Putnam
New York
Tax Exempt
Income 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:
While we are pleased to report positive results for Putnam New York Tax
Exempt Income Fund for the six months ended May 31, 2003, your fund
underperformed both its benchmark and its Lipper peer group average
during the period. Details of these results can be found on page 8.
Significant declines in state and local tax revenues, accompanied by
credit rating downgrades of both municipalities and the corporate
beneficiaries of industrial development bonds, continued to plague the
municipal bond market. The market was further tested as it faced the
challenge of digesting a record level of new issuance during the period.
In the following report, your fund's management team discusses
performance and strategy in detail and provides its view of prospects
for the remainder of the fiscal year.
In bringing you this news of your fund's performance, we would also like
to take the opportunity to tell you how much we appreciate your
confidence in Putnam. We will continue to do our utmost to deliver the
best possible results for your fund.
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
* Putnam New York Tax Exempt Income Fund's class A shares posted total
returns of 5.83% at net asset value and 0.83% at public offering price
for the six months ended May 31, 2003.
* Differences in portfolio quality and composition account for the
fund's underperformance relative to its benchmark, the Lehman Municipal
Bond Index, which returned 6.46% for the six-month period ended May 31.
* Due to the underperformance of certain key holdings, the fund's
results at net asset value were slightly below the 6.15% average return
for its Lipper category, New York Municipal Debt Funds.
* See the Performance Summary on page 8 for complete fund performance,
comparative performance, and Lipper data.
* PERFORMANCE COMMENTARY
The fund's results should be considered in the context of a generally
favorable interest-rate environment. Investments in longer-maturity and
noncallable bonds performed quite well as did insured and high-quality
bonds, but not surprisingly, the fund's lower-rated holdings, which
contribute considerably to the portfolio's monthly income,
underperformed in the difficult economic environment. The presence of
these lower-quality bonds helps explain the fund's slight
underperformance relative to the average for its Lipper category and its
benchmark, which is composed solely of high-quality tax-exempt bonds.
Fund Profile
Putnam New York Tax Exempt Income Fund seeks to provide as high a level
of current income free from federal, New York state, and New York City
income taxes as is believed to be consistent with the preservation of
capital. It may be suitable for New York investors seeking tax-free
income through a diversified portfolio of municipal bonds.
As the markets have begun to factor in the return of higher interest
rates, we've taken defensive measures to dampen the price depreciation
that typically accompanies rising rates. This strategy limited the
portfolio's upside potential at the end of the period.
* MARKET OVERVIEW
From December through April of the semiannual period, bond yields
trended downward. After May 6, when the Federal Reserve Board changed
its bias from "neutral" to "weakness," yields plummeted.
Several factors contributed to a challenging investment environment. As
the war with Iraq ended, investors focused more on the sluggish economy.
State and local municipalities struggled with significant declines in
tax revenues and subsequent downgrades in credit quality. United
Airlines, which had provided credit backing for several municipal bond
issues, filed for bankruptcy in December, as had US Airways in the
months before. In late April, American Airlines narrowly avoided a
similar fate. Various segments of the electric power sector were under
duress as well. These difficulties affected the performance of
industrial development bonds (IDBs), which are issued by municipalities
but backed by companies benefiting from the financing. Lastly, the
burgeoning supply of municipal bonds -- over $357 billion in municipal
debt was issued in 2002 -- broke the all-time record. Supply has
continued to swell in 2003 and is on track to exceed the previous year's
record. This has had a dampening effect on municipal bond prices.
MARKET SECTOR PERFORMANCE 6 MONTHS ENDED 5/31/03
Bonds
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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Citigroup World Government Bond Index 14.34%
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Equities
S&P 500 Index (broad stock market) 3.87%
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Russell 2000 Index (small to 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 5/31/03.
* STRATEGY OVERVIEW
Interest-rate sensitivity is an important consideration in the
management of bond portfolios. Duration is an investment term for
measuring this interest-rate sensitivity and can be calculated from bond
coupon rates and maturities. During the summer of 2002, we began
implementing a defensive strategy (shorter duration, less sensitivity)
in anticipation of rising interest rates. When interest rates rose in
October, we returned to a more neutral duration as the outlook for
growth in the economy was less clear. However, this positioning still
limited upside potential when the market rallied in May. As the period
ended, we believed interest rates were unsustainably low and began to
shift the portfolio back toward a more defensive position.
In early 2003, when tax-exempt municipal bonds offered investors almost
the same yield as comparable Treasury bonds, we established a
cross-market arbitrage position, in which we bought intermediate-term
municipal bonds and shorted 10-year Treasury futures contracts. Our
thesis was that if interest rates should rise (causing bond prices to
fall), the fund would have a loss on the bonds, and yet, potential gains
on the futures contracts could more than compensate for the loss. On the
other hand, if rates should fall (causing bond prices to rise), a loss
on the futures contracts could be mitigated by an even greater gain on
the bonds. We have seen the latter scenario begin to develop as
municipal bonds appreciated during the second half of the period.
[GRAPHIC OMITTED: vertical bar chart THE FUND'S MATURITY AND DURATION COMPARED]
THE FUND'S MATURITY AND DURATION COMPARED*
This chart compares changes in the fund's duration
(a measure of its sensitivity to interest-rate changes)
and its average effective maturity (a weighted average
of the holdings' maturities).
as of as of
11/30/02 5/31/03
Average effective maturity in years 9.6 8.5
Duration in years 6.7 5.9
Footnote reads:
*Average effective maturity also takes into account put and call features,
where applicable, and reflects prepayments for mortgage-backed securities.
* HOW FUND HOLDINGS AFFECTED PERFORMANCE
Although primarily an investment-grade fund, your portfolio maintained
its exposure to higher-yielding securities to pursue a higher return
through the income and appreciation potential we believed they were
offering. Our research has shown that over the course of an interest
rate cycle, lower-rated municipal bonds tend to fluctuate to a lesser
degree than higher-quality bonds and can enhance the fund's share price
stability. However, these securities require greater research effort
because of their added credit risk.
While we still believe in the value of this strategy, the multi-year
slump in the U.S. economy has diminished the outlook for a few bonds in
the portfolio. During the six-month period, we became concerned about
the fund's investments in the Cicero Local Development Corp. revenue
bonds, which are financing a recreational facility in the community.
Unable to cover its debt service, the issuer tried to sell land to meet
its obligations. When the land sale didn't happen as planned, we sold
the entire position. Given the fact that these bonds carried
investment-grade ratings of BBB (Standard & Poor's) and Baa2 (Moody's),
we wanted to find replacement bonds with a similar credit quality to
maintain the income benefit and augment the fund's diversity.
Consequently, part of the proceeds from this sale was invested in New
York City Industrial Development Agency for Staten Island University
Hospital bonds, which are being used to construct a 12,000 square foot
addition to the main hospital facility and acquire radiology equipment.
