Putnam
New York
Tax Exempt
Money Market Fund
Item 1. Report to Stockholders:
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The following is a copy of the report transmitted to stockholders pursuant
to Rule 30e-1 under the Investment Company Act of 1940:
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
5-31-03
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FROM THE TRUSTEES
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Dear Fellow Shareholder:
As you may know, Putnam Investment Management, LLC, your fund's
investment advisor, has proposed, and your Trustees have approved, the
liquidation of Putnam New York Tax Exempt Money Market Fund, effective
August 22, 2003. The decision was made in light of unfavorable market
conditions and the fund's small asset base. You will find further
details on page 6.
We are pleased to report that during the semiannual period ended May 31,
2003, your fund performed in line with its Lipper peer group average. It
achieved this result by employing strategies designed to maximize income
through diversification, maintaining flexibility to take advantage of
short-term upticks in interest rates, and extending days to maturity.
Your fund's management team discusses these strategies in detail in the
following report.
It has been a privilege to have served you as a shareholder of this fund
and we hope to be able to continue to serve you as a shareholder of
another Putnam fund. We also encourage you to consult your financial
advisor and review your investment program in light of this change.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
July 16, 2003
REPORT FROM FUND MANAGEMENT
FUND HIGHLIGHTS
* For the six months ended May 31, 2003, Putnam New York Tax Exempt
Money Market Fund had a total return of 0.31% at net asset value.
* The fund's six-month return was in line with the Lipper New York
Tax-Exempt Money Market Funds category average of 0.32%.
* The fund limited its total operating expenses for the first six
months of calendar 2003 to 0.60% of the fund's average net assets and
will extend this expense limitation until the liquidation of the fund.
See page 6 for more information.
* Putnam recently proposed, and the Trustees approved, the liquidation
of the fund, effective August 22, 2003. See page 6 for more information.
* See the Performance Summary on page 8 for complete fund performance,
comparative performance, and Lipper data.
* PERFORMANCE COMMENTARY
Money market funds continued to enjoy tremendous popularity during the
six months ended May 31, 2003, as investors sought financial refuge
from widespread uncertainty at home and abroad. For your fund, which
invests solely in the highest-quality, New York tax-exempt
money-market-eligible securities, this more conservative mood and a
preference for only the safest of investments have been very positive
trends. We also believe that our efforts to extend the fund's weighted
average days to maturity when possible, while keeping a portion of the
portfolio flexible to capture any short-term upticks in interest rates,
has maximized the fund's income potential in the current
flat-to-declining interest-rate environment. The fund's diversification
has also been an important contributor to performance. With its exposure
to different issuers, security types, and various income structures, we
believe the fund's income strategy protects its $1.00 share value while
capturing the highest level of income consistent with our commitment
to quality.
Fund Profile
Putnam New York Tax Exempt Money Market Fund is designed for investors
seeking current income exempt from New York state, federal, and New York
City personal income tax as we believe to be consistent with capital
preservation, stability of principal, and maintenance of liquidity.
* MARKET OVERVIEW
The sharp decline in interest rates over the past two and a half years,
which culminated in the Federal Reserve Board's half a percentage point
reduction in the federal funds rate on November 6, 2002, has been
unprecedented. For income funds, this fall in interest rates resulted in
a similarly dramatic reduction in yields in a relatively short time. As
a result, in late December, the 7-day average yield for tax-free money
market funds dropped to record lows. Despite the challenge presented by
interest rates hovering at their lowest levels in forty years, our
efforts to maintain the fund's positive yield have been, we think,
relatively successful.
The yield curve remains rather flat, especially in the one- to six-month
maturity range, suggesting how limited our choices are in picking up
incremental yield. With demand for tax-free money market securities
across the Empire State quite high, yields have come under further
pressure as a result of an imbalance in supply/demand dynamics. This
imbalance was greatest in the variable-rate demand note market, where
demand outstripped supply.
MARKET SECTOR PERFORMANCE 6 MONTHS ENDED 5/31/03
Bonds
Lipper New York Tax-Exempt Money Market Funds category average 0.32%
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Lehman Municipal Bond Index 6.46%
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Lehman Aggregate Bond Index (taxable bonds) 6.29%
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Lehman Intermediate Government Bond Index
(intermediate-maturity government bonds) 4.70%
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Equities
S&P 500 Index (broad stock market) 3.87%
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Russell 2000 Index (small- and midsize-company stocks) 9.34%
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MSCI EAFE Index (international stocks) 3.30%
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These indexes provide an overview of performance in different market
sectors for the six months ended May 31, 2003.
* STRATEGY OVERVIEW
In December 2002, there were mixed signals about the strength of the
U.S. economy. Given the lack of any clear direction for interest rates,
we focused on a blended strategy that required buying tax-exempt notes
with maturities out to one year and shorter-maturity tax-exempt money
market instruments, such as daily and weekly variable-rate demand notes.
