Putnam
New York
Tax Exempt
Income Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
11-30-99
[LOGO: BOSTON * LONDON * TOKYO]
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The markets continued to provide their share of challenges and
opportunities as your fund closed its books on fiscal 1999. In the
following report, the fund's manager discusses performance for the period
and prospects for the months ahead.
This is the last letter to you and the other shareholders of Putnam New
York Tax Exempt Income Fund that I will be signing. After more than 30
years as Chairman of the Trustees and President of the Putnam Funds, the
time has come for me to step aside.
In June, John Hill will become Chairman. John is currently an independent
Trustee and has served on the board for the past 14 years. In addition, my
son, George Putnam, III, will take on the role of President. I am
confident that the leadership of the funds will be in exceptionally strong
hands.
I will become Chairman Emeritus, remain a shareholder, and stay in close
touch with the funds. It has been my privilege to serve you.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
January 19, 2000
Report from the Fund Manager
David E. Hamlin
In a year that will long be remembered for sorely testing the patience of
bond investors, shareholders of Putnam New York Tax Exempt Income Fund can
take solace in the fact that their municipal bond fund fared better than
most. The fund's concentration of intermediate-term bonds softened the
impact of rising interest rates and the resulting drop in bond prices. For
the 12 months ended November 30, 1999, total return at net asset value for
all the fund's share classes outperformed the -3.76% average annual return
for the 99 New York municipal debt funds tracked by Lipper, Inc., an
independent firm that tracks mutual fund performance. See page 4 for
complete ranking information.
Total return for 12 months ended 11/30/99
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
- --------------------------------------------------------------------
-2.42% -7.04% -3.06% -7.66% -3.51% -4.43% -2.60% -5.73%
- --------------------------------------------------------------------
Past performance is no indication of future results. Performance
information for longer periods and explanation of performance calculation
methods begin on page 6.
* RECENT CLOUDS COULD HAVE SILVER LINING
If history tells us anything about bond investing, it is this: buying a
bond fund after a bad year is a smart thing to do. Having endured the
toughest year since 1994, investors are faced with considerable
opportunities. For New York City residents paying the highest combined
federal, state, and city income tax rate of 45.77%, the fund's 5.08%
current dividend rate at POP at the end of the period was the equivalent
of a fully taxable yield of 9.37%. With inflation still remarkably low at
3% or less, this means the after-tax, after-inflation returns are the
highest they have been in years. Furthermore, municipal bonds have
historically yielded about 85% of comparable U.S. Treasury bonds. That
ratio has now reached nearly 100%, and the interest income is totally
tax-exempt for most taxpayers.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Transportation 30.6%
Education 20.9%
Health care 10.4%
Utilities 8.1%
Water and sewer 5.6%
Footnote reads:
*Based on net assets as of 11/30/99. Holdings will vary over time.
The reporting period encompassed one of the most dramatic rises in
municipal bond yields on record, with interest rates on long-term
municipal bonds climbing approximately a full percentage point during the
12 months. This stunning increase, the result of inflation fears and three
moves by the Federal Reserve Board to raise interest rates, resulted in a
steeper municipal bond yield curve. From the outset, the fund's heavy
emphasis on bonds with intermediate maturities in the 8- to 15-year range
proved advantageous and helped protect the portfolio's value.
As the year progressed, falling bond prices and the steepening municipal
bond yield curve presented new opportunities. Longer-maturity bonds offer
relatively higher yields than shorter-maturity bonds. Scouting for buys
like a bargain basement shopper, we scoured the universe of 20- to 30-year
maturity municipal bonds, buying during periods of price weakness.
* FUND WELL POSITIONED FOR STEEPENING YIELD CURVE
As part of this strategy, we sold Triborough Authority bonds that mature
in 2010 as well as the Dormitory Authority of New York State University
bonds that mature in 2009 and reinvested the proceeds in long-term bonds.
New holdings include Metropolitan Transportation Authority revenue bonds
and Niagara Mohawk bonds, both of which yield 6.23% and mature in 2024 and
2025, respectively. 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.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
Aaa/AAA 44.6%
Aa/AA 11.4%
A 30.5%
Baa/BBB 11.2%
Ba/BB 1.0%
B 1.2%
VMIGI 0.1%
Footnote reads:
* As a percentage of market value as of 11/30/99. A bond rated BBB/Baa or
higher is considered investment grade. All ratings reflect Moody's and
Standard & Poor's descriptions unless noted otherwise. Percentages may
include unrated bonds considered by Putnam Management to be of comparable
quality. Ratings will vary over time.
The addition of long-term bonds to the portfolio effectively extended its
average duration from 7 years to almost 8 1/2 years at period's end. A
longer duration can mean a more volatile net asset value if rates rise but
also one more likely to appreciate substantially if rates decline. We
believe the slightly longer duration holds the best opportunity for
balancing the fund's priority of high current income with price stability
and appreciation potential. (Duration is a measure of the portfolio's
maturity structure and reflects the price sensitivity of holdings to
changes in interest rates.)
* STRATEGIES: OFFSETTING LOSSES, RAISING YIELDS
In a year characterized by falling bond prices, we tried to make the most
of the less-than-favorable market conditions that, of course, are beyond
our control. Our efforts are focused on goals that are within our control,
namely, the pursuit of steady income, low net asset value volatility, and
a competitive total return. One of the most effective strategies entailed
creating tax losses by selling lower-yielding municipal bonds that had
depreciated. These losses will be used to offset taxable capital gains at
some future date, thereby minimizing the tax consequences on the sale of
municipal bonds with strong price appreciation. Although municipal bond
interest payments are tax exempt for shareholders, the capital gains
earned upon selling the bonds are taxable.
