[SCALES LOGO]
Putnam
Ohio
Tax Exempt
Income Fund II
Semiannual
Report
November 30, 1993
[COVER ARTWORK]
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
6 Portfolio of investments owned
12 Financial statements
19 Fund performance supplement
For investors seeking
high current income
free from federal and
Ohio income taxes,
consistent with capital
preservation
A member
of the Putnam
Family of Funds
<PAGE>
How your
fund performed
For periods ended November 30, 1993
<TABLE>
<CAPTION>
Total return* Fund Lehman
Brothers
Class A Class B Municipal
NAV POP NAV CDSC Bond Index
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------
6 months 3.93% -0.98% -- -- 4.38%
1 year 10.46 5.18 -- -- 11.09
3 years 33.79 27.44 -- -- 34.77
annualized 10.19 8.42 -- -- 10.46
Life-of-class**
Class A shares 43.32 36.57 -- -- 47.67
annualized 9.15 7.88 -- -- 9.95
Class B shares -- -- 1.66% -3.33% 2.65
</TABLE>
<TABLE>
<CAPTION>
Share data Class A Class B
NAV POP NAV
- --------------------------------------- --------- ------- -----------
<S> <C> <C> <C>
May 31, 1993 $ 9.26 $ 9.72 --
July 15, 1993
(inception of class B shares) -- -- $ 9.37
November 30, 1993 $ 9.36 $ 9.83 $ 9.36
======================================= ======= ===== =========
</TABLE>
<TABLE>
Distributions(a) Investment Capital
Number income gains Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A: 6/1/93-11/30/93 6 $ 0.262318 $-- $ 0.262318
Class B: 7/15/93-11/30/93 4 $ 0.165594 $-- $ 0.165594
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Current returns Taxable Taxable
at the end of Class A equivalents+ Class B equivalent+
the period NAV POP NAV POP NAV NAV
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Current dividend rate 5.63% 5.36% 10.08% 9.59% 5.05% 9.04%
Current 30-day yield 4.33 4.12 7.75 7.37 3.62 6.48
----------------------------------------------------------------------------------------
</TABLE>
*Performance data represent past results. Investment return and net asset
value will fluctuate so an investor's shares, when redeemed, may be worth
more or less than their original cost.
**The fund began operations on October 23, 1989 offering shares now known as
class A shares. Effective July 15, 1993, the fund began offering class B
shares. Performance for each share class will differ.
(a)Capital gains, if any, are taxable for federal tax purposes. For some
investors, investment income may be subject to the alternative minimum tax.
+Taxable equivalent rates cited assume the maximum combined state and federal
tax rate of 44.13%. Results for investors subject to lower tax rates would
not be as advantageous, although many such investors would still have the
opportunity to receive attractive tax benefits from a fund investment.
Consult your tax advisor for more guidance.
Terms you need to know
Total return is the change in value of an investment from the beginning to
the end of a period, assuming the reinvestment of all distributions. It may
be shown at net asset value or at public offering price.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not reflecting any
sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase.
Contingent deferred sales charge (CDSC) is a charge applied at the time of
the redemption of shares rather than the time of purchase. It generally
declines and eventually disappears over a stated period.
Class A shares are the shares of your fund offered subject to an initial
sales charge. Your fund's POP includes the maximum 4.75% sales charge.
Class B shares are the shares of your fund offered with no initial sales
charge. Within the first six years of purchase, they are subject to a CDSC
declining from 5% to 1%. After the sixth year, the CDSC no longer applies.
Current dividend rate is calculated by annualizing the net investment income
paid to shareholders in the fund's most recent distribution, then dividing by
the NAV or POP on the last day of the period.
Current 30-day yield, based only on the fund's net investment income
earnings, is calculated in accordance with Securities and Exchange Commission
guidelines.
Taxable equivalent return is the rate at which a taxable investment would
have to generate income to equal the fund's current dividend rate or yield.
Please see the fund performance supplement on page 19 for total return at the
end of the most recent calendar quarter and additional information about
performance comparisons.
<PAGE>
From the
Chairman
[George Putnam photo]
George Putnam
Chairman of the Trustees
(C) Karsh, Ottawa
Dear Shareholder:
I am pleased to report that the six months ended November 30, 1993 represent
another successful semiannual period for Putnam Ohio Tax Exempt Income Fund
II. On a yield basis, the fund's 5.63% dividend rate for class A shares at
net asset value remains attractive in light of the low interest rate
environment which prevailed throughout the period, and underscores the fund's
tax advantages.
Fund manager Thomas Goggins continues to emphasize bonds with improving
credit quality, which have proven valuable in boosting total return
performance. His management expertise is supported by our in-house credit
analysts' ability to identify overlooked or undiscovered bonds in the
municipal market.
The supply of new-issue bonds is expected to be relatively light in Ohio in
1994. As discussed in the Report from Putnam Management that follows, this is
the result of general market factors as well as reduced new issuance at the
state level.
We believe Ohio, like much of the Midwest, is on a more secure economic
footing than the rest of the nation. Many businesses have benefited from the
painful restructuring in the manufacturing sector. Industries, especially
autos, have become more competitive with profit margins increasing due to
greater domestic and foreign sales.
Credit quality remains a vital component of our search for competitive yields
in this low interest rate environment. The fund remains primarily invested in
longer-term bonds, with sector concentrations in health care and industrial
development. Overall, portfolio strategies have changed very little because
they represent what Putnam Management believes is the optimal structure for
meeting the fund's yield and total return objectives.
Respectfully yours,
[George Putnam signature]
George Putnam
January 19, 1994
<PAGE>
Report from
Putnam Management
For the six months ended November 30, 1993, Putnam Ohio Tax Exempt Income
Fund II has ably met its objective of providing a stable source of tax-exempt
income. This becomes all the more apparent when you realize that to keep pace
with the fund's performance, shareholders who pay the maximum combined
federal and state income tax rate of 44.13% would have had to receive 10.08%
from an equivalent taxable investment to match the 5.63% dividend rate at net
asset value for class A shares of the fund. Performance for each share class
will differ.
