<PAGE> 1
PUTNAM
NEW YORK
INTERMEDIATE
TAX EXEMPT
FUND
ANNUAL REPORT
November 30, 1994
<PAGE> 2
PERFORMANCE HIGHLIGHTS
- - "Because we believe interest rates may continue to rise, at least in
the short term, we will be looking for opportunities to lock in higher
yields. We believe this will contribute to a competitive stream of
current income in the months ahead."
- Thomas Goggins, Fund Manager
- - Performance should always be considered in light of a fund's
investment strategy. Putnam New York Intermediate Tax Exempt Fund is
designed for investors seeking a high level of current income free from
federal income tax and New York City and state personal income taxes as
Putnam Management believes is consistent with preservation of capital.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
FISCAL 1994 RESULTS AT A GLANCE
- ----------------------------------------------------------------------------------
Class A Class B
TOTAL RETURN NAV POP NAV CDSC
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(change in value
during period
plus reinvested
distributions)
Life of fund (since 6/8/94) -6.07% -9.16% -6.45% -9.19%
- ----------------------------------------------------------------------------------
SHARE VALUE NAV POP NAV
- ----------------------------------------------------------------------------------
6/1/94 $8.50 $8.79 $8.50
- ----------------------------------------------------------------------------------
11/30/94 7.77 8.03 7.76
</TABLE>
<TABLE>
<CAPTION>
CAPITAL GAINS
LONG- SHORT-
DISTRIBUTIONS1 NO. INCOME TERM TERM TOTAL
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 6 $0.220186 - - $0.220186
Class B 6 $0.197495 - - $0.197495
CURRENT RETURN NAV POP NAV
- ----------------------------------------------------------------------------------
End of period
Current dividend rate2 5.38% 5.21% 4.78%
Taxable equivalent3 (a) 9.67 9.36 8.59
(b) 10.16 9.84 9.03
Current 30-day SEC yield4 5.45 5.27 4.94
Taxable equivalent3 (a) 9.80 9.47 8.88
(b) 10.29 9.95 9.33
<FN>
Performance data represent past results. For performance comparisons to
benchmark indexes, see page 8. POP assumes 3.25% maximum sales charge. CDSC
assumes 3% maximum contingent deferred sales charge. Performance data reflect
an expense limitation in effect during the period. Without this limitation,
performance would have been lower. 1Capital gains are taxable for federal and,
in most cases, state tax purposes. For some investors, investment income may be
subject to the federal Alternative Minimum Tax. Investment income may be
subject to state and local taxes. 2Incom e portion of most recent distribution,
annualized and divided by NAV or POP at end of period. 3Assumes (a) the maximum
combined state and federal tax rate of 44.36% or (b) the maximum combined
state, federal, and New York City tax rates of 47.05%. Results for investors
subject to lower tax rates would not be as advantageous. 4Based only on
investment income, calculated using SEC guidelines.
</TABLE>
2
<PAGE> 3
FROM THE CHAIRMAN
DEAR SHAREHOLDER:
AS WE BEGIN A NEW YEAR, MOST INVESTORS WON'T REGRET THE PASSING OF THE
OLD. SINCE LAST FEBRUARY, WHEN THE FEDERAL RESERVE BOARD BEGAN A SERIES
OF INCREASES IN INTEREST RATES, 1994 WAS MARKED BY SHARP CORRECTIONS
FOLLOWED BY SMALL GAINS AND EXTENDED UNCERTAINTY FOR VIRTUALLY ALL
FINANCIAL MARKETS.
WELL IN ADVANCE OF THE FED'S FIRST INCREASE, FUND MANAGER THOMAS
GOGGINS HAD ADOPTED DEFENSIVE STRATEGIES DESIGNED TO REDUCE THE IMPACT
OF RISING RATES ON PUTNAM NEW YORK INTERMEDIATE TAX EXEMPT FUND'S
PORTFOLIO. WHILE DEFENSIVE STRATEGIES PROVED RELATIVELY SUCCESSFUL,
FUND PERFORMANCE GENERALLY EDGED INTO THE NEGATIVE NUMBERS.
BONDS BORE THE BRUNT OF THE DOWNTURN AND TAX-FREE MUNICIPALS INCURRED
THE STEEPEST DECLINE. ALTHOUGH SHIFTS IN THE MARKET AS A WHOLE
INEVITABLY AFFECT YOUR FUND, PUTNAM MANAGEMENT'S PHILOSOPHY OF
SELECTING SECURITIES ON AN ISSUE-BY-ISSUE BASIS WITH A THOROUGH
EXAMINATION OF EACH ISSUER'S CREDIT QUALITY SHOULD CONTINUE TO HELP
PROTECT YOUR FUND' PORTFOLIO.
IN THE ACCOMPANYING REPORT, TOM DISCUSSES THE FISCAL YEAR JUST ENDED
AND PROSPECTS IN THE CHALLENGING MONTHS AHEAD.
