<PAGE>
PUTNAM
TAX-FREE
HEALTH CARE
FUND
SEMIANNUAL REPORT
November 30, 1994
[LOGO APPEARS HERE]
BOSTON * LONDON * TOKYO
<PAGE>
PERFORMANCE HIGHLIGHTS
Lipper Analytical Services ranked the fund first out of 44 closed-end general
municipal debt funds for two-year performance and 9th out of 60 funds for
one-year performance as of November 30, 1994.*
Performance should always be considered in light of a fund's investment
strategy. Putnam Tax-Free Health Care Fund is designed for investors seeking
high current income free from federal income tax and consistent with
preservation of capital through a portfolio of securities in the health care
sector.
- --------------------------------------------------------------------------------
SEMIANNUAL RESULTS AT A GLANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN NAV MARKET PRICE
<S> <C> <C>
(change in value during
period plus reinvested
distributions)
6 months ended 11/30/94 -2.54% -6.22%
<CAPTION>
<S> <C> <C>
SHARE VALUE NAV MARKET PRICE
5/31/94 $14.29 $14.375
11/30/94 13.43 13.000
<CAPTION>
CAPITAL GAINS/1/
LONG- SHORT-
DISTRIBUTIONS NO. INCOME TERM TERM TOTAL
<S> <C> <C> <C> <C> <C>
6 $0.5064 $0.00 $0.00 $0.5064
<CAPTION>
CURRENT RETURN NAV MARKET PRICE
<S> <C> <C>
End of period
Current dividend rate/2/ 7.54% 7.79%
Taxable equivalent/3/ 12.48 12.90
<FN>
Performance data represent past results. For performance over longer periods,
see page 8. /1/Capital gains are taxable for federal and, in most cases,
state tax purposes. For some investors, investment income may also be
subject to the federal Alternative Minimum Tax. Investment income may be
subject to state and local taxes. /2/Income portion of most recent
distribution, annualized and divided by NAV or market price at end of period.
/3/Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
*Rankings by this independent mutual fund rating company vary over time and
do not reflect the effects of sales charges. Past performance is not
indicative of future results.
</FN>
</TABLE>
2
<PAGE>
FROM THE CHAIRMAN
[PHOTO OF GEORGE PUTNAM APPEARS HERE]
(C) Karsh, Ottowa
DEAR SHAREHOLDER:
AS WE BEGIN A NEW YEAR, MOST INVESTORS WON'T REGRET THE PASSING OF THE OLD.
SINCE LAST FEBRUARY, WHEN THE FEDERAL RESERVE BOARD BEGAN A SERIES OF
INCREASES IN INTEREST RATES, 1994 WAS MARKED BY SHARP CORRECTIONS FOLLOWED BY
SMALL GAINS AND EXTENDED UNCERTAINTY FOR VIRTUALLY ALL FINANCIAL MARKETS.
WELL IN ADVANCE OF THE FED'S FIRST INCREASE, FUND MANAGER HOWARD MANNING HAD
ADOPTED DEFENSIVE STRATEGIES DESIGNED TO REDUCE THE IMPACT OF RISING RATES ON
PUTNAM TAX-FREE HEALTH CARE FUND'S PORTFOLIO. WHILE DEFENSIVE STRATEGIES
PROVED RELATIVELY SUCCESSFUL, FUND PERFORMANCE GENERALLY EDGED INTO THE
NEGATIVE NUMBERS.
BONDS BORE THE BRUNT OF THE DOWNTURN AND TAX-FREE MUNICIPALS INCURRED THE
STEEPEST DECLINE. ALTHOUGH SHIFTS IN THE MARKET AS A WHOLE INEVITABLY AFFECT
YOUR FUND, PUTNAM MANAGEMENT'S PHILOSOPHY OF SELECTING SECURITIES ON AN
ISSUE-BY-ISSUE BASIS WITH A THOROUGH EXAMINATION OF EACH ISSUER'S CREDIT
QUALITY SHOULD CONTINUE TO HELP PROTECT YOUR FUND'S PORTFOLIO.
IN THE ACCOMPANYING REPORT, HOWARD DISCUSSES THE FIRST HALF OF FISCAL 1995
AND PROSPECTS FOR THE CHALLENGING MONTHS AHEAD.
RESPECTFULLY YOURS,
/S/ GEORGE PUTNAM
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
JANUARY 18, 1995
3
<PAGE>
REPORT FROM THE FUND MANAGER
HOWARD MANNING
Damage control in a turbulent municipal bond market and positioning for a
market recovery have been our major priorities in managing Putnam Tax-Free
Health Care Fund over the past several months. The fund's total return for
the six months ended November 30, 1994, was disappointing, but understandably
so in light of the period's market conditions. Still, the fund's results of
- -2.54% at net asset value compare favorably with the broader-based Lehman
Brothers Municipal Bond Index, which returned -3.48% over the same period.
Your fund continues to deliver a competitive stream of income. Its tax-free
current dividend rate of 7.54% at net asset value at the end of the period
was comparable with a 12.48% taxable return for an investor taxed at the maximum
39.6% federal rate. Investors in lower brackets would also have benefited,
though not to the same extent.
PROFILE OF A NERVOUS MARKET
As we have seen as recently as mid-November, the Federal Reserve Board
remains determined to use increases in short-term interest rates to keep
inflation in check. The overall result of the policy is to raise rates across
the board. While this may have positive implications for the income stream of
many tax-exempt bond portfolios, including your fund's, the most significant
result thus far has been to keep the fixed-income markets jittery and,
therefore, volatile.
