PUTNAM
NEW YORK
INTERMEDIATE
TAX EXEMPT
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 con-
cern 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 RESULTS AT A GLANCE
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CLASS A CLASS B
TOTAL RETURN: NAV POP NAV CDSC
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(change in value during period
plus reinvested distributions
6 months ended 5/31/95 8.42% 4.91% 8.11% 5.11%
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SHARE VALUE: NAV POP NAV
- -------------------------------------------------------------------------------
11/30/94 $7.77 $8.03 $7.76
5/31/95 8.20 8.48 8.19
Distributions: No. Income (1) Total
Class A 6 $0.217658 $0.217658
Class B 6 $0.193522 $0.193522
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CURRENT RETURN: NAV POP NAV
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End of period
Current dividend rate (2) 5.33% 5.15% 4.77%
Taxable equivalent (3) (a) 9.55 9.23 8.55
Taxable equivalent (3) (b) 10.03 9.70 8.98
Current 30-day SEC yield (4) 4.94% 4.78% 4.39%
Taxable equivalent (3) (a) 8.85 8.56 7.87
Taxable equivalent (3) (b) 9.30 9.00 8.26
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Performance data represent past results. For performance over longer periods,
see page 8. POP assumes 3.25% maximum sales charge. CDSC assumes 3% maximum con-
tingent deferred sales charge. Performance data reflect an expense limitation
currently in effect. Without the expense limitation, total returns would have
been lower. (1) For some investors, investment income may be subject to the fe-
deral alternative minimum tax. Investment income may be subject to state and
local taxes. (2) Income portion of most recent distribution, annualized and di-
vided by NAV or POP at end of period. (3) Assumes (a) the maximum combined fede-
ral and New York state tax rate of 44.19% or (b) the maximum combined federal,
New York state, and New York City tax rates of 46.88%. Results for investors
subject to lower tax rates would not be as advantageous. (4) Based only on in-
vestment income, calculated using SEC guidelines.
<PAGE>
FROM THE CHAIRMAN [Photograph of George Putnam]
*(C) Karsh, Ottawa
DEAR SHAREHOLDER:
PUTNAM NEW YORK INTERMEDIATE TAX EXEMPT FUND WAS CLEARLY AMONG THE BENEFICIARIES
OF THE MUNICIPAL BOND MARKET'S IMPRESSIVE COMEBACK FROM THE SUSTAINED DECLINE OF
1994. MINDFUL OF THE UNCERTAINTIES STILL HOVERING IN THE BACKGROUND, HOWEVER,
JAMES PRUSKO, YOUR FUND'S NEW MANAGER, HAS BEGUN TAKING STEPS AIMED AT PRESER-
VING SOME OF THE FUND'S GAINS ACHIEVED DURING THE FIRST HALF OF THE FUND'S FIS-
CAL YEAR, THE SIX MONTHS ENDED MAY 31, 1995.
AT THE SAME TIME, JIM 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.
JIM JOINED PUTNAM IN 1992 AS AN ANALYST IN THE TAXABLE INVESTMENT-GRADE GROUP
BEFORE SHIFTING TO THE TAX-EXEMPT GROUP AS A PORTFOLIO MANAGER EARLIER THIS
YEAR. JIM WAS WITH SALOMON BROTHERS BEFORE COMING TO PUTNAM AND HAS FOUR YEARS
OF INVESTMENT EXPERIENCE.
JIM PROVIDES MORE DISCUSSION OF YOUR FUND'S PERFORMANCE AND PROSPECTS IN THE
REPORT THAT FOLLOWS.
RESPECTFULLY YOURS,
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
JULY 19, 199
*(C) Copyright
<PAGE>
REPORT FROM THE FUND MANAGER
JAMES PRUSKO
Over the past six months, declining interest rates, low inflation and positive
supply/demand dynamics contributed to a strong turnaround in the tax-free mar-
ket. As a result, municipal bonds have made great strides, recapturing much of
their losses since market lows last November.
Putnam New York Intermediate Tax Exempt Fund has been an active participant in
the rally, with class A shares posting a total return of 8.42% at net asset va-
lue, for the six months ended May 31, 1995. The fund also offers class B shares,
whose performance -- while different -- reflects a similar trend.
The fund's current return continues to be attractive relative to those of other
funds in the New York tax-free universe. In addition, taxable equivalent yields
are now at double-digit levels and represent excellent values -- particularly
for investors in such high-tax states as New York. In fact, your fund's 5.33%
current dividend rate at net asset value would translate into a current return
of 9.55% for a taxable investment, assuming the maximum combined 44.19% federal
and state tax rate. Most investors in lower brackets would also enjoy tax advan-
tages, though not necessarily to the same extent.
