PUTNAM
NEW YORK
TAX EXEMPT
OPPORTUNITIES
FUND
[GRAPHIC OMITTED:
art work]
ANNUAL REPORT
September 30, 1995
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BOSTON - LONDON - TOKYO]
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PERFORMANCE HIGHLIGHTS
o "The deterioration in muni prices is simply not supported by the facts....
The market is discounting something [the flat tax] that likely will never
occur."
-- Smart Money, September 1995
o Morningstar awarded the fund's class A shares five out of five stars for
risk-adjusted performance as of September 30, 1995. The overall five-star
rating for the fiscal year ended September 30, 1995, puts the fund in the top
10% among all 721 municipal funds rated. Past performance is not indicative
of future results.*
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FISCAL 1995 RESULTS AT A GLANCE
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CLASS A CLASS B CLASS M(1)
TOTAL RETURN NAV POP NAV CDSC NAV POP
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(change in value during
period plus reinvested
distributions)
12 months ended 9/30/95 10.27% 5.07% 9.46% 4.46% 7.11% 3.58%
SHARE VALUE NAV POP NAV NAV POP
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9/30/94 $8.48 $8.90 $8.48 -- --
2/10/95(1) -- -- -- $8.51 $8.80
9/30/95 8.80 9.24 8.79 8.79 9.09
DISTRIBUTIONS: NO. INCOME TOTAL
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Class A 12 $0.519874 $0.519874
Class B 12 0.465763 0.465763
Class M(1) 8 0.315796 0.315796
CURRENT RETURN: NAV POP NAV NAV POP
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(end of period)
Current dividend rate(2) 5.80% 5.52% 5.13% 5.47% 5.29%
Taxable equivalent(3) 10.92 10.39 9.66 10.30 9.96
Taxable equivalent(4) 10.39 9.89 9.19 9.80 9.48
Current 30-day SEC yield(5) 5.72 5.44 5.00 5.32 5.13
Taxable equivalent(3) 10.77 10.24 9.41 10.02 9.66
Taxable equivalent(4) 10.25 9.75 8.96 9.53 9.19
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Performance data represent past results and are not indicative of future
returns. For performance over longer periods, see pages 8 and 9. POP assumes
4.75% maximum sales charge for class A shares and 3.25% for class M shares.
CDSC assumes 5% maximum contingent deferred sales charge. (1)The fund
commenced investment operations of class M shares on 2/10/95. (2)Income
portion of most recent distribution, annualized and divided by NAV or POP at
end of period. (3)Assumes maximum combined 46.88% federal, state, and New
York City tax rate. Results for investors subject to lower tax rates would
not be as advantageous. (4)Combined 44.19% state and federal tax rate.
(5)Based only on investment income, calculated using SEC guidelines.
* Morningstar, an independent mutual fund rating agency, rates the fund in
relation to other funds with similar investment objectives, based on the
fund's 3-year average annual returns and adjusted for risk factors and sales
charges. For the 3-year period ended 9/30/95, the fund had a 5-star rating
among 721 municipal funds rated.
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FROM THE CHAIRMAN
[GRAPHIC OMITTED:
Photo of
George Putnam]
(C) Karsh, Ottawa
Dear Shareholder:
With plenty to be positive about, tax-exempt investors are finally putting their
summer fears behind them. A few months ago, flat-tax proposals were floated in
the pre-election wind. The mere talk of such a tax, which would end the
beneficial treatment now accorded municipal bonds, was enough to send the market
into decline.
Interest rates are still moderate, inflation remains low, and the economy seems
to have slowed to a more comfortable pace, all factors that gladden fixed-income
investors' hearts. Municipal bond investors have been further blessed with
yields virtually at the same level as those of taxable bonds and a favorable
ratio of supply to demand.
As Putnam New York Tax Exempt Opportunities Fund's fiscal year ended on
September 30, 1995, the municipal bond market was showing new signs of strength,
poised for what could be another positive period of advance. In the report that
follows, Fund Manager Michael Bouscaren reviews fiscal 1995 performance and
prospects for the year ahead.
Respectfully yours,
/s/ George Putnam
George Putnam
Chairman of the Trustees
November 15, 1995
<PAGE>
REPORT FROM THE FUND MANAGER
MICHAEL F. BOUSCAREN
Declining interest rates, low inflation, and positive supply/demand dynamics
have offset recent fallout from the tax reform debate, contributing to a
strong turnaround in the tax-free market. As a result, municipal bonds have
made great strides, recapturing much of their losses since market lows last
November.
Putnam New York Tax Exempt Opportunities Fund was clearly a beneficiary of
the rally, though it did not quite match the performance posted by the Lehman
Brothers Municipal Bond Index. Class A shares posted a total return of 10.27%
at net asset value, for the 12 months ended September 30, 1995 -- compared
with the index's 11.18% return for the same period. The fund also offers
class B and class M shares, whose performance, while different, reflects a
similar trend.
The fund's yield continues to be attractive relative to other funds in the
New York tax-free universe. In addition, taxable equivalent yields are now at
double-digit levels and represent excellent values, particularly for
investors in high-tax states like New York. Your fund's class A shares posted
a 5.80% current dividend rate at net asset value, which translates into a
current return of 10.92% for a taxable investment, assuming the maximum
combined 46.88% federal, New York state, and New York City income tax rate
(investors in lower brackets, of course, would benefit to a lesser extent).
o PROACTIVE MANAGEMENT RESULTS IN PORTFOLIO QUALITY UPGRADE FROM A TO AA
The fund has maintained a heavy concentration of investment-grade bonds, with
the portfolio diversified across more than 95 issues and approximately 20
sectors. Throughout the fiscal year, particularly during the last nine months
of the period, our active monitoring of municipal bond market trends led to
several positive events. With signs suggesting that interest rates were close
to their peak, we began to reduce the portfolio's position in BBB-rated bonds
modestly, increasing the position in AAA-rated bonds at the
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same time. In a declining interest-rate environment, higher-quality
investment-grade bonds typically appreciate faster than lower-quality bonds.