RESPECTFULLY YOURS,
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
JANUARY 18, 1995
3
<PAGE> 4
REPORT FROM THE FUND MANAGER
THOMAS GOGGINS
Putnam New York Intermediate Tax Exempt Fund, which began investment
operations on June 8, l994, faced substantial challenges during its
initial abbreviated fiscal year ended November 30, 1994. The fund was
launched during one of the most turbulent municipal bond markets in
recent memory, in which a series of short-term interest rate increases
by the Federal Reserve Board resulted in higher rates across the board.
Each increase sent bond prices into further declines, and in early
October, when many large tax-exempt bond funds started making fiscal
year-end portfolio adjustments for tax purposes, municipal bonds began
selling at large discounts to taxable bonds -- exacerbating the
disruption in an already battered market.
As your fund's portfolio was becoming fully invested, we not only faced
the price-dampening results of this turbulence, but the additional
challenge of achieving the required level of diversification within a
relatively small portfolio. Thus, it is not surprising that this first
performance period ended on a disappointing note, with negative returns
for both class A and class B shares.
Such short-term results should not be taken as any indication of the
fund's long-term performance potential, however. Over the long term,
our research shows that a portfolio of intermediate-term bonds retains
the ability to deliver attractive levels of income with significantly
less volatility than longer-term bond funds. Furthermore, we believe,
that our efforts over this period leave the fund well positioned to take
full advantage of an eventual recovery in the municipal bond market.
- - PROCEEDING WITH CAUTION
Because of the unsettled market environment, we emphasized defensive
positioning throughout most of the period. Our primary strategy was to
shorten the fund's average duration
4
<PAGE> 5
while protecting its stream of current income. We pursued this strategy
by investing primarily in intermediate-term premium bonds with
relatively short call dates and average maturities of approximately
nine years.
These premium bonds, which are sold at prices above their face value,
also held some potential for increasing net asset value. When a premium
bond is paid off before maturity, bondholders usually receive more than
the face value. Thus, by investing in premium bonds that can be called
before maturity, we effectively shortened the average maturity and
duration of the portfolio. Duration measures the price sensitivity of
a bond or portfolio of bonds to a change in interest rates. Like
maturity, with which it is often confused, duration is measured in
years. The shorter the duration, the less volatility you can generally
expect from the portfolio.
We believe your fund will benefit from our defensive strategy. Even as
New York intermediate-term municipal bond prices declined, we
identified and acquired what we believed were the most attractively
priced issues for your fund's portfolio. Over time, we believe these
acquisitions will provide competitive levels of income, along with
potential for price appreciation.
[LINE GRAPH]
The graph compares average yields available on tax-free bonds relative
to those available on fully taxable long-term U.S. Treasury bonds since
the start of 1994. As of November 30, 1994, yields on municipal bonds
were 95.6% of those on long-term Treasury bonds. Sources: Lehman
Brothers Long-Term Treasury Bond Index (taxable bonds), Bond Buyer
Municipal Bond Index (tax-free bonds).
5
<PAGE> 6
- - THE PUTNAM RESEARCH ADVANTAGE AT WORK
Putnam's extensive, time-tested credit analysis capabilities are an
integral part of your fund's investment selection process. Our team
of highly qualified analysts continually assesses the financial
strength of potential and current holdings. We make on-site
inspections of municipal bond issuers to collect such essential
information as financial status, the social and economic environment,
and the feasibility of an issuer's planned projects. The size,
investment power, and experience of the entire Putnam tax-exempt
investment group helps us to anticipate market trends and then purchase
securities in large blocks, enabling you to benefit from economies of
scale.
- - NEW YORK DEBT MAY REMAIN IN SHORT SUPPLY
Since the fund's introduction in June, we have become even more
convinced that a supply/demand imbalance favorable to New York
tax-exempt investors will remain in place for the next several months.
Not only has the pace of refinancing older, higher-interest-rate debt
fallen off, but a debt-reform policy has also cut the level of issuance
of new debt in half. We do not expect this trend to change
significantly over the near term.
- - EMPHASIS ON REVENUE BONDS
The recent gubernatorial election of George Pataki significantly
changed the economic landscape in New York. If the new governor is
successful with his proposed economic agenda, a larger percentage of
the cost of social services will fall to cities and counties. This
could put general obligation bonds - bonds that are repaid from a
municipality's general revenues - in a precarious position.
In such an environment, we would tend to avoid general obligation debt
and, instead, emphasize revenue bonds for the portfolio. Issued to fund
public works projects, revenue bonds are supported directly by the
income generated by those projects. Examples of these types of
securities are bonds issued to finance the New York Port Authority,
the Triborough Bridge, the Metropolitan Transportation Authority (MTA),
and the New York City Municipal Water Commission.
