Putnam
California
Tax Exempt
Money Market
Fund
Semiannual
Report
March 31, 1994
For investors seeking
current income free
from federal and
California income taxes,
consistent with capital
preservation, stable
principal and liquidity
A member
of the Putnam
Family of Funds
<TABLE>
<CAPTION>
<S> <C>
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
6 Portfolio of investments owned
9 Financial statements
14 Fund performance supplement
15 Your Trustees
</TABLE>
<PAGE>
How your
fund performed
For periods ended March 31, 1994
<TABLE>
<CAPTION>
Total return* Lipper
California
Tax Exempt
Money Market Consumer
Fund Fund Average Price Index
<S> <C> <C> <C>
6 months 0.85% 0.98% 1.45%
1 year 1.66 2.00 2.51
5 years 18.90 19.89 20.36
annualized 3.52 3.70 3.78
Life-of-fund
(since
10/26/87) 27.43 28.49 27.67
annualized 3.84 3.98 3.87
</TABLE>
<TABLE>
<S> <C> <C> <C>
Distributions(a)
Investment
6 months ended Number income Total
March 31, 1994 6 $0.008424 $0.008424
</TABLE>
Current returns at the end of the period
<TABLE>
<CAPTION>
Taxable
Fund equivalents+
<S> <C> <C>
Current 30-day yield 1.79% 3.33%
Current 7-day yield 1.82 3.39
</TABLE>
* Performance data represent past results. Investment return will fluctuate.
(a) For some investors, investment income may also be subject to the
Alternative Minimum Tax.
+ Assumes maximum combined 46.24% federal and state tax rate. 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.
An investment in the fund is neither insured nor guaranteed by the U.S.
government. There can be no assurance that the fund will be able to maintain
a stable net asset value of $1.00 per share. However, since the fund's
inception on 10/26/87, no investor has ever lost a penny of principal.
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.
Net asset value (NAV) is the value of all of your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not reflecting any
sales charge.
Current yield is the rate at which an investment earns interest income. The
7- and 30-day yields are the two most common gauges for measuring money
market mutual fund performance.
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 14 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:
For the semiannual period ended March 31, l994, Putnam California Tax Exempt
Money Market Fund once again delivered competitive performance, continuing to
produce a steady stream of double tax-free income. In addition, your fund's
performance outdistanced comparable taxable money market funds on an
after-tax basis for investors in the higher tax brackets.
After several months of steadily declining interest rates, the Federal
Reserve staged a preemptive strike against inflation in early February,
increasing the Federal funds rate--the interest rate banks charge each other
for overnight loans. This action effectively raised all short-term interest
rates. Early in the semiannual period, in anticipation of the Fed's move,
Fund Manager Lindsey Callen began shortening maturities on securities in the
portfolio and increasing the fund's weightings in floating-rate securities.
This strategy allowed your fund to take advantage of higher yields.
Although inflation currently remains under control, there is a good chance
that the Fed may raise rates again in another effort to curb inflation
threats before they happen. In the coming months, Lindsey will work to
position the portfolio to take advantage of interest rate movements, either
up or down. At the same time, we will continue our commitment to maintaining
the fund's superior quality and stability.
As many of you are aware, the Trustees of your fund are recommending a
reorganization of your fund into Putnam Tax Exempt Money Market Fund. We
believe that combining your fund with the national money market fund will
offer shareholders of California the opportunity to pursue similar investment
objectives with greater economies of scale that, over the long term, could
result in a lower operating expense ratio. If the merger is approved, it
would become effective June 2, 1994.
Respectfully yours,
(Signature of George Putnam)
George Putnam
May 18, 1994
<PAGE>
Report from
Putnam Management
For the six-month period ended March 31, l994, Putnam California Tax Exempt
Money Market Fund reported solid performance. As the table on the inside
front cover indicates, your fund's 1.79% 30-day yield is the equivalent of a
taxable 30-day yield of 3.33% for investors in the maximum combined state and
federal tax bracket of 46.24%. Those in lower brackets would also enjoy tax
benefits, though to a lesser extent.
Capitalizing on higher interest rates After interest rates sank to historic
lows this past fall, we began expecting a reversal of this trend. Early in
the period, we began positioning the fund to take advantage of incrementally
higher yields. To this end, we decreased the average maturity of the
portfolio, so that we would not be locked into lower-coupon securities in a
rising interest rate environment. We also increased the number of
floating-rate securities in the portfolio. Interest rates on these securities
are reset at fixed intervals (weekly or monthly), so that when market rates
rise, the investor can benefit.
