SHAREHOLDER LETTER
Dear Shareholder:
This annual report for Franklin New York Tax-Free Trust covers the period ended
December 31, 1999.
BOND MARKET OVERVIEW
During the 12 months under review, U.S. bond markets continued to experience
challenging times. The yield on the benchmark 30-year Treasury bond steadily
increased, from 5.10% at the beginning of the reporting period, to 6.48% on
December 31, 1999. For the same period, the 30-year Treasury bond price dropped
19.9%, as bond prices and yields move in opposite directions so that as yields
rise, bond prices fall. Concerned about domestic inflationary tendencies, the
Federal Reserve Board (the Fed) raised the federal funds target rate from 4.75%
to 5.50% in three incremental steps during the reporting period.
The economy's direction and its effect on inflationary pressures will contribute
to the level of volatility that impacts bond markets in the near future. During
the period under review, many investors reacted swiftly to new releases of
economic data or Fed announcements, and in many instances the market
overcorrected. Investors with short-term investment horizons may view such
instability as unfavorable. However, we prefer to take a long-term approach
toward investing, and we find that recent market fluctuations afforded us
opportunities not only to increase the funds' income-earning potential, but also
to enhance the portfolios' overall structures.
CONTENTS
Shareholder Letter ........................................................ 1
Special Feature: Uncovering Tax-Free Opportunities ........................ 4
Fund Reports
Franklin New York Insured Tax-Free Income Fund ........................... 9
Franklin New York Intermediate-Term Tax-Free Income Fund ................. 15
Franklin New York Tax-Exempt Money Fund .................................. 20
Municipal Bond Ratings .................................................... 23
Financial Highlights & Statement of Investments ........................... 26
Financial Statements ...................................................... 39
Notes to Financial Statements ............................................. 44
Independent Auditors' Report .............................................. 49
Tax Information ........................................................... 50
[PYRAMID GRAPH]
NEW YORK UPDATE
In New York, Standard & Poor's(R), an independent credit rating agency, raised
the state's general obligation and appropriation-backed bond ratings to A+.(1)
The upgrade reflects fundamental changes in fiscal discipline and management, as
evidenced by improving reserves and controlled spending during a period of
revenue growth; slow but steady economic growth through which the state regained
pre-recession employment levels; and some marginal success in reducing the pace
of borrowings. In the short term, the state is well-situated due to the health
of its economy, having recently completed four years of strong financial
performance. In fiscal 1997 through 1999, the state finished the years with
surpluses ranging from $1.4 billion to $2.1 billion and is expecting another
surplus for fiscal 2000.(2) However, New York is projecting budget shortfalls of
$1.2 billion and $5.5 billion for fiscal 2001 and 2002, respectively.(3)
Another long-term risk for New York's economy is the state's high debt level.
During fiscal 1999, the state's net tax-supported debt level reached $36.9
billion, yielding a debt per capita of $2,036, ranking New York fourth highest
in the nation.(2) Although the state's debt level is high, the credit outlook is
stable, given satisfactory economic performance, the ability to manage potential
spending pressures, and the continuance of fiscally responsible actions.(1)
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.
1. Source: Standard and Poor's, CreditWire, 10/99. This does not indicate
Standard and Poor's rating of the fund.
2. Source: Moody's Investors Service, 10/99.
3. Source: Moody's Investors Service, 12/99.
We encourage you to discuss your financial goals with an investment
representative. Mutual funds offer a level of diversification that is difficult
for individual investors to achieve on their own. As always, we appreciate your
support, welcome your questions and look forward to serving your investment
needs in the years ahead.
Sincerely,
/s/ Charles 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.(4) You can find your fund's taxable equivalent distribution rate and
yield in the Performance Summary that follows your fund's report.
4. 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.
UNCOVERING TAX-FREE OPPORTUNITIES
[CIRCULAR GRAPHIC SPECIAL FEATURE]
[PHOTOGRAPH OF RAFAEL COSTAS]
Rafael Costas, Senior Vice President and Director of Franklin's Municipal
Research Department, discusses how research is an integral part of Franklin's
tax-free income funds' success.
Q: Could you provide an overview of Franklin's research department?
RAFAEL COSTAS: We have one of the industry's largest municipal research staffs,
allowing us to routinely analyze more than 2,000 debt issuers a year. The
research department analysts work closely with our portfolio managers, who rely
on these analysts when making buy and sell decisions. With a focus on in-depth
research and the discipline to buy when others are selling, we often are able to
find exciting opportunities, at temporarily depressed prices. Generally, we
concentrate on investment grade issues. Of course, for our high yield funds, we
also look for below investment-grade bonds that we feel offer appropriate
rewards for the increased risk.
Q: What are some advantages of Franklin's size and reputation?
RAFAEL: Today, Franklin is one of the nation's leading tax-free fund managers.
Our size, with approximately $45 billion of tax-free investments, often enables
us to purchase investments at advantageous prices, which in turn, can help keep
investment costs low. We pass on these savings to shareholders in the form of
higher tax-free yields.(1) In addition, our size often makes us a
favorite of new issuers, as many prefer to work with a minimum number of
investors.
1. For investors subject to the federal or state alternative minimum tax, a
portion of this income may be subject to such tax. Distributions of capital
gains and of ordinary income from accrued market discount, if any, are generally
taxable.
This page is not part of the shareholder report.
Q: What type of tax-free bonds do you favor?
RAFAEL: We typically look for investment-grade bonds, as we try to provide our
shareholders high, current income with a relatively low level of risk. Most of
our investment grade tax-free bond funds are composed of a high percentage of
securities rated AAA or AA, the highest ratings bonds can receive from
independent credit rating agencies.(2) In addition, many of our purchases are
insured because of the prevalence of insurance in the municipal bond marketplace
in the past few years. Insured securities normally are rated AAA, further
improving the credit quality of our funds' portfolios. For our high yield funds,
we look for bonds which may be out of favor but, in our view, still have solid
fundamentals and the potential to be upgraded. In fact, we devote much of our
research efforts to finding such bonds in the low investment-grade, high yield
sectors.
Q: How do you research a bond?
RAFAEL: We emphasize detailed, high-quality research, which often enables us to
uncover attractive investments that others may have overlooked. When presented
with an opportunity, our analysts carefully consider such factors as the bond's
purpose, who will repay the bond, if the projections are reasonable, the payment
schedule and the issuer's credit history. We incorporate all of the numerical
findings in our internal, proprietary databases and spreadsheets created by our
analysts. With the processed information and analysis, we meet with our
portfolio managers to discuss the merits of each individual issue. The portfolio
manager's decision to buy a security will depend largely on our analysis of the
bond's credit quality and price. We continue to monitor our investments closely
after the purchase, looking for signs of potential problems as well as
additional opportunities.
2. Ratings can change.
This page is not part of the shareholder report.
WHAT IS A ROAD SHOW?
Before a new issue is brought to the public, the issuer and its investment
bankers travel around the country making presentations to potential investors
concerning the issuer's financial information and outlook.
Q: Do you feel it is important to personally meet management and municipal
officials?
RAFAEL: Very much so. Each year Franklin's analysts and portfolio managers visit
hundreds of sites to garner an understanding that can be obtained only through
personal inspection. They meet face-to-face with the project's management and
municipal officials to discuss firsthand any potential problems. Our analysts
also can use these meetings to discover new opportunities, often before they are
widely known.
Q: Do issuers and investment bankers ever come to Franklin?
RAFAEL: Our sizable presence in the municipal bond market frequently means that
issuers and their bankers come to us with new issues. In a typical day, we may
receive between 50 and 100 calls from brokers offering new and secondary issues.
Approximately three times a week, investment bankers visit our offices, usually
as part of an issue's road show. We view these as excellent opportunities not
only to buy issues at favorable prices, but also to propose changes to the issue
to enhance its appeal to our distinct standards.
Q: How can Franklin's research influence the portfolio managers' investment
decisions?
RAFAEL: Our extensive research allows us to use a contrarian approach to
investing, because we firmly believe that near-term volatility can create
opportunities for greater long-term yields. For example, when Moody's, Standard
& Poor's or Fitch, three independent rating agencies, downgrade a bond, many
investors sell the issue, sometimes reducing prices to what we believe are
attractive levels. As we evaluate our investments based on our internal
assessments, we can use these valuable opportunities to purchase what we believe
are high-quality issues at temporarily depressed prices.
This page is not part of the shareholder report.
External events can also lead to situations where bonds become undervalued. Over
the past few years, for example, Medicare reform negatively affected the
hospital bond sector, even for those hospitals in strong financial shape. As
many hospitals' credit profiles weakened, we were able to find value selectively
through our analysts' expertise. Seeking to take advantage of this, we
recommended such bonds to our portfolio managers who purchased them at a time
when the market seemed to be shunning these issues.
Q: Could you provide an example of a successful outcome of your research?
RAFAEL: Sure. A perfect example is Tucson Electric Power (TEP). It issued $579
million in tax-exempt debt in 1997-98. However, the utility had a long, troubled
history and its debt was rated below investment grade. So, Molly Butler, our
electric utility analyst, and I flew to Tucson and spent an entire day with
TEP's top executives and division heads. We discussed their history, current
position and future plans as well as challenged and questioned many of their
projections and assumptions. At the end of the day, we were satisfied that their
management team had a clear vision and a realistic plan for the future.
[PHOTOGRAPH]
Municipal research analyst Molly Butler discusses a bond issue with portfolio
manager Stella Wong.
This page is not part of the shareholder report.
Q: How is TEP doing today?
RAFAEL: Since then, the rating agencies have raised TEP's credit rating and the
bonds have seen a significant increase in value. Of course, the ratings can
change again in the future. However, the bonds are still offering above-market
yields for our shareholders, because we were able to purchase the securities
when they were unpopular. We have an excellent relationship with management and
they often call Ms. Butler to discuss the latest releases of information.
THANK YOU, RAFAEL.
This page is not part of the shareholder report.
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 12 months under review, the yield on the benchmark 30-year Treasury
bond steadily increased, from 5.10% at the start of the reporting period, to
6.48% on December 31, 1999. While generally negative for municipal securities
prices, the rise in interest rates presented us with opportunities to book tax
losses by selling lower yielding securities, and reinvesting the proceeds at
current higher rates. These losses helped offset any potential capital gains in
the portfolio, possibly lowering shareholder tax liabilities, and can be carried
forward for several years. Our ability to reinvest proceeds from called bonds
into securities with higher yields helped to protect the level of the fund's
dividend payments. This environment also presented opportunities to improve the
portfolio's call protection, which we will continue to pursue.
1. For investors subject to the alternative minimum tax, a small portion of
this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.
2. The insurance guarantees the scheduled payment of principal and interest on
the insured securities in the fund's portfolio, but does not guarantee the
market value of the insured security, the value of the fund's shares, or the
fund's distributions. Shares of the fund are not insured. No representation is
made as to the ability of any insurer to meet its obligation to the fund if
called upon to do so.
You will find a complete listing of the fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 28 of
this report.
PORTFOLIO BREAKDOWN
Franklin New York Insured
Tax-Free Income Fund
12/31/99
<TABLE>
<CAPTION>
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
- ----- -----------
<S> <C>
Utilities 22.2%
Transportation 17.2%
Prerefunded 13.4%
Hospital & Health Care 12.8%
Higher Education 11.6%
Other Revenue 9.9%
General Obligation 9.3%
Subject to Government Appropriation 2.6%
Housing 1.0%
</TABLE>
For the 12 months ended December 31, 1999, Franklin New York Insured Tax-Free
Income Fund - Class A share price was down 8.03%. Compared with the broader
fixed income market, however, the fund performed quite well. Over the same
period, the 30-year Treasury bond price fell 19.9%, while the Lehman Brothers
Municipal Bond Index, a reasonable proxy for the type of securities in the
fund's portfolio, was off 8.2%.(3)
The fund sold a number of prerefunded securities over the course of the
reporting period. In managing our prerefunded security exposure, we typically
look to sell such bonds with approximately five years remaining to their call
date. In doing so, the fund was able to capture a premium on the prerefunded
bonds and use the proceeds to invest in current coupon bonds, thus extending the
fund's call protection, preserving the fund's income stream and helping to
stabilize the fund's share price.
The fund maintained broad sector diversification during the year by purchasing
bonds over many different sectors. On December 31, 1999, utilities was the
fund's largest sector weighting, making up 22.2% of total long-term investments,
followed by transportation with 17.2%. Insured bonds offered some of the best
values during the period, as credit spreads in New York did not typically pay
investors for taking on the additional credit risk of a lower-rated security.
