-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TYId4xDQHd3xe1Rmh5mRc6ykUSpNLkS2hTFgJ39MphffHP0V/36dHEeBx54QtWh5 POyBkgZWg8MNzH46epZHDg== 0000950146-94-000124.txt : 19940705 0000950146-94-000124.hdr.sgml : 19940705 ACCESSION NUMBER: 0000950146-94-000124 CONFORMED SUBMISSION TYPE: ARS PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940430 FILED AS OF DATE: 19940701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUTNAM INVESTMENT GRADE INTERMEDIATE MUNICIPAL TRUST CENTRAL INDEX KEY: 0000900426 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 043187552 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: ARS SEC ACT: 1934 Act SEC FILE NUMBER: 811-07628 FILM NUMBER: 94537566 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6162921000 MAIL ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 ARS 1 PUTNAM INVESTMENT GRADE INTERMEDIATE TRUST FUND Putnam Investment Grade Intermediate Municipal Trust Annual Report April 30, 1994 For investors seeking as high a level of current income exempt from federal income tax as Putnam Management believes is consistent with preservation of capital A member of the Putnam Family of Funds
Contents 2 How your fund performed 3 From the Chairman 4 Report from Putnam Management Annual Report 6 Report of Independent Accountants 7 Portfolio of investments owned 9 Financial statements 15 Tax information 15 Fund performance supplement
How your fund performed For periods ended April 30, 1994
Total return* Lehman Lehman Fund Brothers Consumer Brothers Market Municipal Price Govt. NAV price Bond Index Index Bond Index Life-of-fund 1.24% -14.03% 1.59% 2.22% 1.21% (since 5/28/93)
Share data NAV Market price May 28, 1993 $14.04 $15.000 April 30, 1994 13.64 12.375
Distributions Investment Capital Period ended Number income gains Total April 30, 1994 9 $.5175 $.048 $.5655 Current returns at the end of the period
Taxable equivalents+ NAV Market price NAV Market price Current dividend rate 5.06% 5.58% 8.38% 9.24%
* Performance data represent past results. Investment return and principal value will fluctuate so an investor's shares, when sold, may be worth more or less than their original cost. (a)Capital gains, if any are taxable for federal and, in most cases, state purposes. For some investors, investment income may also be subject to the alternative minimum tax. + Assumes the maximum federal tax rate of 39.6%. Results for investors subject to lower tax rates would not be as advantageous, although many such investors would have the opportunity to receive attractive tax benefits from a fund investment. Consult your tax advisor for more guidance. Please see the fund performance supplement on page 16 for additional information about performance comparisons. Terms you need to know Total return is the change in value of an investment from the beginning to the end of a period, assuming the reinvestment of all distributions. Net asset value (NAV) is the value of all your fund's assets, minus any liabilities, divided by the number of outstanding shares. Market price is the current trading price of one share of the fund. Market prices are set by transactions between buyers and sellers on the New York Stock Exchange. Current dividend rate is calculated by annualizing the income portion of the fund's most recent distribution and dividing by the NAV or market price on the last day of the period. Taxable equivalent return is the return that a taxable investment would have to produce to equal the fund's current return. From the Chairman Dear Shareholder: (George Putnam photo) George Putnam Chairman of the Trustees (C) Karsh, Ottawa Many shareholders have been asking us whether we think the volatility that hit the securities markets in February and March was a prelude to further decline during the rest of 1994. We have been pointing out that recent adjustments in the markets are a natural occurrence at this stage of the economic recovery. Some volatility will likely continue for a while as investors digest new realities in areas such as interest rates, inflation, and the pace of the recovery. But the economy is still strong, interest rates remain historically low, and inflation appears under control. Overall prospects for the long term, in our view, as still positive. Seasoned investors know there will occasionally be periods of rough going. But experience has also taught them that long-term investment programs should rarely