FED ACTIONS SUCCESSFULLY RESTRAIN INFLATION; MUNIS RALLY
Preoccupied with an accelerating economy and the threat of inflation, the Fede-
ral Reserve Board remained committed to its tight stance on U.S. monetary policy
throughout the semiannual period. Early on, there were signs that the 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 in 12
months -- barely caused a ripple in the bond markets.
<PAGE>
In early December, as municipals were enjoying a short rally, the financial woes
of Orange County 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 sus-
tained by the county's investment fund. While the Orange County scare raised
concerns among investors across the country, it only postponed an inevitable
long-term rally in the tax-free market.
The intermediate tax-exempt bonds in your portfolio proved effective in reducing
the price volatility that naturally occurs in such uncertain times. Though there
can be no guarantees, intermediate bonds, which generally have a six- to ten-
year maturity horizon, have historically provided attractive income with greater
relative price stability than long-term bonds. That's because generally the lon-
ger a security's maturity, the higher its volatility; the shorter the maturity,
the lower the volatility.
[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 79.90
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. Treasuries are backed by the
full faith and credit of the U.S. government. Source:Bloomberg.
<PAGE>
Early in calendar 1995, a more sustained rally began. The municipal bond mar-
ket's increasingly positive outlook was supported by a growing belief that in-
terest rates were peaking. In addition, the long-anticipated supply/demand imba-
lance 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.
The fund's assets remain invested across a wide spectrum of industries. With mi-
nor modifications, medical facilities, utilities and transportation continue to
be the fund's top industry sectors throughout the period.
POLITICAL ATMOSPHERE INCREASINGLY PROMISING
Shortly after the close of the semiannual 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.
However, the legislature took the unprecedented step of committing to meeting
debt-service payments on state bonds through the end of the new fiscal year re-
gardless 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 po-
tential 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
<PAGE>
TOP INDUSTRY SECTORS *
- -----------------------------------------
Hospitals/health care 21.3%
Transportation 13.9%
Housing 13.1%
Political subdivision 11.6%
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* Based on net assets on 5/31/95. Holdings will vary over time.
decrease in new issues of high-coupon bonds could push the prices of existing
New York debt higher.
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 provided ample buying
opportunities as the proverbial dust settled.
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. In conjunction,
a large amount of issues maturing in July is expected to further bolster prices,
as investors search for tax-exempt bonds to reinvest the proceeds of the reti-
ring debt.
With the outlook for the second half of the fiscal year appears promising, we
intend to keep the fund fully invested to best capitalize on the market'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 Intermediate Tax Exempt Fund is designed for investors see-
king a high level of current income free from federal income tax, New York sta-
te, and New York City personal income taxes as Putnam Management believes is
consistent with preservation of capital.
TOTAL RETURN FOR PERIODS ENDED 5/31/95
LEHMAN BROS.
CLASS A CLASS B MUNICIPAL
NAV POP NAV CDSC BOND INDEX CPI
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6 months 8.42% 4.91% 8.11% 5.11% 13.05% 1.67%
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Life-of-fund
(since 6/8/94) 1.84 -1.51 1.14 -1.75 9.11 3.19
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TOTAL RETURN FOR PERIODS ENDED 6/30/95
(most recent calendar quarter)
CLASS A CLASS B
NAV POP NAV CDSC
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6 months 5.98% 2.59% 5.66% 2.66%
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Life-of-fund
(since 6/8/94) 1.28 -2.05 0.53 -2.33
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Annual average 1.21 -1.94 0.50 -2.20
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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 fluc-
tuate so an investor's shares, when sold, may be worth more or less than their
original cost. Past performance is not indicative of future results.
<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.
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 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
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>
A PUTNAM PERSPECTIVE ON RISK AND REWARD
You've probably been told how important it is to understand the relationship be-
tween an investment's potential rewards and its accompanying risks. Given the
cautionary nature of such instructions, it may take most investors a while to
realize that risk has a positive side.
EVERY RISK SIGNALS A POTENTIAL REWARD. Selecting only those investments that
offer the greatest degree of security generally leads to only modest rewards.
Furthermore, even insured or guaranteed investments may be subject to changes
in their rates of return or, in some cases, in their principal values Experien-
ced investors know that no investment is truly risk free and are therefore wi-
lling to take on some measure of risk in order to increase their potential
gains.
