N-CSRS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: (811- 06190)
Exact name of registrant as specified in charter:	Putnam International Equity Fund
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109
Name and address of agent for service:	Beth S. Mazor, Vice President
	One Post Office Square
	Boston, Massachusetts 02109
Copy to:	John W. Gerstmayr, Esq.
	Ropes & Gray LLP
	One International Place
	Boston, Massachusetts 02110
Registrant’s telephone number, including area code:	(617) 292-1000
Date of fiscal year end: June 30, 2010
Date of reporting period: July 1, 2009 — December 31, 2009

Item 1. Report to Stockholders:

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:

A BALANCED APPROACH

Since 1937, when George Putnam created a diverse mix of stocks and bonds in a single, professionally managed portfolio, Putnam has championed the balanced approach.

A WORLD OF INVESTING

Today, we offer investors a world of equity, fixed-income, multi-asset, and absolute-return portfolios to suit a range of financial goals.

A COMMITMENT TO EXCELLENCE

Our portfolio managers seek superior results over time, backed by original, fundamental research on a global scale. We believe in the value of experienced financial advice, in providing exemplary service, and in putting clients first in all we do.

Putnam
International Equity
Fund

Semiannual report
12 | 31 | 09

Message from the Trustees	2
About the fund	4
Performance snapshot	6
Interview with your fund’s portfolio manager	7
Your fund’s performance	12
Your fund’s expenses	13
Terms and definitions	15
Trustee approval of management contract	16
Other information for shareholders	26
Financial statements	27
Shareholder meeting results	49

Message from the Trustees

Dear Fellow Shareholder:

The historic market rally that began in March 2009 maintained its momentum through the close of the year. Investors in both stocks and bonds saw their account balances improve, and Putnam’s shareholders were particularly well served. In the early weeks of 2010, encouraging evidence continued to build, pointing to a worldwide economic recovery.

We are pleased to report that Barron’s has named Putnam Investments the top fund family for performance in 2009. This ranking reflects the intense efforts of an investment team infused with a determination to excel, and strengthened by the arrival of several senior portfolio managers, research analysts, and traders.

Although investors may continue to be rewarded this year, we do not expect that 2010 will be a repeat performance of 2009, when markets around the world delivered a potent recovery from distressed levels. The most substantial returns in 2009 came from the historically low-priced shares of companies that survived the downturn. Going forward, growth will more likely come from shares in companies positioned to thrive in the expanding global economic recovery.

If there is any lesson to be learned from the painful market downturn of 2008 and early 2009, it is the importance of positioning one’s portfolio to limit downside risk. It is our belief that the best way to achieve this is by diversifying across all asset classes, as well as across modern investment strategies focused on reducing volatility, and adhering to your plan in every kind of market environment.

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Lastly, we would like to thank all shareholders who took the time to vote by proxy on a number of issues, including shareholder-friendly management fee changes, presented at the Putnam Funds’ recent shareholder meetings. We also welcome new shareholders to the fund and thank all of our investors for your continued confidence in Putnam.

About the fund

Pursuing growth in international stock markets since 1991

As a shareholder of Putnam International Equity Fund, you are seeking to benefit from investment opportunities outside the United States. Although international investing involves additional risks, the fund lets you take advantage of the capital appreciation potential of a broad range of companies.

In many cases, international companies are the top competitors in global industries. If you look at the products or services you use every day — from cars to cell phones to household products — you are likely to find many items made by international companies.

While investing in different currencies and economic systems can add risk, it may help you manage an important financial risk — the possibility of a slump in the U.S. economy — and may give you a chance to keep building wealth even if U.S. stocks struggle.

That’s because international economies can follow a different business cycle than that of the United States, with different monetary conditions. In many regions, economies may be growing faster than the U.S. economy. Also, when you invest internationally, you can benefit when foreign currencies strengthen against the U.S. dollar, although there is also a risk of exchange rate fluctuations.

Since 1991, the fund has sought profitable holdings based on the portfolio manager’s analysis of attractively valued companies in international markets. In addition to selecting stocks, the manager routinely analyzes industry sectors and global market conditions by relying on Putnam’s deep research capabilities. In addition to the United States, Putnam has analysts based in Boston, London, and Singapore for better access to information about international companies.

Using Putnam’s blend strategy, the manager has the flexibility to select a broad range of stocks believed to be priced below their true worth. The portfolio’s diversification may help keep the fund competitive given the risks of changing market conditions and political developments in international markets. The fund can invest in developed economies such as Europe, Japan, Canada, and Australia, as well as in the emerging markets of the world. For over 19 years, the fund has helped investors benefit from diversification and economic growth generated outside the United States.

Consider these risks before investing:

International investing involves certain risks, such as currency fluctuations, economic instability, and political developments. Additional risks may be associated with emerging-market securities, including illiquidity and volatility. The fund invests some or all of its assets in small and/or midsize companies. Such investments increase the risk of greater fluctuations in the value of your investment.

In-depth analysis is key to
successful stock selection.

Drawing on the expertise of a dedicated team of stock analysts, the fund’s portfolio manager seeks stocks that are believed to be underpriced by the market. Once a stock is selected for the portfolio, it is regularly assessed to ensure that it continues to be attractive. Criteria include:

Quality The manager evaluates high-quality companies with characteristics such as solid management teams and sound business models.

Valuation The manager carefully considers how each stock is valued, seeking stocks whose valuations are attractive relative to the company’s growth potential and capitalrequirements.

Cash flow The manager examines each company’s financials, particularly the amount of cash a company generates relative to the earnings that it reports, and projects its ability to generate cash returns going forward.

Developments and events that have affected international markets

Performance
snapshot

Average annual total return (%) comparison as of 12/31/09

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 5.75%; had they, returns would have been lower. See pages 7 and 12–13 for additional performance information. For a portion of the periods, this fund may have limited expenses, without which returns would have been lower. A 1% short-term trading fee may apply. To obtain the most recent month-end performance, visit putnam.com.

* Returns for the six-month period are not annualized, but cumulative.

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Interview with your
fund’s portfolio manager
Joshua Byrne

Josh, how did the fund perform during the semiannual period?

Class A shares of Putnam International Equity Fund appreciated 20.74% during the final six months of 2009. This is a solid result for a semiannual period, but it was slightly behind the return of its benchmark, the MSCI EAFE Index, and the average of its Lipper peer group. Overall, sector and market positioning had a small negative impact on the fund’s relative performance, as once again stock selection provided positive results. Generally, our stock selections lagged the benchmark in the technology, telecommunications, and health-care sectors. Our best relative results were in the consumer discretionary, basic materials, and industrials sectors. Other sectors performed approximately in line with the benchmark. Exposure to foreign currencies added a bit to returns in the period, as the dollar generally weakened until very recently.

What were some of the stocks that performed well for the fund and better than the benchmark?

One contributor was Henkel AG & Co., a German company that makes a variety of skin- and hair-care products, including soaps and shampoos, as well as a number of chemicals used industrially, such as laminating adhesives for glass used in windshields and bottles. These are not particularly new or exciting businesses, but the stock achieved better-than-expected earnings for a couple of reasons. First, the stock’s valuation fell during the recession when the market

Broad market index and fund performance

This comparison shows your fund’s performance in the context of broad market indexes for the six months ended 12/31/09. See page 6 and pages 12–13 for additional fund performance information. Index descriptions can be found on page 15.

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anticipated a prolonged slump in earnings, but the economic recovery came sooner than expected. Second, a new management team has been effective at improving profit margins within Henkel’s skin-care businesses. The stock remains an overweight position in the portfolio versus the benchmark.

Another contributor was Banco Santander Central Hispano of Spain, one of our best selections in the financials sector. This multinational banking company has a different business model than many of its peers, and it served the stock well in 2009. Banco Santander is a rather ordinary retail bank without large capital market or securities-underwriting operations, and because of this, the company did not get heavily involved in exotic mortgage-backed securities during the credit crisis. It owns a number of banks in markets around the world, including Sovereign Bank in the United States, and they tend to be well capitalized locally. During the period, Banco Santander also undertook a successful initial public offering for its Brazilian subsidiary. This stock also remains an overweight position versus the benchmark.

A few of the other top contributors derived their strength from the onset of recovery in the global economy and in emerging markets, in particular. Xstrata, a mining company headquartered in Switzerland and trading in London, benefited from rising demand for coal and other base metals used in infrastructure development and industry. Noble Group, a company based in Hong Kong and registered in Singapore, is a trading company: It buys, sells, transports, and delivers a variety of natural resources and commodities. It also possesses coal-mining interests in Australia. This holding benefited from stronger business orders for commodities. Third, shares of China-based Dongfeng Motor Group Company advanced, owing largely to rising vehicle sales in China. Dongfeng has a couple of different joint ventures with automotive companies in

Top 10 holdings

HOLDING (percentage of fund’s net assets)	COUNTRY	SECTOR/INDUSTRY
BP PLC (3.7%)	United Kingdom	Energy/Oil and gas
Roche Holding AG (3.6%)	Switzerland	Health care/Pharmaceuticals
Nestle SA (3.2%)	Switzerland	Consumer staples/Food
Banco Santander Central Hispano SA (2.6%)	Spain	Financials/Banking
Total SA (2.3%)	France	Energy/Oil and gas
GlaxoSmithKline PLC (2.2%)	United Kingdom	Health care/Pharmaceuticals
BNP Paribas SA (2.1%)	France	Financials/Banking
Japan Tobacco, Inc. (2.1%)	Japan	Consumer staples/Tobacco
Zurich Financial Services AG (2.0%)	Switzerland	Financials/Insurance
BAE Systems PLC (1.9%)	United Kingdom	Capital goods/Aerospace and
		defense

This table shows the fund’s top 10 holdings and the percentage of the fund’s net assets that each represented as of 12/31/09. Short-term holdings are excluded. Holdings will vary over time. Current and future portfolio holdings are subject to risk.

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“The world has escaped what many
anticipated would be Armageddon in
the economic sense.”
Josh Byrne

developed markets, including Nissan and Honda of Japan. Dongfeng will produce and sell Nissan and Honda car models in China, where automobile sales rose between 80% and 100% last year.

Josh, let’s turn to some of the stocks that did not perform as well as expected.

We faced an unusual situation in Porsche Automobil Holding, the German luxury carmaker. It is involved in a complicated ownership struggle. Porsche was pursuing a strategy to acquire control of Volkswagen using stock options, but this effort failed, and left Porsche vulnerable to a takeover by Volkswagen. During the past six months, the market has reduced the valuation on Porsche in part, we believe, because the merger possibilities have been so complex. In our analysis, the market is underestimating how much Volkswagen will end up paying to gain control of Porsche. We continue to hold Porsche, and are confident that the portfolio will see an increase in valuation should Volkswagen ultimately acquire Porsche and add the company to its brand lineup.

Another disappointing holding was KDDI, a wireless telecom company in Japan. This company had poor earnings because subscriber growth flagged, and competition in the Japanese market kept profit margins tight. We continue to believe its valuation is quite attractive. Even small improvements in subscriber growth and profit margins could serve as catalysts and help this stock appreciate.

In the United Kingdom, the portfolio holds BAE Systems, a defense contractor that under-performed largely on fears of lower defense spending around the world, as government finances came under pressure. Also, an investigation into allegations of bribing public

Comparison of top country weightings

This chart shows how the fund’s top weightings have changed over the past six months. Weightings are shown as a percentage of net assets. Holdings will vary over time.

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officials has hurt the stock price, although we believe the market is exaggerating the impact of this on company earnings. As with KDDI, the stock trades well below the average valuations in the market, based on projected earnings, and we view this as attractive. We continue to hold it in the portfolio because of this valuation, as well as an attractive dividend yield of 4%, and the company’s ability to generate high levels of cash flow in a somewhat uncertain economic environment.

IN THE NEWS

After two straight years of stagnation, the global economy is recovering faster than previously thought. In its World Economic Outlook released in late January, the International Monetary Fund (IMF) upgraded its view on global growth — predicting that world economies will expand 3.9% in 2010, up from –0.8% last year. The recovery, according to IMF, will not be consistent across the board, with emerging markets leading more advanced economies, which remain dependent on government stimulus. Asia, in particular, will lead the pack, with strong growth coming from China and India. Meanwhile, the United States and the United Kingdom, whose economies are already recovering, are expected to stay positive in 2010.

Speaking of the economic environment, how would you characterize international market conditions today?

The world has escaped what many anticipated would be Armageddon in the economic sense. The stimulus in the United States has had positive effects abroad because it increased U.S. demand. We have also seen a special stimulus plan in China. Europe has done less, but many countries have a generous social safety net that helps to stabilize economies during a recession and provides a countercyclical impulse. In sum, we expect to continue to see positive economic data in coming quarters, far better than what was forecast a year ago. With additional support from low interest rates in the United States, Europe, and Japan, in particular, markets can continue to rise. The biggest risk to this outlook appears to be sovereign debt levels. Credible deficit reduction plans must be put in place to keep interest rates on government bonds reasonable.

What is your portfolio strategy?

