(logo)
Putnam
Intermediate
Government
Income
Trust
Annual
Report
November 30, 1993
(artwork)
For investors seeking high
current income and
relative stability of net
asset value through a
portfolio of U.S.
government and foreign
governmental securities
with limited maturities
A member
of the Putnam
Family of Funds
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Annual Report
7 Report of Independent Accountants
8 Portfolio of investments owned
12 Financial statements
23 Fund performance supplement
<PAGE>
How your
fund performed
For periods ended November 30, 1993
Total return* Lehman Bros.
Intermediate Consumer
Fund Gov't. Bond Price
NAV Market price Index Index
1 year 9.04% 0.01% 9.13% 2.67%
3 years 34.14 21.50 33.26 8.97
annualized 10.28 6.71 10.04 2.91
5 years 62.07 47.54 62.42 21.20
annualized 10.14 8.09 10.19 3.92
Life-of-fund
(since 6/27/88) 69.46 41.48 65.80 23.57
annualized 10.20 6.60 9.78 3.97
Share data NAV Market price
November 30, 1992 $9.32 $9.125
November 30, 1993 $9.05 $8.125
In excess
Distributions Investment of investment
12 months endedNumber income income Capital gains Total
November 30, 1993 12 $0.5500 $0.0384 $0.4456 $1.034
Current returns
at the end of the period NAV Market price
Current dividend rate 6.23% 6.94%
Total return at end of most recent calendar quarter
Periods ended
December 31, 1993 NAV Market price
1 year 9.19% 4.09%
3 years 34.50 24.53
annualized 10.38 7.59
5 years 64.75 59.83
annualized 10.50 9.83
Life-of-fund 71.61 46.29
(since 6/27/88)
annualized 10.30 7.15
*Performance data represent past results. Investment return,
market price and net asset value will fluctuate so an investor's
shares, when sold, may be worth more or less than their original
cost.
<PAGE>
Terms you need to know
Total return is the change in value of an investment from the
beginning to the end of a period, assuming the reinvestment of
all distributions. It may be shown at net asset value or at
market price.
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares.
Market price is the current trading price of one share of the
fund. Market prices are set by transactions between buyers and
sellers on the New York Stock Exchange.
Current dividend rate is calculated by annualizing the income
portion of the fund's most recent distribution and dividing by
the NAV or market price on the last day of the period.
Please see the fund performance supplement on page 23 for
additional information about performance comparisons.
<PAGE>
From the
Chairman
(photograph of George Putnam)
(C) Karsh, Ottawa
George Putnam
Chairman
of the Trustees
Dear Shareholder:
Putnam Intermediate Government Income Trust delivered a positive
total return at net asset value for the fiscal year ended
November 30, 1993, with a portfolio divided close to its
managers' target mix of 70% U.S. government bonds and 30% bonds
of foreign governments.
Your fund's managers have found plenty of opportunity both at
home and abroad. Essentially, this year's success can be
attributed to investment strategies that relied upon the
micro-management of the elements with the most profound effect on
your fund's portfolio of fixed-income securities. These elements
included working the yield curve, a continual overview and
analysis of the shifting market in mortgage-backed securities and
a cautious approach to international bonds that involved a
protective hedging strategy. The Report from Putnam Management on
the following pages will give you the specifics of these
strategies and show how they contributed to building the fund's
strong total return at net asset value.
Going forward, Putnam Management believes interest rates in the
United States have fallen to a new low and will fluctuate in a
range much narrower than last year's. In Europe, where most of
the fund's international assets are invested, we anticipate
relatively slow economic recovery and more sedate bond markets.
New opportunities and a continual refinement of current
investment strategies offer the potential for another excellent
year for your fund.
Respectfully yours,
George Putnam
January 19, 1994
<PAGE>
Report from
Putnam Management
Back in the days of higher interest rates, managing a fund like
Putnam Intermediate Government Income Trust was less complicated.
This year, our strong returns have been largely the result of a
variety of strategic positions on the yield curve and a careful
analysis of the shifting mortgage-backed securities market.
At the beginning of the fiscal year, the fund's U. S. Treasury
securities were positioned in a barbell configuration. When
"barbelled," the holdings are spread across the spectrum of
maturities with concentrations at both the long and short ends, a
structure that has performed best when there was a wide spread
between long- and short-term rates, as was the case in early
1993.
Later, the fund's Treasuries were shifted into a "bulleted"
configuration with a concentration on seven-year maturities. This
move contributed significantly to the fund's total return when
demand for seven-year Treasuries increased, a result of the
prerefunding process as many municipal bond issuers refinanced
their older debt at new, lower rates of interest. A barbell was
again used until we correctly predicted that the yield curve
would flatten, this time rather dramatically. As of November 30,
1993, we consider the situation "more normal" and the fund's
Treasuries are held once more in a bulleted configuration.
Mortgage-backed market breaks the rules Another consequence of
the year's historically low interest rates has been several
surges in the refinancing of home mortgages as homeowners paid
off older, more expensive loans and took out new mortgages at
lower rates. As a result, the once tranquil mortgage-backed
market has been full of surprises for the unwary.