Some relative calm returned briefly as the bond market stabilized over the
summer. In early October, when many large tax-exempt bond funds started
making fiscal-year-end portfolio adjustments for tax purposes, municipal
bonds began selling at large discounts to taxable bonds. This sell-off
created yet another disruption in the battered municipal bond market.
4
<PAGE>
Opportunity is often the companion of turmoil. In this oversold market, we
are seeking out attractively priced issues to add to your fund's portfolio.
Perhaps more significantly, however, we believe the market is now near the
bottom. If it recovers over the next several months, as we believe it will,
the effect should be an increase in your fund's net asset value.
EMPHASIS REMAINS ON CAUTION
Since the current unsettled market environment seems destined to persist for
a while, we will continue to use a cautious approach in managing your fund.
Keeping the portfolio's duration relatively short has been one of our most
effective defensive tactics. Duration measures the price sensitivity of a
bond or a portfolio of bonds to a change in interest rates. The shorter the
duration, the less volatility you can generally expect from the portfolio.
Many higher-coupon bonds contain provisions allowing them to be called, that
is, retired or refinanced at lower rates before maturity. We are targeting
bonds that cannot be called for several years. By selecting bonds not only
with relatively distant call dates, but with relatively high yields, we are
seeking to reduce the likelihood that we would need to reinvest assets from a
retired issue at more current, lower rates. This strategy can also help
protect the portfolio's income stream. Because these
[TAX-FREE VERSUS TAXABLE BOND YIELDS CHART APPEARS HERE]
5
<PAGE>
attributes also tend to make the bonds more attractive to other investors,
their prices can rise, thereby adding to the fund's net asset value.
Despite recent financial problems in Orange County, California, we believe
the state's municipal bond market offers tremendous value. While the fund has
no direct or indirect exposure to Orange County, it currently holds 10.2% of
its assets in California securities. We will continue to draw on Putnam
Management's strong research capabilities in order to find attractive
opportunities.
HOSPITALS CURRENTLY HOLD GREATEST INVESTMENT POTENTIAL
This year's bond market decline hit some sectors harder than others. Through
September, hospital securities had held up better than most other municipal
bond market sectors. It was only in the last two months of your fund's fiscal
year that their decline began to match that of the market in general. Even
so, we believe hospital bonds retain the strongest appreciation potential
within the health care universe.
Despite congressional failure to pass health care reform, dramatic changes
have been taking place in the nation's hospitals. For several years,
significant cost cutting and consolidation have made this sector immensely
more efficient and cost effective. We are uncovering undervalued health care
facilities in all parts of the country.
Furthermore, some of the health care debt the fund owns has been or appears
likely to be, in our opinion, the target of takeovers by for-profit
organizations or merger/affiliation with stronger not-for-profits. This is
typically a positive event for bondholders because it often leads to a
refunding of the bond issue. When refunding occurs, the revenue source for
interest payments of the bonds shifts from the underlying cash flow of the
project itself to AAA-rated U.S. government securities. This leads to credit
upgrades of the original bonds, which, in turn, often contributes to an
increase in their market price.
TAX-CONSCIOUS INVESTORS SHOULD KEEP DEMAND STEADY
Several issuers represented in the portfolio are currently in the process of
being acquired or merged by for-profit enterprises. The net effect of the
trend nationwide will be a reduction in the number of attractive hospital and
health facility issues available to investors seeking tax-
6
<PAGE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
- --------------------------------------------------------------------------------
MASSACHUSETTS STATE HEALTH AND EDUCATIONAL FACILITIES
AUTHORITY REVENUE BONDS
MICHIGAN STATE HOSPITAL FINANCING AUTHORITY REVENUE BONDS
SIERRA VISTA, ARIZONA, INDUSTRIAL DEVELOPMENT
AUTHORITY HOSPITAL REVENUE BONDS
CALIFORNIA HEALTH FACILITIES AUTHORITY REVENUE BONDS
ORANGE COUNTY, FLORIDA, HEALTH FACILITIES
AUTHORITY RESIDUAL INTEREST BONDS
ALLEGHENY COUNTY, PENNSYLVANIA, HOSPITAL DEVELOPMENT
AUTHORITY REVENUE BONDS
KANSAS CITY, MISSOURI, INDUSTRIAL DEVELOPMENT
AUTHORITY HEALTH FACILITIES REVENUE BONDS
NEW YORK STATE MEDICAL CARE FACILITIES
FINANCING AGENCY REVENUE BONDS
BEXAR COUNTY, TEXAS, HEALTH FACILITIES DEVELOPMENT
CORPORATION REVENUE BONDS
TULSA, OKLAHOMA, INDUSTRIAL AUTHORITY
HOSPITAL REVENUE BONDS
* These holdings represent 39.3% of the fund's net assets as of 11/30/94.
Portfolio holdings are subject to change.
free securities. Furthermore, the pace of refinancing older
higher-interest-rate debt has fallen off. Overall issuance of new municipal
debt is more than 40% behind year-earlier levels.
While demand has also been somewhat soft over the past several months, we
believe the situation will reverse as the bond market overcomes current
uncertainties. Furthermore, implementation of the new changes in the federal
income tax law at the beginning of 1994 resulted in tax increases for many
investors. In our view, higher federal income tax rates, as well as rising
taxes in many states, eventually will add to demand for tax-free securities.
