Putnam
Intermediate
Tax Exempt
Income Fund
ANNUAL REPORT
September 30, 1995
[Graphic: Putnam "Scales" logo]
B O S T O N * L O N D O N * T O K Y O
<PAGE>
Performance highlights
> "Demand for attractively priced municipal bonds is increasing as new bond
sales by states, cities, and agencies become more scarce . . . New sales
have fallen 18 percent during the first nine months of 1995."
--Bloomberg, October 13, 1995
FISCAL 1995 RESULTS AT A GLANCE
<TABLE>
<CAPTION>
Class A Class B
<S> <C> <C> <C> <C> <C> <C> <C>
Total return: NAV POP NAV CDSC
....................................................................................................
(change in value during period
plus reinvested distributions)
12 months ended 9/30/95 6.54% 3.03% 6.03% 3.03%
Share value: NAV POP NAV
....................................................................................................
9/30/94 $8.23 $8.51 $8.24
9/30/95 8.30 8.58 8.32
Distributions: No. Income Total
....................................................................................................
Class A 12 $0.445637 $0.445637
Class B 12 0.397411 0.397411
Current return: NAV POP NAV
....................................................................................................
End of period
Current dividend rate(1) 5.26% 5.08% 4.65%
Taxable equivalent(2) 8.71 8.41 7.70
Current 30-day SEC yield(3) 5.10 4.94 4.57
Without expense limitation 3.99 3.86 3.19
Taxable equivalent(2) 8.44 8.18 7.57
Without expense limitation 6.61 6.39 5.28
</TABLE>
Data above represent past results, reflect an expense limitation in effect
during the period, and are not indicative of future performance. Without the
expense limitation, results would have been lower. For performance over
longer periods, see page 8. POP assumes 3.25% maximum sales charge. CDSC
assumes 3% maximum contingent deferred sales charge. 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. (1)Income portion
of most recent distribution, annualized and divided by NAV or POP at end of
period. (2)Assumes maximum 39.6% federal tax rate. Results for investors
subject to lower tax rates would not be as advantageous. (3)Based on
investment income calculated using SEC guidelines.
<PAGE>
From the Chairman
[Photo: George Putnam]
(c) Karsh, Ottawa
Dear Shareholder:
With plenty to be positive about, tax-exempt investors are finally putting
their summer fears behind them. A few months ago, flat-tax proposals were
floated in the pre-election wind. The mere talk of such a tax, which would
end the beneficial tax treatment now accorded municipal bonds, was enough to
send the market into decline.
Interest rates are still moderate, inflation remains low, and the economy
seems to have slowed to a more comfortable pace, all factors that gladden
fixed-income investors' hearts. Municipal-bond investors have been further
blessed with yields virtually at the same level as those of taxable bonds and
a favorable ratio of supply to demand.
As Putnam Intermediate Tax Exempt Income Fund's fiscal year ended on
September 30, 1995, the municipal-bond market was showing new signs of
strength, poised for what could be another period of advance. James Prusko,
who has been with Putnam since August 1992, assumed the management of your
fund this past June. Prior to joining Putnam, Jim was a sales and trading
associate at Salomon Brothers. He reviews performance and prospects in the
report that follows.
Respectfully yours,
/s/ George Putnam
George Putnam
Chairman of the Trustees
November 22, 1995
<PAGE>
Report from the Fund Manager
James M. Prusko
Fixed-income investors who stayed the course through 1994's turbulence have
been handsomely rewarded during the first nine months of calendar 1995.
During this period, municipal bonds recouped a significant amount of the
losses they incurred in 1994, but did not rally to the same extent as taxable
fixed-income investments. Nevertheless, Putnam Intermediate Tax Exempt Income
Fund's performance for the fiscal year ended September 30, 1995, certainly
demonstrates the fund's ability to take advantage of market trends. For the
fiscal year, your fund's class A and class B shares had a total return of
6.54% and 6.03%, respectively, at net asset value.
> PROSPECT OF TAX REFORM INCREASES DEMAND FOR INTERMEDIATE MATURITIES
Since spring, the municipal market has been haunted by the specter of
flat-tax proposals in Congress that could jeopardize the tax advantages
currently enjoyed by these securities. We believe investors' concerns about
an overhaul of the tax system are premature. Although further instability
cannot be excluded, we do not expect any substantive tax reform until at
least 1997.
The tax reform turmoil had an unexpected benefit for your fund, leading to a
surge in demand for municipals with maturities of 10 years or less. The
attractive tax-free income and greater relative price stability offered by
intermediate municipals are especially appealing in the current environment,
while their performance is matching--or slightly surpassing--that of
longer-term bonds.*
Doubts about the future of tax-exempt investments have caused high-grade
municipal-bond yields to remain very attractive versus Treasuries and other
taxable alternatives. Your fund's current dividend rate of 5.26% for class A
shares at net asset value would actually translate into a current return of
8.71% for an equivalent taxable investment, assuming the maximum federal tax
rate of 39.6%. Most investors in lower brackets would also enjoy tax
advantages, though not necessarily to the same extent.
*Source: Lipper Mutual Funds Quarterly, as cited in Barron's, 10/9/95.