Significant purchases over the year included New York State Dormitory Authority
Revenue, Metropolitan Transportation Authority Transportation Facilities Revenue
and New York City Municipal Water Finance Authority Water and Sewer System
Revenue.
Going forward, the fund 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 into 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.
3. Source: Lehman Brothers(R). Index is unmanaged and includes reinvested
dividends. One cannot invest directly in an index.
DIVIDEND DISTRIBUTIONS*
Franklin New York Insured Tax-Free Income Fund
1/1/99 - 12/31/99
<TABLE>
<CAPTION>
DIVIDEND PER SHARE
-------------------------
MONTH CLASS A CLASS C
- ----- ---------- -----------
<S> <C> <C>
January 4.7 cents 4.41 cents
February 4.7 cents 4.41 cents
March 4.6 cents 3.86 cents
April 4.6 cents 3.86 cents
May 4.6 cents 3.86 cents
June 4.6 cents 3.95 cents
July 4.6 cents 3.95 cents
August 4.6 cents 3.95 cents
September 4.6 cents 4.03 cents
October 4.6 cents 4.03 cents
November 4.6 cents 4.03 cents
December 4.7 cents 4.21 cents
---------- -----------
TOTAL 55.5 CENTS 48.55 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.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of December 31, 1999, the end of the reporting period. Our
strategies and the fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
FRANKLIN NEW YORK
INSURED TAX-FREE INCOME FUND
ONE-YEAR PERFORMANCE SUMMARY
AS OF 12/31/99
One-year total return does not include sales charges. Distributions will vary
based on earnings of the fund's portfolio and any profits realized from the sale
of the portfolio's securities. Past distributions are not indicative of future
trends. All total returns include reinvested distributions at net asset value.
<TABLE>
<CAPTION>
<S> <C> <C>
CLASS A
One-Year Total Return -3.31%
Net Asset Value (NAV) (12/31/99) $10.77 (12/31/98) $11.71
Change in NAV -$0.94
Distributions (1/1/99-12/31/99) Dividend Income $0.555
Long-Term Capital Gain $0.004
---------------------- ------
Total $0.559
CLASS C
One-Year Total Return -3.87%
Net Asset Value (NAV) (12/31/99) $10.88 (12/31/98) $11.82
Change in NAV -$0.94
Distributions (1/1/99-12/31/99) Dividend Income $0.4855
Long-Term Capital Gain $0.0040
---------------------- -------
Total $0.4895
</TABLE>
Franklin New York Insured Tax-Free Income Fund paid distributions derived from
long-term capital gains of 0.4 cents ($0.004) per share in June 1999. The fund
hereby designates such distributions as capital gain dividends per Internal
Revenue Code Section 852 (b)(3).
CLASS A (formerly Class I): Subject to the current, maximum 4.25% initial sales
charge. Prior to July 1, 1994, fund shares were offered at a lower initial sales
charge; thus actual total returns may differ. Effective May 1, 1994, the fund
eliminated the sales charge on reinvested dividends and implemented a Rule 12b-1
plan, which affects subsequent performance.
CLASS C (formerly Class II): Subject to 1% initial sales charge and 1%
contingent deferred sales charge for shares redeemed within 18 months of
investment. These shares have higher annual fees and expenses than Class A
shares.
Past performance does not guarantee future results.
ADDITIONAL PERFORMANCE
AS OF QUARTER ENDED 12/31/99
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR (5/1/91)
- ------- ------ ------ --------
<S> <C> <C> <C>
Cumulative Total Return(1) -3.31% +37.63% +69.02%
Average Annual Total Return(2) -7.42% +5.68% +5.71%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 3-YEAR (5/1/95)
- ------- ------ ------ --------
<S> <C> <C> <C>
Cumulative Total Return(1) -3.87% +9.73% +24.15%
Average Annual Total Return(2) -5.75% +2.81% +4.51%
</TABLE>
<TABLE>
<CAPTION>
SHARE CLASS A C
- ----------- ----- -----
<S> <C> <C>
Distribution Rate(3) 5.01% 4.60%
Taxable Equivalent Distribution Rate(4) 9.24% 8.48%
30-Day Standardized Yield(5) 4.58% 4.19%
Taxable Equivalent Yield(4) 8.45% 7.73%
</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 December
31, 1999.
4. Taxable equivalent distribution rate and yield assume the 1999 maximum
combined federal and New York state and City personal income tax bracket of
45.77%, 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 December 31, 1999.
Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
For updated performance figures, see "Prices and Performance" on the Internet at
www.franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
FRANKLIN NEW YORK
INSURED TAX-FREE INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
12/31/99
<TABLE>
<CAPTION>
CLASS A
- -------
<S> <C>
1-Year -7.42%
5-Year +5.68%
Since Inception (5/1/91) +5.71%
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
12/31/99
<TABLE>
<CAPTION>
CLASS C
- -------
<S> <C>
1-Year -5.75%
3-Year +2.81%
Since Inception (5/1/95) +4.51%
</TABLE>
TOTAL RETURN INDEX COMPARISON FOR HYPOTHETICAL $10,000 INVESTMENT
Total return represents the change in value of an investment over the periods
shown. It includes the current, applicable, maximum sales charges, fund
expenses, account fees and reinvested distributions. The unmanaged index differs
from the fund in composition, does not pay management fees or expenses and
includes reinvested dividends. One cannot invest directly in an index.
Performance of the fund's shares exceeded the rate of inflation as measured by
the Consumer Price Index (CPI).
The following line graph compares the performance of Franklin New York Insured
Tax-Free Income Fund's Class A shares to that of the Lehman Brothers Municipal
Bond Index, and to the Consumer Price Index based on a $10,000 investment from
5/1/91 to 12/31/99.
<TABLE>
<CAPTION>
Franklin New York Insured Lehman Brothers CPI*
Tax-Free Income Fund-Class A Municipal Bond Index*
---------------------------- ----------------------- -------
<S> <C> <C> <C> <C> <C>
05/01/1991 $9,579 $10,000 $10,000
05/31/1991 $9,588 0.89% $10,089 0.30% $10,030
06/30/1991 $9,559 -0.10% $10,079 0.29% $10,059
07/31/1991 $9,722 1.22% $10,202 0.15% $10,074
08/31/1991 $9,866 1.32% $10,337 0.29% $10,103
09/30/1991 $9,976 1.30% $10,471 0.44% $10,148
10/31/1991 $10,058 0.90% $10,565 0.15% $10,163
11/30/1991 $10,043 0.28% $10,595 0.29% $10,193
12/31/1991 $10,234 2.15% $10,823 0.07% $10,200
01/31/1992 $10,307 0.23% $10,847 0.15% $10,215
02/29/1992 $10,322 0.03% $10,851 0.36% $10,252
03/31/1992 $10,347 0.03% $10,854 0.51% $10,304
04/30/1992 $10,438 0.89% $10,951 0.14% $10,318
05/31/1992 $10,590 1.18% $11,080 0.14% $10,333
06/30/1992 $10,743 1.68% $11,266 0.36% $10,370
07/31/1992 $11,149 3.00% $11,604 0.21% $10,392
08/31/1992 $10,968 -0.97% $11,491 0.28% $10,421
09/30/1992 $10,981 0.65% $11,566 0.28% $10,450
10/31/1992 $10,768 -0.98% $11,453 0.35% $10,487
11/30/1992 $11,058 1.79% $11,658 0.14% $10,501
12/31/1992 $11,215 1.02% $11,777 -0.07% $10,494
01/31/1993 $11,362 1.16% $11,913 0.49% $10,545
02/28/1993 $11,698 3.62% $12,344 0.35% $10,582
03/31/1993 $11,700 -1.06% $12,214 0.35% $10,619
04/30/1993 $11,787 1.01% $12,337 0.28% $10,649
05/31/1993 $11,828 0.56% $12,406 0.14% $10,664
06/30/1993 $12,029 1.67% $12,613 0.14% $10,679
07/31/1993 $12,060 0.13% $12,630 0.00% $10,679
08/31/1993 $12,284 2.08% $12,892 0.28% $10,709
09/30/1993 $12,531 1.14% $13,039 0.21% $10,731
10/31/1993 $12,583 0.19% $13,064 0.41% $10,775
11/30/1993 $12,496 -0.88% $12,949 0.07% $10,783
12/31/1993 $12,789 2.11% $13,222 0.00% $10,783
01/31/1994 $12,920 1.14% $13,373 0.27% $10,812
02/28/1994 $12,533 -2.59% $13,027 0.34% $10,849
03/31/1994 $11,912 -4.07% $12,496 0.34% $10,886
04/30/1994 $12,011 0.85% $12,603 0.14% $10,901
05/31/1994 $12,155 0.87% $12,712 0.07% $10,909
06/30/1994 $12,007 -0.61% $12,635 0.34% $10,946
07/31/1994 $12,254 1.83% $12,866 0.27% $10,975
08/31/1994 $12,264 0.35% $12,911 0.40% $11,019
09/30/1994 $12,036 -1.47% $12,721 0.27% $11,049
10/31/1994 $11,737 -1.78% $12,495 0.07% $11,057
11/30/1994 $11,382 -1.81% $12,269 0.13% $11,071
12/31/1994 $11,750 2.20% $12,539 0.00% $11,071
01/31/1995 $12,189 2.86% $12,897 0.40% $11,115
02/28/1995 $12,618 2.91% $13,272 0.40% $11,160
03/31/1995 $12,769 1.15% $13,425 0.33% $11,197
04/30/1995 $12,778 0.12% $13,441 0.33% $11,233
05/31/1995 $13,178 3.19% $13,870 0.20% $11,256
06/30/1995 $13,046 -0.87% $13,749 0.20% $11,278
07/31/1995 $13,105 0.95% $13,880 0.00% $11,278
08/31/1995 $13,248 1.27% $14,056 0.26% $11,308
09/30/1995 $13,318 0.63% $14,145 0.20% $11,330
10/30/1995 $13,558 1.45% $14,350 0.33% $11,368
11/30/1995 $13,775 1.66% $14,588 -0.07% $11,360
12/31/1995 $13,920 0.96% $14,728 -0.07% $11,352
01/31/1996 $14,017 0.76% $14,840 0.59% $11,419
02/29/1996 $13,917 -0.68% $14,739 0.32% $11,455
03/31/1996 $13,744 -1.28% $14,550 0.52% $11,515
04/30/1996 $13,693 -0.28% $14,510 0.39% $11,560
05/31/1996 $13,704 -0.04% $14,504 0.19% $11,582
06/30/1996 $13,853 1.09% $14,662 0.06% $11,589
07/31/1996 $13,952 0.90% $14,794 0.19% $11,611
08/31/1996 $13,962 -0.02% $14,791 0.19% $11,633
09/30/1996 $14,176 1.40% $14,998 0.32% $11,670
10/31/1996 $14,315 1.13% $15,168 0.32% $11,707
11/30/1996 $14,582 1.83% $15,445 0.19% $11,730
12/31/1996 $14,517 -0.42% $15,380 0.00% $11,730
01/31/1997 $14,490 0.19% $15,410 0.32% $11,767
02/28/1997 $14,604 0.92% $15,551 0.31% $11,804
03/31/1997 $14,434 -1.33% $15,344 0.25% $11,833
04/30/1997 $14,563 0.84% $15,473 0.12% $11,847
05/31/1997 $14,759 1.51% $15,707 -0.06% $11,840
06/30/1997 $14,915 1.07% $15,875 0.12% $11,855
07/31/1997 $15,336 2.77% $16,315 0.12% $11,869
08/31/1997 $15,162 -0.94% $16,161 0.19% $11,891
09/30/1997 $15,320 1.19% $16,354 0.25% $11,921
10/31/1997 $15,453 0.64% $16,458 0.25% $11,951
11/30/1997 $15,533 0.59% $16,556 -0.06% $11,944
12/31/1997 $15,788 1.46% $16,797 -0.12% $11,929
01/31/1998 $15,894 1.03% $16,970 0.19% $11,952
02/28/1998 $15,893 0.03% $16,975 0.19% $11,975
03/31/1998 $15,932 0.09% $16,991 0.19% $11,997
04/30/1998 $15,832 -0.45% $16,914 0.18% $12,019
05/31/1998 $16,117 1.58% $17,181 0.18% $12,041
06/30/1998 $16,196 0.39% $17,248 0.12% $12,055
07/31/1998 $16,219 0.25% $17,292 0.12% $12,070
08/31/1998 $16,439 1.55% $17,560 0.12% $12,084
09/30/1998 $16,630 1.25% $17,779 0.12% $12,099
10/31/1998 $16,640 0.00% $17,779 0.24% $12,128
11/30/1998 $16,707 0.35% $17,841 0.00% $12,128
12/31/1998 $16,726 0.25% $17,886 -0.06% $12,120
01/31/1999 $16,879 1.19% $18,099 0.24% $12,149
02/28/1999 $16,832 -0.44% $18,019 0.12% $12,164
03/31/1999 $16,855 0.14% $18,044 0.30% $12,200
04/30/1999 $16,878 0.25% $18,089 0.73% $12,290
05/31/1999 $16,785 -0.58% $17,984 0.00% $12,290
06/30/1999 $16,574 -1.44% $17,726 0.00% $12,290
07/31/1999 $16,583 0.36% $17,789 0.30% $12,326
08/31/1999 $16,415 -0.80% $17,647 0.24% $12,356
09/30/1999 $16,365 0.04% $17,654 0.48% $12,415
10/31/1999 $16,137 -1.08% $17,463 0.18% $12,438
11/30/1999 $16,295 1.06% $17,649 0.06% $12,445
12/31/1999 $16,190 -0.75% $17,516 0.00% $12,445
Totals 61.90% 75.16% 24.45%
</TABLE>
*Source: Standard and Poor's Micropal.
