Putnam
California
Investment Grade
Municipal Trust
Item 1. Report to Stockholders:
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The following is a copy of the report transmitted to stockholders pursuant
to Rule 30e-1 under the Investment Company Act of 1940:
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
10-31-03
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From the Trustees
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John A. Hill and
George Putnam, III
Dear Fellow Shareholder:
You may have read recent press coverage regarding investigations
involving Putnam Investments. Last month all Putnam shareholders were
sent a letter detailing the steps being taken by Putnam to address the
issues raised by federal and state regulators. Since then, a number of
remedial actions, some of which were discussed in last month's letter,
are being instituted under the terms of an order from the Securities and
Exchange Commission (SEC). These include stringent employee trading
restrictions, enhanced compliance standards and systems, new redemption
fees for certain fund shares held less than three months, and a process
for making full monetary restitution for any losses to fund
shareholders. This process will be directed by an independent third
party approved by the SEC and by Putnam's Board of Trustees.
The Board is also continuing its own independent investigation of these
issues and when complete a report will be issued detailing the
additional steps being taken to make sure that nothing like this happens
at Putnam again. We believe that the new senior management team at
Putnam is fully committed to re-establishing the firm as a model for the
highest ethical standards in the mutual fund industry. Our Board is
committed to working with Putnam's management to ensure that everything
possible is done to restore
In the state's unsettled municipal bond market, Putnam California
Investment Grade Municipal Trust managed to deliver positive results at
net asset value for the six months ended October 31, 2003. While
performance trailed the fund's nationally diversified benchmark, it was
in line with its Lipper peer group category average. On the following
pages, you will find full details as well as the management team's
in-depth discussion of performance and strategy. The management team
also provides its view of prospects for the fiscal year's second half.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
December 17, 2003
Report from Fund Management
Fund highlights
* For the six months ended October 31, 2003, Putnam California
Investment Grade Municipal Trust had a total return at net asset value
(NAV) of 1.25%. The fund's return at market price was -0.69%.
* Due to differences in portfolio composition, the fund underperformed
its benchmark, the Lehman Municipal Bond Index, which returned 1.47% for
the period.
* The fund's performance at NAV was in line with the average return of
1.08% for its Lipper category, Closed-End California Municipal Debt
Funds.
* See the Performance Summary on page 7 for complete fund performance,
comparative index performance, and Lipper data.
Performance commentary
High-quality municipal bonds lagged their lower-quality counterparts
during the six months ended October 31, 2003. Following the easing of
political tensions this past spring and recent evidence of an improving
economy, investors became more comfortable with lower-quality,
higher-risk investments. Equity investing took precedence over
fixed-income investing, and within fixed-income, demand for
higher-yielding, lower-quality bonds increased. Despite the resulting
relative underperformance of higher-quality municipal bonds, Putnam
California Investment Grade Municipal Trust delivered positive
performance at NAV and was in line with its Lipper category average. We
believe the lower return at market price reflects this shift in investor
demand.
FUND PROFILE
Putnam California Investment Grade Municipal Trust seeks to provide high
current income free from federal income tax and California personal
income taxes, consistent with the preservation of capital. It may be
suitable for conservative investors seeking tax-free income through
high-quality investments.
While the fund's emphasis on high-quality municipal bonds (83% of the
fund's portfolio market value is invested in bonds rated A or higher)
didn't hamper its performance in relation to its peer group, the fund
did lag its nationally diversified, investment-grade benchmark. By
virtue of its exposure to municipal bonds from around the nation, the
Lehman Municipal Bond Index's greater diversity helped it to soften the
negative impact of unfavorable events taking place in California, such
as the state's failure to resolve its budget crisis. This legislative
gridlock continues to cast a shadow over the state's credit rating and,
consequently, has hurt the prices of its municipal bonds.
Market overview
Municipal bond yields -- which move in the opposite direction of
municipal bond prices -- were unusually volatile between May 1 and
October 31, 2003. Concern about deflation led to falling yields and
higher bond prices through mid June. After rising through August, yields
receded again in September on unfavorable housing and unemployment data.
October's positive economic surprises sent yields back up. Overall,
yields ended the semiannual period higher than at the beginning of the
period.
The spread, or difference between yields of 10-year municipal bonds and
10-year Treasuries, widened, with municipals yielding close to their
long-term average of 85% of comparable Treasury yields at the end of
October, after yielding nearly 100% of Treasury yields earlier in the
year.
As the economy improved, investor demand for higher-yielding municipals
increased. In particular, airline-related industrial development bonds
outperformed other municipal bonds. California general obligation bonds
were downgraded and underperformed as the state's budget crisis
worsened. Tobacco settlement bonds outperformed following the Illinois
Supreme Court's favorable ruling in one of the industry's ongoing
litigation matters.
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MARKET SECTOR PERFORMANCE 6 MONTHS ENDED 10/31/03
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Bonds
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Lehman Municipal Bond Index (tax-exempt bonds) 1.47%
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Lehman Aggregate Bond Index (broad bond market) 0.57%
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Lehman Government Bond Index (U.S. Treasury and agency
securities) -0.19%
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JP Morgan Global High Yield Index (global high-yield
corporate bonds) 9.61%
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Equities
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S&P 500 Index (broad stock market) 15.62%
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Russell 1000 Index (large-company stocks) 16.77%
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Russell 2000 Index (stocks of small and midsize companies) 33.30%
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These indexes provide an overview of performance in different sectors
for the six months ended 10/31/03.
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Strategy overview
We shortened the portfolio's duration (a measure of a fund's sensitivity
to changes in interest rates) in May because interest rates were at
historically low levels and were more likely, in our opinion, to rise
than to fall. This defensive strategy helped protect portfolio assets
when rates rose sharply between mid June and the end of July. We resumed
a neutral duration in August and September, as we believed rates were
unlikely to rise further. In September, rates fell again, so we
shortened duration somewhat. This was beneficial when rates rose in
October. At the end of the period, the portfolio's duration remained
slightly defensive.