Low inflation favors bonds Overall, the economic environment for fixed income
investments has remained favorable throughout the period. Inflation is the
primary barometer for fixed income returns and it continues to be fairly
subdued and relatively stable. Current expectations for 1994's inflation rate
run in the neighborhood of 2.5%. Low inflation makes longer-term bonds
particularly attractive, and your fund continues to invest substantially in
high quality, longer-maturity municipal issues.
Given the present low interest rate environment and recent tax increases, it
is hardly surprising that investors continue to steer much of their
investment capital toward municipal bonds. Prices have been driven up by this
ongoing demand. Two additional factors are contributing to these bonds'
appeal.
* Tax-free bonds are yielding approximately 90% of Treasury bonds. The
narrowing differential between taxable and tax-free yields has given
income-oriented investors in virtually all tax brackets an opportunity in the
municipal bond arena not seen since the early 1980s.
* Spurred on by lower interest rates, states and municipalities continue to be
heavily involved in refinancing; in 1993 issuers closed out nearly $275
billion in bonds, well ahead of 1992's record-setting pace of $236 billion.
Despite the current abundance, we expect the supply of new-issue tax-free
bonds to fall to more conventional levels during the new year. Total volume
in 1994 is likely to be $150 billion--down considerably from 1993's
ground-breaking levels. With the recent tax increases boosting demand, it
appears a distinct possibility that existing municipal bond investments could
appreciate further.
Refinancing pace to slow The types of bonds issued in 1993 are also
indications that supply could be easing in the future. Approximately
two-thirds were refunding issues. (The balance was new bond issuance, down
11% from 1992 levels.) Having reissued older bonds at today's attractive
rates, states and
municipalities will be holding on to bonds with more economical coupons,
contributing to a slower pace of refundings in the future.
Major infrastructure developments such as water and sewer projects, airports,
and toll roads are already well in place--reducing the need for new issuance
to pay for large scale public developments.
During the semiannual period, the fund made new investments in two areas. In
both cases, research and timing allowed us to participate in attractive
offerings.
* Education The Clinton administration's Tax Act of 1993 restricted the amount
of student loan financing. As a result, many states rushed to issue
educational bonds before the new tax laws took effect last fall. With such a
great influx of bonds, prices in this sector became rather inexpensive.
Taking advantage of short-term imperfections in the market, we purchased
A-rated Cincinnati Student Loan Program bonds in late September. We believe
the combination of high quality, attractive prices and a 6.23% yield made
these bonds an excellent buy.
[BAR CHART]
Top industry sectors (based on net assets on 11/30/93):
Utilities 14.8%
Housing 13.9%
Hospitals/Health Care 13.0%
Water and Sewer 12.7%
* Urban renewal Municipal bonds are often issued to help rebuild a community
and revitalize depressed areas. For example, Cleveland's urban renewal bonds,
which we purchased in September, are intended to finance construction of the
Rock and Roll Hall of Fame, an endeavor that should attract new business to
the downtown area. This has the potential to broaden the city's tax
base--which could boost the bonds' income stream.
A longer view During the semiannual period, we witnessed occasional upturns
in interest rates, only to see them resume their broad downtrend. The
increases were temporary, the response to periodic encouraging economic news.
We believe the economy will continue to move along at a modest pace, with
relatively low short- and long-term interest rates predominating.
The fundamental outlook for municipal bonds remains positive. In the face of
higher taxes and strengthening demand, shrinking supply could further enhance
the value of the bonds in the portfolio, and thus, the fund's net asset
value.
<PAGE>
Portfolio of
investments owned
November 30, 1993 (Unaudited)
Municipal Bonds and Notes (100%)(a)
<TABLE>
<CAPTION>
Principal Amount Ratings(b) Value
- ---------------------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C> <C>
Ohio (87.5%)
Akron, Bath and Copley, Joint Township Hosp. Dist. Rev. Bonds (Akron General
Med. Ctr. Project)
$ 205,000 prerefunded 10-5/8s,
1/1/12 A $ 210,125
255,000 unrefunded 10-5/8s,
1/1/12 A 261,055
2,750,000 Akron, Wtr. Works Rev. Bonds, American Municipal Bond Insurance Assn.
(AMBAC), 6.55s, 3/1/12 AAA 3,004,375
100,000 Akron-Wilbeth Hsg. Dev. Corp. 1st Mtge. Rev. Bonds, Federal Housing
Administration (FHA) Insd., 7.9s, 8/1/03 A 120,750
5,000,000 Alliance, Wtr. Works Rev. Bonds, Financial Guaranty Insurance Co. (FGIC),
6.65s, 10/15/17 AAA 5,518,750
2,220,000 Bedford, Hosp. Impt. Rev. Bonds (Cmnty. Hosp. Inc.), 8-1/2s, 5/15/09 BB/P 2,444,775
1,500,000 Clermont Cnty., Hosp. Facs. Residual Interest Bonds (RIBS), AMBAC, 10.601s,
10/5/21 AAA 1,865,625
Cleveland, City School Dist. General Obligation (G.O.) Bonds
900,000 9s, 12/1/08 Aaa 1,107,000
2,500,000 8-1/4s, 12/1/08 Aaa 3,128,125
1,000,000 AMBAC, 7.35s, 12/1/08 AAA 1,156,250
4,870,000 Cleveland, G.O. Bonds, Ser. B, AMBAC, 6-3/4s, 10/1/08 AAA 5,600,500
$2,000,000 Cleveland, G.O. RIBS, Ser P-9A, AMBAC, 6.98s, 9/1/04 (acquired 4/30/93, cost
$1,985,480)(c) AAA $2,050,000
2,500,000 Cleveland, Parking Facs. Impt. Rev. Bonds, 8s, 9/15/12 BBB 2,743,750
1,900,000 Cleveland, Pub. Pwr. Syst. Impt. 1st Mtge. Rev. Bonds, 8-3/8s, 8/1/17 AAA 2,208,750
Cleveland, Urban Renewal Increment Rev. Bonds (Rock & Roll Hall of Fame
Project)
1,650,000 6-3/4s, 3/15/18 BBB/P 1,678,875
2,000,000 6-5/8s, 3/15/11 BBB/P 2,022,500
2,000,000 Cleveland, Wtr. Works 1st Mtge. Rev. Bonds,
Ser. F-92A, AMBAC,
6-1/2s, 1/1/21 AAA 2,275,000
1,000,000 Clyde, Elec. Syst. Mtge. Rev. Bonds, Ser. B, 8-3/8s, 11/15/14 BB/P 1,063,750
1,000,000 Columbus, G.O. Bonds, Ser. B, 6-1/2s, 1/1/10 AA 1,097,500
1,750,000 Columbus, Swr. Rev. Bonds, 6-1/4s, 6/1/08 A 1,890,000
2,000,000 Cuyahoga Cnty., Hosp. Impt. Rev. Bonds
(Univ. Hosp. Hlth.
