Putnam
New York
Tax Exempt
Opportunities
Fund
ANNUAL REPORT
September 30, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* Morningstar, Inc., an independent rating agency, awarded Putnam New
York Tax Exempt Opportunities Fund's class A shares its ratings of 4 and 5
stars for overall performance (based on the 3- and 5-year returns,
respectively) as of September 30, 1997.*
* "[Municipal bond funds] are more liquid than actual munis. And you
get access to a manager who may be able to play the credit-rating changes
of a locality to your advantage."
-- Fortune, August 18, 1997
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
12 Portfolio holdings
16 Financial statements
*Morningstar ratings reflect risk-adjusted performance through 9/30/97 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-year performance, the fund's
class A shares received 4 stars and for the 5-year performance, 5 stars.
There were 1,374 and 668 funds rated in the 3-year and 5-year municipal
category, respectively. 10% of the funds in an investment category receive
5 stars, 22.5% receive four stars. Performance for other share classes
will vary. Past performance is not indicative of future results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
[copyright] Karsh, Ottawa
Dear Shareholder:
The municipal bond market maintained a demeanor of relative calm during Putnam
New York Tax Exempt Opportunities Fund's fiscal year, with investors still
willing to absorb virtually all of the new offerings presented to them. Even
so, a palpable undercurrent of concern persisted that the still-vibrant
economy would finally heat inflation to the flash point.
In deference to the market's mood, Fund Manager Howard Manning maintained a
slightly defensive portfolio position, which he regarded as worthwhile
insurance against any real or imagined threat that might affect the market. As
he explains in the following report, Howard currently expects to keep his
strategy in place during the new fiscal year. He also discusses in detail the
fund's performance during the fiscal year just ended.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
November 19, 1997
Report from the Fund Manager
Howard K. Manning
Over the past year, New York municipal bond investors benefited from a
favorable economic and interest-rate environment at the national, state, and
local levels. With this as a backdrop, Putnam New York Tax Exempt
Opportunities Fund emphasized relative value, yield curve positioning, and
credit selection. We believe these strategies have created a solid, yet
flexible structure that should continue to help produce attractive results
over the long term. Your fund's class A shares generated a total return of
8.33% at net asset value (3.21% at public offering price) for the 12 months
ended September 30, 1997. Results for class B and class M shares and
performance details for longer periods can be found starting on page 8.
* NEW YORK MUNICIPAL BOND INVESTORS BENEFIT FROM STATE'S FISCAL STRENGTH
The investment climate over the period was ripe with opportunity for New York
municipal bond investors. At the national level, moderate-to-strong economic
growth was accompanied by low inflation. This set the stage for a positive
atmosphere in the fixed-income market despite short-term periods of
interest-rate fluctuations. In New York, the state's solid economic health and
sound fiscal management earned it rating upgrades for its general obligation
and state-appropriated bonds.
The year's credit highlight, however, was New York City. Shining from Wall
Street's banner year and investor demand for higher-yielding bonds, the city's
general obligation bonds rose in price to become among the top-performing
credits within the national tax-exempt market. The conservative assumptions in
Mayor Giuliani's fiscal 1998 budget, especially with regard to earnings
expectations for Wall Street firms, led us to conclude that the bonds'
prospects in the months ahead remain positive.
While the rating agencies did not raise New York City's credit ratings,
investors recognized the situation as a promising opportunity. The higher tax
revenues offset some of the city's need to issue new debt. This led to
anticipation of a lower supply, which investors believed could boost prices of
existing bonds. Furthermore, the city's longer-term debt burdens were expected
to be alleviated in part with the establishment of the Transitional Finance
Authority. This new financing conduit has the authorization to issue up to $7
billion in municipal bonds over the next five years.
* DEMAND GROWS AS INVESTORS STRETCH FOR YIELD
In addition to credit factors, we believe spread compression helped stimulate
demand for New York municipal bonds. This phenomenon occurred in both the
tax-exempt and taxable sectors as many investors reached for yield in this low
interest-rate environment. Spread compression drove the prices of lower-rated
bonds higher -- and yields lower -- than their higher-rated counterparts.
We believe several factors caused this to happen. Traditional supply/demand
dynamics changed as demand from nontraditional municipal bond buyers
increased. Demand was particularly strong for New York municipal bonds in
general, since New York City and New York state-appropriated bonds represent
the largest and most liquid BBB-rated market within the national tax-exempt
sector. Also, as these municipalities improved from a credit standpoint, the
cost of bond insurance fell, pushing yields lower.
