Putnam
New York
Tax Exempt
Income Fund
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
11-30-00
[SCALE LOGO OMITTED]
FROM THE TRUSTEES
[GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM III]
Dear Shareholder:
Putnam New York Tax Exempt Income Fund's recently concluded fiscal year
coincided with one of the more anxiety-driven times in recent memory.
Uncertainties generated by the Federal Reserve Board's interest-rate
policy, the slowing pace of the economy, and the dramatic aftermath of
the presidential election have all contributed to the general sense of
unease.
Typically, in such an environment, investors are drawn to the relative
security of fixed-income investments. In this case, they have also been
increasingly drawn to the tax advantages of municipal bonds, helping to
boost demand in the face of a diminishing supply. Consequently, your
fund, under some pressure during the first half of its 2000 fiscal year,
completed the year with solid performance.
Seasoned investors realize that uncertainties such as we have recently
experienced are usually transitory. Your fund's manager, David Hamlin,
successfully positioned the fund to benefit as the market shifted into a
more favorable climate. We are confident that his strategies will
enable it to take full advantages of the opportunities available in
fiscal 2001.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
January 17, 2001
REPORT FROM FUND MANAGEMENT
David E. Hamlin
For the 12 months ended November 30, 2000, shareholders of Putnam New
York Tax Exempt Income Fund may have felt as if they just got off a
roller coaster -- a little dazed but pleased they came along for the
ride. In the early months of the fiscal year, municipal bonds, along
with most fixed-income investments, were overshadowed by the soaring
stock market. However, when the Nasdaq plunged in March and set off a
long string of declines in other equity markets, bonds suddenly were the
place to be. As the year wore on, questions about the direction of
interest rates and the U.S. presidential election fueled greater
uncertainty. Attracted by the relative safety and predictability of
fixed-income investments, investors began to favor bonds, pushing their
prices higher. Municipal bonds enjoyed an additional benefit: the
strength of the U.S. economy has been generating greater personal
wealth, which investors are eager to shelter from taxes. The fund's
performance reflects the positive impact of these developments.
Total return for 12 months ended 11/30/00
Class A Class B Class C Class M
NAV POP NAV CDSC NAV CDSC NAV POP
-----------------------------------------------------------------------
8.07% 3.00% 7.37% 2.37% 7.33% 6.33% 7.74% 4.24%
-----------------------------------------------------------------------
Past performance is not indicative of future results. Performance
information for longer periods and explanation of performance
calculation methods begin on page 6.
* MUNICIPAL BONDS RALLIED WHILE CREDIT YIELD SPREADS WIDENED
During the past year, investors have been reminded of one of the basic
principles of investing: when the financial markets turn around, they
move so fast that those who aren't already positioned in the recovering
sector are probably too late to benefit. After the stock market's rally
came to a sudden halt, the municipal bond market, which had begun to
anticipate the beginning of an economic slowdown, delivered better
performance to investors who had maintained their positions.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Transportation 23.6%
Education 22.3%
Utilities 14.8%
Housing 10.0%
Health care 6.5%
Footnote reads:
*Based on net assets as of 11/30/00. Holdings will vary over time.
For most of the second half of your fund's fiscal year, we've seen
positive total returns as interest rates in the municipal market peaked
and fell. In tandem with declining interest rates and strong demand for
high quality bonds, the AAA/Aaa sector of the municipal market has
rallied the most. With 43% of its total assets invested in AAA/Aaa-rated
or insured New York municipal bonds on November 30, 2000, your fund
benefited from this trend.
* ESSENTIAL SERVICE SECTORS OFFER PROMISE
Given recent evidence that the economy is slowing a bit, we have sought
to improve the diversification of the fund's assets across the essential
service sectors. We expect these industries to weather either a
potential recession or soft landing better than the retail or real
estate sectors, which are more dependent on strong economic growth.
After more than four years of underperformance, the hospital sector
appears poised for a turnaround. Following the Balanced Budget Act of
1997, which mandated lower Medicare reimbursements, the industry endured
massive restructurings and cost-cutting programs, which helped
strengthen hospitals in the long run. Today, hospitals are benefiting
from larger reimbursements from Congress just as they are becoming more
profitable.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
Aaa/AAA -- 43.7%
Aa/AA -- 9.9%
A -- 29.6%
Baa/BBB -- 13.1%
Ba/BB -- 2.5%
B -- 1.2%
Footnote reads:
*As a percentage of market value as of 11/30/00. 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.
"When the Nasdaq plunged in March and set off a string of declines in
the equity markets, bonds suddenly were the place to be."
-- David E. Hamlin, portfolio manager
The fund's recent investment in Westchester County New York Healthcare
Corporation is well positioned to benefit from improving fundamentals.
These bonds are rated A3 by Moody's (lower quality but still investment
grade). While affluent Westchester County is not directly responsible
for this hospital, its commitment to quality health care provides
additional benefits to the facility. We also added New York Dormitory
Authority revenue bonds for Mount Sinai Health, which are rated Baa1
(Moody's) and BBB+ (Standard & Poor's). While these holdings, and others
discussed in this report, were viewed favorably at the end of the
period, they are subject to review and adjustment in accordance with the
fund's investment strategy, and may vary in the future.
Education also offers attractive opportunities. We purchased bonds
issued by the New York City Industrial Development Authority for
Brooklyn Polytechnic University. They are being used to finance campus
improvements and carry a 6.20% yield. This strong regional technical
university has a sizable endowment, resulting in a Baa3 and BBB rating
by Moody's and Standard and Poor's for the bonds. We also added
University of Puerto Rico bonds, which are MBIA insured.
