Putnam
New York
Tax Exempt
Money Market
Fund
ANNUAL REPORT
November 30, 1996
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "With New York's economic and fiscal outlook continuing to improve, we
have positioned the fund to benefit from investment opportunities
while simultaneously exercising appropriate caution on individual
security selection."
-- Lindsey C. Strong, manager
Putnam New York Tax Exempt Money Market Fund
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
14 Financial statements
20 Results of October 31, 1996, shareholder meeting
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
(copyright) Karsh, Ottawa
Dear Shareholder:
Unsettled fixed-income markets and continued uncertainty over the course
of short-term interest rates provided most of the challenges for Fund
Manager Lindsey Strong throughout Putnam New York Tax Exempt Money
Market Fund's fiscal year that ended on November 30, 1996.
Given this market environment, Lindsey placed special emphasis on
flexibility in her approach to the portfolio's makeup during the period.
She also maintained the fund's conservative strategy of investing in
high-quality short-term investments. As a result, she was able to
deliver another year of competitive performance while maintaining a
stable net asset value.
As your fund moves into fiscal 1997, Lindsey sees a continuation of this
general environment ahead, especially as Washington and New York adjust
to the results of the November elections. In the report that follows,
Lindsey discusses in detail the driving forces behind your fund's fiscal
1996 performance and her outlook for the fiscal year ahead.
Respectfully yours,
/S/George Putnam
George Putnam
Chairman of the Trustees
January 15, 1997
Report from the Fund Manager
Lindsey C. Strong
In a year marked by one spectacular stock market gain after another,
Putnam New York Tax Exempt Money Market Fund continued to offer
investors one of the essential ingredients of a well-balanced portfolio
- -- an income investment dedicated to stability. Once again during the
fiscal year ended November 30, 1996, shareholders enjoyed a competitive
total return as well as capital preservation and a stable $1.00 share
price. The fund's conservative investment strategy, which emphasizes
superior quality tax-exempt short-term instruments and the pursuit of
current income, served it well during the year's environment of
continued economic strength, slightly higher interest rates, and
diminished inflationary expectations.
* ECONOMIC STRENGTH WITHOUT INFLATION
Economic strength continued throughout the annual period, although
certain indicators showed some softening as November drew to a close.
Unemployment figures remained low, while retail sales, vehicle sales,
and consumer confidence remained relatively strong. No signs of
inflationary pressure have materialized, despite ongoing market worries
to the contrary. The Federal Reserve Board did not raise short-term
interest rates in September as many had expected, nor did it take action
at its November meeting. In fact, statistics released during the summer
and fall have shown some slowing in the economy and a tapering of
demand, as retail sales growth edged lower, exports softened, and new
home sales came off their earlier peaks.
* NEW YORK FISCAL AND ECONOMIC IMPROVEMENT CONTINUES
Although still lagging the growth rate of the nation as a whole, the New
York economy continued to improve throughout the period. One positive
factor in New York's credit picture has been the stellar year on Wall
Street -- a period in which the U.S. stock market surged above all
previous records. This market environment proved especially beneficial
for New York City. As tax-paying investors earned more money, they
contributed more to both city and state tax revenues. This upswing, in
turn, helped ease chronic budget deficit problems and improved
perceptions of New York's creditworthiness. All three major rating
agencies have acknowledged the city's healthier prospects. Nevertheless,
the reduced flow of dollars from Washington to the cities and states is
an ongoing concern. Accordingly, our investment strategy remained
exceptionally conservative, and we continued to measure the credit
quality of individual securities against the highest possible standards.
* PORTFOLIO FOCUSED ON NEUTRAL DURATION, HIGH-QUALITY HOLDINGS
Improvements in the New York economy notwithstanding, considerable
investor uncertainty remains with respect to the strength of the
nation's economy, the potential for inflation, and the future tone and
direction of Federal Reserve Board monetary policy. Given this unclear
picture, your portfolio remained in a flexible position throughout most
of the annual period. For the most part, this meant keeping portfolio
duration relatively neutral -- rather than short or long -- in order to
position the fund to capture incrementally higher yields as they became
available. In fact, we did extend the portfolio's duration slightly
during the summer when the market was anticipating higher interest rates
and succeeded in capturing some attractive yields for the fund.
Throughout the period, we continued to seek out securities offering
strong value and solid yield.
