811-6176
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 Opportunities Fund for the six months ended May 31, 2003, your
fund also underperformed both its benchmark and its Lipper peer group
average during the period. Details of these results can be found on page
9.
In the following report, your fund's management team discusses the
reasons for the underperformance, in particular with regard to its
standing among its peers. An overweighting in higher-yielding,
lower-rated issues dampened fund results now but positions it for what
the managers believe are potentially greater returns down the road.
Meanwhile, 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 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 Opportunities Fund's total return for the
six months ended May 31, 2003, was 5.86% at net asset value and 0.87%
at public offering price.
* The fund's performance lagged that of its benchmark, Lehman Municipal
Bond Index, which returned 6.46%. The index has a higher overall credit
quality than the fund.
* The fund also trailed its Lipper category, New York Municipal Debt
Funds, which returned an average of 6.15%, primarily reflecting the
fund's greater concentration in higher-yielding securities.
* In June 2003, Putnam's Trustees approved in principle the merger of
your fund into Putnam New York Tax Exempt Income Fund, pending
shareholder approval. See page 7 for more information.
* See the Performance Summary on page 9 for complete fund performance,
comparative performance, and Lipper data.
* PERFORMANCE COMMENTARY
In absolute terms, the first half of fiscal 2003 was a positive period
for your fund. We attribute the fund's relative underperformance to its
position in lower-rated, higher-yielding bonds. Over the long term, we
believe these issues can have a positive effect on your fund's
performance. The fund's benchmark index is composed entirely of
investment-grade bonds and is nationally diversified.
Fund Profile
Putnam New York Tax Exempt Opportunities Fund seeks to provide high
current income free from federal, New York state, and New York City
income taxes, 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 issued in New York.
Differences in credit quality also affected the fund's performance
relative to its Lipper peer group, as did disappointing results from a
few portfolio holdings. The fund's small position in tobacco settlement
bonds was also a negative, even though we reduced the fund's exposure
to about 1% of assets. Specific holdings that hurt performance are
discussed on pages 4 and 5.
* 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. During the
period, municipal bonds slightly outperformed Treasuries and achieved
positive returns overall.
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. The airline
industry, which is linked to the municipal bond market because
individual airlines often provide the credit backing for certain types
of municipal issues, has struggled with higher costs and reduced
passenger counts. This put some of the weaker carriers into bankruptcy,
affecting prices of the municipal bonds they had backed. Other airlines
appeared to bounce back late in the period. Lastly, the burgeoning
supply of municipal bonds nationwide -- 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.
Tobacco settlement bonds, which had come under severe pressure from an
unfavorable legal ruling in Illinois in March, recovered modestly in
May. Despite the turnaround, we maintained our cautious stance toward
these bonds. For a more detailed discussion about tobacco settlement
bonds, see page 4.
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- and midsize-company stocks) 9.34%
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MSCI EAFE Index (international stocks) 3.30%
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These indexes provide an overview of performance in different market
sectors for the six months ended 5/31/03.
* STRATEGY OVERVIEW
Throughout the first half of the fiscal year the fund has maintained its
exposure to high-yielding securities, seeking opportunities for higher
returns through the income and appreciation potential we believe they
offer. To the extent possible in a single-state fund, we strive to
spread risks out over different industries and regions, and diversify by
attributes such as coupon rate, credit quality, and maturity. For
example, we increased holdings in the transportation sector but
diversified them by issuer.
Early in 2003, tax-exempt municipal bonds offered investors almost the
same yield as comparable Treasury bonds. To take advantage of this
opportunity, we established a cross-market arbitrage position, in which
we bought intermediate-term municipal bonds and shorted 10-year Treasury
futures contracts. We believed that when the relationship between yields
returned to more normal levels, the fund would benefit. Our thesis was
that if interest rates rise (causing bond prices to fall), the fund
could have a loss on the municipal bonds, and yet, potential gains on
the Treasury futures contracts could more than compensate for the loss.
On the other hand, if rates fall (causing bond prices to rise), a loss
on the Treasury futures contracts would be mitigated by an even greater
gain on the municipal bonds. We have seen the latter scenario begin to
develop as municipal bonds appreciated in price during the second half
of the period.
[GRAPHIC OMITTED: horizontal bar chart TOP SECTOR WEIGHTINGS COMPARED]
TOP SECTOR WEIGHTINGS COMPARED*
as of 11/30/02 as of 5/31/03
Transportation 12.4% 20.6%
Utilities and power 13.3% 12.2%
Health care 10.8% 9.4%
Education 5.6% 9.0%
Water and sewer 8.6% 7.2%
Footnote reads:
*This chart shows how the fund's top weightings have changed over the last
six months. Weightings are shown as a percentage of net assets. Holdings
will vary over time.
* HOW KEY HOLDINGS AND ALLOCATIONS AFFECTED PERFORMANCE
We continue to have a constructive outlook for the recuperative powers
of both New York City and the state, and we expect improving long-term
results from the fund's lower-rated bonds. However, the road to recovery
is unlikely to be smooth. Tax receipts are down across the state and
weaker investor demand is keeping bond prices depressed. Prices of some
general obligation bonds (GOs), which are backed by taxing authorities,
have been affected by perceived credit weakness. These included New York
City GOs, which made up over 4% of assets at the end of the period.
Although New York City and New York State are very different entities,
Moody's gives them both the same rating of A2, with a negative outlook
for the City. Standard & Poor's rates the City A and the state AA. While
it recently placed the state's debt on negative outlook, it recently
removed its negative outlook on the City.
A few of the fund's industrial development bonds (IDBs) -- bonds issued
by municipalities but backed by the credit of companies -- hurt
performance during the first half of fiscal 2003. These included New
York City Industrial Development Agency Revenue Bonds for Field Hotel
Association, which is backed by a hotel near John F. Kennedy airport
that has been hurt by the decline in international air travel. We
trimmed the position and we are analyzing the situation further. Another
disappointment was New York City Industrial Development Agency for
Brooklyn Polytechnic University -- bonds issued to fund the construction
of dormitory facilities to help attract new students for this primarily
commuter school. Declining job prospects in the technology industry and
a reduced number of student applications undermined the project.