There is no change in our stock-selection discipline: We continue to favor good companies with good balance sheets that have the ability to take market share from competitors. We think owning companies with these characteristics is the best approach, especially because many of these stocks don’t trade at a premium to the market. While the present conditions I outlined are generally supportive, we know that accommodative policies cannot last indefinitely. We already see in the relatively strong market of Australia that the central bank is beginning to tighten monetary policy. As other economies strengthen, their central banks will likely also raise interest rates. The stocks the fund owns, we believe, have the potential to perform well through this transition in the markets.

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When you look across international markets, are there any that you dislike or favor?

It’s important to note that our focus is to build the portfolio through a series of stock-specific decisions. While we consider macro factors, our bottom-up approach tends to keep us from taking large overweights or underweights to specific markets or sectors. We can look at emerging markets for a current example of how we execute this approach. We want to take advantage of the robust growth that we see in emerging markets, but that doesn’t mean we necessarily would establish large weightings in emerging markets. Historically, stocks in these markets have been more volatile than in other regions. Instead, we believe it is also possible to obtain the benefits of this growth through developed-market companies that have operations in emerging markets. To be even more precise, in the current global recovery, we think China is assuming the leadership role usually played by the United States. However, we consider it likely that China’s policym akers may try to keep a lid on growth to avoid a rapid increase in inflation. In our view, companies in developed markets that do business in China could be more attractive investments, should markets react negatively to more restrictive economic policies in China. That’s why we think that, in many cases, investors can tap into the growth of emerging markets through developed markets stocks with attractive valuations. As we conduct research, we consistently ask where do companies operate and what sort of growth potential do these operations have.

Are there any significant risks on the horizon?

In the intermediate term, the euro is at risk because of the potential for default by the government of Greece. In the longer term, however, it appears that the dollar is also vulnerable, given the expected issuance of U.S. government bonds and the differences between U.S. interest rates and those in other markets. With the risk of interest-rate increases later in 2010, we are also paying special attention to stocks in sectors that historically have performed well in a rising-rate environment, including health care, telecommunications, and energy. Although technology stocks historically have been adversely affected by rising interest rates, we think it could be different in this cycle. The sector is still recovering from a decade-long slump and could continue to add to its 2009 recovery even in the face of rising rates.

Josh, thanks for your commentary on the fund today.

The views expressed in this report are exclusively those of Putnam Management. They are not meant as investment advice.

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk.

Portfolio Manager Joshua Byrne is Head of International Large Cap Equities at Putnam. He has an M.B.A. from the Wharton School of the University of Pennsylvania and a B.A. from the University of Virginia. He joined Putnam in 1992 and has been in the investment industry since 1987.

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Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended December 31, 2009, the end of the first half of its current fiscal year. In accordance with regulatory requirements for mutual funds, we also include expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represents past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class Y shares ar e generally only available to corporate and institutional clients and clients in other approved programs. See the Terms and Definitions section in this report for definitions of the share classes offered by your fund.

Fund performance Total return for periods ended 12/31/09

	Class A		Class B		Class C		Class M		Class R	Class Y
(inception dates)	(2/28/91)		(6/1/94)		(7/26/99)		(12/1/94)		(1/21/03)	(7/12/96)
	NAV	POP	NAV	CDSC	NAV	CDSC	NAV	POP	NAV	NAV
Annual average
(life of fund)	7.86%	7.51%	7.02%	7.02%	7.05%	7.05%	7.30%	7.10%	7.59%	8.05%
10 years	–2.49	–8.09	–9.57	–9.57	–9.54	–9.54	–7.27	–10.52	–4.89	–0.04
Annual average	–0.25	–0.84	–1.00	–1.00	–1.00	–1.00	–0.75	–1.11	–0.50	0.00
5 years	8.18	1.97	4.13	2.58	4.15	4.15	5.46	1.75	6.78	9.50
Annual average	1.58	0.39	0.81	0.51	0.82	0.82	1.07	0.35	1.32	1.83
3 years	–25.07	–29.38	–26.78	–28.54	–26.78	–26.78	–26.25	–28.83	–25.67	–24.55
Annual average	–9.17	–10.95	–9.87	–10.60	–9.87	–9.87	–9.65	–10.72	–9.42	–8.96
1 year	25.27	18.04	24.28	19.28	24.26	23.26	24.56	20.18	24.89	25.48
6 months	20.74	13.80	20.28	15.28	20.27	19.27	20.42	16.18	20.63	20.83

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns (public offering price, or POP) for class A and M shares reflect a maximum 5.75% and 3.50% load, respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter. Class C shares reflect a 1% CDSC for the first year that is eliminated thereafter. Class R and Y shares have no initial sales charge or CDSC. Performance for class B, C, M, R, and Y shares before their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares.

For a portion of the periods, this fund may have limited expenses, without which returns would have been lower.

A 1% short-term trading fee may be applied to shares exchanged or sold within 90 days of purchase.

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Comparative index returns For periods ended 12/31/09

		Lipper International Large-Cap Core
	MSCI EAFE Index	Funds category average*
Annual average (life of fund)	5.05%	6.65%
10 years	12.38	6.13
Annual average	1.17	0.38
5 years	18.98	18.73
Annual average	3.54	3.39
3 years	–17.05	–16.93
Annual average	–6.04	–6.07
1 year	31.78	29.55
6 months	22.07	21.59

Index and Lipper results should be compared to fund performance at net asset value.

* Over the 6-month, 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 12/31/09, there were 409, 399, 320, 270, 152, and 17 funds, respectively, in this Lipper category.

Fund price and distribution information For the six-month period ended 12/31/09

Distributions	Class A		Class B	Class C	Class M		Class R	Class Y
Number	1		1	1	1		1	1
Income	$0.430		$0.270	$0.305	$0.350		$0.386	$0.475
Capital gains	—		—	—	—		—	—
Total	$0.430		$0.270	$0.305	$0.350		$0.386	$0.475
Share value	NAV	POP	NAV	NAV	NAV	POP	NAV	NAV
6/30/09	$15.75	$16.71	$14.91	$15.24	$15.35	$15.91	$15.52	$15.94
12/31/09	18.58	19.71	17.66	18.02	18.13	18.79	18.33	18.78

The classification of distributions, if any, is an estimate. Final distribution information will appear on your year-end tax forms.

Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. In the most recent six-month period, your fund limited these expenses; had it not done so, expenses would have been higher. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.

Expense ratios

	Class A	Class B	Class C	Class M	Class R	Class Y
Total annual operating expenses for the fiscal year
ended 6/30/09*	1.42%	2.17%	2.17%	1.92%	1.67%	1.17%
Annualized expense ratio for the six-month period
ended 12/31/09	1.43%	2.18%	2.18%	1.93%	1.68%	1.18%

Fiscal-year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report. Expenses are shown as a percentage of average net assets.

* For the fund’s most recent fiscal half year; may differ from expense ratios based on one-year data in the financial highlights.

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Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in Putnam International Equity Fund from July 1, 2009, to December 31, 2009. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

	Class A	Class B	Class C	Class M	Class R	Class Y
Expenses paid per $1,000*†	$7.96	$12.10	$12.10	$10.72	$9.34	$6.57
Ending value (after expenses)	$1,207.40	$1,202.80	$1,202.70	$1,204.20	$1,206.30	$1,208.30

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 12/31/09. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended December 31, 2009, use the following calculation method. To find the value of your investment on July 1, 2009, call Putnam at 1-800-225-1581.

Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the following table shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

	Class A	Class B	Class C	Class M	Class R	Class Y
Expenses paid per $1,000*†	$7.27	$11.07	$11.07	$9.80	$8.54	$6.01
Ending value (after expenses)	$1,018.00	$1,014.22	$1,014.22	$1,015.48	$1,016.74	$1,019.26

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 12/31/09. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

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Terms and definitions

Important terms

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 price, or value, of one share of a mutual fund, without a sales charge. NAVs fluctuate with market conditions. NAV is calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class.

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 5.75% maximum sales charge for class A shares and 3.50% for class M shares.

Contingent deferred sales charge (CDSC) is generally a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund’s class B CDSC declines from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase.

Share classes

Class A shares are generally subject to an initial sales charge and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class B shares are not subject to an initial sales charge. They may be subject to a CDSC.

Class C shares are not subject to an initial sales charge and are subject to a CDSC only if the shares are redeemed during the first year.

Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class R shares are not subject to an initial sales charge or CDSC and are available only to certain defined contribution plans.

Class Y shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are generally only available to corporate and institutional clients and clients in other approvedprograms.

Comparative indexes

Barclays Capital Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.

BofA Merrill Lynch U.S. 3-month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.

Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

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 is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.

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Trustee approval of management contract

General conclusions

The Board of Trustees of the Putnam funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Investment Management (“Putnam Management”) and the sub-management contract, with respect to your fund, between Putnam Management and its affiliate, Putnam Investments Limited (“PIL”), and the sub-advisory contract among Putnam Management, PIL and another affiliate, Putnam Advisory Company (“PAC”).

In this regard, the Board of Trustees, with the assistance of its Contract Committee consisting solely of Trustees who are not “interested persons” (as such term is defined in the Investment Company Act of 1940, as amended) of the Putnam funds (the “Independent Trustees”), requests and evaluates all information it deems reasonably necessary under the circumstances. Over the course of several months ending in June 2009, the Contract Committee met several times to consider the information provided by Putnam Management and other information developed with the assistance of the Board’s independent counsel and independent staff. The Contract Committee reviewed and discussed key aspects of this information with all of the Independent Trustees. At the Trustees’ June 12, 2009 meeting, the Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management, sub-management and sub-ad visory contracts, effective July 1, 2009. (Because PIL and PAC are affiliates of Putnam Management and Putnam Management remains fully responsible for all services provided by PIL and PAC, the Trustees have not evaluated PIL and PAC as separate entities, except as otherwise indicated below, and all subsequent references to Putnam Management below should be deemed to include reference to PIL and PAC as necessary or appropriate in the context.)

The Independent Trustees’ approval was based on the following conclusions:

• That the fee schedule in effect for your fund represented reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds and the costs incurred by Putnam Management in providing such services, and

• That such fee schedule represented an appropriate sharing between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the fund at current asset levels.

These conclusions were based on a comprehensive consideration of all information provided to the Trustees, were subject to the continued application of certain expense reductions and waivers pending other considerations noted below, and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the fee arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that certain aspects of the arrangements may receive greater scrutiny in some years than others, and that the Trustees’ conclusions may be based, in part, on their consideration of these sam e arrangements in prior years.

Consideration of strategic
pricing proposal

The Trustees considered that the Contract Committee had been engaged in a detailed

16

review of Putnam Management’s strategic pricing proposal that was first presented to the Committee at its May 2009 meeting. The proposal included proposed changes to the basic structure of the management fees in place for all open-end funds (except the Putnam RetirementReady® Funds and Putnam Money Market Liquidity Fund), including implementation of a breakpoint structure based on the aggregate net assets of all such funds in lieu of the individual breakpoint structures in place for each fund, as well as implementation of performance fees for certain funds. In addition, the proposal recommended substituting separate expense limitations on investor servicing fees and on other expenses as a group in lieu of the total expense limitations in place for many funds.

While the Contract Committee noted the likelihood that the Trustees and Putnam Management would reach agreement on the strategic pricing matters in later months, the terms of the management contracts required that the Trustees approve the continuance of the contracts in order to prevent their expiration at June 30, 2009. The Contract Committee’s recommendations in June reflect its conclusion that the terms of the contractual arrangements for your fund continued to be appropriate for the upcoming term, absent any possible agreement with respect to the matters addressed in Putnam Management’sproposal.

The Trustees were mindful of the significant changes that had occurred at Putnam Management in the past two years, including a change of ownership, the installation of a new senior management team at Putnam Management, the substantial decline in assets under management resulting from extraordinary market forces as well as continued net redemptions in many funds, the introduction of new fund products representing novel investment strategies and the introduction of performance fees for certain new funds. The Trustees were also mindful that many other leading firms in the industry had also been experiencing significant challenges due to the changing financial and competitive environment. For these reasons, even though the Trustees believed that the current contractual arrangements in place between the funds and Putnam Management and its affiliates have served shareholders well and continued to be appropriate for the nea r term, the Trustees believed that it was an appropriate time to reconsider the current structure of the funds’ contractual arrangements with Putnam Management with a view to possible changes that might better serve the interests of shareholders in this new environment. The Trustees concluded their review of Putnam Management’s strategic pricing proposal in July 2009, and their considerations regarding the proposal are discussed below under the heading “Subsequent approval of strategic pricing proposal.” With the exception of the discussion under this heading, the following discussion generally addresses only the Trustees’ reasons for recommending the continuance of the current contractual arrangements as, at the time the Trustees determined to make this recommendation, the Trustees had not yet reached any conclusions with respect to the strategic pricing proposal.

Management fee schedules and
categories; total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints, and the assignment of funds to particular fee categories. The general fee structure has been carefully developed over the years and re-examined on many occasions and adjusted where appropriate. In this regard, the Trustees noted that shareholders of all funds voted by overwhelming majorities in 2007 to approve new management contracts containing identical fee schedules.