The supply of municipal securities fluctuates broadly according to
seasonal patterns throughout the year. Typically, June and July are
months of heavier tax-exempt securities issuance, and this year was no
exception. Demand, however, assumed a rather cautious tone during this
annual period, as buyers exhibited renewed enthusiasm for the most
conservative money market investments. Essentially, most market
participants are getting back to basics, eschewing the derivative
investments that were once such popular income vehicles and scrutinizing
the credit quality of even those securities once thought to be above
question.
Your fund has always maintained extremely strict standards for high
quality and liquidity in the securities it purchases. In this time of
increased credit consciousness and demand for the highest-quality money
market securities, we have redoubled efforts to find well-valued tax-
exempt securities that meet our criteria. We continue to hold a large
portion of assets in variable rate demand notes (VRDNs), municipal
commercial paper, and high-quality municipal notes from large, well-
respected issuers. VRDNs are instruments that can be redeemed on short
notice. They pay a variable interest rate that resets at daily, weekly,
or monthly intervals. They are helpful in managing the fund's average
maturity and liquidity. Municipal commercial paper and notes are
securities issued by a municipality to finance capital or operating
needs.
Currently, a majority of your fund's investments are insured or backed
by bank letters of credit. The insurance and letters of credit from a
third party guarantee that the short-term debt (money market
instruments) in which your fund invests will be paid within a certain
period of time. These features add a significant measure of quality
assurance to even those issues rated in the highest categories by
nationally recognized rating services, making many of our holdings among
the highest-quality securities available. We intend to maintain the
portfolio's high percentage of insured and bank-backed securities or
even expand it, should appropriate investment opportunities arise.
* CONSTRUCTIVE, YET CAUTIOUS, OUTLOOK PREVAILS
We are cautiously optimistic about prospects for the municipal bond
market in New York. The state's economic and fiscal situations seem to
be on an upswing, and this scenario bodes well for investors in
municipal securities. At the same time, it would appear that economic
growth has begun to moderate while inflationary pressures remain
subdued. After expecting the Fed to raise interest rates, most market
participants now believe the Fed will not act over the near term, since
the economy appears to be slowing appropriately on its own. Against this
backdrop, money market rates seem to be stabilizing. Nevertheless, the
path is far from clear, and the market may experience some unsettling
moments in the months ahead. Given this assessment, we believe the
portfolio's neutral duration and concentration in superior quality
issues should continue to serve shareholders well by enabling the fund
to maintain its stable share price and income stream amid this
challenging environment.
PERFORMANCE COMPARISONS (11/30/96)
Current After-tax After-tax
return return1 return2
- -----------------------------------------------------------------------
Passbook savings account 2.01% 1.08% 1.13%
- -----------------------------------------------------------------------
Taxable money market fund
7-day yield 4.88 2.62 2.74
- -----------------------------------------------------------------------
3-month certificate of
deposit (as of 11/30/96) 4.00 2.15 2.24
- -----------------------------------------------------------------------
Putnam New York
Tax Exempt Money
Market Fund (7-day yield) 2.85 2.85 2.85
- -----------------------------------------------------------------------
The net asset value of money market mutual funds is uninsured and
designed to be fixed, while distributions vary daily. Investment returns
will fluctuate. 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.
1 After-tax return assumes a combined 46.27% federal, New York State,
and New York City tax rate.
2 After-tax return assumes a combined 43.90% 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), Bank Rate Monitor (3-month
CDs), IBC/Donaghue's Money Fund Report (taxable money market fund 7-day
yield).
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 11/30/96, there is no guarantee the fund
will continue to hold these securities in the future.
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 current income free from federal income tax and New
York State and New York City personal income taxes, 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.
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 11/30/96
Lipper New York
Tax Exempt
Money Market Fund Consumer
NAV Average Price Index
- ------------------------------------------------------------------------
1 year 2.93% 2.92% 3.26%
- ------------------------------------------------------------------------
5 years 12.96 13.46 15.09
Annual average 2.47 2.56 2.85
- ------------------------------------------------------------------------
Life of fund
(10/26/87) 36.64 37.00 37.55
Annual average 3.49 3.53 3.57
- ------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 12/31/96
(most recent calendar quarter)
NAV
- ------------------------------------------------------------------
1 year 2.72%
- ------------------------------------------------------------------
5 years 12.68
Annual average 2.42
- ------------------------------------------------------------------
Life of fund (10/26/87) 36.73
Annual average 3.46
- ------------------------------------------------------------------
Performance data represent past results, do not reflect future
performance, and will differ for each share class. Investment returns
and principal value will fluctuate so that an investor's shares, when
sold, may be worth more or less than their original cost.