Earlier in the year, during the first waves of prepayments, your
fund reduced its holdings in mortgage-backed securities; those
remaining in the portfolio were determined to be unlikely
candidates for refinancing. Prices of all mortgage-backed
securities, even those with little prepayment risk, dropped so
low that your fund manager was able to acquire selected issues at
bargain prices. At this point, in order to increase yield and
total return in the year ahead the fund moved to increase its
holdings in mortgage-backed securities from a low of about 30% of
its U.S. government sector to its present 60%.
International bonds rally throughout the year The fund's overseas
strategy echoed some of our domestic moves. In Europe, the
economic situation roughly paralleled that of the U.S. about a
year ago. The recession there had the European Community
countries looking to the Bundesbank to reduce interest rates as
an economic stimulus. When the Bundesbank failed to provide the
kind of cuts that were needed, some of the so-called "peripheral"
countries, who had earlier gained freedom from the EC monetary
system, opted to devalue their currencies. These devaluations,
especially in the U.K., Italy, and Sweden, had the desired effect
of serving as an economic stimulus and resulted in strong bond
market performance. The fund profited from these rallies and used
the subsequent downturns as buying opportunities, moves that
helped the international sector contribute significantly to the
fund's total return.
Another interest-rate waiting game At mid-year, we took a
considerable profit in our Canadian bonds, reduced our position
there and moved the proceeds to Japan where we feel the bond
market offers significant potential. Currently the fund's
Japanese weighting is approximately 25% of the total
international portfolio and was recently moved to longer-term
bonds. We anticipate interest rates in Japan will finally come
down as an economic necessity and that the yen will stabilize.
Both events would set the stage for recovery from the recession
that has plagued Japan for the past two years.
Currency hedges protect the portfolio As much as we believe that
currency hedges are essential to our conservative approach to
international investing, we also acknowledge that hedges can mute
some of our more outstanding gains in the international sector.
However, especially in cases where we believe the dollar will
strengthen against other currencies as interest rates fall (this
is likely in Europe and Japan), we will probably increase the
fund's hedging.
The outlook Since economic recovery has taken hold in the U.S.
and is now showing increasing signs of growth, there has been
concern that the inevitable result will be inflation and higher
interest rates. Although this may have been the historical
pattern, we believe that the U.S. economy is now operating under
a different set of principles.
Perhaps because this recovery has been cautious and, until
recently, uncertain, the typical signs of inflationary pressure
have been missing. For example, there is little pressure for
higher wages since most workers who have jobs are glad to have
them, a result of recent downsizing and corporate restructuring.
Most sectors of the economy still have excess capacity; it
appears that excess capacity is a feature of most developed
economies the world over. We are also seeing that a new kind of
powerful consumer has taken over. This new consumer is keenly
aware of his or her many choices when making purchasing decisions
and is extremely sensitive to price, especially in light of the
general wage stagnation and job insecurity.
With these factors in mind, we are looking for a relatively
stable interest rate environment here in the United States and
gradually declining interest rates in Europe and Japan. We
currently expect to keep the domestic side's longer-term
Treasuries in a bulleted configuration and a watchful eye on the
mortgage-backed market. We suspect that the European bond rallies
may be over but that the yield curve there will steepen, a
development that, if it occurs, should benefit the
intermediate-term bonds that your fund holds.
<PAGE>
Putnam
Intermediate
Government
Income
Trust
Annual
Report
For the Fiscal Year Ended November 30, 1993
Report of Independent Accountants
To the Trustees and Shareholders of
Putnam Intermediate Government Income Trust
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 Intermediate
Government Income Trust (the "Fund") at November 30, 1993, 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 Fund'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 November 30,
1993 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
Boston, Massachusetts
January 26, 1994
<PAGE>
Portfolio of
investments owned
November 30, 1993
U.S. Government and Agency Obligations (63.6%)(a)
Principal Amount Value
Federal Home Loan
Mortgage Corp.
$ 1,645,961 10 1/2s, May 1, 2020 $ 1,816,215
6,074,801 7 1/2s, January 1, 2020 6,224,773
Federal Home Loan
Mortgage Corp. Certif.