(More information about these and other portfolio securities appears in
the following section.) In addition to maximizing the fund's
flexibility, this laddering of maturity dates helps limit the fund's
reinvestment risk when we must return to the market to find replacement
securities. The longer-maturity securities provide stability of income
by allowing us to lock in yields. Shorter-term instruments provide us
with the opportunity to take advantage of occasional short-term upticks
in yields. This was the case in February, when the announcement of
favorable economic data and the ensuing rally in the stock market
increased the yield differential between shorter-term and longer-term
securities.
In the final weeks of the period, we became convinced that even while
interest rates may remain low for an extended time to promote economic
activity, the eventual rise in yields could be sharp -- similar to what
we saw in 1993 and 1994. To best position the fund for such a scenario,
we've been investing proceeds from maturing tax-exempt notes in daily
and weekly variable rate demand notes to ensure that the fund reacts as
quickly and positively as possible to rate increases.
[GRAPHIC OMITTED: horizontal bar chart WEIGHTINGS BY INVESTMENT TYPE COMPARED]
WEIGHTINGS BY INVESTMENT TYPE COMPARED*
as of 11/30/02 as of 5/31/03
Variable-rate
demand notes 79.8% 76.7%
General
obligation bonds 12.2% 10.2%
Mandatory puts 8.0% 8.0%
Revenue bonds 0.0% 5.1%
Footnote reads:
*This chart shows how the weightings of the fund's investments have changed
over the past six months. Weightings are shown as a percentage of market
value. Holdings will vary over time.
* HOW SECTOR ALLOCATIONS AFFECTED PERFORMANCE
Many states across the country have been driven into historically high
deficit positions over the past year. The slowing economy, along with
weakness in the stock market, higher Medicaid costs, a sharp reduction
in capital gain tax revenues, and slower personal, sales, and corporate
income tax collections, have contributed to this trend. Several states
have already seen their credit downgraded by the rating agencies;
others, including New York, were at risk of a downgrade as this report
was being written. Credit quality remains a critical determinant in our
selection process. Despite New York's deteriorating fundamentals, the
fund's holdings are of the highest Tier-1 quality, which includes but is
not limited to Aaa/AAA-rated and insured tax-free money market
securities. Of course, since higher-quality securities carry a lower
level of risk, they typically offer slightly lower yields.
With budgetary and liquidity pressures among the states and local
governments expected to continue into the second half of 2003, many
states are seeking additional revenues by issuing more tax-exempt notes
than otherwise would have been the case. These notes are being used to
cover short-term gaps in funding. They must mature within 13 months or
397 days from the date of purchase to be money-market-eligible. The fund
holds several general obligations of the state as well as cities and
counties across New York, many of which are school-district-related,
such as the fund's investments in Depew, New York School District notes.
Mandatory puts provided us with another avenue to lock in income for
longer periods of time. With mandatory put bonds, the issuer will redeem
the bonds at par, or face value, at a stated time before maturity.
Often, we are given the opportunity to extend this type of security for
another year when the bonds come due. At period-end, the fund owned New
York State Environmental mandatory put bonds. Investing in such
securities helps us to smooth out income fluctuations over time.
To balance the fund's interest-rate exposure, we also purchased
short-term securities that can react more swiftly to a potential rise in
interest rates. For this reason, we have invested a majority of the
fund's assets in variable-rate demand notes (VRDNs). VRDNs are brought
to market with a long-stated maturity and a coupon that resets at par
daily, weekly, or monthly, depending on the structure of the municipal
debt. This continual reinvestment can put the fund at risk for lower
yields in a flat-to-declining interest-rate market. However, since these
notes reset at par, or face value, they lend stability to the fund's net
asset value and help preserve principal.
The fund's investments in VRDNs decreased slightly to 76.7% of the
portfolio's market value as of May 31. Despite this decrease, the number
reflects our continuing effort to reinvest assets from maturing
longer-term securities into shorter-term securities, which respond more
quickly to a rise in interest rates. Consequently, the fund ended the
period with a relatively short average maturity of 18 days, which we
expect to maintain or extend if interest rates increase. (Typically, the
fund's average days to maturity falls in the range of 50 to 60 days and
cannot exceed 90 days.)
Please note that all holdings discussed in this report are subject to
review in accordance with the fund's investment strategy and may vary in
the future.
PERFORMANCE COMPARISONS (5/31/03)
Current After-tax After-tax
return 1 return 2 return 3
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Passbook savings account 0.45% 0.26% 0.27%
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Taxable money market fund 7-day yield 0.70 0.41 0.42
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3-month certificate of deposit 1.22 0.71 0.74
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Putnam New York Tax Exempt
Money Market Fund 7-day yield 0.72 0.72 0.72
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The net asset value of money market mutual funds is uninsured and
designed to be fixed, while distributions vary daily. Investment returns
will fluctuate. The principal value on passbook savings and on bank CDs
is generally insured up to certain limits by state and federal agencies.
Unlike stocks, which incur more risk, CDs offer a fixed rate of return.
Unlike money market funds, bank CDs may be subject to substantial
penalties for early withdrawals.
1 Sources: FleetBoston (passbook savings), Federal Reserve Board of
Governors (3-month CDs), and IBC/Donaghue's Money Fund Report (taxable
money market fund compound 7-day yield).