A second strategy, often referred to as swapping, involved taking the
proceeds from these tax-conscious bond sales and investing them in the
higher-yielding bonds coming to market. A good example of this dual
strategy was the sale of New York City Municipal Water and Sewer bonds,
which carried a current market yield of approximately 5%, and the purchase
of Metropolitan Transportation Authority dedicated tax bonds, which carry
a current market yield of 6.23%.
Putnam New York Tax Exempt Income Fund ranked 12 out of 99 New York
municipal debt funds (top 12%) tracked by Lipper for the year
ended December 31, 1999.
Past performance is not indicative of future results. Lipper rankings are
based on total return performance, vary over time, and do not include the
effect of sales charges. For the 5- and 10-year periods ended 12/31/99,
the fund's class A shares ranked 46 out of 75 (top 61%) and 23 out of 32
(top 70%), respectively. Performance of other share classes will vary.
Diversification also protects the portfolio during difficult markets. Much
of the Empire State's municipal bond issuance is underwritten by New York
State and New York City, whose fortunes are closely tied to the well-being
of the local economy. So we are vigilant for new investment opportunities
in the private sector. Education tends to be one of these more stable
sectors. We look for bonds issued by colleges with a strong alumni
following and a steady student application pool. Alumni donations are up,
boosting prospects for the fund's position in St. Lawrence University
insured bonds, which is yielding 6.17% and matures in 2028. Local
community colleges do not escape our radar, since many are fiscally well
managed and are in high demand by individuals unable to pay the cost of
more expensive schools.
* THEMES FOR NEW YEAR: POSITIONING AND PATIENCE
Although the Fed did not raise interest rates in October, it did take
action in November, leading to expectations that further increases could
follow. However, these expectations had already been priced into the bond
market's behavior, clearing the way for better performance down the road.
There may be some stumbling blocks ahead, but we believe that for the
moment the major ones are behind us.
With the steepness of the municipal bond yield curve approaching
historical precedent, we are more inclined to take slightly more risk in
the portfolio, extending maturities as opportunities arise preparing for
an eventual yield curve flattening. It has always been our belief that
bear markets are not bad as long as investors do not panic. Bear markets
provide the opportunity to raise yield, find exceptional credits, and
improve call protection, strategies that can be exceptionally rewarding
for shareholders over time.
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 11/30/99, 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 income tax, New York
state and New York City personal income tax consistent with
preservation of capital.
TOTAL RETURN FOR PERIODS ENDED 11/30/99
<TABLE>
<CAPTION>
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>
- ------------------------------------------------------------------------------------------
1 year -2.42% -7.04% -3.06% -7.66% -3.51% -4.43% -2.60% -5.73%
- ------------------------------------------------------------------------------------------
5 years 37.17 30.67 33.01 31.01 31.23 31.23 35.02 30.64
Annual average 6.53 5.50 5.87 5.55 5.59 5.59 6.19 5.49
- ------------------------------------------------------------------------------------------
10 years 83.45 74.71 70.17 70.17 68.65 68.65 76.57 70.80
Annual average 6.26 5.74 5.46 5.46 5.37 5.37 5.85 5.50
- ------------------------------------------------------------------------------------------
Life of fund 266.62 249.45 222.55 222.55 220.66 220.66 242.36 231.26
Annual average 8.33 8.01 7.48 7.48 7.44 7.44 7.87 7.65
- ------------------------------------------------------------------------------------------
</TABLE>
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 11/30/99
Lehman Bros.
Municipal Consumer
Bond Index price index
- ------------------------------------------------------------------------
1 year -1.08% 2.68%
- ------------------------------------------------------------------------
5 years 43.85 12.49
Annual average 7.54 2.38
- ------------------------------------------------------------------------
10 years 97.86 33.76
Annual average 7.06 2.95
- ------------------------------------------------------------------------
Life of fund 293.38 68.06
Annual average 8.79 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.
[GRAPHIC OMMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 11/30/89
Date/year Fund's class A Lehman Bros. Consumer
shares at POP Municipal Bond Index price index
11/30/89 9,524 10,000 10,000
11/30/90 9,942 10,770 10,627
11/30/91 11,178 11,875 10,945
11/30/92 12,364 13,066 11,279
11/30/93 13,849 14,514 11,581
11/30/94 12,738 13,755 11,890
11/30/95 15,024 16,355 12,200
11/30/96 15,762 17,318 12,597
11/30/97 16,816 18,561 12,828
11/30/98 17,904 20,002 13,026
11/30/99 $17,471 $19,786 $13,376
Footnote reads:
Past performance is no assurance of future results. At the end of the same
time period, a $10,000 investment in the fund's class B and class C shares
would have been valued at $17,017 and $16,865, respectively and no
contingent deferred sales charges would apply; a $10,000 investment in the
fund's class M shares would have been valued at $17,657 ($17,080 at public
offering price).
PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 11/30/99
<TABLE>
<CAPTION>
Class A Class B Class C Class M
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
Distributions (number) 12 12 5 12
- --------------------------------------------------------------------------------------
Income $0.435949 $0.378248 $0.128832 $0.408811
- --------------------------------------------------------------------------------------
Capital gains1
Long-term 0.036100 0.036100 -- 0.036100
- --------------------------------------------------------------------------------------
Short-term 0.047600 0.047600 -- 0.047600
- --------------------------------------------------------------------------------------
Total $0.519649 $0.461948 $0.128832 $0.492511
- --------------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
- --------------------------------------------------------------------------------------
11/30/98 $9.05 $9.50 $9.04 -- $9.05 $9.35
- --------------------------------------------------------------------------------------
7/26/99* -- -- -- $8.61 -- --
- --------------------------------------------------------------------------------------
11/30/99 8.32 8.73 8.31 8.32 8.33 8.61
- --------------------------------------------------------------------------------------
Current return
(end of period)
- --------------------------------------------------------------------------------------
Current dividend rate2 5.33% 5.08% 4.65% 4.38% 4.95% 4.79%
- --------------------------------------------------------------------------------------
Taxable equivalent3(a) 9.48 9.03 8.26 7.78 8.81 8.52
- --------------------------------------------------------------------------------------
Taxable equivalent3(b) 9.83 9.37 8.57 8.07 9.13 8.84
- --------------------------------------------------------------------------------------
Current 30-day SEC yield4 4.91 4.68 4.26 4.08 4.61 4.46
- --------------------------------------------------------------------------------------
Taxable equivalent3(a) 8.73 8.32 7.57 7.25 8.19 7.93
- --------------------------------------------------------------------------------------
Taxable equivalent3(b) 9.05 8.63 7.86 7.52 8.50 8.22
- --------------------------------------------------------------------------------------
</TABLE>
* Inception of class C shares.