The following line graph compares the performance of Franklin New York Insured
Tax-Free Income Fund's Class C shares to that of the Lehman Brothers Municipal
Bond Index, and to the Consumer Price Index based on a $10,000 investment from
5/1/95 to 12/31/99.
<TABLE>
<CAPTION>
Franklin New York Lehman Brothers CPI*
Insured Tax-Free Income Municipal Bond
Fund-Class C Index*
----------------------- --------------- ------
<S> <C> <C> <C> <C> <C>
05/01/1995 $9,900 10,000 10,000
05/31/1995 $10,212 3.19% 10,319 0.20% 10,020
06/30/1995 $10,114 -0.87% 10,229 0.20% 10,040
07/31/1995 $10,162 0.95% 10,326 0.00% 10,040
08/31/1995 $10,277 1.27% 10,458 0.26% 10,066
09/30/1995 $10,326 0.63% 10,523 0.20% 10,086
10/30/1995 $10,505 1.45% 10,676 0.33% 10,120
11/30/1995 $10,676 1.66% 10,853 -0.07% 10,112
12/31/1995 $10,773 0.96% 10,957 -0.07% 10,105
01/31/1996 $10,851 0.76% 11,041 0.59% 10,165
02/29/1996 $10,770 -0.68% 10,966 0.32% 10,198
03/31/1996 $10,631 -1.28% 10,825 0.52% 10,251
04/30/1996 $10,587 -0.28% 10,795 0.39% 10,291
05/31/1996 $10,590 -0.04% 10,791 0.19% 10,310
06/30/1996 $10,699 1.09% 10,908 0.06% 10,316
07/31/1996 $10,777 0.90% 11,006 0.19% 10,336
08/31/1996 $10,778 -0.02% 11,004 0.19% 10,356
09/30/1996 $10,944 1.40% 11,158 0.32% 10,389
10/31/1996 $11,035 1.13% 11,284 0.32% 10,422
11/30/1996 $11,234 1.83% 11,491 0.19% 10,442
12/31/1996 $11,189 -0.42% 11,443 0.00% 10,442
01/31/1997 $11,163 0.19% 11,466 0.32% 10,475
02/28/1997 $11,245 0.92% 11,571 0.31% 10,508
03/31/1997 $11,109 -1.33% 11,417 0.25% 10,534
04/30/1997 $11,203 0.84% 11,513 0.12% 10,547
05/31/1997 $11,356 1.51% 11,687 -0.06% 10,540
06/30/1997 $11,470 1.07% 11,812 0.12% 10,553
07/31/1997 $11,786 2.77% 12,139 0.12% 10,565
08/31/1997 $11,648 -0.94% 12,025 0.19% 10,586
09/30/1997 $11,763 1.19% 12,168 0.25% 10,612
10/31/1997 $11,859 0.64% 12,246 0.25% 10,639
11/30/1997 $11,913 0.59% 12,318 -0.06% 10,632
12/31/1997 $12,102 1.46% 12,498 -0.12% 10,619
01/31/1998 $12,188 1.03% 12,627 0.19% 10,640
02/28/1998 $12,181 0.03% 12,631 0.19% 10,660
03/31/1998 $12,216 0.09% 12,642 0.19% 10,680
04/30/1998 $12,134 -0.45% 12,585 0.18% 10,699
05/31/1998 $12,344 1.58% 12,784 0.18% 10,719
06/30/1998 $12,398 0.39% 12,834 0.12% 10,731
07/31/1998 $12,410 0.25% 12,866 0.12% 10,744
08/31/1998 $12,581 1.55% 13,065 0.12% 10,757
09/30/1998 $12,710 1.25% 13,229 0.12% 10,770
10/31/1998 $12,714 0.00% 13,229 0.24% 10,796
11/30/1998 $12,761 0.35% 13,275 0.00% 10,796
12/31/1998 $12,773 0.25% 13,308 -0.06% 10,789
01/31/1999 $12,875 1.19% 13,466 0.24% 10,815
02/28/1999 $12,836 -0.44% 13,407 0.12% 10,828
03/31/1999 $12,856 0.14% 13,426 0.30% 10,861
04/30/1999 $12,865 0.25% 13,459 0.73% 10,940
05/31/1999 $12,787 -0.58% 13,381 0.00% 10,940
06/30/1999 $12,621 -1.44% 13,189 0.00% 10,940
07/31/1999 $12,620 0.36% 13,236 0.30% 10,973
08/31/1999 $12,487 0.80% 13,130 0.24% 10,999
09/30/1999 $12,443 0.04% 13,136 0.48% 11,052
10/31/1999 $12,276 -1.08% 12,994 0.18% 11,072
11/30/1999 $12,388 1.06% 13,131 0.06% 11,079
12/31/1999 $12,291 -0.75% 13,033 0.00% 11,079
Total 22.91% 30.33% 10.79%
</TABLE>
*Source: Standard and Poor's Micropal.
Past performance does not guarantee future results.
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 in which debt must be repaid) between three
and 10 years.(1)
Generally rising interest rates, such as those during the year under review,
presented challenges for the municipal bond market, as bond prices fall when
interest rates rise. For the 12 months ended December 31, 1999, Franklin New
York Intermediate-Term Tax-Free Income Fund - Class A share price was down 6.4%.
Compared to the broader fixed income market, however, the fund performed quite
well. Over the same period, the 10-year Treasury bond price fell 13.1%, while
the Lehman Brothers Muni 10-Year Index, a reasonable proxy for the type of
securities in the fund's portfolio, was off 6.9%.(2)
[PIECHART]
CREDIT QUALITY BREAKDOWN
Franklin New York Intermediate-Term Tax-Free Income Fund
Based on Total Long-Term Investments*
12/31/99
<TABLE>
<S> <C>
AAA 30.2%
AA 1.4%
A 37.3%
BBB 31.1%
</TABLE>
*Quality breakdowns may include internal ratings for bonds not rated by a
national rating agency.
1. For investors subject to the alternative minimum tax, a small portion of
this income may be subject to such tax. Distributions of capital gains and of
ordinary income from accrued market discount, if any, are generally taxable.
2. Source: Lehman Brothers. Index is unmanaged and includes reinvested
dividends. One cannot invest directly in an index.
You will find a complete listing of the fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 33 of
this report.
PORTFOLIO BREAKDOWN
Franklin New York Intermediate-Term Tax-Free Income Fund 12/31/99
<TABLE>
<CAPTION>
% OF TOTAL
LONG-TERM
SECTOR INVESTMENTS
- ------ -----------
<S> <C>
Subject to Government Appropriation 27.3%
General Obligation 20.0%
Hospital & Health Care 15.2%
Utilities 8.9%
Other Revenue 7.4%
Prerefunded 7.0%
Tax-Supported Debt 5.8%
Transportation 5.4%
Housing 3.0%
</TABLE>
The rise in interest rates over the reporting period also presented us with
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 contributing factor to raising the
fund's dividends in September and December.
The majority of the purchases made during the year 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. On December
31, 1999, 31.6% of total long-term investments were AAA and AA, the two highest
credit ratings.
The fund continued to pursue high, current tax-free income while maintaining a
relatively stable share price. As of the end of the period, the fund had 57
positions with an average coupon of slightly more than 5.73%, an average
maturity of 8.6 years and weighted average life to first call of 6.29 years. The
fund maintained broad sector diversification during the year by purchasing bonds
over many different sectors. On December 31, 1999, bonds subject to government
appropriation was the fund's largest sector weighting, making up 27.3% of total
long-term investments, followed by general obligation bonds with 20.0%. Some of
the fund's purchases over the year included bonds issued by the following: New
York State Dormitory Authority Revenue, Metropolitan Transportation Authority
Transportation Facilities Revenue and New York State Urban Development
Corporation Revenue.
Additionally, we were able to book tax losses by selling lower-yielding
securities, and then reinvesting the proceeds at current, higher rates. These
losses helped to offset any potential capital gains in the portfolio, possibly
lowering shareholders' tax liabilities, and can be carried forward for several
years.
Going forward, the fund 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 into 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.
DIVIDEND DISTRIBUTIONS*
Franklin New York Intermediate-Term Tax-Free Income Fund - Class A
1/1/99 - 12/31/99
<TABLE>
<CAPTION>
DIVIDEND
MONTH PER SHARE
- ----- -----------
<S> <C>
January 4.30 cents
February 4.30 cents
March 4.15 cents
April 4.15 cents
May 4.15 cents
June 4.15 cents
July 4.15 cents
August 4.15 cents
September 4.30 cents
October 4.30 cents
November 4.30 cents
December 4.40 cents
-----------
TOTAL 50.80 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.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of December 31, 1999, the end of the reporting period. Our
strategies and the fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
ONE-YEAR PERFORMANCE SUMMARY AS OF 12/31/99
One-year total return does not include sales charges. Distributions will vary
based on earnings of the fund's portfolio and any profits realized from the sale
of the portfolio's securities. Past distributions are not indicative of future
trends. All total returns include reinvested distributions at net asset value.
<TABLE>
<CAPTION>
CLASS A
<S> <C> <C>
One-Year Total Return -1.69%
Net Asset Value (NAV) (12/31/99) $10.08 (12/31/98) $10.77
Change in NAV -$0.69
Distributions (1/1/99-12/31/99) Dividend Income $0.508
</TABLE>
ADDITIONAL PERFORMANCE
AS OF QUARTER ENDED 12/31/99
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR (9/21/92)
- ------- ------ ------ ---------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) -1.69% +36.19% +45.32%
Average Annual Total Return(2) -3.92% +5.89% +4.94%
Distribution Rate(3) 5.12%
Taxable Equivalent Distribution Rate(4) 9.44%
30-Day Standardized Yield(5) 4.73%
Taxable Equivalent Yield(4) 8.72%
</TABLE>
CLASS A (formerly Class I): Subject to the maximum 2.25% initial sales charge.
The fund's manager agreed in advance to waive a portion of the management fees,
which reduces operating expenses and increases distribution rate, yield and
total return to shareholders. Without this waiver, the fund's distribution rate
and total return would have been lower, and the yield for the period would have
been 4.36%. The fee waiver may be discontinued at any time upon notice to the
fund's Board of Trustees.
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the maximum sales charge.
3. Distribution rate is based on an annualization of the current 4.4 cent per
share monthly dividend and the maximum offering price of $10.31 per share on
December 31, 1999.
4. Taxable equivalent distribution rate and yield assume the 1999 maximum
combined federal and New York state and City personal income tax bracket of
45.77%, 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 December 31, 1999.
Bond prices, and thus the fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
For updated performance figures, see "Prices and Performance" on the Internet at
www.franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
TOTAL RETURN INDEX COMPARISON
FOR HYPOTHETICAL $10,000 INVESTMENT
Total return represents the change in value of an investment over the periods
shown. It includes the maximum sales charge, fund expenses, account fees and
reinvested distributions. The unmanaged index differs from the fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index. Performance of the fund's
shares exceeded the rate of inflation as measured by the Consumer Price Index
(CPI).
The following line graph compares the performance of Franklin New York
Intermediate-Term Tax-Free Income Fund's Class A shares to that of the Lehman
Brothers Muni 10-Year Bond Index, and to the Consumer Price Index based on a
$10,000 investment from 9/21/92 to 12/31/99.
