<PAGE>
<PAGE>
Dear Shareholder:
After a turbulent beginning this year, the bond market has settled into a stable
second half and economic indicators are now pointing to continuing growth and
low inflation. In September, the Federal Reserve again showed confidence in the
non-inflationary growth of the economy by deciding not to raise interest rates,
and with the release of October's economic indicators yields reached a
seven-month low. We feel this current economic environment could lead to a
rebound in both the government bond and the closely related municipal markets.
Investment Breakdown:
The New York Tax-Exempt Income
Fund, Inc. as of 10/31/96(3)
[Pie Chart]
<TABLE>
<S> <C>
[*] AAA - 58.3%
[*] AA - 7.4%
[*] A - 6.2%
[*] BBB - 23.8%
[*] BB - 4.3%
</TABLE>
Within this improving environment The New York Tax-Exempt Income Fund, Inc.
performed well, providing a total return at net asset value of 5.65% during the
12 months ended 10/31/96. The Fund paid shareholders tax-exempt income with a
dividend return of 6.36% for the month ended 10/31/96.(1) For New York State
residents in the 40.56% combined effective tax bracket, this tax-free dividend
would have been equivalent to a taxable dividend of 10.70%.(2)
U.S. Treasuries, which leveled off in late summer, rose from 6% in January to
about 7% in July, driven by investors' concerns that strong economic growth
would trigger higher inflation. This rate increase affected the municipal market
because municipal bond yields, although only about 80 to 85% of Treasury yields,
tend to track Treasuries closely. Muni investors, however, were affected less
severely than other fixed income income investors because most of the income
generated by municipals is generally free from federal income tax, making actual
yields more attractive.
Although economic factors such as declining unemployment and strong retail sales
still point toward growth, our outlook is for inflation to remain under control
for the following three reasons: the Federal Reserve's conservative monetary
policy over the last few years; the declining federal government deficit; and
higher corporate productivity that has caused unit labor costs to grow more
slowly than they have in the past.
<PAGE>
<PAGE>
The tax-exempt market is also benefiting from price supports created by a
diminishing supply of securities. We continue to see fewer issues and more
redemptions as bonds mature or are 'called' out of the market. This shrinking
supply dates back to 1985, when a surge of municipal bond issuance occurred just
prior to the Tax Reform Act of 1986. By today's standards, these bonds paid very
high rates of interest, and this year billions of dollars worth of these bonds
were redeemed by issuers who were contractually obligated to wait at least ten
years to 'call' them. Going forward, former bondholders, who received cash from
these redemptions, may fuel bond price increases further by reinvesting in the
smaller pool of municipal bonds.
When you look at all the current factors affecting this market: the prospect of
stable, lower interest rates and the shrinking supply of securities, the outlook
for municipal bond fund investors is very positive.
Thank you for your confidence in OppenheimerFunds. We look forward to helping
you reach your investment goals in the future.
JAMES C.SWAIN
James C.Swain
Chairman
The New York Tax-Exempt Income Fund, Inc.
BRIDGET A. MACASKILL
Bridget A. Macaskill
President
The New York Tax-Exempt Income Fund, Inc.
November 21, 1996
(1) Total return is based on the change in net asset value per share from
10/31/95 to 10/31/96, without deducting any brokerage costs. Dividend return is
determined by annualizing the October 1996 dividend of $0.053 and dividing by
the closing price on the American Stock Exchange of $10.00 per share on 11/1/96
(payment date). Past performance does not guarantee future results.
(2) Assumes a combined effective tax bracket of 40.56% for New York residents,
using the 36% federal and maximum New York State income tax rates, applied to
the switch between taxable and non-taxable investments. A portion of the Fund's
distributions may be subject to federal, state and local income taxes. For
investors subject to alternative minimum income tax, a portion of the Fund's
distributions may increase that tax.
(3) Credit allocations and portfolio composition are subject to change. Chart is
based on total investments at market value.
