Putnam
New York
Tax Exempt
Money Market
Fund
ANNUAL REPORT
November 30, 1995
[Putnam logo]
B O S T O N (bullet) L O N D O N (bullet) T O K Y O
<PAGE>
Fund highlights
(dagger)"In a year when the direction of interest rates changed course very
quickly, maintaining current income and share price stability was
particularly challenging -- however, we have been able to succeed on
both counts without compromising the fund's high quality standards.
Lindsey Strong, Fund Manager
CONTENTS
4 Report from Putnam Management
7 Fund performance summary
10 Portfolio holdings
13 Financial statements
2
<PAGE>
From the Chairman
[photo of George Putnam]
(c) Karsh, Ottawa
Dear Shareholder:
Changes in short-term interest rates are of consuming interest to Lindsey
Strong as she manages the portfolio of Putnam New York Tax Exempt Money
Market Fund. During the fiscal year that ended on November 30, 1995, Lindsey
guided the fund to yet another year of competitive returns.
The fiscal year began as the Federal Reserve Board continued its efforts to
slow the economy to a sustainable growth rate by a series of increases in
short-term rates. Satisfied that the strategy had worked, the Fed posted its
last increase in February. In July and again in December (after the close of
fiscal 1995), the Fed lowered rates by a quarter of a percentage point each
time.
Meanwhile, a new and fiscally conservative administration had taken over the
reins in Albany, creating a certain amount of uncertainty as it put its
program together.
Throughout the period, Lindsey kept close watch, constantly adjusting the
portfolio in response to and in anticipation of events. In the report that
follows, she discusses fiscal 1995 performance and the outlook for fiscal
1996.
Respectfully yours,
/s/ George Putnam
George Putnam
Chairman of the Trustees
January 17, 1996
3
<PAGE>
Report from the Fund Manager
Lindsey C. Strong
During the 12 months ended November 30, 1995, Putnam New York Tax Exempt
Money Market Fund once again generated a competitive return. Throughout the
period, our conservative approach of investing in high-quality, short-term
investments provided shareholders with a steady stream of double tax-free
income and a stable price of $1.00 per share. Our primary challenge this year
was to manage the fund in an environment where the direction of interest
rates changed course very quickly.
(dagger) CHANGING RATES MEAN A CHANGING INVESTMENT ENVIRONMENT
At the end of 1994, economic growth remained strong and concerns about
increased inflation dominated the financial markets. At that time, the
Federal Reserve Board's anti-inflation policy of periodically raising
short-term interest rates was in full force.
Even as the Fed was raising rates for the last time in February 1995, the
success of its anti-inflation policy was becoming apparent. The growth in
gross domestic product (GDP) slowed from 5.1% during the fourth quarter of
1994 to 2.8% during the first quarter of 1995. During the second quarter of
1995, GDP growth declined to 0.5%. By early summer, recession fears began to
mount, and in July, the Fed lowered the federal funds rate from 6.0% to
5.75%. Toward the end of the summer and during the fall, leading economic
indicators began to show signs of strength, and recession concerns abated. In
December, after the end of the fiscal year, the Fed lowered the rate another
quarter point.
In New York, the new administration that took office at the beginning of 1995
has attempted to adopt a more fiscally conservative posture in managing the
state's budget. However, the public debate over which state programs may
continue to be funded and which ones may be reduced or cut from the budget
has created uncertainty in the New York economy. While the economy improved
during the period, it did so at a slower rate than the national economy.
4
<PAGE>
(dagger) CAPITALIZING ON INTEREST-RATE MOVES
While many factors contributed to the fund's performance, our active
investment strategy remains the key ingredient. We combine ongoing analysis
of our current holdings with continuous monitoring of the marketplace in
search of appropriate new investments. We believe this is a prudent strategy
geared for long-term success. While we cannot guarantee future share values,
we remain committed to the conservative investment policies that have enabled
the fund to sustain its performance in a lower interest rate environment.
As interest rates fluctuated, we focused on maximizing income while at the
same time maintaining a very high-quality portfolio of securities. To this
end, when interest rates were rising, we shortened the average maturity of
the portfolio. This allowed us to take advantage of incrementally higher
yields. When interest rates began to decline, we reversed our approach and
sought to lock in higher yields by lengthening the average maturity of the
portfolio.
(dagger) SECURITY SELECTION FOCUSED ON QUALITY
The market for New York's short-term, tax-exempt securities maintained a
healthy balance between supply and demand. New issuance of securities was
relatively stable from past years, and we were able to find investments that
met our criteria for quality.