OUTLOOK: POSITIONED FOR RECOVERY
The combined prospect of short supply and heightened demand should ultimately
translate into a stronger tax-free bond market. We believe the sacrifice of
some short-term performance gains in order to position the fund for an
eventual improvement in the market will ultimately prove worthwhile. Because
we are locking in higher yields as opportunities arise, we believe the fund
will also continue to provide a competitive stream of tax-free income in the
months ahead.
The views expressed here are exclusively those of Putnam Management and are
not meant as investment advice. While Putnam Management viewed the industry
and market sectors mentioned in their report favorably as of 11/30/94, there
is no assurance this will be the case in the future.
7
<PAGE>
PERFORMANCE SUMMARY
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 back into the fund.
TOTAL RETURN FOR PERIODS ENDED 11/30/94
<TABLE>
<CAPTION>
Lehman Bros.
Market Municipal
NAV Price Bond Index CPI
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 months -2.54% -6.22% -3.48% 1.49%
- -------------------------------------------------------------------------------
1 year -3.76 -5.06 -5.25 2.68
- -------------------------------------------------------------------------------
Life of fund
(since 6/29/92) 15.56 3.58 8.91 6.78
Annual average 6.16 1.47 3.59 2.75
- -------------------------------------------------------------------------------
</TABLE>
TOTAL RETURN FOR PERIODS ENDED 12/31/94
(most recent calendar quarter)
<TABLE>
<CAPTION>
Market
NAV Price
- -----------------------------------------------------------------
<S> <C> <C>
6 months -2.26% -9.35%
- -----------------------------------------------------------------
1 year -4.70% -6.95%
- -----------------------------------------------------------------
Life of fund (since 6/29/92) 16.16 1.59
Annual average 6.17 0.63
- -----------------------------------------------------------------
<FN>
Performance data represent past results. Investment returns and net asset
value will fluctuate so an investor's shares, when sold, may be worth more or
less than their original cost. Fund performance data do not take into account
any adjustment for taxes payable on reinvested distributions.
NET ASSET VALUE (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares.
MARKET PRICE is the current trading price of one share of the fund. Market
prices are set by transactions between buyers and sellers on the New York
Stock Exchange.
BOND BUYER MUNICIPAL BOND INDEX is an unmanaged list of tax-exempt bonds that
is frequently used as a general gauge of the municipal bond market.
LEHMAN BROTHERS LONG-TERM TREASURY BOND INDEX is an unmanaged list of
publicly issued U.S. Treasury obligations with maturities of 10 years or more
that is representative of the Treasury bond market.
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.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
The indexes do 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.
</FN>
</TABLE>
8
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
November 30, 1994 (Unaudited)
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES (99.3%)(a)
PRINCIPAL AMOUNT RATINGS(b) VALUE
<C> <S> <C> <C>
ARIZONA (9.6%)
- ------------------------------------------------------------------------------------------------------------
$ 2,935,000 AZ Hlth. Fac. Auth. Hosp. Syst. Rev. Bonds
(St. Luke's Hlth. Syst.), 7 1/4s, 11/1/14 Ba $ 2,997,369
4,000,000 Payson, Indl. Dev. Auth. Hosp. Rev. Bonds
(Payson Regl. Med. Ctr. Inc. Project), 7.7s, 10/1/23 B/P 3,685,000
4,285,000 Pinal Cnty., Indl. Dev. Auth. Rev. Bonds
(Casa Grande Regl. Med. Ctr.), 9s, 12/1/13 BB/P 4,424,262
6,480,000 Sierra Vista, Indl. Dev. Auth. Hosp. Rev. Bonds
(Sierra Vista Cmnty. Hosp. Project), 8 1/2s, 12/1/21 BBB/P 6,698,700
------------
17,805,331
CALIFORNIA (10.2%)
- ------------------------------------------------------------------------------------------------------------
4,000,000 Berkeley, Hlth. Fac. Rev. Bonds
(Alta Bates Med. Ctr.), Ser. A, 6.55s, 12/1/22 Baa 3,340,000
CA Hlth. Fac. Auth. Rev. Bonds
3,195,000 (Summit Med. Ctr.), Ser. 85A, 9s, 5/1/15 Ba 3,214,968
1,090,000 (Valley Presbyterian Hosp. Project), Ser. A, 9s, 5/1/12 B 1,095,450
2,215,000 CA Hlth. Fac. Fin. Auth. Rev. Bonds, Ser. A,
(Summit Med. Ctr.), 7 1/2s, 5/1/09 Ba 2,035,031
CA Hlth. Fac. Fin. Auth. Variable Rate Demand Notes
1,100,000 (Sutter Hlth.), 3.55s, 3/1/20 VMIG1 1,100,000
3,200,000 (St. Joseph Hlth. Syst.), 3.55s, 7/1/13 VMIG1 3,200,000
4,000,000 La Habra, Certif. of Participation
(Friendly Hills Hlth. Care Foundation), Ser. A,
7.15s, 7/1/23 BB/P 4,020,000
900,000 San Bernardino, Hosp. Rev. Bonds
(San Bernardino Cmnty. Hosp.), 7 7/8s, 12/1/08 B 817,875
------------
18,823,324
COLORADO (0.7%)
- ------------------------------------------------------------------------------------------------------------
1,500,000 Denver, City & Cnty. Arpt. Rev. Bonds,
Ser. A, 7 1/4s, 11/15/25 Baa 1,363,125
CONNECTICUT (0.7%)
- ------------------------------------------------------------------------------------------------------------
1,200,000 CT Dev. Auth. Hlth. Care Rev. Bonds
(AHF/Windsor Inc. Project), Ser. A, 9 1/2s, 1/1/22 B/P 1,242,000
FLORIDA (5.4%)
- ------------------------------------------------------------------------------------------------------------
2,000,000 Miami, Hlth. Fac. Auth. Rev. Bonds
(Cedars Med. Ctr.), Ser. A, prerefunded 8 3/8s, AAA/P 2,182,500
10/1/17 Orange Cnty., Hlth. Fac. Auth.
