UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3479
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FRANKLIN NEW YORK-TAX-FREE INCOME FUND
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(Exact name of registrant as specified in charter)
ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
(Address of principal executive offices) (Zip code)
MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)
Registrant's telephone number, including area code: (650) 312-2000
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Date of fiscal year end: 5/31
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Date of reporting period: 5/31/03
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ITEM 1. REPORTS TO STOCKHOLDERS.
MAY 31, 2003
[Statue of Liberty art omitted]
ANNUAL REPORT AND SHAREHOLDER LETTER
TAX-FREE INCOME
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Franklin New York
Tax-Free Income Fund
[LOGO OMITTED]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
Franklin o Templeton o Mutual Series
Franklin Templeton Investments
GAIN FROM OUR PERSPECTIVE
Franklin Templeton's distinct multi-manager structure combines the
specialized expertise of three world-class investment management
groups--Franklin, Templeton and Mutual Series.
Each of our portfolio management groups operates autonomously, relying on its
own research and staying true to the unique investment disciplines that underlie
its success.
FRANKLIN. Founded in 1947, Franklin is a leader in tax-free investing and a
driving force in fixed income investing around the globe. They also bring
expertise in growth- and value-style U.S. equity investing.
TEMPLETON. Founded in 1940, Templeton pioneered international investing and, in
1954, launched what has become the industry's oldest global fund. Today, with
research offices in over 25 countries, they offer investors the broadest global
reach in the industry.
MUTUAL SERIES. Established in 1949, Mutual Series is dedicated to a unique style
of value investing, searching aggressively for opportunity among undervalued
stocks, arbitrage situations and distressed companies.
Because our management groups work independently and adhere to distinctly
different investment approaches, Franklin, Templeton and Mutual Series funds
typically have a low overlap of securities. That's why our funds can be used to
build truly diversified portfolios covering every major asset class.
At Franklin Templeton Investments, we seek to consistently provide investors
with exceptional risk-adjusted returns over the long term, as well as the
reliable account services that have helped us become one of the most trusted
names in financial services.
SPECIALIZED EXPERTISE
TRUE DIVERSIFICATION
RELIABILITY YOU CAN TRUST
MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS
[Building Art omitted]
Not part of the annual report
Contents
SHAREHOLDER LETTER ............ 1
SPECIAL FEATURE:
Understanding Your
Tax-Free Income Fund .......... 6
ANNUAL REPORT
Franklin New York Tax-Free
Income Fund ................... 10
Performance Summary ........... 14
Financial Highlights &
Statement of Investments ...... 19
Financial Statements .......... 36
Notes to Financial Statements . 39
Independent Auditors' Report .. 43
Tax Designation ............... 44
Board Members and Officers .... 45
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Shareholder Letter
Dear Shareholder:
We are pleased to bring you Franklin New York Tax-Free Income Fund's annual
report for the fiscal year ended May 31, 2003. The 12 months under review
witnessed mixed signals for the U.S. economy, the geopolitical landscape and
financial markets. The U.S. economy grew moderately, but unevenly, during the
period. Despite rising unemployment and anemic business spending, consumer
spending held its ground for the most part. In the second half of the fiscal
year, financial markets experienced significant volatility, but most equity
markets showed smaller losses and some gains compared with the first half.
Uncertainty surrounding a U.S.-led war in Iraq dominated the headlines, and as
the war began in mid-March, concerns about its duration, outcome and
repercussions took center stage. At period-end, with major combat over,
attention returned to the U.S. economy. Global business confidence began to
revive, consumer attitudes brightened and inflation remained tame. We believe
financial market volatility will continue, however, until the economy shows more
definite and sustained strength.
Largely as a result of investor uncertainty, the bond market performed well as
investors diversified into fixed income securities. At the beginning of the
reporting period, the 10-year Treasury note yielded 5.08%, and dropped to 3.37%
on May 31, 2003. Over the same period, the Dow Jones Industrial Average,
Standard & Poor's 500 Composite Index (S&P 500) and Nasdaq Composite Index fell
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NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
Not part of the annual report | 1
8.68%, 0.60% and 8.07%, respectively, which tended to steer investors toward
investments generally considered more conservative, such as municipal and U.S.
government bonds.1
BOND MARKET OVERVIEW
Bond issuance hit record levels in 2002, largely because of the low interest
rate environment, which created attractive opportunities for municipalities to
refinance higher interest rate debt and borrow inexpensively for current finance
needs. At the same time, demand was very healthy, due in part to the "flight to
quality" resulting from negative equity market performance and uncertainty.
Although most investors sought the safety of Treasury obligations, municipal
bonds benefited as well. Lower long-term interest rates, tame inflation and
proactive monetary policy by the Federal Reserve Board (the Fed) contributed to
solid price performance for bonds, because long-term interest rates and bond
prices move in opposite directions.
During the year under review, the yield for the Bond Buyer Municipal Bond Index
(Bond Buyer 40), an indicator of municipal bond market performance, fell from
5.37% at the beginning of the reporting period to 4.83% on May 31, 2003.2 In our
opinion, the U.S. government bond market outperformed the municipal bond market
primarily because of unprecedented municipal bond supply and the overwhelming
investor demand Treasury bonds generally experience in times of global
geopolitical uncertainty. Investors from all around the world, including the
U.S., tend to seek the apparent safety and liquidity of U.S. government
securities during such times. Still, relative to Treasuries, municipal bonds
offered significant value. For example, during the 12-month period, the Bond
Buyer 40 yielded as much as 112.9% of the 30-year Treasury bond.2 At that level,
investors were essentially
1. Source: Standard & Poor's Micropal. The Dow Jones Industrial Average is
price-weighted based on the average market price of 30 blue chip stocks of
companies that are generally industry leaders. Total return, calculated by
Wilshire Associates Inc., includes reinvested dividends. The S&P 500 consists of
500 stocks chosen for market size, liquidity and industry group representation.
Each stock's weight in the index is proportionate to its market value. The S&P
500 is one of the most widely used benchmarks of U.S. equity performance. The
Nasdaq Composite Index measures all domestic and international common stocks
listed on the Nasdaq Stock Market. The index is market value-weighted and
includes over 4,000 companies.
2. Source: THE BOND BUYER. The Bond Buyer 40 comprises the yield to maturity of
40 bonds. The index attempts to track the new-issue market as closely as
possible, so it changes bonds twice a month, adding all new bonds that meet
certain requirements and deleting an equivalent number according to their
secondary market trading activity. As a result, the average par call date,
average maturity date and average coupon rate change over time. The average
maturity has generally been 29-30 years. Treasuries, if held to maturity, offer
a fixed rate of return and fixed principal value; their interest payments and
principal are guaranteed.
2 | Not part of the annual report
getting the tax exemption municipal bonds offer for free. In addition, investors
incurred a relatively minimal amount of extra risk because, on a credit quality
basis, municipal bonds are considered to be among the safest types of investment
after Treasuries.
The weak economy of the last three years has generally pressured municipal
revenues. Sales, personal and property taxes tend to bring in less money to
municipalities' coffers during times of economic weakness. As a result, budget
deficits are generated and balancing them usually requires a combination of
higher taxes and fees along with reduced expenditures. These situations also
commonly cause rating downgrades by the independent rating agencies, which can
result in a drop in the affected bonds' values. While we pay close attention to
such movements, we also take a long-term view. Defaults by states and
municipalities are rare. Municipalities usually do not go out of business the
same way corporations can. Because they will need to sell securities in the
future to maintain their infrastructures and to accommodate and promote growth,
they work hard to avoid a default on their records. In this recent climate we
saw -- and sought to take advantage of -- many opportunities to purchase some
municipal bonds trading at historically above-average yield spreads.
LOOKING FORWARD
Although we cannot tell what lies ahead for the economy, markets and
geopolitical arena, fundamentals we have historically followed in fixed income
markets still point to a very sluggish economy with little or no inflation. We
believe the Fed remains unlikely to raise interest rates until it sees concrete
evidence of a recovery and would not hesitate to lower rates again if need be.
With the U.S.-Iraq conflict seemingly over, an expected bond sell-off did not
materialize as of period-end. However, if an economic recovery takes hold in the
second half of 2003, demand for bonds may decline if long-term interest rates
rise and
Not part of the annual report | 3
equity markets stabilize and post gains. We believe some of the reduction in
demand may be offset by other investors being lured by municipal bonds' higher
yields and credit quality and the need to maintain diversified portfolios of
stocks, bonds and cash. Generally, municipal bonds offer unusually good value
versus Treasury obligations. Rather than try to predict the markets going
forward, we will continue to focus on our time-tested approach of seeking the
highest possible income while using our conservative, buy-and-hold strategy that
has served our shareholders so well in the past.
Investors sometimes overreact to volatile markets, and often view stocks and
bonds as alternatives to one another instead of complements. At Franklin
Templeton, we believe bonds should be held for income and portfolio
diversification, not to outperform stock prices. Overall, we believe Franklin
New York Tax-Free Income Fund can provide investors with high credit quality and
valuable tax-free income for the long term.3 Investors are as different as
investments, and the mix of stocks, bonds and cash in their portfolios should be
tailored to their individual, long-term objectives and risk tolerance.
Especially during periods of uncertain markets, working with a financial advisor
can help each investor develop a suitable investment plan and follow it when
markets fluctuate. We encourage you to contact us whenever you have questions
about your Franklin tax-free fixed income investments. We consider accessibility
to our shareholders and their advisors a large part of our responsibility as
portfolio managers.
If you would like more frequent updates, franklintempleton.com provides daily
prices, monthly performance figures, portfolio holdings and other information.
You can also access your account, buy and sell shares, read timely commentary
from portfolio managers, and find helpful financial planning tools. We hope you
will take advantage of these online services.
3. For investors subject to alternative minimum tax, a small portion of this
income may be taxable. Distributions of capital gains are generally taxable.
4 | Annual Report
Thank you for your continued support. We look forward to serving your investment
needs in the years ahead.
Sincerely,
/s/Charles B. Johnson
Charles B. Johnson
President and Chief Executive Officer - Investment Management
Franklin New York Tax-Free Income Fund
/s/Sheila Amoroso
Sheila Amoroso
/s/Rafael R. Costas Jr.
Rafael R. Costas Jr.
Senior Vice Presidents & Co-Directors
Franklin Municipal Bond Department
THIS LETTER REFLECTS OUR ANALYSIS AND OPINIONS AS OF MAY 31, 2003. THE
INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET, COUNTRY,
INDUSTRY, SECURITY OR FUND. STATEMENTS OF FACT HAVE BEEN OBTAINED FROM SOURCES
CONSIDERED RELIABLE.
A NOTE ABOUT DUPLICATE MAILINGS
You will receive your Fund's shareholder
report every six months. To reduce Fund
expenses, we try to identify related share-
holders in a household and send only
one copy of the report. This process, called
"householding," will continue indefinitely
unless you instruct us otherwise. If you prefer
not to have these documents householded,
please call us at 1-800/632-2301. At any
time you may view current shareholder
reports on our website.
Not part of the annual report | 5
SPECIAL FEATURE
UNDERSTANDING YOUR TAX-FREE INCOME FUND --
WHAT CAUSES DIVIDENDS AND FUND PRICES TO FLUCTUATE
DID YOU EVER WONDER WHY THE DIVIDENDS YOU RECEIVE FROM YOUR TAX-FREE INCOME FUND
AREN'T ALWAYS THE SAME? OR HAVE YOU NOTICED HOW CHANGES IN INTEREST RATES CAN
AFFECT YOUR FUND'S SHARE PRICE? AT FRANKLIN TEMPLETON INVESTMENTS, MAINTAINING A
STABLE DIVIDEND AND A RELATIVELY STABLE SHARE PRICE FOR YOUR TAX-FREE FUND IS
OUR TOP PRIORITY. UNFORTUNATELY THOUGH, WE CAN'T CONTROL THE ECONOMIC
ENVIRONMENT, AND FACTORS SUCH AS CHANGING INTEREST RATES CAN CAUSE YOUR FUND'S
SHARE PRICE AND DIVIDEND PAYMENTS TO FLUCTUATE.
BELOW YOU'LL FIND ANSWERS TO COMMONLY ASKED QUESTIONS ABOUT THE RELATIONSHIP
BETWEEN MUNICIPAL BOND PRICES AND INTEREST RATES. UNDERSTANDING WHAT AFFECTS
YOUR TAX-FREE INCOME FUND MAY HELP YOU BECOME A MORE EFFECTIVE INVESTOR.
Q. WHAT CAUSES INTEREST RATES TO RISE AND FALL?
A. Interest rate trends are primarily determined by economic factors such as
inflation, strength of the U.S. dollar and the pace of economic growth. For
example, strong economic growth can lead to inflation. If the Federal Reserve
Board (the Fed) becomes concerned about inflation, it may attempt to cool the
economy by raising short-term interest rates, as it did in 2000. On the other
hand, if the economy slows down, the Fed may lower short-term interest rates
to stimulate economic growth, as we witnessed in 2001 and 2002.
It's important to note the Fed only has the power to change short-term
interest rates such as the federal funds target rate and the discount rate,
which represent the overnight rates charged among banks.
Long-term interest rates, as represented by the 10-year or 30-year Treasury
bond, are market-driven and tend to move in anticipation of changes in the
economy and inflation. Most Franklin tax-free fund portfolios are composed of
long-term municipal bonds, whose prices are affected primarily by changes in
long-term interest rates.
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE
6 | Not part of the annual report
Q. HOW DO CHANGES IN INTEREST RATES AFFECT MY TAX-FREE INCOME FUND?
INTEREST RATES AND BOND PRICES: AN INVERSE RELATIONSHIP
A. Interest rates and bond prices behave like two sides of a seesaw. When
interest rates drop, bond prices usually rise. When rates climb, bond prices
usually fall. This is because when rates go up, newly issued bonds, with
their new, higher yields become more attractive than comparable existing
bonds. So, investors who want to sell their existing bonds have to reduce
their prices to make them equally attractive.
[GRAPHIC OMITTED]
Maturity Graph
As prices of the municipal bonds in your fund's portfolio adjust to a rise in
interest rates, you may see a decline in your fund's share price as measured
by net asset value (NAV). Conversely, when interest rates decline, your
fund's NAV will tend to increase, as we saw in 2001 and 2002.
INTEREST RATES AND TAX-FREE DIVIDENDS
When interest rates decline, municipal bond issuers often "call" or redeem
existing higher-yielding bonds and replace them with new, lower yielding
bonds, to reduce the amount of interest they pay on the debt. As funds now
have to reinvest proceeds from the called bonds into new lower-yielding
bonds, their investment earnings decline and the dividends paid out to
shareholders also decline over time.
When interest rates rise, the situation is reversed. As funds are able to
invest cash proceeds in new, higher-yielding bonds, they're able to pay out
higher dividends to shareholders.
Not part of the annual report |7
Q. WHY HAVE MY TAX-FREE DIVIDENDS BEEN DECLINING RECENTLY?
A. While long-term interest rates have fluctuated over the past 15 years,
overall, they've experienced a net decline. Consequently, industry-wide, many
tax-free portfolios have had older, higher-yielding municipal bonds "called"
away and have had to reinvest their "call" proceeds and new cash inflows in
new, lower-yielding bonds.
Many of Franklin's tax-free funds have been similarly affected, and because
funds can only pay out what they earn, many of our funds have had to reduce
dividend payments.
For example, in the late 1980s and early 1990s, we were able to invest in
bonds yielding approximately 8%. As these bonds matured or were called, we've
had to reinvest the proceeds at lower rates, recently that rate being 4.83%.1
Because we're investing in bonds with lower yields, we've had to reduce
dividends accordingly. We continue to pay out the income we earn, but our
earnings are lower today because we're reinvesting at a lower rate than was
available 10-15 years ago.
Although we can't predict interest rate cycles, we'll continue to focus on
producing the highest monthly tax-free income possible through our
disciplined management approach.
Q. SHOULD I BE CONCERNED WHEN MY FUND'S SHARE PRICE FLUCTUATES?
A. Though interest rates have been volatile over the past 20 years, municipal
bond prices have remained relatively stable, as shown in the chart below.
The following graph compares municipal bond prices versus interest rates* from
June 1983 through May 2003.