DISTRIBUTION INFORMATION
12 months ended 11/30/96
- ------------------------------------------------------------------
Distributions (number) 12
- ------------------------------------------------------------------
Income $.028923
- ------------------------------------------------------------------
Current return
(end of period)
- ------------------------------------------------------------------
7-day yield1 2.85%
- ------------------------------------------------------------------
Taxable equivalent2 (a) 5.08
- ------------------------------------------------------------------
Taxable equivalent2 (b) 5.30
- ------------------------------------------------------------------
30-day yield1 2.73
- ------------------------------------------------------------------
Taxable equivalent2 (a) 4.87
- ------------------------------------------------------------------
Taxable equivalent2 (b) 5.08
- ------------------------------------------------------------------
1 The 7- and 30-day yields are the two most common gauges for measuring
money market mutual fund performance
2 Assumes (a) maximum 43.90% combined federal income tax and New York
State personal income tax rate or (b) maximum 46.27% combined federal
income tax, New York State and New York City personal income tax rate.
Results for investors subject to lower tax rates would not be as
advantageous.
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.
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, not including
any initial or contingent deferred sales charge.
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 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.
Report of independent accountants
For the fiscal year ended November 30, 1996
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, 1996, and the related statement of
operations for the year then ended, 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 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, 1996, 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 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, 1996, the results of its operations for the year then
ended, 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 13, 1997
<TABLE>
<CAPTION>
Portfolio of investments owned
November 30, 1996
Key to Abbreviations
FGIC --Federal Guaranty Insurance Corporation
LOC --Letter of Credit
MCP --Municipal Commercial Paper
RAN --Revenue Anticipation Notes
SPA --Stand-by Purchase Agreement
TAN --Tax Anticipation Notes
VRDN --Variable Rate Demand Notes
<S> <C> <C> <C> <C>
MUNICIPAL BONDS AND NOTES (84.0%) *
PRINCIPAL AMOUNT RATINGS ** VALUE
New York (79.0%)
- --------------------------------------------------------------------------------------------------------------------------
$1,700,000 Babylon, Indl. Dev. Agcy. Resource Recvy. VRDN (Equity Babylon), 3.95s,
12/01/24 (Union Bank of Switzerland LOC) A-1 $ 1,700,000
1,500,000 Buffalo, RAN, Ser. A, 4 1/4s, 7/15/97 (Landesbank Hessen LOC) MIG1 1,505,978
1,000,000 Erie Cnty., RAN, Ser. B, 4 1/4s, 11/19/97 (Union Bank of Switzerland LOC) MIG1 1,006,096
1,895,000 Monroe Cnty., Indl. Dev. Agcy. VRDN (Columbia Sussex Corp.) 5s, 11/01/96
(Cumberland Fed. S&L LOC) A-1 1,895,000
700,000 Nasau Cnty., Indl. Dev. Agcy. VRDN (Cold Spring Harbor Lab) 4s, 7/01/19
(Morgan Guaranty Trust LOC) A-1 700,000
1,900,000 NY City, VRDN, Ser. B, 4.25s, 10/01/22 (FGIC SPA) VMIG1 1,900,000
2,850,000 NY City, Cultural Res. VRDN (Soloman R. Guggenheim), Ser. B, 4s, 12/01/15 A-1 2,850,000
1,900,000 NY State Dorm. Auth. VRDN (Oxford U. Press Inc.), 4.05s, 7/01/23
(Landesbank Hessen of New York LOC) VMIG1 1,900,000
NY State Energy Research & Dev. Auth. Poll. Control VRDN
1,900,000 (NY Elec. Gas), Ser. D, 4.25s 10/01/29 (Union Bank of Switzerland LOC) VMIG1 1,900,000
3,000,000 (LILCO), Ser. A, 3.25s, 3/01/16 (Deutsche Bank A.G., NY LOC) VMIG1 3,000,000
3,400,000 (Niagara Mohawk Pwr.), Ser. A, 4.25s, 7/1/15 (Morgan Guaranty Trust LOC) A-1 3,400,000
1,000,000 (Rochester Gas & Electric) 3.4s, 10/01/14 (Bank of NY, Citibank, NY LOC) P-1 1,000,000
600,000 (Niagara Mohawk Pwr.), 4.3s , 12/01/23 (Morgan Guaranty Trust LOC) A-1 600,000
300,000 (Niagara Mohawk Pwr.), 4.3s, 7/01/27 (Morgan Guaranty Trust LOC) A-1 300,000
1,000,000 NY State Hsg. Fin. Agcy. VRDN (Normadie Court I) 3.7s, 5/15/15
(Landesbank Hessen, LOC) VMIG1 1,000,000
3,000,000 Suffolk Cnty., Indl. Dev. Agcy. VRDN (Cold Spring Harbor Lab) 3.3s, 7/01/23
(Morgan Guaranty Trust LOC) A-1 3,000,000
1,000,000 Triborough Bridge & Tunnel Auth. Special Oblig. VRDN, 3 1/2s, 1/01/24 (FGIC SPA) VMIG1 1,000,000
2,500,000 Westchester Cnty., TAN, 3 3/4s, 12/11/96 MIG1 2,500,521
------------
31,157,595
Puerto Rico (5.0%)
- --------------------------------------------------------------------------------------------------------------------------
2,000,000 PR, Indl. Med. & Env. Poll. Ctrl. Fac. Fin. Auth. (Reynolds Metal Co.)