This strategy had the net effect of increasing the fund's average portfolio
quality rating from A to AA.
Three BBB-rated positions, which were purchased and sold during the course of
the fiscal year, are worth noting. They underscore the value of recognizing
timely buying opportunities and, just as importantly, the significance of
disciplined selling to lock in appreciation gains.
In early 1995, the fund purchased Long Island Lighting bonds, which were out
of favor and battered by much negative news. The bonds subsequently benefited
from a favorable rate consideration by the New York State Public Service
Commission and appreciated in price. They remained in the portfolio until
June, when discussions by Governor Pataki's administration to fold this
historically troubled utility into the Long Island Power Agency effectively
limited further upside potential on these bonds. Our decision to sell the
bonds enabled us to capture much of the price appreciation that has occurred
this year.
The New York City Health and Hospital Corporation was established to oversee
the area's financially troubled hospitals, covering operating shortfalls when
the hospitals were unable to meet their fiscal responsibilities. With the
Pataki administration's theme of
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS* showing:
Utilities 26.0%
Hospitals/health care 12.0%
Transportation 11.7%
Water and sewer 7.8%
Education 6.5%
Footnote: reads:
*Based on net assets on 9/30/95. Holdings will vary over time.]
<PAGE>
fiscal prudence, the future of the corporation and the hospitals under its
jurisdiction came into question. Anticipating that the New York City Health
and Hospital Corporation's bonds could possibly drop below investment grade
in an environment of budget cutting, the fund sold its position, successfully
locking in gains before the market had digested the full impact of the
governor's quest for cost-efficient municipal services on this organization.
Toward the end of 1994 and into early 1995, the fund purchased New York City
general obligation bonds at deeply discounted prices. The bonds had suffered
in the months leading up to and following the election of a Republican
administration committed to budget tightening. When investors realized that
belt-tightening measures would take time and that Mayor Guiliani and Governor
Pataki could work together to resolve the city's budget crisis, the bonds
rallied, despite a slight but much expected credit downgrade from A to Baa in
July. In fact, by the time we had reduced the fund's position, which we did
at a profit, the bonds were outperforming higher-quality investment-grade
bonds.
o INVESTMENT APPROACH CAUTIOUS BUT OPPORTUNISTIC
Our investment decisions, particularly during the early months of the fiscal
year, reflected our conviction that the rising interest-rate environment of
1994 would likely be reversed in 1995. More recently, we have taken a
cautious but more sanguine approach, framed by three additional factors.
First, the ongoing debate about tax reform, especially the flat-tax proposal,
has generated much concern about the future of the tax-free market. While
passage of any tax reform package in its current form is far from certain,
the perceived effects on the tax-exempt status of municipal bonds continues
to pressure municipal bond prices. However, much like the fallout from the
Orange County, California, scare in late 1994, the tax reform debate is
providing ample buying opportunities as the proverbial dust settles.
Secondly, the Federal Reserve Board has successfully engineered a soft
landing, that is, the slowing of economic growth to a sustainable level.
While the Fed's pace and degree of interest-rate
<PAGE>
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TOP 10 HOLDINGS (9/30/95)*
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NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
Electric facilities revenue bonds (Consolidated Edison project)
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NEW YORK CITY INDUSTRIAL DEVELOPMENT AGENCY
Civic facilities revenue bonds (Parking Corporation project)
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NEW YORK STATE URBAN DEVELOPMENT CORP.
Revenue bonds (correctional facility)
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NEW YORK CITY INDUSTRIAL DEVELOPMENT AGENCY
Special facilities revenue bonds
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NEW YORK CITY MUNICIPAL WATER FINANCING AUTHORITY
Water and sewer system revenue bonds
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PUERTO RICO TELEPHONE AUTHORITY
Inverse floating bonds
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TOMPKINS COUNTY INDUSTRIAL DEVELOPMENT AGENCY
Revenue bonds
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PUERTO RICO ELECTRIC POWER AUTHORITY
Power revenue bonds
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NEW YORK STATE HOUSING FINANCING AUTHORITY
Revenue bonds
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COMMONWEALTH OF PUERTO RICO HIGHWAY AND TRANSIT AUTHORITY
Inverse floating bonds
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*These holdings represent 35.1% of the fund's net assets. Portfolio holdings
will vary in the future.
increases in 1994 sorely tested the patience of bond investors, today's
noninflationary environment is providing a hospitable climate for municipal
securities.
Lastly, efforts to reduce the deficit and to balance the budget provide a
third reason for our increasingly positive outlook. In all likelihood, the
financial markets would respond favorably to a bipartisan agreement to reduce
federal spending.
Tax-free securities have underperformed the entire fixed-income market for
much of 1995, suggesting that municipal bonds appear quite attractive
relative to alternative investments on a valuation basis. We will continue to
take advantage of the opportunity that this market environment represents,
while positioning the portfolio to benefit from longer-term trends.
The views expressed in this report are exclusively those of Putnam
Management, and not meant as investment advice. Although the described
holdings were viewed favorably as of 9/30/95, there is no guarantee the fund
will continue to hold these securities in the future.
<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.
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.