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS October 31, 1996
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Ratings: Market
Moody's/S&P's/Fitch's Value
(Unaudited) Face Amount See Note 1
---------------------- ----------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS AND NOTES -- 98.5%
NEW YORK -- 88.3%
Babylon, NY IDA RR RB, Ogden Martin Systems, Inc., Series C,
8.50%, 1/1/19............................................. Aaa/AAA $ 985,000 $ 1,084,357
MTA NY RB, Transportation Facilities Service Contracts,
Prerefunded, Series 1, 8.50%, 7/1/17...................... Aaa/AAA 500,000 525,560
NYC GOB:
Inverse Floater, 7.129%, 8/1/08(1)........................ Baa1/BBB+ 700,000 646,625
Prerefunded, Series A, 8.75%, 11/1/15..................... Aaa/AAA 1,000,000 1,063,380
Series D, 7.50%, 2/1/19................................... Baa1/BBB+ 1,300,000 1,438,255
NYC Health & Hospital Corp. RRB, AMBAC Insured, Inverse
Floater, 7.504%, 2/15/23(1)............................... Aaa/AAA/AAA 1,000,000 932,750
NYC IDA RB, VISY Paper, Inc. Project, 7.95%, 1/1/28......... NR/NR 1,250,000 1,327,725
NYC Municipal Assistance Corp. RB:
Series 61, MBIA Insured, 6.875%, 7/1/07................... Aaa/AAA 500,000 519,015
Series 62, 6.90%, 7/1/07.................................. Aa/AA-/AA 500,000 518,220
NYC MWFA WSS RB, Prerefunded, Series A, 9%, 6/15/17......... Aaa/AAA 500,000 526,050
NYS DA:
RB, Judicial Facilities Lease, Escrowed to Maturity, BIG
Insured, 7.375%, 7/1/16................................ Aaa/AAA 250,000 296,135
RRB, Long Island Jewish Medical Center, Series A, FHA
Insured, 7.75%, 8/15/27................................ Aa/AAA 1,000,000 1,057,160
NYS ERDAEF RB, Long Island Lighting Co., Series C, 6.90%,
8/1/22.................................................... Ba1/BB+ 1,000,000 1,009,210
NYS ERDAPC RB, Rochester Gas & Electric Co. Project, Series
C, 8.375%, 12/1/28........................................ Baa1/BBB+ 250,000 270,915
NYS GORB, 9.875%, 11/15/05.................................. A/A-/A+ 400,000 540,408
NYS HFA RB, State University Construction Project,
Prerefunded, Series A, 8.30%, 5/1/18...................... Aaa/AAA 750,000 797,700
NYS HFASC RB, Prerefunded, Series A, 7.375%, 9/15/21........ Aaa/AAA 575,000 660,491
NYS MCFFA RB:
Bronx-Lebanon Hospital, Series A, BIG Insured, 7.10%,
2/15/27................................................ Aaa/AAA 1,000,000 1,027,370
Mental Health Services Facilities, Prerefunded, Series A,
8.875%, 8/15/07........................................ Aaa/AAA 155,000 164,167
Mental Health Services Facilities, Prerefunded, Series B,
7.875%, 8/15/20........................................ Aaa/AAA 350,000 398,055
Mental Health Services Facilities, Unrefunded Balance,
Series A, 8.875%, 8/15/07.............................. Baa1/BBB+ 345,000 364,320
Mental Health Services Facilities, Unrefunded Balance,
Series B, 7.875%, 8/15/20.............................. Baa1/BBB+ 1,000,000 1,118,460
</TABLE>
3
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Ratings: Market
Moody's/S&P's/Fitch's Value
(Unaudited) Face Amount See Note 1
---------------------- ----------- -----------
<S> <C> <C> <C>
NYS Mtg. Agency RB:
Inverse Floater, 6.816%, 10/1/24(1)............................... NR/NR $1,000,000 $840,250
Ninth Series E, 8.375%, 4/1/18.................................... Aa/NR 655,000 680,669
NYS PAU:
RB, Prerefunded, Series V, 8%, 1/1/17............................. NR/AA 500,000 532,975
RRB, Series V, MBIA Insured, 7.875%, 1/1/13....................... Aaa/AAA 450,000 479,443
Onondaga Cnty., NY RR Agency RB, Resource Recovery Facilities
Project, 7%, 5/1/15............................................... Baa/NR/A- 900,000 924,768
Suffolk Cnty., NY GORB, AMBAC Insured, 10%, 11/1/02................. Aaa/AAA/AAA 250,000 318,955
TBTA of NY General Purpose RB, Prerefunded, Series K, 8.25%,
1/1/17............................................................ Aaa/AAA 1,040,000 1,068,610
-----------
21,131,998
U.S. POSSESSIONS -- 10.2%
PR Commonwealth Aqueduct & Sewer Authority RB, Escrowed to Maturity,
10.25%, 7/1/09.................................................... Aaa/AAA 675,000 937,562
PR EPA RRB, Prerefunded, Series K, 9.375%, 7/1/17................... Aaa/AAA 1,000,000 1,057,320
PR Industrial, Medical & Environmental PC Facilities Financing
Authority RB, American Airlines, Inc. Project, Series A, 6.45%,
12/1/25........................................................... Baa1/BB+ 435,000 450,060
----------
2,444,942
----------
Total Investments, at Value (Cost $22,594,860).................................... 98.5% 23,576,940
Other Assets Net of Liabilities................................................... 1.5 365,158
------ -----------
Net Assets........................................................................ 100.0% $29,942,098
------ -----------
------ -----------
(1) Represents the current interest rate for a variable rate bond. These bonds
known as 'inverse floaters' pay interest at a rate that varies inversely
with short-term interest rates. As interest rates rise, inverse floaters
