Putnam
New York
Tax Exempt
Opportunities
Fund
ANNUAL REPORT
September 30, 1996
[LOGO: LONDON * BOSTON * TOKYO]
Fund highlights
* According to Lipper Analytical Services, Putnam New York Tax
Exempt Opportunities Fund's class A share total return ranked 1 out
of 60 New York municipal bond funds for the 3-year period ended
September 30, 1996.*
* Morningstar, Inc., an independent rating agency, awarded the
fund's class A shares its highest rating of 5 stars for overall
performance (based on the 3- and 5-year return) as of September 30,
1996. Only 10% of the 1,013 municipal funds rated received 5 stars.+
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
12 Portfolio holdings
16 Financial statements
*Lipper Analytical Services, an independent research organization,
ranks funds according to total return performance. The rankings vary
over time and do not reflect the effects of sales charges. Of the
New York municipal bond funds rated for the period ended 9/30/96,
class A shares ranked 18 out of 99 and 22 out of 43 for 1- and 5-
year performance, respectively. Performance of other share classes
will vary. Past performance is not indicative of future results.
+ Morningstar ratings reflect risk-adjusted performance through
9/30/96 and are subject to change every month. Morningstar ratings
are calculated from a fund's 3-, 5-, and 10-year returns (with fee
adjustments) in excess of 90-day Treasury bill returns and a risk
factor that reflects performance below 90-day Treasury bill returns.
For the 3- and 5-year performance, the fund received 5 stars. There
were 1, 013, and 561 funds rated. 10% of the funds in an investment
category receive 5 stars. Performance for other share classes will
vary. Past performance is not indicative of future results.
(copyright) Karsh, Ottawa
[PHOTO OF GEORGE PUTNAM OMITTED]
From the Chairman
Dear Shareholder:
The flat-tax anxiety that gripped the municipal bond market as
Putnam New York Tax Exempt Opportunities Fund began fiscal 1996
seems like ancient history today. As with so many other historical
events, however, the effects linger.
In this case, the residual consequence has had some positive
implications. When the rest of the bond market took a rather steep
drop last February, municipal bond prices barely wavered, although
they are still mildly erratic.
Overall, Howard Manning, your fund's newly appointed manager,
believes positive forces at work in the municipal bond market
outweigh the negatives. Demand is strong, especially relative to
fairly modest supply. The economy, interest rates, and inflation
remain generally favorable. In sum, after a year full of challenges,
the outlook for the year ahead appears positive.
Howard, who joined Putnam's municipal bond group in 1986, has 14
years of investment experience. In the report that follows, he
discusses your fund's performance in fiscal 1996 and what he sees as
the prospects for the fiscal year just under way.
Respectfully yours,
/S/ George Putnam
George Putnam
Chairman of the Trustees
November 20, 1996
Report from the Fund Manager
Howard K. Manning
Municipal bond funds faced a number of challenges over the 12 months
ended September 30, 1996, but Putnam New York Tax Exempt
Opportunities Fund has successfully withstood them. In the first
half of the year, in an otherwise ideal environment for bond market
investing, investors' flat-tax fears held back municipal bond
performance. At the year's midpoint -- as flat-tax concerns
decreased -- the general bond market rally came to an abrupt halt
with the sharpest one-day price decline in nearly two decades. And
while the final six months of your fund's fiscal year brought a bit
more stability to the bond market, investors continued to be anxious
about the possibility of an overheating economy.
Despite this dubious environment for tax-free investing, your fund
concluded the period with a respectable performance record. For the
12 months ended September 30, 1996, your fund's class A shares rose
6.48%, class B shares gained 5.78%, and class M shares rose 6.15%,
all at net asset value. These returns compare favorably with the
Lipper New York municipal debt universe average of 5.55%. The
returns taking maximum sales charges into account were 1.41%, 0.78%,
and 2.65% for class A, class B, and class M shares, respectively.
Please see pages 8 and 9 for complete performance information.
*NEW YORK CREDIT ENVIRONMENT REMAINS STRESSED
In your fund's semiannual report in March, we discussed the credit
pressures on New York bonds, specifically state-appropriated issues
and New York City government obligations. During the second half of
the fiscal year, this situation was essentially unchanged and we
continued to manage the portfolio with these credit issues in mind.
At the year's midpoint, we had significantly reduced holdings in
state-appropriated bonds, which are used to finance public programs,
in favor of essential service issues.
Essential service bonds are self-funding; the income paid to
investors comes from the fees paid by users of the services.
Therefore, income from essential service bonds tends to be
relatively stable and carries a lower risk of default than income
from other types of municipal bonds. In addition, these bonds don't
rely on the New York budgetary process for their long-term survival.
Among the essential service bonds in your fund's portfolio at the
end of the period were New York City Water Authority, Port Authority
of New York and New Jersey, and New York State Local Government
Assistance Corp.
The bright side of the New York credit picture has been the
outstanding year on Wall Street -- a period in which the U.S. stock
market has surged to record highs, including the milestone 6000 mark
for the Dow Jones Industrial Average just after the close of the
fiscal year. This intoxicating market environment proved especially
beneficial for New York City. As tax-paying investors earn more
money, the city's and state's tax collections rise. This increase in
revenue, in turn, helped ease chronic budget deficit problems and
improved perceptions of New York's creditworthiness. In fact, at the
end of September, New York was in better fiscal shape than we had
anticipated.