<PAGE>
> BALANCED APPROACH ADDS VALUE
We strive to maximize your fund's total return potential by seeking the best
balance of credit quality, income, relative price stability, and geographic
diversification. Over the last six months, we have increased the fund's
allocation to state general obligation and transportation bonds in order to
accomplish these goals.
While the fund's overall allocation to health-care bonds decreased somewhat,
the hospital sector continues to be a dynamic and challenging part of the
municipal market and an important component of your fund's portfolio.
Detailed credit analysis can frequently uncover attractive opportunities that
provide generous yields. This is balanced by the addition of high-grade
state general obligation bonds. Secured by the full faith and credit of their
issuing states, state GOs provide a means of diversification and enhance the
portfolio's overall credit quality.
Highway and toll road revenue bonds often generate very favorable cash flow
statistics and offer investors the chance to participate in the rebuilding of
America's infrastructure. One example: bonds issued by the Foothill/Eastern
Transportation Corridor Agency of California. This project, part of the
large, multimillion dollar San Joaquin Toll Road under construction in the
Anaheim/San Diego corridor, will eventually help to ease traffic congestion
in the region. This bond has performed quite well and provides attractive
income for the fund.
- ------------------------------- [BAR CHART] ---------------------------------
TOP INDUSTRY SECTORS (9/30/95)*
Healthcare 21.83%
Municipal utilities 14.56%
Political subdivisions 13.54%
State government obligations 9.58%
Airport and transportation 9.81%
Water and sewer 7.06%
*Based on percentage of net assets. Sector allocations will vary over time.
-----------------------------------------------------------------------------
<PAGE>
> RESTRUCTURED PORTFOLIO REFLECTS A MORE CONSTRUCTIVE OUTLOOK
By early summer, we sensed that flat-tax fears had become overdone and the
municipal market was poised for a turnaround. While still maintaining our
primary objectives of attractive tax-exempt income and an intermediate
maturity profile, we began taking steps to reposition the fund more
aggressively. Our goal was to be positioned to participate fully in any
rallies that might be sparked by declining rates.
Therefore, over the last 6 months, we emphasized bonds with 8- to 10-year
maturities, which tend to be more sensitive to changes in interest rates than
bonds with shorter maturities. We have also increased our holdings of
noncallable bonds to protect the fund from early bond redemptions. As a
result of these strategic changes, the fund's average maturity and duration
have been extended from 6.6 and 4.8 years as of March 31, 1995, to 8.97 and
7.2 years, respectively, as of September 30, 1995. A longer average portfolio
maturity and duration reflect our more positive outlook on the economy and
interest rates.
Bonds at the higher end of the investment-grade quality spectrum tend to
appreciate the most rapidly when interest rates fall. We therefore increased
the portfolio's holdings of AAA-rated bonds from 22.1% of net assets on March
31, 1995, to 32% of net assets as of September 30, 1995, in anticipation of a
market recovery. In order to accomplish this shift, we reduced the percentage
of AA- and A-rated bonds from 17.1% and 15.3% of net assets as of March 31,
1995, to 15.6% and 10.2% of net assets, respectively, as of September 30,
1995.
> FUNDAMENTALS, TECHNICALS FAVOR INTERMEDIATES
While fundamentals remain positive for the bond markets in general, returns
in the municipal market have been hampered by tax reform rhetoric in
Washington. In our opinion, the market has reacted to the perceived effects
of the flat-tax talk and not to any hard facts. We therefore believe a buying
opportunity exists with municipal bonds, although some volatility is still
possible.
<PAGE>
TOP 10 HOLDINGS (9/30/95)*
Mass. Muni. Wholesale Elec. Co. Power System 5.10% 7/1/06 (Massachusetts)
.........................................................................
Washington State IFB 6.31% 5/1/08 (Washington)
.........................................................................
New York, NY G.O. 7.00% 8/15/06 (New York)
.........................................................................
Massachusetts HEFA Mass. Eye & Ear 7.00% 7/1/01 (Massachusetts)
.........................................................................
Oro Loma Sanitation District 8.55% 10/1/06 (California)
.........................................................................
Dickinson County Mem. Hospital 7.625% 11/1/05 (Michigan)
.........................................................................
Dallas County Flood Control Dist. #1 9.25% 4/1/10 (Texas)
.........................................................................
South Essex Sewer District G.O. 7.50% 6/1/04 (Massachusetts)
.........................................................................
Denver City & County Airport 7.00% 11/15/01 (Colorado)
.........................................................................
Connecticut State Dev. Authority Alzheimer Res. Center 6.825% 8/15/04
(Connecticut)
.........................................................................
*Top holdings represent 38.8% of the fund's net assets. Portfolio holdings
will vary over time.
Contracting new issue supply and the continued desire for tax relief should
buoy the municipal market going forward. For the first nine months of 1995,
overall municipal new issue supply was down 17.8% compared with last year's
levels. Demand for intermediate maturities in particular is expected to stay
firm as investors remain reluctant to commit to longer maturities in the face
of uncertain future tax rates. We anticipate investors will continue to
benefit from the attractive tax-free yields and relative price stability of a
diversified, high-quality portfolio of intermediate municipal bonds.