Date Interest Rates Municipal Bond Prices
Jun 1983 10.85% $90.56
Jul 1983 11.38% $90.25
Aug 1983 11.85% $90.73
Sep 1983 11.65% $91.47
Oct 1983 11.54% $88.97
Nov 1983 11.69% $88.86
Dec 1983 11.83% $90.31
Jan 1984 11.67% $91.80
Feb 1984 11.84% $90.71
Mar 1984 12.32% $92.76
Apr 1984 12.63% $92.19
May 1984 13.41% $88.68
Jun 1984 13.56% $87.14
Jul 1984 13.36% $89.90
Aug 1984 12.72% $86.53
Sep 1984 12.52% $91.62
Oct 1984 12.16% $93.61
Nov 1984 11.57% $92.98
Dec 1984 11.50% $93.48
Jan 1985 11.38% $96.60
Feb 1985 11.51% $92.70
Mar 1985 11.86% $94.04
Apr 1985 11.43% $95.93
May 1985 10.85% $96.82
Jun 1985 10.16% $96.21
Jul 1985 10.31% $95.75
Aug 1985 10.33% $95.42
Sep 1985 10.37% $94.26
Oct 1985 10.24% $96.13
Nov 1985 9.78% $99.29
Dec 1985 9.26% $98.66
Jan 1986 9.19% $102.32
Feb 1986 8.70% $103.28
Mar 1986 7.78% $101.67
Apr 1986 7.30% $101.91
May 1986 7.71% $99.80
Jun 1986 7.80% $101.71
Jul 1986 7.30% $100.24
Aug 1986 7.17% $103.37
Sep 1986 7.45% $102.20
Oct 1986 7.43% $102.97
Nov 1986 7.25% $103.63
Dec 1986 7.11% $103.02
Jan 1987 7.08% $105.34
Feb 1987 7.25% $104.87
Mar 1987 7.25% $102.99
Apr 1987 8.02% $100.49
May 1987 8.61% $99.66
Jun 1987 8.40% $101.15
Jul 1987 8.45% $101.08
Aug 1987 8.76% $100.65
Sep 1987 9.42% $97.95
Oct 1987 9.52% $99.99
Nov 1987 8.86% $99.38
Dec 1987 8.99% $99.62
Jan 1988 8.67% $104.13
Feb 1988 8.21% $104.48
Mar 1988 8.37% $102.56
Apr 1988 8.72% $102.17
May 1988 9.09% $101.25
Jun 1988 8.92% $102.00
Jul 1988 9.06% $101.79
Aug 1988 9.26% $101.04
Sep 1988 8.98% $102.18
Oct 1988 8.80% $103.16
Nov 1988 8.96% $101.53
Dec 1988 9.11% $101.88
Jan 1989 9.09% $102.78
Feb 1989 9.17% $100.95
Mar 1989 9.36% $99.96
Apr 1989 9.18% $101.72
May 1989 8.86% $103.09
Jun 1989 8.28% $103.97
Jul 1989 8.02% $104.40
Aug 1989 8.11% $102.64
Sep 1989 8.19% $101.82
Oct 1989 8.01% $102.08
Nov 1989 7.87% $103.12
Dec 1989 7.84% $103.29
Jan 1990 8.21% $103.06
Feb 1990 8.47% $103.39
Mar 1990 8.59% $102.95
Apr 1990 8.79% $102.02
May 1990 8.76% $103.34
Jun 1990 8.48% $103.61
Jul 1990 8.47% $103.28
Aug 1990 8.75% $101.26
Sep 1990 8.89% $100.79
Oct 1990 8.72% $101.85
Nov 1990 8.39% $103.26
Dec 1990 8.08% $103.19
Jan 1991 8.09% $103.89
Feb 1991 7.85% $104.02
Mar 1991 8.11% $103.37
Apr 1991 8.04% $103.75
May 1991 8.07% $103.88
Jun 1991 8.28% $103.16
Jul 1991 8.27% $103.66
Aug 1991 7.90% $103.51
Sep 1991 7.65% $104.29
Oct 1991 7.53% $104.61
Nov 1991 7.42% $104.31
Dec 1991 7.09% $105.89
Jan 1992 7.03% $105.46
Feb 1992 7.34% $104.84
Mar 1992 7.54% $104.15
Apr 1992 7.48% $104.49
May 1992 7.39% $105.05
Jun 1992 7.26% $106.32
Jul 1992 6.84% $109.47
Aug 1992 6.59% $107.80
Sep 1992 6.42% $107.82
Oct 1992 6.59% $105.94
Nov 1992 6.87% $107.20
Dec 1992 6.77% $107.69
Jan 1993 6.39% $106.54
Feb 1993 6.03% $109.63
Mar 1993 6.03% $107.91
Apr 1993 6.05% $108.38
May 1993 6.16% $108.15
Jun 1993 5.80% $109.07
Jul 1993 5.83% $105.93
Aug 1993 5.45% $107.34
Sep 1993 5.40% $107.70
Oct 1993 5.43% $107.18
Nov 1993 5.83% $105.41
Dec 1993 5.83% $106.86
Jan 1994 5.70% $107.37
Feb 1994 6.15% $103.87
Mar 1994 6.78% $98.94
Apr 1994 6.95% $99.25
May 1994 7.12% $99.59
Jun 1994 7.34% $98.41
Jul 1994 7.12% $99.69
Aug 1994 7.19% $99.52
Sep 1994 7.62% $97.55
Oct 1994 7.81% $95.24
Nov 1994 7.91% $92.97
Dec 1994 7.84% $94.53
Jan 1995 7.60% $96.71
Feb 1995 7.22% $99.07
Mar 1995 7.20% $99.68
Apr 1995 7.07% $99.24
May 1995 6.30% $101.87
Jun 1995 6.21% $100.34
Jul 1995 6.45% $100.74
Aug 1995 6.28% $101.47
Sep 1995 6.17% $101.55
Oct 1995 6.03% $102.48
Nov 1995 5.76% $103.63
Dec 1995 5.58% $103.43
Jan 1996 5.60% $103.70
Feb 1996 6.13% $102.47
Mar 1996 6.34% $100.60
Apr 1996 6.66% $99.82
May 1996 6.85% $99.32
Jun 1996 6.73% $99.93
Jul 1996 6.80% $100.37
Aug 1996 6.96% $99.85
Sep 1996 6.72% $100.75
Oct 1996 6.37% $100.03
Nov 1996 6.06% $101.35
Dec 1996 6.43% $100.45
Jan 1997 6.53% $100.15
Feb 1997 6.58% $100.50
Mar 1997 6.92% $98.61
Apr 1997 6.72% $99.01
May 1997 6.67% $100.06
Jun 1997 6.51% $100.65
Jul 1997 6.02% $102.98
Aug 1997 6.34% $101.40
Sep 1997 6.12% $101.60
Oct 1997 5.84% $101.75
Nov 1997 5.86% $101.84
Dec 1997 5.75% $102.73
Jan 1998 5.53% $103.22
Feb 1998 5.62% $102.73
Mar 1998 5.67% $102.30
Apr 1998 5.68% $101.38
May 1998 5.56% $102.40
Jun 1998 5.44% $102.17
Jul 1998 5.50% $101.95
Aug 1998 5.05% $103.09
Sep 1998 4.44% $103.93
Oct 1998 4.64% $103.30
Nov 1998 4.74% $103.20
Dec 1998 4.65% $102.97
Jan 1999 4.66% $103.74
Feb 1999 5.29% $102.67
Mar 1999 5.25% $102.32
Apr 1999 5.36% $102.12
May 1999 5.64% $101.03
Jun 1999 5.81% $99.09
Jul 1999 5.92% $98.71
Aug 1999 5.98% $97.47
Sep 1999 5.90% $97.08
Oct 1999 6.06% $95.62
Nov 1999 6.18% $96.09
Dec 1999 6.28% $94.56
Jan 2000 6.68% $93.74
Feb 2000 6.42% $94.43
Mar 2000 6.03% $96.08
Apr 2000 6.23% $94.88
May 2000 6.29% $93.87
Jun 2000 6.03% $95.93
Jul 2000 6.04% $96.82
Aug 2000 5.73% $97.89
Sep 2000 5.80% $96.91
Oct 2000 5.77% $97.55
Nov 2000 5.48% $97.81
Dec 2000 5.12% $99.82
Jan 2001 5.19% $100.36
Feb 2001 4.92% $100.26
Mar 2001 4.95% $100.75
Apr 2001 5.35% $99.18
May 2001 5.43% $99.79
Jun 2001 5.42% $99.82
Jul 2001 5.07% $100.90
Aug 2001 4.79% $102.15
Sep 2001 4.60% $101.40
Oct 2001 4.30% $102.17
Nov 2001 4.78% $100.85
Dec 2001 5.07% $99.44
Jan 2002 5.07% $100.70
Feb 2002 4.88% $101.55
Mar 2002 5.42% $99.08
Apr 2002 5.11% $100.59
May 2002 5.08% $100.78
Jun 2002 4.86% $100.99
Jul 2002 4.51% $101.93
Aug 2002 4.14% $102.85
Sep 2002 3.63% $104.74
Oct 2002 3.93% $102.60
Nov 2002 4.22% $101.79
Dec 2002 3.83% $103.55
Jan 2003 4.00% $102.87
Feb 2003 3.71% $103.94
Mar 2003 3.83% $103.58
Apr 2003 3.89% $103.94
May 2003 3.37% $106.03
*Source: Standard & Poor's Micropal. Municipal bonds are represented by Lehman
Brothers Municipal Bond Index and interest rates are represented by 10-year
Treasury bond yields which reflect long-term interest rate movements. For
illustrative purposes only, not representative of any Franklin tax-free income
fund.
1. Based on the yield of the Bond Buyer 40 Index as of May 30, 2003.
8 | Not part of the annual report
We generally invest in current coupon securities to maximize tax-free income
for our shareholders.2 Over time, as we invest in different interest rate
climates, the portfolios become well-diversified with a broad range of
securities. As a result of this strategy, we own many older securities with
higher coupons which are generally less sensitive to interest rates, and
which help to provide stability to our fund portfolios.
Q. HOW CAN FRANKLIN'S INVESTMENT APPROACH BENEFIT MY PORTFOLIO WHEN INTEREST
RATES ARE VOLATILE?
A. For over a quarter of a century, we've consistently adhered to a strategy of
investing for high, current, tax-free income while working to preserve
shareholders' capital.3 Our straightforward approach to investing means we
avoid speculative derivatives or futures, which can be extremely sensitive to
interest-rate movements.
Our investment strategy may not immunize fund portfolios from interest rate
risk, but it may help to reduce the risk. Overall, we're confident that our
professionally managed portfolios will provide long-term investors with
relative stability and valuable tax-free income.
2. Coupon refers to the fixed amount of interest income paid out by a municipal
security to a bondholder.
3. For investors subject to the alternative minimum tax, a small portion of
these dividends may be taxable. Distributions of capital gains are generally
taxable.
[Franklin Templeton logo omitted]
SRTFINS 06/03 | Not part of the annual report | 9
Annual Report
Franklin New York Tax-Free Income Fund
YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: Franklin New York Tax-Free Income Fund
seeks to provide high, current income exempt from regular federal, New York
state and New York City personal income taxes through a diversified portfolio
consisting mainly of municipal securities.1
[GRAPHIC OMITTED]
Pie Chart omitted
- --------------------------------------------------------------------------------
Credit Quality Breakdown*
(Based on Total Long-Term Investments as of 5/31/03
AAA 56.1%
AA 28.5%
A 11.0%
BBB 3.3%
Below Investment Grade 1.1%
*Quality breakdown may include internal ratings for bonds not rated by an
independent rating agency.
- --------------------------------------------------------------------------------
NEW YORK ECONOMIC UPDATE
During the 12 months ended May 31, 2003, New York faced a difficult economic
climate, mainly due to the volatile stock market and national economic
recession. The recession's effects reached New York later than other states, but
its impact was felt more deeply than in many parts of the country. Job losses
and slower new job growth kept New York's unemployment rate just above 6.0% for
most of the period as the state's previously booming financial services
industry, now in a downsizing cycle, experienced layoffs.2
1. For investors subject to alternative minimum tax, a small portion of this
income may be taxable. Distributions of capital gains are generally taxable.
2. Source: Bureau of Labor Statistics.
THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND COMPLETE LEGAL
TITLES OF ALL PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF
INVESTMENTS (SOI). THE SOI BEGINS ON PAGE 23.
10 | Annual Report
New York's fiscal year 2003 ended with an estimated $2.7 billion operating
deficit, and lower personal income tax collections contributed to revenue
declines. As the state's largest revenue source, personal income tax receipts
accounted for roughly 70% of the state's general fund proceeds. State personal
income tax collections fell 3.3% in fiscal year 2002 and are projected to weaken
another 10.4% in fiscal year 2003. The state projects personal income tax
receipts should grow 0.8% in fiscal year 2004.3 Recent legislative action
implemented several steps to address the shortfalls. The state deferred major
spending obligations and enacted long-term deficit financing to pay current
operating expenses and relieve acute liquidity pressures. However, New York
still has to contend with a heavy debt load of $2,045 per capita, which ranks as
the nation's fifth highest.3
On May 16, 2003, Standard & Poor's, an independent credit rating agency, revised
its outlook from stable to negative for the state. Meanwhile, Moody's Investors
Service maintained its stable outlook. New York faces weak projected revenue
growth, mounting spending pressures and depleted reserve levels. The state will
be challenged by budget gap projections and cash liquidity problems in the near
term.
PORTFOLIO NOTES
As a result of generally strong municipal bond market performance, Franklin
New York Tax-Free Income Fund-Class A shares' net asset value increased during
the year under review, from $11.65 on May 31, 2002, to $12.22 on May 31, 2003.
We did not invest in derivative products or use leverage that might increase the
Fund's share price volatility. At the end of the reporting period, the Fund
owned no bonds subject to alternative minimum tax.
For the year ended May 31, 2003, Franklin New York Tax-Free Income Fund - Class
A posted a +10.06% cumulative total return as shown in the Performance Summary
beginning on page 14. The Fund's benchmark, the Lehman Brothers Municipal Bond
Index, returned 10.36% during the same period.4 Although the
PORTFOLIO BREAKDOWN
5/31/03
- --------------------------------------------------
% OF TOTAL
LONG-TERM INVESTMENTS
- --------------------------------------------------
Prerefunded 27.6%
- --------------------------------------------------
Subject to Government Appropriations 16.9%
- --------------------------------------------------
Transportation 15.2%
- --------------------------------------------------
Utilities 9.9%
- --------------------------------------------------
Hospital & Health Care 7.4%
- --------------------------------------------------
Tax-Supported 6.2%
- --------------------------------------------------
Housing 5.0%
- --------------------------------------------------
General Obligation 4.8%
- --------------------------------------------------
Other Revenue 4.2%
- --------------------------------------------------
Higher Education 2.8%
- --------------------------------------------------
3. Source: Moody's Investors Service, NEW YORK (STATE OF), 4/29/03.
4. Source: Standard & Poor's Micropal. The Lehman Brothers Municipal Bond Index
includes about 40,000 bonds from across the country. All bonds included have a
minimum credit rating of at least Baa and a maturity of at least two years, and
have been issued within the last five years as part of a deal of over $50
million. Bonds subject to alternative minimum tax or with floating or zero
coupons are excluded. Bonds will be added and the index will be updated monthly
with a one-month lag. The index is unmanaged and includes reinvested
distributions. One cannot invest directly in an index, nor is an index
representative of the Fund's portfolio.
Annual Report | 11
DIVIDEND DISTRIBUTIONS
6/1/02-5/31/03
- --------------------------------------------------------------------------------
DIVIDEND PER SHARE
- --------------------------------------------------------------------------------
MONTH CLASS A CLASS B CLASS C ADVISOR CLASS
- --------------------------------------------------------------------------------
June 4.85 cents 4.30 cents 4.33 cents 4.95 cents
- --------------------------------------------------------------------------------
July 4.85 cents 4.30 cents 4.33 cents 4.93 cents
- --------------------------------------------------------------------------------
August 4.85 cents 4.30 cents 4.33 cents 4.93 cents
- --------------------------------------------------------------------------------
September 4.85 cents 4.30 cents 4.30 cents 4.94 cents
- --------------------------------------------------------------------------------
October 4.85 cents 4.30 cents 4.30 cents 4.93 cents
- --------------------------------------------------------------------------------
November 4.70 cents 4.15 cents 4.15 cents 4.78 cents
- --------------------------------------------------------------------------------
December 4.70 cents 4.15 cents 4.16 cents 4.78 cents
- --------------------------------------------------------------------------------
January 4.70 cents 4.15 cents 4.16 cents 4.79 cents
- --------------------------------------------------------------------------------
February 4.70 cents 4.15 cents 4.16 cents 4.79 cents
- --------------------------------------------------------------------------------
March 4.65 cents 4.09 cents 4.08 cents 4.73 cents
- --------------------------------------------------------------------------------
April 4.65 cents 4.09 cents 4.08 cents 4.73 cents
- --------------------------------------------------------------------------------
May 4.65 cents 4.09 cents 4.08 cents 4.73 cents
- --------------------------------------------------------------------------------
TOTAL 57.00 CENTS 50.37 CENTS 50.46 CENTS 58.01 CENTS
- --------------------------------------------------------------------------------
Fund's total return underperformed that of the benchmark index, our investment
strategy attempts to provide high, current, tax-free income for our
shareholders. It is important to remember that over time the tax-free income
received from municipal bonds will ultimately drive the Fund's total return
performance.
Keep in mind that your Fund combines the advantages of high credit quality and
tax-free yields. The Performance Summary also shows that at the end of this
reporting period, the Fund's Class A shares' distribution rate was 4.37%, based
on an annualization of May's 4.65 cent ($0.0465) per share dividend and the
maximum offering price of $12.76 on May 31, 2003. An investor in the maximum
combined federal and New York state and City income tax bracket of 45.05%
12 | Annual Report
would need to earn 7.51% from a taxable investment to match the Fund's tax-free
distribution rate. The Performance Summary also shows distribution rates and
their taxable equivalents for Class B, C and Advisor shares.
As interest rates generally declined over the past few years and issuers took
the opportunity to refinance higher yielding debt, Franklin New York Tax-Free
Income Fund had higher coupon bonds called, which affected the Fund's income
earnings and resulted in dividend reductions during the period.
Due to continued airline industry weakness, we reduced the Fund's already low
exposure further by selling more than $21 million in American Airlines (Puerto
Rico Revenue) bonds. At period-end, our single remaining airline credit, Port
Authority of New York and New Jersey Revenue for Delta Air Lines, represented
just 0.32% of the Fund's total long-term investments. We also reduced our
exposure to bonds backed by settlement receipts from tobacco companies by
selling Westchester Tobacco and Nassau County Tobacco. On May 31, 2003, the Fund
carried 1.9% of total long-term investments in bonds backed by tobacco
settlement receipts. Purchases during the reporting period consisted mostly of
high-grade bonds in the 20- to 30-year range, including issues by the
Metropolitan Transportation Authority, New York City Transitional Finance
Authority, and Triborough Bridge and Tunnel Authority revenue bonds. We also
increased the Fund's exposure to bonds backed by New York City, as spreads
widened due to the state's current budget problems.
THIS DISCUSSION REFLECTS OUR VIEWS, OPINIONS AND PORTFOLIO HOLDINGS AS OF MAY
31, 2003, THE END OF THE REPORTING PERIOD. OUR STRATEGIES AND THE FUND'S
PORTFOLIO COMPOSITION WILL CHANGE DEPENDING ON MARKET AND ECONOMIC CONDITIONS.
THESE OPINIONS MAY NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A
PARTICULAR SECURITY. THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT
OF ANY MARKET, STATE, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE
FROM SOURCES CONSIDERED RELIABLE, BUT THE ADVISOR MAKES NO REPRESENTATION OR
WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR
INVESTMENT MANAGEMENT PHILOSOPHY.
Annual Report | 13
Performance Summary as of 5/31/03
Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses of each
class. Capital gain distributions are net profits realized from the sale of
portfolio securities. The performance table and graphs do not reflect any taxes
due on Fund dividends, capital gain distributions, if any, or any realized gains
on the sale of Fund shares. Total return reflects the Fund's dividend income,
capital gain distributions, if any, and any unrealized gains or losses.