3.8s, 9/01/13 (ABN AMRO Bank LOC) P-1 2,000,947
------------
Total Municipal Bonds and Notes (cost $33,158,542) $ 33,158,542
MUNICIPAL COMMERCIAL PAPER (13.4%)*
PRINCIPAL AMOUNT RATINGS** VALUE
- --------------------------------------------------------------------------------------------------------------------------
$1,800,000 NY State Dorm 89c MCP (Memorial Sloan-Kettering Cancer Center), 3 1/2s,
12/17/96 A-1 $ 1,800,000
1,800,000 NY City, Muni Water Finance MCP, 3.6s, 3/7/97 A-1 1,800,000
1,700,000 NY State Env. Fac. MCP, 3.55s, 2/10/97 A-1 1,700,000
------------
Total Municipal Commercial Paper (cost $5,300,000) $ 5,300,000
- --------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $38,458,542)*** $ 38,458,542
- --------------------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $39,455,739.
** The Moody's or Standard & Poor's ratings indicated are
believed to be the most recent ratings available at
November 30, 1996 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 30,1996.
Securities rated by Putnam are indicated by "/P" and
are not publicly rated. Ratings are not covered by the
Report of independent accountants.
Moody's Investor Service, Inc. and Standard & Poor's Corp.
are the leading independent rating agencies for debt
securities. Moody's uses the designation "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.
MIGI/VMIGI = Best quality; strong protection of cash flows, superior
liquidity and broad access to refinancing
MIG2/VMIG2 = High quality; ample protection of cash flows, liquidity
support and ability to refinance
AAA = Extremely strong capacity to pay interest and repay principal
AA = Strong capacity to pay interest and repay principal and differs
from the higher rated issues only in a small degree
P-1 = Superior capacity for repayment
P-2 = Strong capacity for repayment
Standard & Poor's Corp.
SP-1 = Overwhelming safety characteristics
SP-2 = Strong capacity to pay interest and repay principal.
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.
The rates shown on VRDN are the current interest rates at November 30, 1996.
