Putnam
New York
Tax Exempt
Income Fund
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
5-31-00
[SCALE LOGO OMITTED]
From the Trustees
[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM, III]
Dear Shareholder:
It is a pleasure to greet you in our new roles as Chairman of the
Trustees and President of the Funds. As you know, both of us have been
members of the Board of Trustees for a number of years -- years in which
Putnam has experienced tremendous growth and transformed itself from a
respected U.S. investment management firm to a financial institution
with a global presence.
As the organization makes its way into the new century, we are certain
that the changes that lie ahead will be even more breathtaking in their
scope. What will not change is the Trustees' dedication to serving the
best interests of our shareholders.
We embark upon this new era of Putnam's rich heritage with confidence
and we look forward to the opportunity of continuing to help you meet
your financial objectives for many years to come.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
July 19, 2000
REPORT FROM THE FUND MANAGER
David E. Hamlin
At first glance, it would seem that bond investors had little to cheer
about in the past six months. The broad fixed-income market continued to
come under pressure as inflation worries prevailed and the Federal
Reserve Board raised interest rates three more times -- making a total
of six increases since June 1999. Although the performance of Putnam New
York Tax Exempt Income Fund during the semiannual period reflects the
market's choppiness, we employed several strategies that enabled your
fund to post attractive results on a relative basis.
Total return for 6 months ended 5/31/00
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
------------------------------------------------------------------------
0.71% -4.01% 0.39% -4.51% 0.43% -0.55% 0.56% -2.71%
------------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods and explanation of performance
calculation methods begin on page 6.
* VOLATILITY BRINGS RENEWED OPPORTUNITY
Until fairly recently, investor sentiment exacerbated the unfavorable
environment; as more and more investors pursued rocketing technology
stocks, many municipal bond funds experienced negative cash flows. A
closer look, however, reveals that the environment for bonds may be
starting to improve.
The stock market's volatility has given investors reason to pause and
rethink the benefits of bond investing, while the Fed's aggressiveness
offers encouragement that inflation may well remain contained.
Experience has taught us that it is often during times of volatility and
market downturns when some of the best opportunities present themselves.
We believe Putnam's extensive research capabilities and decades of money
management experience give us an advantage not only in uncovering
attractive investment opportunities but also in implementing tactics
that might be overlooked by less-experienced investors. Such was the
case throughout the semiannual period and, indeed, the past year.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Housing 31.2%
Transportation 21.0%
Water and sewer 8.1%
Paper and
forest products 7.5%
Hospital/healthcare 6.6%
Footnote reads:
*Based on net assets as of 5/31/00. Holdings will vary over time.
As we pursued a steady stream of attractive interest income for your
fund, we also looked to position the portfolio for any price
appreciation possibilities that may be realized if the Fed's actions
achieve the desired moderation of the U.S. economy later this year. We
focused our efforts on duration, yield curve positioning, and slightly
increasing the fund's exposure to credit-sensitive issues. (The yield
curve is a plotting of the yields of bonds of the same quality with
different maturities.) Much of what we did throughout the semiannual
period was a continuation of the strategies set in motion late last
summer and early fall.
* PORTFOLIO'S SENSITIVITY TO INTEREST-RATE MOVEMENTS INCREASED
Before the Fed began increasing interest rates last summer, we had the
portfolio defensively positioned in terms of duration. Duration is a
measure of a fund's sensitivity to interest-rate changes. A shorter
duration tends to help preserve portfolio value when rates rise but
limits the portfolio's ability to benefit when rates fall. A longer
duration typically gives a fund greater price appreciation potential in
a falling-rate environment but generally is accompanied by increased
share price volatility. The fund's shorter duration stance contributed
to the fund's performance, as rates rose last year.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
Aaa/AAA -- 37.1%
Aa/AA -- 9.2%
A -- 18.4%
Baa/BBB -- 32.8%
Ba/BB -- 1.1%
B -- 1.3%
VMIG1 -- 0.1%
Footnote reads:
*As a percentage of market value as of 5/31/00. A bond rated BBB/Baa or higher
is considered investment grade. Percentages may include unrated bonds
considered by Putnam Management to be of comparable quality. Ratings will
vary over time.
As 1999 drew to a close and 2000 began, we continued to extend the
fund's duration so that it was neutral to slightly longer than the
competition, incrementally increasing it as the semiannual period
progressed so that by period's end it stood at 8.6 years. Although rates
continued to rise and bond prices remained under pressure, we believed
it was the best time to position for the next turn in the road, namely a
slowdown in the economy. If that, in fact, occurs, interest-rate cuts
are likely to follow. A relatively longer duration should then serve the
fund well.
"Running with the herd in a rising market is easy. But the key to
successful long-term investing is to find the silver lining in a bear
market. We believe we are able to do that."
-- David E. Hamlin, portfolio manager
* LONGER MATURITIES AND HIGHER YIELDS SOUGHT
Throughout the latter half of fiscal 1999, bond prices declined and
yields rose as inflation and Y2k concerns grew. The municipal bond yield
curve steepened significantly. For much of 1999, your fund's portfolio
had a substantial bias toward intermediate-term securities, those in the
8- to 15-year range, which were strong contributors to the fund's
relative outperformance. Coming into 2000, however, as municipal bond
prices continued to decline and yields rose considerably, we chose to
trim back the portfolio's position in shorter-maturity bonds,
particularly those that were prerefunded and approaching their call
dates. We then redeployed those assets into longer maturity issues in
the early months of the fiscal year, such as 20- to 30-year securities
because their prices had become too compelling for us to ignore.
Our shift in emphasis proved timely and profitable as the municipal
yield curve began to flatten dramatically shortly after the New Year. In
addition to the anticipated January effect -- the historic and yearly
renewal of interest in municipal bonds by institutional and individual
investors -- the stock market's recent volatility along with the
inversion of the Treasury yield curve helped build demand for
longer-term bonds, pushing their prices higher and yields lower. As of
this writing, the municipal yield curve is almost as flat as it was at
this time last year. Given the current shape of the municipal bond yield
curve, we are now more inclined to look for opportunities in
intermediate-term issues once again.
"With the stock-market volatility and higher interest rates . . . bond
funds are beginning to look more attractive to some investors."
-- "Your Money," The Orange County Register, 5/6/2000
Over the period, we also increased the fund's exposure selectively and
slightly to lower-rated bonds as another way to tap into the
higher-yields created by widened credit spreads. (The credit spread is
the difference in yield between bonds of different credit quality but
with the same maturity.) We added such positions as New York Dormitory
Authority Revenue Bond-Mt. Sinai Hospital, Puerto Rico Commonwealth
Highway and Puerto Rico Industrial Control Authority AES, New York City
IDA/American Airlines, and Suffolk County Jefferson Ferry. While these
holdings, along with others discussed in this report, were viewed
favorably at the end of the period, all are subject to review and
adjustment in accordance with the fund's investment strategy and may
vary in the future.