be altered in response to short-term events. In the report that follows, Fund Manager Tom Goggins discusses the performance of Putnam Investment Grade Intermediate Municipal Trust in this market environment. Respectfully yours, (Signature of George Putnam) George Putnam June 15, 1994 Report from Putnam Management When the Federal Reserve Board raised short-term interest rates in February and March, Putnam Investment Grade Intermediate Municipal Trust, like most other fixed-income investments, felt the effects of the sudden downturn in the bond market. The decline came as the fund approached the midpoint of its fiscal year and contributed substantially to the negative results at the end of the period. Total return since the fund's inception on May 28, 1993, was 1.24%, again at net asset value. While intermediate bonds have provided greater relative stability historically than long-term bonds, they were particularly hard hit by recent market events. The fund provided a current tax-free return of 5.06% at net asset value at the end of the period. Investors in the highest federal income tax bracket of 39.6% would have had to earn 8.38% on a fully taxable investment to match this result. Investors in the lower brackets would also have had the opportunity for tax-advantaged earnings. Preemptive move The Fed's decision to raise short-term rates was billed as a preemptive move against a pickup in the inflation rate. The board's concern was prompted by its perception that the economic recovery was gaining too much momentum, which it feared could begin to put upward pressure on prices. Keeping a tight rein in inflation has been and continues to be the Fed's major policy objective. The market's response to the Fed's boost in rates was, in retrospect, somewhat extreme. Many investors, concerned that the increases were merely the first of a series, ran for the exits. More recently, as they perceived that this might not be the case, they began buying securities with their freshly liberated assets. This, in turn, moderated the extent of the decline. We believe, as do most economists and professional money managers, that the Fed's action was justified and that such market corrections are normal at this stage of the business cycle. As a result, we were able to take advantage of the market's decline to acquire some securities at attractive prices. Stable center The soundness of the fund's basic strategy--seeking high current income by investing in higher-quality bonds with maturities in the 7 to 10-year range--was confirmed, in our view, by the closeness of its returns to those of the municipal bond market at large. The fund does not seek to "beat the market", or to expose its assets to undue risks in the pursuit of above-average gains. The principal attraction of intermediate maturity municipal bonds is that they tend to be less volatile than long-term bonds. Consequently, an intermediate-term portfolio can generally offer a higher degree of price stability over the long term. During the period we committed more assets to noncallable bonds. Because these bonds cannot be called away before the maturity date, we were thus able to lock in attractive yields and thereby provide the fund with a relatively secure stream of investment income. We should point out that this strategy is not one we would normally pursue in an environment of rising interest rates, since it diminishes the fund's ability to invest in new higher-yielding issues as they come to market. Furthermore, prices of noncallable bonds tend to fluctuate more widely than those of callable bonds. However, we felt that our main purpose was to protect the fund's income stream in this period of uncertainty. We did not make any major changes in the portfolio's sector allocations during the period. We did, however, shorten the average duration somewhat. Duration is a mathematical formula that indicates how much bond prices will move up or down with each percentage-point shift in interest rates. Like maturity, with which it is often confused, duration is measured in years. The shorter the duration, the less volatility you can expect from the portfolio. In a rising rate environment, keeping the portfolio's average duration relatively short can be instrumental in protecting asset value. We are maintaining the portfolio's average quality level of A while keeping the fund well diversified as to geographic and investment