However, we decided to hold the position because the school's new CEO is
already making some positive changes that we believe will help lead to a
turnaround. We sold another weak performer, Cicero Local Development
Corporation revenue bonds, issued to fund a community recreation
project. Concerned about the project's progress, we eliminated the
position.
Tobacco settlement bonds were the worst-performing sector during the
period. These bonds are issued by municipalities and secured by cash
payments made in satisfaction of legal judgments against the tobacco
industry. Although they carry investment grade ratings, they are subject
to special risks, and 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 bonds exceeds the demand, the value of the
bonds could drop. We have always approached tobacco settlement bonds
with caution.
While we continue to be concerned about various factors that may
influence the price performance of these issues, we chose not to
completely eliminate the fund's exposure. We sold the New York Tobacco
Settlement Corporation bonds in January but retained Children's Trust
Fund of Puerto Rico Tobacco Settlement bonds (5 1/2 coupon, maturing in
2039). Although the overall sell-off in tobacco settlement bonds in
March depressed the prices of the fund's Puerto Rico tobacco settlement
bonds, they are relatively sought after in the marketplace and have
retained more of their value than similar bonds issued by other
municipalities. Moreover, these bonds are well suited to our overall
diversification strategy. The interest paid by Puerto Rico municipal
bonds is tax exempt for all U.S. residents, which makes them attractive
to managers of many single-state municipal bond portfolios and sometimes
helps support prices.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW*
Aaa/AAA/VMIG1 -- 44.9%
Aa/AA -- 11.7%
A -- 14.4%
Baa/BBB -- 13.4%
Ba/BB -- 6.8%
B -- 8.0%
Other (Caa/CCC) -- 0.8%
Footnote reads:
* As a percentage of market value as of 5/31/03. A bond rated Baa 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. Ratings will
vary over time.
IDBs backed by airlines have hurt the fund's performance during much of
the past two years, but they rebounded in the latter part of the period.
We sold the fund's high-yielding holdings in Port Authority of New York
and New Jersey bonds for Continental/Eastern Airlines at Laguardia in
January because we felt that those bonds had recovered to what we
considered a fair value. Other airline-related holdings remain in the
portfolio, including some British Airways IDBs.
Our purchases during the past six months have been geared to further
expand the fund's diversification to the extent possible in a
single-state fund. For example, in addition to retaining the Puerto Rico
tobacco settlement bonds, we added some noncallable Puerto Rico GOs, (5
1/4 coupon, maturing in 2018), as well as Puerto Rico Electric Power
Authority bonds (5% coupon, maturing in 2019), both insured. These bonds
provide geographical diversification as well as relative safety, since
insured bonds are rated AAA. Their noncallable feature helps ensure
steady income and marketability.
Another recent purchase was Geneva, New York, Industrial Development
bonds issued for Hobart and William Smith Colleges. Although these bonds
are not rated by Moody's, Standard & Poor's gives them an A rating; they
have a coupon of 5 3/8s, maturing in 2033. Hobart (an all-male college
founded in 1822) and William Smith (a women's school) joined forces in
1943. The colleges' endowment has grown steadily, their approach to debt
is conservative, and they have a strong enrollment record. We have
continued to diversify holdings across the education sector.
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.
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OF SPECIAL INTEREST
* Putnam Management has proposed, and the Trustees approved in
principle, the merger of Putnam New York Tax Exempt Opportunities Fund
into Putnam New York Tax Exempt Income Fund. Both funds invest in New
York tax-exempt securities, have similar objectives and investment
strategies, and are managed by the same team of investment
professionals. A prospectus/proxy statement with more information is
expected to be mailed to shareholders in August 2003.
* This report is not an offer to sell, nor a solicitation of an offer
to buy, shares of any fund, nor is it a solicitation of any proxy. To
receive a free copy of the prospectus/proxy statement relating to the
merger (and containing important information about fees, expenses, and
risk considerations) once a registration statement relating to the
merger has been filed with the SEC and becomes effective, please call
1-800-225-1581. The prospectus/proxy statement will also be available at
no charge on the SEC's website (http://www.sec.gov.) Read the
prospectus/proxy statement carefully before making any investment
decisions.
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* THE FUND'S MANAGEMENT TEAM
The fund is managed by the Putnam Tax Exempt Fixed-Income Team. The
members of the team are David Hamlin (Portfolio Leader), Paul Drury
(Portfolio Member), Susan McCormack (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,
although we expect continued volatility. Further, we believe market
yields will move higher in the near term as a weakening dollar, Federal
Reserve Board 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 as governments wrangle with how to implement costly
home-front protection measures while 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 to cover the Treasury
futures contracts) and we expect the fund to 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. This fund
concentrates its investments in one state and involves more risk than a
fund that invests more broadly.