4,000,000 1st. Mtge. Rev. Bonds (RHA/Princeton Hosp.), 9s, 7/1/21 B/P 3,850,000
2,600,000 Inverse Floating Bonds (IFB), Ser. 91-C, Municipal
Bond Insurance Association (MBIA), 7.605s, 10/29/21 AAA 2,203,500
1,610,000 Palm Beach Cnty., Hlth. Fac. Auth. Rev. Bonds
(JFK Med. Ctr. Inc. Project), 8 7/8s, 12/1/18 BBB 1,720,075
------------
9,956,075
GEORGIA (1.9%)
- ------------------------------------------------------------------------------------------------------------
4,000,000 Savannah, Hosp. Auth. Rev. Bonds
(Impt.-Candler Hosp.), 7s, 1/1/23 Baa 3,435,000
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS(b) VALUE
<C> <S> <C> <C>
ILLINOIS (2.8%)
- ------------------------------------------------------------------------------------------------------------
IL Hlth. Fac. Auth. Rev. Bonds
$ 2,720,000 (St. Elizabeth's Hosp.), prerefunded, 10 1/8s, 7/1/16 AAA $ 2,886,600
IL Dev. Fin. Auth. Rev. Bonds,
2,335,000 (Cmnty. Rehab. Providers Facs.) 8 3/4s, 7/1/11 BBB/P 2,294,137
------------
5,180,737
KENTUCKY (1.8%)
- ------------------------------------------------------------------------------------------------------------
2,000,000 Jefferson Cnty., Hosp. IFB,
(Alliant Hlth. Syst. Project), MBIA, 9.09s, 10/1/14 AAA 1,772,500
1,520,000 Muhlenberg Cnty., Hosp. Rev. Bonds
(Muhlenberg Cmnty. Hosp. Project), 9 1/2s, 8/1/10 BB/P 1,620,700
------------
3,393,200
MARYLAND (3.2%)
- ------------------------------------------------------------------------------------------------------------
2,910,000 Berlin, Hosp. Rev. Bonds
(Atlantic Gen. Hosp. Fac.), 8 3/8s, 6/1/22 BB/P 2,924,550
3,765,000 Prince Georges Cnty., Hosp. Rev. Bonds
(Southeast Healthcare Syst.), 6 3/8s, 1/1/23 Baa 3,021,412
------------
5,945,962
MASSACHUSETTS (13.8%)
- ------------------------------------------------------------------------------------------------------------
3,950,000 Boston, Rev. Rfdg. Bonds
(City Hospital), Ser. B, 5 3/4s, 2/15/23 AA 3,234,062
MA Hlth. & Edl. Fac. Auth. Rev. Bonds
2,225,000 (St. Joseph's Hosp.), Ser. C, 9 1/2s, 10/1/20 BBB/P 2,603,250
3,300,000 (Waltham-Weston Hosp. & Med. Ctr.),
Ser. B, 8 3/8s, 7/1/15 Baa 3,353,625
3,830,000 (Norwood Hosp.), Ser. E, 8s, 7/1/12 Ba 3,557,112
115,000 (Norwood Hosp.), Ser. E, 8s, 7/1/05 Ba 108,675
4,000,000 (Rehab. Hosp. Cape & Islands), Ser. A, 7 7/8s, 8/15/24 BB/P 3,710,000
3,000,000 (MA Eye & Ear Infirmary), Ser. A, 7 3/8s, 7/1/11 Baa 2,711,250
2,930,000 (Cooley Dickinson Hosp.), Ser. A, 7 1/8s, 11/15/18 BB/P 2,552,763
MA Indl. Fin. Agcy. Rev. Bonds
1,000,000 (Oddfellows Home of MA), 9.6s, 1/1/15 BB/P 1,030,000
2,385,000 (Morton Hosp. & Med. Ctr.), Ser. A, 8 3/4s, 7/1/11 Aaa 2,677,163
------------
25,537,900
MICHIGAN (7.8%)
- ------------------------------------------------------------------------------------------------------------
1,980,000 Detroit, Hosp. Fin. Auth. Rev. Bonds
(MI Hlth. Care Corp.), 10s, 12/1/20 B 1,683,000
2,000,000 Dickinson Cnty., Hosp. Rev. Bonds (Mem. Hosp. Syst.),
8 1/8s, 11/1/24 BBB 1,960,000
55,000 Highland Park, Fin. Auth. Hosp. Fac. Rev. Bonds
(MI Hlth. Care Corp. Project), Ser. A, 9 3/4s, 12/1/06 B 46,750
MI Hosp. Fin. Auth. Rev. Bonds
4,500,000 (Garden City Hosp.), 8 1/2s, 9/1/17 BBB 4,561,875
4,530,000 (Port Huron Hosp.), Ser. A, 7 5/8s, 7/1/15 Baa 4,614,938
1,465,000 Tawas City, Hosp. Fin. Auth. Rev. Bonds
(St. Joseph's Hosp. Project), Ser. A, 8 1/2s, 3/15/12 BB/P 1,503,456
------------
14,370,019
MINNESOTA (1.2%)
- ------------------------------------------------------------------------------------------------------------
2,300,000 Rochester, Hlth. Care Fac.
