Putnam
Variable
Trust
Putnam VT
New Opportunities Fund
ANNUAL REPORT
December 31, 1996
[LOGO: BOSTON * LONDON * TOKYO]
To the shareholders of Putnam Variable Trust
Putnam VT New Opportunities Fund
After an outstanding start, fiscal 1996 ended on a less positive note
for Putnam VT New Opportunities Fund. The stock market rally shifted
away from the small and medium-capitalization growth stocks that have
made up the core of your fund's portfolio, and toward larger-
capitalization "blue-chip" stocks. For the 12 months ended December 31,
1996, the fund delivered a total return of 10.17% at net asset value.
Although the stock market became disenchanted with many smaller growth
companies after the July selloff, technology firms were the exception,
and these stocks garnered considerable enthusiasm in the second half of
1996. Fortunately, technology stocks represent a substantial allocation
in the portfolio, and this sector contributed significantly to
performance. In particular, the fund benefited from gains among holdings
in software, services, and a small allocation to semiconductors.
Health care represents the second-largest sector allocation in the
portfolio, and these stocks have continued to lag the market. Price
competition and rising costs from increased utilization of products and
services continue to challenge managed-care companies, particularly
health maintenance organizations, which we eliminated from the
portfolio. Nonetheless, favorable demographic trends continue to make
health care stocks a promising long-term investment for the fund, and
management continues to regard this sector positively.
Business services provided a bright spot for the portfolio. These stocks
performed exceptionally well during the period, and fund management
continues to find solid opportunities in such areas as telemarketing
services, temporary help and staffing, and technology service providers.
The business services industry is experiencing a great deal of
consolidation, as well as growth through corporate outsourcing, which
often translates into exciting investment opportunities.
Fund management remains cautiously optimistic about the environment for
small and midsize growth stock performance in the months ahead. The
economy appears to be continuing its leisurely pace, and there are no
signs of rising inflation. This combination provides a solid backdrop
for lower interest rates, which if they were to occur, could support
price increases for smaller growth stocks like those in the fund's
portfolio.
- ----------------------------------------------------------------
INVESTMENT OBJECTIVE
Capital appreciation
- ----------------------------------------------------------------
PORTFOLIO
Common stocks of companies in market sectors with above-average
long-term growth potential
- ----------------------------------------------------------------
NET ASSET VALUE
December 31, 1996 $17.22
- ----------------------------------------------------------------
PERFORMANCE SUMMARY
- ----------------------------------------------------------------
Total return at net asset value
(as of 12/31/96)*
- ----------------------------------------------------------------
1 year 10.17%
- ----------------------------------------------------------------
Life (since 5/2/94) 72.70
- ----------------------------------------------------------------
Annualized 22.71
- ----------------------------------------------------------------
* All total return figures are at net asset value. The charges and
expenses at the insurance company separate account level are not
reflected. Past performance is not indicative of future results.
Report of Independent Accountants
To the Trustees and Shareholders of
Putnam VT New Opportunities Fund
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments owned, and the related statements
of operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Putnam VT New Opportunities Fund (the "fund"), formerly PCM New
Opportunities Fund, one of a series of funds constituting Putnam
Variable Trust (the "Trust"), formerly Putnam Capital Manager Trust, at
December 31, 1996, and the results of its operations, the changes in its
net assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of investments owned at December 31, 1996 by correspondence
with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received,
provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
February 11, 1997
<TABLE>
<CAPTION>
Portfolio of investments owned
December 31, 1996
<S> <C> <C> <C>
COMMON STOCKS (96.4%) *
- -------------------------------------------------------------------------------------------
Number of Shares Value
...........................................................................................
Advertising (0.7%)
...........................................................................................
145,800 Lamar Advertising Co. + $3,535,650
...........................................................................................
219,000 Outdoor Systems, Inc. + 6,159,375
...........................................................................................
100,000 Universal Outdoor Holdings, Inc. + 2,350,000
- -------------------------------------------------------------------------------------------
12,045,025
- -------------------------------------------------------------------------------------------
Aerospace and Defense (0.6%)
...........................................................................................
90,400 Boeing Co. 9,616,300
- -------------------------------------------------------------------------------------------
Apparel (1.2%)
...........................................................................................
59,800 Nautica Enterprises, Inc. + 1,509,950
...........................................................................................
90,400 Nike, Inc. 5,401,400
...........................................................................................
106,500 Tommy Hilfiger Corp. + 5,112,000
...........................................................................................
263,900 Wolverine World Wide, Inc. 7,653,100
- -------------------------------------------------------------------------------------------
19,676,450
- -------------------------------------------------------------------------------------------
Broadcasting (3.6%)
...........................................................................................
121,300 Chancellor Broadcasting Corp. Class A + 2,880,875
...........................................................................................
457,700 Clear Channel Communications, Inc. + 16,534,390
...........................................................................................
21,200 Cox Radio, Inc. Class A + 371,000
...........................................................................................
150,000 Emmis Broadcasting Corp. Class A + 4,912,500
...........................................................................................
130,000 Evergreen Media Corp. Class A + 3,250,000
...........................................................................................
85,300 Heartland Wireless Communications, Inc. + 1,119,564
...........................................................................................
162,700 Infinity Broadcasting Corp. Class A + 5,470,788
...........................................................................................
136,300 Jacor Communications, Inc. + 3,731,213
...........................................................................................
115,900 LIN Television Corp. + 4,896,775
...........................................................................................
73,000 SFX Broadcasting, Inc. Class A + 2,171,750
...........................................................................................
143,900 Sinclair Broadcast Group, Inc. Class A + 3,741,400
...........................................................................................
111,919 Univision Communications, Inc. Class A + 4,141,003
...........................................................................................
199,000 Westwood One, Inc. + 3,308,375
...........................................................................................