1 Capital gains, if any, are taxable for federal and, in most cases, state
tax purposes. For some investors, investment income may also be subject to
the federal alternative minimum tax. Investment income may be subject to
state and local taxes.
2 Income portion of most recent distribution, annualized and divided by
NAV or POP at end of period.
3 Assumes (a) maximum 43.74% combined federal income tax, New York state
personal income tax rate or (b) maximum 45.77% combined federal, New York
state and New York City tax rate. Results for investors subject to lower
tax rates would not be as advantageous.
4 Based only on investment income, calculated using SEC guidelines.
TOTAL RETURN FOR PERIODS ENDED 12/31/99 (most recent calendar quarter)
<TABLE>
<CAPTION>
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>
- ---------------------------------------------------------------------------------------
1 year -3.50% -8.12% -4.04% -8.63% -4.66% -5.57% -3.81% -6.93%
- ----------------------------------------------------------------------------------------
5 years 31.84 25.59 27.69 25.70 26.13 26.13 29.56 25.32
Annual average 5.68 4.66 5.01 4.68 4.75 4.75 5.32 4.62
- ----------------------------------------------------------------------------------------
10 years 80.77 72.13 67.74 67.74 66.03 66.03 73.91 68.16
Annual average 6.10 5.58 5.31 5.31 5.20 5.20 5.69 5.33
- ----------------------------------------------------------------------------------------
Life of fund 263.77 246.45 219.59 219.59 217.65 217.65 238.91 227.92
Annual average 8.23 7.91 7.37 7.37 7.33 7.33 7.76 7.54
- ----------------------------------------------------------------------------------------
</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 class 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, preceded by the Report of independent
accountants, 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.
Report of independent accountants
For the fiscal year ended November 30, 1999
To the Trustees and Shareholders of
New York Tax Exempt Income Fund
In our opinion, the accompanying statement of assets and liabilities,
including the fund's portfolio (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial
position of New York Tax Exempt Income Fund (the "fund") at November 30,
1999, and the results of its operations, the changes in its net assets and
the financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the fund's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of investments owned at November
30, 1999 by correspondence with the custodian, provide a reasonable basis
for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 7, 2000
<TABLE>
<CAPTION>
The fund's portfolio
November 30, 1999
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 (99.2%) (a)
PRINCIPAL AMOUNT RATING (RAT) VALUE
<S> <C> <C> <C>
Guam (0.3%)
- --------------------------------------------------------------------------------------------------------------------------
$ 5,000,000 Guam, Pwr. Auth. Rev. Bonds, Ser. A, MBIA,
5 1/8s, 10/1/29 AAA $ 4,450,000
New York (93.7%)
- --------------------------------------------------------------------------------------------------------------------------
13,750,000 Long Island, Pwr. Auth. NY Elec. Syst. IFB, 7.596,
12/1/24 (acquired 5/19/98, cost $14,833,650) (RES) A-/P 12,701,563
5,480,000 Metropolitan Trans. Auth. Fac. Rev. Bonds, Ser. A,
MBIA, 6s, 7/1/12 Aaa 5,849,900
Metropolitan Trans. Auth. Rev. Bonds
5,000,000 Ser. O, MBIA, 6 3/8s, 7/1/20 Aaa 5,431,250
15,400,000 Ser. A, MBIA, 6 1/4s, 4/1/14 Aaa 16,612,750
14,495,000 Ser. A, MBIA, 6 1/4s, 4/1/13 Aaa 15,727,075
6,395,000 Ser. C, AMBAC, 5 5/8s, 7/1/27 Aaa 6,083,244
10,275,000 Ser. A, FSA, 5 1/4s, 4/1/13 Aaa 10,056,656
Metropolitan Trans. Auth. Svcs. Contract
Fac. Rev. Bonds
3,750,000 (Trans. Fac.), Ser. 3, 7 3/8s, 7/1/08 A- 4,158,712
3,000,000 (Trans. Fac.), Ser. 6, 7s, 7/1/09 A- 3,183,750
5,550,000 (Commuter Fac.), Ser. A, 6s, 7/1/24 BBB+ 5,515,313
11,020,000 (Trans. Fac.), Ser. A, 6s, 7/1/24 BBB+ 10,951,125
20,820,000 (Trans. Fac.), Ser. O, 5 3/4s, 7/1/13 A- 21,288,450
12,500,000 (Commuter Fac.), Ser. O, 5 1/2s, 7/1/17 A- 12,015,625
24,345,000 (Trans. Fac), Ser. O, 5 1/2s, 7/1/17 A- 23,401,631