Rev. Bonds (Olmsted Med. Group), 7 1/2s, 7/1/19 BB/P 2,130,375
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS(b) VALUE
<C> <S> <C> <C>
MISSOURI (3.3%)
- ------------------------------------------------------------------------------------------------------------
$ 5,000,000 Kansas City, Indl. Dev. Auth. Hlth. Fac. Rev. Bonds
(Park Lane Med. Ctr. Project), 8 3/4s, 1/1/15 BBB/P $ 5,275,000
1,000,000 MO Hlth. & Edl. Facs. Auth. Rev. Bonds
(BJC Hlth. Syst.), Ser. A, 6 1/2s, 5/15/20 AA 913,750
------------
6,188,750
NEW HAMPSHIRE (1.0%)
- ------------------------------------------------------------------------------------------------------------
1,945,000 NH Higher Edl. & Hlth. Fac. Auth. Rev. Bonds
(Alice Peck Day Mem. Hosp. Project),
9 3/8s, 11/1/20 Baa/P 1,920,688
NEW JERSEY (3.2%)
- ------------------------------------------------------------------------------------------------------------
3,000,000 NJ Econ. Dev. Auth. Rev. Bonds
(Ocean Nursing Pavilion), Ser. A, 7 3/8s, 12/1/25 BB/P 2,737,500
3,200,000 NJ Hlth. Care Fac. Fin. Auth. Rev. Bonds
(St. Elizabeth Hosp.), Ser. B, 8 1/4s, 7/1/20 Baa 3,276,000
------------
6,013,500
NEW MEXICO (0.8%)
- ------------------------------------------------------------------------------------------------------------
1,350,000 Grant Cnty., Hosp. Fac. Rev. Bonds
(Gila Regl. Med. Ctr. Project), 10s, 2/1/12 BBB/P 1,437,750
NEW YORK (2.8%)
- ------------------------------------------------------------------------------------------------------------
NY Med. Care Fac. Fin. Agcy. Rev. Bonds
(Mental Hlth. Svcs. Fac.), Ser. B,
2,015,000 7 7/8s, 8/15/20 Baa 2,113,231
2,810,000 Prerefunded, 7 7/8s, 8/15/20 AAA 3,129,638
------------
5,242,869
OHIO (1.2%)
- ------------------------------------------------------------------------------------------------------------
2,118,002 Holland, Indl. Dev. Mtge. Rev. Bonds
(Spring Meadow Extended Care Project),
11s, 4/15/13 A/P 2,279,500
OKLAHOMA (2.6%)
- ------------------------------------------------------------------------------------------------------------
Tulsa, Indl. Auth. Hosp. Rev. Bonds
(Tulsa Regl. Med. Ctr.)
2,395,000 Ser. A, 7 5/8s, 6/1/17 BBB 2,239,325
3,000,000 7.2s, 6/1/17 BBB 2,655,000
------------
4,894,325
PENNSYLVANIA (11.7%)
- ------------------------------------------------------------------------------------------------------------
Allegheny Cnty., Hosp. Dev. Auth. Rev. Bonds
1,000,000 (Divine Providence Hosp.), Ser. A, 8 3/4s, 1/1/14 BBB 1,117,500
3,000,000 (Divine Providence Hosp.), Ser. B, 8 3/4s, 1/1/14 BBB 3,180,000
1,000,000 (Southside Hosp.-Pittsburgh), Ser. A, 8 3/4s, 6/1/10 BBB 1,040,000
2,260,000 Chartiers Valley, Indl. & Coml. Dev. Auth. Rev. Bonds
(Beverly Enterprises Project), 6 1/2s, 2/1/07 BB/P 1,963,375
3,525,000 College Township, Indl. Dev. Auth. 1st Mtge. Hlth.
Facs. Rev. Bonds (Nittany Valley Rehab.
Hosp. Project), 7 5/8s, 11/1/07 BBB/P 3,428,063
1,800,000 Lebanon Cnty., Good Samaritan Hosp. Auth.
Rev. Bonds, Ser. B, 8 1/4s, 11/1/18 BBB 2,013,750
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS(b) VALUE
<C> <S> <C> <C>
PENNSYLVANIA (continued)
- ------------------------------------------------------------------------------------------------------------
$ 2,000,000 Montgomery Cnty., Higher Edl. & Hlth. Auth. Hosp.
Rev. Bonds (UTD Hosp. Project), Ser. B,
8 3/8s, 11/1/11 Ba $ 2,015,000
2,950,000 Philadelphia, Hosp. & Higher Edl. Fac. Auth. IFB,
Federal Guaranty Insurance Co. (FGIC)
7.767s, 3/6/12 AAA 1,924,875
2,500,000 Washington Cnty., Hosp. Auth. Rev. Bonds
(Canonsburg Gen. Hosp. Project), 7.35s, 6/1/13 BB/P 2,259,375
2,900,000 York Cnty., Indl. Dev. Auth. 1st Mtge. Hlth. Fac. Rev.