136,900 Young Broadcasting Corp. Class A + 4,004,325
- -------------------------------------------------------------------------------------------
60,533,958
- -------------------------------------------------------------------------------------------
Building Products (0.2%)
...........................................................................................
138,600 Barnett, Inc. + 3,776,850
- -------------------------------------------------------------------------------------------
Business Services (6.1%)
...........................................................................................
157,500 Affiliated Computer Services, Inc. Class A + 4,685,625
...........................................................................................
409,600 Airgas, Inc. + 9,011,200
...........................................................................................
74,100 APAC Teleservices, Inc. + 2,843,588
...........................................................................................
222,000 Corestaff, Inc. + 5,258,625
...........................................................................................
460,400 Corporate Express, Inc. + 13,553,025
...........................................................................................
181,900 Employee Solutions, Inc. + 3,728,950
...........................................................................................
455,000 First Data Corp. 16,607,500
...........................................................................................
111,600 Interim Services Inc. + 3,961,800
...........................................................................................
88,050 Labor Ready, Inc. + 1,188,675
...........................................................................................
65,300 NOVA Corp./Georgia + 1,444,763
...........................................................................................
205,600 Paychex, Inc. 10,575,550
...........................................................................................
142,400 PMT Services, Inc. + 2,492,000
...........................................................................................
3,100 Precision Response Corp. + 108,888
...........................................................................................
1,950,000 Rentokil Group PLC (United Kingdom) 14,655,576
...........................................................................................
247,800 Robert Half International, Inc. + 8,518,125
...........................................................................................
75,409 Select Appointments Holdings PLC ADR (United Kingdom) 867,204
...........................................................................................
13,700 Snyder Communications, Inc. + 369,900
...........................................................................................
110,000 TeleTech Holdings Inc. + 2,860,000
- -------------------------------------------------------------------------------------------
102,730,994
- -------------------------------------------------------------------------------------------
Cable Television (--%)
...........................................................................................
91,900 Century Communications Corp. Class A + 522,681
- -------------------------------------------------------------------------------------------
Chemicals (0.8%)
...........................................................................................
286,300 Praxair, Inc. 13,205,588
- -------------------------------------------------------------------------------------------
Computers Peripherals (1.3%)
...........................................................................................
659,200 EMC Corp. + 21,836,000
- -------------------------------------------------------------------------------------------
Computer Services (3.0%)
...........................................................................................
434,200 America Online, Inc. + 14,437,150
...........................................................................................
234,800 Cambridge Technology Partners, Inc. + 7,880,475
...........................................................................................
137,300 CBT Group PLC ADR (Ireland) + 7,448,525
...........................................................................................
201,000 Computer Horizons Corp. + 7,738,500
...........................................................................................
95,400 National TechTeam, Inc. + 1,908,000
...........................................................................................
25,900 Renaissance Solutions, Inc. + 1,159,025
...........................................................................................
41,700 Sykes Enterprises, Inc. + 1,563,750
...........................................................................................
256,900 Vanstar Corp. + 6,294,050
...........................................................................................
48,500 Whittman-Hart, Inc. + 1,242,813
...........................................................................................
34,000 XLConnect Solutions, Inc. + 977,500
- -------------------------------------------------------------------------------------------
50,649,788
- -------------------------------------------------------------------------------------------
Computer Software (10.8%)
...........................................................................................
276,000 Baan Co., N.V. (Netherlands) + 9,591,000
...........................................................................................
111,793 CCC Information Services Group + 1,788,688
...........................................................................................
87,900 Clarify, Inc. + 4,219,200
...........................................................................................
550,700 Computer Associates Intl., Inc. 27,397,325
...........................................................................................
50,700 Documentum, Inc. + 1,711,125
...........................................................................................
276,200 Electronic Arts, Inc. + 8,268,738
...........................................................................................
68,000 Forte Software, Inc. + 2,227,000
...........................................................................................
169,900 Inso Corp. + 6,753,525
...........................................................................................
120,000 Legato Systems, Inc. + 3,915,000
...........................................................................................
243,600 McAfee Associates, Inc. + 10,718,400
...........................................................................................
261,900 Microsoft Corp. + 21,639,488
...........................................................................................
395,100 Parametric Technology Corp. + 20,298,263
...........................................................................................
217,400 PeopleSoft, Inc. + 10,421,613
...........................................................................................
98,400 Project Software & Development, Inc. + 4,169,700
...........................................................................................
160,000 Rational Software Corp. + 6,330,000
...........................................................................................
67,000 Remedy Corp. + 3,601,250
...........................................................................................
51,000 Sapient Corp. + 2,148,375
...........................................................................................
89,300 Saville Systems Ireland PLC ADR (Ireland) + 3,627,813
...........................................................................................
234,200 Security Dynamics Technologies, Inc. + 7,377,300
...........................................................................................
293,500 Synopsys, Inc. + 13,574,375
...........................................................................................
172,400 The Learning Co., Inc. + 2,478,250
...........................................................................................
178,800 Vantive Corp. + 5,587,500
...........................................................................................
74,800 Viasoft, Inc. + 3,534,300
- -------------------------------------------------------------------------------------------
181,378,228
- -------------------------------------------------------------------------------------------
Consumer Products (2.5%)
...........................................................................................
73,000 Clorox Co. 7,327,375
...........................................................................................
168,800 Gillette Co. 13,124,200
...........................................................................................
134,300 Kimberly-Clark Corp. 12,792,075
...........................................................................................
75,300 Procter & Gamble Co. 8,094,750
- -------------------------------------------------------------------------------------------
41,338,400
- -------------------------------------------------------------------------------------------
Cosmetics (0.5%)
...........................................................................................
120,500 Avon Products, Inc. 6,883,563
...........................................................................................