This hospital is the largest provider of health-care services on Staten
Island and has substantial pricing leverage with commercial and
managed-care payers. Another portion of the proceeds was invested in
Port Authority of New York and New Jersey refunding bonds.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
Aaa/AAA -- 50.0%
Aa/AA -- 25.1%
A -- 13.2%
Baa/BBB -- 4.1%
Ba/BB -- 3.4%
B -- 2.0%
Caa -- 0.6%
VMIG1 -- 1.6%
Footnote reads:
* As a percentage of market value as of 5/31/03. A bond rated Baa/BBB or
higher is considered investment grade. The chart reflects Moody's and
Standard & Poor's ratings; percentages may include unrated bonds
considered by Putnam Management to be of comparable quality. Holdings
will vary over time.
The fund's investments in New York City Industrial Development Authority
for Brooklyn Polytechnical University have also encountered some
headwind in the slower-growth environment. As part of the university's
efforts to transform its status from a commuter campus to a resident
college, proceeds from these bonds, purchased in 2001, are being used to
construct a dormitory and a new academic facility, and to upgrade
existing buildings. Although the school has a substantial endowment, the
bonds were downgraded in May to Ba1 (Moody's) and BB+ (Standard &
Poor's). The school's high-tech focus has made it difficult to recruit
new students in the aftermath of the sharp correction in the technology
sector. Despite the drop in admissions, we're optimistic about the
bonds' prospects, given the university's strong turnaround plan.
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. This makes
general obligation bonds (GOs) especially vulnerable to credit
downgrades, since they are financed by the tax revenues raised by state
and local governments. Several states have already seen their credit
downgraded by the rating agencies. Just following the close of the
fiscal year, Fitch downgraded New York from AA to AA-. Since credit
quality remains a critical determinant in our selection process, we're
following the situation closely but still feel confident that the
issuers of the GOs held by the fund will meet their debt obligations.
Finally, we reduced and diversified the fund's investments in tobacco
settlement bonds. These bonds are issued by municipalities and secured
by cash payments made in satisfaction of legal judgments against the
tobacco industry. Since they are subject to special risks, they
generally offer higher yields than other bonds of comparable quality.
Among the special risks of investing in tobacco settlement bonds is the
possibility that interest payments could be affected by further
litigation against the tobacco industry. Furthermore, if the supply of
these bonds exceeds demand, the value of the bonds could drop. We have
always approached these bonds with caution, and have reduced exposure to
the sector overall.
We trimmed the fund's investments in the New York County Tobacco Trust
bonds and Tobacco Settlement Revenue Bonds. In January 2003, New York
State announced a plan to sell a large amount of tobacco settlement
bonds over the coming months to help close their budget shortfall.
Anticipating that the influx of new bonds would put pressure on the
market for tobacco settlement bonds in New York, we reduced our exposure
to these securities. To diversify the fund further, a portion of the
sale proceeds was then invested in Children's Trust Fund bonds, also
issued by Puerto Rico. The fact that the Puerto Rico bonds can be
purchased by all state municipal bond funds means that they are usually
easier to sell, which can add to their value.
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.
* THE FUND'S MANAGEMENT TEAM
The fund is managed by the Putnam Tax Exempt Fixed-Income Team. The
members of the team are Susan McCormack (Portfolio Leader), Paul Drury
(Portfolio Member), David Hamlin (Portfolio Member), Richard Wyke
(Portfolio Member), Joyce Dragone, and Jerome Jacobs.
THE OUTLOOK FOR YOUR FUND
The following commentary reflects anticipated developments that could
affect your fund over the next six months, as well as your management
team's plans for responding to them.
Our current outlook for the municipal bond market 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 will 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.
Over the next few months, the ratio of municipal bond yields to
comparable Treasury yields is likely to return to more normal levels.
Accordingly, we will look for opportunities to reduce our cross-market
arbitrage position (by selling municipal bonds and buying back the
Treasury futures contracts) and we believe the fund will profit from the
transactions.
In our opinion, the market continues to offer attractive value and
compelling risk/reward characteristics. With credit spreads remaining
very generous, we believe credit risk is worth taking in moderate
amounts. We believe municipal bonds could perform well relative to other
fixed-income sectors, because demand for the bonds is firm and supply
should moderate as rates move higher. We believe we have positioned your
fund to take advantage of the market's potential.
The views expressed in this report are exclusively those of Putnam
Management. They are not meant as investment advice. The 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
10 for definitions of some terms used in this section.
TOTAL RETURN FOR PERIODS ENDED 5/31/03
Class A Class B Class C Class M
(inception dates) (9/2/83) (1/4/93) (7/26/99) (4/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
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6 months 5.83% 0.83% 5.49% 0.49% 5.53% 4.53% 5.79% 2.33%
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1 year 9.10 3.90 8.41 3.41 8.24 7.24 8.77 5.19
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5 years 31.08 24.85 26.88 24.88 25.42 25.42 29.24 25.08
Annual average 5.56 4.54 4.88 4.54 4.63 4.63 5.26 4.58
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10 years 70.68 62.63 59.85 59.85 56.99 56.99 65.40 59.95
Annual average 5.49 4.98 4.80 4.80 4.61 4.61 5.16 4.81
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Annual average
(life of fund) 8.25 7.99 7.42 7.42 7.37 7.37 7.82 7.64
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Performance assumes reinvestment of distributions and does not account
for taxes. Returns at public offering price (POP) for class A and M
shares reflect a sales charge of 4.75% and 3.25%, respectively. Class B
share returns reflect the applicable contingent deferred sales charge
(CDSC), which is 5% in the first year, declining to 1% in the sixth
year, and is eliminated thereafter. Class C shares reflect a 1% CDSC the
first year that is eliminated thereafter. Performance for class B, C,
and M shares before their inception is derived from the historical
performance of class A shares, adjusted for the applicable sales charge
(or CDSC) and higher operating expenses for such shares.
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 5/31/03
Lipper New York
Municipal
Lehman Municipal Debt Funds
Bond Index category average*
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6 months 6.46% 6.15%
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1 year 10.36 9.19
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5 years 36.79 29.38
Annual average 6.47 5.28
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10 years 89.42 73.49
Annual average 6.60 5.65
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Annual average
(life of fund) 8.74 8.04
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*Index and 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 110, 100, 82, and 41 funds, respectively, in this Lipper category.
PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 5/31/03
Class A Class B Class C Class M
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Distributions
(number) 6 6 6 6
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Income 1 $0.191921 $0.162630 $0.156146 $0.178727
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Capital gains 1
Long-term 0.048000 0.048000 0.048000 0.048000
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Short-term -- -- -- --
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Total $0.239921 $0.210630 $0.204146 $0.226727
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Share value: NAV POP NAV NAV NAV POP
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11/30/02 $8.87 $9.31 $8.85 $8.86 $8.87 $9.17
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5/31/03 9.14 9.60 9.12 9.14 9.15 9.46
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Current return (end of period)
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Current
dividend
rate 2 4.14% 3.94% 3.50% 3.35% 3.84% 3.72%
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Taxable
equivalent 3 (a) 6.84 6.51 5.78 5.53 6.34 6.14
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Taxable
equivalent 3 (b) 7.12 6.77 6.02 5.76 6.60 6.39
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Current
30-day SEC
yield 4 3.23 3.08 2.59 2.44 2.94 2.84
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Taxable
equivalent 3 (a) 5.33 5.09 4.28 4.03 4.86 4.69
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Taxable
equivalent 3 (b) 5.55 5.29 4.45 4.19 5.05 4.88
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1 Capital gains, if any, are taxable for federal and, in most cases,
state purposes. For some investors, investment income may be subject to
the federal alternative minimum tax. Income from federally exempt funds
may be subject to state and local taxes.