In selecting securities for the portfolio, we primarily invested in variable
rate demand notes (VRDNs). VRDNs pay variable interest rates that reset at
daily, weekly, or monthly intervals. As interest rates declined, we targeted
a higher percentage of fixed- rate instruments to lock in the higher rates.
This helped protect the fund from the interest rate declines that occurred as
the market adjusted to economic changes. In addition, over 85% of the fund's
investments were insured or backed by bank letters of credit as of 11/30/95.
These features enhance the quality assurance of the securities in the
portfolio, even those rated in the highest categories by nationally
recognized rating services.
(dagger) OUR OUTLOOK
As always, we will be monitoring the national and New York economies very
carefully in the coming months. Because the
5
<PAGE>
Federal Reserve Board seems to have achieved its goals of lower inflation and
a slowly growing economy, we believe interest rates could decline further. At
the state level, we expect the debate over the budget to continue, and we
will keep a close eye on political events in Albany for developments that may
affect the securities in which your fund invests. As a matter of course, we
will continue to use Putnam's strong credit research and analytical abilities
to uncover securities that we believe provide the highest quality and
strongest income for the fund and will maintain our emphasis on stability of
principal, high quality, and liquidity.
[graphic] PERFORMANCE COMPARISONS (11/30/95)
Current After-tax After-tax
return* return(1) return(2)
Passbook savings account 2.01% 1.07% 1.12%
Taxable money market fund
7-day yield 5.29 2.81 2.95
3-month certificate of
deposit (as of 11/29/95) 4.21 2.24 2.35
Putnam New York
Tax Exempt Money
Market Fund (7-day yield) 3.09 3.09 3.09
The principal value and interest of money market mutual funds is uninsured
and designed to be fixed, while distributions vary daily. The principal value
on passbook savings and bank CDs are generally insured up to certain limits
by state and federal agencies. CDs, unlike stocks which incur more risk,
offer a fixed rate of return. Unlike money market funds, early withdrawals
from bank CDs may be subject to substantial penalties. Investment returns
will fluctuate. After-tax return(1) assumes a combined 46.88% Federal, New
York State and New York City tax rate. After-tax return(2) assumes a combined
44.19% Federal and New York State tax rate. An investment in this fund is
neither insured nor guaranteed by the U.S. Government. The fund is managed to
maintain a steady price of $1.00 per share, although there is no assurance
this price will be maintained in the future.
*Sources: Bank of Boston (passbook savings), IBC/Donaghue's Money Fund Report
(taxable money market fund 7-day yield), Bank Rate Monitor (3-month CDs).
The views expressed throughout this report are exclusively those of Putnam
Management. They are not meant as investment advice. Although the described
holdings were viewed favorably as of 11/30/95, there is no guarantee the fund
will continue to hold these securities in the future.
6
<PAGE>
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam New York Tax Exempt Money Market Fund is designed for
investors seeking as high a level of current income free from Federal income
tax, New York State and New York City personal income taxes as Putnam
Management believes is consistent with preservation of capital and
maintenance of liquidity and stability of principal.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares changed
over time, assuming you held the shares through the entire period and
reinvested all distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 11/30/95
Lipper New York
Fund Tax Exempt Consumer
Shares Money Market Price
at NAV Average Index
-----------------------------------------------------------------
1 year 3.23% 3.28% 2.61%
-----------------------------------------------------------------
5 years 14.20 14.60 14.80
Annual average 2.69 2.76 2.80
-----------------------------------------------------------------
Life of fund
(10/26/87) 32.74 33.13 33.22
Annual average 3.56 3.60 3.60
-----------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 12/31/95
(most current calendar quarter)
Fund shares
at NAV
------------------------------------
1 year 3.24%
------------------------------------
5 years 14.01
Annual average 2.66
------------------------------------
Life of fund
(10/26/87) 33.10
Annual average 3.56
------------------------------------
Performance data represent past results and should not be taken as an
assurance of future performance. Investment returns will fluctuate. They do
not take into account any adjustment for taxes payable on reinvested
distributions. An investment in the fund is neither insured nor guaranteed by
the U.S. government. There can be no assurance that the fund will be able to
maintain a stable net asset value of $1.00 per share.