TOTAL RETURN FOR PERIODS ENDED 9/30/95
CLASS A CLASS B CLASS M
NAV POP NAV CDSC NAV POP
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1 year 10.27% 5.07% 9.46% 4.46% -- --
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3 years 20.00 14.32 -- -- -- --
Annual average 6.27 4.56 -- -- -- --
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Life of class A(1) 43.95 37.17 -- -- -- --
Annual average 7.72 6.66 -- -- -- --
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Life of class B(2) -- -- 6.11 2.24 -- --
Annual average -- -- 3.64 1.34 -- --
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Life of class M(3) -- -- -- -- 7.11% 3.58%
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COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 9/30/95
LEHMAN BROS. CONSUMER
MUNICIPAL BOND PRICE
INDEX INDEX
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1 year 11.18% 2.54%
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3 years 22.29 8.42
Annual average 6.94 2.73
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Life of class A(1) 50.16 14.76
Annual average 8.65 2.85
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Life of class B(2) 5.76 4.79
Annual average 3.43 2.86
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Life of class M(3) 9.66 1.93
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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 1994. (1)The fund began
operations on 11/7/90, offering shares now known as class A. (2)Effective
2/1/94, the fund began offering class B shares. (3)Effective 2/10/95, the fund
began investment operations for class M shares. Performance data represent past
results and will differ for each share class, and should not be taken as an
indication of future results. Investment returns and principal value will
fluctuate so an investor's shares, when sold, may be worth more or less than
their original cost.
<PAGE>
[GRAPHIC OMITTED: line chart GROWTH OF A $10,000 INVESTMENT
Legend reads:
Cumulative total return of a $10,000 investment since 11/7/90
Y-axis reads (top to bottom) $15500 to 9500 in $1,000 decrements
X-axis reads (left to right) 11/7/90, then 9/30/91 through 9/30/95 in one
year increments
A solid black line represents Lehman Bros. Municipal Bond Index, ranging from
$10,000 to $15,016 (see plot points below: "Lehman Muni Bond Index")
A solid white line represents Fund's class A shares at POP, ranging from
$9,525 to $13,717 )see plot points below: "Shares at POP")
A solid gray line represents Consumer Price Index, ranging from
$10,000 to $11,476 (see plot points below: "Consumer Price Index")
Date Lehman Muni Bond Index Shares at POP Consumer Price Index
- --------- ---------------------- ------------- --------------------
11/07/90 $10,000 $ 9,525 $10,000
9/30/91 11,117 10,402 10,277
9/30/92 12,279 11,431 10,584
9/30/93 13,844 12,552 10,869
9/30/94 13,506 12,439 11,191
9/30/95 15,016 13,717 11,476
Caption reads:
Past performance is no assurance of future results. A $10,000 investment in the
fund's class B shares at inception on 2/1/94 would have been valued at $10,611
on 9/30/95 ($10,224 with a redemption at the end of the period). A $10,000
investment in the fund's class M shares at the start of investment operations
on 2/10/95 would have been valued at $10,711 at net asset value on 9/30/95
($10,358 including the maximum 3.25% sales charge for class M shares).]
CLASS A SHARES are generally subject to an initial sales charge.
CLASS B SHARES may be subject to a sales charge upon redemption.
CLASS M SHARES have a lower initial sales charge and a higher 12b-1 fee than
class A shares and no sales charge on redemption.
NET ASSET VALUE (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including any
initial or contingent deferred sales charge.
PUBLIC OFFERING PRICE (POP) is the price of a mutual fund share plus the maximum
sales charge levied at the time of purchase. POP performance figures shown here
assume the maximum 4.75% sales charge for class A shares and 3.25% for class M
shares.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the time of the
redemption of class B 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.
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.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
For the fiscal year ended September 30, 1995
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,
1995, and the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments owned at September 30, 1995
by correspondence with the custodian and brokers, provides a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
November 10, 1995
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
September 30, 1995
KEY TO ABBREVIATIONS
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Federal Guaranty Insurance Corporation
FHA -- Federal Housing Administration
FSA -- Financial Security Assurance
GO Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
VRDN -- Variable Rate Demand Notes
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (99.0%)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (87.3%)
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<C> <S> <C> <C>
Babylon, Indl. Dev. Agcy. Resource Recvy. Rev. Bonds
$1,960,000 (Ogden Martin Syst.), Ser. B, 8 1/2s, 1/1/19 Baa $ 2,222,150
985,000 (Ogden Martin Syst.), Ser. C, 8 1/2s, 1/1/19 Baa 1,116,744
500,000 Battery Park, NY City Auth. Rev. Bonds,
7.7s, 5/1/15 AAA 564,375
750,000 Buffalo, Swr. Auth. Rev. Bonds, Ser. D, AMBAC,
7 5/8s, 7/1/06 AAA 793,125
1,130,000 Erie Cnty., Wtr. Auth. Rev. Bonds
(Fourth Resolution), AMBAC, zero %, 2/1/17 AAA 230,238
2,680,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds
(Eddygate Park Apts. Project), 9s, 6/1/06 BBB/P 2,854,200
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid Waste Disposal
Rev. Bonds (Champion Intl. Corp.), 7.2s, 12/1/20 Baa 2,868,625
460,000 Metro. Trans. Auth. Svcs. Contract Fac. Rev. Bonds
(Trans. Fac.), Ser. 3, 7 1/2s, 7/1/16 AAA 527,850
600,000 Metro. Trans. Auth. Transit Fac. Rev. Bonds, Ser. F,
8 3/8s, 7/1/16 AAA 631,500
NY City, G.O. Bonds
1,000,000 Ser. D, Group B, 8 1/4s, 8/1/11 Baa 1,138,750
300,000 Ser. B, 8 1/4s, 6/1/05 Baa 350,250
380,000 Ser. F, 3s, 11/15/00 Baa 343,425
4,000,000 NY City Hlth. & Hosp. Corp. Rev. Bonds, AMBAC,
5.536s, 2/15/11 AAA 3,965,000
600,000 NY City, Hsg. Dev. Corp. Multi-Fam. Hsg. Rev.