2 Most recent distribution, excluding capital gains, annualized and
divided by NAV or POP at end of period.
3 Assumes (a) maximum 39.45% combined federal income tax and New York
state 2003 personal income tax rates or (b) maximum 41.82% combined
federal, New York state, and New York City 2003 tax rates. Results for
investors subject to lower tax rates would not be as advantageous.
4 Based only on investment income, calculated using SEC guidelines.
TOTAL RETURN FOR PERIODS ENDED 6/30/03 (most recent calendar quarter)
Class A Class B Class C Class M
(inception dates) (9/2/83) (1/4/93) (7/26/99) (4/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
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6 months 3.03% -1.88% 2.71% -2.30% 2.63% 1.63% 2.88% -0.44%
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1 year 7.28 2.21 6.59 1.59 6.43 5.42 6.96 3.46
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5 years 30.24 24.03 26.20 24.20 24.67 24.67 28.41 24.26
Annual average 5.43 4.40 4.76 4.43 4.51 4.51 5.13 4.44
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10 years 67.20 59.25 56.77 56.77 53.75 53.75 61.98 56.70
Annual average 5.27 4.76 4.60 4.60 4.40 4.40 4.94 4.59
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Annual average
(life of fund) 8.20 7.93 7.37 7.37 7.31 7.31 7.76 7.58
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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.
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.
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 4.75% maximum 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 or C shares and assumes redemption at the
end of the period. Your fund's class B 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. The CDSC for class C shares is 1% for one
year after purchase.
Class A shares are generally subject to an initial sales charge and no
sales charge on redemption (except on certain redemptions of shares
bought without an initial sales charge).
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are
subject to a contingent deferred sales charge only if the shares are
redeemed during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee
than class A shares and no sales charge on redemption (except on certain
redemptions of shares bought without an initial sales charge).
COMPARATIVE INDEXES
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 10 years.
Citigroup World Government Bond Index is an unmanaged index of
government bonds from 14 countries.
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
FHA Insd. -- Federal Housing Administration Insured
FRB -- Floating Rate Bonds
FSA -- Financial Security Assurance
G.O. Bonds -- General Obligation Bonds
IFB -- Inverse Floating Rate Bonds
MBIA -- MBIA Insurance Company
U.S. Govt. Coll. -- U.S. Government Collateralized
VRDN -- Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (98.6%) (a)
PRINCIPAL AMOUNT RATING (RAT) VALUE
New York (91.1%)
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$2,250,000 Albany, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
(Charitable Leadership), Ser. A , 6s, 7/1/19 Baa3 $2,444,063
2,700,000 Buffalo, G.O. Bonds, Ser. A, FGIC, 4s, 2/1/04 Aaa 2,753,541
13,500,000 Dutchess Cnty., Indl. Dev. Agcy. Civic Fac. Rev. Bonds
(Bard College), 5 3/4s, 8/1/30 (SEG) A3 15,052,500
15,000,000 Dutchess Cnty., Indl. Dev. Agcy. Rev. Bonds
(Vassar College), 5.35s, 9/1/40 Aa2 16,181,250
Erie Cnty., G.O. Bonds
2,470,000 Ser. C, AMBAC, 5 1/2s, 7/1/29 Aaa 2,717,000
4,160,000 Ser. B, AMBAC, 5 3/8s, 7/1/20 Aaa 4,612,400
13,750,000 Long Island, Pwr. Auth. NY Elec. Syst. IFB, 9.114s,
12/1/24 (acquired 5/19/98, cost $14,946,250) (RES) BBB+/P 16,104,688
Long Island, Pwr. Auth. NY Elec. Syst. Rev. Bonds
5,000,000 Ser. A, 5 1/8s, 9/1/29 A- 5,068,750
10,000,000 MBIA, 5s, 4/1/04 Aaa 10,331,100
3,090,000 Madison Cnty., Indl. Dev. Agcy. Rev. Bonds (Colgate U.),
Ser. A, 5s, 7/1/23 Aa3 3,317,888
5,550,000 Metro. Trans. Auth. Commuter Fac. Rev. Bonds, Ser. A,
U.S. Govt. Coll., 6s, 7/1/24 AAA 6,729,375
7,000,000 Metro. Trans. Auth. Fac. IFB, 10.068s, 4/1/25
(acquired 2/11/00, cost $6,684,500) (RES) A3 9,913,750
Metro. Trans. Auth. Fac. Rev. Bonds
15,400,000 Ser. A, MBIA, 6 1/4s, 4/1/14 Aaa 19,654,250
4,245,000 Ser. A, MBIA, 6 1/4s, 4/1/13 Aaa 5,380,538
11,020,000 (Trans. Fac.), Ser. A, U.S. Govt. Coll., 6s, 7/1/24 AAA 13,361,750
14,000,000 (Dedicated Tax Fund), Ser. A, FGIC, 4 3/4s, 4/1/28 Aaa 16,030,000
Metro. Trans. Auth. Rev. Bonds
3,860,000 Ser. E, MBIA, 5 1/2s, 11/15/15 Aaa 4,670,600
7,000,000 Ser. A, AMBAC, 5 1/2s, 11/15/19 Aaa 8,111,250
Metro. Trans. Auth. Svc. Contract Rev. Bonds
3,750,000 (Trans. Fac.), Ser. 3, U.S. Govt. Coll., 7 3/8s, 7/1/08 Aaa 4,312,500
15,820,000 (Trans. Fac.), Ser. O, U.S. Govt. Coll., 5 3/4s, 7/1/13 AAA 18,885,125
8,000,000 Ser. A , MBIA, 5 1/2s, 1/1/20 AAA 9,150,000
Metro. Trans. Auth. Svc. Contract Rev. Bonds
12,500,000 (Commuter Fac.), Ser. O, U.S. Govt Coll.,
5 1/2s, 7/1/17 AAA 15,156,250
24,345,000 (Trans. Fac.), Ser. O, U.S. Govt Coll., 5 1/2s, 7/1/17 AAA 29,518,313
Nassau Cnty., G.O. Bonds, Ser. E, FSA
1,125,000 6s, 3/1/20 Aaa 1,309,219
2,790,000 6s, 3/1/19 Aaa 3,264,300
2,735,000 6s, 3/1/18 Aaa 3,199,950
3,465,000 6s, 3/1/16 Aaa 4,080,038
2,580,000 5.9s, 3/1/15 Aaa 3,037,950
Nassau Cnty., Indl. Dev. Agcy. Rev. Bonds
(North Shore Hlth. Syst.)
