PUTNAM
FLORIDA
TAX EXEMPT
INCOME FUND
SEMIANNUAL REPORT
November 30, 1995
[LOGO]
BOSTON * LONDON * TOKYO
<PAGE>
FUND HIGHLIGHTS
"Our main investment goals are to strategically position the
portfolio's holdings along the part of the yield curve that stands to
perform well in the months ahead and to continue moving call risk out
of the fund."
-- Richard P. Wyke, Manager,
Putnam Florida Tax Exempt Income Fund
"Not only is serious consideration of a major tax overhaul unlikely
until well after the 1996 election, but most current proposals leave
the deductibility of municipal bond interest in place. . . . The
difficulty and cost of buying and selling individual bonds make muni
funds the best choice for most people."
-- Money, OIncome Investing '96,O Forecast 1996
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
17 Financial statements
<PAGE>
FROM THE CHAIRMAN
DEAR SHAREHOLDER:
[PHOTO OF GEORGE PUTNAM]
(C) KARSH, OTTAWA
TAX-EXEMPT BOND INVESTORS WILL LONG REMEMBER 1995 AS A YEAR OF HIGHS
AND LOWS IN THE MARKET. THE YEAR BEGAN AS THE BOND MARKET WAS COMING
OFF ONE OF ITS WORST PERIODS IN RECENT MEMORY. JUST AS THINGS BEGAN TO
LOOK BRIGHTER FOR TAX-EXEMPT BONDS, TALK IN WASHINGTON ABOUT TAX
REFORM CAST A WAVE OF UNCERTAINTY OVER INVESTORS.
BY THE TIME PUTNAM FLORIDA TAX EXEMPT INCOME FUND ENTERED ITS NEW
FISCAL YEAR IN JUNE, INVESTORS HAD BEGUN TO REGAIN THEIR COMPOSURE,
REALIZING HOW REMOTE ENACTMENT OF ANY TAX-REFORM LEGISLATION WAS
LIKELY TO BE DURING AN ELECTION YEAR. AS THE FUND REACHED THE FISCAL
YEAR'S MIDPOINT ON NOVEMBER 30, 1995, SHAREHOLDERS COULD LOOK BACK ON
A PERIOD OF IMPRESSIVE RECOVERY.
FURTHERMORE, BECAUSE OF THE EARLIER INTERRUPTION OVER TAX-REFORM
PROPOSALS, FUND MANAGER RICHARD P. WYKE BELIEVES THE RALLY WILL BE
SUSTAINED DURING THE SECOND HALF OF FISCAL 1996 AS THE TAX-EXEMPT BOND
MARKET CONTINUES TO MAKE UP LOST GROUND. HIS REPORT, WHICH FOLLOWS,
PROVIDES MORE DETAILS.
RESPECTFULLY YOURS,
[SIGNATURE]
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
JANUARY 17, 1996
<PAGE>
REPORT FROM THE FUND MANAGER
RICHARD P. WYKE
For the six months ended November 30, 1995, the sun shone brightly on
Florida municipal debt, overpowering the flat-tax fears that had
clouded the market earlier in 1995. Putnam Florida Tax Exempt Income
Fund produced solid results during the semiannual period, posting
gains of 4.78% and 4.43% at net asset value for class A and class B
shares, respectively. For performance over longer periods and of class
M shares, which became available on May 1, 1995, see page 8.
STRONG RELATIVE PERFORMANCE: A MATTER OF PERSPECTIVE
After overcoming a brief stall in midsummer, the broad fixed-income
market continued its impressive run throughout the six months ended
November 30, 1995. Increased investor confidence in the Federal
Reserve Board's ability to thwart inflation and effectively manage
economic growth over the long term fueled the gains of most fixed-
income investments. Indeed, the rally had gained such momentum by
period's end that the current yield on the benchmark 30-year Treasury
bond seems to be fast approaching the historically low level of 5.79%
(as of October 15, 1993).
On an absolute basis, municipal bonds participated in the rally's
strength in a highly respectable fashion. However, their performance
relative to taxable investments may appear somewhat lackluster because
of investors' lingering concerns about the perceived effects of the
flat-tax proposal introduced in April, which, in its purest form,
would deprive municipal bonds of their beneficial tax treatment. These
investor concerns prevented your fund's investments from attaining the
full price appreciation potential presented by the favorable
investment environment.
We, on the other hand, prefer to look at the semiannual returns in a
historical context, noting that they are the highest on record for any
semiannual period over the past decade. In any good year, this
performance would have been quite satisfactory and during 1994's bear
market, it would have been considered a blessing.
<PAGE>
Furthermore, on a tax-equivalent basis, a Florida investor in the
combined maximum federal and state income tax bracket of 39.60% would
have had to earn 8.61%, 7.53%, and 8.05%, respectively, to match the
5.20%, 4.55%, and 4.86% current dividend rates your fund's class A,
class B, and class M shares produced at NAV.
BULLET CONFIGURATION FAVORED OVER BARBELL
At the beginning of the period, we had the majority of the fund's
holdings clustered, or "barbelled," in securities at both the short
end and the long end of the yield curve. However, with flat-tax
concerns, unsettled interest rate movements, and decreased liquidity
pelting the municipal-bond market this past summer, we chose to
regroup, or "bullet," assets into bonds we believed offered not only
better value but better balance of income and market risk. We
selectively sold bonds with 15- year or shorter maturities and those
with 30-year maturities to purchase bonds within the 15- to 25-year
range. By period's end, the 15- to 25-year bonds comprised 58.02% of
net assets, up from 51% on May 31, 1995, while bonds within the 25- to
30+-year range decreased from 38% of net assets to 32%. Once the rally
regained momentum, the heightened demand for 15- to 25-year bonds
helped boost your fund's net asset value.
MUNICIPAL BONDS CURRENTLY OFFER
AN EXCELLENT BUYING OPPORTUNITY
[MOUNTAIN CHART]
- ----------------------------------------------------------------------
DATE
11/94 86.6%
12/94 85.1%
1/95 83.0%
2/95 80.6%
3/95 80.8%
4/95 82.2%
5/95 86.6%
6/95 90.7%
7/95 87.7%
8/95 90.6%
9/95 91.6%
10/95 90.7%
11/95 90.6%
- ----------------------------------------------------------------------
This chart shows the yield of an average 30-year general obligation
bond as a percentage of the yield of an average 30-year U.S. Treasury
bond, plotted monthly. Treasury bonds are backed by the full faith and
credit of the U.S. government. Source: Bloomberg.
<PAGE>
PORTFOLIO STRUCTURED FOR OPTIMUM PERFORMANCE
Our goal throughout the period has been to position the fund to fully
participate in any rallies that might be sparked by declining interest
rates while avoiding unnecessary market or credit risk. Pursuing this,
we've chosen to emphasize bonds that, through credit quality, price,
or maturity, we believe are more favorable to own in the current
climate.
