Putnam
Managed
Municipal
Income Trust
Item 1. Report to Stockholders:
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The following is a copy of the report transmitted to stockholders pursuant
to Rule 30e-1 under the Investment Company Act of 1940:
ANNUAL REPORT ON PERFORMANCE AND OUTLOOK
10-31-04
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From the Trustees
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John A. Hill and
George Putnam, III
Dear Fellow Shareholder:
During the past several months, Putnam has introduced a number of
reforms for the benefit of shareholders, including increasing the amount
of disclosure for our funds. We are now including additional information
about your fund's management team. Following the Outlook for Your Fund,
we list any changes in your fund's Portfolio Leader and Portfolio
Members during the prior year period, the current Portfolio Leader's and
Portfolio Members' other fund management responsibilities at Putnam, and
the dollar range of fund shares owned by these individuals.
We are also pleased to announce that three new Trustees have joined your
fund's Board of Trustees. Nominated by your fund's independent Trustees,
these individuals have had outstanding careers as leaders in the
investment management industry. Myra R. Drucker is a Vice Chair of the
Board of Trustees of Sarah Lawrence College and serves as Chair of the
New York Stock Exchange (NYSE) Pension Managers Advisory Committee and
as a Trustee of Commonfund, a not-for-profit asset management firm.
Richard B. Worley is Managing Partner of Permit Capital LLC, an
investment management firm. Both Ms. Drucker and Mr. Worley are
independent Trustees (i.e., Trustees who are not "interested persons" of
your fund or its investment advisor). Charles E. Haldeman, Jr., the
third new Trustee, is President and Chief Executive Officer of Putnam
Investments.
During the period covered by the following report, Putnam Managed
Municipal Income Trust delivered strong results. In the following pages,
the fund managers discuss fund performance, strategy, and their outlook
for fiscal 2005.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
December 15, 2004
Report from Fund Management
Fund highlights
* For the fiscal year ended October 31, 2004, Putnam Managed Municipal
Income Trust's total return was 9.76% at net asset value (NAV) and 6.35%
at market price.
* The fund's benchmark, the Lehman Municipal Bond Index, returned 6.02%
for the period.
* The average return for the Lipper High Yield Municipal Debt Funds
category (closed-end) was 8.57%.
* See the Performance Summary beginning on page 10 for additional fund
performance, comparative performance, and Lipper data.
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TOTAL RETURN FOR
PERIODS ENDED 10/31/04
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Market
(inception 2/24/89) NAV price
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1 year 9.76% 6.35%
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5 years 34.49 7.12
Annual average 6.11 1.39
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10 years 79.54 64.16
Annual average 6.03 5.08
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Annual average
(life of fund) 7.02 5.75
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Data is historical. Past performance does not guarantee future results.
More recent returns may be less or more than those shown. Investment
return, net asset value, and market price will fluctuate and you may
have a gain or a loss when you sell your shares. Performance assumes
reinvestment of distributions and does not account for taxes.
FUND PROFILE
Putnam Managed Municipal Income Trust seeks to provide a high level of
current income free from federal income tax through investments in
investment-grade and higher-yielding, lower-rated municipal bonds. The
fund is designed for investors seeking tax-exempt income and willing to
accept the risks associated with below-investment-grade bonds.
Performance commentary
An emphasis on higher-yielding, lower-rated bonds helped Putnam Managed
Municipal Income Trust outperform its benchmark and Lipper peer group
for the 12 months ended October 31, 2004, based on results at NAV.
Results versus the fund's benchmark were particularly favorable as its
benchmark comprises only investment-grade bonds, while the fund's
broader mandate allowed it to own higher-yielding, lower-rated bonds.
This segment of the market outperformed investment-grade bonds due to an
improving economy, rising investor demand, and relatively low supply. It
is important to note that a fund's performance at market price may
differ from its results at NAV. Although market price performance
generally reflects investment results, it may also be influenced by
several other factors, including changes in investor perceptions of the
fund or its investment advisor, market conditions, fluctuations in
supply and demand for the fund's shares, and changes in fund
distributions.
Market overview
The bond market experienced some volatility as yields varied widely
during the fund's fiscal year, which began in November 2003. During the
first six months of the fiscal year, yields fell and bond prices, which
move in the opposite direction of yields, rose. Then in mid-March, the
bond market began to anticipate a change in monetary policy. Treasury
bonds sold off sharply and pushed yields upward, as strong economic
growth and rising corporate profitability increased the likelihood that
the Federal Reserve Board (Fed) would raise short-term interest rates at
its June 30 meeting. Interestingly, when the Fed announced what had been
a widely anticipated 25-basis-point increase, the bond market reversed
course, and yields trended downward, despite two subsequent rate
increases during the fiscal year of 25 basis points each. Over the
one-year period, long-term bond yields have fallen while short-term
rates have risen. This resulted in a flattening of the yield curve --
that is, shorter- and longer-term interest rates began to converge.
Among uninsured bonds and bonds rated A and below, yield spreads
tightened, and bond prices rose. These higher-yielding securities
provided attractive income streams that contributed to the fund's total
return during the period. Municipal bonds issued by the State of
California were generally strong performers. The state's economy
improved to such an extent that three bond-rating agencies -- Moody's,
Standard & Poor's, and Fitch -- upgraded the state's credit rating.
Tobacco settlement bonds performed fairly well during the period. Yields
on these bonds varied with the results of ongoing legal battles but
declined overall for the year, and their prices rose accordingly.
Airline-related industrial development bonds (IDBs) performed poorly, in
general, as the industry continued to face financial difficulties
exacerbated by record high oil prices.
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MARKET SECTOR PERFORMANCE 12 MONTHS ENDED 10/31/04
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Bonds
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Lehman Municipal Bond Index (tax-exempt bonds) 6.02%
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Lehman Government Bond Index (U.S. Treasury and agency
securities) 4.83%
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Lehman Intermediate Treasury Bond Index
(intermediate-maturity U.S. Treasury bonds) 3.26%
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Lehman Aggregate Bond Index (broad bond market) 5.53%
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Stocks
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S&P 500 Index (broad stock market) 9.42%
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S&P Utilities Index (utilities stocks) 24.11%
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Russell 2000 Growth Index (small-company growth stocks) 5.53%
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These indexes provide an overview of performance in different market
sectors for the 12 months ended 10/31/04.
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Strategy overview
Because we believe that the Fed is likely to continue to raise
short-term interest rates through mid-2005, we are positioning the
portfolio more defensively. This involves shortening the fund's
duration, which means reducing its sensitivity to changes in interest
rates. To accomplish this, we began the process of selling longer-term
bonds and replacing them with shorter-term bonds, which have a shorter
duration. Meanwhile, we continued to trim and diversify the fund's
positions in uninsured bonds and bonds rated A and below, which have
performed strongly. We maintained a neutral position, relative to the
fund's benchmark, in California municipal bonds, which were in high
demand as that state got its fiscal house in order and its debt rating
was upgraded by the major bond-rating agencies. The fund maintained an
overweight position in tobacco settlement bonds relative to its
benchmark. We closely monitored developments in that sector. The fund
had less exposure to airline-related IDBs during the period than did its
peers, a positive amid continued uncertainty in that industry.
Prior to the beginning of the fund's fiscal year, the fund emphasized
non-callable bonds -- bonds that the issuer is not permitted to redeem
(or call) before the maturity date. These issues performed well as rates
fell through March 2004, but during the spring, we began to moderate
this position, selling non-callable bonds and purchasing callable issues
scheduled to mature in the 15- to 20-year range. We believe callable
bonds may perform better than non-callable bonds if interest rates rise
and the yield curve flattens further.
[GRAPHIC OMITTED: horizontal bar chart THE FUND'S MATURITY AND DURATION
COMPARED]
THE FUND'S MATURITY AND DURATION COMPARED
10/31/03 4/30/04 10/31/04
Average effective
maturity in years 9.2 8.0 6.6
Duration in years 8.2 7.5 6.1
Footnotes read:
This chart compares changes in the fund's duration (a measure of its
sensitivity to interest-rate changes) and its average effective
maturity (a weighted average of the holdings' maturities).
Average effective maturity also takes into account put and call
features, where applicable, and reflects prepayments for mortgage-backed
securities.
How fund holdings affected performance
During the reporting period, the fund's relative performance benefited
from its emphasis on higher-yielding, lower-rated issues. Two factors
drove strong relative performance in this market segment: The first
factor was the improving economic climate, which increased confidence in
the relative financial stability of many lower-rated bond issuers. The
risk that a company or municipality will default on its bond payments
generally decreases in an improving economy. As a result, the outlook
for several issuers represented in the portfolio was upgraded by rating
agencies, lifting the price of the bonds. The second factor was investor
demand for higher-yielding municipal debt, which increased while supply
remained relatively small, driving up prices of these bonds. It is also
important to note that we have been working to manage the fund's risk
exposure in this area through thorough fundamental analysis of every
issuer and by diversifying holdings across a number of issuers,
locations, and industry sectors.
For much of the year the fund was more conservatively positioned than
its peers in terms of its duration -- a measure of the fund's
sensitivity to interest rates. We began shortening duration in the first
half of the fiscal year in an effort to preserve the fund's principal
value from an increase in interest rates that we saw ahead. In fact,
long-term rates declined, in spite of the Federal Reserve Board's
tightening, but we maintained a moderately defensive duration during
most of the period. Although this caused the fund to miss some capital
appreciation, we continue to believe our cautious approach is warranted.
Moreover, the benefits that accrued from our emphasis on yield more than
compensated for the negative effects of our conservative duration and
poor performance from two distressed holdings during the year.
[GRAPHIC OMITTED: pie chart CREDIT QUALITY OVERVIEW]
CREDIT QUALITY OVERVIEW
Aaa -- (34.6%)
Aa -- (2.1%)
A -- (11.7%)
Baa -- (27.4%)
Ba -- (14.8%)
B -- (4.6%)
Other -- (4.8%)
Footnote reads:
As a percentage of market value as of 10/31/04. A bond rated Baa or
higher is considered investment grade. The chart reflects Moody's
ratings; percentages may include bonds not rated by Moody's but
considered by Putnam Management to be of comparable quality. Ratings
will vary over time.
The fund has maintained a somewhat greater emphasis on tobacco
settlement bonds than its index and peers, which proved advantageous in
spite of the volatile market environment for these bonds. Payments from
these high-yielding issues are secured by income promised to various
states through legal settlements from tobacco companies. This income
could be jeopardized as a result of multibillion-dollar judgments
against the tobacco companies, and prices in this sector have shifted as
concerns about litigation overshadowed optimism. Our analyst believes
that, despite several highly visible lawsuits against the tobacco
industry, litigation risk is receding from where it was in 1999. Also,
cigarette consumption levels appear to be holding steady. Considering
the risks, we have diversified the fund's investments in tobacco
settlement bonds and we remain watchful of the situation. Holdings
include Badger Tobacco Settlement Asset Securitization Corp. revenue
bonds, issued in Wisconsin, and Golden State Tobacco Securitization
Corp. revenue bonds, issued in California. The Golden State bonds give
the fund a special advantage because they are double backed. If the
tobacco companies default on their payments, the State of California has
promised to step in and pay the interest and principal, so these bonds
offer less risk than other tobacco settlement bonds. They also benefited
during the latter half of the fiscal year when California's bond rating
was raised, lifting the price of most of the state's debt securities.
Although some airline-related industrial development bonds (IDBs) remain
in the portfolio, we trimmed these issues and the fund's remaining
position is relatively small. IDBs are bonds issued by municipalities
but backed by the company benefiting from the financing. Investor
perceptions about the backing company's health, or that of its industry
group, affect the prices of these bonds, not the rating of the
municipality issuing them. The airline industry has been under a cloud
for several years, although it regained some ground last year. However,
the industry continues to grapple with high operating costs and strong
competition among carriers, which is keeping the price of airline
tickets down. These problems, plus the ongoing threat of terrorism, make
us cautious on the industry, so we limited the fund's airline-related
investments to a relatively small position in what we believe to be the
strongest carriers.
The fund's health-care holdings generally made positive contributions to
performance. One strong contributor was a bond issued by the California
Statewide Community Development Authority for The Front Porch, which
operates long-term care facilities in California and is currently moving
forward with plans to renovate an older facility, Walnut Manor, located near
the Disney theme park. Although The Front Porch is taking on considerable
debt, the company has a history of successful development and marketing of
comparable facilities, which are well located. The prerefunding of a
formerly distressed holding also boosted performance. The fund held Oklahoma
Development Financing Authority Revenue Bonds issued for Hillcrest
Healthcare, which had a relatively low bond rating and a history of
operating difficulties. The entire system was purchased recently by Ardent
Health Services, a for-profit hospital manager expanding its operations in
acute care facilities. The bonds rose in value when Ardent announced plans
to prerefund the outstanding issues. Prerefunding occurs when an issuer
raises the money to refinance an older, higher-coupon bond by issuing new
bonds at current lower interest rates. This money is then invested in a
secure investment, usually U.S. Treasury securities, that mature at the
older bond's first call date, when it is used to pay off the old bonds. This
added security is often perceived as a credit upgrade by the market, and can
boost the price of the older bonds.
Although high-yielding municipal securities generally performed well
during the fiscal year, a few individual securities experienced
difficulties. These were Hoover Group IDBs, which were sold, and Gilroy
Revenue Bonds for Bonfante Gardens Park in California, which are still
in the portfolio. The Gilroy bonds were issued to fund a theme park that
suffered from poor attendance. The park hopes to reduce its debt by
selling some surrounding land. The price of the bonds has fallen, but we
remain hopeful that current negotiations with the issuer will have a
positive outcome.
Please note that all holdings discussed in this report are subject to
review in accordance with the fund's investment strategy and may vary
in the future.
The outlook for your fund
The following commentary reflects anticipated developments that could
affect your fund over the next six months, as well as your management
team's plans for responding to them.
Judging from the flattened yield curve, the bond market appears to have
largely shrugged off the recent Fed rate hikes. However, we believe that
interest rates all along the yield curve are more likely to rise than
fall. After the close of the fiscal period, the Fed again raised the
discount rate by 25 basis points, or one quarter of a percentage point.
Going forward, we anticipate greater increases for bonds with shorter
maturities because we believe the Fed will continue to raise short-term
rates incrementally through mid-2005. This also suggests further
flattening of the yield curve. The fund is positioned defensively in
terms of duration, and we will continue to monitor and adjust the fund's
duration as seems appropriate. We believe inflation will remain low,
despite the threat posed by high oil prices. We also anticipate that the
rate of GDP growth will slow during the next two quarters, as the
effects of the Fed's tightening policy are felt.
In general, these signs indicate that we are headed into a more
challenging environment for bond investing. Our task will be to continue
to search for the most attractive opportunities among tax-exempt
securities, and to balance the pursuit of attractive current income with
prudent risk management.
The views expressed in this report are exclusively those of Putnam
Management. They are not meant as investment advice. Capital gains, if
any, are taxable for federal and, in most cases, state purposes. For
some investors, investment income may be subject to the federal
alternative minimum tax. Income from federally exempt funds may be
subject to state and local taxes. Mutual funds that invest in bonds are
subject to certain risks, including interest-rate risk, credit risk, and
inflation risk. As interest rates rise, the prices of bonds fall.
Long-term bonds are more exposed to interest-rate risk than short-term
bonds. Unlike bonds, bond funds have ongoing fees and expenses.
Lower-rated bonds may offer higher yields in return for more risk.
Your fund's management
Your fund is managed by the members of the Putnam Tax Exempt
Fixed-Income Team. David Hamlin is the Portfolio Leader, and Paul Drury,
Susan McCormack, and James St. John are Portfolio Members of your fund.
The Portfolio Leader and Portfolio Members coordinate the team's
management of the fund.
For a complete listing of the members of the Putnam Tax Exempt
Fixed-Income Team, including those who are not Portfolio Leaders or
Portfolio Members of your fund, visit Putnam's Individual Investor Web
site at www.putnaminvestments.com.
Fund ownership
The table below shows fund ownership, in dollar ranges, by the fund's
Portfolio Leader and Portfolio Members. Information shown is for the
current and prior year ended November 30.
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FUND PORTFOLIO LEADER AND PORTFOLIO MEMBERS
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$1 - $10,001 - $50,001 - $100,001 - $500,001 - $1,000,001
Year $0 $10,000 $50,000 $100,000 $500,000 $1,000,000 and over
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David Hamlin 2004 *
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Portfolio Leader 2003 *
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Paul Drury 2004 *
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Portfolio Member 2003 *
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Susan McCormack 2004 *
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Portfolio Member 2003 *
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James St. John 2004 *
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Portfolio Member 2003 *
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Other funds managed by the Portfolio Leader and Portfolio Members
David Hamlin is the Portfolio Leader and Paul Drury, Susan McCormack,
and James St. John are Portfolio Members for Putnam's tax-exempt funds
for the following states: Arizona, California, Florida, Massachusetts,
Michigan, Minnesota, New Jersey, New York, Ohio, and Pennsylvania. The
same group also manages Putnam AMT-Free Insured Municipal Fund*, Putnam
California Investment Grade Municipal Trust, Putnam High Yield Municipal
Trust, Putnam Investment Grade Municipal Trust, Putnam Municipal Bond
Fund, Putnam Municipal Income Fund, Putnam Municipal Opportunities
Trust, Putnam New York Investment Grade Municipal Trust, Putnam Tax
Exempt Income Fund, Putnam Tax-Free Health Care Fund, and Putnam
Tax-Free High Yield Fund.
David Hamlin, Paul Drury, Susan McCormack, and James St. John may also
manage other accounts advised by Putnam Management or an affiliate.
Changes in your fund's Portfolio Leader and Portfolio Members
During the year ended October 31, 2004, Portfolio Member Richard Wyke
left your fund's management team.