In reviewing fees and expenses, the Trustees generally focused their attention on material changes in circumstances — for example, changes in a fund’s size or investment style,

17

changes in Putnam Management’s operating costs, or changes in competitive practices in the mutual fund industry — that suggest that consideration of fee changes might be warranted. The Trustees concluded that the circumstances did not warrant changes to the management fee structure of your fund at that time but, as indicated above, based on their detailed review of the current fee structure, were prepared to consider possible changes to this arrangement that might better serve the interests of shareholders in the future. The Trustees focused on two areas of particular interest, as discussed furtherbelow:

• Competitiveness. The Trustees reviewed comparative fee and expense information for competitive funds, which indicated that, in a custom peer group of competitive funds selected by Lipper Inc., your fund ranked in the 10th percentile in management fees and in the 3rd percentile in total expenses (less any applicable 12b-1 fees) as of December31, 2008 (the first percentile being the least expensive funds and the 100th percentile being the most expensive funds).

The Trustees noted that expense ratios for a number of Putnam funds, which show the percentage of fund assets used to pay for management and administrative services, distribution (12b-1) fees and other expenses, had been increasing recently as a result of declining net assets and the natural operation of fee breakpoints. The Trustees expressed their intention to monitor the funds’ percentile rankings in management fees and in total expenses to ensure that fees and expenses of the funds continue to meet evolving competitive standards.

The Trustees noted that the expense ratio increases described above were being controlled by expense limitations initially implemented in January 2004. These expense limitations give effect to a commitment by Putnam Management that the expense ratio of each open-end fund would be no higher than the average expense ratio of the competitive funds included in the fund’s relevant Lipper universe (exclusive of any applicable 12b-1 charges in each case). The Trustees observed that this commitment to limit fund expenses has served shareholders well since its inception and, while the Contract Committee was reviewing proposed alternative expense limitation arrangements as noted above, the Trustees received a commitment from Putnam Management and its parent company to continue this program through at least June30, 2010, or such earlier time as the Trustees and Putnam Management reach agreement on alternative arrangements.

In order to ensure that the expenses of the Putnam funds continue to meet evolving competitive standards, the Trustees requested, and Putnam Management agreed, to extend for the twelve months beginning July 1, 2009, or until such earlier time as the Trustees and Putnam Management reach agreement on alternative expense limitation arrangements, an additional expense limitation for certain funds at an amount equal to the average expense ratio (exclusive of 12b-1 charges) of a custom peer group of competitive funds selected by Lipper to correspond to the size of the fund. This additional expense limitation will be applied to those open-end funds that had above-average expense ratios (exclusive of 12b-1 charges) based on the custom peer group data for the period ended December 31, 2007. This additional expense limitation was not applied to your fund because it had a below-average expense ratio relative to its custom peer group.

• Economies of scale. Your fund currently has the benefit of breakpoints in its management fee that provide shareholders with significant economies of scale, which means that the effective management fee rate of the fund (as a percentage of fund assets) declines as the

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fund grows in size and crosses specified asset thresholds. Conversely, as the fund shrinks in size — as has been the case for many Putnam funds in recent years — these breakpoints result in increasing fee levels. In recent years, the Trustees have examined the operation of the existing breakpoint structure during periods of both growth and decline in asset levels. The Trustees concluded that the fee schedule in effect for your fund represented an appropriate sharing of economies of scale at that time but, as noted above, were in the process of reviewing a proposal to eliminate individual fund breakpoints for all of the open-end funds (except for the Putnam RetirementReady® Funds and Putnam Money Market Liquidity Fund) in favor of a breakpoint structure based on the aggregate net assets of all such funds.

In connection with their review of the management fees and total expenses of the Putnam funds, the Trustees also reviewed the costs of the services provided and profits realized by Putnam Management and its affiliates from their contractual relationships with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management and distribution services provided to the funds. In this regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability with respect to the funds’ management contracts, allocated on a fund-by-fund basis.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees’ evaluation of the quality of services provided by Putnam Management under your fund’s management contract. The Trustees were assisted in their review of the Putnam funds’ investment process and performance by the work of the Investment Oversight Coordinating Committee of the Trustees and the Investment Oversight Committees of the Trustees, which had met on a regular monthly basis with the funds’ portfolio teams throughout the year. The Trustees concluded that Putnam Management generally provides a high-quality investment process — as measured by the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to such personnel, and in general the ability of Putnam Management to attract and retain high-quality personnel — b ut also recognized that this does not guarantee favorable investment results for every fund in every time period. The Trustees considered the investment performance of each fund over multiple time periods and considered information comparing each fund’s performance with various benchmarks and with the performance of competitive funds.

The Trustees noted the disappointing investment performance of many of the funds for periods ended December 31, 2008. They discussed with senior management of Putnam Management the factors contributing to such underperformance and the actions being taken to improve performance. The Trustees recognized that, in recent years, Putnam Management has taken steps to strengthen its investment personnel and processes to address areas of underperformance, including Putnam Management’s continuing efforts to strengthen the equity research function, recent changes in portfolio managers including increased accountability of individual managers rather than teams, recent changes in Putnam Management’s approach to incentive compensation, including emphasis on top quartile performance over a rolling three-year period, and the recent arrival of a new chief investment officer. The Trustees also recognized the substantial improvement in performance of many funds since the implementation of those changes. The Trustees indicated their intention to continue to monitor performance trends to assess the effectiveness of these efforts and to evaluate

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whether additional changes to address areas of underperformance are warranted.

In the case of your fund, the Trustees considered that your fund’s class A share cumulative total return performance at net asset value was in the following percentiles of its Lipper Inc. peer group (Lipper International Large-Cap Core Funds) for the one-year, three-year and five-year periods ended March 31, 2009 (the first percentile being the best-performing funds and the 100th percentile being the worst-performing funds):

One-year period	68th
Three-year period	68th
Five-year period	70th

Over the one-year, three-year and five-year periods ended March 31, 2009, there were 282, 241, and 214 funds, respectively, in your fund’s Lipper peer group. Past performance is no guarantee of future results.

As a general matter, the Trustees believe that cooperative efforts between the Trustees and Putnam Management represent the most effective way to address investment performance problems. The Trustees noted that investors in the Putnam funds have, in effect, placed their trust in the Putnam organization, under the oversight of the funds’ Trustees, to make appropriate decisions regarding the management of the funds. Based on the responsiveness of Putnam Management in the recent past to Trustee concerns about investment performance, the Trustees concluded that it is preferable to seek change within Putnam Management to address performance shortcomings. In the Trustees’ view, the alternative of engaging a new investment adviser for an underperforming fund would entail significant disruptions and would not provide any greater assurance of improved investment performance.

Brokerage and soft-dollar allocations;
other benefits

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage and soft-dollar allocations, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that may be useful to Putnam Management in managing the assets of the fund and of other clients. The Trustees considered a change made, at Putnam Management’s request, to the Putnam funds’ brokerage allocation policy commencing in 2009, which increased the permitted soft dollar allocation to third-party services over what had been authorized in previous years. The Trustees noted that a portion of available soft dollars continue to be allocated to the payment of fund expenses, although the amount allocated for this purpose has declined in recent years. The Tr ustees indicated their continued intent to monitor regulatory developments in this area with the assistance of their Brokerage Committee and also indicated their continued intent to monitor the potential benefits associated with the allocation of fund brokerage and trends in industry practice to ensure that the principle of seeking best price and execution remains paramount in the portfolio trading process.

The Trustees’ annual review of your fund’s management contract also included the review of the investor servicing agreement with Putnam Investor Services, Inc. (“PSERV”), which agreement provides benefits to an affiliate of Putnam Management. The Trustees considered that effective January 1, 2009, the Trustees, PSERV and Putnam Fiduciary Trust Company (“PFTC”) entered into a new fee schedule that includes for the open-end funds (other than funds of Putnam Variable Trust and Putnam Money Market Liquidity Fund) an expense limitation but, as noted above, also considered that this expense limitation is subject to review as part of the Trustees’ pending review of Putnam’s strategic pricing proposal.

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In the case of your fund, the Trustees’ annual review of the fund’s management contract also included the review of the fund’s distributor’s contract and distribution plans with Putnam Retail Management Limited Partnership, which contract and plans also provide benefits to an affiliate of Putnam Management.

Comparison of retail and institutional
fee schedules

The information examined by the Trustees as part of their annual contract review has included for many years information regarding fees charged by Putnam Management and its affiliates to institutional clients such as defined benefit pension plans, college endowments, etc. This information included comparisons of such fees with fees charged to the funds, as well as a detailed assessment of the differences in the services provided to these two types of clients. The Trustees observed, in this regard, that the differences in fee rates between institutional clients and mutual funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients reflect to a substantial degree historical competitive forces operating in separate market places. The Trustees considered the fact that fee rates across different asset classes are typically higher on average fo r mutual funds than for institutional clients, as well as the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to institutional clients of the firm, but did not rely on such comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Subsequent approval of strategic
pricing proposal

As mentioned above, at a series of meetings beginning in May 2009 and ending on July 10, 2009, the Contract Committee and the Trustees engaged in a detailed review of Putnam Management’s strategic pricing proposal. Following this review, the Trustees of each fund, including all of the Independent Trustees, voted unanimously on July 10, 2009 to approve proposed management contracts reflecting the proposal, as modified based on discussions between the Independent Trustees and Putnam Management, for each fund. In considering the proposed contracts, the Independent Trustees focused largely on the specific proposed changes described below relating to management fees. They also took into account the factors that they considered in connection with their most recent annual approval on June 12, 2009 of the continuance of the funds’ current management contracts and the extensive materials that they had reviewed in co nnection with that approval process, as described above.

On December 18, 2009, shareholders approved the proposed management contract for your fund. The new management contract was implemented on January 1, 2010.

• Considerations relating to Fund Family fee rate calculations. The Independent Trustees considered that the proposed management contracts would change the manner in which fund shareholders share in potential economies of scale associated with the management of the funds. Under the current management contracts, shareholders of a fund (other than Putnam Money Market Liquidity Fund and the Putnam RetirementReady Funds) benefit from increased fund size through reductions in the effective management fee paid to Putnam Management once the fund’s net assets exceed the first breakpoint in the fund’s fee schedule ($500 million for most funds). Conversely, in the case of funds with net assets above the level of the first breakpoint, the effective management fee increases as the fund’s average net assets decline below a breakpoint. These breakpoints are measured solely by the

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net assets of each individual fund and are not affected by possible growth (or decline) of net assets of other funds in the Fund Family. (“Fund Family” for purposes of this discussion refers to all open-end mutual funds sponsored by Putnam Management, except for the Putnam RetirementReady® Funds and Putnam Money Market Liquidity Fund.) Under the proposed management contracts, potential economies of scale would be shared ratably among shareholders of all funds, regardless of their size. The management fees paid by a fund (and indirectly by shareholders) would no longer be affected by the growth (or decline) of assets of the particular fund, but rather would be affected solely by the growth (or decline) of the aggregate net assets of all funds in the Fund Family, regardless of whether the net assets of the particular fund are growing or declining.

The table below shows the proposed effective management fee rate for your fund, based on June 30, 2009 net assets of the Fund Family ($52.3 billion). This table also shows the effective management fee rate payable by your fund under its current management contract, based on the net assets of the fund as of June 30, 2009. Finally, this table shows the difference in the effective management fees, based on net assets as of June 30, 2009, between the proposed management contract and the current contract.

	Proposed Effective	Current Effective
Name of Fund	Contractual Rate	Contractual Rate	Difference
Putnam International
Equity Fund	0.712%	0.698%	0.014%

As shown in the foregoing table, based on June 30, 2009 net asset levels, the proposed management contract would provide for payment of a management fee rate that is slightly higher for your fund than the management fee rate payable under the current management contract. For a small number of funds, including your fund, the management fee rate would be slightly higher under the proposed contract at June 30, 2009 net asset levels, but by only immaterial amounts. Most funds, however, would experience a management fee reduction under the proposed management contracts. In the aggregate, the financial impact on Putnam Management of implementing this proposed change for all funds at June 30, 2009 net asset levels is a reduction in annual management fee revenue of approximately $24.0 million. (Putnam Management has already incurred a significant portion of this revenue reduction through the waiver of a portion of its current management fees for certain funds pending shareholder consideration of the proposed management contracts. Putnam is not obliged to continue such waivers beyond July 31, 2010 in the event that the proposed contracts are not approved by shareholders.) The Independent Trustees carefully considered the implications of this proposed change under a variety of economic circumstances. They considered the fact that at current asset levels the management fees paid by the funds under the proposed contract would be lower for almost all funds, and would not be materially higher for any fund. They considered the possibility that under some circumstances, the current management contract could result in a lower fee for a particular fund than the proposed management contract. Such circumstances might occur, for example, if the aggregate net assets of the Fund Family remain largely unchanged and the net assets of an individual fund grew substantially, or if the net assets of an individual fund remain largely unchanged and t he aggregate net assets of the Fund Family declined substantially.

