PUTNAM
NEW YORK
TAX EXEMPT
INCOME FUND
[Artwork]
SEMIANNUAL REPORT
May 31, 1995
[Putnam Logo]
Boston * London * tokyo
<PAGE>
PERFORMANCE HIGHLIGHTS
"The gap is narrowing between Treasury and municipal yields, making munis look
increasingly attractive. . . . Among municipal-bond experts, there is little
concern that any radical change in the tax system could happen before 1997 and
plenty of doubt that any such revolution will happen at all."
-- The Wall Street Journal, May 19, 1995
SEMIANNUAL 1995 RESULTS AT A GLANCE
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CLASS A CLASS B
TOTAL RETURN: NAV POP NAV CDSC
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6 months ended 5/31/95
(change in value during period
plus reinvested distributions) 13.61% 8.23% 13.47% 8.47%
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CLASS A CLASS B CLASS M
SHARE VALUE: NAV POP NAV NAV POP
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11/30/94 $8.05 $8.45 $8.02 -- --
4/10/95 (commencement
of class M shares) -- -- -- $8.79 $9.09
5/31/95 8.88 9.32 8.87 8.88 9.18
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DISTRIBUTIONS: NO. INCOME CAPITAL GAINS(1) TOTAL
- -------------------------------------------------------------------------------
Class A 6 $0.254229 -- $0.254229
Class B 6 0.220386 -- 0.220386
Class M 2 0.062995 -- 0.062995
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CURRENT RETURN: NAV POP NAV NAV POP
- -------------------------------------------------------------------------------
End of period
Current dividend rate(2) 5.65% 5.39% 4.88% 5.10% 4.93%
Taxable equivalent(3)(a) 10.12 9.66 8.74 9.14 8.83
Taxable equivalent(3)(b) 10.64 10.15 9.19 9.60 9.28
Current 30-day SEC yield(4) 5.15 4.91 4.50 4.44 4.28
Taxable equivalent(3)(a) 9.23 8.80 8.06 7.96 7.67
Taxable equivalent(3)(b) 9.70 9.24 8.47 8.36 8.06
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Performance data represent past results and is not indicative of future results.
For performance over longer periods, see pages 8 and 9. POP assumes 4.75% maxi-
mum sales charge for class A shares and 3.25% for class M shares. CDSC assumes
5% maximum contingent deferred sales charge. Performance for class M shares,
which commenced operations 4/10/95 is not shown due to the brevity of the repor-
ting period. (1) Capital gains, if any, are taxable for federal and, in most ca-
ses, state tax purposes. For some investors, investment income may also be sub-
ject to the federal alternative minimum tax. Investment income may be subject
to state and local taxes. (2) Income portion of most recent distribution, annua-
lized and divided by NAV or POP at end of period. (3) Assumes (a) the maximum
combined federal and New York state tax rate of 44.19% or (b) the maximum combi-
ned federal, New York state, and New York City rates of 46.88%. Results for in-
vestors subject to lower tax rates would not be as advantageous. (4) Based only
on investment income, calculated using SEC guidelines.
<PAGE>
FROM THE CHAIRMAN [Photograph of George Putnam]
*(C) Karsh, Ottawa
DEAR SHAREHOLDER:
PUTNAM NEW YORK TAX EXEMPT INCOME FUND'S MANAGER, DAVID EURKUS, COULDN'T BE MORE
PLEASED WITH THE MUNICIPAL BOND MARKET'S IMPRESSIVE COMEBACK FROM THE SUSTAINED
DECLINE OF 1994. MINDFUL OF THE UNCERTAINTIES STILL HOVERING IN THE BACKGROUND,
HOWEVER, HE HAS BEGUN TAKING STEPS AIMED AT PRESERVING SOME OF THE FUND'S GAINS
ACHIEVED DURING THE FUND'S SEMIANNUAL PERIOD, THE SIX MONTHS ENDED MAY 31,
1995.
AT THE SAME TIME, DAVE IS OPTIMISTIC ABOUT PROSPECTS FOR THE REST OF FISCAL
1995. THE RECOVERY IN THE TAX-EXEMPT BOND MARKET, WHILE SUBSTANTIAL, HAS LAGGED
THAT OF OTHER FIXED-INCOME MARKETS, LEADING HIM TO BELIEVE THE RALLY MAY HAVE
SOME STAYING POWER.
MUNICIPAL BOND INVESTORS ALREADY HAVE SHAKEN OFF THE JITTERS IGNITED BY A FLAT-
TAX PROPOSAL RECENTLY THROWN INTO THE LEGISLATIVE HOPPER. IN ITS PUREST FORM, A
FLAT TAX WOULD ELIMINATE THE FEDERAL INCOME TAX ADVANTAGE ENJOYED BY MUNICIPAL
BONDS. WE DO NOT BELIEVE CONGRESS WOULD ENACT ANY SUCH RESTRICTIVE PROVISION.
DAVE PROVIDES MORE DISCUSSION OF THESE AND OTHER ISSUES IN THE REPORT THAT FO-
LLOWS.
RESPECTFULLY YOURS,
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
JULY 19, 199
*(C) Copyright
<PAGE>
REPORT FROM THE FUND MANAGER
DAVID J. EURKUS
Long-term investors who remained committed to their investment goals during a
troublesome 1994 were able to reap the benefits of their patience this spring.
With inflation fears subsiding, prices of all fixed-income securities climbed
appreciably. As a result, municipal bonds were able to recapture much of their
lost ground since market lows last November.
Putnam New York Tax Exempt Income Fund has been an active participant in the ra-
lly, with class A shares posting a total return of 13.61% at net asset value,
for the six months ended May 31, 1995. The fund also offers class B and class M
shares, whose performance, while different, reflects a similar trend.
The fund's yield continues to be very attractive relative to other funds in the
New York tax-free universe. In addition, taxable equivalent yields are now at
double-digit levels for class A shares and represent excellent values, particu-
larly for investors in such high-tax states as New York. In fact, your fund's
5.65% current dividend rate for class Ashares at net asset value would translate
into a current return of 10.12% for a taxable investment, assuming the maximum
combined 44.19% federal and state tax rate. Most investors in lower brackets
would also enjoy tax advantages, though not necessarily to the same extent.
FED ACTIONS SUCCESSFULLY RESTRAIN INFLATION; MUNICIPALS RALLY
Preoccupied with an accelerating economy and the threat of inflation, the Fede-
ral Reserve remained committed to its tight stance on U.S. monetary policy
throughout the semiannual period. Early in the period, there were signs that the
Federal Reserve's November rate hike of three-quarters of a percentage point had
calmed long-term inflation fears considerably. Growing investor confidence was
confirmed by the fact that the Fed's widely expected rate increase in February
- -- the seventh time in 12 months -- barely caused a ripple in the bond markets.
As municipals were enjoying a short rally in early December, the financial woes
of Orange County, California, shook the market. The immediate drop in value of
county-related bonds was only the beginning of the fallout from the $2 billion
in losses sustained by the county's investment fund. While the Orange
<PAGE>
County scare raised concerns among investors across the country, it only postpo-
ned an inevitable long-term rally in the tax-free market.
Early in calendar 1995, the rally began in earnest. The municipal bond market's
increasingly positive outlook was supported by a growing belief that interest
rates were peaking. In addition, the long-anticipated supply/demand imbalance
had become quite pronounced. Following the 44% drop in municipal bonds issuance
to $162 billion in 1994, analysts had predicted at least an additional 20% drop
this year to $120 billion.
According to the April 17, 1995, edition of The Wall Street Journal, long-term
issuance in New York is down more than 50% from the same period last year. The
scarcity of new issues, coupled with mergers and consolidation among municipal
bond issuers, served to drive prices higher as investors chased fewer and fewer
bonds.
POSITIONING FOR AN IMPROVING MUNICIPAL MARKET
With all signs suggesting that the municipal bond market was oversold and poised
to recover in the last quarter of 1994, we
[Line Chart - Page 5]
YIELD RATIO: MUNICIPAL BOND YIELDS AS A PERCENTAGE OF U.S. TREASURY BONDS
It is usually considered a buying signal when
municipal bonds yield between 78% and 82% of Treasuries.
11/94 84.20 %
84.00
12/94 82.50
82.20
1/95 80.70
79.20
2/95 78.90
79.70
3/95 78.90
78.50
4/95 80.50
82.90
5/95 84.90
Chart shows the yield of an average 30-year general obligation bond versus the
yield of an average 30-year U.S. Treasury bond plotted biweekly. Unlike shares
of the fund, Treasuries are backed by the full faith and credit of the U.S. go-
vernment. Source:Bloomberg.
<PAGE>
took several steps to ensure that the fund would be an active participant in a
rally. The re-evaluation -- and possible repositioning -- of current holdings in
light of our market forecasts is part of our daily management of the fund. If
the right circumstances present themselves, we may swap bonds; that is, sell one
holding while simultaneously buying another issue in order to take advantage of
differences in such factors as coupon rates, maturity and marketability.
