(Logo)
Putnam
New Jersey
Tax Exempt
Income Fund
Semiannual
Report
December 31, 1993
(artwork)
For investors seeking
high current income
free from federal and
New Jersey income
taxes, consistent with
capital preservation
A member
of the Putnam
Family of Funds
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Semiannual Report
6 Portfolio of investments owned
11 Financial statements
19 Fund performance supplement
<PAGE>
How your
fund performed
For periods ended December 31, 1993
Total return* Lehman Bros. Consumer
Class A Class B Municipal Price
NAV POP NAV CDSC Bond Index Index
6 months 3.96% -0.95% 3.50% -1.48% 4.82% 0.97%
1 year 12.42 7.07 -- -- 12.28 2.75
3 years 36.84 30.31 -- -- 37.01 8.97
annualized 11.02 9.22 -- -- 11.07 2.91
Life-of-class+
(class A shares) 46.94 40.02 -- -- 46.38 13.91
annualized 10.48 9.11 -- -- 10.37 3.43
(class B shares) -- -- 10.97 5.97 12.28 2.75
Share data Class A Class B
NAV POP NAV
June 30, 1993 $9.46 $9.93 $9.46
December 31, 1993 9.44 9.91 9.43
Distributions(a) Investment Capital gains
Number incomeShort-term Long-term Total
Class A 7$0.259598 $0.077 $0.053 $0.389598
Class B 7$0.227294 $0.077 $0.053 $0.357294
Current returns Class A Class B
Taxable equi- Taxable
valents++ equi-
at the end of the period NAV POP NAV POP NAV valent++
Current dividend rate 5.41% 5.15% 9.63% 9.17% 4.76% 8.47%
Current 30-day yield 4.97 4.73 8.85 8.42 4.26 7.58
*Performance data represent past results. Investment return and
net asset value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
+The fund began operations on February 20, 1990, offering shares
now known as class A shares. On January 4, 1993, the fund began
offering class B shares. Performance for each share class will
differ.
(a)Capital gains, if any, are taxable for federal purposes.
++ Assumes maximum combined state and federal tax rate of 43.83%.
Results for investors subject to lower tax rates would not be as
advantageous, although many would have the opportunity to receive
attractive tax benefits from a fund investment. Consult your tax
advisor for more guidance.
Please see the fund performance supplement on page 19 for
additional information about performance comparisons.
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 public
offering price.
Net asset value (NAV) is the value of all your fund's assets,
minus any liabilities, divided by the number of outstanding
shares, not reflecting any sales charge.
Public offering price (POP) is the price of a mutual fund share
plus the maximum sales charge levied at the time of purchase.
Contingent deferred sales charge (CDSC) is a charge applied at
the time of the redemption of shares rather than the time of
purchase. It generally declines and eventually disappears over a
stated period.
Class A shares are the shares of your fund offered subject to an
initial sales charge. Your fund's POP includes the maximum 4.75%
sales charge.
Class B shares are the shares of your fund offered with no
initial sales charge. Within the first six years of purchase,
they are subject to a CDSC declining from 5% to 1%. After the
sixth year, the CDSC no longer applies.
Current dividend rate is calculated by annualizing the net
investment income paid to shareholders in the fund's most recent
distribution, then dividing by the NAV or POP on the last day of
the period.
Current 30-day yield, based only on the fund's net investment
income earnings, is calculated in accordance with Securities and
Exchange Commission guidelines.
Taxable equivalent return is the rate at which a taxable
investment would have to generate income to equal the fund's
current dividend rate or yield.
<PAGE>
From the
Chairman
(photograph of George Putnam)
(c) Karsh, Ottawa
George Putnam
Chairman
of the Trustees
Dear Shareholder:
I am pleased to report that for the six months ended December 31,
1993, Putnam New Jersey Tax Exempt Fund succeeded in providing a
relatively stable source of tax-exempt income as well as a
respectable total return.
Higher tax rates, a positive supply and demand picture, and the
combination of low interest rates and low inflation created a
favorable environment for New Jersey municipal bonds. During the
period, Portfolio Manager Thomas Goggins emphasized
yield-oriented investments, which helped boost your fund's
dividend level. Tom and his management team continued to find
hospital issues attractive and maintained substantial holdings in
industrial revenue bonds, which generally have higher yields.
Tom began managing your fund in June, shortly after joining
Putnam. He brings more than a decade of experience in finance and
investment management to his new duties. Most recently, he was a
portfolio manager at TransAmerica Investment Services in Los
Angeles.
As tax filing time approaches, investors will start feeling the
effects of the higher federal income taxes voted into law last
August, retroactive to January 1, 1993. These higher rates make
tax-exempt investments, including your fund, more attractive than
ever.
While the climate for municipal securities in New Jersey appears
to be favorable for residents seeking tax-exempt income and
conducive to strong performance, experienced fund management is,
nonetheless, critical to selecting quality issues. Meticulous
research and the skills of experienced analysts are necessary to
assess accurately the potential of each investment considered for
the portfolio. As always, we are making full use of the valuable
resources we have in this area.
Respectfully yours,
George Putnam
February 16, 1994
<PAGE>
Report from
Putnam Management
For the six months ended December 31, 1993, Putnam New Jersey Tax
Exempt Income Fund provided a total return of 3.96% for class A
shares at net asset value. At the end of the period, an
investment taxed at the maximum combined New Jersey and federal
income tax rate of 43.83% would have had to provide a current
return of 9.63% to equal the fund's 5.41% dividend rate for class
A shares at NAV. Results for class B shares will differ. See page
2 for additional performance information.