<TABLE>
<CAPTION>
Franklin New York Lehman Brothers Muni CPI*
Intermediate-Term Tax-Free 10-Year Bond Index*
Income Fund
<S> <C> <C> <C> <C> <C>
09/23/1992 $9,775 $10,000 $10,000
09/30/1992 $9,785 0.19% $10,019 0.07% $10,007
10/31/1992 $9,765 -1.02% $9,917 0.35% $10,042
11/30/1992 $9,892 1.83% $10,099 0.14% $10,056
12/31/1992 $9,980 1.16% $10,216 -0.07% $10,049
01/31/1993 $10,055 1.68% $10,387 0.49% $10,098
02/28/1993 $10,316 3.66% $10,768 0.35% $10,133
03/31/1993 $10,312 -1.46% $10,610 0.35% $10,169
04/30/1993 $10,378 0.95% $10,711 0.28% $10,197
05/31/1993 $10,413 0.35% $10,749 0.14% $10,211
06/30/1993 $10,489 1.97% $10,960 0.14% $10,226
07/31/1993 $10,506 0.25% $10,988 0.00% $10,226
08/31/1993 $10,683 2.07% $11,215 0.28% $10,254
09/30/1993 $10,800 1.23% $11,353 0.21% $10,276
10/31/1993 $10,845 0.16% $11,371 0.41% $10,318
11/30/1993 $10,695 -0.82% $11,278 0.07% $10,325
12/31/1993 $10,997 2.13% $11,518 0.00% $10,325
01/31/1994 $11,135 1.23% $11,660 0.27% $10,353
02/28/1994 $10,901 -2.74% $11,341 0.34% $10,388
03/31/1994 $10,458 -3.82% $10,907 0.34% $10,424
04/30/1994 $10,556 1.10% $11,027 0.14% $10,438
05/31/1994 $10,665 0.80% $11,116 0.07% $10,445
06/30/1994 $10,648 -0.43% $11,068 0.34% $10,481
07/31/1994 $10,821 1.68% $11,254 0.27% $10,509
08/31/1994 $10,857 0.39% $11,298 0.40% $10,551
09/30/1994 $10,659 -1.34% $11,146 0.27% $10,580
10/31/1994 $10,427 1.46% $10,983 0.07% $10,587
11/30/1994 $10,228 -1.89% $10,776 0.13% $10,601
12/31/1994 $10,415 1.80% $10,970 0.00% $10,601
01/31/1995 $10,593 2.59% $11,254 0.40% $10,643
02/28/1995 $10,881 2.83% $11,572 0.40% $10,686
03/31/1995 $10,951 1.35% $11,729 0.33% $10,721
04/30/1995 $10,968 0.12% $11,743 0.33% $10,757
05/31/1995 $11,285 3.17% $12,115 0.20% $10,778
06/30/1995 $11,214 -0.62% $12,040 0.20% $10,800
07/31/1995 $11,343 1.47% $12,217 0.00% $10,800
08/31/1995 $11,507 1.36% $12,383 0.26% $10,828
09/30/1995 $11,547 0.64% $12,462 0.20% $10,849
10/30/1995 $11,712 1.15% $12,606 0.33% $10,885
11/30/1995 $11,844 1.34% $12,775 -0.07% $10,878
12/31/1995 $11,908 0.61% $12,852 -0.07% $10,870
01/31/1996 $11,984 1.01% $12,982 0.59% $10,934
02/29/1996 $11,899 -0.41% $12,929 0.32% $10,969
03/31/1996 $11,802 -1.24% $12,769 0.52% $11,026
04/30/1996 $11,797 -0.35% $12,724 0.39% $11,069
05/31/1996 $11,769 -0.28% $12,688 0.19% $11,090
06/30/1996 $11,882 0.95% $12,809 0.06% $11,097
07/31/1996 $11,995 0.96% $12,932 0.19% $11,118
08/31/1996 $11,978 0.00% $12,932 0.19% $11,139
09/30/1996 $12,139 1.03% $13,065 0.32% $11,175
10/31/1996 $12,254 1.26% $13,230 0.32% $11,210
11/30/1996 $12,453 2.02% $13,497 0.19% $11,232
12/31/1996 $12,424 -0.45% $13,436 0.00% $11,232
01/31/1997 $12,468 0.39% $13,489 0.32% $11,268
02/28/1997 $12,584 0.94% $13,615 0.31% $11,303
03/31/1997 $12,457 -1.34% $13,433 0.25% $11,331
04/30/1997 $12,562 0.74% $13,532 0.12% $11,344
05/31/1997 $12,718 1.42% $13,725 -0.06% $11,338
06/30/1997 $12,836 1.10% $13,875 0.12% $11,351
07/31/1997 $13,154 2.81% $14,265 0.12% $11,365
08/31/1997 $13,074 -0.97% $14,127 0.19% $11,386
09/30/1997 $13,219 1.27% $14,306 0.25% $11,415
10/31/1997 $13,303 0.53% $14,382 0.25% $11,443
11/30/1997 $13,374 0.46% $14,448 -0.06% $11,437
12/31/1997 $13,533 1.58% $14,677 -0.12% $11,423
01/31/1998 $13,656 1.11% $14,840 0.19% $11,445
02/28/1998 $13,676 -0.01% $14,838 0.19% $11,466
03/31/1998 $13,684 -0.07% $14,828 0.19% $11,488
04/30/1998 $13,625 -0.55% $14,746 0.18% $11,509
05/31/1998 $13,852 1.70% $14,997 0.18% $11,530
06/30/1998 $13,924 0.37% $15,052 0.12% $11,543
07/31/1998 $13,930 0.16% $15,076 0.12% $11,557
08/31/1998 $14,148 1.74% $15,339 0.12% $11,571
09/30/1998 $14,299 1.49% $15,567 0.12% $11,585
10/31/1998 $14,316 0.04% $15,574 0.24% $11,613
11/30/1998 $14,374 0.30% $15,620 0.00% $11,613
12/31/1998 $14,431 0.31% $15,669 -0.06% $11,606
01/31/1999 $14,637 1.53% $15,908 0.24% $11,634
02/28/1999 $14,546 -0.90% $15,765 0.12% $11,648
03/31/1999 $14,548 -0.05% $15,757 0.30% $11,683
04/30/1999 $14,591 0.27% $15,800 0.73% $11,768
05/31/1999 $14,498 -0.70% $15,689 0.00% $11,768
06/30/1999 $14,253 -1.86% $15,397 0.00% $11,768
07/31/1999 $14,310 0.67% $15,501 0.30% $11,803
08/31/1999 $14,216 -0.37% $15,443 0.24% $11,831
09/30/1999 $14,248 0.34% $15,496 0.48% $11,888
10/31/1999 $14,099 -0.71% $15,386 0.18% $11,910
11/30/1999 $14,242 1.09% $15,553 0.06% $11,917
12/31/1999 $14,205 -0.52% $15,473 0.00% $11,917
42.05% 54.73% 19.17%
</TABLE>
*Source: Standard and Poor's Micropal.
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
12/31/99
<TABLE>
<CAPTION>
CLASS A
- -------
<S> <C>
1-Year -3.92%
5-Year +5.89%
Since Inception (9/21/92) +4.94%
</TABLE>
*Source: Standard and Poor's Micropal.
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 12 months under review, domestic economic growth accelerated well above
the Federal Reserve Board's (the Fed's) targeted 2.50% long-term growth rate.
Real gross domestic product (GDP) grew at blistering rates of 5.7% and 5.8% for
the third and fourth quarters of 1999, respectively. Higher equity and real
estate prices, increasing wages and a tight labor market spurred consumer
spending, while a rebound in the manufacturing sector and improving
international economic fundamentals also contributed to the expanding domestic
economy. However, this growth led to a moderate rise in inflation during the
third quarter, as measured by the Consumer Price Index's (CPI's) increase from
2.00% in June to 2.60% in September.
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 on any other government agency.
You will find a complete listing of the fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 36 of
this report.
The Fed responded to this strong growth and slightly higher inflation by
increasing the federal funds target rate during the reporting period from 4.75%
to 5.50%. In turn, bond prices dropped, but yields rose, a positive outcome for
money market fund shareholders. In this environment, Franklin New York
Tax-Exempt Money Fund's seven-day effective yield rose from 3.06% on January 1,
1999, to 3.84% on December 31, 1999.
The portfolio'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. This philosophy of
purchasing securities only from what we believe are the most creditworthy
institutions may result in lower returns compared to other money funds. However,
the fund's managers believe that the increased yield offered by lower-rated and
less liquid securities does not justify the added risk to shareholders.
WHAT ARE RANS?
RAN is an acronym for revenue anticipation note, short-term government debt
instruments issued by municipal agencies that are sold in anticipation of
revenues.
PERFORMANCE SUMMARY
12/31/99
- --------
Seven-day effective yield(1) 3.84%
Seven-day annualized yield 3.77%
Taxable equivalent yield(2) 6.95%
1. The seven-day effective yield assumes the compounding of daily dividends.
2. Taxable equivalent yield assumes the 1999 maximum combined federal and New
York state and City personal income tax bracket of 45.77%, based on the
federal income tax rate of 39.6%. Annualized and effective yields are for
the seven-day period ended December 31, 1999. The fund's average weighted
maturity was 37 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, which reduces expenses and increases yield to shareholders.
Without these reductions, the fund's annualized and effective yields for
the period would have been 3.58% and 3.65% respectively. The fee waiver may
be discontinued at any time upon notice to the fund's Board of Directors.
During the reporting period, the fund participated in several attractive deals
including Nassau County General Obligation RANs, New York Metropolitan
Transportation Authority commercial paper, and American Museum of National
History mandatory puts.
Please remember, this discussion reflects our views, opinions and portfolio
holdings as of December 31, 1999, the end of the reporting period. Our
strategies and the fund's portfolio composition will change depending on market
and economic conditions. Although historical performance is no guarantee of
future results, these insights may help you understand our investment and
management philosophy.
Past Performance does not guarantee future results.
MUNICIPAL BOND RATINGS
MOODY'S
Aaa: Best quality. They carry the smallest degree of investment risk and
generally are referred to as "gilt-edged." Interest payments are protected by a
large or exceptionally stable margin, and principal is secure. Although the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.
Aa: High quality by all standards. Together with the Aaa group, they comprise
what generally are known as high-grade bonds. Aa bonds are rated lower than Aaa
because margins of protection may not be as large, fluctuation of protective
elements may be of greater amplitude, or there may be other elements which make
the long-term risks appear larger.
A: Possess many favorable investment attributes and are considered upper
medium-grade obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future.
Baa: Medium-grade obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time.
23
Ba: Contain speculative elements. Often the protection of interest and principal
payments may be very moderate and, thereby, not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes bonds
in this class.
B: Generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small.
Caa: Poor standing. Such issues may be in default, or elements of danger with
respect to principal or interest may be present.
Ca: Obligations that are highly speculative. Such issues are often in default or
have other marked shortcomings.
C: Lowest-rated class of bonds. Issues rated C can be regarded as having
extremely poor prospects of ever attaining any real investment standing.
S&P(R)
AAA: The highest rating assigned by S&P to a debt obligation and indicates the
ultimate degree of protection as to principal and interest.
AA: Also qualify as high-grade obligations, and, in the majority of instances,
differ from AAA issues only in a small degree.
A: Generally regarded as upper medium-grade. They have considerable investment
strength but are not entirely free from adverse effects of changes in economic
and trade conditions. Interest and principal are regarded as safe.
BBB: Regarded as having an adequate capacity to pay principal and interest.
Whereas they normally exhibit adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay principal and interest for bonds in this category than for bonds
in the A category.
BB, B, CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligations. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While such bonds likely will have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
C: Reserved for income bonds on which no interest is being paid.
D: Debt rated D is in default and payment of interest and/or repayment of
principal is in arrears.
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------------------------
1999(2) 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year .......... $ 11.71 $ 11.66 $ 11.29 $ 11.41 $ 10.16
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income ...................... .56 .57 .58 .59 .59
Net realized and unrealized gains (losses) . (.94) .11 .38 (.12) 1.25
----------- ----------- ----------- ----------- -----------
Total from investment operations ............ (.38) .68 .96 .47 1.84
----------- ----------- ----------- ----------- -----------
Less distributions from:
Net investment income ...................... (.56) (.57)(3) (.59) (.59) (.59)
Net realized gains ......................... --(4) (.06) -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions ......................... (.56) (.63) (.59) (.59) (.59)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ................ $ 10.77 $ 11.71 $ 11.66 $ 11.29 $ 11.41
=========== =========== =========== =========== ===========
Total return(1) ............................. (3.31%) 5.94% 8.77% 4.30% 18.46%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ............. $ 242,067 $ 270,435 $ 260,990 $ 261,068 $ 256,171
Ratios to average net assets:
Expenses ................................... .72% .72% .71% .65% .65%
Expenses excluding waiver and payments
by affiliate ............................. .72% .72% .71% .70% .73%
Net investment income ...................... 4.96% 4.84% 5.09% 5.25% 5.38%
Portfolio turnover rate ..................... 15.23% 12.05% 26.85% 15.09% 22.99%
</TABLE>
(1)Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(2)Based on average shares outstanding.