The fund had the following industry group concentrations greater than 10% on November 30, 1996
(as a percentage of net assets):
Energy 30.2%
Industrial 14.2%
Housing 11.9%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
November 30. 1996
<S> <C>
Assets
- -----------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $38,458,542
- -----------------------------------------------------------------------------
Cash 774,429
- -----------------------------------------------------------------------------
Interest and other receivables 282,527
- -----------------------------------------------------------------------------
Receivable for shares of the fund sold 102,288
- -----------------------------------------------------------------------------
Receivable for securities sold 5,000
- -----------------------------------------------------------------------------
Total assets 39,622,786
Liabilities
- -----------------------------------------------------------------------------
Distributions payable to shareholders 71,330
- -----------------------------------------------------------------------------
Payable for shares of the fund repurchased 43,075
- -----------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 45,133
- -----------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 2,682
- -----------------------------------------------------------------------------
Payable for administrative services (Note 2) 680
- -----------------------------------------------------------------------------
Other accrued expenses 4,147
- -----------------------------------------------------------------------------
Total liabilities 167,047
- -----------------------------------------------------------------------------
Net Assets $39,455,739
Represented by
- -----------------------------------------------------------------------------
Paid-in capital (Note 4) $39,455,739
- -----------------------------------------------------------------------------
Computation of net asset value and offering price
- -----------------------------------------------------------------------------
Net asset value, offering and redemption price per share
($39,455,739 divided by 39,455,739 shares) $ 1.00
- -----------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended November 30, 1996
<S> <C>
Tax exempt interest income: $1,446,517
- -----------------------------------------------------------------------
Expenses:
- -----------------------------------------------------------------------
Compensation of Manager (Note 2) 192,377
- -----------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 86,235
- -----------------------------------------------------------------------
Compensation of Trustees (Note 2) 8,463
- -----------------------------------------------------------------------
Administrative services (Note 2) 4,198
- -----------------------------------------------------------------------
Reports to shareholders 27,385
- -----------------------------------------------------------------------
Registration fees 8,427
- -----------------------------------------------------------------------
Auditing 16,334
- -----------------------------------------------------------------------
Legal 4,941
- -----------------------------------------------------------------------
Postage 18,059
- -----------------------------------------------------------------------
Other 8,593
- -----------------------------------------------------------------------
Total expenses 375,012
- -----------------------------------------------------------------------
Expense reduction (Note 2) (105,500)
- -----------------------------------------------------------------------
Net expenses 269,512
- -----------------------------------------------------------------------
Net investment income 1,177,005
- -----------------------------------------------------------------------
Net increase in net assets resulting from operations $1,177,005
- -----------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended November 30
--------------------------------
1996 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
- -----------------------------------------------------------------------------------------------
Operations:
- -----------------------------------------------------------------------------------------------
Net investment income $1,177,005 $1,415,126
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,177,005 1,415,126
- -----------------------------------------------------------------------------------------------
Distributions to shareholders:
- -----------------------------------------------------------------------------------------------
From net investment income (1,177,005) (1,415,126)
- -----------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) 582,464 (5,941,726)
- -----------------------------------------------------------------------------------------------
Total increase(decrease) in net assets 582,464 (5,941,726)
- -----------------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------------
Beginning of year 38,873,275 44,815,001
- -----------------------------------------------------------------------------------------------
End of year $39,455,739 $38,873,275
- -----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
Year ended November 30
- ---------------------------------------------------------------------------------------------------------------------------
1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income .0289 .0318 .0188
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations .0289 .0318 .0188
- ---------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income (.0289) (.0318) (.0188)
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.0289) (.0318) (.0188)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(b) 2.93 3.23 1.90
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $39,456 $38,873 $44,815
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(c) .88 .91 .77
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 2.75 3.18 1.86
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Year ended November 30
- ------------------------------------------------------------------------------------------------------
1993 1992
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $1.00 $1.00
- ------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------
Net investment income .0165 .0259(a)
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments .0001 --
- ------------------------------------------------------------------------------------------------------
Total from investment operations .0166 .0259
- ------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------
From net investment income (.0165) (.0259)
- ------------------------------------------------------------------------------------------------------
From net realized gain on investments (.0001) --
- ------------------------------------------------------------------------------------------------------
Total distributions (.0166) (.0259)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00
- ------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(b) 1.67 2.62
- ------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $50,473 $57,705
- ------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(c) .91 .78(a)
- ------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 1.69 2.59(a)
- ------------------------------------------------------------------------------------------------------
(a) Reflects an expense limitation. As a result of such limitation, expenses
of the fund for the year ended November 30, 1992
reflects a reduction of $0.0024 per share.
(b) Total investment return assumes dividend reinvestments.
(c) The ratio of expenses to average net assets for the period ended November 30,
1995 and thereafter, includes amounts paid through expense offset arrangements.
Prior period ratios exclude these amounts. (See Note 2).
</TABLE>
Notes to financial statements
November 30, 1996
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, Inc. ("Putnam Management"), the fund's manager, a
wholly-owned subsidiary of Putnam Investments, Inc., 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 preparation of financial statements is in conformity
with generally accepted accounting principles and requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities. Actual results could differ from those
estimates.
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 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. 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, 1996, the fund has a capital loss carryover of
approximately $6,600 available to offset future capital gains, if any,
which will expire 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.
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 on the following annual rates: 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.
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.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned 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, 1996, fund expenses were reduced by
$105,500 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 a portion of the assets utilized
in connection with the expense offset arrangements in an income
producing asset if it had not entered into such arrangements.