PRICE AND DISTRIBUTION INFORMATION
- --------------------------------------------------------------------------------
CLASS A CHANGE 5/31/03 5/31/02
- --------------------------------------------------------------------------------
Net Asset Value (NAV) +$0.57 $12.22 $11.65
- --------------------------------------------------------------------------------
DISTRIBUTIONS (6/1/02-5/31/03)
- --------------------------------------------------------------------------------
Dividend Income $0.5700
- --------------------------------------------------------------------------------
CLASS B CHANGE 5/31/03 5/31/02
- --------------------------------------------------------------------------------
Net Asset Value (NAV) +$0.57 $12.20 $11.63
- --------------------------------------------------------------------------------
DISTRIBUTIONS (6/1/02-5/31/03)
- --------------------------------------------------------------------------------
Dividend Income $0.5037
- --------------------------------------------------------------------------------
CLASS C CHANGE 5/31/03 5/31/02
- --------------------------------------------------------------------------------
Net Asset Value (NAV) +$0.58 $12.22 $11.64
- --------------------------------------------------------------------------------
DISTRIBUTIONS (6/1/02-5/31/03)
- --------------------------------------------------------------------------------
Dividend Income $0.5046
- --------------------------------------------------------------------------------
ADVISOR CLASS CHANGE 5/31/03 5/31/02
- --------------------------------------------------------------------------------
Net Asset Value (NAV) +$0.58 $12.23 $11.65
- --------------------------------------------------------------------------------
DISTRIBUTIONS (6/1/02-5/31/03)
- --------------------------------------------------------------------------------
Dividend Income $0.5801
- --------------------------------------------------------------------------------
14 | Past performance does not guarantee future results.| Annual Report
Performance Summary (CONTINUED)
PERFORMANCE
- ------------------------------------------------------------------------------------------------------------------
CLASS A 1-YEAR 5-YEAR 10-YEAR
- ------------------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +10.06% +33.32% +81.81%
Average Annual Total Return 2 +5.35% +5.00% +5.70%
Avg. Ann. Total Return (6/30/03) 3 +4.11% +4.81% +5.49%
Distribution Rate 4 4.37%
Taxable Equivalent Distribution Rate 57.51%
30-Day Standardized Yield 6 2.98%
Taxable Equivalent Yield 5 5.17%
- ------------------------------------------------------------------------------------------------------------------
CLASS B 1-YEAR 3-YEAR INCEPTION (1/1/99)
- ------------------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +9.46% +26.82% +25.30%
Average Annual Total Return 2 +5.46% +7.38% +4.86%
Avg. Ann. Total Return (6/30/03) 3 +4.15% +6.42% +4.67%
Distribution Rate 4 4.02%
Taxable Equivalent Distribution Rate 5 6.91%
30-Day Standardized Yield 6 2.56%
Taxable Equivalent Yield 5 4.44%
- ------------------------------------------------------------------------------------------------------------------
CLASS C 1-YEAR 5-YEAR INCEPTION (5/1/95)
- ------------------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +9.55% +29.70% +61.09%
Average Annual Total Return 2 +7.44% +5.13% +5.94%
Avg. Ann. Total Return (6/30/03) 3 +5.97% +4.93% +5.81%
Distribution Rate 4 3.97%
Taxable Equivalent Distribution Rate 5 6.82%
30-Day Standardized Yield 6 2.54%
Taxable Equivalent Yield 5 4.41%
- ------------------------------------------------------------------------------------------------------------------
ADVISOR CLASS 7 1-YEAR 5-YEAR 10-YEAR
- ------------------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 +10.24% +33.60% +82.20%
Average Annual Total Return 2 +10.24% +5.96% +6.18%
Avg. Ann. Total Return (6/30/03) 3 +8.83% +5.76% +5.97%
Distribution Rate 4 4.64%
Taxable Equivalent Distribution Rate 5 7.98%
30-Day Standardized Yield 6 3.22%
Taxable Equivalent Yield 5 5.59%
ONGOING MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE; MORE
RECENT RETURNS MAY DIFFER FROM THOSE SHOWN. 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 MORE CURRENT PERFORMANCE, SEE "FUNDS AND PERFORMANCE" AT
FRANKLINTEMPLETON.COM OR CALL 1-800/342-5236.
Annual Report | Past Performance does not guarantee future results. | 15
Performance Summary (CONTINUED)
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 charge(s), Fund
expenses, account fees and reinvested distributions. The unmanaged index
includes reinvested dividends. It differs from the Fund in composition and does
not pay management fees or expenses. One cannot invest directly in an index. The
Consumer Price Index (CPI), calculated by the U.S. Bureau of Labor Statistics,
is a commonly used measure of the inflation rate.
AVERAGE ANNUAL TOTAL RETURN
- -------------------------------------
CLASS A 5/31/03
- -------------------------------------
1-Year +5.35%
- -------------------------------------
5-Year +5.00%
- -------------------------------------
10-Year +5.70%
- -------------------------------------
The following line graph compares the performance of the Franklin New York
Tax-Free Income Fund - Class A shares to that of the Lehman Brothers Municipal
Bond Index8, and to the CPI8 based on a $10,000 investment from 6/1/93 to
5/31/03.
Franklin New York Lehman Brothers
Tax-Free Income Fund- Municipal
Date Class A Bond Index CPI
- --------------------------------------------------------------------------
6/1/93 $9,572 10,000 10,000
6/30/93 $9,727 10,167 10,014
7/31/93 $9,731 10,180 10,014
8/31/93 $9,912 10,392 10,042
9/30/93 $10,020 10,510 10,063
10/31/93 $10,039 10,530 10,104
11/30/93 $9,960 10,438 10,111
12/31/93 $10,168 10,658 10,111
1/31/94 $10,261 10,779 10,139
2/28/94 $10,081 10,500 10,173
3/31/94 $9,792 10,073 10,208
4/30/94 $9,812 10,159 10,222
5/31/94 $9,899 10,247 10,229
6/30/94 $9,875 10,184 10,264
7/31/94 $10,006 10,371 10,292
8/31/94 $10,060 10,407 10,333
9/30/94 $9,942 10,254 10,361
10/31/94 $9,797 10,072 10,368
11/30/94 $9,573 9,889 10,382
12/31/94 $9,804 10,107 10,382
1/31/95 $10,009 10,396 10,423
2/28/95 $10,225 10,698 10,465
3/31/95 $10,299 10,821 10,499
4/30/95 $10,319 10,834 10,534
5/31/95 $10,602 11,180 10,555
6/30/95 $10,514 11,083 10,576
7/31/95 $10,571 11,188 10,576
8/31/95 $10,684 11,330 10,604
9/30/95 $10,737 11,402 10,625
10/31/95 $10,893 11,567 10,660
11/30/95 $11,049 11,759 10,652
12/31/95 $11,141 11,872 10,645
1/31/96 $11,186 11,962 10,708
2/29/96 $11,089 11,881 10,742
3/31/96 $11,002 11,729 10,798
4/30/96 $10,981 11,696 10,840
5/31/96 $10,988 11,691 10,861
6/30/96 $11,102 11,818 10,867
7/31/96 $11,197 11,925 10,888
8/31/96 $11,195 11,922 10,908
9/30/96 $11,358 12,089 10,943
10/31/96 $11,463 12,226 10,978
11/30/96 $11,628 12,450 10,999
12/31/96 $11,602 12,397 10,999
1/31/97 $11,629 12,421 11,034
2/28/97 $11,726 12,535 11,069
3/31/97 $11,620 12,369 11,096
4/30/97 $11,706 12,472 11,110
5/31/97 $11,885 12,661 11,103
6/30/97 $11,982 12,796 11,116
7/31/97 $12,296 13,151 11,130
8/31/97 $12,229 13,027 11,151
9/30/97 $12,369 13,182 11,179
10/31/97 $12,457 13,266 11,207
11/30/97 $12,536 13,345 11,200
12/31/97 $12,705 13,540 11,186
1/31/98 $12,838 13,679 11,208
2/28/98 $12,854 13,683 11,229
3/31/98 $12,902 13,695 11,250
4/30/98 $12,864 13,634 11,271
5/31/98 $13,053 13,849 11,291
6/30/98 $13,124 13,903 11,304
7/31/98 $13,151 13,938 11,318
8/31/98 $13,321 14,154 11,332
9/30/98 $13,468 14,331 11,345
10/31/98 $13,484 14,331 11,372
11/30/98 $13,521 14,381 11,372
12/31/98 $13,543 14,417 11,366
1/31/99 $13,670 14,589 11,393
2/28/99 $13,651 14,524 11,407
3/31/99 $13,688 14,545 11,441
4/30/99 $13,725 14,581 11,524
5/31/99 $13,671 14,497 11,524
6/30/99 $13,501 14,288 11,524
7/31/99 $13,538 14,339 11,559
8/31/99 $13,390 14,225 11,587
9/30/99 $13,381 14,230 11,642
10/31/99 $13,208 14,077 11,663
11/30/99 $13,341 14,226 11,670
12/31/99 $13,232 14,119 11,670
1/31/00 $13,176 14,057 11,705
2/29/00 $13,335 14,220 11,774
3/31/00 $13,628 14,530 11,871
4/30/00 $13,546 14,444 11,878
5/31/00 $13,500 14,369 11,892
6/30/00 $13,810 14,750 11,954
7/31/00 $13,961 14,955 11,981
8/31/00 $14,149 15,185 11,981
9/30/00 $14,103 15,106 12,044
10/31/00 $14,218 15,271 12,064
11/30/00 $14,334 15,387 12,071
12/31/00 $14,653 15,767 12,064
1/31/01 $14,744 15,923 12,140
2/28/01 $14,823 15,974 12,189
3/31/01 $14,952 16,118 12,217
4/30/01 $14,864 15,944 12,266
5/31/01 $14,981 16,116 12,321
6/30/01 $15,086 16,224 12,342
7/31/01 $15,282 16,464 12,307
8/31/01 $15,478 16,736 12,307
9/30/01 $15,388 16,679 12,363
10/31/01 $15,533 16,877 12,321
11/30/01 $15,455 16,736 12,300
12/31/01 $15,334 16,577 12,252
1/31/02 $15,560 16,863 12,280
2/28/02 $15,719 17,066 12,329
3/31/02 $15,490 16,731 12,398
4/30/02 $15,691 17,058 12,468
5/31/02 $15,812 17,162 12,468
6/30/02 $15,946 17,343 12,475
7/31/02 $16,136 17,567 12,489
8/31/02 $16,326 17,778 12,530
9/30/02 $16,683 18,167 12,551
10/31/02 $16,445 17,866 12,573
11/30/02 $16,385 17,791 12,573
12/31/02 $16,730 18,166 12,545
1/31/03 $16,684 18,121 12,600
2/28/03 $16,877 18,374 12,697
3/31/03 $16,900 18,385 12,773
4/30/03 $17,037 18,507 12,745
5/31/03 $17,403 18,940 12,725
The following line graph compares the performance of the Franklin New York
Tax-Free Income Fund - Class B shares to that of the Lehman Brothers Municipal
Bond Index8, and to the CPI8 based on a $10,000 investment from 1/1/99 to
5/31/03.
Franklin New York Lehman Brothers
Tax-Free Income Fund Municipal
Date Class B Bond Index CPI
- --------------------------------------------------------------------------
1/1/99 $10,000 $10,000 $10,000
1/31/99 $10,086 $10,119 $10,024
2/28/99 $10,067 $10,074 $10,036
3/31/99 $10,090 $10,089 $10,066
4/30/99 $10,106 $10,114 $10,140
5/31/99 $10,062 $10,055 $10,140
6/30/99 $9,932 $9,910 $10,140
7/31/99 $9,955 $9,946 $10,170
8/31/99 $9,841 $9,866 $10,194
9/30/99 $9,830 $9,870 $10,243
10/31/99 $9,698 $9,764 $10,262
11/30/99 $9,790 $9,867 $10,268
12/31/99 $9,706 $9,793 $10,268
1/31/00 $9,669 $9,750 $10,299
2/29/00 $9,781 $9,863 $10,360
3/31/00 $9,983 $10,078 $10,444
4/30/00 $9,927 $10,019 $10,451
5/31/00 $9,880 $9,967 $10,463
6/30/00 $10,102 $10,231 $10,518
7/31/00 $10,217 $10,373 $10,542
8/31/00 $10,350 $10,533 $10,542
9/30/00 $10,302 $10,478 $10,597
10/31/00 $10,391 $10,592 $10,615
11/30/00 $10,462 $10,673 $10,621
12/31/00 $10,690 $10,936 $10,615
1/31/01 $10,751 $11,045 $10,682
2/28/01 $10,804 $11,080 $10,724
3/31/01 $10,893 $11,180 $10,749
4/30/01 $10,824 $11,059 $10,792
5/31/01 $10,914 $11,178 $10,841
6/30/01 $10,976 $11,253 $10,859
7/31/01 $11,114 $11,420 $10,829
8/31/01 $11,252 $11,608 $10,829
9/30/01 $11,181 $11,569 $10,877
10/31/01 $11,282 $11,707 $10,840
11/30/01 $11,219 $11,608 $10,822
12/31/01 $11,126 $11,498 $10,780
1/31/02 $11,285 $11,697 $10,804
2/28/02 $11,396 $11,837 $10,848
3/31/02 $11,224 $11,605 $10,908
4/30/02 $11,365 $11,831 $10,970
5/31/02 $11,447 $11,904 $10,970
6/30/02 $11,539 $12,030 $10,976
7/31/02 $11,671 $12,185 $10,988
8/31/02 $11,803 $12,331 $11,024
9/30/02 $12,056 $12,601 $11,043
10/31/02 $11,878 $12,392 $11,062
11/30/02 $11,829 $12,340 $11,062
12/31/02 $12,073 $12,600 $11,038
1/31/03 $12,034 $12,569 $11,086
2/28/03 $12,168 $12,745 $11,172
3/31/03 $12,179 $12,753 $11,239
4/30/03 $12,272 $12,837 $11,214
5/31/03 $12,330 $13,137 $11,196
AVERAGE ANNUAL TOTAL RETURN
- -------------------------------------
CLASS B 5/31/03
- -------------------------------------
1-Year +5.46%
- -------------------------------------
3-Year +7.38%
- -------------------------------------
Since Inception (1/1/99) +4.86%
- -------------------------------------
16 | Past performance does not guarantee future results.| Annual Report
Performance Summary (continued)
The following line graph compares the performance of the Franklin New York
Tax-Free Income Fund - Class C shares to that of the Lehman Brothers Municipal
Bond Index8, and to the CPI8 based on a $10,000 investment from 5/1/95 to
5/31/03.
Franklin New York Lehman Brothers
Tax-Free Income Fund Municipal
Date Class C Bond Index CPI
- --------------------------------------------------------------------------
5/1/95 $9,896 $10,000 $10,000
5/31/95 $10,147 $10,319 $10,020
6/30/95 $10,066 $10,229 $10,040
7/31/95 $10,125 $10,326 $10,040
8/31/95 $10,219 $10,458 $10,066
9/30/95 $10,273 $10,523 $10,086
10/31/95 $10,408 $10,676 $10,120
11/30/95 $10,561 $10,853 $10,112
12/31/95 $10,634 $10,957 $10,105
1/31/96 $10,672 $11,041 $10,165
2/29/96 $10,583 $10,966 $10,198
3/31/96 $10,485 $10,825 $10,251
4/30/96 $10,460 $10,795 $10,291
5/31/96 $10,466 $10,791 $10,310
6/30/96 $10,578 $10,908 $10,316
7/31/96 $10,654 $11,006 $10,336
8/31/96 $10,647 $11,004 $10,356
9/30/96 $10,797 $11,158 $10,389
10/31/96 $10,892 $11,284 $10,422
11/30/96 $11,043 $11,491 $10,442
12/31/96 $11,013 $11,443 $10,442
1/31/97 $11,033 $11,464 $10,475
2/28/97 $11,120 $11,570 $10,508
3/31/97 $11,013 $11,416 $10,534
4/30/97 $11,099 $11,512 $10,547
5/31/97 $11,253 $11,686 $10,540
6/30/97 $11,349 $11,811 $10,553
7/31/97 $11,641 $12,138 $10,565
8/31/97 $11,562 $12,024 $10,586
9/30/97 $11,699 $12,167 $10,612
10/31/97 $11,767 $12,245 $10,639
11/30/97 $11,836 $12,317 $10,632
12/31/97 $12,000 $12,497 $10,619
1/31/98 $12,109 $12,626 $10,640
2/28/98 $12,128 $12,629 $10,660
3/31/98 $12,168 $12,641 $10,680
4/30/98 $12,127 $12,584 $10,699
5/31/98 $12,288 $12,783 $10,719
6/30/98 $12,349 $12,832 $10,731
7/31/98 $12,379 $12,865 $10,744
8/31/98 $12,533 $13,064 $10,757
9/30/98 $12,655 $13,227 $10,770
10/31/98 $12,674 $13,227 $10,796
11/30/98 $12,692 $13,274 $10,796
12/31/98 $12,716 $13,307 $10,789
1/31/99 $12,829 $13,465 $10,815
2/28/99 $12,804 $13,406 $10,828
3/31/99 $12,822 $13,425 $10,861
4/30/99 $12,862 $13,458 $10,940
5/31/99 $12,804 $13,380 $10,940
6/30/99 $12,639 $13,187 $10,940
7/31/99 $12,669 $13,235 $10,973
8/31/99 $12,524 $13,129 $10,999
9/30/99 $12,510 $13,134 $11,052
10/31/99 $12,342 $12,992 $11,072
11/30/99 $12,460 $13,130 $11,079
12/31/99 $12,353 $13,032 $11,079
1/31/00 $12,294 $12,974 $11,112
2/29/00 $12,437 $13,125 $11,177
3/31/00 $12,704 $13,411 $11,269
4/30/00 $12,622 $13,332 $11,276
5/31/00 $12,573 $13,263 $11,289
6/30/00 $12,855 $13,614 $11,348
7/31/00 $12,990 $13,803 $11,374
8/31/00 $13,159 $14,016 $11,374
9/30/00 $13,098 $13,943 $11,433
10/31/00 $13,211 $14,095 $11,453
11/30/00 $13,301 $14,202 $11,460
12/31/00 $13,590 $14,553 $11,453
1/31/01 $13,680 $14,697 $11,525
2/28/01 $13,735 $14,744 $11,571
3/31/01 $13,848 $14,877 $11,598
4/30/01 $13,772 $14,716 $11,644
5/31/01 $13,874 $14,875 $11,696
6/30/01 $13,953 $14,974 $11,716
7/31/01 $14,128 $15,196 $11,683
8/31/01 $14,315 $15,447 $11,683
9/30/01 $14,212 $15,394 $11,736
10/31/01 $14,353 $15,578 $11,696
11/30/01 $14,273 $15,447 $11,676
12/31/01 $14,155 $15,300 $11,631
1/31/02 $14,356 $15,565 $11,657
2/28/02 $14,484 $15,751 $11,704
3/31/02 $14,278 $15,443 $11,770
4/30/02 $14,457 $15,744 $11,836
5/31/02 $14,549 $15,840 $11,836
6/30/02 $14,679 $16,008 $11,843
7/31/02 $14,834 $16,214 $11,856
8/31/02 $15,015 $16,409 $11,895
9/30/02 $15,336 $16,768 $11,915
10/31/02 $15,110 $16,490 $11,935
11/30/02 $15,049 $16,421 $11,935
12/31/02 $15,345 $16,767 $11,909
1/31/03 $15,309 $16,725 $11,961
2/28/03 $15,466 $16,959 $12,054
3/31/03 $15,493 $16,969 $12,126
4/30/03 $15,611 $17,081 $12,099
5/31/03 $15,943 $17,481 $12,080
AVERAGE ANNUAL TOTAL RETURN
- -------------------------------------
CLASS C 5/31/03
- -------------------------------------
1-Year +7.44%
- -------------------------------------
5-Year +5.13%
- -------------------------------------
Since Inception (5/1/95) +5.94%
- -------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- -------------------------------------
ADVISOR CLASS7 5/31/03
- -------------------------------------
1-Year +10.24%
- -------------------------------------
5-Year +5.96%
- -------------------------------------
10-Year +6.18%
- --------------------------------------
The following line graph compares the performance of the Franklin New York
Tax-Free Income Fund - Advisor Class shares to that of the Lehman Brothers
Municipal Bond Index 8, and to the CPI 8 based on a $10,000 investment from
6/1/93 to 5/31/03.