of Participation
7,277,567 8 1/2s, September 1, 2008 7,595,961
1,582,872 7s, July 1, 2008 1,622,444
884,482 7s, November 1, 1998 903,830
1,105,306 6 1/2s, September 1, 2002 1,107,724
Federal Home Loan
Mortgage Corp. Multi-
class Certif. of
Participation
33,110,861 8 1/2s, with various due
dates to June 15, 1997 35,046,758
4,004,604 8 1/4s, February 15, 1995 4,114,731
Federal National
Mortgage Association
1,763,532 11 1/2s, August 1, 2022 1,992,791
3,812,141 10 1/2s, with various due
dates December 1, 2018 4,241,006
1,822,252 10s, September 1, 2020 2,001,060
8,492,650 8 1/2s, January 1, 2012 8,946,476
8,187,006 8s, with various due
dates to July 25, 2022 8,553,272
25,248,060 7s, November 1, 2023 25,461,091
16,960,000 6 1/2s, TBA, December 1,
2023(b) 16,710,900
8,076,949 6 1/2s, August 1, 2004 8,140,050
Government National
Mortgage Association
4,935,163 11s, with various due dates
to October 15, 2010 5,619,917
266,727 9 1/2s, with various due
dates to August 15, 2020 286,982
555,081 8 1/2s, February 15, 2023 585,264
53,415,774 8s, with various due dates
to October 15, 2023 56,120,216
$ 28,555,000 7s, TBA, December 15,
2023(b) $ 28,867,320
565,000 U.S. Treasury Notes 8 7/8s,
November 15, 1997 644,277
27,905,000 U.S. Treasury Notes 8 1/4s,
July 15, 1998 31,489,048
11,080,000 U.S. Treasury Notes 7 7/8s,
April 15, 1998 12,291,875
7,000,000 U.S. Treasury Notes 7 1/2s,
May 15, 2002 7,837,813
985,000 U.S. Treasury Notes 6s,
November 30, 1997 1,023,169
13,970,000 U.S. Treasury Notes 5 3/4s,
August 15, 2003 13,913,247
800,000 U.S. Treasury Notes 5 1/4s,
July 31, 1998 804,750
47,000,000 U.S. Treasury Stripped
Interest Payment
Coupon Securities
zero%, February 15,
2003 27,142,676
44,000,000 U.S. Treasury Stripped
Interest Payment
Coupon Securities
zero%, August 15,
2003 24,488,750
22,700,000 U.S. Treasury Stripped
Interest Payment
Coupon Securities
zero%, May 15, 2003 12,868,063
10,105,000 U.S. Treasury Stripped
Interest Payment
Coupon Securities
zero%, May 15, 1998 8,055,580
10,105,000 U.S. Treasury Stripped
Principal Payment
zero%, May 15, 1998 8,061,895
Total U.S. Government
and Agency Obligations
(cost $368,149,094) $374,579,924
Foreign Bonds and Notes (26.9%)(a)(c)
Principal Amount Value
A$ 7,470,000 Australia (Government of)
bonds 10s, 2002 $ 5,993,722
A$11,000,000 Australia (Government of)
bonds 9 1/2s, 2003 8,607,500
DKK33,900,000 Denmark (Government of)
notes 9s, 2000 5,741,813
DKK22,900,000 Denmark (Government of)
notes 9s, 1998 3,792,813
FIN25,000,000 Finland (Republic of) notes
11s, 1999 5,109,375
FIN13,000,000 Finland (Republic of)
notes 10 3/4s, 2002 2,713,750
FF44,300,000 France (Government of)
Balladurs 6s, 1997 7,614,063<PAGE>
ECU 15,300,000 France (Government of)
OAT 8s, 2003 18,991,175
DM 3,300,000 Germany (Republic of)
notes 6 1/2s, 2003 2,002,688
ITL7,750,000,000 Italy (Government of)
BTPS 11 1/2s, 1996 4,732,344
ITL4,300,000,000 Italy (Government of)
bonds 11 1/2s, 2003 2,765,438
ITL1,570,000,000 Italy (Government of)
bonds 10s, 2003 939,056
ITL7,000,000,000 Italy (Government of)
bonds 9s, 1998 4,068,750
JPY1 030,000,000 Japan (Government of)
BTPS 4.7s, 2003 10,338,625
JPY1,644,895,000 Japan (Government of)
bonds 5 1/2s, 2002(d) 17,281,678
JPY 325,900,000 Japan (Government of)
bonds 4.4s, 2003 3,204,004
NLG 16,500,000 Netherlands (Government
of) bonds 6 1/4s, 1998 8,930,625
SEK 21,400,000 Sweden (Government of)
notes 11s, 1999 2,955,875
SEK 48,000,000 Sweden (Government of)
bonds 10 1/4s, 2003 6,630,000
GBP 3,560,000 United Kingdom Treasury
bonds 8s, 2003 5,796,125
GBP 11,100,000 United Kingdom Treasury
bonds 7 1/4s, 1998 $ 17,281,313
JPY 470,000,000 World Bank notes 5 1/4s,
2002 4,835,125
JPY 822,500,000 World Bank notes 4 1/2s,
2003 8,132,469
Total Foreign Bonds
and Notes
(cost $160,888,757) $158,458,326
Collateralized Mortgage Obligations (1.8%)(a)(e)
Principal Amount Value
Federal Home Loan
Mortgage Corp. PAC
Interest Only (IO) Strips
$ 214,050 1166.85s, July 25, 2018 $ 4,174,083
176,470 992.993s, June 15, 2012 2,823,591
120,770 992.5763s, July 15, 2016 2,698,628
89,610 Federal National Mortgage
Associaton PAC (IO)
Strips 1005.502s, July 25,
2010 761,706
Total Collateralized
Mortgage Obligations
(cost $13,126,453) $ 10,458,008
<PAGE>
Call Options On Foreign Currency (--%)(a)(c)
Expiration
Date/Strike
Currency Price Value
DM 14,900,000 Deutschemarks
In Exchange
For Japanese Yen
Dec 93/65.7JPY per 1 DM $ 1,490
DM 29,800,000 Deutschemarks
In Exchange
For Japanese Yen
Dec 93/66.25JPY per 1 DM 8,940
$ 16,400,000 U.S. Dollars
In Exchange