6
<PAGE> 7
<TABLE>
TOP INDUSTRY SECTORS*
<S> <C>
Hospitals/health care 23.1%
Political subdivision 19.2%
Housing 18.6%
Transportation 11.1%
<FN>
*Based on net assets on 11/30/94.
</TABLE>
- - LOOKING AHEAD
We are optimistic about the future of the New York municipal bond
market and your fund. New York state's broad and diversified economy
should continue to rejuvenate. The Port of New York and New Jersey is
enjoying the highest revenues in more than a decade as it handles a
growing stream of exports to major European and South American
economies. Upstate, brisk trade with Canada is pumping life into
business. As a result, we believe the state's tax revenues will
continue to grow at a steady pace.
If this occurs, the quality of outstanding debt across the state should
improve. If the demand for tax-exempt investments strengthens, as we
expect it to, the combined prospect of a short supply and solid demand
should translate into favorable results for New York municipal bond
investors.
Because we believe interest rates may continue to rise, at least in the
short term, we will be looking for opportunities to lock in higher
yields. This would enable the fund to maintain a competitive stream of
current income in the months ahead.
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
November 30, 1994, there is no guarantee the fund will continue to hold
these securities in the future.
7
<PAGE> 8
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, assuming you held the shares through the entire
period and reinvested all distributions back into the fund. For
comparative purposes, we show how the fund performed relative to
appropriate indexes and benchmarks.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIOD ENDED 11/30/94
Lehman Bros.
Class A Class B Municipal
NAV POP NAV CDSC Bond Index CPI
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Life of fund
(since 6/8/94) -6.07% -9.16% -6.45% -9.19% -3.48% 1.49%
--------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIOD ENDED 12/31/94
most recent calendar quarter
Class A Class B
NAV POP NAV CDSC
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Life of fund
(since 6/8/94) -4.43% -7.58% -4.86% -7.63%
--------------------------------------------------------------------------------------
<FN>
Fund performance data do not take into account any adjustment for taxes payable on
reinvested distributions. Performance data represents past results and will differ for
each share class. 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. POP
assumes 3.25% maximum sales charge. CDSC assumes 3% maximum contingent deferred sales
charge. Performance data reflect an expense limitation in effect during the period.
Without this limitation, performance would have been lower. Capital gains are taxable
for federal and, in most cases, state tax purposes. For some investors, investment
income may be subject to the federal Alternative Minimum Tax. Investment income may be
subject to state and local taxes. Income portion of most recent distribution,
annualized and divided by NAV or POP at end of period.
</TABLE>
8
<PAGE> 9
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.
NET ASSET VALUE (NAV) is the value of all your fund's assets, minus any
liabilities, 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 3.25% 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 3% maximum during
the first year to 1% during the fourth year. After the fourth year, the
CDSC no longer applies.
COMPARATIVE BENCHMARKS
BOND BUYER MUNICIPAL BOND INDEX is an unmanaged list of tax-exempt
bonds frequently used as a general measure of the performance of
tax-exempt securities.*
LEHMAN BROTHERS LONG-TERM TREASURY BOND INDEX is an unmanaged list of
Treasury bonds frequently used as a general measure of the market for
long-term fixed-income securities.*
LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged list of long-term
fixed-rate investment-grade tax-exempt bonds representative of the
municipal bond market.*
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
* The indexes do 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.
9
<PAGE> 10
REPORT OF INDEPENDENT ACCOUNTANTS
For the Period Ended November 30, 1994
To the Trustees and Shareholders of
Putnam New York Intermediate Tax Exempt Fund
We have audited the accompanying statement of assets and liabilities of
Putnam New York Intermediate Tax Exempt Fund, including the portfolio of
investments owned, as of November 30, 1994, and the related statement of
operations, the statement of changes in net assets and the "Financial
Highlights" for the period from June 8, 1994 (commencement of
operations) to November 30, 1994. These financial statements and
"Financial Highlights" are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial
statements and "Financial Highlights" based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
"Financial Highlights" are free from material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 1994, by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements and "Financial Highlights"
referred to above represent fairly, in all material respects, the
financial position of Putnam New York Intermediate Tax Exempt Fund as
of November 30, 1994, and the results of its operations, the changes
in its net assets and the "Financial Highlights" for the period from
June 8, 1994 (commencement of operations) to November 30, 1994, in
conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 12, 1995
10
<PAGE> 11
PORTFOLIO OF INVESTMENTS OWNED
November 30, 1994
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (101.8%)(a)
PRINCIPAL AMOUNT RATINGS(b) VALUE
NEW YORK (96.7%)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 75,000 Battery Pk ., City Auth. Rev. Bonds,
Ser. A, 5s, 11/1/04 AA $ 67,125
100,000 Met. Transn. Auth. Facs. Rev. Bonds,
Ser. I, American Municipal Bond Assurance Corp.