Footnote reads:
*Formerly Putnam Tax-Free Insured Fund.
Performance summary
This section shows your fund's performance during its fiscal year, which
ended October 31, 2004. In accordance with regulatory requirements, we
also include performance for the most current calendar quarter-end.
Performance should always be considered in light of a fund's investment
strategy. Data represents past performance. Past performance does not
guarantee future results. More recent returns may be less or more than
those shown. Investment return, net asset value, and market price will
fluctuate and you may have a gain or a loss when you sell your shares.
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TOTAL RETURN AND COMPARATIVE INDEX RESULTS FOR PERIODS ENDED 10/31/04
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Lipper
High Yield
Lehman Municipal
Municipal Debt Funds
Market Bond (closed-end)
NAV price Index category average*
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1 year 9.76% 6.35% 6.02% 8.57%
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5 years 34.49 7.12 41.48 33.12
Annual average 6.11 1.39 7.19 5.85
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10 years 79.54 64.16 97.69 82.00
Annual average 6.03 5.08 7.05 6.14
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Annual average
Life of fund
(since 2/24/89) 7.02 5.75 7.30 5.99
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Performance assumes reinvestment of distributions and does not account
for taxes.
Index and Lipper results should be compared to fund performance at net
asset value.
* Over the 1-, 5-, and 10-year periods ended 10/31/04, there were 14,
12, and 12 funds, respectively, in this Lipper category.
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TOTAL RETURN FOR PERIODS ENDED 9/30/04 (MOST RECENT CALENDAR QUARTER)
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NAV Market price
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1 year 8.35% 2.64%
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5 years 30.25 4.42
Annual average 5.43 0.87
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10 years 73.76 57.73
Annual average 5.68 4.66
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Annual average
Life of fund
(since 2/24/89) 6.99 5.73
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PRICE AND DISTRIBUTION INFORMATION 12 MONTHS ENDED 10/31/04
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Distributions from common shares
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Number 12
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Income 1 $0.5013
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Capital gains 1 --
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Total $0.5013
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Series A Series B Series C
Distributions from prefer shares (550 shares) (550 shares) (650 shares)
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Income 1 $1,137.98 $1,216.21 $1,129.99
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Capital gains 1 -- -- --
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Total $1,137.98 $1,216.21 $1,129.99
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Share value (common shares) NAV Market price
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10/31/03 $7.98 $7.34
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10/31/04 8.18 7.29
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Current return (common shares, end of period)
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Current dividend rate 2 6.12% 6.86%
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Taxable equivalent 3 9.42 10.55
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1 Capital gains, if any, are taxable for federal and, in most cases,
state purposes. For some investors, investment income may be subject to
the federal alternative minimum tax. Income from federally exempt funds
may be subject to state and local taxes.
2 Most recent distribution, excluding capital gains, annualized and
divided by NAV or market price at end of period.
3 Assumes maximum 35% federal tax rate for 2004. Results for investors
subject to lower tax rates would not be
as advantageous.
Terms and definitions
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested
all distributions in the fund.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities and the net assets allocated to remarketed preferred shares,
divided by the number of outstanding common 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
exchanges such as the American Stock Exchange and the New York Stock
Exchange.
Comparative indexes
Lehman Aggregate Bond Index is an unmanaged index used as a general
measure of U.S. fixed-income securities.
Lehman Government Bond Index is an unmanaged index of U.S. Treasury and
agency securities.
Lehman Intermediate Treasury Bond Index is an unmanaged index of
Treasury bonds with maturities between 1 and 10 years.
Lehman Municipal Bond Index is an unmanaged index of long-term
fixed-rate investment-grade tax-exempt bonds.
Russell 2000 Growth Index is an unmanaged index of those companies in
the Russell 2000 Index chosen for their growth orientation.
S&P 500 Index is an unmanaged index of common stock performance.
S&P Utilities Index is an unmanaged index of common stock issued by
utilities companies.
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 funds
(without sales charges) with similar current investment styles or
objectives as determined by Lipper. Lipper category averages reflect
performance trends for funds within a category and are based on results
at net asset value.
Putnam's policy on confidentiality
In order to conduct business with our shareholders, we must obtain
certain personal information such as account holders' addresses,
telephone numbers, Social Security numbers, and the names of their
financial advisors. We use this information to assign an account number
and to help us maintain accurate records of transactions and account
balances.
It is our policy to protect the confidentiality of your information,
whether or not you currently own shares of our funds, and in particular,
not to sell information about you or your accounts to outside marketing
firms. We have safeguards in place designed to prevent unauthorized
access to our computer systems and procedures to protect personal
information from unauthorized use.
Under certain circumstances, we share this information with outside
vendors who provide services to us, such as mailing and proxy
solicitation. In those cases, the service providers enter into
confidentiality agreements with us, and we provide only the information
necessary to process transactions and perform other services related to
your account. We may also share this information with our Putnam
affiliates to service your account or provide you with information about
other Putnam products or services. It is also our policy to share
account information with your financial advisor, if you've listed one on
your Putnam account.
If you would like clarification about our confidentiality policies or
have any questions or concerns, please don't hesitate to contact us at
1-800-225-1581, Monday through Friday, 8:30 a.m. to 7:00 p.m., or
Saturdays from 9:00 a.m. to 5:00 p.m. Eastern Time.
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, 2004, are available on the Putnam Individual Investor Web site,
www.putnaminvestments.com/individual, 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
For periods ending on or after July 9, 2004, 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.
A guide to the financial statements
These sections of the report, as well as the accompanying Notes,
preceded by the Report of Independent Registered Public Accounting Firm,
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 net assets
allocated to remarketed 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 year.
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.
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
highlight table also includes the current reporting period. For open-end
funds, a separate table is provided for each share class.
Report of Independent Registered
Public Accounting Firm
To the Board of Trustees and Shareholders
Putnam Managed Municipal Income Trust
We have audited the accompanying statement of assets and liabilities of
Putnam Managed Municipal Income Trust, including the fund's portfolio,
as of October 31, 2004, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the
two years in the period then ended and the financial highlights for each
of the periods presented. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform our 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 October 31, 2004 by
correspondence with the custodian and brokers or by other appropriate
auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Putnam Managed Municipal Income Trust as of
October 31, 2004, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted
in the United States of America.
/S/ KPMG LLP
Boston, Massachusetts
December 7, 2004
The fund's portfolio
October 31, 2004
Key to Abbreviations
-------------------------------------------------------------------------------
AMBAC AMBAC Indemnity Corporation
COP Certificate of Participation
FNMA Coll. Federal National Mortgage Association Collateralized
FRB Floating Rate Bonds
FSA Financial Security Assurance
GNMA Coll. Government National Mortgage Association Collateralized
G.O. Bonds General Obligation Bonds
IFB Inverse Floating Rate Bonds
MBIA MBIA Insurance Company
PSFG Permanent School Fund Guaranteed
U.S. Govt. Coll. U.S. Government Collateralized
VRDN Variable Rate Demand Notes
Municipal bonds and notes (98.8%) (a)
Principal amount Rating (RAT) Value
Alabama (0.3%)
-------------------------------------------------------------------------------
$1,500,000 Butler, Indl. Dev. Board Rev. Bonds
(Solid Waste Disp. James River
Corp.), 8s, 9/1/28 BB+ $1,540,680
Arizona (1.7%)
-------------------------------------------------------------------------------
1,000,000 Apache Cnty., Indl. Dev. Auth. Poll.
Control Rev. Bonds (Tucson Elec.
Pwr. Co.), Ser. B, 5 7/8s, 3/1/33 Ba3 1,000,180
1,000,000 AZ Hlth. Fac. Auth. Hosp. Syst.
Rev. Bonds (John C. Lincoln Hlth.
Network), 6 3/8s, 12/1/37 BBB 1,050,000
1,800,000 Casa Grande, Indl. Dev. Auth.
Rev. Bonds (Casa Grande Regl. Med.
Ctr.), Ser. A, 7 5/8s, 12/1/29 B-/P 1,905,750
500,000 Cochise Cnty., Indl. Dev. Auth.
Rev. Bonds (Sierra Vista Regl. Hlth.
Ctr.), Ser. A, 6.2s, 12/1/21 BB+/P 512,500
3,000,000 Coconino Cnty., Poll. Control
Rev. Bonds (Tuscon/Navajo Elec.
Pwr.), Ser. A, 7 1/8s, 10/1/32 Ba3 3,120,000
560,000 Scottsdale, Indl. Dev. Auth.
Rev. Bonds (Westminster Village),
7 7/8s, 6/1/09 AAA/P 590,302
1,000,000 Scottsdale, Indl. Dev. Auth. Hosp.
Rev. Bonds (Scottsdale Hlth. Care),
5.8s, 12/1/31 A3 1,053,750
--------------
9,232,482
Arkansas (1.7%)
-------------------------------------------------------------------------------
4,600,000 AR State Hosp. Dev. Fin. Auth.
Rev. Bonds (Washington Regl. Med.
Ctr.), 7 3/8s, 2/1/29 Baa3 5,094,500
1,000,000 Little Rock G.O. Bonds (Cap. Impt.),
FSA, 3.95s, 4/1/19 Aaa 1,015,000
2,750,000 Northwest Regl. Arpt. Auth.
Rev. Bonds, 7 5/8s, 2/1/27 BB/P 2,973,438
--------------
9,082,938
California (12.6%)
-------------------------------------------------------------------------------
250,000 Association of Bay Area Governments
(ABAG) Fin. Auth. for Nonprofit
Corps. Rev. Bonds (San Diego Hosp.
Assn.), Ser. C, 5 3/8s, 3/1/21 Baa1 257,813
1,700,000 CA Hlth. Fac. Auth. IFB (Catholic
Hlth. Care West), AMBAC, 8.806s,
7/1/17 Aaa 1,772,250
CA State Dept. of Wtr. Resources
Rev. Bonds, Ser. A
1,000,000 6s, 5/1/15 A2 1,160,000
20,000,000 AMBAC, 5 1/2s, 5/1/13 Aaa 22,925,000
3,000,000 5 1/2s, 5/1/11 A2 3,390,000
2,250,000 CA Statewide Cmnty. Dev. Auth. Apt.
Dev. Rev. Bonds (Irvine Apt.
Cmntys.), Ser. A-3, 5.1s, 5/15/25 Baa2 2,385,000
3,000,000 CA Statewide Cmnty. Dev. Auth. COP
(The Internext Group), 5 3/8s,
4/1/30 BBB- 2,988,750
1,000,000 Capistrano, Unified School Dist.
Cmnty. Fac. Special Tax (No 98-2
Ladera), 5.7s, 9/1/20 BB/P 1,027,500
Chula Vista, Cmnty. Fac. Dist.
Special Tax Rev. Bonds
300,000 (No 07-I-Otay Ranch Village Eleven),
5 7/8s, 9/1/34 BB-/P 308,250
300,000 (No. 07-I Otay Ranch Village
Eleven), 5.8s, 9/1/28 BB-/P 307,500
1,250,000 Chula Vista, Cmnty. Fac. Dist.
Special Tax Rev. Bonds (No. 08-1
Otay Ranch Village Six), 6s, 9/1/33 BB-/P 1,260,938
10,775,000 Corona, COP (Vista Hosp. Syst.),
zero %, 7/1/29 (In default) (NON) D/P 215,500
750,000 Folsom, Special Tax Rev. Bonds
(Cmnty. Facs. Dist. No. 10), 5 7/8s,
9/1/28 BB/P 763,125
1,970,000 Gilroy, Rev. Bonds (Bonfante Gardens
Park), 8s, 11/1/25 D/P 1,393,775
2,500,000 Golden State Tobacco Securitization
Corp. Rev. Bonds, Ser. B, 5 5/8s,
6/1/38 A- 2,653,125
1,100,000 Murrieta, Cmnty. Fac. Dist. Special
Tax (No. 2 The Oaks Impt. Area A),
6s, 9/1/34 BB-/P 1,120,625
650,000 Orange Cnty., Cmnty. Fac. Dist.
Special Tax Rev. Bonds (No. 02-1
Ladera Ranch), Ser. A, 5.55s,
8/15/33 BB+/P 663,000
1,250,000 Sacramento, Special Tax (North
Natomas Cmnty. Fac.), Ser. 4-C, 6s,
9/1/33 BB+/P 1,292,188
7,000,000 San Bernardino Cnty.,
Certificates of Participation (Med.
Ctr. Fin.), Ser. A, MBIA, 6 1/2s,
8/1/28 Aaa 7,387,170
8,750,000 Santa Clara Cnty., Fin. Auth. Lease
Rev. Bonds (VMC Fac. Replacement
Project), Ser. A, AMBAC, 6 3/4s,
11/15/20 Aaa 8,940,050
2,520,000 Santaluz Cmnty., Facs. Dist. No. 2
Special Tax Rev. Bonds (Impt. Area
No. 1), Ser. B, 6 3/8s, 9/1/30 BB+/P 2,583,000
4,000,000 Thousand Oaks, Cmnty. Fac. Dist.
Special Tax Rev. Bonds (Marketplace
94-1), zero %, 9/1/14 B/P 1,980,000
2,500,000 Vallejo, COP (Marine World
Foundation), 7.2s, 2/1/26 BBB-/P 2,568,750
--------------
69,343,309
Colorado (1.9%)
-------------------------------------------------------------------------------
3,015,000 CO Hlth. Fac. Auth.
Rev. Bonds (Evangelical Lutheran),
3.05s, 10/1/05 A3 3,038,487
CO Hwy. Auth. Rev. Bonds (E-470 Pub.
Hwy.), Ser. B
15,500,000 zero %, 9/1/35 Baa3 1,608,125
16,500,000 zero %, 9/1/34 Baa3 1,835,625
Denver, City & Cnty. Arpt.
Rev. Bonds
1,050,000 Ser. D, AMBAC, 7 3/4s, 11/15/13 AAA 1,303,313
2,500,000 MBIA, 5 1/2s, 11/15/25 Aaa 2,659,375
--------------
10,444,925
Connecticut (1.6%)
-------------------------------------------------------------------------------
CT State Hlth. & Edl. Fac. Auth.
VRDN
7,000,000 Ser. U, 1.64s, 7/1/33 VMIG1 7,000,000
2,000,000 (Yale U.), Ser. U2, 1.64s, 7/1/33 VMIG1 2,000,000
--------------
9,000,000
District of Columbia (0.7%)
-------------------------------------------------------------------------------
4,000,000 DC Tobacco Settlement Fin. Corp.
Rev. Bonds, 6 1/2s, 5/15/33 BBB 3,780,000
Florida (3.7%)
-------------------------------------------------------------------------------
2,000,000 Cap. Trust Agcy. Rev. Bonds
(Seminole Tribe Convention), Ser. A,
10s, 10/1/33 B/P 2,467,500
1,500,000 CFM Cmnty. Dev. Dist. Rev. Bonds,
Ser. A, 6 1/4s, 5/1/35 BB-/P 1,539,375
Fishhawk, Cmnty. Dev. Dist. II
Rev. Bonds
500,000 Ser. A, 6 1/8s, 5/1/34 BB-/P 510,625
1,025,000 Ser. B, 5s, 11/1/07 BB-/P 1,035,250
770,000 FL State Mid-Bay Bridge Auth.
Rev. Bonds, Ser. A, 6.05s, 10/1/22 BBB/P 796,950
500,000 Fleming Island, Plantation Cmnty.
Dev. Dist. Special Assmt.
Rev. Bonds, Ser. B, 7 3/8s, 5/1/31 BB/P 541,250
480,000 Gateway Svcs. Cmnty. Dev. Dist.
Special Assmt. Bonds (Stoneybrook),
5 1/2s, 7/1/08 BB-/P 492,600
500,000 Heritage Harbor, South Cmnty. Dev.
Distr. Rev. Bonds, Ser. A, 6 1/2s,
5/1/34 BB-/P 526,875
575,000 Heritage Isle at Viera, Cmnty. Dev.
Dist. Special Assmt., Ser. B, 5s,
11/1/09 BB/P 577,875
1,250,000 Islands at Doral III, Cmnty. Dev.
Dist. Special Assmt. Rev. Bonds,
Ser. 04-A, 5.9s, 5/1/35 BB 1,265,625
1,000,000 Lee Cnty., Indl. Dev. Auth.
Rev. Bonds (Alliance Cmnty.
Project), Ser. C, 5 1/2s, 11/15/29 BBB- 970,000
1,335,000 Miami Beach, Hlth. Fac. Auth. Hosp.
Rev. Bonds (Mount Sinai Med. Ctr.),
Ser. A, 6.7s, 11/15/19 BB 1,391,738
40,000 Oakstead Cmnty. Dev. Dist. Cap.
Impt. Rev. Bonds, Ser. B, 6 1/2s,
5/1/07 BB/P 40,750
1,500,000 Reunion West, Cmnty. Dev. Dist.
Special Assmt., 6 1/4s, 5/1/36 BB-/P 1,526,250
1,500,000 South Miami, Hlth. Fac. Auth.
Rev. Bonds (Baptist Hlth.), 5 1/4s,
11/15/33 Aa3 1,543,125
1,500,000 St. Johns Cnty., Hlth. Care Indl.
Dev. Auth. Rev. Bonds (Glenmoor St.
Johns Project), Ser. A, 8s, 1/1/30 B-/P 1,573,125
1,000,000 Sterling Hill, Cmnty. Dev. Dist.
Rev. Bonds, Ser. B, 5 1/2s, 11/1/10 BB-/P 1,017,500
1,250,000 Westchester Cmnty. Dev. Dist. No. 1
Special Assmt. (Cmnty.
Infrastructure), 6 1/8s, 5/1/35 BB-/P 1,271,875
1,250,000 World Commerce Cmnty. Dev. Dist.