Project), 6s, 1/15/22 AA 2,050,000
900,000 Cuyahoga Cnty., Hosp. Impt. Variable Rate Demand Notes (VRDN)
(Univ. Hosp. of
Cleveland), 2s, 1/1/16 VMIG1/P 900,000
275,000 Dayton, Arpt. Rev. Bonds
(James M. Cox Intl. Arpt.),
AMBAC, 8-1/4s, 1/1/16 AAA 304,560
$ 3,875,000 Erie Cnty., Franciscan Svcs. Corp. Rev. Bonds
(Providence Hosp. Inc.),
6s, 1/1/19 A $3,899,220
2,200,000 Erie Cnty., Hosp. Impt. Rev. Bonds
(Firelands Cmnty. Hosp.), 8-7/8s, 1/1/15 AAA 2,527,250
1,300,000 Franklin Cnty., Convention Facs. Auth. Tax & Lease Rev. Anticipation Bonds,
Municipal Bond Insurance Assn. (MBIA), 7s, 12/1/19 AAA 1,508,000
Franklin Cnty., Rev. Bonds (Online Computer Library Ctr. Project)
1,250,000 9-3/4s, 7/15/09 BBB/P 1,350,000
2,500,000 6s, 4/15/09 BBB/P 2,512,500
500,000 5-1/2s, 4/15/00 BBB/P 503,750
600,000 5-1/4s, 4/15/99 BBB/P 600,750
700,000 Gateway Econ. Dev. Corp. Excise Tax Rev. Bonds,
7-1/2s, 9/1/05 A 810,250
3,850,000 Geauga Cnty., Hosp. Impt. Rev. Bonds (Geauga Hosp. Assn. Project), 8-3/4s,
11/15/13 Baa 4,254,250
Granville, School Dist. G.O. Bonds
1,100,000 AMBAC, zero %, 12/1/15 AAA 314,875
1,375,000 AMBAC, zero %, 12/1/13 AAA 445,155
1,380,000 AMBAC, zero %, 12/1/11 AAA 500,250
1,400,000 Hamilton Cnty., Hlth. Syst. VRDN (Franciscan Sisters of Poor Hlth.), Ser. A,
2s, 3/1/17 VMIG1 1,400,000
Hamilton, Elec. Syst. Mtge. Rev. Bonds
700,000 Ser. B, FGIC, 8s,
10/15/22 AAA 825,125
$ 2,600,000 Ser. B, FGIC, 7-1/4s,
10/15/23 AAA $2,938,000
1,000,000 Hamilton, Gas Syst. Rev. Bonds, Ser. A, MBIA, 4-3/4s, 10/15/23(d) AAA 894,270
1,000,000 Hubbard, Swr. Syst. Mtge. Rev. Bonds, 8.8s, 11/15/17 BBB/P 1,147,500
1,320,000 Kirtland, G.O. Bonds, AMBAC, 7-1/2s, 12/1/16 AAA 1,551,000
377,982 Lake Cnty., Indl. Dev. Rev. Bonds (Madison Inn Hlth. Ctr. Project), FHA
Insd., 12s, 5/1/14 BBB/P 405,855
872,070 Logan Cnty., Indl. Dev. Rev. Bonds (Indian Lake Hlth. Project), FHA Insd.,
12s, 3/15/14 BBB/P 1,024,680
18,000,000 Lucas Plaza Hsg. Dev. Corp. Mtge. Rev. Bonds, FHA Insd., zero %, 6/1/24 Aaa 2,790,000
460,000 Marion Cnty., Hlth. Care Fac. Rev. Bonds (United Church Homes Inc.), 8-7/8s,
12/1/12 BBB/P 507,725
875,000 Montgomery Cnty., Hlth. Care Facs. Rev. Bonds (Friendship Village of Dayton),
Ser. A, 9-1/4s, 2/1/16 BB/P 960,313
1,895,000 Montgomery-Conifers, Hsg. Dev. Corp. Mtge. Rev. Bonds (Conifers Project), FHA
Insd., 8.45s, 6/1/28 A 2,006,331
2,800,000 Mount Vernon, Hosp. Rev. Bonds (Knox Cmnty. Hosp.), 7-7/8s, 6/1/12 BB/P 2,992,500
$ 1,250,000 Northeast OH Regl. Swr. Waste Wtr. Impt. Rev. Bonds, AMBAC, 6-1/2s, 11/15/16 Aaa $1,381,250
3,000,000 OH Cap. Corp. Multi-Fam. Hsg. Rev. Bonds,
Ser. A, Federal National Mortgage Assn., 7.6s, 11/1/23 AAA 3,180,000
OH Hsg. Fin. Agcy. Single Fam. Mtge. Rev. Bonds
55,000 Ser. 85-B, FGIC, 9s, 1/15/09 AAA 55,963
1,101,000 Ser. B, Government National Mortgage Assn. (GNMA) Coll., 8-1/4s, 12/15/19 AAA 1,116,139
780,000 Ser. C, GNMA Coll., 8-1/8s, 3/1/20 AAA 836,550
740,000 Ser. C, GNMA Coll., 7.85s, 9/1/21 AAA 798,275
1,890,000 Ser. A, GNMA Coll., 7.65s, 3/1/29 AAA 2,076,638
10,000,000 Ser. 4, GNMA Coll., stepped-coupon zero % (9s, 9/1/01), 9/1/18(e) AAA 7,362,500
1,000,000 Ser. 85-A, FGIC, zero %, 1/15/15 AAA 137,500
7,000,000 OH Hsg. Fin. Agcy. Single Fam. Mtge. RIBS,
Ser. A-2, GNMA Coll., 10.896s, 3/1/31 AAA 8,006,250
OH State Air Quality Dev. Auth. Poll. Control Rev. Bonds