(AMBAC) 7s, 7/1/04 AAA 106,500
NY City, G.O. Rev. Bonds,
110,000 Ser. D, Group A, 8s, 8/1/03 A 119,488
175,000 Ser. B, Fiscal 92, 71\2s, 2/1/04 A 183,969
100,000 NY City, Mun. Wtr. Fin. Auth. Wtr. & Sewer Syst.
Variable Rate Demand Notes (VRDN),
Ser. G, FGIC, 3.4s, 6/15/24 VMIG1 100,000
NY State Dorm. Auth. Rev. Bonds
75,000 (Dept. of Ed.), Ser. A, 5.7s, 7/1/05 Baa 68,438
75,000 (State U. Edl. Facs.), Ser. B, 5.6s, 5/15/03 Baa 69,375
100,000 (U. of Rochester Strong Memorial Hosp.),
5.3s, 7/1/05 A 89,125
75,000 (Upstate Cmnty. Colleges), Ser. A, 51\4s, 7/1/05 Baa 64,875
75,000 (Court Facs. Lease), Ser. A, 5.1s, 5/15/04 Baa 66,750
100,000 NY State Env. Facs. Corp. Poll. Control
Rev. Bonds (State Wtr. Revolving Fund),
Ser. D, 6.2s, 11/15/04(c) AAA 101,375
75,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig.
Rev. Bonds, Ser. A, 5.9s, 9/15/04 Baa 69,843
100,000 NY State Loc. Govt. Assistance Corp. Rev. Bonds,
Ser. A, 7s, 4/1/04 A 103,750
NY State Med. Care Facs. Fin. Agcy. Rev. Bonds
300,000 (Mental Hlth. Svcs. Facs.), Ser. A, 87\8s, 8/15/07(d) Baa 326,625
100,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. C, 5.7s, 8/15/04 AAA 94,000
100,000 (Mtge. Project), Ser. B, 53\4s, 8/15/04 AA 94,250
NY State Mtge. Agcy. Rev. Bonds
100,000 Ser. D & E, 81\4s, 4/1/03 AAA 111,750
100,000 Ser. 44, 6.7s, 4/1/04 AA 99,500
75,000 Ser. 40-B, 5.8s, 4/1/05 AA 69,750
95,000 NY State Twy. Auth. Hwy. & Bridge Tr. Fd.
Rev. Bonds, Ser. A, AMBAC, 51\4s, 4/1/04 AAA 88,469
NY State Urban Dev. Corp. Rev. Bonds
75,000 (Correctional Facs.), Ser. A, 6.3s, 1/1/03 Baa 74,062
75,000 (Youth Facs.), 5.7s, 4/1/05 Baa 67,875
100,000 Nassau Cnty., Gen. Impt. Rev. Bonds, Ser. O,
Financial Guaranty Insurance Co. (FGIC),
55\8s, 8/1/05 AAA 93,500
100,000 Niagra Falls Wtr. Fac. Rev. Bonds 6.4s, 11/1/04 AAA 99,270
100,000 Port Auth. of NY & NJ Cons. Rev. Bonds
81st Ser., 5.4s, 8/1/04 AA 94,375
------------
2,524,039
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS(b) VALUE
PUERTO RICO (5.2%)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 125,000 Cmnwlth. of Puerto Rico, Urban Renewal &
Hsg. Corp. Rev. Bonds, 77\8s, 10/1/04 Baa $ 134,687
------------
TOTAL INVESTMENTS
(cost $2,735,263)(e) $ 2,658,726
------------
<FN>
NOTES
---------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $2,610,180 which correspond to a net asset
value per share for class A and class B of $7.77 and $7.76 respectively.
(b) The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings
available at November 30, 1994 for the securities listed. Ratings are generally ascribed to
securities at the time of issuance. While the rating agencies may from time to time revise
such ratings, they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which the agencies would ascribe to these securities at
November 30, 1994. Ratings are not covered by the report of independent accountants.
(c) This security, having a total value of $101,375 or 3.9% of net assets has been purchased on a
"forward commitment" basis, that is, the fund has agreed to take delivery of and make payment
for this security beyond the settlement time of five business days after the trade date and
subsequent to the date of this report. The purchase price and interest rate of such security
are fixed at the trade date although the fund does not earn any interest on such security
until the settlement date.
(d) A portion of this security was pledged to cover margin requirements for future contracts at
November 30, 1994. The market value segregated with the custodian for transactions in future
contracts was $10,888.
(e) The aggregate identified cost on a tax basis is $2,735,263, resulting in gross unrealized
appreciation and depreciation of $9,824 and $86,361, respectively, or net unrealized depreciation
of $76,537.