mix. Outlook Supplies of municipal bonds will be tight in the months ahead as the volume of new issues drops and demand from tax-conscious investors remains high. This already strong demand will be heightened as the gap between yields on municipal bonds and taxable bonds remains narrow, making the tax-free returns available from municipal bonds relatively more attractive. The fund's tax-equivalent rate at the end of the period for investors in the highest federal tax bracket illustrates the point. Long-term Treasury bonds yielded 7.31% on the same date. The reduced supply will reflect significantly smaller number of refinancings coming to market as interest rates begin to move higher. It may also reflect a lower volume of municipal borrowings as municipalities are likely to reduce new issues as well. We expect the municipal bond market to experience continued volatility along with the rest of the bond market through the end of 1994. But the heavy demand should significantly diminish the extent of price swings compared with those in store for taxable bonds. Looking ahead, our expectations are for moderate economic growth, continued low inflation, and only a modest rise in interest rates. The fund is well positioned for this projected outcome, yet flexible enough to adjust to others as required. Investment Grade Intermediate Municipal Trust Annual Report For the period May 28, 1993 (commencement of operations) to April 30, 1994 Report of Independent Accountants To the Trustees and Shareholders of Putnam Investment Grade Intermediate Municipal Trust We have audited the accompanying statement of assets and liabilities of Putnam Investment Grade Intermediate Municipal Trust, including the portfolio of investments owned, as of April 30, 1994, the related statement of operations, the statement of changes in net assets and the "Financial Highlights" for the period May 28, 1993 (commencement of operations) to April 30, 1994. These financial statements and "Financial Highlights" are the responsibility of the Fund's Management. Our responsibility is to express an opinion on these financial statements and "Financial Highlights" based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and "Financial Highlights" are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 1994 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and "Financial Highlights" referred to above present fairly, in all material respects, the financial position of Putnam Investment Grade Intermediate Municipal Trust as of April 30, 1994, the results of its operations, the changes in its net assets and the "Financial Highlights" for the period May 28, 1993 (commencement of operations) to April 30, 1994, in conformity with generally accepted accounting principles. Coopers & Lybrand Boston, Massachusetts June 20, 1994 Portfolio of investments owned April 30, 1994 Municipal Bonds and Notes (92.4%)(a)
Principal Amount Ratings (b) Value California (15.0%) $1,865,000 Duarte, Certif. of Participation (City of Hope Med. Ctr.), 5-1/4s, 4/1/99 Baa $1,802,056 1,500,000 Los Angeles Cnty., Certif. of Participation (Marina Del Rey), Ser. A, 6-1/4s, 7/1/03 BBB/P 1,468,125 500,000 Orange Cnty., Certif. of Participation Variable Rate Demand Notes (Office and Courthouse Project), 2.95s, 12/1/15 A 500,000 3,000,000 Riverside Cnty., Asset Leasing Corp. Rev. Bonds (Hosp. Project), Ser. A, 5-3/4s, 6/1/01 A 2,947,500 6,717,681 Colorado (3.2%) 1,415,000 Denver, City and Cnty., Arpt. Rev. Bonds Ser. D, 7.4s, 11/15/01 Baa 1,434,456 Illinois (17.6%) 4,000,000 Chicago, School Fin. Auth. Residual Interest Bonds (RIBS) 7.37s, 6/1/05 (acquired 6/11/93, cost $3,860,000)(c) AA 3,635,000 2,000,000 IL Dev. Fin. Auth. Solid Waste Disp. Rev. Bonds (Waste Mgmt. Inc. Project), 7-1/8s, 1/1/01 AA 2,152,500 2,000,000 IL Hlth. Fac. Auth. Rev. Bonds (Grant Hosp.), Ser. B, 7-1/4s, 6/1/99 BB 2,080,000 7,867,500 Kentucky (2.2%) $1,000,000 Kenton Cnty., Arpt. Board Rev. Bonds (Cincinnati/Northern KY Intl.), Ser. B, 5-1/2s, 3/1/04 AAA $ 980,000 Maryland (4.5%) 2,075,000 Northeast MD Waste Disp. Auth. Solid Waste Rev. Bonds (Montgomery Cnty. Resource Recvy. Project), Ser. A, 5.8s, 7/1/04 A 2,025,719 Massachusetts (8.0%) 3,000,000 MA Muni. Wholesale Elec. Co. IVRC Trust RIBS, Ser. 93D, American Municipal Bond Assurance Corp. (AMBAC), 7.127s, 4/30/03 (acquired 6/11/93, cost $2,840,340)(c) AAA 2,610,000 1,000,000 MA State Hlth. & Ed. Fac. Auth. Rev. Bonds (Central New England Hlth. Syst.), Ser. A, 5-3/4s, 8/1/03 Baa 975,000 3,585,000 New York (13.0%) 1,000,000 NY City General Obligation Bonds Ser. H, 5.9s, 8/1/05 A 980,000 1,500,000 Ser. A, 6-1/4s, 8/1/03 A 1,526,250 1,925,000 NY State Dorm. Auth. Rev. Bonds (State U. Ed. Fac.), Ser. A, 5.2s, 5/15/02 Baa 1,867,250 1,500,000 NY State Urban Dev. Corp. Rev. Bonds (Correctional Fac.), 5-1/4s, 1/1/03 Baa 1,441,875 5,815,375 North Carolina (7.5%) $1,825,000 NC Eastern Muni. Pwr. Agcy. Rev. Bonds Ser. B, 5-3/4s, 1/1/04 A $ 1,827,281 1,500,000 NC Muni. Pwr. Agcy. Rev. Bonds (No. 1 Catawba Elec.), 5.9s, 1/1/03 A 1,528,125 3,355,406 Pennsylvania (7.6%) 2,000,000 Clinton Cnty., Indl. Dev. Auth. Poll. Control Rev. Bonds (Intl. Paper Co. Project), Ser. A, 5-3/8s, 5/1/04 A 1,917,500 1,500,000 McKeesport, Hosp. Auth. Rev. Bonds (McKeesport Hosp. Project), 6-1/4s, 7/1/03 Baa 1,458,750 3,376,250 South Carolina (3.5%) 1,500,000 Spartanburg Cnty., Indl. Dev. Rev. Bonds (Border Inc. Project), 7.2s, 6/1/00 Baa 1,584,375 Washington (10.3%) 2,000,000 WA State Pub. Pwr. Supply Syst. Rev. Bonds (Nuclear Project No. 1), Ser. A, 5-1/2s, 7/1/04 AA 1,930,000 3,000,000 WA State RIBS, 7.051s, 5/1/08 AA 2,681,250 4,611,250 Total Investments (cost $42,792,335)(d) $41,353,012
Notes (a)Percentages indicated are based on net assets of $44,757,510, which correspond to a net asset value per share of $13.64. (b)The Moody's or Standard & Poor's ratings indicated are believed to be the most recent ratings available at April 30, 1994 for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at April 30, 1994. Securities rated by Putnam are indicated by "/P" and are not publicly rated. Ratings are not covered by the Report of Independent Accountants. (c)Restricted as to public resale. At the date of acquisition, this security was valued at cost. There were no outstanding unrestricted securities of the same class as that held. Total market value of restricted securities owned at April 30, 1994 was $6,245,000 or 14.0% of net assets. (d)The aggregate identified cost for tax purposes is $42,792,335 resulting in gross unrealized appreciation and depreciation of $45,157 and $1,484,480, respectively or net unrealized depreciation of $1,439,323. The rates shown on Residual Interest Bonds (RIBS) and Variable Rate Demand Notes (VRDN) are the current interest rates at April 30, 1994, which are subject to change based on the terms of the security. The Fund had the following industry group concentrations greater than 10% on April 30, 1994 (as a percentage of net assets): Utilities 14.2% Hospital/Health Care 14.1 Statement of assets and liabilities April 30, 1994 Assets Investments in securities, at value (identified cost $42,792,335) (Note 1) $41,353,012 Cash 375,705 Interest receivable 942,272 Receivable for securities sold 2,746,111 Unamortized organization expenses (Note 1) 23,208 Total assets 45,440,308 Liabilities Distributions payable to shareholders $188,718 Payable for compensation of Manager (Note 3) 79,176 Payable for investor servicing and custodian fees (Note 3) 19,121 Payable for administrative services (Note 3) 1,794 Payable for offering and organization costs (Notes 1 and 2) 375,923 Payable for exchange listing fee 5,000 Other accrued expenses 13,066 Total liabilities 682,798 Net assets $44,757,510 Represented by Paid-in capital (Note 2) $46,052,954 Undistributed net investment income 441,853 Accumulated net realized loss on investments (297,974) Net unrealized depreciation of investments (1,439,323) Net assets $44,757,510 Computation of net asset value Net asset value per share ($44,757,510 divided by 3,282,073 shares) $ 13.64
Statement of operations For the period May 28, 1993 (commencement of operations) to April 30, 1994*
Tax exempt interest income $ 2,585,616 Expenses: Compensation of Manager (Note 3) $305,444 Investor servicing and custodian fees (Note 3) 72,656 Compensation of Trustees (Note 3) 1,260 Reports to shareholders 7,812 Auditing 31,729 Legal 14,228 Postage 3,675 Administrative services (Note 3) 5,800 Exchange listing fees 5,000 Amortization of organization expenses (Note 1) 5,800 Other 3,870 Fees waived by Manager (Note 3) (11,619) Total expenses 445,655 Net investment income 2,139,961 Net realized loss on investments (Notes 1 and 4) (140,557) Net unrealized depreciation of investments during the period (1,439,323) Net loss on investments (1,579,880) Net increase in net assets resulting from operations $ 560,081 * See Note 2