7
<PAGE>
PRICE AND DISTRIBUTION INFORMATION
12 months ended 11/30/95
-----------------------------------------------------
Distributions (number) 12
-----------------------------------------------------
Income $0.031780
-----------------------------------------------------
Current return
-----------------------------------------------------
End of period
-----------------------------------------------------
7-day yield(1) 3.09%
-----------------------------------------------------
Taxable equivalent(2)(a) 5.54
-----------------------------------------------------
Taxable equivalent(2)(b) 5.82
-----------------------------------------------------
30-day yield(1) 3.17
-----------------------------------------------------
Taxable equivalent(2)(a) 5.68
-----------------------------------------------------
Taxable equivalent(2)(b) 5.97
-----------------------------------------------------
(1) The 7- and 30-day yields are the two most common gauges for measuring
money market mutual fund performance.
(2) Assumes (a) the maximum combined Federal and New York State tax rate of
44.19% or (b) the maximum combined Federal, New York State, and New York
City tax rates of 46.88%. Results for investors subject to lower tax rates
would not be as advantageous.
TERMS AND DEFINITIONS
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares.
COMPARATIVE BENCHMARKS
Lipper New York Tax Exempt Money Market Fund
Average is an arithmetic average of the total return of all tax exempt money
market mutual funds tracked by Lipper Analytical Services. Lipper is an
independent rating organization for the mutual fund industry. Lipper rankings
vary for other periods. The fund's holdings do not match those in the Lipper
Average.
Consumer Price Index (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
8
<PAGE>
Report of independent accountants
For the year ended November 30, 1995
To the Trustees and Shareholders of
Putnam New York Tax Exempt Money Market Fund
We have audited the accompanying statement of assets and liabilities of
Putnam New York Tax Exempt Money Market Fund, including the portfolio of
investments owned, as of November 30, 1995, the related statement of
operations for the year then ended, and the statements of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated therein. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free from material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1995, by correspondence with the
custodian. 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 audits provide
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 Money Market Fund as of November 30, 1995, the
results of its operations for the year then ended, and the changes in its net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 12, 1996
9
<PAGE>
Portfolio of investments owned
November 30, 1995
Key to
Abbreviations
BIGI -- Bond Investors Guaranty Insurance
FGIC -- Federal Guaranty Insurance Corporation
GO -- General Obligation
MCP -- Municipal Commercial Paper
RAN -- Revenue Anticipation Notes
VRDN -- Variable Rate Demand Notes
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (74.0%)*
PRINCIPAL AMOUNT RATINGS** VALUE
New York
----------------------------------------------------------------------------------
<S> <C> <C> <C>
$2,000,000 Erie Cnty., RAN (Union Bank of
Switzerland LOC), 4-1/2s, 9/20/96 MIG1 $2,010,087
2,000,000 Metropolitan Trans. Auth. NY, Rev. Bond,
Ser. F, 8-3/8s, 7/1/16 AAA 2,092,760
2,035,000 Monroe Cnty., Indl. Dev. Agcy. Notes VRDN
(Columbia Sussex) (Cumberland Federal
Savings and Loan LOC), 5s, 11/1/14 A-1+ 2,035,000
NY City, Hsg. Dev. Corp. VRDN
2,000,000 (East 96th St.) (Mitsubishi Bank LOC),
Ser. A, 3.9s, 8/1/15 VMIG1 2,000,000
510,000 (Parkgate Towers) (Citibank LOC), 3-1/2s,
12/1/07 VMIG1 510,000
1,000,000 NY City, Indl. Dev. Agcy. VRDN (Bank of
New York LOC), 3.85s, 12/1/01 A-1 1,000,000
2,000,000 NY State Dorm. Auth. VRDN (Miriam Osborn
Memorial Home) (Banque Paribas LOC), Ser.
A, 3.6s, 7/1/24 VMIG1 2,000,000
NY State Energy Research & Dev. Auth.
Poll. VRDN
3,000,000 (Lilco Project) (Deutsche Bank LOC), Ser.