We found additional opportunities in Puerto Rico within the utility
sector. For example, we bought AES Cogen Facilities bonds issued by the
Puerto Rico Infrastructure Finance Authority (IFA), which will finance a
state-of-the-art coal-fired electricity plant. The majority of the
country's power plants are petroleum based, and this facility will help
the country reduce its dependence on imported oil. We also purchased IFA
bonds that are being used to improve Puerto Rico's water and sewer
system. The bonds, in effect, have an AAA rating, since they are backed
by U.S. Treasury securities. Interestingly, the U.S. Treasury securities
were purchased with proceeds raised during the privatization of Puerto
Rico's telephone system.
* SOUND FISCAL MANAGEMENT REDUCED BOND ISSUANCE
Like much of the nation, the Empire State is enjoying strong economic
growth that has produced sizable budget surpluses. In fact, New York
City just recorded 20 consecutive years of operating surpluses, despite
a heavy debt burden. Its surplus for fiscal 2000 was the largest in its
recorded history. Governor Pataki and the state legislature approved the
Debt Reform Act of 2000 with broad bipartisan effort. The passage of
this bill, which places restrictions on Albany's ability to issue new
debt, boosts the state's political credibility, because it preserves the
status quo debt burden level and minimizes the risk of any increase in
the state's debt. Given these positive developments, both New York City
and New York state bonds received credit upgrades from the rating
agencies, positively affecting the prices of bonds held in your fund's
portfolio.
In contrast to 1999, the level of new issuance in New York has been
lighter this year. Higher interest rates, particularly in the first half
of 2000, effectively curtailed the number of municipal refinancings.
However, the distribution of proceeds from the tobacco industry's
settlement has brought a whole new class of municipal securities that
enable counties to securitize their prospective receipts. These "tobacco
bonds" have received investment grade ratings from the major rating
agencies -- typically A to AA.
We chose not to participate in the initial offering of these bonds for
two reasons. First of all, we do not believe their current rating
accurately reflects their credit risk and have assigned them a lower
rating internally. A large part of the bonds' credit ratings are
predicated on the future growth of demand for cigarettes, and we were
not comfortable with this outlook at the time of the initial offering.
Secondly, issuance in the sector was heavy, and we did not think there
was enough market interest to support the initial offering prices. These
bonds have underperformed, confirming our reservations.
* MARKET FACTORS DICTATED NEUTRAL BIAS
The Fed did not raise interest rates in November or December and, in a
surprise move on January 3, it lowered short-term interest rates from
6.5% to 6%. There is evidence that the economy is slowing and the
desired soft landing is becoming more of a reality. However, we are not
willing to take on incremental risk at this time, and until more visible
trends present themselves, our decision-making will reflect a neutral
bias.
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 11/30/00, 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 York
City personal income tax consistent with preservation of capital.
TOTAL RETURN FOR PERIODS ENDED 11/30/00
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
------------------------------------------------------------------------------
1 year 8.07% 3.00% 7.37% 2.37% 7.33% 6.33% 7.74% 4.24%
------------------------------------------------------------------------------
5 years 25.69 19.68 21.79 19.89 20.37 20.37 23.93 19.92
Annual average 4.68 3.66 4.02 3.69 3.78 3.78 4.38 3.70
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10 years 89.95 80.83 76.66 76.66 74.69 74.69 83.33 77.31
Annual average 6.63 6.10 5.86 5.86 5.74 5.74 6.25 5.89
------------------------------------------------------------------------------
Annual average
(life of fund) 8.31 8.01 7.47 7.47 7.43 7.43 7.86 7.65
------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 11/30/00
Lehman Brothers Consumer
Municipal Bond Index price index
------------------------------------------------------------------------
1 year 8.18% 3.44%
------------------------------------------------------------------------
5 years 30.88 13.26
Annual average 5.53 2.52
------------------------------------------------------------------------
10 years 98.76 30.19
Annual average 7.11 2.67
------------------------------------------------------------------------
Annual average
(life of fund) 8.76 3.26
------------------------------------------------------------------------
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-year, 5- and
10-year, if 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 OMITTED: worm chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 11/30/90
Lehman Brothers
Fund's class A Municipal Bond Consumer price
Date shares at POP Index index
11/30/90 9,425 10,000 10,000
11/30/91 10,619 11,026 10,299
11/30/92 11,893 12,132 10,613
11/30/93 13,361 13,477 10,897
11/30/94 12,517 12,772 11,188
11/30/95 14,468 15,186 11,495
11/30/96 14,959 16,080 11,861
11/30/97 16,122 17,234 12,085
11/30/98 17,222 18,573 12,272
11/30/99 16,511 18,372 12,586
11/30/00 $18,083 $19,876 $13,019
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 $17,666 and $17,469, 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 $18,333 ($17,731
at public offering price). See first page of performance section for
performance calculation method.
<TABLE>
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PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 11/30/00
Class A Class B Class C Class M
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<S> <C> <C> <C> <C>
Distributions (number) 12 12 12 12
--------------------------------------------------------------------------------------------
Income 1 $0.44997 $0.39470 $0.38195 $0.424518
--------------------------------------------------------------------------------------------
Capital gains 1 -- -- -- --
--------------------------------------------------------------------------------------------
Total $0.449979 $0.394702 $0.381951 $0.424518
--------------------------------------------------------------------------------------------
Share value: NAV POP NAV NAV NAV POP
--------------------------------------------------------------------------------------------
11/30/99 $8.32 $8.73 $8.31 $8.32 $8.33 $8.61
--------------------------------------------------------------------------------------------
11/30/00 8.52 8.94 8.51 8.53 8.53 8.82
--------------------------------------------------------------------------------------------
Current return (end of period)
--------------------------------------------------------------------------------------------
Current dividend rate 2 5.15% 4.90% 4.49% 4.34% 4.84% 4.68%
--------------------------------------------------------------------------------------------
Taxable equivalent (a) 3 9.15 8.71 7.98 7.71 8.60 8.32
--------------------------------------------------------------------------------------------
Taxable equivalent (b) 3 9.54 9.08 8.32 8.04 8.97 8.67
--------------------------------------------------------------------------------------------
Current 30-day SEC yield 4 4.70 4.47 4.04 3.89 4.40 4.25
--------------------------------------------------------------------------------------------
Taxable equivalent (a) 3 8.35 7.95 7.18 6.91 7.82 7.55
--------------------------------------------------------------------------------------------
Taxable equivalent (b) 3 8.71 8.28 7.48 7.21 8.15 7.87
--------------------------------------------------------------------------------------------
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, excluding capital gains,
annualized and divided by NAV or POP at end of period.