Statement of changes in net assets
For the period May 28, 1993(commencement of operations) to April 30 1994* Increase in Net investment income $ 2,139,961 Net realized loss on investments (140,557) Net unrealized depreciation of investments (1,439,323) Net increase in net assets resulting from operations 560,081 Distributions to shareholders from: Net investment income (1,698,429) (1,698,429) Net realized gain on investments (157,539) Increase from capital share transactions (Note 2) 45,953,397 Total increase in net assets 44,657,510 Net assets Beginning of period 100,000 End of period (including undistributed net investment income of $441,853) $44,757,510 *See Note 2.
Financial Highlights* (For a share outstanding throughout the period)
For the period May 28, 1993 (commencement of operations) to April 30 1994 Net Asset Value, Beginning of Period $14.04* Investment operations Net Investment Income .65(a) Net Realized and Unrealized Loss on Investments (.48) Total from Investment Operations .17 Less Distributions from: Net Investment Income (.52) Net Realized Gain on Investments (.05) Total Distributions (.57) Net Asset Value, End of Period $13.64 Market Value, End of Period $12.38 Total Investment Return at Market Value (%) (b) (15.25)(c) Net Assets, End of Period (in thousands) $44,758 Ratio of Expenses to Average Net Assets (%) 1.02(a)(c) Ratio of Net Investment Income to Average Net Assets (%) 4.90(a)(c) Portfolio Turnover (%) 43.07(d)
* Represents initial net asset value of $14.14 less offering expenses and closing costs of approximately $0.10. (a) Reflects a waiver of the management fee for the period May 28, 1993 to June 13, 1993. As a result of such waiver, expenses of the Fund for the period ended April 30, 1994 reflect a reduction of less than $0.01 per share. See Note 3. (b) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (c) Annualized. (d) Not annualized. Notes to financial statements April 30, 1994 Note 1 Significant accounting policies The Fund is registered under the Investment Company Act of 1940, as amended, as a non-diversified, closed-end management investment company. The Fund's investment objective is to provide as high a level of current income exempt from federal income tax as is believed to be consistent with preservation of capital. The Fund intends to achieve its objective by investing in a portfolio of investment grade municipal securities that the Fund's Manager believes does not involve undue risk to income or principal. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A) Security valuation Tax-exempt bonds and notes are stated on the basis of valuations provided by a pricing service, approved by the Trustees, which uses information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining value. The fair value of restricted securities is determined by the Manager following procedures approved by the Trustees, and such valuations and procedures are reviewed periodically by Trustees. B) Security transactions and related investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Interest income is recorded on the accrual basis. C) Federal taxes It is the policy of the Fund to distribute all of its income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. It is also the intention of the Fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code of 1986. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation of securities held and excise tax on income and capital gains. D) Distributions to shareholders Income dividends are declared and distributed monthly by the Fund. Capital gains distributions, if any, are recorded on the ex-dividend date and paid annually. E) Amortization of bond premium and discount Any premium resulting from the purchase of securities in excess of maturity value is amortized on a yield-to-maturity basis. Discount on zero-coupon bonds, original issue discount bonds and stepped-coupon bonds is accredited according to the effective yield method. F) Unamortized organization expenses Expenses incurred by the Fund in connection with its organization aggregated $29,008. These expenses are being amortized on a straight-line basis over a five-year period. Note 2 Initial capitalization and offering of shares The Fund was established as a Massachusetts business trust under the laws of The Commonwealth of Massachusetts on April 1, 1993. During the