We continued to diversify the fund's holdings. We took the opportunity
afforded by strong demand for higher-yielding municipal bonds to take
profits and reduce positions in some of the fund's lower-quality
holdings.
Although we had previously reduced the fund's holdings in tobacco
settlement bonds -- bonds secured by the income stream from tobacco
companies' settlement obligations to the states -- Putnam's bond analyst
for this sector has offered support for a more positive view of the
industry. Recently, numerous court cases have been decided in the
industry's favor and we believe these decisions have reduced, somewhat,
the perceived risk of unfavorable rulings that could affect the
stability of the bonds' income stream. Accordingly, the fund has
purchased more tobacco settlement bonds, and brought the portfolio's
weighting to neutral, relative to the benchmark. The fund may move
toward an overweight position in tobacco settlement bonds if attractive
investment opportunities arise.
[GRAPHIC OMITTED: horizontal bar chart TOP SECTOR WEIGHTINGS COMPARED]
TOP SECTOR WEIGHTINGS COMPARED
as of 4/30/03 as of 10/31/03
Health care 16.7% 14.7%
Water and sewer 10.4% 13.7%
Housing 8.8% 7.3%
Utilities 7.2% 7.1%
Transportation 0.3% 5.5%
Footnote reads:
This chart shows how the fund's top sector weightings have changed over
the last six months. Weightings are shown as a percentage of portfolio
market value. Holdings will vary over time.
How fund holdings affected performance
We've been actively seeking ways to broaden the fund's diversification
in the past six months, trimming some of the larger positions and adding
new bond issuers to the portfolio. By spreading risk across a larger
number of municipal bonds, we believe we can reduce the potentially
damaging effect that any one holding might have on the portfolio if an
unforeseen or negative event occurs. For instance, California's credit
rating remains under pressure because the legislature has failed to
effectively deal with the state's $7.2 billion budget shortfall. The
state's current credit ratings of A2 (Moody's) and A (Standard &
Poor's), which were last lowered in August 2003 and July 2002,
respectively, are still vulnerable to another downgrade if the budget
quandary is not rectified. This situation, as well as the weak economic
growth that has reduced incoming tax receipts, has led us to limit the
fund's exposure to California general obligation bonds.
In contrast, we think bonds from the health-care sector offer a timely
investment opportunity, especially since the yield spread differential
between higher- and lower-rated bonds has begun to decline. We believe
many of the California municipal bonds in the health care industry that
offer the best value today tend to be lower-rated -- that is,
investment-grade BBB or lower. These lower credit ratings, which are
accompanied by relatively higher yields, reflect the greater risk
associated with investing in a sector undergoing change as it
restructures. Given the cost-cutting programs, however, we think many
hospitals are on their way to becoming more profitable.
Bearing in mind that your fund invests solely in investment-grade
municipal bonds (though it may continue to hold bonds whose credit
quality falls below investment grade), we purchased the Association of
Bay Area Governments Finance Authority bonds issued for San Diego
Hospital. These bonds carried a coupon of 5.38%, had a maturity date of
2021, and were rated Baa1 by Moody's and BBB+ by Standard & Poor's.
Since we're working to reduce the size of the fund's exposure to
individual issuers or regions, while maintaining an overall exposure to
the various sectors, we sold $300,000 of Duarte California Hope National
Medical Center, which were rated Baa2 and BBB, respectively, by Moody's
and Standard & Poor's, to finance the new purchase.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW
Aaa/AAA (71.2%)
Aa/AA (3.6%)
A (7.3%)
Baa/BBB (16.7%)
Ba/BB (0.6%)
VMIG1 (0.6%)
Footnote reads:
As a percentage of portfolio market value as of 10/31/03. A bond rated
Baa/BBB or higher is considered investment grade. The chart reflects
Moody's and Standard & Poor's ratings; percentages may include unrated
bonds considered by Putnam Management to be of comparable quality.
Ratings will vary over time.
We've increased the fund's exposure to tobacco settlement bonds, which
we believe are benefiting from an improving outlook. Until recently, our
view on the sector had been less favorable because of the
multibillion-dollar litigation pending against the tobacco companies.
This litigation, if successful, could have affected the ability of
tobacco companies to meet their settlement payment obligations to the
states. Ultimately, such a scenario would have had a negative effect on
tobacco settlement bonds, which are secured by this promised income
stream.
During the reporting period, the litigation environment shifted in favor
of tobacco companies. In several cases, higher courts reversed severe
lower court judgments and outlined higher hurdles and stricter rules for
litigants against tobacco companies. This change prompted a more
positive view of the sector. In September, we purchased several bonds
issued by the Golden State Tobacco Securitization Corporation, including
$1.5 million in bonds that are backed by both the income stream from the
tobacco settlement payments and by the state of California. This
particular bond carries a coupon of 5.625% and will mature in 2038.
Please note that all holdings discussed in this report are subject to
review in accordance with the fund's investment strategy and may vary in
the future.
The fund's management team
The fund is managed by the Putnam Tax Exempt Fixed-Income Team. The
members of the team are David Hamlin (Portfolio Leader), Paul Drury
(Portfolio Member), Susan McCormack (Portfolio Member), James St. John
(Portfolio Member), Richard Wyke (Portfolio Member), and Kevin Cronin.
The outlook for your fund
The following commentary reflects anticipated developments that could
affect your fund over the next six months, as well as your management
team's plans for responding to them.
We anticipate continued volatility in the coming six months, and we
believe the Federal Reserve Board will hold the federal funds rate
steady at 1%. Our 12- to 18-month outlook is less certain. If economic
policy succeeds, we may experience a classic bear market for bonds that
may push yields higher. However, it is also possible that the economy
may not respond satisfactorily to fiscal and monetary policy, and the
yield on 10-year Treasuries could fall.