3 Assumes (a) maximum 43.74% combined federal income tax and New York
state personal income tax rates or (b) maximum 46.02% combined federal,
New York state, and New York City tax rates. Results for investors
subject to lower tax rates would not be as advantageous.
4 Based only on investment income, calculated using SEC guidelines
</TABLE>
TOTAL RETURN FOR PERIODS ENDED 12/31/00 (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
------------------------------------------------------------------------------
1 year 12.43% 7.08% 11.58% 6.58% 11.53% 10.53% 12.09% 8.40%
------------------------------------------------------------------------------
5 years 28.33 22.23 24.21 22.27 22.85 22.85 26.39 22.33
Annual average 5.11 4.10 4.43 4.10 4.20 4.20 4.79 4.11
------------------------------------------------------------------------------
10 years 95.54 86.34 81.75 81.75 79.69 79.69 88.44 82.23
Annual average 6.94 6.42 6.16 6.16 6.04 6.04 6.54 6.18
------------------------------------------------------------------------------
Annual average
(life of fund) 8.47 8.16 7.61 7.61 7.57 7.57 8.01 7.80
------------------------------------------------------------------------------
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 assumes reinvestment of all
distributions and interest payments and does not take into account
brokerage fees or taxes. Securities in the fund do not match those in
the indexes and performance of the fund 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
The Board of Trustees and Shareholders
Putnam New York Tax Exempt Income Fund
We have audited the accompanying statements of assets and liabilities of
Putnam New York Tax Exempt Income Fund, including the fund's portfolio,
as of November 30, 2000, and the related statement of operations for the
year then ended, statement of changes in net assets for the year then
ended and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The
statement of changes in net assets for the year ended November 30, 1999
and the financial highlights for each of the years or periods in the
four-year period ended November 30, 1999 were audited by other auditors
whose report dated January 7, 2000 expressed an unqualified opinion on
that financial statement and those financial highlights.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform our audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as
of November 30, 2000 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Putnam New York Tax Exempt Putnam New York Tax
Exempt Income Fund as of November 30, 2000, the results of its
operations, changes in its net assets and financial highlights for the
year then ended, in conformity with accounting principles generally
accepted in the United States of America.
KPMG LLP
Boston, Massachusetts
January 5, 2001
<TABLE>
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THE FUND'S PORTFOLIO
November 30, 2000
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 (99.7%) (a)
PRINCIPAL AMOUNT RATING (RAT) VALUE
<S> <C> <C> <C>
New York (92.8%)
-------------------------------------------------------------------------------------------------------------------
$ 8,500,000 Dutchess Cnty., Indl. Dev. Agcy. Rev. Bonds
(Bard College Civic Fac.), 5 3/4s, 8/1/30 A3 $ 8,478,750
Erie Cnty.,
2,470,000 Ser. C, AMBAC, 5 1/2s, 7/1/29 Aaa 2,451,475
4,160,000 Ser. B, AMBAC, 5 3/8s, 7/1/20 Aaa 4,123,600
13,750,000 Long Island, Pwr. Auth. NY Elec. Syst. IFB, 7 1/4s,
12/1/24 (acquired 5/19/98, cost $14,833,650) (RES) A-/P 13,853,125
7,000,000 Metropolitan Trans. Auth., FRB, 7.8s, 4/1/25
(acquired 2/11/00, cost $6,684,580) (RES) A3 7,455,000
Metropolitan Trans. Auth. Rev. Bonds
15,400,000 Ser. A, MBIA, 6 1/4s, 4/1/14 Aaa 17,171,000
8,245,000 Ser. A, MBIA, 6 1/4s, 4/1/13 Aaa 9,234,400
5,550,000 (Commuter Facs.), Ser. A, 6s, 7/1/24 BBB+ 5,716,500
5,480,000 Ser. A, MBIA, 6s, 7/1/12 Aaa 6,007,450
11,020,000 (Trans. Facs.), Ser. A, 6s, 7/1/24 BBB+ 11,350,600
6,395,000 Ser. C, AMBAC, 5 5/8s, 7/1/27 Aaa 6,434,969
5,000,000 Ser. A, AMBAC, 5 1/4s, 1/1/29 AAA 4,768,750
10,275,000 Ser. A, FSA, 5 1/4s, 4/1/13 Aaa 10,441,969
21,235,000 (Dedicated Tax Fund), Ser. A, FGIC,
4 3/4s, 4/1/28 Aaa 18,686,800
Metropolitan Trans. Auth. Svcs. Contract Fac.