Supply/demand dynamic During the first half of the fiscal year, the supply of
high-quality California tax-exempt securities was relatively low. This is
because the supply of these securities changes on a cyclical, seasonal basis.
Generally, it is heaviest in the summer, after the California legislature
completes its budget process, and municipalities determine how much
short-term debt they have to issue to meet their individual financing needs.
While we anticipate that new issuance this summer will be somewhat lower than
in the past, Putnam's credit analysts will be targeting and evaluating a wide
range of securities to find the most attractive, high-quality investments for
your Fund.
Maintaining portfolio quality Superior portfolio quality is one of the most
important attributes of your fund. Ideally, every holding must be rated in
one of the two highest categories by at least two nationally recognized
rating services.
* If only one rating service has rated the security, it must be in one of the
two highest categories rated by that service.
* If the securities are unrated, Putnam Management must judge them to be of
equivalent quality.
In addition, we monitor the quality of each investment carefully for as long
as it remains in the portfolio, making sure it provides the right balance of
attractive yield and relative stability. We also scrutinize all kinds of
market trends and factors that could affect the finan-
<PAGE>
cial strength of each security's issuer, working to ensure the continued high
credit quality of every portfolio holding. Credit quality is further enhanced
by the fact that timely payment of principal and interest on nearly all
portfolio securities are guaranteed, insured or backed by letters of credit.
Looking ahead A continuation of the strengthening national economy could
prompt the Federal Reserve to raise rates again in order to keep a tight rein
on inflation. The current goal appears to be a "neutral" Federal funds rate,
usually defined as 1% over the inflation rate. Even if inflation remains
relatively low (at or below 3%), this could mean substantially higher
short-term rates in the next several months.
Consequently, we will be closely monitoring economic developments in an
effort to determine the trend of interest rates. As the California economy
improves, we will continue to diversify your fund's assets among a variety of
high-quality, tax-exempt money market securities. We believe your fund is
well positioned for the months ahead.
Performance comparisons (3/31/94)
<TABLE>
<CAPTION>
Current Net return
return after taxes*
<S> <C> <C>
Passbook savings 2.00% 1.08%
Taxable money market
fund 7-day yield 2.93% 1.58%
3-month CD 2.60% 1.40%
Putnam California
Tax MM 7-day yield 1.82% 1.82%
</TABLE>
* Assumes maximum combined state and federal income tax bracket of 46.24%.
The principal value of money market mutual funds is uninsured and designed to
be fixed while distributions vary daily. The principal value on passbook
savings and bank CDs are generally insured up to certain limits by state and
federal agencies. Unlike money market mutual funds, substantial penalties may
apply to early withdrawals of bank CDs. Performance data represent past
performance. Investment returns will fluctuate. Sources: Bank of Boston
(passbook savings). Bank Rate Monitor (3-month CDs). IBC/Donoghue's Money
Fund Report (taxable money market fund 7-day yield).
<PAGE>
Portfolio of
investments owned
March 31, 1994 (Unaudited)
Municipal Bonds and Notes (94.4%)(a)
<TABLE>
<CAPTION>
Principal Amount Ratings (b) Value
<C> <S> <C> <C>
California
CA Hlth. Fac. Fin. Auth.
Variable Rate Demand
Notes (VRDN)
$1,500,000 (Memorial Hlth. Svcs.),
Ser. A, 2.7s, 11/15/15 VMIG1 $ 1,500,000
1,800,000 (Morgan Gty. Trust C. of
N.Y. LOC) (Sutter Hlth.),
Ser. A, 2-3/4s, 3/1/20 VMIG1 1,800,000
1,000,000 (Bank of America NT & SA
LOC) (Hlth. Dimensions
Inc.), Ser. A, 2-3/4s,
8/1/17 VMIG1 1,000,000
2,000,000 CA State Rev. Antic.
Notes, 3-1/2s, 6/28/94 MIG1 2,003,618
3,000,000 CA Pub. Cap. Impt. Fin.
Auth. VRDN (National
Westminster Bank PLC LOC)
(Pooled Project),
2-3/4s, 6/1/28 VMIG1 3,000,000
1,125,000 Chula Vista, Coml. Dev.
