<PAGE>
PUTNAM
NEW YORK
TAX EXEMPT
OPPORTUNITIES
FUND
ANNUAL REPORT
September 30, 1994
[LOGO APPEARS HERE]
BOSTON * LONDON * TOKYO
<PAGE>
PERFORMANCE HIGHLIGHTS
. The fund's class A shares earned Morningstar's highest ranking, five stars,
based on risk-adjusted 3-, 5-, and life performance through September 30,
1994.*
. Performance should always be considered in light of a fund's investment
strategy. Putnam New York Tax Exempt Opportunities Fund is designed for
investors seeking high current income free from federal, New York State and
New York City income taxes.
FISCAL 1994 RESULTS AT A GLANCE
<TABLE>
<CAPTION>
Class A Class B
Total return NAV POP NAV CDSC
<S> <C> <C> <C> <C>
(change in value during
period plus reinvested
distributions)
12 months ended 9/30/94 -0.89% -5.56% -- --
Since 2/1/94 /1/ -- -- -3.06% -7.73%
<CAPTION>
Share value NAV POP NAV
<S> <C> <C> <C>
9/30/93 $9.12 $9.57
2/1/94 /1/ -- -- $9.07
9/30/94 8.48 8.90 8.48
</TABLE>
<TABLE>
<CAPTION>
Capital gains/2/
Long- Short-
Distributions No. Income term term Total
<S> <C> <C> <C> <C> <C>
Class A 13 $0.544303 $0.007 $0.009 $0.560303
Class B 8 0.312942 -- -- 0.312942
</TABLE>
<TABLE>
<CAPTION>
Current return NAV POP NAV
<S> <C> <C> <C>
End of period
Current dividend rate/3/ 6.22% 5.92% 5.57%
Taxable equivalent/4/ 11.18 10.64 10.01
Current 30-day SEC yield/5/ 5.82 5.54 5.06
Taxable equivalent/4/ 10.46 9.96 9.09
</TABLE>
Performance data represent past results. For performance over longer periods,
see page 8. POP assumes 4.75% maximum sales charge. CDSC assumes 5% maximum
contingent deferred sales charge. /1/ Commencement of operations of class B
shares. /2/ Capital gains 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 Taxes and/or state and local taxes. /3/ Income
portion of most recent distribution, annualized and divided by NAV or POP at
end of period. /4/ Maximum combined 44.36% federal and state tax rate. Results
for investors subject to lower tax rates would not be as advantageous. 5Based
only on investment income, calculated using SEC guidelines.
* Morningstar, an independent rating agency, rates a fund in relation to other
funds with similar investment objectives based on risk-adjusted medium- and
long-term total return, as applicable, adjusted for sales charges. A five-star
rating puts the fund in the top 10%. Ratings are updated monthly. Past
performance is not indicative of future results.
2
<PAGE>
From the Chairman [PHOTO OF
GEORGE PUTNAM
APPEARS HERE]
Dear Shareholder:
Municipal bond investors have experienced more than their share of
frustration over the past several months as the fixed-income markets endure a
prolonged period of volatility. Putnam New York Tax Exempt Opportunities
Fund's performance during the fiscal year ended September 30, 1994, reflects
this unsettled environment.
Some signs of encouragement are beginning to appear for investors in tax-
exempt securities. Supplies may become tighter as more investors seek tax
relief; as with any commodity, more dollars chasing fewer goods should
translate into higher prices. Many sectors of the tax-exempt market,
including health care, education, and resource recovery, are poised for
growth, which should bode well over the long term for investments in those
areas.
Under the guidance of its new manager, we expect your fund to share in these
positive developments. Michael F. Bouscaren returns to Putnam after eight
years at Salomon Brothers, where most recently he was president, chairman,
and portfolio manager of Salomon Brothers Series Funds, Inc. Mike has 19
years of investment experience.
Respectfully yours,
/s/ George Putnam
George Putnam
Chairman of the Trustees
November 9, 1994
3
<PAGE>
REPORT FROM THE FUND MANAGER
MICHAEL F. BOUSCAREN
Like most fixed-income mutual funds, Putnam New York Tax Exempt Opportunities
Fund has had to operate in some rather inhospitable times over the past
several months. Fears of inflation persisted for much of the fiscal year ended
September 30, 1994, despite a series of interest rate increases intended to
keep it under control. As a result, the fund's class A shares' one-year total
return of -0.89% at net asset value was somewhat disappointing. However,
compared with the -4.33% one-year return of the average New York municipal
bond fund, as tracked by Lipper Analytical Services, the fund's performance
stands as a genuine achievement. Your fund also fulfilled its goal of
providing attractive current return. The 12-month current tax-free dividend
rate SEC yields of 5.82% for class A shares and 5.06% for class B shares were
better than the average New York tax-exempt fund, based on Lipper data.
. REACTING TO RISING RATES
Since the past year's rather trying conditions seem destined to remain for a
while, we will continue to use a cautious approach in managing the fund. This
resolve is evidenced by the fact that the fund's sector weightings changed
very little during fiscal '94. Furthermore, our defensive positioning has
given the fund's value a measure of protection, along with an attractive
current income.
Foremost of these defensive measures has been to keep the portfolio's average
duration relatively short (duration measures the price sensitivity of a bond
or a portfolio of bonds to a change in interest rates). Like maturity, with
which it is often confused, duration is measured in years. The shorter the
duration, the less volatility you can generally expect from the portfolio.
We also used premium-coupon bonds. The bond's higher coupons tend to make
their prices less sensitive to rising interest rates and their higher income
stream represents a greater portion of their return. This provides, at least,
a temporary floor for their prices. Holding premium-coupon bonds in a rising
interest rate
4
<PAGE>
environment, therefore, can help reduce price volatility. The presence of
these bonds in your fund's portfolio also helped to provide attractive levels
of dividend income.