Rev. Bonds
3,750,000 (Trans. Fac.), Ser. 3, 7 3/8s, 7/1/08 Baa 4,195,313
3,000,000 (Trans. Fac.), Ser. 6, 7s, 7/1/09 AAA 3,105,300
20,820,000 (Trans. Fac.), Ser. O, 5 3/4s, 7/1/13 A 22,043,175
12,500,000 (Commuter Fac.), Ser. O, 5 1/2s, 7/1/17 A 12,750,000
24,345,000 (Trans. Fac), Ser. O, 5 1/2s, 7/1/17 A 24,831,900
Nassau Cnty., G.O. Bonds, Ser. E, FSA
1,125,000 6s, 3/1/20 AAA 1,175,625
2,790,000 6s, 3/1/19 AAA 2,919,038
2,735,000 6s, 3/1/18 AAA 2,871,750
3,465,000 6s, 3/1/16 AAA 3,655,575
2,580,000 5.9s, 3/1/15 AAA 2,705,775
6,500,000 NY City, City Transitional Fin. Auth. Rev. Bonds,
Ser. A, 5 3/4s, 8/15/24 Aa 6,621,875
NY City, G.O. Bonds
12,325,000 Ser. B, 8 1/4s, 6/1/05 A 14,096,719
18,675,000 Ser. B, MBIA, 6 1/2s, 8/15/11 AAA 21,242,813
21,495,000 Ser. D, 6 1/2s, 11/1/10 AAA 24,396,825
8,710,000 Ser. I, 6 1/4s, 4/15/27 A2 9,123,725
4,700,000 Ser. I, 6 1/4s, 4/15/17 A2 4,982,000
300,000 Ser. I, 6 1/4s, 4/15/17, Prerefunded A3 330,000
10,000,000 Ser. H, 6 1/8s, 8/1/25 A2 10,412,500
NY City, Indl. Dev. Agcy. Rev. Bonds
17,350,000 (Visy Paper Inc.), 7.95s, 1/1/28 B/P 17,978,938
19,000,000 (Brooklyn Polytech U. Project J), 6 1/8s, 11/1/30 Baa3 19,023,750
1,500,000 (Brooklyn Navy Yard Cogen. Partners),
5.65s, 10/1/28 Baa3 1,381,875
7,000,000 (Horace Mann School), MBIA, 5s, 7/1/28 Aaa 6,431,250
NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
6,500,000 (American Airlines, Inc.), 8s, 7/1/20 Baa1 5,841,875
29,625,000 (American Airlines, Inc.), 6.9s, 8/1/24 Baa1 30,698,906
14,465,000 (Terminal One Group Assn.), 6 1/8s, 1/1/24 A3 14,645,813
18,250,000 (Terminal One Group Assn.), 6s, 1/1/19 A3 18,432,500
8,250,000 (British Airways), 5 1/4s, 12/1/32 A2 7,167,188
10,750,000 NY City, Muni. Assistance Corp. IFB, Ser. 337B,
7.544s, 7/1/08 (acquired 3/19/98,
cost $13,344,611) (RES) AA/P 12,617,813
13,000,000 NY City, Muni. Wtr. & Swr. Fin. Auth. FRB,
11.594s, 6/15/11, (acquired 8/9/91,
cost $13,344,611) (RES) Aaa 18,248,750
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds Aaa 10,655,219
10,000,000 Ser. A, 5 1/2s, 6/15/24 AA 9,912,500
8,150,000 Ser. B, FGIC, 5 1/4s, 6/15/29 Aaa 7,773,063
12,265,000 Ser. A, 4 3/4s, 6/15/31
17,500,000 NY City, Muni. Wtr. & Swr. Fin. Auth. IFB,
MBIA, 5.92s, 6/15/08 Aaa 18,221,875
5,600,000 NY City, NY State Dorm. Auth. Lease Rev.
Bonds (Court Facs.), 6s, 5/15/39 A 5,838,000
7,000,000 NY City, Transitional Fin. Auth., FRB, 8.05s,
11/15/29 (acquired 2/4/00, cost $6,788,320) (RES) AA/P 7,533,750
NY City, Transitional Fin. Auth. Rev. Bonds
15,000,000 Ser. C, 5 1/2s, 5/1/25 Aa 15,018,750
7,100,000 (Future Tax Secd.), Ser. A, 5s, 8/15/27 Aa 6,540,875
NY State Dorm. Auth. Cap. Appn. Rev. Bonds
(State U.), Ser. B
23,250,000 MBIA, zero %, 5/15/09 Aaa 15,403,125
53,490,000 MBIA, zero %, 5/15/08 Aaa 37,376,138
13,250,000 NY State Dorm. Auth. IFB, MBIA, 6.709s, 7/1/13
(acquired 10/22/97, cost $15,191,120) (RES) AAA/P 15,386,563
NY State Dorm. Auth. Rev. Bonds
5,000,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa1 5,195,000
18,800,000 (City U. Syst.), Ser. C, 7 1/2s, 7/1/10 Baa1 21,808,000
4,000,000 (State U. Athletic Fac.), 7 1/4s, 7/1/21 A 4,144,800
2,500,000 (Mount Sinai Hlth.), Ser. A, 6.6s, 7/1/26 Baa1 2,562,500
3,000,000 (Mnt. Sinai Hlth.), Ser. A, 6 1/2s, 7/1/25 BBB+ 3,112,500
8,950,000 (State U. Edl. Fac.), Ser. A, FSA, 5 7/8s, 5/15/17 AAA 9,643,625
13,200,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 A 14,190,000
10,000,000 (Mental Hlth. Svcs. Fac.), Ser. A, 5 3/4s, 8/15/22 A 10,112,500
6,000,000 (NY U.), Ser. A, MBIA, 5 3/4s, 7/1/20 Aaa 6,322,500
45,385,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/18 Baa 47,257,131
14,645,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/13
(2nd Gen) Baa 15,505,394
10,000,000 (Columbia U.), Ser. A, 5 3/4s, 7/1/10 Aaa 10,862,500
15,600,000 (U. Syst. Construction), Ser. A, 5 5/8s, 7/1/16 A 16,185,000
16,055,000 (State U. Edl. Fac.), Ser. A, 5 1/2s, 5/15/13 A 16,697,200
20,960,000 (Mental Hlth. Svcs. Fac. Impt. D), FSA,
5 1/4s, 8/15/30 AAA 20,095,400
3,000,000 (Westchester Cnty.), 5 1/4s, 8/1/18 Aa 2,977,500
7,500,000 (Columbia U.), 5s, 7/1/22 Aaa 7,115,625
13,750,000 (Colgate U.), MBIA, 4 3/4s, 7/1/28 Aaa 11,996,875
23,250,000 (St. John's U.), MBIA, 4 3/4s, 7/1/28 AAA 20,285,625
10,000,000 (NY & Presbyterian Hosp.), AMBAC,
4 3/4s, 8/1/27 Aaa 8,700,000
6,000,000 (Mental Hlth. Svcs. Fac.), Ser. C, MBIA,
4 3/4s, 8/15/22 AAA 5,317,500
8,000,000 NY State Energy Res. & Dev. Auth. Elec. Fac.