period April 1, 1993 to May 27, 1993 the Fund had no operations other than those related to organizational matters, including the initial capital contribution of $100,000, and the issuance of 7,073 shares to Putnam Mutual Funds Corp. on May 27, 1993. On May 28, 1993, the Fund completed the initial offering of 3,200,000 of its shares for which it received net proceeds of $48,000,000 before deducting $346,915 of initial offering expenses and closing costs of $2,760,000 (such offering expenses and the Fund's organizational expenditures were paid initially by Putnam Investment Management, Inc., the Fund's Manager, and the Fund will reimburse the Manager for such costs). Regular investment operations commenced on May 28, 1993. On July 8, 1993, the Fund completed a supplemental offering of 75,000 shares for which it received net proceeds of $1,060,313. Note 3 Management fee, administrative services, and other transactions Compensation of Putnam Investment Management, Inc. ("Putnam Management"), the Fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., for management, investment advisory and administrative services fees is paid quarterly based on the average net assets of the Fund. Such fee, in the aggregate, is based on the annual rate of 0.70% of the first $500 million of the average net asset value of the Fund, 0.60% of the next $500 million, 0.55% of the next $500 million, and 0.50% of any excess over $1.5 billion of such average net asset value. In connection with the initial offering of shares of the Fund, Putnam Investment Management agreed to waive its management fee from the period May 28, 1993 (commencement of operations) to June 13, 1993. As a result of the voluntary waiver, expenses for the period ended April 30, 1994 were reduced by $11,619 . The Fund also reimburses the Manager for the compensation and related expenses of certain officers of the Fund and their staff who provide administrative services to the Fund. The aggregate amount of all such reimbursements is determined annually by the Trustees. For the period ended April 30, 1994, the Fund paid $ 5,800 for these services. Trustees of the Fund receive an annual Trustee's fee of $510 and an additional fee for each Trustees' meeting attended. Trustees who are not interested persons of the Manager and who serve on committees of the Trustees receive additional fees for attendance at certain committee meetings. Custodial functions for the Fund's assets are provided by Putnam Fiduciary Trust Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing agent functions are provided by Putnam Investor Services, a division of PFTC. Fees paid for these investor servicing and custodial functions for the period ended April 30, 1994 amounted to $72,656. Investor servicing and custodian fees reported in the Statement of operations for the period ended April 30, 1994 have been reduced by credits allowed by PFTC. Note 4 Purchases and sales of securities During the year ended April 30, 1994, purchases and sales of investment securities other than short-term investments aggregated $62,414,587 and $ 19,936,386 , respectively. Purchases and sales of short-term municipal obligations aggregated $49,035,000 and $48,535,000, respectively. In determining the net gain or loss on securities sold, the cost of securities has been determined on the identified cost basis. Selected Quarterly Data (Unaudited)
For the period May 28, 1993 Three months ended (commencement of operations) to April 30 January 31 October 31 July 31, 1993* 1994 1994 1993 1993 Total investment income Total $ 725,352 $ 710,220 $ 705,625 $ 444,419 Per Share $ .22 $ .16 $ .28 $ .13 Net investment income Total $ 611,890 $ 575,733 $ 585,631 $ 366,707 Per Share $ .18 $ .13 $ .23 $ .11 Net realized and unrealized gain (loss) on investments Total $(3,826,674) $ 662,908 $ 1,123,177 $ 460,709 Per Share $ (1.15) $ .24 $ .29 $ .14 Net increase (decrease) in net assets resulting from operations Total $(3,214,784) $ 1,238,641 $ 1,708,808 $ 827,416 Per Share $ (.97) $ .37 $ .52 $ .25 Net assets as end of period Total $44,757,510 $48,538,426 $48,042,558 $46,899,916 Per Share $ 13.64 $ 14.79 $ 14.64 $ 14.29 * In connection with the initial offering of shares of the Fund, Putnam Management agreed to waive its management fee for the period May 28, 1993 to June 13, 1993. As a result of such waiver, expenses of the Fund reflect a reduction of less than $.01 per share.