21,235,000 (Dedicated Tax), Ser. A, FGIC, 4 3/4s, 4/1/28 Aaa 17,465,788
NY City, G.O. Bonds
12,325,000 Ser. B, 8 1/4s, 6/1/05 A3 14,235,375
18,675,000 Ser. B, MBIA, 6 1/2s, 8/15/11 AAA 20,635,875
21,495,000 Ser. D, 6 1/2s, 11/1/10 AAA 23,751,975
8,710,000 Ser. I, 6 1/4s, 4/15/27 A3 8,797,100
11,975,000 Ser. I, 6 1/4s, 4/15/27, Prerefunded A3 13,037,781
4,700,000 Ser. I, 6 1/4s, 4/15/17 A3 4,817,500
300,000 Ser. I, 6 1/4s, 4/15/17, Prerefunded A3 326,625
10,000,000 Ser. H, 6 1/8s, 8/1/25 A3 10,037,500
5,000,000 Ser. G, FSA, 5s, 8/1/15 Aaa 4,637,500
NY City, Indl. Dev. Agcy. Rev. Bonds
17,350,000 (Visy Paper Inc.), 7.95s, 1/1/28 B/P 18,282,563
1,500,000 (Brooklyn Navy Yard Cogen. Partners),
5.65s, 10/1/28 Baa3 1,355,625
7,000,000 (Horace Mann School), MBIA, 5s, 7/1/28 Aaa 6,055,000
NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
6,500,000 (American Airlines, Inc.), 8s, 7/1/20 Baa1 5,906,875
25,625,000 (American Airlines, Inc.), 6.9s, 8/1/24 Baa1 26,714,063
14,465,000 (Terminal One Group Assn.), 6 1/8s, 1/1/24 A 14,284,188
18,250,000 (Terminal One Group Assn.), 6s, 1/1/19 A 17,976,250
8,250,000 (British Airways), 5 1/4s, 12/1/32 A2 7,125,938
1,900,000 NY City, Indl. Dev. Agcy. VRDN (Columbia
Grammar School), 3.7s, 6/30/14 A-1 1,900,000
5,000,000 NY City, Metropolitan Trans. Auth. , Ser. A,
AMBAC, 5 1/4s, 1/1/29 Aaa 4,493,750
10,750,000 NY City, Muni. Assistance Corp. IFB, Ser. 337B,
8.706s, 7/1/08 (acquired 3/19/98,
cost $13,344,611) (RES) AA 12,255,000
14,455,000 NY City, Muni. Assistance Corp. Rev. Bonds,
6 1/4s, 7/1/08 Aa2 15,719,812
13,000,000 NY City, Muni. Wtr. & Swr. Fin. Auth. FRB, 10.95s,
6/15/11 (acquired 8/9/91, cost $13,487,029) (RES) (SEG) Aaa 18,183,750
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds
12,000,000 Ser. B, MBIA, 5 1/2s, 6/15/27 Aaa 11,295,000
12,265,000 Ser. A, 4 3/4s, 6/15/31 Aaa 10,041,969
8,150,000 Ser. B, FGIC, 5 1/4s, 6/15/29 AAA 7,375,750
17,500,000 NY City, Muni. Wtr. Fin. Auth. IFB, MBIA, 6.76s,
6/15/08 Aaa 17,784,375
10,000,000 NY City, Muni. Wtr. Fin. Auth. Rev. Bonds, Ser. A,
5 1/2s, 6/15/24 A 9,300,000
NY City, Transitional Fin. Auth. Rev. Bonds
15,000,000 Ser. C, 5 1/2s, 5/1/25 AA 13,987,500
4,485,000 Ser. A, 5 1/4s, 11/15/12 AA 4,412,119
7,100,000 (Future Tax Secd.), Ser. A, 5s, 8/15/27 AA 6,061,625
4,990,000 NY State G.O. Bonds, 6 1/8s, 6/15/14 A+ 5,376,725
NY State Dorm. Auth. Cap. Appn. Rev. Bonds
(State U.), Ser. B
48,000,000 MBIA, zero %, 5/15/09 Aaa 29,640,000
53,490,000 MBIA, zero %, 5/15/08 Aaa 34,969,088
NY State Dorm. Auth. IFB
13,000,000 (Cornell U.), 10.5s, 7/1/30 (acquired (8/9/91,
cost $13,309,032) (RES) Aa2 13,805,090
13,250,000 MBIA, 8.206s, 7/1/13 (acquired 10/22/97,
cost $15,065,810) (RES) AAA/P 14,260,312
NY State Dorm. Auth. Rev. Bonds
5,000,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa1 5,356,250
9,000,000 (State U. Edl. Fac.), Ser. A, 7 5/8s, 5/15/05 AAA 9,329,130
18,800,000 (City U. Syst.), Ser. C, 7 1/2s, 7/1/10 A- 21,246,444
4,000,000 (State U. Athletic Fac.), 7 1/4s, 7/1/21 A- 4,255,000
8,950,000 (State U. Edl. Fac.), Ser. A, FSA, 5 7/8s, 5/15/17 Aaa 9,218,500
13,200,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 A 13,827,000
6,000,000 (NY U.), Ser. A, MBIA, 5 3/4s, 7/1/27 Aaa 5,947,500
20,000,000 (Mental Hlth. Svcs. Fac.), Ser. A, 5 3/4s, 8/15/22 A 19,275,000
6,000,000 (NY U.), Ser. A, MBIA, 5 3/4s, 7/1/20 Aaa 6,015,000
45,385,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/18 Baa1 44,931,140
14,645,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/13 Baa1 14,974,513
10,000,000 (Columbia U.), Ser. A, 5 3/4s, 7/1/10 Aaa 10,500,000
15,600,000 (U. Syst. Construction), Ser. A, 5 5/8s, 7/1/16 A- 15,307,500
16,055,000 (State U. Edl. Fac.), Ser. A, 5 1/2s, 5/15/13 A 16,075,069
3,000,000 (Westchester Cnty.), 5 1/4s, 8/1/18 Aa1 2,797,500
7,500,000 (Columbia U.), 5s, 7/1/22 Aaa 6,618,750
13,750,000 (Colgate U.), MBIA, 4 3/4s, 7/1/28 Aaa 11,292,188
23,250,000 (St. John's U.), MBIA, 4 3/4s, 7/1/28 Aaa 19,094,063
10,000,000 (NY & Presbyterian Hosp.), AMBAC,
4 3/4s, 8/1/27 Aaa 8,200,000
6,000,000 (Mental Hlth. Svcs. Fac.), Ser. C, MBIA,
4 3/4s, 8/15/22 AAA 5,032,500
1,700,000 NY State Dorm. Auth. VRDN (NY Pub. Library),
Ser. B, MBIA, 3.6s, 7/1/28 VMIG1 1,700,000
8,000,000 NY State Energy Res. & Dev. Auth. Elec. Fac.