Given this degree of uncertainty, we have, at this time, positioned the
fund's duration somewhat defensively, and we believe rates may rise in
the short term. Currently, we no longer see much opportunity to
capitalize on yield spreads between municipal bonds and Treasuries, as
the relationship between them is now near the long-term average. We
believe that the credit quality of general obligation municipal bonds
will remain under pressure because tax revenues cannot be expected to
grow significantly until taxpayers begin to report improved earnings.
Although yield spreads between high- and low-quality municipal bonds
have narrowed somewhat, we believe they could narrow further. As a
result, we may see more opportunity for potential gain in this area. In
keeping with the fund's objective, we will continue to monitor market
conditions as we pursue a high level of tax-free income and manage the
fund's risk exposures.
The views expressed in this report are exclusively those of Putnam
Management. They are not meant as investment advice. This fund
concentrates its investments in one state and involves more risk than a
fund that invests more broadly.
Performance summary
This section provides information about your fund's performance during
the first half of its fiscal year, which ended October 31, 2003. In
accordance with regulatory requirements, we also include performance for
the most current calendar quarter-end. Performance should always be
considered in light of a fund's investment strategy. Past performance
does not indicate future results. More recent returns may be less or
more than those shown. Investment return, net asset value, and market
price will fluctuate and you may have a gain or a loss when you sell
your shares. A profile of your fund's strategy appears on the first page
of this report. See page 8 for definitions of some terms used in this
section.
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TOTAL RETURN FOR PERIODS ENDED 10/31/03
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Lipper
Closed-End
Lehman California
Municipal Municipal Debt
Market Bond Funds category
NAV price Index average*
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6 months 1.25% -0.69% 1.47% 1.08%
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1 year 6.51 2.18 5.12 5.40
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5 years 26.48 11.32 31.08 29.16
Annual average 4.81 2.17 5.56 5.24
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10 years 74.01 58.01 78.34 77.26
Annual average 5.70 4.68 5.96 5.88
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Annual average
Life of fund
(since 11/27/92) 7.01 5.15 6.55 6.79
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Performance does not reflect taxes on reinvested distributions.
Index and Lipper results should be compared to fund performance at net
asset value.
* Over the 6-month and 1-, 5-, and 10-year periods ended 10/31/03, there
were 30, 30, 17, and 17 funds, respectively, in this Lipper category.
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TOTAL RETURN FOR PERIODS ENDED 9/30/03 (MOST RECENT CALENDAR QUARTER)
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NAV Market price
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6 months 3.02% 2.12%
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1 year 4.29 -1.61
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5 years 26.94 12.39
Annual average 4.89 2.36
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10 years 75.28 60.23
Annual average 5.77 4.83
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Annual average
Life of fund
(since 11/27/92) 7.14 5.28
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PRICE AND DISTRIBUTION INFORMATION 6 MONTHS ENDED 10/31/03
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Putnam California Investment Grade Municipal Trust
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Distributions from common shares
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Number 6
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Income $0.372
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Capital gains 1 --
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Total $0.372
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Series A
Distributions from preferred shares (320 shares)
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Income $235.18
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Capital gains 1 --
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Total $235.18
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Share value (common shares) NAV Market price
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4/30/03 $14.92 $13.44
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10/31/03 14.69 12.98
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Current return (common shares, end of period)
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Current dividend rate 2 5.06% 5.73%
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Taxable equivalent 3 8.58 9.72
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1 Capital gains, if any, are taxable for federal and, in most cases,
state purposes. For some investors, investment income may be subject to
the federal alternative minimum tax. Income from federally exempt funds
may be subject to state and local taxes.
2 Most recent distribution, excluding capital gains, annualized and
divided by NAV or market price at end of period.
3 Assumes maximum 41.05% federal and state combined tax rate for 2003.
Results for investors subject to lower tax rates would not be as
advantageous.
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested
all distributions in the fund.
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
public exchanges such as the New York Stock Exchange or American Stock
Exchange.
Comparative indexes
JP Morgan Global High Yield Index is an unmanaged index that is designed
to mirror the investable universe of the U.S. dollar global high-yield
corporate debt market, including domestic and international issues.
Lehman Aggregate Bond Index is an unmanaged index used as a general
measure of U.S. fixed-income securities.
Lehman Government Bond Index is an unmanaged index of U.S. Treasury and
agency securities.
Lehman Municipal Bond Index is an unmanaged index of long-term
fixed-rate investment-grade tax-exempt bonds.
Russell 1000 Index is an unmanaged index of the largest 1,000 companies
in the Russell 3000 Index.
Russell 2000 Index is an unmanaged index of common stocks that generally
measure performance of small to midsize companies within the Russell
3000 Index.
S&P 500 Index is an unmanaged index of common stock performance.
Indexes assume reinvestment of all distributions and do not account for
fees. Securities and performance of a fund and an index will differ. You
cannot invest directly in an index.
Lipper Inc. is a third-party industry ranking entity that ranks funds
(without sales charges) with similar current investment styles or
objectives as determined by Lipper. Lipper category averages reflect
performance trends for funds within a category and are based on results
at net asset value.
A note about duplicate mailings
In response to investors' requests, the SEC has modified mailing
regulations for proxy statements, semiannual and annual reports, and
prospectuses. Putnam is now able to send a single copy of these
materials to customers who share the same address. This change will
automatically apply to all shareholders except those who notify us. If
you would prefer to receive your own copy, please call Putnam at
1-800-225-1581.
The fund's portfolio
October 31, 2003 (Unaudited)
Key to Abbreviations
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AMBAC AMBAC Indemnity Corporation
COP Certificate of Participation
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance
GNMA Coll. Government National Mortgage Association Collateralized
G.O. Bonds General Obligation Bonds
IFB Inverse Floating Rate Bonds
MBIA MBIA Insurance Company
U.S. Govt. Coll. U.S. Government Collateralized
VRDN Variable Rate Demand Notes
Municipal bonds and notes (100.0%) (a)
Principal amount Rating (RAT) Value
California (93.6%)
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ABAG Fin. Auth. COP
$500,000 (American Baptist Homes), Ser. A,
6.2s, 10/1/27 BB+ $467,500
1,000,000 (Odd Fellows Home), 6s, 8/15/24 BBB 1,052,500
150,000 ABAG Fin. Auth. for Nonprofit Corps.