2 After-tax return assumes a combined 41.82% federal, state, and city tax
rate, based on 2003 rates.
3 After-tax return assumes a combined 39.45% federal and state tax rate,
based on 2003 rates.
* THE FUND'S MANAGEMENT TEAM
The fund is managed by the Putnam Tax Exempt Fixed-Income Team. The
members of the team are Joyce Dragone (Portfolio Leader), Richard Wyke
(Portfolio Member), Paul Drury, David Hamlin, Jerome Jacobs, and Susan
McCormack.
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OF SPECIAL INTEREST
* After reviewing interest-rate trends and the impact of historically
low interest rates on the fund's yield, the Trustees voted in December
2002 to limit the fund's total annual fund operating expenses for the
first six months of calendar 2003 to 0.60% of the fund's average net
assets and, in June 2003, voted to extend this expense limitation until
the liquidation of the fund. This decision is designed to provide a more
attractive yield to our shareholders in today's historically low
interest-rate environment.
* After working with Putnam Investment Management, your fund's
investment advisor, your fund's Trustees approved the liquidation of
Putnam New York Tax Exempt Money Market Fund, effective August 22, 2003.
With short-term interest rates at 40-year lows, the market environment
has not been beneficial for tax-exempt money market investments. The
decision to liquidate the fund was made in light of these unfavorable
market conditions and the fund's small asset base. Shareholders of
record were sent a letter describing this change and consequences for
their accounts. For more details about the liquidation, contact your
financial advisor or call a Putnam customer service representative at
1-800-225-1581.
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THE OUTLOOK FOR YOUR FUND
The following commentary reflects anticipated market trends over the
next six months, as well as your management team's plans for responding
to them.
Our current outlook for the fixed-income markets is cautiously
optimistic. The conflict with Iraq is largely over, and investors are
focused on economic concerns on the home front. While serious issues
remain, the level of uncertainty in the world seems to have eased a bit,
though we expect continued volatility.
Further, we expect that market yields will move higher in the near term
as a weakening dollar, Fed policy, the recently enacted tax cut package,
and growing federal budget deficits take effect. Municipal budgets will
continue to face significant pressures in the months ahead. Governments
wrangle with how to implement costly home-front protection measures
while at the same time pushing tax cuts to stimulate economic growth.
Historically, improvement in the credit quality of state and local
governments has lagged a general economic recovery, so we expect
municipal credit quality to remain fragile for some time to come.
With the easing of geopolitical tensions, we believe investors are
refocusing their attention on the health of the U.S. economy. This is
likely to bring some redeployment of assets as portfolios are realigned
to reflect a changing economic outlook. After three years of corporate
America and the financial markets correcting for the excess of the late
1990s, we believe the groundwork is being laid for a return to a more
disciplined, healthier market. We believe that investing in money market
securities that help preserve principal value across all market
conditions remains a wise course for any well-diversified portfolio.
The views expressed in this report are exclusively those of Putnam
Management. They are not meant as investment advice. Money market funds
are not insured or guaranteed by the Federal Deposit Insurance
Corporation (FDIC) or any other governmental agency. Although the fund
seeks to maintain a constant share price of $1.00, it is possible to
lose money by investing in this fund. This fund concentrates its
investments in one state and involves more risk than a fund that invests
more broadly.
PERFORMANCE SUMMARY
This section provides information about your fund's performance during
its semiannual period, which ended May 31, 2003. In accordance with
regulatory requirements, we also include performance for the most
current calendar quarter-end. Performance should always be considered in
light of a fund's investment strategy. Past performance does not
indicate future results. More recent returns may be less or more than
those shown. Investment return and principal value will fluctuate and
you may have a gain or a loss when you sell your shares. A profile of
your fund's strategy appears on the first page of this report. See page
9 for definitions of some terms used in this section.
TOTAL RETURN FOR PERIODS ENDED 5/31/03
Lipper New York
Tax-Exempt Money
Market Funds Fund shares
category average* at NAV
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6 months 0.32% 0.31%
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1 year 0.77 0.66
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5 years 11.47 11.02
Annual average 2.20 2.11
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10 years 27.80 26.58
Annual average 2.48 2.38
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Annual average
(life of fund, since 10/26/87) 3.04 2.99
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Current return (end of period)
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Current 7-day yield 1 0.72
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Taxable
equivalent 2 1.24
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Taxable
equivalent 3 1.19
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Current 30-day yield 1 0.76
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Taxable
equivalent 2 1.31
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Taxable
equivalent 3 1.26
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For a portion of the period, this fund limited expenses, without which
returns would have been lower.
1 The 7-day and 30-day yields are the two most common gauges for
measuring money market mutual fund performance. Yield data reflect the
current earnings of the fund more closely than total return.
2 Assumes a maximum 41.82% combined 2003 federal, New York State, and
New York City tax rate. Results for investors subject to lower tax rates
would not be as advantageous. For some investors, investment income may
also be subject to the federal alternative minimum tax. Investment
income may be subject to state and local taxes.