Rev. Bonds (LILCO), Ser. B, 5.3s, 11/1/23 A- 7,430,000
10,000,000 NY State Energy Res. & Dev. Auth. Gas Fac.
IFB (Brooklyn Union Gas Co.), Ser. B,
9.057s, 7/1/26 A 11,650,000
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 10,987,500
26,000,000 (Niagara Mohawk Pwr. Corp.), Ser. A,
AMBAC, 5.15s, 11/1/25 Aaa 24,602,500
6,000,000 (Lilco Project), Ser. B, 5.15s, 3/1/16 A- 5,692,500
10,675,000 NY State Env. Fac. Corp. IFB (PA 221), 7.209s,
6/15/11 (acquired 11/24/97,
cost $12,993,315) (RES) AAA/P 12,863,375
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
10,000,000 8.7s, 6/15/12 (acquired 11/24/97,
cost $12,803,212) (RES) Aaa 12,037,500
6,870,000 (State Wtr. Revolving Fund), Ser. B, 6.65s, 9/15/13 Aaa 7,204,913
5,265,000 (State Wtr. Revolving Fund), Ser. A, 6.55s, 9/15/10 Aaa 5,528,250
NY State Hsg. Fin. Agcy. Rev. Bonds
2,485,000 8s, 11/1/08 A 2,540,913
9,440,000 (Multi-Fam. Hsg. Insd. Mtge. Program), Ser. A,
FHA Insd., 7s, 8/15/22 Aa 9,876,600
7,500,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig.
Rev. Bonds, Ser. C, 7.3s, 3/15/21 AAA 7,820,025
NY State Local Govt. Assistance Corp. Rev. Bonds
11,900,000 Ser. A, 6 1/2s, 4/1/20 AAA 12,219,634
12,510,000 Ser. E, 6s, 4/1/14 AA- 13,729,725
6,000,000 Ser. E, AMBAC, 6s, 4/1/14 Aaa 6,562,500
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
1,965,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/20 A 2,015,029
3,145,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 A 3,162,172
24,775,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 Aaa 25,419,150
6,625,000 (Methodist Hosp. & Nursing Home), Ser. A,
FHA Insd., 6.7s, 8/15/23 AA 7,005,938
12,325,000 Ser. A, AMBAC, FHA Insd., 6 1/2s, 8/15/29 Aaa 13,495,875
4,250,000 NY State Muni. Bond Bk. Agcy. Special Program
Rev. Bonds (Rochester), Ser. A, 6 3/4s, 3/15/11 AAA 4,413,668
NY State Thruway Auth. Hwy. & Bridge Rev.
Bonds, Ser. A, FSA
1,000,000 6s, 4/1/16 AAA 1,071,250
2,000,000 5.8s, 4/1/18 AAA 2,092,500
2,000,000 5 3/4s, 4/1/17 AAA 2,092,500
NY State Urban Dev. Corp. Rev. Bonds
8,000,000 9.1s, 1/1/11 (acquired 8/29/91, cost $8,669,307) (RES) Aaa 10,150,000
9,000,000 (Onondaga Cnty. Convention), 7 7/8s, 1/1/20 Aaa 9,202,320
5,250,000 (State Fac.), 5 3/4s, 4/1/12 A 5,551,875
5,830,000 (Correctional Fac.), Ser. 7, 5.7s, 1/1/16 A 5,961,175
11,225,000 (State Fac.), 5.7s, 4/1/10 A 11,870,438
19,100,000 5.6s, 4/1/15 A 19,840,125
7,710,000 (Correctional Fac), Ser. A, 5 1/2s, 1/1/09 Baa 8,028,038
8,600,000 Port Auth. NY & NJ Cons. Rev. IFB, 8.926s,
8/1/26 (acquired 8/29/91, cost $8,669,307) (RES) AA- 9,013,402
Port Auth. NY & NJ Rev. Bonds
6,000,000 (Kennedy Intl. Arpt.), 6 3/4s, 10/1/19 BB/P 6,150,000
3,075,000 6 3/4s, 10/1/11 BB/P 3,163,406
7,750,000 St. Lawrence Cnty., Indl. Dev. Rev. Bonds
(St. Lawrence U.), Ser. A, MBIA, 5s, 7/1/28 AAA 7,062,188
4,220,000 Suffolk Cnty. Judicial Fac. Agcy. Svc. Agreement
Rev. Bonds (John P. Cohalan Complex),
AMBAC, 5s, 4/15/16 Aaa 4,082,850
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 3,925,000
4,000,000 7.2s, 11/1/19 BB-/P 3,935,000
Suffolk Cnty., Indl. Dev. Agcy. Rev. Bonds
(Peconic Landing), Ser. A
10,200,000 8s, 10/1/30 BB-/P 10,200,000
5,000,000 8s, 10/1/20 BB-/P 5,000,000
3,000,000 Suffolk Cnty., Indl. Dev. Agcy. VRDN
(Peconic Landing), Ser. B, 7s, 10/1/30 BB-/P 3,000,000
Triborough Bridge & Tunnel Auth. Rev. Bonds
38,750,000 (Convention Ctr.), Ser. E, 7 1/4s, 1/1/10 A 43,787,500
10,965,000 6.95s, 1/1/12 (acquired 10/24/97,
cost $11,954,024) (RES) A+ 12,075,206
18,850,000 Ser. X, MBIA, 6 5/8s, 1/1/12 Aa 21,630,375
17,700,000 Ser. Y, 6s, 1/1/12 Aa 19,359,375
14,000,000 (Convention Ctr.), Ser. E, 6s, 1/1/11 A 15,102,500
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 19,048,140
10,000,000 Westchester Cnty., Hlth. Care Corp. Rev. Bonds,
Ser. A, 5 7/8s, 11/1/25 A 9,887,500
-------------
1,338,390,417
Puerto Rico (6.9%)
-------------------------------------------------------------------------------------------------------------------
Comnwlth. of PR, G.O. Bonds
3,915,000 FSA, 6 1/2s, 7/1/13 AAA 4,575,656
11,110,000 FSA, 6 1/2s, 7/1/12 AAA 12,943,150
PR Comnwlth. Hwy. & Trans. Auth. Rev. Bonds
3,000,000 Ser. V, 6 5/8s, 7/1/12 A 3,138,750
5,000,000 Ser. B, 6s, 7/1/26 A 5,181,250
3,500,000 Ser. B, MBIA, 5 7/8s, 7/1/35 AAA 3,653,125
10,000,000 PR Elec. Pwr. Auth. IFB, MBIA, 9.318s, 7/1/07
(acquired 10/30/97, cost $13,651,251) (RES) A-/P 12,975,000
PR Elec. Pwr. Auth. Rev. Bonds
10,000,000 Ser. AA, MBIA, 5 3/8s, 7/1/27 Aaa 9,987,500
2,000,000 MBIA, 5s, 7/1/28 Aaa 1,892,500
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 7,323,750
20,000,000 PR Infrastructure Fin. Auth. Special Rev. Bond,
Ser. A, 5 1/2s, 10/1/40 AAA 20,100,000
11,350,000 PR Tel. Auth. IFB, 8.373s, 1/1/20 (acquired 9/25/92,
cost $10,981,125) (RES) A 12,074,575
5,500,000 U. of PR Rev. Bonds, Ser. O, MBIA, 5 3/8s, 6/1/30 AAA 5,465,625
--------------
99,310,881
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,377,273,571) (b) $1,437,701,298
-------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $1,442,510,508.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to
be the most recent ratings available at November 30, 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 November 30, 2000. 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 $1,378,609,520
resulting in gross unrealized appreciation and depreciation of
$72,672,339 and $13,580,561, respectively, or net unrealized
appreciation of $59,091,778.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at November 30, 2000
was $175,332,199 or 12.2% 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, 2000.
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, 2000.
The fund had the following industry group concentrations greater than 10% at November 30, 2000
(as a percentage of net assets):
Transportation 23.6%
Education 22.3
Utilities 14.8
Housing 10.0
The fund had the following insurance concentration greater than
10% at November 30, 2000 (as a percentage of net assets):
MBIA 18.3%
------------------------------------------------------------------------------
Futures Contracts Outstanding at November 30, 2000
Aggregate Face Expiration Unrealized
Total Value Value Date Appreciation
------------------------------------------------------------------------------
Municipal Bond
Index (short) $90,276,719 $88,642,043 Dec-00 $1,634,676
Municipal Bond
Index (short) 13,575,938 13,480,842 Mar-01 95,096
------------------------------------------------------------------------------
$1,729,772
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 2000
<S> <C>
Assets
-------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $1,377,273,571) (Note 1) $1,437,701,298