[GRAPHIC OMITTED horizontal bar chart TOP INDUSTRY SECTORS*]
Health care 19.3%
Water and sewer 17.6%
Education 17.3%
Transportation 10.2%
Utilities 8.4%
Footnote reads:
*Based on net assets as of 9/30/96. Holdings will vary over time.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW*]
B 2.37%
Aaa/AAA 35.89%
Aa/AA 18.48%
A/A1 13.37%
Baa/BBB 22.27%
Ba/BB 7.62%
Footnote reads:
*As a percentage of market value as of 9/30/96. A bond rated Baa or
higher is considered investment grade. All ratings reflect Moody's
descriptions unless noted otherwise; percentages may include unrated
bonds considered by Putnam Management to be of comparable quality.
Ratings will vary over time.
*A MODEST UPGRADE IN PORTFOLIO QUALITY
The emphasis on essential service bonds, combined with the fund's
relatively high percentage of insured bonds, has increased the
overall credit quality of your fund's portfolio. Our shift away from
several lower-quality holdings was another contributing factor. One
such position was Long Island Lighting Co. -- the gas and electric
company that has been burdened by many problems, not the least of
which is Governor Pataki's plan to fold the facility. We have also
reduced the portfolio's weighting of health-care issues. The New
York health-care industry has experienced increased volatility
because of changes in laws concerning federal and state funding.
While we believe the legislative changes will be positive for the
industry over the long term, we remain cautious about their short-
term impact on health-care bonds. As always, we will constantly re-
evaluate portfolio holdings to ensure that they meet the fund's
credit quality standards.
*POSITIVE OUTLOOK FOR THE COMING YEAR
While fiscal 1996 was a tough year for municipal bond investing,
your fund has come through it with a strong record. In addition, a
relatively low supply of new issues at fiscal year's end brought New
York municipal bond prices to appealing levels relative to other
municipals. Concern about a flat tax, a recurring theme in recent
reports, no longer appears to have a negative impact on municipal
bond demand. And although discussions of tax reform may reappear at
some point, radical changes are not expected in the near future.
As fiscal 1997 begins, we expect the financial markets to become
more conducive to fixed-income investing, with stable to lower
interest rates and relatively slow economic growth. Of course, we
will constantly monitor market conditions as well as your fund's
portfolio and will search for municipal bonds that offer the right
balance of credit quality, yield, and relative price stability.
Footnote reads:
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described
holdings were viewed favorably as of 9/30/96, there is no guarantee
the fund will continue to hold these securities in the future.
Performance summary
Performance should always be considered in light of a fund's
investment strategy. Putnam New York Tax Exempt Opportunities Fund
is designed for investors seeking high current income free from
federal, New York State, and New York City income taxes, consistent
with capital preservation.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 9/30/96
Class A Class B Class M
(inception date) (11/7/90) (2/1/94) (2/10/95)
NAV POP NAV CDSC NAV POP
- -------------------------------------------------------------------
1 year 6.48% 1.41% 5.78% 0.78% 6.15% 2.65%
- -------------------------------------------------------------------
5 years 40.40 33.78 -- -- -- --
Annual average 7.02 5.99 -- -- -- --
- -------------------------------------------------------------------
Life of class 53.27 46.06 12.24 9.31 13.70 9.95
Annual average 7.51 6.63 4.44 3.40 8.14 5.95
- -------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 9/30/96
Lehman Bros. Consumer
Municipal Bond Price
Index Index
- -------------------------------------------------------------------
1 year 6.04% 3.00%
- -------------------------------------------------------------------
5 years 43.28 15.02
Annual average 7.46 2.84
- -------------------------------------------------------------------
Life of class A 59.29 18.20
Annual average 8.19 2.88
- -------------------------------------------------------------------
Life of class B 12.19 7.93
Annual average 4.41 2.91
- -------------------------------------------------------------------
Life of class M 16.30 4.99
Annual average 9.50 3.01
- -------------------------------------------------------------------
Footnote reads:
Performance data represent past results, do not reflect future
performance, and will differ for each share class. They do not take
into account any adjustment for taxes payable on reinvested
distributions. Investment returns and net asset value will fluctuate
so that an investor's shares, when sold, may be worth more or less
than their original cost. POP assumes 4.75% maximum sales charge for
class A shares and 3.25% for class M shares. CDSC for class B shares
assumes the applicable sales charge., with the maximum being 5%.
Performance data prior to 5/11/92 do not reflect operation under the
fund's current investment objective and policies.
[GRAPHIC OMITTED worm chart GROWTH OF A $10,000 INVESTMENT]
Footnote 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 $11,224 at net asset value on 9/30/96 ($10,931
with a redemption at the end of the period). A $10,000 investment in
the fund's class M shares at inception on 2/10/95 would have been
valued at $11,370 at net asset value on 9/30/96, $10,995 at public
offering price.