[GRAPHIC OMITTED: horizontal bar chart TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Education 16.4%
Transportation 14.9%
Water and sewerage 12.7%
Hospitals and health care 10.9%
Utilities 6.2%
Footnote reads:
*Based on net assets as of 9/30/97. Holdings will vary over time.
* ATTRACTIVE RELATIVE VALUE GENERATES LONG-TERM BENEFITS
In this environment, your fund focused on relative value and de-emphasized
interest-rate management. We structured the portfolio to reflect a neutral
interest-rate stance and built positions that we believed would provide
attractive income and price appreciation over the long term.
We sold bonds that were particularly interest-rate sensitive, including
zero-coupon bonds and bonds that had low coupons with maturities longer than
20 years. We replaced them with bonds with coupons in the 6% to 6 1/2% range
and maturities ranging from 12 to 20 years. Many of these bonds were
noncallable. In addition to offering attractive yields, bonds in the 15-year
maturity range tend to appreciate in value simply by moving closer to
maturity, thereby approaching the shorter end of the yield curve.
We also emphasized quality, building a substantial position in insured New
York bonds. These also were among the strongest performers in the tax-exempt
market. When the yield differential between lower-rated bonds and their
higher-rated counterparts fell to historically low levels, we believed that
yields on lower-rated bonds did not compensate investors for the incremental
credit risk.
* OUTLOOK: POSITIVE TRENDS AHEAD
We anticipate a continuation of many of the positive trends we witnessed over
the past 12 months. We look for the national economy to grow at a
moderate-to-strong pace with inflation remaining well contained. We believe
New York's favorable credit outlook and the ongoing healthy demand for
municipal bonds should cause that state's municipal bond prices --
particularly those of state-appropriated bonds -- to rise further relative to
alternative investments. In our opinion, these same factors would cushion the
effects of a softening in the market, thus creating a floor if prices were to
decline.
[GRAPHIC OMITTED: pie chart PORTFOLIO QUALITY OVERVIEW]
PORTFOLIO QUALITY OVERVIEW*
Aaa 25.0%
Aa 19.7%
A 10.6%
Baa 31.0%
Ba 10.7%
B 3.0%
Footnote reads:
*As a percentage of market value as of 9/30/97. 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.
We will continue to structure the portfolio with bonds that we believe offer
attractive relative value, particularly targeting those with the structural
characteristics we have sought over the past year. Specifically we will focus
on bonds that we expect will benefit from the state's positive credit
momentum, have good call protection, and have maturities primarily in the
15-year range. As always, we also will remain flexible for situations that
present unique and attractive value outside those parameters.
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 9/30/97, 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.
TOTAL RETURN FOR PERIODS ENDED 9/30/97
Class A Class B Class M
(inception date) (11/7/90) (2/1/94) (2/10/95)
NAV POP NAV CDSC NAV POP
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1 year 8.33% 3.21% 7.63% 2.63% 7.89% 4.35%
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5 years 38.42 31.87 33.65 31.65 35.72 31.31
Annual average 6.72 5.69 5.97 5.65 6.30 5.60
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Life of fund 66.04 58.22 57.95 57.95 61.48 56.24
Annual average 7.63 6.88 6.85 6.85 7.19 6.68
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COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 9/30/97
Lehman Bros.
Municipal Bond Consumer
Index Price Index
- ------------------------------------------------------------------------------
1 year 9.03% 2.15%
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5 years 41.44 14.08
Annual average 7.18 2.67
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Life of fund 73.67 20.75
Annual average 8.31 2.76
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Returns for class A and class M shares reflect the current maximum initial
sales charges of 4.75% for class A shares and 3.25% for class M shares.
One-year, five-year (when available), and life of fund returns for class B
shares reflect the applicable contingent deferred sales charges (CDSC),
which is 5% in the first year, declining to 1% in the sixth year, and is
eliminated thereafter. Returns shown for class B and class M shares for
periods prior to their inception are derived from the historical
performance of class A shares, adjusted to reflect both the initial sales
charge or CDSC, if any, currently applicable to each class and, in the
case of class B and class M shares, the higher operating costs applicable
to such shares. All returns assume reinvestment of distributions at NAV
and represent past performance; they do not guarantee future results.
Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
[GRAPHIC OMITTED: growth chart GROWTH OF A $10,000 INVESTMENT]
GROWTH OF A $10,000 INVESTMENT
Cumulative total return of a $10,000 investment since 11/7/90
Plot points read:
Date/year Fund's
Class A shares Lehman Bros. Consumer
at POP Municipal Bond Index Price Index
11/7/90 9225 9500 9500
9/30/91 10402 11117 10277
9/30/92 11431 12279 10584
9/30/93 12552 13843 10869
9/30/94 12439 13508 11191
9/30/95 13717 15020 11475
9/30/96 14606 15927 11819
9/30/97 15822 17367 12075
Footnote reads:
Past performance is no assurance of future results. At the end of the same
time period, a $10,000 investment in the fund's class B shares would
have been valued at $15,795 and no contingent deferred sales charge
would apply; a $10,000 investment in the fund's class M shares at net
asset value would have been valued at $16,148 ($15,624 at public offering
price). See first page of performance section for performance calculation
method.
PRICE AND DISTRIBUTION INFORMATION
12 months ended 9/30/97
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 12 12 12
- ------------------------------------------------------------------------------
Income $0.487214 $0.428010 $0.459420
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Capital gains1 -- -- --
- ------------------------------------------------------------------------------
Total $0.487214 $0.428010 $0.459420
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
9/30/96 $8.87 $9.31 $8.86 $8.86 $9.16
- ------------------------------------------------------------------------------
9/30/97 9.10 9.55 9.09 9.08 9.39
- ------------------------------------------------------------------------------
Current return (end of period)
- ------------------------------------------------------------------------------
Current dividend rate2 5.29% 5.04% 4.63% 4.99% 4.83%
- ------------------------------------------------------------------------------
Taxable equivalent3 9.81 9.35 8.59 9.25 8.96
- ------------------------------------------------------------------------------
Taxable equivalent4 9.40 8.96 8.23 8.87 8.59
- ------------------------------------------------------------------------------
Current 30-day SEC yield5 5.09 4.85 4.46 4.80 4.65
- ------------------------------------------------------------------------------
Taxable equivalent3 9.44 8.99 8.27 8.90 8.62
- ------------------------------------------------------------------------------
Taxable equivalent4 9.05 8.62 7.93 8.53 8.27
- ------------------------------------------------------------------------------
1 Capital 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.
2 Income portion of most recent distribution, annualized and divided by
NAV or POP at end of period.
3 Assumes maximum 46.08% combined federal, state, and New York City tax
rate. Results for investors subject to lower tax rates would not be as
advantageous.
4 Assumes maximum 43.74% combined federal and state tax rate. Results for
investors subject to lower tax rates would not be as advantageous.
5 Based only on investment income, calculated using SEC guidelines.
TERMS AND DEFINITIONS
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.
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 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. Securities in the fund
do not match those in the indexes and performance of the fund will differ.
It is not possible to invest directly in an index.
Consumer Price Index (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
Report of independent accountants
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, 1997, 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,
1997 by correspondence with the custodian and the application of alternative
auditing procedures where investments purchased were not yet received by the
custodian, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
November 12, 1997
Portfolio of investments owned
September 30, 1997
Key to Abbreviations
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
FHA Insd. -- Federal Housing Administration Insured
FSA -- Financial Security Assurance
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- Municipal Bond Investors Assurance Corporation
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (98.2%) *
PRINCIPAL AMOUNT RATINGS** VALUE
<S> <C> <C> <C>
New York (94.9%)
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$ 2,250,000 Essex Cnty., Indl. Dev. Agcy. Rev. Bonds
(Intl. Paper Co.), Ser. A, 6.15s, 4/1/21 A $ 2,351,250
2,585,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds
(Eddygate Park Apts.), 9s, 6/1/06 BBB 2,689,512
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid Waste Disp.
Rev. Bonds (Champion Intl. Corp.), 7.2s, 12/1/20 Baa 2,958,063
1,360,000 Lockport, Hsg. Dev. Corp. Rev. Bonds
(Urban Pk. Towers), Ser. A, 6s, 10/1/18 Baa 1,385,500
2,500,000 Metropolitan Trans. Auth. Commuter Fac. Rev.