produce less current income. Their price may be more volatile than the price
of a comparable fixed-rate security. Inverse floaters amount to $2,419,625
or 10.11% of the Fund's net assets at October 31, 1996.
As of October 31, 1996, securities subject to the alternative minimum tax
amounted to $4,213,287 or 17.60% of the Fund's net assets.
4
<PAGE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
The New York Tax-Exempt Income Fund, Inc.
Distribution of investments by industry, as a percentage of total
investments at value, is as follows:
</TABLE>
<TABLE>
<CAPTION>
Market
Industry Value Percent
- -------- -------- -------
<S> <C> <C>
General Obligation.................................................. $ 4,007,623 17.0%
Lease Rental........................................................ 3,527,188 15.0
Hospital/Healthcare................................................. 3,017,280 12.8
Electric Utilities.................................................. 2,069,739 8.8
Resource Recovery................................................... 2,009,125 8.5
Single Family Housing............................................... 1,520,919 6.5
Water Utilities..................................................... 1,463,612 6.2
Manufacturing, Non-Durable Goods.................................... 1,327,725 5.6
Pollution Control................................................... 1,280,125 5.4
Highways............................................................ 1,068,610 4.5
Sales Tax........................................................... 1,037,235 4.4
Higher Education.................................................... 797,700 3.4
Corporate Backed.................................................... 450,059 1.9
----------- -------
$23,576,940 100.0%
----------- -------
----------- -------
</TABLE>
To simplify the listings of The New York Tax-Exempt Income Fund, Inc.
holdings in the Statement of Investments, we have abbreviated the descriptions
of many of the securities per the table below:
<TABLE>
<S> <C>
DA Dormitory Authority
EPA Electric Power Authority
ERDAEF Energy Research & Development Authority
Electric Facilities
ERDAPC Energy Research & Development Authority
Pollution Control
GOB General Obligation Bonds
GORB General Obligation Refunding Bonds
HFA Housing Finance Agency
HFASC Housing Finance Agency Service Contract
IDA Industrial Development Authority
MCFFA Medical Care Facilities Finance Agency
MTA Metropolitan Transportation Authority
MWFA Municipal Water Finance Authority
NYC New York City
NYS New York State
PAU Power Authority
PC Pollution Control
RB Revenue Bonds
RR Resource Recovery
RRB Revenue Refunding Bonds
TBTA Triborough Bridge & Tunnel Authority
WSS Water & Sewer System
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $22,594,860) -- see accompanying statement.................... $23,576,940
Cash........................................................................................ 168,469
Receivables:
Investments sold.......................................................................... 887,656
Interest.................................................................................. 512,662
Other....................................................................................... 3,674
-----------
Total assets........................................................................... 25,149,401
-----------
LIABILITIES:
Payables and other liabilities:
Investments purchased..................................................................... 1,049,601
Dividends................................................................................. 130,932
Transfer agent and accounting service fees................................................ 1,604
Other..................................................................................... 25,166
-----------
Total liabilities...................................................................... 1,207,303
-----------
NET ASSETS.................................................................................. $23,942,098
-----------
-----------
COMPOSITION OF NET ASSETS:
Par value of shares of capital stock........................................................ $ 24,704
Additional paid-in capital.................................................................. 22,912,752
Undistributed net investment income......................................................... 59,636
Accumulated net realized loss on investment transactions.................................... (37,074)
Net unrealized appreciation on investments -- Note 3...................................... 982,080
-----------
NET ASSETS -- applicable to 2,470,421 shares of capital stock outstanding................. $23,942,098
-----------
-----------
NET ASSET VALUE PER SHARE................................................................... $9.69
-----
-----
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended October 31, 1996
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<S> <C>
INVESTMENT INCOME -- Interest.............................................................. $1,767,852
