortgage Agency Revenue, Homeowner Mortgage, Series 93,
5.75%, 10/01/12 ............................................................... 900,000 918,000
5.80%, 10/01/13 ............................................................... 800,000 813,064
New York State Thruway Authority Highway and Bridge Trust Fund, Series C,
FGIC Insured, 5.25%, 4/01/14 ..................................................... 2,000,000 1,971,000
New York State Urban Development Corp. Revenue,
Correctional Facilities Service Contract, Series C, AMBAC Insured,
6.00%, 1/01/15 ............................................................... 1,000,000 1,044,830
Correctional Facilities, Refunding, 5.75%, 1/01/13 ........................... 500,000 505,300
Youth Facilities, 5.75%, 4/01/10 ............................................. 400,000 413,552
Youth Facilities, 5.875%, 4/01/10 ............................................ 1,500,000 1,551,615
North Hempstead GO, Refunding, FGIC Insured, 6.00%, 7/15/14 ..................... 1,715,000 1,803,323
Oneida-Herkimer Solid Waste Management Authority Solid Waste Systems Revenue,
Refunding, 6.65%, 4/01/05 ....................................................... 125,000 133,280
Puerto Rico Commonwealth GO, 6.00%, 7/01/05 ..................................... 1,000,000 1,054,000
Puerto Rico Electric Power Authority Revenue, Series T, 6.00%, 7/01/04 .......... 1,500,000 1,565,145
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 .......... 1,645,000 1,626,921
Virgin Islands PFA Revenue, senior lien, Refunding, Series A, 5.30%, 10/01/11 ... 3,000,000 2,874,750
Virgin Islands Water and Power Authority Electric System Revenue,
Refunding, 5.125%, 7/01/13 ....................................................... 1,775,000 1,676,701
Virgin Islands Water and Power Authority Water System Revenue, Refunding,
4.875%, 7/01/06 .............................................................. 1,985,000 1,893,670
5.00%, 7/01/09 ............................................................... 520,000 485,627
----------
TOTAL LONG TERM INVESTMENTS (COST $67,361,023) .................................. 68,111,064
----------
(a)SHORT TERM INVESTMENTS 3.0%
Long Island Power Authority Electric System Revenue, Sub Series 5, Daily
VRDN and Put, 3.00%, 5/01/33 .................................................... 300,000 300,000
New York City GO,
Series 8, Sub Series A-8, Daily VRDN and Put, 3.25%, 8/01/18 ................. 300,000 300,000
Series B, Sub Series B-3, MBIA Insured, Daily VRDN and Put, 4.50%, 8/15/04 ... 300,000 300,000
New York City Municipal Water Finance Authority Water and Sewer
System Revenue, Series G, FGIC Insured, Daily
VRDN and Put, 3.20%, 6/15/24 .................................................... 1,000,000 1,000,000
Puerto Rico Commonwealth Highway and Transportation Authority Revenue,
Series A, AMBAC Insured, Weekly VRDN
and Put, 2.60%, 7/01/28 ......................................................... 200,000 200,000
----------
TOTAL SHORT TERM INVESTMENTS (COST $2,100,000) .................................. 2,100,000
----------
TOTAL INVESTMENTS (COST $69,461,023) 101.6% ..................................... 70,211,064
OTHER ASSETS, LESS LIABILITIES (1.6%) ........................................... (1,102,179)
----------
NET ASSETS 100.0% ............................................................... $ 69,108,885
==========
</TABLE>
See Glossary of Terms on page 33.
(a) Variable rate demand notes (VRDNs) are tax-exempt obligations which
contain a floating or variable interest rate adjustment formula and an
unconditional right of demand to receive payment of the principal
balance plus accrued interest at specified dates.