Special Assmt., Ser. A-1, 6 1/2s,
5/1/36 BB-/P 1,270,313
--------------
20,358,601
Georgia (1.9%)
-------------------------------------------------------------------------------
4,000,000 Burke Cnty., Poll. Control Dev.
Auth. Mandatory Put Bonds (GA Power
Co.), 4.45s, 12/1/08 A2 4,245,000
425,000 Fulton Cnty., Res. Care Fac.
Rev. Bonds (Canterbury Court), Class
A, 6 1/8s, 2/15/34 B+/P 427,656
700,000 GA Med. Ctr. Hosp. Auth. IFB, MBIA,
10.777s, 8/1/10 Aaa 704,319
2,500,000 Muni. Elec. Auth. Rev. Bonds, AMBAC,
5s, 1/1/26 Aaa 2,718,750
2,145,000 Rockdale Cnty., Dev. Auth. Solid
Waste Disp. Rev. Bonds (Visay Paper,
Inc.), 7.4s, 1/1/16 B+/P 2,217,051
--------------
10,312,776
Hawaii (0.3%)
-------------------------------------------------------------------------------
1,760,000 HI Dept. of Trans. Special Fac.
Rev. Bonds (Continental Airlines,
Inc.), 7s, 6/1/20 B 1,496,000
Illinois (1.4%)
-------------------------------------------------------------------------------
3,500,000 Chicago, G.O. Bonds, Ser. A, AMBAC,
5 5/8s, 1/1/39 Aaa 3,836,875
3,250,000 IL Dev. Fin. Auth. Hosp. Rev. Bonds
(Adventist Hlth. Syst./Sunbelt
Obligation), 5.65s, 11/15/24 A 3,400,312
500,000 IL Hlth. Fac. Auth. Rev. Bonds (St.
Benedict), Ser. 03A-1, 6.9s,
11/15/33 B+/P 508,750
--------------
7,745,937
Indiana (2.0%)
-------------------------------------------------------------------------------
2,500,000 IN State Dev. Fin. Auth. Env. Impt.
Rev. Bonds (USX Corp.), 5.6s,
12/1/32 Baa1 2,543,750
6,500,000 IN Trans. Fin. Auth. Arpt. Facs.
Lease Rev. Bonds, Ser. A, AMBAC, 5s,
11/1/16 Aaa 6,825,000
1,750,000 Rockport, Poll. Control Mandatory
Put Bonds (Indiana Michigan Pwr.
Co.), Ser. C, 2 5/8s, 10/1/06 Baa2 1,745,625
--------------
11,114,375
Iowa (0.9%)
-------------------------------------------------------------------------------
IA Fin. Auth. Hlth. Care Fac.
Rev. Bonds (Care Initiatives)
2,940,000 9 1/4s, 7/1/25 BBB-/P 3,564,750
1,350,000 9.15s, 7/1/09 BBB-/P 1,581,188
--------------
5,145,938
Kentucky (0.6%)
-------------------------------------------------------------------------------
1,000,000 Boone Cnty., Poll. Control
Rev. Bonds (Dayton Pwr. & Lt. Co.),
Ser. A, 6 1/2s, 11/15/22 Baa3 1,018,370
1,700,000 KY Econ. Dev. Fin. Auth. Rev. Bonds
(Norton Hlth. Care, Inc.), Ser. A,
6 1/2s, 10/1/20 BBB/P 1,853,000
460,000 Scott Cnty., Indl. Dev. Rev. Bonds
(Hoover Group, Inc.), 8 1/2s,
11/1/14 Ba3 253,000
--------------
3,124,370
Louisiana (0.8%)
-------------------------------------------------------------------------------
1,140,000 LA Pub. Fac. Auth. Hosp. Rev. Bonds
(Lake Charles Memorial Hosp.),
8 5/8s, 12/1/30 CCC/P 919,125
500,000 Tangipahoa Parish Hosp. Svcs.
Rev. Bonds (North Oaks Med. Ctr.),
Ser. A, 5s, 2/1/25 A 502,500
2,750,000 W. Feliciana Parish, Poll. Control
Rev. Bonds (Gulf States Util. Co.),
Ser. C, 7s, 11/1/15 Ba1 2,825,433
--------------
4,247,058
Maine (0.8%)
-------------------------------------------------------------------------------
1,965,000 ME State Hsg. Auth. Rev. Bonds,
Ser. D-2-AMT, 5s, 11/15/27 Aa1 2,070,619
2,000,000 Rumford, Solid Waste Disp.
Rev. Bonds (Boise Cascade Corp.),
6 7/8s, 10/1/26 Ba2 2,115,000
--------------
4,185,619
Maryland (0.5%)
-------------------------------------------------------------------------------
1,000,000 MD State Hlth. & Higher Edl. Fac.
Auth. Rev. Bonds (Medstar Hlth.),
5 3/4s, 8/15/15 Baa2 1,102,500
1,850,000 Westminster, Econ. Dev. Rev. Bonds
(Carroll Lutheran Village), Ser. A,
5 7/8s, 5/1/21 BB/P 1,882,375
--------------
2,984,875
Massachusetts (6.4%)
-------------------------------------------------------------------------------
600,000 Boston, Indl. Dev. Fin. Auth.
Rev. Bonds (Springhouse, Inc.), 6s,
7/1/28 BB-/P 563,250
MA State Hlth. & Edl. Fac. Auth.
Rev. Bonds
2,000,000 (Civic Investments), Ser. A, 9s,
12/15/15 BB/P 2,300,000
1,185,000 (Norwood Hosp.), Ser. C, 7s, 7/1/14 Ba2 1,499,025
1,200,000 (Jordan Hosp.), Ser. E, 6 3/4s,
10/1/33 BBB- 1,260,000
2,225,000 (UMass Memorial), Ser. C, 6 5/8s,
7/1/32 Baa2 2,364,063
1,875,000 (UMass Memorial), Ser. C, 6 1/2s,
7/1/21 Baa2 2,017,969
1,500,000 (Caritas Christi Oblig. Group),
Ser. A, 5 1/4s, 7/1/08 BBB 1,591,875
MA State Hsg. Fin. Agcy. Rev. Bonds
(Rental Mtge.)
2,000,000 Ser. C, AMBAC, 5 5/8s, 7/1/40 Aaa 2,062,500
15,290,000 Ser. A, AMBAC, 5 1/2s, 7/1/40 Aaa 15,729,588
MA State Indl. Fin. Agcy. Rev. Bonds
500,000 (1st Mtge. Stone Institution &
Newton), 7.9s, 1/1/24 BB-/P 510,840
1,000,000 (1st Mtge. Brookhaven), Ser. A, 7s,
1/1/15 BBB/P 1,027,500
1,000,000 (1st Mtge. Brookhaven), Ser. A, 7s,
1/1/09 BBB/P 1,035,000
1,550,000 (1st Mtge. Berkshire Retirement),
Ser. A, 6 5/8s, 7/1/16 BBB- 1,571,313
1,500,000 (1st Mtge. Brookhaven), Ser. B,
5 1/4s, 1/1/17 BBB/P 1,507,500
--------------
35,040,423
Michigan (3.0%)
-------------------------------------------------------------------------------
500,000 Flint, Hosp. Bldg. Auth. Rev. Bonds
(Hurley Med. Ctr.), 6s, 7/1/20 Baa3 508,125
350,000 Garden City, Hosp. Fin. Auth.
Rev. Bonds (Garden City Hosp. OB
Group), Ser. A, 5 3/4s, 9/1/17 Ba2 330,750
1,100,000 Macomb Cnty., Hosp. Fin. Auth.
Rev. Bonds (Mt. Clemens Gen. Hosp.),
Ser. B, 5 7/8s, 11/15/34 BB 1,027,125
1,500,000 MI State Hosp. Fin. Auth. Rev. Bonds
(Oakwood Hosp.), Ser. A, 6s, 4/1/22 A2 1,631,250
2,000,000 Midland Cnty., Econ. Dev. Corp.
Rev. Bonds, 6 3/4s, 7/23/09 Ba3 2,087,500
1,700,000 Pontiac, Hosp. Fin. Auth. Rev. Bonds
(NOMC Obligation Group), Ser. B, 6s,
8/1/18 Ba1 1,515,125
2,975,000 Warren Cons. School Dist. G.O.
Bonds, FSA, 5 3/8s, 5/1/18 Aaa 3,279,938
6,670,000 Waterford, Econ. Dev. Corp.
Rev. Bonds (Canterbury Hlth.), 6s,
1/1/39 B-/P 4,935,800
2,000,000 Wayne Charter Cnty., Special Arpt.
Fac. Rev. Bonds (Northwest Airlines,
Inc.), 6s, 12/1/29 B+/P 1,385,000
--------------
16,700,613
Minnesota (0.8%)
-------------------------------------------------------------------------------
500,000 Minneapolis, Rev. Bonds (Walker
Methodist Sr. Svcs.), Ser. C, 6s,
11/15/28 B+/P 390,625
500,000 Northfield, Hlth. Care Fac.
Rev. Bonds (Retirement Ctr.),
Ser. A, 5 3/4s, 5/1/16 B/P 500,620
400,000 Sauk Rapids Hlth. Care & Hsg. Fac.
Rev. Bonds (Good Shepherd Lutheran
Home), 6s, 1/1/34 B/P 404,000
3,055,000 St. Paul, Hsg. & Hosp. Redev. Auth.
Rev. Bonds (Healtheast), Ser. B,
6 5/8s, 11/1/17 Ba2 3,086,925
--------------
4,382,170
Mississippi (0.7%)
-------------------------------------------------------------------------------
1,500,000 Lowndes Cnty., Solid Waste Disp. &
Poll. Control Rev. Bonds
(Weyerhaeuser Co.), Ser. B, 6.7s,
4/1/22 Baa2 1,785,000
2,250,000 MS Bus. Fin. Corp. Poll. Control
Rev. Bonds (Syst. Energy Resources,
Inc.), 5.9s, 5/1/22 BBB 2,275,313
--------------
4,060,313
Missouri (1.2%)
-------------------------------------------------------------------------------
1,500,000 Cape Girardeau Cnty., Indl. Dev.
Auth. Hlth. Care Fac. Rev. Bonds
(St. Francis Med. Ctr.),
Ser. A, 5 1/2s, 6/1/32 A 1,546,875
1,500,000 Kansas City, Indl. Dev. Auth. Hlth.
Fac. Rev. Bonds (First Mtg. Bishop
Spencer), Ser. A, 6 1/2s, 1/1/35 BB-/P 1,530,000
1,985,000 MO Hsg. Dev. Comm. Rev. Bonds (Home
Ownership), GNMA/FNMA Coll., 5.55s,
9/1/34 AAA 2,171,094
1,450,000 MO State Hlth. & Edl. Fac. Auth.
Rev. Bonds (BJC Hlth. Syst.),
5 1/4s, 5/15/32 Aa2 1,497,125
--------------
6,745,094
Montana (0.3%)
-------------------------------------------------------------------------------
1,775,000 Forsyth, Poll. Control Mandatory Put
Bonds (Avista Corp.), AMBAC, 5s,
12/30/08 Aaa 1,912,562
Nebraska (0.1%)
-------------------------------------------------------------------------------
920,000 Gage Cnty., Indl. Dev. Rev. Bonds
(Hoover Group, Inc.), 8 1/2s,
12/1/07 Ba3 506,000
Kearney, Indl. Dev. Rev. Bonds
68,154 (Great Platte River), 8s, 9/1/12 CCC/P 59,124
791,466 (Brookhaven), zero %, 9/1/12 CCC/P 3,957
--------------
569,081
Nevada (2.1%)
-------------------------------------------------------------------------------
1,000,000 Clark Cnty., Impt. Dist. Special
Assmt. (Dist. No. 142), 6 3/8s,
8/1/23 BB-/P 1,017,500
5,000,000 Clark Cnty., Indl. Dev. Rev. Bonds
(Southwest Gas Corp.), Ser. C,
AMBAC, 5.95s, 12/1/38 Aaa 5,593,750
1,595,000 Henderson, Local Impt. Dist. Special
Assmt. (No. T-14), 3.2s, 3/1/06 BB-/P 1,598,988
500,000 Henderson, Local Impt. Dist. Special
Assmt. Bonds (No. T-14), 5.8s,
3/1/23 BB-/P 514,375
875,000 Las Vegas, Local Impt. Board Special
Assmt. (Dist. No. 607), 5.9s, 6/1/18 BB-/P 901,294
2,000,000 Washoe Cnty., Wtr. Fac. Mandatory
Put Bonds (Sierra Pacific Pwr. Co.),
5s, 7/1/09 Ba2 2,017,500
--------------
11,643,407
New Hampshire (1.0%)
-------------------------------------------------------------------------------
1,275,000 NH Hlth. & Ed. Fac. Auth. Rev. Bonds
(Kendal at Hanover), Ser. A, 5s,
10/1/18 BBB 1,287,750
2,565,000 NH State Bus. Fin. Auth. Rev. Bonds
(Alice Peck Day Hlth. Syst.),
Ser. A, 7s, 10/1/29 BBB-/P 2,597,063
1,750,000 NH State Bus. Fin. Auth. Poll.
Control Rev. Bonds, 3 1/2s, 7/1/27 Baa2 1,763,125
--------------
5,647,938
New Jersey (2.7%)
-------------------------------------------------------------------------------
NJ Econ. Dev. Auth. Rev. Bonds
1,300,000 (Cranes Mill), Ser. A, 7 1/2s,
2/1/27 BB-/P 1,360,125
1,250,000 (Cedar Crest Vlg., Inc.), Ser. A,
7 1/4s, 11/15/31 BB-/P 1,298,438
1,500,000 (Newark Arpt. Marriot Hotel), 7s,
10/1/14 Ba3 1,558,125
500,000 (First Mtge. Presbyterian Home),
Ser. A, 6 3/8s, 11/1/31 BB/P 511,250
2,500,000 (Cigarette Tax), 5 1/2s, 6/15/24 Baa2 2,559,375
1,750,000 NJ Econ. Dev. Auth. Solid Waste
Rev. Bonds (Disp. Waste Management),
5.3s, 6/1/15 BBB 1,859,375
NJ Hlth. Care Fac. Fin. Auth.
Rev. Bonds
1,300,000 (Trinitas Hosp. Oblig. Group),
7 1/2s, 7/1/30 Baa3 1,465,750
2,000,000 (United Methodist Homes), Ser. A,
5 3/4s, 7/1/29 BB+ 1,935,000
1,250,000 (Atlantic City Med. Ctr.), 5 3/4s,
7/1/25 A2 1,320,313
1,000,000 (Somerset Med. Ctr.), 5 1/2s, 7/1/33 Baa2 1,011,250
--------------
14,879,001
New Mexico (0.3%)
-------------------------------------------------------------------------------
1,740,000 Farmington, Poll. Control Mandatory
Put Bonds (Pub. Svc. San Juan),
Class B, 2.1s, 4/1/06 Baa2 1,726,950
New York (12.6%)
-------------------------------------------------------------------------------
500,000 Huntington, Hsg. Auth. Rev. Bonds
(Gurwin Jewish Sr. Residence),
Ser. A, 6s, 5/1/39 B+/P 465,625
3,600,000 Long Island, Pwr. Auth. NY Elec.
Syst. Rev. Bonds, Ser. A, 5 3/4s,
12/1/24 A- 3,874,500
2,000,000 Nassau Cnty., Indl. Dev. Agcy.
Rev. Bonds (Keyspan-Glenwood),
5 1/4s, 6/1/27 A 2,047,500
13,000,000 Nassau Cnty., Interim Fin. Auth.
Rev. Bonds, Ser. B, MBIA, 5s,
11/15/10 Aaa 14,462,500
10,000,000 NY City, G.O. Bonds, Ser. B, 5 1/4s,
12/1/09 A2 11,100,000
1,500,000 NY City, Indl. Dev. Agcy. Rev. Bonds
(Visy Paper, Inc.), 7.95s, 1/1/28 B-/P 1,567,500
3,025,000 NY City, Indl. Dev. Agcy. Special
Fac. Rev. Bonds (British Airways),
5 1/4s, 12/1/32 BB+ 2,212,018
1,490,000 NY City, Indl. Dev. Agency
Rev. Bonds (Staten Island U. Hosp.
Project), 6.45s, 7/1/32 Ba3 1,445,300
10,000,000 NY City, Muni. Wtr. Fin. Auth.
Rev. Bonds, Ser. C, MBIA, 5 1/2s,
6/15/17 Aaa 10,625,000
900,000 NY State Dorm. Auth. Rev. Bonds
(Winthrop- U. Hosp. Assn.), Ser. A,
5 1/2s, 7/1/32 Baa1 930,375
2,000,000 Onondaga Cnty., Indl. Dev. Agcy.
Rev. Bonds (Solvay Paperboard, LLC),
7s, 11/1/30 (acquired 12/9/98, cost
$2,000,000) (RES) BB-/P 2,117,500
15,000,000 Port. Auth. NY & NJ Special
Obligation Rev. Bonds (JFK Intl. Air
Term. - 6), MBIA, 5.9s, 12/1/17 Aaa 16,406,250
1,700,000 Suffolk Cnty., Indl. Dev. Agcy.
Rev. Bonds (Peconic Landing),
Ser. A, 8s, 10/1/30 B+/P 1,795,625
--------------
69,049,693
North Carolina (1.5%)
-------------------------------------------------------------------------------
NC Eastern Muni. Pwr. Agcy. Syst.
Rev. Bonds
1,500,000 Ser. D, 6 3/4s, 1/1/26 Baa2 1,670,625
3,000,000 Ser. A, 5 3/4s, 1/1/26 Baa2 3,153,750
750,000 NC Med. Care Cmnty. Healthcare Fac.