3 Assumes a combined 39.45% federal and New York State tax rate.
* Lipper results should be compared to fund performance at net asset value.
Over the 6-month and 1-, 5-, and 10-year periods ended 5/31/03, there were
53, 53, 45, and 30 funds, respectively, in this Lipper category.
DISTRIBUTION INFORMATION 6 MONTHS ENDED 5/31/03
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Distributions (number) 6
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Income $0.003086
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Total $0.003086
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TOTAL RETURN FOR PERIODS ENDED 6/30/03 (most recent calendar quarter)
Fund shares
at NAV
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6 months 0.32%
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1 year 0.65
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5 years 10.80
Annual average 2.07
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10 years 26.45
Annual average 2.37
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Annual average
(life of fund, since 10/26/87) 2.98
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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.
Net asset value (NAV) is the price, or value, of one share of a mutual
fund, without a sales charge. NAVs fluctuate with market conditions. The
NAV is calculated by dividing the net value of all the fund's assets by
the number of outstanding shares.
COMPARATIVE INDEXES
Lipper New York Tax-Exempt Money Market Funds Category Average is an
arithmetic average of the total return of all New York tax-exempt money
market mutual funds.
Lehman Municipal Bond Index is an unmanaged index of long-term
fixed-rate investment-grade tax-exempt bonds.
Lehman Aggregate Bond Index is an unmanaged index used as a general
measure of U.S. fixed-income securities.
Lehman Intermediate Government Bond Index is an unmanaged index of
government bonds with maturities between 1 and up to 10 years.
S&P 500 Index is an unmanaged index of common stock performance.
Russell 2000 Index is an unmanaged index of common stocks that generally
measure performance of small to midsize companies within the Russell
3000 Index.
Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged
index of international stocks from Europe, Australasia, and the Far
East.
Indexes assume reinvestment of all distributions and do not account for
fees. Securities and performance of a fund and an index will differ. You
cannot invest directly in an index.
Lipper Inc. is a third-party industry ranking entity that ranks funds
(without sales charges) with similar current investment styles or
objectives as determined by Lipper. Lipper category averages reflect
performance trends for funds within a category and are based on results
at net asset value.
A NOTE ABOUT DUPLICATE MAILINGS
In response to investors' requests, the SEC has modified mailing
regulations for proxy statements, semiannual and annual reports, and
prospectuses. Putnam is now able to send a single copy of these
materials to customers who share the same address. This change will
automatically apply to all shareholders except those who notify us. If
you would prefer to receive your own copy, please call Putnam at
1-800-225-1581.
A GUIDE TO THE FINANCIAL STATEMENTS
These sections of the report, as well as the accompanying Notes,
constitute the fund's financial statements.
The fund's portfolio lists all the fund's investments and their values
as of the last day of the reporting period. Holdings are organized by
asset type and industry sector, country, or state to show areas of
concentration and diversification.
Statement of assets and liabilities shows how the fund's net assets and
share price are determined. All investment and noninvestment assets are
added together. Any unpaid expenses and other liabilities are
subtracted from this total. The result is divided by the number of
shares to determine the net asset value per share, which is calculated
separately for each class of shares. (For funds with preferred shares,
the amount subtracted from total assets includes the net assets
allocated to remarketed preferred shares.)
Statement of operations shows the fund's net investment gain or loss.
This is done by first adding up all the fund's earnings -- from
dividends and interest income -- and subtracting its operating expenses
to determine net investment income (or loss). Then, any net gain or
loss the fund realized on the sales of its holdings -- as well as any
unrealized gains or losses over the period -- is added to or subtracted
from the net investment result to determine the fund's net gain or loss
for the fiscal period.
Statement of changes in net assets shows how the fund's net assets were
affected by distributions to shareholders and by changes in the number
of the fund's shares. It lists distributions and their sources (net
investment income or realized capital gains) over the current reporting
period and the most recent fiscal year-end. The distributions listed
here may not match the sources listed in the Statement of operations
because the distributions are determined on a tax basis and may be paid
in a different period from the one in which they were earned.
Financial highlights provide an overview of the fund's investment
results, per-share distributions, expense ratios, net investment income
ratios, and portfolio turnover in one summary table, reflecting the five
most recent reporting periods. In a semiannual report, the highlight
table also includes the current reporting period. For open-end funds, a
separate table is provided for each share class.