4,125,000 (Cincinnati Gas & Elec.), 10-1/8s, 12/1/15 Baa 4,697,344
250,000 (Toledo Edison), Ser. B, 8s, 5/15/19 Baa 281,563
3,000,000 (PA Pwr. Co.), Ser. A, AMBAC, 6.45s, 5/1/27 AAA 3,255,000
$ 7,750,000 OH State Air Quality Dev. Auth. Rev. Bonds (Columbus & Southern OH), Ser. A,
FGIC,
6-3/8s, 12/1/20 AAA $8,340,938
OH State Building Auth. Rev. Bonds
100,000 (Sen. Ocasek Govt. Office Building), Ser. A, 9.1s, 10/1/04 A 111,625
1,000,000 (State Facs. Data Ctr.), Ser. A, 5.9s, 10/1/07 A 1,071,250
3,900,000 (Green Building), Ser. A, 4-3/4s, 4/1/14 A 3,573,375
OH State Econ. Dev. Rev. Bonds
1,615,000 (Sponge, Inc. Project), Ser. 5-A, 8-3/8s, 6/1/14 A 1,845,138
720,000 (Superior Forge & Steel Corp.), Ser. 3, 7-5/8s, 6/1/11 A 806,400
7,640,000 OH State G.O. Bonds, zero %, 8/1/13(d) AA 2,626,250
1,000,000 OH State Higher Ed. Fac. Rev. Bonds (Kenyon College Project), 5-3/8s,
12/1/16(d) A 971,250
OH State Wtr. Dev. Auth. Poll. Control Facs. Rev. Bonds
550,000 (PA Pwr. Co. Project), 12s, 12/1/14 Baa 609,813
4,400,000 (OH Edison Co. Project), 10-5/8s, 7/1/15 Baa 4,977,500
2,500,000 (PA Pwr. Co. Project), Ser. B, 8.1s, 9/1/18 Baa 2,768,750
2,750,000 (Cleveland Elec. Illuminating Project), 8s, 10/1/23 Baa 3,124,688
2,195,000 (Toledo Edison Project), Ser. A, 7.4s, 11/1/22 Baa 2,384,319
OH State Wtr. Dev. Auth. Rev. Bonds
$1,760,000 AMBAC, 9-3/8s, 12/1/18 AAA $ 1,951,188
1,000,000 Ser. A, AMBAC, 7-3/4s, 12/1/09 AAA 1,121,250
3,425,000 (Mid-American Waste Syst. Inc. Project), 7-3/4s, 9/1/07 BBB/P 3,733,250
400,000 Oberlin, 1st Mtge. Swr. Rev. Bonds, Bond Investors Guaranty Insurance, 7.8s,
12/15/08 AAA 467,500
500,000 Olmsted Falls, Local School Dist. Rev. Bonds,
FGIC, 7.05s, 12/15/11 AAA 573,125
2,275,000 Orrville, Elec. Syst. Mtge. Rev. Bonds, Ser. A & B, AMBAC, 7-1/2s, 12/1/10 AAA 2,619,094
1,000,000 Oxford, Wtr. Supply Syst. Mtge. Rev. Bonds,
AMBAC, 7-5/8s, 12/1/14 AAA 1,166,250
890,000 Portage Cnty., Hosp. Rev. Bonds (Robinson Memorial Hosp.), 9-3/8s, 10/1/07 A 975,663
Sandusky Cnty., Hosp. Fac. Rev. Bonds (Memorial Hosp. Project),
1,750,000 7-3/4s, 12/1/09 BB 1,795,938
795,000 7-3/8s, 12/1/01 BB 806,925
2,600,000 Southwest OH Local School Dist. G.O. Bonds
(Hamilton Cnty.), AMBAC, 7.65s,
12/1/10 AAA 3,029,000
800,000 Stark Cnty., Hosp. Rev. Bonds (Doctors Hosp. Inc.), 8-5/8s, 4/1/18 BBB/P 887,000
Student Loan Funding Corp. of Cincinnati Rev. Bonds
$2,500,000 Ser. B, 6-3/4s, 1/1/07 BBB $ 2,590,625
1,000,000 Ser. B, 6.2s, 8/1/12 A 1,020,000
1,100,000 Tuscarawas Cnty., Hosp. Facs. Rev. Bonds
(Union Hosp. Project), Ser. A, 6-1/2s, 10/1/21 Baa 1,071,125
2,500,000 U. of Cincinnati General Receipts Rev. Bonds,
Ser. G, 7s, 6/1/11 AA 2,821,875
1,150,000 Washington, Wtr. Syst. Mtge. Rev. Bonds,
AMBAC, zero %,
12/1/09(d) AAA 487,313
Zanesville, Hsg. Dev. Corp. Mtge. Rev. Bonds
220,000 7-3/8s, 10/1/21 AAA 264,550
205,000 7-3/8s, 10/1/20 AAA 246,513
185,000 7-3/8s, 10/1/19 AAA 222,463
180,000 7-3/8s, 10/1/18 AAA 216,450
160,000 7-3/8s, 10/1/17 AAA 192,400
155,000 7-3/8s, 10/1/16 AAA 186,388
--------------------------------------------------------------------------------------------------------------------------------
178,213,717
--------------------------------------------------------------------------------------------------------------------------------
Puerto Rico (9.9%)
1,500,000 Cmnwlth. of Puerto Rico, Aqueduct & Swr. Auth. Rev.