THE GREATER THE RISK, THE GREATER THE POTENTIAL REWARD. Accepting an appropriate
level of investment risk can give you a better chance of outpacing inflation
over time and seeking to maximize your investment's return. How much risk? Your
A RUNDOWN OF RISK TYPES
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MARKET RISK Most important for stock funds, but relevant to all funds, this is
a measure of how sensitive a fund's holdings are to changes in general market
conditions. Remember, though, that securities that lose value quickly in market
declines may also show the strongest gains in more favorable environments.
INTEREST-RATE RISK Since bond prices fall as interest rates rise, this type of
risk is a particular concern for fixed-income investors. However, interest-rate
increases can also have a substantial negative effect on the stock market.
INFLATION RISK If your investments cannot keep pace with inflation, your money
will begin to lose its purchasing power. Stock investments are generally consi-
dered among the best ways of addressing inflation risk over the long term.
- -------------------------------------------------------------------------------
<PAGE>
financial advisor's feedback and your time horizon can make all the difference
in determining how much risk is compatible with your investment goals and your
peace of mind.
FITTING YOUR FUND SELECTION TO YOUR RISK TOLERANCE
How do you find the right balance between investment risks and their potential
rewards? It's helpful to understand the types of risks that can apply to diffe-
rent types of investments, and to look at your own portfolio with this perspec-
tive.
For short-term goals, your first priority may be managing market risk. Longer-
term investors may be more concerned with inflation risk. And all income-
oriented investors should consider interest-rate, credit, and prepayment risks
carefully. Within each of Putnam's four investment categories, you can select
funds with differing levels of risk and reward potential to customize your port-
folio.
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CREDIT AND PREPAYMENT RISK Credit risk is the concern that the security's issuer
will not be able to meet its payment, while prepayment risk involves the prema-
ture payoff of a loan, with a resulting loss of interest income. Professional
management and in-depth research are invaluable in managing both these risks.
LIQUIDITY RISK Not all investments can be readily converted into cash at their
perceived market values. Liquidity risk can affect the price of securities held
in the fund's portfolio and, thus, the fund's share prices.
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This list covers only the most general types of risks; however, each investment
will also have its own specific risks. You will find a more detailed discussion
of these risk considerations in each fund's prospectus.
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
May 31, 1995 (Unaudited)
KEY TO ABBREVIATIONS
AMBAC AMBAC INDEMNITY CORPORATION
FSA FINANCIAL SECURITY ASSURANCE
G.O. BONDS GENERAL OBLIGATION BONDS
MBIA MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION
MUNICIPAL BONDS AND NOTES (90.3%)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (83.4%)
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$150,000 Metro. Trans. Auth. Svc. Contract
Rev. Bonds, 6.9s, 7/1/05 BBB $ 161,812
100,000 Muni. Assistance Corp. for City of NY,
Ser. 60, 7s, 7/1/06 AA 106,000
NY City, G.O. Bonds
110,000 Ser. D, Group A, 8s, 8/1/03 A 123,475
175,000 7 1/2s, 2/1/04 A 190,969
100,000 NY City, Hlth. & Hosp. Corp. Rev. Bonds,
Ser. A, 6s, 2/15/05 Baa 97,250
100,000 NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
(USTA Natl. Tennis Ctr. Project), FSA, 6.1s,
11/15/04 AAA 107,875
NY State Dorm. Auth. Rev. Bonds
100,000 (City University), Ser. A, 8 1/8s, 7/1/07 Baa 109,750
75,000 (State U. Edl. Facs.), Ser. B, 5 1/4s, 5/15/05 Baa 73,312
75,000 (Court Facs. Lease), Ser. A, 5.2s, 5/15/05 Baa 73,031
100,000 NY State Env. Fac. Corp. Rev. Bonds (Poll.
Control Rev. State Wtr. Revolving Fund),
Ser. D, 6.2s, 11/15/04 AAA 110,125
125,000 NY State Env. Quality Rev. Bonds, 6 1/8s,
12/1/05 A 133,906
100,000 NY State Hsg. Fin. Agcy. Rev. Bonds, Ser. A,
8s, 11/1/08 BBB 113,250
100,000 NY State Local Govt. Assistance Corp. Rev.