. POSITIVE MARKET OUTLOOK
As this report was being written, the Empire State was engaged in one of the
nation's most hotly contested gubernatorial races. Despite some short-term
political questions, we remain optimistic about the post-election prospects
for the New York municipal bond market.
New York is also in the midst of an economic recovery. The state's cyclical
industries have shown signs of fueling a buoyant economic environment that
will continue well into next year. As a result, we believe tax revenues will
continue to grow. This has the effect of improving the quality of outstanding
debt across the state.
In the municipal bond market nationwide, there has been a decrease of more
than 40% in the issuance of debt. This reduction in supply, coupled with the
potential for increased demand for municipal bonds, may eventually result in
higher prices. The supply/demand relationship in New York was further enhanced
recently by a state policy that has curtailed the amount of debt coming to
market.
[ARTWORK APPEARS HERE]
5
<PAGE>
The debt reform policy has cut the state's level of issuance in half, from $30
billion in 1993 to a projected $15 billion in 1994. New York has also taken
steps to improve the efficiency of publicly funded programs. Along with a
dwindling supply of debt, these new efficiency measures could make the state's
securities very attractive investments over the long term.
. SECTORS CHANGED LITTLE
Because of our confidence in the state's actions, we believe the bonds that
finance New York's public programs, known in the market as state-appropriated
debt, may enjoy a significant level of price appreciation. Over the near term,
we have purchased the insured debt for public hospitals as well as bonds that
finance dormitories on the state's college campuses.
During the past year, we have also invested the fund's assets primarily in the
health care, utilities, and education sectors. We remain somewhat cautious,
however, about other parts of the portfolio. The major utility companies in
New York were impacted by recent court rulings inhibiting their ability to
raise rates. While we have maintained our positions in the debt of Niagara
Mohawk, Long Island Lighting Company, Con Edison, and the New York State Power
Authority, we have not added to them.
. A LONG-TERM VIEW
Looking further ahead, however, we are optimistic about the New York
tax-exempt bond market. While the sectors in which we have invested have not
changed much, the fund has positions within those sectors that we believe will
help it take advantage of stronger total return potential in fiscal 1995.
6
<PAGE>
[ARTWORK APPEARS HERE]
We will continue to monitor political and economic developments for any changes
that might affect the fund's holdings. We will also continue to use Putnam
Management's strong credit research and analytical capabilities to pinpoint
other securities that offer appreciation potential.
As the fund enters fiscal 1995, we believe the economy will continue its current
pace of slow but steady growth with relatively low inflation. We also believe
that as time goes on, municipal bonds, and particularly New York debt, will
become more attractive to tax-conscious investors when compared to taxable U.S.
Treasuries.
The views expressed about the securities mentioned in this report are
exclusively those of Putnam Management, and are not meant as investment advice.
Although the described holdings were viewed favorably as of September 30, 1994,
there is no guarantee the fund will continue to hold these securities in the
future.
7
<PAGE>
PERFORMANCE SUMMARY
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 back into the fund. We show total return in two ways: on a
cumulative long-term basis and on average how the fund might have grown each
year over varying periods. For comparative purposes, we show how the fund
performed relative to appropriate indexes and benchmarks.
TOTAL RETURN FOR PERIODS ENDED 9/30/94
<TABLE>
<CAPTION>
Lehman Bros.
Class A Class B Municipal
NAV POP NAV CDSC Bond Index CPI
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 year -0.89% -5.56% -- -- -2.44% 2.96%
----------------------------------------------------------------------------
3 years 19.58 13.93 -- -- 21.49 8.89
Annual average 6.14 4.44 -- -- 6.70 2.88
----------------------------------------------------------------------------
Life of class A 30.54 24.39 -- -- 35.06 11.91
Annual average 7.07 5.76 -- -- 8.01 2.93
----------------------------------------------------------------------------
Life of class B -- -- -3.06 -7.73 -4.88 2.19
----------------------------------------------------------------------------
</TABLE>
Fund performance data do not take into account any adjustment for taxes
payable on reinvested distributions or, for class A shares, distribution fees
prior to implementation of the class A distribution plan in 1990. The fund
began operations on November 7, 1990, offering shares now known as class A.
Effective February 1, 1994, the fund began offering class B shares.
Performance data represent past results and will differ for each share class.
Investment returns and net asset value will fluctuate so an investor's shares,
when sold, may be worth more or less than their original cost.
COMPARATIVE BENCHMARKS
LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged list of long-term fixed-
rate investment-grade tax-exempt bonds representative of the municipal bond
market. The index does not take into account brokerage commissions or other
costs, may include bonds different from those in the fund, and may pose
different risks than the fund.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
8
<PAGE>
[ARTWORK APPEARS HERE]
TERMS AND DEFINITIONS
CLASS A SHARES are generally subject to an initial sales charge.
CLASS B SHARES may be subject to a sales charge upon 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 maximum 4.75% sales charge.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the time of the
redemption of class B shares and assumes redemption at the end of the period.
Your fund's 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.
9
<PAGE>
THE PUTNAM FUND SELECTOR(TM)
The Putnam Fund Selector shows the many opportunities for investors within every
investment strategy. All investors should first accumulate a base of
conservative, cash-equivalent investments. Then, with the help of your
investment advisor, diversify your portfolio by investing in the Putnam Family
of Funds.
[ARTWORK APPEARS HERE]
10
<PAGE>
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Health Sciences Trust
Investors Fund
Natural Resources Fund*
New Opportunities Fund
OTC Emerging Growth Fund
Overseas Growth Fund
Vista Fund
Voyager Fund
PUTNAM GROWTH AND INCOME FUNDS
Convertible Income-Growth Trust
Dividend Growth Fund
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Managed Income Trust
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
Adjustable Rate U.S. Government Fund
American Government Income Fund
Balanced Government Fund
Corporate Asset Trust
Diversified Income Trust
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE FUNDS
Intermediate Tax Exempt Fund
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
STATE TAX-FREE FUNDS+
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio, and Pennsylvania
LIFESTAGE(SM) FUNDS
Putnam Asset Allocation Funds -- three investment portfolios that spread
your money across a variety of stocks, bonds, and money market investments
to help maximize your return and reduce your risk.