</TABLE>
12
<PAGE> 13
<TABLE>
- ----------------------------------------------------------------------------------------------
U.S. TREASURY BOND FUTURES OUTSTANDING AT NOVEMBER 30, 1994
- ----------------------------------------------------------------------------------------------
<CAPTION>
TOTAL AGGREGATE EXPIRATION UNREALIZED
VALUE FACE VALUE DATE DEPRECIATION
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
US Treasury
Bond Futures
(Sell) $298,406 $298,125 Mar. 95 $ (281)
- ----------------------------------------------------------------------------------------------
The rates shown on Variable Rate Demand Notes (VRDN) are the current interest rates at
November 30, 1994 which are subject to change based on the terms of the security.
The fund had the following industry group concentrations greater than 10% on November 30, 1994
(as a percentage of net assets):
</TABLE>
<TABLE>
<S> <C>
Hospitals/Healthcare 23.1%
Political Subdivision 19.2
Housing 18.6
Transportation 11.1
</TABLE>
<TABLE>
The table below shows the percentages of the fund's investments at November 30, 1994 in
securities assigned to the various rating categories by Moody's and Standard & Poor's.
<CAPTION>
Rated securities
as a percentage
Rating of fund's net assets
<S> <C>
"AAA/Aaa" 26.6%
"AA/Aa" 16.3
"A/A" 19.0
"BBB/Baa" 36.1
"VMIG1" 3.8
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1994
<TABLE>
<S> <C>
ASSETS
-------------------------------------------------------------------------------------------------------------
Investments in securities at value (identified cost $2,735,263) (Note 1) $2,658,726
-------------------------------------------------------------------------------------------------------------
Cash 101,426
-------------------------------------------------------------------------------------------------------------
Interest receivable 43,359
-------------------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 38,225
-------------------------------------------------------------------------------------------------------------
Receivable for securities sold 69,658
-------------------------------------------------------------------------------------------------------------
Receivable from Manager (Note 3) 11,904
-------------------------------------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 16,204
-------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 2,939,502
LIABILITIES
-------------------------------------------------------------------------------------------------------------
Payable for securities purchased 300,467
-------------------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 632
-------------------------------------------------------------------------------------------------------------
Distributions payable to shareholders 2,699
-------------------------------------------------------------------------------------------------------------
Payable for administrative services (Note 3) 27
-------------------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 3) 869
-------------------------------------------------------------------------------------------------------------
Payable for variation margin on open futures contracts 1,031
-------------------------------------------------------------------------------------------------------------
Payable for organization expenses (Note 1) 16,388
-------------------------------------------------------------------------------------------------------------
Other accrued expenses 7,209
-------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 329,322
-------------------------------------------------------------------------------------------------------------
NET ASSETS $2,610,180
-------------------------------------------------------------------------------------------------------------
REPRESENTED BY
-------------------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1, 2, and 5) $2,725,038
-------------------------------------------------------------------------------------------------------------
Distribution in excess of net investment income (Note 1) (16)
-------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment
transactions and futures contracts (38,024)
-------------------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments
and futures contracts (76,818)
-------------------------------------------------------------------------------------------------------------
TOTAL-REPRESENTING NET ASSETS APPLICABLE TO CAPITAL SHARES OUTSTANDING $2,610,180
-------------------------------------------------------------------------------------------------------------
COMPUTATION OF NET ASSETS VALUE AND OFFERING PRICE
-------------------------------------------------------------------------------------------------------------
Net asset value and redemption price of class A shares
($1,473,566 divided by 189,668 shares) $7.77
-------------------------------------------------------------------------------------------------------------
Offering price per class A share (100/96.75 of $7.77)* $8.03
-------------------------------------------------------------------------------------------------------------
Net asset value and offering price of class B shares
($1,136,614 divided by 146,437 shares)+ $7.76
-------------------------------------------------------------------------------------------------------------
<FN>
* On single retail sales of less than $100,000. On sales of $100,000 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.
</TABLE>
The accompanying notes are an integral part these financial statements.