Because of investors' appetite for yield, the yield spread between AAA-
and BBB-rated bonds has remained narrow despite the rally, creating an
ideal environment for us to upgrade our bond selections without
sacrificing high current income potential. We decreased the
portfolio's exposure to the lower-rated end of the investment grade
spectrum slightly and increased its weighting in higher-rated bonds.
The fund's AAA- rated holdings have already appreciated significantly
as a result of the declining rate environment and stand to appreciate
more should the yield spread widen.
An example of our repositioning efforts includes the sale of a large
position in a Tampa Capital Improvement Program revenue bond -- a BBB-
rated issue -- in favor of several AAA- rated securities.
Interestingly, this action not only helped the fund experience
additional price appreciation from the rising market but also proved
timely because the Tampa bond had considerable exposure to the now
deteriorated Japanese banking industry.
FUNDAMENTALS ARE SOUND, VALUATIONS APPEALING
As we enter the second half of fiscal 1996, we expect conditions for
investing in fixed-income securities to remain advantageous. Subsiding
inflation, a benign interest rate environment, and decelerating
economic growth seem likely to continue.
The debate over tax reform is probably the most critical factor that
will influence tax-exempt bond performance over the next 12 months.
While more instability cannot be ruled out, we believe investors have
come to realize that a revision of the income tax code would not
likely occur until after the 1996 presidential election, at which time
it would most likely involve a simplification of the existing system
rather than a major
<PAGE>
TOP INDUSTRY SECTORS*
[BAR CHART]
- ----------------------------------------------------------------------
Hospitals/Health care 22.1%
Utilities/Water and sewerage 17.9%
Transportation/Airlines 12.5%
- ----------------------------------------------------------------------
*Based on net assets as of 11/30/95. Holdings will vary over time.
overhaul. That said, we are upbeat about the prospects for the
municipal-bond market for several reasons:
First, any time municipal bonds underperform relative to Treasuries we
believe a buying opportunity exists. Most high-grade, long-term
municipal bonds are now providing 90% of the yield that Treasury bonds
are offering on a before-tax basis. While there can be no assurance,
the failure of municipal bonds to participate in the 1995 rally to the
same degree as their taxable counterparts leaves the potential for
additional price appreciation.
Second, new issue supply has been scant in 1995, down by roughly 10%
to 15% from 1994 levels, while investor demand for municipal bonds has
once again picked up with the easing of flat-tax concerns. This
presents a positive dynamic for continued price support.
Last, government, on both the state and national levels, is addressing
for the first time in history the issue of how to be more efficient.
Such attention to fiscal responsibility bodes well for the fundamental
structure of the municipal market.
The views expressed throughout this report are exclusively those of
Putnam Management. They are not meant as investment advice. Although
the described holdings were viewed favorably as of 11/30/95, there is
no guarantee the fund will continue to hold these securities in the
future.
<PAGE>
PERFORMANCE SUMMARY
PERFORMANCE SHOULD ALWAYS BE CONSIDERED IN LIGHT OF A FUND'S
INVESTMENT STRATEGY. PUTNAM FLORIDA TAX EXEMPT INCOME FUND IS DESIGNED
FOR INVESTORS SEEKING A HIGH LEVEL OF CURRENT INCOME FREE FROM FEDERAL
TAX CONSISTENT WITH PRESERVATION OF CAPITAL, BY INVESTING IN
SECURITIES EXEMPT FROM THE FLORIDA INTANGIBLES TAX.
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions in the fund. We show total
return in two ways: on a cumulative long-term basis and on average how
the fund might have grown each year over varying periods.
TOTAL RETURN FOR PERIODS ENDED 11/30/95
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CLASS A CLASS B CLASS M
(8/24/90)* (1/4/93)* (5/1/95)*
NAV POP NAV CDSC NAV CDSC
- ----------------------------------------------------------------------
6 months 4.78% -0.15% 4.43% -0.57% 4.53% 1.10%
- ----------------------------------------------------------------------
1 year 19.11 13.47 18.33 13.33 -- --
- ----------------------------------------------------------------------
5 years 49.20 42.11 -- -- -- --
Annual average 8.33 7.28 -- -- -- --
- ----------------------------------------------------------------------
Life of class 54.20 46.94 17.96 13.96 7.95 4.42
Annual average 8.57 7.58 5.86 4.61 -- --
- ----------------------------------------------------------------------
<FN>
* Commencement of operations
COMPARATIVE RETURNS FOR PERIODS ENDED 11/30/95
LEHMAN BROS.
MUNICIPAL CONSUMER
BOND INDEX PRICE INDEX
- ----------------------------------------------------------------------
6 months 5.18%
0.92%
- ----------------------------------------------------------------------
1 year 18.90
2.61
- ----------------------------------------------------------------------
5 years 51.82
14.80
Annual average 8.71
2.80
- ----------------------------------------------------------------------
Life of class A 57.77
16.72
Annual average 9.04
2.98
- ----------------------------------------------------------------------
Life of class B 23.88
8.24
Annual average 7.66
2.77
- ----------------------------------------------------------------------
Life of class M 8.53
1.12
- ----------------------------------------------------------------------
<FN>
Performance data represent past results, do not reflect future
performance, and will differ for each share class. Class A share
performance data do not take into account distribution fees prior to
implementation of the class A distribution plan in 1993. They do not
take into account any adjustment for taxes payable on reinvested
distributions. Investment returns and principal value will fluctuate
so that an investor's shares, when sold, may be worth more or less
than their original cost. POP assumes 4.75% maximum sales charge for
class A shares and 3.25% for class M shares. CDSC for class B shares
assumes applicable contingent deferred sales charge with the maximum
being 5%.