THE FUND'S PORTFOLIO
May 31, 2003 (Unaudited)
KEY TO ABBREVIATIONS
AMBAC -- AMBAC Indemnity Corporation
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
G.O. Bonds -- General Obligation Bonds
LOC -- Letter of Credit
MBIA -- MBIA Insurance Company
VRDN -- Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (98.2%) (a)
PRINCIPAL AMOUNT RATING (RAT) VALUE
New York (93.2%)
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$575,000 Chateaugay Central School Dist. G.O. Bonds, FGIC,
2 1/2s, 6/15/03 AAA $575,151
600,000 Chemung Cnty., Indl. Dev. Agcy. VRDN (Arnot Ogden
Med. Ctr.), Ser. A, 1.15s, 3/1/19 (JP Morgan
Chase & Co. (LOC)) VMIG1 600,000
800,000 Depew Union Free School Dist. G.O. Bonds, FSA,
2 1/2s, 6/15/03 Aaa 800,310
1,800,000 Dutchess Cnty., Indl. Dev. Agcy. Civic Fac. VRDN
(Marist College), Ser. A, 1.15s, 7/1/28 (Bank of
New York (LOC)) A-1+ 1,800,000
760,000 Greenwich, Central School Dist. G.O. Bonds, FGIC,
2 1/2s, 6/15/03 AAA 760,184
2,000,000 Long Island, Pwr. Auth. VRDN, Ser. 2, 1 1/4s, 5/1/33
(Bayerische Landesbank (LOC)) VMIG1 2,000,000
2,300,000 NY City, Courts Fac. Lease VRDN (Jay Street
Dev. Corp.), Ser. A-1, 1.1s, 5/1/22 (JP Morgan
Chase & Co. (LOC)) VMIG1 2,300,000
NY City, Cultural Resource VRDN
1,146,000 (Solomon R. Guggenheim), Ser. B, 1.3s, 12/1/15
(Westdeutsche Landesbank (LOC)) VMIG1 1,146,000
150,000 Ser. A, MBIA, 1.1s, 4/1/21 VMIG1 150,000
1,800,000 (American Museum of National History), Ser. B,
MBIA, 1.1s, 4/1/21 VMIG1 1,800,000
1,540,000 NY City, Indl. Dev. Agcy. Civic Fac. VRDN (Church
Heavenly Rest Day), 1.15s, 7/1/21 (Bank of
New York (LOC)) VMIG1 1,540,000
1,500,000 NY City, Indl. Dev. Agcy. VRDN (Stroheim & Romann),
1.15s, 12/1/15 (Westdeutsche Landesbank (LOC)) A-1+ 1,500,000
400,000 NY City, Muni. Wtr. & Swr. Fin. Auth. VRDN, Ser. A,
FGIC, 1.3s, 6/15/25 VMIG1 400,000
2,200,000 NY City, VRDN, Ser. B, FGIC, 1.3s, 10/1/20 VMIG1 2,200,000
NY State Dorm. Auth. VRDN
2,200,000 (Oxford U. Press Inc.), 1.3s, 7/1/23 (Landesbank
Hessen Thuringen (LOC)) VMIG1 2,200,000
1,600,000 (NY Pub. Library), Ser. B, MBIA, 1.1s, 7/1/28 VMIG1 1,600,000
1,800,000 NY State Energy Research & Dev. Auth. Poll. Control
VRDN (NY Elec. & Gas), Ser. D, 1.22s, 10/1/29
(Bank One Chicago N.A. (LOC)) VMIG1 1,800,000
1,000,000 NY State Env. Mandatory Put Bonds, Ser. G, 1.48s,
11/30/18 (Westdeutsche Landesbank (LOC)) AAA 1,000,000
1,400,000 NY State Hsg. Fin. Agcy. VRDN (Special Surgery
Hosp. Staff), Ser. A, 1.15s, 11/1/10
(Chase Manhattan Bank (LOC)) VMIG1 1,400,000
2,200,000 NY State Local Govt. Assistance Corp. VRDN, Ser. A,
1.1s, 4/1/22 (Bayerische Landesbank, Westdeutsche
Landesbank (LOC)) VMIG1 2,200,000
2,475,000 NY State Mandatory Put Bonds, Ser. A, 1.35s,
3/13/20 (Dexia Credit Local (LOC)) Aaa 2,475,000
2,300,000 Oneida Indian Nation, VRDN, 1.15s, 10/1/32
(Bank of America N.A. (LOC)) VMIG1 2,300,000
745,000 Red Hook Central School Dist. G.O. Bonds, FSA,
2 1/2s, 6/15/03 Aaa 745,196
Shenendehowa Central School Dist. G.O. Bonds
240,000 Ser. B, FSA, 2 1/2s, 6/15/03 Aaa 240,053
240,000 Ser. A, FSA, 2 1/2s, 6/1/03 Aaa 240,004
585,000 Sherrill City School Dist. G.O. Bonds, FGIC,
2 1/2s, 6/15/03 Aaa 585,167
480,000 South Glens Falls Central School Dist. G.O. Bonds,
MBIA, 2 1/2s, 11/15/03 Aaa 481,847
2,325,000 Suffolk Cnty., Indl. Dev. Agcy. VRDN (Target Rock
Corp.), 1.2s, 2/1/07 (Bank of Nova Scotia (LOC)) VMIG1 2,325,000
2,200,000 Triborough Bridge & Tunnel Auth. Rev. Bonds, Ser. A,
FSA, 2 3/4s, 1/1/31 VMIG1 2,200,000
1,700,000 Westchester Cnty., Indl Dev. Agcy. Civic Fac.