The Independent Trustees noted that future changes in the net assets of individual funds are inherently unpredictable and that experience has

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shown that funds often grow in size and decline in size over time depending on market conditions and the changing popularity of particular investment styles and asset classes. They noted that, while the aggregate net assets of the Fund Family have changed substantially over time, basing a management fee on the aggregate level of assets of the Fund Family would likely reduce fluctuations in costs paid by individual funds and lead to greater stability and predictability of fund operating costs over time.

The Independent Trustees considered that the proposed management contract would likely be advantageous for newly organized funds that have yet to attract significant assets and for funds in specialty asset classes that are unlikely to grow to a significant size. In each case, such funds would participate in the benefits of scale made possible by the aggregate size of the Fund Family to an extent that would not be possible based solely on their individual size.

The Independent Trustees also considered that for funds that have achieved or are likely to achieve considerable scale on their own, the proposed management contract could result in sharing of economies which might lead to slightly higher costs under some circumstances, but they noted that any such increases are immaterial at current asset levels and that over time such funds are likely to realize offsetting benefits from their opportunity to participate, both through the exchange privilege and through the Fund Family breakpoint fee structure, in the improved growth prospects of a diversified Fund Family able to offer competitively priced products.

The Independent Trustees noted that the implementation of the proposed management contracts would result in a reduction in aggregate fee revenues for Putnam Management at current asset levels. They also noted that applying various projections of growth equally to the aggregate net assets of the Fund Family and to the net assets of individual funds also showed revenue reductions for Putnam Management. They recognized, however, the possibility that under some scenarios Putnam Management might realize greater future revenues, with respect to certain funds, under the proposed contracts than under the current contracts, but considered such circumstances to be both less likely and inherently unpredictable.

The Independent Trustees considered the extent to which Putnam Management may realize economies of scale in connection with the management of the funds. In this regard, they considered the possibility that such economies of scale as may exist in the management of mutual funds may be associated more closely with the size of the aggregate assets of the mutual fund complex than with the size of any individual fund. In this regard the Independent Trustees considered the financial information provided to them by Putnam Management over a period of many years regarding the allocation of costs involved in calculating the profitability of its mutual fund business as a whole and the profitability of individual funds. The Independent Trustees noted that the methodologies for such cost allocations had been reviewed on a number of occasions in the past by independent financial consultants engaged by the Independent Trustees. The Independent Trustees noted that thes e methodologies support Putnam Management’s assertion that many of its operating costs and any associated economies of scale are related more to the aggregate net assets under management in various sectors of its business than to the size of individual funds. They noted that on a number of occasions in the past the Independent Trustees had separately considered the possibility of calculating management fees in whole or in part based on aggregate net assets of the Putnam funds.

The Independent Trustees considered the fact that the proposed contracts would result in a sharing among the affected funds of economies

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of scale that for the most part are now enjoyed by the larger funds, without materially increasing the current costs of any of the larger funds. They concluded that this sharing of economies among funds was appropriate in light of the diverse investment opportunities available to shareholders of all funds through the existence of the exchange privilege. They also considered that the proposed change in management fee structure would allow Putnam Management to introduce new investment products at more attractive pricing levels than may be currently be the case.

After considering all of the foregoing, the Independent Trustees concluded that the proposed calculation of management fees based on the aggregate net assets of the Fund Family represented a fair and reasonable means of sharing possible economies of scale among the shareholders of all funds.

• Considerations relating to addition of fee rate adjustments based on investment performance for certain funds. The Independent Trustees considered that Putnam’s proposal to add fee rate adjustments based on investment performance to the management contracts of certain funds reflected a desire by Putnam Management to align its fee revenues more closely with investment performance in the case of certain funds. They noted that Putnam Management already has a significant financial interest in achieving good performance results for the funds it manages. Putnam Management’s fees are based on the assets under its management (whether calculated on an individual fund or complex-wide basis). Good performance results in higher asset levels and therefore higher revenues to Putnam Management. Moreover, good performance also tends to at tract additional investors to particular funds or the complex generally, also resulting in higher revenues. Nevertheless, the Independent Trustees concluded that adjusting management fees based on performance for certain selected funds could provide additional benefits to shareholders.

The Independent Trustees noted that Putnam Management proposed the addition of performance adjustments only for certain of the funds and considered whether similar adjustments might be appropriate for other funds. In this regard, they considered Putnam Management’s belief that the addition of performance adjustments would be most appropriate for shareholders of U.S. growth funds, international equity funds, including your fund, and Putnam Global Equity Fund. They also considered Putnam Management’s view that it would continue to monitor whether performance fees would be appropriate for other funds. Accordingly, the Independent Trustees concluded that it would be desirable to gain further experience with the operation of performance adjustments for certain funds and the market’s receptivity to such fee structures before giving further consideration to whether similar performance adjustments would be appropriate for other funds as well.

• Considerations relating to standardization of payment terms. The proposed management contracts for all funds provide that management fees will be computed and paid monthly within 15 days after the end of each month. The current contracts of the funds contain quarterly computation and payment terms in some cases. These differences largely reflect practices in place at earlier times when many of the funds were first organized. Under the proposed contract, certain funds would make payments to Putnam Management earlier than they do under their current contract. This would reduce a fund’s opportunity to earn income on accrued but unpaid management fees by a small amount, but would not have a material effect on a fund’s operating costs.

The Independent Trustees considered the fact that standardizing the payment terms for all funds would involve an acceleration in

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the timing of payments to Putnam Management for some funds and a corresponding loss of a potential opportunity for such funds to earn income on accrued but unpaid management fees. The Independent Trustees did not view this change as having a material impact on shareholders of any fund. In this regard, the Independent Trustees noted that the proposed contracts conform to the payment terms included in management contracts for all Putnam funds organized in recent years and that standardizing payment terms across all funds would reduce administrative burdens for both the funds and Putnam Management.

• Considerations relating to comparisons with management fees and total expenses of competitive funds. As part of their evaluation of the proposed management contracts, the Independent Trustees also reviewed the general approach taken by Putnam Management and the Independent Trustees in recent years in imposing appropriate limits on total fund expenses. As part of the annual contract review process in recent years, Putnam Management agreed to waive fees as needed to limit total fund expenses to a maximum level equal to the average total expenses of comparable competitive funds in the mutual fund industry. In connection with its proposal to implement new management contracts, Putnam Management also proposed, and the Independent Trustees approved, certain changes in this approach that shift the focus from controlling total expenses to imposing separate limits on certain c ategories of expenses, as required. As a general matter, Putnam Management and the Independent Trustees concluded that management fees for the Putnam funds are competitive with the fees charged by comparable funds in the industry. Nevertheless, the Independent Trustees considered specific management fee waivers proposed to be implemented as of August 1, 2009 by Putnam Management with respect to the current management fees of certain funds, as well as projected reductions in management fees for almost all funds that would result under the proposed contracts. Putnam Management and the Independent Trustees also agreed to impose separate expense limitations of 37.5 basis points on the general category of shareholder servicing expenses and 20 basis points on the general category of other ordinary operating expenses. These new expense limitations, as well as the fee waivers, were implemented for all funds effective as of August 1, 2009, replac ing the expense limitation referred to above.

These changes resulted in lower total expenses for many funds, but in the case of some funds total expenses increased after application of the new waivers and expense limitations (as compared with the results obtained using the expense limitation method previously in place). In this regard, the Independent Trustees considered the likelihood that total expenses for most of these funds would have increased in any event in the normal course under the previous expense limitation arrangement, as the reported total expense levels of many competitive funds increased in response to the major decline in asset values that began in September 2008. These new waivers and expense limitations will continue in effect until at least July 31, 2010 and will be re-evaluated by the Independent Trustees as part of the annual contract review process prior to their scheduled expiration. However, the management fee waivers referred to above would largely become permanent reduc tions in fees as a result of the implementation of the proposed management contracts.

Under these new expense limitation arrangements effective August 1, 2009, your fund is subject to expense limitations of 37.5 basis points on the category of shareholder servicing fees and 20 basis points on the general category of other ordinary operating expenses.

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Other information for shareholders

Important notice regarding delivery
of shareholder documents

In accordance with SEC regulations, Putnam sends a single copy of annual and semiannual shareholder reports, prospectuses, and proxy statements to Putnam shareholders who share the same address, unless a shareholder requests otherwise. If you prefer to receive your own copy of these documents, please call Putnam at 1-800-225-1581, and Putnam will begin sending individual copies within 30 days.

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2009, are available in the Individual Investors section of putnam.com, and on the SEC’s Web site, www.sec.gov. If you have questions about finding forms on the SEC’s Web site, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain the fund’s Forms N-Q on the SEC’s Web site at www.sec.gov. In addition, the fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s Web site or the operation of the Public Reference Room.

Trustee and employee
fund ownership

Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam mutual funds. As of December 31, 2009, Putnam employees had approximately $303,000,000 and the Trustees had approximately $44,000,000 invested in Putnam mutual funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.

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Financial statements

A guide to financial statements

These sections of the report, as well as the accompanying Notes, constitute the fund’s financial statements.

The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and noninvestment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal period.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year.

Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.

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The fund’s portfolio 12/31/09 (Unaudited)

COMMON STOCKS (100.5%)*	Shares	Value
Australia (1.6%)
AGL Energy, Ltd.	734,020	$9,238,894
BlueScope Steel, Ltd.	7,148,264	19,737,122
		28,976,016
Belgium (1.0%)
KBC Groep SA †	137,462	5,948,151
UCB SA	314,761	13,170,376
		19,118,527
Brazil (1.1%)
Cia Brasileira de Meios de Pagamento	1,124,462	9,899,137
Companhia Brasileira de Meios de Pagamento 144A	197,300	1,736,919
Vale SA ADR	334,500	9,710,535
		21,346,591
Canada (3.1%)
Agrium, Inc.	193,160	12,072,731
National Bank of Canada	425,000	24,459,731
Nexen, Inc.	897,451	21,623,879
		58,156,341
China (4.4%)
China National Materials Co., Ltd.	13,782,000	10,173,225
Dongfeng Motor Group Co., Ltd.	7,632,000	10,863,569
Guangdong Investment, Ltd.	17,782,000	10,330,229
Industrial & Commercial Bank of China	23,924,000	19,634,135
Longtop Financial Technologies Ltd. ADR † S	172,800	6,397,056
Renhe Commercial Holdings Co., Ltd.	63,318,000	14,279,474
Sohu.com, Inc. † S	151,900	8,700,832
		80,378,520
Finland (0.6%)
Nokia Corp.	795,257	10,201,192
		10,201,192
France (11.4%)
Alstom SA	230,806	16,023,185
AXA SA	1,087,711	25,703,991
BNP Paribas SA	484,538	38,205,974
Christian Dior SA	188,952	19,405,158
Renault SA †	201,417	10,248,121
Saft Groupe SA	260,596	12,543,181
Total SA	653,276	41,829,361
UBISOFT Entertainment †	1,370,930	19,353,795
Vivendi SA	914,581	26,978,315
		210,291,081
Germany (6.4%)
Deutsche Post AG	1,412,374	27,154,000
HeidelbergCement AG	30,190	2,074,975
HeidelbergCement AG 144A	71,115	4,887,771
Henkel AG & Co. KGaA	513,095	26,691,653
MTU Aero Engines Holding AG	317,292	17,396,615
Porsche Automobil Holding SE (Preference)	465,306	29,202,284
Puma AG Rudolf Dassier Sport	33,900	11,218,289
		118,625,587

28

COMMON STOCKS (100.5%)* cont.	Shares	Value
Greece (0.6%)
National Bank of Greece SA †	398,571	$10,155,036
		10,155,036
Hong Kong (2.7%)
Esprit Holdings, Ltd.	2,023,683	13,319,387
Noble Group, Ltd.	10,663,000	24,444,829
Wharf (Holdings), Ltd.	2,064,000	11,802,604
		49,566,820
Ireland (1.2%)
Genesis Lease, Ltd. ADR S	249,792	2,230,643
Irish Life & Permanent PLC †	1,325,578	6,253,407
Kerry Group PLC Class A	473,899	13,957,464
		22,441,514
Italy (2.0%)
Mediaset SpA	1,639,263	13,383,410
Prysmian SpA	1,146,553	20,053,965
Prysmian SpA 144A	164,000	2,868,468
		36,305,843
Japan (18.7%)
Aisin Seiki Co., Ltd.	1,147,400	32,827,934
Astellas Pharma, Inc.	782,300	29,169,390
Fujitsu, Ltd.	2,770,000	17,832,030
Japan Tobacco, Inc.	11,201	37,832,547
JFE Holdings, Inc.	167,900	6,618,644
Jupiter Telecommunications Co., Ltd.	24,251	24,050,461
KDDI Corp.	4,898	25,855,400
Mitsui & Co., Ltd.	1,190,600	16,872,667
Mitsui Fudosan Co., Ltd.	715,000	12,019,118
Nippon Telegraph & Telephone (NTT) Corp.	523,400	20,608,979
Nomura Holdings, Inc. 144A	470,504	3,470,953
Nomura Securities Co., Ltd.	1,797,500	13,260,328
Ono Pharmaceutical Co., Ltd.	211,900	9,063,277
ORIX Corp.	400,430	27,259,268
ORIX Corp. 144A	34,940	2,378,540
Sankyo Co., Ltd.	291,500	14,535,644
Suzuken Co., Ltd.	483,500	15,849,206
Tokyo Gas Co., Ltd.	4,773,000	19,046,728
Toyo Suisan Kaisha, Ltd.	657,000	15,075,323
		343,626,437
Netherlands (0.9%)
AerCap Holdings NV †	430,650	3,901,689
ASML Holding NV	388,666	13,209,084
		17,110,773
Norway (2.4%)
DnB NOR ASA † S	1,938,596	21,040,614
StatoilHydro ASA	668,232	16,665,062
Yara International ASA	123,132	5,574,318
		43,279,994
Singapore (1.5%)
DBS Group Holdings, Ltd.	1,208,000	13,142,406
Singapore Airlines, Ltd.	1,332,800	14,080,813
		27,223,219