Bonds (Rehabilitation Hosp. of York Project),
7 1/2s, 9/1/07 BBB/P 2,813,000
------------
21,754,938
TENNESSEE (0.8%)
- ------------------------------------------------------------------------------------------------------------
Meigs Cnty., Hlth. Edl. & Hsg. Fac. Board Rev. Bonds
1,308,646 (Meigs Cnty. Hlth. Ctr.), Federal Housing Administration
Insd., 12s, 7/15/25 A/P 1,401,887
TEXAS (8.3%)
- ------------------------------------------------------------------------------------------------------------
1,000,000 Amarillo, Hlth. Fac. Hosp. Corp. IFB
(High Plains Baptist Hosp.), Financial Security
Assurance, Inc. 9.443s, 1/3/22 AAA 851,250
Bexar Cnty., Hlth. Fac. Dev. Corp. Rev. Bonds
(St. Luke's Lutheran Hosp. Project),
5,000,000 7.9s, 5/1/11 Baa 5,050,000
200,000 7s, 5/1/21 Baa 178,250
1,085,000 Cherokee Cnty., Hlth. Fac. Dev. Corp. Hosp. Rev. Bonds
(Nancy Travis Mem. Hosp. Project), 10s, 5/15/13 B/P 1,108,056
1,655,000 Montgomery Cnty., Hlth. Fac. Dev. Corp. Rev. Bonds
(Woodlands Med. Ctr. Project), 8.85s, 8/15/14 BB/P 1,739,819
2,000,000 North Central TX Hlth. Fac. Dev. Corp. IFB
(Baylor Hlth. Care Syst.), Ser. B, 9s, 5/15/08 AA 1,912,500
3,500,000 Northeast Hosp. Auth. Rev. Bonds
(Northeast Med. Ctr. Hosp.), Ser. B, FGIC,
7 1/4s, 7/1/22 AAA 3,163,125
1,415,000 Tarrant Cnty., Hlth. Facs. Dev. Corp. Hosp. Rev. Bonds
(Cmnty. Hlth. Care Foundation, Inc. Project),
10 1/8s, 4/1/21 B/P 1,432,688
------------
15,435,688
VIRGINIA (2.5%)
- ------------------------------------------------------------------------------------------------------------
1,000,000 Fairfax Cnty., Indl. Dev. Auth. IFB
(Fairfax Hosp. Syst.), Ser. C, 9.937s, 8/29/23 AA 1,128,750
4,000,000 Roanoke, Indl. Dev. Auth. Hosp. IFB
(Roanoke Mem. Hosp.), Ser. B, MBIA, 5.95s, 7/1/20 AAA 3,505,000
------------
4,633,750
WASHINGTON (1.3%)
- ------------------------------------------------------------------------------------------------------------
2,250,000 Grant Cnty., Pub. Hosp. Dist. No. 1 Rev. Bonds
(Samaritan Hosp.), 9 1/4s, 9/1/10 BBB/P 2,430,000
WEST VIRGINIA (0.7%)
- ------------------------------------------------------------------------------------------------------------
1,280,000 WV State Hosp. Fin. Auth. Hosp. Rev. Bonds
(St. Francis Hosp.-Charleston), 7 3/4s, 8/15/13 B 1,300,800
------------
TOTAL INVESTMENTS (cost $192,441,282)(c) $184,117,493
============
</TABLE>
12
<PAGE>
[FN]
(a) Percentages indicated are based on total net assets of $185,480,993,
which correspond to a net asset value per share of $13.43.
(b) The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at November 30, 1994 for the securities
listed. Ratings are generally ascribed to securities at the time of
issuance. While the agencies may from time to time revise such ratings, they
undertake no obligation to do so, and the ratings do not necessarily
represent what the agencies would ascribe to these securities at November
30, 1994. Securities rated by Putnam are indicated by "/P" and are not
publicly rated.
(c) The aggregate identified cost for tax purposes is $192,441,282, resulting
in gross unrealized appreciation and depreciation of $2,073,395 and
$10,397,184, respectively, or net unrealized depreciation of $8,323,789.
The rates shown on Inverse Floating Bonds (IFB), which are securities paying
variable interest rates that vary inversely to changes in market interest
rates and Variable Rate Demand Notes, are the current interest rates at
November 30, 1994, which are subject to change based on the terms of the
security.