Bonds, Ser. A, 7s, 4/1/04 A 111,750
NY State Med. Care Facs. Fin. Agcy. Rev. Bonds
300,000 (Mental Hlth. Svcs. Facs.), Ser. A, 8 7/8s, 8/15/07 Baa 330,000
125,000 (NY Hosp. Mtge. Project), Ser. A, AMBAC,
6.2s, 2/15/05 AAA 134,063
100,000 (Mtge. Project), Ser. B, 5 3/4s, 8/15/04 AA 104,750
100,000 NY State Mtge. Agcy. Rev. Bonds, Ser. D & E,
8 1/4s, 4/1/03 AAA 119,250
100,000 Ser. 44, 6.7s, 4/1/04 AA 107,250
160,000 NY State Twy. Auth. Hwy. & Bridge Trust Fund
Rev. Bonds, Ser. A, AMBAC, 5 1/4s, 4/1/04 AAA 162,200
100,000 Niagara Falls, Wtr. Treatment Plant Rev. Bonds,
MBIA, 6.4s, 11/1/04 AAA 108,500
<PAGE>
MUNICIPAL BONDS AND NOTES*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
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$130,000 Niagara Frontier Trans. Auth. Arpt. Rev. Bonds
(Greater Buffalo Intl. Arpt.), Ser. A, AMBAC, 6s,
4/1/06 AAA $ 136,989
100,000 Port Auth. of NY & NJ, Rev. Bonds, Cons. 81st
Ser., 5.4s, 8/1/04 AA 102,750
100,000 Triborough Bridge & Tunnel Auth. of NY, Rev.
Bonds (Gen. Purpose), Ser. Y, 5 3/4s, 1/1/05 AA 105,875
125,000 United Nations Dev. Corp. Rev. Bonds, Ser. B,
5 3/4s, 7/1/02 A 130,625
------------
$3,054,757
PUERTO RICO (6.9%)
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225,000 Cmnwlth. of PR, Urban Renewal & Hsg. Corp.
G.O. Bonds (Cmnwlth. Appropriation), 7 7/8s,
10/1/04 Baa $ 252,563
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TOTAL INVESTMENTS (cost $3,152,530)*** $3,307,320
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* Percentages indicated are based on net assets of $3,664,614, which corres-
pond to a net asset value per share for class A share and class B share of
$8.20 and $8.19, 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. Ra-
tings are generally ascribed to securities at the time of issuance. While
the rating agencies may from time to time revise such ratings, they underta-
ke no obligation to do so, and the ratings indicated do not necessarily re-
present ratings which the agencies would ascribe to these securities at May
31, 1995.
*** The aggregate identified cost on a tax basis is $3,152,530, resulting in
gross unrealized appreciation and depreciation of $159,383 and $4,593, res-
pectively or net unrealized appreciation of $154,790.
The fund had the following industry group concentrations greater than 10%
at May 31, 1995 (as a percentage of net assets):
Hospitals/Health Care 21.3%
Transportation 13.9
Housing 13.1
Political Subdivision 11.6
The table below shows the percentages of the fund's investments at May 31,
1995 in securities assigned to the various rating categories by Moody's and
Standard & Poor's.
RATED SECURITIES
AS A PERCENTAGE
RATING OF FUND'S NET ASSETS
"AAA/Aaa" 24.0%
"AA/Aa" 14.4%
"A/A" 18.9%
"BBB/Baa" 26.2%
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1995 (Unaudited)
ASSETS
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Investments in securities, at value
(identified cost $3,152,530) (Note 1) $3,307,320
Cash 358,144
Interest receivable 55,697
Receivable for shares of the fund sold 106,925
Receivable from Manager (Note 2) 47,937
Unamortized organization expenses (Note 1) 15,904
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TOTAL ASSETS 3,891,927
LIABILITIES
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Payable for securities purchased 138,419
Payable for shares of the fund repurchased 27,213
Distributions payable to shareholders 4,345
Payable for distribution fees (Note 2) 1,358
Payable for organization expenses (Note 1) 16,388
Other accrued expenses 39,590
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TOTAL LIABILITIES 227,313
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NET ASSETS $3,664,614
REPRESENTED BY
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Paid-in capital (Notes 1and 4) $3,608,253
Distributions in excess of net investment income (Note 1) (538)
Accumulated net realized loss on investment transactions
and futures contracts (97,891)
Net unrealized appreciation of investments 154,790
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TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO
CAPITAL SHARES OUTSTANDING $3,664,614
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- -------------------------------------------------------------------------------
Net asset value and redemption price of class A shares
($2,154,166 divided by 262,766 shares) $8.20
Offering price per class A share (100/96.75 of $8.20) * $8.48
Net asset value and offering price of class B shares
($1,510,448 divided by 184,487 shares) + $8.19
- -------------------------------------------------------------------------------
* 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.