The views expressed throughout the report are exclusively those of Putnam
Management. They are not meant as investment advice. While we viewed
favorably the issues discussed here as of 9/30/95, there is no assurance the
fund will continue to hold them in the future.
<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. 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.
Performance should always be considered in light of a fund's investment
strategy. Putnam Intermediate Tax Exempt Income Fund is designed for
investors seeking high current income free from federal income tax and
consistent with capital preservation.
TOTAL RETURN FOR PERIODS ENDED 9/30/95
Lehman
Bros.
Class A Class B Municipal
NAV POP NAV CDSC Bond Index CPI
- -------------------------------------------------------------------------
1 year 6.54% 3.03% 6.03% 3.03% 11.18% 2.54%
- -------------------------------------------------------------------------
Life of fund 5.47 1.98 4.86 1.92 11.26 3.86
Annual average 4.08 1.49 3.63 1.44 8.36 2.89
- -------------------------------------------------------------------------
Fund performance data do not take into account any adjustment for taxes
payable on reinvested distributions. The fund began operations on 6/1/94,
offering both class A and class B shares. Performance data represent past
results and will differ for each share class. 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.
- ---------------------------------- [LINE CHART] ------------------------------
GROWTH OF $10,000 COMPARED
Consumer Price Putnam Intermediate Lehman Bros.
Index Tax Exempt A at POP Municipal Bond Index
10000 9675 10000
10129 9573 10007
10149 9353 9864
10264 9724 10561
10339 9906 10816
10386 10198 11126
Past performance is no assurance of future results. A $10,000
investment in the fund's class B shares at inception on 6/1/94
would have been valued at $10,486 on 9/30/95 ($10,192 with a
redemption at the end of the period).
- -----------------------------------------------------------------------------
<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.
Net asset value (NAV) is the value of all your 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 3.25% sales charge.
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 3% maximum during the first year to
1% during the fourth year. After the fourth year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
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.
Consumer Price Index (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
Federal tax information
(Unaudited)
The fund designated 100% of dividends paid from net investment income during
the fiscal year as tax exempt for federal income tax purposes.
The Form 1099 you receive in January 1996 will show the tax status of all
distributions paid to your account in calendar 1995.
<PAGE>
Report of independent accountants
For the fiscal year ended September 30, 1995
To the Trustees and Shareholders of
Putnam Intermediate Tax Exempt Income Fund
We have audited the accompanying statement of assets and liabilities of
Putnam Intermediate Tax Exempt Income Fund, including the portfolio of
investments owned, as of September 30, 1995, and the related statement of
operations for the year then ended, the statement of changes in net assets,
and the financial highlights for the year ended and the period from June 1,
1994 (commencement of operations) through September 30, 1994. These financial
statements and financial highlights are the responsibility of the fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1995 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Putnam Intermediate Tax Exempt Income Fund as of September 30, 1995, the
results of its operations for the year then ended, the changes in its net
assets and the financial highlights for the year ended and the period from
June 1, 1994 (commencement of operations) through September 30, 1994, in
conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
November 10, 1995
<PAGE>
Portfolio of investments owned
September 30, 1995
- ---------------------- Key to Abbreviations ----------------------------
AMBAC -- AMBAC Indemnity Corporation
COP -- Certificate of Participation.
FGIC -- Federal Guaranty Insurance Company
FNMA Coll. -- Federal National Mortgage Association--Collateral
G.O. Bonds -- General Obligation Bonds
GNMA Coll. -- Government National Mortgage Association--Collateral
MBIA -- Municipal Bond Investors Assurance Corporation
VRDN -- Variable Rate Demand Notes
- ------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES (100.3%)*
PRINCIPAL AMOUNT RATINGS** VALUE
California (15.9%)*
- ---------------------------------------------------------------------------
$ 700,000 CA Hsg. Fin. Agcy. Rev. Bonds
Ser K, AMBAC 5.55s, 2/1/21 AAA $ 693,875
500,000 Central Valley Fing. Auth. Rev.
Bonds (Carson Ice-Cogeneration
Project), 5.8s, 7/1/04 BBB 505,000
150,000 Foothill/Eastern Trans. Corridor
Agcy. Rev. Bonds
(California Toll Road), Ser. A,
zero% s, 1/1/04 Baa 88,313
500,000 Garden Grove Cmnty. Dev. Tax
Allocation Rev. Bonds
(Garden Grove Cmnty. Project),
5.7s, 10/1/08 A 481,875
650,000 Los Angeles Multi. Fam. Rev. Bonds
(Earthquake Rehab. Project),
Ser. A, 5.65s, 12/1/25 AAA 644,313
1,200,000 Orange Cnty. G.O. Bonds
Ser. A, MBIA 5.6s, 6/1/07 AAA 1,206,000
1,700,000 Oro Loma San. Dist. Swr. Rev.
Bonds
Ser. A, AMBAC, 8.55s, 10/1/06 AAA 2,059,125
305,000 Pleasanton, Jt. Pwrs. Fing. Auth.
Rev. Bonds Ser. B, 6-1/2s,
9/2/04 BBB/P 307,669
Sacramento Cogen. Auth. Rev.