410,000 Ser. A, 6 1/4s, 11/1/21 BB+/P 426,400
1,390,000 Ser. B, 5 7/8s, 11/1/11 BB+/P 1,449,075
1,615,000 Ser. D, 4 7/8s, 11/1/05 BB+/P 1,641,244
3,000,000 Niagara Cnty., Indl. Dev. Agcy. Rev. Bonds, Ser. D,
5.55s, 11/15/24 Baa1 3,198,750
7,000,000 NY City, City Transitional Fin. Auth. IFB, 10.308s,
11/15/29 (acquired 2/4/00, cost $6,788,320) (RES) AA/P 10,193,750
NY City, City Transitional Fin. Auth. Rev. Bonds
6,500,000 Ser. A, 5 3/4s, 8/15/24 AA+ 7,856,875
8,360,000 Ser. C, 5 1/2s, 5/1/25 AA+ 9,154,200
6,640,000 Ser. C, 5 1/2s, 5/1/25 AA+ 7,893,300
3,600,000 Ser. B, 5 1/4s, 11/15/05 AA+ 3,942,000
8,300,000 NY City, Cts. Fac. Lease VRDN (Jay Street Dev. Corp.),
Ser. A-1, 1.1s, 5/1/22 VMIG1 8,300,000
NY City, G.O. Bonds
12,325,000 Ser. B, 8 1/4s, 6/1/05 AAA 13,865,625
18,675,000 Ser. B, MBIA, 6 1/2s, 8/15/11 AAA 23,086,969
21,495,000 Ser. D, MBIA, 6 1/2s, 11/1/10 AAA 26,492,588
945,000 Ser. I, U.S. Govt. Coll., 6 1/4s, 4/15/27 Aaa 1,113,919
1,845,000 Ser. I, U.S. Govt. Coll., 6 1/4s, 4/15/17 Aaa 2,174,794
20,000,000 Ser. B, 5 1/2s, 12/1/11 A2 22,725,000
18,825,000 Ser. C, 5 1/4s, 8/1/11 A2 20,966,344
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
2,000,000 (Staten Island U. Hosp.), Ser. A, 6 3/8s, 7/1/31 Baa3 2,112,500
19,000,000 (Brooklyn Polytechnical U. Project J), 6 1/8s, 11/1/30 Ba1 17,337,500
7,000,000 (Horace Mann School), MBIA, 5s, 7/1/28 Aaa 7,358,750
NY City, Indl. Dev. Agcy. Rev. Bonds
17,350,000 (Visy Paper, Inc.), 7.95s, 1/1/28 B+/P 17,718,688
7,500,000 (British Airways), 7 5/8s, 12/1/32 BBB- 6,000,000
2,500,000 (Brooklyn Navy Yard Cogen. Partners), 6.2s, 10/1/22 BBB- 2,587,500
NY City, Indl. Dev. Agcy. Special Arpt. Fac. Rev. Bonds
9,500,000 (Airis JFK I LLC), Ser. A, 6s, 7/1/27 Baa3 9,856,250
8,500,000 (Airis JFK I LLC), Ser. A, 5 1/2s, 7/1/28 Baa3 8,542,500
NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
18,500,000 (American Airlines, Inc.), 6.9s, 8/1/24 Caa2 8,371,250
14,465,000 (Terminal One Group Assn.), 6 1/8s, 1/1/24 A3 14,923,541
5,000,000 NY City, Metro. Trans. Auth. Rev. Bonds, Ser. A,
AMBAC, 5 1/4s, 1/1/29 Aaa 5,343,750
NY City, Muni. Assistance Corp. Rev. Bonds
5,150,000 Ser. E, 6s, 7/1/04 Aa1 5,424,598
10,000,000 Ser. P, 5s, 7/1/08 Aa1 11,375,000
4,550,000 Ser. O, 5s, 7/1/05 Aa1 4,908,313
200,000 NY City, Muni. Wtr. & Swr. Fin. Auth. IFB, 13.507s,
6/15/11 (acquired 8/9/91, cost $207,493) (RES) Aaa 323,000
NY City, Muni. Wtr. & Swr. Fin. Auth. Rev. Bonds
25,600,000 AMBAC, 7 1/2s, 6/15/11 Aaa 32,096,000
35,000,000 MBIA, 5.2s, 6/15/08 Aaa 36,668,100
2,700,000 NY City, Muni. Wtr. & Swr. Fin. Auth. VRDN, Ser. G,
FGIC, 1.25s, 6/15/24 VMIG1 2,700,000
NY City, State Dorm. Auth. Lease Rev. Bonds
5,600,000 (Court Fac.), 6s, 5/15/39 A 6,272,000
3,000,000 (Westchester Cnty.), 5 1/4s, 8/1/18 Aa1 3,296,250
2,500,000 NY City, Transitional Fin. Auth. Rev. Bonds, Ser. C, FSA,
5 1/4s, 8/1/12 Aaa 2,931,250
6,000,000 NY Cntys. Trust II Rev. Bonds (Tobacco Settlement),
5 3/4s, 6/1/43 A- 5,077,500
6,000,000 NY State Thruway Auth. Rev. Bonds, Ser. A, MBIA,
5 1/4s, 4/1/13 AAA 7,027,500
13,250,000 NY State Dorm. Auth. IFB, MBIA, 9.646s, 7/1/13
(acquired 10/22/97, cost $15,237,500) (RES) AAA/P 18,997,188
6,000,000 NY State Dorm. Auth. Mandatory Put Bonds, Ser. B,
5 1/4s, 11/15/23 AA- 6,817,500
NY State Dorm. Auth. Rev. Bonds
18,800,000 (City U. Syst.), Ser. C, 7 1/2s, 7/1/10 A3 23,030,000
2,500,000 (Mount Sinai Hlth.), Ser. A, 6.6s, 7/1/26 Ba1 2,540,625
3,000,000 (Mount Sinai Hlth.), Ser. A, 6 1/2s, 7/1/25 Ba1 3,090,000
8,950,000 (State U. Edl. Fac.), Ser. A, FSA, 5 7/8s, 5/15/17 Aaa 11,209,875
13,200,000 (State U. Edl. Fac.), Ser. A, 5 7/8s, 5/15/11 AA- 15,790,500
6,000,000 (NY Dept. of Ed.), Ser. A , MBIA, 5 3/4s, 7/1/20 Aaa 7,410,000
35,385,000 (U. Syst. Construction), Ser. A, 5 3/4s, 7/1/18 AA- 43,258,163