The three portfolios:
Putnam Asset Allocation: Balanced Portfolio
Putnam Asset Allocation: Conservative Portfolio
Putnam Asset Allocation: Growth Portfolio
MOST CONSERVATIVE INVESTMENTS++
Putnam money market funds:
Money Market Fund(S)
Tax Exempt Money Market Fund
California Tax Exempt Money Market Fund
New York Tax Exempt Money Market Fund
CDS AND SAVINGS ACCOUNTS**
* Formerly Energy-Resources Trust.
+ Not available in all states.
++ Relative to above.
(S) Formerly Daily Dividend Trust.
** Not offered by Putnam Investments. Certificates of deposit offer a fixed
rate of return and may be insured, up to certain limits, by federal/state
agencies. Savings accounts may also be insured up to certain limits.
Please call your financial advisor or Putnam to obtain a prospectus for
any Putnam fund. It contains more complete information, including charges
and expenses. Read it carefully before you invest or send money.
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
For the Year ended September 30, 1994
To the Trustees and Shareholders of
Putnam New York Tax Exempt Opportunities Fund
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments owned (except for bond ratings), and
the related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial
position of Putnam New York Tax Exempt Opportunities Fund (the "fund") at
September 30, 1994 and the results of its operations, the changes in its net
assets, and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of portfolio positions at September
30, 1994 by correspondence with the custodian and brokers, provides a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
November 11, 1994
12
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
September 30, 1994
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (98.0%)(a)
PRINCIPAL AMOUNT RATINGS(b) VALUE
NEW YORK (94.6%)
- ------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Babylon, Indl. Dev. Agcy. Resource Recvy. Rev. Bonds
$ 1,960,000 (Ogden Martin Syst.), Ser. A, 8 1/2s, 1/1/19 Baa $ 2,133,950
985,000 (Ogden Martin Syst.), Ser. C, 8 1/2s, 1/1/19 Baa 1,072,418
500,000 Battery Park, City Auth. Rev. Bonds 7.7s, 5/1/15 AAA 560,000
750,000 Buffalo, Swr. Auth. Rev. Bonds
Ser. D, American Municipal Bond Assurance Corp.
(AMBAC), 7 5/8s, 7/1/06 AAA 810,937
600,000 Erie Cnty., General Obligation (G.O.) Bonds
Ser. A, 9 1/2s, 2/1/00 BBB 628,500
1,130,000 Erie Cnty., Wtr. Auth. Rev. Bonds
AMBAC, zero%, 12/1/17 AAA 214,700
4,000,000 Hempstead, Town Acgy. Resource Recvy. Rev. Bonds
(American Fuel Co.), 7.4s, 12/1/10 A 4,175,000
2,725,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds
(Eddygate Park Apts. Project), 9s, 6/1/06 BBB/P 2,742,031
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid Waste Desposal
Rev. Bonds (Champion Intl. Corp.), 7.2s, 12/1/20 Baa 2,686,437
Metro. Trans. Auth. Svcs. Contract Fac. Rev. Bonds
2,000,000 (Commuter Fac.), Ser. 5, 6 1/2s, 7/1/16 Baa 1,955,000
460,000 (Trans. Fac.), Ser. 3, 7 1/2s, 7/1/16 AAA 519,800
Metro. Trans. Auth. Transit Fac. Rev. Bonds
600,000 Ser. F, 8 3/8s, 7/1/16 AAA 650,250
140,000 NY City Muni. Wtr. Fin. Auth. Wtr. & Swr. Sys. Rev.
Bonds Ser. B, Financial Guaranty Insurance Corp.
(FGIC), 7 1/2s, 6/15/11 AAA 155,750
NY City, G.O. Bonds
1,000,000 Ser. D, Group B, 8 1/4s, 8/1/11 Baa 1,123,750
300,000 Ser. B, 8 1/4s, 6/1/05 A 346,500
1,400,000 3.7s, 8/15/20 Variable Rate Demand Note (VRDN) VMIG1 1,400,000
380,000 Ser. F, 3s, 11/15/00 A 323,950
5,415,000 NY City, Hlth. & Hosp. Auth. Local Govt. Rev. Bonds
Ser. A, 6s, 2/15/06 Baa 5,218,706
NY City, Hsg. Dev. Corp. Multi-Fam. Hsg. Rev. Bonds
1,750,000 1st Ser. 85, Federal Housing Admin. (FHA) Insd.,
9 7/8s, 10/1/17 AA 1,815,625
600,000 Ser. A, FHA Insd., 9 5/8s, 1/1/19 A 632,250
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
1,500,000 (The Lighthouse Inc. Project), 6 1/2s, 7/1/22 AA 1,481,250
4,250,000 (Parking Corp. Project), 8 1/2s, 12/30/22 BB/P 4,149,062
NY City, Muni. Wtr. Fin. Auth. (VRDN),
1,500,000 Ser. G, (FGIC) 3.6s, 6/15/24 (VRDN) VMIG1 1,500,000
NY City, Muni. Wtr. Fin. Auth. Wtr & Swr. Rev. Bonds
1,000,000 NYC Ind. Dev. Auth. American Air Amt
6.9s, 8/1/24 BB 980,000
650,000 Ser. C, 7 3/4s, 6/15/20 AAA 747,500
45,000 Refunded, Ser. B, FGIC, 7 1/2s, 6/15/11 AAA 51,525
1,935,000 Ser. A, Municipal Bond Insurance Assn. (MBIA),
zero%, 6/15/03 AAA 1,206,956
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Municipal Bonds and Notes