Bonds
1,000,000 (Procter & Gamble Cogen. Project),
6.2s, 7/1/06 BBB 1,013,750
1,000,000 (Procter & Gamble Cogen. Project),
6s, 7/1/03 BBB 1,022,500
1,000,000 San Joaquin Hills Trans. Corridor
Agy. Toll Rd. Rev. Bonds zero%
s, 1/1/04 BB/P 698,750
----------
8,721,170
Colorado (7.9%)
- ---------------------------------------------------------------------------
Denver City & Cnty. Arpt. Rev.
Bonds
800,000 Ser. A, 7-1/2s, 11/15/06 Baa 891,000
1,250,000 Ser. A, 7.4s, 11/15/05 Baa 1,384,375
250,000 Ser. B, 7s, 11/15/02 Baa 269,375
1,700,000 Ser. B, 7s, 11/15/01 Baa 1,829,625
----------
4,374,375
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
Connecticut (3.0%)
- ---------------------------------------------------------------------------
$1,600,000 CT State Dev. Auth Hlth. Care Rev.
Bonds (Alzheimer Res. Ctr.),
Class A 6-7/8s, 8/15/04 BB/P $1,638,000
Florida (1.9%)
- ---------------------------------------------------------------------------
1,000,000 Escambia Cnty. Hsg. Fin. Auth.
Single Fam. Mtge. Rev. Bonds
(Multi. Cnty. Project) GNMA/FNMA
Coll., 6.6s, 10/1/12 AAA 1,043,750
Georgia (5.8%)
- ---------------------------------------------------------------------------
400,000 Burke Cnty. Dev. Auth. Poll.
Cntrl. Rev. Bonds (Oglethorpe
Pwr. Co.-Vogtle Project) MBIA,
7-1/2s, 1/1/03 AAA 445,500
1,000,000 GA Muni. Elec. Pwr. Auth. Rev.
Bonds
Ser. V, 6.3s, 1/1/04 A 1,081,250
1,000,000 GA State G.O. Bonds
Ser. D, 6.8s, 8/1/04 Aaa 1,155,000
500,000 Metropolitan Rapid Tran. Auth.
Sales Tax Rev. Bonds Ser. K,
7.3s, 7/1/06 AA 543,125
----------
3,224,875
Massachusetts (14.4%)
- ---------------------------------------------------------------------------
3,000,000 MA Muni. Whsl. Elec. Co. Pwr.
Supply Syst. Rev. Bonds
Ser. A, AMBAC, 5.1s, 7/1/06 AAA 3,003,750
2,120,000 MA State Hlth. & Edl. Facs. Auth.
Rev. Bonds (MA Eye & Ear
Infirmary), Ser. A, 7s, 7/1/01 Baa 2,130,600
1,000,000 MA State Hlth. & Edl. Facs. Auth.
Rev. Bonds (Central New England
Hlth. Syst.),
Ser. A, 5-3/4s, 8/1/03 Baa 998,750
1,570,000 South Essex Swr. Dist. G.O. Bonds
Ser. B, MBIA 7-1/2s, 6/1/04 AAA 1,840,825
----------
7,973,925
Michigan (7.7%)
- ---------------------------------------------------------------------------
Detroit G.O. Bonds
1,000,000 Ser. B, 6-3/4s, 4/1/03 BBB 1,055,000
500,000 Ser. A, 5-3/4s, 5/1/03 BBB 493,750
1,800,000 Dickinson Cnty. Mem. Hosp. Rev.
Bonds
7-5/8s, 11/1/05 Ba 1,894,500
3,000,000 Howell Pub. School Rev. Bonds
FGIC, zero %, 5/1/17 AAA 795,000
----------
4,238,250
Minnesota (1.8%)
- ---------------------------------------------------------------------------
1,000,000 U. of Minn. Rev. Bonds
4.8s, 8/15/03 AA 987,500
Mississippi (0.7%)
- ---------------------------------------------------------------------------
400,000 Rankin Cnty., Indl. Dev. Rev.
Bonds
(Yellow Fght. Syst. Inc.
Project), 5-3/4s, 10/1/08 BBB 395,500
<PAGE>
Nevada (1.9%)
- ---------------------------------------------------------------------------
$1,000,000 Washoe Cnty. School Dist. Rev.
Bonds
MBIA 5.9s, 8/1/05 AAA $1,055,000
New York (7.5%)
- ---------------------------------------------------------------------------
2,000,000 NY City G.O. Bonds
Ser. B, 7s, 8/15/06 Baa 2,132,500
500,000 NY State Dorm. Auth. Rev. Bonds
(City University), Ser. A,
8-1/8s, 7/1/07 Baa 545,625
1,000,000 NY State Mtge. Agcy., Home Mtge.,
Rev. Bonds
Ser. 44 6.8s, 10/1/05 Aa 1,072,500
400,000 NY State Urban Dev. Corp. Youth
Fac. Rev. Bonds
5-7/8s, 4/1/07 Baa 397,500
----------
4,148,125
North Carolina (3.8%)
- ---------------------------------------------------------------------------
NC Eastern Muni. Pwr. Agcy. Pwr.