VRDN (Sanwa Bank LOC)
(South Bay Ambulatory
Surgical Ctr.), Ser. A,
2.9s, 12/1/99 VMIG1 1,125,000
2,000,000 Fontana, Certif. of
Participation VRDN
(Sakura Bank, Ltd. LOC),
2.85s, 7/1/21 A-1 2,000,000
1,600,000 Hermosa Beach, Parking
Auth. Certif of
Participation VRDN
(Wells Fargo Bank LOC),
2.45s, 12/1/13 A-1 1,600,000
2,000,000 Irvine Ranch, Wtr. Dist.
VRDN (Sumitomo Bank LOC),
Ser. B, 2.65s, 10/1/09 A-1 2,000,000
<PAGE>
California (continued)
$2,200,000 Los Angeles Cnty., Cmnty.
Dev. Certif. of
Participation VRDN
(Wells Fargo Bank LOC)
(Willow Brook Project),
2-1/4s, 11/1/15 A-1 $2,200,000
Los Angeles Cnty., Hsg.
Auth. Multi-Fam. Hsg.
VRDN
2,000,000 (Dai-Ichi Kangyo Bank
LOC) (River Park Apt.
Project), Ser. D, 2.4s,
9/1/10 VMIG1 2,000,000
2,000,000 (Sumitomo Bank LOC)
(Malibu Meadows II
Project), Ser. B, 2.2s,
12/1/15 A-1+ 2,000,000
2,500,000 Los Angeles, Unified
School Dist. Tax & Rev.
Antic. Notes (TRAN),
3-1/4s, 7/15/94 MIG1 2,503,531
1,800,000 Monterey Peninsula, Wtr.
Mgt. Dist. Certif. of
Participation VRDN
(Sumitomo Bank LOC)
(Wastewater
Reclaimation Project),
2.15s, 7/1/22 VMIG1 1,800,000
2,000,000 Moorpark, Multi-Fam.
VRDN (Citibank, N.A. LOC)
(Le Club Apts. Project),
Ser. A, 2.2s, 11/1/15 A-1 2,000,000
2,000,000 Oakland, Certif. of
Participation VRDN
(National Westminster
Bank PLC LOC) (Cap.
Equipment Project),
2.55s, 12/1/15 AA 2,000,000
2,000,000 Orange Cnty., TRAN, Ser.
A, 3s, 6/30/94 SP-1+ 2,002,430
<PAGE>
California (continued)
$650,000 Orange Cnty., Airport
Rev. Bonds (John Wayne
Airport), Municipal Bond
Insurance Association,
3s, 7/1/94 AAA $ 650,000
1,000,000 Orange Cnty., Impt. Board
Act of 1915 VRDN
(Industrial Bank of Japan
LOC) (Irvine Coast
Assmnt. Dist. No. 88-1),
2.65s, 9/2/18 VMIG1 1,000,000
1,000,000 Orange Cnty., Sanitation
Dists. Certif. of
Participation VRDN (Nos.
1,2,3,6,7,11), Ser. C,
Financial Guaranty
Insurance Company, 2.6s,
8/1/17 VMIG1 1,000,000
Palm Springs, Cmnty.
Redev. Agcy. Certif. of
Participation VRDN
(First Bank N.A. LOC)
200,000 (Headquarters
Hotel-7), 2-1/4s,
12/1/14 A-1 200,000
2,000,000 (Headquarters
Hotel-10), 2-1/4s,
12/1/14 A-1 2,000,000
2,000,000 Pomona, Redev. Agcy.
Multi-Fam. VRDN (Bauer
Group Apt.),
2-1/2s, 12/1/07 A-1+ 2,000,000
2,000,000 Sacramento Cnty.,
Multi-Fam. Hsg. VRDN
(Dai-Ichi Kangyo Bank
LOC) (River Oaks Apts.),
Ser. E, 2.35s, 9/15/07 VMIG1 2,000,000
1,000,000 Sacramento Cnty., TRAN,
3s, 7/29/94 MIG1 1,000,142
<PAGE>
California (continued)
$1,000,000 San Bernardino Cnty. Hsg.
Auth. Multi-Fam. VRDN
(Tokai Bank, Ltd. LOC)
(Brookside Meadows),
Ser. A, 2.95s, 8/1/05 VMIG2 $ 1,000,000
2,500,000 San Diego Cnty., TRAN,
3-1/4s, 7/29/94 MIG1 2,503,588
1,000,000 San Diego, Hsg. Auth.