Rev. Bonds (San Diego Hosp. Assn.),
Ser. C, 5 3/8s, 3/1/21 Baa1 145,500
Alameda, Corridor Trans. Auth.
Rev. Bonds
8,000,000 Ser. 99A, MBIA, zero %, 10/1/32 Aaa 1,630,000
8,000,000 Ser. 99-A, MBIA, zero %, 10/1/31 Aaa 1,730,000
2,000,000 Alameda, Recreational Fac. Impts.
COP, MBIA, 5 3/4s, 12/1/21 Aaa 2,225,000
4,200,000 Anaheim, Pub. Fin. Auth. Lease
Rev. Bonds (Pub. Impts.), Ser. C,
FSA, 6s, 9/1/16 Aaa 5,003,250
CA Hlth. Fac. Auth. Rev. Bonds
750,000 (Sinai Med. Ctr.), Ser. A, 6 1/4s,
12/1/34 A3 792,188
1,600,000 (Sutter Hlth.), Ser. A, MBIA,
5 3/8s, 8/15/30 Aaa 1,638,000
1,665,000 CA Hsg. Fin. Agcy. Rev. Bonds
(Multi-Fam. Hsg. III), Ser. B,
MBIA, 5 1/2s, 8/1/39 Aaa 1,685,813
2,000,000 CA State G.O. Bonds, 5 3/4s, 12/1/29 A3 2,060,000
2,000,000 CA State Dept. of Wtr. Resources
IFB (Central Valley), 12.66s,
12/1/12 (acquired 11/27/92, cost
$2,198,104) (RES) Aa2 3,020,000
CA State Dept. of Wtr. Resources
Rev. Bonds
1,000,000 Ser. A, 6s, 5/1/15 A3 1,117,500
2,000,000 Ser. O, MBIA, 4 3/4s, 12/1/29 Aaa 1,955,000
2,000,000 CA State Dept. of Wtr. Resources
Pwr. Supply Pwr. Supply Rev. Bonds,
Ser. A, AMBAC, 5 1/2s, 5/1/16 Aaa 2,195,000
2,290,000 CA State U. Syst. Rev. Bonds,
Ser. A, AMBAC, 5s, 11/1/33 Aaa 2,301,450
1,250,000 CA Statewide Cmnty. Dev. Auth. COP
(The Internext Group), 5 3/8s,
4/1/30 BBB- 1,150,000
1,000,000 CA Statewide Cmnty. Dev. Auth.
Multi-Fam. Rev. Bonds (Hsg. Equity
Res.), Ser. B, 5.2s, 12/1/29 Baa1 1,066,250
500,000 CA Statewide Cmnty. Dev. Auth. VRDN
(Concordia U. Irvine), Ser. A,
0.95s, 10/1/31 VMIG1 500,000
905,000 CA Tobacco Securitization Agcy.
Rev. Bonds (Gold Cnty. Funding
Corp.), 5 3/4s, 6/1/27 Baa2 789,613
Central CA Joint Pwr. Hlth. Fin.
Auth. COP (Cmnty. Hosp. of Central
CA)
200,000 6s, 2/1/30 Baa2 203,750
1,000,000 6s, 2/1/20 Baa2 1,035,000
1,250,000 Delano, COP (Delano Regl. Med.
Ctr.), 5.6s, 1/1/26 BBB- 1,192,188
1,200,000 Duarte, COP, (Hope National Medical
Center), Ser. A, 5 1/4s, 4/1/31 Baa2 1,132,500
1,200,000 Foothill/Eastern Corridor Agcy.
Rev. Bonds (CA Toll Roads), 5 3/4s,
1/15/40 Baa3 1,224,000
Golden State Tobacco Securitization
Corp. Rev. Bonds
500,000 Ser. A-2, 7.9s, 6/1/42 Baa2 513,750
1,500,000 Ser. B, 5 5/8s, 6/1/38 Baa1 1,455,000
1,000,000 Ser. 2003 A-1, 6 1/4s, 6/1/33 Baa2 883,750
3,120,000 Los Angeles, Multi-Fam. Rev. Bonds
(Mission Plaza Apts.), Ser. A, GNMA
Coll., 7.8s, 1/20/35 AAA 3,320,741
1,000,000 Los Angeles, Unified School Dist.
G.O. Bonds, Ser. B, FGIC, 5s, 7/1/17 Aaa 1,056,250
2,000,000 Los Angeles, Wtr. & Pwr. Rev. Bonds
(Pwr. Syst.), Ser. B, FSA, 5 1/8s,
7/1/20 Aaa 2,105,000
1,000,000 Metropolitan Wtr. Dist. Rev. Bonds
(Southern CA Waterworks), Ser. B,
MBIA, 4 3/4s, 7/1/21 Aaa 1,003,750
1,000,000 Orange Cnty., Pub. Fin. Auth. Waste
Mgt. Syst. Rev. Bonds, AMBAC,
5 3/4s, 12/1/10 Aaa 1,151,250
500,000 Placentia Redev. Auth. Tax Alloc.
Rev. Bonds, Ser. B, 5 3/4s, 8/1/32 BBB+ 506,250
2,000,000 Placer Union High School Dist. G.O.
Bonds (Cap. Appn.), Ser. A, FGIC,
zero %, 8/1/20 AAA 857,500
3,000,000 San Diego, Unified School Dist. G.O.
Bonds (Election of 1998), Ser. D,
FGIC, 5 1/4s, 7/1/21 Aaa 3,183,750
2,000,000 San Jose Fin. Auth. Rev. Bonds
(Civic Ctr.), Ser. B, AMBAC, 5s,
6/1/27 Aaa 2,022,500
San Juan, Basin Auth. Lease
Rev. Bonds (Ground Wtr. Recvy.