-------------------------------------------------------------------------------------------
Interest and other receivables 26,676,499
-------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 775,415
-------------------------------------------------------------------------------------------
Receivable for securities sold 10,211,697
-------------------------------------------------------------------------------------------
Total assets 1,475,364,909
Liabilities
-------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 6,632,020
-------------------------------------------------------------------------------------------
Payable for variation margin 607,008
-------------------------------------------------------------------------------------------
Distributions payable to shareholders 2,725,739
-------------------------------------------------------------------------------------------
Payable for securities purchased 18,876,748
-------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,331,057
-------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,796,270
-------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 181,366
-------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 39,421
-------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 44,437
-------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 540,841
-------------------------------------------------------------------------------------------
Other accrued expenses 79,494
-------------------------------------------------------------------------------------------
Total liabilities 32,854,401
-------------------------------------------------------------------------------------------
Net assets $1,442,510,508
Represented by
-------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $1,411,027,239
-------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 2,145,459
-------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (29,360,145)
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 58,697,955
-------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $1,442,510,508
Computation of net asset value and offering price
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,276,566,177 divided by 149,806,276 shares) $8.52
-------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $8.52)* $8.94
-------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($163,839,362 divided by 19,262,037 shares)+ $8.51
-------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($574,100 divided by 67,328 shares)+ $8.53
-------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($1,530,869 divided by 179,550 shares) $8.53
-------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $8.53)** $8.82
-------------------------------------------------------------------------------------------
* 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, 2000
<S> <C>
Tax exempt interest income: $ 90,666,741
-------------------------------------------------------------------------------------------
Expenses:
-------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 7,294,424
-------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 1,102,760
-------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 49,765
-------------------------------------------------------------------------------------------
Administrative services (Note 2) 60,807
-------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 2,582,045
-------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 1,490,618
-------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 4,727
-------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 7,913
-------------------------------------------------------------------------------------------
Other 566,392
-------------------------------------------------------------------------------------------
Total expenses 13,159,451
-------------------------------------------------------------------------------------------
Expense reduction (Note 2) (552,108)
-------------------------------------------------------------------------------------------
Net expenses 12,607,343
-------------------------------------------------------------------------------------------
Net investment income 78,059,398
-------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 3,753,419
-------------------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (4,492,409)
-------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
futures contracts during the year 33,564,874
-------------------------------------------------------------------------------------------
Net gain on investments 32,825,884
-------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $110,885,282
-------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Year ended November 30
---------------------------------
2000 1999
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Decrease in net assets
--------------------------------------------------------------------------------------------------
Operations:
--------------------------------------------------------------------------------------------------
Net investment income $ 78,059,398 $ 85,497,618
--------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (738,990) 1,116,256
--------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments 33,564,874 (129,945,929)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 110,885,282 (43,332,055)
--------------------------------------------------------------------------------------------------
Distributions to shareholders:
--------------------------------------------------------------------------------------------------
From net investment income
Class A (69,713,623) (75,849,480)
--------------------------------------------------------------------------------------------------
Class B (8,395,485) (9,468,710)
--------------------------------------------------------------------------------------------------
Class C (21,533) (2,809)
--------------------------------------------------------------------------------------------------
Class M (81,200) (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) (162,013,857) (135,867,274)
--------------------------------------------------------------------------------------------------
Total decrease in net assets (129,340,416) (281,708,452)
Net assets
--------------------------------------------------------------------------------------------------
Beginning of year 1,571,850,924 1,853,559,376
--------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $2,145,459 and $2,713,116 respectively) $1,442,510,508 $1,571,850,924
--------------------------------------------------------------------------------------------------
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