PRICE AND DISTRIBUTION INFORMATION
12 months ended 9/30/96
Class A Class B Class M
- --------------------------------------------------------------------
Distributions (number) 12 12 12
- --------------------------------------------------------------------
Income $0.4867321 $0.4275790 $0.458714
- --------------------------------------------------------------------
Capital gains1 -- -- --
- --------------------------------------------------------------------
Total $0.4867321 $0.4275790 $0.458714
- --------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- --------------------------------------------------------------------
9/30/95 $8.80 $9.24 $8.79 $8.79 $9.09
- --------------------------------------------------------------------
9/30/96 8.87 9.31 8.86 8.86 9.16
- --------------------------------------------------------------------
Current return
(end of period)
- --------------------------------------------------------------------
Current dividend rate2 5.13% 4.89% 4.48% 4.83% 4.67%
- --------------------------------------------------------------------
Taxable equivalent3 9.55 9.10 8.34 8.99 8.69
- --------------------------------------------------------------------
Current 30-day
SEC yield4 4.86 4.62 4.22 4.56 4.41
- --------------------------------------------------------------------
Taxable equivalent3 9.05 8.60 7.85 8.49 8.21
- --------------------------------------------------------------------
1Capital gains, if any, are taxable for federal and, in most cases,
state tax purposes. For some investors, investment income may also
be subject to the federal alternative minimum tax. Investment income
may be subject to state and local taxes.
2Income portion of most recent distribution, annualized and divided
by NAV or POP at end of period.
3Assumes maximum 46.27 % combined federal, state, and city tax rate.
Results for investors subject to lower tax rates would not be as
advantageous.
4Based only on investment income, calculated using SEC guidelines.
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.
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.
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.
It is not possible to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation;
it does not represent an investment return.
PUTNAM GROWTH FUNDS
Asia Pacific Growth Fund
Capital Appreciation Fund
Diversified Equity Trust
Europe Growth Fund
Global Growth Fund
Global Natural Resources Fund *
Health Sciences Trust
International Growth Fund +
International New Opportunities Fund
Investors Fund
New Opportunities Fund
OTC Emerging Growth Fund
Vista Fund
Voyager Fund
Voyager Fund II
PUTNAM GROWTH
AND INCOME FUNDS
Balanced Retirement Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
Growth and Income Fund II
International Growth and Income Fund
New Value Fund
Utilities Growth and Income Fund
PUTNAM INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Diversified Income Trust II
Federal Income Trust
Global Governmental Income Trust
High Yield Advantage Fund
High Yield Trust
Income Fund
Intermediate U.S. Government
Income Fund
Preferred Income Fund
U.S. Government Income Trust
PUTNAM TAX-FREE
INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds [DBL. DAGGER]
Arizona, California, Florida, Massachusetts, Michigan, Minnesota,
New Jersey, New York, Ohio and Pennsylvania
LIFESTAGESM 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:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
MOST CONSERVATIVE
INVESTMENTS [SECTION MARK]
Putnam money market funds: **
California Tax Exempt Money Market Fund
Money Market Fund
New York Tax Exempt Money Market Fund
Tax Exempt Money Market Fund
CDs and savings accounts ++
* Formerly Natural Resources Fund
+ Formerly Overseas Growth Fund
[DBL. DAGGER] Not available in all states.
[SECTION MARK] Relative to above.
** An investment in a money market fund is neither
insured nor guaranteed by the U.S. government. These
funds are managed to maintain a price of $1.00 per
share, although there is no assurance that this
price will be maintained in the future.
++ 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 at 1-800-225-1581 to obtain a
prospectus for any Putnam fund. It contains more
complete information, including charges and
expenses. Please read it carefully before you invest
or send money.
Report of independent accountants
For the fiscal year ended September 30, 1996
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, 1996,
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, 1996 by correspondence with the custodian and brokers
and the application of alternative auditing procedures where
confirmations from brokers were not received, provide a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
November 14, 1996
<TABLE>
<CAPTION>
Portfolio of investments owned
September 30, 1996
Key to Abbreviations
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
FHA Insd. -- Federal Housing Administration Insured
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
MUNICIPAL BONDS AND NOTES (98.6%) *
PRINCIPAL AMOUNT RATINGS** VALUE
<S> <C> <C> <C> <C>
New York (88.9%)
- ---------------------------------------------------------------------------------------------------------------------------
$1,130,000 Erie Cnty., Wtr. Auth. Rev. Bonds
(Fourth Resolution), AMBAC, zero %, 12/1/17 Aaa $ 247,786
2,635,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds
(Eddygate Park Apts. Project), 9s, 6/1/06 BBB/P 2,756,473
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid
Waste Disp. Rev. Bonds
(Champion Intl. Corp.), 7.2s, 12/1/20 Baa 2,875,250
NY City G.O. Bonds
480,000 Ser. D, 8 1/4s, 8/1/11 A 548,400
300,000 Ser. B, 8 1/4s, 6/1/05 BBB+ 347,625
10,000,000 Ser. J, 5 1/2s, 2/15/26 Baa 8,925,000
380,000 Ser. F, 3s, 11/15/00 BBB+ 352,925
1,000,000 NY City G.O. IFB AMBAC, 8.24s, 9/1/11 Aaa 1,048,750
6,400,000 NY City Hlth. & Hosp. Corp.
Rev. Bonds AMBAC, 5.635s, 2/15/23 Aaa 6,208,000
4,000,000 NY City Hlth. & Hosp. Corp. Rev. Bonds,
AMBAC, 5.536s, 2/15/11 Aaa 3,915,000
5,000,000 NY City Indl. Dev. Agcy. Rev. Bonds
(Paer Inc. Project), 7.95s, 1/1/28 BB/P 5,293,750
NY City Indl. Dev. Agcy.