Rev. Bonds (Deerfield), Ser. A, 5s,
11/1/23 A-/P 758,438
NC State Muni. Pwr. Agcy. Rev. Bonds
(No. 1, Catawba Elec.)
1,000,000 Ser. B, 6 1/2s, 1/1/20 Baa1 1,130,000
1,300,000 Ser. A, 5 1/2s, 1/1/13 Baa1 1,439,750
--------------
8,152,563
Ohio (2.6%)
-------------------------------------------------------------------------------
Cuyahoga Cnty., Rev. Bonds, Ser. A
1,280,000 6s, 1/1/16 A1 1,470,400
2,000,000 6s, 1/1/15 A1 2,302,500
3,000,000 OH State Air Quality Dev. Auth.
Rev. Bonds (Toledo Poll. Control),
Ser. A, 6.1s, 8/1/27 Baa2 3,127,500
5,100,000 OH State Air Quality Dev. Auth.
VRDN (Columbus Southern), Ser. C,
1.77s, 12/1/38 VMIG1 5,100,000
2,100,000 OH State Solid Waste Rev. Bonds
(General Motors Corp.), 6.3s,
12/1/32 Baa2 2,218,125
--------------
14,218,525
Oklahoma (2.3%)
-------------------------------------------------------------------------------
3,150,000 OK City Arpt. Trust Rev. Bonds Jr.
Lien 27th Ser., Ser. A, FSA, 5s,
7/1/18 Aaa 3,342,938
1,575,000 OK Dev. Fin. Auth. Rev. Bonds
(Hillcrest Hlth. Care Syst.),
Ser. A, U.S. Govt. Coll., 5 5/8s,
8/15/29 AAA 1,787,625
7,000,000 OK State Indl. Dev. Auth. Rev. Bonds
(Hlth. Syst.-Oblig. Group), Ser. A,
MBIA, 5 3/4s, 8/15/29 Aaa 7,612,500
--------------
12,743,063
Oregon (0.6%)
-------------------------------------------------------------------------------
2,000,000 Multnomah Cnty., Hosp. Fac. Auth.
Rev. Bonds (Terwilliger Plaza),
6 1/2s, 12/1/29 BB-/P 2,057,500
1,000,000 OR State Hsg. & Cmnty. Svcs. Dept.
Rev. Bonds (Single Family Mtg.),
Ser. K, 5 5/8s, 7/1/29 Aa2 1,076,250
--------------
3,133,750
Pennsylvania (7.9%)
-------------------------------------------------------------------------------
1,995,000 Carbon Cnty., Indl. Dev. Auth.
Rev. Bonds (Panther Creek Partners),
6.65s, 5/1/10 BBB- 2,162,081
1,750,000 Dauphin Cnty., Gen. Auth. Rev. Bonds
(Office & Pkg.), Ser. A, 6s, 1/15/25 D/P 813,750
350,000 Lebanon Cnty., Hlth. Fac. Auth.
Rev. Bonds (Good Samaritan Hosp.),
6s, 11/15/35 Baa1 360,500
1,000,000 Lehigh Cnty., Gen. Purpose Auth.
Rev. Bonds (Lehigh Valley Hosp.
Hlth. Network), Ser. A, 5 1/4s,
7/1/32 A2 1,020,000
500,000 Monroe Cnty., Hosp. Auth. Rev. Bonds
(Pocono Med. Ctr.), 6s, 1/1/43 BBB+ 520,625
PA Convention Ctr. Auth. Rev. Bonds
750,000 Ser. A, 6 3/4s, 9/1/19 Baa2 769,425
7,250,000 MBIA, 6.7s, 9/1/14 Aaa 7,455,175
PA Econ. Dev. Fin. Auth. Rev. Bonds
7,750,000 (MacMillan Ltd. Partnership), 7.6s,
12/1/20 Baa2 8,355,895
1,000,000 (Amtrak), Ser. A, 6 3/8s, 11/1/41 A3 1,048,750
PA State Econ. Dev. Fin. Auth.
Resource Recvy. Rev. Bonds
1,750,000 (Colver), Ser. E, 8.05s, 12/1/15 BBB-/P 1,790,478
1,000,000 (Colver), Ser. D, 7 1/8s, 12/1/15 BBB- 1,023,750
4,200,000 (Northampton Generating), Ser. A,
6.6s, 1/1/19 BBB- 4,252,500
PA State Higher Edl. Fac. Auth.
Rev. Bonds
1,000,000 (Widener U.), 5.4s, 7/15/36 BBB+ 1,031,250
995,000 (Philadelphia College of Osteopathic
Medicine), 5s, 12/1/07 A 1,060,919
5,715,000 Philadelphia, Gas Wks. Rev. Bonds
(1975 Gen. Ordinance 17th), FSA, 5s,
7/1/07 Aaa 6,129,338
2,729,624 Philadelphia, Hosp. & Higher Ed.
Fac. Auth. Rev. Bonds (Graduate
Hlth. Syst.), 7 1/4s, 7/1/10 (In
default) (NON) D/P 3,412
2,000,000 Philadelphia, Indl. Dev. Auth. VRDN
(Fox Chase Cancer Ctr.), 1.74s,
7/1/25 A-1+ 2,000,000
2,000,000 Philadelphia, Indl. Dev. Auth. Arpt.
Rev. Bonds (Aero Philadelphia, LLC),
5 1/2s, 1/1/24 BB/P 1,852,500
1,800,000 Sayre, Hlth. Care Fac. Auth.
Rev. Bonds (Guthrie Hlth.), Ser. A,
5 7/8s, 12/1/31 A- 1,874,250
--------------
43,524,598
South Carolina (1.6%)
-------------------------------------------------------------------------------
775,000 Lexington Cnty. Rev. Bonds, 5 1/2s,
11/1/32 A2 801,156
1,000,000 Lexington Cnty. Hlth. Svcs. Dist.
Inc. Hosp. Rev. Bonds, 5 1/2s,
5/1/37 A2 1,028,750
3,000,000 Richland Cnty., Rev. Bonds (Intl.
Paper Co.), Ser. A, 4 1/4s, 10/1/07 Baa2 3,116,250
1,250,000 SC Hosp. Auth. Rev. Bonds (Med. U.),
Ser. A, 6 1/2s, 8/15/32 BBB+ 1,346,875
1,000,000 SC Jobs Econ. Dev. Auth. Hosp. Fac.
Rev. Bonds (Palmetto Hlth.
Alliance), Ser. A, 7 3/8s, 12/15/21 Baa2 1,241,250
1,300,000 SC Tobacco Settlement Rev. Mgt.
Rev. Bonds, Ser. B, 6 3/8s, 5/15/30 BBB 1,213,875
--------------
8,748,156
South Dakota (0.3%)
-------------------------------------------------------------------------------
2,000,000 SD Edl. Enhancement Funding Corp.
Rev. Bonds, Ser. B, 6 1/2s, 6/1/32 BBB 1,902,500
Tennessee (3.8%)
-------------------------------------------------------------------------------
12,000,000 Johnson City, Hlth. & Edl. Fac.
Hosp. Board Rev. Bonds (First Mtg.-
Mountain States Hlth.),
Ser. A, MBIA, 6s, 7/1/21 Aaa 13,635,000
3,700,000 Johnson City, Hlth. & Edl. Fac.
Board Hosp. Rev. Bonds (Mountain
States Hlth.), Ser. A, 7 1/2s,
7/1/33 BBB+ 4,347,500
600,000 Johnson City, Hlth. & Edl. Facs.
Board Retirement Fac. Rev. Bonds
(Appalachian Christian
Village), Ser. A, 6 1/4s, 2/15/32 BB-/P 585,750
Shelby Cnty., Hlth. Edl. & Hsg. Fac.
Hosp. Board Rev. Bonds (Methodist
Hlth. Care)
1,255,000 6 1/2s, 9/1/26 A3 1,535,806
745,000 6 1/2s, 9/1/26 A3 892,138
--------------
20,996,194
Texas (6.9%)
-------------------------------------------------------------------------------
5,500,000 Alliance, Arpt. Auth. Rev. Bonds
(Federal Express Corp.), 6 3/8s,
4/1/21 (SEG) Baa2 5,781,875
4,655,000 Carrollton, Farmers Branch Indpt.
School Dist. G.O. Bonds, PSFG, 5s,
2/15/17 Aaa 4,992,488
1,000,000 Comal Cnty., Hlth. Fac. Dev. Corp.
Rev. Bonds (Hlth. Care Syst. -
McKenna Memorial), Ser. A, 6 1/4s,
2/1/32 Baa2 1,028,750
2,360,000 Dallas-Fort Worth, Intl. Arpt. Fac.
Impt. Corp. Rev. Bonds (American
Airlines, Inc.), 6 3/8s, 5/1/35 Caa2 1,342,250
7,500,000 Harris Cnty., Rev. Bonds, Ser. B,
FSA, 5s, 8/15/32 Aaa 8,371,875
3,000,000 Harris Cnty., Hlth. Fac. Rev. Bonds
(Memorial Hermann Hlth. Care),
Ser. A, 6 3/8s, 6/1/29 A2 3,315,000
3,880,000 Houston, Arpt. Syst. Rev. Bonds
(Continental Airlines, Inc.),
Ser. C, 5.7s, 7/15/29 B- 2,614,150
2,000,000 Lower Neches Valley Indl. Dev. Swr.
Auth. Rev. Bonds (Mobil Oil Refining
Corp.), 6.4s, 3/1/30 Aaa 2,053,660
1,400,000 Matagorda Cnty., Navigation Dist. TX
Poll. Control FRB (American Elec.
Power), 2.15s, 5/1/30 Baa2 1,400,000
2,500,000 Sam Rayburn Muni. Pwr. Agcy.
Rev. Bonds, 6s, 10/1/21 Baa2 2,706,250
Tomball, Hosp. Auth. Rev. Bonds
(Tomball Regl. Hosp.)
2,000,000 6s, 7/1/29 Baa3 1,997,500
800,000 6s, 7/1/25 Baa3 800,000
800,000 6s, 7/1/19 Baa3 813,000
745,000 Tyler, Hlth. Fac. Dev. Corp.
Rev. Bonds (Mother Frances Hosp.),
5s, 7/1/08 Baa1 789,700
--------------
38,006,498
Utah (2.6%)
-------------------------------------------------------------------------------
Carbon Cnty., Solid Waste Disp.
Rev. Bonds (Laidlaw Env.), Ser. A
750,000 7 1/2s, 2/1/10 BB- 767,063
600,000 7.45s, 7/1/17 BB-/P 610,500
5,000,000 Intermountain Power Agency
Rev. Bonds, Ser. A, FSA, 5s, 7/1/11 Aaa 5,575,000
6,000,000 Tooele Cnty., Harbor & Term. Dist.
Port Fac. Rev. Bonds (Union
Pacific), Ser. A, 5.7s, 11/1/26 Baa2 6,127,500
1,000,000 UT Cnty., Env. Impt. Rev. Bonds
(Marathon Oil), 5.05s, 11/1/17 Baa1 1,102,500
--------------
14,182,563
Vermont (0.2%)
-------------------------------------------------------------------------------
1,000,000 VT Hsg. Fin. Agcy. Rev. Bonds, Ser.
19A, FSA, 4.62s, 5/1/29 Aaa 1,048,750
Virginia (0.8%)
-------------------------------------------------------------------------------
1,000,000 James Cnty., Indl. Dev. Auth.
Rev. Bonds (Williamsburg), Ser. A,
6 1/8s, 3/1/32 BB-/P 1,035,000
Roanoke Cnty. Indl. Dev. Auth.
Rev. Bonds (Res. Care Fac.), Ser. A
1,000,000 6.3s, 7/1/35 B+/P 1,015,000
500,000 4.4s, 7/1/08 B+/P 501,875
2,000,000 Russell Cnty. Indl. Dev. Auth. Poll.
Control Rev. Bonds (Appalachian Pwr.
Co.), Ser. I, 2.7s, 11/1/07 Baa2 2,002,500
--------------
4,554,375
Washington (1.0%)
-------------------------------------------------------------------------------
5,000,000 King Cnty., G.O. Bonds, Ser. C,
6 1/4s, 1/1/32 Aa1 5,500,000
West Virginia (0.3%)
-------------------------------------------------------------------------------
2,250,000 Princeton, Hosp. Rev. Bonds (Cmnty.
Hosp. Assn., Inc.), 6.1s, 5/1/29 B2 1,681,875
Wisconsin (1.8%)
-------------------------------------------------------------------------------
Badger Tobacco Settlement
Asset Securitization Corp.
Rev. Bonds
3,000,000 7s, 6/1/28 BBB 3,011,250
3,000,000 6 3/8s, 6/1/32 BBB 2,808,750
3,900,000 WI State Hlth. & Edl. Fac. Auth.
Rev. Bonds (Wheaton Franciscan),
5 3/4s, 8/15/30 A2 4,114,500
--------------
9,934,500
--------------
Total Municipal bonds and notes
(cost $532,616,116) $543,825,038
Preferred stocks (1.2%) (a)
Number of shares Value
-------------------------------------------------------------------------------
$2,000,000 Charter Mac. Equity Trust 144A
Ser. A, 6.625% cum. pfd. $2,205,000
4,000,000 MuniMae Tax Exempt Bond Subsidiary,
LLC 144A 6.875% cum. pfd. 4,455,000
--------------
Total Preferred stocks
(cost $6,000,000) $6,660,000
Common stocks (--%) (a) (cost $--)
Number of shares Value
-------------------------------------------------------------------------------
16,910 Hoover Group, Inc. (NON) $2
-------------------------------------------------------------------------------
Total Investments
(cost $538,616,116) $550,485,040
-------------------------------------------------------------------------------
(a) Percentages indicated are based on portfolio market value.
(RAT) The Moody's or Standard & Poor's ratings indicated are believed to
be the most recent ratings available at October 31, 2004 for the
securities listed. Ratings are generally ascribed to securities at the
time of issuance. While the agencies may from time to time revise such
ratings, they undertake no obligation to do so, and the ratings do not
necessarily represent what the agencies would ascribe to these
securities at October 31, 2004. Securities rated by Putnam are indicated
by "/P". Ratings are not covered by the Report of Independent Registered
Public Accounting Firm.
(NON) Non-income-producing security.
(RES) Restricted, excluding 144A securities, as to public resale. The
total market value of restricted securities held at October 31, 2004
was $2,117,500 or 0.4% of portfolio market value.
(SEG) A portion of this security was pledged and segregated with the
custodian to cover margin requirements for futures contracts at October
31, 2004.
144A after the name of a security represents those exempt from
registration under Rule 144A of the Securities Act of 1933. These
securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
The rates shown on VRDN, mandatory put bonds and Floating Rate Bonds
(FRB) are the current interest rates at October 31, 2004.
The rates shown on IFB and IF COP, which are securities paying interest
rates that vary inversely to changes in the market interest rates, are
the current interest rates at October 31, 2004.
The fund had the following industry group concentrations greater than
10% at October 31, 2004 (as a percentage of portfolio market value):
Health care 27.9%
Education 22.4
Transportation 11.5
The fund had the following insurance concentrations greater than 10% at
October 31, 2004 (as a percentage of portfolio market value):
MBIA 14.7%
AMBAC 13.4
The dates shown on mandatory put bonds are the next mandatory put dates.