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended May 31, 1995 (Unaudited)
TAX EXEMPT INTEREST INCOME $ 97,313
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EXPENSES:
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Compensation of Manager (Note 2) 9,587
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Compensation of Trustees (Note 2) 804
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Investor servicing and custodian fees (Note 2) 2,763
- -------------------------------------------------------------------------------
Auditing 12,002
- -------------------------------------------------------------------------------
Reports to shareholders 26,254
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Distribution fees -- class A (Note 2) 1,433
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Distribution fees -- class B (Note 2) 4,909
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Legal 15,324
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Amortization of organization expenses (Note 1) 300
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Other expenses (Note 2) 136
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Fees waived by Manager (Note 2) (58,725)
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TOTAL EXPENSES 14,787
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NET INVESTMENT INCOME 82,526
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Net realized loss on investment transactions (Notes 1 and 3) (29,456)
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Net realized loss on futures contracts (Notes 1 and 3) (30,411)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 231,608
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NET GAIN ON INVESTMENTS 171,741
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $254,267
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The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
JUNE 8, 1994
SIX MONTHS (COMMENCEMENT OF
ENDED OPERATIONS) TO
MAY 31 NOVEMBER 30
1995* 1994
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INCREASE IN NET ASSETS
- -------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------
Net investment income $ 82,526 $ 35,436
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Net realized loss on investment
transactions (29,456) (40,363)
- -------------------------------------------------------------------------------
Net realized gain (loss) on future contracts (30,411) 2,339
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments and futures contracts 231,608 (76,818)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 254,267 (79,406)
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
- -------------------------------------------------------------------------------
Net investment income:
Class A (51,719) (22,136)
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Class B (31,329) (13,461)
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Increase from capital share transactions
(Note 4) 883,215 2,723,183
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TOTAL INCREASE IN NET ASSETS 1,054,434 2,608,180
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NET ASSETS
Beginning of period 2,610,180 2,000
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END OF PERIOD (including distributions in
excess of net investment income of
$538 and $16, respectively) $3,664,614 $2,610,180
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* 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
JUNE 8, 1994 JUNE 8, 1994
SIX MONTHS (COMMENCEMENT OF SIX MONTHS (COMMENCEMENT OF
ENDED OPERATIONS) TO ENDED OPERATIONS) TO
MAY 31 NOVEMBER 30 MAY 31 NOVEMBER 30
1995* 1994 1995* 1994
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Class A Class B
- ----------------------------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $7.77 $8.50 $7.76 $8.50
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INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------- -------------------------------------
Net investment income (c) .22 .22 .19 .20
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Net realized and unrealized
loss on investments .43 (.73) .43 (.74)
- ----------------------------------------------------------------------------- -------------------------------------
TOTAL FROM INVESTMENT OPERATIONS .65 (.51) .62 (.54)
- ----------------------------------------------------------------------------- -------------------------------------
LESS DISTRIBUTIONS FROM:
- ----------------------------------------------------------------------------- -------------------------------------
Net investment income (.22) (.22) (.19) (.20)
- ----------------------------------------------------------------------------- -------------------------------------
TOTAL DISTRIBUTIONS (.22) (.22) (.19) (.20)
- ----------------------------------------------------------------------------- -------------------------------------
NET ASSET VALUE, END OF PERIOD $8.20 $7.77 $8.19 $7.76
- ----------------------------------------------------------------------------- -------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%) (a) 8.42(b) (6.07)(b) 8.11(b) (6.45)(b)
- ----------------------------------------------------------------------------- -------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $2,154 $1,474 $1,510 $1,137
- ----------------------------------------------------------------------------- -------------------------------------
Ratio of expenses to average
net assets (%) (c) .35(b) .17(b) .63(b) .46(b)
- ----------------------------------------------------------------------------- -------------------------------------
Ratio of net investment income
to average net assets (%) (c) 2.70(b) 2.67(b) 2.40(b) 2.27(b)
- ----------------------------------------------------------------------------- -------------------------------------
Portfolio turnover (%) 34.49(b) 104.64(b) 34.49(b) 104.64(b)
- ----------------------------------------------------------------------------- -------------------------------------
<FN>
* Unaudited.
(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 2.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
May 31, 1995 (Unaudited)
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is a series of Putnam New York Intermediate Tax Exempt Fund (the
"fund") which is registered under the Investment Company Act of 1940, as amen-
ded, 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.