Principal Amount Ratings(b) Value
New York (continued)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NY State Crossover G.O. Bonds
$ 750,000 6 1/8s, 11/15/13 A $ 729,375
475,000 6 1/8s, 11/15/12 A 464,906
NY State Dorm Auth. Rev. Bonds
2,200,000 (City U.), Ser. T, 10 1/4s, 7/1/12 Baa 2,332,000
5,920,000 (The Society of NY Hosp.), 9 3/4s, 7/1/15 Baa 6,090,200
1,100,000 (Rochester General Hosp.), FHA Insd., 8 3/4s, 2/1/25 AA 1,161,875
170,000 (City U.), Ser. D, 8 3/4s, 7/1/03 BBB 202,725
1,250,000 (Long Island Med. Ctr.), Ser. A, FHA Insd.,
7 3/4s, 8/15/27 AAA 1,353,125
835,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa 918,500
1,000,000 (State U. Edl. Fac.), Ser. A, 7 5/8s, 5/15/05 Baa 1,131,250
750,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 Baa 831,563
605,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/30 AA 663,231
500,000 (Wildwood School), 7.3s, 7/1/15 A 538,125
2,050,000 (Our Lady of Mercy), 6.3s, 8/1/32 AA 1,991,063
1,125,000 (Culinary Institute of America), 6s, 7/1/22 AAA 1,054,687
5,000,000 (City U. Syst.), Ser. C, 6s, 7/1/16 Baa 4,637,500
1,000,000 (New Hope Cmnty. College), 5.7s, 7/1/17 AA 892,500
1,400,000 (Upstate Cmnty. Colleges), 5 1/2s, 7/1/14 Baa 1,225,000
725,000 (State U. Edl. Fac.), Ser. B, zero%, 5/15/09 Baa 281,844
NY State Energy Research & Dev. Auth. Elec. Fac. Rev.
Bonds
7,075,000 (Cons. Edison Co. of NY, Inc. Project), 9s, 8/15/20 Aa 7,437,594
1,600,000 (Cons. Edison Co. of NY, Inc. Project) 7 1/2s, 7/1/25 Aa 1,692,000
NY State Energy Research & Dev. Auth. Gas Fac. Rev.
Bonds
2,850,000 (Brooklyn Union Gas Co. Project), Ser. A, 9s, 5/15/15 A 2,978,250
4,000,000 (Brooklyn Union Gas Co. Project), 8 3/4s, 7/1/15 A 4,190,000
NY State Energy Research & Dev. Auth. Poll. Control
Rev. Bonds
5,135,000 (Niagara Mohawk Pwr. Corp. Project), Ser. I,
11 3/8s, 10/1/14 Baa 5,237,700
2,325,000 (Orange and Rockland Util. Project), 10 1/4s, 10/1/14 A 2,371,500
4,580,000 (Niagara Mohawk Pwr. Corp.), Ser. I, 8 7/8s, 11/1/25 Baa 4,831,900
1,000,000 NY State Energy Research & Dev. Auth. Rev. Bonds
(Cons. Edison Co. of NY, Inc. Project), 6 3/4s, 1/15/27 AA 997,500
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
500,000 (State Wtr. Revolving Fund), Ser A, 7 1/2s, 6/15/12 AA 553,750
3,600,000 7 1/8s, 7/1/12 A 3,843,000
NY State Environmental Fac. Corp. Special Oblig.
Control Rev. Bonds
1,550,000 (State Pk. Infrastructure), 5 3/4s, 3/15/13 Baa 1,402,750
NY State Hsg. Fin. Agcy. Rev. Bonds
970,000 (Mult-Fam. Insd. Mtge.), Ser. 83A, 10s, 5/1/23 Aa 980,913
750,000 (Multi-Fam. Hsg. Secd. Mtge. Program),
Ser. D, 6.2s, 8/15/12 AA 732,187
NY State Hsg. Fin. Agcy. Svcs. Contract Oblig. Rev.
Bonds
700,000 Ser. A, 7.8s, 9/15/20 AAA 806,750
500,000 Ser. A, 7 1/4s, 9/15/12 Baa 522,500
1,000,000 Ser. C, 6.3s, 9/15/12 Baa 968,750
3,500,000 Ser. C, 6 1/8s, 3/15/20 Baa 3,237,500
NY State Local Govt. Assistance Corp. Rev. Bonds
100,000 Ser. C, 7s, 4/1/21 AAA 111,000
1,000,000 2.3s, 4/1/95 VRDN VMIG1 1,000,000
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Municipal Bonds and Notes
Principal Amount Ratings(b) Value
New York (continued)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NY State Med Care Fac. Fin. Agcy. Rev. Bonds
$ 350,000 (Nursing Home Insd. Mtge.), Ser. B, FHA Insd.,
10 1/2s, 1/15/24 A $ 356,563
1,490,000 (Mercy Cmnty. Hosp.-Sisters of Mercy),
Ser. A, 9.8s, 11/1/16 A 1,510,488
430,000 Ser. A, FHA Insd., 9 1/4s, 1/15/25 Aa 444,513
490,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B, FHA Insd.,
9 1/8s, 2/15/25 AA 508,987
1,850,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. C, FHA Insd.,
9s, 2/15/26 AA 1,912,437
630,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B, FHA Insd.,
8 7/8s, 8/15/27 AA 693,000
2,595,000 (Mt. Sinai Hosp. Insd. Mtge.), Ser. C, FHA Insd.,
8 7/8s, 1/15/26 AAA 2,789,625
400,000 (Kingston Hosp. Project), 8 7/8s, 11/15/17 A 424,000
2,645,000 (Mental Hlth. Svcs. Facs.), Ser. A, 8 7/8s, 8/15/07 Baa 2,939,256
750,000 (Brooklyn, Caledonia & Long Island Hosps. Insd. Mtge.),
Ser. A, FHA Insd., 8 1/2s, 1/15/22 AAA 802,500
25,000 (Mt. Sinai Hosp. Insd. Mtge.), Ser. C, FHA Insd.,
8 3/8s, 1/15/00 AAA 26,719
395,000 7 7/8s, 8/15/08 AAA 438,944
360,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08 AAA 414,450
70,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 AAA 76,300