Project), AMBAC
1,000,000 5s, 12/1/34 Aaa 1,005,000
1,000,000 5s, 12/1/22 Aaa 1,028,750
3,515,000 Santa Ana, Unified School Dist. G.O.
Bonds (Election of 1999), Ser. B,
FGIC, zero %, 8/1/18 Aaa 1,722,350
3,750,000 Santa Clara Cnty., Fin. Auth. Lease
Rev. Bonds (Vmc Fac. Replacement),
Ser. A, AMBAC, 6 7/8s, 11/15/14 Aaa 4,047,713
3,400,000 Santa Rosa, Waste Wtr. Rev. Bonds
(Cap. Appn.), Ser. B, AMBAC, zero %,
9/1/23 AAA 1,190,000
500,000 Tobacco Securitization Auth. of
Southern CA Rev. Bonds (Asset Backed
Bonds), Ser. B, 6s, 6/1/43 Baa3 405,625
1,000,000 Torrance Memorial Med. Ctr.
Rev. Bonds, Ser. A, 6s, 6/1/22 A1 1,065,000
Tustin, Unified School Dist.
Rev. Bonds, (Cmnty. Fac. Dist. No.
97-1)
750,000 U.S. Govt. Coll., 6 1/4s, 9/1/21 AAA 897,188
1,000,000 FSA, 5s, 9/1/32 Aaa 1,005,000
1,000,000 U. of CA Rev. Bonds, Ser. A, AMBAC,
5 1/8s, 5/15/18 Aaa 1,066,250
3,000,000 U. of CA Hosp. Rev. Bonds (U. of CA
Med. Ctr.), AMBAC, 5 3/4s, 7/1/15 Aaa 3,371,250
1,000,000 Vallejo, COP (Marine World
Foundation), 7s, 2/1/17 BBB-/P 1,048,750
3,345,000 Victor, Elementary School Dist. COP
(School Construction Refinancing),
MBIA, 6.45s, 5/1/18 Aaa 4,177,069
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77,401,438
Puerto Rico (6.4%)
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Cmnwlth. of PR, G.O. Bonds (Pub.
Impt.), Ser. A, MBIA
1,370,000 5 1/2s, 7/1/20 Aaa 1,566,938
1,000,000 5 1/2s, 7/1/15 AAA 1,152,500
PR Elec. Pwr. Auth. Rev. Bonds
1,000,000 Ser. II, 5 1/4s, 7/1/31 A- 1,013,750
1,465,000 MBIA, 5s, 7/1/21 Aaa 1,573,040
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5,306,228
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Total Investments (cost $77,426,779) $82,707,666
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(a) Percentages indicated are based on portfolio market value.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to
be the most recent ratings available at October 31, 2003 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 October 31, 2003. Securities rated by Putnam are indicated
by "/P" and are not publicly rated.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at October 31, 2003 was
$3,020,000 or 3.7% of portfolio market value.
The rates shown on VRDNs are the current interest rates shown at October
31, 2003.
The rates shown on IFB, which are securities paying interest rates that
vary inversely to changes in the market interest rates, are the current
interest rates at October 31, 2003.
The fund had the following industry group concentrations greater than
10% at October 31, 2003 as a percentage of portfolio market value:
Health care 14.7%
Water and sewer 13.7
The fund had the following insurance concentrations greater than 10% at
October 31, 2003 as a percentage of portfolio market value:
AMBAC 23.4%
MBIA 24.6
The accompanying notes are an integral part of these financial
statements.
Statement of assets and liabilities
October 31, 2003 (Unaudited)
Assets
- -------------------------------------------------------------------------------
Investments in securities, at value (identified cost
$77,426,779) (Note 1) $82,707,666
- -------------------------------------------------------------------------------
Cash 67,926
- -------------------------------------------------------------------------------
Interest and other receivables 1,402,683
- -------------------------------------------------------------------------------
Total assets 84,178,275
Liabilities
- -------------------------------------------------------------------------------
Distributions payable to shareholders 285,608
- -------------------------------------------------------------------------------
Accrued preferred shares distribution payable (Note 1) 8,486
- -------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 138,691
- -------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 11,585
- -------------------------------------------------------------------------------
Payable for Trustee compensation and expenses (Note 2) 21,104
- -------------------------------------------------------------------------------
Payable for administrative services (Note 2) 339
- -------------------------------------------------------------------------------
Other accrued expenses 47,014
- -------------------------------------------------------------------------------
Total liabilities 512,827
- -------------------------------------------------------------------------------
Series A remarketed preferred shares (320 shares issued and
outstanding at $50,000 per share (Note 4) 16,000,000
- -------------------------------------------------------------------------------
Net assets $67,665,448
Represented by
- -------------------------------------------------------------------------------
Paid-in capital -- common shares (Note 1) $64,103,468
- -------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 379,540
- -------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (2,098,447)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investments 5,280,887
- -------------------------------------------------------------------------------
Total -- Representing net assets applicable to common shares
outstanding $67,665,448
Computation of net asset value
- -------------------------------------------------------------------------------
Net asset value per common share ($67,665,448 divided by
4,607,092 shares) $14.69
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Statement of operations
Six months ended October 31, 2003 (Unaudited)
Interest income: $2,236,752
- -------------------------------------------------------------------------------
Expenses:
- -------------------------------------------------------------------------------
Compensation of Manager (Note 2) 279,880
- -------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 36,605
- -------------------------------------------------------------------------------
Trustee compensation and expenses (Note 2) 4,842
- -------------------------------------------------------------------------------
Administrative services (Note 2) 2,040
- -------------------------------------------------------------------------------
Auditing 31,615
- -------------------------------------------------------------------------------
Preferred share remarketing agent fees 21,800
- -------------------------------------------------------------------------------
Other 27,340
- -------------------------------------------------------------------------------
Total expenses 404,122
- -------------------------------------------------------------------------------
Expense reduction (Note 2) (2,673)
- -------------------------------------------------------------------------------
Net expenses 401,449
- -------------------------------------------------------------------------------
Net investment income 1,835,303
- -------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (456,000)
- -------------------------------------------------------------------------------
Net unrealized depreciation of investments during the period (640,410)
- -------------------------------------------------------------------------------
Net loss on investments (1,096,410)
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations $738,893
- -------------------------------------------------------------------------------
Distributions to Series A remarketed preferred shareholders: (Note 1)
- -------------------------------------------------------------------------------
From tax exempt income (75,258)
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations
applicable to common shareholders $663,635
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets
Six months ended Year ended
October 31 April 30
Increase (decrease) in net assets 2003* 2003
- -------------------------------------------------------------------------------