(b) Sufficient collateral has been segregated for securities traded on a
when-issued or delayed delivery basis.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2000 ------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)
Net asset value, beginning of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------------------------------------------------------------------------
Income from investment operations -
net investment income ................................ .02 .03 .03 .03 .03 .03
Less distributions from net investment income ........ (.02) (.03) (.03) (.03) (.03) (.03)
------------------------------------------------------------------------
Net asset value, end of period ....................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========================================================================
Total return(a) ...................................... 2.95% 2.56% 2.79% 3.01% 2.79% 3.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .................... $66,160 $69,164 $57,878 $63,720 $59,178 $61,079
Ratios to average net assets:
Expenses ........................................... .60%(b) .60% .60% .60% .60% .60%
Expenses excluding waiver and payments
by affiliate ....................................... .82%(b) .83% .83% .81% .86% .85%
Net investment income .............................. 3.14%(b) 2.54% 2.75% 2.97% 2.75% 3.06%
</TABLE>
(a) Total return is not annualized for periods less than one year.
(b) Annualized
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND AMOUNT VALUE
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS 99.1%
Erie County GO,
Public Improvement Project, Series A, FGIC Insured, 5.25%, 8/15/00 ................. $1,745,000 $1,748,102
Refunding, Series B, FGIC Insured, 5.25%, 8/15/00 .................................. 1,085,000 1,086,929
(a)Long Island Power Authority Electric System Revenue, Sub Series
5, Daily VRDN and Put, 2.80%, 5/01/33 ............................................. 1,100,000 1,100,000
Metropolitan Transportation Authority Service Contract Revenue,
Transit Facilities, Series 3, FSA Insured,Pre-Refunded on
7/01/00, 7.50%, 7/01/16 ........................................................... 750,000 765,000
Metropolitan Transportation Authority Service Contract Revenue,
Transit Facilities, Series 4, Pre-Refunded on
7/01/00, 7.50%, 7/01/19 .......................................................... 1,000,000 1,015,000
Municipal Assistance Corp. for City of New York, Refunding,
Series J, 5.25%, 7/01/01 .......................................................... 1,250,000 1,257,184
Nassau County, RAN, Series D, 6.00%, 4/12/01 ....................................... 2,000,000 2,022,919
(a)New York City GO, Series B, Sub Series B-2,
MBIA Insured, Daily VRDN and Put, 2.90%, 8/15/03 ................................... 2,100,000 2,100,000
(a)New York City HDC,
MF Rental Housing Revenue, Brittany Development, Series A,
Weekly VRDN and Put, 2.80%, 6/15/29 ............................................... 1,500,000 1,500,000
MF Rental Housing Revenue, Tribeca Tower, Series A, FNMA Insured,
Weekly VRDN and Put, 3.00%, 11/15/19 .............................................. 2,100,000 2,100,000
MFMR, Columbus Apartments, Series A, Weekly VRDN and Put, 2.95%, 3/15/25 ........... 1,900,000 1,900,000
(a)New York City Health and Hospital Corp. Revenue, Health Systems,
Series D, Weekly VRDN and Put, 2.95%, 2/15/26 ...................................... 1,500,000 1,500,000
(a)New York City IDA, Civic Facility Revenue,
American Civil Liberties, Weekly VRDN and Put, 2.90%, 6/01/12 ...................... 900,000 900,000
National Audubon Society, Daily VRDN and Put, 2.75%, 12/01/14 ...................... 500,000 500,000
(a)New York City Municipal Water Finance Authority Water and Sewer System Revenue,
Series C, FGIC Insured, Daily VRDN and Put, 2.90%, 6/15/22 ......................... 1,100,000 1,100,000
Series G, FGIC Insured, Daily VRDN and Put, 2.80%, 6/15/24 ......................... 1,000,000 1,000,000
New York City Transitional Finance Authority, TECP, 3.90%, 8/14/00 .................. 2,000,000 2,000,000
New York City Transportation Authority MTA, TECP, 3.90%, 7/25/00 .................... 2,500,000 2,500,000
(a)New York City Trust Cultural Resources Revenue,