14
<PAGE> 15
STATEMENT OF OPERATIONS
For the period June 8, 1994 (commencement of operations) to November 30, 1994
<TABLE>
<S> <C>
----------------------------------------------------------------------------------
TAX EXEMPT INTEREST INCOME $ 39,527
----------------------------------------------------------------------------------
EXPENSES:
----------------------------------------------------------------------------------
Compensation of Manager (Note 3) 4,093
----------------------------------------------------------------------------------
Compensation of Trustees (Note 3) 542
----------------------------------------------------------------------------------
Auditing 6,334
----------------------------------------------------------------------------------
Reports to shareholders 3,478
----------------------------------------------------------------------------------
Administrative services (Note 3) 27
----------------------------------------------------------------------------------
Distribution fees-class A (Note 3) 590
----------------------------------------------------------------------------------
Distribution fees-class B (Note 3) 2,104
----------------------------------------------------------------------------------
Registration fees 1,085
----------------------------------------------------------------------------------
Legal 3,655
----------------------------------------------------------------------------------
Amortization of organizational expenses (Note 1) 184
----------------------------------------------------------------------------------
Investor servicing, custodian fees, and other expenses (Note 3) 16
----------------------------------------------------------------------------------
Fees waived by Manager (Note 3) (18,017)
----------------------------------------------------------------------------------
TOTAL EXPENSES 4,091
----------------------------------------------------------------------------------
NET INVESTMENT INCOME 35,436
----------------------------------------------------------------------------------
Net realized loss on investment transactions
(Notes 1 and 4) (40,363)
----------------------------------------------------------------------------------
Net realized gain on futures contracts (Notes 1 and 4) 2,339
----------------------------------------------------------------------------------
Net unrealized depreciation of investments and futures
contracts during the period (76,818)
----------------------------------------------------------------------------------
NET LOSS ON INVESTMENT TRANSACTIONS (114,842)
----------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (79,406)
----------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
15
</TABLE>
<PAGE> 16
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the period
June 8, 1994
(commencement of operations)
to November 30
--------------------------------
1994
<S> <C>
INCREASE IN NET ASSETS
---------------------------------------------------------------------------
Operations:
---------------------------------------------------------------------------
Net investment income $ 35,436
---------------------------------------------------------------------------
Net realized loss on investment transactions (40,363)
---------------------------------------------------------------------------
Net realized gain on future contracts 2,339
---------------------------------------------------------------------------
Net unrealized depreciation of
investments and futures contracts (76,818)
---------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (79,406)
---------------------------------------------------------------------------
Distributions to shareholders from:
---------------------------------------------------------------------------
Net investment income
---------------------------------------------------------------------------
Class A (22,136)
---------------------------------------------------------------------------
Class B (13,461)
---------------------------------------------------------------------------
Increase from capital share transactions (Note 5) 2,723,183
---------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 2,608,180
---------------------------------------------------------------------------
NET ASSETS
---------------------------------------------------------------------------
Beginning of period (Note 2) 2,000
---------------------------------------------------------------------------
END OF PERIOD (including distribution in excess
of net investment income of $16) $2,610,180
---------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16
</TABLE>
<PAGE> 17
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
JUNE 8, 1994 JUNE 8, 1994
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) TO OF OPERATIONS) TO
NOVEMBER 30 NOVEMBER 30
------------------------------------------------------------
1994 1994
---------------------------------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.50 $ 8.50
---------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income (C) .22 .20
---------------------------------------------------------------------------------------------------------
Net realized and unrealized
loss on investments (.73) (.74)
---------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (.51) (.54)
---------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income (.22) (.20)
---------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.22) (.20)
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 7.77 $ 7.76
---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(A) (6.07)(B) (6.45)(B)
---------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (in thousands) $ 1,474 $ 1,137
---------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(C) .17(b) .46(b)
---------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets (%)(C) 2.67(b) 2.27(b)
---------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 104.64(b) 104.64(b)
---------------------------------------------------------------------------------------------------------
<FN>
(a) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(b) Not annualized.
(c) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses for the
period ended November 30, 1994, reflect a reduction of $0.01 per share for class A and class B. Without these
limitations, results would have been lower. See Note 3.
17
</TABLE>
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
November 30, 1994
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is a series of Putnam New York Tax Exempt Income Trust (the
"trust") which is registered under the Investment Company Act of 1940, as
amended, as a non-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 taxes as Putnam Investment
Management, Inc. the fund's manager ("Putnam management"), a wholly owned
subsidiary of Putnam Investments, Inc., believes is consistent with
preservation of capital by investing primarily in a portfolio of
intermediate-term New York tax exempt securities.
The fund offers both class A and class B shares. Class A shares are sold
with a maximum front-end sales charge of 3.25%. 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 four years of purchase. Expenses of the
fund are borne pro-rata by the holders of both classes of shares, except
that each class bears expenses unique to that class (including the
distribution fees applicable to such class). Each class votes as a class
only 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
followed 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
valuations provided by a pricing service, approved by the Trustees, which
uses information 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 market
value of restricted securities is determined 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). Interest income is recorded on the accrual basis.
C FUTURES A futures contract is an agreement between two parties to buy and
sell a 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
tax-exempt securities equal to the minimum "initial margin" requirements of
the exchange. Pursuant to the contract, the fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value
of the contract. Such receipts or payments are known as "variation margin,"
and are recorded 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
18
<PAGE> 19
the time it was opened and the value at the time it was closed. The potential
risk to the fund is that the change in value of the underlying securities may
not correspond to the change in value of the futures contracts.
D 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
Internal 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. Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation of securities held and excise tax on
income and capital gains.
At November 30, 1994, the fund had a capital loss carryover of approximately
$38,305 which may be available to offset realized capital gains to the extent
provided by regulations. This amount will expire November 30, 2002. To the
extent that capital loss carryovers are used to offset capital gains, it is
unlikely that capital gains will be distributed to shareholders, since any
distribution might be taxable as ordinary income.