82,600 Thermolase Corp. + 1,300,950
- -------------------------------------------------------------------------------------------
8,184,513
- -------------------------------------------------------------------------------------------
Data Communications (0.8%)
...........................................................................................
237,801 MFS Communications, Inc. + 12,920,915
- -------------------------------------------------------------------------------------------
Education Services (0.5%)
...........................................................................................
134,300 Apollo Group, Inc. Class A + 4,490,656
...........................................................................................
155,315 Learning Tree International, Inc. + 4,581,793
- -------------------------------------------------------------------------------------------
9,072,449
- -------------------------------------------------------------------------------------------
Electric Utilities (0.5%)
...........................................................................................
248,000 Calenergy, Inc. + 8,339,000
- -------------------------------------------------------------------------------------------
Electronics and Electrical Equipment (1.1%)
...........................................................................................
136,000 Cognex Corp. + 2,516,000
...........................................................................................
165,700 General Electric Co. 16,383,588
- -------------------------------------------------------------------------------------------
18,899,588
- -------------------------------------------------------------------------------------------
Energy-Related (0.3%)
...........................................................................................
139,000 Thermo Electron Corp. + 5,733,750
- -------------------------------------------------------------------------------------------
Environmental Control (0.3%)
...........................................................................................
178,700 U.S. Filter Corp. + 5,673,725
- -------------------------------------------------------------------------------------------
Finance (1.5%)
...........................................................................................
180,800 American Express Co. 10,215,200
...........................................................................................
241,100 Federal National Mortgage Association 8,980,975
...........................................................................................
137,135 TCF Financial Corp. 5,965,373
- -------------------------------------------------------------------------------------------
25,161,548
- -------------------------------------------------------------------------------------------
Financial Services (1.9%)
...........................................................................................
158,400 Aames Financial Corp. 5,682,600
...........................................................................................
130,000 Finova Group, Inc. 8,352,500
...........................................................................................
99,400 First USA Paymentech, Inc. + 3,367,175
...........................................................................................
277,000 MBNA Corp. 11,495,500
...........................................................................................
134,500 RAC Financial Group, Inc. + 2,841,313
- -------------------------------------------------------------------------------------------
31,739,088
- -------------------------------------------------------------------------------------------
Food and Beverages (1.7%)
...........................................................................................
135,600 Campbell Soup Co. 10,881,900
...........................................................................................
263,700 Coca-Cola Enterprises, Inc. 12,789,450
...........................................................................................
75,300 Pioneer Hi-Bred International, Inc. 5,271,000
- -------------------------------------------------------------------------------------------
28,942,350
- -------------------------------------------------------------------------------------------
Funeral/Cemetery Services (1.8%)
...........................................................................................
162,400 Loewen Group, Inc. 6,353,900
...........................................................................................
355,000 Service Corp. International 9,940,000
...........................................................................................
389,600 Stewart Enterprises, Inc. Class A 13,246,400
- -------------------------------------------------------------------------------------------
29,540,300
- -------------------------------------------------------------------------------------------
HMO's (0.2%)
...........................................................................................
89,300 Compdent Corp. + 3,147,825
- -------------------------------------------------------------------------------------------
Health Care Information Systems (1.7%)
...........................................................................................
375,000 HBO & Co. 22,265,625
...........................................................................................
141,500 Medic Computer Systems, Inc. + 5,704,219
- -------------------------------------------------------------------------------------------
27,969,844
- -------------------------------------------------------------------------------------------
Health Care Services (5.6%)
...........................................................................................
112,900 ABR Information Services, Inc. + 4,445,438
...........................................................................................
64,200 Access Health, Inc. + 2,872,950
...........................................................................................
166,600 American Medical Response + 5,414,500
...........................................................................................
261,850 Cardinal Health, Inc. 15,252,763
...........................................................................................
101,900 Carematrix Corp. + 1,337,438
...........................................................................................
109,300 Emcare Holdings, Inc. + 2,541,225
...........................................................................................
283,600 Genesis Health Ventures, Inc. + 8,827,050
...........................................................................................
678,900 Healthsouth Rehabilitation Corp. + 26,222,513
...........................................................................................
184,000 Renal Treatment Centers, Inc. + 4,692,000
...........................................................................................
119,500 Rotech Medical Corp. + 2,509,500
...........................................................................................
147,100 Sunrise Assisted Living, Inc. + 4,100,413
...........................................................................................
98,000 Total Renal Care Holdings, Inc. + 3,552,500
...........................................................................................
69,200 Vencor, Inc. + 2,188,450
...........................................................................................
337,800 Vivra, Inc. + 9,331,725
- -------------------------------------------------------------------------------------------
93,288,465
- -------------------------------------------------------------------------------------------
Hospital Management (1.0%)
...........................................................................................
741,500 Health Management Assoc., Inc. + 16,683,750
- -------------------------------------------------------------------------------------------
Insurance (1.7%)
...........................................................................................
84,400 American International Group, Inc. 9,136,300
...........................................................................................
86,000 CRA Managed Care, Inc. + 3,870,000
...........................................................................................
235,000 HCC Insurance Holdings, Inc. 5,640,000
...........................................................................................
203,266 Travelers Group Inc. 9,223,195
- -------------------------------------------------------------------------------------------
27,869,495
- -------------------------------------------------------------------------------------------
Leisure (0.2%)
...........................................................................................
87,000 Signature Resorts, Inc. + 3,066,750
- -------------------------------------------------------------------------------------------
Lodging (4.4%)
...........................................................................................
240,600 Doubletree Corp. + 10,827,000
...........................................................................................
333,800 Extended Stay America, Inc. + 6,717,725
...........................................................................................
514,000 HFS, Inc. + 30,711,500
...........................................................................................
195,900 Marriott International, Inc. 10,823,475
...........................................................................................
309,000 Prime Hospitality Corp. + 4,982,625
...........................................................................................