* BRIGHTER PROSPECTS SEEN FOR MUNI MARKET OVER REMAINDER OF YEAR
Until there are concrete signs that economic growth is moderating, the
Fed may well continue to seek to raise short-term interest rates to curb
inflation. Should it continue doing so, further market volatility, at
least in the near term, cannot be ruled out. But as any savvy investor
will tell you, the low point in a market cycle is often the best time to
position a portfolio for the possibilities that lie ahead. Current
municipal bond prices and higher yields suggest that much of the bad
news has been priced into the market already. Add to that the health of
the broad New York economy along with the decline of new issues and the
investment environment for New York municipal bonds seems poised for
brighter days later this year.
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described holdings
were viewed favorably as of 5/31/00, there is no guarantee the fund will
continue to hold these securities in the future.
PERFORMANCE SUMMARY
This section provides information about your fund's performance, which
should always be considered in light of its investment strategy. Putnam
New York Tax Exempt Income Fund is designed for investors seeking a high
level of current income free from federal, New York state, and New Yok
City personal income tax consistent with preservation of capital.
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 5/31/00
Class A Class B Class C Class M
(inception dates) (9/2/83) (1/4/93) (7/26/99) (4/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------
6 months 0.71% -4.01% 0.39% -4.51% 0.43% -0.55% 0.56% -2.71%
--------------------------------------------------------------------------------------------
1 year -1.94 -6.63 -2.48 -7.13 -2.97 -3.90 -2.13 -5.27
--------------------------------------------------------------------------------------------
5 years 21.60 15.85 17.67 15.83 16.49 16.49 19.87 15.95
Annual average 3.99 2.99 3.31 2.98 3.10 3.10 3.69 3.00
--------------------------------------------------------------------------------------------
10 years 83.40 74.60 70.37 70.37 68.72 68.72 76.71 70.90
Annual average 6.25 5.73 5.47 5.47 5.37 5.37 5.86 5.51
--------------------------------------------------------------------------------------------
Life of fund 269.55 251.96 223.80 223.80 222.02 222.02 244.29 233.13
Annual average 8.12 7.81 7.27 7.27 7.24 7.24 7.66 7.45
--------------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 5/31/00
Lehman Bros. Municipal Consumer
Bond Index price index
------------------------------------------------------------------
6 months 1.03% 1.72%
------------------------------------------------------------------
1 year -0.86 3.07
------------------------------------------------------------------
5 years 28.55 12.55
Annual average 5.15 2.39
------------------------------------------------------------------
10 years 94.58 32.59
Annual average 6.88 2.86
------------------------------------------------------------------
Life of fund 297.43 70.96
Annual average 8.59 3.25
------------------------------------------------------------------
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. Returns for class A and class M
shares reflect the current maximum initial sales charges of 4.75% and
3.25%, respectively. Class B share returns for the 1-, 5-, and 10-year
(where available) and life-of-fund periods reflect the applicable
contingent deferred sales charge (CDSC), which is 5% in the first year,
declines to 1% in the sixth year, and is eliminated thereafter. Returns
shown for class B and class M shares for periods prior to their
inception are derived from the historical performance of class A shares,
adjusted to reflect both the initial sales charge or CDSC, if any,
currently applicable to each class and in the case of class B and class
M shares the higher operating expenses applicable to such shares. For
class C shares, returns for periods prior to their inception are derived
from the historical performance of class A shares, adjusted to reflect
both the CDSC currently applicable to class C shares, which is 1% for
the first year and is eliminated thereafter, and the higher operating
expenses applicable to class C shares. All returns assume reinvestment
of distributions at NAV. Investment return and principal value will
fluctuate so that an investor's shares when redeemed may be worth more
or less than their original cost.
<TABLE>
<CAPTION>
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 5/31/00
Class A Class B Class C Class M
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Distributions (number) 6 6 6 6
------------------------------------------------------------------------------------------------
Income $0.228756 $0.201401 $0.194763 $0.215956
------------------------------------------------------------------------------------------------
Capital gains -- -- -- --
------------------------------------------------------------------------------------------------
Total $0.228756 $0.201401 $0.194763 $0.215956
------------------------------------------------------------------------------------------------
Share value NAV POP NAV NAV NAV POP
------------------------------------------------------------------------------------------------
11/30/99 $8.32 $8.73 $8.31 $8.32 $8.33 $8.61
------------------------------------------------------------------------------------------------
5/31/00 8.15 8.56 8.14 8.16 8.16 8.43
------------------------------------------------------------------------------------------------
Current return (end of period)
------------------------------------------------------------------------------------------------
Current dividend yield1 5.54% 5.27% 4.88% 4.74% 5.23% 5.06%
------------------------------------------------------------------------------------------------
Taxable equivalent (a)2 9.85 9.37 8.67 8.43 9.30 8.99
------------------------------------------------------------------------------------------------
Taxable equivalent (b)2 10.26 9.76 9.04 8.78 9.69 9.37
------------------------------------------------------------------------------------------------
30-day SEC yield3 4.99 4.75 4.34 4.20 4.69 4.54
------------------------------------------------------------------------------------------------
Taxable equivalent (a)2 8.87 8.44 7.71 7.47 8.34 8.07
------------------------------------------------------------------------------------------------
Taxable equivalent (b)2 9.24 8.80 8.04 7.78 8.69 8.41
------------------------------------------------------------------------------------------------
1 Income portion of most recent distribution, annualized and divided by NAV or POP at end of period.
2 Assumes (a) maximum 43.74% combined federal income tax, New York state personal income tax rate
or (b) maximum 46.02% combined federal, New York state and New York City tax rate. Results
for investors subject to lower tax rates would not be as advantageous.
3 Based on investment income, calculated using SEC guidelines.
</TABLE>
<TABLE>
<CAPTION>
TOTAL RETURN FOR PERIODS ENDED 6/30/00 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (9/2/83) (1/4/93) (7/26/99) (4/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 months 4.65% -0.33% 4.19% -0.81% 4.23% 3.23% 4.49% 1.04%
-------------------------------------------------------------------------------------------
1 year 2.94 -1.98 2.26 -2.62 1.80 0.82 2.61 -0.74
-------------------------------------------------------------------------------------------
5 years 27.56 21.53 23.45 21.52 22.04 22.04 25.60 21.54
Annual average 4.99 3.98 4.30 3.98 4.06 4.06 4.66 3.98
-------------------------------------------------------------------------------------------
10 years 86.26 77.40 72.77 72.77 71.12 71.12 79.45 73.59
Annual average 6.42 5.90 5.62 5.62 5.52 5.52 6.02 5.67
-------------------------------------------------------------------------------------------
Life of fund 280.67 262.55 232.98 232.98 231.10 231.10 254.13 242.65
Annual average 8.27 7.95 7.41 7.41 7.37 7.37 7.80 7.59
-------------------------------------------------------------------------------------------
</TABLE>
Past performance is no assurance of future results. More recent returns
may be more or less than those shown. They do not take into account any
adjustment for taxes payable on reinvested distributions. Investment
returns and principal value will fluctuate so that an investor's shares
when sold may be worth more or less than their original cost. See first
page of performance section for performance calculation method.