Syst. Rev. Bonds
1,000,000 Ser. B, 7s, 1/1/08 A 1,070,000
1,000,000 Ser. B, 6s, 1/1/06 BBB 1,016,250
----------
2,086,250
Ohio (0.8%)
- ---------------------------------------------------------------------------
400,000 Cuyahoga Cnty. Hosp. Rev. Bonds
(Merida Health Systems), 6.2s,
8/15/05 A 424,000
Oklahoma (4.4%)
- ---------------------------------------------------------------------------
Tulsa, Indl. Auth. Hosp. Rev. Bonds
(Tulsa Regl. Med. Ctr.)
1,250,000 Ser. A, 7-5/8s, 6/1/06 BBB 1,364,063
1,000,000 7s, 6/1/06 BBB 1,073,750
----------
2,437,813
Pennsylvania (6.2%)
- ---------------------------------------------------------------------------
900,000 Delaware Cnty., Indl. Dev. Auth.
Arpt. Fac. VRDN
(UTD Parcel Svc. Project), 6.1s,
12/1/15 AAA 900,000
1,500,000 McKeesport, Hosp. Auth. Rev. Bonds
(McKeesport Hosp. Project),
6-1/4s, 7/1/03 Baa 1,490,625
1,000,000 Philadelphia Hosp. & Higher Edl.
Facs. Hosp. Rev. Bonds
(Temple U. Hosp.), Ser. A,
6-1/2s, 11/15/08 BBB 1,038,750
----------
3,429,375
South Dakota (1.8%)
- ---------------------------------------------------------------------------
1,000,000 SD Hsg. Dev. Auth. Homeownership
Mtge. Rev. Bonds
Ser. C, 4-1/2s, 5/1/98 AA 999,998
Texas (6.8%)
- ---------------------------------------------------------------------------
150,000 Dallas Civic Ctr. Convention
Complex Sr. Lien Rev. Bonds
8-1/2s, 1/1/04 A 151,500
1,460,000 Dallas Cnty. Flood Control Dist.
#1 Rev. Bonds
9-1/4s, 4/1/10 Aaa 1,892,525
Keller Indpt. Schl. Dist. Rev.
Bonds
420,000 zero % s, 8/15/10 AAA 179,025
435,000 zero % s, 8/15/09 AAA 197,925
435,000 zero % s, 8/15/08 AAA 211,519
<PAGE>
Texas (continued)
- ---------------------------------------------------------------------------
$1,000,000 Texas State Texas Pub. Fin. Auth.
Rev. Bonds Ser. A, 6-1/2s,
10/1/04 AA $ 1,128,750
----------
3,761,244
Washington (8.0%)
- ---------------------------------------------------------------------------
3,000,000 WA State IFB
6.31s, 5/1/08 (acquired 6/4/93,
cost $2,960,100)++ AA 3,003,750
1,300,000 WA State Pub. Pwr. Supply Syst.,
Rev. Bonds (Nuclear Project No.
1), Ser. A, 7-1/2s, 7/1/07 AA 1,423,500
----------
4,427,250
- ---------------------------------------------------------------------------
Total Investments (cost $53,323,332)*** $55,366,400
==========
NOTES
- ---------------------------------------------------------------------------
* Percentages indicated are based on net assets of $55,207,216, which
correspond to a net asset value per class A share and class B share of $8.30
and $8.32, respectively.
** The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at September 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 September
30, 1995. Securities rated by Putnam are indicated by "/P" and are not
publicly rated. Ratings are not covered by the report of independent
accountants.
++ Restricted as to public resale. At the date of acquistion 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
September 30, 1995 was $3,003,750 or 5.4% of net assets.
*** The aggregate identified cost for federal income tax purposes is
$53,323,332, resulting in gross unrealized appreciation and depreciation of
$2,086,650 and $43,582, respectively, or net unrealized appreciation of
$2,043,068.