For the past two years, new issuance of municipal bonds reached
record highs nationwide, totaling $233 billion in 1992 and $290
billion in 1993. Most of this new-issue activity was the result
of refinancing. Just as the lowest interest rates in more than 20
years spurred homeowners to rewrite their mortgages,
municipalities were heavily involved in refinancing their debt.
Unlike homeowners, however, municipalities have certain
limitations on their ability to refinance, and we believe that
most of the refinancing is over. We expect new issuance to
decrease significantly in 1994, to around $150 billion to $200
billion.
Fewer New Jersey bonds While other states flooded the market with
new bonds last year, the volume of new issues in New Jersey
decreased by about 42%. This was due in large part to cutbacks in
negotiated bond deals. Generally, municipalities issue bonds
through underwriters, and investment managers negotiate with the
underwriters for the best prices. Last year, most new-issue New
Jersey bonds came to market on a competitive basis, where coupons
and maturities were already set. This arrangement limits the
flexibility of portfolio managers to negotiate more favorable
prices.
Sector rewards and risks Throughout the semiannual period, we
continued to find investments in the health care sector
attractive. For more than a year, we have taken a
market-by-market approach to this sector; that is, we analyze the
dominant health care providers in various areas of the state. We
look for issues that are attractively priced and that may have
been overlooked by others. We have found several well-managed
facilities over the past six months. Nursing homes in particular,
have fared well, and we added Ocean County New Jersey Nursing
Home and Union County Megacare to the portfolio. Both of these
facilities are located in affluent areas where they are the sole
providers of nursing home care.
Industrial development bonds (IDBs) are issued to finance
specific municipal projects. Because they are backed by revenues
of corporate projects rather than the taxing power of state or
local governments, they carry more risk than other municipal
securities. To compensate for the additional risk, they usually
pay higher yields. For the most part, we simply maintained the
portfolio's holdings in these types of securities, which include
bonds backed by GATX, Hartz Mountain, and Vineland Cogeneration.
IDBs were in short supply, and any new offerings were issued at
premium prices, which we believed overstated their true values.
Positive economic outlook The economic outlook for New Jersey
appears positive. The economy continues its slow but steady
recovery: unemployment is trending downward; inflation and
interest rates are holding at low levels. We welcome the
probusiness attitude of the state's new governor, Christine
Whitman, and we believe New Jersey, with its diverse business and
industrial base, should fare well in the months ahead, especially
if the national economic picture continues to improve.
The supply and demand relationship of New Jersey bonds over the
next several months should work in your fund's favor. Since we
expect the supply to remain limited and demand to stay strong,
the result should be positive for your portfolio.
Promising portfolio mix We have begun adding discount bonds --
those with coupons slightly below market rate -- to the
portfolio. If there is a rally in the municipal market and our
expectation for strong demand materializes, these bonds,
purchased below par value, should perform better than current- or
premium-coupon bonds.
As we enter the second half of fiscal 1994, our overall strategy
is to increase the fund's total return through an investment mix
in which the portfolio's current- and premium-coupon bonds
provide most of the yield and the performance-oriented discount
bonds provide the opportunity for price appreciation.
Top industry sectors(based on net assets as of December 31, 1993)
Utilities .............................17.7%
Transportation ...........................16.4%
Energy .......................14.6%
Health care .....................13.6%
Housing ................10.2%
<PAGE>
<TABLE>
<CAPTION>
Portfolio of
investments owned
December 31, 1993 (Unaudited)
Municipal Bonds and Notes (98.7%)(a)
Principal Amount Ratings(b) Value
<S> <C> <C> <C>
Guam (1.6%)
$4,400,000 Guam, Pwr. Auth. Rev.
Bonds, 6.3s, 10/1/22 BBB $ 4,647,500
New Jersey (85.4%)
1,000,000 Atlantic City, Muni. Utils.
Auth. Wtr. Rev. Bonds,
7 3/4s, 5/1/17 A 1,210,000
2,375,000 Atlantic Cnty., Utils. Auth.
Solid Waste Rev. Bonds,
7 1/8s, 3/1/16 A 2,562,031
2,000,000 Cape May Cnty., Muni.
Utils. Auth. Rev. Bonds,
Ser. A, Municipal Bond
Insurance Assn. (MBIA),
5 3/4s, 1/1/16 AAA 2,097,500
Cape May Cnty., Muni.
Utils. Auth. Rev. Bonds,
American Municipal
Bond Assurance Corp.
(AMBAC),
3,225,000 5 1/4s, 8/1/09 AAA 3,273,375
2,000,000 5 1/4s, 8/1/08 AAA 2,042,500
2,100,000 Delaware River & Bay
Auth. Rev. Bonds,
MBIA, 4 3/4s, 1/1/24 AAA 1,966,125
4,760,000 Delaware River, Joint Toll
Bridge Rev. Bonds,
FGIC, 6 1/4s, 7/1/12 AAA 5,140,800
Essex Cnty., General
Obligation (G.O.)
Bonds, AMABC,
4,200,000 5 1/2s, 12/1/20 AAA 4,320,750
3,000,000 5 1/2s, 12/1/13 AAA 3,101,250
1,000,000 Gloucester Cnty., Utils.