For Japanese Yen
Dec 93/108JPY per $1 150,880
Total Call Options On
Foreign Currency
(cost $666,789) $ 161,310
Short-Term Investments (16.1%)(a)
Principal Amount Value
$ 15,000,000 General Electric
Capital Corp. 3.07s,
December 15, 1993 $ 14,983,404
GRD535,000,000 Greece Treasury Bills
zero %, May 31, 1994(c) 1,952,750
$77,927,000 Interest in $475,912,000
joint repurchase
agreement dated
November 30, 1993
with J.P. Morgan
Securities, due
December 1, 1993
with respect to various
U.S. Treasury obligations--
maturity value of
$77,933,927 for an
effective yield of 3.2% 77,933,927
Total Short-Term
Investments
(cost $95,177,214) $ 94,870,081
Total Investments
(cost $638,008,307)(f) $638,527,649
<PAGE>
Notes
(a) Percentages indicated are based on net assets of
$589,227,021, which correspond to a net asset value per share of
$9.05.
(b) TBAs are mortgage backed securities traded under delayed
delivery commitments, settling after November 30, 1993. Although
the unit price for the trade has been established, the principal
value has not been finalized. However, the principal amount will
not fluctuate more than 2.0% from the commitment. Income on such
security will not be earned until settlement date. The cost of
TBA purchase held at November 30, 1993 was $46,200,737 or 7.8% of
net assets.
(c) Foreign currency-denominated. Market value is translated at
the current exchange rate.
(d) A portion of this security, having a value of $9,055,284 or
1.5% of net assets, has been purchased on a "forward commitment"
basis, that is, the Fund has agreed to take delivery of and make
payment for such security beyond the settlement time of five
business days after the trade date and subsequent to the date of
this report. The purchase price and interest rate of such
security is fixed at the trade date, although the Fund does not
earn any interest on such security until the settlement date.
(e) Interest Only (IO) Strips represent the right to receive the
monthly interest payments on an underlying pool of mortgage
loans. Payments of principal on the pool reduce the nominal value
of the IO holding.
(f) The aggregate identified cost for federal income tax purposes
is $638,088,944, resulting in gross unrealized appreciation and
depreciation of $11,827,407 and $11,388,702, respectively, or net
unrealized appreciation of $438,705.
Forward Currency Contracts Outstanding
at November 30, 1993
Unrealized
Market Aggregate Delivery Appreciation/
Value Face Value Date (Depreciation)
Australian
Dollar
(Sell) $2,202,620 $2,251,368 2/4/94 $48,748
Australian
Dollar
(Sell) 4,338,180 4,391,343 2/14/94 53,163
Deutschemarks
(Buy) 7,885,280 7,910,656 2/7/94 (25,376)
Deutschemarks
(Buy) 4,632,000 4,647,245 2/28/94 (15,245)
<PAGE>
Forward Currency Contracts Outstanding
at November 30, 1993
Unrealized
Market Aggregate Delivery Appreciation/
Value Face Value Date (Depreciation)
Deutschemarks
(Buy) 4,921,500 4,946,462 2/28/94 (24,962)
Deutschemarks
(Sell) 16,464,520 16,672,735 2/4/94 208,215
Deutschemarks
(Sell) 4,057,900 4,098,817 2/8/94 40,917
Deutschemarks
(Sell) 1,159,400 1,171,029 2/8/94 11,629
Deutschemarks
(Sell) 4,347,750 4,362,748 2/9/94 14,998
Deutschemarks
(Sell) 1,739,100 1,759,634 2/8/94 20,534
Deutschemarks
(Sell) 3,764,800 3,767,352 2/24/94 2,552
Deutschemarks
(Sell) 13,321,600 13,320,978 2/23/94 (622)
Deutschemarks
(Sell) 13,288,870 13,291,312 1/24/94 2,442
Deutschemarks
(Sell) 13,288,870 13,287,687 1/24/94 (1,183)
French Francs
(Sell) 10,687,050 11,153,657 12/21/93 466,607
French Francs
(Sell) 8,118,900 8,134,718 2/22/94 15,818
Japanese
Yen
(Buy) 614,598 629,551 12/22/93 (14,953)
Japanese
Yen
(Sell) 10,091,291 10,271,925 12/24/93 180,636
Japanese
Yen
(Sell) 10,617,100 10,884,930 2/16/94 267,830
Japanese
Yen
(Sell) 5,787,330 5,859,653 2/24/94 72,323
Japanese
Yen
(Sell) 1,388,650 1,391,833 2/28/94 3,183
$1,327,254
<PAGE>
Cross Forward Currency Contracts Outstanding
at November 30, 1993 (Aggregate Face Value $7,072,011)
In
Market Exchange Market DeliveryUnrealized
Contracts Value For Value DateDepreciation
Deutschemarks Danish
(Buy) $4,616,760 Krone$4,756,677 1/18/94 $(139,917)
Deutschemarks Greek
(Buy) 591,900 Drachmas 625,508 12/14/93 (33,608)
Deutschemarks Greek
(Buy) 1,266,300 Drachmas 1,361,247 2/15/94 (94,947)
$(268,472)
Diversification of Foreign Bonds and Notes
at November 30, 1993 (as a percentage of net assets):
Japan 7.4%
United Kingdom 3.9
Multi-National 3.2
Australia 2.5
Italy 2.1
Sweden 1.7
Denmark 1.6
Netherland 1.5
France 1.3
Finland 1.3
Germany 0.4
Greece 0.3
<PAGE>
<TABLE>