Rev. Bonds (Lilco), Ser. B, 5.3s, 11/1/23 A- 7,010,000
5,000,000 NY State Energy Res. & Dev. Auth. Fac. Rev.
Bonds (Cons. Edison Co. of NY, Inc.), Ser. A,
7 1/8s, 12/1/29 A1 5,431,250
10,000,000 NY State Energy Res. & Dev. Auth. Gas Fac. IFB
(Brooklyn Union Gas Co.), Ser. B, 8.195s, 7/1/26 A2 11,425,000
NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds
10,000,000 (Niagara Mohawk Pwr. Corp.), Ser. A, FGIC,
7.2s, 7/1/29 Aaa 11,025,000
26,000,000 (Niagara Mohawk Pwr. Corp.), Ser. A, AMBAC,
5.15s, 11/1/25 Aaa 23,075,000
6,000,000 (Lilco Project), Ser. B, 5.15s, 3/1/16 A- 5,415,000
9,460,000 NY State Energy Res. & Dev. Auth. Rev. Bonds,
AMBAC, 6.1s, 8/15/20 Aaa 9,613,725
10,675,000 NY State Env. Fac. Corp. IFB (PA 221), 7.798s,
6/15/11 (acquired 11/24/97,cost $12,803,212) (RES) AAA/P 12,182,844
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
(State Wtr. Revolving Fund)
10,000,000 8.7s, 6/15/12 (acquired 3/31/99,
cost $12,566,752) (RES) Aaa 11,437,500
550,000 Ser. E, 6 7/8s, 6/15/10 Aaa 579,563
4,500,000 Ser. E, 6 7/8s, 6/15/10, Prerefunded Aaa 4,758,750
6,870,000 Ser. B, 6.65s, 9/15/13 Aaa 7,290,788
5,265,000 Ser. A, 6.55s, 9/15/10 Aaa 5,620,387
NY State Hsg. Fin. Agcy. Rev. Bonds
4,790,000 8s, 11/1/08 A- 5,026,195
23,310,000 8s, 11/1/08, Prerefunded Aaa 24,608,367
9,440,000 (Multi-Fam. Hsg. Insd. Mtge. Program), Ser. A,
FHA Insd., 7s, 8/15/22 Aa2 9,971,000
7,500,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig.
Rev. Bonds, Ser. C, 7.3s, 3/15/21 AAA 8,034,375
NY State Local Govt. Assistance Corp. Rev. Bonds
11,900,000 Ser. A, 6 1/2s, 4/1/20 AA- 12,480,125
12,510,000 Ser. E, 6s, 4/1/14 AA- 13,032,543
6,000,000 Ser. E, AMBAC, 6s, 4/1/14 Aaa 6,279,360
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 2,203,285
11,625,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/20,
Prerefunded Aaa 12,167,074
3,750,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 A 3,808,688
22,525,000 (Presbyterian Hosp.), Ser. A, FHA Insd.,
7.7s, 2/15/25 Aaa 23,548,536
24,775,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 Aaa 26,199,563
18,500,000 (St. Luke's Hosp.), Ser. B, FHA Insd., 7.45s, 2/15/29 Aaa 18,998,575
6,625,000 (Methodist Hosp. & Nursing Home), Ser. A,
FHA Insd., 6.7s, 8/15/23 AA 7,121,875
12,325,000 Ser. A, AMBAC, FHA Insd., 6 1/2s, 8/15/29 Aaa 13,542,094
6,260,000 NY State Mtge. Agcy. Rev. Bonds (Homeowner Mtge.),
Ser. 50, 6 5/8s, 4/1/25 Aa2 6,424,325
4,250,000 NY State Muni. Bond Bk. Agcy. Special Program
Rev. Bonds (Rochester), Ser. A, 6 3/4s, 3/15/11 AAA 4,510,313
4,000,000 NY State Thruway Auth. Rev. Bonds, 6s, 4/1/12 A- 4,140,000
NY State Thruway Auth. Svcs. Contract Rev. Bonds
13,300,000 (Local Hwy. & Bridge), 7 1/4s, 1/1/10 AAA 13,982,556
23,500,000 (Hwy. & Brdg.), 6s, 4/1/11 A- 24,498,750
NY State Urban Dev. Corp. Rev. Bonds
8,000,000 IFB, 9.1s, 1/1/11 (acquired 9/1/98,
cost $10,625,557) (RES) Aaa 9,720,000
9,000,000 (Onondaga Cnty. Convention), 7 7/8s, 1/1/20 A- 9,520,560
33,250,000 (Correctional Fac.), Ser. 2, 7 1/2s, 1/1/18 Baa1 35,043,173
5,250,000 (State Fac.), 5 3/4s, 4/1/12 A- 5,387,813
5,830,000 (Correctional Fac.), Ser. 7, 5.7s, 1/1/16 A- 5,735,263
11,225,000 (State Fac.), 5.7s, 4/1/10 A- 11,561,750
19,100,000 5.6s, 4/1/15 A- 18,861,250
7,710,000 (Correctional Fac.), Ser. A, 5 1/2s, 1/1/09 A- 7,844,925