PERFORMANCE SUMMARY
This section provides information about your fund's performance during
its semiannual period, which ended May 31, 2003. In accordance with
regulatory requirements, we also include performance for the most
current calendar quarter-end. Performance should always be considered in
light of a fund's investment strategy. Past performance does not
indicate future results. More recent returns may be less or more than
those shown. Investment return and principal value will fluctuate and
you may have a gain or a loss when you sell your shares. A profile of
your fund's strategy appears on the first page of this report. See page
11 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) (11/7/90) (2/1/94) (7/26/99) (2/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
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6 months 5.86% 0.87% 5.40% 0.40% 5.43% 4.43% 5.71% 2.25%
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1 year 8.75 3.62 7.93 2.93 7.87 6.87 8.43 4.88
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5 years 29.63 23.45 25.47 23.47 24.71 24.71 27.83 23.65
Annual average 5.33 4.30 4.64 4.31 4.51 4.51 5.03 4.34
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10 years 77.74 69.26 66.19 66.19 64.20 64.20 71.95 66.42
Annual average 5.92 5.40 5.21 5.21 5.08 5.08 5.57 5.23
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Annual average
(life of fund) 6.70 6.29 5.96 5.96 5.86 5.86 6.32 6.05
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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
Lehman Municipal
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) 7.54 6.88
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* Lipper and index results should be compared with 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 $0.223145 $0.193961 $0.187784 $0.209489
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Capital gains 1 -- -- -- --
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Total $0.223145 $0.193961 $0.187784 $0.209489
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Share value: NAV POP NAV NAV NAV POP
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11/30/02 $8.89 $9.33 $8.89 $8.91 $8.88 $9.18
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5/31/03 9.18 9.64 9.17 9.20 9.17 9.48
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Current return (end of period)
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Current
dividend
rate 2 4.75% 4.53% 4.12% 3.96% 4.46% 4.31%
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Taxable equivalent
(a) 3 7.84 7.48 6.80 6.54 7.37 7.12
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Taxable equivalent
(b) 3 8.16 7.79 7.08 6.81 7.67 7.41
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Current
30-day SEC
yield 4 3.68 3.51 3.04 2.89 3.39 3.27
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Taxable equivalent
(a) 3 6.08 5.80 5.02 4.77 5.60 5.40
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Taxable equivalent
(b) 3 6.33 6.03 5.23 4.97 5.83 5.62
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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% federal income tax and New York state
personal income tax rates or (b) maximum 41.82% federal, New York state,
and New York City tax rates for 2003. 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) (11/7/90) (2/1/94) (7/26/99) (2/10/95)
NAV POP NAV CDSC NAV CDSC NAV POP
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6 months 3.60% -1.33% 3.27% -1.74% 3.19% 2.19% 3.45% 0.11%
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1 year 7.27 2.12 6.57 1.57 6.41 5.41 6.95 3.47
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5 years 28.74 22.60 24.75 22.76 23.92 23.92 26.96 22.80
Annual average 5.18 4.16 4.52 4.19 4.38 4.38 4.89 4.19
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10 years 74.79 66.51 63.50 63.50 61.60 61.60 69.23 63.65
Annual average 5.74 5.23 5.04 5.04 4.92 4.92 5.40 5.05
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Annual average
(life of fund) 6.62 6.21 5.89 5.89 5.78 5.78 6.25 5.97
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TERMS AND DEFINITIONS
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested
all distributions in the fund.
Net asset value (NAV) is the price, or value, of one share of a mutual
fund, without a sales charge. NAVs fluctuate with market conditions. The
NAV is calculated by dividing the net value of all the fund's assets by
the number of outstanding shares.
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 of U.S. fixed-income
securities.
Lehman Intermediate Government Bond Index is an unmanaged index of
government bonds with maturities between 1 and up to 10 years.
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