<PAGE>
TOTAL RETURN FOR PERIODS ENDED 12/31/95
(most recent calendar quarter)
CLASS A CLASS B CLASS M
NAV POP NAV CDSC NAV POP
- ----------------------------------------------------------------------
1 year 17.17% 11.62% 16.57% 11.57% -- --
- ----------------------------------------------------------------------
5 years 50.20 43.06 -- -- -- --
Annual average 8.48 7.42 -- -- -- --
- ----------------------------------------------------------------------
Life of class 55.97 48.62 19.27 15.27 9.29%
5.71%
Annual average 8.65 7.67 6.07 4.87 -- --
- ----------------------------------------------------------------------
PRICE AND DISTRIBUTION INFORMATION
6 months ended 11/30/95
CLASS A CLASS B CLASS M
- ----------------------------------------------------------------------
Distributions (no.) 6 6 6
- ----------------------------------------------------------------------
Income $0.245591 $0.215784 $0.233819
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TOTAL $0.245591 $0.215784 $0.233819
- ----------------------------------------------------------------------
SHARE VALUE: NAV POP NAV NAV POP
- ----------------------------------------------------------------------
5/31/95 $9.12 $9.57 $9.12 $9.12 $9.43
- ----------------------------------------------------------------------
11/30/95 9.30 9.76 9.30 9.29 9.60
- ----------------------------------------------------------------------
CURRENT RETURN:
End of period
- ----------------------------------------------------------------------
Current dividend rate(1) 5.20% 4.95% 4.55% 4.86%
4.70%
Taxable equivalent(2) 8.61 8.20 7.53 8.05 7.78
- ----------------------------------------------------------------------
Current 30-day
SEC yield(3) 4.87 4.64 4.23 4.72 4.55
Taxable equivalent(2) 8.06 7.68 7.00 7.81 7.53
- ----------------------------------------------------------------------
<FN>
For some investors, investment income may be subject to the federal
alternative minimum tax. Investment income may be subject to state and
local taxes. (1)Income portion of most recent distribution, annualized
and divided by NAV or POP at end of period. (2)Assumes maximum federal
tax rate of 39.60%. Results for investors subject to lower tax rates
would not be as advantageous. (3)Based on investment income,
calculated using SEC guidelines.
</TABLE>
<PAGE>
TERMS AND DEFINITIONS
CLASS A SHARES are generally subject to an initial sales charge.
CLASS B SHARES may be subject to a sales charge upon redemption.
CLASS M SHARES have a lower initial sales charge and a higher 12b-1
fee than class A shares and no sales charge on redemption.
NET ASSET VALUE (NAV) is the value of the fund's assets, minus any
liabilities, divided by the number of outstanding shares, not
including any initial or contingent deferred 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. POP
performance figures shown here assume the maximum 4.75% sales charge
for class A shares and 3.25% for class M shares.
CONTINGENT DEFERRED SALES CHARGE (CDSC) is a charge applied at the
time of the redemption of class B shares and assumes redemption at the
end of the period. Your fund's CDSC declines from a 5% maximum during
the first year to 1% during the sixth year. After the sixth year, the
CDSC no longer applies.
LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged list of long-term
fixed-rate investment-grade tax-exempt bonds representative of the
municipal bond market. The index does not take into account brokerage
commissions or other costs, may include bonds different from those in
the fund, and may pose different risks than the fund. It is not
possible to invest directly in an index.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
November 30, 1995 (Unaudited)
KEY TO ABBREVIATIONS
AMBAC -AMBAC Indemnity Corporation
CGIC -Capital Guaranty Insurance Corporation
CLI -Connie Lee Insured
COP -Certificate of Participation
FGIC -Federal Guaranty Insurance Company
FSA -Financial Security Assurance
GNMA Coll. -Government National Mortgage Association Collateralized
G.O. Bonds -General Obligation Bonds
IFB -Inverse Floating Rate Bonds
MBIA -Municipal Bond Investors Assurance Corporation
VRDN -Variable Rate Demand Notes
MUNICIPAL BONDS AND NOTES (98.9%)*
<TABLE><CAPTION>
<C> <S> <C> <C>
PRINCIPAL AMOUNT RATINGS** VALUE
CALIFORNIA (4.5%)
- ----------------------------------------------------------------------
$15,000,000 Los Angeles, Convention & Exhib. Ctr.
Rev. Bonds, Ser. A, MBIA, 5 1/8s, 8/15/21 AAA$14,268,750
Florida (87.5%)
- ----------------------------------------------------------------------
2,345,000 Brevard Cnty., Hlth. Fac. Fin. Auth. Rev.
Bond (Courtenay Springs), 7 1/2s, 11/15/09BB/P 2,371,381
Broward Cnty., Edl. Fac. Auth. Rev. Bonds
2,500,000 (Nova U. Dorm Project), Ser. A, 7 1/2s,
4/1/17 BBB 2,909,375
715,000 (Nova U. Dorm Project), Ser. A, 7 1/4s,
4/1/01 BBB 812,419
2,500,000 (Nova S.E. Univ. Project), CLI, 6s, 4/1/10 AAA 2,600,000
1,000,000 Broward Cnty., Hlth. Fac. Auth. Rev.
Bonds (Broward Cnty. Nursing Home), 7 1/2s,
8/15/20 A 1,103,750
Broward Cnty., Resource Recvy. Rev. Bonds
1,340,000 (Waste-Energy LP North Project), 7.95s,
12/1/08 A 1,504,150
3,155,000 (SES Broward Cnty. LP South Project),
7.95s, 12/1/08 A 3,541,488
1,400,000 Clay Cnty., Multi-Fam. Hsg. Fin. Auth.
Rev. Bonds (Oak Forest), Ser. A, GNMA Coll.,
7.4s, 12/1/25 AAA 1,501,500
1,875,000 Clay Cnty., Single Fam. Hsg. Fin. Auth.
Rev. Bonds, Ser. A, GNMA Coll., 7.45s,
9/1/23 Aaa 1,989,844
1,100,000 Cocoa, Wtr. & Swr. Rev. Bonds, Ser. B,
AMBAC, 5 1/4s, 10/1/16 AAA 1,073,875
1,500,000 Coral Springs, Impt. Dist. Wtr. & Swr.
Rev. Bonds, MBIA, 8 1/4s, 6/1/14 AAA 1,678,125
4,000,000 Dade Cnty., Hsg. Fin. Auth. Single-
Family Mtge. Rev. Bonds Ser. B, GNMA Coll.,
5 1/2s, 10/1/18 AAA 4,005,000
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
FLORIDA (CONTINUED)
- ----------------------------------------------------------------------
$2,500,000 Dade Cnty., Seaport G.O. Bonds, AMBAC,
6 1/4s, 10/1/21 AAA $2,634,375
10,000,000 Dade Cnty., Wtr. & Swr. Syst. Rev. Bonds,
FGIC, 5 1/2s, 10/1/25 AAA 9,950,000
1,690,000 Dade Cnty., Single Fam. Hsg. Fin. Auth.
Mtge. Rev. Bonds, Ser. B, GNMA Coll.,
8 3/4s, 7/1/17 AAA 1,761,825
6,000,000 Escambia Cnty. Poll. Control Rev. Bonds
(Champion Intl. Corp. Project), 5 7/8s,
6/1/22 BBB 5,805,000
2,335,000 Escambia Cnty., Single Fam. Hsg. Fin.