29

COMMON STOCKS (100.5%)* cont.	Shares	Value
South Korea (1.9%)
KT Corp.	454,580	$15,275,427
LG Display Co., Ltd. ADR S	508,500	8,608,905
Shinhan Financial Group Co., Ltd. †	316,200	11,749,998
		35,634,330
Spain (5.4%)
Banco Bilbao Vizcaya Argentaria SA	1,239,621	22,436,903
Banco Santander Central Hispano SA	2,892,432	47,484,228
Endesa SA	532,602	18,191,608
Obrascon Huarte Lain SA S	422,973	11,351,086
		99,463,825
Switzerland (10.1%)
Credit Suisse Group	443,952	21,851,411
Nestle SA	1,227,250	59,585,797
Roche Holding AG	392,404	66,712,349
Zurich Financial Services AG	172,025	37,379,331
		185,528,888
Taiwan (1.6%)
Hon Hai Precision Industry Co., Ltd.	4,241,000	19,972,395
United Microelectronics Corp. †	17,002,000	9,097,035
		29,069,430
United Arab Emirates (0.8%)
Aldar Properties PJSC †	6,495,029	8,669,718
DP World, Ltd.	13,221,376	5,685,192
		14,354,910
United Kingdom (21.1%)
BAE Systems PLC	6,182,962	35,664,430
Barclays PLC	2,266,596	9,997,431
Barclays PLC 144A	620,147	2,735,325
BG Group PLC	1,332,919	23,891,779
BHP Billiton PLC	93,775	2,998,209
BP PLC	7,117,415	68,897,712
BT Group PLC	13,964,612	30,264,558
Cairn Energy PLC †	3,939,559	21,014,087
Compass Group PLC	2,610,732	18,663,787
Eurasian Natural Resources Corp.	249,152	3,678,227
Gartmore Group, Ltd. 144A	3,017,000	10,462,417
GlaxoSmithKline PLC	1,894,347	40,165,511
Next PLC	351,148	11,718,087
Reckitt Benckiser Group PLC	479,412	25,997,616
TUI Travel PLC	1,882,063	7,753,417
Vedanta Resources PLC	485,973	20,104,350
WPP PLC	2,114,357	20,665,580
Xstrata PLC †	1,959,145	34,539,837
		389,212,360
Total common stocks (cost $1,597,226,116)		$1,850,067,234

30

SHORT-TERM INVESTMENTS (1.7%)*	Principal amount/shares	Value
Putnam Money Market Liquidity Fund e	295,681	$295,681
Short-term investments held as collateral for loaned
securities with yields ranging from zero % to 0.27%
and due dates ranging from January 4, 2010
to February 19, 2010 d	$22,494,539	22,493,070
U.S. Treasury Bills with effective yields ranging
from of 0.33% to 0.39%, November 18, 2010 ##	8,873,000	8,841,598
U.S. Treasury Cash Management Bills with an
effective yield of 0.25%, July 15, 2010 ##	12,000	11,978
Total short-term investments (cost $31,646,327)		$31,642,327
TOTAL INVESTMENTS
Total investments (cost $1,628,872,443)		$1,881,709,561

Key to holding’s abbreviations

ADR American Depository Receipts

* Percentages indicated are based on net assets of $1,841,230,279.

† Non-income-producing security.

## These securities, in part or in entirety, were pledged and segregated with the custodian for collateral on certain derivative contracts at December 31, 2009.

d See Note 1 to the financial statements regarding securities lending.

e See Note 6 to the financial statements regarding investments in Putnam Money Market Liquidity Fund.

S Securities on loan, in part or in entirety, at December 31, 2009.

At December 31, 2009, liquid assets totaling $10,294,724 have been segregated to cover certain derivativescontracts.

144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

ADR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank.

The fund had the following industry concentrations greater than 10% at December 31, 2009 (as a percentage of net assets):

Banking	11.7%
Oil and gas	10.5

FORWARD CURRENCY CONTRACTS TO BUY at 12/31/09
(aggregate face value $332,204,455) (Unaudited)

		Aggregate	Delivery	Unrealized
	Value	face value	date	depreciation
Australian Dollar	$128,137,880	$131,601,059	1/20/10	$(3,463,179)
British Pound	9,686,398	9,962,229	1/20/10	(275,831)
Danish Krone	14,093,063	14,831,558	1/20/10	(738,495)
Euro	75,336,813	79,216,116	1/20/10	(3,879,303)
Japanese Yen	41,991,322	44,738,312	1/20/10	(2,746,990)
Norwegian Krone	351,375	363,382	1/20/10	(12,007)
Swedish Krona	49,485,687	51,491,799	1/20/10	(2,006,112)
Total				$(13,121,917)

31

FORWARD CURRENCY CONTRACTS TO SELL at 12/31/09
(aggregate face value $229,165,900) (Unaudited)

				Unrealized
		Aggregate	Delivery	appreciation/
	Value	face value	date	(depreciation)
Australian Dollar	$2,003,659	$2,058,530	1/20/10	$54,871
British Pound	20,414,342	20,690,142	1/20/10	275,800
Canadian Dollar	53,908,233	53,748,831	1/20/10	(159,402)
Hong Kong Dollar	57,551,934	57,580,799	1/20/10	28,865
Norwegian Krone	32,363,240	33,477,759	1/20/10	1,114,519
Singapore Dollar	9,660,774	9,815,284	1/20/10	154,510
Swedish Krona	1,219,877	1,269,467	1/20/10	49,590
Swiss Franc	48,892,163	50,525,088	1/20/10	1,632,925
Total				$3,151,678

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 — Valuations based on quoted prices for identical securities in active markets.

Level 2 — Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 — Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of December 31, 2009:

		Valuation inputs
Investments in securities:	Level 1	Level 2	Level 3
Common stocks:
Australia	$—	$28,976,016	$—
Belgium	—	19,118,527	—
Brazil	21,346,591	—	—
Canada	58,156,341	—	—
China	15,097,888	65,280,632	—
Finland	—	10,201,192	—
France	—	210,291,081	—
Germany	—	118,625,587	—
Greece	—	10,155,036	—
Hong Kong	—	49,566,820	—
Ireland	2,230,643	20,210,871	—
Italy	—	36,305,843	—
Japan	—	343,626,437	—
Netherlands	3,901,689	13,209,084	—
Norway	—	43,279,994	—
Singapore	—	27,223,219	—
South Korea	8,608,905	27,025,425	—
Spain	—	99,463,825	—
Switzerland	—	185,528,888	—
Taiwan	—	29,069,430	—
United Arab Emirates	5,685,192	8,669,718	—
United Kingdom	—	389,212,360	—
Total common stocks	115,027,249	1,735,039,985	—
Short-term investments	295,681	31,346,646	—
Totals by level	$115,322,930	$1,766,386,631	$—

32

	Level 1	Level 2	Level 3
Other financial instruments:	$—	$(9,970,239)	$797,407

Other financial instruments include forward currency contracts and receivable purchase agreements.

						Net
				Change in net		transfers
	Balance as	Accrued	Realized	unrealized	Net	in and/	Balance as of
	of June 30,	discounts/	gain/	appreciation/	purchases/	or out of	December 31,
	2009††	premiums	(loss)	(depreciation)†	sales	Level 3	2009††
Other financial
instruments	$894,021	$—	$—	$(96,614)	$—	$—	$797,407

† Includes ($96,614) related to Level 3 securities still held at period end. Total change in unrealized appreciation/(depreciation) for securities (including Level 1 and Level 2) can be found in the Statement of operations.

†† Includes amount receivable under receivable purchase agreement.

The accompanying notes are an integral part of these financial statements.

33

Statement of assets and liabilities 12/31/09 (Unaudited)

ASSETS
Investment in securities, at value, including $21,083,703 of securities on loan (Note 1):
Unaffiliated issuers (identified cost $1,628,576,762)	$1,881,413,880
Affiliated issuers (identified cost $295,681) (Note 6)	295,681
Cash	8
Foreign currency (cost $2,628,877) (Note 1)	2,669,931
Dividends, interest and other receivables	3,151,773
Foreign Tax reclaim	2,296,476
Receivable for shares of the fund sold	840,204
Receivable for investments sold	17,085,719
Unrealized appreciation on forward currency contracts (Note 1)	3,311,080
Receivable for receivable purchase agreement (Note 2)	797,407
Total assets	1,911,862,159
LIABILITIES
Payable for investments purchased	19,946,092
Payable for shares of the fund repurchased	8,490,144
Payable for compensation of Manager (Note 2)	3,310,043
Payable for investor servicing fees (Note 2)	542,891
Payable for custodian fees (Note 2)	102,984
Payable for Trustee compensation and expenses (Note 2)	539,327
Payable for administrative services (Note 2)	11,895
Payable for distribution fees (Note 2)	1,150,099
Unrealized depreciation on forward currency contracts (Note 1)	13,281,319
Collateral on securities loaned, at value (Note 1)	22,493,070
Other accrued expenses	764,016
Total liabilities	70,631,880
Net assets	$1,841,230,279
REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$3,230,172,862
Distributions in excess of net investment income (Note 1)	(38,188,645)
Accumulated net realized loss on investments and foreign currency transactions (Note 1)	(1,594,557,897)
Net unrealized appreciation of investments and assets and liabilities in foreign currencies	243,803,959
Total — Representing net assets applicable to capital shares outstanding	$1,841,230,279
(Continued on next page)

34

Statement of assets and liabilities (Continued)

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share
($1,431,265,521 divided by 77,052,256 shares)	$18.58
Offering price per class A share (100/94.25 of $18.58)*	$19.71
Net asset value and offering price per class B share ($121,373,208 divided by 6,873,862 shares)**	$17.66
Net asset value and offering price per class C share ($102,036,470 divided by 5,662,194 shares)**	$18.02
Net asset value and redemption price per class M share ($33,443,267 divided by 1,844,431 shares)	$18.13
Offering price per class M share (100/96.50 of $18.13)*	$18.79
Net asset value, offering price and redemption price per class R share
($4,236,305 divided by 231,163 shares)	$18.33
Net asset value, offering price and redemption price per class Y share
($148,875,508 divided by 7,926,487 shares)	$18.78

* On single retail sales of less than $50,000. On sales of $50,000 or more 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.

35

Statement of operations Six months ended 12/31/09 (Unaudited)

INVESTMENT INCOME
Dividends (net of foreign tax of $1,086,781)	$16,239,386
Interest (including interest income of $10,210 from investments in affiliated issuers) (Note 6)	34,502
Securities lending	177,696
Total investment income	16,451,584
EXPENSES
Compensation of Manager (Note 2)	6,570,805
Investor servicing fees (Note 2)	3,544,893
Custodian fees (Note 2)	102,319
Trustee compensation and expenses (Note 2)	68,329
Administrative services (Note 2)	36,671
Distribution fees — Class A (Note 2)	1,842,877
Distribution fees — Class B (Note 2)	670,819
Distribution fees — Class C (Note 2)	517,184
Distribution fees — Class M (Note 2)	124,469
Distribution fees — Class R (Note 2)	11,807
Other	877,088
Total expenses	14,367,261
Expense reduction (Note 2)	(436,200)
Net expenses	13,931,061
Net investment income	2,520,523
Net realized gain on investments (Notes 1 and 3)	110,625,574
Net realized gain on foreign currency transactions (Note 1)	20,267,151
Net realized gain on written options (Notes 1 and 3)	201,685
Net unrealized depreciation of assets and liabilities in foreign currencies during the period	(9,416,479)
Net unrealized appreciation of investments, written options and
receivable purchase agreement during the period	225,460,169
Net gain on investments	347,138,100
Net increase in net assets resulting from operations	$349,658,623

The accompanying notes are an integral part of these financial statements.