(3)Includes distributions in excess of net investment income in the amount of
$.003.
(4)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
-------------------------------------------------------------------
Year Ended December 31,
-------------------------------------------------------------------
1999(2) 1998 1997 1996(2) 1995(6)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year .......... $ 11.82 $ 11.75 $ 11.37 $ 11.46 $ 10.85
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ...................... .49 .48 .52 .53 .36
Net realized and unrealized gains (losses).. (.94) .16 .38 (.10) .59
---------- ---------- ---------- ---------- ----------
Total from investment operations ............ (.45) .64 .90 .43 .95
---------- ---------- ---------- ---------- ----------
Less distributions from:
Net investment income ...................... (.49) (.51)(3) (.52) (.52) (.34)
Net realized gains ......................... --(4) (.06) -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions ......................... (.49) (.57) (.52) (.52) (.34)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ................ $ 10.88 $ 11.82 $ 11.75 $ 11.37 $ 11.46
========== ========== ========== ========== ==========
Total return(1).............................. (3.87%) 5.55% 8.17% 3.87% 8.92%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ............. $ 12,309 $ 9,450 $ 5,601 $ 4,137 $ 696
Ratios to average net assets:
Expenses ................................... 1.27% 1.28% 1.27% 1.22% 1.23%(5)
Expenses excluding waiver and payments
by affiliate ............................. 1.27% 1.28% 1.27% 1.27% 1.30%(5)
Net investment income ...................... 4.42% 4.27% 4.63% 4.69% 4.74%(5)
Portfolio turnover rate ..................... 15.23% 12.05% 26.85% 15.09% 22.99%
</TABLE>
(1)Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(2)Based on average shares outstanding.
(3)Includes distributions in excess of net investment income in the amount of
$.002.
(4)The fund distributed capital gains in the amount of $.004.
(5)Annualized
(6)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, DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 96.4%
Albany County GO, FGIC Insured, 5.85%, 6/01/12 ......................... $1,000,000 $1,029,490
Albany Municipal Water Finance Authority Water and Sewer
System Revenue, Refunding, Series A, FGIC Insured,
5.95%, 12/01/12 ..................................................... 2,505,000 2,591,623
5.50%, 12/01/22 ..................................................... 8,990,000 8,391,356
Amsterdam HDC, Mortgage Revenue, Refunding, MBIA Insured,
6.25%, 1/01/25 ...................................................... 2,475,000 2,492,276
Battery Park City Authority Revenue, Series A, AMBAC Insured,
5.50%, 11/01/26 ..................................................... 1,000,000 923,650
Brookhaven GO, Series B, MBIA Insured, 7.00%, 5/01/09 .................. 200,000 225,522
Broome County COP, Public Safety Facilities, MBIA Insured,
5.25%, 4/01/22 ...................................................... 2,125,000 1,897,030
Buffalo and Fort Erie Public Bridge Authority,
Toll Bridge System Revenue, MBIA Insured, 5.75%, 1/01/25 ............ 4,000,000 3,836,400
Buffalo GO,
General Improvement, Series A, FGIC Insured, 5.00%, 2/01/15 ......... 425,000 387,536
General Improvement, Series A, FGIC Insured, 5.00%, 2/01/16 ......... 425,000 383,567
General Improvement, Series A, FGIC Insured, 5.00%, 2/01/17 ......... 425,000 379,967
Refunding, Series C, FGIC Insured, 5.00%, 12/01/17 .................. 415,000 369,807
Refunding, Series C, FGIC Insured, 5.00%, 12/01/18 .................. 400,000 352,232
Refunding, Series C, FGIC Insured, 5.00%, 12/01/21 .................. 150,000 128,580
Refunding, Series C, FGIC Insured, 5.00%, 12/01/22 .................. 170,000 145,398
School, Series B, FGIC Insured, 5.00%, 2/01/15 ...................... 370,000 337,385
School, Series B, FGIC Insured, 5.00%, 2/01/17 ...................... 410,000 366,556
School, Series B, FSA Insured, 4.75%, 2/01/18 ....................... 500,000 423,280
Series E, AMBAC Insured, Pre-Refunded, 6.70%, 12/01/17 .............. 360,000 395,431
Series E, AMBAC Insured, Pre-Refunded, 6.70%, 12/01/18 .............. 385,000 422,892
Series E, AMBAC Insured, Pre-Refunded, 6.70%, 12/01/19 .............. 410,000 450,352
Buffalo Municipal Water Finance Authority, Water System Revenue,
FSA Insured, 6.00%,
7/01/26 ............................................................. 1,185,000 1,172,581
7/01/29 ............................................................. 3,000,000 2,963,190
Central Square GO, Central School District, FGIC Insured, 6.50%, 6/15/09 900,000 989,937
Dutchess County IDA, Civic Facilities Revenue, Bard College
Project, AMBAC Insured,
5.50%, 6/01/17 ...................................................... 2,315,000 2,217,376
5.375%, 6/01/27 ..................................................... 2,000,000 1,798,200
Erie County GO, Series B, FGIC Insured, 5.625%, 6/15/20 ................ 1,000,000 960,670
Hempstead Town IDA, Civic Facilities Revenue,
Hofstra University Project, MBIA Insured, 5.80%, 7/01/15 ............ 1,340,000 1,341,769
Long Island Power Authority, Electric System Revenue,
MBIA Insured, 5.75%, 12/01/24 ....................................... 2,540,000 2,423,592
Series A, FSA Insured, 5.125%, 12/01/22 ............................. 7,000,000 6,093,290
Monroe County IDA Revenue, Civic Facilities, Nazareth College,
MBIA Insured, 6.00%, 6/01/20 ........................................ 2,000,000 1,995,200
Mount Sinai Union Free School District, Refunding, AMBAC Insured,
6.20%, 2/15/13 ...................................................... 1,055,000 1,129,399
MTA Commuter Facilities Revenue, Series A, FSA Insured, 5.00%, 7/01/23 . 3,000,000 2,541,330
MTA Dedicated Tax Fund, Series A, FGIC Insured, 5.00%, 4/01/23 ......... 3,000,000 2,543,280
Nassau County IDA, Civic Facility Revenue, Hofstra University Project,
AMBAC Insured, Pre-Refunded, 6.75%, 8/01/11 ......................... 1,150,000 1,210,789
New Rochelle GO, Series C, MBIA Insured, 6.25%,
3/15/22 ............................................................. 390,000 394,941
3/15/23 ............................................................. 530,000 536,440
3/15/24 ............................................................. 555,000 561,460
New York City IDA, Civic Facility Revenue GO,
Polytechnic Prep Country Day School, FSA Insured, 5.375%, 5/01/29 ... 2,750,000 2,482,480
New York City Municipal Water Finance Authority
Water and Sewer System Revenue,
Series A, FGIC Insured, 6.75%, 6/15/16 .............................. 505,000 522,352
Series C, AMBAC Insured, Pre-Refunded, 6.20%, 6/15/21 ............... 6,000,000 6,297,060
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
New York City Transportation Authority MTA, Triborough COP, Series A, AMBAC
Insured, 5.25%, 1/01/29 ....................................................... $3,500,000 $3,038,210
New York City Trust Cultural Resources Revenue,
American Museum of Natural History, Series A, AMBAC Insured, 5.25%, 7/01/19 ... 1,585,000 1,434,282
American Museum of Natural History, Series A, MBIA Insured, 5.65%, 4/01/27 .... 4,000,000 3,766,960
New York Botanical Garden, MBIA Insured, 5.75%, 7/01/16 ....................... 3,000,000 2,971,650
New York State Dormitory Authority Revenues,
853 Schools Program, Issue 2, Series E, AMBAC Insured, 5.75%, 7/01/19 ......... 1,340,000 1,303,297
Associated Children's Inc., MBIA Insured, 7.60%, 7/01/18 ...................... 140,000 143,976
Brooklyn Law School, FSA Insured, 6.40%, 7/01/11 .............................. 2,460,000 2,559,581
Comsewogue Public Library, MBIA Insured, 6.05%, 7/01/24 ....................... 2,445,000 2,447,885
Hamilton College, MBIA Insured, Pre-Refunded, 6.50%, 7/01/21 .................. 1,000,000 1,047,650
Hartwick College, MBIA Insured, 6.25%, 7/01/12 ................................ 1,000,000 1,048,750
Judicial Lease Facilities, Suffolk County, Series B,
MBIA Insured, 7.00%, 4/15/16 ................................................. 2,780,000 2,909,103
Leake and Watts Services Inc., MBIA Insured, 6.00%, 7/01/23 ................... 1,890,000 1,878,206
Maimonides Medical Center, Series A, MBIA Insured, 5.75%, 8/01/24 ............. 1,500,000 1,440,885
Marist College, Refunding, MBIA Insured, 6.00%, 7/01/22 ....................... 1,000,000 995,100
Mental Health Services, Refunding, Series B, MBIA Insured, 5.00%, 2/15/24 ..... 2,260,000 1,907,869
Mount Sinai School of Medicine, Refunding, MBIA Insured, 6.75%, 7/01/15 ....... 2,500,000 2,611,400
New York University, FGIC Insured, 6.25%, 7/01/09 ............................. 1,000,000 1,038,050
Oceanside Library, AMBAC Insured, 6.00%, 7/01/25 .............................. 1,195,000 1,184,209
Pace University, Refunding, MBIA Insured, 5.75%, 7/01/26 ...................... 4,500,000 4,305,690
Rochester Institute of Technology, Refunding, MBIA Insured, 5.25%, 7/01/22 .... 500,000 446,120
Siena College, Refunding, MBIA Insured, 5.70%, 7/01/17 ........................ 2,000,000 1,958,840
St. John's University, AMBAC Insured, 6.875%, 7/01/11 ......................... 1,000,000 1,047,220
St. Vincent's Hospital and Medical Center, AMBAC Insured, 6.00%, 8/01/28 ...... 5,000,000 4,905,950
University of Rochester, Refunding, Series A, MBIA Insured, 5.00%, 7/01/27 .... 2,500,000 2,094,925
University of Rochester, Strong Health Facilities, MBIA Insured, 5.90%, 7/01/17 2,355,000 2,356,225
Wildwood Programs Inc., Refunding, MBIA Insured, 5.875%, 7/01/15 .............. 1,000,000 1,006,290
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 5,035,850
Series A, MBIA Insured, 6.75%, 1/15/27 ........................................ 4,950,000 5,081,670
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 2,346,646
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 1,569,540
Niagara Mohawk Power Corp., Refunding, Series A,
FGIC Insured, 7.20%, 7/01/29 ................................................. 5,000,000 5,475,150
Rochester Gas and Electric Project, Refunding, Series A,
MBIA Insured, 6.35%, 5/15/32 ................................................. 1,150,000 1,178,854
Rochester Gas and Electric Project, Refunding, Series B,
MBIA Insured, 6.50%, 5/15/32 ................................................. 1,000,000 1,044,120
New York State Environmental Facilities Corp. Water Facilities Revenue,
Refunding, Spring Valley Water Project,
Series A, AMBAC Insured, 6.30%, 8/01/24 ....................................... 2,000,000 2,042,960
Series B, AMBAC Insured, 6.15%, 8/01/24 ....................................... 3,000,000 3,032,070
New York State Medical Care Facilities Finance Agency Revenue,
Long-Term Health Care, Series A, FSA Insured, 6.80%, 11/01/14 ................. 6,285,000 6,624,579
Long-Term Health Care, Series B, FSA Insured, 6.45%, 11/01/14 ................. 5,355,000 5,611,023
Long-Term Health Care, Series C, FSA Insured, 6.40%, 11/01/14 ................. 4,245,000 4,443,369
Our Lady of Victory Hospital, Series A, AMBAC Insured, 6.625%, 11/01/16 ....... 1,000,000 1,047,410
Refunding, Hospital and Nursing Home Mortgage, Series C,
MBIA Insured, 6.25%, 8/15/12 ................................................. 1,000,000 1,051,530
Refunding, St. Mary's Hospital Project, Series A,
AMBAC Insured, 6.20%, 11/01/14 ............................................... 1,495,000 1,568,375
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
New York State Medical Care Facilities Finance Agency Revenue, (cont.)