The wave of tax-loss selling we saw in late 1994 prompted us to begin repositio-
ning the portfolio. We noted a pool of bonds whose low prices did not reflect
what we perceived as their fair investment value. We sold selected lower-coupon
investment-grade bonds and redeployed the proceeds into higher-yielding bonds of
similar quality. The addition of these higher-yielding bonds may help the fund
maintain a more competitive yield and they may also appreciate in value over
time.
The fund's assets remain invested across a wide spectrum of industries. With mi-
nor modifications, education, health care, and transportation continued to be
the fund's top industry sectors throughout the period.
POLITICAL ATMOSPHERE INCREASINGLY PROMISING
Shortly after the close of the period, the New York state legislature passed a
budget for fiscal 1996. This budget process was particularly drawn out as the
April 1, 1995, deadline for passage came and went without final approval. Unlike
previous budgetary stalemates, however, the legislature took the extraordinary
step of committing to meeting debt-service payments on state bonds through the
end of the new fiscal year regardless of the status of the budget. While the
fiscal 1996 budget debate failed to produce deeper cuts in spending, we believe
the Pataki administration's theme of fiscal prudence offers the potential for
more cost-efficient municipal services in the future.
The legislature is considering a constitutional amendment that would cap state
borrowing and significantly curtail New York's bond issuance. The state is the
nation's second-highest issuer of municipal debt, and Governor Pataki appears
committed to streamlining New York's borrowing. With a significant number of
bonds being refunded or called during the year, an expected decrease in new
issues of high-coupon bonds could push the prices of existing New York debt
higher.
<PAGE>
[Bar Chart - Page 7]
TOP INDUSTRY SECTORS *
Education 18.3%
Transportation 18.0%
Health care 15.0%
Utilities 12.6%
Housing 5.4%
* Based on net assets on 5/31/95. Holdings will vary over time.
POSITIVE ECONOMIC AND MARKET FUNDAMENTALS SEEN FOR 1995
Among the myriad tax-reform proposals before Congress, one that has generated a
great deal of attention in the media is the flat tax. Although its passage is
far from certain, its perceived effects on the tax status of municipal bonds
contributed to a short-term downturn in the market this spring. Much like the
fallout from the Orange County scare, the flat tax debate is providing ample
buying opportunities as the proverbial dust settles.
Despite the souring effect of the flat tax discussion, we continue to see strong
potential in the municipal market. Interest rate trends should remain positive
as low inflation and moderate economic growth generally foster a benign environ-
ment for bonds. Furthermore, moderately strong demand chasing a diminishing su-
pply of tax-free securities can create a natural price support. The fact that a
large number of issues are scheduled to mature in July 1995 is expected to fur-
ther bolster prices, as investors search for tax-exempt bonds to reinvest the
proceeds of the retiring debt.
With the prospects for the second half of the fiscal year appearing so promi-
sing, we intend to keep the fund fully invested to best capitalize on the mar-
ket's strong prospects.
The view expressed about the securities mentioned in this report are exclusively
those of Putnam Management and are not meant as investment advice. Although the
described holdings were viewed favorably as of May 31, 1995, there is no guaran-
tee the fund will continue to hold these securities in the future.
<PAGE>
PERFORMANCE SUMMARY
This section provides, at a glance, information about your fund's performance.
Total return shows how the value of the fund's shares changed over time, assu-
ming you held the shares through the entire period and reinvested all distribu-
tions back into the fund. We show total return in two ways: on a cumulative
long-term basis and on average how the fund might have grown each year over va-
rying periods.
Performance should always be considered in light of a fund's investment strate-
gy. Putnam New York Tax Exempt Income Fund is designed for investors seeking as
high a level of current income free from federal income tax and New York state
and New York City personal income taxes as Putnam Management believes is consis-
tent with preservation of capital.
TOTAL RETURN FOR PERIODS ENDED 5/31/95
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CLASS A CLASS B
NAV POP NAV CDSC
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6 months 13.61% 8.23% 13.47% 8.47%
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1 year 7.16 2.05 6.59 1.59
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5 years 50.83 43.60 -- --
Annual average 8.57 7.50 -- --
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10 years 141.06 129.60 -- --
Annual average 9.20 8.67 -- --
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Life of class B -- -- 13.12 9.15
Annual average -- -- 5.25 3.70
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TOTAL RETURN FOR PERIODS ENDED 6/30/95
(most recent calendar quarter)
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CLASS A CLASS B
NAV POP NAV CDSC
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1 year 5.92% 0.93% 5.22% 0.23%
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5 years 46.00 39.06 -- --
Annual average 7.86 6.82 -- --
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10 years 133.64 122.61 -- --
Annual average 8.86 8.33 -- --
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Life of class B -- -- 10.87 7.00
Annual average -- -- 4.23 2.75
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Fund performance data do not take into account any adjustment for taxes payable
on reinvested distributions or, for class A shares, distribution fees prior to
implementation of the class A distribution plan in 1990. The fund began opera-
tions on 9/2/83 offering shares now known as class A. On 1/4/93, the fund co-
mmenced operations for class B shares. On 4/10/95 the fund commenced operations
for class M shares. Total return for class M shares is not shown due to the bre-
vity of the reporting period. Performance data represent past results and will
differ for each share class and are no indication of future results. Investment
returns and net asset value will fluctuate so an investor's shares, when sold,
may be worth more or less than their original cost.
<PAGE>
TERMS AND DEFINITIONS
CLASS A SHARES are generally subject to an initial sales charge.
CLASS B SHARES may be subject to a sales charge upon redemption.
CLASS M SHARES have a lower initial sales charge and a higher 12b-1 fee than
class A shares and no sales charge on redemption.
NET ASSET VALUE (NAV) is the value of all your fund's assets, minus any liabili-
ties, divided by the number of outstanding shares, not including any initial or
contingent deferred sales charge.
PUBLIC OFFERING PRICE (POP) is the price of a mutual fund share plus the maximum
sales charge levied at the time of purchase. POP performance figures shown here
assume the maximum 4.75% sales charge.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the time of the
redemption of class B shares and assumes redemption at the end of the period.
Your fund's CDSC declines from a 5% maximum during the first year to 1% during
the sixth year. After the sixth year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
LEHMAN BROS.
MUNICIPAL
BOND INDEX CPI
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6 months 13.05% 1.67%
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1 year 9.11 3.19
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5 years 51.33 17.80
Annual average 8.64 3.33
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10 years 145.19 41.85
Annual average 9.38 3.56
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Life of class B 17.78 7.26
Annual average 7.03 2.95
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LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged list of long-term fixed-
rate investment-grade tax-exempt bonds representative of the municipal bond mar-
ket. The index does not take into account brokerage commissions or other costs,
may include bonds different from those in the fund, and may pose different risks
than the fund.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it does not
represent an investment return.
<PAGE>
RELATIVE RISK/REWARD POTENTIAL OF PUTNAM FUNDS
These illustrations provide a simplified guide to the risk/reward potential for
funds within each category of the Putnam Family of Funds and are not intended as
investment advice. Your investment advisor can help you evaluate your risk tole-
rance.
These rankings are relative only to Putnam funds and should not be compared to
other investments. There is no guarantee that one Putnam fund will be less vola-
tile than another, since each fund has its own investment risks. That's why it
is essential to read the fund's prospectus before investing.
PUTNAM GROWTH FUNDS
OTC
EMERGING
EUROPE GROWTH(2)
GROWTH(1) .
VOYAGER . . Higher Risk
NATURAL . . . . Higher Reward
RESOURCES . . . . Potential
GLOBAL . . . .
GROWTH(1) . . . . ASIA PACIFIC
INVESTORS . . . . GROWTH(1)
. . . . . NEW .
. . . . OPPORTUNITIES(2)
. . . . OVERSEAS
Lower Risk . . . GROWTH(1)
Lower Reward . . . HEALTH
Potential . . SCIENCES
. VISTA
DIVERSIFIED
EQUITY(1)
PUTNAM GROWTH AND INCOME FUNDS
FUND FOR GROWTH
AND INCOME Higher Risk
CONVERTIBLE . . Higher Reward
.UTILILITIES INCOME-GROWTH . . Potential
.GROWTH AND . . .
.INCOME . . .
. . . . PUTNAM
Lower Risk . . . EQUITY GROWTH AND
Lower Reward . . INCOME INCOME FUND II
Potential . GEORGE
BALANCE PUTNAM
RETIREMENT
(1) Foreign investments are subject to certain risks, such as currency fluctua-
tions and political developments, that are not present with domestic invest-
ments.
(2) This fund invests all or a portion of its assets in small to medium-sized
companies, which increases the risk of price fluctuations.
(3) While U.S. government backing of individual securities does not insure your
principal, which will fluctuate, it does guarantee that the fund's govern-
ment-backed holdings will make timely payments of interest and principal.