----------
EXPENSES:
Management fees -- Note 4.................................................................. 119,243
Shareholder reports.......................................................................... 31,248
Transfer agent and accounting service fees -- Note 4....................................... 25,635
Legal and auditing fees...................................................................... 10,470
Custodian fees and expenses.................................................................. 6,153
Directors' fees and expenses................................................................. 2,009
Registration and filing fees................................................................. 7,500
Other........................................................................................ 309
----------
Total expenses.......................................................................... 202,567
Less expenses paid indirectly -- Note 4............................................... (3,564)
----------
Net expenses............................................................................ 199,003
----------
NET INVESTMENT INCOME........................................................................ 1,568,849
----------
REALIZED AND UNREALIZED LOSS:
Net realized loss on investments............................................................. (30,729)
Net change in unrealized appreciation or depreciation on investments......................... (221,504)
----------
NET REALIZED AND UNREALIZED LOSS............................................................. (252,233)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......................................... $1,316,616
----------
----------
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income............................................................... $ 1,568,849 $ 1,531,652
Net realized loss................................................................... (30,729) (2,641)
Net change in unrealized appreciation or depreciation............................... (221,504) 1,126,994
----------- -----------
Net increase in net assets resulting from operations................................ 1,316,616 2,656,005
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME................................ (1,562,020) (1,541,374)
CAPITAL STOCK TRANSACTIONS:
Proceeds from shares issued to shareholders in reinvestment of dividends and
distributions -- Note 2......................................................... 308,225 296,884
----------- -----------
NET ASSETS:
Total increase...................................................................... 62,821 1,411,515
Beginning of period................................................................. 23,879,277 22,467,762
----------- -----------
End of period (including undistributed net investment income of $59,636 and $53,705,
respectively)..................................................................... $23,942,098 $23,879,277
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
The New York Tax-Exempt Income Fund, Inc.
<TABLE>
<CAPTION>
Year Ended October 31,
---------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period........................ $ 9.79 $ 9.33 $ 10.77 $ 10.37 $ 10.22
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income.................................. .64 .63 .65 .66 .65
Net realized and unrealized gain (loss)................ (.10) .47 (1.18) .55 .18
------- ------- ------- ------- -------
Total income (loss) from investment
operations........................................ .54 1.10 (.53) 1.21 .83
------- ------- ------- ------- -------
Dividends and distributions to shareholders:
Dividends from net investment income................... (.64) (.64) (.66) (.74) (.64)
Distributions from net realized gain................... -- -- -- (.07) (.04)
Distributions in excess of net realized gain........... -- -- (.25) -- --
------- ------- ------- ------- -------
Total dividends and distributions to shareholders.... (.64) (.64) (.91) (.81) (.68)
------- ------- ------- ------- -------
Net asset value, end of period.............................. $ 9.69 $ 9.79 $ 9.33 $ 10.77 $ 10.37
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Market value, end of period................................. $ 10.00 $ 9.63 $ 9.50 $ 12.63 $ 10.88
TOTAL RETURN, AT MARKET VALUE(1)............................ 10.82% 8.32% (17.70)% 25.11% 16.09%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................... $23,942 $23,879 $22,468 $25,516 $24,266
Average net assets (in thousands)........................... $23,840 $23,143 $23,852 $24,936 $24,042
Ratios to average net assets:
Net investment income.................................. 6.58% 6.62% 6.53% 6.26% 6.32%
Expenses(2)............................................ 0.85% 0.88% 0.87% 0.84% 0.97%
Portfolio turnover rate(3).................................. 13% 12% 6% 28% 9%
</TABLE>
(1) Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and
a sale at the current market price on the last business day of the period.