Bonds, Ser. A, FHA Insd., 9 5/8s, 1/1/19 A 627,000
6,000,000 NY City, Ind. Dev. Agcy. Special Fac. Rev. Bonds
(American Airlines Inc., Project), 6.9s, 8/1/24 Baa 6,225,000
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
8,410,000 (Parking Corp. Project), 8 1/2s, 12/30/22 BB/P 8,662,300
1,500,000 (The Lighthouse Inc. Project), 6 1/2s, 7/1/22 AA 1,567,500
NY City, Muni. Wtr. Fin. Auth. VRDN,
4,200,000 Ser. G, FGIC, 3 1/4s, 6/15/24 VMIG1 4,200,000
800,000 Ser. C, FGIC, 4.6s, 6/15/23 VMIG1 800,000
650,000 NY City, Muni. Wtr. Fin. Auth. Rev. Bonds, Ser. C,
7 3/4s, 6/15/20 AAA 762,938
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------------------
NY City, Muni. Wtr. Fin. Auth. Wtr. & Swr. Syst.
Rev. Bonds,
$5,955,000 Ser. B, MBIA, 5 1/2s, 6/15/19 AAA $ 5,627,475
45,000 Prerefunded Ser. B, FGIC, 7 1/2s, 6/15/11 AAA 53,606
140,000 Ser. B, FGIC, 7 1/2s, 6/15/11 AAA 167,825
4,000,000 Ser. A, FGIC, 7s, 6/15/15 AAA 4,390,000
NY State Dorm. Auth. Rev. Bonds
170,000 (City U.), Ser. D, 8 3/4s, 7/1/03 BBB 205,275
2,750,000 (Long Island Med. Ctr.), Ser. A, FHA Insd.,
7 3/4s, 8/15/27 AAA 2,987,180
835,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa 931,025
1,000,000 (State U. Edl. Fac.), Ser. A, 7 5/8s, 5/15/05 AAA 1,150,000
750,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 Baa 859,688
605,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/30 AA 682,894
500,000 (Wildwood School), 7.3s, 7/1/15 A 551,250
2,050,000 (Our Lady Of Mercy), 6.3s, 8/1/32 AA 2,106,375
1,850,000 (State U. Edl. Facs.), Ser. B, 6 1/4s, 5/15/20 Baa 1,836,125
4,000,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 BBB 3,940,000
1,400,000 (Upstate Cmnty. Colleges), 5 1/2s, 7/1/14 Baa 1,296,750
2,500,000 (State U. Edl. Facilities), Ser. A, AMBAC,
5 1/4s, 5/15/15 AAA 2,328,125
725,000 (State U. Edl. Fac.), Ser. B, zero %, 5/15/09 Baa 328,063
NY State Energy Resh. & Dev. Auth. Elec. Fac.
Rev. Bonds
16,500,000 (Cons. Edison Co. Project), Ser. A, 7 3/4s, 1/1/24 A 17,758,125
1,600,000 (Cons. Edison Co. of NY, Inc. Project), 7 1/2s, 7/1/25 A 1,734,000
NY State Energy Resh. & Dev. Auth. Gas Fac. IFB
2,000,000 (Brooklyn Union Gas Co.), Ser. B, 9.719s, 7/1/26 A 2,335,000
2,000,000 (Brooklyn Union Gas Co. Project), 8.142s, 4/1/20 A 2,135,000
NY State Energy Resh. & Dev. Auth. Gas Fac. Rev. Bonds
(Brooklyn Union Gas Co. Project),
2,850,000 Ser. A, 9s, 5/15/15 A 2,921,250
4,000,000 8 3/4s, 7/1/15 A 4,115,000
NY State Energy Resh. & Dev. Auth. Poll. Control
Rev. Bonds (Niagara Mohawk Pwr. Corp.),
4,580,000 Ser. I, 8 7/8s, 11/1/25 BBB 4,683,050
1,750,000 Ser. A, FGIC, 7.2s, 7/1/29 Aaa 1,968,750
500,000 NY State Environmental Fac. Corp. Poll. Control
Rev. Bonds (State Wtr. Revolving Fund),
Ser. A, 7 1/2s, 6/15/12 Aa 564,375
4,270,000 NY State Hsg. Fin. Agcy. Rev. Bonds, Ser. A,
8s, 11/1/08 Baa 4,819,763
NY State Hsg. Fin. Agcy. Svcs. Contract Oblig.
Rev. Bonds
700,000 Ser. A, 7.8s, 9/15/20 AAA 821,625
500,000 Ser. A, 7 1/4s, 9/15/12 Baa 548,125
100,000 NY State Local Govt. Assistance Corp. Rev. Bonds,
Ser. C, 7s, 4/1/21 AAA 113,625
1,500,000 NY State Local Govt. Assistance Corp. VRDN,
Ser. B, 4.2s, 4/1/23 VMIG1 1,500,000
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
1,490,000 (Mercy Cmnty. Hosp.-Sisters of Mercy), Ser. A,
9.8s, 11/1/16 A 1,495,588
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------------------
$ 205,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B,
FHA Insd., 9 1/8s, 2/15/25 AA $ 210,638
960,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. C,
FHA Insd., 9s, 2/15/26 A 985,200
620,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B, FHA
Insd., 8 7/8s, 8/15/27 AA 677,350
2,595,000 (Mt. Sinai Hosp. Insd. Mtge.), Ser. C, FHA Insd.,
8 7/8s, 1/15/26 AAA 2,682,581
400,000 (Kingston Hosp. Project), 8 7/8s, 11/15/17 A 409,500
2,645,000 (Mental Hlth. Svcs. Facs.), Ser. A, 8 7/8s, 8/15/07 BBB 2,889,663
750,000 (Brooklyn, Caledonia & Long Island Hosps. Insd.