<PAGE>
PUTNAM INCOME FUNDS
HIGH YIELD
GLOBAL ADVANTAGE(5)
GOV'T(1,5) .
INCOME . . Higher Risk
FEDERAL . . .. Higher Reward
INCOME(3) . . . . Potential
U.S. GOV'T . . . .
ADJUSTABLE INCOME(3) . . . HIGH YIELD(5)
RATE U.S. . . . . .
GOV'T(3) . . . PREFERRED
. . . . . INCOME
. . . .
Lower Risk . . . . DIVERSIFIED
Lower Reward . . . . INCOME(1,3,5)
Potential . . AMERICAN
. . GOV'T.
MONEY INTERMEDIATE INCOME(3)
MARKET(4) U.S. GOV'T(3)
PUTNAM TAX-FREE FUNDS(6)
SINGLE-STATE TAX-FREE
TAX-FREE FUNDS* HIGH YIELD(5) Higher Risk
TAX-FREE . . Higher Reward
INSURED(7) . . . Potential
TAX EXEMPT . . .
MONEY . . MUNICIPAL
MARKET(4) . . INCOME
Lower Risk . TAX EXEMPT
Lower Reward . . INCOME
Potential .
INTERMEDIATE
TAX EXEMPT
* State tax-free funds available for Arizona, California, Florida, Massachu-
setts, Michigan, Minnesota, New Jersey, New York, Ohio, and Pennsylvania. Not
available in all states.
LIFESTAGE(SM) FUNDS
Putnam Asset Allocation Funds -- three investment portfolios that spread your
money across a variety of stocks, bonds, and money market investments. The three
portfolios are:
PUTNAM ASSET ALLOCATION: BALANCED PORTFOLIO
PUTNAM ASSET ALLOCATION: CONSERVATIVE PORTFOLIO
PUTNAM ASSET ALLOCATION: GROWTH PORTFOLIO
Please call your financial advisor -- or Putnam at 1-800-225-1581 -- to obtain
a prospectus for any Putnam fund. The prospectus contains more complete informa-
tion, including risk considerations, charges, and expenses. Read it carefully
before you invest or send money.
(4) The fund is managed to maintain a steady price of $1.00 per share, although
there is no assurance this price can be maintained in the future.
(5) The lower credit ratings of high-yield corporate and municipal bonds reflect
a greater possibility that adverse changes in the economy or their issuers
may affect their ability to pay principal and interest on the bonds.
(6) Income may be subject to state and local taxes. Capital gains, if any, are
taxable for federal and, in most cases, state purposes.
(7) Bond insurance does not guarantee principal or protect against changes in
market price.
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
May 31, 1995 (Unaudited)
KEY TO ABBREVIATION OF MUNICIPAL INSTRUMENTS
IFB Inverse Floating Bonds
FB Floating Bonds
G.O. Bonds General Obligation Bonds
VRDN Variable Rate Demand Notes
KEY TO INSURANCE ABBREVIATIONS
AMBAC American Municipal Bond Assurance Corporation
FGIC Federal Guaranty Insurance Corporation
FHA Federal Housing Administration
FSA Financial Security Assurance
MBIA Municipal Bond Investors Assurance
MUNICIPAL BONDS AND NOTES (97.0%)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (93.4%)
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$ 5,300,000 34th Street Partnership Inc. Rev. Bonds
(34th Street Business Impt.), 5 1/2s, 1/1/23 A $ 5,041,625
Albany, Indl. Dev. Agcy. Rev. Bonds
(Mental Hlth. & Retardation Ctr.)
1,215,000 Ser. B, 7.9s, 6/1/07 A 1,306,125
1,010,000 Ser. A, 7.9s, 12/1/06 A 1,085,750
5,000,000 Albany, Parking Auth. Rev. Bonds
(Green & Hudson St. Garage), Ser. A,
7.15s, 9/15/16 A 5,243,750
3,000,000 Babylon, Indl. Dev. Agcy. Resource Recvy.
Rev. Bonds (Ogden Martin Syst.), Ser. B,
8 1/2s, 1/1/19 Baa 3,292,500
Battery Park, City Auth. Rev. Bonds
14,500,000 7.7s, 5/1/15 AAA 16,421,250
350,000 Ser. A, 5.7s, 11/1/20 AA 337,312
29,125,000 Ser. A, 5 1/4s, 11/1/17 AA 26,685,781
20,645,000 Ser. A, 5s, 11/1/13 AA 18,735,337
Erie Cnty., Pre-refunded G.O. Bonds
1,700,000 Ser. B, 9 1/2s, 12/15/00 AAA/P 1,797,750
1,700,000 Ser. B, 9 1/2s, 12/15/99 AAA/P 1,797,750
4,750,000 Grand Central Dist. Mgmt. Assn. Inc. Rev.
Bonds, 5 1/4s, 1/1/22 A 4,340,312
Greece, Central School Dist. Rev.
Bonds, FGIC,
950,000 6s, 6/15/15 AAA 984,437
950,000 6s, 6/15/14 AAA 989,187
950,000 6s, 6/15/13 AAA 988,000
950,000 6s, 6/15/12 AAA 992,750
950,000 6s, 6/15/11 AAA 996,312
950,000 6s, 6/15/10 AAA 998,687
5,000,000 Metro. Trans. Auth. IFB, Ser. 1993B,
AMBAC, 5.017s, 6/26/02 (acquired
6/30/93, cost $5,143,073) ++ AAA 4,812,500
4,000,000 Metro. Trans. Auth. Rev. Bonds
(Commuter Fac.), Ser. A, MBIA,
5 1/2s, 7/1/17 AAA 3,880,000
<PAGE>
MUNICIPAL BONDS AND NOTES (continued)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------
Metro. Trans. Auth. Svcs. Contract Fac.
Rev. Bonds
$ 3,290,000 (Trans. Fac.), Ser. 3, 7 1/2s, 7/1/16 AAA $ 3,775,275
3,750,000 (Trans. Fac.), Ser. 3, 7 3/8s, 7/1/08 Baa 4,270,312
3,000,000 (Trans. Fac.), Ser. 6, 7s, 7/1/09 Baa 3,228,750
7,460,000 (Commuter Fac.), Ser. 5, 6s, 7/1/18 Baa 7,404,050
28,215,000 (Trans. Fac.), Ser. P, 5 3/4s, 7/1/15 Baa 27,192,206
10,400,000 (Trans. Fac.), Ser. 7, 5 5/8s, 7/1/16 Baa 9,867,000
8,000,000 (Commuter Fac.), Ser. O, 5 1/2s, 7/1/17 Baa 7,500,000
16,995,000 (Trans. Fac), Ser. O, 5 1/2s, 7/1/17 Baa 15,932,812
1,575,000 (Commuter Fac.), Ser. 7, 4 3/4s, 7/1/19 Baa 1,303,312
3,500,000 (Trans. Fac.), Ser. 7, 4 3/4s, 7/1/19 Baa 2,896,250
Metro. Trans. Auth. Transit Facs. Rev. Bonds
4,450,000 Ser. O, MBIA, 6s, 7/1/24 AAA 4,505,625
4,500,000 Ser. M, AMBAC, 6s, 7/1/14 AAA 4,606,875
1,305,000 Monroe Cnty., Rochester Pure Wtr. Dist.
G.O. Bonds, 8.4s, 6/1/01 AA 1,383,300
2,400,000 Monroe Cnty., Wtr. Auth. Rev. Bonds,
Ser. A, 6 1/4s, 8/1/11 AA 2,490,000
Muni. Assistance Corp. for the City of NY
Rev. Bonds
4,500,000 Ser. 61, 5 3/4s, 7/1/08 AA 4,539,375
11,795,000 Ser. 62, 5 1/2s, 7/1/08 AA 11,824,487
17,125,000 NY City Hlth. & Hosp. Corp. Ser. A,
AMBAC, 5 3/4s, 2/15/22 AAA 16,953,750
NY City, G.O. Bonds
11,200,000 Ser. D, Group B, 8 1/4s, 8/1/11 A 12,474,000
2,775,000 Ser. B, 8 1/4s, 6/1/07 A 3,288,375
12,325,000 Ser. B, 8 1/4s, 6/1/05 A 14,420,250
205,000 Ser. A, 8s, 8/15/19 A 226,269
20,195,000 Pre-refunded, Ser. A, 8s, 8/15/19 AAA/P 23,931,075
1,000,000 Ser. D, Group A, 8s, 8/1/07 A 1,108,750
10,000,000 Ser. D, Group A, 8s, 8/1/03 A 11,225,000
5,575,000 Ser. D, 7.65s, 2/1/08 A 6,055,844
3,455,000 Ser. E, 7.6s, 2/1/05 A 3,778,906
4,730,000 Ser. F, 7.6s, 2/1/05 A 5,173,438
27,000,000 Ser. B, 7 1/2s, 2/1/06 A 29,362,500
20,000,000 Ser. B, 7 1/2s, 2/1/02 A 21,900,000
18,800,000 Ser. F, 3s, 11/15/00 A 16,708,500
5,000,000 Ser. F, MBIA, 3s, 11/15/00 AAA 4,543,750
NY City, Indl. Dev. Agcy. Civic Fac.