218,400 Promus Hotel Corp. + 6,470,100
...........................................................................................
48,900 Renaissance Hotel Group N.V.
(Hong Kong) + 1,149,150
...........................................................................................
105,850 Studio Plus Hotels, Inc. + 1,667,138
- -------------------------------------------------------------------------------------------
73,348,713
- -------------------------------------------------------------------------------------------
Medical Management Services (1.5%)
...........................................................................................
35,000 NCS HealthCare, Inc. Class A + 1,019,375
...........................................................................................
151,300 OccuSystems, Inc. + 4,085,100
...........................................................................................
141,700 Pediatrix Medical Group, Inc. + 5,242,900
...........................................................................................
261,800 Phycor, Inc. + 7,428,575
...........................................................................................
126,400 Phymatrix, Inc. + 1,801,200
...........................................................................................
248,000 Physician Reliance Network, Inc. + 1,922,000
...........................................................................................
162,200 Physicians Resource Group, Inc. + 2,879,050
- -------------------------------------------------------------------------------------------
24,378,200
- -------------------------------------------------------------------------------------------
Medical Supplies and Devices (3.6%)
...........................................................................................
375,593 Boston Scientific Corp. + 22,535,580
...........................................................................................
49,500 Endosonics Corp. + 754,875
...........................................................................................
140,800 I-Stat Corp. + 3,344,000
...........................................................................................
130,000 Medtronic, Inc. 8,840,000
...........................................................................................
100,300 Neuromedical Systems, Inc. + 1,328,975
...........................................................................................
345,300 Omnicare, Inc. 11,092,763
...........................................................................................
294,300 Physician Sales & Service, Inc. + 4,230,563
...........................................................................................
90,000 Spine-Tech, Inc. + 2,250,000
...........................................................................................
172,800 Thermo Cardiosystems, Inc. + 5,184,000
- -------------------------------------------------------------------------------------------
59,560,756
- -------------------------------------------------------------------------------------------
Networking and Communications Equipment (5.8%)
...........................................................................................
149,000 Ascend Communications, Inc. + 9,256,625
...........................................................................................
134,300 Bay Networks Inc. + 2,803,513
...........................................................................................
35,600 Black Box Corp. + 1,468,500
...........................................................................................
461,600 Cabletron Systems, Inc. + 15,348,200
...........................................................................................
384,000 Cascade Communications Corp. + 21,168,000
...........................................................................................
135,000 3Com Corp. + 9,905,625
...........................................................................................
500,900 Cisco Systems, Inc. + 31,869,763
...........................................................................................
170,400 Shiva Corp. + 5,942,700
- -------------------------------------------------------------------------------------------
97,762,926
- -------------------------------------------------------------------------------------------
Nursing Homes (0.5%)
...........................................................................................
321,000 Health Care & Retirement Corp. + 9,188,625
- -------------------------------------------------------------------------------------------
Office Equipment (0.8%)
...........................................................................................
208,000 BT Office Products International, Inc. + 1,846,000
...........................................................................................
418,000 Viking Office Products, Inc. + 11,155,375
- -------------------------------------------------------------------------------------------
13,001,375
- -------------------------------------------------------------------------------------------
Oil and Gas (0.6%)
...........................................................................................
105,500 Schlumberger Ltd. 10,536,813
- -------------------------------------------------------------------------------------------
Pharmaceuticals and Biotechnology (6.4%)
...........................................................................................
271,200 Abbott Laboratories 13,763,400
...........................................................................................
178,900 Biochem Pharmaceutical, Inc. + 8,989,725
...........................................................................................
137,200 Dura Pharmaceuticals, Inc. + 6,551,300
...........................................................................................
539,800 Elan Corp. PLC ADR (Ireland) + 17,948,350
...........................................................................................
221,600 Gilead Sciences, Inc. + 5,540,000
...........................................................................................
229,400 IDEXX Laboratories, Inc. + 8,258,400
...........................................................................................
73,400 Martek Biosciences Corp. + 1,468,000
...........................................................................................
256,100 Merck & Co., Inc. 20,295,925
...........................................................................................
26,900 Neurogen Corp. + 517,825
...........................................................................................
46,000 Parexel International Corp. + 2,374,750
...........................................................................................
241,100 Pfizer, Inc. 19,981,163
...........................................................................................
24,400 Quintiles Transnational Corp. + 1,616,500
- -------------------------------------------------------------------------------------------
107,305,338
- -------------------------------------------------------------------------------------------
Photography (0.6%)
...........................................................................................
128,000 Eastman Kodak Co. 10,272,000
- -------------------------------------------------------------------------------------------
Publishing (1.1%)
...........................................................................................
120,500 Gannett Co., Inc. 9,022,438
...........................................................................................
23,600 Mecklermedia Corp. + 466,100
...........................................................................................
120,500 Tribune Co. 9,504,438
- -------------------------------------------------------------------------------------------
18,992,976
- -------------------------------------------------------------------------------------------
Restaurants (2.3%)
...........................................................................................
200,500 Applebee's International, Inc. 5,513,750
...........................................................................................
400,000 Boston Chicken, Inc. + 14,350,000
...........................................................................................
266,910 J.D. Wetherspoon PLC (United Kingdom) 5,346,314
...........................................................................................
206,300 Landry's Seafood Restaurants, Inc. + 4,409,663
...........................................................................................
173,475 Papa Johns International, Inc. + 5,854,781
...........................................................................................
131,400 Rainforest Cafe, Inc. + 3,087,900
- -------------------------------------------------------------------------------------------
38,562,408
- -------------------------------------------------------------------------------------------
Retail (5.8%)
...........................................................................................
498,400 Bed Bath & Beyond, Inc. + 12,086,200
...........................................................................................
106,400 Boise Cascade Office Products + 2,234,400
...........................................................................................