Mtge.), Ser. A, FHA Insd., 8 1/2s, 1/15/22 AAA 774,375
20,000 (Mt. Sinai Hosp. Insd. Mtge.), Ser. C, FHA Insd.,
8 3/8s, 1/15/00 AAA 20,650
620,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/01 AAA 717,650
130,000 (Mental Hlth. Svcs. Fac. ), Ser. A, 7.8s, 2/15/19 AAA 146,413
70,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 Baa 76,563
395,000 (Mental Hlth. Svcs. Facs.), Ser B, 7 7/8s, 8/15/08 Baa 445,856
360,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08 AAA 419,850
230,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 Baa 256,738
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 AAA 725,375
3,780,000 (Mental Hlth. Svcs. Fac.), Ser. F, 6 1/2s, 8/15/12 Baa 3,883,950
2,500,000 (Mental Hlth. Svcs.), Ser. A, MBIA, 5 1/4s, 8/15/14 AAA 2,303,125
190,000 NY State Mtge. Agcy. Rev. Bonds,
5th Ser., 9 3/4s, 10/1/10 Aa 196,888
1,740,000 (Single-Fam.), Ser. 2, zero %, 10/1/14 Aa 278,400
4,475,000 NY State Twy. Auth. Hwy. & Brdg. Rev. Bonds,
Ser. A, MBIA, 5 1/2s, 4/1/15 AAA 4,307,188
3,150,000 NY State Twy. Auth. Svc. Contract Rev. Bonds
(Local Highway & Bridge), 6 1/4s, 4/1/14 BBB 3,161,813
NY State Urban Dev. Corp. Rev. Bonds
2,510,000 (Correctional Fac.), 8s, 1/1/15 AAA 2,585,300
1,285,000 (Onondaga Cnty. Convention Project),
7 7/8s, 1/1/20 Baa 1,498,631
500,000 (State Fac.), 7 1/2s, 4/1/20 Baa 550,000
500,000 (Correctional Fac.), Ser. 2, 7 1/2s, 1/1/18 AAA 577,500
1,300,000 (Ctr. Indl. Innovation Project), 7s, 1/1/13 BBB 1,334,125
1,305,000 (Higher Ed. Technology Grants), MBIA, 6s, 4/1/10 AAA 1,358,831
7,375,000 (Correctional Fac.), MBIA, 5 3/8s, 1/1/12 AAA 7,043,125
Port Auth. of NY & NJ Cons. Bonds
2,000,000 7 7/8s, 3/1/24 AA 2,067,500
175,000 78th Ser., 6 1/2s, 10/15/08 AA 189,438
2,800,000 5 5/8s, 7/15/21 AA 2,688,000
5,000,000 Tompkins Cnty. Indl. Dev. Agcy. Rev. Bonds
(Life Care Cmnty., Kendal Ithaca), 7 7/8s, 6/1/24 B/P 5,056,250
United Nations Dev. Corp. Rev. Bonds
200,000 (Sr. Lien, Phase 2 & 3), Ser. A, 7 7/8s, 7/1/26 Aaa 209,750
3,250,000 Ser. B, 6 1/4s, 7/1/26 A 3,327,188
1,000,000 (Sr. Lien, Phase 2 & 3), Ser. A, 6s, 7/1/12 A 1,017,500
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- -------------------------------------------------------------------------------------------
$1,460,000 Valley Hlth. Dev. Corp. Mtge. Rev. Bonds
(Valley Hlth. Project), FHA Insd., 11.3s, 2/1/23 A $ 1,801,275
------------
174,484,831
PUERTO RICO (11.7%)
- -------------------------------------------------------------------------------------------
Cmnwlth. of Puerto Rico Hwy. & Trans. Auth. Rev. Bonds,
500,000 Ser. S, 6 1/2s, 7/1/22 AAA 561,250
3,710,000 Ser. W, AMBAC, 5.85s, 7/1/15 AAA 3,761,013
4,700,000 Cmnwlth. of Puerto Rico Hwy. & Trans. Auth.
Hwy. IFB, Ser. W, 6.6743s, 7/1/08 A 4,729,375
5,000,000 Puerto Rico Elec. Pwr. Auth. Pwr. IFB,
FSA, 7.928s, 7/1/23 AAA 5,037,500
4,000,000 Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Bonds,
6 3/8s, 7/1/24 A 4,115,000
5,000,000 Puerto Rico Tel. Auth. Tel. Auth. IFB, 7.516s, 1/1/20
(acquired 9/25/92, cost $4,837,500)++ A 5,100,000
------------
23,304,138
- -------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $193,762,537)*** $197,788,969
- -------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $199,767,615, which correspond to a
net asset value per class A, class B and class M shares of $8.80, $8.79 and $8.79,
respectively.
** The Moody's or Standard & Poor's ratings indicated are believed to be the most recent
ratings available at September 30, 1995 for the securities listed. Ratings are
generally ascribed to securities at the time of issuance. While the agencies may from
time to time revise such ratings, they undertake no obligation to do so, and the
ratings do not necessarily represent what the agencies would ascribe to these
securities at September 30, 1995. Securities rated by Putnam are indicated by "/P" and
are not publicly rated. Ratings are not covered by the Report of Independent
Accountants.
*** The aggregate identified cost for federal income tax purposes is $193,762,537,
resulting in gross unrealized appreciation and depreciation of $10,417,514 and
$6,391,082, respectively, or net unrealized appreciation of $4,026,432.
++ Restricted as to public resale. At the date of acquisition these securities were valued
at cost. There were no outstanding securities of the same class as those held. Total
market value of restricted securities owned at September 30, 1995 was $5,100,000 or
2.6% of net assets.
The rates shown on IFBs, which are securities paying variable interest rates that vary
inversely to changes in the market interest rates, and VRDNs are the current interest
rates at September 30, 1995, which are subject to change based on the terms of the
security.