Rev. Bonds
1,000,000 Ser. 1990, 7 5/8s, 7/1/10 AAA/P 1,077,500
9,100,000 (Rockefeller Fndtn. Project), 5 3/8s,
7/1/23 AAA 8,883,875
15,625,000 NY City, Indl. Dev. Agcy. Special Fac. Rev.
Bonds (American Airlines Inc. Project),
6.9s, 8/1/24 Baa 16,210,938
13,000,000 NY City, Muni. Fin. Auth. Wtr. & Swr.
Syst. IFB, FGIC, 10.178s, 6/15/11 (acquired
8/9/91, cost $13,503,082) ++ AAA 18,297,500
<PAGE>
MUNICIPAL BONDS AND NOTES (continued)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------
NY City, Muni. Fin. Auth. Wtr. & Swr.
Syst. Rev. Bonds
$ 5,000,000 Ser. A, 6 3/4s, 6/15/17 A $ 5,306,250
1,700,000 Ser. A, FGIC, 6 3/4s, 6/15/16 AAA 1,802,000
3,150,000 Ser. A, 6s, 6/15/17 A 3,181,500
4,000,000 Ser. A, FSA, 6s, 6/15/17 AAA 4,045,000
11,425,000 MBIA, 5 1/2s, 6/15/23 AAA 10,968,000
16,090,000 Ser. B, 5 1/2s, 6/15/19 A 15,365,950
1,250,000 Ser. A, FSA, 5 1/2s, 6/15/11 AAA 1,231,250
13,000,000 NY State Dorm. Auth. IFB (Cornell U.),
10.178s, 7/1/30 (acquired 8/9/91, cost
$13,315,900) ++ AA 15,567,500
NY State Dorm Auth. Rev. Bonds
5,000,000 (NY Dept. of Ed.), 7 3/4s, 7/1/21 A 5,612,500
9,000,000 (State U. Edl. Fac.), Ser. A, 7 5/8s, 5/15/05 AAA 10,350,000
18,800,000 (City U. Syst.), Ser. C, 7 1/2s, 7/1/10 A 21,925,500
500,000 (Wildwood School), 7.3s, 7/1/15 A 554,375
4,000,000 (State U. Athletic Fac.), 7 1/4s, 7/1/21 A 4,345,000
260,000 (State U. Edl. Fac.), Ser. A, 7 1/4s, 5/15/18 AAA 303,550
4,465,000 (U. of Rochester), 6 1/2s, 7/1/09 A 4,632,438
16,750,000 (State U. Edl. Fac.), Ser. A, 6s, 5/15/22 Baa 16,519,688
1,955,000 (U. of Rochester Strong Memorial Hosp.),
MBIA, 5.9s, 7/1/17 AAA 1,972,106
23,640,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/17 Baa 23,167,200
12,200,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 BBB 12,184,750
7,515,000 (State U. Edl. Facs.), Ser. B, 5 3/4s,5/15/24 Baa 7,158,038
21,810,000 (Construction City U. Syst.), Ser. A,
5 3/4s, 7/1/18 Baa 20,992,125
1,000,000 (Columbia U.), 5 3/4s, 7/1/15 Aaa 1,006,250
10,000,000 (U. of Rochester Strong Memorial Hosp.),
MBIA, 5 3/4s, 7/1/14 AAA 10,000,000
6,975,000 (Construction City U. Syst.), 2nd Gen.,
Ser. A, 5 3/4s, 7/1/13 Baa 6,783,188
11,615,000 (Upstate Cmnty. Colleges), Ser. A, 5.7s,
7/1/21 Baa 11,092,325
4,000,000 (Upstate Cmnty. Colleges), Ser. A, 5 5/8s,
7/1/14 Baa 3,815,000
20,825,000 (U. of Rochester Strong Memorial Hosp.),
MBIA, 5 1/2s, 7/1/21 AAA 20,096,125
3,000,000 (State U. Edl. Facs.), Ser. A, 5 1/2s,5/15/13 Baa 2,853,750
7,875,000 (State U. Edl. Facs.), Ser. A, 5 1/4s,5/15/21 Baa 7,067,813
31,705,000 (State U. Edl. Facs.), Ser. B, 5 1/4s,5/15/19 Baa 28,534,500
38,600,000 (State U. Edl. Facs.), Ser. A, 5 1/4s,5/15/15 Baa 35,222,500
12,975,000 (Mt. Sinai Med. School), Ser. A, MBIA,
5.15s, 7/1/24 AAA 11,969,438
17,025,000 (Mt. Sinai Med. School), Ser. A, MBIA,
5s, 7/1/21 AAA 15,237,375
16,500,000 (City U.), Ser. F, 5s, 7/1/20 Baa 14,190,000
27,990,000 (State U. Edl. Fac.), Ser. B, 5s, 5/15/18 A 24,386,288
11,000,000 (City U. Syst.), Ser. C, 5s, 7/1/17 A 9,611,250
4,020,000 (Columbia U.), 5s, 7/1/15 Aaa 3,788,850
15,985,000 (Cornell U.), 5s, 7/1/15 AA 15,045,881
4,750,000 (Columbia U.), Ser. A, 4 3/4s, 7/1/14 AAA 4,257,188
<PAGE>
MUNICIPAL BONDS AND NOTES (continued)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------
$23,864,000 (State U. Edl. Fac.), Ser. B, zero%, 5/15/10 A $ 9,963,220
48,000,000 (State U. Edl. Fac.), Ser. B, zero%, 5/15/09 Baa 21,420,000
54,520,000 (State U. Edl. Fac.), Ser. B, zero%, 5/15/08 A 25,692,550
10,000,000 (State U. Edl. Fac.), Ser. B, zero%, 5/15/07 A 5,025,000
10,580,000 (State U. Edl. Fac.), Ser. B, zero%, 5/15/06 A 5,699,975
10,000,000 NY State Energy Research & Dev. Auth.
Gas Fac. IFB (Brooklyn Union Gas Co.),
Ser. B, 9.371s, 7/1/26 A 11,875,000
8,100,000 NY State Energy Research & Dev. Auth.
Gas Fac. Rev. Bonds (Brooklyn Union Gas
Co. Project), Ser. A, 9s, 5/15/15 A 8,413,875
5,000,000 NY State Energy Research & Dev. Auth.
Poll. Control Rev. Bonds (Orange and
Rockland Util. Project), 9s, 8/1/15 A 5,131,250
19,000,000 NY State Energy VRDN, 2.7s, 6/1/29 VMIG1 19,000,000
NY State Env. Fac. Corp. Poll. Control Rev.
Bonds (State Wtr. Revolving Fund)
8,655,000 Ser. A, 7 1/2s, 6/15/12 Aa 9,758,513
5,050,000 Ser. E, 6 7/8s, 6/15/10 Aa 5,542,375
6,870,000 Ser. B, 6.65s, 9/15/13 AAA 7,462,538
5,265,000 Ser. A, 6.55s, 9/15/10 AAA 5,692,781
14,400,000 Ser. A, 5 7/8s, 6/15/14 AAA 14,634,000
2,670,000 Ser. B, 5.1s, 5/15/10 AAA 2,563,200
2,780,000 NY State G.O. Bonds, 5.2s, 3/15/10 A 2,654,900
NY State Hsg. Corp. Rev. Bonds
9,000,000 5s, 11/1/18 AA 7,830,000
13,135,000 5s, 11/1/13 AA 11,755,825
16,750,000 Ser. A, MBIA, zero%, 11/1/10 A 13,253,438
NY State Hsg. Fin. Agcy. Rev. Bonds
28,000,000 Ser. A, 8s, 11/1/08 Baa 31,710,000
9,440,000 (Multi-Fam. Hsg. Insd. Mtge. Program),
Ser. A, 7s, 8/15/22 AA 9,959,200
2,750,000 (Multi-Fam. Mtge. Hsg.), Ser. C, FHA Insd.,
6 1/2s, 8/15/24 AAA 2,805,000
5,570,000 (Multi-Fam. Mtge.), Ser. B, AMBAC,
6.35s, 8/15/23 AAA 5,674,438
NY State Hsg. Fin. Agcy. Svcs. Contract
Oblig. Rev. Bonds
7,500,000 Ser. C, 7.3s, 3/15/21 AAA 8,700,000
1,000,000 Ser. C, 7.3s, 9/15/12 A 1,097,500
1,500,000 Ser. A, 7 1/4s, 9/15/12 Baa 1,650,000
10,000,000 Ser. C, 6s, 9/15/21 Baa 9,862,500
31,710,000 Ser. A, 5 1/2s, 9/15/22 Baa 29,133,563
15,500,000 Ser. D, 5 3/8s, 3/15/23 Baa 13,911,250
NY State Local Govt. Assistance Corp.