1,750,000 Civic Fac. Rev. Bonds (The Lighthouse Inc. Project),
6 1/2s, 7/1/22 Aa 1,817,812
8,325,000 Civic Fac. Rev. Bonds (Parking Corp. Project),
8 1/2s, 12/30/22 BB/P 8,772,468
4,000,000 NY City Muni. Fin. Auth. Wtr. & Swr. Syst.
Rev. Bonds, MBIA, 5 1/2s, 6/15/23 Aaa 3,850,000
5,000,000 NY City Muni. Wtr. & Swr. Fin. Auth.
Rev. Bonds, MBIA, 6.82s, 6/15/13 Aaa 4,606,250
NY City Muni. Wtr. Fin. Auth. Wtr. & Swr. Syst. Rev. Bonds
9,020,000 MBIA, 5 1/2s, 6/15/19 Aaa 8,749,400
2,690,000 Ser. B, AMBAC, 5 1/2s, 6/15/19 Aaa 2,626,112
4,160,000 NY State Dorm Auth. Rev. Bonds (City U.),
AMBAC, 5 3/8s, 7/1/25 Aaa 3,957,200
NY State Dorm. Auth. Rev. Bonds (City U.), Ser. D
170,000 8 3/4s, 7/1/03 Baa 201,875
5,250,000 8.2s, 7/1/12 Baa 5,656,875
NY State Dorm. Auth. Rev. Bonds
7,225,000 (City U.), Ser. C, 8 1/8s, 7/1/08 Baa 7,775,906
2,750,000 (Long Island Med. Ctr.), Ser. A, FHA Insd., 7 3/4s, 8/15/27 AAA 2,911,563
835,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 A 957,119
750,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 Baa 882,187
605,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/30 Aa 667,769
6,000,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/20 Aa 6,622,500
500,000 (Wildwood School), 7.3s, 7/1/15 A 563,750
2,050,000 (Our Lady Of Mercy), 6.3s, 8/1/32 AA 2,114,063
5,050,000 (City U. Syst.), MBIA, 5 1/2s, 7/1/24 Aaa 4,911,125
5,000,000 (State U. Edl. Fac), Ser. C, 5.4s, 5/15/23 Baa 4,543,750
2,000,000 (State U. Dorm. Facs.), Ser. A, AMBAC, 5.3s, 7/1/24 Aaa 1,890,000
725,000 (State U. Edl. Fac.), Ser. B, zero %, 5/15/09 Baa 347,094
NY State Energy Research & Dev. Auth.
2,000,000 Gas Facs. IFB (Brooklyn Union Gas Co. Project),
Ser. B, 10.0283s, 7/1/26 A 2,362,500
2,000,000 Gas IFB (Brooklyn Union Gas Co. Project), 8.810s, 4/1/20 A 2,165,000
1,700,000 Poll. Control Rev. Bonds (Hudson Gas), FGIC, 7 3/8s, 10/1/14 Aaa 1,870,000
1,750,000 Poll. Control Rev. Bonds (Niagara Mohawk Pwr. Corp.),
Ser. A, FGIC, 7.2s, 7/1/29 Aaa 1,977,500
1,000,000 NY State Energy Resh. & Dev. Auth. Poll. Control
Rev. Bonds (Hudson Gas), FGIC, 7 3/8s, 10/1/14 Aaa 1,100,000
8,500,000 NY State Energy Resource & Dev. Auth. Rev. Bonds,
AMBAC, 5 1/4s, 8/15/20 Aaa 7,883,750
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
8,000,000 (State Wtr. Revolving Fund), Ser. A, 7 1/2s, 6/15/12 Aa 8,840,000
1,000,000 Ser. B, 7 1/2s, 3/15/11 Aa 1,083,750
7,185,000 (State Wtr. Revolving Fund), 7s, 6/15/12 Aa 7,921,463
500,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig. Rev. Bonds,
Ser. A, 7 1/4s, 9/15/12 Baa 548,125
2,900,000 NY State Local Govt. Assistance Corp. Rev. Bonds,
Ser. C, 5 1/2s, 4/1/17 A 2,842,000
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
615,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B, FHA Insd.,
8 7/8s, 8/15/27 AA 654,206
395,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08 Baa 440,919
70,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 BBB+ 75,425
2,000,000 MBIA, 7.6s, 2/15/29 Aaa 2,162,500
230,000 (Mental Hlth. Svcs. Fac), Ser. A, 7 1/2s, 2/15/21 BBB+ 254,438
5,750,000 (North Shore U. Hosp.), MBIA, 7.2s, 11/1/20 Aaa 6,325,000
200,000 (Bronx, Lebanon & the Jamaica Hosps.), Ser. A, 7.1s, 2/15/27 Baa 204,000
700,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. D, FHA Insd.,
6.6s, 2/15/31 AAA 728,000
1,725,000 NY State Mtge. Agcy. Rev. Bonds (Single-Fam.),
Ser. 2, zero %, 10/1/14 Aa 317,642
6,125,000 NY State Thru-Way Auth. General Purpose
Rev. Bonds, Ser. B, MBIA, 5s, 1/1/20 Aaa 5,612,031
NY State Urban Dev. Corp. Rev. Bonds (Clarkson Ctr.)