16,500 Borders Group, Inc. + 591,938
...........................................................................................
400,000 CompUSA, Inc. + 8,250,000
...........................................................................................
165,700 CVS Corp. 6,855,838
...........................................................................................
414,400 Dixons Group PLC (United Kingdom) 3,848,781
...........................................................................................
271,200 Federated Department Stores + 9,254,700
...........................................................................................
188,300 Global DirectMail Corp. + 8,214,588
...........................................................................................
651,200 Officemax, Inc. + 6,919,000
...........................................................................................
269,800 Revco D.S., Inc. + 9,982,600
...........................................................................................
195,900 Sears, Roebuck & Co. 9,035,888
...........................................................................................
420,000 Staples, Inc. + 7,586,250
...........................................................................................
250,900 TJX Cos., Inc. (The) 11,886,388
- -------------------------------------------------------------------------------------------
96,746,571
- -------------------------------------------------------------------------------------------
Satellite Services (0.4%)
...........................................................................................
261,705 PanAmSat Corp. + 7,327,740
- -------------------------------------------------------------------------------------------
Semiconductors (3.8%)
...........................................................................................
235,050 Analog Devices, Inc. + 7,962,319
...........................................................................................
153,200 Credence Systems Corp. + 3,083,150
...........................................................................................
135,600 Intel Corp. 17,755,125
...........................................................................................
204,000 Linear Technology Corp. 8,950,500
...........................................................................................
207,700 Maxim Integrated Products Inc. + 8,983,025
...........................................................................................
52,000 Microchip Technology, Inc. + 2,645,500
...........................................................................................
105,500 Texas Instruments, Inc. 6,725,625
...........................................................................................
181,500 Xilinx, Inc. + 6,681,469
- -------------------------------------------------------------------------------------------
62,786,713
- -------------------------------------------------------------------------------------------
Specialty Consumer Products (0.2%)
...........................................................................................
71,100 Central Garden and Pet Co. + 1,497,544
...........................................................................................
61,100 West Marine, Inc. + 1,726,075
- -------------------------------------------------------------------------------------------
3,223,619
- -------------------------------------------------------------------------------------------
Telecommunication Equipment (2.3%)
...........................................................................................
145,700 Brooks Fiber Properties, Inc. + 3,715,350
...........................................................................................
42,210 Diana Corp. + 1,160,775
...........................................................................................
374,400 Pairgain Technologies, Inc. + 11,395,800
...........................................................................................
99,000 Premisys Communications, Inc. + 3,341,250
...........................................................................................
488,900 Tellabs, Inc. + 18,394,863
- -------------------------------------------------------------------------------------------
38,008,038
- -------------------------------------------------------------------------------------------
Telephone Services (2.8%)
...........................................................................................
127,000 Intermedia Communications, Inc. + 3,270,250
...........................................................................................
160,200 IXC Communications, Inc. + 4,926,150
...........................................................................................
98,400 LCI International, Inc. + 2,115,600
...........................................................................................
215,400 McLeod, Inc. Class A + 5,492,700
...........................................................................................
256,100 Sprint Corp. 10,211,988
...........................................................................................
288,000 Tel-Save Holdings, Inc. + 8,352,000
...........................................................................................
494,339 WorldCom, Inc. + 12,883,710
- -------------------------------------------------------------------------------------------
47,252,398
- -------------------------------------------------------------------------------------------
Wireless Communications (1.4%)
...........................................................................................
200,000 Clearnet Communications, Inc. Class A
(Canada) + 2,200,000
...........................................................................................
94,700 ICG Communications, Inc. + 1,669,088
...........................................................................................
517,600 NEXTEL Communications, Inc. Class A + 6,761,150
...........................................................................................
114,500 Omnipoint Corp. + 2,204,125
...........................................................................................
617,000 Paging Network, Inc. + 9,409,250
...........................................................................................
56,600 Preferred Networks, Inc. + 367,900
...........................................................................................
12,900 Western Wireless Corp. Class A + 178,988
- -------------------------------------------------------------------------------------------
22,790,501
- -------------------------------------------------------------------------------------------
Total Common Stocks
(cost $1,449,168,806) $1,614,589,327
- -------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS (--%) * (cost $450,000)
- -------------------------------------------------------------------------------------------
Number of Shares Value
...........................................................................................
9,000 Vanstar Corp. 144A $3.375 cv. pfd. $465,750
- -------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (4.6%)* (cost $76,859,408)
- -------------------------------------------------------------------------------------------
Principal Amount Value
...........................................................................................
$76,845,000 Interest in $716,873,000 joint repurchase
agreement dated December 31, 1996
with UBS Securities due January 2, 1997
with respect to various U.S. Treasury
obligations -- maturity value of
$76,873,817 for an effective yield
of 6.75% $76,859,408
- -------------------------------------------------------------------------------------------
Total Investments
(cost $1,526,478,214) *** $1,691,914,485
- -------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets.
+ Non-income-producing security.
144A after the name of a security represents those exempt from
registration under Rule 144A of the Securities Act of 1933.
These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
ADR after the name of a foreign holding stands for American
Depository Receipts representing ownership of foreign securities
on deposit with a domestic custodian bank.
*** On December 31, 1996, the aggregate cost of investments on a tax
basis is $1,527,807,520 resulting in gross unrealized appreciation and
depreciation of $249,205,026, and $85,098,061, respectively, or net
unrealized appreciation of $164,106,965.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------------------------------------------------------------
<S> <C>
Assets
Investments in securities, at value (Note 1) $1,691,914,485
Cash 1,648,088
Dividends and other receivables 632,279
Receivables for shares of the fund sold 3,869,777
Receivables for securities sold 5,042,718
Foreign tax reclaim 2,459
................................................................................
Total assets 1,703,109,906
................................................................................