130,000 (Mental Hlth. Svcs. Fac. ), Ser. A, 7.8s, 2/15/19 AAA 145,925
230,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 Baa 248,113
620,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 AAA 703,700
200,000 (Bronx, Lebanon & the Jamaica Hosps.),
Ser. A, 7.1s, 2/15/27 Baa 204,750
700,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. D, FHA Insd.,
6.6s, 2/15/31 AA 688,625
3,780,000 (Mental Hlth. Svcs. Fac.), Ser. F, 6 1/2s, 8/15/12 Baa 3,718,575
3,220,000 (Hosp. & Nursing Home Insd. Mtge),
Ser. C, 6 1/4s, 8/15/12 AAA 3,147,550
1,700,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. A, FHA Insd.,
6.2s, 2/15/23 AAA 1,625,625
750,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B, FHA Insd.,
6.2s, 8/15/22 AAA 718,125
NY State Mtge. Agcy. Rev. Bonds
190,000 5th Ser., 9 3/4s, 10/1/10 AA 197,363
1,780,000 (Single-Fam.) Ser. 2, zero%, 10/1/14 AA 275,900
1,580,000 NY State Muni. Bond Bank Agcy. Rev. Bonds
Ser. A, 6 5/8s, 3/15/06 A 1,651,100
NY State Urban Dev. Corp. Rev. Bonds
2,510,000 (Correctional Fac.), 8s, 1/1/15 Aaa 2,663,738
1,285,000 (Onondaga Cnty. Convention Project), 7 7/8s, 1/1/20 Baa 1,426,350
500,000 (State Fac.), 7 1/2s, 4/1/20 Baa 538,125
500,000 (Correctional Fac.), Ser. 2, 7 1/2s, 1/1/18 Aaa 566,250
5,000,000 (Correctional Fac.), 5 1/2s, 1/1/18 Baa 4,250,000
1,500,000 North Cnty., Dev. Auth. Rev. Bonds
(Solid Waste Mgmt. Syst.), Ser. A, 6 3/4s, 7/1/12 Baa 1,509,375
5,900,000 NY Engy. Con Edsn Amt 7 3/4s, 1/1/24 A 6,246,625
2,800,000 Onondaga Cnty., Indl. Dev. Agcy. Civic Fac. Rev Bonds
6 5/8s, 1/1/18 Baa 2,747,500
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS(b) VALUE
NEW YORK (continued)
- ------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Port Auth. of NY & NJ Cons. Bonds
$ 3,300,000 53rd Ser., 8.7s, 7/15/20 AA $ 3,481,500
2,000,000 7 7/8s, 3/1/24 AA 2,115,000
3,500,000 7s, 9/1/24 AAA 3,648,750
280,000 78th Ser., 6 1/2s, 4/15/11 AA 283,850
175,000 78th Ser., 6 1/2s, 10/15/08 AA 182,219
500,000 Schulyer Cnty., Indl. Dev. Rev. Bonds
6.2s, 10/1/05 AA 504,375
5,000,000 Tompkins Co. NY Ind. Dev. Auth. Kendal
7 7/8s, 6/1/24 B 4,900,000
United Nations Dev. Corp. Rev. Bonds
200,000 (Sr. Lien, Phase 2 & 3), Ser. A, 7 7/8s, 7/1/26 Aaa 215,250
1,000,000 (Sr. Lien, Phase 2 & 3), Ser A, 6s, 7/1/12 A 981,250
1,465,000 Valley Hlth. Dev. Corp. Mtge. Rev. Bonds
(Valley Hlth. Project), FHA Insd., 11.3s, 2/1/23 A 1,807,444
-----------
174,407,594
Puerto Rico (2.8%)
- ------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Cmnwlth. of Puerto Rico, Hwy. & Trans. Auth. Rev. Bonds
500,000 Ser. S, 6 1/2s, 7/1/22 AAA 544,375
5,000,000 Puerto Rico Tel. Auth. Tel. Auth. Residual Interest
Bonds (RIBS)
8.501s, 1/1/20 (acquired 9/25/92, cost $4,837,500)(c) A 4,637,500
-----------
5,181,875
Virgin Islands (0.6%)
- ------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
1,000,000 Virgin Islands, Pub. Fin. Auth. Rev. Bonds
(Matching Funds Loan Notes),
Ser. A, 7 1/4s, 10/1/18 BBB/P 1,022,500
-----------
Total Investments (cost $185,585,618)(d) $180,611,969
===========
</TABLE>
(a) Percentages indicated are based on net assets of $184,362,651, which
correspond to a net asset value per share of both Class A and Class B
shares of $8.48.
(b) The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at September 30, 1994 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 ratings which agencies would ascribe to these securities at
September 30, 1994. Securities rated by Putnam are indicated by "/P" and
are not publicly rated. Ratings are not covered by the Report of
Independent Accountants.
(c) Restricted as to public resale. At the date of acquisition this security
was valued at cost. There were no outstanding unrestricted securities of
the same class as that held. Total market value of the restricted security
owned at September 30, 1993 was $4,637,500 or 2.5% of net assets.
(d) The aggregate identified cost for federal income tax purposes is
$185,585,618, resulting in gross unrealized appreciation and depreciation
of $1,789,026 and $6,762,675 respectively, or net depreciation of
$4,973,649.
The rates shown on Residual Interest Bonds (RIBS) which are securities
paying variable interest rates that vary inversely to changes in market
interest rates and Variable Rate Demand Notes (VRDN) are the current
interest rates at September 30, 1994 which are subject to change based on
the terms of the security.