Bonds, Ser. A, MBIA, 6.1s, 7/1/08 Aaa 2,796,875
2,500,000 Metropolitan Trans. Auth. Dedicated Tax Fund
Rev. Bonds, Ser. A, MBIA, 6 1/4s, 4/1/11 Aaa 2,821,875
2,300,000 Nassau Cnty., G.O. Bonds, Ser. A, FGIC, 6s, 7/1/11 Aaa 2,538,625
NY City, G.O. Bonds
1,310,000 Ser. D, 8 1/4s, 8/1/11 Baa 1,488,488
370,000 Ser. D, Prerefunded, 8 1/4s, 8/1/11 Aaa 427,813
300,000 Ser. B, 8 1/4s, 6/1/05 Baa 364,125
3,455,000 Ser. E, 7.6s, 2/1/05 Baa 3,873,913
4,730,000 Ser. F, 7.6s, 2/1/05 Baa 5,303,513
5,000,000 Ser. G, MBIA, 6 3/4s, 2/1/09 Aaa 5,825,000
5,000,000 Ser. D, MBIA, 6 1/2s, 11/1/09 Aaa 5,750,000
1,800,000 Ser. H, 6s, 8/1/17 Baa 1,869,750
2,750,000 Ser. J, 6s, 8/1/17 Baa 2,856,563
2,000,000 Ser. I, 5 7/8s, 3/15/14 Baa 2,060,000
2,000,000 Ser. B, FSA, 5 1/4s, 8/1/13 AAA 2,020,000
1,500,000 Ser. B, 5 1/4s, 8/1/20 Baa 1,426,875
380,000 Ser. F, 3s, 11/15/00 Baa 365,750
1,000,000 NY City, IFB, AMBAC, 8.08s, 9/1/11 Aaa 1,136,250
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
8,230,000 (Parking Corp.), 8 1/2s, 12/30/22 BB+/P 9,495,363
1,750,000 (The Lighthouse, Inc.), 6 1/2s, 7/1/22 Aa 1,859,375
5,000,000 NY City, Indl. Dev. Agcy. Rev. Bonds (Paper, Inc.),
7.95s, 1/1/28 BB-/P 5,706,250
4,000,000 NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
(American Airlines, Inc.), 6.9s, 8/1/24 Baa 4,430,000
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds
5,000,000 MBIA, 6.72s, 6/15/13 Aaa 5,231,250
955,000 Ser. B, 5 3/4s, 6/15/26 A 975,294
2,000,000 NY City, Muni. Wtr. & Swr. Syst. Fin. Auth.
Rev. Bonds, Ser. A, AMBAC, 6s, 6/15/09 Aaa 2,240,000
NY State Dorm. Auth. Rev. Bonds
170,000 (City U.), Ser. D, 8 3/4s, 7/1/03 Baa 204,850
5,250,000 (City U.), Ser. D, 8.2s, 7/1/12 Baa 5,515,965
7,225,000 (City U.), Ser. C, 8 1/8s, 7/1/08 Baa 7,587,045
2,750,000 (Long Island Med. Ctr.), Ser. A, FHA Insd.,
7 3/4s, 8/15/27 AAA 2,840,420
835,000 (NY Dept of Ed.), 7 3/4s, 7/1/21 Baa 949,813
5,000,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 Baa 6,150,000
1,605,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/30 Aa 1,757,475
6,000,000 (Cornell U.), Ser. A, 7 3/8s, 7/1/20 Aa 6,570,000
500,000 (Wildwood School), 7.3s, 7/1/15 A/P 561,250
2,050,000 (Our Lady Of Mercy), 6.3s, 8/1/32 AA 2,185,813
725,000 (State U. Edl. Fac.), Ser. B, zero %, 5/15/09 Baa 396,031
NY State Energy Res. & Dev. Auth. Elec. Fac.
Rev. Bonds (Long Island Ltg. Co.), Ser. A
2,000,000 7.15s, 12/1/20 Ba 2,165,000
1,500,000 7.15s, 6/1/20 Ba 1,623,750
3,500,000 NY State Energy Res. & Dev. Auth. Gas IFB,
(Brooklyn Union Gas Co.), 8.599s, 4/1/20 A 4,230,625
NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds (Hudson Gas)
1,000,000 Ser. A, FGIC, 7 3/8s, 10/1/14 Aaa 1,087,500
1,700,000 Ser. B, FGIC, 7 3/8s, 10/1/14 # Aaa 1,848,750
1,250,000 NY State Energy Res. & Dev. Auth. Rev. Bonds
(Cons. Edison Co. of NY), Ser. C, 7 1/4s, 11/1/24 A 1,303,000
2,000,000 NY State Energy Res. & Dev. Auth. Gas Fac. IFB,
(Brooklyn Union Gas Co.), Ser. B, 9.676s, 7/1/26 A 2,510,000
1,750,000 NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds (Niagara Mohawk Pwr. Corp.),
Ser. A, FGIC, 7.2s, 7/1/29 Aaa 2,012,500
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
16,200,000 (State Wtr. Revolving Fund), Ser. A, 7 1/2s,
6/15/12 Aa 17,779,500
1,000,000 Ser. B, 7 1/2s, 3/15/11 Aa 1,066,250
7,185,000 (State Wtr. Revolving Fund), 7s, 6/15/12 Aa 7,903,500
500,000 NY State Hsg. Fin. Agcy. Svcs. Contract Oblig.