E 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. The differences include treatment of
amortization of organization costs. 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. For the
period ended November 30, 1994, the fund reclassified $145 to decrease
distribution in excess of net investment income, and $145 to decrease paid-in
capital.
F AMORTIZATION OF BOND PREMIUM AND DISCOUNT Any premium resulting from the
purchase of securities in excess of maturity value is amortized using the
effective yield method for bonds issued after September 27, 1985 and on a
straight-lined 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 maturity.
G UNAMORTIZED ORGANIZATION EXPENSES Expenses incurred by the fund in
connection with its organization, its registration with the Securities and
Exchange Commission and the initial offering of its class A and class B
shares aggregated $16,388. These expenses are being amortized over a five-year
period based on current and projected net asset levels.
NOTE 2
INITIAL CAPITALIZATION AND OFFERING OF SHARES
The fund was established as a Massachusetts business trust under the laws of
the Commonwealth of Massachusetts on June 1, 1994. During the period June 1,
1994 to June 7, 1994, the fund had no operations other than those related to
organizational matters, including the initial contributions of $1,000 and the
issuance of 118 shares for class A and the initial contribution of $1,000 and
the issuance of 118 shares for class B, to Putnam Mutual Funds Corp. on June
1, 1994. Investment operations began on June 8, 1994.
NOTE 3
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS Compensation
of Putnam Management for management and investment advisory services is paid
quarterly based on the average net assets of the fund
19
<PAGE> 20
for the quarter. Such fee is based on the following annual rates: 0.60% of the
first $500 million of average net assets, 0.50% of the next $500 million,
0.45% of the next $500 million and 0.40% 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 Manager has agreed to reduce its compensation (and, to the extent
necessary, absorb other expenses of the fund), until the earlier of the date
the net assets of the fund exceed $100,000,000 or June 1, 1995, to the extent
that expenses of the fund (exclusive of brokerage, interest, taxes, deferred
organizational and extraordinary expenses, and payments under the fund's
Distribution Plans) exceed an annual rate of 0.80% of the fund's average net
assets until November 4, 1994 then 0.65% thereafter. The limitation was
accomplished by a reduction of the compensation payable under the management
contract to the Manager and, to the extent necessary, by the Manager's
assumption of additional fund expenses. As a result of this limitation, the
expenses for the period ended November 30, 1994 were reduced by $18,017.
The fund also reimburses the Manager for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services 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 $100 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 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 Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
Fees paid for these investor servicing and custodial functions for the period
ended November 30, 1994 amounted to $1,936.
Investor servicing and custodian fees have been reduced by credits allowed by
PFTC. Such credits amounted to $2,031.
The fund has adopted a distribution plan with respect to its class A shares
("the Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act
of 1940. The purpose of the Class A Plan is to compensate Putnam Mutual Funds
Corp., a wholly owned subsidiary of Putnam Investments, Inc. for services
provided and expenses incurred by it in distributing class A shares. The
Class A Plan provides for payments by the fund to Putnam Mutual Funds Corp.
at an annual rate of up to 0.35% of the fund's average net assets
attributable to class A shares. Currently the Trustees have limited payments
under the plan to 0.15% of such assets.
For the period ended November 30, 1994, Putnam Mutual Funds Corp., acting as
underwriter, received net commissions of $1,375 from the sale of class A
shares of the fund.
A deferred sales charge of up to 1.00% is assessed on certain redemptions of
class A shares purchased as part of an investment of $ 1 million or more. For
the period ended November 30, 1994, Putnam Mutual Funds Corp, acting as
underwriter, received no money on such redemptions.
The fund has adopted a separate distribution plan with respect to its
class B shares ("the Class B Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Class B Plan is to
compensate Putnam Mutual Funds Corp. for services provided and
20
<PAGE> 21
expenses incurred by it in distributing class B shares. The Class B Plan
provides for payments by the fund to Putnam Mutual Funds Corp. at an annual
rate of 0.75% of the fund's average net assets attributable to class B shares.
Payments under the plan cannot exceed 1.00% without shareholder approval.
Putnam Mutual Funds Corp. also receives the proceeds of the contingent deferred
sales charges levied on class B share redemptions within four years of
purchase. The charge is based on declining rates, which begin at 3% of the
net asset value of the redeemed shares. Putnam Mutual Funds Corp. has
received contingent deferred sales charges of $198 from such redemptions
during the period ended November 30, 1994.
NOTE 4
PURCHASES AND SALES OF SECURITIES
During the period ended November 30, 1994, purchases and sales of investment
securities other than short-term investments aggregated $4,217,661 and
$1,541,234 respectively. Purchases and sales of short-term municipal
obligations aggregated $400,000, and $300,000, respectively. In determining
the net gain or loss on securities sold, the cost of securities has been
determined on the identified cost basis.
The following is a summary of futures contracts activity during the period
ended November 30, 1994.