Liabilities
Payable for securities purchased 25,986,822
Payable for shares of the fund repurchased 117,750
Payable for compensation of Manager (Note 2) 2,453,878
Payable for investor servicing and
custodian fees (Note 2) 96,695
Payable for compensation of Trustees (Note 2) 12,002
Payable for administrative services (Note 2) 5,776
Other accrued expenses 240,186
................................................................................
Total liabilities 28,913,109
................................................................................
Net assets $1,674,196,697
................................................................................
Represented by:
Paid in Capital (Notes 1 and 4) $1,541,518,630
Accumulated net investment loss (Note 1) (3,300)
Accumulated net realized loss on investments
and foreign currency transactions (Note 1) (32,755,137)
Net unrealized appreciation of
investments and assets and liabilities in
foreign currencies 165,436,504
................................................................................
Total--Representing net assets applicable
to capital shares outstanding $1,674,196,697
................................................................................
Computation of net asset value
Number of shares outstanding 97,206,802
Net asset value, offering price and redemption
price per share (net assets divided by number
of shares outstanding) $17.22
................................................................................
Cost of investments (Note 1) $1,526,478,214
- --------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
- --------------------------------------------------------------------------------
Year ended December 31, 1996
- --------------------------------------------------------------------------------
<S> <C>
Investment income:
Dividends $1,875,819
Interest 4,586,640
Less: foreign taxes withheld (38,376)
................................................................................
Total investment income 6,424,083
................................................................................
Expenses:
Compensation of Manager (Note 2) 7,144,796
Investor servicing and custodian fees (Note 2) 582,144
Compensation of Trustees (Note 2) 39,310
Administrative services (Note 2) 20,964
Reports to shareholders 66,203
Auditing 44,196
Legal 24,789
Postage 144,668
................................................................................
Total expenses 8,067,070
................................................................................
Expense reduction (Note 2) (187,206)
Net expenses 7,879,864
................................................................................
Net investment loss (1,455,781)
................................................................................
Net realized loss on investments
(Notes 1 and 3) (30,518,627)
Net realized gain on foreign currency
transactions (Note 1) 225
Net unrealized appreciation of assets and
liabilities in foreign currencies during the year 253
Net unrealized appreciation of
investments during the year 71,887,399
................................................................................
Net gain on investments 41,369,250
................................................................................
Net increase in net assets resulting
from operations $39,913,469
- --------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ----------------------------------------------------------------------------------------------------
Year ended Year ended
December 31, December 31,
1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment loss $(1,455,781) $(63,494)
Net realized loss on investments and
foreign currency transactions (30,518,402) (2,173,197)
Net unrealized appreciation of investments
and assets and liabilities in foreign currencies 71,887,652 90,775,571
.....................................................................................................
Net increase in net assetsNet increase in net assets
resulting from operations 39,913,469 88,538,880
.....................................................................................................
Distributions to shareholders:
From net investment income -- (7,784)
From net realized gain on investments -- (208,404)
In excess of net realized gain -- (63,823)
Return of capital -- (73,542)
Increase from capital share
transactions (Note 4) 1,119,174,604 358,331,301
.....................................................................................................
Total increase in net assets 1,159,088,073 446,516,628
.....................................................................................................
Net assets:
Beginning of year 515,108,624 68,591,996
.....................................................................................................
End of year $1,674,196,697 $515,108,624
.....................................................................................................
Accumulated net investment loss, end
of year $(3,300) $ --
- -----------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Investment Operations
Net
Realized and
Unrealized From
Net Asset Value Net Gain Total from Net
Beginning of Investment on Investment Investment
Period ended Period Loss Investments Operations Income
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1996 $15.63 $(.01) $1.60 $1.59 $ --
December 31, 1995 10.82 -- 4.84 4.84 --(e)
December 31, 1994** 10.00 --(b) .82 .82 --
- --------------------------------------------------------------------------------------------------
<CAPTION>
Financial Highlights (Continued)
Less Distributions
From In Excess
Net of Net
Realized Realized Return
Gain on Gain on of Total Net Asset Value,
Period ended Investments Investments Capital Distributions End of Period
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1996 $-- $-- $-- $ -- $17.22
December 31, 1995 (.02) --(e) (.01) (.03) 15.63
December 31, 1994** -- -- -- -- 10.82
- --------------------------------------------------------------------------------------------------
<CAPTION>
Financial Highlights (Continued)
Total Ratio of Net
Investment Ratio of Investment
Return at Net Assets, Expenses Income to Average
Net Asset End of Period to Average Net Average Net Portfolio commission rate
Period ended Value (%)(c) (in thousands) Assets (%)(d) Assets (%) Turnover (%) paid (a)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1996 10.17 $1,674,197 .72 (.13) 57.94 $.0488
December 31, 1995 44.87 515,109 .84 (.03) 30.87
December 31, 1994** 8.20* 68,592 .47(b)* .03(b)* 32.77*
- -----------------------------------------------------------------------------------------------------------------
* Not annualized.
** For the period May 2, 1994 (commencement of operations) to December 31, 1994.
(a) Average commission rate paid on security trades is required for fiscal periods beginning on or
after September 1, 1995.
(b) Reflects an expense limitation in effect during the period. As a result of such limitation, expenses
for the period ended December 31, 1994 reflect a reduction of approximately $0.02 per share.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(d) The ratio of expenses to average net assets for the period ended December 31, 1995, and thereafter,
includes amounts paid through expense offset and brokerage service arrangements. Prior period ratios
exclude these amounts (Note 2).
(e) Per share distributions were less than $0.01 per share.