1,685,000 5 1/2s, 1/1/20 Baa 1,602,856
3,345,000 5 1/2s, 1/1/15 Baa 3,198,656
NY State Urban Dev. Corp. Rev. Bonds
2,000,000 (Syracuse U.), 5 1/2s, 1/1/15 Baa 1,895,000
2,950,000 (Correctional Fac.), Ser. 4, 5 3/8s, 1/1/23 Baa 2,658,688
2,000,000 (Correctional Fac.), Ser. A, 5 1/4s, 1/1/21 Baa 1,777,500
2,000,000 NY City Indl. Dev. Rev. Bonds (Solid Waste
Disp-Visy Paper Project), 7.8s, 1/1/16 BB/P 2,117,500
175,000 Port Auth. NY & NJ Cons. Rev. Bonds,
Ser. 78, 6 1/2s, 10/15/08 AA 187,469
5,000,000 Tompkins Cnty. Indl. Dev. Agcy. Rev. Bonds
(Life Care Cmnty., Kendal Ithaca), 7 7/8s, 6/1/24 B/P 5,031,250
10,000,000 Triborough Brdg. & Tunl. Auth. General Purpose
Rev. Bonds, Ser. A, 5s, 1/1/24 Aa 9,050,000
1,450,000 Valley Hlth. Dev. Corp. Mtge. Rev. Bonds (Valley Hlth.
Project), FHA Insd., 11.3s, 2/1/23 A 1,732,750
-----------
191,563,695
Puerto Rico (9.7%)
- ---------------------------------------------------------------------------------------------------------------------------
10,000,000 Cmnwlth. of PR Aqueduct & Swr. Rev. Bonds, 5s, 7/1/19 A 9,025,000
Cmnwlth. of PR Hwy. & Trans. Auth. Rev. Bonds, Ser. Y
1,600,000 5s, 7/1/36 A 1,396,480
1,000,000 6 1/4s, 7/1/13 A 1,066,250
4,700,000 Cmnwlth. of PR Hwy. & Trans. Auth. Hwy. IFB, Ser. W, 6.67s, 7/1/08 A 4,653,000
1,000,000 PR Indl. & Environmental Poll. Control Fac. Fing. Auth.
Rev. Bonds, 7.6s, 5/1/14 A1 1,093,750
3,800,000 PR Tel. Auth. Rev. Bonds, MBIA, 5.51s, 1/16/15 AAA 3,690,750
-----------
20,925,230
- ---------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $210,322,731) *** 212,488,925
- ---------------------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $215,457,286.
** The Moody's or Standard & Poor's ratings indicated are
believed to be the most recent ratings available at
September 30,1996 for the securities listed. Ratings
are generally ascribed to securities at the time of
issuance. While the agencies may from time to time revise
such ratings, they undertake no obligation to do so, and the
ratings do not necessarily represent what the agencies would
ascribe to these securities at September 30, 1996.
Securities rated by Putnam are indicated by "/P"and
are not publicly rated. Ratings are not covered by the
Report of independent accountants.
*** The aggregate identified cost on a tax basis is
$210,331,429, resulting in gross unrealized appreciation and
depreciation of $3,896,864 and $1,739,368, respectively,
or net unrealized appreciation of $2,157,496.
The rates shown on IFB, which are securities
paying interest rates that vary inversely to changes in the
market interest rates, and are the current interest
rates at September 30, 1996.
The fund had the following industry group
concentrations greater than 10% at
September 30, 1996 (as a percentage of net assets):
Health care 19.3%
Water and sewer 17.6
Education 17.3
Transportation 10.2
The fund had the following insurance
concentrations greater than 10% at
September 30, 1996 (as a percentage of net assets):
MBIA 17.5%
AMBAC 12.9%
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
September 30, 1996
<S> <C>
Assets
- ------------------------------------------------------------------------------------------------------
Investments in securities, at value (identified cost
$210,322,731) (Note 1) $212,488,925
- ------------------------------------------------------------------------------------------------------
Cash 693,090
- ------------------------------------------------------------------------------------------------------
Interest and other receivables 3,339,029
- ------------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 640,377
- ------------------------------------------------------------------------------------------------------
Receivable for securities sold 24,242,366
- ------------------------------------------------------------------------------------------------------
Total assets 241,403,787
Liabilities
- ------------------------------------------------------------------------------------------------------
Distributions payable to shareholders 241,107
- ------------------------------------------------------------------------------------------------------
Payable for securities purchased 24,279,489
- ------------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 876,768
- ------------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 320,813
- ------------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 7,617
- ------------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 78
- ------------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,931
- ------------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 116,484
- ------------------------------------------------------------------------------------------------------
Other accrued expenses 102,214
- ------------------------------------------------------------------------------------------------------
Total liabilities 25,946,501
- ------------------------------------------------------------------------------------------------------
Net assets $215,457,286
Represented by
- ------------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $213,841,779
- ------------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 161,060
- ------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (711,747)
- ------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 2,166,194
- ------------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $215,457,286
Computation of net asset value and offering price
- ------------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($172,170,072 divided by 19,410,001 shares) $8.87
- ------------------------------------------------------------------------------------------------------
Offering Price per class A share (100/95.25 of $8.87)* $9.31
- ------------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($41,795,327 divided by 4,716,475)*** $8.86
- ------------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($1,491,887 divided by 168,436 shares) $8.86
- ------------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $8.86)** $9.16
- ------------------------------------------------------------------------------------------------------
* 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.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Year ended September 30,1996
<S> <C>
Tax exempt interest income $13,371,284
- ----------------------------------------------------------------------------------------------------
Expenses:
- ----------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) $1,259,730
- ----------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 245,502
- ----------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 12,523
- ----------------------------------------------------------------------------------------------------
Administrative services (Note 2) 7,793
- ----------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 346,958
- ----------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 286,629
- ----------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 5,104
- ----------------------------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 1,439
- ----------------------------------------------------------------------------------------------------
Reports to shareholders 38,614
- ----------------------------------------------------------------------------------------------------
Auditing 30,736
- ----------------------------------------------------------------------------------------------------
Legal 11,111
- ----------------------------------------------------------------------------------------------------
Postage 68,981
- ----------------------------------------------------------------------------------------------------
Other 9,359
- ----------------------------------------------------------------------------------------------------
Total expenses 2,324,479
- ----------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (319,312)
- ----------------------------------------------------------------------------------------------------