Rev. Bonds, Ser. A, 7 1/4s, 9/15/12 Baa 551,875
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
605,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. B,
FHA Insd., 8 7/8s, 8/15/27 AA 626,217
120,000 (Mental Hlth. Svcs. Fac.), Ser. B, 7 7/8s, 8/15/08 Baa 133,050
275,000 (Mental Hlth. Svcs. Fac.), Ser. B, Prerefunded,
7 7/8s, 8/15/08 Aaa 308,000
40,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7.8s, 2/15/19 Baa 42,500
30,000 (Mental Hlth. Svcs. Fac.), Ser. A, Prerefunded,
7.8s, 2/15/19 Aaa 32,100
2,000,000 (Mental Hlth. Svcs. Fac.), MBIA, 7.6s, 2/15/29 Aaa 2,122,500
85,000 (Mental Hlth. Svcs. Fac.), Ser. A, 7 1/2s, 2/15/21 Baa 94,138
145,000 (Mental Hlth. Svcs. Fac.), Ser. A, Prerefunded,
7 1/2s, 2/15/21 Aaa 162,581
510,000 (Mental Hlth. Svcs. Fac.), Ser. D, Prerefunded,
7.4s, 2/15/18 BBB 580,125
205,000 (Mental Hlth. Svcs. Fac.), Ser. D, 7.4s, 2/15/18 Baa 227,550
5,750,000 (North Shore U. Hosp.), MBIA, 7.2s, 11/1/20 Aaa 6,289,063
200,000 (Bronx, Lebanon & the Jamaica Hosps.), Ser. A,
7.1s, 2/15/27 Baa 203,530
700,000 (Hosp. & Nursing Home Insd. Mtge.), Ser. D,
FHA Insd., 6.6s, 2/15/31 AAA 750,750
4,300,000 NY State Thruway Auth. Hwy. & Bridge Trust Fund
Rev. Bonds, Ser. B, FGIC, 6s, 4/1/14 Aaa 4,541,875
2,500,000 NY State Thruway Auth. Rev. Bonds, 5s, 4/1/17 Baa 2,353,125
NY State Urban Dev. Corp. Rev. Bonds
1,685,000 (Clarkson Ctr.), 5 1/2s, 1/1/20 Baa 1,676,575
3,345,000 (Clarkson Ctr.), 5 1/2s, 1/1/15 Baa 3,420,263
2,000,000 (Syracuse U.), 5 1/2s, 1/1/15 Baa 2,045,000
5,000,000 (Ctr. for Indl. Innovation), 5 1/2s, 1/1/13 Baa 5,106,250
2,440,000 NY State, G.O. Bonds, 5.7s, 10/1/11 A 2,555,900
4,000,000 NY City, Indl. Dev. Agcy. Rev. Bonds
(Visy Paper, Inc.), 7.8s, 01/01/16 BB-/P 4,555,000
5,755,000 Port Auth. NY & NJ Special Oblig. Rev. Bonds
(Continental/Eastern Laguardia), 9 1/8s, 12/1/15 B 6,553,506
175,000 Port Auth. NY & NJ Cons. Rev. Bonds, Ser. 78,
6 1/2s, 10/15/08 AA 189,219
2,000,000 Port Auth. NY & NJ Rev. Bonds, Ser. 83, 6 3/8s,
10/15/17 AA 2,112,500
1,240,000 Triborough Bridge & Tunnel Auth. Rev. Bonds,
Ser. B, 6s, 1/1/07 Aa 1,376,400
2,495,000 Upper Mohawk Valley Regl. Wtr. Fin. Auth.