<CAPTION>
Statement of
assets and liabilities
November 30,1993
<S> <C> <C>
Assets
Investments in securities, at value (identified cost
$560,074,380) (Note 1) $560,593,722
Repurchase agreement, at value (cost $77,933,927) 77,933,927
Cash 37,402
Interest and other receivables 6,814,330
Receivable for securities sold 20,924,278
Receivable for open forward currency contracts 1,409,595
Receivable for closed forward currency contract 949,480
Total assets 668,662,734
Liabilities
Payable for securities purchased $73,221,860
Distributions payable to shareholders 3,257,356
Payable for compensation of Manager (Note 2) 1,094,275
Payable for administrative services (Note 2) 8,421
Payable for compensation of Trustees (Note 2) 2,249
Payable for investor servicing and custodian
fees (Note 2) 4,447
Payable for open forward currency contracts 350,813
Payable for closed forward currency contracts 1,379,856
Other accrued expenses 116,436
Total liabilities 79,435,713
Net assets $589,227,021
Represented by
Paid-in capital $582,796,090
Distributions in excess of net investment income (2,519,510)
Accumulated net realized gain on investment transactions 7,372,317
Net unrealized appreciation of investments, options and
forward currency contracts 1,578,124
Total -- Representing net assets applicable to capital
shares outstanding $589,227,021
Computation of net asset value
Net asset value per share ($589,227,021 divided by
65,098,252 shares) $9.05
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
operations
Year ended November 30, 1993
<S> <C> <C>
Interest income (net of foreign tax $189,993) $40,985,777
Expenses:
Compensation of Manager (Note 2) $4,374,276
Investor servicing and custodian fees (Note 2) 479,651
Compensation of Trustees (Note 2) 24,134
Reports to shareholders 80,608
Auditing 55,587
Legal 8,384
Postage 191,411
Administrative services (Note 2) 28,221
Registration fee 1,312
Exchange listing fees 52,438
Amortization of organization expenses (Note 1) 4,541
Other expenses 15,892
Total expenses 5,316,455
Net investment income 35,669,322
Net realized gain on investments (Notes 1 and 3) 10,950,035
Net realized loss on options (Notes 1 and 3) (400,852)
Net realized loss on forward currency contracts (Notes 1 and 3) (3,692,956)
Net realized loss on foreign currency (Note 1) (69,619)
Net unrealized foreign currency translation gains 21,920
Net unrealized appreciation of investments, options
and forward currency contracts during the year 7,068,587
Net gain on investment transactions 13,877,115
Net increase in net assets resulting from operations $49,546,437
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Statement of
changes in net assets
<S> <C> <C>
Increase in net assets
Operations:
Net investment income $ 35,669,322 $ 38,707,729
Net realized gain on investments 10,950,035 24,366,499
Net realized loss on options (400,852) (1,578,638)
Net realized gain (loss) on forward currency
contracts (3,692,956) 17,385,014
Net realized loss on foreign currency (69,619) (64,345)
Net unrealized foreign currency translation
gains (losses) 21,920 (118,622)
Net unrealized appreciation (depreciation) of
investments, options, and forward currency
contracts 7,068,587 (21,933,056)
Net increase in net assets resulting
from operations 49,546,437 56,764,581
Distributions to shareholders from:
Net investment income (35,669,322) (38,707,729)
In-excess of net investment income (2,519,510) --
Net realized gain on investments (28,856,348) (10,666,473)
Increase from capital share transactions 5,152,532 8,533,561
Total increase (decrease) in net assets (12,346,211) 15,923,940
<PAGE>
Net assets
Beginning of year 601,573,232 585,649,292
End of year (including distributions in excess
of net investment income of $2,519,510 and
$0, respectively) $589,227,021 $601,573,232
Number of Fund shares
Shares outstanding at beginning of year 64,528,505 63,598,496
Shares issued in connection with reinvestment
of distributions 569,747 930,009
Shares outstanding at end of year 65,098,252 64,528,505
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights*
(For a share outstanding throughout the period)
For the period
June 27, 1988
(commencement
of operations) to
Year ended November 30 November 30
1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $9.32 $9.21 $9.08 $9.11 $9.38 $9.30
Investment Operations
Net Investment Income .55 .60 .68 .73 .79 .35
Net Realized and Unrealized Gain
(Loss) on Investments .21 .28 .34 .22 (.05) .07
Total from Investment Operations .76 .88 1.02 .95 .74 .42