36

Statement of changes in net assets

INCREASE (DECREASE) IN NET ASSETS	Six months ended 12/31/09*	Year ended 6/30/09
Operations:
Net investment income	$2,520,523	$58,481,448
Net realized gain (loss) on investments and
foreign currency transactions	131,094,410	(1,644,591,674)
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies	216,043,690	(348,793,332)
Net increase (decrease) in net assets resulting from operations	349,658,623	(1,934,903,558)
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class A	(32,742,371)	—
Class B	(1,835,302)	—
Class C	(1,710,993)	—
Class M	(635,150)	—
Class R	(86,780)	—
Class Y	(3,672,638)	—
Increase in capital from settlement payments	—	8,117,190
Redemption fees (Note 1)	26,217	162,892
Decrease from capital share transactions (Note 4)	(221,850,988)	(1,639,396,727)
Total increase (decrease) in net assets	87,150,618	(3,566,020,203)
Net Assets:
Beginning of period	1,754,079,661	5,320,099,864
End of period (including distributions in excess of net investment
income of $38,188,645 and accumulated net investment loss of
$25,934, respectively)	$1,841,230,279	$1,754,079,661
* Unaudited

The accompanying notes are an integral part of these financial statements.

37

Financial highlights (For a common share outstanding throughout the period)

INVESTMENT OPERATIONS:					LESS DISTRIBUTIONS:							RATIOS AND SUPPLEMENTAL DATA:
			Net realized											Ratio of net
	Net asset	Net	and			From net							Ratio	investment
	value,	investment	unrealized	Total from	From net	realized				Net asset	Total return	Net assets,	of expenses	income (loss)
	beginning	income	gain (loss) on	investment	investment	gain on	Total	Redemption	Non-recurring	value, end of	at net asset	end of period	to average	to average	Portfolio
Period ended	ofperiod	(loss) a	investments	operations	income	investments	distributions	fees b	reimbursements	period	value (%) c	(in thousands)	net assets (%) d	net assets (%)	turnover (%)
Class A
December 31, 2009 **	$15.75	.03	3.23	3.26	(.43)	—	(.43)	—	—	$18.58	20.74 *	$1,431,266	.72 *	.18*	58.82 *
June 30, 2009	24.68	.38	(9.38)	(9.00)	—	—	—	—	.07 f,g	15.75	(36.18)	1,364,234	1.35 e	2.27 e	82.09
June 30, 2008	34.90	.48	(4.40)	(3.92)	(1.06)	(5.24)	(6.30)	—	—	24.68	(12.73)	3,246,278	1.19 e	1.63 e	73.98
June 30, 2007	28.82	.35	7.89	8.24	(.70)	(1.46)	(2.16)	—	—	34.90	29.51	4,223,621	1.25 e	1.11 e	94.85
June 30, 2006	23.39	.45 h,i	5.51	5.96	(.53)	—	(.53)	—	—	28.82	25.70	3,601,661	1.19 e,i	1.69 e,h,i	83.10
June 30, 2005	20.86	.25 j	2.61	2.86	(.33)	—	(.33)	—	—	23.39	13.71	3,137,593	1.24 e	1.11 e,j	74.79
Class B
December 31, 2009 **	$14.91	(.03)	3.05	3.02	(.27)	—	(.27)	—	—	$17.66	20.28 *	$121,373	1.10 *	(.20) *	58.82 *
June 30, 2009	23.55	.24	(8.95)	(8.71)	—	—	—	—	.07 f,g	14.91	(36.69)	134,905	2.10 e	1.45 e	82.09
June 30, 2008	33.50	.18	(4.15)	(3.97)	(.74)	(5.24)	(5.98)	—	—	23.55	(13.38)	478,126	1.94 e	.62 e	73.98
June 30, 2007	27.71	.09	7.60	7.69	(.44)	(1.46)	(1.90)	—	—	33.50	28.56	1,013,822	2.00 e	.29 e	94.85
June 30, 2006	22.49	.21 h,i	5.33	5.54	(.32)	—	(.32)	—	—	27.71	24.77	1,162,723	1.94 e,i	.81 e,h,i	83.10
June 30, 2005	20.07	.07 j	2.51	2.58	(.16)	—	(.16)	—	—	22.49	12.86	1,344,142	1.99 e	.35 e,j	74.79
Class C
December 31, 2009  **	$15.24	(.04)	3.13	3.09	(.31)	—	(.31)	—	—	$18.02	20.27 *	$102,036	1.10 *	(.20) *	58.82 *
June 30, 2009	24.07	.25	(9.15)	(8.90)	—	—	—	—	.07 f,g	15.24	(36.68)	93,839	2.10 e	1.56 e	82.09
June 30, 2008	34.16	.24	(4.30)	(4.06)	(.79)	(5.24)	(6.03)	—	—	24.07	(13.39)	211,371	1.94 e	.82 e	73.98
June 30, 2007	28.25	.11	7.73	7.84	(.47)	(1.46)	(1.93)	—	—	34.16	28.55	300,684	2.00 e	.37 e	94.85
June 30, 2006	22.93	.23 h,i	5.42	5.65	(.33)	—	(.33)	—	—	28.25	24.77	264,090	1.94 e,i	.87 e,h,i	83.10
June 30, 2005	20.44	.08j	2.55	2.63	(.14)	—	(.14)	—	—	22.93	12.87	259,993	1.99 e	.34 e,j	74.79
Class M
December 31, 2009 **	$15.35	(.01)	3.14	3.13	(.35)	—	(.35)	—	—	$18.13	20.42 *	$33,443	.97 *	(.08) *	58.82 *
June 30, 2009	24.18	.29	(9.19)	(8.90)	—	—	—	—	.07 f,g	15.35	(36.52)	29,707	1.85 e	1.81 e	82.09
June 30, 2008	34.30	.31	(4.32)	(4.01)	(.87)	(5.24)	(6.11)	—	—	24.18	(13.20)	66,502	1.69 e	1.07 e	73.98
June 30, 2007	28.35	.19	7.76	7.95	(.54)	(1.46)	(2.00)	—	—	34.30	28.89	96,237	1.75 e	.61 e	94.85
June 30, 2006	23.00	.30 h,i	5.44	5.74	(.39)	—	(.39)	—	—	28.35	25.12	86,932	1.69 e,i	1.14 e,h,i	83.10
June 30, 2005	20.51	.13 j	2.56	2.69	(.20)	—	(.20)	—	—	23.00	13.13	90,499	1.74 e	.60 e,j	74.79
Class R
December 31, 2009 **	$15.52	.01	3.19	3.20	(.39)	—	(.39)	—	—	$18.33	20.63 *	$4,236	.85 *	.06 *	58.82 *
June 30, 2009	24.40	.35	(9.30)	(8.95)	—	—	—	—	.07 f,g	15.52	(36.39)	3,648	1.60 e	2.18 e	82.09
June 30, 2008	34.59	.42	(4.38)	(3.96)	(.99)	(5.24)	(6.23)	—	—	24.40	(12.96)	5,128	1.44 e	1.45 e	73.98
June 30, 2007	28.61	.33	7.77	8.10	(.66)	(1.46)	(2.12)	—	—	34.59	29.23	5,504	1.50 e	1.05 e	94.85
June 30, 2006	23.25	.53 h,i	5.33	5.86	(.50)	—	(.50)	—	—	28.61	25.42	3,354	1.44 e,i	1.95 e,h,i	83.10
June 30, 2005	20.77	.26 j	2.52	2.78	(.30)	—	(.30)	—	—	23.25	13.38	1,125	1.49 e	1.17 e,j	74.79
Class Y
December 31, 2009 **	$15.94	.06	3.26	3.32	(.48)	—	(.48)	—	—	$18.78	20.83 *	$148,876	.60 *	.30 *	58.82 *
June 30, 2009	24.92	.41	(9.46)	(9.05)	—	—	—	—	.07 f,g	15.94	(36.04)	127,746	1.10 e	2.25 e	82.09
June 30, 2008	35.18	.58	(4.46)	(3.88)	(1.14)	(5.24)	(6.38)	—	—	24.92	(12.49)	1,312,695	.94 e	1.94 e	73.98
June 30, 2007	29.03	.45	7.94	8.39	(.78)	(1.46)	(2.24)	—	—	35.18	29.85	1,613,443	1.00 e	1.40 e	94.85
June 30, 2006	23.55	.53 h,i	5.54	6.07	(.59)	—	(.59)	—	—	29.03	26.05	1,253,655	.94 e,i	1.95 e,h,i	83.10
June 30, 2005	21.01	.29j	2.64	2.93	(.39)	—	(.39)	—	—	23.55	13.98	1,111,652	.99 e	1.31 e,j	74.79

38  39

See notes to financial highlights at the end of this section.

The accompanying notes are an integral part of these financial statements.

Financial highlights (Continued)

* Not annualized.

** Unaudited.

a Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

b Amount represents less than $0.01 per share.

c Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

d Includes amounts paid through expense offset and brokerage/services arrangements (Note 2).

e Reflects an involuntary contractual expense limitation in effect during the period. For periods prior to June 30, 2009, certain fund expenses were waived in connection with the fund’s investment in Putnam Prime Money Market Fund. As a result of such limitation and/or waivers, the expenses of each class reflect a reduction of the following amounts:

	Percentage of
	average net assets
June 30, 2009	0.01%
June 30, 2008	<0.01
June 30, 2007	<0.01
June 30, 2006	<0.01
June 30, 2005	0.06

f Reflects a non-recurring reimbursement pursuant to a settlement between the SEC and Millennium Partners, L.P., Millennium Management, L.L.C., and Millennium International Management, L.L.C., which amounted to $0.04 per share outstanding as of June 23, 2009.

g Reflects a non-recurring reimbursement pursuant to a settlement between the SEC and Bear, Stearns & Co., Inc. and Bear, Stearns Securities Corp., which amounted to $0.03 per share outstanding as of May 21, 2009.

h Net investment income (loss) per share and ratio of net investment income (loss) to average net assets reflects a special dividend received by the fund which amounted to the following amounts:

		Percentage of
	Per share	average net assets
Class A	$0.14	0.54%
Class B	0.13	0.51
Class C	0.14	0.52
Class M	0.14	0.53
Class R	0.18	0.66
Class Y	0.15	0.56

i Reflects a non-recurring reimbursement from Putnam Investments relating to the calculation of certain amounts paid by the fund to Putnam in previous years for transfer agent services, which amounted to $0.02 per share and 0.07% of average net assets for the period ended June 30, 2006.

j Reflects a non-recurring accrual related to Putnam Management’s settlement with the SEC regarding brokerage allocation practices. As a result, the expenses of each class reflect a reduction of the following amounts:

		Percentage of
	Per share	average net assets
Class A	<$0.01	0.01%
Class B	<0.01	0.01
Class C	<0.01	0.01
Class M	<0.01	0.01
Class R	<0.01	0.01
Class Y	<0.01	0.01

The accompanying notes are an integral part of these financial statements.

40

Notes to financial statements 12/31/09 (Unaudited)

Note 1: Significant accounting policies

Putnam International Equity Fund (“the fund”), is Massachusetts business trust, which is registered under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The fund seeks capital appreciation by investing primarily in equity securities of companies located outside the United States.

The fund offers class A, class B, class C, class M, class R and class Y shares. Class A and class M shares are sold with a maximum front-end sales charge of 5.75% and 3.50%, respectively, and generally do not pay a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge and are subject to a contingent deferred sales charge, if those shares are redeemed within six years of purchase. Class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class R shares, which are offered to qualified employee-benefit plans, are sold at net asset value. The expenses for class A, class B, class C, class M and class R shares may differ based on the distribution fee of each class, which is identified in Note2. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee. Class Y shares are generally only available to corporate and institutional clients and clients in other approved programs.

A 1.00% redemption fee may apply on any shares that are redeemed (either by selling or exchanging into another fund) within 90 days of purchase. The redemption fee is accounted for as an addition to paid-in-capital.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). 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. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.

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. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued, February 11, 2010, have been evaluated in the preparation of the financial statements.

A) Security valuation Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets. If no sales are reported — as in the case of some securities traded over-the-counter — a security is valued at its last reported bid price. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors, including movements in the U.S. securities markets. The number of days on which fair value prices will be used will depend on market activity an d it is possible that fair value prices will be used by the fund to a significant extent. At December 31, 2009, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Investment Management, LLC (“Putnam Management”), the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC, does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that

41

the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

B) Joint trading account Pursuant to an exemptive order from the Securities and Exchange Commission (the “SEC”), the fund may transfer uninvested cash balances, including cash collateral received under security lending arrangements, into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Management. These balances may be invested in issues of short-term investments having maturities of up to 397 days for collateral received under security lending arrangements and up to 90 days for other cash investments.

C) Security transactions and related investment income Security transactions are recorded on the trade date (the 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. Dividend income, net of applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

All premiums/discounts are amortized/accreted on a yield-to-maturity basis.

D) Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losse s on closed forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations, not present with domestic investments.

E) Futures and options contracts The fund may use futures and options contracts to hedge against changes in the values of securities the fund owns, owned or expects to purchase, or for other investment purposes. The fund may also write options on swaps or securities it owns or in which it may invest to increase its current returns.

The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased option s are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” 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. Futures and written option contracts outstanding at period end, if any, are listed

42

after the fund’s portfolio. For the six months ended December 31, 2009 the fund did not have any activity on Purchased options contracts. See Note 3 for the volume of Written options contracts activity for the six months ended December 31, 2009. For the six months ended December 31, 2009 the fund did not have any activity on Futures contracts.