Auth. Swr. Rev. Bonds
5 1/8s, 1/1/13 AA 993,750
Jersey City, G.O. Bonds
1,000,000 4.9s, 12/15/14 AAA 960,000
1,000,000 4.9s, 12/15/13 AAA 960,000
1,000,000 4.9s, 12/15/12 AAA 961,250
1,000,000 4.9s, 12/15/11 AAA 968,750
1,500,000 4.9s, 12/15/10 AAA 1,471,875
1,450,000 4.9s, 12/15/08 AAA 1,424,625
2,000,000 Middlesex Cnty., Poll.
Control Auth. Rev.
Bonds, 6 7/8s,
12/1/22 BBB/P 2,215,000
3,000,000 Middlesex Cnty., Utils.
Auth. Swr. Residual
Interest Bonds (RIBS)
Ser. A, MBIA, 7.65s,
8/15/10 AAA 3,513,750
Monroe, Board of Ed.
Rev. Bonds
(Gloucester Cnty.)
Federal Guaranty
Insurance Company
(FGIC),
898,000 5.2s, 8/1/18 AAA 901,368
875,000 5.2s, 8/1/17 AAA 884,844
875,000 5.2s, 8/1/16 AAA 883,750
825,000 5.2s, 8/1/15 AAA 833,250
1,338,000 Morris Cnty., G.O. Bonds
5 1/8s, 5/13/11 AAA 1,354,725
6,195,000 NJ Econ. Dev. Auth.
Elec. Energy Fac.
Rev. Bonds (Vineland
Cogeneration L.P.
Project), 7 7/8s, 6/1/19 BB/P 6,984,863
NJ Econ. Dev. Auth.
1st Mtge. Gross
Rev. Bonds
1,000,000 (Stone Arch Nursing
Home Project), 8 3/4s,
12/1/10 BB/P 1,095,000
575,000 (Delaire Nursing Home),
Ser. A, 8 5/8s, 11/1/06 BB/P 623,875
NJ Econ. Dev. Auth.
Natural Gas Fac.
Rev. Bonds
2,000,000 (Elizabethtown Gas Co.),
Ser. 84A, 11s, 6/1/14 A 2,100,000
(NJ Natural Gas Co. Project),
2,500,000 9s, 12/1/17 A 2,937,500
2,500,000 Ser. 84A, 7.05s, 3/1/16 A 2,740,625
NJ Econ. Dev. Auth.
Rev. Bonds
1,255,000 (GATX Terminals Corp.),
Ser. 84C, 10 3/4s, 11/1/09 A 1,302,063
2,800,000 (Stolt Terminals Project),
10 1/2s, 1/15/18 BB/P 3,321,500
4,550,000 (Holt Hauling Co.), Ser. D,
10 1/4s, 9/15/14 BB/P 5,187,000
3,000,000 (Tevco Inc. Project),
8 1/8s, 10/1/09 A/P 3,423,750
3,260,000 (Cadbury Corp.), 8s,
7/1/15 BBB/P 3,427,075
1,200,000 (Ninette Group L.P
Project), 7 3/4s, 8/1/11 A 1,318,500
5,000,000 (Ocean Nursing Pavilion),
Ser. A, 7 3/8s, 12/1/25 BB/P 4,950,000
2,000,000 (Hartz Mountain
Industries, Inc.), 7s,
2/1/14 A 2,260,000
3,280,000 (Lakewood School),
Ser. 91R, Ser. A, 6.9s,
12/1/11 AAA 3,636,700
1,500,000 (Performing Arts Ctr.),
6 3/4s, 6/15/12 A 1,646,250
1,500,000 Ser. S, 6 1/2s, 6/1/12 Aa 1,638,750
1,355,000 Ser. Q2, 5.9s, 12/1/12 Aa 1,395,650
1,200,000 NJ Econ. Dev. Auth.
Variable Rate Demand
Notes, 2 3/4s, 5/1/01 AAA/P 1,200,000
2,925,000 NJ Econ. Dev. Auth.
Waste Paper Recycling
Rev. Bonds (Marcal
Paper Mills Inc. Project),
8 1/2s, 2/1/10 BB/P 3,429,563
NJ Hlth. Care Fac. Fin.
Auth. Rev. Bonds
1,300,000 (Gen. Hosp. Ctr.-Passaic
Inc.), Ser. B, 10 3/8s,
7/1/14 BBB 1,428,375
2,140,000 (St. Mary's Hosp. - Franciscan
Sisters of the Poor
Health System), 9 1/4s,
7/1/12 Baa 2,311,200
4,300,000 (Dover Gen. Hosp. &
Med. Ctr.), Issue C, 9s,
7/1/12 A 4,703,125
4,250,000 (St. Elizabeth Hosp.),
Ser. B, 8 1/4s, 7/1/20 Baa 4,781,250
3,095,000 (Jersey Shore Med. Ctr.),
AMBAC, 8s, 7/1/18 AAA 3,609,544
2,000,000 (Kimball Med. Ctr.),
Ser. C, 8s, 7/1/13 Baa 2,242,500
1,000,000 (East Orange Gen.