Franklin New York Lehman Brothers
Tax-Free Income Fund Municipal
Date Advisor Class Bond Index CPI
- --------------------------------------------------------------------------
6/1/93 $10,000 10,000 10,000
6/30/93 $10,162 10,167 10,014
7/31/93 $10,166 10,180 10,014
8/31/93 $10,356 10,392 10,042
9/30/93 $10,468 10,510 10,063
10/31/93 $10,488 10,530 10,104
11/30/93 $10,405 10,438 10,111
12/31/93 $10,622 10,658 10,111
1/31/94 $10,720 10,779 10,139
2/28/94 $10,532 10,500 10,173
3/31/94 $10,230 10,073 10,208
4/30/94 $10,251 10,159 10,222
5/31/94 $10,342 10,247 10,229
6/30/94 $10,317 10,184 10,264
7/31/94 $10,454 10,371 10,292
8/31/94 $10,510 10,407 10,333
9/30/94 $10,386 10,254 10,361
10/31/94 $10,235 10,072 10,368
11/30/94 $10,002 9,889 10,382
12/31/94 $10,242 10,107 10,382
1/31/95 $10,457 10,396 10,423
2/28/95 $10,682 10,698 10,465
3/31/95 $10,759 10,821 10,499
4/30/95 $10,781 10,834 10,534
5/31/95 $11,076 11,180 10,555
6/30/95 $10,984 11,083 10,576
7/31/95 $11,044 11,188 10,576
8/31/95 $11,162 11,330 10,604
9/30/95 $11,218 11,402 10,625
10/31/95 $11,380 11,567 10,660
11/30/95 $11,543 11,759 10,652
12/31/95 $11,639 11,872 10,645
1/31/96 $11,686 11,962 10,708
2/29/96 $11,585 11,881 10,742
3/31/96 $11,494 11,729 10,798
4/30/96 $11,472 11,696 10,840
5/31/96 $11,480 11,691 10,861
6/30/96 $11,599 11,818 10,867
7/31/96 $11,698 11,925 10,888
8/31/96 $11,696 11,922 10,908
9/30/96 $11,866 12,089 10,943
10/31/96 $11,976 12,226 10,978
11/30/96 $12,149 12,450 10,999
12/31/96 $12,121 12,397 10,999
1/31/97 $12,149 12,421 11,034
2/28/97 $12,251 12,535 11,069
3/31/97 $12,140 12,369 11,096
4/30/97 $12,230 12,472 11,110
5/31/97 $12,416 12,661 11,103
6/30/97 $12,518 12,796 11,116
7/31/97 $12,846 13,151 11,130
8/31/97 $12,776 13,027 11,151
9/30/97 $12,922 13,182 11,179
10/31/97 $13,015 13,266 11,207
11/30/97 $13,097 13,345 11,200
12/31/97 $13,274 13,540 11,186
1/31/98 $13,412 13,679 11,208
2/28/98 $13,429 13,683 11,229
3/31/98 $13,479 13,695 11,250
4/30/98 $13,440 13,634 11,271
5/31/98 $13,637 13,849 11,291
6/30/98 $13,711 13,903 11,304
7/31/98 $13,740 13,938 11,318
8/31/98 $13,917 14,154 11,332
9/30/98 $14,071 14,331 11,345
10/31/98 $14,087 14,331 11,372
11/30/98 $14,126 14,381 11,372
12/31/98 $14,148 14,417 11,366
1/31/99 $14,282 14,589 11,393
2/28/99 $14,262 14,524 11,407
3/31/99 $14,300 14,545 11,441
4/30/99 $14,339 14,581 11,524
5/31/99 $14,282 14,497 11,524
6/30/99 $14,105 14,288 11,524
7/31/99 $14,144 14,339 11,559
8/31/99 $13,989 14,225 11,587
9/30/99 $13,980 14,230 11,642
10/31/99 $13,799 14,077 11,663
11/30/99 $13,938 14,226 11,670
12/31/99 $13,824 14,119 11,670
1/31/00 $13,765 14,057 11,705
2/29/00 $13,932 14,220 11,774
3/31/00 $14,238 14,530 11,871
4/30/00 $14,152 14,444 11,878
5/31/00 $14,104 14,369 11,892
6/30/00 $14,428 14,750 11,954
7/31/00 $14,585 14,955 11,981
8/31/00 $14,783 15,185 11,981
9/30/00 $14,734 15,106 12,044
10/31/00 $14,855 15,271 12,064
11/30/00 $14,976 15,387 12,071
12/31/00 $15,308 15,767 12,064
1/31/01 $15,403 15,923 12,140
2/28/01 $15,486 15,974 12,189
3/31/01 $15,621 16,118 12,217
4/30/01 $15,529 15,944 12,266
5/31/01 $15,651 16,116 12,321
6/30/01 $15,760 16,224 12,342
7/31/01 $15,965 16,464 12,307
8/31/01 $16,171 16,736 12,307
9/30/01 $16,076 16,679 12,363
10/31/01 $16,242 16,877 12,321
11/30/01 $16,161 16,736 12,300
12/31/01 $16,036 16,577 12,252
1/31/02 $16,273 16,863 12,280
2/28/02 $16,427 17,066 12,329
3/31/02 $16,202 16,731 12,398
4/30/02 $16,414 17,058 12,468
5/31/02 $16,527 17,162 12,468
6/30/02 $16,669 17,343 12,475
7/31/02 $16,868 17,567 12,489
8/31/02 $17,068 17,778 12,530
9/30/02 $17,442 18,167 12,551
10/31/02 $17,209 17,866 12,573
11/30/02 $17,148 17,791 12,573
12/31/02 $17,495 18,166 12,545
1/31/03 $17,463 18,121 12,600
2/28/03 $17,651 18,374 12,697
3/31/03 $17,692 18,385 12,773
4/30/03 $17,836 18,507 12,745
5/31/03 $18,220 18,940 12,725
Annual Report|Past performance does not guarantee future results. | 17
Performance Summary (continued)
ENDNOTES
BOND PRICES, AND THUS THE FUND'S SHARE PRICE, GENERALLY MOVE IN THE OPPOSITE
DIRECTION FROM INTEREST RATES. MUNICIPAL BONDS ARE PARTICULARLY SENSITIVE TO
INTEREST RATE MOVEMENTS; THEREFORE, THE FUND'S YIELD AND SHARE PRICE WILL
FLUCTUATE WITH MARKET CONDITIONS. SINCE THE FUND CONCENTRATES ITS INVESTMENTS IN
A SINGLE STATE, IT IS SUBJECT TO GREATER RISK OF ADVERSE ECONOMIC AND REGULATORY
CHANGES IN THAT STATE THAN A GEOGRAPHICALLY DIVERSIFIED FUND. THESE AND OTHER
RISKS ARE DESCRIBED MORE FULLY IN THE FUND'S PROSPECTUS.
CLASS A: Subject to the current, maximum 4.25% initial sales charge.
Prior to 7/1/94, Fund shares were offered at a lower initial
sales charge; thus actual total returns may differ. Effective
5/1/94, the Fund implemented a Rule 12b-1 plan, which affects
subsequent performance.
CLASS B: Subject to no initial sales charge, but subject to a
contingent deferred sales charge (CDSC) declining from 4% to 0%
over six years. These shares have higher annual fees and expenses
than Class A shares.
CLASS C: Subject to 1% initial sales charge and 1% CDSC for shares
redeemed within 18 months of investment. These shares have higher
annual fees and expenses than Class A shares.
ADVISOR CLASS: No initial sales charge or Rule 12b-1 fees; are available
to a limited class of investors.
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 any current, applicable,
maximum sales charge(s).
3. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.
4. Distribution rate is based on an annualization of the respective class's May
dividend and the maximum offering price (NAV for Classes B and Advisor) per
share on 5/31/03.
5. Taxable equivalent distribution rate and yield assume the published rates as
of 5/29/03 for the maximum combined federal and New York state and City personal
income tax bracket of 42.38%, based on the federal income tax rate of 35.00%.
6. Yield, calculated as required by the SEC, is based on the earnings of the
Fund's portfolio for the 30 days ended 5/31/03.
7. Effective 10/1/01, the Fund began offering Advisor Class shares, which do not
have sales charges or a Rule 12b-1 plan. Performance quotations for this class
reflect the following methods of calculation: (a) For periods prior to 10/1/01,
a restated figure is used based upon the Fund's Class A performance, excluding
the effect of Class A's maximum initial sales charge, but reflecting the effect
of the Class A Rule 12b-1 fees; and (b) for periods after 9/30/01, actual
Advisor Class performance is used reflecting all charges and fees applicable to
that class. Since 10/1/01 (commencement of sales), the cumulative and average
annual total returns of Advisor Class shares were +13.33% and +7.81%.
8. Source: Standard & Poor's Micropal. The Lehman Brothers Municipal Bond Index
includes about 40,000 bonds from across the country. All bonds included have a
minimum credit rating of at least Baa and a maturity of at least two years, and
have been issued within the last five years as part of a deal of over $50
million. Bonds subject to alternative minimum tax or with floating or zero
coupons are excluded. Bonds will be added and the index will be updated monthly
with a one-month lag.
18 | Past performance does not guarantee future results.| Annual Report
Franklin New York Tax-Free Income Fund
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------
YEAR ENDED MAY 31,
2003 2002 2001 2000 1999
-----------------------------------------------------------------
CLASS A
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year .................. $11.65 $11.62 $11.06 $11.91 $12.08
-----------------------------------------------------------------
Income from investment operations:
Net investment incomea ............................. .57 .59 .62 .64 .64
Net realized and unrealized gains (losses) ......... .57 .04 .57 (.79) (.08)
-----------------------------------------------------------------
Total from investment operations .................... 1.14 .63 1.19 (.15) .56
-----------------------------------------------------------------
Less distributions from:
Net investment income .............................. (.57) (.60) (.63) (.63) (.64)
Net realized gains ................................. -- -- -- (.07) (.09)
-----------------------------------------------------------------
Total distributions ................................. (.57) (.60) (.63) (.70) (.73)
-----------------------------------------------------------------
Net asset value, end of year ........................ $12.22 $11.65 $11.62 $11.06 $11.91
=================================================================
Total return b ...................................... 10.06% 5.55% 10.97% (1.24)% 4.73%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ..................... $4,828,889 $4,609,318 $4,483,909 $4,219,849 $4,847,001
Ratio to average net assets:
Expenses ........................................... .60% .59% .60% .60% .59%
Net investment income .............................. 4.81% 5.09% 5.39% 5.64% 5.30%
Portfolio turnover rate ............................. 13.44% 9.57% 7.83% 24.61% 13.34%
aBased on average shares outstanding effective May 31, 2000.
bTotal return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
Annual Report | 19
Franklin New York Tax-Free Income Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
-----------------------------------------------------------------
YEAR ENDED MAY 31,
-----------------------------------------------------------------
CLASS B 2003 2002 2001 2000 1999 C
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year .................. $11.63 $11.61 $11.04 $11.89 $12.06
-----------------------------------------------------------------
Income from investment operations:
Net investment incomea ............................. .50 .53 .55 .57 .77
Net realized and unrealized gains (losses) ......... .57 .03 .58 (.78) (.70)
-----------------------------------------------------------------
Total from investment operations .................... 1.07 .56 1.13 (.21) .07
Less distributions from:
Net investment income .............................. (.50) (.54) (.56) (.57) (.24)
Net realized gains ................................. -- -- -- (.07) --
-----------------------------------------------------------------
Total distributions ................................. (.50) (.54) (.56) (.64) (.24)
-----------------------------------------------------------------
Net asset value, end of year ........................ $12.20 $11.63 $11.61 $11.04 $11.89
=================================================================
Total return b ...................................... 9.46% 4.88% 10.46% (1.80)% .62%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ..................... $233,767 $160,194 $87,697 $40,874 $19,059
Ratio to average net assets:
Expenses ........................................... 1.17% 1.16% 1.16% 1.17% 1.16%d
Net investment income .............................. 4.24% 4.53% 4.80% 5.08% 4.72%d
Portfolio turnover rate ............................. 13.44% 9.57% 7.83% 24.61% 13.34%
aBased on average shares outstanding effective May 31, 2000.
bTotal return does not reflect contingent deferred sales charge, and is not
annualized for periods less than one year.
cFor the period January 1, 1999 (effective date) to May 31, 1999.
dAnnualized
20 | Annual Report
Franklin New York Tax-Free Income Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
-----------------------------------------------------------------
YEAR ENDED MAY 31,
-----------------------------------------------------------------
CLASS C 2003 2002 2001 2000 1999
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year .................. $11.64 $11.62 $11.06 $11.91 $12.07
-----------------------------------------------------------------
Income from investment operations:
Net investment incomea ............................. .50 .53 .55 .57 .62
Net realized and unrealized gains (losses) ......... .58 .03 .57 (.78) (.12)
-----------------------------------------------------------------
Total from investment operations .................... 1.08 .56 1.12 (.21) .50
-----------------------------------------------------------------
Less distributions from:
Net investment income .............................. (.50) (.54) (.56) (.57) (.57)
Net realized gains ................................. -- -- -- (.07) (.09)
-----------------------------------------------------------------
Total distributions ................................. (.50) (.54) (.56) (.64) (.66)
-----------------------------------------------------------------
Net asset value, end of year ........................ $12.22 $11.64 $11.62 $11.06 $11.91
=================================================================
Total returnb ....................................... 9.55% 4.86% 10.35% (1.80)% 4.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ..................... $242,965 $188,642 $146,824 $119,302 $139,756
Ratio to average net assets:
Expenses ........................................... 1.17% 1.16% 1.16% 1.17% 1.16%
Net investment income .............................. 4.24% 4.53% 4.82% 5.07% 4.73%
Portfolio turnover rate ............................. 13.44% 9.57% 7.83% 24.61% 13.34%
aBased on average shares outstanding effective May 31, 2000.
bTotal return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
Annual Report | 21
Franklin New York Tax-Free Income Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
-------------------------
YEAR ENDED MAY 31,
ADVISOR CLASS 2003 2002 C
-------------------------
PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the year)
Net asset value, beginning of year ............................................................ $11.65 $11.68
-------------------------
Income from investment operations:
Net investment incomea ....................................................................... .58 .40
Net realized and unrealized gains (losses) ................................................... .58 (.08)
-------------------------
Total from investment operations .............................................................. 1.16 .32
-------------------------
Less distributions from net investment income ................................................. (.58) (.35)
-------------------------
Net asset value, end of year .................................................................. $12.23 $11.65
=========================
Total return b ................................................................................ 10.24% 2.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ............................................................... $18,278 $14,054
Ratios to average net assets:
Expenses ..................................................................................... .52% .51%d
Net investment income ........................................................................ 4.89% 5.16%d
Portfolio turnover rate ....................................................................... 13.44% 9.57%
aBased on average shares outstanding.
bTotal return is not annualized for periods less than one year.
cFor the period October 1, 2001 (effective date) to May 31, 2002.
dAnnualized
22 | See notes to financial statements. | Annual Report
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS 97.9%
BONDS 96.1%
Albany Housing Authority Limited Obligation Revenue, Refunding, 6.25%, 10/01/12 ......... $ 5,250,000 $ 5,758,148
Albany IDA, Civic Facility Revenue,
Albany Medical Center Project, 6.00%, 5/01/19 ........................................ 1,270,000 1,268,628
Albany Medical Center Project, 6.00%, 5/01/29 ........................................ 1,460,000 1,400,724
St. Rose Project, Series A, AMBAC Insured, 5.375%, 7/01/31 ........................... 2,750,000 3,012,653
Albany Parking Authority Revenue,
Refunding, Series A, 5.625%, 7/15/25 ................................................. 1,000,000 1,081,970
Series A, 5.625%, 7/15/20 ............................................................ 1,250,000 1,386,638
Amherst IDA, Civic Facility Revenue, University of Buffalo Foundation,
Faculty Student Housing Corp.,
Series A, AMBAC Insured, 5.125%, 8/01/20 ............................................. 1,410,000 1,559,629
Series A, AMBAC Insured, 5.25%, 8/01/31 .............................................. 5,055,000 5,450,908
Series B, AMBAC Insured, 5.625%, 8/01/20 ............................................. 1,690,000 1,933,833
Series B, AMBAC Insured, 5.75%, 8/01/25 .............................................. 3,050,000 3,476,451
Series B, AMBAC Insured, 5.75%, 8/01/30 .............................................. 3,440,000 3,900,031
Series B, AMBAC Insured, 5.25%, 8/01/31 .............................................. 1,000,000 1,078,320
Auburn IDA, MFR, Auburn Memorial Home, 6.50%, 2/01/34 ................................... 5,250,000 5,566,575
Battery Park City Authority Revenue, Refunding, Series A, 5.80%, 11/01/22 ............... 68,795,000 71,594,269
Bethany Retirement Home Inc. Mortgage Loan Revenue, FHA Insured, 7.50%, 2/01/34 ......... 8,160,000 8,729,242
Clinton County COP, Correctional Facilities Project, 8.125%, 8/01/17 .................... 5,375,000 7,077,263
Dutchess County IDA, Civic Facility Revenue, Vassar College Project, 5.35%, 9/01/40 ..... 16,000,000 17,269,280
Franklin County COP, Court House Redevelopment Project, 8.125%, 8/01/06 ................. 3,060,000 3,247,792
Geneva IDA, Civic Facilities Revenue, Colleges of the Seneca Project, AMBAC Insured,
5.00%, 9/01/21 ....................................................................... 2,835,000 3,075,550
5.125%, 9/01/31 ...................................................................... 5,045,000 5,395,073
Guam Airport Authority Revenue, Series A, 6.50%, 10/01/23 ............................... 5,385,000 5,536,803
Guam Power Authority Revenue, Series A, Pre-Refunded,
6.625%, 10/01/14 ..................................................................... 2,900,000 3,173,412
6.75%, 10/01/24 ...................................................................... 25,500,000 27,945,960
Hamilton Elderly Housing Corp. Mortgage Revenue, Hamilton Apartments Project,
11.25%, 1/01/15 ...................................................................... 1,135,000 1,161,559
Ilion Elderly Housing Corp. Mortgage Revenue, Section 8 Housing Assistance Revenue,
7.25%, 7/01/09 ....................................................................... 1,380,000 1,431,916
Long Island Power Authority Electric System Revenue,
MBIA Insured, 5.75%, 12/01/24 ........................................................ 15,060,000 16,762,834
Refunding, Series A, 5.75%, 12/01/24 ................................................. 15,000,000 16,286,100
Refunding, Series A, AMBAC Insured, 5.25%, 12/01/26 .................................. 5,000,000 5,291,050
Series A, 5.50%, 12/01/29 ............................................................ 17,065,000 17,235,650
Series A, FSA Insured, 5.00%, 12/01/18 ............................................... 10,000,000 10,818,200
Series A, FSA Insured, 5.125%, 12/01/22 .............................................. 28,210,000 29,864,517
Series A, MBIA Insured, 5.25%, 12/01/26 .............................................. 9,000,000 9,620,460
Metropolitan Transporation Authority Service Contract Revenue, Refunding, Series A,
5.125%, 1/01/29 ...................................................................... 6,000,000 6,299,460
Middleburg Central School District GO, FGIC Insured,
4.60%, 8/15/17 ....................................................................... 1,045,000 1,116,718
4.625%, 8/15/18 ...................................................................... 1,155,000 1,228,516
4.625%, 8/15/19 ...................................................................... 1,210,000 1,281,511
Annual Report | 23
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Middleburg Central School District GO, FGIC Insured, (cont.)