Operations:
- -------------------------------------------------------------------------------
Net investment income $1,835,303 $3,868,045
- -------------------------------------------------------------------------------
Net realized loss on investments (456,000) (1,530,073)
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments (640,410) 2,822,410
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 738,893 5,160,382
Distributions to Series A remarketed
preferred shareholders: (Note 1)
- -------------------------------------------------------------------------------
From tax exempt income (75,258) (180,893)
- -------------------------------------------------------------------------------
From ordinary income -- (3,722)
- -------------------------------------------------------------------------------
From net realized long-term gains on
investments -- (25,561)
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations applicable to common shareholders 663,635 4,950,206
- -------------------------------------------------------------------------------
Distributions to common shareholders: (Note 1)
- -------------------------------------------------------------------------------
From tax exempt income (1,713,648) (3,717,505)
- -------------------------------------------------------------------------------
From ordinary income -- (58,504)
- -------------------------------------------------------------------------------
From net realized long-term gain on
investments -- (345,956)
- -------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,050,013) 828,241
Net assets
- -------------------------------------------------------------------------------
Beginning of period 68,715,461 67,887,220
- -------------------------------------------------------------------------------
End of period (including undistributed net
investment income of $379,540 and $333,143,
respectively) $67,665,448 $68,715,461
- -------------------------------------------------------------------------------
Number of fund shares
- -------------------------------------------------------------------------------
Common shares outstanding at beginning and
end of period 4,607,092 4,607,092
- -------------------------------------------------------------------------------
Remarketed preferred shares outstanding at
beginning and end of period 320 320
- -------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
Financial highlights
(For a common share outstanding throughout the period)
Six months
ended
October 31
Per-share (Unaudited) Year ended April 30
operating performance 2003 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period (common shares) $14.92 $14.74 $14.69 $14.14 $15.49 $15.37
- ---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (a) .40 .84 .95 .96 .96 .98
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments (.24) .28 .02 .58 (1.30) .18
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .16 1.12 .97 1.54 (.34) 1.16
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to preferred shareholders:
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income (.02) (.04) (.06) (.13) (.13) (.11)
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments -- (.01) -- (e) -- -- (e) (.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations:
applicable to common shares .14 1.07 .91 1.41 (.47) 1.04
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to common shareholders:
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income (.37) (.82) (.83) (.86) (.87) (.87)
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized
gain on investments -- (.07) (.03) -- (.01) (.05)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (.37) (.89) (.86) (.86) (.88) (.92)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
(common shares) $14.69 $14.92 $14.74 $14.69 $14.14 $15.49
- ---------------------------------------------------------------------------------------------------------------------------------
Market price, end of period
(common shares) $12.98 $13.44 $13.82 $13.90 $13.44 $15.56
- ---------------------------------------------------------------------------------------------------------------------------------
Total return at market price
(common shares) (%)(b) (0.69)* 3.73 5.51 9.75 (8.02) 8.11
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(common shares) (in thousands) $67,665 $68,715 $67,887 $67,667 $65,161 $71,380
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c)(d) .59* 1.20 1.20 1.22 1.21 1.22
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(c) 2.58* 5.41 5.97 5.67 5.72 5.52
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 16.31* 22.00 11.82 13.65 17.48 13.87
- ---------------------------------------------------------------------------------------------------------------------------------
* Not annualized.
(a) Per share net investment income has been determined on the basis of
the weighted average number of common shares outstanding during the
period.
(b) Total return assumes dividend reinvestment.
(c) Ratio reflects net assets available to common shares only; net
investment income ratio also reflects reduction for dividend payments to
preferred shareholders.
(d) Includes amounts paid through expense offset arrangements (Note 2).
(e) Distributions amounted to less than $0.01 per share.
The accompanying notes are an integral part of these financial statements.
Notes to financial statements
October 31, 2003 (Unaudited)
Note 1
Significant accounting policies
Putnam California Investment Grade Municipal Trust (the "fund") is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company. The fund's
investment objective is to seek high current income exempt from federal
income tax and California personal income tax. The fund seeks to achieve
its objective by investing in investment-grade municipal securities
constituting a portfolio Putnam Investment Management, LLC ("Putnam
Management"), the fund's manager, an indirect wholly-owned subsidiary of
Putnam, LLC, believes to be consistent with preservation of capital. The
fund may be affected by economic and political developments in the state
of California.
The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The preparation of financial statements is in conformity
with accounting principles generally accepted in the United States of
America and requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities in the financial
statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results could
differ from those estimates.
A) Security valuation Tax-exempt bonds and notes are valued on the basis
of valuations provided by an independent pricing service, approved by
the Trustees. Such services use information with respect to transactions
in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining value. Restricted securities are valued at fair value
following procedures approved by the Trustees. Such valuations and
procedures are reviewed periodically by the Trustees.
B) Security transactions and related investment income Security
transactions are recorded on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis. Interest income is recorded on the accrual
basis. All premiums/discounts are amortized/accreted on a
yield-to-maturity basis. The premium in excess of the call price, if
any, is amortized to the call date; thereafter, any remaining premium is
amortized to maturity.
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, as amended. Therefore, no
provision has been made for federal taxes on income, capital gains or
unrealized appreciation on securities held nor for excise tax on income
and capital gains.
At April 30, 2003, the fund had a capital loss carryover of $636,304
available to the extent allowed by tax law to offset future net capital
gain, if any. This capital loss carryover will expire on April 30, 2011.