Futures contracts outstanding at October 31, 2004
Aggregate Expiration Unrealized
Value face value date depreciation
------------------------------------------------------------------------------------------------------
U.S. Treasury Note
10 yr (Short) $18,851,375 $18,504,665 Dec-04 $(346,710)
------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Statement of assets and liabilities
October 31, 2004
Assets
-------------------------------------------------------------------------------
Investments in securities, at value (identified cost
$538,616,116) (Note 1) $550,485,040
-------------------------------------------------------------------------------
Cash 247,334
-------------------------------------------------------------------------------
Interest and other receivables 10,236,106
-------------------------------------------------------------------------------
Receivable for securities sold 4,070,350
-------------------------------------------------------------------------------
Total assets 565,038,830
Liabilities
-------------------------------------------------------------------------------
Payable for variation margin (Note 1) 62,250
-------------------------------------------------------------------------------
Distributions payable to shareholders 1,968,504
-------------------------------------------------------------------------------
Accrued preferred shares distribution payable (Note 1) 99,254
-------------------------------------------------------------------------------
Payable for securities purchased 588,720
-------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 989,469
-------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 78,173
-------------------------------------------------------------------------------
Payable for Trustee compensation and expenses (Note 2) 59,984
-------------------------------------------------------------------------------
Payable for administrative services (Note 2) 789
-------------------------------------------------------------------------------
Other accrued expenses 119,064
-------------------------------------------------------------------------------
Total liabilities 3,966,207
-------------------------------------------------------------------------------
Series A, B and C remarketed preferred shares: (8,000 shares
authorized; 1,750 shares issued at $100,000 per share (Note 4) 175,000,000
-------------------------------------------------------------------------------
Net assets $386,072,623
Represented by
-------------------------------------------------------------------------------
Paid-in capital -- common shares (unlimited shares
authorized) (Note 1) $434,703,689
-------------------------------------------------------------------------------
Undistributed net investment income (Note 1) 1,099,611
-------------------------------------------------------------------------------
Accumulated net realized loss on investments (Note 1) (61,252,891)
-------------------------------------------------------------------------------
Net unrealized appreciation of investments 11,522,214
-------------------------------------------------------------------------------
Total -- Representing net assets applicable to common shares
outstanding $386,072,623
Computation of net asset value
-------------------------------------------------------------------------------
Net asset value per common share ($386,072,623 divided by
47,206,343 shares) $8.18
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Statement of operations
Year ended October 31, 2004
Interest income: $30,347,178
-------------------------------------------------------------------------------
Expenses:
-------------------------------------------------------------------------------
Compensation of Manager (Note 2) 3,840,217
-------------------------------------------------------------------------------
Investor servicing fees (Note 2) 197,458
-------------------------------------------------------------------------------
Custodian fees (Note 2) 142,899
-------------------------------------------------------------------------------
Trustee compensation and expenses (Note 2) 16,401
-------------------------------------------------------------------------------
Administrative services (Note 2) 8,664
-------------------------------------------------------------------------------
Preferred share remarketing agent fees 472,417
-------------------------------------------------------------------------------
Other 235,330
-------------------------------------------------------------------------------
Total expenses 4,913,386
-------------------------------------------------------------------------------
Expense reduction (Note 2) (21,310)
-------------------------------------------------------------------------------
Net expenses 4,892,076
-------------------------------------------------------------------------------
Net investment income 25,455,102
-------------------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 3) (7,361,559)
-------------------------------------------------------------------------------
Net realized loss on futures contracts (Note 1) (1,045,010)
-------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures
contracts during the year 17,847,804
-------------------------------------------------------------------------------
Net gain on investments 9,441,235
-------------------------------------------------------------------------------
Net increase in net assets resulting from operations $34,896,337
-------------------------------------------------------------------------------
Distributions to Series A, B, and C remarketed preferred shareholders:
(Note 1)
-------------------------------------------------------------------------------
From tax exempt income (2,026,238)
-------------------------------------------------------------------------------
From ordinary income (3,054)
-------------------------------------------------------------------------------
Net increase in net assets resulting from operations
(applicable to common shareholders) $32,867,045
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Statement of changes in net assets
Year ended October 31
-------------------------------------------------------------------------------
Increase in net assets 2004 2003
-------------------------------------------------------------------------------
Operations:
-------------------------------------------------------------------------------
Net investment income $25,455,102 $29,009,265
-------------------------------------------------------------------------------
Net realized loss on investments (8,406,569) (27,107,452)
-------------------------------------------------------------------------------
Net unrealized appreciation of investments 17,847,804 33,501,746
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 34,896,337 35,403,559
-------------------------------------------------------------------------------
Distributions to Series A, B, and C remarketed
preferred shareholders: (Note 1)
-------------------------------------------------------------------------------
From tax exempt income (2,026,238) (1,911,395)
-------------------------------------------------------------------------------
From ordinary income (3,054) --
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations (applicable to common
shareholders) 32,867,045 33,492,164
-------------------------------------------------------------------------------
Distributions to common shareholders: (Note 1)
-------------------------------------------------------------------------------
From tax exempt income (23,617,277) (26,907,616)
-------------------------------------------------------------------------------
From ordinary income (42,484) --
-------------------------------------------------------------------------------
Total increase in net assets 9,207,284 6,584,548
Net assets
-------------------------------------------------------------------------------
Beginning of year 376,865,339 370,280,791
-------------------------------------------------------------------------------
End of year (including undistributed net
investment income of $1,099,611 and
$913,954, respectively) $386,072,623 $376,865,339
-------------------------------------------------------------------------------
Number of fund shares
-------------------------------------------------------------------------------
Common shares outstanding at beginning and
end of year 47,206,343 47,206,343
-------------------------------------------------------------------------------
Remarketed preferred shares outstanding at
beginning and end of year 1,750 1,750
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
Financial highlights
(For a common share outstanding throughout the period)
Per-share Year ended October 31
operating performance 2004 2003 2002 2001 2000
---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period
(common shares) $7.98 $7.84 $8.49 $8.44 $8.77
---------------------------------------------------------------------------------------------------------------------------------
Investment operations:
---------------------------------------------------------------------------------------------------------------------------------
Net investment income (a) .54 .61 .70 .72 .75
---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments .20 .14 (.73) .04 (.16)
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .74 .75 (.03) .76 .59
---------------------------------------------------------------------------------------------------------------------------------
Distributions to preferred shareholders:
---------------------------------------------------------------------------------------------------------------------------------
From net investment income (.04) (.04) (.05) (.12) (.16)
---------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations: (applicable to
common shareholders) .70 .71 (.08) .64 .43
---------------------------------------------------------------------------------------------------------------------------------
Distributions to
common shareholders:
---------------------------------------------------------------------------------------------------------------------------------
From net investment income: (.50) (.57) (.57) (.59) (.76)
---------------------------------------------------------------------------------------------------------------------------------
Total distributions (.50) (.57) (.57) (.59) (.76)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
(common shares) $8.18 $7.98 $7.84 $8.49 $8.44
---------------------------------------------------------------------------------------------------------------------------------
Market price, end of period
(common shares) $7.29 $7.34 $7.43 $8.44 $9.63
---------------------------------------------------------------------------------------------------------------------------------
Total return at market price (%)
(common shares) (b) 6.35 6.44 (5.57) (6.21) 6.84
---------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(common shares) (in thousands) $386,073 $376,865 $370,281 $400,255 $396,212
---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%)(c)(d) 1.28 1.27 1.25 1.22 1.27
---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets (%)(c) 6.12 7.21 7.84 7.01 6.97
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 25.54 40.82 20.44 17.95 16.72
---------------------------------------------------------------------------------------------------------------------------------
(a) Per share net investment income has been determined on the basis of
the weighted average number of shares outstanding during the period.
(b) Total return assumes dividend reinvestment.
(c) Ratios reflect net assets available to common shares only; net
investment income ratio also reflects reduction for dividend payments to
preferred shareholders.
(d) Includes amounts paid through expense offset arrangements (Note 2).
The accompanying notes are an integral part of these financial
statements.
Notes to financial statements
October 31, 2004
Note 1
Significant accounting policies
Putnam Managed Municipal Income Trust (the "fund"), a Massachusetts
business trust, is registered under the Investment Company Act of 1940,
as amended, as a diversified, closed-end management investment company.
The fund's investment objective is to seek a high level of current
income exempt from federal income tax. The fund intends to achieve its
objective by investing in a diversified portfolio of tax-exempt
municipal securities which Putnam Investment Manage ment, LLC ("Putnam
Management"), the fund's manager, an indirect wholly-owned subsidiary of
Putnam, LLC, believes does not involve undue risk to income or
principal. Up to 60% of the fund's assets may consist of high-yield
tax-exempt municipal securities that are below investment grade and
involve special risk considerations. The fund also uses leverage by
issuing preferred shares in an effort to increase the income to the
common shares.
The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The preparation of financial statements is in conformity
with accounting principles generally accepted in the United States of
America and requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities in the financial
statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results could
differ from those estimates.
A) Security valuation Tax-exempt bonds and notes are valued at fair
value on the basis of valuations provided by an independent pricing
service, approved by the Trustees. Such services use information with
respect to transactions in bonds, quotations from bond dealers, market
transactions in comparable securities and various relationships between
securities in determining value. Other investments are valued at fair
value following procedures approved by the Trustees. Such valuations and
procedures are reviewed periodically by the Trustees.
B) Security transactions and related investment income Security
transactions are recorded on the trade date (date the order to buy or
sell is executed). Gains or losses on securities sold are determined on
the identified cost basis.
Interest income is recorded on the accrual basis. All premiums/discounts
are amortized/accreted on a yield-to-maturity basis. The premium in
excess of the call price, if any, is amortized to the call date;
thereafter, any remaining premium is amortized to maturity.
C) Futures and options contracts The fund may use futures and options
contracts to hedge against changes in the values of securities the fund
owns or expects to purchase. The fund may also write options on
securities it owns or 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, or if the counterparty to the contract is
unable to perform. 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 options 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 an addition 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 after the fund's portfolio.
D) Federal taxes It is the policy of the fund to distribute all of its
income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code of 1986 (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, as amended. Therefore, no provision has
been made for federal taxes on income, capital gains or unrealized
appreciation on securities held nor for excise tax on income and capital
gains.
At October 31, 2004, the fund had a capital loss carryover of
$58,719,216 available to the extent allowed by tax law to offset future
net capital gain, if any. The amount of the carryover and the expiration
dates are:
Loss Carryover Expiration
-------------------------------------
$11,188,485 October 31, 2005
2,894,998 October 31, 2006
3,629,209 October 31, 2007
1,237,146 October 31, 2008
1,641,465 October 31, 2009
3,729,886 October 31, 2010
25,837,158 October 31, 2011
8,560,869 October 31, 2012
E) Distributions to shareholders Distributions to common and preferred
shareholders from net investment income are recorded by the fund on the
ex-dividend date. Distributions from capital gains, if any, are recorded
on the ex-dividend date and paid at least annually. Dividends on
remarketed preferred shares become payable when, as and if declared by
the Trustees. Each dividend period for the remarketed preferred shares
is generally a 28-day period for Series A and Series B shares, and a
7-day period for Series C shares. The applicable dividend rate for the
remarketed preferred shares on October 31, 2004 was 1.42% for Series A,
1.60% for Series B and 1.65% for Series C. The amount and character of
income and gains to be distributed are determined in accordance with
income tax regulations, which may differ from generally accepted
accounting principles. These differences include temporary and permanent
differences of dividends payable, defaulted bond interest, realized and
unrealized gains and losses on certain futures contracts, market
discount and straddle loss deferrals. Reclassifications are made to the
fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations. For the year ended October 31, 2004, the fund reclassified
$419,608 to increase undistributed net investment income and $4,975 to
decrease paid-in-capital, with an increase to accumulated net realized
losses of $414,633.
The tax basis components of distributable earnings and the federal tax
cost as of period end were as follows:
Unrealized appreciation $23,949,663
Unrealized depreciation (11,619,925)
------------
Net unrealized appreciation 12,329,738
Undistributed tax exempt
income 2,742,613
Undistributed ordinary income 383,189
Capital loss carryforward (58,719,216)
Cost for federal income
tax purposes $538,155,302
F) Determination of net asset value Net asset value of the common
shares is determined by dividing the value of all assets of the fund,
less all liabilities and the liquidation preference of any outstanding
remarketed preferred shares, by the total number of common shares
outstanding as of period end.
Note 2
Management fee, administrative services and other transactions
Putnam Management is paid for management and investment advisory
services quarterly based on the average net assets of the fund. Such
fee is based on 0.70% of the average weekly net assets attributable to
common and preferred shares outstanding.
If dividends payable on remarketed preferred shares during any dividend
payment period plus any expenses attributable to remarketed preferred
shares for that period exceed the fund's gross income attributable to
the proceeds of the remarketed preferred shares during that period, then
the fee payable to Putnam Management for that period will be reduced by
the amount of the excess (but not more than 0.70% of the liquidation
preference of the remarketed preferred shares outstanding during the
period).
The fund reimburses Putnam Management an allocated amount for the
compensation and related expenses of certain officers of the fund and
their staff who provide administrative services to the fund. The
aggregate amount of all such reimbursements is determined annually by
the Trustees.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company ("PFTC"), a subsidiary of Putnam, LLC. Putnam
Investor Services, a division of PFTC, provides investor servicing agent
functions to the fund. During the year ended October 31, 2004, the fund
paid PFTC $340,357 for these services.
The fund has entered into an arrangement with PFTC whereby credits
realized as a result of uninvested cash balances are used to reduce a
portion of the fund's expenses. For the year ended October 31, 2004, the
fund's expenses were reduced by $21,310 under these arrangements.
Each independent Trustee of the fund receives an annual Trustee fee, of
which $758, 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.
The fund has adopted a Trustee Fee Deferral Plan (the "Deferral Plan")
which allows the Trustees to defer the receipt of all or a portion of
Trustees fees payable on or after July 1, 1995. The deferred fees remain
invested in certain Putnam funds until distribution in accordance with
the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension
plan (the "Pension Plan") covering all Trustees of the fund who have
served as a Trustee for at least five years. Benefits under the Pension
Plan are equal to 50% of the Trustee's average total retainer and
meeting fees for the three years preceding retirement. Pension expense
for the fund is included in Trustee compensation and expenses in the
statement of operations. Accrued pension liability is included in
Payable for Trustee compensation and expenses in the statement of assets
and liabilities. The Trustees have terminated the Pension Plan with
respect to any Trustee first elected after 2003.
Note 3
Purchases and sales of securities
During the year ended October 31, 2004, cost of purchases and proceeds
from sales of investment securities other than short-term investments
aggregated $141,857,371 and $135,854,094, respectively. There were no
purchases or sales of U.S. government securities.
Note 4
Preferred shares
The Series A (550), Series B (550) and Series C (650) shares are
redeemable at the option of the fund on any dividend payment date at a
redemption price of $100,000 per share, plus an amount equal to any
dividends accumulated on a daily basis but unpaid through the redemption
date (whether or not such dividends have been declared) and, in certain
circumstances, a call premium.
It is anticipated that dividends paid to holders of remarketed preferred
shares will be considered tax-exempt dividends under the Internal
Revenue Code of 1986. To the extent that the fund earns taxable income
and capital gains by the conclusion of a fiscal year, it may be required
to apportion to the holders of the remarketed preferred shares
throughout that year additional dividends as necessary to result in an
after-tax equivalent to the applicable dividend rate for the period.
Total additional dividends for the period ended October 31, 2004 were
$1,069.
Under the Investment Company Act of 1940, the fund is required to
maintain asset coverage of at least 200% with respect to the remarketed
preferred shares as of the last business day of each month in which any
such shares are outstanding. Additionally, the fund is required to meet
more stringent asset coverage requirements under terms of the remarketed
preferred shares and the shares' rating agencies. Should these
requirements not be met, or should dividends accrued on the remarketed
preferred shares not be paid, the fund may be restricted in its ability
to declare dividends to common shareholders or may be required to redeem
certain of the remarketed preferred shares. At October 31, 2004, no such
restrictions have been placed on the fund.
Note 5
Regulatory matters and litigation
On April 8, 2004, Putnam Management entered into agreements with the
Securities and Exchange Commission ("SEC") and the Massachusetts
Securities Division representing a final settlement of all charges
brought against Putnam Management by those agencies on October 28, 2003
in connection with excessive short-term trading by Putnam employees and,
in the case of the charges brought by the Massachusetts Securities
Division, by participants in some Putnam-administered 401(k) plans. The
settlement with the SEC requires Putnam Management to pay $5 million in
disgorgement plus a civil monetary penalty of $50 million, and the
settlement with the Massachusetts Securities Division requires Putnam
Management to pay $5 million in restitution and an administrative fine
of $50 million. The settlements also leave intact the process
established under an earlier partial settlement with the SEC under which
Putnam Management agreed to pay the amount of restitution determined by
an independent consultant, which may exceed the disgorgement and
restitution amounts specified above, pursuant to a plan to be developed
by the independent consultant.
Putnam Management, and not the investors in any Putnam fund, will bear
all costs, including restitution, civil penalties and associated legal
fees stemming from both of these proceedings. The SEC's and
Massachusetts Securities Division's allegations and related matters also
serve as the general basis for numerous lawsuits, including purported
class action lawsuits filed against Putnam Management and certain
related parties, including certain Putnam funds. Putnam Management has
agreed to bear any costs incurred by Putnam funds in connection with
these lawsuits. Based on currently available information, Putnam
Management believes that the likelihood that the pending private
lawsuits and purported class action lawsuits will have a material
adverse financial impact on the fund is remote, and the pending actions
are not likely to materially affect its ability to provide investment
management services to its clients, including the Putnam funds.
Federal tax information
(Unaudited)
The fund has designated 99.82% of dividends paid from net investment
income during the fiscal year as tax exempt for Federal income tax
purposes.
The Form 1099 you receive in January 2005 will show the tax status of
all distributions paid to your account in calendar 2004.
Results of October 14, 2004 shareholder meeting
(Unaudited)
An annual meeting of shareholders of the fund was held on October 14,
2004. At the meeting, each of the nominees for Trustees was elected, as
follows:
Common Shares
Votes
Votes for withheld
--------------------------------------------------------------------
Jameson Adkins Baxter 39,183,683 1,111,697
Charles B. Curtis 39,199,297 1,096,083
Myra R. Drucker 39,164,006 1,131,374
Charles E. Haldeman, Jr. 39,159,161 1,136,219
Ronald J. Jackson 39,196,959 1,098,421
Paul L. Joskow 39,201,103 1,094,277
Elizabeth T. Kennan 39,166,088 1,129,292
John H. Mullin III 39,187,417 1,107,963
George Putnam, III 39,157,946 1,137,434
A.J.C. Smith 39,162,059 1,133,321
W. Thomas Stephens 39,183,683 1,111,697
Richard B. Worley 39,167,511 1,127,869
Preferred Shares
Votes
Votes for withheld
--------------------------------------------------------------------
Jameson Adkins Baxter 1,607 88
Charles B. Curtis 1,607 88
Myra R. Drucker 1,607 88
Charles E. Haldeman, Jr. 1,607 88
John A. Hill 1,607 88
Ronald J. Jackson 1,607 88
Paul L. Joskow 1,607 88
Elizabeth T. Kennan 1,607 88
John H. Mullin III 1,607 88
Robert E. Patterson 1,607 88
George Putnam, III 1,607 88
A.J.C. Smith 1,607 88
W. Thomas Stephens 1,607 88
Richard B. Worley 1,607 88
All tabulations are rounded to nearest whole number.
About the Trustees
Jameson A. Baxter (9/6/43), Trustee since 1994
Ms. Baxter is the President of Baxter Associates, Inc., a private
investment firm that she founded in 1986.
Ms. Baxter serves as a Director of ASHTA Chemicals, Inc., Banta
Corporation (a printing and digital imaging firm), Ryerson Tull, Inc. (a
steel service corporation), Advocate Health Care and BoardSource,
formerly the National Center for Nonprofit Boards. She is Chairman
Emeritus of the Board of Trustees, Mount Holyoke College, having served
as Chairman for five years and as a board member for thirteen years.
Until 2002, Ms. Baxter was a Director of Intermatic Corporation (a
manufacturer of energy control products).