TERMS AND DEFINITIONS
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 in the fund.
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are
subject to a contingent deferred sales charge only if the shares are
redeemed during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
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 4.75% maximum sales charge for class A
shares and 3.25% for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time
of the redemption of class B or C shares and assumes redemption at the
end of the period. Your fund's class B CDSC declines from a 5% maximum
during the first year to 1% during the sixth year. After the sixth year,
the CDSC no longer applies. The CDSC for class C shares is 1% for one
year after purchase.
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 market. The index does not take into account brokerage
commissions or other costs and may pose different risks than the fund.
Securities in the fund do not match those in the index and performance
will differ. It is not possible to invest directly in an index.
Consumer price index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
A GUIDE TO THE FINANCIAL STATEMENTS
These sections of the report constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values
as of the last day of the reporting period. Holdings are organized by
asset type and industry sector, country, or state to show areas of
concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are
subtracted from this total. The result is divided by the number of
shares to determine the net asset value per share, which is calculated
separately for each class of shares. (For funds with preferred shares,
the amount subtracted from total assets includes the net assets
allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss
for the reporting period. This is determined by adding up all the fund's
earnings -- from dividends and interest income -- and subtracting its
operating expenses. This statement also lists any net gain or loss the
fund realized on the sales of its holdings and -- for holdings that
remain in the portfolio -- any change in unrealized gains or losses over
the period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number
of the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed
here may not match the sources listed in the Statement of operations
because the distributions are determined on a tax basis and may be paid
in a different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment income
ratios and portfolio turnover in one summary table, reflecting the five
most recent reporting periods. In a semiannual report, the highlight
table also includes the current reporting period. For open-end funds, a
separate table is provided for each share class.
<TABLE>
<CAPTION>
THE FUND'S PORTFOLIO
May 31, 2000 (Unaudited)
KEY TO ABBREVIATIONS
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
FHA Insd. -- Federal Housing Administration Insured
FRB -- Floating Rate Bonds
FSA -- Financial Security Assurance
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
VRDN -- Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (97.1%) (a)
PRINCIPAL AMOUNT RATING (RAT) VALUE
<S> <C> <C> <C>
Guam (0.1%)
-------------------------------------------------------------------------------------------------------------------
$ 2,000,000 Guam, Pwr. Auth. Rev. Bonds, Ser. A, MBIA,
5 1/8s, 10/1/29 AAA $ 1,752,500
New York (92.2%)
-------------------------------------------------------------------------------------------------------------------
13,750,000 Long Island, Pwr. Auth. NY Elec. Syst. IFB, 7 1/4s,
12/1/24 (acquired 5/1/98, cost $14,833,650) (RES) A-/P 12,014,063
5,480,000 Metropolitan Trans. Auth. Fac. Rev. Bonds, Ser. A,
MBIA, 6s, 7/1/12 Aaa 5,740,300
Metropolitan Trans. Auth. Rev. Bonds
15,400,000 Ser. A, MBIA, 6 1/4s, 4/1/14 Aaa 16,420,250
8,245,000 Ser. A, MBIA, 6 1/4s, 4/1/13 Aaa 8,801,538
6,395,000 Ser. C, AMBAC, 5 5/8s, 7/1/27 Aaa 6,035,281
10,275,000 Ser. A, FSA, 5 1/4s, 4/1/13 Aaa 9,825,469
Metropolitan Trans. Auth. Svcs. Contract Fac. Rev. Bonds
3,750,000 (Trans. Fac.), Ser. 3, 7 3/8s, 7/1/08 Baa1 4,092,188
3,000,000 (Trans. Fac.), Ser. 6, 7s, 7/1/09 Baa1 3,129,870
20,820,000 (Trans. Fac.), Ser. O, 5 3/4s, 7/1/13 Baa1 20,715,900
12,500,000 (Commuter Fac.), Ser. O, 5 1/2s, 7/1/17 Baa1 11,843,750
24,345,000 (Trans. Fac), Ser. O, 5 1/2s, 7/1/17 Baa1 23,066,888
Nassau Cnty., G.O. Bonds, Ser. E, FSA
1,125,000 6s, 3/1/20 AAA 1,110,938
2,790,000 6s, 3/1/19 AAA 2,765,588
2,735,000 6s, 3/1/18 AAA 2,721,325
3,465,000 6s, 3/1/16 AAA 3,477,994
2,580,000 5.9s, 3/1/15 AAA 2,583,225
NY City, G.O. Bonds
12,325,000 Ser. B, 8 1/4s, 6/1/05 A3 13,850,219
18,675,000 Ser. B, MBIA, 6 1/2s, 8/15/11 Baa1 20,262,375
21,495,000 Ser. D, 6 1/2s, 11/1/10 A3 23,295,206
8,710,000 Ser. I, 6 1/4s, 4/15/27 A3 8,764,438
11,975,000 Ser. I, 6 1/4s, 4/15/27, Prerefunded A3 12,753,375
4,700,000 Ser. I, 6 1/4s, 4/15/17 A3 4,794,000
300,000 Ser. I, 6 1/4s, 4/15/17, Prerefunded A3 319,500
10,000,000 Ser. H, 6 1/8s, 8/1/25 A3 9,975,000
5,000,000 Ser. G, FSA, 5s, 8/1/15 Aaa 4,525,000
NY City, Indl. Dev. Agcy. Rev. Bonds