Auth. Mtge. VRDN (Multi-Cnty. Program),
Ser. A, GNMA Coll., 5s, 10/1/24 Aaa 2,387,538
FL Hsg. Fin. Agcy. Rev. Bonds
(Home Ownership Dev. Program)
660,000 Ser. G-1, GNMA Coll., 7.9s, 3/1/22 Aaa 707,850
4,690,000 Ser. 1-B, GNMA Coll., 7.1s, 1/1/17 AAA 4,895,188
FL State Board Education Outlay Rev. Bonds
2,900,000 Ser. 94-C, MBIA, 5.6s, 6/1/20 AAA 2,903,625
4,500,000 (Cap. Outlay Pub. Ed.), Ser. D, 5 1/8s,
6/1/18 AA 4,303,125
FL State Dept. Gen. Svc. Rev. Bonds
1,500,000 (Fac. Mgmt.), 7 3/4s, 9/1/16 AAA 1,574,640
7,750,000 (Fac. Mgmt.), AMBAC, 5.4s, 9/1/17 AAA 7,711,250
FL State Mid-Bay Bridge Auth. Rev. Bonds,
Ser. A
1,500,000 8s, 10/1/06 BBB/P 1,710,000
2,180,000 7 1/2s, 10/1/17 BB/P 2,430,700
2,140,000 6.1s, 10/1/22 BBB 2,131,975
2,000,000 FL State Muni. Pwr. Agcy. IFB, AMBAC,
8.682s, 10/1/20 (acquired 7/10/92 cost
$2,101,200)++ AAA 2,572,500
FL State Tpke. Auth. Rev. Bonds, Ser. A,
FGIC
3,000,000 5 1/4s, 7/1/22 AAA 2,898,750
8,000,000 5s, 7/1/19 AAA 7,580,000
Gulf Breeze, Local Govt. Rev. Bonds
2,500,000 Ser. E, FGIC, 7 3/4s, 12/1/15 AAA 2,850,000
3,645,000 Hillsborough Cnty. Ind., Dev. Auth. Poll.
Cntl. Rev. Bonds (Tampa Elec. Co. Project),
6 1/4s, 12/1/34 AA 3,859,144
4,500,000 Hillsborough Cnty. School Board COP
(Master Lease Program), AMBAC, 5 5/8s,
7/1/15 AAA 4,567,500
2,400,000 Hillsborough Cnty. Util. Rev. Bonds,
Ser. A, FSA, 6 1/2s, 8/1/16 AAA 2,592,000
3,000,000 Hillsborough Cnty., Cap. Impt. Rev. Bonds,
8.3s, 8/1/16 AAA 3,081,090
2,500,000 Hillsborough Cnty., Indl. Dev. Auth.
Poll. Control Rev. Bonds (Tampa Elec. Co.
Project), Ser. 91, 7 7/8s, 8/1/21 AA 2,950,000
5,000,000 Jacksonville Elec. Auth. Rev. Bonds
(Johns River Park System), Ser. II, 5 1/4s,
10/1/20 AA 4,825,000
3,000,000 Jacksonville, Cap. Impt. Rev. Bonds
(Gator Bowl Project), AMBAC, 5 1/2s,
10/1/19 AAA 3,007,500
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
FLORIDA (CONTINUED)
- ----------------------------------------------------------------------
Jacksonville, Hlth. Fac. Auth. Ind. Dev.
Rev. Bonds (Cypress Village Project)
$1,350,000 7s, 12/1/22 Baa $1,404,000
3,650,000 7s, 12/1/14 Baa 3,827,938
970,000 Jacksonville, Hlth. Fac. Auth. Rev. Bonds
(Mental Hlth. Ctr.), 9 1/8s, 10/15/19 B/P 1,013,650
3,000,000 Lake Cnty., Res. Rcvy. Ind. Dev. Rev.
Bonds (Rcvy. Group), Ser. A, 5.85s, 10/1/09BBB 2,928,750
Largo, Sun Coast Hlth. Syst. Rev. Bonds
2,000,000 6.3s, 3/1/20 BBB 1,887,500
1,000,000 6.2s, 3/1/13 BBB 951,250
Lee Cnty. Board of Directors Hosp. IFB,
MBIA
4,000,000 9.144s, 4/1/20 AAA 4,545,000
10,000,000 (Lee Memorial Hosp.), 6.35s, 3/26/20 AAA 10,512,500
Leesburg, Hosp. Rev. Bonds
1,000,000 (Leesburg Regl. Med. Ctr. Project),
Ser. 91-A, 7 1/2s, 7/1/21 A 1,187,500
2,065,000 6 1/8s, 7/1/18 Baa 2,065,000
1,750,000 Ser. B, 5.7s, 7/1/18 Baa 1,664,688
Miami, Hlth. Fac. Auth. Rev. Bonds
(Cedars Med. Ctr.)
1,000,000 Ser. A, 8 3/8s, 10/1/17 AAA 1,096,250
1,300,000 Ser. A, 8.2s, 10/1/02 AAA/P 1,420,250
4,000,000 Orange Cnty. Hsg. Fin. Auth. VRDN
(Sundown Assoc. II), Ser. B, 3.85s,
6/1/04 VMIGI 4,000,000
Orange Cnty., Hlth. Fac. Auth. Rev.
Bonds
7,905,000 (Pooled Hosp. Loan), Ser. A, FGIC,
7 7/8s, 12/1/25 AAA 8,399,063
4,000,000 9.512s, 10/1/14 (acquired 4/19/95
cost $5,273,120)++ AAA 5,700,000
1,720,000 Orange Cnty., Hsg. Fin. Auth. Mtge.
Rev. Bonds Ser. E, GNMA Coll., 7.9s,
10/1/22 Aaa 1,814,600
Orlando & Orange Cnty., Expressway
Auth. Rev. Bonds
2,500,000 7 1/4s, 7/1/14 AAA 2,600,825
2,850,000 FGIC, 5 1/2s, 7/1/18 AAA 2,857,125
1,996,000 Osceola Cnty., Indl. Dev. Auth. Rev.
Bonds (Cmnty. Provider Pooled Loan
Program), Ser. A, CGIC, 7 3/4s, 7/1/10 AAA 2,153,185
7,000,000 Palm Beach Cnty. School Board. COP,
Ser. A, AMBAC, 6 3/8s, 8/1/15 AAA 7,560,000
2,000,000 Palm Beach Cnty., Arpt. Syst. Rev. Bonds,
MBIA, 7 3/4s, 10/1/10 AAA 2,355,000
Palm Beach Cnty., Hlth. Fac. Auth. Rev.
Bonds (JFK Med. Ctr. Inc. Project)
2,560,000 8 7/8s, 12/1/18, Prerefunded AAA/P 2,947,200
1,770,000 8 7/8s, 12/1/18 BBB 2,039,925
4,000,000 5 3/4s, 12/1/14 AAA 4,390,000
215,000 Palm Beach Cnty., Single Fam. Hsg. Fin.
Auth. Mtge. VRDN, GNMA Coll., 7.2s,
10/1/24 AAA 230,050
Palm Beach Cnty., Solid Waste Indl. Dev.