A, 4.7s, 3/1/16 VMIG1 3,000,000
2,000,000 (Niagara Mohawk Power Project) (Toronto
Dominion LOC), Ser. A, 3.95s 7/1/15 A-1+ 2,000,000
1,000,000 (Rochester Gas & Electric) (Bank of New
York LOC), Ser. A, 3.65s, 10/1/14 P-1 1,000,000
1,500,000 NY State Hsg. Fin. Agcy. VRDN (Normandie
Ct.) (Societe Generale LOC), 3.45s,
5/15/15 VMIG1 1,500,000
NY State Local Govt. Asst. Corp. VRDN
1,000,000 (Swiss Bank Corp., Credit Suisse LOC),
Ser. B, 3-1/2s, 4/1/23 VMIG1 1,000,000
2,000,000 (Toronto Dominion Bank LOC), Ser. F,
3.55s, 4/1/25 VMIG1 2,000,000
1,000,000 NY State Medical Care Fac. Corp. VRDN
(Lenox Hill Hospital) (Chemical Bank
LOC), Ser. A, 3.45s, 11/1/08 VMIG1 1,000,000
1,600,000 NY State Urban Dev. Corp. Rev. Bond
(Correctional Facilities), Ser. A, BIGI,
7-3/4s 1/1/12 AAA 1,637,316
10
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
$2,000,000 North Hempstead, Solid Waste Mgmt. Auth.
VRDN (National Westminster Bank PLC LOC),
Ser. A, 3-1/2s, 2/1/12 VMIG1 $ 2,000,000
2,000,000 Triborough Brdg. & Tunnel Auth. Special
Oblig. VRDN, Ser. A, FGIC, 3-1/2s, 1/1/24 VMIG1 2,000,000
----------------------------------------------------------------------------------
Total Municipal Bonds and Notes
(cost $28,785,163)*** $28,785,163
----------------------------------------------------------------------------------
MUNICIPAL COMMERCIAL PAPER (27.4%)*
PRINCIPAL AMOUNT RATINGS** VALUE
----------------------------------------------------------------------------------
$1,100,000 NY City, GO MCP (Chemical Bank LOC),
3-3/4s, 1/31/96 VMIG1 $ 1,100,000
2,000,000 NY City, GO MCP (Chemical Bank LOC),
3.65s, 2/8/96 VMIG1 2,000,000
2,500,000 NY City, Water Finance MCP (Canadian
Imperial Bank of Commerce LOC), 3.55s,
1/25/96 A-1+ 2,500,000
2,040,000 NY State Dorm Auth. MCP (Memorial
Sloan-Kettering Cancer Center) (Chemical
Bank LOC), 3.55s, 3/8/96 P-1 2,040,000
3,000,000 NY State Env. Fac. MCP (General Electric
Project), 3.45s, 3/12/96 P-1 3,000,000
----------------------------------------------------------------------------------
Total Municipal Commercial Paper
(cost $10,640,000)*** $10,640,000
----------------------------------------------------------------------------------
Total Investments (cost $39,425,163)*** $39,425,163
----------------------------------------------------------------------------------
</TABLE>
* Percentages indicated are based on total net assets of $38,873,275.
** The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at November 30, 1995, 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 obligations to do so, and the ratings do not necessarily
represent what the agencies would ascribe to these securities at November
30, 1995. These ratings are not covered by the Report of Independent
Accountants.
Moody's Investors Service, Inc. and Standard & Poor's Corp. are the leading
independent rating agencies for debt securities. "Moody's Investment Grade",
or "MIG", for most short-term municipal obligations, adding a "V" ("VMIG")
for bonds with a demand or variable feature; the designation "P" is used for
tax exempt commercial paper. Standard & Poor's uses "SP" for notes maturing
in three years or less, "A" for bonds with a demand or variable feature.
Moody's Investor Service, Inc.
MIG1/VMIG1= Best quality; strong protection of cash flow, superior liquidity
and broad access to refinancing
MIG2/VMIG2= High quality ; ample protection of cash flow, liquidity support
and ability to refinance
P-1= Superior capacity for repayment
P-2= Strong capacity for repayment
AAA= Capacity to pay interest and repay principal is extremely strong.
AA= Strong capacity to pay interest and repay principal and differs from the
higher rated issues only in a small degree
Standard & Poor's Corp.
SP-1= Overwhelming safety characteristics
SP-2= Strong capacity to pay principal and interest
A-1+= Overwhelming degree of credit and protection
A-1= Strong degree of safety
A-2= Considered strong but lacks solid strength for timely repayment
*** The aggregate identified cost on a tax basis is the same.
11
<PAGE>
The rates shown on VRDNs, which are securities paying variable interest
rates, are the current interest rates at November 30, 1995, which are subject
to change based on the terms of the security.