COP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FHA Insd. -- Federal Housing Administration Insured
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 (98.4%) (a)
PRINCIPAL AMOUNT RATING(RAT) VALUE
New York (88.0%)
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Albany, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
$1,460,000 (Albany Med. Ctr.), 6s, 5/1/29 (SEG) BB+/P $1,401,600
500,000 (Charitable Leadership), Ser. A , 6s, 7/1/19 Baa3 543,125
3,400,000 Battery Park, City Auth. Rev. Bonds, Ser. A, AMBAC,
5 1/2s, 11/1/16 Aaa 3,854,750
2,000,000 Chautauqua Cnty., Indl. Dev. Agcy. Rev. Bonds
(Women's Christian Assn.), Ser. A, 6.4s, 11/15/29 A/P 2,005,000
1,000,000 Dutchess Cnty., Indl. Dev. Agcy. Rev. Bonds
(Vassar College), 5.35s, 9/1/40 Aa2 1,078,750
1,250,000 Erie Cnty., Indl. Dev. Life Care Cmnty. Rev. Bonds
(Episcopal Church Home), Ser. A, 6s, 2/1/28 B/P 1,245,313
2,250,000 Essex Cnty., Indl. Dev. Agcy. Rev. Bonds (Intl. Paper Co.),
Ser. A, 6.15s, 4/1/21 Baa2 2,334,375
2,000,000 Geneva, Indl. Dev. Agcy. Rev. Bonds (Hobart & William
Smith Project), Ser. A, 5 3/8s, 2/1/33 A 2,160,000
1,250,000 Huntington, Hsg. Auth. Sr. Hsg. Fac. Rev. Bonds
(Gurwin Jewish Sr. Residence), Ser. A, 6s, 5/1/29 B+/P 1,109,375
2,650,000 Jefferson Cnty., Indl. Dev. Agcy. Solid Waste Disp. Rev.
Bonds (Champion Intl. Corp.), 7.2s, 12/1/20 Baa2 2,762,069
1,360,000 Lockport, Hsg. Dev. Corp. Rev. Bonds
(Urban Pk. Towers), Ser. A, 6s, 10/1/18 Baa2 1,426,300
Long Island, Pwr. Auth. NY Elec. Syst. IFB
5,000,000 9.114s, 12/1/24 (acquired 5/19/98,
cost $5,435,000) (RES) BBB+/P 5,856,250
5,000,000 MBIA, 8 3/4s, 4/1/12 (acquired 11/3/98,
cost $5,422,000) (RES) AAA 6,100,000
1,000,000 Madison Cnty., Indl. Dev. Agcy. Rev. Bonds
(Colgate U.), Ser. A, 5s, 7/1/23 Aa3 1,073,750
2,500,000 Metropolitan Trans. Auth. Fac. Rev. Bonds
(Dedicated Tax Fund), Ser. A, MBIA, 6 1/4s, 4/1/11 Aaa 3,109,375
Metropolitan Trans. Auth. Rev. Bonds, Ser. A
3,500,000 FGIC, 5 1/2s, 11/15/19 Aaa 4,248,125
1,000,000 AMBAC, 5 1/2s, 11/15/19 Aaa 1,158,750
2,000,000 Metropolitan Trans. Auth. Svc. Contract Rev. Bonds,
Ser. A , MBIA, 5 1/2s, 1/1/20 AAA 2,287,500
1,000,000 Mount Vernon, Indl. Dev. Agcy. Fac. Rev. Bonds
(Wartburg Senior Hsg., Inc.- Meadowview), 6.2s,
6/1/29 B+/P 872,500
Nassau Cnty., G.O. Bonds, Ser. A, FGIC
1,000,000 6s, 7/1/13 Aaa 1,227,500
2,300,000 6s, 7/1/11 Aaa 2,774,375
825,000 Nassau Cnty., Indl. Dev. Agcy. Rev. Bonds
(North Shore Hlth. Syst.), Ser. D, 5 5/8s, 11/1/09 BB+/P 863,156
5,000,000 Niagara Falls, City School Dist. COP, 5 7/8s, 6/15/19 Baa3 5,506,250
80,000 NY City, City Transitional Fin. Auth. Rev. Bonds, Ser. C,
U.S. Govt. Coll., 5s, 5/1/26 AA+ 92,000
NY City, G.O. Bonds
300,000 Ser. B, 8 1/4s, 6/1/05 AAA 337,500
45,000 Ser. F, 7.6s, 2/1/05 A2 45,695
2,000,000 Ser. I, 5 7/8s, 3/15/14 A 2,165,000
3,525,000 Ser. B, 5 1/2s, 12/1/11 A2 4,005,281
3,000,000 Ser. C, 5 1/4s, 8/1/11 A2 3,341,250
800,000 NY City, IFB, AMBAC, 10.67s, 9/1/11 Aaa 829,000
NY City, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
7,490,000 (Parking Corp.), 8 1/2s, 12/30/22 B-/P 6,375,863
1,300,000 (Staten Island U. Hosp. Project), Ser. A, 6 3/8s, 7/1/31 Baa3 1,373,125
2,575,000 (Brooklyn Polytech. U. Project J), 6 1/8s, 11/1/30 Ba1 2,349,688
NY City, Indl. Dev. Agcy. Rev. Bonds
5,000,000 (Visy Paper Inc.), 7.95s, 1/1/28 B+/P 5,106,250
2,500,000 (Brooklyn Navy Yard Cogen. Partners), 6.2s, 10/1/22 BBB- 2,587,500
1,440,000 (Brooklyn Navy Yard Cogen. Partners), 5.65s, 10/1/28 BBB- 1,351,800
1,000,000 (Field Hotel Assoc.), 3s, 11/1/28 CCC/P 600,000
500,000 NY City, Indl. Dev. Agcy. Special Arpt. Fac. Rev. Bonds
(Airis JFK I LLC), Ser. A, 5 1/2s, 7/1/28 Baa3 502,500
NY City, Indl. Dev. Agcy. Special Fac. Rev. Bonds
2,025,000 (American Airlines, Inc.), 6.9s, 8/1/24 Caa2 916,313
1,250,000 (British Airways), 5 1/4s, 12/1/32 BBB- 862,500
5,000,000 NY City, Muni. Wtr. & Swr. Fin. Auth. IFB, MBIA, 9.3s,
6/15/13 Aaa 5,360,550
500,000 NY City, Muni. Wtr. & Swr. Fin. Auth. VRDN, Ser. A,
FGIC, 1.3s, 6/15/25 VMIG1 500,000
2,000,000 NY City, Transitional Fin. Auth. Rev. Bonds
(Future Tax), AMBAC, 5 1/4s, 8/1/15 Aaa 2,300,000
NY State Dorm. Auth. Rev. Bonds
170,000 (City U. Syst.), Ser. D, 8 3/4s, 7/1/03 AA- 170,952
5,000,000 (State U. Edl. Fac.), Ser. A, 7 1/2s, 5/15/13 AA- 6,718,750
1,950,000 (Our Lady of Mercy), FHA Insd., 6.3s, 8/1/32 AAA 1,985,588
1,000,000 (Mount Sinai Hlth.), Ser. C, 6s, 7/1/26 Ba1 1,038,750
1,340,000 (Schools PG - Issue 2), Ser. E, AMBAC, 5 3/4s, 7/1/19 Aaa 1,551,050
2,650,000 (City U. Syst.), Ser. A, FGIC, 5 3/4s, 7/1/09 AAA 3,117,063
1,310,000 (Mental Hlth. Svcs. Fac.), Ser. B, MBIA, 5 3/4s, 7/1/09 Aaa 1,555,625
1,000,000 (NYU), Ser. 1, AMBAC, 5 1/2s, 7/1/40 Aaa 1,227,500
3,465,000 (School Dist. Fin. Project), Ser. A, MBIA, 5 1/4s, 10/1/11 AAA 4,049,719