17,350,000 (Visy Paper Inc.), 7.95s, 1/1/28 B 17,718,688
1,500,000 (Brooklyn Navy Yard Cogen. Partners),
5.65s, 10/1/28 Baa3 1,267,500
7,000,000 (Horace Mann School), MBIA, 5s, 7/1/28 Aaa 5,888,750
NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
6,500,000 (American Airlines, Inc.), 8s, 7/1/20 Baa1 5,516,875
25,625,000 (American Airlines, Inc.), 6.9s, 8/1/24 Baa1 26,041,406
14,465,000 (Terminal One Group Assn.), 6 1/8s, 1/1/24 A3 14,121,456
18,250,000 (Terminal One Group Assn.), 6s, 1/1/19 A3 17,725,313
8,250,000 (British Airways), 5 1/4s, 12/1/32 A2 6,754,688
5,000,000 NY City, Metropolitan Trans. Auth., Ser. A, AMBAC,
5 1/4s, 1/1/29 Aaa 4,387,500
10,750,000 NY City, Muni. Assistance Corp. IFB, Ser. 337B, 8.2s,
7/1/08 (acquired 3/19/98, cost $13,344,611) (RES) AA/P 11,690,625
13,000,000 NY City, Muni. Wtr. & Swr. Fin. Auth. FRB, 9.598s,
6/15/11 (acquired 8/9/91, cost $13,487,029) (RES) (SEG) Aaa 17,452,500
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds
12,000,000 Ser. B, MBIA, 5 1/2s, 6/15/27 Aaa 11,070,000
8,150,000 Ser. B, FGIC, 5 1/4s, 6/15/29 A1 7,141,438
12,265,000 Ser. A, 4 3/4s, 6/15/31 Aaa 9,766,006
17,500,000 NY City, Muni. Wtr. Fin. Auth. IFB, MBIA,
8.045s, 6/15/08 Aaa 17,018,750
10,000,000 NY City, Muni. Wtr. Fin. Auth. Rev. Bonds, Ser. A,
5 1/2s, 6/15/24 AA 9,300,000
5,600,000 NY City, NY State Dorm. Auth. Lease Rev. Bonds
(Court Facs.), 6s, 5/15/39 A3 5,425,000
7,000,000 NY City, Transitional Fin. Auth., FRB, 8.05s, 11/15/29
(acquired 2/4/00, cost $6,788,320).(RES) AA 6,886,250
NY City, Transitional Fin. Auth. Rev. Bonds
15,000,000 Ser. C, 5 1/2s, 5/1/25 Aa3 13,800,000
6,500,000 Ser. A, 5 3/4s, 8/15/24 AA 6,280,625
4,485,000 Ser. A, 5 1/4s, 11/15/12 Aa3 4,367,269
7,100,000 (Future Tax Secd.), Ser. A, 5s, 8/15/27 Aa3 6,026,125
NY Metropolitan Trans. Auth. Rev. Bonds
5,550,000 (Commuter Facs.), Ser. A, 6s, 7/1/24 BBB+ 5,439,000
11,020,000 (Trans. Facs.), Ser. A, 6s, 7/1/24 BBB+ 10,799,600
21,235,000 (Dedicated Tax Fund), Ser. A, FGIC, 4 3/4s, 4/1/28 Aaa 17,120,719
NY State Dorm. Auth. Cap. Appn. Rev. Bonds
(State U.), Ser. B
46,250,000 MBIA, zero %, 5/15/09 Aaa 28,212,500
53,490,000 MBIA, zero %, 5/15/08 Aaa 34,567,913
13,250,000 NY State Dorm. Auth. IFB, MBIA, 7.45s, 7/1/13
(acquired 10/22/97, cost $15,065,810) (RES) AAA 13,780,000
NY State Dorm. Auth. Rev. Bonds
5,000,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa1 5,252,500
18,800,000 (City U. Syst.), Ser. C, 7 1/2s, 7/1/10 Baa1 20,962,000
4,000,000 (State U. Athletic Fac.), 7 1/4s, 7/1/21 Baa1 4,181,360
2,500,000 (Mount Sinai Hlth.), Ser. A, 6.6s, 7/1/26 Baa1 2,503,125
3,000,000 (Mount Sinai Hlth.), Ser. A, 6 1/2s, 7/1/25 Baa1 3,003,750
8,950,000 (State U. Edl. Fac.), Ser. A, FSA, 5 7/8s, 5/15/17 AAA 9,106,625
13,200,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 A3 13,447,500
20,000,000 (Mental Hlth. Svcs. Fac.), Ser. A, 5 3/4s, 8/15/22 A3 19,100,000
6,000,000 (NY U.), Ser. A, MBIA, 5 3/4s, 7/1/20 Aaa 5,940,000
NY State Dorm. Auth. Rev. Bonds
45,385,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/18 Baa1 44,307,106
14,645,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/13
(2nd Gen) Baa1 14,626,694
10,000,000 (Columbia U.), Ser. A, 5 3/4s, 7/1/10 Aaa 10,337,500
15,600,000 (U. Syst. Construction), Ser. A, 5 5/8s, 7/1/16 Baa1 15,151,500
16,055,000 (State U. Edl. Fac.), Ser. A, 5 1/2s, 5/15/13 A3 15,713,831
3,000,000 (Westchester Cnty.), 5 1/4s, 8/1/18 Aa1 2,733,750
7,500,000 (Columbia U.), 5s, 7/1/22 Aaa 6,571,875
13,750,000 (Colgate U.), MBIA, 4 3/4s, 7/1/28 Aaa 11,051,563
23,250,000 (St. John's U.), MBIA, 4 3/4s, 7/1/28 Aaa 18,687,188
10,000,000 (NY & Presbyterian Hosp.), AMBAC,
4 3/4s, 8/1/27 Aaa 7,950,000
6,000,000 (Mental Hlth. Svcs. Fac.), Ser. C, MBIA,
4 3/4s, 8/15/22 AAA 4,912,500
2,000,000 NY State Dorm. Auth. VRDN
(Oxford U. Press Inc.), 4.0s, 7/1/23 VMIG1 2,000,000
8,000,000 NY State Energy Res. & Dev. Auth. Elec. Fac.
Rev. Bonds (LILCO), Ser. B, 5.3s, 11/1/23 Baa3 6,900,000
10,000,000 NY State Energy Res. & Dev. Auth. Gas Fac. IFB
(Brooklyn Union Gas Co.), Ser. B, 10.375s, 7/1/26 A2 11,162,500
NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds
10,000,000 (Niagra Mohawk Pwr. Corp.), Ser. A, FGIC,
7.2s, 7/1/29 Aaa 10,850,000
26,000,000 (Niagara Mohawk), Ser. A, AMBAC, 5.15s, 11/1/25 Aaa 22,522,500
6,000,000 (Lilco Project), Ser. B, 5.15s, 3/1/16 Baa3 5,340,000
10,675,000 NY State Env. Fac. Corp. IFB (PA 221), 7.95s, 6/15/11
(acquired 11/24/97, cost $12,803,212) (RES) AAA 11,689,125
10,000,000 NY State Env. Fac. Corp. Poll. Control. IFB
(State Wtr. Revolving Fund) 8.7s, 6/15/12
(acquired 3/31/99, cost $12,566,752) (RES) Aaa 10,900,000
NY State Env. Fac. Corp. Poll. Control. Rev. Bonds
6,870,000 (State Wtr. Revolving Fund), Ser. B, 6.65s, 9/15/13 Aaa 7,153,388
5,265,000 (State Wtr. Revolving Fund), Ser. A, 6.55s, 9/15/10 Aaa 5,482,181
NY State Hsg. Fin. Agcy. Rev. Bonds
3,660,000 8s, 11/1/08 Baa3 3,775,912
23,310,000 8s, 11/1/08, Prerefunded Aaa 24,079,929
9,440,000 (Multi-Fam. Hsg. Insd. Mtge. Program), Ser. A,
FHA Insd., 7s, 8/15/22 Aa2 9,841,200
7,500,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig.