Multi-Fam. Rev. Bonds
(Bank of Tokyo LOC) (Paseo
Point Apt.), Ser. A,
2.05s, 8/1/15 VMIG1 1,000,000
1,500,000 Union City, Hsg. Mtge.
VRDN (Mitsubishi Trust &
Banking Corp. LOC) (Green
Haven Apts. Project),
Ser. A, 2.85s, 10/1/11 VMIG2 1,500,000
Total Municipal Bonds and Notes (cost
$48,388,309) $48,388,309
</TABLE>
<TABLE>
<CAPTION>
Municipal Commercial Paper (2.0%)(a)
(cost $1,000,000)
Principal Amount Ratings (b) Value
<C> <S> <C> <C>
$1,000,000 City of Chula Vista,
Industrial Dev. Rev.
Bonds (San Diego Gas &
Electric Co.), Ser. D,
2.4s, 4/8/94 VMIG1 $ 1,000,000
Total Investments $
(cost $49,388,309)(c) 49,388,309
</TABLE>
<PAGE>
(a) Percentages indicated are based on total net assets of $51,234,740 which
correspond to a net asset value per share of $1.00.
(b)The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at March 31, 1994 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 March 31, 1994. Securities
rated by Putnam are indicated by "/P" and are not publicly rated. Moody's
Investors Service, Inc. and Standard & Poor's Corp. are the leading
independent rating agencies for debt securities. Moody's Investment Grade,
"or "MIG", for most short-term municipal obligations, adding a "V" ("VMIG")
for bonds with a demand or variable feature; the designation "P" is used for
tax-exempt commercial paper. Standard & Poor's uses "SP" for notes maturing
in three years or less, "A" for bonds with a demand or variable
feature.Moody's Investor Service, Inc.
MIG1/VMIG1 = Best quality; strong protection of cash flow, superior liquidity
and broad access to refinancing
MIG2/VMIG2 = High quality; ample protection of cash flow, liquidity support
and ability to refinance
AAA = Capacity to pay interest and repay principal is extremely strong
AA = Strong capacity to pay interest and repay principal and differs from the
higher rated issues only in a small degree
Standard & Poor's corp.
P-1 = Superior capacity for repayment
P-2 = Strong capacity for repayment
SP-1 = Overwhelming safety characteristics
SP-2 = Strong capacity to pay principal and interest
A-1+ = Overwhelming degree of credit protection
A-1 = Strong degree of safety
A-2 = Considered strong but lacks solid strength for timely repayment
(c) The aggregate identified cost on a tax basis is the same.
The rates shown on Variable Rate Demand Notes (VRDN) are the current interest
rates at March 31, 1994 which are subject to change based on the terms of the
security.
The Fund had the following industry group concentrations greater than 10% on
March 31, 1994 (as a percentage of net assets):
Housing 26.3%
Building & Construction 15.7%
Hospital/Healthcare 10.6%
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of
assets and liabilities
March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
<S> <S> <C> <C>
Assets Investments in securities, at amortized cost (Note 1) $49,388,309
Cash 1,081,892
Interest and other receivables 354,383
Receivable for shares of the Fund sold 1,176,532
Total Assets 52,001,116
Liabilities Payable for shares of the Fund repurchased $220,095
Payable for securities purchased 400,562
Distributions payable to shareholders 65,336
Payable for compensation of Manager (Note 2) 51,444
Payable for administrative services (Note 2) 1,717
Payable for investor servicing and custodian fees (Note 2) 2,607
Other accrued expenses 24,615
Total Liabilities 766,376
Net assets $51,234,740
Represented by Paid-in capital (Note 4) $51,234,740
Net asset value, offering and redemption price per share
($51,234,740 divided by 51,234,740 shares) $ 1.00
</TABLE>
<PAGE>
Statement of
operations
Six months ended March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Tax exempt interest income $578,816
Expenses:
Compensation of Manager (Note 2) $109,880
Investor servicing and custodian
fees (Note 2) 17,304
Compensation of Trustees (Note 2) 2,219
Reports to shareholders 7,255
Auditing 5,341
Legal 7,046
Postage 1,562
Administrative services (Note 2) 1,745
Distribution fees (Note 2) 4,841
Other expenses 4,953
Total expenses 162,146
Net investment income $416,670
</TABLE>
Statement of
changes in net assets
<TABLE>
<CAPTION>
<S> <C> <C>
Six months ended Year ended
March 31 September 30
1994* 1993
Increase (Decrease) in
net assets
Operations:
Net investment income $ 416,670 $ 956,224
Net increase in net assets
resulting from operations 416,670 956,224
Distributions to shareholders from:
Net investment income (416,670) (956,224)
Increase (Decrease) from
capital share
transactions (Note 4) 5,870,632 (13,493,726)
Total increase (decrease) in net
assets 5,870,632 (13,493,726)
Net assets
Beginning of period 45,364,108 58,857,834
End of period $51,234,740 $ 45,364,108
</TABLE>
*Unaudited.