American Museum National History, Series B, AMBAC Insured,
Annual VRDN and Put, 3.70%, 7/01/29 ............................................... 2,000,000 2,000,000
American Museum National History, Series B,
MBIA Insured, Weekly VRDN and Put, 2.95%, 4/01/21 ................................. 1,100,000 1,100,000
Jewish Museum, Weekly VRDN and Put, 2.75%, 12/01/21 ................................ 600,000 600,000
Museum of Broadcasting, Weekly VRDN and Put, 2.75%, 5/01/14 ........................ 2,000,000 2,000,000
(a)New York State Dormitory Authority Revenues,
New York Public Library, Series B, MBIA Insured, Weekly VRDN and Put, 2.95%, 7/01/28 2,600,000 2,600,000
Oxford University Press Inc., Weekly VRDN and Put, 3.00%, 7/01/25 .................. 700,000 700,000
Sloan Kettering Cancer Center, Series C, Weekly VRDN and Put, 2.85%, 7/01/19 ....... 1,200,000 1,200,000
Sloan Kettering Memorial, Series B, Daily VRDN and Put, 2.80%, 7/01/19 ............. 2,500,000 2,500,000
(a)New York State Energy Research and Development Authority PCR,
Niagara Mohawk Power Corp., Series 1985-B, Daily VRDN and Put, 2.80%, 12/01/25 .... 1,200,000 1,200,000
Orange and Rockland Project, Series A, AMBAC Insured,
Weekly VRDN and Put, 2.95%, 8/01/15 ............................................... 1,350,000 1,350,000
Orange and Rockland Project, Series A, Weekly VRDN and Put, 2.95%, 10/01/14 ......... 1,000,000 1,000,000
New York State Environmental Facility Corp., TECP, 3.95%, 7/11/00 ................... 2,500,000 2,500,000
(a)New York State GO, Series B, Mandatory Put, 4.05%, 8/09/00 .......................... 2,000,000 2,000,000
(a)New York State HFAR, Normandie Court I Project, Weekly VRDN and Put,
2.75%, 5/15/15 ...................................................................... 2,100,000 2,100,000
(a)New York State Housing Finance Agency Revenue, Housing East 84th Street,
Series A, Weekly VRDN and Put, 3.05%, 11/01/28 ..................................... 1,100,000 1,100,000
(a)New York State Job Development Authority Revenue, State
Guaranteed, Special Purpose, Series A-1 to A-25, Daily VRDN
and Put, 2.90%, 3/01/07 ............................................................ 500,000 500,000
(a)New York State Local Government Assistance Corp.,
Series F, Weekly VRDN and Put,
2.85%, 4/01/25 ..................................................................... 2,100,000 2,100,000
(a)New York State Medical Care Facilities Finance Agency Revenue,
Pooled Equipment Loan Program, II-A, Weekly VRDN and Put,
3.00%, 11/01/03 .................................................................... 1,230,000 1,230,000
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, JUNE 30, 2000 (UNAUDITED)(CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND AMOUNT VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
New York State Power Authority Revenue and General Purpose, TECP,
4.05%, 8/08/00 ..................................................... $ 2,000,000 $ 2,000,000
4.15%, 8/08/00 ..................................................... 1,000,000 1,000,000
(a)Port Authority of New York and New Jersey Special Obligation Revenue,
Versatile Structure, Series 2, Daily VRDN and Put,
2.75%, 5/01/19 ...................................................... 2,500,000 2,500,000
Puerto Rico Commonwealth GO, TRAN, Series A-1, 4.50%, 7/30/00 ......... 2,000,000 2,001,172
(a)Puerto Rico Commonwealth Government Development Bank, Refunding,
MBIA Insured, Weekly VRDN and Put, 3.30%, 12/01/15 ................. 600,000 600,000
(a)Puerto Rico Commonwealth Highway and Transportation Authority
Revenue, Series A, AMBAC Insured, Weekly VRDN and Put,
2.60%, 7/01/28 ..................................................... 200,000 200,000
(a)Triborough Bridge and Tunnel Authority Revenue,
General Purpose, Series C, AMBAC Insured, Weekly VRDN and Put,
2.75%, 1/01/13 ..................................................... 3,400,000 3,400,000
-----------
TOTAL INVESTMENTS (COST $65,576,306) 99.1% .......................... 65,576,306
OTHER ASSETS, LESS LIABILITIES .9% .................................. 583,990
-----------
NET ASSETS 100.0% ................................................... $66,160,296
===========
</TABLE>
See Glossary of Terms on page 33.