-----------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended November 30
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.32 $9.05 $9.02 $8.91 $8.97
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment income .45 .44 .43 .46 .48
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .20 (.65) .13 .12 (.06)
-----------------------------------------------------------------------------------------------------
Total from
investment operations .65 (.21) .56 .58 .42
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net
investment income (.45) (.44) (.43) (.47) (.48)
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.08) (.10) -- --
-----------------------------------------------------------------------------------------------------
Total distributions (.45) (.52) (.53) (.47) (.48)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.52 $8.32 $9.05 $9.02 $8.91
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 8.07 (2.42) 6.47 6.69 4.92
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,276,566 $1,374,040 $1,620,108 $1,725,773 $1,873,649
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .82 .83 .83 .79 .81
-----------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.40 5.02 4.79 5.19 5.47
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 14.86 13.24 31.55 81.95 59.60
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(b) 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
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.31 $9.04 $9.00 $8.90 $8.95
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment income .39 .38 .37 .40 .42
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .20 (.65) .14 .11 (.05)
-----------------------------------------------------------------------------------------------------
Total from
investment operations .59 (.27) .51 .51 .37
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net
investment income (.39) (.38) (.37) (.41) (.42)
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.08) (.10) -- --
-----------------------------------------------------------------------------------------------------
Total distributions (.39) (.46) (.47) (.41) (.42)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.51 $8.31 $9.04 $9.00 $8.90
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 7.37 (3.06) 5.91 5.89 4.35
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $163,839 $195,618 $231,057 $227,747 $227,405
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.47 1.48 1.48 1.44 1.46
-----------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.75 4.37 4.12 4.53 4.81
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 14.86 13.24 31.55 81.95 59.60
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(b) 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 Year ended July 26, 1999+
operating performance Nov. 30 to Nov. 30
--------------------------------------------------------------
2000 1999
--------------------------------------------------------------
<S> <C> <C>
Net asset value,
beginning of period $8.32 $8.61
--------------------------------------------------------------
Investment operations
--------------------------------------------------------------
Net investment income .38 .13
--------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .21 (.29)
--------------------------------------------------------------
Total from
investment operations .59 (.16)
--------------------------------------------------------------
Less distributions:
--------------------------------------------------------------
From net
investment income (.38) (.13)
--------------------------------------------------------------
From net realized gain
on investments -- --
--------------------------------------------------------------
Total distributions (.38) (.13)
--------------------------------------------------------------
Net asset value,
end of period $8.53 $8.32
--------------------------------------------------------------
Total return at
net asset value (%)(a) 7.33 (1.87)*
--------------------------------------------------------------
Ratios and supplemental data
--------------------------------------------------------------
Net assets, end of period
(in thousands) $574 $356
--------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.62 .58*
--------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.57 1.59*
--------------------------------------------------------------
Portfolio turnover (%) 14.86 13.24
--------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(b) Includes amounts paid through expense offset arrangements (Note 2).
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
CLASS M
-----------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended November 30
-----------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.33 $9.05 $9.02 $8.91 $8.97
-----------------------------------------------------------------------------------------------------
Investment operations
-----------------------------------------------------------------------------------------------------
Net investment income .42 .41 .41 .43 .45
-----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .20 (.64) .13 .12 (.06)
-----------------------------------------------------------------------------------------------------
Total from
investment operations .62 (.23) .54 .55 .39
-----------------------------------------------------------------------------------------------------
Less distributions:
-----------------------------------------------------------------------------------------------------
From net
investment income (.42) (.41) (.41) (.44) (.45)
-----------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.08) (.10) -- --
-----------------------------------------------------------------------------------------------------
Total distributions (.42) (.49) (.51) (.44) (.45)
-----------------------------------------------------------------------------------------------------
Net asset value,
end of period $8.53 $8.33 $9.05 $9.02 $8.91
-----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 7.74 (2.60) 6.15 6.37 4.59
-----------------------------------------------------------------------------------------------------
Ratios and supplemental data
-----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,531 $1,837 $2,394 $1,865 $1,266
-----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.12 1.13 1.13 1.09 1.11
-----------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.11 4.72 4.47 4.87 5.17
-----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 14.86 13.24 31.55 81.95 59.60
-----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(b) Includes amounts paid through expense offset arrangements (Note 2).