Hosp.), Ser. B, 7 3/4s,
7/1/20 BBB 1,138,750
3,000,000 (Kimball Med. Ctr.), 7.3s,
7/1/99 BBB/P 3,131,250
1,500,000 (Holy Name Hosp.),
Ser. A, AMBAC,
6 7/8s, 7/1/04 AAA 1,680,000
1,070,000 (Union Hosp./Mega
Care Inc.), 5 7/8s,
7/1/14 Baa 1,052,613
3,400,000 (St. Mary's Hosp.)
5 7/8s, 7/1/12(c) Baa 3,408,500
5,325,000 (Union Hosp./Mega
Care Inc.), 5 7/8s,
7/1/07 Baa 5,325,000
2,315,000 (St. Peter's Med. Ctr.),
Ser. F, MBIA, 4.8s,
7/1/08 AAA 2,254,231
3,425,000 NJ Sports & Exposition Auth.
Convention Ctr.
Luxury Tax Rev.
Bonds, Ser. A, MBIA,
5 1/2s, 7/1/22 AAA 3,523,469
2,195,000 NJ Sports & Exposition
Auth. State Contract
Rev. Bonds Ser. A,
6 1/2s, 3/1/19 A 2,474,863
3,000,000 NJ State Edl. Fac. Auth.
Rev. Bonds (Institute
for Advanced Study),
Ser. B, 6.35s, 7/1/11 AA 3,262,500
6,050,000 NJ State G.O. Bonds
Ser. D, 6s, 2/15/11 AA 6,745,750
NJ State Hsg. & Mtge.
Fin. Agcy. Rev. Bonds,
455,000 (Home Mtge. Purchase),
Ser. C, MBIA, 8 3/8s,
4/1/17 AAA 495,950
2,765,000 (Home Buyer Project),
Ser. 89D, MBIA, 7.7s,
10/1/29 AAA 2,937,813
5,000,000 Ser. A, 6.95s, 11/1/13 A 5,431,250
4,000,000 Ser. 1, 6.7s, 11/1/28 A 4,300,000
4,750,000 6.6s, 11/1/14 A 5,070,625
3,000,000 NJ State Hsg. & Mtge.
Fin. Agcy. RIBS, Ser. 1,
8.831s, 11/1/07 A/P 3,255,000
NJ State Hwy. Auth.
Gen. Rev. Bonds
(Garden State Pkwy.
Project),
3,000,000 6 1/4s, 1/1/14 A 3,262,500
1,500,000 6.2s, 1/1/10 A 1,706,250
1,000,000 6s, 1/1/19 AA 1,126,250
NJ State Tpk. Auth.
Rev. Bonds,
1,100,000 12s, 1/1/05 AAA 1,133,000
11,750,000 Ser. C, 6 1/2s, 1/1/16 A 13,806,250
1,800,000 NJ State Tpk. Auth.
RIBS, 9.04s, 1/1/16
(acquired 3/27/92,
cost $1,817,856)(d) AAA 2,405,250
1,000,000 NJ Wastewater
Treatment Rev. Bonds
AMBAC, 4.8s, 3/1/13 AAA 952,500
Ocean Cnty., G.O. Bonds
2,500,000 5.15s, 7/1/12 AA 2,506,250
2,500,000 5.15s, 7/1/11 AA 2,506,250
4,250,000 Ocean Cnty., Utils.
Auth. Wastewater
Rev. Bonds Ser. A,
5 3/4s, 1/1/18 AA 4,414,688
2,000,000 Passaic Valley Comnty.,
Wtr. Supply Rev. Bonds
Ser. A, FGIC, 6.4s,
12/15/22 AAA 2,320,000
2,750,000 Passaic Valley, Sewage
Commissioner Rev.
Bonds, Ser. D, AMBAC,
5 3/4s, 12/1/10 AAA/P 2,901,250
3,225,000 Port Auth. NY & NJ Cons.
Rev. Bonds 74th Ser.,
6 3/4s, 8/1/26 A 3,599,906
5,000,000 Port Auth. NY & NJ Cons.
RIBS 9.96s, 8/1/26
(acquired 8/29/91,
cost $8,814,828)(d) AA 5,981,250
2,000,000 Rutgers State U. Rev.
Bonds Ser. A, 6.4s,
5/1/13 A 2,342,500
4,500,000 Salem Cnty., Indl. Poll.
Control Fin. Auth.
Rev. Bonds (Pub.
Svc. Elec. & Gas Co.
Project), Ser. C, MBIA,
5.55s, 11/1/33 AAA 4,545,000
2,000,000 Sayreville, Hsg. Dev.
Corp. Mtge. Rev.
Bonds (Lakeview
Section 8), FHA Insd.,
7 3/4s, 8/1/24 AAA 2,112,500
3,500,000 South Jersey, Port
Corp. Rev. Bonds
(Marine Terminal),
Ser. G, 5.6s, 1/1/23 A 3,587,500
1,000,000 Stony Brook, Regional
Swr. Rev. Bonds
Ser. B, 5.45s, 12/1/12 AA 1,038,750
995,000 Union City, G.O. Bonds
6.4s, 11/1/13 AAA 1,145,494
Union Cnty., Util. Auth.
Solid Waste Rev.
Bonds, Ser. A,
9,000,000 7.2s, 6/15/14 A 9,978,750
4,500,000 7.15s, 6/15/09 A 4,972,500
251,568,078
Puerto Rico (10.6%)
$2,900,000 Cmnwlth. of Puerto Rico,
Aqueduct & Swr. Auth.