Rev. Bonds
5,000,000 Ser. A, 7 1/4s, 4/1/18 AAA 5,743,750
11,900,000 Ser. A, 6 1/2s, 4/1/20 A 12,539,625
4,400,000 5 1/2s, 4/1/21 A 4,207,500
17,605,000 Ser. B, 5 3/8s, 4/1/16 A 16,746,756
13,750,000 5 1/4s, 4/1/19 A 12,735,938
35,415,000 Ser. E, 5 1/4s, 4/1/16 A 33,157,294
11,125,000 Ser. D, 5s, 4/1/23 A 9,803,906
25,500,000 Ser. C, 5s, 4/1/21 A 22,695,000
<PAGE>
MUNICIPAL BONDS AND NOTES (continued)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------
$24,700,000 NY State Med. Care Facs. Fin. Agcy. IFB
(Monterfiore Med. Ctr.), Ser. A, MBIA,
9.585s, 2/15/24 (acquired from 10/3/91
to 4/8/92, cost $26,348,616) ++ AAA $ 28,281,500
NY State Med. Care Facs. Fin. Agcy.
Rev. Bonds
3,450,000 (Nursing Home Insd. Mtge.), Ser. B,
FHA Insd., 10 1/2s, 1/15/24 A 3,488,813
425,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. B, FHA Insd., 9 1/8s, 2/15/25 AA 437,219
2,090,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. C, FHA Insd., 9s, 2/15/26 AA 2,150,088
335,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. B, FHA Insd., 8 7/8s, 8/15/27 AA 369,338
2,780,000 (Mental Hlth. Svcs. Fac.), Ser. A, 8 7/8s,
8/15/07 BBB 3,058,000
3,230,000 (Mental Hlth. Svcs. Fac.), Ser. A,
Pre-refunded, 8 7/8s, 8/15/07 AAA 3,601,450
12,730,000 (Hosp. & Nursing Home), Ser. B, FHA
Insd., 8s, 2/15/28 AAA 14,066,650
8,750,000 (St. Vincents Hosp. & Nursing Home Insd.
Mtge.), Ser. A, FHA Insd., 8s, 2/15/27 AAA 9,581,250
5,805,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s,
8/15/20 A 6,537,881
7,985,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s,
8/15/00 AAA 9,322,488
7,275,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s,
2/15/19 AAA 7,975,219
22,525,000 (Presbyterian Hosp.), Ser. A, FHA Insd.,
7.7s, 2/15/25 AA 26,129,000
5,000,000 (Buffalo Gen. Hosp.), Ser. C, FHA Insd.,
7.7s, 2/15/22 AAA 5,612,500
6,180,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 5/8s,
8/15/17 A 6,844,350
24,775,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s,
2/15/21 AAA 28,708,031
18,500,000 (St. Luke's Hosp.), Ser. B, FHA Insd.,
7.45s, 2/15/29 AAA 21,043,750
1,785,000 (Mental Hlth. Svcs. Fac.), Ser. C, 7.3s,
8/15/21 AAA 2,068,369
590,000 (Mental Hlth. Svcs. Fac.), Ser. C, 7.3s,
2/15/21 A 650,475
1,205,000 (Hosp. & Nursing Home), Ser. B, FHA
Insd., 7s, 8/15/32 AA 1,290,856
3,000,000 (Hosp. & Nursing Home), Ser. A, FHA
Insd., 6 7/8s, 2/15/32 AA 3,180,000
6,625,000 (Methodist Hosp. & Nursing Home),
Ser. A, FHA Insd., 6.7s, 8/15/23 AA 7,047,344
7,325,000 Ser. A, AMBAC, 6 1/2s, 8/15/29 AAA 7,737,031
5,000,000 Ser. A, 6 1/4s, 2/15/24 Baa 4,818,750
10,000,000 (Hosp. & Nursing Mtge.), Ser. B, FHA,
6 1/8s, 8/15/24 AAA 10,175,000
<PAGE>
MUNICIPAL BONDS AND NOTES (continued)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------
$ 5,500,000 (Mental Hlth. Svcs. Fac.), Ser A, AMBAC,
5.8s, 8/15/22 AAA $ 5,500,000
6,850,000 (Hosp. & Nursing Home Insd. Mtge.)
Ser. C, MBIA, 5 3/4s, 8/15/19 AAA 6,790,063
NY State Med. Care Facs. Fin. Agcy.
Rev. Bonds (continued)
24,570,000 (St. Luke's -Roosevelt), MBIA, 5.7s, 2/15/29 AAA 24,262,875
5,000,000 (Mental Hlth. Svcs. Fac.), Ser. A, AMBAC,
5.7s, 8/15/14 AAA 4,993,750
12,140,000 (St. Luke's - Roosevelt), MBIA,
5 5/8s, 8/15/18 AAA 11,897,200
25,100,000 (Presbyterian Hosp. ), Ser. A, MBIA, FHA,
5 1/2s, 8/15/24 AAA 24,190,125
19,550,000 (Presbyterian Hosp.) MBIA, 5 3/8s, 2/15/25 AAA 18,474,750
6,000,000 (Mental Health ), Ser. D, FGIC, 5 3/8s,
8/15/13 AAA 5,775,000
2,725,000 (Mental Hlth. Svcs. Fac.), Ser. A, 5 1/4s,
8/15/23 Baa 2,398,000
4,785,000 (Mental Hlth. Svcs. Fac.), Ser. D, 5 1/4s,
8/15/23 Baa 4,210,800
16,290,000 FGIC, Ser. F, 5 1/4s, 2/15/19 AAA 15,292,238
10,340,000 NY State Med. Care Hosp. Rev. Bonds
(Hosp. & Nursing Home Insd. Mtge.),
Ser. D, MBIA, 5.4s, 8/15/33 AAA 9,577,425
NY State Mtge. Agcy. Rev. Bonds
3,015,000 (Homeownership Dev. Program),
Ser. BB-2, 7.95s, 10/1/15 Aa 3,161,981
4,475,000 (Homeownership Dev. Program),
Ser. QQ, 7.7s, 10/1/12 Aa 4,799,438
5,000,000 5.65s, 4/1/15 Aa 4,825,000
2,500,000 5.4s, 10/1/17 Aa 2,315,625
4,800,000 (Homeowner Mtg.), Ser. 31-A, MBIA,
5 3/8s, 10/1/17 AAA 4,464,000
43,045,000 (Single-Fam.), Ser. 2, zero%, 10/1/14 Aa 6,671,975
4,250,000 NY State Muni. Bond Bank Agcy. Rochester
Special Program Rev. Bonds, 6 3/4s, 3/15/11 A 4,526,250
5,400,000 NY State Pwr. Auth. General Purpose Rev.
Bonds, Ser. U, 5 3/4s, 1/1/18 AA 5,373,000
28,740,000 NY State Thruway Auth. General Purpose
Rev. Bonds, Ser. B, MBIA, 5s, 1/1/20 AAA 25,830,075
NY State Thruway Auth. Svc. Contract Rev.
Bonds (Local Hwy. & Bridge Project)
13,300,000 7 1/4s, 1/1/10 A 14,380,625
6,500,000 6 1/4s, 4/1/07 Baa 6,751,875
9,525,000 5 1/4s, 4/1/13 Baa 8,715,375
NY State Urban Dev. Corp. Rev. Bonds
9,000,000 (Onondaga Cnty. Convention Project),
7 7/8s, 1/1/20 A 10,091,250
23,250,000 (State Fac.), 7 1/2s, 4/1/20 A 25,720,313
33,250,000 (Correctional Fac.), Ser. 2, 7 1/2s, 1/1/18 AAA 38,445,313
8,000,000 (Correctional Fac.), Ser. A, 5 1/2s, 1/1/16 Baa 7,440,000
2,650,000 (Correctional Fac.), 5 1/2s, 1/1/15 Baa 2,471,125
20,700,000 (Correctional Fac.), FSA, 5 1/2s, 1/1/15 Baa 19,302,750
29,345,000 (Correctional Fac.), Ser. A, 5 1/4s, 1/1/21 Baa 26,117,050
<PAGE>
MUNICIPAL BONDS AND NOTES (continued)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------
$ 5,000,000 Niagara Falls, Bridge Commn. Toll Rev.
Bonds, Ser. B, FGIC, 5 1/4s, 10/1/21 AAA $ 4,593,750
7,000,000 Onondaga Cnty., Indl. Dev. Agcy. Swr. Fac.
Rev. Bonds (Bristol-Meyers Squibb Co.
Project), 5 3/4s, 3/1/24 AAA 7,000,000
2,800,000 Ontario Cnty., Indl. Dev. Agcy. Res. Recvy.