F) Forward currency contracts The fund may buy and sell forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to protect against a decline in value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of a currency in which securities a fund intends to buy are denominated, when a fund holds cash reserves and short term investments), or for other investment purposes. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is clos ed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities. Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio. Outstanding contracts on Forward currency contracts at the six months ended December 31, 2009 are indicative of the volume of activity during the period.

G) Master agreements The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (“Master Agreements”) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio. Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral ca n be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could imp act the fund’s future derivative activity.

At December 31, 2009, the fund had net liability position of $10,117,623 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $8,230,859.

H) Securities lending The fund may lend securities, through its agents, to qualified borrowers in order to earn additional income. The loans are collateralized by cash and/or securities in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agents; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending is included in investment income on the Statement of operations. At December 31, 2009, the value of securities loaned amounted to $21,083,703. The fund received cash collateral of $22,493,070 which is pooled with collateral of other Putnam funds into 47 issues of short-term investments.

I) Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the “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 Code. The fund is subject to the provisions of Accounting Standards Codification ASC740 Income Taxes (“ASC 740”). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capita l gains or unrealized appreciation on securities

43

held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service and state departments of revenue.

At June 30, 2009, the fund had a capital loss carryover of $614,819,563 available to the extent allowed by the Code to offset future net capital gain, if any. The amounts of the carryovers and the expiration dates are:

Loss Carryover	Expiration
$20,221,268	June 30, 2011
594,598,295	June 30, 2017

Pursuant to federal income tax regulations applicable to regulated investment companies, the fund has elected to defer to its fiscal year ending June 30, 2010 $1,057,942,066 of losses recognized during the period November 1, 2008 to June 30, 2009.

The aggregate identified cost on a tax basis is $1,681,763,121, resulting in gross unrealized appreciation and depreciation of $283,275,763 and $83,329,323, respectively, or net unrealized appreciation of $199,946,440.

J) Distributions to shareholders Distributions to 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. 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. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year. 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.

Note 2: Management fee, administrative
services and other transactions

The fund pays Putnam Management for management and investment advisory services quarterly based on the average net assets of the fund. Such fee is based on the following annual rates: Such fee is based on the following annual rates: 0.80% of the first $500 million of average net assets, 0.70% of the next $500 million, 0.65% of the next $500 million, 0.60% of the next $5 billion, 0.575% of the next $5 billion, 0.555% of the next $5 billion, 0.54% of the next $5 billion, and 0.53% thereafter.

Effective January 1, 2010, the fund will pay Putnam Management a management fee (“base fee”) (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of most open-end funds, as defined in the fund’s management contract, sponsored by Putnam Management. Such annual rates may vary as follows: 0.85% of the first $5 billion of average net assets, 0.80% of the next $5 billion, 0.75% of the next $10 billion, 0.70% of the next $10 billion, 0.65% of the next $50 billion, 0.63% of the next $50 billion, 0.62% of the next $100 billion, and 0.615% thereafter.

In addition, beginning with the fund’s thirteenth complete calendar month of operation under the new management contract, the monthly management fee will consist of the monthly base fee plus or minus a performance adjustment for the month. The performance adjustment will be determined based on performance over the thirty-six month period then ended or, if the new management contract has not yet been effective for thirty-six complete calendar months, the period from the date the new management contract became effective to the end of the month for which the fee adjustment is being computed. Each month, the performance adjustment will be calculated by multiplying the performance adjustment rate and the fund’s average net assets over the performance period and the result will be divided by twelve. The resulting dollar amount will be added to, or subtracted from, the base fee for that month. The performance adjustment rate is equal to 0.03 multipl ied by the difference between the fund’s annualized performance (measured by the fund’s class A shares) and the annualized performance of MSCI EAFE Index (Net Dividends), each measured over the performance period. The maximum annualized performance adjustment rates are +/– 0.15%. The monthly base fee is determined based on the fund’s average net assets for the month, while the performance adjustment will be determined based on the fund’s average net assets over the performance period of up to thirty-six months. This means it is possible that, if the fund underperforms significantly over the performance period, and the fund’s assets have declined significantly over that period, the negative performance adjustment may exceed the base fee. In this event, Putnam Management would make a payment to the fund.

Putnam Management had agreed to waive fees and reimburse expenses of the fund through July 31, 2009 to the extent necessary to ensure that the fund’s expenses do not exceed the simple average of the expenses of all front-end load funds viewed by Lipper Inc. as having the same investment classification or objective as the fund. The expense reimbursement is

44

based on a comparison of the fund’s expenses with the average annualized operating expenses of the funds in its Lipper peer group for each calendar quarter during the fund’s last fiscal year, excluding 12b-1 fees and without giving effect to any expense offset and brokerage/service arrangements that may reduce fund expenses. During the period ended December 31, 2009, the fund’s expenses were not reduced as a result of this limit.

Effective August 1, 2009 through July 31, 2010, Putnam Management has also contractually agreed to reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis (or from August 1, 2009 through the fund’s next fiscal year end, as applicable), to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period (or since August 1, 2009, as applicable). During the period ended December 31, 2009, the fund’s expenses were not reduced as a result of this limit.

Putnam Investments Limited (“PIL”), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. Putnam Management pays a quarterly sub-management fee to PIL for its services at an annual rate of 0.35% of the average net assets of the portion of the fund managed by PIL.

The Putnam Advisory Company, LLC (“PAC”), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund, as designated from time to time by Putnam Management or PIL. Putnam Management or PIL, as applicable, pays a quarterly sub-advisory fee to PAC for its services at the annual rate of 0.35% of the average net assets of the portion of the fund’s assets for which PAC is engaged as sub-adviser.

On September 15, 2008, the fund terminated its outstanding derivatives contracts with Lehman Brothers Special Financing, Inc. (“LBSF”) in connection with the bankruptcy filing of LBSF’s parent company, Lehman Brothers Holdings, Inc. On September 26, 2008, the fund entered into receivable purchase agreements (“Agreements”) with other registered investment companies (each a “Purchaser”) managed by Putnam Management. Under the Agreements, the fund sold to the Purchasers the fund’s right to receive, in the aggregate, $3,469,039 in net payments from LBSF in connection with certain terminated derivatives transactions (the “Receivable”), in each case in exchange for an initial payment plus (or minus) additional amounts based on the applicable Purchaser’s ultimate realized gain (or loss) on the Receivable. The Agreements, which are included in the Statement of assets and liabilities, are valued at fair value following procedures approved by the Trustees. All remaining payments under the agreement will be recorded as realized gain or loss.

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 State Street Bank and Trust Company (“State Street”). Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provided investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing, subject to certain limitations, based on the fund’s retail asset level, the number of shareholder accounts in the fund and the level of defined contribution plan assets in the fund. The amounts incurred for investor servicing agent functions provided by affiliates of Putnam Management during the six months ended December 31, 2009 are included in Investor servicing fees in the Statement of operations.

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. The fund also reduced expenses through brokerage/service arrangements. For the six months ended December 31, 2009, the fund’s expenses were reduced by $1,273 under the expense offset arrangements and by $434,927 under the brokerage/service arrangements.

Each independent Trustee of the fund receives an annual Trustee fee, of which $1,440, as a quarterly retainer, 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 and industry seminars and for certain compliance-related matters. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

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

45

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 and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. 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. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the “Plans”) with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, a wholly-owned subsidiary of Putnam Investments, LLC and Putnam Retail Management GP, Inc., for services provided and expenses incurred in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and 0.50% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively.

For the six months ended December 31, 2009, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $29,359 and $563 from the sale of class A and class M shares, respectively, and received $36,766 and $561 in contingent deferred sales charges from redemptions of classB and class C shares, respectively.

A deferred sales charge of up to 1.00% and 0.65% is assessed on certain redemptions of class A and class M shares, respectively. For the six months ended December 31, 2009, Putnam Retail Management Limited Partnership, acting as underwriter, received no monies on class A and class M redemptions.

Note 3: Purchases and sales of securities

During the six months ended December 31, 2009, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $1,082,134,791 and $1,295,096,834, respectively. There were no purchases or sales of U.S. government securities.

Written option transactions during the period ended December 31, 2009 are summarized as follows:

		Contract	Premiums
		Amounts	Received
Written
options
outstanding
at beginning
of period	JPY	353,600	$138,594
Options
opened	JPY	353,600	211,270
Options
exercised		—	—
Options
expired	JPY	(353,600)	(138,594)
Options
closed	JPY	(353,600)	(211,270)
Written
options
outstanding
at end
of period		—	$—

Note 4: Capital shares

At December 31, 2009, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:

	Six months ended 12/31/09		Year ended 6/30/09
Class A	Shares	Amount	Shares	Amount
Shares sold	3,489,858	$62,707,871	15,932,966	$266,701,858
Shares issued in connection with
reinvestment of distributions	1,672,291	30,669,823	—	—
	5,162,149	93,377,694	15,932,966	266,701,858
Shares repurchased	(14,748,323)	(265,828,154)	(60,823,475)	(961,185,984)
Net decrease	(9,586,174)	$(172,450,460)	(44,890,509)	$(694,484,126)

46

	Six months ended 12/31/09		Year ended 6/30/09
Class B	Shares	Amount	Shares	Amount
Shares sold	129,080	$2,226,501	436,780	$6,715,057
Shares issued in connection with
reinvestment of distributions	95,998	1,673,251	—	—
	225,078	3,899,752	436,780	6,715,057
Shares repurchased	(2,400,521)	(40,693,782)	(11,690,463)	(188,187,806)
Net decrease	(2,175,443)	$(36,794,030)	(11,253,683)	$(181,472,749)
	Six months ended 12/31/09		Year ended 6/30/09
Class C	Shares	Amount	Shares	Amount
Shares sold	94,460	$1,680,733	290,007	$4,506,747
Shares issued in connection with
reinvestment of distributions	75,901	1,350,281	—	—
	170,361	3,031,014	290,007	4,506,747
Shares repurchased	(665,615)	(11,636,003)	(2,914,678)	(45,751,383)
Net decrease	(495,254)	$(8,604,989)	(2,624,671)	$(41,244,636)
	Six months ended 12/31/09		Year ended 6/30/09
Class M	Shares	Amount	Shares	Amount
Shares sold	85,387	$1,509,728	241,392	$3,766,712
Shares issued in connection with
reinvestment of distributions	34,014	608,843	—	—
	119,401	2,118,571	241,392	3,766,712
Shares repurchased	(210,130)	(3,686,989)	(1,056,240)	(16,720,163)
Net decrease	(90,729)	$(1,568,418)	(814,848)	$(12,953,451)
	Six months ended 12/31/09		Year ended 6/30/09
Class R	Shares	Amount	Shares	Amount
Shares sold	81,876	$1,417,673	153,766	$2,776,942
Shares issued in connection with
reinvestment of distributions	4,630	83,760	—	—
	86,506	1,501,433	153,766	2,776,942
Shares repurchased	(90,359)	(1,669,686)	(128,935)	(2,169,233)
Net increase (decrease)	(3,853)	$(168,253)	24,831	$607,709
	Six months ended 12/31/09		Year ended 6/30/09
Class Y	Shares	Amount	Shares	Amount
Shares sold	1,021,048	$17,577,016	11,235,044	$186,466,773
Shares issued in connection with
reinvestment of distributions	189,821	3,519,282	—	—
	1,210,869	21,096,298	11,235,044	186,466,773
Shares repurchased	(1,300,952)	(23,361,136)	(55,905,315)	(896,316,247)
Net decrease	(90,083)	$(2,264,838)	(44,670,271)	$(709,849,474)

47

Note 5: Summary of derivative activity

The following is a summary of the market values of derivative instruments as of December 31, 2009:

Market values of derivative instruments as of December 31, 2009
	Asset derivatives		Liability derivatives
Derivatives not
accounted for as	Statement of		Statement of
hedging instruments	assets and		assets and
under ASC 815	liabilities location	Market value	liabilities location	Market value
Foreign exchange
contracts	Receivables	$3,311,080	Payables	$13,281,319
Total		$3,311,080		$13,281,319

The following is a summary of realized and unrealized gains or losses of derivative instruments on the Statement of operations for the six months ended December 31, 2009 (see Note 1):

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income

Derivatives not accounted for
as hedging instruments under		Forward currency
ASC 815	Options	contracts	Total
Foreign exchange contracts	$—	$20,421,248	$20,421,248
Equity contracts	201,685	—	$201,685
Total	$201,685	$20,421,248	$20,622,933

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income

Derivatives not accounted for
as hedging instruments under		Forward currency
ASC 815	Options	contracts	Total
Foreign exchange contracts	$—	$(9,643,496)	$(9,643,496)
Equity contracts	71,282	—	71,282
Total	$71,282	$(9,643,496)	$(9,572,214)

Note 6: Investment in Putnam Money Market
Liquidity Fund

The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Management. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income in the Statement of operations and totaled $10,210 for the period ended December 31, 2009. During the period ended December 31, 2009, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $291,181,363 and $297,831,153, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

Note 7: Regulatory matters and litigation

In late 2003 and 2004, Putnam Management settled charges brought by the SEC and the Massachusetts Securities Division in connection with excessive short-term trading in Putnam funds. Distribution of payments from Putnam Management to certain open-end Putnam funds and their shareholders is expected to be completed in the next several months. These allegations and related matters have served as the general basis for certain lawsuits, including purported class action lawsuits against Putnam Management and, in a limited number of cases, some Putnam funds. Putnam Management believes that these lawsuits will have no material adverse effect on the funds or on Putnam Management’s ability to provide investment management services. In addition, Putnam Management has agreed to bear any costs incurred by the Putnam funds as a result of these matters.