(2) Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not
been adjusted.
(3) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the period ended October 31, 1996 were $4,388,945
and $3,142,587, respectively.
See accompanying Notes to Financial Statements.
9
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The New York Tax-Exempt Income Fund, Inc.
1. SIGNIFICANT ACCOUNTING POLICIES
The New York Tax-Exempt Income Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end
management investment company. The Fund seeks to provide high current income
which is free from federal, New York State and New York City income taxes. The
Fund's investment adviser is OppenheimerFunds, Inc. (the Manager). The following
is a summary of significant accounting policies consistently followed by the
Fund.
Investment Valuation -- Portfolio securities are valued at the close of the
American Stock Exchange on the last day of each week on which day the American
Stock Exchange is open. Listed and unlisted securities for which such
information is regularly reported are valued at the last sale price of the day
or, in the absence of sales, at values based on the closing bid or the last sale
price on the prior trading day. Long-term and short-term 'non-money market`!'
debt securities are valued by a portfolio pricing service approved by the Board
of Directors. Such securities which cannot be valued by the approved portfolio
pricing service are valued using dealer-supplied valuations provided the Manager
is satisfied that the firm rendering the quotes is reliable and that the quotes
reflect current market value, or are valued under consistently applied
procedures established by the Board of Directors to determine fair value in good
faith. Short-term 'money market type`!' debt securities having a remaining
maturity of 60 days or less are valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium or discount.
Federal Taxes -- The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
Distributions to Shareholders -- The Fund intends to declare and pay dividends
from net investment income monthly. Distributions from net realized gains on
investments, if any, will be declared at least once each year.
Classification of Distributions to Shareholders --
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes primarily because of premium amortization
for tax purposes. The character of the distributions made during the year from
net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gain (loss) was recorded by the
Fund.
During the year ended October 31, 1996, the Fund adjusted the classification of
net investment income and capital gain (loss) to reflect the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. Accordingly, during the year ended October 31, 1996,
amounts have been reclassified to reflect a decrease in undistributed net
investment income of $898. Accumulated net realized loss on investments was
decreased by the same amount.
Other -- Investment transactions are accounted for on the date the investments
are purchased or sold (trade date). Original issue discount on securities
purchased is amortized over the life of the respective securities, in
10
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
The New York Tax-Exempt Income Fund, Inc.
accordance with federal income tax requirements. For bonds acquired after April
30, 1993, on disposition or maturity, taxable ordinary income is recognized to
the extent of the lesser of gain or market discount that would have accrued over
the holding period. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes. The Fund concentrates
its investments in New York and, therefore, may have more credit risks related
to the economic conditions of New York than a portfolio with a broader
geographical diversification.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
2. CAPITAL STOCK
The Fund has authorized 250,000,000 shares of $.01 par value capital stock. Of
these shares, 204,579 shares were reserved for issuance under a Dividend
Reinvestment and Cash Purchase Plan. Transactions in shares of capital stock
were as follows:
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------
1996 1995
----------------- -----------------
Shares Amount Shares Amount
------ -------- ------ --------
<S> <C> <C> <C> <C>
Net increase from
dividends and
distributions
reinvested........ 31,639 $308,225 30,958 $296,884
------ -------- ------ --------
------ -------- ------ --------
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1996, net unrealized appreciation on investments of $982,080 was
composed of gross appreciation of $1,234,089, and gross depreciation of
$252,009.
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.50% on the Fund's
average annual net assets.
The Manager acts as the accounting agent for the Fund at an annual fee of
$12,000, plus out-of-pocket costs and expenses reasonably incurred.
Shareholder Financial Services, Inc. (SFSI), a wholly owned subsidiary of the
Manager, is the transfer agent and registrar for the Fund. Fees paid to SFSI are
based on the number of accounts and the number of shareholder transactions, plus
out-of-pocket costs and expenses.