<PAGE>
Financial
Highlights*
(For a share
outstanding
throughout the
period)
<TABLE>
<CAPTION>
For the period
October 26, 1987
Six months (commencement of
ended operations) to
March 31 Year ended September 30 September 30
1994** 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C>
Net Investment Income $ .0084 $ .0175 $ .0262(a) $ .0407(a) $ .0513(a) $ .0566(a) $ .0416(a)
Net Realized Gain on
Investments -- -- .0001 -- -- .0001 .0001
Total from Investment
Operations $ .0084 $ .0175 $ .0263 $ .0407 $ .0513 $ .0567 $ .0417
Total Distributions: $ .0084 $ .0175 $ .0263 $ .0407 $ .0513 $ .0567 $ .0417
Total Investment Return at
Net Asset Value (%) (b) 1.70(c) 1.77 2.67 4.15 5.26 5.82 4.57(c)
Net Assets, End of Period
(in thousands) $51,235 $45,364 $58,858 $69,184 $87,095 $73,136 $43,436
Ratio of Expenses to
Average Net Assets (%) .66(c) .89 .85(a) .80(a) .69(a) .69(a) .62(a)(c)
Ratio of Net Investment
Income to Average Net
Assets (%) 1.72(c) 1.78 2.70(a) 4.03(a) 5.12(a) 5.65(a) 4.53(a)(c)
</TABLE>
* Financial Highlights for periods ended through September 30, 1992 have been
restated to conform with requirements issued by the SEC in April 1993.
** Unaudited
(a) Reflects a voluntary expense limitation and, during the period ended
September 30, 1988, a waiver of a portion of distribution fees in effect
during the period. As a result of such limitation and waiver, expenses of the
Fund for the years ended September 30, 1992, 1991, 1990, 1989, and for the
period ended September 30, 1988, reflect per share reductions of $0.0026,
$0.0033, $0.0033, $0.0043 and $0.0051, respectively.
(b) Total Investment Return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(c) Annualized.
<PAGE>
Notes to
financial statements
March 31, 1994 (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 California
personal income tax as is consistent with preservation of capital,
maintenance of liquidity and stability of principal by investing primarily in
a diversified portfolio of short-term California tax-exempt securities.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A) Security valuation The valuation of the Fund's portfolio instruments is
determined by means of the amortized cost method as set forth in Rule 2a-7
under the Investment Company Act of 1940. The amortized cost of an instrument
is determined by valuing it at cost originally and thereafter amortizing any
discount or premium from its face value at a constant rate until maturity.
B) Security transactions Security transactions are accounted for on trade
date (date the order to buy or sell is executed).
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 income and excise
taxes on income and capital gains.
D) Interest income and distributions to shareholders Interest is recorded on
the accrual basis. Income distributions (and distributions of capital gains,
if any) are recorded daily by the Fund and are distributed to shareholders
monthly.
Note 2 Management fee, administrative services, and other transactions
Compensation of Putnam Investment Management, Inc., "Putnam Management," the
Fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., for
management and investment advisory services is paid quarterly based on the
average nets assets of the Fund. Such fee is based on the following annual
rates: 0.45% of the first $500 million of average net assets, 0.35% of the
next $500 million, 0.30% of the next $500 million, and 0.25% 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 the
Manager on the Fund's portfolio transactions.
The Fund also reimburses the Manager 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 March 31, 1994, the Fund paid $1,745 for these services.
Trustees of the Fund receive an annual Trustee's fee of $400 and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of the Manager and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
Custodian functions for the Fund are provided by the 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 March 31, 1994 amounted to $17,304.
Investor servicing and custodian fees reported in the statement of operations
for the six months ended March 31, 1994 have been reduced by credits allowed
by PFTC.