Rev. Bonds, Ser. C, 7.3s, 3/15/21 Baa1 7,865,625
NY State Local Govt. Assistance Corp. Rev. Bonds
11,900,000 Ser. A, 6 1/2s, 4/1/20 A3 12,308,646
12,510,000 Ser. E, 6s, 4/1/14 A3 12,979,125
6,000,000 Ser. E, AMBAC, 6s, 4/1/14 Aaa 6,225,000
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
2,125,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/20 A3 2,177,211
3,750,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 A3 3,805,838
6,625,000 (Methodist Hosp. & Nursing Home), Ser. A,
FHA Insd., 6.7s, 8/15/23 AA 6,981,094
12,325,000 Ser. A, AMBAC, FHA Insd., 6 1/2s, 8/15/29 Aaa 13,249,375
24,775,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21,
Prerefunded Aaa 25,738,252
7,000,000 NY State Metropolitan Trans. Auth. , FRB, 7.8s,
4/1/25 (acquired 2/11/00, cost $6,684,580) (RES) A3 6,685,000
4,250,000 NY State Muni. Bond Bk. Agcy. Special Program
Rev. Bonds (Rochester), Ser. A, 6 3/4s, 3/15/11 AAA 4,430,625
NY State Thruway Auth. Hwy. & Bridge
Rev. Bonds, Ser. A
1,000,000 FSA, 6s, 4/1/16 Aaa 1,025,000
2,000,000 FSA, 5.8s, 4/1/18 Aaa 1,980,000
2,000,000 FSA, 5.79s, 4/1/17 Aaa 1,982,500
13,300,000 NY State Thruway Auth. Svcs. Contract Rev. Bonds
(Local Hwy. & Bridge), 7 1/4s, 1/1/10 Baa1 13,755,259
8,000,000 NY State Urban Dev. Corp. IFB, FSA, 9.1s, 1/1/11
(acquired 9/1/98, cost $10,625,557) (RES) Aaa 9,300,000
NY State Urban Dev. Corp. Rev. Bonds
9,000,000 (Onondaga Cnty. Convention), 7 7/8s, 1/1/20 Baa1 9,339,480
33,250,000 (Correctional Fac.), Ser. 2, 7 1/2s, 1/1/18 Baa1 34,434,698
5,250,000 (State Fac.), 5 3/4s, 4/1/12 Baa1 5,269,688
5,830,000 (Correctional Fac.), Ser. 7, 5.7s, 1/1/16 Baa1 5,662,388
11,225,000 (State Fac.), 5.7s, 4/1/10 Baa1 11,309,188
19,100,000 5.6s, 4/1/15 Baa1 18,622,500
7,710,000 (Correctional Fac), Ser. A, 5 1/2s, 1/1/09 Baa1 7,681,088
8,600,000 Port Auth. NY & NJ Cons. IFB, 9.963s, 8/1/26
(acquired 8/29/91, cost $8,669,307) (RES) A1 9,073,000
Port Auth. NY & NJ Rev. Bonds (Kennedy Intl. Arpt.)
6,000,000 6 3/4s, 10/1/19 BB 6,007,500
1,000,000 6 3/4s, 10/1/11 BB 1,018,750
7,750,000 St. Lawrence Cnty., Indl. Dev. Rev. Bonds
(St. Lawrence U.), Ser. A, MBIA, 5s, 7/1/28 AAA 6,510,000
4,220,000 Suffolk Cnty. Judicial Fac. Agcy. Svc. Agreement
Rev. Bonds (John P. Cohalan Complex), AMBAC,
5s, 4/15/16 AAA 3,834,925
Suffolk Cnty., Indl. Dev. Agcy. Cont. Care Ret.
Rev. Bonds (Jefferson's Ferry), Ser. A
4,000,000 7 1/4s, 11/1/28 BB- 3,860,000
4,000,000 7.2s, 11/1/19 BB- 3,880,000
10,965,000 Triborough Bridge & Tunnal Auth. IFB, 6.95s, 1/1/12
(acquired 10/24/97, cost $11,952,024) (RES) Aa3 10,869,046
Triborough Bridge & Tunnel Auth. Gen. Purpose
Rev. Bonds
38,750,000 (Convention Ctr.), Ser. E, 7 1/4s, 1/1/10 Baa1 42,431,250
17,700,000 Ser. Y, 6s, 1/1/12 Aa3 18,496,500
Triborough Bridge & Tunnel Auth. Rev. Bonds
18,850,000 Ser. X, MBIA, 6 5/8s, 1/1/12 Aa3 20,593,625
14,000,000 (Convention Ctr.), Ser. E, 6s, 1/1/11 Baa1 14,350,000
18,000,000 Triborough Bridge & Tunnel Auth. Special Oblig.
IFB, 9.677s, 1/1/12 (acquired 7/10/92,
cost $18,112,814) (RES) Aaa 18,877,500
----------------
1,318,296,954
Puerto Rico (4.8%)
-------------------------------------------------------------------------------------------------------------------
Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds
3,000,000 Ser. V, 6 5/8s, 7/1/12 Baa1 3,127,500
7,000,000 Ser. Z, FSA, 6 1/4s, 7/1/16 Aaa 7,516,250
PR Cmnwlth. G.O. Bonds
3,915,000 FSA, 6 1/2s, 7/1/13 AAA 4,321,181
11,110,000 FSA, 6 1/2s, 7/1/12 AAA 12,262,663
PR Comnwlth. Hwy. & Trans. Auth. Rev. Bonds, Ser. B
5,000,000 6s, 7/1/26 Baa1 4,943,750
3,500,000 MBIA, 5 7/8s, 7/1/35 Aaa 3,465,000
10,000,000 PR Elec. Pwr. Auth. IFB, MBIA, 10.15s, 7/1/07
(acquired 10/30/97, cost $13,157,299) (RES) Baa1 12,312,500
2,000,000 PR Elec. Pwr. Auth. Rev. Bonds, MBIA, 5s, 7/1/28 Aaa 1,720,000
7,000,000 PR Indl. Tourist Edl. Med. & Env. Control Facs.
Rev. Bonds (Cogen Facs.-AES PR Project),
6 5/8s, 6/1/26 Baa2 7,043,750
11,350,000 PR Tel. Auth. IFB, 8.373s, 1/1/20 (acquired 9/25/92,
cost $10,981,125) (RES) A3 12,031,000
----------------
68,743,594
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,396,303,688) (b) $ 1,388,793,048
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $1,430,256,964.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to
be the most recent ratings available at May 31, 2000 for the securities
listed. Ratings are generally ascribed to securities at the time of
issuance. While the agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings do not
necessarily represent what the agencies would ascribe to these
securities at May 31, 2000. Securities rated by Putnam are indicated by
"/P" and are not publicly rated.
(b) The aggregate identified cost on a tax basis is $1,397,639,637,
resulting in gross unrealized appreciation and depreciation of
$36,823,586 and $45,670,175, respectively, or net unrealized
depreciation of $8,846,589.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at May 31, 2000 was
$163,560,609 or 11.4% of net assets.
(SEG) A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts at May 31,
2000.
The rates shown on IFB's, which are securities paying interest
rates that vary inversely to changes in the market interest rates, FRB's
and VRDN's are the current interest rates at May 31, 2000.