The Fund had the following industry group concentrations greater than 10%
on September 30, 1994 (as a percentage of net assets):
Utilities 22.0%
Health Care 19.0%
16
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1994
<TABLE>
<CAPTION>
ASSETS
- --------------------------------------------------------------------------
<S> <C>
Investments in securities, at value
(identified cost $185,585,618) (Note 1) $180,611,969
- --------------------------------------------------------------------------
Cash 236,835
- --------------------------------------------------------------------------
Interest receivable 3,362,529
- --------------------------------------------------------------------------
Receivable for shares of the fund sold 1,246,272
- --------------------------------------------------------------------------
Receivable for securities sold 1,250
- --------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 15,355
- --------------------------------------------------------------------------
TOTAL ASSETS 185,474,210
<CAPTION>
LIABILITIES
- --------------------------------------------------------------------------
<S> <C>
Distributions payable to shareholders $ 283,215
- --------------------------------------------------------------------------
Payable for shares of the fund repurchased 357,402
- --------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 300,168
- --------------------------------------------------------------------------
Payable for administrative services (Note 2) 6,185
- --------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 1,542
- --------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 10,309
- --------------------------------------------------------------------------
Payable for distribution fees -- (Note 2) 96,919
- --------------------------------------------------------------------------
Other accrued expenses 55,819
- --------------------------------------------------------------------------
TOTAL LIABILITIES 1,111,559
- --------------------------------------------------------------------------
NET ASSETS $184,362,651
- --------------------------------------------------------------------------
REPRESENTED BY
Paid-in capital (Note 4) $191,050,194
- --------------------------------------------------------------------------
Undistributed net investment loss (66,768)
- --------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (1,647,126)
- --------------------------------------------------------------------------
Net unrealized depreciation of investments (4,973,649)
- --------------------------------------------------------------------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO CAPITAL
SHARES OUTSTANDING $184,362,651
- --------------------------------------------------------------------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- --------------------------------------------------------------------------
Net asset value and redemption price per Class A
share ($175,740,885 divided by 20,713,248 shares) $8.48
- --------------------------------------------------------------------------
(Offering price per share (100/95.25 of $8.48)* $8.90
- --------------------------------------------------------------------------
Net asset value and redemption price of class B shares
($8,621,766 divided by 1,016,682 shares)+ $8.48
- --------------------------------------------------------------------------
</TABLE>
* 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.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
STATEMENT OF OPERATIONS
Year ended September 30, 1994
<TABLE>
<S> <C>
TAX EXEMPT INTEREST INCOME $12,845,291
- --------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------
Compensation of Manager (Note 2) $ 1,161,243
- --------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 101,321
- --------------------------------------------------------------------------
Compensation of Trustees (Note 2) 13,399
- --------------------------------------------------------------------------
Reports to shareholders 22,999
- --------------------------------------------------------------------------
Auditing 21,119
- --------------------------------------------------------------------------
Legal 18,604
- --------------------------------------------------------------------------
Postage 12,939
- --------------------------------------------------------------------------
Administrative services (Note 2) 11,001
- --------------------------------------------------------------------------
Registration fees 11,766
- --------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 353,348
- --------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 21,113
- --------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 3,453
- --------------------------------------------------------------------------
Other 9,506
- --------------------------------------------------------------------------
TOTAL EXPENSES 1,761,811
- --------------------------------------------------------------------------
NET INVESTMENT INCOME 11,083,480
- --------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (1,647,127)
- --------------------------------------------------------------------------
Net unrealized depreciation of investments during the year (10,999,505)
- --------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (12,646,632)
- --------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,563,152)
- --------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
Statement of changes in net assets
<TABLE>
<CAPTION>
Year ended September 30
1994 1993
- ------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
- ------------------------------------------------------------------------------------
OPERATIONS:
- ------------------------------------------------------------------------------------
Net investment income $ 11,083,480 $ 8,795,470
- ------------------------------------------------------------------------------------
Net realized gain (loss) on investments (1,647,127) 309,911
- ------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments (10,999,505) 3,964,474
- ------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (1,563,152) 13,069,855
- ------------------------------------------------------------------------------------
Distributions to shareholders
- ------------------------------------------------------------------------------------
From net investment income
- ------------------------------------------------------------------------------------
Class A (10,901,830) (8,795,470)
- ------------------------------------------------------------------------------------
Class B (133,868) --
- ------------------------------------------------------------------------------------
In excess of net investment income -- (115,134)
- ------------------------------------------------------------------------------------
From net realized loss on investments -- Class A (296,029) --
- ------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 26,724,353 57,765,169
- ------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 13,829,474 61,924,420
- ------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------
Beginning of year 170,533,177 108,608,757
- ------------------------------------------------------------------------------------
END OF YEAR (including distributions in
excess of net investment income of
$66,770 and $127,399, respectively) $184,362,651 $170,533,177
- ------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
For the period
February 1, 1994
(commencement
of operations) to
September 30
- ------------------------------------------------------------------------------
1994 1994
- ------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 9.07 $9.12
- ------------------------------------------------------------------------------
Investment Operations
Net Investment Income .32 .54
- ------------------------------------------------------------------------------
Net Realized and Unrealized
Gain on Investments (.60) (.62)
- ------------------------------------------------------------------------------
Total from Investment Operations (.28) (.08)
- ------------------------------------------------------------------------------
Less Distributions:
From Net Investment Income (.31) (.54)
- ------------------------------------------------------------------------------
In Excess of Net Investment Income --
- ------------------------------------------------------------------------------
Net Realized Gain on Investments -- (.02)