Expenses paid indirectly represent a reduction of custodian fees for earnings on
cash balances maintained by the Fund.
11
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The New York Tax-Exempt Income Fund, Inc.
The Board of Directors and Shareholders of
The New York Tax-Exempt Income Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of The New York Tax-Exempt Income Fund, Inc. as of
October 31, 1996, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended October 31, 1996 and
1995 and the financial highlights for the period November 1, 1991 to October 31,
1996. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1996 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The New York
Tax-Exempt Income Fund, Inc. at October 31, 1996, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
November 21, 1996
12
<PAGE>
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
The New York Tax-Exempt Income Fund, Inc.
In early 1997, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1996. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended October 31,
1996 are eligible for the corporate dividend-received deduction. The dividends
were derived from interest on municipal bonds and are not subject to federal
income tax. To the extent a shareholder is subject to any state or local tax
laws, or to alternative minimum tax, some or all of the dividends received may
be taxable.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax adviser for specific guidance.
SHAREHOLDER MEETING (Unaudited)
On May 21, 1996, an annual shareholder meeting was held at which the three
Directors identified below were elected and the selection of Deloitte & Touche
LLP as the independent certified public accountants and auditors of the Fund for
the fiscal year beginning November 1, 1995 was ratified (Proposal No. 1). In
addition, the terms of office of the following Directors continued after the
meeting: Messrs. William A. Baker, Charles Conrad, Jr., Raymond J. Kalinowski,
C. Howard Kast, Robert M. Kirchner, Ned M. Steel and Ms. Bridget A. Macaskill.
The following is a report of the votes cast:
<TABLE>
<CAPTION>
Withheld/ Broker
Nominee For Against Abstain Non-Votes Total
- ------------------------------------------ --------- ------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
C. Howard Kast............................ 1,959,590 -- 21,582 470,915 2,452,087
Robert M. Kirchner........................ 1,960,465 -- 20,707 470,915 2,452,087
Ned M. Steel.............................. 1,959,590 -- 21,582 470,915 2,452,087
Proposal No. 1............................ 1,945,861 14,550 20,761 470,915 2,452,087
</TABLE>
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THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
GENERAL INFORMATION CONCERNING
THE FUND
The New York Tax-Exempt Income Fund, Inc. is a closed-end investment company
whose shares trade on the American Stock Exchange (the ASE). The Fund seeks to
provide high current income which is exempt from federal, New York State and New
York City income taxes. A portion of the Fund's distributions may be subject to
income tax. For investors subject to the alternative minimum income tax, a
portion of the Fund's distributions may increase that tax. The Fund seeks to
achieve its objective by investing in municipal obligations, the income from
which is generally tax-exempt as described above. The Fund may invest in
municipal lease obligations, municipal obligations with variable or floating
interest rates and certain derivative investments, such as inverse floaters. The
Fund may also use certain hedging instruments. The investment adviser (the
Manager) of the Fund is OppenheimerFunds, Inc.
The Portfolio Manager of the Fund is Robert E. Patterson, who also serves as
Vice President of the Fund and Senior Vice President of the Manager. Mr.
Patterson has been the person principally responsible for the day-to-day
management of the Fund's portfolio since February 1992. During the past six
years, Mr. Patterson has also served as an officer and portfolio manager for
certain mutual funds managed by the Manager (Oppenheimer funds).
DIVIDEND REINVESTMENT AND CASH
PURCHASE PLAN
Pursuant to the Fund's Dividend Reinvestment and Cash Purchase Plan (the Plan),
as to shares of the Fund (Shares) not registered in nominee name, all dividends
and capital gains distributions (Distributions) declared by the Fund will be
automatically reinvested in additional full and fractional Shares unless a
shareholder elects to receive cash. If Shares are registered in nominee name,
the shareholder should consult the nominee if the shareholder desires to
participate in the Plan. Shareholders that participate in the Plan
(Participants) may, at their option, make additional cash investments in Shares,
semi-annually in amounts of at least $100, through payment to Shareholder
Financial Services, Inc., the agent for the Plan (the Agent), accompanied by a
service fee of $.75.