4.75%, 8/15/20 ....................................................................... $ 1,270,000 $ 1,340,168
4.75%, 8/15/21 ....................................................................... 1,330,000 1,397,511
Monroe County IDAR, Civic Facilities, De Paul Community Facilities, 6.50%, 2/01/24 ...... 1,285,000 1,332,160
Monroe County Water Authority Water Revenue,
5.15%, 8/01/22 ....................................................................... 1,000,000 1,082,210
5.25%, 8/01/36 ....................................................................... 2,250,000 2,426,040
MTA Commuter Facilities Revenue,
Series 8, 5.50%, 7/01/21 ............................................................. 5,000,000 6,045,950
Series A, 6.00%, 7/01/24 ............................................................. 5,575,000 6,762,810
Series A, 5.25%, 7/01/28 ............................................................. 18,300,000 21,577,713
Series A, 6.125%, 7/01/29 ............................................................ 9,625,000 11,743,751
Series A, FGIC Insured, 5.25%, 7/01/28 ............................................... 8,655,000 10,205,197
Series A, MBIA Insured, Pre-Refunded, 5.625%, 7/01/27 ................................ 10,000,000 11,728,500
Series A, Pre-Refunded, 6.50%, 7/01/24 ............................................... 35,620,000 38,258,017
Series C-1, FGIC Insured, 5.375%, 7/01/27 ............................................ 19,100,000 22,494,834
Series R, 5.50%, 7/01/17 ............................................................. 2,000,000 2,433,000
MTA New York Dedicated Tax Fund Revenue, Series A,
FGIC Insured, 5.00%, 11/15/25 ........................................................ 22,010,000 23,353,270
FGIC Insured, 6.00%, 4/01/30 ......................................................... 27,260,000 33,154,157
FGIC Insured, 5.00%, 11/15/31 ........................................................ 39,685,000 41,662,900
FSA Insured, 5.00%, 11/15/28 ......................................................... 41,575,000 44,112,322
FSA Insured, 5.00%, 4/01/29 .......................................................... 25,800,000 30,154,782
MBIA Insured, Prerefunded, 5.25%, 4/01/26 ............................................ 20,500,000 24,131,165
Refunding, 5.00%, 11/15/30 ........................................................... 37,000,000 38,525,880
MTA New York Service Contract Revenue, Series B,
5.375%, 1/01/30 ...................................................................... 50,000,000 53,768,500
MBIA Insured, 5.00%, 1/01/31 ......................................................... 22,290,000 23,468,472
MTA Revenue,
Dedicated Tax Fund, Series A, FSA Insued, 5.00%, 11/15/32 ............................ 10,000,000 10,546,500
Refunding, Series A, FSA Insured, 5.00%, 11/15/30 .................................... 43,980,000 46,418,251
Refunding, Series A, MBIA Insured, 5.125%, 11/15/31 .................................. 15,000,000 16,072,500
MTA Transit Facilities Revenue, Series A,
6.00%, 7/01/24 ....................................................................... 7,000,000 8,491,420
6.125%, 7/01/29 ...................................................................... 11,595,000 14,147,407
FSA Insured, Pre-Refunded, 6.10%, 7/01/21 ............................................ 15,000,000 17,441,550
FSA Insured, Pre-Refunded, 5.50%, 7/01/22 ............................................ 16,170,000 18,986,814
MBIA Insured, Pre-Refunded, 5.625%, 7/01/25 .......................................... 8,000,000 9,343,040
Pre-Refunded, 5.625%, 7/01/27 ........................................................ 14,440,000 17,042,232
MTA Transportation Revenue,
5.25%, 11/15/31 ...................................................................... 15,000,000 15,988,500
Refunding, Series A, FGIC Insured, 5.25%, 11/15/31 ................................... 34,000,000 36,786,980
Nassau County Interim Finance Authority Revenue, Series A, AMBAC Insured,
4.75%, 11/15/23 ...................................................................... 5,000,000 5,239,150
Nassau County Tobacco Settlement Corp. Revenue, Asset Backed, Series A,
6.50%, 7/15/27 ....................................................................... 15,000,000 15,142,950
Nassau Health Care Corp. Health System Revenue, Nassau County Guaranteed,
FSA Insured,
5.75%, 8/01/29 ...................................................................... 36,040,000 41,250,663
24 | Annual Report
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York City GO,
6.125%, 8/01/25 ...................................................................... $ 4,940,000 $ 5,441,953
Refunding, Series A, 5.50%, 5/15/24 .................................................. 10,000,000 10,639,500
Refunding, Series A, FSA Insured, 6.00%, 5/15/30 ..................................... 6,250,000 7,293,063
Refunding, Series F, 5.875%, 8/01/24 ................................................. 7,000,000 7,475,860
Refunding, Series H, Pre-Refunded, 6.125%, 8/01/25 ................................... 60,000 70,907
Series A, 6.25%, 8/01/17 ............................................................. 445,000 503,566
Series A, Pre-Refunded, 6.25%, 8/01/17 ............................................... 2,230,000 2,593,445
Series A-1, 6.625%, 8/01/25 .......................................................... 13,360,000 15,035,745
Series A-1, Pre-Refunded, 6.625%, 8/01/25 ............................................ 3,640,000 4,100,751
Series B, 7.00%, 2/01/18 ............................................................. 25,000 25,368
Series B, Pre-Refunded, 6.00%, 8/15/26 ............................................... 915,000 1,060,201
Series B, Sub Series B-1, Pre-Refunded, 7.00%, 8/15/16 ............................... 2,000,000 2,163,440
Series B, Sub Series B-1, Pre-Refunded, 7.50%, 8/15/20 ............................... 10,000,000 10,876,600
Series C, 7.00%, 2/01/12 ............................................................. 705,000 710,661
Series C, FSA Insured, 5.125%, 3/15/25 ............................................... 6,500,000 6,922,565
Series D, 8.00%, 8/01/17 ............................................................. 5,000 5,048
Series D, 7.50%, 2/01/18 ............................................................. 5,000 5,077
Series D, 5.125%, 8/01/19 ............................................................ 1,985,000 2,075,715
Series D, 5.25%, 8/01/21 ............................................................. 14,500,000 15,050,275
Series D, 5.50%, 6/01/24 ............................................................. 23,945,000 25,535,427
Series D, FGIC Insured, 5.25%, 8/01/21 ............................................... 5,355,000 5,707,252
Series F, Pre-Refunded, 6.625%, 2/15/25 .............................................. 11,240,000 12,365,236
Series F, 5.30%, 1/15/26 ............................................................. 45,000,000 46,890,000
Series G, 6.00%, 10/15/26 ............................................................ 9,815,000 10,614,432
Series G, Pre-Refunded, 6.00%, 10/15/26 .............................................. 85,000 100,899
Series H, 7.20%, 2/01/15 ............................................................. 5,000 5,075
Series H, FSA Insured, 5.375%, 8/01/27 ............................................... 8,510,000 9,033,535
Series H, MBIA Insured, 5.125%, 8/01/25 .............................................. 4,000,000 4,186,880
Series I, 6.25%, 4/15/27 ............................................................. 3,275,000 3,635,119
Series I, 5.00%, 3/01/29 ............................................................. 10,000,000 10,169,000
Series I, 5.00%, 3/01/30 ............................................................. 23,785,000 24,186,967
Series I, Pre-Refunded, 6.25%, 4/15/27 ............................................... 6,225,000 7,338,030
Series K, Pre-Refunded, 6.25%, 4/01/26 ............................................... 9,000,000 10,356,300
New York City HDC, MFMR,
Refunding, Series A, FHA Insured, 6.55%, 10/01/15 .................................... 19,450,000 19,928,665
Series A, FHA Insured, 6.55%, 4/01/18 ................................................ 10,000,000 10,246,400
Series A, FHA Insured, 6.60%, 4/01/30 ................................................ 51,500,000 52,808,615
New York City IDA, Civic Facility Revenue,
College of New Rochelle, 5.80%, 9/01/26 .............................................. 1,500,000 1,627,185
Institute of International Education Inc. Project, 5.25%, 9/01/21 .................... 1,530,000 1,674,294
Institute of International Education Inc. Project, 5.25%, 9/01/31 .................... 5,235,000 5,614,276
New York Blood Center Inc. Project, Pre-Refunded, 7.20%, 5/01/12 ..................... 3,800,000 4,008,886
New York Blood Center Inc. Project, Pre-Refunded, 7.25%, 5/01/22 ..................... 7,000,000 7,391,230
New York University Project, AMBAC Insured, 5.00%, 7/01/31 ........................... 8,000,000 8,400,640
Staten Island University Hospital Project, Series A, 6.375%, 7/01/31 ................. 3,995,000 4,221,437
Annual Report | 25
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York City Municipal Water Authority Revenue, Refunding, Series E, FGIC Insured,
5.00%, 6/15/26 ....................................................................... $23,780,000 $ 25,181,355
New York City Municipal Water Finance Authority Revenue, Series B, 5.00%, 6/15/26 ....... 25,000,000 26,298,750
New York City Municipal Water Finance Authority Water and Sewer System Revenue,
Refunding, Series E, MBIA Insured, 5.125%, 6/15/31 ................................... 34,175,000 36,503,343
Series A, 5.75%, 6/15/30 ............................................................. 41,190,000 46,835,913
Series A, 5.25%, 6/15/33 ............................................................. 7,000,000 7,471,940
Series A, FGIC Insured, 5.75%, 6/15/31 ............................................... 19,315,000 22,019,100
Series A, FGIC Insured, 5.50%, 6/15/32 ............................................... 11,655,000 12,773,647
Series B, 5.75%, 6/15/26 ............................................................. 24,455,000 27,415,033
Series B, 6.10%, 6/15/31 ............................................................. 21,005,000 25,483,476
Series B, 6.00%, 6/15/33 ............................................................. 6,040,000 7,289,555
Series B, FGIC Insured, 5.125%, 6/15/30 .............................................. 12,500,000 13,071,125
Series B, MBIA Insured, 5.50%, 6/15/27 ............................................... 32,620,000 35,800,450
Series B, Pre-Refunded, 6.10%, 6/15/31 ............................................... 3,995,000 4,941,775
Series B, Pre-Refunded, 6.00%, 6/15/33 ............................................... 10,260,000 12,625,751
New York City Transitional Finance Authority Revenue, Future Tax Secured,
Pre-Refunded, Series A, 5.125%, 8/15/21 .............................................. 5,820,000 6,665,471
Refunding, Series B, AMBAC Insured, 5.00%, 5/01/30 ................................... 3,000,000 3,172,890
Refunding, Series C, Pre-Refunded, 5.50%, 11/01/29 ................................... 13,660,000 16,331,213
Refunding, Series C-A, 5.50%, 11/01/24 ............................................... 16,800,000 18,456,480
Series A, 5.125%, 8/15/21 ............................................................ 9,115,000 9,667,734
Series A, 5.00%, 8/15/27 ............................................................. 770,000 798,390
Series A, 6.00%, 8/15/29 ............................................................. 29,000,000 35,452,790
Series A, 5.25%, 5/01/31 ............................................................. 27,005,000 28,820,276
Series A, FGIC Insured, 5.00%, 5/01/28 ............................................... 16,065,000 16,910,662
Series A, Pre-Refunded, 5.625%, 2/15/26 .............................................. 20,000,000 23,959,600
Series A, Pre-Refunded, 5.00%, 8/15/27 ............................................... 21,145,000 24,110,375
Series B, 6.00%, 11/15/29 ............................................................ 15,000,000 18,422,700
Series B, 5.00%, 5/01/30 ............................................................. 7,520,000 7,870,131
Series C, 5.50%, 5/01/25 ............................................................. 5,570,000 6,095,808
Series C, 5.00%, 5/01/26 ............................................................. 3,680,000 3,834,229
Series C, 5.00%, 5/01/29 ............................................................. 5,215,000 5,446,807
Series C, MBIA Insured, 5.00%, 5/01/29 ............................................... 1,365,000 1,435,161
Series C, MBIA Insured, Pre-Refunded, 5.00%, 5/01/29 ................................. 2,270,000 2,636,128
Series C, Pre-Refunded, 5.50%, 5/01/25 ............................................... 4,430,000 5,266,517
Series C, Pre-Refunded, 5.00%, 5/01/26 ............................................... 320,000 368,051
Series C, Pre-Refunded, 5.00%, 5/01/29 ............................................... 8,655,000 10,050,965
Series D, Refunding, 5.00%, 2/01/31 .................................................. 7,500,000 7,850,550
Series D, 5.00%, 2/01/27 ............................................................. 62,025,000 65,173,389
Series E, 5.00%, 2/01/24 ............................................................. 7,000,000 7,406,280
Series E, 5.00%, 2/01/25 ............................................................. 5,000,000 5,273,950
Series E, 5.00%, 2/01/27 ............................................................. 10,000,000 10,507,600
Series E, 5.00%, 2/01/33 ............................................................. 18,035,000 18,877,956
New York City Transportation Authority MTA, Triborough COP, Series A, AMBAC Insured,
5.25%, 1/01/29 ....................................................................... 79,840,000 85,360,138
26 | Annual Report
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York City Trust Cultural Resources Revenue, Museum of Modern Art 2001, Series D,
AMBAC Insured, 5.125%, 7/01/31 ........................................................ $15,500,000 $ 16,620,495
New York IDA, Parking Facility Revenue, Royal Charter Presbyterian,
FSA Insured, 5.25%, 12/15/32 .......................................................... 1,525,000 1,646,634
New York State Commissioner General Services People of the State of New York
Certificate of Lease Assignment,
5.70%, 3/01/29 ....................................................................... 72,062,044 75,080,002
5.75%, 3/01/29 ....................................................................... 35,964,486 37,572,818
New York State COP, Hanson Redevelopment Project, 8.375%, 5/01/08 ....................... 15,245,000 17,971,721
New York State Dormitory Authority Lease Revenue,
Court Facilities, 6.00%, 5/15/39 ..................................................... 58,245,000 65,239,060
State University Dormitory Facilities, 5.00%, 7/01/32 ................................ 5,500,000 5,736,170
State University Dormitory Facilities, FGIC Insured, 5.50%, 7/01/27 .................. 2,000,000 2,202,320
State University Dormitory Facilities, FGIC Insured, 5.10%, 7/01/31 .................. 7,700,000 8,153,992
State University Dormitory Facilities, Series A, 6.00%, 7/01/30 ...................... 5,750,000 6,684,893
State University Dormitory Facilities, Series B, MBIA Insured, 5.125%, 7/01/28 ....... 4,800,000 5,091,600
State University Dormitory Facilities, Series C, MBIA Insured, 5.50%, 7/01/19 ........ 5,090,000 5,713,576
State University Dormitory Facilities, Series C, MBIA Insured, 5.50%, 7/01/29 ........ 9,250,000 10,227,540
New York State Dormitory Authority Revenue,
5.00%, 7/01/28 ....................................................................... 5,000,000 5,237,800
Bishop Henry B. Hucles Nursing Home, 6.00%, 7/01/24 .................................. 2,545,000 2,695,511
Buena Vida Nursing Home, Series A, 5.25%, 7/01/28 .................................... 4,730,000 4,925,302
City University Consolidated, FGIC Insured, 5.25%, 7/01/25 ........................... 4,100,000 4,419,882
City University Consolidated, Refunding, FGIC Insured, 5.375%, 7/01/24 ............... 14,300,000 16,681,522
City University System Consolidated, Second General, Refunding,
Series A, 6.00%, 7/01/17 ........................................................... 10,215,000 11,454,488
City University System Consolidated, Series 1, MBIA Insured, 5.125%, 7/01/27 ......... 6,680,000 7,719,742
City University System Consolidated, Series C, 7.50%, 7/01/10 ........................ 14,900,000 18,253,394
City University System Consolidated, Series D, 7.00%, 7/01/09 ........................ 3,430,000 4,008,195
City University System Consolidated, Third General, Refunding,
Series A, 6.00%, 7/01/16 ........................................................... 23,185,000 25,998,268
City University System Consolidated, Fourth General, Series A, 5.25%, 7/01/31 ........ 12,000,000 13,934,400
City University System Consolidated, Fourth General, Series A, FGIC Insured,
5.25%, 7/01/30 ..................................................................... 20,705,000 24,331,895
City University System Consolidated, Third General, Series 1, FSA Insured,
5.50%, 7/01/29 ..................................................................... 38,375,000 45,802,098
City University System, FSA Insured, 5.375%, 7/01/24 ................................. 5,000,000 5,832,700
City University System, Series 2, 6.00%, 7/01/26 ..................................... 6,020,000 6,981,815
City University System, Third General, 6.00%, 7/01/20 ................................ 13,000,000 15,077,010
City University System, Third General, Residence 2, 6.20%, 7/01/22 ................... 8,565,000 9,984,906
City University System, Third General, Residence 2, Pre-Refunded, 6.20%, 7/01/22 ..... 19,990,000 23,270,759
Concord Nursing Home Inc., 6.50%, 7/01/29 ............................................ 2,500,000 2,790,875
Department of Health, 6.625%, 7/01/15 ................................................ 760,000 850,326
Department of Health, 6.20%, 7/01/17 ................................................. 7,650,000 8,178,156
Department of Health, Pre-Refunded, 6.625%, 7/01/15 .................................. 4,595,000 5,211,373
Department of Health, Rosewell Park Cancer Center, Pre-Refunded, 6.625%, 7/01/24 ..... 9,175,000 10,405,735
FHA, Insured Mortgage, St. Barnabas, Series A, AMBAC Insured, 5.125%, 2/01/22 ........ 4,000,000 4,358,040
FHA, Insured Mortgage, St. Barnabas, Series A, AMBAC Insured, 5.00%, 2/01/31 ......... 5,500,000 5,805,690
FGIC Insured, 5.125%, 5/15/31 ........................................................ 45,000,000 53,226,900
Good Samaritan Hospital Medical Center, Series A, MBIA Insured, 5.50%, 7/01/24 ....... 5,000,000 5,451,400
Heritage House Nursing Center, 7.00%, 8/01/31 ........................................ 2,215,000 2,235,755
Insured, Fordham University, FGIC Insured, 5.00%, 7/01/27 ............................ 6,020,000 6,441,099
Annual Report | 27
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State Dormitory Authority Revenue, (cont.)