8,600,000 Port Auth. NY & NJ Cons. Rev. IFB, 9.963s, 8/1/26
(acquired 8/29/91, cost $8,669,307) (RES) AA- 9,331,000
Port Auth. NY & NJ Rev. Bonds (Kennedy Intl. Arpt.),
6,000,000 6 3/4s, 10/1/19 BB/P 6,165,000
1,000,000 6 3/4s, 10/1/11 BB/P 1,055,000
7,750,000 St. Lawrence Cnty., Indl. Dev. Rev. Bonds
(St. Lawrence U.), Ser. A, MBIA, 5s, 7/1/28 AAA 6,703,750
4,220,000 Suffolk Cnty. Judicial Fac. Agcy. Svc. Agreement
Rev. Bonds (John P. Cohalan Complex),
AMBAC, 5s, 4/15/16 AAA 3,892,950
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-/P 3,985,000
4,000,000 7.2s, 11/1/19 BB-/P 3,985,000
100,000 Suffolk Cnty., Indl. Dev. Agcy. VRDN (Cold Spring
Harbor Lab), 3.75s, 7/1/23 VMIG1 100,000
Triborough Bridge & Tunnel Auth. Gen. Purpose
Rev. Bonds
38,750,000 (Convention Ctr.), Ser. E, 7 1/4s, 1/1/10 A- 43,200,050
17,700,000 Ser. Y, 6s, 1/1/12 Aa3 18,715,980
Triborough Bridge & Tunnel Auth. Rev. Bonds
11,100,000 IFB, 6.95s, 1/1/12 (acquired 10/24/97,
cost $12,099,176) (RES) Aa3 11,557,875
18,850,000 Ser. X, 6 5/8s, 1/1/12 Aa3 20,870,909
14,000,000 (Convention Ctr.), Ser. E, 6s, 1/1/11 A- 14,805,000
18,000,000 Triborough Bridge & Tunnel Auth. Special
Oblig. IFB, 8.463s, 1/1/12 (acquired 7/10/92,
cost 18,112,814) (RES) Aaa 19,237,500
--------------
1,472,997,631
Puerto Rico (5.2%)
- --------------------------------------------------------------------------------------------------------------------------
Comnwlth. of PR, G.O. Bonds
15,750,000 MBIA, 6 1/2s, 7/1/23 AAA 17,325,000
3,915,000 FSA, 6 1/2s, 7/1/13 AAA 4,384,800
11,110,000 FSA, 6 1/2s, 7/1/12 AAA 12,526,525
Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds
3,000,000 Ser. V, 6 5/8s, 7/1/12 A 3,172,500
7,000,000 Ser. Z, FSA, 6 1/4s, 7/1/16 Aaa 7,542,500
10,000,000 PR Elec. Pwr. Auth. IFB, MBIA, 10.558s, 7/1/07
(acquired 10/30/97, cost $13,157,299) (RES) Baa1 12,737,500
10,315,000 PR Elec. Pwr. Auth. Rev. Bonds, Ser. R, 6 1/4s, 7/1/17 Baa1 10,946,794
11,350,000 PR Tel. Auth. IFB,7.899s, 1/1/20 (acquired 9/25/92,
cost $10,981,125) (RES) A+ 12,414,063
--------------
81,049,682
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,533,460,643) (b) $1,558,497,313
- --------------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $1,571,850,924.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to be
the most recent ratings available at November 30, 1999 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
November 30, 1999. Securities rated by Putnam are indicated by "/P"
and are not publicly rated. Ratings are not covered by the Report of
independent accountants.
(b) The aggregate identified cost on a tax basis is $1,534,796,592,
resulting in gross unrealized appreciation and depreciation of
$57,671,229 and $33,970,508, respectively, or net unrealized
appreciation of $23,700,721.
(RES) Restricted, excluding 144A securities, as to public resale.
The total market value of restricted securities held at November 30,
1999 was $169,823,997 or 10.8% of net assets.
(SEG) A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts
at November 30, 1999.
The rates shown on IFB, which are securities paying interest rates
that vary inversely to changes in the market interest rates, VRDN's
and FRB's are the current interest rates at November 30, 1999.