The fund had the following industry group concentrations greater than 10% on
November 30, 1995 (as a percentage of net assets):
Energy 23.2%
Housing 20.7%
Waste/Water 11.6%
Transportation 10.5%
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
Statement of assets and liabilities
November 30, 1995
Assets
---------------------------------------------------------------------
Investments in securities at amortized cost (Note 1) $39,425,163
---------------------------------------------------------------------
Cash 723,098
---------------------------------------------------------------------
Interest and other receivables 276,069
---------------------------------------------------------------------
Receivable for securities sold 55,000
---------------------------------------------------------------------
Receivable for shares of the fund sold 65,041
---------------------------------------------------------------------
Total assets 40,544,371
---------------------------------------------------------------------
Liabilities
---------------------------------------------------------------------
Distributions payable to shareholders $ 72,785
---------------------------------------------------------------------
Payable for shares of the fund repurchased 1,532,342
---------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 49,206
---------------------------------------------------------------------
Payable for administrative services (Note 2) 795
---------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 50
---------------------------------------------------------------------
Other accrued expenses 15,918
---------------------------------------------------------------------
Total liabilities 1,671,096
---------------------------------------------------------------------
Net assets $38,873,275
---------------------------------------------------------------------
Represented by
---------------------------------------------------------------------
Paid-in capital (Note 4) $38,873,275
---------------------------------------------------------------------
Net asset value, offering and redemption price per
share ($38,873,275 divided by 38,873,275 shares) $1.00
---------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
Statement of operations
For the year ended November 30, 1995
Tax exempt interest income $1,719,428
- ----------------------------------------------------------------
Expenses:
- ----------------------------------------------------------------
Compensation of Manager (Note 2) 199,969
- ----------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 106,956
- ----------------------------------------------------------------
Compensation of Trustees (Note 2) 5,680
- ----------------------------------------------------------------
Administrative services (Note 2) 4,801
- ----------------------------------------------------------------
Reports to shareholders 24,001
- ----------------------------------------------------------------
Registration fees 7,225
- ----------------------------------------------------------------
Auditing 27,655
- ----------------------------------------------------------------
Legal 18,618
- ----------------------------------------------------------------
Other expenses 10,669
- ----------------------------------------------------------------
Total expenses 405,574
- ----------------------------------------------------------------
Expense reduction (Note 2) (101,272)
- ----------------------------------------------------------------
Net expense 304,302
- ----------------------------------------------------------------
Net investment income 1,415,126
- ----------------------------------------------------------------
Net increase in net assets resulting from
operations $1,415,126
- ----------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Statement of changes in net assets
Year ended November 30
--------------------------
1995 1994
- --------------------------------------------------------------------------------
Decrease in net assets
- --------------------------------------------------------------------------------
Operations:
- --------------------------------------------------------------------------------
Net investment income $ 1,415,126 $ 926,696
- --------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 1,415,126 926,696
- --------------------------------------------------------------------------------
Distributions to shareholders:
- --------------------------------------------------------------------------------
From net investment income (1,415,126) (926,696)
- --------------------------------------------------------------------------------
Decrease from capital share transactions (Note 4) (5,941,726) (5,657,947)
- --------------------------------------------------------------------------------
Total decrease in net assets (5,941,726) (5,657,947)
- --------------------------------------------------------------------------------
Net assets
- --------------------------------------------------------------------------------
Beginning of year 44,815,001 50,472,948
- --------------------------------------------------------------------------------
End of year $38,873,275 $44,815,001
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Financial highlights
(For a share outstanding throughout the year)
<TABLE>
<CAPTION>
Year ended November 30
--------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------
Investment operations:
- -------------------------------------------------------------------------------------
Net investment income .0318 .0188 .0165 .0259(a) .0399(a)
- -------------------------------------------------------------------------------------
Net realized gain on
investments -- -- .0001 -- --
- -------------------------------------------------------------------------------------
Total from investment
operations .0318 .0188 $ .0166 $ .0259 $ .0399
- -------------------------------------------------------------------------------------
Less distributions:
- -------------------------------------------------------------------------------------
From net investment income (.0318) (.0188) (.0165) (.0259) (.0399)
- -------------------------------------------------------------------------------------
From net realized gain on
investments -- -- (.0001) -- --
- -------------------------------------------------------------------------------------
Total distributions (.0318) (.0188) (.0166) (.0259) (.0399)
- -------------------------------------------------------------------------------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------
Total investment return at
net asset value (%) (b) 3.23 1.90 1.67 2.62 4.07
- -------------------------------------------------------------------------------------
Net assets
end of year (in thousands) $38,873 $44,815 $50,473 $57,705 $64,286
- -------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) (c) 0.91 0.77 0.91 0.78(a) 0.80(a)
- -------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 3.18 1.86 1.69 2.59(a) 3.96(a)
- -------------------------------------------------------------------------------------
</TABLE>
(a) Reflects an expense limitation. As a result of such limitations, expenses of
the fund for the years ended November 30, 1992 and 1991 reflect reductions
of $0.0024 and $0.0034 per share, respectively.