(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, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
GLOSSARY OF TERMS
--------------------------------------------------------------------------------
<S> <C>
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Corp.
FHA - Federal Housing Authority/Agency
FNMA - Federal National Mortgage Association
FSA - Financial Security Assistance
GO - General Obligation
HDC - Housing Development Corp.
HFAR - Housing Finance Authority Revenue
IDA - Industrial Development Authority/Agency
MBIA - Municipal Bond Investors Assurance Corp.
MF - Multi-Family
MFMR - Multi-Family Mortgage Revenue
MTA - Metropolitan Transit Authority
PCR - Pollution Control Revenue
PFA - Public Financing Authority
RAN - Revenue Anticipation Notes
TECP - Tax-Exempt Commercial Paper
TRAN - Tax and Revenue Anticipation Notes
USTA - United States Tennis Association
VRDN - Variable Rate Demand Notes
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN
FRANKLIN NEW YORK
NEW YORK INTERMEDIATE- FRANKLIN
INSURED TERM NEW YORK
TAX-FREE TAX-FREE TAX-EXEMPT
INCOME FUND INCOME FUND MONEY FUND
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities:
Cost ............................. $ 234,586,480 $ 69,461,023 $ 65,576,306
Value ............................ 239,153,136 70,211,064 65,576,306
Cash .............................. 62,539 74,187 74,620
Receivables:
Investment securities sold ....... 464,451 -- --
Capital shares sold .............. 274,276 308,783 648,139
Interest ......................... 4,939,134 1,316,952 528,670
--------------------------------------------------------
Total assets ................. 244,893,536 71,910,986 66,827,735
--------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased .. 4,992,222 2,556,875 --
Capital shares redeemed .......... 208,393 24,854 539,191
Affiliates ....................... 165,942 25,634 26,718
Shareholders ..................... 218,282 54,471 76,493
Distributions to shareholders ..... 373,532 129,487 --
Other liabilities ................. 21,214 10,780 25,037
--------------------------------------------------------
Total liabilities ............ 5,979,585 2,802,101 667,439
--------------------------------------------------------
Net assets, at value ........ $ 238,913,951 $ 69,108,885 $ 66,160,296
========================================================
Net assets consist of:
Undistributed net investment
income .......................... $ 11,737 $ 58,435 $ --
Net unrealized appreciation ....... 4,566,656 750,041 --
Accumulated net realized loss ..... (3,798,868) (3,026,259) --
Capital shares .................... 238,134,426 71,326,668 66,160,296
--------------------------------------------------------
Net assets, at value ......... $ 238,913,951 $ 69,108,885 $ 66,160,296
========================================================
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Statements (continued)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN
FRANKLIN NEW YORK
NEW YORK INTERMEDIATE- FRANKLIN
INSURED TERM NEW YORK
TAX-FREE TAX-FREE TAX-EXEMPT
INCOME FUND INCOME FUND MONEY FUND
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A:
Net assets, at value ............................ $ 227,950,028 $ 69,108,885 $ 66,160,296
==========================================================
Shares outstanding .............................. 20,847,251 6,781,378 66,160,296
==========================================================
Net asset value per share* ...................... $ 10.93 $ 10.19 $ 1.00
==========================================================
Maximum offering price per share (net asset value
per share / 95.75%, 97.75%, 100% respectively) .. $ 11.42 $ 10.42 $ 1.00
==========================================================
CLASS C:
Net assets, at value ............................ $ 10,963,923 --
==========================================================
Shares outstanding .............................. 992,247 -- --
==========================================================
Net asset value per share* ...................... $ 11.05 -- --
==========================================================
Maximum offering price per share (net asset value
per share / 99.00%, respectively) ............... $ 11.16 -- --
==========================================================
</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, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FRANKLIN
FRANKLIN NEW YORK
NEW YORK INTERMEDIATE- FRANKLIN
INSURED TERM NEW YORK
TAX-FREE TAX-FREE TAX-EXEMPT
INCOME FUND INCOME FUND MONEY FUND
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment income:
Interest .......................................... $ 7,224,789 $ 1,884,616 $ 1,275,840
--------------------------------------------------------
Expenses:
Management fees (Note 3) .......................... 663,942 208,167 212,438
Distribution fees (Note 3)
Class A .......................................... 109,483 33,042 --
Class C .......................................... 35,931 -- --
Transfer agent fees (Note 3) ...................... 58,209 15,294 49,063