Net expenses 2,005,167
- ----------------------------------------------------------------------------------------------------
Net investment income 11,366,117
- ----------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 2,703,328
- ----------------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Notes 1 and 3) 531,200
- ----------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments during the year (1,860,238)
- ----------------------------------------------------------------------------------------------------
Net gain on investments 1,374,290
- ----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $12,740,407
- ----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended September 30
------------------------------
1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ------------------------------------------------------------------------------------------------------------
Operations:
- ------------------------------------------------------------------------------------------------------------
Net investment income $11,366,117 $11,270,965
- ------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 3,234,528 (2,207,244)
- ------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments (1,860,238) 9,000,081
- ------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 12,740,407 18,063,802
- ------------------------------------------------------------------------------------------------------------
Distributions to shareholders
- ------------------------------------------------------------------------------------------------------------
From net investment income:
- ------------------------------------------------------------------------------------------------------------
Class A (9,635,133) (10,369,002)
- ------------------------------------------------------------------------------------------------------------
Class B (1,614,654) (840,237)
- ------------------------------------------------------------------------------------------------------------
Class M (51,638) (4,453)
- ------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 14,250,689 8,554,854
- ------------------------------------------------------------------------------------------------------------
Total increase in net assets 15,689,671 15,404,964
- ------------------------------------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------------------------------------
Beginning of year 199,767,615 184,362,651
- ------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $161,060 and $72,372 respectively) $215,457,286 $199,767,615
- ------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
For the period
February 10, 1995
(commencement
Year ended of operations) to
September 30 September 30 September 30
--------------------------------------------------------
1996 1995 1996
--------------------------------------------------------
Class M
--------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.79 $8.51 $8.79
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income .47 .31 .43
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments .06 .29 .07
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations .53 .60 .50
- ---------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income (.46) (.32) (.43)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.46) (.32) (.43)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.86 $8.79 $8.86
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%) (a) 6.15 7.11 * 5.78
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,492 $299 $41,795
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.30 0.83 * 1.66
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 5.03 3.21 * 4.83
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 270.34 120.38 270.34
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
For the period
February 1, 1994
(commencement
Year ended of operations) to
September 30 September 30
-------------------------------------------------------
1995 1994 1996
-------------------------------------------------------
Class B
-------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.48 $9.07 $8.80
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income .47 .32 .49
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments .31 (.60) .07
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations .78 (.28) .56
- ---------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income (.47) (.31) (.49)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.47) (.31) (.49)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.79 $8.48 $8.87
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%) (a) 9.46 (3.06)* 6.48
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $24,259 $8,622 $172,170
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.65 1.05 * 1.00
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 5.28 3.39 * 5.53
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 120.38 13.85 270.34
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Year ended September 30
-------------------------------------------------------
1995 1994 1993
-------------------------------------------------------
Class A
-------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.48 $9.12 $8.86
- ---------------------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income .52 .54 .57
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments .32 (.62) .27
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations .84 (.08) .84
- ---------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income (.52) (.54) (.57)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- (.01)
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments -- (.02) --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions (.52) (.56) (.58)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.80 $8.48 $9.12
- ---------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%) (a) 10.27 (.89) 9.80
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $175,210 $175,741 $170,533
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.01 .98 1.02
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 6.12 6.22 6.32
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 120.38 13.85 17.68
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
1992
----------------
<S> <C>
Net asset value, beginning of period $8.67
- ---------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------
Net investment income .63 (c)
- ---------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments .19
- ---------------------------------------------------------------------------------
Total from investment operations .82
- ---------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------
From net investment income (.63)
- ---------------------------------------------------------------------------------
In excess of net investment income --
- ---------------------------------------------------------------------------------
From net realized gain on investments --
- ---------------------------------------------------------------------------------
Total distributions (.63)
- ---------------------------------------------------------------------------------
Net asset value, end of period $8.86
- ---------------------------------------------------------------------------------
Total investment return at net asset value (%) (a) 9.89
- ---------------------------------------------------------------------------------
Net assets, end of period (in thousands) $108,609
- ---------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .91 (c)
- ---------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 7.04 (c)
- ---------------------------------------------------------------------------------
Portfolio turnover (%) 11.56
- ---------------------------------------------------------------------------------
(a) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the periods ended
September 30, 1995 and thereafter, includes amounts paid through
expense offset arrangements. Prior period ratios exclude these
amounts (Note 2).