(b) Total investment return assumes dividend reinvestment.
(c) The ratio of expenses to average net assets for the year ended November 30,
1995 includes amounts paid through expense offset arrangements. Prior year
ratios exclude these amounts. (See Note 2).
16
<PAGE>
Notes to financial statements
November 30, 1995
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as amended,
as a nondiversified, open- end management investment company. The fund seeks
as high a level of current income exempt from Federal, New York State and New
York City personal income taxes as Putnam Investment Management believes is
consistent with maintenance of liquidity and stability of principal. The fund
invests primarily in a nondiversified portfolio of short-term New York tax
exempt securities.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A) Security valuation The valuation of the fund's portfolio instruments is
determined by means of the amortized cost method as set forth in Rule 2a-7
under the Investment Company Act of 1940. The amortized cost of an instrument
is determined by valuing it at cost originally and thereafter amortizing any
discount or premium from its face value at a constant rate until maturity.
B) Security transactions Security transactions are accounted for on the trade
date (date the order to buy or sell is executed).
C) Federal income 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 or capital gains on securities held and excise tax on income and
capital gains.
At November 30, 1995 the fund has a capital loss carryover of approximately
$6,605 which may be available to offset realized gains, if any. This amount
will expire on November 30, 2002.
D) Interest income and distributions to shareholders Interest is recorded on
the accrual basis. Income dividends (and distributions of realized gains, if
any) are recorded daily by the fund and are distributed monthly to the
shareholders. 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.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Investment Management, Inc., the fund's Manager, a
wholly-owned subsidiary of Putnam Investments, Inc., for management and
investment advisory services is paid quarterly at an annual rate of 0.45% of
the first $500 million of average net assets, 0.35% of the next $500 million,
0.30% of the next $500 million and 0.25% of any amount over $1.5 billion,
subject to reduction in any year by the amount of certain brokerage
commissions and fees (less expenses) received by affiliates of the Manager on
the fund's portfolio transactions.
17
<PAGE>
The fund reimburses Putnam Management for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Trustees of the fund receive an annual Trustees fee of $390 and an additional
fee for each Trustee's meeting attended. Trustees who are not interested
persons of Putnam Management and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
During the year ended November 30, 1995, the fund adopted a Trustee Fee
Deferral Plan (the "Plan") which allows the Trustees to defer the receipt of
all or a portion of Trustees Fees payable on or after July 1, 1995. The
deferred fees remain in the fund and are invested in the fund or in other
Putnam funds until distribution in accordance with the Plan.
Custodial functions for the fund 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, 1995, fund expenses were reduced by $101,272
under expense offset arrangements with PFTC. Investor servicing and custodian
fees reported in the Statement of operations exclude these credits. The fund
could have invested the assets utilized in connection with the expense offset
arrangements in an income producing asset if it had not entered into such
arrangements.
Note 3
Purchases and sales of securities
During the year ended November 30, 1995, purchases and sales (including
maturities) of investment securities (all short-term obligations) aggregated
$277,852,848 and $285,400,000 respectively. In determining the net gain or
loss on securities sold, the cost of securities has been determined on the
identified cost basis.
Note 4
Capital shares
At November 30, 1995, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares, at a constant net asset
value of $1.00 per share, were as follows:
Year ended November 30
- -------------------------------------------------------------------
1995 1994
- -------------------------------------------------------------------
Shares sold 186,252,463 286,251,626
- -------------------------------------------------------------------
Shares issued in connection with
reinvestment of distributions 1,305,570 862,975
- -------------------------------------------------------------------
187,558,033 287,114,601
- -------------------------------------------------------------------
Shares repurchased (193,499,759) (292,772,548)
- -------------------------------------------------------------------
Net decrease (5,941,726) (5,657,947)
- -------------------------------------------------------------------
18
<PAGE>
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT
ACCOUNTANTS
Coopers & Lybrand L.L.P.
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Gary N. Coburn
Vice President
James E. Erickson
Vice President
William F. McGue
Vice President
Blake E. Anderson
Vice President
Lindsey C. Strong
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Senior Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York Tax
Exempt Money Market 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
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.
19
<PAGE>
[GRAPHIC] PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
22201-063 1/96
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