Rev. Bonds Ser. A,
7 7/8s, 7/1/17 BBB $ 3,356,750
Cmnwlth. of Puerto Rico,
Hwy. & Trans. Auth.
Rev. Bonds
1,500,000 Ser. Q, 7 3/4s, 7/1/16 AAA 1,826,250
1,500,000 Ser. T, 6 5/8s, 7/1/18 A 1,665,000
4,000,000 Cmnwlth. of Puerto Rico,
Pub. Impt. G.O.
Bonds 6.8s, 7/1/21 AAA 4,730,000
Puerto Rico, Hsg. Fin.
Corp. Single Fam.
Mtge. RIBS
2,500,000 Government National
Mortgage Assn.
(GNMA) Coll.,
10.306s, 8/4/25 AAA 2,637,500
1,250,000 GNMA Coll., 0.76s,
8/1/16 (acquired
2/12/1992 ,cost
1,250,000)(d) AAA 1,112,500
2,520,000 Puerto Rico, Hsg. Fin.
Corp. Single Fam.
Mtge. VRDN Ser. B,
GNMA Coll., 7.65s,
10/15/22 AAA 2,646,000
2,000,000 Puerto Rico, Indl.
Med. & Env. Poll.
Control Fac. Fin. Auth.
Rev. Bonds (American
Airlines), Ser. A,
8 3/4s, 12/1/25 Baa 2,192,500
1,000,000 Puerto Rico, Port Auth.
Special Fac. Rev.
Bonds (American
Airlines), Ser. A, 6.3s,
6/1/23 Baa 1,037,500
Puerto Rico, Pub. Bldgs.
Auth. Gtd. Edl. & Hlth.
Fac. Rev. Bonds
1,250,000 Ser. G, 7 7/8s, 7/1/16 AAA 1,445,313
1,000,000 Ser. H, 7 7/8s, 7/1/16 A 1,156,250
1,000,000 Ser. M, 5 1/2s, 7/1/06 A 1,036,250
3,750,000 Puerto Rico, Pub. Bldgs.
Auth. Rev. Bonds
Ser. K, 6 7/8s, 7/1/21 AAA 4,453,125
2,000,000 Puerto Rico, Tel. Auth.
RIBS AMBAC, 6.741s,
1/1/03 (acquired 3/26/93,
cost $2,000,000)(d) AAA 2,052,500
31,347,438
Virgin Islands (1.1%)
Virgin Islands, Pub. Fin.
Auth. Rev. Bonds,
Ser. A,
2,000,000 7 1/4s, 10/1/18 BBB/P 2,252,500
845,000 6.9s, 10/1/01 BBB/P 930,552
3,183,052
Total Investments
(cost $274,446,635)(e) $290,746,068
/TABLE
<PAGE>
Notes
(a) Percentages indicated are based on total net assets of
$294,704,257, which correspond to a net asset value per class A
and class B share of $9.44 and $9.43, respectively.
(b) The Moody's or Standard & Poor's ratings indicated are
believed to be the most recent ratings available at December 31,
1993 for the securities listed. Ratings are generally ascribed to
securities at the time of issuance. While the agencies may from
time to time revise such ratings, they undertake no obligation to
do so, and the ratings do not necessarily represent what the
agencies would ascribe to these securities at December 31, 1993.
Securities rated by Putnam are indicated by "/P" and are not
publicly rated.
(c) A portion of this security, having a total value of
$3,408,500, or 1.2% 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 this security beyond the
settlement time of five business days after the trade and
subsequent to the date of this report. The purchase price and
interest rate of this security is fixed at the trade date,
although the Fund does not earn any interest on such security
until the settlement date.
(d) Restricted as to public resale. At the date of acquisition
these secutities were valued at cost. There were no outstanding
unrestricted securities of the same class held. Total market
value of restricted securities owned at December 31, 1993 was
$11,551,500 or 3.9% of net assets.
(e) The aggregate identified cost for federal income tax purposes
is $274,446,635, resulting in gross unrealized appreciation and
depreciation of $16,942,065 and $642,632, respectively, or net
unrealized appreciation of $16,299,433.
The rates shown on Variable Rate Demand Notes and Residual
Interest Bonds are the current interest rates at December 31,
1993, which are subject to change based on the terms of the
security.
The Fund had the following industry group concentrations greater
than 10% on December 31, 1993 (as a percentage of net assets):
Utilities 17.7%
Transportation 16.4
Energy 14.6
Health Care 13.6
Housing 10.2
<PAGE>
<TABLE>
<CAPTION>
Statement of
assets and liabilities
December 31, 1993 (Unaudited)
<S> <C> <C>
Assets
Investments in securities, at value (identified cost $274,446,635)
(Note 1) $290,746,068
Cash 945,268
Interest receivable 5,775,752
Receivable for shares of the Fund sold 1,844,001
Unamortized organization expenses (Note 1) 17,390
Prepaid expenses 712
Total assets 299,329,191
Liabilities
Payable for securities purchased $3,405,194
Distributions payable to shareholders 420,856
Payable for shares of the Fund repurchased 145,099
Payable for compensation of Manager (Note 2) 430,314
Payable for administrative services (Note 2) 4,495
Payable for compensation of Trustees (Note 2) 481
Payable for investor servicing and custodian fees (Note 2) 43,345
Payable for distribution fees -- class A (Note 2) 127,343
Payable for distribution fees -- class B (Note 2) 23,180
Other accrued expenses 24,627
Total liabilities 4,624,934
Net assets $294,704,257
<PAGE>
Represented by
Paid-in capital (Note 4) $278,534,362
Distributions in excess of net investment income (94,766)
Accumulated net realized loss on investment transactions (34,771)
Net unrealized appreciation of investments 16,299,432
Total -- Representing net assets applicable to capital shares outstanding $294,704,257
Computation of net asset value and offering price
Net asset value and redemption price of class A shares
($260,307,139 divided by 27,585,665 shares) $9.44
Offering price per class A share (100/95.25 of $9.44)* $9.91
Net asset value and offering price of class B shares
($34,397,118 divided by 3,646,121 shares)** $9.43
*On single retail sales of less than $25,000. On sales of $25,000 or more and on group
sales the offering price is reduced.