Rev Bonds, Ser. A, FSA, 5 1/8s, 10/1/26 Aaa 2,385,844
1,440,000 Valley Hlth. Dev. Corp. Mtge. Rev. Bonds
(Valley Hlth.), FHA Insd., 11.3s, 2/1/23 A 1,742,400
--------------
213,234,145
Puerto Rico (3.3%)
- ------------------------------------------------------------------------------------------------------------
4,700,000 Cmnwlth. of PR, Hwy. & Trans. Auth. Hwy. IFB,
Ser. W, 6.697s, 7/1/08 A 5,093,625
1,000,000 Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds,
Ser. Y, 6 1/4s, 7/1/13 A 1,125,000
1,000,000 PR Indl. & Env. Poll. Control Fac. Fin. Auth.
Rev. Bonds, 7.6s, 5/1/14 A 1,080,000
--------------
7,298,625
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Total Investments (cost $213,913,359) *** $ 220,532,770
- ------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $224,601,357.
** The Moody's or Standard & Poor's ratings indicated are
believed to be the most recent ratings available at September 30, 1997,
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, 1997. Securities rated by Putnam are
indicated by "/P" and are not publicly rated.
The table below shows the percentage of the fund's investment on
September 30, 1997, in securities assigned to various rating categories
by Moody's and Standard & Poor's and in unrated securities determined by
Putnam Management to be of comparable quality.
Unrated securities
Rated securities of comparable quality,
as a percentage of as a percentage of
Rating fund's net assets fund's net assets
AAA/Aaa 24.5% --%
AA/Aa 19.3 --
A/A 10.4 .2
BBB/Baa 30.4 4.2
BB/Ba 1.7 4.6
B/B 2.9 --
Caa/CCC -- --
Ca/CC -- --
C -- --
D -- --
A-1/VMIGI -- --
---- ----
89.2% 9.0%
Ratings are not covered by the Report of independent
accountants.
*** The aggregate identified cost on a tax basis is $213,913,359,
resulting in gross unrealized appreciation and depreciation of
$9,074,430 and $2,455,019, respectively, or net unrealized appreciation
of $6,619,411.
# A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts at
September 30, 1997.
The rates shown on IFBs, which are securities paying interest
rates that vary inversely to changes in the market interest rates are the
current interest rates at September 30, 1997.
The fund had the following industry group concentrations greater
than 10% at September 30, 1997 (as a percentage of net assets):
Education 16.4%
Transportation 14.9
Water & Sewerage 12.7
Hospitals/Health Care 10.9
The fund had the following insurance concentration greater than
10% at September 30, 1997 (as a percentage of net assets):
MBIA 13.7%
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Futures Contracts Outstanding at September 30, 1997
(aggregate face value $22,209,154)
Aggregate Face Expiration Unrealized
Total Value Value Date Depreciation
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds
(short) $11,528,125 $11,376,875 Dec-97 $(151,250)
Municipal Bond Index
(long) 10,816,875 10,832,279 Dec-97 (15,404)
- ----------------------------------------------------------------------------------------
$(166,654)
- ----------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
September 30, 1997
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $213,913,359) (Note 1) $220,532,770
- ---------------------------------------------------------------------------------------------------
Cash 603,101
- ---------------------------------------------------------------------------------------------------
Interest and other receivables 3,860,978
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 1,007,727
- ---------------------------------------------------------------------------------------------------
Receivable for variation margin 4,375
- ---------------------------------------------------------------------------------------------------
Total assets 226,008,951
Liabilities
- ---------------------------------------------------------------------------------------------------
Distributions payable to shareholders 248,971
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 606,553
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 335,954
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 36,095
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 8,814
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,738
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 125,047
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 44,422
- ---------------------------------------------------------------------------------------------------
Total liabilities 1,407,594
- ---------------------------------------------------------------------------------------------------
Net assets $224,601,357
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $217,344,672
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 130,474
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments (Note 1) 673,454
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 6,452,757
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $224,601,357
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($165,992,807 divided by 18,238,016 shares) $9.10
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $9.10)* $9.55
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($56,243,780 divided by 6,185,255 shares)*** $9.09
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($2,364,770 divided by 260,315 shares) $9.08
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $9.08)** $9.39
- ---------------------------------------------------------------------------------------------------
* 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, 1997
<S> <C>
Tax exempt interest income: $13,560,856
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 1,286,589
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 243,400
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 18,899
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 7,046
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 328,319
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 411,035
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 8,959
- --------------------------------------------------------------------------------------------------
Reports to shareholders 24,085
- --------------------------------------------------------------------------------------------------
Registration fees 4,146
- --------------------------------------------------------------------------------------------------
Auditing 31,171
- --------------------------------------------------------------------------------------------------