The fund had the following insurance concentration greater than 10% of
net assets at September 30, 1995:
AMBAC 10.43%
The fund had the following industry group concentrations greater than 10%
of net assets at September 30, 1995:
Healthcare 21.83%
Municipal Utilities 14.56%
Political Subdivision 13.54%
The rates shown on IFBs, which are securities paying variable interest
rates that vary inversely to changes in the market interest rates, and
VRDNs are the current interest rates at September 30, 1995, which are
subject to change based on the terms of the security.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of assets and liabilities
September 30, 1995
Assets
- -----------------------------------------------------------------------------
Investments in securities, at value (identified cost
$53,323,332) (Note 1) $ 55,366,400
- -----------------------------------------------------------------------------
Cash 83,127
----------------------------------------------------------------------------
Interest and other receivables 1,027,117
----------------------------------------------------------------------------
Receivable for shares of the fund sold 118,697
----------------------------------------------------------------------------
Unamorized organization expenses (Note 1) 73,242
----------------------------------------------------------------------------
Receivable from Manager (Note 2) 60,380
- -----------------------------------------------------------------------------
Total assets 56,728,963
- -----------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------
Payable for securities purchased $ 1,006,750
- -----------------------------------------------------------------------------
Payable for shares of the fund repurchased 19,895
- -----------------------------------------------------------------------------
Payable for investor servicing and custodian (Note 2) 729
- -----------------------------------------------------------------------------
Distributions payable to shareholders 142,719
- -----------------------------------------------------------------------------
Payable for organization expenses (Note 1) 83,924
- -----------------------------------------------------------------------------
Payable for administrative services (Note 2) 1,442
- -----------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 952
- -----------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 62,550
- -----------------------------------------------------------------------------
Payable for merger expense 144,001
- -----------------------------------------------------------------------------
Payable for distribution fees (Note 2) 17,130
- -----------------------------------------------------------------------------
Other accrued expenses 41,655
- -----------------------------------------------------------------------------
Total liabilities 1,521,747
- -----------------------------------------------------------------------------
Net assets $ 55,207,216
- -----------------------------------------------------------------------------
Represented by
- -----------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) 53,253,439
- -----------------------------------------------------------------------------
Undistributed net investment income (Note 1) 28,215
- -----------------------------------------------------------------------------
Accumulated net realized loss on investment transactions
(Note 1) (117,506)
- -----------------------------------------------------------------------------
Net unrealized appreciation of investments 2,043,068
- -----------------------------------------------------------------------------
Total--Representing net assets applicable
to capital shares outstanding $ 55,207,216
- -----------------------------------------------------------------------------
Computation of net asset value and offering price
- -----------------------------------------------------------------------------
Net asset value and redemption price of class A shares
($49,259,101 divided by 5,935,325 shares) $8.30
- -----------------------------------------------------------------------------
Offering price per class A share (100/96.75 of $8.30)* $8.58
- -----------------------------------------------------------------------------
Net asset value and offering price of class B shares
($5,948,115 divided by 715,213 shares)+ $8.32
- -----------------------------------------------------------------------------
* On single retail sales of less than $100,000. On sales of $100,000 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.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of operations
Year ended September 30, 1995
Tax exempt interest income $ 1,183,794
- ----------------------------------------------------------------
Expenses:
- ----------------------------------------------------------------
Compensation of Manager (Note 2) $ 112,068
- ----------------------------------------------------------------
Compensation of Trustees (Note 2) 3,184
- ----------------------------------------------------------------
Auditing 21,157
- ----------------------------------------------------------------
Legal 29,887
- ----------------------------------------------------------------
Amortization of organization expense (Note 1) 4,200
- ----------------------------------------------------------------
Reports to shareholders 54,021
- ----------------------------------------------------------------
Investor servicing and custodian (Note 2) 31,676
- ----------------------------------------------------------------
Registration fees 26,122
- ----------------------------------------------------------------
Distribution fees -- Class A (Note 2) 21,255
- ----------------------------------------------------------------
Distribution fees -- Class B (Note 2) 36,008
- ----------------------------------------------------------------
Postage 2,557
- ----------------------------------------------------------------
Administrative services 1,446
- ----------------------------------------------------------------
Other expenses 1,136
- ----------------------------------------------------------------
Fees and expenses waived by Manager (Note 2) (133,830)
- ----------------------------------------------------------------
Total expenses 210,887
- ----------------------------------------------------------------
Fees paid indirectly (Note 2) (26,167)
- ----------------------------------------------------------------
Net expenses 184,720
- ----------------------------------------------------------------
Net investment income 999,074
- ----------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (32,940)
- ----------------------------------------------------------------
Net unrealized appreciation of investments during
the year 1,053,637
- ----------------------------------------------------------------
Net gain on investment transactions 1,020,697
- ----------------------------------------------------------------
Net increase in net assets resulting from
operations $2,019,771
- ----------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of changes in net assets
June 1, 1994
(commencement of
For the year operations) to
September 30 September 30
-----------------------------------
1995 1994
- ---------------------------------------------------------------------
Increase in net assets
- ---------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------
Net investment income $ 999,074 $ 70,084
- ---------------------------------------------------------------------
Net realized loss on investments (32,940) (75,449)
- ---------------------------------------------------------------------
Net unrealized appreication
(depreciation) of investments 1,053,637 (29,830)
- ---------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations 2,019,771 (35,195)
- ---------------------------------------------------------------------
Distributions to shareholders from:
- ---------------------------------------------------------------------
Net investment income
- ---------------------------------------------------------------------
Class A (761,544) (42,275)
- ---------------------------------------------------------------------
Class B (221,133) (27,809)