2,000,000 (Columbia U.), Ser. B, 5s, 7/1/21 Aaa 2,172,500
725,000 (State U. Edl. Fac.), Ser. B, zero %, 5/15/09 AA- 608,094
750,000 NY State Dorm. Auth. VRDN (Oxford U. Press Inc.),
1.3s, 7/1/23 VMIG1 750,000
NY State Energy Research & Dev. Auth. Gas Fac. IFB
(Brooklyn Union Gas Co.)
2,000,000 Ser. B, 12.251s, 7/1/26 A+ 2,475,000
3,500,000 11.216s, 4/1/20 A+ 4,554,375
NY State Energy Research & Dev. Auth. Poll. Control
Rev. Bonds
1,750,000 (Niagara Mohawk Pwr. Corp.), Ser. A, FGIC, 7.2s,
7/1/29 Aaa 1,890,385
1,000,000 (Lilco Project), Ser. B, 5.15s, 3/1/16 A- 1,030,810
NY State Env. Fac. Corp. Poll. Control Rev. Bonds
70,000 Ser. B, 7 1/2s, 3/15/11 Aa2 70,353
270,000 5 7/8s, 6/15/14 Aaa 286,916
1,740,000 5 7/8s, 6/15/14, Prerefunded Aaa 1,862,131
710,000 Ser. A, 5 7/8s, 6/15/14 Aaa 759,835
4,300,000 NY State Hwy. & Bridge Auth. Rev. Bonds, Ser. B,
FGIC, 6s, 4/1/14 Aaa 4,563,289
35,000 NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
(Mental Hlth. Svcs. Fac.), Ser. D, 7.4s, 2/15/18 AA- 35,568
3,000,000 NY State Thruway Auth. Rev. Bonds, Ser. A, MBIA,
5 1/4s, 4/1/12 AAA 3,502,500
NY State Urban Dev. Corp. Rev. Bonds
1,685,000 (Clarkson Ctr.), 5 1/2s, 1/1/20 AA- 1,994,619
3,345,000 (Clarkson Ctr.), 5 1/2s, 1/1/15 AA- 3,963,825
2,000,000 (Syracuse U. ), 5 1/2s, 1/1/15 AA- 2,370,000
5,000,000 (Ctr. for Indl. Innovation), Ser. A, 5 1/2s, 1/1/13 AA- 5,875,000
355,000 (Correctional Fac.), Ser. A, 5s, 1/1/28 AA- 408,250
1,000,000 Oneida Cnty., Indl. Dev. Agcy. Rev. Bonds
(St. Elizabeth Med.), Ser. A, 5 7/8s, 12/1/29 BB-/P 915,000
1,000,000 Onondaga Cnty., Indl. Dev. Agcy. Rev. Bonds
(Solvay Paperboard, LLC), 7s, 11/1/30 BB-/P 1,062,500
750,000 Orange Cnty., Indl. Dev. Agcy. Rev. Bonds
(Arden Hill Care Ctr. Newburgh), Ser. C, 7s, 8/1/31 BB-/P 772,500
750,000 Otsego Cnty., Indl. Dev. Agcy. Rev. Bonds
(Hartwick College), 5.9s, 7/1/22 Baa3 805,313
Port Auth. NY & NJ Rev. Bonds
1,100,000 (Kennedy Intl. Arpt. - 5th Installment), 6 3/4s, 10/1/19 BB+/P 1,163,250
1,000,000 (Kennedy Intl. Arpt. - 4th Installment), 6 3/4s, 10/1/11 BB+/P 1,073,750
Suffolk Cnty., Indl. Dev. Agcy. Civic Fac. Rev. Bonds
500,000 (Southampton Hosp. Assn.), Ser. B, 7 5/8s, 1/1/30 B-/P 510,000
500,000 (Southampton Hosp. Assn.), Ser. A, 7 1/4s, 1/1/30 B-/P 499,375
1,000,000 (Huntington Hosp. Project), Ser. B, 5 7/8s, 11/1/32 Baa1 1,050,000
Suffolk Cnty., Indl. Dev. Agcy. Rev. Bonds
1,000,000 (Peconic Landing), Ser. A, 8s, 10/1/30 B+/P 1,022,500
2,000,000 (Nissequogue Cogen. Partners Fac.), 5 1/2s, 1/1/23 BB+/P 1,887,500
800,000 Syracuse, Indl. Dev. Agcy. Rev. Bonds
(1st Mtge. - Jewish Home), Ser. A, 7 3/8s, 3/1/21 BB-/P 853,000
Triborough Bridge & Tunnel Auth. Rev. Bonds
1,870,000 MBIA, 5 1/2s, 11/15/21 Aaa 2,251,013
2,000,000 MBIA, 5 1/2s, 11/15/18 AAA 2,435,000
4,000,000 Ser. B, MBIA, 5 1/4s, 11/15/15 Aaa 4,765,000
4,000,000 FGIC, 5 1/4s, 1/1/14 Aaa 4,515,000
1,270,000 AMBAC, 5s, 11/15/12 Aaa 1,470,025
2,000,000 Westchester Cnty., Hlth. Care Corp. Rev. Bonds,
Ser. A, 5 7/8s, 11/1/25 A 2,152,500
720,000 Yonkers, Indl. Dev. Agcy. Civic Fac. Rev. Bonds
(St. John's Riverside Hosp.), Ser. A, 7 1/8s, 7/1/31 BB 753,300
-------------
186,544,976
Puerto Rico (10.4%)
- -------------------------------------------------------------------------------------------------------------------
1,500,000 Children's Trust Fund Tobacco Settlement Rev. Bonds,
5 1/2s, 5/15/39 A- 1,275,000
Cmnwlth. of PR, G.O. Bonds
1,500,000 FGIC, 5 1/2s, 7/1/13 Aaa 1,803,750
1,250,000 (Pub. Impt.), MBIA, 5 1/4s, 7/1/18 AAA 1,476,563
4,700,000 Cmnwlth. of PR, Hwy. & Trans. Auth. IFB, Ser. W, 9.353s,
7/1/08 A 4,872,584
3,000,000 Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds,
Ser. AA, MBIA, 5 1/2s, 7/1/19 Aaa 3,641,250
3,500,000 PR Elec. Pwr. Auth. Rev. Bonds, MBIA, 5s, 7/1/19 AAA 4,046,875
1,000,000 PR Indl. Tourist Edl. Med. & Env. Control Fac. Rev. Bonds
(Cogen. Fac.- AES Project), 6 5/8s, 6/1/26 Baa2 1,052,500
2,000,000 PR Infrastructure Fin. Auth. Special Rev. Bonds, Ser. A,
5 1/2s, 10/1/40 Aaa 2,255,000
1,500,000 U. of PR Rev. Bonds, Ser. O, MBIA, 5 3/8s, 6/1/30 Aaa 1,580,618
-------------
22,004,140
- -------------------------------------------------------------------------------------------------------------------
Total Investments (cost $196,213,544) $208,549,116
- -------------------------------------------------------------------------------------------------------------------
(a) Percentages indicated are based on net assets of $212,038,362.
(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
$11,956,250 or 5.6% 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 IFB, which are securities paying interest rates
that vary inversely to changes in the market interest rates, and VRDN
are the current interest rates at May 31, 2003.