</TABLE>
Notes to Financial Statements
December 31, 1996
NOTE 1
SIGNIFICANT
ACCOUNTING
POLICIES
Putnam VT New Opportunities Fund (the "fund"), formerly PCM New
Opportunities Fund, is one of a series of funds comprising Putnam
Variable Trust (the "Trust"), formerly Putnam Capital Manager Trust,
which is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The
following is a summary of significant accounting policies consistently
followed by the Fund in preparation of its financial statements. The
preparation of financial statements is in conformity with generally
accepted accounting principles and requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
A) Security valuation Investments for which market quotations are
readily available are stated at market value, which is determined using
the last reported sale price on the principal market on which such
securities are traded, or, if no sales are reported--as in the case of
some securities traded over-the-counter--the last reported bid price.
Securities quoted in foreign currencies are translated into U.S. dollars
at the current exchange rate. Short-term investments having remaining
maturities of 60 days or less are stated at amortized cost, which
approximates market value and other investments are stated at fair value
following procedures approved by the Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested
cash balances into a joint trading account along with the cash of other
registered investment companies and certain other accounts managed by
Putnam Investment Management, Inc. ("Putnam Management"), the fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc.. These
balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through
its custodian, receives delivery of the underlying securities, the
market value of which at the time of purchase is required to be in an
amount at least equal to the resale price, including accrued interest.
Putnam Management is responsible for determining that the value of these
underlying securities is at all times at least equal to the resale
price, including accrued interest.
D) 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.
Dividend income is recorded on the ex-dividend date except that certain
dividends from foreign securities are recorded as soon as the fund is
informed of the ex-dividend date.
E) Foreign currency translation The accounting records of the fund are
maintained in U.S. dollars. The market value of foreign securities,
currency holdings, other assets and liabilities are recorded in the
books and records of the fund after translation to U.S. dollars based on
the exchange rates on that day. The cost of each security is determined
using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when accrued or incurred. The
fund does not isolate that portion of realized or unrealized gains or
losses resulting from changes in the foreign exchange rate on
investments from fluctuations arising from changes in the market prices
of the securities. Such fluctuations are included with the net realized
and unrealized gain or loss on investments. Net realized gains and
losses on foreign currency transactions represent net exchange gains or
losses on disposition of foreign currencies and the difference between
the amount of investment income and foreign withholding taxes recorded
on the fund's books and the U.S. dollar equivalent amounts actually
received or paid. Net unrealized gains and losses on foreign currency
transactions arise from changes in the value of assets and liabilities
other than investments at the period end, resulting from changes in the
exchange rate.
F) Federal income taxes It is the policy of the fund to distribute all
of its taxable income within the prescribed time and otherwise comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies. Therefore, no provision has been made for federal
taxes on income, capital gains or unrealized appreciation on securities
held.
At December 31, 1996 the fund had capital loss carryovers, which will
expire on the following dates:
Loss Carryover Expiration Date
- -----------------------------------------------------------------
$ 1,756,000 December 31, 2003
24,242,000 December 31, 2004
- -----------------------------------------------------------------
These capital loss carryovers may be used to offset realized gains, if
any.
G) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the funds on the ex-dividend date.
Capital gain distributions, if any, are recorded on the ex-dividend date
and paid 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. These
differences include losses on wash sale transactions, deferred trustee
fees and post-October loss deferrals. 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. For the year ended December 31, 1996, the fund reclassified
$1,452,481 to increase undistributed net investment income and
$1,452,256 to decrease paid-in-capital, with a decrease to accumulated
net realized gain on investments of $225.
The calculation of net investment income per share in the financial
highlights table excludes these adjustments.
H) Expenses of the trust Expenses directly charged or attributable to
the fund will be paid from the assets of the fund. Generally, expenses
of the trust will be allocated among and charged to the assets of each
fund in the series of funds on a basis that the Trustees deem fair and
equitable, which may be based on the relative assets of each fund or the
nature of the services performed and relative applicability to each
fund.
I) Beneficial Interest At December 31, 1996, insurance companies or
their separate accounts were record owners of all but a de minimis
number of the shares of the fund. Approximately 90% of the fund is owned
by accounts of one group of insurance companies.
NOTE 2 MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Management, for management and investment
advisory services is paid quarterly based on the average net assets of
the fund. The following summarizes the management fee rates in effect at
December 31, 1996:
Rate
- --------------------------------------------------------------------
0.70% of first $500 million of average net assets,
0.60% of the next $500 million,
0.55% of the next $500 million,
0.50% of the next $5 billion,
0.475% of the next $5 billion,
0.455% of the next $5 billion,
0.44% of the next $5 billion,
and 0.43% of any excess thereafter.
- --------------------------------------------------------------------
The Trust reimburses Putnam Management for the compensation and related
expenses of certain officers of the Trust and their staff who provide
administrative services to the Trust. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
For the year ended December 31, 1996, the fund's expenses were reduced
by $187,206 under expense offset arrangements with PFTC and brokerage
service arrangements.
Investor servicing and custodian fees reported in the Statement of
Operations exclude these credits. The fund could have invested a portion
of these assets utilized in connection with the expense offset
arrangements in an income producing asset if it had not entered into
such arrangements.
Trustees of the Trust receive an annual Trustees fee of $2,350 and an
additional fee for each Trustee's 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.
The fund has adopted a Trustee Fee Deferral Plan (the "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 in the
fund and are invested in certain Putnam funds until distribution in
accordance with the 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 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.
NOTE 3 PURCHASES AND SALES OF SECURITIES
During the year ended December 31, 1996, purchases and sales of
investment securities (other than short-term investments) were
$1,689,757,472 and $604,837,542, respectively.
There were no purchases and sales of U.S. government obligations.
In determining net gain or loss on securities sold, the cost of
securities has been determined on the identified cost basis.