The fund had the following insurance concentrations greater than 10% of net assets at
September 30, 1995:
MBIA 10.3%
The fund had the following industry group concentrations greater than 10% of net assets
at September 30, 1995:
Utilities 26.0%
Hospitals/Health Care 12.0
Transportation 11.7
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
ASSETS
- -------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $193,762,537) (Note 1) $197,788,969
- -------------------------------------------------------------------------------
Cash 789,187
- -------------------------------------------------------------------------------
Interest receivable and other 3,305,740
- -------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,074,686
- -------------------------------------------------------------------------------
Receivable for securities sold 783
- -------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 1,439
- -------------------------------------------------------------------------------
TOTAL ASSETS 202,960,804
LIABILITIES
- -------------------------------------------------------------------------------
Distributions payable to shareholders 313,770
- -------------------------------------------------------------------------------
Payable for securities purchased 2,285,885
- -------------------------------------------------------------------------------
Payable for shares of the fund repurchased 178,587
- -------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 255,432
- -------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,279
- -------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 335
- -------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 108,109
- -------------------------------------------------------------------------------
Other accrued expenses 48,792
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 3,193,189
- -------------------------------------------------------------------------------
NET ASSETS $199,767,615
REPRESENTED BY
- -------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $199,591,851
- -------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 72,372
- -------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (Note 1) (3,923,040)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments 4,026,432
- -------------------------------------------------------------------------------
TOTAL--REPRESENTING NET ASSETS APPLICABLE TO CAPITAL
SHARES OUTSTANDING $199,767,615
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- -------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($175,210,124 divided by 19,906,996 shares) $8.80
- -------------------------------------------------------------------------------
(Offering price per share (100/95.25 of $8.80)* $9.24
- -------------------------------------------------------------------------------
Net asset value and redemption price of class B shares
($24,258,957 divided by 2,759,502 shares)+ $8.79
- -------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($298,534 divided by 33,959 shares) $8.79
- -------------------------------------------------------------------------------
(Offering price per share (100/96.75 of $8.79)** $9.09
- -------------------------------------------------------------------------------
* 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.
** On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
+ 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.
<PAGE>
STATEMENT OF OPERATIONS
Year ended September 30, 1995
TAX EXEMPT INTEREST INCOME $13,027,742
- -------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------
Compensation of Manager (Note 2) $ 1,140,841
- -------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 216,985
- -------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 10,712
- -------------------------------------------------------------------------------
Reports to shareholders 36,709
- -------------------------------------------------------------------------------
Auditing 26,779
- -------------------------------------------------------------------------------
Legal 21,479
- -------------------------------------------------------------------------------
Postage 26,001
- -------------------------------------------------------------------------------
Administrative services (Note 2) 4,781
- -------------------------------------------------------------------------------
Registration fees 6,018
- -------------------------------------------------------------------------------
Distribution fees--Class A (Note 2) 343,462
- -------------------------------------------------------------------------------
Distribution fees--Class B (Note 2) 134,173
- -------------------------------------------------------------------------------
Distribution fees--Class M (Note 2) 423
- -------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 13,875
- -------------------------------------------------------------------------------
Other 6,906
- -------------------------------------------------------------------------------
TOTAL EXPENSES 1,989,144
- -------------------------------------------------------------------------------
FEES PAID INDIRECTLY (Note 2) (232,367)
- -------------------------------------------------------------------------------
NET EXPENSES 1,756,777
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME 11,270,965
- -------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (3,152,700)
- -------------------------------------------------------------------------------
Net realized gain on futures (Note 1) 945,668
- -------------------------------------------------------------------------------
Net realized loss on written options (Notes 1 and 3) (212)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments during the year 9,000,081
- -------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 6,792,837
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $18,063,802
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30
1995 1994
- -------------------------------------------------------------------------------
INCREASE IN NET ASSETS
- -------------------------------------------------------------------------------
OPERATIONS:
- -------------------------------------------------------------------------------
Net investment income $ 11,270,965 $ 11,083,480
- -------------------------------------------------------------------------------
Net realized loss on investments (2,207,244) (1,647,127)
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments 9,000,081 (10,999,505)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 18,063,802 (1,563,152)
- -------------------------------------------------------------------------------
Distributions to shareholders:
- -------------------------------------------------------------------------------
From net investment income
- -------------------------------------------------------------------------------
Class A (10,369,002) (10,901,830)
- -------------------------------------------------------------------------------
Class B (840,237) (133,868)
- -------------------------------------------------------------------------------
Class M (4,453) --
- -------------------------------------------------------------------------------
From net realized loss on investments--Class A -- (296,029)
- -------------------------------------------------------------------------------
Increase from capital share transactions
(Note 4) 8,554,854 26,724,353
- -------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 15,404,964 13,829,474
NET ASSETS
- -------------------------------------------------------------------------------
Beginning of year $184,362,651 $170,533,177
- -------------------------------------------------------------------------------
END OF YEAR (including undistributed net
investment income of $72,372 and
distributions in excess of net investment
income of $66,768, respectively) $199,767,615 $184,362,651
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
Financial highlights
(For a share outstanding throughout the period)
<CAPTION>
For the period For the period For the period
February 10, 1995 February 1, 1994 November 7, 1990
(commencement of (commencement of (commencement of
operations) to Year ended operations) to operations) to
September 30 September 30 September 30 Year ended September 30 September 30
- -----------------------------------------------------------------------------------------------------------------------------------
1995 1995 1994 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------------
Class M Class B Class A
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $8.51 $8.48 $9.07 $8.48 $9.12 $8.86 $8.67 $8.50
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income .31 .47 .32 .52 .54 .57 .63(a) .58(a)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .29 .31 (.60) .32 (.62) .27 .19 .17
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS .60 .78 (.28) .84 (.08) .84 .82 .75
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income (.32) (.47) (.31) (.52) (.54) (.57) (.63) (.58)
- -----------------------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- -- (.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain on
investments -- -- -- (.02) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.32) (.47) (.31) (.52) (.56) (.58) (.63) (.58)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
END OF PERIOD $8.79 $8.79 $8.48 $8.80 $8.48 $9.12 $8.86 $8.67
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
NET ASSET VALUE (%)(b) 7.11(c) 9.46 (3.06)(c) 10.27 (.89) 9.80 9.89 9.16(c)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(IN THOUSANDS) $299 $24,259 $8,622 $175,210 $175,741 $170,533 $108,609 $30,864
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(d) 0.83(c) 1.65 1.05(c) 1.01 .98 1.02 .91(a) .64(a)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets (%) 3.21(c) 5.28 3.39(c) 6.12 6.22 6.32 7.04(a) 6.73(a)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 120.38 120.38 13.85 120.38 13.85 17.68 11.56 5.74(c)
- -----------------------------------------------------------------------------------------------------------------------------------
(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.