The fund had the following industry group concentrations greater
than 10% at May 31, 2003 (as a percentage of net assets):
Transportation 20.6%
Utilities & power 12.2
The fund had the following insurance concentrations greater than
10% at May 31, 2003 (as a percentage of net assets):
MBIA 21.8%
FGIC 11.6
- ------------------------------------------------------------------------------
Futures Contracts Outstanding at May 31, 2003 (Unaudited)
Market Aggregate Face Expiration Unrealized
Value Value Date Depreciation
- ------------------------------------------------------------------------------
U.S. Treasury Note
10 yr. (Short) $19,186,858 $19,084,081 Sep-03 $(102,777)
- ------------------------------------------------------------------------------
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 $196,213,544) (Note 1) $208,549,116
- -------------------------------------------------------------------------------------------
Interest and other receivables 3,604,173
- -------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 474,183
- -------------------------------------------------------------------------------------------
Receivable for securities sold 500,250
- -------------------------------------------------------------------------------------------
Receivable for variation margin (Note 1) 10,125
- -------------------------------------------------------------------------------------------
Total assets 213,137,847
Liabilities
- -------------------------------------------------------------------------------------------
Payable to subcustodian (Note 2) 13,356
- -------------------------------------------------------------------------------------------
Distributions payable to shareholders 261,646
- -------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 386,943
- -------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 261,793
- -------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 24,719
- -------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 24,405
- -------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 770
- -------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 96,741
- -------------------------------------------------------------------------------------------
Other accrued expenses 29,112
- -------------------------------------------------------------------------------------------
Total liabilities 1,099,485
- -------------------------------------------------------------------------------------------
Net assets $212,038,362
Represented by
- -------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $205,486,024
- -------------------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 56,231
- -------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (5,736,688)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 12,232,795
- -------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to capital shares
outstanding $212,038,362
Computation of net asset value and offering price
- -------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($142,028,715 divided by 15,475,132 shares) $9.18
- -------------------------------------------------------------------------------------------
Offering price per class A share (100/95.25 of $9.18)* $9.64
- -------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($62,913,813 divided by 6,857,970 shares)** $9.17
- -------------------------------------------------------------------------------------------
Net asset value and offering price per class C share
($5,010,776 divided by 544,689 shares)** $9.20
- -------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($2,085,058 divided by 227,437 shares) $9.17
- -------------------------------------------------------------------------------------------
Offering price per class M share (100/96.75 of $9.17)*** $9.48
- -------------------------------------------------------------------------------------------
* 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: $6,041,698
- -------------------------------------------------------------------------------------------
Expenses:
- -------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 518,115
- -------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 119,584
- -------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 7,534
- -------------------------------------------------------------------------------------------
Administrative services (Note 2) 4,690
- -------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 138,420
- -------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 262,944
- -------------------------------------------------------------------------------------------
Distribution fees -- Class C (Note 2) 24,748
- -------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 5,037
- -------------------------------------------------------------------------------------------
Other 60,432
- -------------------------------------------------------------------------------------------
Total expenses 1,141,504
- -------------------------------------------------------------------------------------------
Expense reduction (Note 2) (6,036)
- -------------------------------------------------------------------------------------------
Net expenses 1,135,468
- -------------------------------------------------------------------------------------------
Net investment income 4,906,230
- -------------------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (141,728)
- -------------------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (1,279,805)
- -------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures contracts
during the period 8,104,359
- -------------------------------------------------------------------------------------------
Net gain on investments 6,682,826
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $11,589,056
- -------------------------------------------------------------------------------------------
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 in net assets
- -------------------------------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------------------------------
Net investment income $4,906,230 $10,087,909
- -------------------------------------------------------------------------------------------------------
Net realized loss on investments (1,421,533) (789,826)
- -------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 8,104,359 410,530
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 11,589,056 9,708,613
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders: (Note 1)
- -------------------------------------------------------------------------------------------------------
From tax-exempt income
Class A (3,451,470) (7,180,627)
- -------------------------------------------------------------------------------------------------------
Class B (1,342,167) (2,776,283)
- -------------------------------------------------------------------------------------------------------
Class C (103,787) (169,226)
- -------------------------------------------------------------------------------------------------------
Class M (47,198) (98,124)
- -------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 4) (1,752,003) 8,800,470
- -------------------------------------------------------------------------------------------------------
Total increase in net assets 4,892,431 8,284,823
Net assets
- -------------------------------------------------------------------------------------------------------
Beginning of period 207,145,931 198,861,108
- -------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income
of $56,231 and $94,623, respectively) $212,038,362 $207,145,931
- -------------------------------------------------------------------------------------------------------
* 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 Two months
Per-share May 31 ended
operating performance (Unaudited) Year ended November 30 Nov. 30+
- ------------------------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $8.89 $8.91 $8.62 $8.52 $9.19 $9.27
- ------------------------------------------------------------------------------------------------------------------
Investment operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income .22 .46 .46 .47 .46 .07
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .29 (.01) .29 .09 (.66) (.08)
- ------------------------------------------------------------------------------------------------------------------
Total from
investment operations .51 .45 .75 .56 (.20) (.01)
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------
From net
investment income (.22) (.47) (.46) (.46) (.44) (.07)
- ------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (.03) --
- ------------------------------------------------------------------------------------------------------------------
Total distributions (.22) (.47) (.46) (.46) (.47) (.07)
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.18 $8.89 $8.91 $8.62 $8.52 $9.19
- ------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.86* 5.15 8.89 6.86 (2.33) (.07)*
- ------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $142,029 $137,270 $135,791 $129,535 $142,299 $166,816
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .44* .87 .87 .86 .93 .17*
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.47* 5.18 5.16 5.48 5.13 .79*
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 16.57* 12.00 5.10 6.00 9.36 9.22*
- ------------------------------------------------------------------------------------------------------------------
+ The fiscal year end was advanced from September 30 to November 30.
* 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 A (continued)
- ---------------------------------------------------------
Per-share Year ended
operating performance September 30
- ---------------------------------------------------------
1998
- ---------------------------------------------------------
Net asset value,
beginning of period $9.10
- ---------------------------------------------------------
Investment operations:
- ---------------------------------------------------------
Net investment income .46
- ---------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .21
- ---------------------------------------------------------
Total from
investment operations .67
- ---------------------------------------------------------
Less distributions:
- ---------------------------------------------------------
From net
investment income (.47)
- ---------------------------------------------------------
From net realized gain
on investments (.03)
- ---------------------------------------------------------
Total distributions (.50)
- ---------------------------------------------------------
Net asset value,
end of period $9.27
- ---------------------------------------------------------
Total return at
net asset value (%)(a) 7.55
- ---------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------
Net assets, end of period
(in thousands) $168,032
- ---------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.00
- ---------------------------------------------------------
Ratio of net investment income
to average net assets (%) 5.00
- ---------------------------------------------------------
Portfolio turnover (%) 42.76
- ---------------------------------------------------------
(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 Two months
Per-share May 31 ended
operating performance (Unaudited) Year ended November 30 Nov. 30+
- ------------------------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $8.89 $8.90 $8.61 $8.51 $9.19 $9.26
- ------------------------------------------------------------------------------------------------------------------
Investment operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income .19 .40 .40 .41 .40 .06
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .28 --(c) .29 .10 (.67) (.07)
- ------------------------------------------------------------------------------------------------------------------
Total from
investment operations .47 .40 .69 .51 (.27) (.01)
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------
From net
investment income (.19) (.41) (.40) (.41) (.38) (.06)
- ------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (.03) --
- ------------------------------------------------------------------------------------------------------------------
Total distributions (.19) (.41) (.40) (.41) (.41) (.06)
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.17 $8.89 $8.90 $8.61 $8.51 $9.19
- ------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.40* 4.59 8.19 6.17 (3.08) (.07)*
- ------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $62,914 $62,850 $58,190 $53,894 $65,168 $68,513
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .77* 1.52 1.52 1.51 1.58 .28*
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.14* 4.52 4.51 4.84 4.48 .68*
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 16.57* 12.00 5.10 6.00 9.36 9.22*
- ------------------------------------------------------------------------------------------------------------------
+ The fiscal year end was advanced from September 30 to November 30.