Tax Information The Fund has designated all distributions from investment income during the fiscal year as exempt-interest dividends. Thus, 100% of these distributions are exempt from federal income tax. During the fiscal year, the Fund distributed $0.048 per share from short-term capital gains constituting "dividend income". The Form 1099 you receive in January 1995 will show the tax status of any taxable distributions paid to your account in calendar 1994. Fund performance supplement Putnam Investment Grade Intermediate Municipal Trust is a portfolio managed for high current income free from federal income tax, consistent with preservation of capital. The Lehman Brothers Municipal Bond Index is an unmanaged list of approximately 8,000 investment-grade, fixed rate, long-term maturity tax-exempt bonds, which are selected to be representative of the market in terms of price movement and sector distribution. The average quality of bonds held in the index may differ from the average quality of those bonds in which the fund invests. The index does not take into account brokerage commissions or other costs, may include bonds different from those in the fund, and may pose different risks from the fund. Total return performance for the index reflects mathematically derived changes of market price and reinvestment of interest payments, as computed by Lehman Brothers. The fund's portfolio contains securities that do not match those in the index. The Consumer Price Index is a commonly used measure of inflation; it does not represent an investment return. The fund performance supplement has been prepared by Putnam Management to provide additional information about the fund and the indexes used for performance comparisons. The information is not part of the portfolio of investments owned or the financial statements. THIS PAGE INTENTIONALLY LEFT BLANK THIS PAGE INTENTIONALLY LEFT BLANK THIS PAGE INTENTIONALLY LEFT BLANK Putnam Investment Grade Intermediate Municipal Trust Fund information Investment manager Putnam Investment Management, Inc. One Post Office Square Boston, MA 02109 Marketing services Putnam Mutual Funds Corp. One Post Office Square Boston, MA 02109 Investor servicing agent Putnam Investor Services Mailing address: P.O. Box 41203 Providence, RI 02940-1203 1-800-225-1581 Custodian Putnam Fiduciary Trust Company Legal Counsel Ropes & Gray Independent accountants Copoers & Lybrand Putnam Investor Services has received the DALBAR award each year since the award's 1990 inception. In more than 10,000 tests of 38 shareholder service components, Putnam outperformed the industry standard in every category. 583-12463 Officers George Putnam President Charles E. Porter Executive Vice President Patricia C. Flaherty Senior Vice President Lawrence J. Lasser Vice President Gordon H. Silver Vice President John R. Verani Vice President Gary N. Coburn Vice President James E. Erickson Vice President Thomas Goggins Vice President and Fund Manager William N. Shiebler Vice President John D. Hughes Vice President and Treasurer Paul O'Neil Vice President Beverly Marcus Clerk and Assistant Treasurer Call 1-800-634-1587 weekdays from 9 a.m. to 5 p.m. Eastern time for up-to-date information about the fund's NAV or to request Putnam's quarterly Closed-End Fund Commentary PUTNAM INVESTMENTS The Putnam Funds One Post Office Square Boston, Massachusetts 02109 Bulk Rate U.S. Postage Paid Boston, MA Permit No. 53749 APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED AND EDGAR-FILED TEXTS: (1) Bold and italic typefaces are displayed in normal type. (2) Headers (e.g., the name of the fund) and footers (e.g., page numbers and "The accompanying notes are an integral part of these financial statements") are omitted. (3) Certain tabular and columnar headings and symbols are displayed differently in this filing. (4) Bullet points and similar graphic signals are omitted. (5) Page numbering is omitted. (6) Dagger footnote symbol replaced with plus sign (+). -----END PRIVACY-ENHANCED MESSAGE-----