The fund had the following industry group concentrations greater
than 10% at May 31, 2000 (as a percentage of net assets):
Housing 31.2%
Transportation 21.0
The fund had the following insurance concentration greater than
10% at May 31, 2000 (as a percentage of net assets):
MBIA 17.4%
---------------------------------------------------------------------------------------
Futures Contracts Outstanding at May 31, 2000 (Unaudited)
Aggregate Face Expiration Unrealized
Total Value Value Date Depreciation
---------------------------------------------------------------------------------------
Municipal Bond Index (short) $27,909,563 $27,583,670 Jun-00 $(325,893)
---------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000 (Unaudited)
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $1,396,303,688) (Note 1) $1,388,793,048
-------------------------------------------------------------------------------------------
Cash 902,401
-------------------------------------------------------------------------------------------
Interest and other receivables 26,997,477
-------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 651,768
-------------------------------------------------------------------------------------------
Receivable for securities sold 35,831,130
-------------------------------------------------------------------------------------------
Total assets 1,453,175,824
Liabilities
-------------------------------------------------------------------------------------------
Payable for variation margin 242,125
-------------------------------------------------------------------------------------------
Distributions payable to shareholders 3,154,590
-------------------------------------------------------------------------------------------
Payable for securities purchased 15,280,544
-------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,654,279
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,905,206
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 52,558
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 33,805
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,793
-------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 548,823
-------------------------------------------------------------------------------------------
Other accrued expenses 44,137
-------------------------------------------------------------------------------------------
Total liabilities 22,918,860
-------------------------------------------------------------------------------------------
Net assets $1,430,256,964
Represented by
-------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $1,462,233,212
-------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 2,738,404
-------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (26,878,119)
-------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (7,836,533)
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $1,430,256,964
Computation of net asset value and offering price
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,256,940,530 divided by 154,153,096 shares) $8.15
-------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $8.15)* $8.56
-------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($171,281,678 divided by 21,045,148 shares)+ $8.14
-------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($498,102 divided by 61,046 shares)+ $8.16
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($1,536,654 divided by 188,356, shares) $8.16
-------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $8.16)** $8.43
-------------------------------------------------------------------------------------------
* On single retail sales of less than $25,000. On sales of $25,000
or more and on group sales, the offering price is reduced.
+ Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
** On single retail sales of less than $50,000. On sales of $50,000
or more and on group sales, the offering price is reduced.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six months ended May 31, 2000 (Unaudited)
<S> <C>
Tax exempt interest income: $47,174,876
-------------------------------------------------------------------------------------------
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 3,736,227
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 601,929
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 19,219
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 8,053
-------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 1,304,650
-------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 766,647
-------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 2,110
-------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 4,097
-------------------------------------------------------------------------------------------
Reports to shareholders 18,656
-------------------------------------------------------------------------------------------
Registration fees 75
-------------------------------------------------------------------------------------------
Auditing 26,750
-------------------------------------------------------------------------------------------
Legal 4,559
-------------------------------------------------------------------------------------------
Postage 33,789
-------------------------------------------------------------------------------------------
Other 118,754
-------------------------------------------------------------------------------------------
Total expenses 6,645,515
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (284,980)
-------------------------------------------------------------------------------------------
Net expenses 6,360,535
-------------------------------------------------------------------------------------------
Net investment income 40,814,341
-------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 1,088,942
-------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 707,168
-------------------------------------------------------------------------------------------
Net unrealized depreciation of investments and
futures contracts during the period (32,969,614)
-------------------------------------------------------------------------------------------
Net loss on investments (31,173,504)
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 9,640,837
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
May 31 November 30
2000* 1999
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Decrease in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment income $ 40,814,341 $ 85,497,618
--------------------------------------------------------------------------------------------------
Net realized gain on investments 1,796,110 1,116,256
--------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (32,969,614) (129,945,929)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 9,640,837 (43,332,055)
--------------------------------------------------------------------------------------------------
Distributions to shareholders:
--------------------------------------------------------------------------------------------------
From net investment income
Class A (36,310,986) (75,849,480)
--------------------------------------------------------------------------------------------------
Class B (4,425,409) (9,468,710)
--------------------------------------------------------------------------------------------------
Class C (9,766) (2,809)
--------------------------------------------------------------------------------------------------
Class M (42,892) (107,145)
--------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (14,917,571)
--------------------------------------------------------------------------------------------------
Class B -- (2,141,288)
--------------------------------------------------------------------------------------------------
Class M -- (22,120)
--------------------------------------------------------------------------------------------------
Decrease from capital share transactions (Note 4) (110,445,744) (135,867,274)
--------------------------------------------------------------------------------------------------
Total decrease in net assets (141,593,960) (281,708,452)
Net assets
--------------------------------------------------------------------------------------------------
Beginning of period 1,571,850,924 1,853,559,376
--------------------------------------------------------------------------------------------------
End of period (including undistributed
net investment income of $2,738,404 and
$2,713,116 respectively) $1,430,256,964 $1,571,850,924
--------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS A
-----------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share May 31
operating performance (Unaudited) Year ended November 30
-----------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.32 $9.05 $9.02 $8.91 $8.97 $8.05
-----------------------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------------------
Net investment income .23 .44 .43 .46 .48 .49
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.17) (.65) .13 .12 (.06) .92
-----------------------------------------------------------------------------------------------------------------
Total from
investment operations .06 (.21) .56 .58 .42 1.41
-----------------------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------------------
From net
investment income (.23) (.44) (.43) (.47) (.48) (.49)
-----------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.08) (.10) -- -- --
-----------------------------------------------------------------------------------------------------------------
Total distributions (.23) (.52) (.53) (.47) (.48) (.49)
-----------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.15 $8.32 $9.05 $9.02 $8.91 $8.97
-----------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) .71* (2.42) 6.47 6.69 4.92 17.95
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,256,941 $1,374,040 $1,620,108 $1,725,773 $1,873,649 $2,013,022
-----------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .41* .83 .83 .79 .81 .78
-----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.78* 5.02 4.79 5.19 5.47 5.63
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.31* 13.24 31.55 81.95 59.60 73.85
-----------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis
of the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(c) Includes amounts paid through expense offset arrangements (Note 2).
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS B
-----------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share May 31
operating performance (Unaudited) Year ended November 30
-----------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.31 $9.04 $9.00 $8.90 $8.95 $8.02
-----------------------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------------------
Net investment income .20 .38 .37 .40 .42 .43
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.17) (.65) .14 .11 (.05) .93
-----------------------------------------------------------------------------------------------------------------
Total from
investment operations .03 (.27) .51 .51 .37 1.36
-----------------------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------------------
From net
investment income (.20) (.38) (.37) (.41) (.42) (.43)
-----------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.08) (.10) -- -- --
-----------------------------------------------------------------------------------------------------------------
Total distributions (.20) (.46) (.47) (.41) (.42) (.43)
-----------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.14 $8.31 $9.04 $9.00 $8.90 $8.95
-----------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) .39* (3.06) 5.91 5.89 4.35 17.26
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $171,282 $195,618 $231,057 $227,747 $227,405 $215,614
-----------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .73* 1.48 1.48 1.44 1.46 1.43
-----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.46* 4.37 4.12 4.53 4.81 4.95
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.31* 13.24 31.55 81.95 59.60 73.85
-----------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis
of the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(c) Includes amounts paid through expense offset arrangements (Note 2).