* 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).
(c) Amount represents less than $0.01 per share.
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS
(For a common share outstanding throughout the period)
CLASS B (continued)
- ---------------------------------------------------------
Per-share Year ended
operating performance September 30
- ---------------------------------------------------------
1998
- ---------------------------------------------------------
Net asset value,
beginning of period $9.09
- ---------------------------------------------------------
Investment operations:
- ---------------------------------------------------------
Net investment income .40
- ---------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .21
- ---------------------------------------------------------
Total from
investment operations .61
- ---------------------------------------------------------
Less distributions:
- ---------------------------------------------------------
From net
investment income (.41)
- ---------------------------------------------------------
From net realized gain
on investments (.03)
- ---------------------------------------------------------
Total distributions (.44)
- ---------------------------------------------------------
Net asset value,
end of period $9.26
- ---------------------------------------------------------
Total return at
net asset value (%)(a) 6.86
- ---------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------
Net assets, end of period
(in thousands) $68,547
- ---------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.65
- ---------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.36
- ---------------------------------------------------------
Portfolio turnover (%) 42.76
- ---------------------------------------------------------
(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 $8.91 $8.93 $8.63 $8.52 $8.87
- -----------------------------------------------------------------------------------------------------
Investment operations:
- -----------------------------------------------------------------------------------------------------
Net investment income .19 .39 .39 .40 .14
- -----------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .29 (.01) .30 .11 (.35)
- -----------------------------------------------------------------------------------------------------
Total from
investment operations .48 .38 .69 .51 (.21)
- -----------------------------------------------------------------------------------------------------
Less distributions:
- -----------------------------------------------------------------------------------------------------
From net
investment income (.19) (.40) (.39) (.40) (.14)
- -----------------------------------------------------------------------------------------------------
Total distributions (.19) (.40) (.39) (.40) (.14)
- -----------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.20 $8.91 $8.93 $8.63 $8.52
- -----------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.43* 4.31 8.15 6.14 (2.39)*
- -----------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $5,011 $5,067 $2,880 $350 $247
- -----------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .84* 1.67 1.67 1.66 .61*
- -----------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.07* 4.34 4.31 4.60 1.64*
- -----------------------------------------------------------------------------------------------------
Portfolio turnover (%) 16.57* 12.00 5.10 6.00 9.36
- -----------------------------------------------------------------------------------------------------
++ 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 Two months
Per-share May 31 ended
operating performance (Unaudited) Year ended November 30 Nov. 30+
- ------------------------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $8.88 $8.90 $8.61 $8.51 $9.18 $9.25
- ------------------------------------------------------------------------------------------------------------------
Investment operations:
- ------------------------------------------------------------------------------------------------------------------
Net investment income .21 .44 .43 .44 .43 .07
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .29 (.02) .29 .10 (.66) (.07)
- ------------------------------------------------------------------------------------------------------------------
Total from
investment operations .50 .42 .72 .54 (.23) --
- ------------------------------------------------------------------------------------------------------------------
Less distributions:
- ------------------------------------------------------------------------------------------------------------------
From net
investment income (.21) (.44) (.43) (.44) (.41) (.07)
- ------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- -- -- -- (.03) --
- ------------------------------------------------------------------------------------------------------------------
Total distributions (.21) (.44) (.43) (.44) (.44) (.07)
- ------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $9.17 $8.88 $8.90 $8.61 $8.51 $9.18
- ------------------------------------------------------------------------------------------------------------------
Total return at
net asset value (%)(a) 5.71* 4.84 8.57 6.54 (2.64) (.01)*
- ------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,085 $1,959 $2,000 $2,068 $2,447 $2,558
- ------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) .59* 1.17 1.17 1.16 1.23 .22*
- ------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%) 2.32* 4.88 4.86 5.18 4.84 .74*
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 16.57* 12.00 5.10 6.00 9.36 9.22*
- ------------------------------------------------------------------------------------------------------------------
+ The fiscal year end was advanced from September 30 to November 30.
* 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 (continued)
- ----------------------------------------------------------
Per-share Year ended
operating performance September 30
- ----------------------------------------------------------
1998
- ----------------------------------------------------------
Net asset value,
beginning of period $9.08
- ----------------------------------------------------------
Investment operations:
- ----------------------------------------------------------
Net investment income .43
- ----------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .21
- ----------------------------------------------------------
Total from
investment operations .64
- ----------------------------------------------------------
Less distributions:
- ----------------------------------------------------------
From net
investment income (.44)
- ----------------------------------------------------------
From net realized gain
on investments (.03)
- ----------------------------------------------------------
Total distributions (.47)
- ----------------------------------------------------------
Net asset value,
end of period $9.25
- ----------------------------------------------------------
Total return at
net asset value (%)(a) 7.23
- ----------------------------------------------------------
Ratios and supplemental data
- ----------------------------------------------------------
Net assets, end of period
(in thousands) $2,433
- ----------------------------------------------------------
Ratio of expenses to
average net assets (%)(b) 1.30
- ----------------------------------------------------------
Ratio of net investment income
to average net assets (%) 4.71
- ----------------------------------------------------------
Portfolio turnover (%) 42.76
- ----------------------------------------------------------
(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 Opportunities Fund (the "fund") is registered
under the Investment Company Act of 1940, as amended, as a
non-diversified, open-end management investment company. The fund seeks
as high a level of current income exempt from federal income tax and New
York State and City personal income taxes by investing in a portfolio of
New York tax-exempt securities which Putnam Investment Management, LLC
("Putnam Management"), the fund's manager, a indirect wholly-owned
subsidiary of Putnam, LLC, believes does not involve undue risk to
income or principal.