(Boys & Girls Club), VRDN, 1.15s, 2/1/24
(Bank of New York (LOC)) A-1+ 1,700,000
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41,063,912
Puerto Rico (5.0%)
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2,200,000 Cmnwlth. of PR, Hwy & Trans. Auth. VRDN, Ser. A,
AMBAC, 1.1s, 7/1/28 VMIG1 2,200,000
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Total Investments (cost $43,263,912) $43,263,912
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(a) Percentages indicated are based on net assets of $44,064,803.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to
be the most recent ratings available at May 31, 2003 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 May 31, 2003. Securities rated by Putnam are indicated by
"/P" and are not publicly rated.
Moody's Investor Service, Inc. and Standard & Poor's Corp. are the
leading independent rating agencies for debt securities. Moody's uses
the designation "Moody's Investment Grade", or "MIG", for most
short-term municipal obligations, adding a "V" ("VMIG") for bonds with a
demand or variable feature; the designation "P" is used for tax exempt
commercial paper. Standard & Poor's uses "SP" for notes maturing in
three years or less, "A" for bonds with a demand or variable feature.
The rates shown on VRDNs are the current interest rates shown at
May 31, 2003, which are subject to change based on the terms of the
security.
The fund had the following insurance concentration greater than
10% at May 31, 2003 (as a percentage of net assets)
FGIC 10.3%
The accompanying notes are an integral part of these financial statements.
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2003 (Unaudited)
Assets
- -------------------------------------------------------------------------------------------
Investments in securities, at amortized cost (Note 1) $43,263,912
- -------------------------------------------------------------------------------------------
Cash 765,366
- -------------------------------------------------------------------------------------------
Interest and other receivables 124,714
- -------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 179,318
- -------------------------------------------------------------------------------------------
Total assets 44,333,310
Liabilities
- -------------------------------------------------------------------------------------------
Distributions payable to shareholders 20,351
- -------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 191,963
- -------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 24,635
- -------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 8,229
- -------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 1,806
- -------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 422
- -------------------------------------------------------------------------------------------
Other accrued expenses 21,101
- -------------------------------------------------------------------------------------------
Total liabilities 268,507
- -------------------------------------------------------------------------------------------
Net assets $44,064,803
Represented by
- -------------------------------------------------------------------------------------------
Paid-in capital (Note 4) $44,064,803
- -------------------------------------------------------------------------------------------
Computation of net asset value and offering price
- -------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share
($44,064,803 divided by 44,064,803 shares) $1.00
- -------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
STATEMENT OF OPERATIONS
Six months ended May 31, 2003 (Unaudited)
Interest income: $273,019
- -------------------------------------------------------------------------------------------
Expenses:
- -------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 102,811
- -------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 51,396
- -------------------------------------------------------------------------------------------
Administrative services (Note 2) 2,569
- -------------------------------------------------------------------------------------------
Auditing 12,783
- -------------------------------------------------------------------------------------------
Legal expense 8,353
- -------------------------------------------------------------------------------------------
Other 5,341
- -------------------------------------------------------------------------------------------
Fees waived and reimbursed by Manager (Note 2) (42,647)
- -------------------------------------------------------------------------------------------
Total expenses 140,606
- -------------------------------------------------------------------------------------------
Expense reduction (Note 2) (7,909)
- -------------------------------------------------------------------------------------------
Net expenses 132,697
- -------------------------------------------------------------------------------------------
Net investment income 140,322
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $140,322
- -------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
May 31 November 30
2003* 2002
- -------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
- -------------------------------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------------------------------
Net investment income $140,322 $318,183
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 140,322 318,183
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders: (Note 1)
- -------------------------------------------------------------------------------------------------------
From tax exempt income (140,322) (318,183)
- -------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (1,934,533) 4,756,366
- -------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,934,533) 4,756,366
Net assets
- -------------------------------------------------------------------------------------------------------
Beginning of period 45,999,336 41,242,970
- -------------------------------------------------------------------------------------------------------
End of period $44,064,803 $45,999,336
- -------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
(For a common share outstanding throughout the period)
- ------------------------------------------------------------------------------------------------------------------
Six months
ended
Per-share May 31
operating performance (Unaudited) Year ended November 30
- ------------------------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------
Investment operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income .0031 (c) .0081 .0217 .0329 .0251 .0288
- ------------------------------------------------------------------------------------------------------------------
Total from
investment operations .0031 .0081 .0217 .0329 .0251 .0288
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------
From net
investment income (.0031) (.0081) (.0217) (.0329) (.0251) (.0288)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (.0031) (.0081) (.0217) (.0329) (.0251) (.0288)
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 0.31* 0.81 2.20 3.34 2.55 2.91
- ------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $44,065 $45,999 $41,243 $39,278 $41,051 $38,986
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .31* (c) .82 .80 .76 .77 .79
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) .31* (c) .72 2.14 3.43 2.60 2.88
- ------------------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Total return assumes dividend reinvestment.
(b) Includes amounts paid through expense offset arrangements. (Note 2)
(c) Reflects an expense limitation in effect during the period (Note
2). As a result of such limitation, expenses for the fund reflect a
reduction of 0.09% per share for the period ended May 31, 2003.