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.60%, 11/01/10 $ 700,000 $ 735,014
Sisters of Charity Hospital, Series A, AMBAC Insured, 6.625%, 11/01/18 1,500,000 1,569,765
New York State Power Authority Revenue and General Purpose,
Series AA, MBIA Insured, Pre-Refunded, 6.25%, 1/01/23 ................ 2,000,000 2,097,780
Series Y, AMBAC Insured, Pre-Refunded, 6.50%, 1/01/11 ................ 2,255,000 2,347,996
Series Z, FGIC Insured, Pre-Refunded, 6.50%, 1/01/19 ................. 2,000,000 2,107,180
New York State Thruway Authority General Revenue, Series C,
FGIC Insured, Pre-Refunded, 6.00%, 1/01/25 ........................... 11,500,000 12,239,795
New York State Urban Development Corp. Revenue,Correctional Facilities
Service Contract, Series C, AMBAC Insured, 6.00%, 1/01/29 ............ 10,000,000 9,824,700
Niagara County GO, Public Improvement, MBIA Insured, 6.00%,
7/15/18 .............................................................. 500,000 503,470
7/15/19 .............................................................. 510,000 511,897
7/15/20 .............................................................. 610,000 611,287
7/15/21 .............................................................. 645,000 645,671
Niagara Falls Bridge Commission Toll Revenue, Refunding,
Series B, FGIC Insured, 5.25%, 10/01/21 .............................. 10,000,000 8,949,800
Niagara Falls Public Improvement, MBIA Insured,
6.85%, 3/01/19 ....................................................... 1,000,000 1,070,040
6.90%, 3/01/20 ....................................................... 500,000 535,360
6.90%, 3/01/21 ....................................................... 500,000 534,970
Niagara Falls Water Treatment Plant, MBIA
Insured, 7.00%, 11/01/12 ............................................. 1,200,000 1,315,632
Niagara Frontier Transportation Authority Airport Revenue,
Greater Buffalo International Airport,
Series A, AMBAC Insured, 6.25%, 4/01/24 .............................. 1,000,000 1,017,940
Series C, AMBAC Insured, 6.00%, 4/01/24 .............................. 1,440,000 1,428,941
North Hempstead GO, Refunding, Series B, FGIC Insured, 6.40%,
4/01/15 .............................................................. 1,065,000 1,150,317
4/01/16 .............................................................. 1,000,000 1,076,700
Phelps-Clifton GO, Springs Central School District,
AMBAC Insured, 5.65%, 6/15/13 ........................................ 1,355,000 1,368,536
Port Authority of New York and New Jersey Revenue,
Consolidated 71st Series, AMBAC Insured, 6.50%, 1/15/26 .............. 1,000,000 1,025,140
Consolidated 71st Series, MBIA Insured, 6.50%, 1/15/26 ............... 1,600,000 1,640,224
Consolidated 76th Series, AMBAC Insured, 6.50%, 11/01/26 ............. 4,230,000 4,372,255
Rensselear County GO, AMBAC Insured, 6.70%, 2/15/11 ..................... 810,000 904,252
St. Lawrence County IDA, Civic Facility Revenue,
St. Lawrence University Project, Series A, MBIA Insured,
5.00%, 7/01/28 ....................................................... 2,455,000 2,051,864
Suffolk County GO, Public Improvement, Refunding, Series B,
FGIC Insured, 6.20%,
5/01/11 .............................................................. 500,000 521,090
5/01/13 .............................................................. 500,000 520,070
Triborough Bridge and Tunnel Authority Revenue,
General Purpose, Refunding, Series Q, AMBAC Insured, 6.00%, 1/01/13 .. 1,500,000 1,502,970
General Purpose, Series B, MBIA Insured, 5.20%, 1/01/27 .............. 5,000,000 4,354,600
General Purpose, Series X, AMBAC Insured, 6.50%, 1/01/19 ............. 4,475,000 4,650,196
General Purpose, Series X, MBIA Insured, 6.50%, 1/01/19 .............. 2,750,000 2,857,663
Series T, MBIA Insured, Pre-Refunded, 7.00%, 1/01/20 ................. 1,100,000 1,150,633
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INSURED TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
Upper Mohawk Valley Regional Water Finance Authority Water System Revenue,
AMBAC Insured, 5.625%, 8/01/19 ........................................ $ 500,000 $ 479,105
AMBAC Insured, 5.75%, 8/01/29 ......................................... 550,000 524,473
Refunding, Series A, FSA Insured, 5.125%, 10/01/26 .................... 2,000,000 1,725,440
------------
TOTAL LONG TERM INVESTMENTS (COST $246,045,246) ........................ 245,029,901
------------
(a) SHORT TERM INVESTMENTS 2.4%
Long Island Power Authority Electric System Revenue,
Sub Series 5, Daily VRDN and Put,
3.20%, 5/01/33 ........................................................ 1,200,000 1,200,000
4.70%, 5/01/33 ........................................................ 200,000 200,000
New York City GO,
Series B, Sub Series B-5, MBIA Insured, Daily VRDN
and Put, 3.95%, 8/15/22 ............................................ 900,000 900,000
Sub Series A-5, Daily VRDN and Put, 3.40%, 8/01/15 .................... 200,000 200,000
Unlimited, Series B, Sub Series B-4,
Daily VRDN and Put, 3.40%, 8/15/23 ................................. 1,300,000 1,300,000
New York City Municipal Water Finance Authority
Water and Sewer System Revenue,
Series C, FGIC Insured, Daily VRDN and Put, 3.40%, 6/15/22 ............ 1,000,000 1,000,000
Series C, FGIC Insured, Daily VRDN and Put, 3.40%, 6/15/23 ............ 900,000 900,000
Series G, FGIC Insured, Daily VRDN and Put, 5.10%, 6/15/24 ............ 300,000 300,000
Puerto Rico Commonwealth Highway and Transportation Authority Revenue,
Series A, AMBAC Insured, Weekly VRDN and Put, 5.00%, 7/01/28 .......... 200,000 200,000
------------
TOTAL SHORT TERM INVESTMENTS (COST $6,200,000) ........................... 6,200,000
------------
TOTAL INVESTMENTS (COST $252,245,246) 98.8% .............................. 251,229,901
OTHER ASSETS, LESS LIABILITIES 1.2% ...................................... 3,146,471
------------
NET ASSETS 100.0% ........................................................ $254,376,372
============
</TABLE>
See glossary of terms on page 38.
(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
specific dates.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL HIGHLIGHTS
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------
1999(2) 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year .......... $ 10.77 $ 10.62 $ 10.28 $ 10.40 $ 9.60
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ...................... .52 .51 .54 .56 .55
Net realized and unrealized gains (losses) . (.70) .18 .35 (.12) .80
---------- ---------- ---------- ---------- ----------
Total from investment operations ............ (.18) .69 .89 .44 1.35
---------- ---------- ---------- ---------- ----------
Less distributions from net investment income (.51) (.54) (.55) (.56) (.55)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ................ $ 10.08 $ 10.77 $ 10.62 $ 10.28 $ 10.40
========== ========== ========== ========== ==========
Total return(1) ............................. (1.69%) 6.63% 8.89% 4.38% 14.31%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ............. $ 66,941 $ 80,689 $ 58,916 $ 44,822 $ 43,229
Ratios to average net assets:
Expenses ................................... .45% .45% .45% .37% .33%
Expenses excluding waiver and
payments by affiliate .................... .82% .83% .82% .83% .83%
Net investment income ...................... 4.95% 4.81% 5.26% 5.47% 5.51%
Portfolio turnover rate ..................... 17.98% 10.46% 6.87% 24.67% 24.68%
</TABLE>
(1)Total return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
(2)Based on average shares outstanding.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS 95.6%
Albany County Airport Authority Revenue, Series B,
FSA Insured, 4.75%, 12/15/13 ..................................... $ 1,850,000 $ 1,661,004
Albany IDA, Civic Facility Revenue, Albany Medical
Center Project, 5.75%, 5/01/09 ................................... 1,010,000 949,481
Buffalo School GO Series E, FSA Insured, 5.35%, 12/01/12 ............ 880,000 867,865
Cortland County IDA, Civic Facility Revenue,
Cortland Memorial Hospital Inc. Project, 6.15%, 7/01/02 .......... 65,000 65,460
Erie County GO,
FGIC Insured, 4.70%, 11/01/12 .................................... 700,000 645,876
FGIC Insured, 4.75%, 11/01/13 .................................... 525,000 476,296
Public Improvement, Series A, FGIC Insured, 5.625%, 10/01/12 ..... 1,335,000 1,360,739
Franklin County IDA, Lease Revenue,
County Correctional Facility Project, 6.375%, 11/01/02 ........... 35,000 35,934
Guam Airport Authority Revenue, Refunding, Series A, 6.00%, 10/01/03 260,000 266,960
Guam Power Authority Revenue, Series A, 6.00%, 10/01/04 ............. 1,300,000 1,377,168
MTA Service Contract Revenue, Transit Facilities,
Refunding, Series O, 5.75%, 7/01/07 .............................. 500,000 515,315
MTA Transportation Facilities Revenue, Series A, 6.00%, 7/01/15 ..... 1,500,000 1,508,610
New Rochelle Municipal Housing Authority Revenue,
Series A, 5.55%, 12/01/14 ........................................ 2,000,000 1,896,920
New York City GO,
Refunding, Series A, 6.375%, 8/01/05 ............................. 3,455,000 3,616,383
Refunding, Series B, 6.20%, 8/15/06 .............................. 1,000,000 1,056,990
Refunding, Series F, 6.00%, 8/01/12 .............................. 700,000 723,149
Series A, Pre-Refunded, 6.375%, 8/01/05 .......................... 1,745,000 1,839,492
Series G, 5.75%, 10/15/10 ........................................ 1,000,000 1,022,410
Series H, 7.00%, 2/01/06 ......................................... 200,000 210,804
Series H, Pre-refunded, 7.00%, 2/01/06 ........................... 140,000 148,274
New York City Health and Hospital Corp. Revenue, Health System,
Refunding, Series A, AMBAC Insured, 4.60%, 2/15/12 ............... 1,625,000 1,478,035
New York City IDA, Civic Facility Revenue,
New York Blood Center Inc. Project, ETM, 6.80%, 5/01/02 .......... 110,000 112,729
USTA National Tennis Center Project, FSA Insured, 6.00%, 11/15/03 1,875,000 1,964,756
USTA National Tennis Center Project, FSA Insured, 6.10%, 11/15/04 1,675,000 1,774,998
New York City Transitional Finance Authority Revenue,
Future Tax Secured, Series A, 4.75%, 11/15/13 .................... 1,000,000 896,450
New York State COP, Commissioner of General Services,
Executive Department, 6.50%, 3/01/00 ............................. 3,010,000 3,018,729
New York State Dormitory Authority Revenue,
City University, Refunding, Series U, 6.25%, 7/01/02 ............. 100,000 103,410
City University, Refunding, Series U, 6.35%, 7/01/04 ............. 1,720,000 1,814,445
Department of Health, 6.25%, 7/01/04 ............................. 690,000 725,142
Department of Health, 6.30%, 7/01/05 ............................. 735,000 777,843
Department of Health, Refunding, 5.125%, 7/01/13 ................. 1,410,000 1,253,857
North General Hospital, Refunding, Series G, 5.20%, 2/15/13 ...... 2,000,000 1,795,600
Nyack Hospital, Refunding, 6.00%, 7/01/06 ........................ 2,000,000 2,010,640
St. Agnes Hospital, Series A, 5.30%, 2/15/13 ..................... 1,380,000 1,251,108
W.K. Nursing Home Corp., FHA Insured, 5.55%, 8/01/08 ............. 300,000 301,407
New York State HFAR, Health Facilities of New York City,
Refunding, Series A, 6.00%, 11/01/08 ............................. 3,045,000 3,104,591
New York State Medical Care Facilities Finance Agency Revenue,
Hospital and Nursing Home, Refunding, FHA Insured, 5.70%, 2/15/05 1,500,000 1,533,870
Huntington Hospital Mortgage Project, Refunding,
Series A, 5.90%, 11/01/04 ....................................... 475,000 487,759
New York State Urban Development Corp. Revenue,
Correctional Facilities, Refunding, 5.75%, 1/01/13 ............... 500,000 497,285
Correctional Facilities Service Contract, Series A, 5.00%, 1/01/12 2,000,000 1,886,200
Correctional Facilities Service Contract, Series C,
AMBAC Insured, 6.00%, 1/01/15 ................................... 1,000,000 1,012,730
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK INTERMEDIATE-TERM TAX-FREE INCOME FUND AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG TERM INVESTMENTS (CONT.)