The fund had the following industry group concentrations greater
than 10% at November 30, 1999 (as a percentage of net assets):
Transportation 30.6%
Education 20.9
Health care 10.4
The fund had the following insurance concentration greater than
10% at November 30, 1999 (as a percentage of net assets):
MBIA 17.1%
- -------------------------------------------------------------------------------
Futures Contracts Outstanding at November 30, 1999
Unrealized
Aggregate Face Expiration Appreciation/
Total Value Value Date (Depreciation)
- -------------------------------------------------------------------------------
Municipal Bond
Index (Long) $ 5,333,063 $ 5,336,403 Mar-00 $ (3,340)
Municipal Bond
Index (Long) 11,220,000 11,120,249 Dec-99 99,751
- -------------------------------------------------------------------------------
$96,411
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
November 30, 1999
<S> <C>
Assets
- -----------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $1,533,460,643) (Note 1) $1,558,497,313
- -----------------------------------------------------------------------------------------------
Cash 1,198,540
- -----------------------------------------------------------------------------------------------
Interest and other receivables 29,095,687
- -----------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 489,662
- -----------------------------------------------------------------------------------------------
Receivable for variation margin 65,407
- -----------------------------------------------------------------------------------------------
Total assets 1,589,346,609
Liabilities
- -----------------------------------------------------------------------------------------------
Distributions payable to shareholders 3,234,094
- -----------------------------------------------------------------------------------------------
Payable for securities purchased 8,049,772
- -----------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 3,464,402
- -----------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 2,047,301
- -----------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 17,925
- -----------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 30,899
- -----------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 3,125
- -----------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 603,214
- -----------------------------------------------------------------------------------------------
Other accrued expenses 44,953
- -----------------------------------------------------------------------------------------------
Total liabilities 17,495,685
- -----------------------------------------------------------------------------------------------
Net assets $1,571,850,924
Represented by
- -----------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $1,572,678,956
- -----------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 2,713,116
- -----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (28,674,229)
- -----------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 25,133,081
- -----------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $1,571,850,924
Computation of net asset value and offering price
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,374,039,957 divided by 165,076,386 shares) $8.32
- -----------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $8.32)* $8.73
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($195,618,246 divided by 23,546,850 shares)+ $8.31
- -----------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($356,182 divided by 42,785 shares)+ $8.32
- -----------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($1,836,539 divided by 220,604 shares) $8.33
- -----------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $8.33)** $8.61
- -----------------------------------------------------------------------------------------------
* 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
Year ended November 30, 1999
<S> <C>
Tax exempt interest income: $100,967,801
- -----------------------------------------------------------------------------------------------
Expenses:
- -----------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 8,685,061
- -----------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 1,601,075
- -----------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 30,034
- -----------------------------------------------------------------------------------------------
Administrative services (Note 2) 18,374
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 3,025,881
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 1,849,945
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 628
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 11,406
- -----------------------------------------------------------------------------------------------
Reports to shareholders 42,603
- -----------------------------------------------------------------------------------------------
Registration fees 75
- -----------------------------------------------------------------------------------------------
Auditing 66,727
- -----------------------------------------------------------------------------------------------
Legal 49,636
- -----------------------------------------------------------------------------------------------
Postage 89,282
- -----------------------------------------------------------------------------------------------
Other 288,757
- -----------------------------------------------------------------------------------------------
Total expenses 15,759,484
- -----------------------------------------------------------------------------------------------
Expense reduction (Note 2) (289,301)
- -----------------------------------------------------------------------------------------------
Net expenses 15,470,183
- -----------------------------------------------------------------------------------------------
Net investment income 85,497,618
- -----------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (2,295,461)
- -----------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 3,411,717
- -----------------------------------------------------------------------------------------------
Net unrealized depreciation of investments and
futures contracts during the year (129,945,929)
- -----------------------------------------------------------------------------------------------
Net loss on investments (128,829,673)
- -----------------------------------------------------------------------------------------------
Net decrease in net assets resulting from operations $ (43,332,055)
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended November 30
-------------------------------
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Decrease in net assets
- ---------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income $ 85,497,618 $ 89,692,508
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments 1,116,256 7,267,372
- ---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments (129,945,929) 22,295,841
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (43,332,055) 119,255,721
- ---------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ---------------------------------------------------------------------------------------------------------------
From net investment income
Class A (75,849,480) (80,596,474)
- ---------------------------------------------------------------------------------------------------------------
Class B (9,468,710) (9,492,244)
- ---------------------------------------------------------------------------------------------------------------
Class C (2,809) --
- ---------------------------------------------------------------------------------------------------------------
Class M (107,145) (99,145)
- ---------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (14,917,571) (19,600,027)
- ---------------------------------------------------------------------------------------------------------------
Class B (2,141,288) (2,600,474)
- ---------------------------------------------------------------------------------------------------------------
Class M (22,120) (21,285)
- ---------------------------------------------------------------------------------------------------------------
Decrease from capital share transactions (Note 4) (135,867,274) (108,670,874)
- ---------------------------------------------------------------------------------------------------------------
Total decrease in net assets (281,708,452) (101,824,802)
Net assets
- ---------------------------------------------------------------------------------------------------------------
Beginning of year 1,853,559,376 1,955,384,178
- ---------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $2,713,116 and $2,295,836 respectively) $1,571,850,924 $1,853,559,376
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended November 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.05 $9.02 $8.91 $8.97 $8.05
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .44 .43 .46 .48 .49
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.65) .13 .12 (.06) .92
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.21) .56 .58 .42 1.41
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.44) (.43) (.47) (.48) (.49)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.08) (.10) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.52) (.53) (.47) (.48) (.49)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.32 $9.05 $9.02 $8.91 $8.97
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) (2.42) 6.47 6.69 4.92 17.95
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,374,040 $1,620,108 $1,725,773 $1,873,649 $2,013,022
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .83 .83 .79 .81 .78
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.02 4.79 5.19 5.47 5.63
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 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
- ------------------------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended November 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.04 $9.00 $8.90 $8.95 $8.02
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .38 .37 .40 .42 .43
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.65) .14 .11 (.05) .93
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.27) .51 .51 .37 1.36
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.38) (.37) (.41) (.42) (.43)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.08) (.10) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.46) (.47) (.41) (.42) (.43)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.31 $9.04 $9.00 $8.90 $8.95
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) (3.06) 5.91 5.89 4.35 17.26
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $195,618 $231,057 $227,747 $227,405 $215,614
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.48 1.48 1.44 1.46 1.43
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.37 4.12 4.53 4.81 4.95
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 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 C
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share July 26, 1999+
operating performance to Nov. 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value,
beginning of period $8.61
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .13
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.16)
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.32
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) (1.87)*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $356,182
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) .58*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.59*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 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>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------------------------
For the period
Per-share Apr. 10, 1995+
operating performance Year ended November 30 to Nov. 30
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.05 $9.02 $8.91 $8.97 $8.79
- ------------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income .41 .41 .43 .45 .26(a)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.64) .13 .12 (.06) .21
- ------------------------------------------------------------------------------------------------------------------------------------
Total from
investment operations (.23) .54 .55 .39 .47
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------------------------
From net
investment income (.41) (.41) (.44) (.45) (.29)
- ------------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.08) (.10) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (.49) (.51) (.44) (.45) (.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.33 $9.05 $9.02 $8.91 $8.97
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(b) (2.60) 6.15 6.37 4.59 5.44*
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,837 $2,394 $1,865 $1,266 $588
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c) 1.13 1.13 1.09 1.11 .65*
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.72 4.47 4.87 5.17 3.30*
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 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
November 30, 1999
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 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 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. The fund
began offering class C shares on July 26, 1999. 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 each class 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 maintain an asset coverage ratio of at least 300% and
borrowings must not exceed prospectus limitations. For the year ended
November 30, 1999, 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
taxable 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.