Ms. Baxter has held various positions in investment banking and
corporate finance, including Vice President and Principal of the Regency
Group, and Vice President of and Consultant to First Boston Corporation.
She is a graduate of Mount Holyoke College.
Charles B. Curtis (4/27/40), Trustee since 2001
Mr. Curtis is President and Chief Operating Officer of the Nuclear
Threat Initiative (a private foundation dealing with national security
issues) and serves as Senior Advisor to the United Nations Foundation.
Mr. Curtis is a member of the Council on Foreign Relations and the
Trustee Advisory Council of the Applied Physics Laboratory, Johns
Hopkins University. Until 2003, Mr. Curtis was a member of the Electric
Power Research Institute Advisory Council and the University of Chicago
Board of Governors for Argonne National Laboratory. Prior to 2002, Mr.
Curtis was a Member of the Board of Directors of the Gas Technology
Institute and the Board of Directors of the Environment and Natural
Resources Program Steering Committee, John F. Kennedy School of
Government, Harvard University. Until 2001, Mr. Curtis was a member of
the Department of Defense Policy Board and Director of EG&G Technical
Services, Inc. (a fossil energy research and development support
company).
From August 1997 to December 1999, Mr. Curtis was a Partner at Hogan &
Hartson L.L.P., a Washington, D.C. law firm. Prior to May 1997, Mr.
Curtis was Deputy Secretary of Energy. He served as Chairman of the
Federal Energy Regulatory Commission from 1977 to 1981 and has held
positions on the staff of the U.S. House of Representatives, the U.S.
Treasury Department, and the SEC.
Myra R. Drucker (1/16/48)
Ms. Drucker is a Vice Chair of the Board of Trustees of Sarah Lawrence
College, a Trustee of Commonfund (a not-for-profit firm specializing in
asset management for educational endowments and foundations) and a
member of the Investment Committee of the Kresge Foundation (a
charitable trust). She is also Chair of the New York Stock Exchange
(NYSE) Pension Managers Advisory Committee and a member of the Executive
Committee of the Committee on Investment of Employee Benefit Assets.
Until August 31, 2004, Ms. Drucker was Managing Director and a member of
the Board of Directors of General Motors Asset Management and Chief
Investment Officer of General Motors Trust Bank. Ms. Drucker also served
as a member of the NYSE Corporate Accountability and Listing Standards
Committee and the NYSE/NASD IPO Advisory Committee.
Prior to joining General Motors Asset Management in 2001, Ms. Drucker
held various executive positions in the investment management industry.
Ms. Drucker served as Chief Investment Officer of Xerox Corporation (a
technology and service company in the document industry), where she was
responsible for the investment of the company 's pension assets. Ms.
Drucker was also Staff Vice President and Director of Trust Investments
for International Paper (a paper, paper distribution, packaging and
forest products company) and previously served as Manager of Trust
Investments for Xerox Corporation. Ms. Drucker received a B.A. degree in
Literature and Psychology from Sarah Lawrence College and pursued
graduate studies in economics, statistics and portfolio theory at Temple
University.
John A. Hill (1/31/42), Trustee since 1985 and Chairman since 2000
Mr. Hill is Vice Chairman of First Reserve Corporation, a private equity
buyout firm that specializes in energy investments in the diversified
worldwide energy industry.
Mr. Hill is a Director of Devon Energy Corporation, TransMontaigne Oil
Company, Continuum Health Partners of New York and various private
companies controlled by First Reserve Corporation, as well as a Trustee
of TH Lee, Putnam Investment Trust (a closed-end investment company
advised by an affiliate of Putnam Management). He is also a Trustee of
Sarah Lawrence College.
Prior to acquiring First Reserve Corporation in 1983, Mr. Hill held
executive positions in investment banking and investment management with
several firms and with the federal government, including Deputy
Associate Director of the Office of Management and Budget and Deputy
Director of the Federal Energy Administration. He is active in various
business associations, including the Economic Club of New York, and
lectures on energy issues in the United States and Europe. Mr. Hill
holds a B.A. degree in Economics from Southern Methodist University and
pursued graduate studies there as a Woodrow Wilson Fellow.
Ronald J. Jackson (12/17/43), Trustee since 1996
Mr. Jackson is a private investor.
Mr. Jackson is President of the Kathleen and Ronald J. Jackson
Foundation (a charitable trust). He is also a member of the Board of
Overseers of WGBH (a public television and radio station) as well as a
member of the Board of Overseers of the Peabody Essex Museum.
Mr. Jackson is the former Chairman, President and Chief Executive
Officer of Fisher-Price, Inc. (a major toy manufacturer), from which he
retired in 1993. He previously served as President and Chief Executive
Officer of Stride-Rite, Inc. (a manufacturer and distributor of
footwear) and of Kenner Parker Toys, Inc. (a major toy and game
manufacturer). Mr. Jackson was President of Talbots, Inc. (a distributor
of women's apparel) and has held financial and marketing positions with
General Mills, Inc. and Parker Brothers (a toy and game company). Mr.
Jackson is a graduate of Michigan State University Business School.
Paul L. Joskow (6/30/47), Trustee since 1997
Dr. Joskow is the Elizabeth and James Killian Professor of Economics and
Management, and Director of the Center for Energy and Environmental
Policy Research at the Massachusetts Institute of Technology.
Dr. Joskow serves as a Director of National Grid Transco (a UK-based
holding company with interests in electric and gas transmission and
distribution and telecommunications infrastructure) and TransCanada
Corporation (an energy company focused on natural gas transmission and
power services). He also serves on the board of the Whitehead Institute
for Biomedical Research (a non-profit research institution) and has been
President of the Yale University Council since 1993. Prior to February
2002, he was a Director of State Farm Indemnity Company (an automobile
insurance company), and, prior to March 2000, he was a Director of New
England Electric System (a public utility holding company).
Dr. Joskow has published five books and numerous articles on topics in
industrial organization, government regulation of industry, and
competition policy. He is active in industry restructuring,
environmental, energy, competition and privatization policies -- serving
as an advisor to governments and corporations worldwide. Dr. Joskow
holds a Ph.D. and M. Phil from Yale University and B.A. from Cornell
University.
Elizabeth T. Kennan (2/25/38), Trustee since 1992
Dr. Kennan is a Partner of Cambus-Kenneth Farm (thoroughbred horse and
cattle breeding). She is President Emeritus of Mount Holyoke College.
Dr. Kennan served as Chairman and is now Lead Director of Northeast
Utilities and is a Director of Talbots, Inc. She has served as Director
on a number of other boards, including Bell Atlantic, Chastain Real
Estate, Shawmut Bank, Berkshire Life Insurance and Kentucky Home Life
Insurance. She is a Trustee of the National Trust for Historic
Preservation, of Centre College and of Midway College in Midway,
Kentucky. She is also a member of The Trustees of Reservations. Dr.
Kennan has served on the oversight committee of the Folger Shakespeare
Library, as President of Five Colleges Incorporated, as a Trustee of
Notre Dame University and is active in various educational and civic
associations.
As a member of the faculty of Catholic University for twelve years,
until 1978, Dr. Kennan directed the post-doctoral program in Patristic
and Medieval Studies, taught history and published numerous articles.
Dr. Kennan holds a Ph.D. from the University of Washington in Seattle,
an M.S. from St. Hilda's College at Oxford University and an A.B. from
Mount Holyoke College. She holds several honorary doctorates.
John H. Mullin, III (6/15/41), Trustee since 1997
Mr. Mullin is the Chairman and CEO of Ridgeway Farm (a limited liability
company engaged in timber and farming).
Mr. Mullin serves as a Director of The Liberty Corporation (a
broadcasting company), Progress Energy, Inc. (a utility company,
formerly known as Carolina Power & Light) and Sonoco Products, Inc. (a
packaging company). Mr. Mullin is Trustee Emeritus of The National
Humanities Center and Washington & Lee University, where he served as
Chairman of the Investment Committee. Prior to May 2001, he was a
Director of Graphic Packaging International Corp. Prior to February
2004, he was a Director of Alex Brown Realty, Inc.
Mr. Mullin is also a past Director of Adolph Coors Company; ACX
Technologies, Inc.; Crystal Brands, Inc.; Dillon, Read & Co., Inc.;
Fisher-Price, Inc.; and The Ryland Group, Inc. Mr. Mullin is a graduate
of Washington & Lee University and The Wharton Graduate School,
University of Pennsylvania.
Robert E. Patterson (3/15/45), Trustee since 1984
Mr. Patterson is Senior Partner of Cabot Properties, L.P. and Chairman
of Cabot Properties, Inc. (a private equity firm investing in commercial
real estate).
Mr. Patterson serves as Chairman of the Joslin Diabetes Center and as a
Director of Brandywine Trust Company. Prior to June 2003, he was a
Trustee of Sea Education Association. Prior to December 2001, he was
President and Trustee of Cabot Industrial Trust (a publicly traded real
estate investment trust). Prior to February 1998, he was Executive Vice
President and Director of Acquisitions of Cabot Partners Limited
Partnership (a registered investment adviser involved in institutional
real estate investments). Prior to 1990, he served as Executive Vice
President of Cabot, Cabot & Forbes Realty Advisors, Inc. (the
predecessor company of Cabot Partners) and as a Senior Vice President of
the Beal Companies (a real estate management, investment and development
firm).
Mr. Patterson practiced law and held various positions in state
government and was the founding Executive Director of the Massachusetts
Industrial Finance Agency. Mr. Patterson is a graduate of Harvard
College and Harvard Law School.
W. Thomas Stephens (9/2/42), Trustee since 1997
Mr. Stephens serves on a number of corporate boards.
Mr. Stephens is Chairman and Chief Executive Officer of Boise Cascade,
L.L.C. (a paper, forest products and timberland assets company). Mr.
Stephens serves as a Director of TransCanada Pipelines Limited. Until
2004, Mr. Stephens was a Director of Xcel Energy Incorporated (a public
utility company), Qwest Communications, and Norske Canada, Inc. (a paper
manufacturer). Until 2003, Mr. Stephens was a Director of Mail-Well,
Inc. (a diversified printing company). He served as Chairman of
Mail-Well until 2001 and as CEO of MacMillan-Bloedel, Ltd. (a forest
products company) until 1999.
Prior to 1996, Mr. Stephens was Chairman and Chief Executive Officer of
Johns Manville Corporation. He holds B.S. and M.S. degrees from the
University of Arkansas.
Richard B. Worley (11/15/45)
Mr. Worley is Managing Partner of Permit Capital, LLC, an investment
management firm.
Mr. Worley serves on the Executive Committee of the University of
Pennsylvania Medical Center, is a Trustee of The Robert Wood Johnson
Foundation (a philanthropic organization devoted to health care issues)
and is a Director of The Colonial Williamsburg Foundation (a historical
preservation organization). Mr. Worley also serves on the investment
committees of Mount Holyoke College and World Wildlife Fund (a wildlife
conservation organization).
Prior to joining Permit Capital LLC in 2002, Mr. Worley served as Chief
Strategic Officer of Morgan Stanley Investment Management. He previously
served as President, Chief Executive Officer and Chief Investment
Officer of Morgan Stanley Dean Witter Investment Management and as a
Managing Director of Morgan Stanley, a financial services firm. Mr.
Worley also was the Chairman of Miller Anderson & Sherrerd, an
investment management firm.
Mr. Worley holds a B.S. degree from University of Tennessee and pursued
graduate studies in economics at the University of Texas.
Charles E. Haldeman, Jr.* (10/29/48)
Mr. Haldeman is President and Chief Executive Officer of Putnam, LLC
("Putnam Investments"). He is a member of Putnam Investments' Executive
Board of Directors and Advisory Council. Prior to November 2003, Mr.
Haldeman served as Co-Head of Putnam Investments' Investment Division.
Prior to joining Putnam Investments in 2002, Mr. Haldeman held executive
positions in the investment management industry. He previously served as
Chief Executive Officer of Delaware Investments and President & Chief
Operating Officer of United Asset Management. Mr. Haldeman was also a
partner and director of Cooke & Bieler, Inc. (an investment management
firm).
Mr. Haldeman currently serves as a Trustee of Dartmouth College and as
Emeritus Trustee of Abington Memorial Hospital. He is a graduate of
Dartmouth College, Harvard Law School and Harvard Business School. Mr.
Haldeman is also a Chartered Financial Analyst (CFA) charterholder.
George Putnam, III* (8/10/51), Trustee since 1984 and President
since 2000
Mr. Putnam is President of New Generation Research, Inc. (a publisher of
financial advisory and other research services), and of New Generation
Advisers, Inc. (a registered investment advisor to private funds). Mr.
Putnam founded the New Generation companies in 1986.
Mr. Putnam is a Director of The Boston Family Office, LLC (a registered
investment adviser). He is a Trustee of St. Mark's School, Shore Country
Day School, and until 2002 was a Trustee of the Sea Education
Association.
Mr. Putnam previously worked as an attorney with the law firm of Dechert
LLP (formerly known as Dechert Price & Rhoads) in Philadelphia. He is a
graduate of Harvard College, Harvard Business School and Harvard Law
School.
A.J.C. Smith* (4/13/34), Trustee since 1986
Mr. Smith is the Chairman of Putnam Investments and Consultant to Marsh
& McLennan Companies, Inc.
Mr. Smith is also a Director of Trident Corp. (a limited partnership
with over thirty institutional investors). He is also a Trustee of the
Carnegie Hall Society, the Educational Broadcasting Corporation, and the
National Museums of Scotland. He is Chairman of the Central Park
Conservancy and a Member of the Board of Overseers of the Joan and
Sanford I. Weill Graduate School of Medical Sciences of Cornell
University. Prior to November 2004, Mr. Smith was a Director of Marsh &
McLennan Companies, Inc. Prior to May 2000 and November 1999, Mr. Smith
was Chairman and CEO, respectively, of Marsh & McLennan Companies, Inc.
The address of each Trustee is One Post Office Square, Boston, MA 02109.
As of October 31, 2004, there were 110 Putnam Funds. All Trustees other
than Ms. Drucker and Messrs. Worley and Haldeman serve as Trustees of
all Putnam funds. Ms. Drucker and Messrs. Worley and Haldeman currently
serve as Trustees of 82 Putnam funds.
Each Trustee serves for an indefinite term, until his or her
resignation, retirement at age 72, death, or removal.
* Trustees who are or may be deemed to be "interested persons" (as
defined in the Investment Company Act of 1940) of the fund, Putnam
Management, Putnam Retail Management, or Marsh & McLennan Companies,
Inc., the parent company of Putnam, LLC and its affiliated companies.
Messrs. Haldeman, Putnam, III, and Smith are deemed "interested persons"
by virtue of their positions as officers of the fund, Putnam Management,
Putnam Retail Management or Marsh & McLennan Companies, Inc. and as
shareholders of Marsh & McLennan Companies, Inc. Mr. Putnam, III is the
President of your fund and each of the other Putnam funds. Mr. Haldeman
is President and Chief Executive Officer of Putnam Investments. Mr.
Smith serves as a Consultant to Marsh & McLennan Companies, Inc. and as
Chairman of Putnam Investments.
Officers
In addition to George Putnam, III, the other officers of the
fund are shown below:
Charles E. Porter (7/26/38)
Executive Vice President, Associate Treasurer and Principal
Executive Officer
Since 1989
Managing Director, Putnam Investments
and Putnam Management
Jonathan S. Horwitz (6/4/55)
Senior Vice President and Treasurer
Since 2004
Managing Director, Putnam Investments
Steven D. Krichmar (6/27/58)
Vice President and Principal Financial Officer
Since 2002
Senior Managing Director, Putnam Investments. Prior to July
2001, Partner, PricewaterhouseCoopers LLP
Michael T. Healy (1/24/58)
Assistant Treasurer and Principal
Accounting Officer
Since 2000
Managing Director, Putnam Investments
Beth S. Mazor (4/6/58)
Vice President
Since 2002
Senior Vice President, Putnam Investments
Daniel T. Gallagher (2/27/62)
Vice President and Legal and Compliance Liaison Officer
Since 2004
Vice President, Putnam Investments. Prior to 2004,
Associate, Ropes & Gray LLP; prior to 2000, Law Clerk,
Massachusetts Supreme Judicial Court
Francis J. McNamara, III (8/19/55)
Vice President and Chief Legal Officer
Since 2004
Senior Managing Director, Putnam
Investments, Putnam Management and
Putnam Retail Management. Prior to 2004, General Counsel,
State Street Research & Management Company
James P. Pappas (2/24/53)
Vice President
Since 2004
Managing Director, Putnam Investments and Putnam Management.
During 2002, Chief Operating Officer, Atalanta/Sosnoff
Management Corporation; prior to 2001, President and Chief
Executive Officer, UAM Investment Services, Inc.
Richard S. Robie, III (3/30/60)
Vice President
Since 2004
Senior Managing Director, Putnam
Investments, Putnam Management and
Putnam Retail Management. Prior to 2003, Senior Vice
President, United Asset Management Corporation
Charles A. Ruys de Perez (10/17/57)
Vice President and Chief Compliance Officer
Since 2004
Managing Director, Putnam Investments
Mark C. Trenchard (6/5/62)
Vice President and BSA Compliance Officer
Since 2002
Senior Vice President, Putnam Investments
Judith Cohen (6/7/45)
Clerk and Assistant Treasurer
Since 1993
Clerk and Assistant Treasurer, The Putnam Funds
The address of each Officer is One Post Office Square,
Boston, MA 02109.
Fund information
About Putnam Investments
One of the largest mutual fund families in the United States, Putnam
Investments has a heritage of investment leadership dating back to Judge
Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition
and practice since 1830. Founded over 65 years ago, Putnam Investments
was built around the concept that a balance between risk and reward is
the hallmark of a well-rounded financial program. We presently manage
over 100 mutual funds in growth, value, blend, fixed income, and
international.