Note 8: Market and credit risk

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default.

48

Shareholder meeting results (Unaudited)

December 18, 2009 meeting

At the meeting, each of the nominees for Trustee was elected, as follows:

	Votes for	Votes withheld
Ravi Akhoury	63,313,758	3,019,754
Jameson A. Baxter	63,333,557	2,999,955
Charles B. Curtis	63,294,653	3,038,859
Robert J. Darretta	63,337,171	2,996,341
Myra R. Drucker	63,313,584	3,019,928
John A. Hill	63,294,486	3,039,026
Paul L. Joskow	63,340,320	2,993,192
Elizabeth T. Kennan	63,299,625	3,033,887
Kenneth R. Leibler	63,336,081	2,997,431
Robert E. Patterson	63,337,869	2,995,643
George Putnam, III	63,273,159	3,060,353
Robert L. Reynolds	63,371,398	2,962,114
W. Thomas Stephens	63,352,061	2,981,451
Richard B. Worley	63,330,810	3,002,702

A proposal to approve a new management contract between the fund and Putnam Management with both Fund Family breakpoints and performance fees was approved as follows:

Votes	Votes		Broker
for	against	Abstentions	non-votes
45,579,278	2,477,143	1,921,447	16,355,644

A proposal to approve a new management contract between the fund and Putnam Management with Fund Family breakpoints only was approved as follows:

Votes	Votes		Broker
for	against	Abstentions	non-votes
45,522,012	2,438,789	2,017,066	16,355,645

A proposal to approve a new management contract between the fund and Putnam Management with performance fees only was approved as follows:

Votes	Votes		Broker
for	against	Abstentions	non-votes
45,669,390	2,362,221	1,946,257	16,355,644

A proposal to amend the fundamental investment restrictions with respect to diversification of investments was approved as follows:

Votes	Votes		Broker
for	against	Abstentions	non-votes
46,124,319	1,910,163	1,943,387	16,355,643

49

Shareholder meeting results (Unaudited) (Continued)

A proposal to amend the fundamental investment restrictions with respect to borrowing was approved as follows:

Votes	Votes		Broker
for	against	Abstentions	non-votes
45,196,456	2,785,554	1,995,856	16,355,646

A proposal to amend the fundamental investment restrictions with respect to making loans was approved as follows:

Votes	Votes		Broker
for	against	Abstentions	non-votes
45,236,377	2,837,921	1,903,569	16,355,645

All tabulations are rounded to the nearest whole number.

50

The Putnam family of funds

The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus containing this and other information for any Putnam fund or product, call your financial advisor at 1-800-225-1581 and ask for a prospectus. Please read the prospectus carefully before investing.

Growth
Growth Opportunities Fund
International Growth Fund* **
New Opportunities Fund
Small Cap Growth Fund*
Vista Fund
Voyager Fund

Blend
Asia Pacific Equity Fund*
Capital Opportunities Fund*
Capital Spectrum Fund‡
Emerging Markets Equity Fund*
Equity Spectrum Fund‡
Europe Equity Fund*
Global Equity Fund*
Global Natural Resources Fund*
International Capital Opportunities Fund*
International Equity Fund*
Investors Fund
Research Fund

Value
Convertible Income-Growth Trust
Equity Income Fund
The George Putnam Fund of Boston
The Putnam Fund for Growth and Income
International Value Fund* ††
Mid Cap Value Fund
Small Cap Value Fund*

Income
American Government Income Fund
Diversified Income Trust
Floating Rate Income Fund
Global Income Trust*
High Yield Advantage Fund*
High Yield Trust*
Income Fund
Money Market Fund†
U.S. Government Income Trust

* A 1% redemption fee on total assets redeemed or exchanged within 90 days of purchase may be imposed for all share classes of these funds.

† An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

** Prior to January 1, 2010, the fund was known as Putnam International New Opportunities Fund.

†† Prior to January 1, 2010, the fund was known as Putnam International Growth and Income Fund.

51

Tax-free income
AMT-Free Municipal Fund
Tax Exempt Income Fund
Tax Exempt Money Market Fund†
Tax-Free High Yield Fund

State tax-free income funds:
Arizona, California, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, and Pennsylvania

Absolute Return
Absolute Return 100 Fund
Absolute Return 300 Fund
Absolute Return 500 Fund
Absolute Return 700 Fund

Global Sector*
Global Consumer Fund
Global Energy Fund
Global Financials Fund
Global Health Care Fund
Global Industrials Fund
Global Natural Resources Fund
Global Technology Fund
Global Telecommunications Fund
Global Utilities Fund

Asset allocation
Income Strategies Fund
Putnam Asset Allocation Funds — three investment portfolios that spread your money across a variety of stocks, bonds, and money market investments.

The three portfolios:
Asset Allocation: Balanced Portfolio
Asset Allocation: Conservative Portfolio
Asset Allocation: Growth Portfolio

Putnam RetirementReady®

Putnam RetirementReady Funds — 10 investment portfolios that offer diversification among stocks, bonds, and money market instruments and adjust to become more conservative over time based on a target date for withdrawing assets.

The 10 funds:
Putnam RetirementReady 2050 Fund
Putnam RetirementReady 2045 Fund
Putnam RetirementReady 2040 Fund
Putnam RetirementReady 2035 Fund
Putnam RetirementReady 2030 Fund
Putnam RetirementReady 2025 Fund
Putnam RetirementReady 2020 Fund
Putnam RetirementReady 2015 Fund
Putnam RetirementReady 2010 Fund
Putnam RetirementReady Maturity Fund

‡ A 1% redemption fee on total assets redeemed or exchanged within 30 days of purchase may be imposed for all share classes of these funds.

With the exception of money market funds, a 1% redemption fee may be applied to shares exchanged or sold within 7 days of purchase (90 days, for certain funds).

Check your account balances and the most recent month-end performance in the Individual Investors section at putnam.com.

52

Fund information

Founded over 70 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 manage over 100 funds across income, value, blend, growth, asset allocation, absolute return, and global sector categories.

Investment Manager	Myra R. Drucker	Beth S. Mazor
Putnam Investment	Paul L. Joskow	Vice President
Management, LLC	Elizabeth T. Kennan
One Post Office Square	Kenneth R. Leibler	James P. Pappas
Boston, MA 02109	Robert E. Patterson	Vice President
	George Putnam, III
Investment Sub-Manager	Robert L. Reynolds	Francis J. McNamara, III
Putnam Investments Limited		Vice President and Chief
57–59 St James’s Street	W. Thomas Stephens	Legal Officer
London, England SW1A 1LD	Richard B. Worley
		Robert R. Leveille
Investment Sub-Advisor	Officers	Vice President and
The Putnam Advisory	Robert L. Reynolds	Chief Compliance Officer
Company, LLC	President
One Post Office Square		Mark C. Trenchard
Boston, MA 02109	Jonathan S. Horwitz	Vice President and
	Executive Vice President,	BSA Compliance Officer
Marketing Services	Principal Executive Officer,
Putnam Retail Management	Treasurer and	Judith Cohen
One Post Office Square	Compliance Liaison	Vice President, Clerk and
Boston, MA 02109		Assistant Treasurer
	Charles E. Porter
Custodian	Senior Advisor to the Trustees	Wanda M. McManus
State Street Bank and Trust		Vice President, Senior Associate
Company	Steven D. Krichmar	Treasurer and Assistant Clerk
	Vice President and
Legal Counsel	Principal Financial Officer	Nancy E. Florek
Ropes & Gray LLP		Vice President, Assistant Clerk,
	Janet C. Smith	Assistant Treasurer and
Trustees	Vice President, Principal	Proxy Manager
John A. Hill, Chairman	Accounting Officer and
Jameson A. Baxter,	Assistant Treasurer
Vice Chairman
Ravi Akhoury	Susan G. Malloy
Charles B. Curtis	Vice President and
Robert J. Darretta	Assistant Treasurer

This report is for the information of shareholders of Putnam International Equity Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.

Item 2. Code of Ethics:

Not applicable

Item 3. Audit Committee Financial Expert:

Not applicable

Item 4. Principal Accountant Fees and Services:

Not applicable

Item 5. Audit Committee of Listed Registrants

Not applicable

Item 6. Schedule of Investments:

The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:

Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies

Not Applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:

Not applicable

Item 10. Submission of Matters to a Vote of Security Holders:

Not applicable

Item 11. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer 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, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report 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 12. Exhibits:

(a)(1) Not applicable

(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

Putnam International Equity Fund

By (Signature and Title):

/s/Janet C. Smith
Janet C. Smith
Principal Accounting Officer

Date: February 26, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and 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/Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer

Date: February 26, 2010

By (Signature and Title):

/s/Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer

Date: February 26, 2010

EX-99.CERT

Certifications

I, Jonathan S. Horwitz, the Principal Executive Officer of the funds listed on Attachment A, certify that:

1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:

2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;

3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting.

Date: February 25, 2010

/s/ Jonathan S. Horwitz
_______________________
Jonathan S. Horwitz
Principal Executive Officer

Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the funds listed on Attachment A, certify that:

1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:

2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;

3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting.

Date: February 25, 2010

/s/ Steven D. Krichmar
_______________________
Steven D. Krichmar
Principal Financial Officer

Attachment A 

N-CSR 

Period (s) ended December 31, 2009 

Putnam Europe Equity Fund 

Putnam International Equity Fund 

Putnam New Opportunities Fund 

Putnam Small Cap Growth Fund 

Putnam International Value Fund (formerly Putnam International Growth and Income Fund) 

Putnam Variable Trust 

Putnam VT American Government Income Fund 

Putnam VT Capital Opportunities Fund 

Putnam VT Diversified Income Fund 

Putnam VT Equity Income Fund 

Putnam VT The George Putnam Fund of Boston 

Putnam VT Global Asset Allocation Fund 

Putnam VT Global Equity Fund 

Putnam VT Global Health Care Fund 

Putnam VT Global Utilities Fund 

Putnam VT Growth and Income Fund 

Putnam VT Growth Opportunities Fund 

Putnam VT High Yield Fund 

Putnam VT Income Fund 

Putnam VT International Equity Fund 

Putnam VT International Value Fund (formerly Putnam VT International Growth and Income Fund) 

Putnam VT International Growth Fund (formerly Putnam VT International New Opportunities Fund) 

Putnam VT Investors Fund 

Putnam VT Mid Cap Value Fund 

Putnam VT Money Market Fund 

Putnam VT New Opportunities Fund 

Putnam VT Research Fund 

Putnam VT Small Cap Value Fund 

Putnam VT Vista Fund 

Putnam VT Voyager Fund 

EX-99.906 CERT

Section 906 Certifications

I, Jonathan S. Horwitz, the Principal Executive Officer of the Funds listed on Attachment A, certify that, to my knowledge:

1. The form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2009 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: February 25, 2010

/s/ Jonathan S. Horwitz
______________________
Jonathan S. Horwitz
Principal Executive Officer

Section 906 Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the Funds listed on Attachment A, certify that, to my knowledge:

1. The form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2009 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: February 25, 2010

/s/ Steven D. Krichmar
______________________
Steven D. Krichmar
Principal Financial Officer

Attachment A 

N-CSR 

Period (s) ended December 31, 2009 

Putnam Europe Equity Fund 

Putnam International Equity Fund 

Putnam New Opportunities Fund 

Putnam Small Cap Growth Fund 

Putnam International Value Fund (formerly Putnam International Growth and Income Fund) 

Putnam Variable Trust 

Putnam VT American Government Income Fund 

Putnam VT Capital Opportunities Fund 

Putnam VT Diversified Income Fund 

Putnam VT Equity Income Fund 

Putnam VT The George Putnam Fund of Boston 

Putnam VT Global Asset Allocation Fund 

Putnam VT Global Equity Fund 

Putnam VT Global Health Care Fund 

Putnam VT Global Utilities Fund 

Putnam VT Growth and Income Fund 

Putnam VT Growth Opportunities Fund 

Putnam VT High Yield Fund 

Putnam VT Income Fund 

Putnam VT International Equity Fund 

Putnam VT International Value Fund (formerly Putnam VT International Growth and Income Fund) 

Putnam VT International Growth Fund (formerly Putnam VT International New Opportunities Fund) 

Putnam VT Investors Fund 

Putnam VT Mid Cap Value Fund 

Putnam VT Money Market Fund 

Putnam VT New Opportunities Fund 

Putnam VT Research Fund 

Putnam VT Small Cap Value Fund 

Putnam VT Vista Fund 

Putnam VT Voyager Fund