Rev. Bonds
1,500,000 (Osceola Pwr. Ltd.), Ser. A, 6.95s,
1/1/22 BB/P 1,550,625
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
FLORIDA (continued)
- ----------------------------------------------------------------------
$3,000,000 (Osceola Pwr. Ltd. Partnership),
Ser. A, 6.85s, 1/1/14 BB/P $3,112,500
5,000,000 Pinellas Cnty., Poll. Control Rev. Bonds
(FL Pwr. Corp.), 7.2s, 12/1/14 A 5,568,750
655,000 Polk Cnty., Hsg. Fin. Auth. Rev. Bonds,
Ser. A, GNMA Coll., 7 7/8s, 9/1/22 Aaa 693,481
2,000,000 Polk Cnty., Sch. Brd. COP, FSA, 4 7/8s,
1/1/18 AAA 1,832,500
Port Everglades Auth. Port Impt. Rev.
Bonds
5,000,000 Ser. A, 5s, 9/1/16 BBB 4,443,750
5,000,000 (FL Port Impt.), 7 1/8s, 11/1/16 AAA 6,212,500
2,675,000 SCA Tax Exempt Trust, Multi-Fam. Mtge.
Rev. Bonds (Rcpt.), Ser. A-1, FSA, 7.05s,
1/1/30 AAA 2,832,156
2,935,000 Sanibel, Swr. Util. Rev. Bonds, 7 1/2s,
8/1/21 AAA/P 3,441,288
2,390,000 Santa Rosa Cnty., Hlth. Fac. Auth. Rev.
Bonds (Gulf Breeze Hosp. Inc.), Ser. A,
6.2s, 10/1/14 BBB 2,390,000
2,250,000 South Broward Hosp. Dist. IFB, Ser. C,
AMBAC, 9.045s, 5/13/21 AAA 2,559,375
3,905,000 St. Lucie Cnty., Util. Syst. Rev. Bonds,
FGIC, 5 1/2s, 10/1/16 AAA 3,953,813
7,800,000 St. Petersburg, Hlth. Fac. Auth. Rev.
Bonds (Allegany Hlth.), Ser. A, MBIA,
7s, 12/1/15 AAA 8,804,250
3,490,000 Sumter Cnty., Capital Impt. Rev Bonds,
MBIA, 5s, 6/1/24 AAA 3,284,963
4,860,000 Sumter Cnty., School Dist. Rev. Bonds
(Multi Dist. Loan Program), CGIC, 7.15s,
11/1/15 AAA 5,947,425
Tampa, Rev. Bonds (Allegany Hlth. Syst.,
St. Joseph), MBIA
6,000,000 6 1/2s, 12/1/23 AAA 6,600,000
11,350,000 5 1/8s, 12/1/23 AAA 10,725,750
1,800,000 Volusia Cnty., Hlth. Fac. Auth. Rev. Bonds
(Hosp.-Facs Memorial Hlth. Syst. Project),
8 1/8s, 6/1/08 AAA/P 2,110,500
- ----------------------------------------------------------------------
$274,396,357
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
GEORGIA (1.7%)
- ----------------------------------------------------------------------
$5,000,000 Atlanta Metro. Rapid Tran. Auth. Sales
Tax Rev. Bonds, Ser. O, 6.55s, 7/1/20 AA $5,362,500
PUERTO RICO (5.2%)
- ----------------------------------------------------------------------
3,000,000 Cmnwlth. of Puerto Rico G.O. Bonds, MBIA,
6.45s, 7/1/17 AAA 3,243,750
1,500,000 Puerto Rico Comnwlth. Aqueduct & Swr.
Auth. Rev. Bonds, Ser. A, 7 7/8s, 7/1/17 Baa 1,665,000
1,000,000 Puerto Rico Comnwlth. Hwy. & Transn. Auth.,
Ser. T, 6 5/8s, 7/1/18 A 1,071,245
1,000,000 Puerto Rico Comnwlth. of Impt. G.O.
Bonds, 7.7s, 7/1/20 AAA 1,165,000
4,750,000 Puerto Rico Elec. Pwr. Auth. Rev. Bonds,
6 3/8s, 7/1/24 A 5,029,063
3,800,000 Puerto Rico Indl. Tourist Edl. Med. &
Environ. Control Facs. Fing. Auth. Hosp.
Rev. Bonds (Auxilio Muto Obligation Group),
Ser. A, MBIA, 6 1/4s, 7/1/16 AAA 4,061,250
- ----------------------------------------------------------------------
$16,235,308
- ----------------------------------------------------------------------
TOTAL MUNICIPAL BONDS AND NOTES
(cost $293,261,486) $310,262,915
- ----------------------------------------------------------------------
MUNICIPAL COMMERCIAL PAPER (0.8%)
PRINCIPAL AMOUNT VALUE
$1,000,000 Jacksonville Cnty., 8 3/4s, 12/6/95 A-1 $1,000,103
1,500,000 Orange Cnty. Hlth. (Banque Paribas LOC),
MBIA, 3 3/4s, 12/4/95 A-1 1,500,154
- ----------------------------------------------------------------------
TOTAL MUNICIPAL COMMERCIAL PAPER
(cost $2,500,257) $2,500,257
- ----------------------------------------------------------------------
TOTAL INVESTMENTS (cost $295,761,743)*** $312,763,172
- ----------------------------------------------------------------------
<PAGE>
<FN>
NOTES
- ----------------------------------------------------------------------
* Percentages indicated are based on net assets of $313,654,597.
** The Moody's or Standard & Poor's ratings indicated are believed
to be the most recent ratings available at November 30, 1995 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 November 30, 1995.
Securities rated by Putnam are indicated by "/P" and are not
publicly rated.
*** The aggregate identified cost on a tax cost basis is
$295,779,364, resulting in gross unrealized appreciation and
depreciation of $17,282,244 and $298,436, respectively, or net
unrealized appreciation of $16,983,808.
++ Restricted as to public resale. At the date of acquisition these
securities were valued at cost. There were no outstanding
securities of the same class as those held. Total market value of
restricted securities owned at November 30, 1995 was $8,272,500
or 2.6% of net assets.
The fund had the following insurance concentration greater than
10% of net assets at November 30, 1995.
MBIA 18.3%
The fund had the following industry group concentrations greater
than 10% of net assets at November 30, 1995.
Hospitals/Health Care 22.1%
Utilities/Water & Sewerage17.9
Transportation/Airlines 12.5
The rates shown on VRDNs and IFBs, which are securities paying
variable interest rates that vary inversely to changes in the
market interest rates, are the current interest rates at November
30, 1995, which are subject to change based on the terms of the
security.