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.
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 certain Putnam funds until distribution in
accordance with the Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and
meeting fees for the three years preceding retirement. Pension expense
for the fund is included in Compensation of trustees in the Statement of
operations. Accrued pension liability is included in Payable for
compensation of Trustees in the Statement of assets and liabilities.
Note 3
Purchase and sales of securities
During the year ended November 30, 1996, purchases and sales of
investment securities (all short-term obligations) aggregated
$337,684,080 and $338,512,000, 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, 1996, 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
- ----------------------------------------------------
1996 1995
- ----------------------------------------------------
Shares sold 304,712,398 186,252,463
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Shares issued in
connection with
reinvestment of
distributions 1,174,100 1,305,570
- ----------------------------------------------------
305,886,498 187,558,033
Shares
repurchased (305,304,034) (193,499,759)
- ----------------------------------------------------
Net increase
(decrease) 582,464 (5,941,726)
- ----------------------------------------------------
Federal tax information
The fund has designated 100% of dividends paid from net investment
income during the fiscal year as tax exempt for Federal income tax
purposes.
Results of October 31, 1996 shareholder meeting
(Unaudited)
A meeting of shareholders of the fund was held on October 31, 1996. At
the meeting, each of the nominees for Trustees was elected, as follows:
Votes
Votes for withheld
Jameson Adkins Baxter 22,386,455 1,920,987
Hans H. Estin 22,309,044 1,998,398
John A. Hill 22,386,455 1,920,987
R.J. Jackson 22,316,305 1,991,137
Elizabeth T. Kennan 22,347,433 1,960,009
Lawrence J. Lasser 22,386,455 1,920,987
Robert E. Patterson 22,365,016 1,942,426
Donald S. Perkins 22,309,044 1,998,398
William F. Pounds 22,309,044 1,998,398
George Putnam 22,357,998 1,949,444
George Putnam, III 22,326,744 1,980,698
Eli Shapiro 22,270,023 2,037,419
A.J.C. Smith 22,386,455 1,920,987
W. Nicholas Thorndike 22,365,016 1,942,426
A proposal to ratify the selection of Coopers & Lybrand L.L.P. as
auditors for the fund was approved as follows: 20,830,736 votes for, and
373,770 votes against, with 3,102,936 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to diversification of investments was approved as follows:
19,739,653 votes for, and 989,462 votes against, with 3,578,327
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to investments in the securities of a single issuer was approved
as follows: 18,386,467 votes for, and 2,224,348 votes against, with
3,696,627 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to making loans through purchases of debt obligations,
repurchase agreements and securities loans was approved as follows:
17,946,064 votes for, and 2,653,536 votes against, with 3,707,842
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to investments in real estate was approved as follows:
18,195,498 votes for, and 2,412,246 votes against, with 3,699,698
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to investments in senior securities was approved as follows:
18,744,890 votes for, and 1,915,231 votes against, with 3,647,321
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to concentration of its assets was approved as follows:
18,958,623 votes for, and 1,769,526 votes against, with 3,579,292
abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction
with respect to investments in securities of issuers in which management
of the fund or Putnam Investment Management, Inc. owns securities was
approved as follows: 18,642,523 votes for, and 2,154,846 votes against,
with 3,510,072 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction
with respect to margin transactions was approved as follows: 17,580,845
votes for, and 3,031,797 votes against, with 3,694,800 abstentions and
broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction
with respect to short sales was approved as follows: 17,756,197 votes
for, and 3,161,154 votes against, with 3,390,090 abstentions and broker
non-votes.
A proposal to eliminate the fund's fundamental investment restriction
which limits the fund's ability to pledge assets was approved as
follows: 17,584,921 votes for, and 3,214,921 votes against, with
3,507,600 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction
with respect to investments in restricted securities was approved as
follows: 17,622,460 votes for, and 3,094,799 votes against, with
3,590,183 abstentions and broker non-votes.
All tabulations are rounded to nearest whole number.
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
Ronald J. Jackson
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
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Gary N. Coburn
Vice President
William J. Curtin
Vice President
William McGue
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
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. You can also learn more at Putnam Investments'
website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed
or endorsed by, any financial institution, are not insured by the
Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board
or any other agency, and involve risk, including the possible loss of
principal amount invested.
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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Bulk Rate
U.S. Postage
PAID
Putnam
Investments
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29940-063 1/97