**Redemption price per share is equal to net asset value less any applicable contingent
deferred sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of
operations
Six months ended December 31, 1993 (Unaudited)
<S> <C> <C>
Tax exempt interest income $ 8,708,797
Expenses:
Compensation of Manager (Note 2) $828,244
Investor servicing and custodian fees (Note 2) 168,877
Compensation of Trustees (Note 2) 7,058
Auditing 10,586
Legal 7,562
Reports to shareholders 7,562
Administrative services (Note 2) 5,042
Amortization of organization expenses (Note 1) 5,403
Distribution fees -- class A (Note 2) 248,834
Distribution fees -- class B (Note 2) 106,191
Other 225
Total expenses 1,395,584
Net investment income 7,313,213
Net realized gain on investments (Notes 1 and 3) 1,631,196
Net unrealized appreciation of investments during the period 1,358,811
Net gain on investments 2,990,007
Net increase in net assets resulting from operations $10,303,220
/TABLE
<PAGE>
<TABLE>
<CAPTIONS>
Statement of
changes in net assets
<S> <C> <C>
Six months ended Year ended
December 31 June 30
1993* 1993
<S> <C> <C>
Increase in net assets
Operations:
Net investment income $ 7,313,213 $ 11,469,655
Net realized gain on investments 1,631,196 3,235,878
Net realized loss on futures contracts -- (53,129)
Net unrealized appreciation of investments 1,358,811 9,627,934
Net increase in net assets resulting from operations 10,303,22024,280,338
Distributions to shareholders from:
Net investment income:
Class A (6,762,932) (11,401,026)
Class B (583,540) (170,038)
Net realized gain on investments:
Class A (3,503,630) (1,649,611)
Class B (445,929) --
Increase from capital share transactions (Note 4) 45,341,190 79,638,108
Total increase in net assets 44,348,379 90,697,771
Net assets
Beginning of year 250,355,878 159,658,107
End of year (including distributions in excess of net
investment income of $94,766 and
$69,838, respectively) $294,704,257 $250,355,878
*Unaudited
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Financial highlights*
(For a share outstanding
throughout the period)
For the period
January 4, 1993 February 20, 1990
Six months (commencement Six months (commencement
ended of operations) to ended of operations) to
December 31** June 30 December 31** Year ended June 30 June 30
1993 1993 1993 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Class B Class A
Net Asset Value,
Beginning of Period $9.46 $9.02 $9.46 $8.97 $8.64 $8.50 $8.50
Investment operations
Net Investment Income .23 .21 .26 .54 .59(a) .62(a) .22(a)
Net Realized and Unrealized
Gain on Investments .10 .43 .11 .58 .38 .13 .01
Total from
investment operations .33 .64 .37 1.12 .97 .75 .23
Less Distributions from:
Net Investment Income (.23) (.20) (.26) (.55) (.60) (.61) (.23)
Net Realized Gain on Investments (.13) -- (.13) (.08) (.04) -- --
Total Distributions (.36) (.20) (.39) (.63) (.64) (.61) (.23)
Net Asset Value,
End of Period $9.43 $9.46 $9.44 $9.46 $8.97 $8.64 $8.50
Total investment Return at
Net Asset Value (%)(b) 7.00(c) 14.71(c) 7.92(c) 13.02 11.52 9.17 7.53(c)
Net Assets, End of Period
(in thousands) $34,397 $15,113 $260,307 $235,243 $159,658 $99,978 $34,588
<PAGE>
Ratio of Expenses to Average
Net Assets (%) 1.58(c) 1.59(c) .95(c) .92 .75(a) .66(a) .59(a)(c)
Ratio of Net Investment
Income to Average
Net Assets (%) 4.58(c) 4.62(c) 5.37(c) 5.90 6.69(a) 7.09(a)6.99(a)(c)
Portfolio Turnover (%) 17.42(d) 44.58(d) 17.42(d) 44.58 80.21 101.21 7.58(d)
*Financial Highlights for periods ended through June 30, 1992 have been restated to conform with requirements issued by
the SEC in April 1993.
**Unaudited
(a)Reflects an expense limitation. As a result, expenses of the Fund for the years ended June 30, 1992 and 1991 and for
the period ended June 30, 1990 reflect a reduction of $0.01, $0.03 and $0.02, respectively.
(b)Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(c)Annualized.
(d)Not annualized.