Rev. Bonds (High Tech. Fac. Group), 7 3/8s,
5/1/96 A 2,828,000
Port Auth. of NY & NJ Cons. IFB
8,600,000 8.909s, 8/1/26 (acquired 8/29/91, cost
$8,779,076) ++ AA 9,847,000
28,000,000 FGIC, 5.723s, 11/15/20 (acquired 3/10/95,
cost $22,466,253) ++ AAA 24,465,000
Port Auth. of NY & NJ Cons. Rev. Bonds
11,000,000 53rd Ser., 8.7s, 7/15/20 AA 11,371,250
32,500,000 93rd Ser. 6 1/8s, 6/1/94 AA 33,515,625
18,000,000 Ser. 89, 5 1/8s, 10/1/21 AA 16,425,000
5,250,000 Port Auth. of NY & NJ Cons. VRDN, 7s,
12/01/14 AA 5,460,000
Rockland Cnty., Swr. Dist. Pre-refunded
Rev. Bonds
1,000,000 7.7s, 6/1/16 AAA/P 1,083,750
1,000,000 7.7s, 6/1/15 AAA/P 1,083,750
900,000 7.7s, 6/1/14 AAA/P 975,375
10,000,000 Suffolk Cnty., Wtr. Auth. Wtrwks. Rev.
Bonds, Ser. B, AMBAC, 5 5/8s, 6/1/16 AAA 9,925,000
18,000,000 Triborough Bridge & Tunnel Auth. Special
Oblig. IFB
7.755s, 1/1/12 (acquired 7/1/92, cost
$18,135,000) ++ AAA 19,530,000
Triborough Bridge & Tunnel Auth. General
Purpose Rev. Bonds
38,750,000 (Convention Ctr. Project), Ser. E,
7 1/4s, 1/1/10 A 44,368,750
4,750,000 Ser. Y, 6 1/8s, 1/1/21 A 4,993,437
12,500,000 (Convention Ctr. Project), Ser. E, 6s,
1/1/11 A 12,671,875
14,575,000 Ser. P, 5 1/2s, 1/1/19 A 13,955,562
31,880,000 Ser. A, 5s, 1/1/24 Aa 28,293,500
21,480,000 Ser. B, MBIA, zero%, 1/1/22 AAA 4,645,050
8,985,000 Ser. B, MBIA, zero%, 1/1/21 AAA 2,055,318
9,105,000 Ser. B, MBIA, zero%, 1/1/15 AAA 2,970,505
----------------
2,097,709,160
<PAGE>
MUNICIPAL BONDS AND NOTES (continued)*
PRINCIPAL AMOUNT RATINGS** VALUE
PUERTO RICO (3.6%)
- -------------------------------------------------------------------------------
$20,500,000 Cmnwlth. of Puerto Rico, Aqueduct &
Swr. Auth. Rev. Bonds, Ser. A, 7 7/8s,
7/1/17 A $ 22,524,375
Puerto Rico Elec. Pwr. Auth. Rev. Bonds
7,500,000 Ser. J, 9 1/8s, 7/1/15 AAA 7,757,025
68,500,000 Ser. N, zero%, 7/1/17 A 18,152,500
11,175,000 Ser. O, zero%, 7/1/17 A 2,961,375
1,225,449 Puerto Rico Hsg. Fin. Corp. Rev. Bonds
(Bayamon Hsg. Dev. Project), FHA Insd.,
7 1/2s, 7/1/21 Baa 1,393,947
13 850,000 Puerto Rico Pub. Bldg. Auth. Rev. Bonds
(Gtd. Pub. Edl. & Hlth. Facs.), Ser. L,
6 7/8s, 7/1/12 AAA 15,979,437
11,350,000 Puerto Rico Tel. Auth. Tel. Auth. IFB,
7.516s, 1/1/20 (acquired 9/25/92, cost
$10,981,125) ++ A 11,832,375
----------------
80,601,034
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $1,974,985,587)*** $2,178,310,194
- -------------------------------------------------------------------------------
<PAGE>
NOTES
* Percentages indicated are based on net assets of $2,246,669,789, which co-
rrespond to a net asset value per class A share, class B share and class M
share of $8.88, $8.87, and $8.88, respectively.
** The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at May 31, 1995 for the securities listed.
Ratings are generally ascribed to securities at the time of issuance. While
the agencies may from time to time revise such ratings, they undertake no
obligation to do so, and the ratings do not necessarily represent what the
agencies would ascribe to these securities at May 31, 1995. Securities rated
by Putnam are indicated by "/P" and are not publicly rated.
++ Restricted as to public resale. At the date of acquisition these securities
were valued at cost. There were no outstanding securities of the same class
as those held. Total market value of restricted securities owned at May 31,
1995 was $132,633,375 or 5.9% of net assets.
*** The aggregate identified cost on a tax basis is $1,978,562,316 resulting in
gross unrealized appreciation and depreciation of $204,773,191 and
$5,025,313, respectively, or net unrealized appreciation of $199,747,878.
The rates shown on Variable Rate Demand Notes (VRDN) and Inverse Floating
Bonds (IFB) are the current interest rates at May 31,1995, which are subject
to change based on the terms of the security.
The fund had the following industry group concentrations greater than 10% on
May 31, 1995 (as a percentage of net assets):
Education 18.3 %
Transportation 18.0
Healthcare 15.0
Utilities 12.6
Housing 5.4
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1995 (Unaudited)
ASSETS
- -------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $1,974,985,587) (Note 1) $2,178,310,194
Cash 400,826
Interest receivables 38,446,407
Receivable for shares of the fund sold 2,211,549
Receivable for securities sold 39,442,245
- -------------------------------------------------------------------------------
TOTAL ASSETS $2,258,811,221
LIABILITIES
- -------------------------------------------------------------------------------
Payable for shares of the fund repurchased 3,631,083
Distributions payable to shareholders 4,825,551
Payable for compensation of Manager (Note 2) 2,672,269
Payable for compensation of Trustees (Note 2) 961
Payable for administrative services (Note 2) 5,096
Payable for investor servicing and custodian fees (Note 2) 58,190
Payable for distribution fees (Note 2) 818,840
Other accrued expenses 129,442
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 12,141,432
- -------------------------------------------------------------------------------
NET ASSETS $2,246,669,789
REPRESENTED BY
- -------------------------------------------------------------------------------
Paid-in capital (Note 4) $2,137,399,695
Undistributed net investment income 944,270
Accumulated net realized loss on investment transactions (94,998,783)
Net unrealized appreciation of investments 203,324,607
- -------------------------------------------------------------------------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO
CAPITAL SHARES OUTSTANDING $2,246,669,789
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- -------------------------------------------------------------------------------
Net asset value and redemption price of class A shares
($2,042,757,233 divided by 229,922,833 shares) $8.88
Offering price per class A share (100/95.25 of $8.88) * $9.32
Net asset value and offering price of class B shares
($203,686,373 divided by 22,973,657 shares) + $8.87
Net asset value and redemption price of class M shares
($226,183 divided by 25,471 shares) $8.88
Offering price per class M share (100/96.75 of $8.88) ** $9.18
- -------------------------------------------------------------------------------
* On single retail sales of less than $25,000. On sales of $25,000 or more and
on group sales the offering price is reduced.