[/FN]
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1994 (Unaudited)
<TABLE>
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------
Investments in securities at value
(identified cost $192,441,282) (Note 1) $184,117,493
- -----------------------------------------------------------------------------------
Cash 232,982
- -----------------------------------------------------------------------------------
Interest receivable 4,639,807
- -----------------------------------------------------------------------------------
Unamortized organization expenses (Note 1) 21,163
- -----------------------------------------------------------------------------------
Total assets 189,011,445
LIABILITIES
- -----------------------------------------------------------------------------------
Distributions payable to shareholders 1,165,273
- -----------------------------------------------------------------------------------
Payable for securities purchased 1,974,390
- -----------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 326,289
- -----------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 871
- -----------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 36,011
- -----------------------------------------------------------------------------------
Payable for administrative services (Note 2) 3,312
- -----------------------------------------------------------------------------------
Other accrued expenses 24,306
- -----------------------------------------------------------------------------------
TOTAL LIABILITIES 3,530,452
- -----------------------------------------------------------------------------------
NET ASSETS $185,480,993
- -----------------------------------------------------------------------------------
REPRESENTED BY
Paid-in capital $191,832,474
Undistributed net investment income 697,410
Accumulated net realized gain on investments 1,274,898
Net unrealized depreciation of investments (8,323,789)
- -----------------------------------------------------------------------------------
TOTAL--REPRESENTING NET ASSETS APPLICABLE TO
CAPITAL SHARES OUTSTANDING $185,480,993
- -----------------------------------------------------------------------------------
COMPUTATION OF NET ASSET VALUE
Net asset value per share
($185,480,993 divided by 13,807,168 shares) $13.43
- -----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
STATEMENT OF OPERATIONS
Six months ended November 30, 1994*
<TABLE>
<S> <C>
TAX EXEMPT INTEREST INCOME $ 7,534,807
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Compensation of Manager (Note 2) $ 686,046
- -----------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 90,679
- -----------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 6,268
- -----------------------------------------------------------------------------------
Reports to shareholders 16,906
- -----------------------------------------------------------------------------------
Postage 12,721
- -----------------------------------------------------------------------------------
Auditing 8,885
- -----------------------------------------------------------------------------------
Legal 2,608
- -----------------------------------------------------------------------------------
Administrative services (Note 2) 4,011
- -----------------------------------------------------------------------------------
Amortization of organization expenses (Note 1) 4,174
- -----------------------------------------------------------------------------------
Registration fees 1,185
- -----------------------------------------------------------------------------------
Exchange listing fees 12,133
- -----------------------------------------------------------------------------------
Other expenses 5,734
- -----------------------------------------------------------------------------------
TOTAL EXPENSES 851,350
- -----------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,683,457
- -----------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (643,351)
- -----------------------------------------------------------------------------------
Net realized gain on futures contracts (Notes 1 and 3) 8,188
- -----------------------------------------------------------------------------------
Net unrealized depreciation of investments
during the period (10,899,497)
- -----------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS (11,534,660)
- -----------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (4,851,203)
- -----------------------------------------------------------------------------------
</TABLE>
* Unaudited
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six months ended For the year ended
November 30 May 31
- -----------------------------------------------------------------------------------------------------
1994* 1994
<S> <C> <C>
DECREASE IN NET ASSETS
- -----------------------------------------------------------------------------------------------------
Operations:
- -----------------------------------------------------------------------------------------------------
Net investment income $ 6,683,457 $ 13,543,620
- -----------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (643,351) 3,171,219
- -----------------------------------------------------------------------------------------------------
Net realized gain on futures contracts 8,188 --
- -----------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (10,899,497) (6,258,248)
- -----------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,851,203) 10,456,591
- -----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
- -----------------------------------------------------------------------------------------------------
From net investment income (6,993,692) (13,984,155)
- -----------------------------------------------------------------------------------------------------
From net realized gain on investments -- (2,554,233)
- -----------------------------------------------------------------------------------------------------
TOTAL DECREASE IN NET ASSETS (11,844,895) (6,081,797)
NET ASSETS:
- -----------------------------------------------------------------------------------------------------
Beginning of period 197,325,888 203,407,685
- -----------------------------------------------------------------------------------------------------
END OF PERIOD (including undistributed
net investment income of $697,410
and $1,007,645, respectively) $185,480,993 $197,325,888
- -----------------------------------------------------------------------------------------------------
NUMBER OF FUND SHARES:
- -----------------------------------------------------------------------------------------------------
Shares outstanding at beginning and end of period 13,807,168 13,807,168
- -----------------------------------------------------------------------------------------------------
</TABLE>
* Unaudited
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the year)
<TABLE>
<CAPTION>
For the period
June 29, 1992
Six months (commencement of
ended Year ended operations) to
November 30 May 31 May 31
- ------------------------------------------------------------------------------------------------------------
1994* 1994 1993
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.29 $14.73 $13.89**
- ------------------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .48 .98 .95(a)
- ------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized
Gain (Loss) on Investments (.83) (.22) .80
- ------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS (.35) .76 1.75
- ------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net Investment Income (.51) (1.01) (.84)
- ------------------------------------------------------------------------------------------------------------
Net Realized Gain on
Investments (Note 1) -- (.19) (.07)
- ------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.51) (1.20) (.91)
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.43 $14.29 $14.73
- ------------------------------------------------------------------------------------------------------------
MARKET VALUE, END OF PERIOD $13.000 $14.375 $14.625
- ------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
MARKET VALUE (%) (A) (6.22)(b) 6.46 3.75(b)
- ------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (in thousands) $185,481 $197,326 $203,408
- ------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average
Net Assets (%) .44(b) .91 .49(a)(b)
- ------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income
to Average Net Assets (%) 3.43(b) 6.58 6.71(a)(b)
- ------------------------------------------------------------------------------------------------------------
Portfolio Turnover (%) 15.47 36.92 69.11(b)
- ------------------------------------------------------------------------------------------------------------
<FN>
* Unaudited.
** Represents initial net asset value of $13.95 less offering expenses of
approximately $0.06.
(a) Reflects an absorption of expenses incurred by the fund. As a result of
this limitation, expenses for the period ended May 31, 1993 reflect a
reduction of $0.05 per share.
(b) Not annualized.