Custodian fees .................................... 1,187 323 412
Reports to shareholders ........................... 11,794 2,563 5,941
Registration and filing fees ...................... 9,128 4,913 3,360
Professional fees (Note 3) ........................ 9,982 4,649 4,036
Trustees' fees and expenses ....................... 7,446 2,164 2,138
Other ............................................. 10,327 4,414 4,038
----------------------------------------------------------
Total expenses ............................... 917,429 275,529 281,426
Expenses waived/paid by affiliate (Note 3) ... -- (126,595) (77,498)
----------------------------------------------------------
Net expenses ................................ 917,429 148,934 203,928
----------------------------------------------------------
Net investment income ...................... 6,307,360 1,735,682 1,071,912
----------------------------------------------------------
Realized and unrealized gains (losses):
Net realized loss from investments ................ (2,131,270) (106,648) --
Net unrealized appreciation on investments ........ 5,582,001 918,391 --
----------------------------------------------------------
Net realized and unrealized gain ................... 3,450,731 811,743 --
----------------------------------------------------------
Net increase in net assets resulting from
operations ....................................... $ 9,758,091 $ 2,547,425 $ 1,071,912
===========================================================
</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, 2000 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRANKLIN NEW YORK INSURED FRANKLIN NEW YORK INTERMEDIATE-TERM
TAX-FREE INCOME FUND TAX-FREE INCOME FUND
--------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31,
2000 1999 2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ................... $ 6,307,360 $ 13,255,975 $ 1,735,682 $ 3,754,559
Net realized loss from investments ...... (2,131,270) (1,667,598) (106,648) (360,080)
Net unrealized appreciation
(depreciation) on investments ............ 5,582,001 (20,465,331) 918,391 (4,629,244)
---------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from operations .. 9,758,091 (8,876,954) 2,547,425 (1,234,765)
Distributions to shareholders from:
Net investment income:
Class A ................................ (5,973,890) (12,758,387) (1,773,561) (3,723,462)
Class C ................................ (259,910) (482,398) -- --
Net realized gains:
Class A ................................ -- (90,756) -- --
Class C ................................ -- (4,126) -- --
---------------------------------------------------------------------------------
Total distributions to shareholders ...... (6,233,800) (13,335,667) (1,773,561) (3,723,462)
Capital share transactions: (Note 2)
Class A ................................. (17,476,590) (7,113,827) 1,394,113 (8,789,954)
Class C ................................. (1,510,122) 3,817,868 -- --
---------------------------------------------------------------------------------
Total capital share transactions ........ (18,986,712) (3,295,959) 1,394,113 (8,789,954)
Net increase (decrease) in net assets (15,462,421) (25,508,580) 2,167,977
(13,748,181)
Net assets
Beginning of period ...................... 254,376,372 279,884,952 66,940,908 80,689,089
---------------------------------------------------------------------------------
End of period ............................ $ 238,913,951 $ 254,376,372 $ 69,108,885 $ 66,940,908
=================================================================================
Undistributed net investment income
(accumulated distributions in excess of
net investment income) included in
net assets:
End of period ........................... $ 11,737 $ (61,823) $ 58,435 $ 96,314
=================================================================================
</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, 2000 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRANKLIN NEW YORK
TAX-EXEMPT MONEY FUND
---------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
---------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ...................................... $ 1,071,912 $ 1,539,584
Distributions to shareholders from net investment income .... (1,071,912) (1,539,584)
Capital share transactions (Note 2) ......................... (3,004,081) 11,286,397
---------------------------------
Net increase (decrease) in net assets .................. (3,004,081) 11,286,397
Net assets (there is no undistributed net investment income at
beginning or end of period)
Beginning of period ......................................... 69,164,377 52,877,980
---------------------------------
End of period ............................................... $ 66,160,296 $ 69,164,377
================================
</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 a non-diversified, open-end 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. 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), dividends from net investment
income are normally declared daily and distributed monthly to shareholders.