Bonds, Ser. A, 7-7/8s, 7/1/17 Baa 1,723,125
1,000,000 Cmnwlth. of Puerto Rico, Elec. Pwr. Auth. Rev. Bonds,
Ser. N, 7s, 7/1/07 A 1,103,750
Cmnwlth. of Puerto Rico, Hwy. Auth. Rev. Bonds
50,000 Ser. O, 8s, 7/1/05 AAA 58,625
1,350,000 Ser. Q, 7-3/4s, 7/1/16 AAA 1,621,688
Cmnwlth. of Puerto Rico, Pub. Impt. G.O. Bonds
3,600,000 7.7s, 7/1/20 AAA 4,315,500
8,000,000 stepped-coupon zero % (8s, 7/1/96), 7/1/02(e) A 8,060,000
$ 225,000 Cmnwlth. of Puerto Rico, Urban Renewal & Hsg. Corp. Rev. Bonds, 7-7/8s,
10/1/04 A $ 261,000
950,000 Puerto Rico, Muni. Fin. Agcy. Rev. Bonds,
Ser. A, 8-1/4s, 7/1/08 A 1,099,625
Puerto Rico, Pub. Buildings Auth. Ed. & Hlth. Facs. Rev. Bonds
1,500,000 Ser. H, 7-7/8s, 7/1/16 A 1,723,125
330,000 Ser. H, zero %, 7/1/05 A 178,200
--------------------------------------------------------------------------------------------------------------------------------
20,144,638
--------------------------------------------------------------------------------------------------------------------------------
Virgin Islands (2.6%)
$2,800,000 Virgin Islands, Pub. Fin. Auth. Rev. Bonds
(Matching Fund Loan Notes), Ser. A, 7-1/4s, 10/1/18 BBB/P $ 3,104,500
2,000,000 Virgin Islands, Wtr. & Pwr. Auth. Elec. Syst. Rev. Bonds, Ser. A, 7.4s,
7/1/11 BBB/P 2,280,000
--------------------------------------------------------------------------------------------------------------------------------
5,384,500
--------------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $191,462,471)(f) $203,742,855
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes
The accompanying notes are an integral part of these financial statements.
(a) Percentages indicated are based on net assets of $203,723,656, which
correspond to a net asset value per class A share and class B share of $9.36
and $9.36, respectively.
(b) The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at November 30, 1993 for the securities listed.
Ratings are generally ascribed to securities at the time of issuance. While
the rating agencies may from time to time revise such ratings, they undertake
no obligation to do so, and the ratings indicated do not necessarily
represent ratings which the agencies would ascribe to these securities at
November 30, 1993. Securities rated by Putnam are indicated by "/P" and are
not publicly rated.
(c) Restricted as to public resale. At the date of acquisition this security
was valued at cost. There were no outstanding unrestricted securities of the
same class as that held. Total market value of the restricted security owned
at November 30, 1993 was $2,050,000 or 1.0% of net assets.
(d) These securities, valued at $4,979,083 or 2.4% of the Fund's net assets,
have been purchased on a "forward commitment" basis--that is, the Fund has
agreed to take delivery of and make payment for these securities beyond the
settlementtime of five business days after the trade date and subsequent to
the date of this report. The purchase price and interest rate of these
securities are fixed at the trade date, although the Fund does not earn any
interest on these securities until the settlement date.
(e) The interest rate and date shown parenthetically represent the new
interest rate to be paid and the date the Fund will begin accruing this rate.
(f) The aggregate identified cost on a tax basis is $191,462,721, resulting
in gross unrealized appreciation and depreciation of $13,577,044 and
$1,296,910, respectively, or net unrealized appreciation of $12,280,134.
The rates shown on Variable Rate Demand Notes (VRDN) and Residual Interest
Bonds (RIBS) are the current interest rates at November 30, 1993, which are
subject to change based on the terms of the security.
The Fund had the following industry group concentrations greater than 10% at
November 30, 1993 (as a percentage of net assets):
Utilities 14.8%
Housing 13.9
Hospitals/Health Care 13.0
Water and Sewer 12.7
The Fund had the following insurance group concentrations greater than 10% at
November 30, 1993 (as a percentage of net assets):
AMBAC 16.7%
<PAGE>
Statement of
assets and liabilities
November 30, 1993 (Unaudited)
<TABLE>
================================================================== ============= =============
<S> <S> <C> <C>
Assets Investments in securities, at value (identified cost $191,462,471)
(Note 1) $203,742,855
Cash 16,118
Interest receivable 3,715,639
Receivable for shares of the Fund sold 1,561,907
Receivable for securities sold 804,037
Unamortized organization expenses (Note 1) 6,845
------------------------------------------------------------------ ------------- -------------
Total assets 209,847,401
Liabilities Payable for shares of the Fund repurchased $ 62,660
Payable for securities purchased 4,968,936
Distributions payable to shareholders 621,066
Payable for compensation of Manager (Note 2) 298,251
Payable for administrative services (Note 2) 1,137
Payable for compensation of Trustees (Note 2) 128
Payable for distribution fees (Note 2) 69,889
Payable for investor servicing and custodian fees (Note 2) 58,252
Other accrued expenses 43,426
------------------------------------------------------------------ ------------- -------------
Total liabilities 6,123,745
------------------------------------------------------------------ ------------- -------------
Net assets $203,723,656
------------------------------------------------------------------ ------------- -------------
Represented by Paid-in capital (Note 4) $188,607,309
Distributions in excess of net investment income (182,983)
Accumulated net realized gain on investments 3,018,946
Net unrealized appreciation of investments 12,280,384
------------------------------------------------------------------ ------------- -------------
Total--Representing net assets applicable to capital shares
outstanding $203,723,656
------------------------------------------------------------------ ------------- -------------
Computation of Net asset value and redemption price of class A shares
net asset value ($195,550,622 divided by 20,898,145 shares) $9.36
and offering price Offering price per share (100/95.25 of $9.36)* $9.83
Net asset value and offering price of class B shares
($8,173,034 divided by 873,586 shares)** $ 9.36
------------------------------------------------------------------ ------------- -------------
</TABLE>
* 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.