</TABLE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS C
-------------------------------------------------------------------------
Six months
ended For the period
Per-share May 31 July 26, 1999+
operating performance (Unaudited) to Nov. 30
-------------------------------------------------------------------------
2000 1999
-------------------------------------------------------------------------
Net asset value,
beginning of period $8.32 $8.61
-------------------------------------------------------------------------
Investment operations
-------------------------------------------------------------------------
Net investment income .20 .13
-------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.16) (.29)
-------------------------------------------------------------------------
Total from
investment operations .04 (.16)
-------------------------------------------------------------------------
Less distributions:
-------------------------------------------------------------------------
From net
investment income (.20) (.13)
-------------------------------------------------------------------------
From net realized gain
on investments -- --
-------------------------------------------------------------------------
Total distributions (.20) (.13)
-------------------------------------------------------------------------
Net asset value,
end of period $8.16 $8.32
-------------------------------------------------------------------------
Ratios and supplemental data
-------------------------------------------------------------------------
Total return at
net asset value (%)(b) .43* (1.87)*
-------------------------------------------------------------------------
Net assets, end of period
(in thousands) $498 $356,182
-------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .81* .58*
-------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.38* 1.59*
-------------------------------------------------------------------------
Portfolio turnover (%) 6.31* 13.24
-------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis
of the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(c) Includes amounts paid through expense offset arrangements (Note 2).
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS M
-----------------------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share May 31 Apr. 10, 1995+
operating performance (Unaudited) Year ended November 30 to Nov. 30
-----------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.33 $9.05 $9.02 $8.91 $8.97 $8.79
-----------------------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------------------
Net investment income .22 .41 .41 .43 .45 .26(a)
-----------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.17) (.64) .13 .12 (.06) .21
-----------------------------------------------------------------------------------------------------------------
Total from
investment operations .05 (.23) .54 .55 .39 .47
-----------------------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------------------
From net
investment income (.22) (.41) (.41) (.44) (.45) (.29)
-----------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.08) (.10) -- -- --
-----------------------------------------------------------------------------------------------------------------
Total distributions (.22) (.49) (.51) (.44) (.45) (.29)
-----------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.16 $8.33 $9.05 $9.02 $8.91 $8.97
-----------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) .56* (2.60) 6.15 6.37 4.59 5.44*
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,537 $1,837 $2,394 $1,865 $1,266 $588
-----------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .56* 1.13 1.13 1.09 1.11 .65*
-----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.64* 4.72 4.47 4.87 5.17 3.30*
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.31* 13.24 31.55 81.95 59.60 73.85
-----------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Per share net investment income has been determined on the basis
of the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(c) Includes amounts paid through expense offset arrangements (Note 2).
</TABLE>
NOTES TO FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
Note 1
Significant accounting policies
Putnam New York Tax Exempt Income Fund, ("the fund"), is registered
under the Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The fund seeks as high a level
of current income exempt from federal income tax and New York State and
City personal income tax as Putnam 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
investing primarily in a portfolio of longer-term New York tax exempt
securities.
The fund offers class A, class B, class C and class M shares. Class A
shares are sold with a maximum front-end sales charge of 4.75%. Class B
shares, which convert to class A shares after approximately eight years,
do not pay a front-end sales charge but pay a higher ongoing
distribution fee than class A shares, and are subject to a contingent
deferred sales charge, if those shares are redeemed within six years of
purchase. Class C shares have a higher ongoing distribution fee than
class B shares and have a one-year 1.00% contingent deferred sales
charge and do not convert to class A shares. Class M shares are sold
with a maximum front end sales charge of 3.25% and pay an ongoing
distribution fee that is higher than class A shares but lower than class
B and class C shares.
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 preparation of financial statements is in conformity
with generally accepted accounting principles and requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities of the financial statements and the reported
amounts of increases and decreases in net assets from operations during
the reporting period. Actual results could differ from those estimates.
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.
Restricted securities are stated at fair value following procedures
approved by the Trustees. Such valuations and procedures are reviewed
periodically 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). Gains or losses on securities sold are determined
on the identified cost basis. Interest income is recorded on the accrual
basis.
C) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund
owns or expects to purchase. The fund may also write options on
securities it owns or in which it may invest to increase its current
returns.
The potential risk to the fund is that the change in value of futures
and options contracts may not correspond to the change in value of the
hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparty to the contract is
unable to perform. When the contract is closed, the fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was
closed. Realized gains and losses on purchased options are included in
realized gains and losses on investment securities.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded options
are valued at the last sale price, or if no sales are reported, the last
bid price for purchased options and the last ask price for written
options. Options traded over-the-counter are valued using prices
supplied by dealers.
D) Line of credit The fund has entered into a committed line of credit
with certain banks. This line of credit agreement includes restrictions
that the fund maintains an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the six months
ended May 31, 2000, the fund had no borrowings against the line of
credit.
E) Federal taxes It is the policy of the fund to distribute all of its
income within the prescribed time and otherwise comply with the
provisions of the 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, as amended. Therefore, no
provision has been made for federal taxes on income, capital gains or
unrealized appreciation on securities held nor for excise tax on income
and capital gains.
F) Distributions to shareholders Income dividends are recorded daily by
the fund and are paid monthly. Capital gain distributions, if any, are
recorded on the ex-dividend date and paid at least annually. The amount
and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. Reclassifications are made to the fund's
capital accounts to reflect income and gains available for distribution
(or available capital loss carryovers) under income tax regulations.
G) Amortization of bond premium and accretion of bond discount Any
premium resulting from the purchase of securities in excess of maturity
value is amortized on a yield-to-maturity basis. 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. Discounts on
original issue discount bonds are accreted according to the
yield-to-maturity basis.
Note 2
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. Such fee is based upon the lesser of (i) an annual rate of
0.50% of the average net asset value of the fund or (ii) 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, 0.40% of the next
$5 billion, 0.375% of the next $5 billion, 0.355% of the next $5 billion,
0.340% of the next $5 billion, 0.330% thereafter.
The fund reimburses Putnam Management an allocated amount 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.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor
Services, a division of PFTC.
For the six months ended May 31, 2000, fund expenses were reduced by
$284,980 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the
Statement of operations exclude these credits. The fund could have
invested a portion of the assets utilized in connection with the expense
offset arrangements in an income producing asset if it had not entered into
such arrangements.
Each Trustee of the fund receives an annual Trustee fee, of which $1,589
has been allocated to the fund, and an additional fee for each Trustee's
meeting attended. Trustees who are not interested persons of Putnam
Management and who serve on committees of the Trustees receive
additional fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees remain
in the fund and are invested in certain Putnam funds until distribution
in accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and
meeting fees for the three years preceding retirement. Pension expense for the
fund is included in Compensation of Trustees in the Statement of operations.
Accrued pension liability is included in Payable for compensation of Trustees
in the Statement of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B, class C and class M shares pursuant to Rule 12b-1
under the Investment Company Act of 1940. The purpose of the Plans
is to compensate Putnam Retail Management, Inc., a wholly-owned
subsidiary of Putnam Investments Inc., for services provided and
expenses incurred by it in distributing shares of the fund. The Plans
provide for payments by the fund to Putnam Retail Management, Inc. at an
annual rate up to 0.35%, 1.00%, 1.00% and 1.00% of the average net
assets attributable to class A, class B, class C and class M shares,
respectively. The Trustees have approved payment by the fund to an
annual rate of 0.20%, 0.85%, 1.00% and 0.50% of the average net assets
attributable to class A, class B, class C and class M shares
respectively.