At November 30, 1999, the fund had a capital loss carryover of
approximately $15,745,000, available to offset future net capital gain, if
any, which will expire on November 30, 2007.
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. These differences include temporary and
permanent differences of losses on wash sale transactions, dividends
payable, unrealized gains and losses on certain futures contracts and
unrealized straddle loss deferrals. Reclassifications are made to the
fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations. For the year ended November 30, 1999, the fund reclassified
$347,806 to increase undistributed net investment income and $727,654 to
decrease paid-in-capital, with an decrease to accumulated net realized
losses of $379,848. The calculation of net investment income per share in
the financial highlights table excludes these adjustments.
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 fees, 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 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 the next $5 billion, 0.375% of the next
$5 billion, 0.355% of the next $5 billion, 0.34% of the next $5 billion,
0.33% thereafter.
On June 4, 1999, the Trustees approved a management fee schedule that
became effective on July 1, 1999, based upon the lesser of (i) an annual
rate of 0.50% of the average net asset value of the fund or (ii) the
initial tiers mentioned above.
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 year ended November 30, 1999, fund expenses were reduced by
$289,301 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 $1,615
has been allocated to the fund, and an additional fee for each Trustee's
meeting attended. 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
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 a 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 Mutual Funds Corp., 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 Mutual Funds Corp. 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 at 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 year ended November 30, 1999, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $66,218 and $369 from the sale of
class A and class M shares, respectively and received $366,966 and $210 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 that were purchased without an
initial sales charge as part of an investment of $1 million or more. For
the year ended November 30, 1999, Putnam Mutual Funds Corp., acting as
underwriter received $3,396 on class A redemptions.
Note 3
Purchases and sales of securities
During the year ended November 30, 1999, cost of purchases and proceeds
from sales of investment securities other than short-term investments
aggregated $225,971,849 and $370,594,677, respectively. There were no
purchases and sales of U.S. government obligations.
Note 4
Capital shares
At November 30, 1999, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
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)
- -----------------------------------------------------------------------------
Year ended November 30, 1998
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 6,075,882 $ 54,846,447
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 6,620,568 59,746,462
- -----------------------------------------------------------------------------
12,696,450 114,592,909
Shares
repurchased (25,093,936) (226,291,535)
- -----------------------------------------------------------------------------
Net decrease (12,397,486) $(111,698,626)
- -----------------------------------------------------------------------------
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)
- -----------------------------------------------------------------------------
Year ended November 30, 1998
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 3,362,245 $30,305,679
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 905,213 8,153,712
- -----------------------------------------------------------------------------
4,267,458 38,459,391
Shares
repurchased (3,996,392) (35,954,621)
- -----------------------------------------------------------------------------
Net increase 271,066 $ 2,504,770
- -----------------------------------------------------------------------------
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
- -----------------------------------------------------------------------------
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)
- -----------------------------------------------------------------------------
Year ended November 30, 1998
- -----------------------------------------------------------------------------
Class M Shares Amount
- -----------------------------------------------------------------------------
Shares sold 70,227 $636,484
- -----------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 12,577 113,496
- -----------------------------------------------------------------------------
82,804 749,980
Shares
repurchased (25,163) (226,998)
- -----------------------------------------------------------------------------
Net increase 57,641 $522,982
- -----------------------------------------------------------------------------
Federal tax information
(Unaudited)
The fund has designated 100% of dividends paid from net investment income
during the fiscal year as tax exempt for Federal income tax purposes.
The Form 1099 you receive in January 2000 will show the tax status of all
distributions paid to your account in calendar 1999.
Our commitment to quality service
* CHOOSE AWARD-WINNING SERVICE
Putnam Investments has won the DALBAR Service Award 8 times in the past 9
years. In 1997 and 1998, Putnam was the only company to win all three
DALBAR awards: for service to investors, to financial advisors, and to
variable annuity contract holders.*
* HELP YOUR INVESTMENTS GROW
Set up a systematic program for investing with as little as $25 a month
from a Putnam money market fund or from your checking or savings account.+
* SWITCH FUNDS EASILY
Within the same class of shares, you can move money from one account to
another 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 the original
cost of the shares.
For details about any of these or other services, contact your financial
advisor or call the toll-free number shown below and speak with a helpful
Putnam representative. To learn more about Putnam, visit our Web site.
www.putnaminv.com
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
* DALBAR, Inc., an independent research firm, presents the awards to
financial services firms that provide consistently excellent service.
+ Regular investing, of course, does not guarantee a profit or protect
against a loss in a declining market.
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 [DBL. DAGGER]
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 Opportunities Fund [DBL. DAGGER]
OTC & Emerging Growth Fund
Research Fund
Tax Smart Equity Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Retirement 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
Growth and Income Fund II
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 Diversified Income Trust 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 Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
John A. Hill, Vice 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
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
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
For account balances, economic forecasts, and the latest on Putnam funds,
Visit www.putnaminv.com
- --------------------
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