Investment Manager
Putnam Investment
Management, LLC
One Post Office Square
Boston, MA 02109
Marketing Services
Putnam Retail Management
One Post Office Square
Boston, MA 02109
Custodian
Putnam Fiduciary Trust Company
Legal Counsel
Ropes & Gray LLP
Independent Registered Public Accounting Firm
KPMG LLP
Trustees
John A. Hill, Chairman
Jameson Adkins Baxter
Charles B. Curtis
Myra R. Drucker
Charles E. Haldeman, Jr.
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin, III
Robert E. Patterson
George Putnam, III
A.J.C. Smith
W. Thomas Stephens
Richard B. Worley
Officers
George Putnam, III
President
Charles E. Porter
Executive Vice President,
Associate Treasurer and
Principal Executive Officer
Jonathan S. Horwitz
Senior Vice President and Treasurer
Steven D. Krichmar
Vice President and Principal Financial Officer
Michael T. Healy
Assistant Treasurer and Principal Accounting Officer
Beth S. Mazor
Vice President
Daniel T. Gallagher
Vice President and Legal and Compliance Liaison Officer
James P. Pappas
Vice President
Richard S. Robie, III
Vice President
Mark C. Trenchard
Vice President and BSA Compliance Officer
Francis J. McNamara, III
Vice President and Chief Legal Officer
Charles A. Ruys de Perez
Vice President and Chief Compliance Officer
Judith Cohen
Clerk and Assistant Treasurer
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time, or
visit our Web site (www.putnaminvestments.com) anytime for up-to-date
information about the fund's NAV.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
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216547 12/04
Item 2. Code of Ethics:
-----------------------
All officers of the Fund, including its principal executive, financial and
accounting officers, are employees of Putnam Investment Management, LLC,
the Fund's investment manager. As such they are subject to a comprehensive
Code of Ethics adopted and administered by Putnam Investments which is
designed to protect the interests of the firm and its clients. The Fund
has adopted a Code of Ethics which incorporates the Code of Ethics of
Putnam Investments with respect to all of its officers and Trustees who are
employees of Putnam Investment Management, LLC. For this reason, the Fund
has not adopted a separate code of ethics governing its principal
executive, financial and accounting officers.
Item 3. Audit Committee Financial Expert:
-----------------------------------------
The Funds' Audit and Pricing Committee is comprised solely of Trustees
who are "independent" (as such term has been defined by the Securities
and Exchange Commission ("SEC") in regulations implementing Section 407
of the Sarbanes-Oxley Act (the "Regulations")). The Trustees believe
that each of the members of the Audit and Pricing Committee also possess
a combination of knowledge and experience with respect to financial
accounting matters, as well as other attributes, that qualify them for
service on the Committee. In addition, the Trustees have determined
that all members of the Funds' Audit and Pricing Committee meet the
financial literacy requirements of the New York Stock Exchange's rules
and that Mr. Patterson, Mr. Stephens and Mr. Worley qualify as "audit
committee financial experts" (as such term has been defined by the
Regulations) based on their review of their pertinent experience and
education. Certain other Trustees, although not on the Audit and Pricing
Committee, would also qualify as "audit committee financial experts."
The SEC has stated that the designation or identification of a person
as an audit committee financial expert pursuant to this Item 3 of Form
N-CSR does not impose on such person any duties, obligations or liability
that are greater than the duties, obligations and liability imposed on
such person as a member of the Audit and Pricing Committee and the Board
of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services:
-----------------------------------------------
The following table presents fees billed in each of the last two
fiscal years for services rendered to the fund by the fund's
independent auditors:
Audit Audit-Related Tax All Other
Fiscal year ended Fees Fees Fees Fees
----------------- ---------- ------------- ------- ---------
October 31, 2004 $34,850 $19,500 $4,150 $68
October 31, 2003 $30,300 $17,950 $3,600 $--
For the fiscal years ended October 31, 2004 and October 31, 2003,
the fund's independent auditors billed aggregate non-audit fees in
the amounts of $23,718 and $21,550, respectively, to the fund,
Putnam Management and any entity controlling, controlled by or
under common control with Putnam Management that provides ongoing
services to the fund.
Audit Fees represents fees billed for the fund's last two fiscal
years.
Audit-Related Fees represents fees billed in the fund's last two
fiscal years for services traditionally performed by the fund's
auditor, including accounting consultation for proposed transactions
or concerning financial accounting and reporting standards and other
audit or attest services not required by statute or regulation.
Tax Fees represent fees billed in the fund's last two fiscal years
for tax compliance, tax planning and tax advice services. Tax
planning and tax advice services include assistance with tax audits,
employee benefit plans and requests for rulings or technical advice
from taxing authorities.
All Other Fees Fees represent fees billed for services relating
relating interfund trading.
Pre-Approval Policies of the Audit and Pricing Committee. The Audit
and Pricing Committee of the Putnam funds has determined that, as a
matter of policy, all work performed for the funds by the funds'
independent auditors will be pre-approved by the Committee and will
generally not be subject to pre-approval procedures.
Under certain circumstances, the Audit and Pricing Committee
believes that it may be appropriate for Putnam Investment
Management, LLC ("Putnam Management") and certain of its affiliates
to engage the services of the funds' independent auditors, but only
after prior approval by the Committee. Such requests are required
to be submitted in writing to the Committee and explain, among other
things, the nature of the proposed engagement, the estimated fees,
and why this work must be performed by that particular audit firm.
The Committee will review the proposed engagement at its next
meeting.
Since May 6, 2003, all work performed by the independent auditors
for the funds, Putnam Management and any entity controlling,
controlled by or under common control with Putnam Management that
provides ongoing services to the fund was pre-approved by the
Committee or a member of the Committee pursuant to the pre-approval
policies discussed above. Prior to that date, the Committee had a
general policy to pre-approve the independent auditor's engagements
for non-audit services with the funds, Putnam Management and any
entity controlling, controlled by or under common control with
Putnam Management that provides ongoing services to the fund.
The following table presents fees billed by the fund's principal
auditor for services required to be approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X.
Audit-Related Tax All Other Total Non-
Fiscal year ended Fees Fees Fees Audit Fees
----------------- ------------- ---- --------- ----------
October 31, 2004 $-- $-- $-- $--
October 31, 2003 $-- $-- $-- $--
Item 5. Audit Committee
------------------------
(a) The fund has a separately-designated audit committee
established in accordance with Section 3(a)(58)(A) of the Securities
Exchange Act of 1934, as amended. The Audit Committee of the fund's
Board of Trustees is composed of the following persons:
Myra R. Drucker
Paul L. Joskow (Chairperson)
Robert E. Patterson
W. Thomas Stephens
Richard B. Worley
(b) Not applicable
Item 6. Schedule of Investments: Not applicable
--------------------------------
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End
-------------------------------------------------------------------------
Management Investment Companies:
--------------------------------
Proxy voting guidelines of the Putnam funds
-------------------------------------------
The proxy voting guidelines below summarize the funds' positions on
various issues of concern to investors, and give a general
indication of how fund portfolio securities will be voted on
proposals dealing with particular issues. The funds' proxy voting
service is instructed to vote all proxies relating to fund portfolio
securities in accordance with these guidelines, except as otherwise
instructed by the Proxy Coordinator, a member of the Office of the
Trustees who is appointed to assist in the coordination and voting
of the funds' proxies.
The proxy voting guidelines are just that - guidelines. The
guidelines are not exhaustive and do not include all potential
voting issues. Because proxy issues and the circumstances of
individual companies are so varied, there may be instances when the
funds may not vote in strict adherence to these guidelines. For
example, the proxy voting service is expected to bring to the Proxy
Coordinator's attention proxy questions that are company-specific
and of a non-routine nature and that, even if covered by the
guidelines, may be more appropriately handled on a case-by-case
basis.
Similarly, Putnam Management's investment professionals, as part of
their ongoing review and analysis of all fund portfolio holdings,
are responsible for monitoring significant corporate developments,
including proxy proposals submitted to shareholders, and notifying
the Proxy Coordinator of circumstances where the interests of fund
shareholders may warrant a vote contrary to these guidelines. In
such instances, the investment professionals will submit a written
recommendation to the Proxy Coordinator and the person or persons
designated by Putnam Management's Legal and Compliance Department to
assist in processing referral items pursuant to the funds' "Proxy
Voting Procedures." The Proxy Coordinator, in consultation with the
funds' Senior Vice President, Executive Vice President, and/or the
Chair of the Board Policy and Nominating Committee, as appropriate,
will determine how the funds' proxies will be voted. When
indicated, the Chair of the Board Policy and Nominating Committee
may consult with other members of the Committee or the full Board of
Trustees.
The following guidelines are grouped according to the types of
proposals generally presented to shareholders. Part I deals with
proposals that have been put forth by management and approved and
recommended by a company's board of directors. Part II deals with
proposals submitted by shareholders for inclusion in proxy
statements. Part III addresses unique considerations pertaining to
non-U.S. issuers.
The Putnam funds will disclose their proxy votes in accordance with
the timetable established by SEC rules (i.e., not later than August
31 of each year for the most recent 12-month period ended June 30).
I. BOARD-APPROVED PROPOSALS
----------------------------
The vast majority of matters presented to shareholders for a vote
involve proposals made by a company itself (sometimes referred to as
"management proposals"), which have been approved and recommended by
its board of directors. In view of the enhanced corporate
governance practices currently being implemented in public companies
and of the funds' intent to hold corporate boards accountable for
their actions in promoting shareholder interests, the funds' proxies
generally will be voted for the decisions reached by majority
independent boards of directors, except as otherwise indicated in
these guidelines. Accordingly, the funds' proxies will be voted for
board-approved proposals, except as follows:
Matters relating to the Board of Directors
------------------------------------------
Uncontested Election of Directors
The funds' proxies will be voted for the election of a company's
nominees for the board of directors, except as follows:
The funds will withhold votes for the entire board of directors if
* the board does not have a majority of independent directors,
* the board has not established independent nominating, audit, and
compensation committees,
* the board has more than 19 members or fewer than five members,
absent special circumstances,
* the board has not acted to implement a policy requested in a
shareholder proposal that received the support of a majority of the
shares of the company at its previous two annual meetings, or
* the board has adopted or renewed a shareholder rights plan
(commonly referred to as a "poison pill") without shareholder
approval during the current or prior calendar year.
The funds will withhold votes for any nominee for director who:
* is considered an independent director by the company and who has
received compensation from the company other than for service as a
director (e.g., investment banking, consulting, legal, or financial
advisory fees),
* attends less than 75% of board and committee meetings without
valid reasons for the absences (e.g., illness, personal emergency,
etc.),
* as a director of a public company (Company A), is employed as a
senior executive of another public company (Company B) if a director
of Company B serves as a senior executive of Company A (commonly
referred to as an "interlocking directorate"), or
* serves on more than five unaffiliated public company boards (for
the purpose of this guideline, boards of affiliated registered
investment companies will count as one board).
Commentary:
Board independence: Unless otherwise indicated, for the purposes of
determining whether a board has a majority of independent directors
and independent nominating, audit, and compensation committees, an
"independent director" is a director who (1) meets all requirements
to serve as an independent director of a company under the final
NYSE Corporate Governance Rules (e.g., no material business
relationships with the company and no present or recent employment
relationship with the company (including employment of an immediate
family member as an executive officer)), and (2) has not accepted
directly or indirectly any consulting, advisory, or other
compensatory fee from the company other than in his or her capacity
as a member of the board of directors or any board committee. The
funds' Trustees believe that the receipt of compensation for
services other than service as a director raises significant
independence issues.
Board size: The funds' Trustees believe that the size of the board
of directors can have a direct impact on the ability of the board to
govern effectively. Boards that have too many members can be
unwieldy and ultimately inhibit their ability to oversee management
performance. Boards that have too few members can stifle innovation
and lead to excessive influence by management.
Time commitment: Being a director of a company requires a
significant time commitment to adequately prepare for and attend the
company's board and committee meetings. Directors must be able to
commit the time and attention necessary to perform their fiduciary
duties in proper fashion, particularly in times of crisis. The
funds' Trustees are concerned about over-committed directors. In
some cases, directors may serve on too many boards to make a
meaningful contribution. This may be particularly true for senior
executives of public companies (or other directors with
substantially full-time employment) who serve on more than a few
outside boards. The funds may withhold votes from such directors on
a case-by-case basis where it appears that they may be unable to
discharge their duties properly because of excessive commitments.
Interlocking directorships: The funds' Trustees believe that
interlocking directorships are inconsistent with the degree of
independence required for outside directors of public companies.
Corporate governance practices: Board independence depends not only
on its members' individual relationships, but also on the board's
overall attitude toward management. Independent boards are
committed to good corporate governance practices and, by providing
objective independent judgment, enhancing shareholder value. The
funds may withhold votes on a case-by-case basis from some or all
directors who, through their lack of independence, have failed to
observe good corporate governance practices or, through specific
corporate action, have demonstrated a disregard for the interest of
shareholders.
Contested Elections of Directors
The funds will vote on a case-by-case basis in contested elections
of directors.
Classified Boards
The funds will vote against proposals to classify a board, absent
special circumstances indicating that shareholder interests would be
better served by this structure.
Commentary: Under a typical classified board structure, the
directors are divided into three classes, with each class serving a
three-year term. The classified board structure results in
directors serving staggered terms, with usually only a third of the
directors up for re-election at any given annual meeting. The
funds' Trustees generally believe that it is appropriate for
directors to stand for election each year, but recognize that, in
special circumstances, shareholder interests may be better served
under a classified board structure.
Other Board-Related Proposals
The funds will generally vote for board-approved proposals that have
been approved by a majority independent board, and on a case-by-case
basis on board-approved proposals where the board fails to meet the
guidelines' basic independence standards (i.e., majority of
independent directors and independent nominating, audit, and
compensation committees).
Executive Compensation
----------------------
The funds generally favor compensation programs that relate
executive compensation to a company's long-term performance. The
funds will vote on a case-by-case basis on board-approved proposals
relating to executive compensation, except as follows:
Except where the funds are otherwise withholding votes for the
entire board of directors, the funds will vote for stock option and
restricted stock plans that will result in an average annual
dilution of 1.67% or less (based on the disclosed term of the plan
and including all equity-based plans).
The funds will vote against stock option and restricted stock
plans that will result in an average annual dilution of greater than
1.67% (based on the disclosed term of the plan and including all
equity-based plans).
The funds will vote against any stock option or restricted stock
plan where the company's actual grants of stock options and
restricted stock under all equity-based compensation plans during
the prior three (3) fiscal years have resulted in an average annual
dilution of greater than 1.67%.
The funds will vote against stock option plans that permit the
replacing or repricing of underwater options (and against any
proposal to authorize such replacement or repricing of underwater
options).
The funds will vote against stock option plans that permit
issuance of options with an exercise price below the stock's current
market price.
Except where the funds are otherwise withholding votes for the
entire board of directors, the funds will vote for an employee stock
purchase plan that has the following features: (1) the shares
purchased under the plan are acquired for no less than 85% of their
market value; (2) the offering period under the plan is 27 months or
less; and (3) dilution is 10% or less.
Commentary: Companies should have compensation programs that are
reasonable and that align shareholder and management interests over
the longer term. Further, disclosure of compensation programs
should provide absolute transparency to shareholders regarding the
sources and amounts of, and the factors influencing, executive
compensation. Appropriately designed equity-based compensation
plans can be an effective way to align the interests of long-term
shareholders with the interests of management. The funds may vote
against executive compensation proposals on a case-by-case basis
where compensation is excessive by reasonable corporate standards,
or where a company fails to provide transparent disclosure of
executive compensation. In voting on a proposal relating to
executive compensation, the funds will consider whether the proposal
has been approved by an independent compensation committee of the
board.
Capitalization
--------------
Many proxy proposals involve changes in a company's capitalization,
including the authorization of additional stock, the issuance of
stock, the repurchase of outstanding stock, or the approval of a
stock split. The management of a company's capital structure
involves a number of important issues, including cash flow,
financing needs, and market conditions that are unique to the
circumstances of the company. As a result, the funds will vote on a
case-by-case basis on board-approved proposals involving changes to
a company's capitalization, except that where the funds are not
otherwise withholding votes from the entire board of directors:
The funds will vote for proposals relating to the authorization
and issuance of additional common stock (except where such proposals
relate to a specific transaction).
The funds will vote for proposals to effect stock splits
(excluding reverse stock splits).
The funds will vote for proposals authorizing share repurchase
programs.
Commentary: A company may decide to authorize additional shares of
common stock for reasons relating to executive compensation or for
routine business purposes. For the most part, these decisions are
best left to the board of directors and senior management. The
funds will vote on a case-by-case basis, however, on other proposals
to change a company's capitalization, including the authorization of
common stock with special voting rights, the authorization or
issuance of common stock in connection with a specific transaction
(e.g., an acquisition, merger or reorganization), or the
authorization or issuance of preferred stock. Actions such as these
involve a number of considerations that may affect a shareholder's
investment and that warrant a case-by-case determination.
Acquisitions, Mergers, Reincorporations, Reorganizations and Other
------------------------------------------------------------------
Transactions
------------
Shareholders may be confronted with a number of different types of
transactions, including acquisitions, mergers, reorganizations
involving business combinations, liquidations, and the sale of all
or substantially all of a company's assets, which may require their
consent. Voting on such proposals involves considerations unique to
each transaction. As a result, the funds will vote on a
case-by-case basis on board-approved proposals to effect these types
of transactions, except as follows:
The funds will vote for mergers and reorganizations involving
business combinations designed solely to reincorporate a company in
Delaware.
Commentary: A company may reincorporate into another state through
a merger or reorganization by setting up a "shell" company in a
different state and then merging the company into the new company.