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.
At November 30, 2002, the fund had a capital loss carryover of
approximately $3,188,000 available to the extent allowed by tax law to
offset future capital gains, if any. The amount of the carryover and the
expiration dates are:
Loss Carryover Expiration
- -------------- ------------------
$2,817,000 November 30, 2008
94,000 November 30, 2009
277,000 November 30, 2010
Pursuant to federal income tax regulations applicable to regulated
investment companies, the fund has elected to defer to its fiscal year
ending November 30, 2003 approximately $189,000 of losses recognized
during the period November 1, 2002 to November 30, 2002.
The aggregate identified cost on a tax basis is $196,213,544, resulting
in gross unrealized appreciation and depreciation of $15,817,530 and
$3,481,958, respectively, or net unrealized appreciation of $12,335,572.
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 following annual rates: the lesser of (i) an annual rate
of 0.50% of the average net assets of the fund or (ii) the following
annual rates: 0.60% of the first $500 million of average net assets,
0.50% of the next $500 million, 0.45% of the next $500 million, 0.40% of
the next $5 billion, 0.375% of the next $5 billion, 0.355% of the next
$5 billion, 0.34% of the next $5 billion and 0.33% thereafter.
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 subsidiary of Putnam, LLC. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
Under the subcustodian contract between the subcustodian bank and PFTC,
the subcustodian bank has a lien on the securities of the fund to the
extent permitted by the fund's investment restrictions to cover any
advances made by the subcustodian bank for the settlement of securities
purchased by the fund. At May 31, 2003, the payable to the subcustodian
bank represents the amount due for cash advanced for the settlement of a
security purchased.
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 $6,036 under these arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $701 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 $10,282 and $165 from the
sale of class A and class M shares, respectively, and received $61,779
and $2,505 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 $242 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 $33,358,054 and $36,468,675, 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 947,871 $8,531,311
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 222,606 1,996,578
- ---------------------------------------------------------------------------
1,170,477 10,527,889
Shares repurchased (1,136,243) (10,197,328)
- ---------------------------------------------------------------------------
Net increase 34,234 $330,561
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class A Shares Amount
- ---------------------------------------------------------------------------
Shares sold 1,927,893 $17,244,552
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 439,224 3,924,584
- ---------------------------------------------------------------------------
2,367,117 21,169,136
Shares repurchased (2,171,364) (19,381,618)
- ---------------------------------------------------------------------------
Net increase 195,753 $1,787,518
- ---------------------------------------------------------------------------
Six months ended May 31, 2003
- ---------------------------------------------------------------------------
Class B Shares Amount
- ---------------------------------------------------------------------------
Shares sold 390,757 $3,506,498
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 98,236 875,511
- ---------------------------------------------------------------------------
488,993 4,382,009
Shares repurchased (703,852) (6,313,848)
- ---------------------------------------------------------------------------
Net decrease (214,859) $(1,931,839)
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class B Shares Amount
- ---------------------------------------------------------------------------
Shares sold 1,389,780 $12,444,674
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 182,740 1,632,843
- ---------------------------------------------------------------------------
1,572,520 14,077,517
Shares repurchased (1,034,510) (9,245,273)
- ---------------------------------------------------------------------------
Net increase 538,010 $4,832,244
- ---------------------------------------------------------------------------
Six months ended May 31, 2003
- ---------------------------------------------------------------------------
Class C Shares Amount
- ---------------------------------------------------------------------------
Shares sold 70,657 $638,801
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 8,308 74,685
- ---------------------------------------------------------------------------
78,965 713,486
Shares repurchased (102,774) (924,295)
- ---------------------------------------------------------------------------
Net decrease (23,809) $(210,809)
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class C Shares Amount
- ---------------------------------------------------------------------------
Shares sold 651,976 $5,865,567
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 12,821 114,954
- ---------------------------------------------------------------------------
664,797 5,980,521
Shares repurchased (418,879) (3,764,214)
- ---------------------------------------------------------------------------
Net increase 245,918 $2,216,307
- ---------------------------------------------------------------------------
Six months ended May 31, 2003
- ---------------------------------------------------------------------------
Class M Shares Amount
- ---------------------------------------------------------------------------
Shares sold 8,353 $74,687
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 3,319 29,736
- ---------------------------------------------------------------------------
11,672 104,423
Shares repurchased (4,942) (44,339)
- ---------------------------------------------------------------------------
Net increase 6,730 $60,084
- ---------------------------------------------------------------------------
Year ended November 30, 2002
- ---------------------------------------------------------------------------
Class M Shares Amount
- ---------------------------------------------------------------------------
Shares sold 8,465 $75,708
- ---------------------------------------------------------------------------
Shares issued in connection
with reinvestment
of distributions 6,918 61,717
- ---------------------------------------------------------------------------
15,383 137,425
Shares repurchased (19,549) (173,024)
- ---------------------------------------------------------------------------
Net decrease (4,166) $(35,599)
- ---------------------------------------------------------------------------
Note 5
Actions by Trustees
On June 13, 2003 the Trustees approved in principle the merger of Putnam
New York Tax Exempt Opportunities Fund into Putnam New York Tax Exempt
Income Fund. The transaction is scheduled to occur in November 2003. It is
subject to a number of conditions, including approval by the shareholders
of the Putnam New York Tax Exempt Opportunities Fund, and there is no
guarantee it will occur.
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 Opportunities Fund. It may also be used as sales literature
when preceded or accompanied by the current prospectus, which gives
details of sales charges, investment objectives, and operating policies
of the fund, and the most recent copy of Putnam's Quarterly Performance
Summary and Putnam's Quarterly Ranking Summary. For more information or
to request a prospectus, call toll free: 1-800-225-1581. The fund's
Statement of Additional Information contains additional information
about the fund's Trustees and is available without charge upon request
by calling 1-800-225-1581.
Visit www.putnaminvestments.com or call a representative at 1-800-225-1581.
NOT FDIC INSURED, MAY LOSE VALUE, NO BANK GUARANTEE
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- ---------------------
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
- ---------------------
For account balances, economic forecasts, and the latest on Putnam funds, visit
www.putnaminvestments.com
SA052-88671 854/228/759 7/03