Insured, Fordham University, FGIC Insured, 5.00%, 7/01/32 ............................ $ 5,235,000 $ 5,544,074
Interfaith Medical Center, Series D, 5.40%, 2/15/28 .................................. 14,000,000 14,709,660
Ithaca College, AMBAC Insured, 5.25%, 7/01/26 ........................................ 2,000,000 2,133,360
Long Island University, Asset Guaranteed, 5.125%, 9/01/23 ............................ 1,800,000 1,917,450
Long Island University, Asset Guaranteed, 5.25%, 9/01/28 ............................. 1,500,000 1,602,195
Long Island University, Pre-Refunded, 6.25%, 9/01/23 ................................. 5,495,000 6,223,088
Mental Health Services Facilities Improvement, Series B,
MBIA Insured, 6.00%, 2/15/25 .................................................... 6,100,000 7,042,450
Mental Health Services Facilities Improvement, Series B,
MBIA Insured, 6.00%, 2/15/30 .................................................... 4,865,000 5,597,766
Mental Health Services Facilities Improvement, Series B,
MBIA Insured, 5.25%, 8/15/31 .................................................... 10,000,000 10,728,400
Mental Health Services Facilities Improvement, Series D,
FSA Insured, 5.50%, 2/15/21 ..................................................... 1,135,000 1,265,264
Mental Health Services Facilities Improvement, Series D,
FSA Insured, 5.50%, 8/15/21 ..................................................... 2,315,000 2,580,693
Mental Health Services Facilities Improvement, Series D,
FSA Insured, 5.25%, 8/15/30 ..................................................... 5,000,000 5,345,300
Mental Health Services Facilities Improvement, Series D,
MBIA Insured, 5.00%, 8/15/17 .................................................... 23,000,000 24,931,540
Mental Health Services Facilities, Refunding, 6.00%, 8/15/21 ......................... 1,785,000 2,006,322
Mental Health Services Facilities, Series A, 5.75%, 8/15/22 .......................... 1,390,000 1,529,612
Mental Health Services Facilities, Series A, 5.75%, 2/15/27 .......................... 9,370,000 10,276,641
Mental Health Services, Series B, 5.75%, 8/15/12 ..................................... 2,155,000 2,440,107
Mental Health Services, Series B, Pre-Refunded, 5.75%, 8/15/12 ....................... 10,000 11,594
New School University, MBIA Insured, 5.00%, 7/01/31 .................................. 2,500,000 2,625,200
New York Hospital Medical Center, AMBAC Insured, 5.60%, 2/15/39 ...................... 4,900,000 5,311,208
New York University, Series 2, AMBAC Insured, 5.00%, 7/01/26 ......................... 3,500,000 3,709,650
New York University, Series 2, AMBAC Insured, 5.00%, 7/01/31 ......................... 5,000,000 5,250,400
Nursing Home, Arden Hill, FHA Insured, Pre-Refunded, 5.85%, 8/01/26 .................. 4,455,000 5,145,258
Nursing Home, Center for Nursing, FHA Insured, 5.55%, 8/01/37 ........................ 8,435,000 8,939,582
Nursing Home, St. John's Health Care Corp., Refunding, FHA Insured,
6.25%, 2/01/36 .................................................................. 33,065,000 36,274,950
Nursing Home, Wesley Garden, FHA Insured, 6.125%, 8/01/35 ............................ 2,000,000 2,220,740
Our Lady of Mercy, Mortgage Revenue, FHA Insured, 6.30%, 8/01/32 ..................... 5,565,000 5,666,561
Pace University, Refunding, MBIA Insured, 5.75%, 7/01/26 ............................. 2,000,000 2,236,660
Rockefeller University, Series A1, 5.00%, 7/01/32 .................................... 11,500,000 12,143,425
School District Financing Program, Series A, MBIA Insured, 5.00%, 4/01/31 ............ 9,500,000 10,035,800
Second Hospital, St. Clare's Hospital, Series B, 5.40%, 2/15/25 ...................... 6,500,000 6,843,655
St. Agnes Hospital, Series A, 5.40%, 2/15/25 ......................................... 2,000,000 2,105,740
St. Francis Hospital, Series A, MBIA Insured, 5.50%, 7/01/29 ......................... 1,000,000 1,082,390
St. Johns University, MBIA Insured, 5.25%, 7/01/25 ................................... 5,770,000 6,228,080
St. Johns University, Series A, MBIA Insured, 5.25%, 7/01/25 ......................... 5,310,000 5,787,210
St. Lukes Home Residential Health, Series A, FHA Insured, 6.375%, 8/01/35 ............ 5,200,000 5,645,380
State Rehabilitation Association, Series A, AMBAC Insured, 5.00%, 7/01/23 ............ 1,725,000 1,862,379
State University Adult Facility, Series B, 5.375%, 5/15/23 ........................... 9,500,000 11,291,605
State University Educational Facilities, 5.125%, 5/15/21 ............................. 12,090,000 12,737,903
State University Educational Facilities, Pre-Refunded, 5.125%, 5/15/21 ............... 2,910,000 3,367,132
State University Educational Facilities, Refunding, 5.00%, 5/15/17 ................... 3,600,000 3,834,720
Teachers College, MBIA Insured, 5.00%, 7/01/22 ....................................... 2,885,000 3,109,511
Teachers College, MBIA Insured, 5.00%, 7/01/32 ....................................... 6,000,000 6,331,080
The Highlands Living, FHA Insured, 6.60%, 2/01/34 .................................... 3,490,000 3,731,334
Upstate Community Colleges, Series A, 5.00%, 7/01/19 ................................. 7,230,000 7,713,470
Upstate Community Colleges, Series A, 6.00%, 7/01/22 ................................. 7,000,000 7,915,040
28 | Annual Report
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State Dormitory Authority Revenue, (cont.)
Upstate Community Colleges, Series A, 5.00%, 7/01/27 ................................. $ 3,720,000 $ 3,875,347
Upstate Community Colleges, Series A, 5.00%, 7/01/28 ................................. 25,675,000 26,615,219
Upstate Community Colleges, Series A, 5.00%, 7/01/31 ................................. 7,365,000 7,648,332
Upstate Community Colleges, Series A, Pre-Refunded, 6.125%, 7/01/27 .................. 11,845,000 14,121,017
W.K. Nursing Home Corp, FHA Insured, 6.05%, 2/01/26 .................................. 6,800,000 7,463,680
New York State Energy Research and Development Authority Electric Facilities Revenue,
Consolidated Edison Project, Refunding, Series A, 6.10%, 8/15/20 ..................... 11,820,000 12,654,492
New York State Energy Research and Development Authority PCR, Niagara Mohawk
Power Project,
Refunding, Series A, AMBAC Insured, 5.15%, 11/01/25 .................................. 20,000,000 21,350,000
New York State Environmental Facilities Corp. PCR, State Water, Series E,
6.875%, 6/15/14 ...................................................................... 1,190,000 1,272,741
Pre-Refunded, 6.875%, 6/15/14 ........................................................ 1,810,000 1,946,601
New York State Environmental Facilities Corp. State Clean Water and Drinking Revenue,
Revolving Funds
Pooled Financing, Series B, 5.25%, 5/15/31 ........................................... 9,595,000 10,276,245
Series C, 5.25%, 6/15/31 ............................................................. 37,600,000 40,426,392
New York State Government Assistance Corp., Refunding, Series B, MBIA Insured,
4.875%, 4/01/20 ...................................................................... 4,080,000 4,281,552
New York State HFA, Service Contract Obligation Revenue,
6.375%, 9/15/15 ...................................................................... 570,000 640,036
Refunding, Series C, 6.125%, 3/15/20 ................................................. 91,910,000 94,914,538
Refunding, Series C, 6.00%, 9/15/21 .................................................. 19,310,000 19,928,886
Series A, 6.50%, 3/15/24 ............................................................. 330,000 357,093
Series A, 6.50%, 3/15/25 ............................................................. 860,000 969,100
Series A, 6.00%, 3/15/26 ............................................................. 970,000 1,095,120
Series A, Pre-Refunded, 6.375%, 9/15/15 .............................................. 4,430,000 5,271,301
Series A, Pre-Refunded, 6.50%, 3/15/24 ............................................... 28,000,000 30,525,880
Series A, Pre-Refunded, 6.50%, 3/15/25 ............................................... 10,410,000 11,880,621
Series A, Pre-Refunded, 6.00%, 3/15/26 ............................................... 15,755,000 18,388,133
Series C, 6.30%, 3/15/22 ............................................................. 1,950,000 1,996,566
Series C, 5.50%, 3/15/25 ............................................................. 17,015,000 18,109,915
Series C, Pre-Refunded, 6.125%, 3/15/20 .............................................. 7,850,000 8,118,784
New York State HFAR,
5.00%, 3/15/33 ....................................................................... 7,000,000 7,319,130
Children's Rescue Fund Housing, Series A, 7.625%, 5/01/18 ............................ 5,015,000 5,022,021
Health Facilities of New York City, Refunding, Series A, 6.00%, 11/01/08 ............. 2,400,000 2,659,056
Health Facilities of New York City, Series A, 6.00%, 5/01/07 ......................... 11,200,000 12,546,688
Housing Project Mortgage, Refunding, Series A, FSA Insured, 6.10%, 11/01/15 .......... 25,100,000 27,540,975
Housing Project Mortgage, Refunding, Series A, FSA Insured, 6.125%, 11/01/20 ......... 30,320,000 33,220,714
MFHR, Second Mortgage, Series A, 7.00%, 8/15/23 ...................................... 4,215,000 4,220,480
MFHR, Second Mortgage, Series C, 6.60%, 8/15/27 ...................................... 5,500,000 5,758,995
MFHR, Second Mortgage, Series D, 6.25%, 8/15/23 ...................................... 2,500,000 2,530,950
MFHR, Second Mortgage, Series E, 6.75%, 8/15/25 ...................................... 6,475,000 6,554,643
MFMR, Refunding, Series C, FHA Insured, 6.45%, 8/15/14 ............................... 1,000,000 1,012,190
MFMR, Series A, FHA Insured, 7.00%, 8/15/22 .......................................... 4,680,000 4,736,441
MFMR, Series B, AMBAC Insured, 6.25%, 8/15/14 ........................................ 2,295,000 2,407,248
Annual Report | 29
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State HFAR, (cont.)
MFMR, Series B, AMBAC Insured, 6.35%, 8/15/23 ........................................ $30,600,000 $ 31,845,114
MFMR, Series C, FHA Insured, 6.50%, 8/15/24 .......................................... 6,870,000 6,952,715
New York State Local Government Assistance Corp. Revenue Series A, 6.00%, 4/01/24 ....... 11,200,000 12,423,488
New York State Medical Care Facilities Finance Agency Revenue,
Beth Israel Medical Center Project, Refunding, Series A, 7.20%, 11/01/14 ............. 9,145,000 8,977,281
Hospital and Nursing Home, Mortgage Revenue, Refunding, Series B, FHA Insured,
6.25%, 2/15/25 .................................................................. 2,635,000 2,880,424
Hospital and Nursing Home, Mortgage Revenue, Refunding, Series B, FHA Insured,
6.25%, 2/15/35 .................................................................. 4,745,000 5,186,949
Hospital and Nursing Home, Mortgage Revenue, Refunding, Series C, FHA Insured,
6.375%, 8/15/29 ................................................................. 63,365,000 67,446,340
Hospital and Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.30%, 8/15/23 ... 9,000,000 9,257,400
Hospital and Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.25%, 2/15/27 ... 12,235,000 12,648,421
Hospital and Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.20%, 2/15/28 ... 26,910,000 29,382,491
Hospital and Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.375%, 8/15/33 .. 7,940,000 8,168,116
Hospital and Nursing Home, Mortgage Revenue, Series A, FHA Insured, 6.50%, 2/15/34 ... 9,955,000 10,389,536
Hospital and Nursing Home, Mortgage Revenue, Series C, FHA Insured, 6.20%, 8/15/23 ... 21,540,000 23,644,458
Hospital and Nursing, Series C, FHA Insured, 6.65%, 8/15/32 .......................... 2,820,000 2,874,426
The Hospital for Special Surgery Revenue, Series A, Pre-Refunded, 6.375%, 8/15/24 .... 5,765,000 6,250,355
The Hospital for Special Surgery Revenue, Series A, Pre-Refunded, 6.45%, 8/15/34 ..... 36,650,000 39,768,182
Hospital Mortgage, Series A, AMBAC Insured, Pre-Refunded, 6.80%, 8/15/24 ............. 3,200,000 3,572,704
Hospital Mortgage, Series A, AMBAC Insured, Pre-Refunded, 6.50%, 8/15/29 ............. 5,125,000 5,696,079
Hospital Mortgage, Series A, AMBAC Insured, Pre-Refunded, 6.90%, 8/15/34 ............. 31,210,000 34,897,149
Huntington Hospital Mortgage, Project A, Refunding, 6.50%, 11/01/14 .................. 5,500,000 6,026,295
Medina Memorial Hospital Project, Series A, 7.30%, 5/01/11 ........................... 2,075,000 2,105,399
Mortgage Revenue Project, Series A, FHA Insured, 6.50%, 2/15/35 ...................... 3,800,000 4,143,824
Mortgage Revenue Project, Series B , 6.60%, 8/15/34 .................................. 23,775,000 25,222,898
Mortgage Revenue Project, Series B, FHA Insured, 6.15%, 2/15/35 ...................... 2,200,000 2,356,706
Mortgage Revenue Project, Series C, FHA Insured, 6.375%, 8/15/29 ..................... 10,200,000 10,761,204
Mortgage Revenue Project, Series D, FHA Insured, 6.20%, 2/15/35 ...................... 6,250,000 6,814,250
Mortgage Revenue Project, Series E, FHA Insured, 6.375%, 2/15/35 ..................... 13,200,000 14,464,428
Mortgage Revenue Project, Series F, FHA Insured, Pre-Refunded, 6.30%, 8/15/25 ........ 16,400,000 18,573,984
Mortgage Revenue Project, Series F, FHA Insured, Pre-Refunded, 6.375%, 8/15/34 ....... 21,050,000 23,874,489
Second Mortgage, Health Care Project Revenue, Series B, 6.35%, 11/01/14 .............. 1,410,000 1,449,522
Secured Hospital Revenue, Series A, 6.25%, 2/15/24 ................................... 16,770,000 17,469,644
Security Mortgage Program Revenue, Adult Day Care, 6.375%, 11/15/20 .................. 18,930,000 20,224,055
Series A, FHA Insured, Pre-Refunded, 6.125%, 2/15/15 ................................. 1,180,000 1,351,360
Series A, FHA Insured, 6.125%, 2/15/15 ............................................... 5,235,000 5,628,463
Series A, FHA Insured, 7.45%, 8/15/31 ................................................ 16,430,000 16,631,103
New York State Mortgage Agency Revenue, Homeowners Mortgage,
Series 51, 6.40%, 10/01/17 ........................................................... 9,945,000 10,494,859
Series 57, 6.25%, 10/01/15 ........................................................... 10,000,000 10,662,400
Series 57, 6.30%, 10/01/17 ........................................................... 7,330,000 7,799,780
Series 57, 6.375%, 10/01/27 .......................................................... 8,590,000 9,105,400
Series 61, 5.90%, 4/01/27 ............................................................ 4,040,000 4,256,504
New York State MTA Revenue, Refunding, AMBAC Insured, 5.25%, 7/01/31 .................... 50,000,000 53,965,000
30 | Annual Report
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
New York State Municipal Bond Bank Agency Program Revenue, Buffalo, Series A,
AMBAC Insured, 5.25%, 5/15/31 ......................................................... $ 4,145,000 $ 4,439,295
New York State Power Authority Revenue, Series A, 5.25%,
11/15/30 ............................................................................. 2,000,000 2,146,280
11/15/40 ............................................................................. 9,000,000 9,569,160
New York State Thruway Authority Highway and Bridge Trust Fund, Refunding, Series C,
AMBAC Insured, 5.00%,
4/01/19 .............................................................................. 20,000,000 21,988,800
4/01/20 .............................................................................. 18,835,000 20,529,962
New York State Thruway Authority Revenue, State Personal Income Tax, Transportation,
Series A,
5.00%, 3/15/22 ....................................................................... 14,270,000 15,338,823
New York State Thruway Authority Service Contract Revenue, Local Highway and Bridge,
5.75%, 4/01/19 ....................................................................... 30,000,000 34,181,100
AMBAC Insured, 5.375%, 4/01/19 .......................................................... 10,555,000 11,843,660
Pre-Refunded, 6.25%, 4/01/14 ......................................................... 23,970,000 26,696,588
New York State Tollway Authority General Revenue,
Refunding, Series E, FGIC Insured, 5.00%, 1/01/25 .................................... 6,500,000 6,806,670
Series D, 5.25%, 1/01/21 ............................................................. 41,675,000 44,155,079
Series D, 5.375%, 1/01/27 ............................................................ 10,975,000 11,625,379
New York State Tollway Authority Highway and Bridge Trust Fund Revenue,
Series A, FGIC Insured, 5.00%, 4/01/17 ............................................... 9,000,000 9,754,200
Series A, FGIC Insured, 5.00%, 4/01/20 ............................................... 2,500,000 2,719,925
Series A, FGIC Insured, 5.00%, 4/01/21 ............................................... 2,500,000 2,704,025
Series B, MBIA Insured, 4.75%, 4/01/18 ............................................... 12,465,000 13,404,113
Series B, MBIA Insured, 4.875%, 4/01/19 .............................................. 10,290,000 11,095,501
Series B, MBIA Insured, 4.90%, 4/01/20 ............................................... 10,000,000 10,711,900
Series B-1, FGIC Insured, 5.75%, 4/01/15 ............................................. 2,000,000 2,357,460
Series B-1, FGIC Insured, 5.75%, 4/01/16 ............................................. 2,000,000 2,341,240
New York State Urban Development Corp. Revenue,
Cornell Center Project, 6.00%, 1/01/14 ............................................... 4,500,000 4,606,515
Correctional Capital Facilities, Series 7, 5.70%, 1/01/16 ............................ 3,000,000 3,375,690
Correctional Capital Facilities, Series 7, Pre-Refunded, 5.70%, 1/01/27 .............. 10,000,000 11,569,800
Correctional Facilities Service Contract, Series A, 5.00%, 1/01/28 ................... 14,000,000 15,045,101
Correctional Facilities Service Contract, Series A, MBIA Insured, 5.00%, 1/01/18 ..... 12,000,000 12,938,160
Correctional Facilities Service Contract, Series B, 5.00%, 1/01/25 ................... 21,055,000 23,362,393
Correctional Facilities Service Contract, Series C, AMBAC Insured, Pre-Refunded,
6.00%, 1/01/29 ..................................................................... 34,135,000 41,147,353
Correctional Facilities Service Contract, Series D, FSA Insured, 5.25%, 1/01/30 ...... 10,000,000 11,691,400
Onondaga County Convention Project, Refunding, 6.25%, 1/01/20 ........................ 28,325,000 31,838,716
Personal Income Tax, Series C-1, 5.00%, 3/15/25 ...................................... 3,225,000 3,364,223
Personal Income Tax, State Facilities, Series A, 5.25%, 3/15/32 ...................... 20,000,000 21,195,800
Youth Facilities, 6.00%, 4/01/15 ..................................................... 8,500,000 9,428,540
Niagara Falls City School District COP, High School Facilities, 5.375%, 6/15/28 ......... 5,000,000 5,290,400
Oneida-Herkimer Solid Waste Management Authority Solid Waste Systems Revenue,
6.75%, 4/01/14 ....................................................................... 655,000 670,956
Refunding, 6.65%, 4/01/05 ............................................................ 1,115,000 1,142,005
Otsego County IDA, Civic Facility Revenue, Hartwick College Project,
Series A, 5.50%, 7/01/19 ............................................................. 3,400,000 4,036,718
Annual Report | 31
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Port Authority of New York and New Jersey Revenue, Delta Air Lines Special Project,
Series 1,
6.95%, 6/01/08 ....................................................................... $17,000,000 $ 17,130,050
Puerto Rico Commonwealth Highway and Transportation Authority Highway Revenue,
Series Y,
5.00%, 7/01/36 ....................................................................... 4,000,000 4,131,880
5.50%, 7/01/36 ....................................................................... 10,000,000 10,866,300
Puerto Rico Commonwealth Highway and Transportation Authority Transportation Revenue,
Series A, 5.00%, 7/01/38 ............................................................. 12,000,000 12,206,880
Puerto Rico Commonwealth Urban Renewal and Housing Corp. Revenue, Commonwealth
Appropriation, Refunding, 7.875%, 10/01/04 ........................................... 2,805,000 2,830,666
Puerto Rico Municipal Finance Agency Revenue, Series A, Pre-Refunded, 6.50%, 7/01/19 .... 11,000,000 11,802,230
Puerto Rico Public Finance Corp. Revenue, Commonwealth Appropriation, Series A,
MBIA Insured,
5.00%, 8/01/31 ....................................................................... 4,000,000 4,221,720
Rensselaer Municipal Leasing Corp. Leasehold Mortgage Revenue, Rensselaer
County Nursing Home
Series A, 6.90%, 6/01/24 ............................................................. 10,000,000 10,378,900
Series B, 6.90%, 6/01/24 ............................................................. 3,345,000 3,471,742
St. Lawrence County IDA, Civic Facility Revenue, Clarkson University Project,
Series A,
5.50%, 7/01/29 ....................................................................... 6,000,000 6,400,920
Suffolk County Judicial Facilities Agency Service Agreement Revenue,
John P. Cohalan Complex,
AMBAC Insured, 5.00%, 4/15/16 ........................................................ 2,720,000 2,985,717
Sunnybrook Elderly Housing Corp. Mortgage Revenue, Sunnybrook Apartments Project,
11.25%, 12/01/14 ..................................................................... 1,105,000 1,156,836
Syracuse IDA, Civic Facility Revenue, Crouse Health Hospital Inc., Project A,
5.25%, 1/01/16 ....................................................................... 4,000,000 2,000,000
5.375%, 1/01/23 ...................................................................... 4,760,000 2,380,000
Tompkins County IDAR, Civic Facility, Cornell University, 5.75%, 7/01/30 ................ 7,510,000 9,130,207
Triborough Bridge and Tunnel Authority New York Revenues, General Purpose,
AMBAC Isured, 5.00%, 11/15/28 ........................................................ 15,000,000 15,993,000
Refunding, Series B, 5.00%, 11/15/24 ................................................. 16,000,000 16,976,480
Refunding, Series B, 5.00%, 11/15/25 ................................................. 33,810,000 35,900,472
Refunding, Series B, 5.125%, 11/15/29 ................................................ 17,175,000 18,210,481
Refunding, MBIA Insured, 5.00%, 11/15/26 ............................................. 10,000,000 10,658,500
Series A, 5.00%, 1/01/27 ............................................................. 42,500,000 44,831,550
Series A, 5.125%, 1/01/31 ............................................................ 24,310,000 25,752,799
Series A, 5.00%, 1/01/32 ............................................................. 40,450,000 42,166,698
Series A, MBIA Insured, 5.00%, 1/01/32 ............................................... 9,000,000 9,507,060
Series B, 5.20%, 1/01/27 ............................................................. 15,000,000 17,278,950
Series B, 5.50%, 1/01/30 ............................................................. 32,185,000 37,679,945
Series B, MBIA Insured, Pre-Refunded, 5.20%, 1/01/27 ................................. 4,110,000 4,734,432
TSASC Inc. New York Revenue, Tobacco Flexible Amortization Bonds, Series 1, 6.25%,
7/15/27 .............................................................................. 35,000,000 34,824,300
7/15/34 .............................................................................. 40,000,000 38,258,000
Utica IDA, Civic Facility Revenue,
5.40%, 7/15/30 ....................................................................... 1,000,000 1,092,500
Series A, 5.50%, 7/15/29 ............................................................. 9,915,000 10,824,503
Virgin Islands PFAR, senior lien, Fund Loan Notes, Refunding, Series A, 5.50%,
10/01/15 ............................................................................. 2,500,000 2,664,875
10/01/18 ............................................................................. 2,500,000 2,639,200
32 | Annual Report
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
LONG TERM INVESTMENTS (CONT.)