- ------------------------------------------------------------------------------
Total Distributions (.31) (.56)
- ------------------------------------------------------------------------------
Net Asset Value, End of Period $8.48 $8.48
- ------------------------------------------------------------------------------
Total Investment Return at
Net Asset Value (%) (b) -3.06(c) -0.89
- ------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $8,622 $175,741
- ------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets (%) 1.05(c) .98
- ------------------------------------------------------------------------------
Ratio of Net Investment Income
to Average Net Assets (%) 3.39(c) 6.22
- ------------------------------------------------------------------------------
Portfolio Turnover (%) 13.85 13.85
- ------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
For the period
November 7, 1990
(commencement
of operations) to
Year ended September 30 September 30
- -----------------------------------------------------------------------------------------------------------
1993 1992 1991
- -----------------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $8.86 $8.67 $8.50
- -----------------------------------------------------------------------------------------------------------
Investment Operations
Net Investment Income .57 .63(a) .58(a)
- -----------------------------------------------------------------------------------------------------------
Net Realized and Unrealized
Gain on Iinvestments .27 .19 .17
- -----------------------------------------------------------------------------------------------------------
Total from Investment Operations .84 .82 .75
- -----------------------------------------------------------------------------------------------------------
Less Distributions:
From Net Investment Income (.57) (.63) (.58)
- -----------------------------------------------------------------------------------------------------------
In Excess of Net Investment Income (.01) -- --
- -----------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments -- -- --
- -----------------------------------------------------------------------------------------------------------
Total Distributions (.58) (.63) (.58)
- -----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $9.12 $8.86 $8.67
- -----------------------------------------------------------------------------------------------------------
Total Investment Return at
Net Asset Value (%) (b) 9.80 9.89 9.16(c)
- -----------------------------------------------------------------------------------------------------------
Net Assets, End of Period (in thousands) $170,533 $108,609 $30,864
- -----------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets (%) 1.02 .91(a) .64(a)(c)
- -----------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income
to Average Net Assets (%) 6.32 7.04(a) 6.73(a)(c)
- -----------------------------------------------------------------------------------------------------------
Portfolio Turnover (%) 17.68 11.56 5.74(c)
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects an expense limitation. As a result, expenses of the fund for the
year ended September 30, 1992 and the period ended September 30, 1991
reflect reductions of approximately $0.02 and$0.07 per share, respectively.
(b) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(c) Not annualized.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1994
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is registered under the Investment Company Act of 1940, as amended,
as a non-diversified, open-end management investment company. The fund seeks
as high a level of current income exempt from federal income tax and New York
State and City personal income taxes which Putnam Management believes does not
involve undue risk to income or principal by investing primarily in a
portfolio of investment grade New York tax-exempt securities.
The fund offers both class A and class B shares. Class A shares are sold with
a maximum front-end sales charge of 4.75%. Class B shares do not pay a front-
end sales charge, but pay a higher ongoing distribution fee than class A
shares, and may be subject to contingent deferred sales charge if those shares
are redeemed within six years of purchase. Expenses of the fund are borne pro-
rata by the holders of both classes of shares, except that each class bears
expenses unique to that class (including the distribution fees applicable to
such class) and votes as a class only with respect to its own distribution
fees applicable to such class) and votes as a class only with respect to its
own distribution plan or other matters on which a class vote is required by
law or determined by the Trustees. Shares of each class would receive their
pro-rata share of the net assets of the fund, if the fund were liquidated. In
addition, the Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A SECURITY VALUATION Tax-exempt bonds and notes are stated on the basis of
valuations provided by a pricing service, approved by the Trustees, which uses
information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value. The fair value of
restricted securities is determined by the fund manager following Procedures
approved 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). Interest income is recorded on the accrual basis.
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 of securities held and excise tax on
income and capital gains.
D DISTRIBUTIONS TO SHAREHOLDERS Income dividends are declared daily by the
fund and are distributed monthly. Capital gain distributions, if any, are
recorded on the ex-dividend date and paid annually. The amount and charac-
22
<PAGE>
ter of income and gains to be distributed are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. Reclassifications are made to the fund's capital accounts to
reflect income and gains available for distribution (or available capital loss
carryovers) under income tax regulations. For the year ended September 30,
1994, the fund increased distribution in excess of net investment income by
$2,795 and decreased paid-in capital by $2,795.
E 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. Discount on zero-coupon bonds,
original issue discount bonds and stepped coupon bonds is accreted according
to the effective yield method.
F UNAMORTIZED ORGANIZATION EXPENSES Expenses incurred by the fund in
connection with its organization, its registration with the Securities and
Exchange Commission and with various states, and the initial public offering
of its shares aggregated to be $30,827. These expenses are being amortized
over a five-year period based on current and projected net asset levels.
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Investment Management, Inc. (Putnam Management), the
fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., for
management and investment advisory services is paid quarterly based on the
average net assets of the fund for the quarter. Such fees is based on the
following annual rates: 0.65% of the first $500 million of average net assets,
0.55% of the next $500 million, 0.50% of the next $500 million and 0.45% 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.
The fund also reimburses the Manager 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. For the year ended September 30, 1994 the
fund paid $11,001 for these services.
Trustees of the fund receive an annual Trustee's fee of $790, and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of the Manager and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
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.
Fees paid for these investor servicing and custodial functions for the year
ended September 30, 1994 amounted to $101,321. Investor servicing and
custodian fees reported in the Statement of operations for the year ended
September 30, 1994 have been reduced by credits allowed by PFTC.
The fund has adopted a distribution plan with respect to Class A shares (the
"Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940. The purpose of the Plan is to compensate Putnam Mutual Funds Corp., a
wholly-owned subsidiary of Putnam Investments, Inc., for services provided and
expenses incurred by it in distributing shares. The Trustees have approved
payments by the fund to Putnam Mutual Funds Corp. at an annual rate of 0.20%
of the fund's average net assets attributable to Class A shares. For the year
ended September
23
<PAGE>
30, 1994, the fund paid $353,348 in distribution fees for class A shares.