Depending upon the circumstances hereinafter described, Plan Shares will be
acquired by the Agent for the Participant's account through receipt of newly
issued Shares or the purchase of outstanding Shares on the open market. If the
market price of Shares on the relevant date (normally the payment date) equals
or exceeds their net asset value, the Agent will ask the Fund for payment of the
Distribution in additional Shares at the greater of the Fund's net asset value
determined as of the date of purchase or 95% of the then-current market price.
If the market price is lower than net asset value, the Distribution will be paid
in cash, which the Agent will use to buy Shares on the ASE, or otherwise on the
open market to the extent available. If the market price exceeds the net asset
value before the Agent has completed its purchases, the average purchase price
per Share paid by the Agent may exceed the net asset value, resulting in fewer
Shares being acquired than if the Distribution had been paid in Shares issued by
the Fund.
Participants may elect to withdraw from the Plan at any time and thereby receive
cash in lieu of Shares by sending appropriate written instructions to the Agent.
Elections received by the Agent will be effective only if received more than ten
days prior to the record date for any Distribution; otherwise, such
termina-
14
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tion will be effective shortly after the investment of such Distribution with
respect to any subsequent Distribution. Upon withdrawal from or termination of
the Plan, all Shares acquired under the Plan will remain in the Participant's
account unless otherwise requested. For full Shares, the Participant may either:
(1) receive without charge a share certificate for such Shares; or (2) request
the Agent (after receipt by the Agent of signature guaranteed instructions by
all registered owners) to sell the Shares acquired under the Plan and remit the
proceeds less any brokerage commissions and a $2.50 service fee. Fractional
Shares may either remain in the Participant's account or be reduced to cash by
the Agent at the current market price with the proceeds remitted to the
Participant. Shareholders who have previously withdrawn from the Plan may rejoin
at any time by sending written instructions signed by all registered owners to
the Agent.
There is no direct charge for participation in the Plan; all fees of the Agent
are paid by the Fund. There are no brokerage charges for Shares issued directly
by the Fund. However, each Participant will pay a pro rata share of brokerage
commissions incurred with respect to open market purchases of Shares to be
issued under the Plan. Participants will receive tax information annually for
their personal records and to assist in federal income tax return preparation.
The automatic reinvestment of Distributions does not relieve Participants of any
income tax that may be payable on Distributions.
The Plan may be terminated or amended at any time upon 30 days' prior written
notice to Participants which, with respect to a Plan termination, must precede
the record date of any Distribution by the Fund. Additional information
concerning the Plan may be obtained by shareholders holding Shares registered
directly in their names by writing the Agent, Shareholder Financial Services,
Inc., P.O. Box 173673, Denver, CO 80217-3673 or by calling 1-800-647-7374.
Shareholders holding Shares in nominee name should contact their brokerage firm
or other nominee for more information.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the ASE section of
newspapers. The Fund's ASE trading symbol is XTX. Weekly comparative net asset
value (NAV) and market price information about The New York Tax-Exempt Income
Fund, Inc. is published each Monday in The Wall Street Journal and The New York
Times and each Saturday in Barron's in a table under the heading 'Closed-End
Bond Funds.'
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THE NEW YORK TAX-EXEMPT INCOME FUND, INC.
Officers and Directors
James C. Swain, Chairman and
Chief Executive Officer
Bridget A. Macaskill, Director and
President
Robert G. Avis, Director
William A. Baker, Director
Charles Conrad, Jr., Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
George C. Bowen, Vice President,
Treasurer and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Robert E. Patterson, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
Investment Adviser
OppenheimerFunds, Inc.
Transfer Agent and Registrar
Shareholder Financial Services, Inc.
Custodian of Portfolio Securities
Citibank, N.A.
Independent Auditors
Deloitte & Touche LLP
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of The New York Tax-Exempt
Income Fund, Inc. It does not offer for sale or solicit orders to buy
any securities.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that periodically the Fund may purchase its shares of
capital stock in the open market at prevailing market prices.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of the
principal amount invested.
RA0875.001.1296 [Logo] Printed on recycled paper
1996 ANNUAL REPORT
THE
NEW YORK
TAX-EXEMPT
INCOME
FUND, INC.
OCTOBER 31, 1996
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