** On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
+ Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF OPERATIONS
May 31, 1995 (Unaudited)
TAX EXEMPT INTEREST INCOME $72,116,044
- -------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------
Compensation of Manager (Note 2) 5,205,670
- -------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 628,447
- -------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 26,500
- -------------------------------------------------------------------------------
Reports to shareholders 52,011
- -------------------------------------------------------------------------------
Auditing 35,791
- -------------------------------------------------------------------------------
Legal 15,183
- -------------------------------------------------------------------------------
Postage 88,818
- -------------------------------------------------------------------------------
Registration fees 520
- -------------------------------------------------------------------------------
Administrative services (Note 2) 16,467
- -------------------------------------------------------------------------------
Distribution fees -- class A (Note 2) 1,977,904
- -------------------------------------------------------------------------------
Distribution fees -- class B (Note 2) 804,533
- -------------------------------------------------------------------------------
Distribution fees -- class M (Note 2) 67
- -------------------------------------------------------------------------------
Other expenses 48,633
- -------------------------------------------------------------------------------
TOTAL EXPENSES 8,900,544
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 63,215,500
- -------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 3,407,132
- -------------------------------------------------------------------------------
Net realized loss on futures contracts (Notes 1 and 3) (11,773,345)
- -------------------------------------------------------------------------------
Net realized loss on written options (Notes 1 and 3) (31,776,966)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures contracts
during the period 254,179,659
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENT TRANSACTIONS 214,036,480
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $277,251,980
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31 NOVEMBER 30
1995* 1994
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
- -------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------
Net investment income $ 63,215,500 $ 134,386,692
- -------------------------------------------------------------------------------
Net realized loss on investments, written
options and futures contracts (40,143,179) (39,809,864)
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments and futures contracts 254,179,659 (284,366,608)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 277,251,980 (189,789,780)
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
- -------------------------------------------------------------------------------
From net investment income
Class A (58,850,674) (123,572,963)
- -------------------------------------------------------------------------------
Class B (4,881,261) (8,995,974)
- -------------------------------------------------------------------------------
Class M (778) --
- -------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (12,732,691)
- -------------------------------------------------------------------------------
Class B -- (849,699)
- -------------------------------------------------------------------------------
In excess of net realized gain on investments
Class A -- (14,104,706)
- -------------------------------------------------------------------------------
Class B -- (941,033)
- -------------------------------------------------------------------------------
Decrease from capital share transactions
(Note 4) (41,963,850) (1,157,824)
- -------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 171,555,417 (352,144,670)
- -------------------------------------------------------------------------------
NET ASSETS
Beginning of period 2,075,114,372 2,427,259,042
- -------------------------------------------------------------------------------
END OF PERIOD (including undistributed net
investment income of $944,270 and
$1,461,483, respectively) $2,246,669,789 $2,075,114,372
- -------------------------------------------------------------------------------
* Unaudited.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
FOR THE PERIOD FOR THE PERIOD
APRIL 10, 1995 JANUARY 4, 1993
(COMMENCEMENT SIX MONTHS (COMMENCEMENT SIX MONTHS
OF OPERATIONS) TO ENDED YEAR ENDED OF OPERATIONS) TO ENDED
MAY 31 MAY 31 NOVEMBER 30 NOVEMBER 30 MAY 31
1995* 1995* 1994 1993 1995*
- -------------------------------------------------------------------------------------------------------------------------------
CLASS M CLASS B CLASS A
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $8.79 $8.02 $9.37 $8.95 $8.05
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income .08 .22 .46 .40 .25
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments .07 .85 (1.24) .42 .83
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS .15 1.07 (.78) .82 1.08
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (.06) (.22) (.46) (.40) (.25)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments -- -- (.05) -- --
- -------------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain
on investments -- -- (.06) -- --
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.06) (.22) (.57) (.40) (.25)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $8.88 $8.87 $8.02 $9.37 $8.88
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (a) 1.75(b) 13.47(b) (8.75) 9.25(b) 13.61(b)
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $226 $203,686 $173,213 $146,665 $2,042,757
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) .25(b) .70(b) 1.39 1.28(b) .38(b)
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 76(b) 2.60(b) 5.16 4.29(b) 2.94(b)
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 21.18(b) 21.18(b) 47.56 26.60 21.18(b)
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
* Unaudited.
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Not annualized.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
(For a share outstanding throughout the period)
YEAR ENDED OCTOBER 31
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $9.38 $8.98 $8.75 $8.34 $8.61
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income .53 .53 .57 .58 .58
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 1.24 .52 .32 .42 (.23)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (.71) 1.05 .89 1.00 .35
- ------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income (.51) (.53) (.58) (.59) (.56)
- ------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (.05) (.10) (.08) -- (.06)
- ------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain
on investments (.06) (.02) -- -- --
- ------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.62) (.65) (.66) (.59) (.62)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $8.05 $9.38 $8.98 $8.75 $8.34
- ------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (a) (8.02) 12.02 10.60 12.44 4.37
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $1,901,901 $2,280,604 $1,960,500 $1,659,383 $1,416,555
- ------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
(in thousands) $1,901,901 $2,280,604 $1,960,500 $1,659,383 $1,416,555
- ------------------------------------------------------------------------------------------------------------------------
net assets (%) .75 .76 .66 .63 .56
- ------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.82 5.67 6.44 6.84 6.96
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 47.56 26.60 20.13 49.91 17.22
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
May 31, 1995 (Unaudited)
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end management investment company. The fund seeks as high a
level of current income exempt from federal income tax and New York State and
City personal income tax as Putnam Management believes is consistent with pre-
servation of capital by investing primarily in a portfolio of longer-term New
York tax exempt securities.
The fund offers class A, class B and class M shares. Class A shares are sold
with a maximum front-end sales charge of 4.75%. Class B shares do not pay a
front-end sales charge, but pay a higher ongoing distribution fee than class A
shares, and may be subject to a contingent deferred sales charge if those shares
are redeemed within six years of purchase. Class M shares commenced operations
on 4/10/95 and are sold with a maximum front-end sales charge of 3.25% and pay
an ongoing distribution fee that is lower than class B shares and higher than
class A shares. Expenses of the fund are borne pro-rata by the holders of each
class of shares, except that each class bears expenses unique to that class (in-
cluding the distribution fees applicable to such class) and votes as a class on-
ly with respect to its own distribution plan or other matters on which a class
vote is required by law or determined by the Trustees. Shares of each class
would receive their pro-rata share of the net assets of the fund, if the fund
were liquidated. In addition, the Trustees declare separate dividends on each
class of shares.
The following is a summary of significant accounting policies consistently fo-
llowed by the fund in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles.
A) SECURITY VALUATION Tax-exempt bonds and notes are stated on the basis of va-
luations provided by a pricing service, approved by the Trustees, which uses in-
formation with respect to transactions in bonds, quotations from bond dealers,
market transactions in comparable securities and various relationships between
securities in determining value. The fair value of restricted securities is de-
termined by the Manager following procedures approved by the Trustees.
B) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME Security transactions are
accounted for on the trade date (date the order to buy or sell is executed). In-
terest income is recorded on the accrual basis.
C) FUTURES The fund may purchase and sell financial futures contracts to hedge
against changes in the values of tax-exempt municipal securities the fund owns
or expects to purchase.
A futures contract is an agreement between two parties to buy or sell units of
a particular index or a certain amount of a U.S. Government security at a set
price on a future date.
Upon entering into such a contract the fund is required to pledge to the broker
an amount of cash or securities equal to the minimum "initial margin" require-
ments of the futures. Pursuant to the contract, the fund agrees to receive from
or pay to
<PAGE>
the broker an amount of cash equal to the daily fluctuation in value of the con-
tract. Such receipts or payments are known as "variation margin" and are recor-
ded by the fund as unrealized gains or losses. When the contract is closed, the
fund records a realized gain or loss equal to the difference between the value
of the contract at the time it was opened and the value at the time it was clo-
sed.
The potential risk to the fund is that the change in value of futures contracts
primarily corresponds with the value of underlying instruments which may not co-
rrespond to the change in value of the hedged instruments. In addition, there is
a risk that the fund may not be able to close out its futures positions due to
an illiquid secondary market.
D) OPTION ACCOUNTING PRINCIPLES The fund may, to the extent consistent with its
investment objective and policies, seek to increase its current returns by wri-
ting covered call and put options on securities it owns or in which it may in-
vest. When a fund writes a call or put option, an amount equal to the premium
received by the fund is included in the fund's "Statement of assets and liabili-
ties" as an asset and an equivalent liability. The amount of the liability is
subsequently "marked-to-market" to reflect the current market value of an option
written. The current market value of an option is the last sale price or, in the
absence of a sale, the last offering price. If an option expires on its stipula-
ted expiration date, or if the fund enters into a closing purchase transaction,
the fund realizes a gain (or loss if the closing purchase transaction exceeds
the premium received when the option was written) without regard to and unreali-
zed gain or loss on the underlying security, and the liability related to such
option is extinguished. If a written call option is exercised, the fund realizes
a gain or loss from the sale of the underlying security and the proceeds of the
sale are increased by the premium originally received. If a written put option
is exercised, the amount of the premium originally received reduces the cost of
the security that the fund purchases upon exercise of the option.
The risk in writing a call option is that the fund relinquishes the opportunity
to profit if the market price of the underlying security increases and the op-
tion is exercised. In writing a put option, the fund assumes the risk of incu-
rring a loss if the market price of the underlying security decreases and the
option is exercised. In addition, there is the risk the fund may not be able to
enter into a closing transaction because of an illiquid secondary market.
The fund may also, to the extent consistent with its investment objectives and
policies, buy put options to protect its portfolio holdings in an underlying se-
curity against a decline in market value. The fund may buy call options to hedge
against an increase in the price of the securities that the fund ultimately
wants to buy. These funds may also buy and sell combinations of put and call op-
tions on the same underlying security to earn additional income. The premium
paid by a fund for the purchase of a put or call option is included in the
fund's "Statement of assets and liabilities" as an investment and is subsequen-
tly "marked-to-market" to reflect the current market value of the option. If an
option the fund has purchased expires on the stipulated expiration date, the
fund realizes a loss in the amount of the cost of the option. If the fund enters
into a closing sale transaction, the
<PAGE>
fund realizes a gain or loss, depending on whether proceeds from the closing sa-
le transaction are greater or less than the cost of the option. If the fund
exercises a call option, the cost of securities acquired by exercising the call
is increased by the premium paid to buy the call. If the fund exercises a put
option, it realizes a gain or loss from the sale of the underlying security and
the proceeds from such sale are decreased by the premium originally paid. The
risk associated with purchasing options is limited to the premium originally
paid.