BONDS (CONT.)
Warren and Washington Counties IDAR, Adirondack Resource Recovery Project, Refunding,
Series A, 7.90%, 12/15/07 ................................................................ $24,420,000 $ 24,400,708
Westchester Tobacco Asset Securitization Corp. Revenue, Capital Appreciation,
6.75%, 7/15/29 ....................................................................... 15,000,000 15,345,900
Yonkers GO, Series A, 9.20%,
2/01/04 .............................................................................. 1,095,000 1,148,337
2/01/05 .............................................................................. 1,095,000 1,229,258
- --------------------------------------------------------------------------------------------------------------------------
TOTAL BONDS (COST $4,647,399,251) ....................................................... 5,118,566,562
- --------------------------------------------------------------------------------------------------------------------------
ZERO COUPON BONDS/STEP-UP BONDS 1.8%
MTA Service Contract Revenue,
Commuter Facilities, Refunding, Series 7, 7/01/10 .................................... 7,500,000 6,105,000
Commuter Facilities, Refunding, Series 7, 7/01/11 .................................... 7,590,000 5,892,345
Commuter Facilities, Refunding, Series 7, 7/01/13 .................................... 2,065,000 1,460,141
Transit Facilities, Refunding, Series 7, 7/01/09 ..................................... 13,125,000 11,198,644
Transit Facilities, Refunding, Series 7, 7/01/10 ..................................... 9,000,000 7,326,000
Transit Facilities, Refunding, Series 7, 7/01/12 ..................................... 15,380,000 11,437,798
Transit Facilities, Refunding, Series 7, 7/01/13 ..................................... 7,935,000 5,610,759
New York City GO,
Capital Appreciation, Series A-2, 8/01/10 ............................................ 2,690,000 2,077,810
Citysavers, Series B, 8/01/09 ........................................................ 8,875,000 7,211,026
Citysavers, Series B, 6/01/12 ........................................................ 1,030,000 774,828
Citysavers, Series B, 12/01/12 ....................................................... 1,030,000 759,594
Citysavers, Series B, 6/01/13 ........................................................ 1,030,000 735,245
Citysavers, Series B, 12/01/13 ....................................................... 1,030,000 720,331
Citysavers, Series B, 6/01/14 ........................................................ 1,030,000 694,426
Citysavers, Series B, 12/01/14 ....................................................... 1,030,000 679,841
Citysavers, Series B, 6/01/15 ........................................................ 1,030,000 655,482
Citysavers, Series B, 12/01/15 ....................................................... 1,030,000 641,309
Citysavers, Series B, 6/01/16 ........................................................ 1,030,000 617,949
Citysavers, Series B, 12/01/16 ....................................................... 1,030,000 604,239
Citysavers, Series B, 6/01/17 ........................................................ 1,030,000 586,791
Citysavers, Series B, 12/01/17 ....................................................... 1,030,000 573,628
Citysavers, Series B, 6/01/18 ........................................................ 1,030,000 555,850
Citysavers, Series B, 12/01/18 ....................................................... 1,005,000 530,037
Citysavers, Series B, 6/01/19 ........................................................ 1,030,000 525,928
Citysavers, Series B, 12/01/19 ....................................................... 1,030,000 513,826
Citysavers, Series B, 6/01/20 ........................................................ 10,000,000 4,496,300
Orangetown Housing Authority Facilities Revenue, Senior Housing Center Project,
Refunding,
MBIA Insured, 4/01/30 .................................................................... 21,170,000 5,383,531
Triborough Bridge and Tunnel Authority Revenue, Convention Center Project,
Series E, 1/01/12 .................................................................... 21,625,000 15,818,241
-------------
TOTAL ZERO COUPON BONDS/STEP-UP BONDS (COST $71,547,650) ................................ 94,186,899
-------------
TOTAL LONG TERM INVESTMENTS (COST $4,718,946,901) ....................................... 5,212,753,461
-------------
Annual Report | 33
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------------------------
SHORT TERM INVESTMENTS .7%
New York City GO,
aDaily VRDN and Put, 1.30%, 8/01/17 ................................................... $ 4,400,000 $ 4,400,000
aRefunding, Series H, FSA Insured, Daily VRDN and Put, 1.25%, 8/01/19 ................. 1,200,000 1,200,000
aRefunding, Series H, Sub Series H-3, Daily VRDN and Put, 1.25%, 8/01/20 .............. 1,300,000 1,300,000
aRefunding, Series H, Sub Series H-3, FSA Insured, Daily VRDN and Put, 1.25%, 8/01/21 . 300,000 300,000
aSeries 8, Sub Series A-8, Daily VRDN and Put, 1.30%, 8/01/18 ......................... 3,100,000 3,100,000
aSeries B, Sub Series B-7, AMBAC Insured, Daily VRDN and Put, 1.30%, 8/15/18 .......... 3,600,000 3,600,000
aSeries E-2, Daily VRDN and Put, 1.22%, 8/01/20 ....................................... 3,500,000 3,500,000
aSeries H, Sub Series H-3, Daily VRDN and Put, 1.25%, 8/01/23 ......................... 5,400,000 5,400,000
aSub Series A-10, Daily VRDN and Put, 1.22%, 8/01/16 .................................. 3,950,000 3,950,000
aSub Series A-7, Daily VRDN and Put, 1.25%, 8/01/19 ................................... 1,800,000 1,800,000
aSub Series A-7, Daily VRDN and Put, 1.25%, 8/01/20 ................................... 600,000 600,000
aSub Series A-7, Daily VRDN and Put, 1.25%, 8/01/21 ................................... 3,400,000 3,400,000
aSub Series B, Daily VRDN and Put, 1.22%, 8/15/18 ..................................... 2,950,000 2,950,000
aUnlimited, Series B, Sub Series B-4, Daily VRDN and Put, 1.30%, 8/15/23 .............. 1,700,000 1,700,000
--------------
TOTAL SHORT TERM INVESTMENTS (COST $37,200,000) ......................................... 37,200,000
--------------
TOTAL INVESTMENTS (COST $4,756,146,901) 98.6% ........................................... 5,249,953,461
OTHER ASSETS, LESS LIABILITIES 1.4% ..................................................... 73,946,470
--------------
NET ASSETS 100.0% ....................................................................... $5,323,899,931
--------------
See glossary of terms on page 35.
aVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a
floating or variable interest rate adjustment formula and an unconditional right
of demand to receive payment of the principal balance plus accrued interest at
specified dates.
34 | See notes to financial statements. | Annual Report
Franklin New York Tax-Free Income Fund
STATEMENT OF INVESTMENTS, MAY 31, 2003 (CONTINUED)
GLOSSARY OF TERMS
AMBAC - American Municipal Bond Assurance Corp.
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Co.
FHA - Federal Housing Authority/Agency
FSA - Financial Security Assistance
GO - General Obligation
HDC - Housing Development Corp.
HFA - Housing Finance Authority/Agency
HFAR - Housing Finance Authority/Agency Revenue
IDA - Industrial Development Authority/Agency
IDAR - Industrial Development Authority Revenue
MBIA - Municipal Bond Investors Assurance Corp.
MFHR - Multi-Family Housing Revenue
MFMR - Multi-Family Mortgage Revenue
MFR - Multi-Family Revenue
MTA - Metropolitan Transportation Authority
PCR - Pollution Control Revenue
PFAR - Public Financing Authority Revenue
VRDN - Variable Rate Demand Notes
Annual Report | 35
Franklin New York Tax-Free Income Fund
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2003
Assets:
Investments in securities:
Cost ..................................................... $4,756,146,901
--------------
Value .................................................... 5,249,953,461
Cash ........................................................ 85,950
Receivables:
Capital shares sold ...................................... 6,570,028
Interest ................................................. 77,125,543
--------------
Total assets .......................................... 5,333,734,982
Liabilities:
Payables:
Capital shares redeemed .................................. 4,467,298
Affiliates ............................................... 2,999,681
Shareholders ............................................. 2,180,298
Other liabilities ........................................... 187,774
--------------
Total liabilities ..................................... 9,835,051
--------------
Net assets, at value ................................ $5,323,899,931
--------------
Net assets consist of:
Undistributed net investment income ......................... $ 3,138,610
Net unrealized appreciation (depreciation) .................. 493,806,560
Accumulated net realized gain (loss) ........................ (26,702,108)
Capital shares .............................................. 4,853,656,869
--------------
Net assets, at value ................................ $5,323,899,931
--------------
CLASS A:
Net assets, at value ........................................ $4,828,888,961
--------------
Shares outstanding .......................................... 395,030,749
--------------
Net asset value per sharea .................................. $12.22
--------------
Maximum offering price per share
(net asset value per share / 95.75%) ....................... $12.76
--------------
CLASS B:
Net assets, at value ........................................ $ 233,767,395
--------------
Shares outstanding .......................................... 19,158,165
--------------
Net asset value and maximum offering price per sharea ....... $12.20
--------------
CLASS C:
Net assets, at value ........................................ $ 242,965,229
--------------
Shares outstanding .......................................... 19,884,664
--------------
Net asset value per sharea .................................. $12.22
--------------
Maximum offering price per share
(net asset value per share / 99.00%) ....................... $12.34
--------------
ADVISOR CLASS:
Net assets, at value ........................................ $ 18,278,346
--------------
Shares outstanding .......................................... 1,494,762
Net asset value and maximum offering price per share ........ $12.23
--------------
aRedemption price is equal to net asset value less any applicable contingent
deferred sales charge.
36 | See notes to financial statements. | Annual Report
Franklin New York Tax-Free Income Fund
FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF OPERATIONS
for the year ended May 31, 2003
Investment income:
Interest .................................................... $277,471,777
------------
Expenses:
Management fees (Note 3) .................................... 23,455,688
Distribution fees (Note 3)
Class A .................................................... 3,976,906
Class B .................................................... 1,284,789
Class C .................................................... 1,401,827
Transfer agent fees (Note 3) ................................ 2,242,527
Custodian fees .............................................. 50,924
Reports to shareholders ..................................... 193,716
Registration and filing fees ................................ 53,599
Professional fees (Note 3) .................................. 98,389
Directors' fees and expenses ................................ 90,116
Other ....................................................... 322,915
------------
Total expenses ........................................ 33,171,396
------------
Net investment income (loss) ........................ 244,300,381
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from investments ................... 5,006,383
Net unrealized appreciation (depreciation) on investments ... 243,448,165
------------
Net realized and unrealized gain (loss) ...................... 248,454,548
------------
Net increase (decrease) in net assets resulting from operations $492,754,929
------------
Annual Report | See notes to financial statements. | 37
Franklin New York Tax-Free Income Fund
FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF CHANGES IN NET ASSETS
for the years ended May 31, 2003 and 2002
--------------------------------
2003 2002
--------------------------------
Increase (decrease) in net assets:
Operations:
Net investment income .............................................................. $ 244,300,381 $ 246,419,668
Net realized gain (loss) from investments .......................................... 5,006,383 13,724,409
Net unrealized appreciation (depreciation) on investments .......................... 243,448,165 (2,835,852)
--------------------------------
Net increase (decrease) in net assets resulting from operations ................ 492,754,929 257,308,225
Distributions to shareholders from:
Net investment income:
Class A ........................................................................... (225,619,458) (234,970,996)
Class B ........................................................................... (8,284,786) (5,618,437)
Class C ........................................................................... (9,038,590) (7,670,614)
Advisor Class ....................................................................... (760,077) (71,740)
--------------------------------
Total distributions to shareholders ................................................. (243,702,911) (248,331,787)
Capital share transactions: (Note 2)
Class A ........................................................................... (8,374,738) 116,830,421
Class B ........................................................................... 63,785,148 72,451,028
Class C ........................................................................... 43,777,769 41,556,192
Advisor Class ....................................................................... 3,451,801 13,964,411
--------------------------------
Total capital share transactions .................................................... 102,639,980 244,802,052
Net increase (decrease) in net assets .......................................... 351,691,998 253,778,490
Net assets
Beginning of year.................................................................... 4,972,207,933 4,718,429,443
--------------------------------
End of year ......................................................................... $5,323,899,931 $4,972,207,933
================================
Undistributed net investment income included in net assets:
End of year ......................................................................... $ 3,138,610 $ 2,027,506
================================
38 | See notes to financial statements.| Annual Report
Franklin New York Tax-Free Income Fund
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Franklin New York Tax-Free Income Fund (the Fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end investment company.
The Fund seeks to provide investors with as high a level of income exempt from
federal, New York state and New York City income taxes as is consistent with
prudent investing, while seeking preservation of shareholders' capital.
The following summarizes the Fund's 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 Fund may utilize a pricing service, bank or
broker/dealer experienced in such matters to perform any of the pricing
functions under procedures approved by the Board of Directors. 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 Directors.
b. Income Taxes
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its 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 a yield to maturity basis. Distributions to
shareholders are recorded on the ex-dividend date.
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.
d. Accounting Estimates
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expense during the reporting period. Actual results could differ from those
estimates.
Annual Report | 39
Franklin New York Tax-Free Income Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Guarantees and Indemnifications
Under the Funds' organizational documents, its officers and trustees are
indemnified against certain liability arising out of the performance of their
duties to the Funds. Additionally, in the normal course of business the Fund
enters into contracts with service providers that contain general
indemnification clauses. The Funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, based on experience, the Fund expects the
risk of loss to be remote.
2. SHARES OF BENEFICIAL INTEREST
The Fund offers four classes of shares: Class A, Class B, Class C, and Advisor
Class. Each class of shares differs by its initial sales load, contingent
deferred sales charges, distribution fees, voting rights on matters affecting a
single class and its exchange privilege.
At May 31, 2003, there were an unlimited number of shares authorized ($.01 par
value). Transactions in the Fund's shares were as follows:
--------------------------------------------------------------
YEAR ENDED MAY 31,
--------------------------------------------------------------
2003 2002
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------
CLASS A SHARES:
Shares sold ......................... 31,269,637 $ 371,509,962 36,730,664 $ 428,174,714
Shares issued in reinvestment of
distributions ................... 10,400,672 123,140,266 9,616,419 111,868,932
Shares redeemed ..................... (42,363,253) (503,024,966) (36,362,999) (423,213,225)
--------------------------------------------------------------
Net increase (decrease) ............. (692,944) $ (8,374,738) 9,984,084 $ 116,830,421
==============================================================
CLASS B SHARES:
Shares sold ......................... 6,319,516 $ 74,942,461 6,770,048 $ 78,850,578
Shares issued in reinvestment of
distributions ................... 464,323 5,491,671 296,729 3,445,676
Shares redeemed ..................... (1,402,551) (16,648,984) (846,102) (9,845,226)
--------------------------------------------------------------
Net increase (decrease) ............. 5,381,288 $ 63,785,148 6,220,675 $ 72,451,028
..................................... ==============================================================
CLASS C SHARES:
Shares sold ......................... 5,843,855 $ 69,435,630 5,202,569 $ 60,642,138
Shares issued in reinvestment of
distributions ................... 506,929 6,003,538 405,485 4,716,638
Shares redeemed ..................... (2,666,311) (31,661,399) (2,042,348) (23,802,584)
--------------------------------------------------------------
Net increase (decrease) ............. 3,684,473 $ 43,777,769 3,565,706 $ 41,556,192
==============================================================
ADVISOR CLASS SHARES:a
Shares sold ......................... 504,062 $ 6,017,897 1,209,355 $ 14,001,342
Shares issued in reinvestment of
distributions ................... 4,150 49,255 1,439 16,642
Shares redeemed ..................... (219,616) (2,615,351) (4,628) (53,573)
--------------------------------------------------------------
Net increase (decrease) ............. 288,596 $ 3,451,801 1,206,166 $ 13,964,411
==============================================================
aFor the period October 1, 2001 (effective date) to May 31, 2002.