During the year ended September 30, 1994, Putnam Mutual Funds Corp., acting as
the underwriter, received net commissions of $81,736 from the sale of Class A
shares of the fund.
A deferred sales charge of up to 1% is assessed on certain redemptions of
class A shares purchased as part of an investment of $1 million or more. For
the year ended September 30, 1994, Putnam Mutual Funds Corp., acting as the
underwriter, received no monies on class A redemptions.
The fund has adopted a separate distribution plan with respect to its class B
shares (the Class B Plan) pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The purpose of Class B Plan is to compensate Putnam Mutual Funds
Corp. for services provided and expenses incurred by it in distributing Class
B shares. The Trustees have approved payments by the Fund to Putnam Mutual
Funds Corp. at an annual rate of up to 1.00%. Currently the Trustees limited
payments under the plan to 0.85% of the fund's average net assets attributable
to Class B shares. For the year ended September 30, 1994, the fund paid Putnam
Mutual Funds Corp. distribution fees of $21,113 for class B shares.
Putnam Mutual Funds Corp. also receives the proceeds on the contingent
deferred sales charges on the fund's class B share redemptions within six
years of purchase. The charge is based on declining rates, which begin at 5%
of the net asset value of the redeemed shares. Putnam Mutual Funds Corp.
received contingent deferred sales charges of $3,159 from redemptions during
this period ended September 30, 1994.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the year ended September 30, 1994, purchases and sales of investment
securities other than short-term municipal obligations aggregated $44,334,332
and $23,839,652, respectively. Purchases and sales of short-term municipal
obligations aggregated $13,300,000 and $9,400,000, 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 September 30, 1994, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1994
---------------------------------------------
CLASS A SHARES AMOUNT
---------------------------------------------
<S> <C> <C>
Shares sold 4,955,088 $ 43,660,936
---------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 620,886 5,459,381
---------------------------------------------
5,575,974 49,120,317
---------------------------------------------
Shares
repurchased (3,566,478) (31,180,191)
---------------------------------------------
Net increase 2,009,496 $ 17,940,126
---------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, 1993
---------------------------------------------
CLASS A SHARES AMOUNT
---------------------------------------------
<S> <C> <C>
Shares sold 7,643,484 $ 68,483,001
---------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 508,040 4,557,727
---------------------------------------------
8,151,524 73,040,728
---------------------------------------------
Shares
repurchased (1,704,796) (15,275,559)
---------------------------------------------
Net increase 6,446,728 $ 57,765,169
---------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 1, 1994
(COMMENCEMENT OF
OPERATIONS) TO
SEPTEMBER 30 1994
---------------------------------------------
CLASS B SHARES AMOUNT
---------------------------------------------
<S> <C> <C>
Shares sold 1,036,184 $ 8,959,767
---------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 7,309 62,740
---------------------------------------------
1,043,493 9,022,507
---------------------------------------------
Shares
repurchased (26,811) (238,280)
---------------------------------------------
Net increase 1,016,682 $ 8,784,227
---------------------------------------------
</TABLE>
NOTE 5
RECLASSIFICATION OF CAPITAL ACCOUNTS
Effective October 1, 1993, Putnam New York Tax Exempt Opportunities Fund has
adopted the provisions of Statement of Position (SOP) 93-2 "Determination,
Disclosure and Financial Statement Presentation of Income, Capital Gain and
Return of Capital Distributions, by Investment Companies." The purpose of this
SOP is to report the accumulated net investment income (loss) and accumulated
net realized gain (loss) accounts in such a manner as to approximate amounts
available for future distributions (or to offset future realized capital
gains) and to achieve uniformity in the presentation of distributions by
investment companies.
As a result of the SOP, the fund has reclassified $10,054 to decrease
distributions in excess of net investment income and $234 to increase
accumulated net realized loss with a decrease of $10,288 to additional paid-in
capital.
These adjustments represent the accumulated amounts necessary to report these
balances through September 30, 1993, the close of the fund's last fiscal year
end, for financial reporting and tax purposes.
These adjustments, which have no impact on the total net asset value of the
fund, are primarily attributable to market discount, bond premium, dividend
income, and gains and losses on paydowns on mortgage backed securities, which
are treated differently in the computation of distributable income and capital
gains under federal income tax rules and regulations versus generally accepted
accounting principles.
25
<PAGE>
FEDERAL TAX INFORMATION
The fund has designated all dividends paid during the fiscal year as exempt-
interest dividends. Thus, 100% of the fund's distributions are exempt from
federal income tax. For residents of New York State and City, 100% of the
fund's distributions are also exempt from New York State and City personal
income taxes. The Fund also paid a short-term capital gain of $0.009 per share
and a long term gain of $.007 on December 28, 1993. This amount was previously
reported to you on form 1099 in January 1994. The form 1099 you will receive
in January 1995 will tell you the tax status of any distributions paid to your
account in calendar year 1994.
At September 30, 1994, the Fund had a capital loss carryover of approximately
$74,000 which may be available to offset realized capital gains to the extent
provided by regulations. This amount will expire September 30, 2002. The fund
may at times pay distributions from net current realized short term gains that
could have been retained by the fund and offset by the capital loss carryover.
In such circumstances the fund loses the benefit of the carryover.Please call
your financial advisor or Putnam to obtain a prospectus for any Putnam fund.
It contains more complete information, including charges and expenses. Read it
carefully before you invest or send money.
26
<PAGE>
FUND INFORMATION
Please call your financial advisor or Putnam to obtain a prospectus for any
Putnam fund. It contains more complete information, including charges and
expenses. Read it carefully before you invest or send money.
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
Price Waterhouse LLP
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
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
Michael F. Bouscaren
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York Tax
Exempt Opportunities 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.
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PUTNAM INVESTMENTS -----------------
Bulk Rate
The Putnam Funds U.S. Postage
One Post Office Square PAID
Boston, Massachusetts 02109 Putnam
Investments
-----------------
854-14789