<TABLE>
SALES OF FUTURES CONTRACTS
<CAPTION>
- ---------------------------------------------------
NUMBER OF AGGREGATE
CONTRACTS FACE VALUE
- ---------------------------------------------------
<S> <C> <C>
Contracts
opened 13 $1,294,469
Contracts closed (10) (996,344)
- ---------------------------------------------------
OPEN AT END
OF PERIOD 3 $ 298,125
</TABLE>
<TABLE>
NOTE 5
CAPITAL SHARES
At November 30, 1994 there was an unlimited number of shares of beneficial
interest authorized divided into two classes of shares, class A and class B
capital shares. Transactions in capital shares were as follows:
<CAPTION>
FOR THE PERIOD JUNE 8, 1994
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30
1994
- ----------------------------------------------------
CLASS A SHARES AMOUNT
- ----------------------------------------------------
<S> <C> <C>
Shares sold 224,029 $1,815,798
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 2,133 17,090
- ----------------------------------------------------
226,162 1,832,888
- ----------------------------------------------------
Shares repurchased (36,612) (296,863)
- ----------------------------------------------------
NET INCREASE 189,550 $1,536,025
- ----------------------------------------------------
FOR THE PERIOD JUNE 8, 1994
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30
1994
- ----------------------------------------------------
CLASS B SHARES AMOUNT
- ----------------------------------------------------
Shares sold 146,001 $1,184,776
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,134 9,046
- ----------------------------------------------------
147,135 1,193,822
- ----------------------------------------------------
Shares repurchased (816) (6,664)
- ----------------------------------------------------
NET INCREASE 146,319 $1,187,158
- ----------------------------------------------------
</TABLE>
21
<PAGE> 22
OUR COMMITMENT TO QUALITY SERVICE
CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested
Service Seal every year for the past five years, through 1994.
DALBAR, an independent research firm, ran more than 10,000 tests
of 38 shareholder service components. In every category, Putnam
outperformed the industry standard.
HELP YOUR INVESTMENT GROW.
Set up a systematic program for investing with as little as $25
a month from a Putnam money market fund or from your checking or
savings account.*
SWITCH FUNDS EASILY.
You can move money from one account to another with the same class
of shares without a service charge. (This privilege is subject
to change or termination.)
ACCESS YOUR MONEY QUICKLY.
You can get checks sent regularly or redeem shares any business day
at the then-current net asset value, which may be more or less than
their original cost.
For details about any of these or other services, contact your
financial advisor or call the toll-free number shown below and speak
with a helpful Putnam representative.
To make an additional investment in this or any other Putnam fund,
contact your financial advisor or call our toll-free number:
1-800-225-1581.
* Regular investing, of course, does not guarantee a profit or protect
against a loss in a declining market. Investors should consider their
ability to continue purchasing shares during periods of low price
levels.
22
<PAGE> 23
FUND INFORMATION
INVESTMENT MANAGER OFFICERS
Putnam Investment Management, Inc. George Putnam
One Post Office Square President
Boston, MA 02109 Charles E. Porter
Executive Vice President
MARKETING SERVICES Patricia C.Flaherty
Putnam Mutual Funds Corp. Senior Vice President
One Post Office Square Lawrence J. Lasser
Boston, MA 02109 Vice President
Gordon H. Silver
CUSTODIAN Vice President
Putnam Fiduciary Trust Company Gary N. Coburn
Vice President
LEGAL COUNSEL James E. Erickson
Ropes & Gray Vice President
Blake E. Anderson
INDEPENDENT Vice President
ACCOUNTANTS Thomas Goggins
Coopers & Lybrand L.L.P. Vice President and Fund Manager
William N. Shiebler
TRUSTEES Vice President
George Putnam, Chairman John R. Verani
William F. Pounds, Vice Chairman Vice President
Jameson Adkins Baxter Paul M. O'Neil
Hans H. Estin Vice President
John A. Hill John D. Hughes
Elizabeth T. Kennan Vice President and Treasurer
Lawrence J. Lasser Beverly Marcus
Robert E. Patterson Clerk and Assistant Treasurer
Donald S. Perkins
George Putnam, III This report is for the information of
A.J.C. Smith shareholders of Putnam New York
W. Nicholas Thorndike Intermediate Tax Exempt Fund. It may
also be used as sales literature when
preceded or accompanied by the current
prospectus, which gives details of
sales charges, investment objectives,
and operating policies of the fund,
and the most recent copy of Putnam's
Quarterly Performance Summary. For
more information or to request a
prospectus, call toll free:
1-800-225-1581.
23
<PAGE> 24
PUTNAM INVESTMENTS -------------
BULK RATE
U.S POSTAGE
THE PUTNAM FUNDS PAID
One Post Office Square PUTNAM
Boston, Massachusetts 02109 INVESTMENTS
-------------
927/942-15843