Other distributions are recorded on the ex-dividend date. For the Money Fund,
dividends from net investment income and capital gains or losses are normally
declared daily. Such distributions are reinvested in additional shares of the
Fund.
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. Each
class of shares differs by its initial sales load, distribution fees, voting
rights on matters affecting a single class and its exchange privilege.
<TABLE>
<CAPTION>
CLASS A Class A & Class C
--------------------------------------------------------------------------------------------------------
<S> <C>
Franklin New York Intermediate-Term Tax-Free Income Fund Franklin New York Tax-Exempt Money Fund
Franklin New York Insured Tax-Free Income Fund
</TABLE>
At June 30, 2000, there were an unlimited number of shares authorized (no par
value). Transactions in the Funds' shares were as follows:
<TABLE>
<CAPTION>
FRANKLIN
FRANKLIN NEW YORK NEW YORK
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-EXEMPT
INSURED INCOME FUND TAX-FREE INCOME FUND MONEY FUND
SHARES AMOUNT SHARES AMOUNT AMOUNT
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES:
Six Months ended June 30, 2000
Shares sold .................. 706,851 $ 7,625,626 943,914 $ 9,497,398 $ 21,966,592
Shares issued in reinvestment
of distributions ............. 289,551 3,122,454 100,499 1,010,477 1,068,455
Shares redeemed .............. (2,623,813) (28,224,670) (906,155) (9,113,762) (26,039,128)
-----------------------------------------------------------------------------------
Net increase (decrease) ...... (1,627,411) $(17,476,590) 138,258 $ 1,394,113 $ (3,004,081)
===================================================================================
Year Ended December 31, 1999
Shares sold .................. 3,689,287 $ 41,578,212 1,860,922 $ 19,607,579 $ 61,171,774
Shares issued in
reinvestment of distributions 610,077 6,907,377 204,183 2,136,304 1,539,854
Shares redeemed .............. (4,917,014) (55,599,416) (2,912,303) (30,533,837) (51,425,230)
-----------------------------------------------------------------------------------
Net increase (decrease) ...... (617,650) $ (7,113,827) (847,198) $ (8,789,954) $ 11,286,398
===================================================================================
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST (cont.)
<TABLE>
<CAPTION>
FRANKLIN NEW YORK INSURED
TAX-FREE INCOME FUND
-------------------------
SHARES AMOUNT
-------------------------
<S> <C> <C>
CLASS C SHARES:
Six months ended June 30, 2000
Shares sold .................. 69,016 $ 752,667
Shares issued in reinvestment
of distributions ............ 15,828 172,428
Shares redeemed .............. (223,589) (2,435,217)
-------------------------------
Net decrease ................. (138,745) $(1,510,122)
===============================
Year ended December 31, 1999
Shares sold .................. 468,274 $ 5,352,278
Shares issued in reinvestment
of distributions ............ 31,185 355,633
Shares redeemed .............. (168,128) (1,890,043)
-------------------------------
Net increase ................. 331,331 $ 3,817,868
===============================
</TABLE>
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:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE NET ASSETS
-----------------------------------------------------------------------
<S> <C>
.625% First $100 million
.500% Over $100 million, up to and including $250 million
.450% In excess of $250 million
</TABLE>
Advisers agreed in advance to waive management fees for the Money Fund and the
Intermediate-Term Fund, as noted in the Statement of Operations.