10,000,000 (Columbia U.), Ser. A, 5 3/4s, 7/1/10 Aaa 12,000,000
15,600,000 (U. Syst. Construction), Ser. A, 5 5/8s, 7/1/16 AA- 18,837,000
7,500,000 (NYU), Ser. 1, AMBAC, 5 1/2s, 7/1/40 Aaa 9,206,250
3,500,000 (NYU), Ser. 1, AMBAC, 5 1/2s, 7/1/31 Aaa 4,208,750
16,055,000 (State U. Edl. Fac.), Ser. A, 5 1/2s, 5/15/13 AA- 18,944,900
19,960,000 (Mental Hlth. Svcs. Fac. Impt. D), FSA, 5 1/4s, 8/15/30 Aaa 21,332,250
10,000,000 (Memorial Sloan-Kettering Ctr.), Ser. 1, 5s, 7/1/34 Aa2 10,437,500
3,000,000 (Yeshiva U.), AMBAC, 5s, 7/1/30 Aaa 3,168,750
3,000,000 (U. of Rochester), Ser. A, 5s, 7/1/27 Aaa 3,150,000
2,700,000 (Yeshiva U.), AMBAC, 5s, 7/1/26 Aaa 2,872,125
2,000,000 (Columbia U.), Ser. B, 5s, 7/1/24 Aaa 2,150,000
2,000,000 (Columbia U.), Ser. B, 5s, 7/1/23 Aaa 2,160,000
7,500,000 (Columbia U.), 5s, 7/1/22 Aaa 7,959,375
3,000,000 (Columbia U.), Ser. B, 5s, 7/1/22 Aaa 3,255,000
2,505,000 (Lutheran Med.), MBIA, 5s, 8/1/12 Aaa 2,887,013
10,000,000 (Colgate U.), MBIA, 4 3/4s, 7/1/28 Aaa 10,300,000
5,000,000 (St. John's U.), MBIA, 4 3/4s, 7/1/28 Aaa 5,150,000
10,359,000 NY State Dorm. Auth. VRDN (Oxford U. Press, Inc.),
1.3s, 7/1/23 VMIG1 10,359,000
20,000,000 NY State Energy Res. & Dev. Auth. Gas Fac. Rev. Bonds
(Brooklyn Union Gas), 6.952s, 7/1/26 A+ 22,375,000
NY State Energy Res. & Dev. Auth. Poll. Control
Rev. Bonds
10,000,000 (Niagara Mohawk Pwr. Corp.), Ser. A, FGIC,
7.2s, 7/1/29 Aaa 10,802,200
6,000,000 (Lilco), Ser. B, 5.15s, 3/1/16 A- 6,184,860
1,660,000 NY State Energy Res. & Dev. Auth. Poll. Control
VRDN (NY Elec & Gas), Ser. D, 1.22s, 10/1/29 VMIG1 1,660,000
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
(State Wtr. Revolving Fund)
3,425,000 Ser. B, 6.65s, 9/15/13 Aaa 3,507,645
1,735,000 Ser. A, 6.55s, 9/15/10 Aaa 1,776,744
NY State Env. Fac. Corp. Rev. Bonds
9,000,000 MBIA, 6s, 6/15/12 Aaa 11,103,750
9,640,000 (NY City Wtr.), Ser. K, 5 1/2s, 6/15/14 Aaa 11,592,100
9,035,000 NY State Hsg. Fin. Agcy. Rev. Bonds (Multi-Fam.
Hsg. Insd. Mtge. Program), Ser. A, FHA Insd.,
7s, 8/15/22 AAA 9,143,962
NY State Hwy. & Bridge Auth. Rev. Bonds
1,000,000 Ser. A, FSA, 6s, 4/1/16 Aaa 1,225,000
2,000,000 Ser. A, FSA, 5.8s, 4/1/18 Aaa 2,337,500
2,000,000 Ser. A, FSA, 5 3/4s, 4/1/17 Aaa 2,340,000
11,740,000 Ser. B, MBIA, 5s, 4/1/05 Aaa 12,561,800
NY State Local Govt. Assistance Corp. Rev. Bonds
12,510,000 Ser. E, 6s, 4/1/14 AA- 15,199,650
6,000,000 Ser. E, AMBAC, 6s, 4/1/14 Aaa 7,417,500
7,745,000 (Sub. Lien), Ser. A, FSA, 5s, 4/1/13 AAA 8,897,069
12,325,000 NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
(NY Hosp.), Ser. A, AMBAC, 6 1/2s, 8/15/29 Aaa 13,696,156
15,000,000 NY State Pwr. Auth. FRB, 2.9s, 3/1/20 Aa2 15,067,350
NY State Pwr. Auth. Rev. Bonds
4,250,000 5s, 11/15/20 Aa2 4,621,875
31,135,000 5s, 11/15/06 Aa2 34,832,281
NY State Urban Dev. Corp. Rev. Bonds
5,250,000 (State Fac.), 5 3/4s, 4/1/12 AA- 6,267,188
5,830,000 (Correctional Fac.), Ser. 7, 5.7s, 1/1/16 AA- 6,558,750
11,225,000 (State Fac.), 5.7s, 4/1/10 AA- 13,175,344
4,000,000 (Personal Income Tax), Ser. C-1, FGIC, 5 1/2s, 3/15/19 Aaa 4,605,000
7,710,000 (Correctional Fac.), Ser. A, 5 1/2s, 1/1/09 AA- 8,876,138
Orange Cnty., Indl. Dev. Agcy. Rev. Bonds
2,300,000 (Arden Hill Care Ctr. Newburgh), Ser. C, 7s, 8/1/21 BB-/P 2,386,250
2,450,000 (Arden Hill Care Ctr. Newburgh), Ser. C, 7s, 8/1/31 BB-/P 2,523,500
1,450,000 Otsego Cnty., Indl. Dev. Agcy. Rev. Bonds
(Hartwick College), 5.9s, 7/1/22 Baa3 1,556,938
2,500,000 Port Auth. NY & NJ Rev. Bonds (Kennedy Intl.
Arpt. -- 5th Installment), 6 3/4s, 10/1/19 BB+/P 2,643,750
7,750,000 St. Lawrence Cnty., Indl. Dev. Rev. Bonds
(St. Lawrence U.), Ser. A, MBIA, 5s, 7/1/28 Aaa 8,166,563
1,200,000 Suffolk Cnty., Indl. Dev. Agcy. Civic Fac. Rev. Bonds
(Huntington Hosp.), Ser. B, 5 7/8s, 11/1/32 Baa1 1,260,000
Suffolk Cnty., Indl. Dev. Agcy. Cont. Care Ret. Rev.