(d) The ratio of expenses to average net assets for the year ended September 30, 1995 included amounts paid through expense offset
arrangements. Prior period ratios exclude these amounts. (See Note 2).
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
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 class A, class B and class M shares. The fund commenced its
offering of class M shares on February 10, 1995. 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 a contingent deferred sales charge if those shares are
redeemed within six years of purchase. Class M shares are sold with a maximum
front-end sales charge of 3.25% and pay an ongoing distribution fee that is
lower than class B shares and higher than class A shares. Expenses of the fund
are borne pro-rata by the holders of each class of shares, except that each
class bears expenses unique to that class (including the distribution fees
applicable to such class). Each class votes as a class only with respect to its
own distribution plan or other matters on which a class vote is required by law
or determined by the Trustees. Shares of each class would receive their pro-rata
share of the net assets of the fund, if the fund were liquidated. In addition,
the Trustees declare separate dividends on each class of shares.
The following is a summary of significant accounting policies consistently
followed by the fund in the preparation of its financial statements. The
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.
<PAGE>
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 FUTURES AND OPTIONS CONTRACTS The fund may use futures and options contracts
to hedge against changes in the values of securities the fund owns or expects to
purchase. The fund may also write options on securities it owns or in which it
may invest to increase its current returns.
The potential risk to the fund is that the change in value of futures and
options contracts may not correspond to the change in value of the hedged
instruments. In addition, losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparty to the contract is unable to perform.
Futures contracts are valued at the quoted daily settlement prices established
by the exchange on which they trade. Exchange traded options are valued at the
last sale price, or if no sales are reported, the last bid price for purchased
options and the last ask price for written options. Options traded
over-the-counter are valued using prices supplied by dealers.
D 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. At September 30, 1995 the fund had a capital loss carryover of
approximately $3,710,000 available to offset future capital gains, if any. The
amount of carryover and the expiration dates are:
LOSS CARRYOVER EXPIRATION
- -------------------------------------
$ 74,000 September 30, 2002
$3,636,000 September 30, 2003
E 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 character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
<PAGE>
These differences include treatment of post-October loss deferrals, dividends
payable, market discount, organization expenses and capital loss carryover.
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, 1995, the fund reclassified $81,867 to increase
undistributed net investment income and $13,197 to decrease paid-in-capital,
with an increase to accumulated net realized loss of $68,670. The calculation of
net investment income per share in the financial highlights table excludes these
adjustments.
F 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.
G 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. 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 fee is based on the following annual rates:
0.60% of the first $500 million of average net assets, 0.50% of the next $500
million, 0.45% of the next $500 million and 0.40% of 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.
<PAGE>
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.
During the year ended September 30, 1995, the fund adopted a Trustee Fee
Deferral Plan (the "Plan") which allows the Trustees to defer the receipt of all
or a portion of Trustees fees payable on or after July 1, 1995. The deferred
fees remain in the fund and are invested in the fund or in other Putnam funds
until distribution in accordance with the Plan.
Custodial functions for the fund'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. Investor servicing and custodian fees reported in the Statement of
operations for the year ended September 30, 1995 have been reduced by credits
allowed by PFTC.
For the year ended September 30, 1995, fund expenses were reduced by $232,367
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
offset arrangements in an income-producing asset if it had not entered into such
arrangements.
The fund has adopted distribution plans (the "Plans") with respect to its class
A shares, class B and class M shares pursuant to Rule 12b-1 under the Investment
Company Act of 1940. The purpose of the Plans is to compensate Putnam Mutual
Funds Corp., a wholly-owned subsidiary of Putnam Investments Inc., for services
provided and expenses incurred by it in distributing shares of the fund. The
Plans provide for payments by the fund to Putnam Mutual Funds Corp. at an annual
rate up to .20%, .85% and .50% of the average net assets attributable to class
A, class B and class M shares, respectively. The Trustees have approved payment
by the fund at an annual rate of .20%, .85% and .50% of the average net assets
attributable to class A, class B and class M shares respectively.
For the year ended September 30, 1995, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $43,118 and $393 from
<PAGE>
the sale of class A and class M shares respectively. There was $57,939 in
contingent deferred sales charges from redemptions of class B shares. A deferred
sales charge of up to 1% is assessed on certain redemptions of class A shares.
For the year ended September 30, 1995, Putnam Mutual Funds Corp., acting as
underwriter received $31,327 on class A redemptions.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the year ended September 30, 1995, purchases and sales of investment
securities other than short-term municipal obligations aggregated $226,972,142
and $214,045,897, respectively. Purchases and sales of short-term municipal
obligations aggregated $99,195,000 and $100,845,000, respectively. In
determining the net gain or loss on securities sold, the cost of securities has
been determined on the identified cost basis.