("Putnam Management"), the fund's manager, a wholly-owned subsidiary of Putnam
Investments, Inc., believes is consistent with preservation of capital by inves-
ting primarily in a portfolio of intermediate-term New York tax exempt securi-
ties.
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 re-
deemed 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 de-
clare 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 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). 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. govern-
ment security at a set price on a future date.
<PAGE>
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 re-
ceive 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 mar-
gin," and are recorded by the fund as unrealized gains or losses. When the con-
tract is closed, the fund records a realized gain or loss equal to the differen-
ce between the value of the contract at 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 se-
curities primarily corresponds with the value of underlying instruments which
may not correspond to the change in value of the future contracts. 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) 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.
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 ex-
tent that capital loss carryovers are used to offset capital gains, it is unli-
kely that capital gains will be distributed to shareholders, since any distri-
butions 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 accep-
ted 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.
F) AMORTIZATION OF BOND PREMIUM AND DISCOUNT Any premium resulting from the pur-
chase 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 Commi-
ssion 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.
<PAGE>
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Management for management and investment advisory servi-
ces is paid quarterly based on the average net assets of the fund for the quar-
ter. 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, under current
law, 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 portfo-
lio transactions.
The Manager has voluntarily agreed to reduce its compensation (and, to the ex-
tent necessary, absorb other expenses of the fund), until the earlier of the da-
te the net assets of the fund exceed $100 million or September 30, 1995, to the
extent that expenses of the fund (exclusive of brokerage, interest, taxes, defe-
rred 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 accom-
plished 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 May 31, 1995 were reduced by $52,807.
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 $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.
Investor servicing and custodian fees have been reduced by credits allowed by
PFTC.
The fund has adopted distribution plans (the "Plans") with respect to its class
A shares and class B shares pursuant to Rule 12b-1 under the Investment Company
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 pro-
vided and expenses incurred by it in distributing shares of the fund. The Trus-
tees have approved payment by the fund at an annual rate of 0.35% and 0.75% of
the average net assets attributable to class A and class B shares, respectively.
For the six months ended May 31, 1995, Putnam Mutual Funds Corp., acting as the
underwriter received net commissions of $420 from the sale of class A shares and
$1,436 in contingent deferred sales charges from redemptions of class B shares.
A deferred sales charge of up to 1.0% 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 the under-
writer received no money on such redemptions.
<PAGE>
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 $1,577,370 and $1,059,177
respectively. Sales of short-term municipal obligations aggregated $100,000. In
determining the net gain or loss on securities sold, the cost of securities has
been determined on the identified cost basis.
NOTE 4
CAPITAL SHARES
At May 31, 1995 there was an unlimited number of shares of beneficial interest
authorized divided into two classes of shares, class A and class B capital sha-
res. Transactions in capital shares were as follows:
SIX MONTHS ENDED
MAY 31, 1995
CLASS A SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 160,845 $1,282,106
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 4,895 39,383
- -------------------------------------------------------------------------------
165,740 1,321,489
- -------------------------------------------------------------------------------
Shares repurchased (92,642) (742,273)
- -------------------------------------------------------------------------------
NET INCREASE 73,098 $ 579,216
- -------------------------------------------------------------------------------
FOR THE PERIOD
JUNE 8, 1994
(COMMENCEMENT OF
OPERATIONS) TO
NOVEMBER 30, 1994
CLASS A SHARES AMOUNT
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
SIX MONTHS ENDED
MAY 31, 1995
CLASS B SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 77,985 $623,784
- -------------------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 2,934 23,562
- -------------------------------------------------------------------------------
80,919 647,346
- -------------------------------------------------------------------------------
Shares repurchased (42,869) (343,347)
- -------------------------------------------------------------------------------
NET INCREASE 38,050 $303,999
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
<PAGE>
OUR COMMITMENT TO QUALITY SERVICE
CHOOSE AWARD-WINNING SERVICE.
Putnam Investor Services has won the DALBAR Quality Tested Service Seal 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, Put-
nam 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 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 repre-
sentative.
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 con-
tinue purchasing shares during periods of low price levels.
<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 Blake E. Anderson
Vice President Vice President
James Prusko William N. Shiebler
Vice President and Fund Manager Vice President
John R. Verani Paul M. O'Neil
Vice President Vice President
John D. Hughes Beverly Marcus
Vice President and Treasurer Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York Interme-
diate 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, in-
vestment 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.
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
INSURANCE 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
---------------
19006-927/924
<PAGE>
<PAGE>
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(8) The dagger symbol has been replaced by +
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