Bonds (Jefferson's Ferry), Ser. A
4,000,000 7 1/4s, 11/1/28 BB-/P 4,235,000
4,000,000 7.2s, 11/1/19 BB-/P 4,280,000
Suffolk Cnty., Indl. Dev. Agcy. Rev. Bonds
(Peconic Landing)
8,200,000 Ser. A, 8s, 10/1/30 B+/P 8,384,500
3,000,000 Ser. B, 7s, 10/1/30 B+/P 3,022,500
4,220,000 Suffolk Cnty., Judicial Fac. Agcy. Rev. Bonds
(John P. Cohalan Complex), AMBAC, 5s, 4/15/16 Aaa 4,631,450
2,800,000 Syracuse, Indl. Dev. Agcy. Rev. Bonds (1st Mtge. --
Jewish Home), Ser. A, 7 3/8s, 3/1/31 BB-/P 2,964,500
4,250,000 Tobacco Settlement Rev. Bonds (Asset Backed Bonds),
Ser. 1, 5 3/4s, 7/15/32 A3 3,899,375
Triborough Bridge & Tunnel Auth. Gen. Purpose
Rev. Bonds
38,750,000 (Convention Ctr.), Ser. E, 7 1/4s, 1/1/10 AA- 45,628,114
17,700,000 Ser. Y, 6s, 1/1/12 AAA 21,461,250
10,525,000 Triborough Bridge & Tunnel Auth. IFB, 9.239s, 1/1/12
(acquired 10/24/97, cost $11,472,417) (RES) A+ 13,893,000
Triborough Bridge & Tunnel Auth. Rev. Bonds
14,000,000 (Convention Ctr.), Ser. E, 6s, 1/1/11 AA- 16,695,000
9,500,000 MBIA, 5 1/2s, 11/15/21 Aaa 11,435,625
5,000,000 MBIA, 5 1/2s, 11/15/20 Aaa 6,031,250
5,050,000 AMBAC, 5 1/4s, 11/15/16 Aaa 6,015,813
10,000,000 Westchester Cnty., Hlth. Care Corp. Rev. Bonds,
Ser. A, 5 7/8s, 11/1/25 A 10,762,500
3,285,000 Yonkers, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
(St. John's Riverside Hosp.), Ser. A, 7 1/8s, 7/1/31 BB 3,436,931
-------------
1,338,741,346
Puerto Rico (7.5%)
- -------------------------------------------------------------------------------------------------------------------
7,750,000 Children's Trust Fund Tobacco Settlement Rev. Bonds,
5 1/2s, 5/15/39 A- 6,587,500
3,915,000 Cmnwlth. of PR, G.O. Bonds, FSA, 6 1/2s, 7/1/13 AAA 5,045,456
Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds
5,000,000 Ser. B, 6s, 7/1/26 A 5,431,250
2,275,000 Ser. B, MBIA, 5 7/8s, 7/1/35 (Prerefunded) AAA 2,656,063
1,225,000 Ser. B, MBIA, 5 7/8s, 7/1/35 AAA 1,430,188
7,035,000 Ser. AA, MBIA, 5 1/2s, 7/1/18 Aaa 8,512,350
PR Elec. Pwr. Auth. Rev. Bonds
10,000,000 Ser. LL, MBIA, 5 1/2s, 7/1/17 Aaa 12,100,000
20,000,000 (PA 205), 5 1/2s, 7/1/07 Aaa 24,000,000
10,000,000 Ser. AA, MBIA, 5 3/8s, 7/1/27 Aaa 10,675,000
5,000,000 PR Indl. Tourist Edl. Med. & Env. Control Fac. Rev.
Bonds (Cogen. Fac. - AES Project), 6 5/8s, 6/1/26 Baa2 5,262,500
20,000,000 PR Infrastructure Fin. Auth. Special Rev. Bonds, Ser. A,
5 1/2s, 10/1/40 Aaa 22,550,000
5,500,000 U. of PR Rev. Bonds, Ser. O, MBIA, 5 3/8s, 6/1/30 Aaa 5,795,625
-------------
110,045,932
- -------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,296,739,363) $1,448,787,278
- -------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $1,469,443,090.
(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.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at May 31, 2003 was
$69,425,376 or 4.7% of net assets.
(SEG) A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts at May 31,
2003.
The rates shown on VRDN, Mandatory Put Bonds and FRB are the
current interest rates at May 31, 2003.
The rates shown on IFB, which are securities paying interest rates
that vary inversely to changes in the market interest rates, are the
current interest rates at May 31, 2003.
The fund had the following industry group concentration greater
than 10% at May 31, 2003 (as a percentage of net assets):
Transportation 11.4%
The fund had the following insurance concentration greater than
10% at May 31, 2003 (as a percentage of net assets):
MBIA 19.4%
- ------------------------------------------------------------------------------
Futures Contracts Outstanding at May 31, 2003 (Unaudited)
Market Aggregate Face Expiration Unrealized
Value Value Date Depreciation
- ------------------------------------------------------------------------------
U.S. Treasury Note
10 yr. (Short) $107,896,471 $107,320,570 Sep-03 $(575,901)
- ------------------------------------------------------------------------------
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 value (identified cost
$1,296,739,363) (Note 1) $1,448,787,278
- -------------------------------------------------------------------------------------------
Cash 1,695,676
- -------------------------------------------------------------------------------------------
Interest and other receivables 24,254,016
- -------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 876,232
- -------------------------------------------------------------------------------------------
Receivable for variation margin (Note 1) 56,938
- -------------------------------------------------------------------------------------------
Total assets 1,475,670,140
Liabilities
- -------------------------------------------------------------------------------------------
Distributions payable to shareholders 2,094,657
- -------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 1,505,355
- -------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 1,826,139
- -------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 108,640
- -------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 98,762
- -------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 2,198
- -------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 536,410
- -------------------------------------------------------------------------------------------
Other accrued expenses 54,889
- -------------------------------------------------------------------------------------------
Total liabilities 6,227,050
- -------------------------------------------------------------------------------------------
Net assets $1,469,443,090
Represented by
- -------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $1,337,014,710
- -------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 3,350,377
- -------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (22,394,011)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 151,472,014
- -------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to capital shares
outstanding $1,469,443,090
Computation of net asset value and offering price
- -------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($1,335,805,502 divided by 146,221,983 shares) $9.14
- -------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $9.14)* $9.60
- -------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($123,297,817 divided by 13,517,169 shares)** $9.12
- -------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($7,972,234 divided by 872,651 shares)** $9.14
- -------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($2,367,537 divided by 258,832 shares) $9.15
- -------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $9.15)*** $9.46
- -------------------------------------------------------------------------------------------
* On single retail sales of less than $25,000. On sales of $25,000
or more and on group sales, the offering price is reduced.
** Redemption price per share is equal to net asset value less any
applicable contingent deferred sales charge.
*** 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.
The accompanying notes are an integral part of these financial statements.