Legal 10,527
- --------------------------------------------------------------------------------------------------
Postage 4,555
- --------------------------------------------------------------------------------------------------
Other 4,557
- --------------------------------------------------------------------------------------------------
Total expenses 2,383,288
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (114,798)
- --------------------------------------------------------------------------------------------------
Net expenses 2,268,490
- --------------------------------------------------------------------------------------------------
Net investment income 11,292,366
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 952,626
- --------------------------------------------------------------------------------------------------
Net realized gain on futures contracts (Note 1) 463,243
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures during the year 4,286,563
- --------------------------------------------------------------------------------------------------
Net gain on investments 5,702,432
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $16,994,798
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Year ended September 30
--------------------------------
1997 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income $11,292,366 $11,366,117
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 1,415,869 3,234,528
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation(depreciation) of investments 4,286,563 (1,860,238)
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 16,994,798 12,740,407
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net investment income
- ----------------------------------------------------------------------------------------------------------------------
Class A (8,947,477) (9,635,133)
- ----------------------------------------------------------------------------------------------------------------------
Class B (2,314,259) (1,614,654)
- ----------------------------------------------------------------------------------------------------------------------
Class M (91,884) (51,638)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 3,502,893 14,250,689
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 9,144,071 15,689,671
Net assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of year 215,457,286 199,767,615
- ----------------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $130,474 and $161,060, respectively) $224,601,357 $215,457,286
- ----------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS A
- -------------------------------------------------------------------------------------------------------------------
Per-share
operating performance Year ended September 30
- -------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $8.87 $8.80 $8.48 $9.12 $8.86
- -------------------------------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------------------------------
Net investment income .49 .49 .52 .54 .57
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .23 .07 .32 (.62) .27
- -------------------------------------------------------------------------------------------------------------------
Total from
investment operations .72 .56 .84 (.08) .84
- -------------------------------------------------------------------------------------------------------------------
Less distributions:
- -------------------------------------------------------------------------------------------------------------------
From net
investment income (.49) (.49) (.52) (.54) (.57)
- -------------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- -- (.01)
- -------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- (.02) --
- -------------------------------------------------------------------------------------------------------------------
Total distributions (.49) (.49) (.52) (.56) (.58)
- -------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.10 $8.87 $8.80 $8.48 $9.12
- -------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 8.33 6.48 10.27 (.89) 9.80
- -------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $165,993 $172,170 $175,210 $175,741 $170,533
- -------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .96 1.00 1.01 .98 1.02
- -------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.42 5.53 6.12 6.22 6.32
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 117.00 270.34 120.38 13.85 17.68
- -------------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(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).
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS B
- ---------------------------------------------------------------------------------------------------------------
For the period
Per-share Feb. 1, 1994+
operating performance Year ended September 30 to Sept. 30
- ---------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $8.86 $8.79 $8.48 $9.07
- ---------------------------------------------------------------------------------------------------------------
Investment operations
- ---------------------------------------------------------------------------------------------------------------
Net investment income .43 .43 .47 .32
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .23 .07 .31 (.60)
- ---------------------------------------------------------------------------------------------------------------
Total from
investment operations .66 .50 .78 (.28)
- ---------------------------------------------------------------------------------------------------------------
Less distributions:
- ---------------------------------------------------------------------------------------------------------------
From net
investment income (.43) (.43) (.47) (.31)
- ---------------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Total distributions (.43) (.43) (.47) (.31)
- ---------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.09 $8.86 $8.79 $8.48
- ---------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 7.63 5.78 9.46 (3.06)*
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $56,244 $41,795 $24,259 $8,622
- ---------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.61 1.66 1.65 1.05*
- ---------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.76 4.83 5.28 3.39*
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 117.00 270.34 120.38 13.85
- ---------------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(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).