Written options transactions during the year are summarized as follows:
CONTRACT PREMIUMS
AMOUNT RECEIVED
- -----------------------------------------------------
Open at beginning of year -- --
Options written (14,400,000) ($232,475)
Options expired --
Options closed 14,400,000 $232,475
- -----------------------------------------------------
OPEN AT END OF YEAR -- --
- -----------------------------------------------------
<PAGE>
NOTE 4
CAPITAL SHARES
At September 30, 1995, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
YEAR ENDED SEPTEMBER 30 YEAR ENDED SEPTEMBER 30
1995 1994
- -------------------------------------------------------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 4,362,516 $37,214,894 4,955,088 $43,660,936
Shares issued in
connection with
reinvestment of
distributions 587,902 5,019,522 620,886 5,459,381
- -------------------------------------------------------------------------------
4,950,418 42,234,416 5,575,974 49,120,317
- -------------------------------------------------------------------------------
Shares repurchased (5,756,670) (48,914,592) (3,566,478) (31,180,191)
- -------------------------------------------------------------------------------
NET INCREASE (DECREASE) (806,252) $(6,680,176) 2,009,496 $17,940,126
- -------------------------------------------------------------------------------
FOR THE PERIOD
FEBRUARY 1, 1994
(COMMENCEMENT OF
OPERATIONS) TO
YEAR ENDED SEPTEMBER 30 SEPTEMBER 30
1995 1994
- -------------------------------------------------------------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 2,047,174 $17,535,586 1,036,184 $8,959,767
Shares issued in
connection with
reinvestment of
distributions 54,190 465,295 7,309 62,740
- -------------------------------------------------------------------------------
2,101,364 18,000,881 1,043,493 9,022,507
- -------------------------------------------------------------------------------
Shares repurchased (358,544) (3,061,066) (26,811) (238,280)
- -------------------------------------------------------------------------------
NET INCREASE 1,742,820 $14,939,815 1,016,682 $8,784,227
- -------------------------------------------------------------------------------
FOR THE PERIOD
FEBRUARY 10, 1995
(COMMENCEMENT OF
OPERATIONS) TO
SEPTEMBER 30
1995
- -------------------------------------------------------------------------------
CLASS M SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 35,453 $308,178
Shares issued in connection with
reinvestment of distributions 374 3,262
- -------------------------------------------------------------------------------
35,827 311,440
- -------------------------------------------------------------------------------
Shares repurchased (1,868) (16,225)
- -------------------------------------------------------------------------------
NET INCREASE 33,959 $295,215
- -------------------------------------------------------------------------------
<PAGE>
FEDERAL TAX INFORMATION
(Unaudited)
The fund 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 form 1099 you will receive in January 1996 will tell you the tax status of
any distributions paid to your account in calendar year 1995.
- --------------------------------------------------------------------------------
RESULTS OF JULY 13, 1995 SHAREHOLDER MEETING
An annual meeting of shareholders of the fund was held on July 13, 1995. At the
meeting, each of the nominees for Trustees was elected, as follows:
VOTES FOR VOTES WITHHELD
- --------------------------------------------------------------------------------
Jameson Adkins Baxter 11,584,797 211,248
Hans H. Estin 11,582,027 214,018
John A. Hill 11,591,770 204,275
Elizabeth T. Kennan 11,575,729 220,316
Lawrence J. Lasser 11,584,022 212,023
Robert E. Patterson 11,592,004 204,041
Donald S. Perkins 11,592,004 204,041
William F. Pounds 11,583,192 212,853
George Putnam 11,589,436 206,610
George Putnam, III 11,580,997 215,048
E. Shapiro 11,572,078 223,968
A.J.C. Smith 11,591,176 204,869
W. Nicholas Thorndike 11,586,369 209,676
- --------------------------------------------------------------------------------
A proposal to ratify the selection of Price Waterhouse LLP as auditors for the
fund was approved as follows: 11,341,264 votes for, and 54,871 votes against,
with 399,911 abstentions and broker non-votes. A proposal to amend the fund's
fundamental investment restriction on investments in restricted securities was
approved as follows: 10,181,798 for, and 710,204 against, with 904,043
abstentions and broker non-votes. A proposal to eliminate the fund's fundamental
investment restriction on investments in investment companies was approved as
follows: 10,304,459 for, and 693,672 against, with 797,915 abstentions and
broker non-votes. All tabulations have been rounded to the nearest whole number.
<PAGE>
FUND INFORMATION
INVESTMENT MANAGER OFFICERS
Putnam Investment George Putnam
Management, Inc. President
One Post Office Square
Boston, MA 02109 Charles E. Porter
Executive Vice President
MARKETING SERVICES
Putnam Mutual Funds Corp. Patricia C. Flaherty
One Post Office Square Senior Vice President
Boston, MA 02109
Lawrence J. Lasser
CUSTODIAN Vice President
Putnam Fiduciary Trust Company
Gordon H. Silver
LEGAL COUNSEL Vice President
Ropes & Gray
Gary N. Coburn
INDEPENDENT ACCOUNTANTS Vice President
Price Waterhouse LLP
James E. Erickson
TRUSTEES Vice President
George Putnam, Chairman
Blake E. Anderson
William F. Pounds, Vice Chairman Vice President
Jameson Adkins Baxter Michael F. Bouscaren
Vice President and Fund Manager
Hans H. Estin
William N. Shiebler
John A. Hill Vice President
Elizabeth T. Kennan John R. Verani
Vice President
Lawrence J. Lasser
Paul M. O'Neil
Robert E. Patterson Vice President
Donald S. Perkins John D. Hughes
Vice President and Treasurer
George Putnam, III
Beverly Marcus
Eli Shapiro Clerk and Assistant Treasurer
A.J.C. Smith
W. Nicholas Thorndike
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.
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.
<PAGE>
[LOGO: PUTNAM INVESTMENTS] ------------
Bulk Rate
THE PUTNAM FUNDS U.S. Postage
One Post Office Square PAID
Boston, Massachusetts 02109 Putnam
Investments
------------
20987-854/228/759 11/95