Pursuant to federal income tax regulations applicable to regulated
investment companies, the fund has elected to defer to its fiscal year
ending April 30, 2004, $890,044 of losses recognized during the period
November 1, 2002 to April 30, 2003.
The aggregate identified cost on a tax basis is $77,426,779, resulting
in gross unrealized appreciation and depreciation of $5,714,073 and
$433,186, respectively, or net unrealized appreciation of $5,280,887.
D) Distributions to shareholders Distributions to common and preferred
shareholders from net investment income are recorded by the fund on the
ex-dividend date. Distributions from capital gains, if any, are recorded
on the ex-dividend date and paid at least annually. Dividends on
remarketed preferred shares become payable when, as and if declared by
the Trustees. Each dividend period for the remarketed preferred shares
is generally a 28-day period. The applicable dividend rate for the
remarketed preferred shares on October 31, 2003 was 0.88%. 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. 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.
E) Determination of net asset value Net asset value of the common shares
is determined by dividing the value of all assets of the fund, less all
liabilities and the liquidation preference of any outstanding remarketed
preferred shares, by the total number of common shares outstanding as of
period end.
Note 2
Management fee, administrative
services and other transactions
Putnam Management is paid for management and investment advisory
services quarterly based on the average net assets of the fund. Such fee
is paid quarterly and based on 0.65% of weekly average net assets of the
fund.
If dividends payable on remarketed preferred shares during any dividend
payment period plus any expenses attributable to remarketed preferred
shares for that period exceed the fund's gross income attributable to
the proceeds of the remarketed preferred shares during that period, then
the fee payable to Putnam Management for that period will be reduced by
the amount of the excess (but not more than 0.65% of the liquidation
preference of the remarketed preferred shares outstanding during the
period).
The fund reimburses Putnam Management an allocated amount 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.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a subsidiary of Putnam, LLC. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
The fund has entered into an arrangement with PFTC whereby credits
realized as a result of uninvested cash balances are used to reduce a
portion of the fund's expenses. For the six months ended October 31,
2003, the fund's expenses were reduced by $2,673 under these
arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $466 has been allocated to the fund, and an additional fee for
each Trustees meeting attended. Trustees receive additional fees for
attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral 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
invested in certain Putnam funds until distribution in accordance with
the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and
meeting fees for the three years preceding retirement. Pension expense
for the fund is included in Trustee compensation and expenses in the
Statement of operations. Accrued pension liability is included in
Payable for Trustee compensation and expenses in the Statement of assets
and liabilities.
Note 3
Purchases and sales of securities
During the six months ended October 31, 2003, cost of purchases and
proceeds from sales of investment securities other than short-term
investments aggregated $14,331,661 and $13,412,054, respectively. There
were no purchases and sales of U.S. government obligations.
Note 4
Preferred shares
The Series A shares are redeemable at the option of the fund on any
dividend payment date at a redemption price of $50,000 per share, plus
an amount equal to any dividends accumulated on a daily basis but unpaid
through the redemption date (whether or not such dividends have been
declared) and, in certain circumstances, a call premium.
It is anticipated that dividends paid to holders of remarketed preferred
shares will be considered tax-exempt dividends under the Internal
Revenue Code of 1986. To the extent that the fund earns taxable income
and capital gains by the conclusion of a fiscal year, it may be required
to apportion to the holders of the remarketed preferred shares
throughout that year additional dividends as necessary to result in an
after-tax equivalent to the applicable dividend rate for the period.
Under the Investment Company Act of 1940, the fund is required to
maintain asset coverage of at least 200% with respect to the remarketed
preferred shares as of the last business day of each month in which any
such shares are outstanding. Additionally, the fund is required to meet
more stringent asset coverage requirements under terms of the remarketed
preferred shares and the shares' rating agencies. Should these
requirements not be met, or should dividends accrued on the remarketed
preferred shares not be paid, the fund may be restricted in its ability
to declare dividends to common shareholders or may be required to redeem
certain of the remarketed preferred shares. At October 31, 2003, no such
restrictions have been placed on the fund.
Note 5
Regulatory matters and litigation
On November 13, 2003, Putnam Management agreed to entry of an order
by the Securities and Exchange Commission (SEC) in partial
resolution of administrative and cease-and-desist proceedings
initiated by the SEC on October 28, 2003 in connection with alleged
excessive short-term trading by at least six Putnam Management
investment professionals. The SEC's findings reflect that four of
those employees engaged in such trading in funds over which they had
investment decision-making responsibility and had access to
non-public information regarding, among other things, current
portfolio holdings, and valuations. The six individuals no longer
have investment responsibilities with Putnam Management. Under the
order, Putnam Management will make restitution for losses
attributable to excessive short-term trading by Putnam employees,
institute new employee trading restrictions and enhanced employee
trading compliance, retain an independent compliance consultant, and
take other remedial actions. Putnam Management neither admitted nor
denied the order's findings, which included findings that Putnam
Management willfully violated provisions of the federal securities
laws. A civil monetary penalty and other monetary relief, if any,
will be determined at a later date. If a hearing is necessary to
determine the amounts of such penalty or other relief, Putnam
Management will be precluded from arguing that it did not violate
the federal securities laws in the manner described in the SEC
order, the findings set forth in the SEC order will be accepted as
true by the hearing officer and additional evidence may be
presented. Putnam Management, and not the investors in any Putnam
fund, will bear all costs, including restitution, civil penalties
and associated legal fees. Administrative proceedings instituted by
the Commonwealth of Massachusetts on October 28, 2003 against Putnam
Management in connection with alleged market timing activities by
Putnam employees and by participants in some Putnam-administered
401(k) plans are pending. Putnam Management has committed to make
complete restitution for any losses suffered by Putnam shareholders
as a result of any improper market-timing activities by Putnam
employees or within Putnam-administered 401(k) plans.