<PAGE>
Statement of
operations
Six months ended November 30, 1993 (Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
================================================================== ============= =============
Tax exempt interest income $6,275,168
Expenses:
Compensation of Manager (Note 2) $576,818
Investor servicing and custodian fees (Note 2) 112,504
Compensation of Trustees (Note 2) 6,558
Auditing 10,826
Legal 11,001
Postage 16,644
Reports to shareholders 10,203
Registration fees 5,989
Administrative services (Note 2) 2,122
Amortization of organization expenses (Note 1) 1,407
Distribution fees--class A (Note 2) 188,504
Distribution fees--class B (Note 2) 13,404
Other 3,650
------------------------------------------------------------------ ------------- -------------
Total expenses 959,630
------------------------------------------------------------------ ------------- -------------
Net investment income 5,315,538
------------------------------------------------------------------ ------------- -------------
Net realized gain on investments (Notes 1 and 3) 2,328,641
Net unrealized depreciation of investments during the period (521,636)
------------------------------------------------------------------ ------------- -------------
Net gain on investments 1,807,005
------------------------------------------------------------------ ------------- -------------
Net increase in net assets
resulting from operations $7,122,543
------------------------------------------------------------------ ------------- -------------
</TABLE>
<PAGE>
Statement of
changes in net assets
<TABLE>
<CAPTION>
Six months
ended Year ended
November 30 May 31
1993* 1993
================================================================== ==================================
<S> <S> <C> <C>
Increase in Operations:
net assets
Net investment income $ 5,315,538 $ 9,344,800
Net realized gain on investments 2,328,641 1,054,686
Net unrealized appreciation (depreciation) of investments (521,636) 7,199,495
------------------------------------------------------------------ ------------- -------------
Net increase in net assets resulting from operations 7,122,543 17,598,981
Distributions to shareholders
from net investment income:
class A (5,257,964) (9,449,262)
class B (70,814) --
Increase from capital share transactions (Note 4) 24,051,097 29,420,327
------------------------------------------------------------------ ------------- -------------
Total increase in net assets 25,844,862 37,570,046
Net assets
Beginning of year 177,878,794 140,308,748
------------------------------------------------------------------ ------------- -------------
End of period (including distributions in excess of net investment
income of $182,983 and $169,743, respectively) $203,723,656 $177,878,794
------------------------------------------------------------------ ------------- -------------
</TABLE>
<PAGE>
Financial highlights*
(For a share outstanding
throughout the period)
<TABLE>
<CAPTION>
For the period
October 23,
For the period 1989
July 15, 1993 (commencement
(commencement Six months of operations)
of operations) to ended to
November 30 November 30 Year ended May 31 May 31
------------------ ----------- ---------------------------- ---------------
1993**+ 1993** 1993 1992 1991 1990
------------------ ----------- -------- ------ ------- ---------------
class B class A
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 9.37 $ 9.26 $ 8.78 $ 8.55 $ 8.40 $ 8.50
- ---------------------------------------------------------------------------------------------------------------------------
Investment Operations
Investment Income .17 .26 .54 .57(a) .59(a) .35(a)
Net Realized and Unrealized Gain
(Loss) on Investments (.01) .10 .48 .23 .14 (.10)
- ---------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .16 .36 1.02 .80 .73 .25
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
Net Investment Income (.17) (.26) (.54) (.57) (.58) (.35)
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions (.17) (.26) (.54) (.57) (.58) (.35)
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.36 $ 9.36 $ 9.26 $ 8.78 $ 8.55 $ 8.40
- ---------------------------------------------------------------------------------------------------------------------------
Total Investment Return at Net
Asset Value (%)(b) 4.37(c) 7.86(c) 11.94 9.65 9.09 4.90(c)
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets, End of Period
(in thousands) $8,173 $195,551 $177,879 $140,309 $21,136 $ 7,684
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net
Assets (%) 1.60(c) 1.00(c) 1.04 .90(a) .87(a) .78(a)(c)
Ratio of Net Investment Income to
Average Net Assets (%) 4.41(c) 5.54(c) 5.90 6.41(a) 6.83(a) 6.92(a)(c)
Portfolio Turnover (%) 21.07(d) 21.07(d) 21.57 15.20(e) 17.40 23.27(d)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Financial highlights for periods ended through May 31, 1992 have been
restated to conform with requirements issued by the SEC in April, 1993.
** Unaudited.
+ Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
(a) Reflects a voluntary expense limitation, and, during the period ended May
31, 1990, a voluntary absorption of expenses incurred by the Fund. As a
result, net investment income of the Fund for the years ended 1992, 1991, and
the period ended May 31, 1990, reflect expense reductions of approximately
$0.01, $0.05, and $0.05 per share, respectively.
(b) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(c) Annualized.
(d) Not annualized.
(e) Portfolio turnover excludes the impact of assets received from the
acquisition of Putnam Ohio Tax Exempt Income Fund. See Note 5.
<PAGE>
Notes to
financial statements
November 30, 1993 (Unaudited)
Note 1 Significant accounting policies
The Fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company. The Fund seeks as
high a level of current income exempt from federal income tax and Ohio
personal income tax as Putnam Management believes is consistent with
preservation of capital by investing primarily in a portfolio of Ohio tax
exempt securities.