NOTE 4 CAPITAL SHARES
At December 31, 1996, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
<TABLE>
<CAPTION>
Year ended December 31
- ---------------------------------------------------------------------------------------------------
1996 1995
- ---------------------------------------------------------------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 68,915,384 $1,199,098,629 29,068,100 $388,540,076
Shares issued in connection with
reinvestment of distributions -- -- 30,039 353,553
...................................................................................................
68,915,384 1,199,098,629 29,098,139 388,893,629
Shares repurchased (4,655,563) (79,924,025) (2,490,522) (30,562,328)
...................................................................................................
Net increase 64,259,821 $1,119,174,604 26,607,617 $358,331,301
...................................................................................................
Results of December 5, 1996 shareholder meeting
(Unaudited)
An annual meeting of shareholders of the Trust was held on December 5,
1996. At the meeting, each of the nominees for Trustees was elected, as
follows:
Putnam Variable Trust*
Votes for Votes withheld
Jameson Adkins Baxter 1,116,288,234 23,372,229
Hans H. Estin 1,116,475,551 23,184,912
John A. Hill 1,116,577,571 23,082,892
Ronald J. Jackson 1,116,470,036 23,190,427
Elizabeth T. Kennan 1,115,797,665 23,862,798
Lawrence J. Lasser 1,116,851,005 22,809,458
Robert E. Patterson 1,116,715,152 22,945,311
Donald S. Perkins 1,116,412,123 23,248,340
William F. Pounds 1,116,537,372 23,123,091
George Putnam 1,116,346,318 23,314,145
George Putnam, III 1,116,194,622 23,465,841
Eli. Shapiro 1,114,773,906 24,886,557
A.J.C. Smith 1,116,753,131 22,907,332
W. Nicholas Thorndike 1,116,437,126 23,223,337
A proposal to ratify the selection of Price Waterhouse LLP as auditors
for the fund was approved as follows; 1,088,978,752* votes for, and
6,167,133* votes against, with 44,514,578* abstentions and broker non-
votes.
* These voting results represent the entire Trust, of which Putnam VT
New Opportunities Fund is one in the series.
</TABLE>
<TABLE>
<CAPTION>
Results of December 5, 1996 shareholder meeting (continued)
- -------------------------------------------------------------------------------------------------------------------
Putnam VT New Opportunities Fund
- -------------------------------------------------------------------------------------------------------------------
Abstentions
Votes Votes and Broker
For Against Non-Votes
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A proposal to amend the fund's fundamental investment
restriction with respect to investments in the securities of a single
issuer was approved as follows 71,389,133 3,063,018 3,725,862
- -------------------------------------------------------------------------------------------------------------------
A proposal to amend the fund's fundamental investment
restriction with respect to making loans through purchases
of debt obligations, repurchase agreements and securities loans
was approved as follows 69,491,114 4,902,633 3,784,266
- -------------------------------------------------------------------------------------------------------------------
A proposal to amend the fund's fundamental investment
restriction with respect to investments in real estate was
approved as follows 70,541,730 3,987,060 3,649,223
- -------------------------------------------------------------------------------------------------------------------
A proposal to amend the fund's fundamental investment
restriction with respect to concentration of its assets was
approved as follows 71,647,680 2,793,203 3,737,130
- -------------------------------------------------------------------------------------------------------------------
A proposal to amend the fund's fundamental investment
restriction with respect to senior securities was approved
as follows 71,615,163 2,750,424 3,812,426
- -------------------------------------------------------------------------------------------------------------------
A proposal to amend the fund's fundamental investment
restriction with respect to investments in commodities or
commodity contracts was approved as follows 70,144,361 4,304,633 3,729,019
- -------------------------------------------------------------------------------------------------------------------
A proposal to eliminate the fund's fundamental investment
restriction with respect to investments in securities of issuers
in which management of the fund or Putnam Investment
Management, Inc. owns securities was approved as follows 69,912,558 4,406,707 3,858,748
- -------------------------------------------------------------------------------------------------------------------
A proposal to eliminate the fund's fundamental investment
restriction with respect to margin transactions was approved
as follows 68,842,000 5,324,831 4,011,182
- -------------------------------------------------------------------------------------------------------------------
A proposal to eliminate the fund's fundamental investment
restriction with respect to short sales was approved as follows 68,715,980 5,391,069 4,070,964
- -------------------------------------------------------------------------------------------------------------------
A proposal to eliminate the fund's fundamental investment
restriction which limits the fund's ability to pledge assets was
approved as follows 68,923,707 5,177,019 4,077,287
- -------------------------------------------------------------------------------------------------------------------
A proposal to eliminate the fund's fundamental investment
restriction with respect to investments in certain oil, gas and
mineral interests was approved as follows 70,322,006 3,973,334 3,882,673
- -------------------------------------------------------------------------------------------------------------------
A proposal to eliminate the fund's fundamental investment
restriction with respect to invest to gain control of a company's
management was approved as follows 70,249,812 4,036,461 3,891,740
- -------------------------------------------------------------------------------------------------------------------
A proposal to amend the fund's Agreement and Declaration
of Trust of Putnam Capital Manager Trust to permit the issuance
of additional classes of shares was approved as follows 70,610,244 3,805,420 3,762,349
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Putnam
Variable
Trust
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
Independent Accountants
Price Waterhouse LLP
Trustees
George Putnam, Chairman,
William F. Pounds, Vice Chairman,
Jameson Adkins Baxter, Hans H. Estin,
John A. Hill, Ronald J. Jackson, Elizabeth T. Kennan,
Lawrence J. Lasser, Robert E. Patterson,
Donald S. Perkins, George Putnam, III, Eli Shapiro,
A.J.C. Smith, W. Nicholas Thorndike
PUTNAM INVESTMENTS
This report has been prepared for the shareholders of Putnam Variable
Trust. It is not authorized for other distribution unless preceded or
accompanied by an effective prospectus that describes the trust's
policies, charges and other matters of interest for the prospective
investor.
32014 2/97