- ---------------------------------------------------------------------
In excess of net investment income
- ---------------------------------------------------------------------
Class A -- (608)
- ---------------------------------------------------------------------
Class B -- (665)
- ---------------------------------------------------------------------
Increase from capital share transactions
(Notes 4 and 5) 47,006,647 7,170,027
- ---------------------------------------------------------------------
Total increase in net assets 48,043,741 7,063,475
Net assets
- ---------------------------------------------------------------------
Beginning of year 7,163,475 100,000
- ---------------------------------------------------------------------
End of year (including
undistributed net investment
income and distributions in
excess of net investment
income of $28,215 and $1,273
respectively). $55,207,216 $7,163,475
- ---------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
June 1, 1994
(commencement June 1, 1994
of (commencement
For the operations) For the of operations)
year ended to year ended to
September 30 September 30 September 30 September 30
------------------------------------------------------------------
1995 1994 1995 1994
------------------------------------------------------------------
Class A Class B
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 8.23 $ 8.50 $ 8.24 $ 8.50
- ---------------------------------------------------------------------------------------
Investment
operations
- ---------------------------------------------------------------------------------------
Net investment
income .45 .18(a)(b) .40 .17(a)(b)
- ---------------------------------------------------------------------------------------
Net realized and
unrealized loss
on investments .07 (.27) 08 (.26)
- ---------------------------------------------------------------------------------------
Total from
investment
Operations .52 (.09) .48 (.09)
- ---------------------------------------------------------------------------------------
Less
distributions:
- ---------------------------------------------------------------------------------------
From net
investment
income (.45 ) (.18) (.40 ) (.17)
- ---------------------------------------------------------------------------------------
Total
distributions (.45 ) (.18) (.40 ) (.17)
- ---------------------------------------------------------------------------------------
Net asset value,
end of period $ 8.30 $ 8.23 $ 8.32 $ 8.24
- ---------------------------------------------------------------------------------------
Total investment
return at net
asset value (%) (c) 6.54 (1.01)(d) 6.03 (1.11)(d)
- ---------------------------------------------------------------------------------------
Net assets, end
of period (in
thousands) $49,259 $4,237 $5,948 $2,926
- ---------------------------------------------------------------------------------------
Ratio of
expenses to
average net
assets (%) .99 (e) .05(a)(d) 1.55 (e) .17(a)(d)
- ---------------------------------------------------------------------------------------
Ratio of net
investment
income to
average net
assets (%) 5.50 1.89(a)(d) 4.90 1.73(a)(d)
- ---------------------------------------------------------------------------------------
Portfolio
turnover (%) 162.31 122.9(d) 162.31 122.9(d)
- ---------------------------------------------------------------------------------------
</TABLE>
(a) Reflects an absorption of expenses incurred by the fund. As a result of
this limitation, expenses for the period ended September 30, 1994,
reflect a reduction of $0.12 and $0.06 for class A and class B shares,
respectively. Expenses for the year ended September 30, 1995 reflect a
reduction of $0.03 and $0.07 for class A and class B shares,
respectively.
(b) Per share net investment income for the period ended September 30, 1994
has been determined on the basis of the weighted average number of shares
outstanding during the period.
(c) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(d) Not annualized.
(e) The ratio of expenses to average net assets for the year ended
September 30, 1995 includes amounts paid through expense offset
arrangements. Prior period ratios exclude these amounts. (Note 2)
<PAGE>
Notes to financial statements
September 30, 1995
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as amended,
as a 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 Inc. ("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 tax
exempt securities.
The fund offers both class A and class B shares. Class A shares are sold with
a maximum front-end sales charge of 3.25%. Class B shares do not pay a
front-end sales charge, but pay a higher ongoing distribution fee than class
A shares, and may be subject to a contin-
gent deferred sales charge if those shares
are redeemed within four years of purchase. Expenses of the fund are borne
pro-rata by the holders of both classes of shares, except that each class
bears expenses unique to that class (including the distribution fees
applicable to such class). 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 re-
ceive 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.
B) Security transactions and related investment income Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Interest income is recorded on the accrual basis.
C) Futures 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 primarily corresponds with the value of underlying
instruments which 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 or if there is an illiquid secondary market for the
contracts.
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.
<PAGE>
D) Federal taxes It is the policy of the fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986. Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation of securities held and excise tax on
income and capital gains.
At September 30, 1995 the fund had a capital loss carryover of approximately
$37,000 available to offset future net capital gain, if any, which will
expire on September 30, 2002.
The fund has additional capital loss carryovers of approximately $1,014,000
and $1,153,000 as a result of the acquisition of Putnam Investment Grade
Intermediate Municipal Trust. These carryovers will expire on September 30,
2001 and September 30, 2002, respectively.
The Internal Revenue Code provides for various limitations on the amount of
such capital loss carryforward that may be utilized in each post-acquisition
year. These limitations may affect the amount of the loss carryforward which
can be used prior to expiration.
E) Distribution to shareholders Income dividends are recorded daily by the
fund and are distributed monthly. Capital gain distributions if any, are
recorded on the ex-dividend date and paid annually. The amount and character
of income and gains to be distributed are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences include treatment of market discount,
organization expenses, and the utilization of a capital loss carryover.
Reclassifications are made to the fund's capital accounts to reflect income
and gains available for distribution (or available capital loss carryovers)
under income tax regulations.
For the year ended September 30, 1995, the fund reclassified $13,091 to
increase undistributed net investment income and $3,974 to decrease
paid-in-capital, with an increase to accumulated net realized gains and
losses of $9,117. The calculation of net investment income per share in the
financial highlights table excludes these adjustments.
F) Amortization of bond premium and discount Any premium resulting from the
purchase of securities in excess of maturity value is amortized on a yield-
to-maturity basis. Discount on zero-coupon
bonds, original issued discount Treasury bonds and step-up bonds are accreted
according to the effective yield method.
G) Unamortized organization expenses Expenses incurred by the fund in
connection with its organization, its registration with the Securities and
Exchange Commission and with various states, and the initial public offering
of its shares aggregated $77,750. These expenses are being amortized on a
straight-line basis over a five-year period. The fund will reimburse Putnam
Management for the payment of these expenses.