STATEMENT OF OPERATIONS
Six months ended May 31, 2003 (Unaudited)
Interest income: $37,030,045
- -------------------------------------------------------------------------------------------
Expenses:
- -------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 3,618,110
- -------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 594,589
- -------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 20,674
- -------------------------------------------------------------------------------------------
Administrative services (Note 2) 13,377
- -------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 1,317,759
- -------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 513,508
- -------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 32,282
- -------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 5,690
- -------------------------------------------------------------------------------------------
Other 269,319
- -------------------------------------------------------------------------------------------
Total expenses 6,385,308
- -------------------------------------------------------------------------------------------
Expense reduction (Note 2) (21,678)
- -------------------------------------------------------------------------------------------
Net expenses 6,363,630
- -------------------------------------------------------------------------------------------
Net investment income 30,666,415
- -------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 2,204,669
- -------------------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (6,743,457)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures contracts
during the period 56,224,002
- -------------------------------------------------------------------------------------------
Net gain on investments 51,685,214
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $82,351,629
- -------------------------------------------------------------------------------------------
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 $30,666,415 $65,351,193
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (4,538,788) 7,657,046
- -------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 56,224,002 3,668,481
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 82,351,629 76,676,720
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders: (Note 1)
- -------------------------------------------------------------------------------------------------------
From tax-exempt income
Class A (28,469,905) (58,834,699)
- -------------------------------------------------------------------------------------------------------
Class B (2,213,761) (4,430,858)
- -------------------------------------------------------------------------------------------------------
Class C (111,927) (198,746)
- -------------------------------------------------------------------------------------------------------
Class M (44,519) (81,884)
- -------------------------------------------------------------------------------------------------------
From ordinary income
Class A -- (278,308)
- -------------------------------------------------------------------------------------------------------
Class B -- (24,142)
- -------------------------------------------------------------------------------------------------------
Class C -- (1,063)
- -------------------------------------------------------------------------------------------------------
Class M -- (367)
- -------------------------------------------------------------------------------------------------------
From net realized long-term gain on investments
Class A (7,114,861) --
- -------------------------------------------------------------------------------------------------------
Class B (647,542) --
- -------------------------------------------------------------------------------------------------------
Class C (32,093) --
- -------------------------------------------------------------------------------------------------------
Class M (11,234) --
- -------------------------------------------------------------------------------------------------------
Decrease from capital share transactions (Note 4) (24,282,449) (49,954,866)
- -------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 19,423,338 (37,128,213)
Net assets
- -------------------------------------------------------------------------------------------------------
Beginning of period 1,450,019,752 1,487,147,965
- -------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $3,350,377 and $3,524,074, respectively) $1,469,443,090 $1,450,019,752
- -------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
(For a common share outstanding throughout the period)
CLASS A
- ------------------------------------------------------------------------------------------------------------------
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 $8.87 $8.79 $8.52 $8.32 $9.05 $9.02
- ------------------------------------------------------------------------------------------------------------------
Investment operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income .19 .40 .42 .45 .44 .43
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .32 .07 .27 .20 (.65) .13
- ------------------------------------------------------------------------------------------------------------------
Total from
investment operations .51 .47 .69 .65 (.21) .56
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------
From net
investment income (.19) (.39) (.42) (.45) (.44) (.43)
- ------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.05) -- -- -- (.08) (.10)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (.24) (.39) (.42) (.45) (.52) (.53)
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.14 $8.87 $8.79 $8.52 $8.32 $9.05
- ------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.83* 5.44 8.24 8.07 (2.42) 6.47
- ------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,335,806 $1,322,541 $1,362,488 $1,276,566 $1,374,040 $1,620,108
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .41* .82 .81 .82 .83 .83
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.14* 4.50 4.80 5.40 5.02 4.79
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.06* 17.90 18.63 14.86 13.24 31.55
- ------------------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements (Note 2).
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
(For a common share outstanding throughout the period)
CLASS B
- ------------------------------------------------------------------------------------------------------------------
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 $8.85 $8.77 $8.51 $8.31 $9.04 $9.00
- ------------------------------------------------------------------------------------------------------------------
Investment operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income .16 .34 .37 .39 .38 .37
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .32 .07 .25 .20 (.65) .14
- ------------------------------------------------------------------------------------------------------------------
Total from
investment operations .48 .41 .62 .59 (.27) .51
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------
From net
investment income (.16) (.33) (.36) (.39) (.38) (.37)
- ------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.05) -- -- -- (.08) (.10)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (.21) (.33) (.36) (.39) (.46) (.47)
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.12 $8.85 $8.77 $8.51 $8.31 $9.04
- ------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.49* 4.75 7.41 7.37 (3.06) 5.91
- ------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $123,298 $119,251 $117,722 $163,839 $195,618 $231,057
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .74* 1.47 1.46 1.47 1.48 1.48
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.82* 3.84 4.18 4.75 4.37 4.12
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.06* 17.90 18.63 14.86 13.24 31.55
- ------------------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements (Note 2).
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
(For a common share outstanding throughout the period)
CLASS C
- -----------------------------------------------------------------------------------------------------
Six months
ended For the period
Per-share May 31 July 26, 1999+
operating performance (Unaudited) Year ended November 30 to Nov. 30
- -----------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $8.86 $8.79 $8.53 $8.32 $8.61
- -----------------------------------------------------------------------------------------------------
Investment operations:
- -----------------------------------------------------------------------------------------------------
Net investment income .16 .33 .35 .38 .13
- -----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .33 .06 .26 .21 (.29)
- -----------------------------------------------------------------------------------------------------
Total from
investment operations .49 .39 .61 .59 (.16)
- -----------------------------------------------------------------------------------------------------
Less distributions:
- -----------------------------------------------------------------------------------------------------
From net
investment income (.16) (.32) (.35) (.38) (.13)
- -----------------------------------------------------------------------------------------------------
From net realized gain
on investments (.05) -- -- -- --
- -----------------------------------------------------------------------------------------------------
Total distributions (.21) (.32) (.35) (.38) (.13)
- -----------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.14 $8.86 $8.79 $8.53 $8.32
- -----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.53* 4.48 7.25 7.33 (1.87)*
- -----------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $7,972 $5,885 $5,145 $574 $356
- -----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .81* 1.62 1.61 1.62 .58*
- -----------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.74* 3.69 3.93 4.57 1.59*
- -----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.06* 17.90 18.63 14.86 13.24
- -----------------------------------------------------------------------------------------------------
+ Commencement of operations.
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements (Note 2).
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
(For a common share outstanding throughout the period)
CLASS M
- ------------------------------------------------------------------------------------------------------------------
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 $8.87 $8.79 $8.53 $8.33 $9.05 $9.02
- ------------------------------------------------------------------------------------------------------------------
Investment operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income .18 .37 .40 .42 .41 .41
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .33 .07 .26 .20 (.64) .13
- ------------------------------------------------------------------------------------------------------------------
Total from
investment operations .51 .44 .66 .62 (.23) .54
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------
From net
investment income (.18) (.36) (.40) (.42) (.41) (.41)
- ------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments (.05) -- -- -- (.08) (.10)
- ------------------------------------------------------------------------------------------------------------------
Total distributions (.23) (.36) (.40) (.42) (.49) (.51)
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.15 $8.87 $8.79 $8.53 $8.33 $9.05
- ------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.79* 5.12 7.78 7.74 (2.60) 6.15
- ------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,368 $2,343 $1,793 $1,531 $1,837 $2,394
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .56* 1.12 1.11 1.12 1.13 1.13
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 1.99* 4.17 4.51 5.11 4.72 4.47
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 6.06* 17.90 18.63 14.86 13.24 31.55
- ------------------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Total return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b) Includes amounts paid through expense offset arrangements (Note 2).
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 Income Fund, ("the fund"), is registered
under the Investment Company Act of 1940, as amended, as a 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 tax as Putnam Investment Management, LLC ("Putnam
Management"), the fund's manager, an indirect subsidiary of Putnam, LLC,
believes is consistent with preservation of capital by investing
primarily in a portfolio of longer-term New York tax-exempt securities.
The fund offers class A, class B, class C 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 and class M shares, and are subject to a
contingent deferred sales charge, if those shares are redeemed within
six years of purchase. Class C shares have a higher ongoing distribution
fee than class B shares and have a one-year 1.00% contingent deferred
sales charge and do not convert to class A shares. Class M shares are
sold with a maximum front-end sales charge of 3.25% and pay an ongoing
distribution fee that is higher than class A shares but lower than class
B and class C 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 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 Tax-exempt bonds and notes are valued on the basis
of valuations provided by an independent pricing service, approved by
the Trustees. Such services use information with respect to transactions
in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining value. Restricted securities are valued at fair value
following procedures approved by the Trustees. Such valuations and
procedures are reviewed periodically by the Trustees.