The Fund offers both class A and class B shares. The Fund commenced its
public offering of class B shares on July 15, 1993. Class A shares are sold
with a maximum front-end sales charge of 4.75%. Class B shares do not pay a
front-end sales charge but pay a higher ongoing distribution fee than class A
shares, and may be subject to a contingent deferred sales charge if those
shares are redeemed within six years of purchase. Expenses of the Fund are
borne pro-rata by the holders of both classes of shares, except that each
class bears expenses unique to that class (including the distribution fees
applicable to such class) and 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
policies are in conformity with generally accepted accounting principles.
A) Security valuation Tax exempt bonds and notes are stated on the basis of
valuations provided by a pricing service, approved by the Trustees, which
uses information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value.
B) Security transactions and related investment income Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Interest income is recorded on the accrual basis.
C) Federal taxes It is the policy of the Fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the Fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986. Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation of securities held and excise tax on
income and capital gains.
D) Distributions to shareholders Income dividends are recorded daily by the
Fund and are distributed monthly. Capital gains distributions, if any, are
recorded on the ex-dividend date and paid annually.
E) Amortization of bond premium and discount Any premium resulting from the
purchase of securities in excess of maturity value is amortized on a
yield-to-maturity basis. Discount on zero-coupon bonds is accreted according
to the effective yield method.
F) Unamortized organization expenses Expenses incurred by the Fund in
connection with its organization, its registration with the Securities and
Exchange Commission and with various states, and the initial public offering
of its shares aggregated $15,011. These expenses are being amortized over a
five-year period based on current and projected net asset levels.
Note 2 Management fee, administrative services, and other transactions
Compensation of Putnam Investment Management, Inc. ("Putnam Management,"
formerly known as The Putnam Management Company, Inc.), the Fund's Manager, a
wholly-owned subsidiary of Putnam Investments, Inc. (formerly known as The
Putnam Companies, Inc.), for management and investment advisory services is
paid quarterly based on the average net assets of the Fund. Such fee is based
on the following annual rates: 0.6% of the first $500 million of average net
assets, 0.5% of the next $500 million, 0.45% of the next $500 million, and
0.4% of any amount over $1.5 billion, subject to reduction in any year by the
amount of certain
brokerage commissions and fees (less expenses) received by affiliates of
Putnam Management on the Fund's portfolio transactions.
The Fund also reimburses Putnam Management for the compensation and related
expenses of certain officers of the Fund and their staff who provide
administrative services to the Fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees. For the six months
ended November 30, 1993, the Fund paid $2,122 for these services.
Trustees of the Fund receive an annual Trustee's fee of $1,060 and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of the
Trustees receive additional fees for attendance at certain committee
meetings.
Custodial functions for the Fund are provided by Putnam Fiduciary Trust
Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing
agent functions are provided by Putnam Investor Services, a division of PFTC.
Fees paid for these investor servicing and custodial functions for the six
months ended November 30, 1993 amounted to $112,504.
Investor servicing and custodian fees reported in the Statement of operations
for the six months ended November 30, 1993 have been reduced by credits
allowed by PFTC.
The Fund has adopted a distribution plan with respect to its class A shares
(the "Class A Plan") pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as amended. The purpose of the Class A Plan is to compensate Putnam
Mutual Funds Corp. (formerly known as Putnam Financial Services, Inc.), a
wholly-owned subsidiary of Putnam Investments, Inc., for services provided
and expenses incurred by it in distributing class A shares. The Trustees have
approved payment by the Fund to Putnam Mutual Funds Corp. at an annual rate
of 0.2% of the average net assets attributable to class A shares. For the six
months ended November 30, 1993, the Fund paid distribution fees of $188,504
for class A shares.
The Fund has been informed that during the six months ended November 30,
1993, Putnam Mutual Funds Corp., acting as an underwriter, received net
commissions of $44,485 from the sale of class A shares of the Fund.
A deferred sales charge of up to 1.00% is assessed on certain redemptions of
class A shares purchased as part of an investment of $1 million or more. For
the six months ended November 30, 1993, Putnam Mutual Funds Corp., acting as
underwriter, did not receive any commissions on class A redemptions.
The Fund has adopted a separate distribution plan with respect to its class B
shares (the "Class B Plan") pursuant to Rule 12b-1 under the Investment
Company Act of 1940. The purpose of the Class B Plan is to compensate Putnam
Mutual Funds Corp. for services provided and expenses incurred by it in
distributing class B shares. The Class B Plan provides for payments by the
Fund to Putnam Mutual Funds Corp. at an annual rate of 0.85% of the Fund's
average net assets attributable to class B shares. For the period July 15,
1993 (commencement of class B operations) to November 30, 1993, the Fund paid
distribution fees of $13,404 for class B shares.
Putnam Mutual Funds Corp. also receives the proceeds of the contingent
deferred sales charges levied on class B share redemptions within six years
of purchase. The charge is based on declining rates, which begin at 5.00% of
the net asset value of the redeemed shares. Putnam Mutual Funds Corp.
received contingent deferred sales charges of $2,375 from such redemptions
during the period July 15, 1993 (commencement of class B operations) to
November 30, 1993.
Note 3 Purchases and sales of securities
During the six months ended November 30, 1993, purchases and sales of
investment securities other than short-term municipal obligations aggregated
$64,588,579 and $39,705,783, respectively. Purchases and sales of short-term
municipal obligations aggregated $9,800,000 and $7,500,000, respectively. In
determining the net gain or loss on securities sold, the cost of securities
has been determined on the identified cost basis.