Pursuant to the Fund's underwriting agreement and to a distribution plan
adopted under Rule 12b-1 of the Investment Company Act of 1940, the Fund pays
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments,
Inc., a monthly distribution fee at the annual rate of 0.10% of the average
net assets of the Fund. For the six months ended March 31, 1994, the Fund
paid distribution fees in the amount of $4,841.
<PAGE>
Note 3 Purchases and sales of securities
During the six months ended March 31, 1994, purchases and sales (including
maturities) of investment securities (all short-term obligations) aggregated
$40,894,920 and $45,894,920, 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 March 31, 1994, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares, at a constant net asset
value of $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months
ended Year ended
March 31 September 30
1994 1993
<S> <C> <C>
Shares sold 63,803,716 84,583,103
Shares issued in connection
with reinvestment of
distributions 375,577 900,537
64,179,293 85,483,640
Shares repurchased (58,308,662) (98,977,366)
Net increase (decrease) 5,870,631 (13,493,726)
</TABLE>
Note 5 Reclassification of Capital Accounts
Effective October 1, 1993, Putnam California Tax Exempt Money Market Fund has
adopted the provisions of the AICPA Statement of Position (SOP) 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions, by Investment Companies.
"The purpose of this SOP is to report the accumulated net investment income
(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.
There were no cumulative adjustments, as a result of the SOP, to
undistributed net investment income or accumulated net realized gains.
Any adjustments would represent the cumulated amounts necessary to report
balances through September 30, 1993, the close of the Fund's most recent
fiscal year end for financial reporting and tax purposes.
Note 6 Proposed Merger
If approved at the shareholder meeting on June 2, 1994, Putnam California Tax
Exempt Money Market Fund will transfer all of its assets to Putnam Tax Exempt
Money Market Fund in exchange for the assumption by Tax Exempt Money Market
Fund of all of the liabilities of California Tax Exempt Money Market Fund and
for a number of Tax Exempt Money Market Fund shares equal in value to the
value of the net assets of California Tax Exempt Money Market transferred to
Tax Exempt Money Market Fund.
<PAGE>
Fund
performance
supplement
Putnam California Tax Exempt Money Market Fund is a portfolio managed for
current income free from federal and California personal income taxes,
consistent with capital preservation, stable principal and liquidity by
investing primarily in a diversified portfolio of short-term California
tax-exempt securities.
The Lipper California Tax Exempt Money Market Fund Average, used for
performance comparison purposes, is an arithmetic average of the total return
of all the California tax exempt money market mutual funds tracked by the
Lipper Analytical Services. Lipper is an independent rating organization for
the mutual fund industry. Lipper rankings vary for other periods. The fund's
holdings do not match those in the Lipper Average.
The Consumer Price Index is a commonly used measure of inflation; it does not
represent an investment return.
The fund performance supplement has been prepared by Putnam Management to
provide additional information about the fund and the indexes used for
performance comparisons. The information is not part of the portfolio of
investments owned or the financial statements.
<PAGE>
Your
Trustees
George Putnam
Chairman
Chairman and President,
The Putnam Funds
William F. Pounds
Vice Chairman
The Putnam Funds,
Professor of Management,
Alfred P. Sloan
School of Management,
Massachusetts Institute of
Technology
Jameson Adkins Baxter
President,
Baxter Associates, Inc.
Hans H. Estin
Vice Chairman,
North American
Management Corporation
John A. Hill
Principal and
Managing Director,
First Reserve Corp.
Elizabeth T. Kennan
President,
Mount Holyoke College
Lawrence J. Lasser
President and
Chief Executive Officer,
Putnam Investments, Inc.
Robert E. Patterson
Executive Vice President,
Cabot Partners
Limited Partnership
Donald S. Perkins
Director of various
corporations
George Putnam, III
President, New Generation
Research, Inc.
A.J.C. Smith
Chairman of the Board
and Chief Executive Officer,
Marsh & McLennan
Companies, Inc.
W. Nicholas Thorndike
Director of various
corporations
<PAGE>
Putnam
California
Tax-Exempt
Money Market
Fund
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
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.
80/11-11899
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 P. Erickson
Vice President
Lindsey S. Callen
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
This report is for the information of shareholders of Putnam California Tax
Exempt Money Market Fund. It may also be used as sales literature when
preceded or accompanied by the current prospectus, which gives details of
sales charges, investment objectives, and operating policies of the fund.
<PAGE>
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
<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) 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 (+).