40 | Annual Report
Franklin New York Tax-Free Income Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRANSACTIONS WITH AFFILIATES
Certain officers and trustees of the Fund are also officers and/or directors of
Franklin Advisers, Inc. (Advisers), Franklin Templeton Services, LLC (FT
Services), Franklin/Templeton Distributors, Inc. (Distributors), and
Franklin/Templeton Investor Services, LLC (Investor Services), the Fund's
investment manager, administrative manager, principal underwriter, and transfer
agent respectively.
The Fund pays an investment management fee to Advisers based on the net assets
of the Fund as follows:
- --------------------------------------------------------------------------------
ANNUALIZED FEE RATE MONTH-END NET ASSETS
- --------------------------------------------------------------------------------
.625% First $100 million
.500% Over $100 million, up to and including $250 million
.450% Over $250 million, up to and including $10 billion
Fees are further reduced on net asets over $10 billion.
Under an agreement with Advisers, FT Services provides administrative services
to the Fund. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Fund.
The Fund reimburses Distributors up to .10%, .65%, and .65% per year of their
average daily net assets of Class A, Class B, and Class C, respectively, for
costs incurred in marketing the Fund's shares.
Distributors paid net commissions on sales of the Fund's shares, and received
contingent deferred sales charges for the period of $2,634,946 and $375,026,
respectively.
The Fund paid shareholder servicing fees of $2,242,527 of which $1,546,370 was
paid to Investor Services.
Included in professional fees are legal fees of $29,850 that were paid to a law
firm in which a partner is an officer of the Fund.
4. INCOME TAXES
At May 31, 2003, the cost of investments, net unrealized appreciation
(depreciation) and undistributed tax-exempt income for income tax purposes were
as follows:
Investments at cost ................................... $4,754,204,773
==============
Unrealized appreciation ............................... 502,104,101
Unrealized depreciation ............................... (6,355,413)
--------------
Net unrealized appreciation (depreciation) ............ $ 495,748,688
==============
Distributable earnings - tax-exempt income ............ $ 184,640
==============
Annual Report | 41
Franklin New York Tax-Free Income Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. INCOME TAXES (CONTINUED)
The tax character of distributions paid during the years ended May 31, 2002 and
2003, was as follows:
------------------------
2003 2002
------------------------
Distributions paid from:
Tax-exempt income ..................... $243,702,911 $248,331,787
At May 31, 2003, the Fund had tax basis capital losses which may be carried over
to offset future capital gains. Such losses expire as follows:
Capital loss carryovers expiring in:
2008 .................................................. $ 6,411,881
2009 .................................................. 14,143,946
-----------
$20,555,827
===========
At May 31, 2003, the Fund had deferred capital losses occuring subsequent to
October 31, 2002 of $5,134,436. For tax purposes, such losses will be reflected
in the year ending May 31, 2004.
Net investment income differs for financial statement and tax purposes primarily
due to differing treatments of bond discounts.
Net realized gains differ for financial statement and tax purposes primarily due
to differing treatments of wash sales, losses realized subsequent to October 31
on the sale of securities, and bond discounts.
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the year
ended May 31, 2003 aggregated $758,454,054 and $680,684,719 respectively.
42 | Annual Report
Franklin New York Tax-Free Income Fund
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FRANKLIN NEW YORK TAX-FREE
INCOME FUND
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Franklin New York Tax-Free Income
Fund (the "Fund") at May 31, 2003, the results of its operations for the year
then ended, the changes in its 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 accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund'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 auditing standards generally accepted in
the United States of America, 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 May 31, 2003 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
July 2, 2003
Annual Report | 43
Franklin New York Tax-Free Income Fund
TAX DESIGNATION (UNAUDITED)
Under Section 852(b)(5)(A) of the Internal Revenue Code, the Fund hereby
designates 100% of the distributions paid from net investment income as
exempt-interest dividends for the fiscal year ended May 31, 2003.
44 | Annual Report
Board Members and Officers
The name, age and address of the officers and board members, as well as their
affiliations, positions held with the Trust, principal occupations during the
past five years and number of portfolios overseen in the Franklin Templeton
Investments fund complex are shown below. Each board member will serve until the
person's successor is elected and qualified.
INDEPENDENT BOARD MEMBERS
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN
LENGTH OF FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS POSITION TIME SERVED BY BOARD MEMBER* OTHER DIRECTORSHIPS HELD
- ------------------------------------------------------------------------------------------------------------------------------------
HARRIS L. ASHTON (70) Trustee Since 1982 132 Director, Bar-S Foods (meat packing
One Franklin Parkway company).
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director of various companies; and FORMERLY, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President,
Chief Executive Officer and Chairman of the Board, General Host Corporation (nursery and craft centers)(until 1998).
- ------------------------------------------------------------------------------------------------------------------------------------
S. JOSEPH FORTUNATO (70) Trustee Since 1982 133 None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Attorney; and FORMERLY, member of the law firm of Pitney, Hardin, Kipp & Szuch.
- ------------------------------------------------------------------------------------------------------------------------------------
EDITH E. HOLIDAY (51) Trustee Since 1998 83 Director, Amerada Hess Corporation
One Franklin Parkway (exploration and refining of oil and
San Mateo, CA 94403-1906 gas); Hercules Incorporated (chemicals,
fibers and resins); Beverly Enterprises,
Inc.(health care); H.J. Heinz Company
(processed foods and allied products);
RTI International Metals, Inc.
(manufacture and distribution of
titanium); and Canadian National Railway
(railroad).
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Director or Trustee of various companies and trusts; and FORMERLY, Assistant to the President of the United States and Secretary
of the Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary
and Assistant Secretary for Public Affairs and Public Liaison-United States Treasury Department (1988-1989).
- ------------------------------------------------------------------------------------------------------------------------------------
GORDON S. MACKLIN (75) Trustee Since 1992 132 Director, White Mountains Insurance
One Franklin Parkway Group, Ltd. (holding company); Martek
San Mateo, CA 94403-1906 Biosciences Corporation; MedImmune, Inc.
(biotechnology); Overstock.com (Internet
services); and Spacehab, Inc.(aerospace
services).
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Deputy Chairman, White Mountains Insurance Group, Ltd. (holding company); and FORMERLY, Chairman, White River Corporation
(financial services) (until 1998) and Hambrecht & Quist Group (investment banking) (until 1992); and President, National
Association of Securities Dealers, Inc. (until 1987).
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Report | 45
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED BOARD MEMBERS AND OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN
LENGTH OF FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS POSITION TIME SERVED BY BOARD MEMBER* OTHER DIRECTORSHIPS HELD
- ------------------------------------------------------------------------------------------------------------------------------------
**CHARLES B. JOHNSON (70) Trustee, Trustee since 132 None
One Franklin Parkway President and 1982, President
San Mateo, CA 94403-1906 Chief Executive since 1983 and
Officer - Chief Executive
Investment Officer -
Management Investment
Management
since 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Chairman of the Board, Chief Executive Officer, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Vice
President, Franklin Templeton Distributors, Inc.; Director, Fiduciary Trust Company International; officer and/or director or
trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc.; and officer of 45 of the investment
companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
**RUPERT H. JOHNSON, JR. (62) Trustee and Since 1983 115 None
One Franklin Parkway Vice President
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Vice President and Director, Franklin
Templeton Distributors, Inc.; Director, Franklin Advisers, Inc. and Franklin Investment Advisory Services, Inc.; Senior Vice
President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other
subsidiaries of Franklin Resources, Inc. and of 48 of the investment companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
SHEILA AMOROSO (43) Vice President Since 1999 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President, Franklin Advisers, Inc.; and officer of eight of the investment companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
HARMON E. BURNS (58) Vice President Since 1987 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Member - Office of the Chairman and Director, Franklin Resources, Inc.; Vice President and Director, Franklin
Templeton Distributors, Inc.; Executive Vice President, Franklin Advisers, Inc.; Director, Franklin Investment Advisory Services,
Inc.; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and
of 48 of the investment companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
RAFAEL R. COSTAS, JR. (38) Vice President Since 1999 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President, Franklin Advisers, Inc.; and officer of eight of the investment companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
46 | Annual Report
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN
LENGTH OF FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS POSITION TIME SERVED BY BOARD MEMBER* OTHER DIRECTORSHIPS HELD
- ------------------------------------------------------------------------------------------------------------------------------------
MARTIN L. FLANAGAN (42) Vice President Since 1995 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Franklin Resources, Inc.; Senior Vice President and Chief Financial Officer, Franklin Mutual Advisers, LLC; Executive
Vice President, Chief Financial Officer and Director, Templeton Worldwide, Inc.; Executive Vice President and Chief Operating
Officer, Templeton Investment Counsel, LLC; President and Director, Franklin Advisers, Inc.; Executive Vice President, Franklin
Investment Advisory Services, Inc. and Franklin Templeton Investor Services, LLC; Chief Financial Officer, Franklin Advisory
Services, LLC; Chairman, Franklin Templeton Services, LLC; and officer and/or director of some of the other subsidiaries of
Franklin Resources, Inc. and of 49 of the investment companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
JIMMY D. GAMBILL (55) Senior Vice Since 2002 Not Applicable None
500 East Broward Blvd. President and
Suite 2100 Fort Lauderdale, Chief Executive
FL 33394-3091 Officer -
Finance and
Administration
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
President, Franklin Templeton Services, LLC; Senior Vice President, Templeton Worldwide, Inc.; and officer of 51 of the investment
companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
DAVID P. GOSS (56) Vice President Since 2000 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Associate General Counsel, Franklin Resources, Inc.; officer and director of one of the subsidiaries of Franklin Resources, Inc.;
officer of 51 of the investment companies in Franklin Templeton Investments; and FORMERLY, President, Chief Executive Officer and
Director, Property Resources Equity Trust (until 1999) and Franklin Select Realty Trust (until 2000).
- ------------------------------------------------------------------------------------------------------------------------------------
BARBARA J. GREEN (55) Vice President Since 2000 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice President and Deputy General Counsel, Franklin Resources, Inc.; Senior Vice President, Templeton Worldwide, Inc.; officer of
one of the other subsidiaries of Franklin Resources, Inc. and of 51 of the investment companies in Franklin Templeton Investments;
and FORMERLY, Deputy Director, Division of Investment Management, Executive Assistant and Senior Advisor to the Chairman, Counselor
to the Chairman, Special Counsel and Attorney Fellow, U.S. Securities and Exchange Commission (1986-1995); Attorney, Rogers & Wells
(until 1986); and Judicial Clerk, U.S. District Court (District of Massachusetts) (until 1979).
- ------------------------------------------------------------------------------------------------------------------------------------
MICHAEL O. MAGDOL (66) Vice Since 2002 Not Applicable Director, FTI Banque, Arch Chemicals,
600 Fifth Avenue President Inc. and Lingnan Foundation.
Rockefeller Center AML
New York, NY 10048-0772 Compliance
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Vice Chairman, Chief Banking Officer and Director, Fiduciary Trust Company International; officer and/or director, as the case
may be, of some of the other subsidiaries of Franklin Resources, Inc.; and officer of 48 of the investment companies in Franklin
Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Report | 47
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN
LENGTH OF FUND COMPLEX OVERSEEN
NAME, AGE AND ADDRESS POSITION TIME SERVED BY BOARD MEMBER* OTHER DIRECTORSHIPS HELD
- ------------------------------------------------------------------------------------------------------------------------------------
KIMBERLEY H. MONASTERIO (39) Treasurer and Treasurer since Not Applicable None
One Franklin Parkway Chief Financial 1999 and Chief
San Mateo, CA 94403-1906 Officer Financial Officer
since 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President, Franklin Templeton Services, LLC; and officer of 51 of the investment companies in Franklin Templeton
Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
MURRAY L. SIMPSON (65) Vice President Since 2000 Not Applicable None
One Franklin Parkway and Secretary
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Executive Vice President and General Counsel, Franklin Resources, Inc.; officer and/or director as the case may be, of some of the
subsidiaries of Franklin Resources, Inc. and of 51 of the investment companies in Franklin Templeton Investments; and FORMERLY,
Chief Executive Officer and Managing Director, Templeton Franklin Investment Services (Asia) Limited (until 2000); and Director,
Templeton Asset Management Ltd. (until 1999).
- ------------------------------------------------------------------------------------------------------------------------------------
THOMAS WALSH (41) Vice President Since 1999 Not Applicable None
One Franklin Parkway
San Mateo, CA 94403-1906
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DURING PAST 5 YEARS:
Senior Vice President, Franklin Advisers, Inc.; and officer of eight of the investment companies in Franklin Templeton Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton
Investments fund complex. These portfolios have a common investment adviser or affiliated investment advisers.
**Charles B. Johnson and Rupert H. Johnson, Jr. are considered interested persons of the Fund under the federal securities laws due
to their positions as officers and directors and major shareholders of Franklin Resources, Inc., which is the parent company of the
Fund's adviser and distributor. Note: Charles B. Johnson and Rupert H. Johnson, Jr. are brothers.
THE STATEMENT OF ADDITIONAL INFORMATION (SAI) INCLUDES ADDITIONAL INFORMATION ABOUT THE BOARD MEMBERS AND IS AVAILABLE, WITHOUT
CHARGE, UPON REQUEST. SHAREHOLDERS MAY CALL 1-800/DIAL BEN (1-800/342-5236) TO REQUEST THE SAI.
</FN>
48 | Annual Report
Literature Request
For a brochure and prospectus, which contains more complete information,
including charges and expenses, call Franklin Templeton Investments at
1-800/DIAL BEN(r) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. To ensure the highest quality of service, telephone
calls to or from our service departments may be monitored, recorded and
accessed. These calls can be determined by the presence of a regular beeping
tone.
FRANKLIN TEMPLETON INVESTMENTS
INTERNATIONAL
Mutual European Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund
GLOBAL
Franklin Global Aggressive Growth Fund
Franklin Global Growth Fund
Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund
GROWTH
Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund 1
Franklin Small-Mid Cap Growth Fund
Franklin Small Cap Growth Fund II 2
VALUE
Franklin Balance Sheet Investment Fund 3
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 4
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Shares Fund
BLEND
Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund 5
SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Franklin Technology Fund
Mutual Financial Services Fund
ASSET ALLOCATION
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target
Fund Franklin Templeton Moderate Target Fund
INCOME
Franklin Adjustable U.S. Government Securities Fund 6
Franklin's AGE High Income Fund
Franklin Federal Money Fund 6, 7
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust 8
Franklin Income Fund
Franklin Money Fund 6, 7
Franklin Short-Intermediate U.S. Government Securities Fund 6
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund 6
Templeton Global Bond Fund
TAX-FREE INCOME9
Double Tax-Free Income Fund
Federal Intermediate-Term Tax-Free
Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 10
Tax-Exempt Money Fund 6, 7
STATE-SPECIFIC TAX-FREE INCOME 9
Alabama
Arizona
California 11
Colorado
Connecticut
Florida 11
Georgia
Kentucky
Louisiana
Maryland
Massachusetts 10
Michigan 10
Minnesota 10
Missouri
New
Jersey
New York11
North Carolina
Ohio 10
Oregon
Pennsylvania
Tennessee
Virginia
VARIABLE INSURANCE PRODUCTS FUNDS
Franklin Templeton Variable Insurance
Products Trust 12
1. Formerly Franklin California Growth Fund. Effective 9/1/02, the fund's name
changed and its investment criteria was modified. The fund's investment goal
remained the same.
2. The fund is closed to new investors. Existing shareholders can continue
adding to their accounts.
3. The fund is only open to existing shareholders as well as select retirement
plans.
4. Effective June 30, 2003, the fund reopened to all new investors.
5. Upon reaching approximately $350 million in assets, the fund will close to
all investors.
6. An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
7. No assurance exists that the fund's $1.00 per share price will be
maintained. It is possible to lose money by investing in the fund.
8. The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the
outstanding number of shares. Investors may tender all or a portion of their
shares during the tender period.
9. For investors subject to the alternative minimum tax, a small portion of
these dividends may be taxable. Distributions of capital gains are generally
taxable.
10. Portfolio of insured municipal securities.
11. These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA)
and intermediate-term and money market portfolios (CA and NY).
12. The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.
06/03 Not part of the annual report
[Franklin Tempoleton logo omitted]
One Franklin Parkway
San Mateo, CA 94403-1906
WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?
Eligible shareholders can sign up for eDelivery at
franklintempleton.com. See inside for details.
ANNUAL REPORT AND SHAREHOLDER LETTER
Franklin New York
Tax-Free Income Fund
INVESTMENT MANAGER
Franklin Advisers, Inc.
DISTRIBUTOR
Franklin Templeton Distributors, Inc.
1-800/DIAL BEN(r)
franklintempleton.com
SHAREHOLDER SERVICES
1-800/632-2301
This report must be preceded or accompanied by the current Franklin New York
Tax-Free Income Fund prospectus, which contains more complete information
including charges and expenses.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.
115 A2003 07/03
ITEM 2. CODE OF ETHICS. N/A
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. N/A
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. N/A
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. N/A
ITEM 9. CONTROLS AND PROCEDURES.
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant
maintains disclosure controls and procedures that are designed to ensure that
information required to be disclosed in the Registrant's filings under the
Securities Exchange Act of 1934 and the Investment Company Act of 1940 is
recorded, processed, summarized and reported within the periods specified in
the rules and forms of the Securities and Exchange Commission. Such
information is accumulated and communicated to the Registrant's management,
including its principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure. The
Registrant's management, including the principal executive officer and the
principal financial officer, recognizes that any set of controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision
and with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation,
the Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.
(B) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in
the Registrant's internal controls or in other factors that could
significantly affect the internal controls subsequent to the date of their
evaluation in connection with the preparation of this Shareholder Report on
Form N-CSR.
ITEM 10. EXHIBITS.
(A) N/A
(B)(1) CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002 OF JIMMY D. GAMBILL, CHIEF EXECUTIVE OFFICER - FINANCE AND
ADMINISTRATION, AND KIMBERLEY H. MONASTERIO, CHIEF FINANCIAL OFFICER
(B)(2) CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002 OF JIMMY D. GAMBILL, CHIEF EXECUTIVE OFFICER - FINANCE AND
ADMINISTRATION, AND KIMBERLEY H. MONASTERIO, CHIEF FINANCIAL OFFICER
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
FRANKLIN NEW YORK TAX-FREE INCOME FUND
By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date July 31, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date July 31, 2003
By /s/Kimberley H. Monasterio
Chief Financial Officer
Date July 31, 2003