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1995 (Unaudited)
<TABLE>
<S> <C>
ASSETS
- ----------------------------------------------------------------------
Investments in securities, at value
(identified cost $295,761,743) (Note 1) $312,763,172
- ----------------------------------------------------------------------
Cash 232,230
- ----------------------------------------------------------------------
Interest receivable 6,181,919
- ----------------------------------------------------------------------
Receivable for shares of the fund sold 423,131
- ----------------------------------------------------------------------
Receivable for securities sold 225,000
- ----------------------------------------------------------------------
TOTAL ASSETS 319,825,452
LIABILITIES
- ----------------------------------------------------------------------
Distributions payable to shareholders 387,559
- ----------------------------------------------------------------------
Payable for securities purchased 4,766,351
- ----------------------------------------------------------------------
Payable for shares of the fund repurchased 412,140
- ----------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 445,180
- ----------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 134
- ----------------------------------------------------------------------
Payable for administrative services (Note 2) 1,416
- ----------------------------------------------------------------------
Payable for distribution fees (Note 2) 121,067
- ----------------------------------------------------------------------
Other accrued expenses 37,008
- ----------------------------------------------------------------------
TOTAL LIABILITIES 6,170,855
- ----------------------------------------------------------------------
NET ASSETS $313,654,597
- ----------------------------------------------------------------------
REPRESENTED BY
- ----------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $302,866,244
- ----------------------------------------------------------------------
Distributions in excess of net investment income
(Note 1) (409,919)
- ----------------------------------------------------------------------
Accumulated net realized loss on investment transactions
(Note 1) (5,803,157)
- ----------------------------------------------------------------------
Net unrealized appreciation of investments 17,001,429
- ----------------------------------------------------------------------
TOTAL -- REPRESENTING NET ASSETS APPLICABLE TO CAPITAL
SHARES OUTSTANDING $313,654,597
- ----------------------------------------------------------------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
- ----------------------------------------------------------------------
Net asset value and redemption price of class A shares
($263,515,066 divided by 28,340,867 shares) $9.30
- ----------------------------------------------------------------------
Offering price per share (100/95.25 of $9.30)* $9.76
Net asset value and offering price of class B shares
($49,723,592 divided by 5,349,329)+ $9.30
- ----------------------------------------------------------------------
Net asset value and offering price of class M shares
($415,939 divided by 44,750) $9.29
- ----------------------------------------------------------------------
Offering price per share (100/96.75 of $9.29)** $9.60
- ----------------------------------------------------------------------
<FN>
* 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.
** On single retail sales of less than $50,000. On sales of $50,000
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>
STATEMENT OF OPERATIONS
Six months ended November 30, 1995 (Unaudited)
<TABLE><CAPTION>
<S> <C>
TAX EXEMPT INTEREST INCOME $9,623,260
- ----------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------
Compensation of Manager (Note 2) 924,948
- ----------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 152,283
- ----------------------------------------------------------------------
Compensation of Trustees (Note 2) 6,300
- ----------------------------------------------------------------------
Reports to shareholders 11,971
- ----------------------------------------------------------------------
Postage 13,310
- ----------------------------------------------------------------------
Auditing 20,139
- ----------------------------------------------------------------------
Legal 12,458
- ----------------------------------------------------------------------
Administrative services (Note 2) 4,245
- ----------------------------------------------------------------------
Amortization of organization expenses (Note 1) 8,751
- ----------------------------------------------------------------------
Distribution fees--class A (Note 2) 262,511
- ----------------------------------------------------------------------
Distribution fees--class B (Note 2) 196,063
- ----------------------------------------------------------------------
Distribution fees--class M (Note 2) 110
- ----------------------------------------------------------------------
Other 4,888
- ----------------------------------------------------------------------
TOTAL EXPENSES 1,617,977
- ----------------------------------------------------------------------
Expense reduction (143,454)
- ----------------------------------------------------------------------
NET EXPENSES 1,474,523
- ----------------------------------------------------------------------
NET INVESTMENT INCOME 8,148,737
- ----------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 2,820,536
- ----------------------------------------------------------------------
Net realized gain on futures contracts (Notes 1 and 3) 22,006
- ----------------------------------------------------------------------
Net unrealized appreciation of investments and futures
contracts during the period 3,095,497
- ----------------------------------------------------------------------
NET GAIN ON INVESTMENTS 5,938,039
- ----------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 14,086,776
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
<S> <C> <C>
ELEVEN MONTHS
SIX MONTHS ENDED ENDED
NOVEMBER 30 MAY 31
- ----------------------------------------------------------------------
1995* 1995
INCREASE (DECREASE) IN NET ASSETS
- ----------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------
Net investment income $8,148,737 $15,802,907
- ----------------------------------------------------------------------
Net realized gain (loss) on
investments, written options and
futures contracts 2,842,542 (5,408,850)
- ----------------------------------------------------------------------
Net unrealized appreciation of
investments and futures contracts 3,095,497 17,688,731
- ----------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 14,086,776 28,082,788
- ----------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
- ----------------------------------------------------------------------
From net investment income:
Class A (7,098,610) (13,660,959)
- ----------------------------------------------------------------------
Class B (1,094,106) (1,811,006)
- ----------------------------------------------------------------------
Class M (912) --
- ----------------------------------------------------------------------
In excess of net investment income:
- ----------------------------------------------------------------------
Class A -- (322,301)
- ----------------------------------------------------------------------
Class B -- (42,727)
- ----------------------------------------------------------------------
Decrease from capital share transactions
(Note 4) (8,129,610) (9,529,703)
- ----------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,236,462) 2,716,092
- ----------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------
Beginning of period 315,891,059 313,174,967
- ----------------------------------------------------------------------
END OF PERIOD (Including distributions
in excess of net investment income of
$409,919 and $365,028, respectively) $313,654,597 $315,891,059
- ----------------------------------------------------------------------
<FN>
* Unaudited
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE><CAPTION>
<S><C> <C> <C> <C> <C> <C>
FOR THE PERIOD FOR THE
MAY 1, 1995 ELEVEN
SIX MONTHS (COMMENCEMENT SIX MONTHS MONTHS YEAR