(c) Reflects an expense limitation in effect during the period. As a result
of such limitation, expenses for the year ended September 30, 1992
reflect a reduction of $0.02 per share.
* Not annualized.
</TABLE>
Notes to financial statements
September 30, 1996
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 by investing in a portfolio of New York tax-exempt securities
which Putnam Management believes does not involve undue risk to
income or principal.
The fund offers class A, class B and class M shares. Class A shares
are sold with a maximum front-end sales charge of 4.75%. Class B
shares, which convert to class A shares after approximately eight
years, do not pay a front-end sales charge, but pay a higher ongoing
distribution fee than class A shares, and are subject to a
contingent deferred sales charge, if those shares are redeemed
within six years of purchase. Class 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 preparation of financial statements is in
conformity with generally accepted accounting principles and
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities. Actual results could
differ from those estimates.
A) Security valuation 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.
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 on securities held and for
excise tax on income and capital gains.
At September 30, 1996, the fund had a capital loss carryover of
approximately $424,000 available to offset future capital gains, if
any, which will expire on September 30, 2003.
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 character of income and gains to be distributed are
determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These
differences include treatment of organizational expenses, market
discount and realized gains and losses on certain futures contracts.
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, 1996, the fund reclassified $23,996 to increase
undistributed net investment income and $761 to decrease paid-in-
capital, with an increase to accumulated net realized loss on
investments of $23,235. The calculation of net investment income per
share in the financial highlights table excludes these adjustments.
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. The
premium in excess of the call price, if any, is amortized to the
call date; thereafter, the remaining excess premium is amortized to
maturity. Discounts on zero coupon bonds and original issue bonds
are 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 were $30,827. These expenses
have been fully amortized over a five year period ended September
30, 1996.
Note 2
Management fee, administrative
services and other transactions
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net assets
of the fund. Such fee is based on the following annual rates: 0.60%
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, under current law, to reduction
in any year by the amount of certain brokerage commissions and fees
(less expenses) received by affiliates of Putnam Management on the
fund's portfolio transactions.
The fund reimburses Putnam Management for the compensation and
related expenses of certain officers of the fund and their staff who
provide administrative services to the fund. The aggregate amount of
all such reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
For the year ended September 30, 1996, fund expenses were reduced by
$319,312 under expense offset arrangements with PFTC. Investor
servicing and custodian fees reported in the Statement of operations
exclude these credits. The fund could have invested a portion of the
assets utilized in connection with the expense offset arrangements
in an income producing asset if it had not entered into such
arrangements.
Trustees of the fund receive an annual Trustees fee of $780 and an
additional fee for each Trustee's meeting attended. Trustees who are
not interested persons of Putnam Management and who serve on
committees of the Trustees receive additional fees for attendance at
certain committee meetings.
The fund adopted a Trustee Fee Deferral Plan (the "Plan") which
allows the Trustees to defer the receipt of all or a portion of
Trustees Fees payable on or after July 1, 1995. The deferred fees
remain in the fund and are invested in certain Putnam funds until
distribution in accordance with the Plan.
The fund has adopted distribution plans (the "Plans") with respect
to its class A, 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 0.35%, 1.00% and 1.00% 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 0.20%, 0.85% and 0.50% of the average net assets
attributable to class A, class B and class M shares respectively.
For the year ended September 30, 1996, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $68,869 and $1,816
from the sale of class A and class M shares, respectively and
$106,581 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, 1996, Putnam Mutual Funds Corp., acting as underwriter received
no commissions on class A redemptions.
Note 3
Purchase and sales of securities
During the year ended September 30, 1996, purchases and sales of
investment securities other than short-term municipal obligations
aggregated $557,705,843 and $537,244,533, respectively. Purchases
and sales of short-term municipal obligations aggregated
$169,700,000 and $176,285,000, 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, 1996, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were
as follows:
Year ended
September 30, 1996
- ----------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------
Shares sold 5,450,704 $ 48,248,509
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 536,654 4,753,649
- ----------------------------------------------------
5,987,358 53,002,158
Shares
repurchased (6,484,353) (57,331,874)
- ----------------------------------------------------
Net decrease (496,995) $(4,329,716)
- ----------------------------------------------------
Year ended
September 30, 1995
- ----------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------
Shares sold 4,362,516 $ 37,214,894
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 587,902 5,019,522
- ----------------------------------------------------
4,950,418 42,234,416
Shares
repurchased (5,756,670) (48,914,592)
- ----------------------------------------------------
Net decrease (806,252) $ (6,680,176)
- ----------------------------------------------------
Year ended
September 30, 1996
- ----------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------
Shares sold 2,494,552 $22,114,554
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 106,657 942,403
- ----------------------------------------------------
2,601,209 23,056,957
Shares
repurchased (644,236) (5,668,228)
- ----------------------------------------------------
Net increase 1,956,973 $17,388,729
- ----------------------------------------------------
Year ended
September 30, 1995
- ----------------------------------------------------
Class B Shares Amount
- ----------------------------------------------------
Shares sold 2,047,174 $ 17,535,586
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 54,190 465,295
- ----------------------------------------------------
2,101,364 18,000,881
Shares
repurchased (358,544) (3,061,066)
- ----------------------------------------------------
Net increase 1,742,820 $14,939,815
- ----------------------------------------------------
Year ended
September 30, 1996
- ----------------------------------------------------
Class M Shares Amount
- ----------------------------------------------------
Shares sold 141,757 $1,255,609
- ----------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 4,139 36,540
- ----------------------------------------------------
145,896 1,292,149
Shares
repurchased (11,419) (100,473)
- ----------------------------------------------------
Net increase 134,477 $1,191,676
- ----------------------------------------------------
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
- ----------------------------------------------------
Federal tax information
(Unaudited)
The fund has designated 100% of dividends paid from net investment
income during the fiscal year as tax exempt for Federal income tax
purposes.