</TABLE>
NOTES TO FINANCIAL STATEMENTS
November 30, 2000
Note 1
Significant accounting policies
Putnam New York Tax Exempt Income Fund, ("the fund"), 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, LLC ("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 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 that 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 accounting principles generally accepted in the United States of
America and requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities in 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 an independent 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, 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.
At November 30, 2000, the fund had a capital loss carryover of
approximately $14,403,000 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,
market discount, and 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, 2000, the fund reclassified
$415,214 to decrease undistributed net investment income and $362,140 to
increase paid-in-capital, with an decrease to accumulated net realized
losses of $53,074. 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 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 and 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.
The fund has entered into an arrangement with PFTC whereby credits
realized as a result of uninvested cash balances are used to reduce a
portion of the fund's expenses. For the year ended November 30, 2000,
the fund's expenses were reduced by $552,108 under these arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $6,180 has been allocated to the fund, and an additional fee for
each Trustees 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 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 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, 2000, Putnam Retail Management, Inc.,
acting as underwriter received net commissions of $48,904 and $168 from
the sale of class A and class M shares, respectively, and received
$258,697 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 that were
purchased without an initial sales charge as part of an investment of $1
million or more. For the year ended November 30, 2000, Putnam Retail
Management, Inc., acting as underwriter received $4,117 on
class A redemptions.
Note 3
Purchases and sales of securities
During the year ended November 30, 2000, cost of purchases and proceeds
from sales of investment securities other than short-term investments
aggregated $215,245,719 and $373,570,591, respectively. There were no
purchases and sales of U.S. government obligations.
Note 4
Capital shares
At November 30, 2000, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
Year ended November 30, 2000
---------------------------------------------------------------------------
Class A Shares Amount
---------------------------------------------------------------------------
Shares sold 9,596,899 $ 79,546,246
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,814,548 40,091,993
---------------------------------------------------------------------------
14,411,447 119,638,239
Shares
repurchased (29,681,557) (246,023,619)
---------------------------------------------------------------------------
Net decrease (15,270,110) $(126,385,380)
---------------------------------------------------------------------------
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, 2000
---------------------------------------------------------------------------
Class B Shares Amount
---------------------------------------------------------------------------
Shares sold 1,359,442 $ 11,308,534
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 626,878 5,209,189
---------------------------------------------------------------------------
1,986,320 16,517,723
Shares
repurchased (6,271,133) (52,010,608)
---------------------------------------------------------------------------
Net decrease (4,284,813) $(35,492,885)
---------------------------------------------------------------------------
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, 2000
---------------------------------------------------------------------------
Class C Shares Amount
---------------------------------------------------------------------------
Shares sold 47,880 $ 395,831
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 2,209 18,456
---------------------------------------------------------------------------
50,089 414,287
Shares
repurchased (25,546) (212,734)
---------------------------------------------------------------------------
Net increase 24,543 $ 201,553
---------------------------------------------------------------------------
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, 2000
---------------------------------------------------------------------------
Class M Shares Amount
---------------------------------------------------------------------------
Shares sold 10,018 $ 83,412
---------------------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 8,640 71,990
---------------------------------------------------------------------------
18,658 155,402
Shares
repurchased (59,712) (492,547)
---------------------------------------------------------------------------
Net decrease (41,054) $(337,145)
---------------------------------------------------------------------------
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)
---------------------------------------------------------------------------
Note 5
Change in independent accountants
(unaudited)
Based on the recommendation of the Audit Committee of the fund, the
Board of Trustees has determined not to retain PricewaterhouseCoopers
LLP as this funds' independent accountants and voted to appoint KPMG LLP
for the fund's fiscal year ended November 30, 2000. During the two
previous fiscal years, PricewaterhouseCoopers LLP audit reports
contained no adverse opinion or disclaimer of opinion; nor were its
reports qualified or modified as to uncertainty, audit scope, or
accounting principle. Further, in connection with its audits for the two
previous fiscal years and through July 24, 2000, there were no
disagreements between the fund and PricewaterhouseCoopers LLP on any
matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which if not resolved to the
satisfaction of PricewaterhouseCoopers LLP would have caused it to make
reference to the disagreements in its report on the financial statements
for such years.
Note 6
New accounting pronouncement
In November 2000, the AICPA issued a revised Audit and Accounting Guide,
Audits of Investment Companies, which is effective for fiscal years
beginning after December 15, 2000. The revised Guide will require the
fund to amortize premium and accrete discount on all fixed-income
securities, and classify as interest income gains and losses realized on
paydowns on mortgage-backed securities which are presently included in
realized gain/loss. Adopting these accounting principles will not affect
the fund's net asset value, but will change the classification of
certain amounts between interest income and realized and unrealized
gain/loss in the Statement of operations. The fund has not at this time
quantified the impact, if any, resulting from the adoption of this
principle on the financial statements.
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 2001 will show the tax status of
all distributions paid to your account in calendar 2000.
WELCOME TO WWW.PUTNAMINVESTMENTS.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
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* your current account value, portfolio value and transaction history
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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
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The site can be accessed through any of the major online services
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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.putnaminvestments.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
Technology Fund
Vista Fund
Voyager Fund
Voyager Fund II
GROWTH AND INCOME FUNDS
Balanced Fund
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.putnaminvestments.com.
FUND INFORMATION
WEB SITE
www.putnaminvestments.com
INVESTMENT MANAGER
Putnam Investment Management, LLC
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
INDEPENDENT ACCOUNTANTS
KPMG LLP
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
and Putnam's Quarterly Ranking 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.putnaminvestments.com.
NOT FDIC INSURED, MAY LOSE VALUE, NO BANK GUARANTEE
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
---------------------
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---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminvestments.com
AN051-67719 030/345/681 1/01