Under an agreement with Advisers, FT Services provides administrative services
to the Funds. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Funds.
The Intermediate-Term Fund reimburses Distributors up to .10% per year of its
average daily net assets and the Insured Fund reimburses Distributors up to .10%
and .65% per year of the average daily net assets of Class A and Class C,
respectively, for costs incurred in marketing the Funds' shares.
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES OF 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 period as follows:
<TABLE>
<CAPTION>
Franklin
Franklin New York
New York Intermediate-
Insured Term
Tax-Free Tax-Free
Income Income
Fund Fund
-----------------------------------
<S> <C> <C>
Net commissions paid .... $10,770 $ 6,946
Contingent deferred sales
charges ................ $ 5,382 $ 146
</TABLE>
The Funds paid transfer agent fees of $122,566, of which $90,526 was paid to
Investor Services.
Included in professional fees are legal fees of $538 that were paid to a law
firm in which a partner of that firm was an officer of the Fund.
4. INCOME TAXES
At December 31, 1999, the Funds had tax basis capital losses which may be
carried over to offset future capital gains. Such losses expire as follows:
<TABLE>
<CAPTION>
Franklin
Franklin New York
New York Intermediate-
Insured Term
Tax-Free Tax-Free
Income Income
Fund Fund
-----------------------------------
<S> <C> <C>
Capital loss
carryovers expiring
in:
2002 .................. $ -- $2,297,936
2004 .................. -- 261,595
2007 .................. 1,575,765 213,880
------------------------------------
$1,575,765 $2,773,411
====================================
</TABLE>
At December 31, 1999, the Insured Fund and Intermediate-Term Fund have deferred
capital loss occurring subsequent to October 31, 1999 of $91,833 and $146,200,
respectively. For tax purposes, such losses will be reflected in the year ending
December 31, 2000.
Distributions of income to shareholders may not equal net investment income due
to differing treatments of dividend distributions for book and tax purposes.
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES OF FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
4. INCOME TAXES (cont.)
At June 30, 2000 the net unrealized appreciation (depreciation) based on the
cost of investments for income tax purposes was as follows:
<TABLE>
<CAPTION>
Franklin
Franklin New York
New York Intermediate-
Insured Term
Tax-Free Tax-Free
Income Income
Fund Fund
----------------------------------
<S> <C> <C>
Investments at cost .......... $ 234,586,480 $ 69,461,023
==================================
Unrealized appreciation ...... $ 6,889,224 $ 1,632,057
Unrealized depreciation ...... (2,322,568) (882,016)
----------------------------------
Net unrealized appreciation .. $ 4,566,656 $ 750,041
==================================
</TABLE>
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Franklin
Franklin New York
New York Intermediate-
Insured Term
Tax-Free Tax-Free
Income Income
Fund Fund
----------------------------------
<S> <C> <C>
Purchases ........... $36,566,552 $14,306,511
Sales ............... $46,314,918 $11,007,313
</TABLE>
6. CREDIT RISK
The Franklin New York Intermediate-Term Fund has 4.8% of its portfolio invested
in lower rated and comparable quality unrated high yield securities, which tend
to be more sensitive to economic conditions than higher rated securities. The
risk of loss due to default by the issuer may be significantly greater for the
holders of high yielding securities because such securities are generally
unsecured and are often subordinated to other creditors of the issuer.
The Funds have investments in excess of 10% of their total net assets in the
state of New York or U.S. territories and possessions. Such concentration may
subject the Funds more significantly to economic changes occurring within these
regions.
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