E) FEDERAL TAXES It is the policy of the fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the In-
ternal Revenue Code applicable to regulated investment companies. It is also the
intention of the fund to distribute an amount sufficient to avoid imposition of
any excise tax under Section 4982 of the Internal Revenue Code of 1986. Therefo-
re, no provision has been made for federal taxes on income, capital gains or un-
realized appreciation of securities held and excise tax on income and capital
gains.
F) DISTRIBUTIONS TO SHAREHOLDERS Income dividends are recorded daily by the fund
and are distributed to the shareholders monthly. Capital gains distributions, if
any, are recorded on the ex-dividend date and paid annually.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryovers) under income tax regulations.
G) AMORTIZATION OF BOND PREMIUM AND DISCOUNT Any premium resulting from the pur-
chase of securities is amortized using the effective yield method for bonds
issued after September 27, 1985 and on a straight-line basis for bonds issued
prior thereto. The premium in excess of the call price, if any, is amortized to
the call date; thereafter, the remaining excess premium is amortized to maturi-
ty. Discount on zero-coupon bonds is accreted according to the effective yield
method.
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Investment Management Inc., the fund's Manager, a wholly-
owned subsidiary of Putnam Investments, Inc., for management and investment ad-
visory services is paid quarterly based on the average net assets of the fund
for the quarter. Such fee is based on the following annual rates: 0.6% of the
first $500 million of average net assets, 0.5% of the next $500 million, 0.45%
of the next $500 million and 0.4% of any amount over $1.5 billion, subject to
reduction in any year to the extent of certain brokerage commissions and fees
(less expenses) received by affiliates of the Manager on the fund's portfolio
transactions.
The fund also reimburses the Manager for the compensation and related expenses
of certain officers of the fund and their staff who provide administrative ser-
vices to the fund. The aggregate amount of all such reimbursements is determined
annually by the Trustees.
Trustees of the fund receive an annual Trustee's fee of $2,760 and an additional
fee for each Trustees' meeting attended. Trustees who are not interested persons
of the Manager and who serve on committees of the
<PAGE>
Trustees receive additional fees for attendance at certain committee meetings.
Custodial functions are being provided to the fund by Putnam Fiduciary Trust
Company (PFTC), a subsidiary of the Putnam Companies, Inc. Investor servicing
agent functions are provided by Putnam Investor Services, a division of PFTC.
Investor servicing and custodian fees reported in the Statement of operations
for the six months ended May 31, 1995 have been reduced by credits allowed by
PFTC.
The fund has adopted distribution plans (the "Plans") with respect to its class
A, class B and class M shares pursuant to Rule 12b-1 under the Investment Compa-
ny Act of 1940. The purpose of the Plans is to compensate Putnam Mutual Funds
Corp., a wholly-owned subsidiary of Putnam Investments Inc., for services provi-
ded and expenses incurred by it in distributing shares of the fund. The Trustees
have approved payment by the fund at an annual rate of 0.20%, 0.85% and 0.50% of
the average net assets attributable to class A, class B and class M shares res-
pectively.
For the six months ended May 31, 1995, Putnam Mutual Funds Corp., acting as un-
derwriter received net commissions of $94,182 and $345 from the sale of class A
and class M shares and $314,906 in contingent deferred sales charges from re-
demptions of class B shares. A deferred sales charge of up to 1% is assessed on
certain redemptions of class A shares purchased as part of an investment of $1
million or more. For the six months ended May 31, 1995, Putnam Mutual Funds
Corp., acting as underwriter received $641 on class A redemptions.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the six months ended May 31, 1995, purchases and sales of investment se-
curities other than short-term investments aggregated $456,399,905 and
$579,871,609 respectively. Purchases and sales of short-term municipal obliga-
tions aggregated $61,400,000 and $90,720,000, respectively. In determining the
net gain or loss on securities sold, the cost of securities has been determined
on the identified cost basis.
Written option transactions during the period are summarized as follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
- -------------------------------------------------------------------------------
Outstanding at beginning of period -- --
Options written 1,952,600,774 $33,765,983
Options closed (1,952,600,774) (33,765,983)
Written options outstanding at
end of period -- $ --
- -------------------------------------------------------------------------------
NOTE 4
CAPITAL SHARES
At May 31, 1995 there was an unlimited number of shares of beneficial interest
authorized divided into three classes of shares, class A, class B and class M
capital shares. Transactions in capital shares were as follows:
SIX MONTHS ENDED
MAY 31, 1995
CLASS A SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 16,677,886 $142,422,849
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 4,092,733 35,197,242
- -------------------------------------------------------------------------------
20,770,619 177,620,091
- -------------------------------------------------------------------------------
Shares repurchased (27,222,879) (231,764,345)
- -------------------------------------------------------------------------------
NET DECREASE (6,452,260) $(54,144,254)
- -------------------------------------------------------------------------------
<PAGE>
YEAR ENDED NOVEMBER 30, 1994
CLASS A SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 41,795,457 $368,221,874
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 10,274,603 91,568,268
- -------------------------------------------------------------------------------
52,070,060 459,790,142
- -------------------------------------------------------------------------------
Shares repurchased (58,823,972) (514,934,500)
- -------------------------------------------------------------------------------
NET DECREASE (6,753,912) $(55,144,358)
- -------------------------------------------------------------------------------
SIX MONTHS ENDED
MAY 31, 1995
CLASS B SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 2,869,890 $24,532,612
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 369,705 3,173,595
- -------------------------------------------------------------------------------
3,239,595 27,706,207
- -------------------------------------------------------------------------------
Shares repurchased (1,852,698) (15,749,627)
- -------------------------------------------------------------------------------
NET INCREASE 1,386,897 $11,956,580
- -------------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30, 1994
CLASS B SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 7,990,189 $71,636,430
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 823,923 7,301,216
- -------------------------------------------------------------------------------
8,814,112 78,937,646
- -------------------------------------------------------------------------------
Shares repurchased (2,881,112) (24,951,111)
- -------------------------------------------------------------------------------
NET INCREASE 5,933,000 $53,986,535
- -------------------------------------------------------------------------------
FOR THE PERIOD
APRIL 10, 1995
(COMMENCEMENT OF
OPERATIONS) TO
MAY 31, 1995
CLASS M SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 25,387 $223,078
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 84 746
- -------------------------------------------------------------------------------
25,471 223,824
- -------------------------------------------------------------------------------
Shares repurchased -- --
- -------------------------------------------------------------------------------
NET INCREASE 25,471 $223,824
- -------------------------------------------------------------------------------
<PAGE>
FUND INFORMATION
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman William F. Pounds, Vice Chairman
Jameson Adkins Baxter Hans H. Estin
John A. Hill Elizabeth T. Kennan
Lawrence J. Lasser Robert E. Patterson
Donald S. Perkins George Putnam, III
Eli Shapiro A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam Charles E. Porter
President Executive Vice President
Patricia C. Flaherty Lawrence J. Lasser
Senior Vice President Vice President
Gordon H. Silver Gary N. Coburn
Vice President Vice President
James E. Erickson David J. Eurkus
Vice President Vice President and Fund Manager
William N. Shiebler John R. Verani
Vice President Vice President
Paul M. O'Neil John D. Hughes
Vice President Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York Tax Exempt
Income Fund. It may also be used as sales literature when preceded or accompa-
nied by the current prospectus, which gives details of sales charges, investment
objectives and operating policies of the fund, and the most recent copy of Put-
nam's Quarterly Performance Summary. For more information, or to request a pros-
pectus, call toll free: 1-800-225-1581.
SHARES OF MUTUAL FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR EN-
DORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT INSURED BY THE FEDERAL DEPOSIT IN-
SURANCE CORPORATION (FDIC), THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND
INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
<PAGE>
---------------
PUTNAM INVESTMENTS Bulk Rate
U.S. Postage
THE PUTNAM FUNDS PAID
One Post Office Square Putnam
Boston, Massachusetts 02109 Investments
---------------
15818-030/345
<PAGE>
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND
EDGAR-FILED TEXTS:
(1) Boldface typeface is displayed with capital letters, italic typeface is
displayed in normal type.
(2) Because the printed page breaks are not reflected, certain tabular and
columnar headings and symbols are displayed differently in this filing.
(3) Bullet points and similar graphic signals are omitted.
(4) Page numbering has been omitted.
(5) The trademark symbol has been replaced by (TM).
(6) The copyright symbol has been replaced by (C).
(7) The registered mark symbol has been replaced by (R).
(8) The dagger symbol has been replaced by +
(9) The double dagger symbol has been replaced by ++
(10) The section symbol has been replaced by +++