Distributions to Shareholders from:
Net Investment Income (.55) (.60) (.68) (.73) (.79) (.34)
In-excess of net investment income (.04) -- -- -- -- --
Net Realized Gain on Investments (.44) (.17) (.05) (.08) (.22) --
Paid-in Capital -- -- (.16) (.17) -- --
Total Distributions (1.03) (.77) (.89) (.98) (1.01) (.34)
Net Asset Value,
End of Period $9.05 $9.32 $9.21 $9.08 $9.11 $9.38
Market Price, End of Period $8.125 $9.125 $9.125 $9.000 $9.000 $9.250
Total Investment Return
at Market Price (%) (.01) 8.69 11.80 11.90 8.52 (9.56)(a)
Net Assets, End of Period
(in thousands) $589,227 $601,573 $585,649 $567,117 $562,115 $569,990
Ratio of Expenses to
Average Net Assets (%) .89 .92 1.01 1.02 1.00 .98(a)
Ratio of Net Investment Income to
Average Net Assets (%) 5.98 6.51 7.51 8.19 8.43 8.63(a)
Portfolio Turnover (%) 303.68 216.24 255.49 268.42 174.57 34.74(b)
*Financial highlights for periods ended through November 30, 1992 have been restated to conform with requirements issued
by the SEC in December 1992.
(a)Annualized.
(b)Not annualized.
/TABLE
<PAGE>
Notes to
financial statements
November 30, 1993
Note 1
Significant
accounting
policies
The Fund is registered under the Investment Company Act of 1940,
as amended, as a diversified, closed-end management investment
company. The Fund's investment objective is to seek, with equal
emphasis, high current income and relative stability of net asset
value by investing in a portfolio of U.S. government and agency
obligations and foreign governmental obligations with limited
maturities.
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 Investments for which market quotations are
readily available are stated at market value, which is determined
using the last reported sale price, or, if no sales are reported-
- -as in the case of some securities traded over-the-counter--the
last reported bid price, except that certain U.S. government
obligations are stated at the mean between the bid and asked
prices. 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, and other
investments are stated at fair value following procedures
approved by the Trustees.
B) Security transactions and related investment income Security
transactions are accounted for on the trade date (date the order
to buy or sell is executed). Interest income is recorded on the
accrual basis. Discount on zero coupon bonds is accreted
according to the effective yield method.
Upon receipt or payment for foreign currency denominated
receivables and payables, the Fund realizes a gain or loss on
foreign currency amounting to the difference between the original
value and the ending value of the receivable or payable. Foreign
currency gains and losses related to interest receivable are
reported as part of interest income.
C) 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 managed by
Putnam Investment Management, Inc. (Putnam Management) (formerly
known as The Putnam Management Company, Inc.), the Fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc.
(formerly known as The Putnam Companies, Inc.), and certain other
accounts. These balances may be invested in one or more
repurchase agreements and/or short-term money market instruments.
D) 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. The Fund's Manager 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.
E) TBA and forward purchase commitments The Fund may enter into
"TBA" (to be announced) purchase commitments to purchase
securities for a fixed price at a future date beyond customary
settlement time if the Fund holds, and maintains until the
settlement date in a segregated account, cash or high-grade debt
obligations in an amount sufficient to meet the purchase price,
or the Fund enters into offsetting contracts for the forward sale
of other securities it owns. TBA purchase commitments may be
considered securities in themselves, and involve a risk of loss
if the value of the security to be purchased declines prior to
the settlement date, which risk is in addition to the risk of
decline in the value of the Fund's other assets. Unsettled TBA
purchase commitments are valued at the current market value of
the underlying securities, generally according to the procedures
described under "Security valuation" above.
Although the Fund will generally enter into TBA purchase
commitments with the intention of acquiring securities for its
portfolio or for delivery pursuant to options contracts it has
entered into, the Fund may dispose of a commitment prior to
settlement if the Fund Manager deems it appropriate to do so.