While reincorporation into states with extensive and established
corporate laws - notably Delaware - provides companies and
shareholders with a more well-defined legal framework, shareholders
must carefully consider the reasons for a reincorporation into
another jurisdiction, including especially an offshore jurisdiction.
Anti-Takeover Measures
----------------------
Some proxy proposals involve efforts by management to make it more
difficult for an outside party to take control of the company
without the approval of the company's board of directors. These
include the adoption of a shareholder rights plan, requiring
supermajority voting on particular issues, the adoption of fair
price provisions, the issuance of blank check preferred stock, and
the creation of a separate class of stock with disparate voting
rights. Such proposals may adversely affect shareholder rights,
lead to management entrenchment, or create conflicts of interest.
As a result, the funds will vote against board-approved proposals to
adopt such anti-takeover measures, except as follows:
The funds will vote on a case-by-case basis on proposals to ratify
or approve shareholder rights plans; and
The funds will vote on a case-by-case basis on proposals to adopt
fair price provisions.
Commentary: The funds' Trustees recognize that poison pills and
fair price provisions may enhance shareholder value under certain
circumstances. As a result, the funds will consider proposals to
approve such matters on a case-by-case basis.
Other Business Matters
----------------------
Many proxies involve approval of routine business matters, such as
changing a company's name, ratifying the appointment of auditors,
and procedural matters relating to the shareholder meeting. For the
most part, these routine matters do not materially affect
shareholder interests and are best left to the board of directors
and senior management of the company. The funds will vote for
board-approved proposals approving such matters, except as follows:
The funds will vote on a case-by-case basis on proposals to amend
a company's charter or bylaws (except for charter amendments
necessary or to effect stock splits to change a company's name or to
authorize additional shares of common stock).
The funds will vote against authorization to transact other
unidentified, substantive business at the meeting.
The funds will vote on a case-by-case basis on other business
matters where the funds are otherwise withholding votes for the
entire board of directors.
Commentary: Charter and bylaw amendments and the transaction of
other unidentified, substantive business at a shareholder meeting
may directly affect shareholder rights and have a significant impact
on shareholder value. As a result, the funds do not view such items
as routine business matters. Putnam Management's investment
professionals and the funds' proxy voting service may also bring to
the Proxy Coordinator's attention company-specific items that they
believe to be non-routine and warranting special consideration.
Under these circumstances, the funds will vote on a case-by-case
basis.
II. SHAREHOLDER PROPOSALS
--------------------------
SEC regulations permit shareholders to submit proposals for
inclusion in a company's proxy statement. These proposals generally
seek to change some aspect of the company's corporate governance
structure or to change some aspect of its business operations. The
funds generally will vote in accordance with the recommendation of
the company's board of directors on all shareholder proposals,
except as follows:
The funds will vote for shareholder proposals to declassify a
board, absent special circumstances which would indicate that
shareholder interests are better served by a classified board
structure.
The funds will vote for shareholder proposals to require
shareholder approval of shareholder rights plans.
The funds will vote for shareholder proposals that are consistent
with the funds' proxy voting guidelines for board-approved
proposals.
The funds will vote on a case-by-case basis on other shareholder
proposals where the funds are otherwise withholding votes for the
entire board of directors.
Commentary: In light of the substantial reforms in corporate
governance that are currently underway, the funds' Trustees believe
that effective corporate reforms should be promoted by holding
boards of directors - and in particular their independent directors
- accountable for their actions, rather than imposing additional
legal restrictions on board governance through piecemeal proposals.
Generally speaking, shareholder proposals relating to business
operations are often motivated primarily by political or social
concerns, rather than the interests of shareholders as investors in
an economic enterprise. As stated above, the funds' Trustees
believe that boards of directors and management are responsible for
ensuring that their businesses are operating in accordance with high
legal and ethical standards and should be held accountable for
resulting corporate behavior. Accordingly, the funds will generally
support the recommendations of boards that meet the basic
independence and governance standards established in these
guidelines. Where boards fail to meet these standards, the funds
will generally evaluate shareholder proposals on a case-by-case
basis.
III. VOTING SHARES OF NON-U.S. ISSUERS
---------------------------------------
Many of the Putnam funds invest on a global basis, and, as a result,
they may be required to vote shares held in non-U.S. issuers - i.e.,
issuers that are incorporated under the laws of foreign
jurisdictions and that are not listed on a U.S. securities exchange
or the NASDAQ stock market. Because non-U.S. issuers are
incorporated under the laws of countries and jurisdictions outside
the U.S., protection for shareholders may vary significantly from
jurisdiction to jurisdiction. Laws governing non-U.S. issuers may,
in some cases, provide substantially less protection for
shareholders. As a result, the foregoing guidelines, which are
premised on the existence of a sound corporate governance and
disclosure framework, may not be appropriate under some
circumstances for non-U.S. issuers.
In many non-U.S. markets, shareholders who vote proxies of a
non-U.S. issuer are not able to trade in that company's stock on or
around the shareholder meeting date. This practice is known as
"share blocking." In countries where share blocking is practiced,
the funds will vote proxies only with direction from Putnam
Management's investment professionals.
In addition, some non-U.S. markets require that a company's shares
be re-registered out of the name of the local custodian or nominee
into the name of the shareholder for the meeting. This practice is
known as "share re-registration." As a result, shareholders,
including the funds, are not able to trade in that company's stock
until the shares are re-registered back in the name of the local
custodian or nominee. In countries where share re-registration is
practiced, the funds will generally not vote proxies.
The funds will vote proxies of non-U.S. issuers in accordance with
the foregoing guidelines where applicable, except as follows:
Uncontested Election of Directors
---------------------------------
Japan
For companies that have established a U.S.-style corporate
structure, the funds will withhold votes for the entire board of
directors if
* the board does not have a majority of outside directors,
* the board has not established nominating and compensation
committees composed of a majority of outside directors, or
* the board has not established an audit committee composed of a
majority of independent directors.
The funds will withhold votes for the appointment of members of a
company's board of statutory auditors if a majority of the members
of the board of statutory auditors is not independent.
Commentary:
Board structure: Recent amendments to the Japanese Commercial Code
give companies the option to adopt a U.S.-style corporate structure
(i.e., a board of directors and audit, nominating, and compensation
committees). The funds will vote for proposals to amend a company's
articles of incorporation to adopt the U.S.-style corporate
structure.
Definition of outside director and independent director: Corporate
governance principles in Japan focus on the distinction between
outside directors and independent directors. Under these
principles, an outside director is a director who is not and has
never been a director, executive, or employee of the company or its
parent company, subsidiaries or affiliates. An outside director is
"independent" if that person can make decisions completely
independent from the managers of the company, its parent,
subsidiaries, or affiliates and does not have a material
relationship with the company (i.e., major client, trading partner,
or other business relationship; familial relationship with current
director or executive; etc.). The guidelines have incorporated
these definitions in applying the board independence standards
above.
Korea
The funds will withhold votes for the entire board of directors if
* the board does not have a majority of outside directors,
* the board has not established a nominating committee composed of
at least a majority of outside directors, or
* the board has not established an audit committee composed of at
least three members and in which at least two-thirds of its members
are outside directors.
Commentary: For purposes of these guideline, an "outside director"
is a director that is independent from the management or controlling
shareholders of the company, and holds no interests that might
impair performing his or her duties impartially from the company,
management or controlling shareholder. In determining whether a
director is an outside director, the funds will also apply the
standards included in Article 415-2(2) of the Korean Commercial Code
(i.e., no employment relationship with the company for a period of
two years before serving on the committee, no director or employment
relationship with the company's largest shareholder, etc.) and may
consider other business relationships that would affect the
independence of an outside director.
United Kingdom
The funds will withhold votes for the entire board of directors if
* the board does not have at least a majority of independent
non-executive directors,
* the board has not established nomination committees composed of a
majority of independent non-executive directors, or
* the board has not established compensation and audit committees
composed of (1) at least three directors (in the case of smaller
companies, two directors) and (2) solely of independent
non-executive directors.
The funds will withhold votes for any nominee for director who is
considered an independent director by the company and who has
received compensation from the company other than for service as a
director (e.g., investment banking, consulting, legal, or financial
advisory fees).
Commentary:
Application of guidelines: Although the U.K.'s Combined Code on
Corporate Governance ("Combined Code") has adopted the "comply and
explain" approach to corporate governance, the funds' Trustees
believe that the guidelines discussed above with respect to board
independence standards are integral to the protection of investors
in U.K. companies. As a result, these guidelines will be applied in
a prescriptive manner.
Definition of independence: For the purposes of these guidelines, a
non-executive director shall be considered independent if the
director meets the independence standards in section A.3.1 of the
Combined Code (i.e., no material business or employment
relationships with the company, no remuneration from the company for
non-board services, no close family ties with senior employees or
directors of the company, etc.), except that the funds do not view
service on the board for more than nine years as affecting a
director's independence.
Smaller companies: A smaller company is one that is below the FTSE
350 throughout the year immediately prior to the reporting year.
Canada
In January 2004, Canadian securities regulators issued proposed
policies that would impose new corporate governance requirements on
Canadian public companies. The recommended practices contained in
these new corporate governance requirements mirror corporate
governance reforms that have been adopted by the NYSE and other U.S.
national securities exchanges and stock markets. As a result, the
funds will vote on matters relating to the board of directors of
Canadian issuers in accordance with the guidelines applicable to
U.S. issuers.
Commentary: Like the U.K.'s Combined Code, the proposed policies on
corporate governance issued by Canadian securities regulators embody
the "comply and explain" approach to corporate governance. Because
the funds' Trustees believe that the board independence standards
contained in the proxy voting guidelines are integral to the
protection of investors in Canadian companies, these standards will
be applied in a prescriptive manner.
Other Matters
-------------
The funds will vote for shareholder proposals calling for a
majority of a company's directors to be independent of management.
The funds will vote for shareholder proposals seeking to increase
the independence of board nominating, audit, and compensation
committees.
The funds will vote for shareholder proposals that implement
corporate governance standards similar to those established under
U.S. federal law and the listing requirements of U.S. stock
exchanges, and that do not otherwise violate the laws of the
jurisdiction under which the company is incorporated.
The funds will vote on a case-by-case basis on proposals relating
to (1) the issuance of common stock in excess of 20% of the
company's outstanding common stock where shareholders do not have
preemptive rights, or (2) the issuance of common stock in excess of
100% of the company's outstanding common stock where shareholders
have preemptive rights.
As adopted December 10, 2004
Proxy Voting Procedures of the Putnam Funds
-------------------------------------------
The Role of the Funds' Trustees
-------------------------------
The Trustees of the Putnam Funds exercise control of the voting of
proxies through their Board Policy and Nominating Committee, which is
composed entirely of independent Trustees. The Board Policy and
Nominating Committee oversees the proxy voting process and participates,
as needed, in the resolution of issues which need to be handled on a
case-by-case basis. The Committee annually reviews and recommends for
approval by the Trustees guidelines governing the Funds' proxy votes,
including how the Funds vote on specific proposals and which matters are
to be considered on a case-by-case basis. The Trustees are assisted in
this process by their independent administrative staff ("Fund
Administration"), independent legal counsel, and an independent proxy
voting service. The Trustees also receive assistance from Putnam
Investment Management, LLC ("Putnam Management"), the Funds' investment
adviser, on matters involving investment judgments. In all cases, the
ultimate decision on voting proxies rests with the Trustees, acting as
fiduciaries on behalf of the shareholders of the Funds.
The Role of the Proxy Voting Service
------------------------------------
The Funds have engaged an independent proxy voting service to assist in
the voting of proxies. The proxy voting service is responsible for
coordinating with the Funds' custodians to ensure that all proxy
materials received by the custodians relating to the Funds' portfolio
securities are processed in a timely fashion. To the extent applicable,
the proxy voting service votes all proxies in accordance with the proxy
voting guidelines established by the Trustees. The proxy voting service
will refer proxy questions to the Proxy Coordinator (described below)
for instructions under circumstances where: (1) the application of the
proxy voting guidelines is unclear, (2) a particular proxy question is
not covered by the guidelines, or (3) the guidelines call for specific
instructions on a case-by-case basis. The proxy voting service is also
requested to call to the Proxy Coordinator's attention specific proxy
questions which, while governed by a guideline, appear to involve
unusual or controversial issues. The Funds also utilize research
services relating to proxy questions provided by the proxy voting
service and by other firms.
The Role of the Proxy Coordinator
---------------------------------
Each year, a member of Fund Administration is appointed Proxy
Coordinator to assist in the coordination and voting of the Funds'
proxies. The Proxy Coordinator will deal directly with the proxy voting
service and, in the case of proxy questions referred by the proxy voting
service, will solicit voting recommendations and instructions from Fund
Administration, the Chair of the Board Policy and Nominating Committee,
and Putnam Management's investment professionals, as appropriate. The
Proxy Coordinator is responsible for ensuring that these questions and
referrals are responded to in a timely fashion and for transmitting
appropriate voting instructions to the proxy voting service.
Voting Procedures for Referral Items
------------------------------------
As discussed above, the proxy voting service will refer proxy questions
to the Proxy Coordinator under certain circumstances. When the
application of the proxy voting guidelines is unclear or a particular
proxy question is not covered by the guidelines (and does not involve
investment considerations), the Proxy Coordinator will assist in
interpreting the guidelines and, as appropriate, consult with the Senior
Vice President of Fund Administration, the Executive Vice President of
Fund Administration and the Chair of the Board Policy and Nominating
Committee on how the Funds' shares will be voted.
For proxy questions that require a case-by-case analysis pursuant to the
guidelines or that are not covered by the guidelines but involve
investment considerations, the Proxy Coordinator will refer such
questions, through a written request, to Putnam Management's investment
professionals for a voting recommendation. Such referrals will be made
in cooperation with the person or persons designated by Putnam
Management's Legal and Compliance Department to assist in processing
such referral items. In connection with each such referral item, the
Legal and Compliance Department will conduct a conflicts of interest
review, as described below under "Conflicts of Interest," and provide a
conflicts of interest report (the "Conflicts Report") to the Proxy
Coordinator describing the results of such review. After receiving a
referral item from the Proxy Coordinator, Putnam Management's investment
professionals will provide a written recommendation to the Proxy
Coordinator and the person or persons designated by the Legal and
Compliance Department to assist in processing referral items. Such
recommendation will set forth (1) how the proxies should be voted, (2)
the basis and rationale for such recommendation, and (3) any contacts
the investment professionals have had with respect to the referral item
with non-investment personnel of Putnam Management or with outside
parties (except for routine communications from proxy solicitors). The
Proxy Coordinator will then review the investment professionals'
recommendation and the Conflicts Report with the Senior Vice President
and/or Executive Vice President in determining how to vote the Funds'
proxies. The Proxy Coordinator will maintain a record of all proxy
questions that have been referred to Putnam Management's investment
professionals, the voting recommendation and the Conflicts Report.
In some situations, the Proxy Coordinator, the Senior Vice President
and/or the Executive Vice President may determine that a particular
proxy question raises policy issues requiring consultation with the
Chair of the Board Policy and Nominating Committee who, in turn, may
decide to bring the particular proxy question to the Committee or the
full board of Trustees for consideration.
Conflicts of Interest
---------------------
Occasions may arise where a person or organization involved in the proxy
voting process may have a conflict of interest. A conflict of interest
may exist, for example, if Putnam Management has a business relationship
with (or is actively soliciting business from) either the company
soliciting the proxy or a third party that has a material interest in
the outcome of a proxy vote or that is actively lobbying for a
particular outcome of a proxy vote. Any individual with knowledge of a
personal conflict of interest (e.g., familial relationship with company
management) relating to a particular referral item shall disclose that
conflict to the Proxy Coordinator and the Legal and Compliance
Department and otherwise remove himself or herself from the proxy voting
process. The Legal and Compliance Department will review each item
referred to Putnam Management's investment professionals to determine if
a conflict of interest exists and will provide the Proxy Coordinator
with a Conflicts Report for each referral item that (1) describes any
conflict of interest; (2) discusses the procedures used to address such
conflict of interest; and (3) discloses any contacts from parties
outside Putnam Management (other than routine communications from proxy
solicitors) with respect to the referral item not otherwise reported in
an investment professional's recommendation. The Conflicts Report will
also include written confirmation that any recommendation from an
investment professional provided under circumstances where a conflict of
interest exists was made solely on the investment merits and without
regard to any other consideration.
As adopted March 14, 2003
Item 8. Purchases of Equity Securities by Closed-End Management Investment
--------------------------------------------------------------------------
Companies and Affiliated Purchasers: Not applicable
------------------------------------
Item 9. Submission of Matters to a Vote of Security Holders:
------------------------------------------------------------
Not applicable
Item 10. 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 on Form N-CSR, that the design and
operation of such procedures are generally effective to provide
reasonable assurance that information required to be disclosed by
the investment company in the reports that it files or submits under
the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the
Commission's rules and forms.
(b) Changes in internal control over financial reporting:
Not applicable
Item 11. Exhibits:
------------------
(a) The Code of Ethics of The Putnam Funds, which incorporates the
Code of Ethics of Putnam Investments, is filed herewith.
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Investment Company Act of 1940, as amended, and the officer
certifications as required by Section 906 of the Sarbanes-Oxley Act
of 2002 are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
an the Investment Company Act of 1940, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NAME OF REGISTRANT
By (Signature and Title): /s/Michael T. Healy
--------------------------
Michael T. Healy
Principal Accounting Officer
Date: December 29, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934
an the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By (Signature and Title): /s/Charles E. Porter
---------------------------
Charles E. Porter
Principal Executive Officer
Date: December 29, 2004
By (Signature and Title): /s/Steven D. Krichmar
---------------------------
Steven D. Krichmar
Principal Financial Officer
Date: December 29, 2004