Note 4 Capital shares
At November 30, 1993, there was an unlimited number of shares of beneficial
interest authorized, divided into two classes, class A and class B capital
stock. Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Six months ended Year ended
November 30 May 31
---------------------- ---------------------------
1993 1993
---------------------- ---------------------------
class A Shares Amount Shares Amount
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,034,467 $19,121,859 4,180,525 $ 37,989,323
Shares issued in connection
with
reinvestment of distributions 349,926 3,291,598 657,287 5,961,518
2,384,393 22,413,457 4,837,812 43,950,841
Shares repurchased (700,183) (6,581,696) (1,602,335) (14,530,514)
--------------------------------------------------------------------------------------
Net increase 1,684,210 $15,831,761 3,235,477 $ 29,420,327
--------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
July 15, 1993
(commencement
of operations) to
November 30
----------------------
1993
----------------------
class B Shares Amount
-----------------------------------------------------------------------------
<S> <C> <C>
Shares sold 884,032 $8,318,489
Shares issued in connection
with reinvestment of
distributions 3,643 34,436
-----------------------------------------------------------------------------
887,675 8,352,925
Shares repurchased (14,089) (133,589)
-----------------------------------------------------------------------------
Net increase 873,586 $8,219,336
-----------------------------------------------------------------------------
</TABLE>
Note 5
Acquisition of
Putnam
Ohio Tax
Exempt Income
Fund
On March 9, 1992, the exchange date, the Fund acquired the net assets of
Putnam Ohio Tax Exempt Income Fund (POTEIF) by a tax-free exchange approved
by the shareholders.
<TABLE>
<CAPTION>
POTEIF
----------------------------------------------------------------------------------
<S> <C>
Net assets of POTEIF on March 6, 1992, valuation date (including
net unrealized appreciation of $4,001,833) $100,718,399
Shares of the Fund issued in the acquisition 11,537,045
----------------------------------------------------------------------------------
</TABLE>
Immediately following the acquisition on March 6, 1992, the aggregate net
assets of the Fund were $135,992,128.
Note 6 Reclassification of Capital Account
Effective June 1, 1993, Putnam Ohio Tax Exempt Income Fund II has adopted the
provisions of Statement of Position 93-2 "Determination, Disclosure and
Financial Statement Presentation of Income, Capital Gain and Return of
Capital Distributions by Investment Companies (SOP)." The purpose of this SOP
is to report the accumulated net investment income (loss) and accumulated net
realized gain (loss) accounts in such a manner as to approximate amounts
available for future distributions (or to offset future realized capital
gains) and to achieve uniformity in the presentation of distributions by
investment companies.
As a result of the SOP, the Fund has reclassified $463,167 to decrease
accumulated net realized gain with an increase of $463,167 to additional
paid-in capital. These adjustments represent the cumulative amounts necessary
to report these balances through May 31, 1993, the close of the Fund's most
recent fiscal year-end, for financial reporting and tax purposes.
<PAGE>
Fund
performance
supplement
Putnam Ohio Tax Exempt Income Fund II is a portfolio managed for high current
income free from federal and state income taxes and consistent with capital
preservation. This fund invests at least 75% of its portfolio in
investment-grade tax-exempt bonds. The balance may be invested in securities
rated below investment-grade.
The Lehman Brothers Municipal Bond Index is an unmanaged list of
approximately 8,000 investment-grade, fixed rate, long-term maturity
tax-exempt bonds, which are selected to be representative of the market in
terms of price movement and sector distribution. The average quality of bonds
held in the index may differ from the average quality of those bonds in which
the fund invests. The index does not include bonds in certain of the lower
rating classifications in which the fund may invest. The index does not take
into account brokerage commissions or other costs and may pose different
risks from the fund. Total return performance for the index reflects
mathematically derived changes of market price and reinvestment of interest
payments, as computed by Lehman Brothers. The fund's portfolio contains
securities that do not match those in the index.
This fund performance supplement has been prepared by Putnam Management to
provide further detail about the fund and the indexes used for performance
comparisons. It is not part of the portfolio of investments owned or the
financial statements and notes.
<TABLE>
<CAPTION>
Total return at end of most recent calendar quarter
Periods ended December 31, 1993
Class A Class B
NAV POP NAV CDSC
---------------------------- ------- ------ ----- -------
<S> <C> <C> <C> <C>
1 year 10.68% 5.42% -- --
3 years 34.74 28.35 -- --
annualized 10.45 8.67 -- --
Life-of-class*
Class A shares 45.15 38.35 -- --
annualized 9.30 8.05 -- --
Class B shares -- -- 2.93% -2.05%
---------------------------- ----- ---- --- ------
</TABLE>
*The fund began operations on October 23, 1989, offering shares now known as
class A shares. Effective July 15, 1993, the fund began offering class B
shares. Performance for each share class will differ.
<PAGE>
Putnam
Ohio
Tax Exempt
Income Fund II
Fund information
Investment manager
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
Marketing services
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
[DALBAR LOGO]
Putnam Investor Services has
received the DALBAR award
each year since the award's
1990 inception.
In more than 10,000 tests
of 38 shareholder
service components,
Putnam outperformed
the industry standard
in every category.
A41/B09-10028
<PAGE>
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
John R. Verani
Vice President
Gary N. Coburn
Vice President
James E. Erickson
Vice President
Thomas Goggins
Vice President
and Fund Manager
William N. Shiebler
Vice President
John D. Hughes
Vice President
and Treasurer
Paul O'Neil
Vice President
Beverly Marcus
Clerk and
Assistant Treasurer
Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Hans H. Estin, John A. Hill,
Elizabeth T. Kennan, Lawrence J. Lasser,
Robert E. Patterson, Donald S. Perkins,
George Putnam, III, A.J.C. Smith,
W. Nicholas Thorndike
This report is for the information of shareholders of Putnam Ohio Tax Exempt
Income Fund II. 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.
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
<PAGE>
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS:
(1) Bold and italic typefaces are displayed in normal type.
(2) Headers (e.g., the name of the fund) and footers (e.g., page
numbers and "The accompanying notes are an integral part of these
financial statements") are omitted.
(3) Because the printed page breaks are not reflected, certain tabular
and columnar headings and symbols are displayed differently in
this filing.
(4) Bullet points and similar graphic signals are omitted.
(5) Page numbering is omitted.
(6) Dagger footnote symbol replaced with plus sign (+).