New York State Urban Development Corp. Revenue, (cont.)
Youth Facilities, 5.75%, 4/01/10 .................................. $ 400,000 $ 410,040
Youth Facilities, 5.875%, 4/01/10 ................................. 1,500,000 1,542,075
North Hempstead GO, Refunding, Series B, FGIC Insured, 6.00%, 7/15/14 1,715,000 1,774,493
Oneida-Herkimer Solid Waste Management Authority Solid
Waste Systems Revenue, Refunding, 6.65%, 4/01/05 .................. 125,000 133,915
Puerto Rico Commonwealth GO, 6.00%, 7/01/05 .......................... 1,000,000 1,054,340
Puerto Rico Electric Power Authority Revenue, Series T, 6.00%, 7/01/04 1,500,000 1,571,910
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 1,646,283
Puerto Rico Municipal Finance Agency GO, Series A,
5.875%, 7/01/06 ................................................... 300,000 309,828
FSA Insured, 5.60%, 7/01/05 ....................................... 300,000 315,834
United Nations Development Corp. Revenue, senior lien,
Refunding, Series A, ETM, 5.70%, 7/01/02 .......................... 350,000 358,789
Virgin Islands PFA Revenue, senior lien, Refunding,
Series A, 5.30%, 10/01/11 ......................................... 3,000,000 2,831,790
Virgin Islands Water and Power Authority Electric System Revenue,
Refunding, 5.125%, 7/01/13 ........................................ 1,775,000 1,640,473
Virgin Islands Water and Power Authority Water
System Revenue, Refunding,
4.875%, 7/01/06 ................................................... 1,985,000 1,876,597
5.00%, 7/01/09 .................................................... 520,000 479,950
-----------
TOTAL LONG TERM INVESTMENTS (COST $64,161,381) ........................ 63,993,031
-----------
(a)SHORT TERM INVESTMENTS 1.6%
Long Island New York Power Authority Electric System Revenue,
Sub Series 5, Daily VRDN and Put, 4.70%, 5/01/33 .................. 200,000 200,000
New York City GO, Unlimited, Series B, Sub Series B-4,
Daily VRDN and Put, 1.75%, 8/15/23 ................................ 200,000 200,000
New York City Municipal Water Finance Authority
Water and Sewer System Revenue, Series C, FGIC Insured,
Daily VRDN and Put, 1.70%, 6/15/23 ................................ 700,000 700,000
-----------
TOTAL SHORT TERM INVESTMENTS (COST $1,100,000) ....................... 1,100,000
-----------
TOTAL INVESTMENTS (COST $65,261,381) 97.2% ........................... 65,093,031
OTHER ASSETS, LESS LIABILITIES 2.8% .................................. 1,847,877
-----------
NET ASSETS 100.0% .................................................... $66,940,908
===========
</TABLE>
See glossary of terms on page 38.
(a)Variables 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 balances plus accrued
interest at specified dates.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
Financial Highlights
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ............................. .03 .03 .03 .03 .03
Less distributions from net investment income ...... (.03) (.03) (.03) (.03) (.03)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return(1) ...................................... 2.56% 2.79% 3.01% 2.79% 3.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .................. $ 69,164 $ 57,878 $ 63,720 $ 59,178 $ 61,079
Ratios to average net assets:
Expenses .......................................... .60% .60% .60% .60% .60%
Expenses excluding waiver and payments by affiliate .83% .83% .81% .86% .85%
Net investment income ............................. 2.54% 2.75% 2.97% 2.75% 3.06%
</TABLE>
(1) Total return is not annualized to periods less than one year.
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS 102.8%
Erie County GO,
Public Improvement Project, Series A, FGIC Insured, 5.25%, 8/15/00 ... $1,745,000 $1,760,647
Refunding, Series B, FGIC Insured, 5.25%, 8/15/00 .................... 1,085,000 1,094,729
Hempstead Town GO, AMBAC Insured, 5.00%, 2/15/00 .......................... 1,000,000 1,002,008
(a) Long Island Power Authority Electric System Revenue, sub lien,
Sub Series 2, Weekly VRDN and Put, 5.50%, 5/01/33 .................... 600,000 600,000
Sub Series 5, Daily VRDN and Put, 4.70%, 5/01/33 ..................... 3,050,000 3,050,000
Metropolitan Transit Authority, TECP, 3.50%, 1/20/00 ...................... 2,500,000 2,500,000
Nassau County GO, RAN, 4.25%, 3/15/00 ..................................... 1,000,000 1,001,283
(a) New York City GO,
Daily VRDN and Put, 5.00%, 8/01/17 ................................... 900,000 900,000
Series B, Sub Series B-3, MBIA Insured, Daily VRDN
and Put, 5.00%, 8/15/04 ........................................... 400,000 400,000
Sub Series A-5, Daily VRDN and Put, 5.00%, 8/01/15 ................... 500,000 500,000
Sub Series A-5, Daily VRDN and Put, 5.00%, 8/01/16 ................... 800,000 800,000
(a)New York City HDC,
MF Rental Housing Revenue, Brittany Development, Series A,
Weekly VRDN and Put, 5.50%, 6/15/29 ............................... 1,500,000 1,500,000
MF Rental Housing Revenue, Tribeca Tower, Series A,
FNMA Insured, Weekly VRDN and Put, 5.60%, 11/15/19 ................ 2,100,000 2,100,000
MFMR, Columbus Apartments, Series A,
Weekly VRDN and Put, 5.50%, 3/15/25 ............................... 2,000,000 2,000,000
(a) New York City Health and Hospital Corp. Revenue,
Health Systems, Series D, Weekly VRDN and Put, 5.50%, 2/15/26 ......... 1,500,000 1,500,000
(a) New York City IDA, Civic Facility Revenue,
American Civil Liberties, Weekly VRDN and Put, 5.35%, 6/01/12 ........ 900,000 900,000
National Audubon Society, Daily VRDN and Put, 4.75%, 12/01/14 ........ 500,000 500,000
New York City Municipal Water Finance Authority
Water and Sewer System Revenue,
Series A, Pre-Refunded, 6.00%, 6/15/00 ................................ 3,630,000 3,674,173
(a)Series C, FGIC Insured, Daily VRDN and Put, 5.00%, 6/15/22 ......... 1,700,000 1,700,000
(a)Series C, FGIC Insured, Daily VRDN and Put, 5.00%, 6/15/23 ......... 600,000 600,000
(a)Series G, FGIC Insured, Daily VRDN and Put, 4.70%, 6/15/24 ......... 300,000 300,000
New York City Transitional Finance Authority Revenue,
Future Tax Secured, Sub Series B-1, Daily VRDN and Put,
4.75%, 11/01/27 ....................................................... 200,000 200,000
New York City Trust Cultural Resources Revenue,
American Museum National History,
(a)Jewish Museum, Weekly VRDN and Put, 5.20%, 12/01/21 ................ 700,000 700,000
(a)Museum of Broadcasting, Weekly VRDN and Put, 5.20%, 5/01/14 ........ 2,000,000 2,000,000
Museum of Modern Art, Series One, AMBAC Insured, 5.00%, 1/01/00 ...... 1,325,000 1,325,000
Series B, AMBAC Insured, 3.70%, 7/01/00 .............................. 2,000,000 2,000,000
(a)Series B, MBIA Insured, Weekly VRDN and Put, 5.05%, 4/01/21 ........ 1,100,000 1,100,000
(a) New York Public Library, Series B, MBIA Insured,
Weekly VRDN and Put, 5.55%, 7/01/28 ................................... 2,600,000 2,600,000
(a) New York State Dormitory Authority Revenue,
Oxford University Press Inc., Weekly VRDN and Put, 5.04%, 7/01/25 .... 700,000 700,000
Sloan Kettering Cancer Center, Series C,
Weekly VRDN and Put, 5.50%, 7/01/19 .................................. 1,200,000 1,200,000
Sloan Kettering Memorial, Series B, Daily VRDN and Put, 4.95%, 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, 4.90%, 12/01/25 ..................................... 1,200,000 1,200,000
Orange and Rockland Project, Series A, AMBAC Insured,
Weekly VRDN and Put, 5.05%, 8/01/15 ............................... 1,350,000 1,350,000
Orange and Rockland Project, Series A,
Weekly VRDN and Put, 5.05%, 10/01/14 .............................. 1,000,000 1,000,000
Rochester Gas and Electric Project, Series C,
MBIA Insured, Weekly VRDN and Put, 5.05%, 8/01/32 ................. 1,500,000 1,500,000
New York State Environmental Facilities, TECP, 3.75%, 1/31/00 ............ 2,000,000 2,000,000
(a) New York State HFAR, Normandie Court I Project,
Weekly VRDN and Put, 5.20%, 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, 5.60%, 11/01/28 ........... 1,100,000 1,100,000
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
FRANKLIN NEW YORK TAX-EXEMPT MONEY FUND AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS (CONT.)
(a) New York State Job Development Authority Revenue,
State Guaranteed, Special Purpose, Series A-1 to A-25,
Daily VRDN and Put, 4.75%, 3/01/07 ............................ $ 1,060,000 $ 1,060,000
(a) New York State Local Government Assistance Corp.,
Series D, Weekly VRDN and Put, 5.20%, 4/01/25 ................. 200,000 200,000
Series F, Weekly VRDN and Put, 5.40%, 4/01/25 ................. 2,200,000 2,200,000
Weekly VRDN and Put, 5.40%, 4/01/23 ........................... 500,000 500,000
New York State Medical Care Facilities Finance Agency Revenue,
(a)Pooled Equipment Loan Program, II-A,
Weekly VRDN and Put, 5.10%, 11/01/03 ......................... 1,630,000 1,630,000
St. Lukes, 7.45%, 2/15/00 .................................... 1,000,000 1,024,111
New York State Power Authority Revenue and GP, 3.70%, 2/23/00 ..... 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, 4.90%, 5/01/19 ............................ 3,300,000 3,300,000
(a),(b)Puerto Rico Commonwealth GO,
TRAN, Series A-1, 4.50%, 7/30/00 .............................. 2,000,000 2,008,080
(a) Puerto Rico Commonwealth Government Development Bank,
Refunding, MBIA Insured, Weekly VRDN and Put, 4.95%, 12/01/15.. 1,500,000 1,500,000
(a) Puerto Rico Commonwealth Highway and Transportation Authority
Revenue, Series A, AMBAC Insured, Weekly VRDN and Put,
5.00%, 7/01/28 ................................................ 700,000 700,000
(a) Syracuse IDA, Civic Facility Revenue, Syracuse
University Project, Daily VRDN and Put, 4.95%, 3/01/23 ........ 400,000 400,000
Triborough Bridge and Tunnel Authority New York Revenues,
Weekly VRDN and Put, 5.40%, 1/01/13 ........................... 2,600,000 2,600,000
TOTAL INVESTMENTS (COST $71,080,031) 102.8% ....................... 71,080,031
OTHER ASSETS, LESS LIABILITIES (2.8%) ............................. (1,915,654)
------------
NET ASSETS 100.0% ................................................. $ 69,164,377
============
</TABLE>
See glossary of terms on page 38.
(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
STATEMENT OF INVESTMENTS, DECEMBER 31, 1999 (CONT.)
GLOSSARY OF TERMS
- --------------------------------------------------------------------------------
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
ETM - Escrow to Maturity
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FNMA - Federal National Mortgage Association
FSA - Financial Security Assistance (Some of the securities shown as FSA
Insured were originally insured by Capital Guaranty Insurance Co.
(CGIC) which was acquired by FSA in 1995 and no longer does business
under this name.)
GO - General Obligation
HDC - Housing Development Corp.