</TABLE>
<PAGE>
Notes to
Financial statements
December 31, 1993 (unaudited)
Note 1 Significant accounting policies
The Fund is registered under the Investment Company Act of 1940,
as amended, as a non-diversified, open-end management investment
company. The Fund seeks as high a level of current income exempt
from federal income tax and New Jersey personal income tax as
Putnam Management believes is consistent with preservation of
capital by investing primarily in a portfolio of New Jersey
tax-exempt securities.
The Fund offers both class A and class B shares. Class A shares
are sold with a maximum front-end sales charge of 4.75%. Class B
shares do not pay a front-end sales charge but pay a higher
on-going distribution fee than class A shares, and may be subject
to a contingent deferred sales charge if those shares are
redeemed within six years of purchase. Expenses of the Fund are
borne pro-rata by the holders of both classes of shares, except
that each class bears expenses unique to that class (including
the distribution fees applicable to such class) and votes as a
class only with respect to its own distribution plan or other
matters on which a class vote is required by law or determined by
the Trustees. Shares of each class would receive their pro-rata
share of the net assets of the Fund, if the Fund were liquidated.
In addition, the Trustees declare separate dividends on each
class of shares.
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with
generally accepted accounting principles.
A) Security valuation Tax-exempt bonds and notes are stated on
the basis of valuations provided by a pricing service, approved
by the Trustees, which uses information with respect to
transactions in bonds, quotations from bond dealers, market
transactions in comparable securities and various relationships
between securities in determining value. The fair value of
restricted securities is determined by the Manager 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.
C) Futures A futures contract is an agreement between two parties
to buy or sell a security at a set price on a future date. Upon
entering into such a contract the Fund is required to pledge to
the broker an amount of cash or securities equal to the minimum
"initial margin" requirements of the exchange. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as "variation
margin" and are recorded by the Fund as unrealized gains or
losses. 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 potential risk to the Fund is that the change in
value of the underlying securities may not correspond to the
change in value of the futures contracts.
D) 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.
E) Distributions to shareholders Income dividends are recorded
daily by the Fund and are distributed monthly. Capital gains
distributions, if any, are recorded on the ex-dividend date and
paid annually.
F) Amortization of bond premium and discount Any premium
resulting from the purchase of securities in excess of maturity
value is amortized on a yield-to-maturity basis. Discount on
zero-coupon bonds is accreted according to the effective yield
method.
G) Unamortized organization expenses Expenses incurred by the
Fund in connection with its organization, its registration with
the Securities and Exchange Commission and with various states,
and the initial public offering of its class A shares aggregated
$49,086. These expenses are being amortized over a five-year
period based on current and projected net asset levels.
Note 2 Management fee, administrative services, and other
transactions
Compensation of Putnam Investment Management, Inc., the Fund's
Manager, a wholly-owned subsidiary of Putnam Investments, Inc.,
for management and investment advisory services is paid quarterly
based on the average net assets of the Fund. Such fee is based on
the following annual rates: 0.6% of the first $500 million of
average net assets, 0.5% of the next $500 million, 0.45% of the
next $500 million, and 0.4% of any amount over $1.5 billion,
subject to reduction in any year by the amount of certain
brokerage commissions and fees (less expenses) received by
affiliates of the Manager on the Fund's portfolio transactions.
The Fund also reimburses the Manager for the compensation and
related expenses of certain officers of the Fund and their staff
who provide administrative services to the Fund. The aggregate
amount of all such reimbursements is determined annually by the
Trustees. For the six months ended December 31, 1993, the Fund
incurred $5,042 in expenses for these services.
Trustees of the Fund receive an annual Trustee's fee of $1,090,
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 six months
ended December 31, 1993 amounted to $168,877.
Investor servicing and custodian fees reported in the Statement
of operations for the six months ended December 31, 1993 have
been reduced by credits allowed by PFTC.
The Fund has adopted a Distribution Plan with respect to its
Class A shares (the "class A Plan") pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the plan is
to compensate Putnam Mutual Funds Corp. a wholly-owned subsidiary
of Putnam Investments, Inc., for services provided and expenses
incurred by it in distributing shares of the Fund. The Trustees
have approved payment by the Fund to Putnam Mutual Funds Corp. at
an annual rate of up to 0.35%, but is currently limited to 0.2%
of average net assets attributable to Class A shares. For the six
months ended December 31, 1993, the Fund paid $248,834 in
distribution fees for class A shares.
For the six months ended December 31, 1993, Putnam Mutual Funds
Corp., acting as underwriter, received net commissions of $72,968
from the sale of class A shares of the Fund.
A deferred sales charge of up to 1.00% is assessed on certain
redemptions of class A shares purchased as part of an investment
of $1 million or more. For the six months ended December 31,
1993, Putnam Mutual Funds Corp., acting as underwriter, did not
receive any commissions on such redemptions.
The Fund has adopted a separate distribution plan with respect to
its class B shares (the "class B Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The purpose of the
class B Plan is to compensate Putnam Mutual Funds Corp. for
services provided and expenses incurred by it in distributing
class B shares. The class B Plan provides for payments by the
Fund to Putnam Mutual Funds Corp. at an annual rate of 0.85% of
the Fund's average net assets attributable to Class B shares.
Payments under the plan cannot exceed 1% without shareholder
approval. For the six months ended December 31, 1993, the Fund
paid Putnam Mutual Funds Corp. distribution fees of $106,191 for
class B shares.