ENDEDOF OPERATIONS) ENDED ENDED ENDED
NOVEMBER 30 TO MAY 31 NOVEMBER 30 MAY 31 JUNE 30
- ----------------------------------------------------------------------
1995(+) 1995 1995(+) 1995* 1994
- ----------------------------------------------------------------------
Class M Class B
- ----------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $9.12 $8.87 $9.12 $8.76 $9.53
- ----------------------------------------------------------------------
INVESTMENT OPERATIONS
Net investment income .09 .04 .22 .40 .44
Net realized and
unrealized gain (loss)
on investments .31 .25 .18 .36 (.66)
- ----------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS .40 .29 .40 .76 (.22)
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS:
From net investment
income (.23) (.04) (.22) (.39) (.44)
In excess of net
investment income -- -- -- (.01) --
From net realized gain
on investments -- -- -- -- (.09)
In excess of net
realized gain
on investments -- -- -- -- (.02)
- ----------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.23) (.04) (.22) (.40) (.55)
- ----------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $9.29 $9.12 $9.30 $9.12 $8.76
- ----------------------------------------------------------------------
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE (%)(b)4.53(c) 3.28(c) 4.43(c)9.06(c) (2.55)
- ----------------------------------------------------------------------
NET ASSETS, END OF PERIOD
(in thousands) $416 $1 $49,724$44,581 $36,930
- ----------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(d) .53(c) .10(c) .80(c)1.42(c) 1.51
- ----------------------------------------------------------------------
Ratio of net investment income to
average net assets (%)1.79(c) .45(c) 2.36(c)4.62(c) 4.74
- ----------------------------------------------------------------------
Portfolio turnover (%)36.32(c) 61.46 36.32(c) 61.46 64.83
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<C> <C> <C> <C> <C> <C> <C>
FOR THE
JANUARY 4, 1993 ELEVEN AUGUST 24, 1990
(COMMENCEMENT SIX MONTHS MONTHS (COMMENCEMENT
OF OPERATIONS) TO ENDED ENDED OF OPERATIONS) TO
JUNE 30 NOVEMBER 30 MAY 31 YEAR ENDED JUNE 30 JUNE 30
- ----------------------------------------------------------------------
- ---------------------
1993 1995(+) 1995* 1994 1993 1992 1991
- ----------------------------------------------------------------------
- ---------------------
CLASS A
- ----------------------------------------------------------------------
- ---------------------
$9.17 $9.12 $8.77 $9.53 $9.08 $8.65 $8.50
- ----------------------------------------------------------------------
- ---------------------
.21 .25 .46 .50 .56(a) .60(a) .52(a)
.36 .18 .35 (.65) .53 .45 .15
- ----------------------------------------------------------------------
- ---------------------
.57 .43 .81 (.15) 1.09 1.05 .67
- ----------------------------------------------------------------------
- ---------------------
(.21) (.25) (.45) (.50) (.56) (.60) (.52)
-- -- (.01) -- -- -- --
-- -- -- (.09) (.08) (.02) --
-- -- -- (.02) -- -- --
- ----------------------------------------------------------------------
- ---------------------
(.21) (.25) (.46) (.61) (.64) (.62) (.52)
- ----------------------------------------------------------------------
- ---------------------
$9.53 $9.30 $9.12 $8.77 $9.53 $9.08 $8.65
- ----------------------------------------------------------------------
- ---------------------
12.84(c) 4.78(c) 9.58(c) (1.79) 12.44 12.57 9.46(c)
- ----------------------------------------------------------------------
- ---------------------
$17,881 $263,515 $271,309 $276,245 $278,039 $195,963 $109,739
- ----------------------------------------------------------------------
- ---------------------
.78(c) .48(c) .83(c) .91 .77(a) .60(a) .41(a)(c)
- ----------------------------------------------------------------------
- ---------------------
2.21(c) 2.70(c) 5.24(c) 5.38 5.94(a) 6.73(a) 5.94(a)
- ----------------------------------------------------------------------
- ---------------------
106.69 36.32(c) 61.46 64.83 106.69 72.73 46.72(c)
- ----------------------------------------------------------------------
- ---------------------
<FN>
* The fiscal year has advanced from June 30 to May
31.
(+) Unaudited
(a) Reflects an absorption of expenses incurred by the fund and an
expense limitation applicable during the period. As a result of
these limitations, expenses of the fund for the year ended June
30, 1992 and the period ended June 30, 1991, reflect a reduction
of $0.02 and $0.04 per share, respectively.
(b) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(c) Not annualized
(d) The ratio of expenses to average net assets for the year ended
November 30, 1995 includes amounts paid through brokerage service
and expenses offset arrangments. Prior period ratios exclude
these amounts (See Note 2).
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
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 as Putnam Investment
Management ("Putnam Management"), the fund's Manager, a wholly-owned
subsidiary of Putnam Investments, Inc., believes is consistent with
preservation of capital by investing primarily in a portfolio of
securities exempt from the Florida intangibles tax.
The fund offers class A, class B and class M 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 ongoing
distribution fee than class A shares and are subject to a contingent
deferred sales charge, if those shares are redeemed within six years
of purchase. Class M shares are sold with a maximum front-end sales
charge of 3.25% and pay an ongoing distribution fee that is lower than
class B shares and higher than class A shares.
Expenses of the fund are borne pro- rata by the holders of each class
of shares, except that each class bears expenses unique to that class
(including the distribution fees applicable to such class). Each class
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 Putnam
Management following procedures approved by the Trustees, and such
valuations and procedures are reviewed periodically by the Trustees.
Putnam Management is responsible for determining that the value of
short- term instruments is at all times equal to the resale price,
including accrued interest.
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.
<PAGE>
C FEDERAL TAXES It is the policy of the fund to distribute all of its
income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. It is also the intention of the fund to
distribute an amount sufficient to avoid imposition of any excise tax
under Section 4982 of the Internal Revenue Code of 1986. Therefore, no
provision has been made for federal taxes on income, capital gains or
unrealized appreciation of securities held and excise tax on income
and capital gains.
D DISTRIBUTIONS TO SHAREHOLDERS Income dividends are recorded daily by
the fund and are distributed monthly. Capital gains distributions, if
any, are recorded on the ex-dividend date and paid annually. 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.
E AMORTIZATION OF BOND PREMIUM AND DISCOUNT Any premium resulting from
the purchase of securities in excess of maturity value is amortized on
a yield-to-maturity basis. Discount on zero-coupon bonds and original
issue bonds, are accreted according to the effective yield method.
F FUTURES AND OPTIONS CONTRACTS The fund may use futures and options
contracts to hedge against changes in the values of securities the
fund owns or expects to purchase. The fund may also write options on
securities it owns or which it invests to increase its current
returns.
The potential risk to the fund is that the change in value of futures
and options contracts may not correspond to the change in value of the
hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparty to the contract is
unable to perform.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded
options are valued at the last sale price, or if no sales are
reported, the last bid price for purchased options and the last ask
price for written options. Options traded over-the-counter are valued
using prices supplied by dealers
H UNAMORTIZED ORGANIZATION EXPENSES Expenses incurred by the fund in
connection with its organization, its registration with the Securities
and Exchange Commission and with various states, and the initial
public offering of its shares were $75,474. These expenses are being
amortized over a five-year period.