The SEC's and Commonwealth's allegations and related matters also
serve as the general basis for numerous lawsuits, including
purported class action lawsuits filed against Putnam Management and
certain related parties, including certain Putnam funds. Putnam
Management has agreed to bear any costs incurred by Putnam funds in
connection with these lawsuits. Based on currently available
information, Putnam Management believes that the likelihood that the
pending private lawsuits and purported class action lawsuits will
have a material adverse financial impact on the fund is remote, and
the pending actions are not likely to materially affect its ability
to provide investment management services to its clients, including
the Putnam funds.
Review of these matters by counsel for Putnam Management and by
separate independent counsel for the Putnam funds and their
independent Trustees is continuing. In addition, Marsh & McLennan
Companies, Inc., Putnam Management's parent company, has engaged
counsel to conduct a separate review of Putnam Management's policies
and controls related to short-term trading.
Results of October 7, 2003 shareholder meeting
(Unaudited)
An annual meeting of shareholders of the fund was held on October 7,
2003. At the meeting, each of the nominees for Trustees was elected, as
follows:
Common shares
Votes
Votes for withheld
- -----------------------------------------------------------------
Jameson Adkins Baxter 4,283,677 56,312
Charles B. Curtis 4,286,357 53,632
Ronald J. Jackson 4,289,077 50,912
Paul L. Joskow 4,289,877 50,112
Elizabeth T. Kennan 4,288,723 51,266
Lawrence J. Lasser* 4,286,577 53,412
John H. Mullin III 4,284,423 55,566
George Putnam, III 4,292,677 47,312
A.J.C. Smith 4,286,277 53,712
W. Thomas Stephens 4,289,253 50,736
W. Nicholas Thorndike 4,286,048 53,941
Preferred Shares
Votes
Votes for withheld
- -----------------------------------------------------------------
Jameson Adkins Baxter 318 2
Charles B. Curtis 318 2
John A. Hill 318 2
Ronald J. Jackson 318 2
Paul L. Joskow 318 2
Elizabeth T. Kennan 318 2
Lawrence J. Lasser* 318 2
John H. Mullin III 318 2
Robert E. Patterson 318 2
George Putnam, III 318 2
A.J.C. Smith 318 2
W. Thomas Stephens 318 2
W. Nicholas Thorndike 318 2
All tabulations are rounded to nearest whole number.
*Mr. Lasser resigned from the Board of Trustees of the Putnam funds on
November 3, 2003.
Fund information
About Putnam Investments
One of the largest mutual fund families in the United States, Putnam
Investments has a heritage of investment leadership dating back to Judge
Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition
and practice since 1830. Founded over 65 years ago, Putnam Investments
was built around the concept that a balance between risk and reward is
the hallmark of a well-rounded financial program. We presently manage
over 100 mutual funds in growth, value, blend, fixed income, and
international.
Investment Manager
Putnam Investment
Management, LLC
One Post Office Square
Boston, MA 02109
Marketing Services
Putnam Retail Management
One Post Office Square
Boston, MA 02109
Custodian
Putnam Fiduciary Trust Company
Legal Counsel
Ropes & Gray LLP
Trustees
John A. Hill, Chairman
Jameson Adkins Baxter
Charles B. Curtis
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
W. Nicholas Thorndike
Officers
George Putnam, III
President
Charles E. Porter
Executive Vice President, Treasurer and
Principal Financial Officer
Patricia C. Flaherty
Senior Vice President
Karnig H. Durgarian
Vice President and
Principal Executive Officer
Steven D. Krichmar
Vice President and
Principal Financial Officer
Michael T. Healy
Assistant Treasurer and
Principal Accounting Officer
Beth S. Mazor
Vice President
Gordon H. Silver
Vice President
Mark C. Trenchard
Vice President and
BSA Compliance Officer
William H. Woolverton
Vice President and
Chief Legal Officer
Judith Cohen
Clerk and Assistant Treasurer
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time, or
visit our Web site (www.putnaminvestments.com) any time for up-to-date
information about the fund's NAV.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
Do you want to save paper and receive this document faster?
Shareholders can sign up for email delivery of shareholder reports on
www.putnaminvestments.com.
203407 184 12/03
Item 2. Code of Ethics:
- -----------------------
Not applicable
Item 3. Audit Committee Financial Expert:
- -----------------------------------------
Not applicable
Item 4. Principal Accountant Fees and Services:
- -----------------------------------------------
Not applicable
Items 5-6. [Reserved]
- ---------------------
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed End
- -------------------------------------------------------------------------
Management Investment Companies: Not applicable
--------------------------------
Item 8. [Reserved]
- ------------------
Item 9. Controls and Procedures:
- --------------------------------
(a) The registrant's principal executive officer and principal financial
officers have concluded, based on their evaluation of the effectiveness
of the design and operation of the registrant's disclosure controls and
procedures as of a date within 90 days of the filing date of this report
on Form N-CSR, that the design and operation of such procedures are
effective to provide reasonable assurance that information required to
be disclosed by the investment company in the reports that it files or
submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized, and reported within the time periods specified in
the Commission's rules and forms.
(b) Changes in internal control over financial reporting:
Not applicable
Item 10. Exhibits:
- ------------------
(a) Not applicable
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Investment Company Act of 1940, as amended, and the officer
certifications as required by Section 906 of the Sarbanes-Oxley Act of 2002
are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
an the Investment Company Act of 1940, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NAME OF REGISTRANT
By (Signature and Title): /s/Michael T. Healy
--------------------------
Michael T. Healy
Principal Accounting Officer
Date: December 23, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934
an the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By (Signature and Title): /s/Karnig H. Durgarian
---------------------------
Karnig H. Durgarian
Principal Executive Officer
Date: December 23, 2003
By (Signature and Title): /s/Charles E. Porter
---------------------------
Charles E. Porter
Principal Financial Officer
Date: December 23, 2003
By (Signature and Title): /s/Steven D. Krichmar
---------------------------
Steven D. Krichmar
Principal Financial Officer
Date: December 23, 2003