Note 2
Management fee, administrative
services, and other transactions
Compensation of Putnam Management for management and investment advisory
services is paid quarterly based on the average net assets of the fund for
the quarter. Such fee is based on the following annual rates: 0.60% of the
first $500 million of average net assets, 0.50% of the next $500 million,
045% of the next $500 million and 0.40% of any amount over $1.5 billion,
subject to reduction in any year to the extent of certain brokerage
commissions and fees (less expenses) received by affiliates of the Manager on
the fund's portfolio transactions.
Until December 31, 1995, the Manager has agreed to reduce its compensation to
the extent that expenses of the fund
<PAGE>
exceed 0.80% of average net assets. The fund's expenses subject to this
limitation are exclusive of brokerage, interest, taxes, deferred
organizational and extraordinary expenses and payments required under the
fund's Distribution Plans. This limitation is accomplished by a reduction of
the compensation payable to the Manager and, if necessary, payment of
additional fund expenses by the Manager.
The fund 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 $100 and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of the Putnam Management and who serve on committees of
the Trustees receive additional fees for attendance at certain committee
meetings.
During the year ended September 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 are provided by Putnam Fiduciary Trust
Company (PFTC), a subsidiary of the Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the year ended September 30, 1995, fund expenses were reduced by $26,167
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 a portion of the assets generating the credits relating
to the expense offset agreement in an alternate income-producing asset if it
had not agreed to a reduction in fees under the expense offset arrangement.
The fund has adopted distribution plans (the "Plans") with respect to its class
A shares and class B 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 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% and 1.00% of the average net assets attributable to class A and
class B shares, respectively. The Trustees have approved payment by the fund at
an annual rate of 0.15% and 0.75% of the average net assets attributable to
class A and class B shares, respectively.
For the year ended September 30, 1995, Putnam Mutual Funds Corp., acting as
underwriter, received net commissions of $9,815 from the sale of class A
shares and $8,498 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 year ended September 30, 1995, Putnam
Mutual Funds Corp., acting as underwriter received $188 on class A
redemptions.
Note 3
Purchases and sales of securities
During the year ended September 30, 1995, purchases and sales of investment
securities other than short-term investments aggregated $34,269,964 and
$21,263,521, 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 September 30, 1995 there was an unlimited number of shares of beneficial
interest authorized divided into two classes of shares, class A and class B
capital stock. Transactions in capital shares were as follows:
June 1, 1994
(commencement of
For the year ended operations) to
September 30 September 30
---------------------------------------------------
1995 1994
- -----------------------------------------------------------------------------
Class A Shares Amount
- -----------------------------------------------------------------------------
Shares sold 3,450,048 $28,020,298 577,132 $ 4,821,888
Shares issued in
connection with
reinvestment of
distributions 45,151 368,981 3,463 28,725
- -----------------------------------------------------------------------------
Shares issued in
connection with the
merger of Putnam
Investment Grade
Intermediate
Municipal Trust 5,479,185 44,655,354 -- --
- -----------------------------------------------------------------------------
8,974,384 73,044,633 580,595 4,850,613
- -----------------------------------------------------------------------------
Shares repurchased (3,553,718) (28,942,412) (71,818) (603,138)
- -----------------------------------------------------------------------------
Net increase 5,420,666 $44,102,221 508,777 $ 4,247,475
- -----------------------------------------------------------------------------
June 1, 1994
(commencement of
For the year ended operations) to
September 30 September 30
---------------------------------------------------
1995 1994
- -----------------------------------------------------------------------------
Class B Shares Amount
- -----------------------------------------------------------------------------
Shares sold 522,558 $ 4,227,016 375,444 $3,138,621
Shares issued in
connection with
reinvestment of
distributions 17,291 140,674 1,938 16,076
- -----------------------------------------------------------------------------
539,849 4,367,690 377,382 3,154,697
- -----------------------------------------------------------------------------
Shares repurchased (179,845) (1,463,264) (28,055) (232,145)
- -----------------------------------------------------------------------------
Net increase 360,004 $ 2,904,426 349,327 $2,922,552
- -----------------------------------------------------------------------------
Note 5
Acquisition of Putnam Investment Grade
Intermediate Municipal Trust
On August 7, 1995, the fund issued 5,479,185 shares to the shareholders of
the Putnam Investment Grade Intermediate Municipal Trust to acquire that
fund's net assets in a tax-free exchange approved by the shareholders. The
net assets of the fund and Putnam Investment Grade Intermediate Municipal
Trust on August 4, 1995, valuation date, were $17,456,306 and $44,655,354
respectively. On August 4, 1995, the Trust had unrealized appreciation of
$1,019,261.
The aggregate net assets of the fund immediately following the acquisition
were $61,745,597.
<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
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
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
James M. Prusko
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
This report is for the information of shareholders of Putnam Intermediate 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 logo]
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
20970-155/341 11/95
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS:
(1) Bold and italic typefaces are displaced in normal type.
(2) Headers (e.g., the name of the fund) are omitted.
(3) Certain tabular and columar headings and symbols are displayed
differently in this filings.
(4) Bullet points and similar graphic signals are omitted.
(5) Page numbering is omitted.
(6) Trademark symbol replaced with (TM)
(7) Copyright symbol is replaced with (c)