<PAGE>
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Investment Management, for management and
investment advisory services is paid quarterly based on the average
net assets of the fund for the quarter. Such fee is based on the
following annual rates: 0.60% of the first $500 million of the fund's
average net assets, 0.50% of the next $500 million, 0.45% of the next
$500 million and 0.4% of any amount over $1.5 billion, subject to
reduction in any year by the amount of certain brokerage commissions
and fees (less expenses) received by affiliates of Putnam Management
on the fund's portfolio transactions.
The fund reimburses Putnam Management for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Trustees of the fund receive an annual Trustee's fee of $780, and an
additional fee for each Trustees' meeting attended. Trustees who are
not interested persons of Putnam Management and who serve on
committees of the Trustees receive additional fees for attendance at
certain committee meetings.
During the period ended November 30, 1995, the fund 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 the
fund or in other Putnam funds until distribution in accordance with
the Plan.
Custodial functions for the fund's assets are provided by the 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 period ended November 30, 1995, fund expenses were reduced by
$143,454 under expense offset arrangements with PFTC. Investor
servicing and custodian fees reported in the Statement of operations
exclude these credits. The fund could have invested the assets
utilized in connection with the expense offset arrangements in an
income producing asset if it had not entered into such arrangements.
The fund has adopted distribution plans (the "Plans") with respect to
its class A, class B and class M shares pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The purpose of the Plans is to
compensate Putnam Mutual Funds Corp., a wholly-owned subsidiary of
Putnam Investments Inc., for services provided and expenses incurred
by it in
<PAGE>
distributing shares of the fund. The Plans provide for payments by the
fund to Putnam Mutual Funds Corp. at an annual rate up to 0.35%, 1.00%
and 1.00% of the average net assets attributable to class A, class B
and class M shares, respectively. The Trustees have approved payment
by the fund at an annual rate of 0.20%, 0.85% and 0.50% of the average
net assets attributable to class A, class B and class M shares,
respectively.
For the period ended November 30, 1995, Putnam Mutual Funds Corp.,
acting as underwriter received net commissions of $24,667 and $37 from
the sale of class A and class M shares, respectively and received
$71,893 in contingent deferred sales charges from redemptions of class
B shares. A deferred sales charge of up to 1% is assessed on certain
redemptions of class A shares. For the period ended November 30, 1995,
Putnam Mutual Funds Corp., acting as underwriter received $4,760 on
class A redemptions.
NOTE 3
PURCHASES AND SALES OF SECURITIES During the period ended November 30,
1995, purchases and sales of investment securities other than U.S.
government obligations and short-term investments aggregated
$112,249,918 and $109,937,796, respectively. There were no purchases
and sales of U.S. government obligations. In determining the net gain
or loss on securities sold, the cost of securities has been determined
on the identified cost basis.
<PAGE>
NOTE 4
CAPITAL SHARES
At November 30, 1995, there was an unlimited number of shares of
beneficial interest authorized. Class M shares became effective on May
1, 1995 and 113 shares were sold to Putnam Investments, Inc. for
$1,003. Transactions in capital shares were as follows:
<TABLE><CAPTION>
<S> <C> <C>
- ----------------------------------------------------------------------
SIX MONTHS ENDED
NOVEMBER 30
- ----------------------------------------------------------------------
1995
- ----------------------------------------------------------------------
CLASS A SHARES AMOUNT
- ----------------------------------------------------------------------
Shares sold 1,434,419 $13,027,294
Shares issued in connection
with reinvestment of distributions 335,967 3,038,043
- ----------------------------------------------------------------------
1,770,386 16,065,337
- ----------------------------------------------------------------------
Shares repurchased (3,183,240) (28,769,730)
- ----------------------------------------------------------------------
NET DECREASE (1,412,854) $(12,704,393)
- ----------------------------------------------------------------------
ELEVEN MONTHS
ENDED
MAY 31
- ----------------------------------------------------------------------
1995
- ----------------------------------------------------------------------
CLASS A SHARES AMOUNT
- ----------------------------------------------------------------------
Shares sold 5,779,235 $49,373,332
Shares issued in connection
with reinvestment of distributions 687,442 5,977,266
- ----------------------------------------------------------------------
6,466,677 55,350,598
- ----------------------------------------------------------------------
Shares repurchased (8,212,455) (70,755,752)
- ----------------------------------------------------------------------
NET DECREASE (1,745,778) $(15,405,154)
- ----------------------------------------------------------------------
SIX MONTHS ENDED
NOVEMBER 30
- ----------------------------------------------------------------------
1995
- ----------------------------------------------------------------------
CLASS B SHARES AMOUNT
- ----------------------------------------------------------------------
Shares sold 741,937 $6,737,894
Shares issued in connection
with reinvestment of distributions 45,999 415,668
- ----------------------------------------------------------------------
787,936 7,153,562
- ----------------------------------------------------------------------
Shares repurchased (328,909) (2,988,599)
- ----------------------------------------------------------------------
NET INCREASE 459,027 $4,164,963
- ----------------------------------------------------------------------
ELEVEN MONTHS
ENDED
MAY 31
- ----------------------------------------------------------------------
1995
- ----------------------------------------------------------------------
CLASS B SHARES AMOUNT
- ----------------------------------------------------------------------
Shares sold 1,642,091 $14,208,252
Shares issued in connection with
reinvestment of distributions 82,121 714,840
- ----------------------------------------------------------------------
1,724,212 14,923,092
- ----------------------------------------------------------------------
Shares repurchased (1,047,931) (9,048,644)
- ----------------------------------------------------------------------
NET INCREASE 676,281 $5,874,448
- ----------------------------------------------------------------------
SIX MONTHS
ENDED
NOVEMBER 30
- ----------------------------------------------------------------------
1995
- ----------------------------------------------------------------------
CLASS M SHARES AMOUNT
- ----------------------------------------------------------------------
Shares sold 44,619 $409,659
Shares issued in connection with
reinvestment of distributions 18 161
- ----------------------------------------------------------------------
44,637 409,820
- ----------------------------------------------------------------------
Shares repurchased -- --
- ----------------------------------------------------------------------
NET INCREASE 44,637 $409,820
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
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
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
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
Gary N. Coburn
Vice President
James E. Erickson
Vice President
Richard P. Wyke
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Senior Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Florida
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, and the most recent copy of Putnam's Quarterly Performance
Summary. For more information, or to request a prospectus, call toll
free: 1-800-225-1581.
SHARES OF MUTUAL FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND INVOLVE RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
<PAGE>
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
22179 1/96
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APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS.
(1) Rule lines for tables are omitted.
(2) Italic typefaces is displayed in normal type.
(3) Boldface type is displayed in capital letters.
(4) Headers (e.g. the names of the fund) and footers (e.g. page
numbers and OThe accompanying notes are an integral part of these
financial statementsO) are omitted.
(5) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(6) Bullet points and similar graphic symbols are omitted.
(7) Page numbering is different.