F) Option accounting principles When the Fund writes a call
option or put option, an amount equal to the premium received by
the Fund is included in the Fund's "statement of assets and
liabilities'' as an asset and an equivalent liability. The amount
of the liability is subsequently "marked-to-market'' to reflect
the current market value of the option written. The current
market value of an option is the last sale price or, in the
absence of a sale, the last offering price, except that certain
options on U.S. government obligations are stated at fair value
on the basis of valuations furnished by a pricing service
approved by the Trustees. If an option expires on its stipulated
expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss if the cost of a
closing purchase transaction exceeds the premium received when
the option was written) without regard to any unrealized gain or
loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is
exercised, the Fund realizes a gain or loss from the sale of the
underlying security and the proceeds of the sale are increased by
the premium originally received. If a written put option is
exercised, the amount of the premium originally received reduces
the cost the security that the Fund purchases upon exercise of
the option. Accordingly, the risk in writing a call option is
that the Fund relinquishes the opportunity to profit if the
market price of the underlying security increases and the option
is exercised. In writing a put option, the Fund assumes the risk
of incurring a loss if the market price of the underlying
security decreases and the option is exercised.
The premium paid by the Fund for the purchase of a call option or
put option is included in the Fund's "Statement of assets and
liabilities" as an investment and subsequently "marked-to-market"
to reflect the current market value of the option. If an option
the Fund has purchased expires on the stipulated expiration date
the Fund realizes a loss in the amount of the cost of the option.
If the Fund enters into a closing sale transaction, it realizes a
gain or loss, depending on whether the proceeds from the closing
sale are greater or less than the cost of the option. If the Fund
exercises a put option, it realizes a gain or loss from the sale
of the underlying security and the proceeds from such sale will
be decreased by the premium originally paid. If the Fund
exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium originally paid.
Options on foreign currencies The Fund writes and purchases put
and call options on foreign currencies. The accounting principles
and risks involved are similar to those described above relating
to options on securities.
Forward currency contracts A forward currency contract is an
agreement between two parties to buy and sell a currency at a set
price on a future date. The market value of the contract will
fluctuate with changes in currency exchange rates. The contract
is marked-to-market daily and the change in market value is
recorded by the Fund as an unrealized gain or loss. When the
contract is closed, the Fund records a realized gain or loss
equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The
maximum potential loss from forward currency contracts is the
aggregate face value in U.S. dollars at the time the contract was
opened; however, management of the Fund believes the likelihood
of such loss to be remote.
G) Federal taxes It is the policy of the Fund to distribute all
of its income within the prescribed time and otherwise comply
with the provisions of the Internal Revenue Code applicable to
regulated investment companies. It is also the intention of the
Fund to distribute an amount sufficient to avoid imposition of
any excise tax under Section 4982 of the Internal Revenue Code of
1986. Therefore, no provision has been made for federal taxes on
income, capital gains or unrealized appreciation of securities
held and excise tax on income and capital gains.
H) Distributions to shareholders Distributions to shareholders
are recorded by the Fund on the ex-dividend date. At certain
times, the Fund may pay distributions at a level rate even
though, as a result of market conditions or investment decisions,
the Fund may not achieve projected investment results for a given
period.
I) Unamortized organization expenses Expenses incurred by the
Fund in connection with its organization aggregated $39,592.
These expenses were amortized on a straight-line basis over a
five-year period.
Note 2
Management fee,
administrative
services, and
other transactions
Compensation of Putnam Management, the Fund's Manager, a
wholly-owned subsidiary of Putnam Investments, Inc., for
management and investment advisory services is paid quarterly at
the annual rate of 0.75% of the first $500 million of average
weekly net assets, 0.65% of the next $500 million, 0.60% of the
next $500 million, and 0.55% of any excess over $1.5 billion.
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 year ended November 30, 1993, the Fund paid
$28,221 for these services.
Trustees of the Fund receive an annual Trustee's fee of $1,420,
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.
Custodial functions for the Fund are provided by Putnam Fiduciary
Trust Company (PFTC), a subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam
Investor Services, a division of PFTC. Fees paid for these
investor servicing and custodial functions for the year ended
November 30, 1993 amounted to $479,651. Investor servicing and
custodian fees reported in the Statement of operations for the
year ended November 30, 1993 have been reduced by credits allowed
by PFTC.
<PAGE>
<TABLE>
<CAPTION>
Note 3
Purchases
and sales of
securities
During the year ended November 30, 1993, purchases and sales of investment securities
other than U.S. government obligations and short-term investments aggregated $565,890,351
and $581,734,519, respectively. Purchases and sales of U.S. government obligations
aggregated $1,168,617,852 and $1,212,823,187, respectively. In determining the net gain or
loss on securities sold, the cost of securities has been determined on the identified cost
basis.