B) Security transactions and related investment income Security
transactions are recorded on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis.
Interest income is recorded on the accrual basis. All premiums/discounts
are amortized/accreted on a yield-to-maturity basis. The premium in
excess of the call price, if any, is amortized to the call date;
thereafter, any remaining premium is amortized to maturity.
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. When the contract is closed, the fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was
closed. Realized gains and losses on purchased options are included in
realized gains and losses on investment securities.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. The fund and the broker
agree to exchange an amount of cash equal to the daily fluctuation in
the value of the futures contract. Such receipts or payments are known
as "variation margin." 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.
Futures and written option contracts outstanding at period end are
listed after The fund's portfolio.
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 that
borrowings not exceed prospectus limitations. For the six months ended
May 31, 2003, 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.
The aggregate identified cost on a tax basis is $1,296,739,363,
resulting in gross unrealized appreciation and depreciation of
$166,188,805 and $14,140,890, respectively, or net unrealized
appreciation of $152,047,915.
F) Distributions to shareholders Income dividends are recorded daily by
the fund and are paid monthly. Distributions from capital gains, 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. 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.
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 annual rate equal to the lesser of (i) 0.50% of the
average net assets of the fund or (ii) 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.
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 Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam,
LLC. 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 $21,678 under these arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $1,890 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.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B, class C 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 Retail Management, a wholly-owned subsidiary of
Putnam, LLC and Putnam Retail Management GP, 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 Retail Management at an
annual rate of up to 0.35%, 1.00%, 1.00% and 1.00% of the average net
assets attributable to class A, class B, class C and class M shares,
respectively. The Trustees have approved payment by the fund at the
annual rates of 0.20%, 0.85%, 1.00% and 0.50% of the average net assets
attributable to class A, class B, class C and class M shares,
respectively.
For the six months ended May 31, 2003, Putnam Retail Management, acting
as underwriter, received net commissions of $28,412 and $147 from the
sale of class A and class M shares, respectively, and received $50,460
and $1,383 in contingent deferred sales charges from redemptions of
class B and class C shares, respectively. A deferred sales charge of up
to 1.00% 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 six months ended May 31, 2003, Putnam Retail
Management, acting as underwriter, received $1,371 on class A
redemptions.
Note 3
Purchases and sales of securities
During the six months ended May 31, 2003, cost of purchases and proceeds
from sales of investment securities other than short-term investments
aggregated $85,236,397 and $107,134,117, respectively. There were no
purchases and sales of U.S. government obligations.
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:
Six months ended May 31, 2003
- ---------------------------------------------------------------------------
Class A Shares Amount
- ---------------------------------------------------------------------------
Shares sold 2,588,522 $23,144,270
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 2,594,942 23,259,499
- ---------------------------------------------------------------------------
5,183,464 46,403,769
Shares repurchased (8,147,595) (72,837,213)
- ---------------------------------------------------------------------------
Net decrease (2,964,131) $(26,433,444)
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class A Shares Amount
- ---------------------------------------------------------------------------
Shares sold 7,755,574 $68,778,102
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 3,984,563 35,275,995
- ---------------------------------------------------------------------------
11,740,137 104,054,097
Shares repurchased (17,597,806) (155,732,893)
- ---------------------------------------------------------------------------
Net decrease (5,857,669) $(51,678,796)
- ---------------------------------------------------------------------------
Six months ended May 31, 2003
- ---------------------------------------------------------------------------
Class B Shares Amount
- ---------------------------------------------------------------------------
Shares sold 921,270 $8,225,574
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 226,505 2,027,195
- ---------------------------------------------------------------------------
1,147,775 10,252,769
Shares repurchased (1,111,211) (9,927,015)
- ---------------------------------------------------------------------------
Net increase 36,564 $325,754
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class B Shares Amount
- ---------------------------------------------------------------------------
Shares sold 2,491,793 $22,055,377
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 328,439 2,903,504
- ---------------------------------------------------------------------------
2,820,232 24,958,881
Shares repurchased (2,765,037) (24,495,564)
- ---------------------------------------------------------------------------
Net increase 55,195 $463,317
- ---------------------------------------------------------------------------
Six months ended May 31, 2003
- ---------------------------------------------------------------------------
Class C Shares Amount
- ---------------------------------------------------------------------------
Shares sold 317,886 $2,845,866
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 11,370 101,969
- ---------------------------------------------------------------------------
329,256 2,947,835
Shares repurchased (120,484) (1,075,164)
- ---------------------------------------------------------------------------
Net increase 208,772 $1,872,671
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class C Shares Amount
- ---------------------------------------------------------------------------
Shares sold 963,489 $8,580,255
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 17,543 155,233
- ---------------------------------------------------------------------------
981,032 8,735,488
Shares repurchased (902,744) (8,014,250)
- ---------------------------------------------------------------------------
Net increase 78,288 $721,238
- ---------------------------------------------------------------------------
Six months ended May 31, 2003
- ---------------------------------------------------------------------------
Class M Shares Amount
- ---------------------------------------------------------------------------
Shares sold 35,517 $318,091
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 5,067 45,460
- ---------------------------------------------------------------------------
40,584 363,551
Shares repurchased (45,970) (410,981)
- ---------------------------------------------------------------------------
Net decrease (5,386) $(47,430)
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class M Shares Amount
- ---------------------------------------------------------------------------
Shares sold 91,279 $815,474
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 8,383 74,362
- ---------------------------------------------------------------------------
99,662 889,836
Shares repurchased (39,367) (350,461)
- ---------------------------------------------------------------------------
Net increase 60,295 $539,375
- ---------------------------------------------------------------------------
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.
SERVICES FOR SHAREHOLDERS
HELP YOUR INVESTMENT GROW
Set up a program for systematic investing with as little as $25 a month from
a Putnam fund or from your own savings or checking account. (Regular
investing does not guarantee a profit or protect against loss in a
declining market.)
SWITCH FUNDS EASILY
You can move money from one Putnam fund to another within the same class
of shares without a service charge. (This privilege is subject to change
or termination.)
ACCESS YOUR MONEY EASILY
You can have checks sent regularly or redeem shares any business day at
the then-current net asset value, which may be more or less than the
original cost of the shares. Class B and class C shares carry a sales
charge that is applied to certain withdrawals.
HOW TO BUY ADDITIONAL SHARES
You may buy shares through your financial advisor or directly from
Putnam. To open an account by mail, send a check made payable to the
name of the fund along with a completed fund application. To add to an
existing account, complete the investment slip found at the top of your
Confirmation of Activity statement and return it with a check payable to
your fund.
VISIT US AT WWW.PUTNAMINVESTMENTS.COM
A secure section of our Web site contains complete information on your
account, including balances and transactions, updated daily. You may
also conduct transactions, such as exchanges, additional investments,
and address changes. Log on today to get your password.
USE OUR TOLL-FREE NUMBER
1-800-225-1581 Ask a helpful Putnam representative or your financial
advisor for details about any of these or other services, or see your
prospectus.
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 Income 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 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
SA051-88677 030/345/681 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:
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(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