For the six months ended May 31, 2000, Putnam Retail Management, Inc.,
acting as underwriter received net commissions of $23,007 and $128 from
the sale of class A and class M shares, respectively and $176,516 and
$30 in contingent deferred sales charges from redemptions of class B and
class C shares, respectively. A deferred sales charge of up to 1% is
assessed on certain redemptions of class A shares. For the six months
ended May 31, 2000, Putnam Retail Management, Inc., acting as underwriter
received $4,117 on class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended
May 31, 2000, cost of purchases and proceeds from sales of investment
securities other than short-term investments aggregated $91,943,142 and
$229,686,197, respectively. There were no purchases and sales of U.S.
government obligations.
Note 4
Capital shares
At May 31, 2000, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended May 30, 2000
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 6,341,284 $ 52,050,993
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 2,544,482 20,892,367
---------------------------------------------------------------------------
8,885,766 72,943,360
Shares
repurchased (19,809,056) (162,790,306)
---------------------------------------------------------------------------
Net decrease (10,923,290) $(89,846,946)
---------------------------------------------------------------------------
Year ended November 30, 1999
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 8,037,911 $ 69,406,077
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 6,202,528 54,056,393
---------------------------------------------------------------------------
14,240,439 123,462,470
Shares
repurchased (28,090,322) (242,247,284)
---------------------------------------------------------------------------
Net decrease (13,849,883) $(118,784,814)
---------------------------------------------------------------------------
Six months ended May 30, 2000
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 699,212 $ 5,752,230
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 338,265 2,773,226
---------------------------------------------------------------------------
1,037,477 8,525,456
Shares
repurchased (3,539,179) (29,009,817)
---------------------------------------------------------------------------
Net decrease (2,501,702) $(20,484,361)
---------------------------------------------------------------------------
Year ended November 30, 1999
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 2,296,832 $ 20,161,464
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 882,308 7,680,007
---------------------------------------------------------------------------
3,179,140 27,841,471
Shares
repurchased (5,201,015) (44,927,760)
---------------------------------------------------------------------------
Net decrease (2,021,875) $(17,086,289)
---------------------------------------------------------------------------
Six months ended May 30, 2000
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 30,412 $248,265
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 982 8,066
---------------------------------------------------------------------------
31,394 256,331
Shares
repurchased (13,133) (107,684)
---------------------------------------------------------------------------
Net increase 18,261 $148,647
---------------------------------------------------------------------------
For the period July 26, 1999
(commencement of operations) to
November 30, 1999
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 45,038 $378,641
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 357 2,809
---------------------------------------------------------------------------
45,395 381,450
Shares
repurchased (2,610) (21,951)
---------------------------------------------------------------------------
Net increase 42,785 $359,499
---------------------------------------------------------------------------
Six months ended May 31, 2000
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 6,340 $ 52,329
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,559 37,460
---------------------------------------------------------------------------
10,899 89,789
Shares
repurchased (43,147) (352,873)
---------------------------------------------------------------------------
Net decrease (32,248) $(263,084)
---------------------------------------------------------------------------
Year ended November 30, 1999
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 52,379 $ 457,997
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 12,044 104,914
---------------------------------------------------------------------------
64,423 562,911
Shares
repurchased (108,190) (918,581)
---------------------------------------------------------------------------
Net decrease (43,767) $(355,670)
---------------------------------------------------------------------------
WELCOME TO WWW.PUTNAMINV.COM
Now you can use your PC to get up-to-date information about your funds,
learn more about investing and retirement planning, and access market
news and economic outlooks from Putnam.
VISIT PUTNAM'S SITE ON THE WORLD WIDE WEB FOR:
* the benefits of investing with Putnam
* Putnam's money management philosophy
* complete fund information, daily pricing and long-term performance
* your current account value, portfolio value and transaction history
* the latest on new funds and other Putnam news
You can also read Putnam economist Dr. Robert Goodman's commentary and
Putnam's Capital Markets outlook, search for a particular fund by name
or objective, use our glossary to decode investment terms . . . and much
more.
The site can be accessed through any of the major online services
(America Online, CompuServe, Prodigy) that offer web access. Of course,
you can also access it via Netscape or Microsoft Internet Explorer,
using an independent Internet service provider.
New features will be added to the site regularly. So be sure to bookmark us at
http://www.putnaminv.com
THE PUTNAM FAMILY OF FUNDS
The following is a complete list of Putnam's open-end mutual funds.
Please call your financial advisor or Putnam at 1-800-225-1581 to obtain
a prospectus for any Putnam fund. It contains more complete information,
including charges and expenses. Please read it carefully before you
invest or send money.
GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Capital Opportunities Fund
Europe Growth Fund
Global Equity Fund
Global Growth Fund
Global Natural Resources Fund
Growth Opportunities Fund
Health Sciences Trust
International Growth Fund
International New Opportunities Fund
Investors Fund
New Century Growth Fund
New Opportunities Fund
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement Fund
Classic Equity Fund *
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
Global Growth and Income Fund
The Putnam Fund for Growth and Income
International Growth and Income Fund
New Value Fund
Small Cap Value Fund
Utilities Growth and Income Fund
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Governmental Income Trust
High Yield Advantage Fund [DBL. DAGGER]
High Yield Trust [DBL. DAGGER]
High Yield Trust II
Income Fund
Intermediate U.S. Government Income Fund
Money Market Fund **
Preferred Income Fund
Strategic Income Fund
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund **
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [SECTION MARK]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
State tax-free money market funds [SECTION MARK] **
California, New York
ASSET ALLOCATION FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Formerly Putnam Growth and Income Fund II
[DBL. DAGGER] Closed to new investors. Some exceptions may apply.
Contact Putnam for details.
[SECTION MARK] Not available in all states.
** An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share, it
is possible to lose money by investing in the fund.
Check your account balances and current performance at www.putnaminv.com.
FUND INFORMATION
WEB SITE
www.putnaminv.com
INVESTMENT MANAGER
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management, Inc.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
John A. Hill, Chairman
Jameson Adkins Baxter
Hans H. Estin
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam, III
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Ian C. Ferguson
Vice President
Brett C. Browchuk
Vice President
Stephen Oristaglio
Vice President
Jerome J. Jacobs
Vice President
David E. Hamlin
Vice President and Fund Manager
Richard A. Monaghan
Vice President
Richard G. Leibovitch
Vice President
John R. Verani
Vice President
This report is for the information of shareholders of Putnam New York
Tax Exempt Income Fund. It may also be used as sales literature when
preceded or 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.
You can also learn more at Putnam Investments' Web site: www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed 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.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
---------------------
BULK RATE
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminv.com
SA051-62251 030/345/681 7/00