The accompanying notes are an integral part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
May 31, 2003 (Unaudited)
Note 1
Significant accounting policies
Putnam New York Tax Exempt Money Market Fund (the "fund") is registered
under the Investment Company Act of 1940, as amended, as a
nondiversified, open-end management investment company. The fund seeks
as high a level of current income exempt from federal, New York State
and New York City personal income taxes as Putnam Investment Management,
LLC ("Putnam Management"), the fund's manager, an indirect, wholly-owned
subsidiary of Putnam Investments, LLC, believes is consistent with the
maintenance of liquidity and stability of principal. The fund invests
primarily in a nondiversified portfolio of short-term New York
tax-exempt securities.
The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The fund may be affected by economic and political
developments in the state of New York. The preparation of financial
statements is in conformity with accounting principles generally
accepted in the United States of America and requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and the reported amounts of
increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
A) Security valuation The valuation of the funds' portfolio instruments
is determined by means of the amortized cost method (which approximates
market value) as set forth in Rule 2a-7 under the Investment Company Act
of 1940. The amortized cost of an instrument is determined by valuing it
at its original cost and thereafter amortizing any discount or premium
from its face value at a constant rate until maturity.
B) Security transactions and related investment income Security
transactions are recorded on the trade date (the date the order to buy
or sell is executed). Interest is recorded on the accrual basis.
Premiums and discounts from purchases of short-term investments are
amortized/accreted at a constant rate until maturity.
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, 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.
The aggregate identified cost on a financial reporting and tax basis is
the same.
D) Distributions to shareholders Income dividends are recorded daily by
the fund and are paid monthly to the shareholders.
Note 2
Management fee, administrative
services and other transactions
Putnam Management is paid for management and investment advisory
services quarterly based on the average net assets of the fund. Such fee
is based on the following annual rates: 0.45% of the first $500 million
of average net assets, 0.35% of the next $500 million, 0.30% of the next
$500 million, 0.25% of the next $5 billion, 0.225% of the next $5
billion, 0.205% of the next $5 billion, 0.19% of the next $5 billion and
0.18% thereafter.
Effective January 1, 2003, Putnam Management has agreed to limit its
compensation (and, to the extent necessary, bear other expenses) until
the fund is liquidated, to the extent that expenses of the fund
(exclusive of brokerage commissions, interest, taxes, offering and
extraordinary expenses, credits from Putnam Fiduciary Trust Company
(PFTC), a subsidiary of Putnam, LLC, and payments under the fund's
distribution plan) would exceed an annual rate of 0.60% of the fund's
average net assets.
The fund reimburses Putnam Management an allocated amount 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 PFTC. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
The fund has entered into an arrangement with PFTC whereby credits
realized as a result of uninvested cash balances are used to reduce a
portion of the fund's expenses. For the six months ended May 31, 2003,
the fund's expenses were reduced by $7,909 under these arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $351 has been allocated to the fund, and an additional fee for
each Trustees meeting attended. 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
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 a 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.
A deferred sales charge of up to 1.00% is assessed on certain
redemptions of class A shares exchanged from other Putnam funds that
were purchased without an initial sales charge as part of an investment
of $1 million or more. For the six months ended May 31, 2003, Putnam
Retail Management, a wholly-owned subsidiary of Putnam, LLC and Putnam
Retail Management GP, Inc., acting as underwriter, received no monies on
such redemptions.
Note 3
Purchases and sales of securities
During the six months ended May 31, 2003, cost of purchases and proceeds
from sales (including maturities) of investment securities (all
short-term obligations) aggregated $10,407,302 and $12,429,000,
respectively.
Note 4
Capital shares
At May 31, 2003, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Year ended
Six months ended November 30,
May 31, 2003 2002
- ---------------------------------------------------------------------------
Shares sold 15,151,995 36,274,028
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 132,178 318,183
- ---------------------------------------------------------------------------
15,284,173 36,592,211
Shares repurchased (17,218,706) (31,835,845)
- ---------------------------------------------------------------------------
Net increase (decrease) (1,934,533) 4,756,366
- ---------------------------------------------------------------------------
Note 5
Actions by Trustees
On June 13, 2003 the Trustees approved the liquidation of the fund. The
closing is scheduled to occur in August 2003.
THE PUTNAM FAMILY OF FUNDS
The following is a complete list of Putnam's open-end mutual funds.
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.
GROWTH FUNDS
Discovery Growth Fund
Growth Opportunities Fund
Health Sciences Trust
International New Opportunities Fund
New Opportunities Fund
OTC & Emerging Growth Fund
Small Cap Growth Fund
Vista Fund
Voyager Fund
BLEND FUNDS
Capital Appreciation Fund
Capital Opportunities Fund
Europe Equity Fund
Global Equity Fund
Global Natural Resources Fund
International Capital Opportunities Fund
International Equity Fund
Investors Fund
Research Fund
Tax Smart Equity Fund
Utilities Growth and Income Fund
VALUE FUNDS
Classic Equity Fund
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
International Growth and Income Fund
Mid Cap Value Fund
New Value Fund
Small Cap Value Fund *
INCOME FUNDS
American Government Income Fund
Diversified Income Trust
Global Income Trust
High Yield Advantage Fund *
High Yield Trust
Income Fund
Intermediate U.S. Government Income Fund
Money Market Fund +
U.S. Government Income Trust
TAX-FREE INCOME FUNDS
Municipal Income Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund +
Tax-Free High Yield Fund
Tax-Free Insured Fund
State tax-free income funds
Arizona, California, Florida, Massachusetts, Michigan, Minnesota, New
Jersey, New York, Ohio and Pennsylvania
State tax-free money market funds +
California, New York
ASSET ALLOCATION FUNDS
Putnam Asset Allocation Funds--three investment portfolios that spread
your money across a variety of stocks, bonds, and money market
investments.