Written option transactions on investments during the year are summarized as follows:
Number of Premiums
Contracts Received
<S> <C> <C>
Options written 15,600 $ 48,162
Options closed (15,600) 48,162
Written options outstanding at end of year $ --
Purchased options transactions on foreign currencies during the year are
summarized as follows:
Cost
Options purchased 2,041,862
Options expired (282,800)
Options closed (1,092,273)
Purchased options outstanding at end of year $ 666,789
<PAGE>
Written option transactions on foreign currencies during the year are summarized as
follows:
Premiums
Received
Options open at beginning of year $ 394,400
Options closed (394,400)
Written options outstanding at end of year $ --
Transactions in forward currency contracts during the year are summarized as follows:
Purchases of Forward
Currency Contracts
Aggregate
Face Value
Contracts open at beginning of year $ 78,207,996
Contracts purchased 629,634,495
Contracts closed (682,636,566)
Open at end of year $ 25,205,925
Sales of Forward
Currency Contracts
Aggregate
Face Value
Contracts open at beginning of year $ 174,810,581
Contracts opened 1,494,213,045
Contracts closed (1,542,951,909)
Open at end of year $ 126,071,719
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Selected
quarterly data
(Unaudited)
Three months ended
November 30 August 31 May 31 February 28 November 30 August 31 May 31 February 28
1993 1993 1993 1993 1992 1992 1992 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total investment
income
Total $ 9,416,897$ 10,122,570$ 10,923,417$ 10,522,893$ 9,486,368$ 11,818,592$ 11,421,240$ 11,432,832
Per Share $ .15$ .15$ .17$ .16$ .15$ .18$ .18$ .18
Net investment
income
Total $ 8,175,281$ 8,808,242$ 9,474,981$ 9,210,818$ 8,164,154$ 10,428,221$ 10,053,157$ 10,062,197
Per Share $ .13$ .13$ .15$ .14$ .12$ .16$ .16$ .16
Net realized and
unrealized gain
(loss) on
investments
Total $(13,054,383)$ 7,879,731$ 3,870,296$ 15,181,471$ (144,023)$ 17,524,842$ 973,099$ (297,066)
Per Share $ (.21)$ .13$ .05$ .24$ --$ .28$ .01$ (.01)
Net increase in
net assets
resulting from
operations
Total $ (4,879,102)$ 16,687,973$ 13,345,277$ 24,392,289$ 8,020,131$ 27,953,063$ 11,026,256$ 9,765,131
Per Share$ (.08)$ .26$ .20$ .38$ .12$ .44$ .17$ .15
Net assets at
end of period
Total $589,227,021 $603,871,402 $596,948,092 $593,400,171 $601,573,232 $603,882,234 $586,216,506 $583,588,249
Per Share $ 9.05 $ 9.28 $ 9.17 $ 9.12 $ 9.32 $ 9.38 $ 9.12 $ 9.15
/TABLE
<PAGE>
Dividend Policy
It is the Fund's dividend policy to pay monthly distributions
from net investment income and any net realized short-term gains
(including gains from options and futures transactions).
Long-term capital gains, if any, are distributed at least
annually. In an effort to maintain a more stable level of
distributions, the Fund's monthly distribution rate will be based
on Putnam Management's projections of the net investment income
and net realized short-term capital gains that the Fund is likely
to earn over the long term. Such distributions at times may
exceed the current earnings of the Fund, resulting in a return of
capital to shareholders.
At the time of each distribution, shareholders are furnished
Putnam Management's current estimate of the sources of such
distribution. These estimates are subject to adjustment depending
on investment results for the Fund's entire fiscal year. Final
information regarding such matters is furnished to shareholders
in tax information provided following the end of each calendar
year.
Fund
performance
supplement
Putnam Intermediate Government Income Trust is a portfolio
managed for high current income and relative stability of net
asset value through a portfolio of U.S. government and foreign
governmental securities with limited maturities.
The Lehman Brothers Intermediate-Term Government Bond Index is an
unmanaged list of intermediate-term United States Treasury and
agency bonds. The index assumes reinvestment of all distributions
and does not take into account brokerage commission or other
costs. Securities in the fund do not match those in the index and
may pose different risks.
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>
Putnam
Intermediate
Government
Income
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
(DALBAR logo)
Putnam Investor Services
has received the DALBAR
award each year since the
award's 1990 inception.
In more than 10,000 tests
of 38 shareholder
service components,
Putnam outperformed
the industry standard
in every category.
MIG-10026<PAGE>
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
John R. Verani
Vice President
Gary N. Coburn
Vice President
Neil Powers
Vice President
and Fund Manager
William N. Shiebler
Vice President
John D. Hughes
Vice President
and Treasurer
Paul O'Neil
Vice President
Beverly Marcus
Clerk and
Assistant Treasurer
Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Hans H. Estin, John A. Hill,
Elizabeth T. Kennan, Lawrence J. Lasser,
Robert E. Patterson, Donald S. Perkins,
George Putnam, III, A.J.C. Smith,
W. Nicholas Thorndike
Call 1-800-634-1587 weekdays from
9 a.m. to 5 p.m. Eastern time for up-
to-date information about the fund's
NAV or to request Putnam's quarterly
Closed-End Fund Commentary.
- ------------------
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
- -------------------
PUTNAMINVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
APPENDIX TO FORM N30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN
PRINTED AND EDGAR-FILED TEXTS:
(1) Rule lines for tables are omitted.
(2) Boldface and italic typefaces are displayed in normal type.
(3) 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.
(4) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(5) Bullet points and similar graphic signals are omitted.
(6) Page numbering is different.
(7) The symbol for the Japanese Yen has been replaced by "JPY",
the symbol for the British Pound has been replaced by "GBP".