Putnam Mutual Funds Corp. also receives the proceeds of the
contingent deferred sales charges levied on class B share
redemptions within six years of purchase. The charge is based on
declining rates, which begin at 5% of the net asset value of the
redeemed shares. Putnam Mutual Funds Corp. has received
contingent deferred sales charges of $5,134 from such redemptions
during the six months ended December 31, 1993.
Note 3 Purchases and sales of securities
During the six months ended December 31, 1993, purchases and
sales of investment securities other than short-term municipal
obligations aggregated $87,664,013 and $46,627,585, respectively.
In determining the net gain or loss on securities sold, the cost
of securities has been determined on the identified cost basis.
<PAGE>
<TABLE>
<CAPTION>
Note 4 Capital shares
At December 31, 1993, there was an unlimited number of shares of beneficial interest
authorized, divided into two classes, class A and class B shares. Transactions in capital
shares were as follows:
Six months ended
December 31 Year ended June 30
1993 1992
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Class A
Shares sold 3,669,502 $34,904,589 9,255,847 $84,801,517
Shares issued in connection
with reinvestment of
distributions 601,867 5,698,430 727,399 6,637,885
4,271,369 40,603,019 9,983,246 91,439,402
Shares repurchased (1,551,590) (14,761,854) (2,909,789) (26,589,103)
Net increase 2,719,779 $25,841,165 7,073,457 $64,850,299
January 4, 1993
Six months (commencement of
ended operations) to
December 31 June 30
1993 1993
Shares Amount Shares Amount
Class B
Shares sold 2,022,554 $19,256,760 1,621,688 $15,009,092
Shares issued in connection
with reinvestment of
distributions 65,590 619,784 9,539 88,917
2,088,144 19,876,544 1,631,227 15,098,009
Shares repurchased (39,735) (376,519) (33,515) (310,200)
Net Increase 2,048,409 $19,500,025 1,597,712 $14,787,809
/TABLE
<PAGE>
Note 5 Reclassification of Capital Account
Effective July 1, 1993, Putnam New Jersey Tax Exempt Income Fund
has adopted the provisions of Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation
of Income, Capital Gain and Return of Capital Distributions by
Investment Companies (SOP)." The purpose of this SOP is to report
the accumulated net investment income (loss) and accumulated net
realized gain (loss) accounts in such a manner as to approximate
amounts available for future distributions (or to offset future
realized capital gains) and to achieve uniformity in the
presentation of distributions by investment companies.
As a result of the SOP, the Fund has reclassified $8,331 to
increase undistributed net investment income with a decrease of
$8,331 to additional paid in capital.
These adjustments represent the cumulative amounts necessary to
report these balances through June 30, 1993, the close of the
Fund most recent fiscal year-end, for financial reporting and tax
purposes.
<PAGE>
Fund
performance
supplement
Putnam New Jersey Tax Exempt Income Fund is a portfolio managed
for high current income free from federal and New Jersey income
taxes, consistent with capital preservation. This fund invests at
least 75% of its portfolio in investment-grade tax-exempt bonds.
The balance may be invested in securities rated below
investment-grade.
The Lehman Brothers Municipal Bond Index is an unmanaged list of
approximately 8,000 investment-grade, fixed rate, long-term
maturity tax-exempt bonds, which are selected to be
representative of the market in terms of price movement and
sector distribution. The average quality of bonds held in the
index may differ from the average quality of those bonds in which
the fund invests. The index does not include bonds in certain of
the lower rating classifications in which the fund may invest.
The index does not take into account brokerage commissions or
other costs and may pose different risks from the fund. Total
return performance for the index reflects mathematically derived
changes of market price and reinvestment of interest payments, as
computed by Lehman Brothers. The fund's portfolio contains
securities that do not match those in the index.
The Consumer Price Index is a commonly used measure of inflation;
it does not represent an investment return.
This fund performance supplement has been prepared by Putnam
Management to provide further detail about the fund and the
indexes used for performance comparisons. It is not part of the
portfolio of investments owned or the financial statements and
notes.
<PAGE>
Putnam
New Jersey
Tax Exempt
Income Fund
Fund information
Investment manager
Putnam Investment Management
One Post Office Square
Boston, MA 02109
Marketing services
Putnam Mutual Funds
One Post Office Square
Boston, MA 02109
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
Putnam Investor Services
has received the DALBAR
award each year since the
award's 1990 inception.
In more than 10,000 tests
of 38 shareholder
service components,
Putnam outperformed
the industry standard
in every category.
<PAGE>
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
John R. Verani
Vice President
Gary N. Coburn
Vice President
James E. Erickson
Vice President
Thomas C. Goggins
Vice President and
Fund Manager
William N. Shiebler
Vice President
Paul O'Neil
Vice President
John D. Hughes
Vice President
and Treasurer
Beverly Marcus
Clerk and
Assistant Treasurer
Trustees
George Putnam, Chairman
William F. Pounds, Vice Chairman
Hans H. Estin, John A. Hill,
Elizabeth T. Kennan, Lawrence J. Lasser,
Robert E. Patterson, Donald S. Perkins,
George Putnam, III, A.J.C. Smith,
W. Nicholas Thorndike
This report is for the information
of shareholders of Putnam New Jersey
Tax Exempt Income Fund. It may
also be used as sales literature when
preceded or accompanied by the
current prospectus, which gives
details of sales charges, investment
objectives and operating policies of
the fund.
42/70-10473
- ------------------
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.