</FN>
</TABLE>
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
November 30, 1994 (Unaudited)
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, closed-end management investment company. The fund seeks as
high a level of current income exempt from federal income tax as Putnam
Management believes is consistent with preservation of capital by investing
primarily in a portfolio of tax-exempt securities in the healthcare sector of
the tax-exempt securities market.
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 and such valuations and procedures as reviewed
periodically by 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 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 Distributions to shareholders are recorded
by the fund on the ex-dividend date.
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. The differences include treatment of wash
sales and post October loss deferrals. Reclassifications are made to the
fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carry-overs) under income tax
regulations.
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 is accreted according
to the effective yield method.
F 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 aggregated
18
<PAGE>
$41,646. These expenses are being amortized over a five-year period based on
a straight line basis.
NOTE 2
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Investment Management, Inc. ("Putnam Management"), the
fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., for
management and investment advisory services is paid quarterly based on the
average net assets of the fund. Such fee is based on the annual rate of
0.70% of average weekly net assets.
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.
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 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 wholly-owned subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor Services,
a division of PFTC.
Investor servicing and custodian fees reported in the Statement of operations
for the period ended November 30, 1994 have been reduced by credits allowed
by PFTC.
NOTE 3
PURCHASES AND SALES OF SECURITIES
During the six months ended November 30, 1994, purchases and sales of
investment securities other than short-term municipal obligations aggregated
$31,496,930 and $29,682,007 respectively. Purchases and sales of short-term
municipal obligations aggregated $9,900,000 and $8,190,000, respectively. In
determining the net gain or loss on securities sold, the cost of securities
has been determined on the identified cost basis.
The following is a summary of futures contracts activity during the period:
<TABLE>
<CAPTION>
Sales of futures contracts
- -------------------------------------------------
Number of Aggregate
Contracts Face Value
- -------------------------------------------------
<S> <C> <C>
Contracts opened 75 $ 7,488,125
Contracts closed (75) (7,488,125)
- -------------------------------------------------
Open at end
of period -- $ --
- -------------------------------------------------
</TABLE>
19
<PAGE>
SELECTED QUARTERLY DATA
<TABLE>
<CAPTION>
Three months ended
- ---------------------------------------------------------------------------------------------------------
November 30 August 31 May 31 February 28
- ---------------------------------------------------------------------------------------------------------
1994 1994 1994 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TOTAL INVESTMENT
INCOME
Total $ 3,763,452 $ 3,771,355 $ 3,775,827 $ 3,833,864
Per share $ .27 $ .27 $ .27 $ .28
- ---------------------------------------------------------------------------------------------------------
NET INVESTMENT
INCOME
Total $ 3,365,265 $ 3,318,192 $ 3,339,676 $ 3,373,354
Per share $ .24 $ .24 $ .24 $ .25
- ---------------------------------------------------------------------------------------------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Total $ (11,789,485) $ 254,825 $ (8,917,744) $ (264,663)
Per share $ ( .85) $ .02 $ (.65) $ (.02)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE)
IN ASSETS RESULTING FROM
OPERATIONS
Total $ (8,424,220) $ 3,573,017 $ (5,578,068) $ 3,108,691
Per share $ (.61) $ .26 $ (.41) $ .23
- ---------------------------------------------------------------------------------------------------------
NET ASSETS AT THE
END OF THE PERIOD
Total $ 185,480,993 $197,401,016 $197,325,888 $206,407,850
Per share $ 13.43 $ 14.30 $ 14.29 $ 14.95
- ---------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
For the period
June 29, 1992
(commencement of
- ---------------------------------------------------------------------------------------------------------------- operations) to
November 30 August 31 May 31 February 28 November 30 August 31
- -----------------------------------------------------------------------------------------------------------------------------------
1993 1993 1993 1993 1992 1992
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT
INCOME
Total $ 3,883,176 $ 3,906,776 $ 3,880,955 $ 3,867,862 $ 3,893,481 $ 2,419,259
Per share $ .27 $ .29 $ .28 $ .28 $ .29 $ .17
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT
INCOME
Total $ 3,414,063 $ 3,416,527 $ 3,414,250 $ 3,540,227 $ 3,765,663 $ 2,384,870
Per share $ .24 $ .25 $ .25 $ .25 $ .28 $ .17
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Total $ 1,802,283 $ 4,293,095 $ (1,139,899) $ 8,705,014 $ (57,854) $ 3,565,044
Per share $ .14 $ .31 $ (.08) $ .63 $ (.01) $ .26
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE)
IN ASSETS RESULTING FROM
OPERATIONS
Total $ 5,216,346 $ 7,709,622 $ 2,274,351 $ 12,245,241 $ 3,707,809 $ 5,949,914
Per share $ .38 $ .56 $ .17 $ .88 $ .27 $ .43
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT THE
END OF THE PERIOD
Total $209,341,170 $207,629,192 $203,407,685 $204,627,026 $196,953,640 $196,620,029
Per share $ 15.16 $ 15.04 $ 14.73 $ 14.82 $ 14.26 $ 14.24
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<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
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
Howard Manning
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
22
<PAGE>
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time for
up-to-date information about the fund's NAV or to request Putnam's quarterly
Closed-End Fund Commentary.
23
<PAGE>
PUTNAM INVESTMENTS ------------
THE PUTNAM FUNDS Bulk Rate
One Post Office Square U.S. Postage
Boston, Massachusetts 02109 PAID
Putnam
Investments
------------
168-15834