HFAR - Housing Finance Authority Revenue
IDA - Industrial Development Authority/Agency
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
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL STATEMENTS
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
----------------- -------------------- -----------------
<S> <C> <C> <C>
Assets:
Investments in securities:
Cost ................................................... $ 252,245,246 $ 65,261,381 $ 71,080,031
------------- ------------- -------------
Value .................................................. 251,229,901 65,093,031 71,080,031
Cash .................................................... -- 873,602 302,022
Receivables:
Capital shares sold .................................... 814,248 18,908 28,715
Interest ............................................... 4,758,986 1,211,877 356,380
------------- ------------- -------------
Total assets ........................................ 256,803,135 67,197,418 71,767,148
------------- ------------- -------------
Liabilities:
Payables:
Investment securities purchased ........................ -- -- 2,008,080
Capital shares redeemed ................................ 906,431 66,598 465,937
Affiliates ............................................. 179,082 41,234 35,512
Shareholders ........................................... 133,279 8,032 61,077
Distributions to shareholders ........................... 453,258 126,555 --
Funds advanced by custodian ............................. 718,015 -- --
Other liabilities ....................................... 36,698 14,091 32,165
------------- ------------- -------------
Total liabilities ................................... 2,426,763 256,510 2,602,771
------------- ------------- -------------
Net assets, at value ........................... $ 254,376,372 $ 66,940,908 $ 69,164,377
============= ============= =============
Net assets consist of:
Undistributed net investment income ..................... $ -- $ 96,314 $ --
Accumulated distributions in excess of
net investment income ................................ (61,823) -- --
Net unrealized depreciation ............................. (1,015,345) (168,350) --
Accumulated net realized loss ........................... (1,667,598) (2,919,611) --
Capital shares .......................................... 257,121,138 69,932,555 69,164,377
------------- ------------- -------------
Net assets, at value ................................ $ 254,376,372 $ 66,940,908 $ 69,164,377
============= ============= =============
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL STATEMENTS (CONTINUED)
STATEMENTS OF ASSETS AND LIABILITIES (CONT.)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
------------- ------------- -------------
<S> <C> <C> <C>
CLASS A:
Net assets, at value .................................. $ 242,067,527 $ 66,940,908 $69,164,377
----------------------------------------------------------------
Shares outstanding .................................... 22,474,662 6,643,120 69,164,377
----------------------------------------------------------------
Net asset value per share* ............................ $ 10.77 $ 10.08 $ 1.00
----------------------------------------------------------------
Maximum offering price per share
(net asset value per share / 95.75%,
97.75%, 100% respectively) ........................... $ 11.25 $ 10.31 $ 1.00
----------------------------------------------------------------
CLASS C:
Net assets, at value .................................. $ 12,308,845 -- --
----------------------------------------------------------------
Shares outstanding .................................... 1,130,992 -- --
----------------------------------------------------------------
Net asset value per share* ............................ $ 10.88 -- --
----------------------------------------------------------------
Maximum offering price per share
(net asset value per share / 99%) .................... $ 10.99 -- --
----------------------------------------------------------------
</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 YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
------------- ------------- -------------
<S> <C> <C> <C>
Investment income:
Interest ..................................................... $ 15,256,921 $ 4,095,354 $ 1,903,283
------------ ------------ ------------
Expenses:
Management fees (Note 3) ..................................... 1,456,859 472,120 378,583
Distribution fees (Note 3)
Class A ..................................................... 243,527 75,540 --
Class C ..................................................... 72,008 -- --
Transfer agent fees (Note 3) ................................. 110,008 27,763 66,282
Custodian fees ............................................... 2,525 870 795
Reports to shareholders ...................................... 34,491 7,127 28,960
Registration and filing fees ................................. 19,013 10,147 6,507
Professional fees ............................................ 24,691 11,715 9,414
Trustees' fees and expenses .................................. 14,979 4,224 3,395
Other ........................................................ 22,845 9,921 6,146
------------ ------------ ------------
Total expenses ........................................... 2,000,946 619,427 500,082
Expenses waived/paid by affiliate (Note 3) ............... -- (278,632) (136,383)
------------ ------------ ------------
Net expenses ............................................. 2,000,946 340,795 363,699
------------ ------------ ------------
Net investment income ................................ 13,255,975 3,754,559 1,539,584
------------ ------------ ------------
Realized and unrealized losses:
Net realized loss from investments ........................... (1,667,598) (360,080) --
Net unrealized depreciation on investments ................... (20,465,331) (4,629,244) --
------------ ------------ ------------
Net realized and unrealized loss .............................. (22,132,929) (4,989,324) --
------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations ............................................ $ (8,876,954) $ (1,234,765) $ 1,539,584
============ ============ ============
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL STATEMENTS (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
FRANKLIN NEW YORK INSURED FRANKLIN NEW YORK INTERMEDIATE-TERM
TAX-FREE INCOME FUND TAX-FREE INCOME FUND
------------------------------ ----------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income .............................. $ 13,255,975 $ 13,181,749 $ 3,754,559 $ 3,209,507
Net realized gain (loss) from investments .......... (1,667,598) 1,939,615 (360,080) 262,095
Net unrealized appreciation (depreciation)
on investments .................................... (20,465,331) 706,841 (4,629,244) 861,981
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations .................... (8,876,954) 15,828,205 (1,234,765) 4,333,583
Distributions to shareholders from:
Net investment income:
Class A .......................................... (12,758,387) (12,887,618) (3,723,462) (3,321,193)
Class C .......................................... (482,398) (294,131) -- --
In excess of net investment income:
Class A .......................................... -- (74,373) -- --
Class C .......................................... -- (1,697) -- --
Net realized gains:
Class A .......................................... (90,756) (1,299,492) -- --
Class C .......................................... (4,126) (44,540) -- --
------------- ------------- ------------- -------------
Total distributions to shareholders ................. (13,335,667) (14,601,851) (3,723,462) (3,321,193)
Capital share transactions: (Note 2)
Class A .......................................... (7,113,827) 8,241,153 (8,789,954) 20,760,497
Class C .......................................... 3,817,868 3,826,083 -- --
------------- ------------- ------------- -------------
Total capital share transactions .................... (3,295,959) 12,067,236 (8,789,954) 20,760,497
Net increase (decrease) in net assets ............ (25,508,580) 13,293,590 (13,748,181) 21,772,887
Net assets
Beginning of year ................................... 279,884,952 266,591,362 80,689,089 58,916,202
------------- ------------- ------------- -------------
End of year ......................................... $ 254,376,372 $ 279,884,952 $ 66,940,908 $ 80,689,089
============= ============= ============= =============
Undistributed net investment income (accumulated
distributions in excess of net
investment income) included in net assets:
End of year ........................................ $ (61,823) $ (77,013) $ 96,314 $ 65,217
============= ============= ============= =============
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
FINANCIAL STATEMENTS (CONTINUED)
STATEMENTS OF CHANGES IN NET ASSETS (CONT.)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
FRANKLIN NEW YORK
TAX-EXEMPT MONEY FUND
------------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ............................................................ $ 1,539,584 $ 1,656,684
------------ ------------
Distributions to shareholders from net investment income .......................... (1,539,584) (1,656,684)
Capital share transactions (Note 2) ............................................... 11,286,397 (5,841,785)
------------ ------------
Net increase (decrease) in net assets ........................................ 11,286,397 (5,841,785)
Net assets (there is no undistributed net investment income
at beginning or end of year):
Beginning of year ................................................................ 57,877,980 63,719,765
------------ ------------
End of year ...................................................................... $ 69,164,377 $ 57,877,980
============ ============
</TABLE>
See notes to financial statements.
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS
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 (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. INSURANCE: (CONT.)
Depending on the type of coverage, premiums for insurance are either added to
the cost basis of the security, included as an expense of the Fund, or paid by a
third party.
e. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amount of income and expense during the reporting
period. Actual results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The classes of shares offered within each of the funds are indicated below.
Effective January 1, 1999, Class I and Class II were renamed Class A and C,
respectively. Each class of shares differs by its initial sales load,
distribution fees, voting rights on matters affecting a single class and the
exchange privilege.
<TABLE>
<CAPTION>
<S> <C>
CLASS A CLASS A & CLASS C
- ----------------------------------------------------------------------------------------------------------------------------
Franklin New York Intermediate-Term Tax-Free Income Fund Franklin New York Insured Tax-Free Income Fund
Franklin New York Tax-Exempt Money Fund
</TABLE>
At December 31, 1999, there were an unlimited number of shares authorized (no
par value). Transactions in the Funds' shares were as follows:
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM TAX-EXEMPT
INCOME FUND TAX-FREE INCOME FUND MONEY FUND
------------------------------ ------------------------------ --------------------
SHARES AMOUNT SHARES AMOUNT AMOUNT
------------------------------ ------------------------------ --------------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES:
Year Ended December 31, 1999
Shares sold ............................ 3,689,287 $ 41,578,212 1,860,922 $ 19,607,579 $ 61,171,773
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) $ 11,286,397
------------ ------------ ------------ ------------ ------------
Year ended December 31, 1998
Shares sold ............................ 2,627,781 $ 30,700,744 3,890,300 $ 41,529,693 $ 51,502,356
Shares issued in reinvestment
of distributions ..................... 679,637 7,946,653 189,172 2,019,473 1,656,994
Shares redeemed ........................ (2,604,462) (30,406,244) (2,136,427) (22,788,669) (59,001,135)
------------ ------------ ------------ ------------ ------------
Net increase (decrease) ............ 702,956 $ 8,241,153 1,943,045 $ 20,760,497 $ (5,841,785)
============ ============ ============ ============ ============
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (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:
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
======== ===========
Year ended December 31, 1998
Shares sold ........................................................ 410,496 $ 4,858,484
Shares issued in reinvestment of distributions ..................... 21,224 250,668
Shares redeemed .................................................... (108,928) (1,283,069)
-------- -----------
Net increase ................................................... 322,792 $ 3,826,083
======== ===========
</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 TO FINANCIAL STATEMENTS (CONTINUED)
3. TRANSACTIONS WITH AFFILIATES (CONT.)
Distributors paid net commissions on sales of the Funds' shares, and received
contingent deferred sales charges for the year as follows:
<TABLE>
<CAPTION>
Franklin New York Franklin New York
Insured Tax-Free Intermediate-Term
Income Fund Tax-Free Income Fund
----------- --------------------
<S> <C> <C>
Net commissions paid ................................................... $68,294 $20,051
Contingent deferred sales charges ...................................... $ 5,852 $33,626
</TABLE>
The Funds paid transfer agent fees of $204,053 of which $188,463 was paid to
Investor Services.
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 New York Franklin New York
Insured Tax-Free Intermediate-Term
Income Fund Tax-Free Income 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.
At December 31, 1999, the net unrealized depreciation based on the cost of
investments for income tax purposes was as follows:
<TABLE>
<CAPTION>
FRANKLIN NEW YORK FRANKLIN NEW YORK
INSURED TAX-FREE INTERMEDIATE-TERM
INCOME FUND TAX-FREE INCOME FUND
----------- --------------------
<S> <C> <C>
Investments at cost ................. $252,245,246 $65,261,381
============ ===========
Unrealized appreciation ............. $ 5,733,011 $ 1,414,652
Unrealized depreciation ............. (6,748,356) (1,583,002)
------------ -----------
Net unrealized depreciation ......... $ (1,015,345) $ (168,350)
============ ===========
</TABLE>
FRANKLIN NEW YORK TAX-FREE TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the year
ended December 31, 1999, were as follows:
<TABLE>
<CAPTION>
Franklin New York Franklin New York
Insured Tax-Free Intermediate-Term
Income Fund Tax-Free Income Fund
----------- --------------------
<S> <C> <C>
Purchases ....... $40,046,924 $13,274,676
Sales ... ....... $50,211,891 $23,031,693
</TABLE>
6. CREDIT RISK
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.
7. CREDIT FACILITY
Certain Franklin Templeton Funds, including the Insured Fund and the
Intermediate-Term Fund, are participants in a $750 million senior unsecured
credit agreement for temporary or emergency purposes. The termination date of
the agreement is March 1, 2000. Interest is calculated on the Funds' borrowings
at market rates. At December 31, 1999, the Funds had not utilized this credit
facility.
FRANKLIN NEW YORK TAX-FREE TRUST
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF FRANKLIN NEW YORK TAX-FREE TRUST
In our opinion, the accompanying statements of assets and liabilities, including
the statements of investments, and the related statements of operations and
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the funds constituting the
Franklin New York Tax-Free Trust (hereafter referred to as the "Trust") at
December 31, 1999, the results of each of their operations for the year then
ended, the changes in each of their net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles in the
United States. These financial statements and financial highlights (hereinafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
San Francisco, California
February 3, 2000
FRANKLIN NEW YORK TAX-FREE TRUST
TAX DESIGNATION
Under Section 852(b)(5)(A) of the Internal Revenue Code, the funds hereby
designate 100% of the distributions paid from net investment income as
exempt-interest dividends for the fiscal year ended December 31, 1999.