The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio
* Closed to new investors.
+ An investment in a money market fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although the funds seek to preserve your investment at $1.00 per share,
it is possible to lose money by investing in the fund.
Check your account balances and current performance at
www.putnaminvestments.com.
FUND INFORMATION
ABOUT PUTNAM INVESTMENTS
One of the largest mutual fund families in the United States, Putnam
Investments has a heritage of investment leadership dating back to Judge
Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition
and practice since 1830. Founded over 65 years ago, Putnam Investments
was built around the concept that a balance between risk and reward is
the hallmark of a well-rounded financial program. We presently manage
over 100 mutual funds in growth, value, blend, fixed income, and
international.
INVESTMENT MANAGER
Putnam Investment Management, LLC
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Retail Management
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray LLP
TRUSTEES
John A. Hill, Chairman
Jameson Adkins Baxter
Charles B. Curtis
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
Lawrence J. Lasser
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
OFFICERS
George Putnam, III
President
Charles E. Porter
Executive Vice President, Treasurer
and Principal Financial Officer
Patricia C. Flaherty
Senior Vice President
Karnig H. Durgarian
Vice President and
Principal Executive Officer
Steven D. Krichmar
Vice President and
Principal Financial Officer
Michael T. Healy
Assistant Treasurer and
Principal Accounting Officer
Brett C. Browchuk
Vice President
Charles E. Haldeman, Jr.
Vice President
Lawrence J. Lasser
Vice President
Beth S. Mazor
Vice President
Richard A. Monaghan
Vice President
Stephen M. Oristaglio
Vice President
Gordon H. Silver
Vice President
Mark C. Trenchard
Vice President
Jerome J. Jacobs
Vice President
Judith Cohen
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam New York
Tax Exempt Money Market Fund. It may also be used as sales literature
when preceded or accompanied by the current prospectus, which gives
details of sales charges, investment objectives, and operating policies
of the fund, and the most recent copy of Putnam's Quarterly Performance
Summary and Putnam's Quarterly Ranking Summary. For more information or
to request a prospectus, call toll free: 1-800-225-1581. The fund's
Statement of Additional Information contains additional information
about the fund's Trustees and is available without charge upon request
by calling 1-800-225-1581.
Visit www.putnaminvestments.com or call a representative at 1-800-225-1581.
NOT FDIC INSURED, MAY LOSE VALUE, NO BANK GUARANTEE
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminvestments.com
SA056-88662 063 7/03
Item 2. Code of Ethics:
- -----------------------
Not applicable
Item 3. Audit Committee Financial Expert:
- -----------------------------------------
Not applicable
Item 4. Principal Accountant Fees and Services:
- -----------------------------------------------
Not applicable
Items 5-6. [Reserved]
- ---------------------
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed End
- -------------------------------------------------------------------------
Management Investment Companies: Not applicable
--------------------------------
Item 8. [Reserved]
- ------------------
Item 9. Controls and Procedures:
- --------------------------------
The registrant's principal executive officer and principal financial
officers have concluded, based on their evaluation of the effectiveness
of the design and operation of the registrant's disclosure controls and
procedures as of a date within 90 days of the filing date of this report
on Form N-CSR, that the design and operation of such procedures are
effective to provide reasonable assurance that information required to
be disclosed by the investment company in the reports that it files or
submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized, and reported within the time periods specified in
the Commission's rules and forms.
There have been no significant changes in the registrant's internal
controls subsequent to the date of their evaluation.
Item 10. Exhibits:
- ------------------
(a) Not applicable
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Investment Company Act of 1940, as amended, and the officer
certifications as required by Section 906 of the Sarbanes-Oxley Act of 2002
are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
an the Investment Company Act of 1940, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NAME OF REGISTRANT
By (Signature and Title): /s/Michael T. Healy
--------------------------
Michael T. Healy
Principal Accounting Officer
Date: July 24, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934
an the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By (Signature and Title): /s/Karnig H. Durgarian
---------------------------
Karnig H. Durgarian
Principal Executive Officer
Date: July 24, 2003
By (Signature and Title): /s/Charles E. Porter
---------------------------
Charles E. Porter
Principal Financial Officer
Date: July 24, 2003
By (Signature and Title): /s/Steven D. Krichmar
---------------------------
Steven D. Krichmar
Principal Financial Officer
Date: July 24, 2003