The Form 1099 you receive in January 1997 will show the tax status
of all distributions paid to your account in calendar 1996.
Results of September 5, 1996 shareholder meeting
An annual meeting of shareholders of the fund was held on September
5, 1996. At the meeting, each of the nominees for Trustees was
elected, as follows:
Votes
Votes for withheld
Jameson Adkins Baxter 15,416,949 184,244
Hans H. Estin 15,415,995 185,198
John A. Hill 15,416,949 184,244
R.J. Jackson 15,411,176 190,017
Elizabeth T. Kennan 15,406,890 194,303
Lawrence J. Lasser 15,413,467 187,726
Robert E. Patterson 15,407,659 193,534
Donald S. Perkins 15,411,274 189,919
William F. Pounds 15,406,120 195,073
George Putnam 15,402,018 199,175
George Putnam, III 15,407,126 194,067
Eli Shapiro 15,286,278 214,915
A.J.C. Smith 15,410,407 190,786
W. Nicholas Thorndike 15,412,228 188,965
A proposal to ratify the selection of Price Waterhouse LLP as
auditors for the fund was approved as follows: 15,066,889 votes for,
and 67,140 votes against, with 467,164 abstentions and broker non-
votes.
A proposal to amend the fund's fundamental investment restriction
with respect to diversification of investments was approved as
follows: 12,874,295 votes for, and 353,434 votes against, with
2,373,464 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction
with respect to investments in the securities of a single issuer was
approved as follows: 12,587,803 votes for, and 584,439 votes
against, with 2,428,951 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction
with respect to making loans through purchases of debt obligations,
repurchase agreements and securities loans was approved as follows:
12,240,951 votes for, and 891,228 votes against, with 2,469,014
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction
with respect to investments in commodities or commodity contracts
was approved as follows: 12,336,465 votes for, and 793,505 votes
against, with 2,471,223 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction
with respect to senior securities was approved as follows:
12,716,385 votes for, and 413,188 votes against, with 2,471,620
abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment
restriction with respect to investments in securities of issuers in
which management of the fund or Putnam Investment Management, Inc.
owns securities was approved as follows: 12,385,659 votes for, and
759,213 votes against, with 2,456,321 abstentions and broker non-
votes.
A proposal to eliminate the fund's fundamental investment
restriction with respect to margin transactions was approved as
follows: 12,099,881 votes for, and 1,001,197 votes against, with
2,500,115 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment
restriction with respect to short sales was approved as follows:
12,232,884 votes for, and 870,828 votes against, with 2,497,481
abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment
restriction which limits the fund's ability to pledge assets was
approved as follows: 12,082,789 votes for, and 959,630 votes
against, with 2,558,774 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment
restriction with respect to investments in restricted securities was
approved as follows: 12,209,918 votes for, and 881,583 votes
against, with 2,509,692 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment
restriction with respect to invest to gain control of a company's
management was approved as follows: 12,323,763 votes for, and
773,648 votes against, with 2,503,782 abstentions and broker non-
votes.
Our commitment to quality service
*CHOOSE AWARD-WINNING SERVICE
Putnam Investor Services has won the DALBAR Quality Tested Service
Seal for the past six years. In 1995, over 146,000 tests of 56
shareholder service components demonstrated that Putnam outperformed
the industry standard in every category.
*HELP YOUR INVESTMENT GROW
Set up a systematic program for investing with as little as $25 a
month from a Putnam money market fund or from your checking or
savings account.*
*SWITCH FUNDS EASILY
You can move money from one account to another with the same class
of shares without a service charge. (This privilege is subject to
change or termination.)
*ACCESS YOUR MONEY QUICKLY
You can get checks sent regularly or redeem shares any business day
at the then-current net asset value, which may be more or less than
the original cost of the shares.
For details about any of these or other services, contact your
financial advisor or call the toll-free number shown below and speak
with a helpful Putnam representative.
To make an additional investment in this or any other Putnam fund,
contact your financial advisor or call our toll-free number: 1-800-
225-1581.
* Regular investing of course, does not guarantee a profit or
protect against a loss in a declining market.
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Gary N. Coburn
Vice President
William J. Curtin
Vice President
James E. Erickson
Vice President
Howard K. Manning
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New
York Tax Exempt 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. You can also learn more
at Putnam Investments' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or
guaranteed or endorsed by, any financial institution, are not
insured by the Federal Deposit Insurance Corporation (FDIC), the
Federal Reserve Board or any other agency, and involve risk,
including the possible loss of principal amount invested.
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
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Bulk Rate
U.S. Postage
PAID
Putnam
Investments
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28367-854/228/759 11/96