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------
For the period
Per-share Feb. 10, 1995+
operating performance Year ended September 30 to Sept. 30
- ------------------------------------------------------------------------------------------------------
1997 1996 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value,
beginning of period $8.86 $8.79 $8.51
- ------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------
Net investment income .46 .47 .31
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .22 .06 .29
- ------------------------------------------------------------------------------------------------------
Total from
investment operations .68 .53 .60
- ------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------
From net
investment income (.46) (.46) (.32)
- ------------------------------------------------------------------------------------------------------
In excess of net
investment income -- -- --
- ------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- --
- ------------------------------------------------------------------------------------------------------
Total distributions (.46) (.46) (.32)
- ------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.08 $8.86 $8.79
- ------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------
Total investment return
at net asset value (%)(a) 7.89 6.15 7.11*
- ------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,365 $1,492 $299
- ------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.26 1.30 .83*
- ------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.09 5.03 3.21*
- ------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 117.00 270.34 120.38
- ------------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(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).
</TABLE>
Notes to financial statements
September 30, 1997
Note 1
Significant accounting policies
Putnam New York Tax Exempt Opportunities Fund (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 Investment Management, Inc. ("Putnam Management"), the fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc. 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) 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) Line of credit The fund has entered into a committed line of credit with
certain banks. This line of credit agreement includes restrictions that the
fund maintain an asset coverage ratio of at least 300% and borrowings must not
exceed prospectus limitations. For the year ended September 30, 1997, the fund
had no borrowings against the line of credit.
E) 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, as amended. Therefore, no provision has been made for federal taxes
on income, capital gains or unrealized appreciation on securities held nor for
excise tax on income and capital gains.
F) Distributions to shareholders Income dividends are recorded daily by the
fund and are distributed monthly. Capital gain distributions, if any, are
recorded on the ex-dividend date and paid at least 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 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, 1997, the fund reclassified
$30,668 to increase undistributed net investment income and to decrease
accumulated net realized gain on investments of $30,668. The calculation of
net investment income per share in the financial highlights table excludes
these adjustments.
G) Amortization of bond premium and accretion of bond discount 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, original issue discount, stepped-coupon bonds and payment in
kind bonds are accreted according to the effective yield method.
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, 0.40% of the next $5 billion, 0.375% of the next $5 billion, 0.355%
of the next $5 billion, 0.34% of the next $5 billion and 0.33% thereafter.
Prior to January 20, 1997, any amount over $1.5 billion was based on 0.40%.
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, 1997, fund expenses were reduced by $114,798
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 $1,571 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 has adopted a Trustee Fee Deferral Plan (the "Deferral 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
Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of Trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
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 currently limit payment by the fund to 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, 1997, Putnam Mutual Funds Corp., acting as
underwriter received net commissions of $38,748 and $900 from the sale of
class A and class M shares, respectively, and $153,200 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 that were
purchased without an initial sales charge as part of an investment of $1
million or more. For the year ended September 30, 1997, Putnam Mutual Funds
Corp., acting as underwriter received $38,353 on class A redemptions.
Note 3
Purchase and sales of securities
During the year ended September 30, 1997, purchases and sales of investment
securities other than short-term municipal obligations aggregated $246,655,276
and $243,792,813, respectively. Purchases and sales of short-term municipal
obligations aggregated $122,510,000 and $122,605,000, 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, 1997, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended
September 30, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 3,620,335 $32,317,239
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 503,552 4,502,230
- ------------------------------------------------------------
4,123,887 36,819,469
Shares
repurchased (5,295,872) (47,255,173)
- ------------------------------------------------------------
Net decrease (1,171,985) $(10,435,704)
- ------------------------------------------------------------
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, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 2,266,604 $20,236,321
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 153,804 1,375,031
- ------------------------------------------------------------
2,420,408 21,611,352
Shares
repurchased (951,628) (8,500,966)
- ------------------------------------------------------------
Net increase 1,468,780 $13,110,386
- ------------------------------------------------------------
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, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 126,540 $1,138,814
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 6,506 58,176
- ------------------------------------------------------------
133,046 1,196,990
Shares
repurchased (41,167) (368,779)
- ------------------------------------------------------------
Net increase 91,879 $828,211
- ------------------------------------------------------------
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
- ------------------------------------------------------------
Federal tax information
(Unaudited)
Pursuant to Section 852 of the Internal Revenue Code, the fund
hereby designates $219,221 as capital gain for its taxable year ending
September 30, 1997.
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 1998 will show the tax status of
all distributions paid to your account in calendar 1997.
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
A.J.C. Smith
W. Thomas Stephens
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
Jerome J. Jacobs
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 the principal amount
invested.
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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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AN052 36852 11/97
