UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: (811-05346)

Exact name of registrant as specified in charter: Putnam Variable Trust

Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109

Name and address of agent for service: Robert T. Burns, Vice President
One Post Office Square
Boston, Massachusetts 02109

Copy to:         Bryan Chegwidden, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036

Registrant’s telephone number, including area code: (617) 292-1000

Date of fiscal year end: December 31, 2014

Date of reporting period : January 1, 2014 — December 31, 2014

Item 1. Report to Stockholders:

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

Message from the Trustees

Dear Shareholder:

The falling price of oil has captured headlines in recent months and is having a sustained effect on markets and economies worldwide. Cheaper oil allows many consumers and businesses to shift spending to other priorities. At the same time, the decline reflects greater pessimism about global growth, and it is having a negative impact on the energy sector — not just in the United States, but wherever energy is a key export.

This change in the investing environment has contributed to an increase in market volatility. Although the U.S. economy continues to grow, economic challenges in Europe, China, and Japan are causing uncertainty.

Compared with recent years, we may see more tempered returns from equity and fixed-income markets. While a number of positive trends continue, including an improving housing market and a brighter employment situation, investors should also be alert to a possible increase in short-term interest rates that is widely expected to occur in 2015. History suggests that rising rates could generate headwinds for markets.

In all types of market conditions, Putnam offers a wide range of flexible strategies. Our experienced investment teams employ new ways of thinking about building portfolios for both the opportunities and risks in today’s markets. In this dynamic environment, it may be an opportune time for you to meet with your financial advisor to ensure that your portfolio is properly aligned with your goals and tolerance for risk.

As always, thank you for investing with Putnam.

Performance summary (as of 12/31/14)

Investment objective

Capital appreciation and, as a secondary objective, current income

Net asset value December 31, 2014

Class IA: $21.87  Class IB: $21.79 

Total return at net asset value

			Russell 3000
(as of 12/31/14)	Class IA shares*	Class IB shares*	Value Index
1 year	11.08%	10.76%	12.70%
5 years	118.00	115.32	104.09
Annualized	16.87	16.58	15.34
10 years	130.78	125.13	101.63
Annualized	8.72	8.45	7.26
Life	244.62	234.84	198.64
Annualized	11.19	10.91	9.83

For a portion of the periods, the fund had expense limitations, without which returns would have been lower.

* Class inception date: May 1, 2003.

The Russell 3000 Value Index is an unmanaged index of those companies in the broad-market Russell 3000 Index chosen for their value orientation.

Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. All total return figures are at net asset value and exclude contract charges and expenses, which are added to the variable annuity contracts to determine total return at unit value. Had these charges and expenses been reflected, performance would have been lower. For more recent performance, contact your variable annuity provider who can provide you with performance that reflects the charges and expenses at your contract level.

Portfolio composition

Allocations are shown as a percentage of the fund’s net assets. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the exclusion of as-of trades, if any, and the use of different classifications of securities for presentation purposes. Holdings and allocations may vary over time.

Putnam VT Multi-Cap Value Fund   1 

Report from your fund’s manager

U.S. stocks tallied solid gains in 2014, outperforming international stocks. How did Putnam VT Multi-Cap Value Fund perform for the 12-month reporting period ended December 31, 2014?

Investors bid up equity prices on evidence of continued acceleration in U.S. economic growth and statements by the Federal Reserve signaling its intention to maintain short-term interest rates at their current low levels. But the markets’ advances were marked by periods of volatility. Several factors, including geopolitical tensions in the Middle East and Ukraine and slowing growth in Europe and China, created headwinds that led to sell-offs as investors moved into lower-risk alternatives. Thus, while equities augmented their multiyear rally, we believe there was a somewhat defensive tone to those gains for the period.

Against this backdrop, the portfolio delivered a solid return for the reporting period but fell shy of its benchmark, the Russell 3000 Value Index. In our view, there were two primary reasons for this result. First, the portfolio’s emphasis on the smaller-cap segment of the value market was a detracting factor, as larger-cap value stocks widely outperformed their smaller counterparts. We believe market uncertainty drove many investors toward the larger-cap segment. Second, periods of market turbulence can have short-term effects on individual stocks. This was the case with some of the portfolio’s holdings in the financials and energy sectors, which accounted for much of its relative underperformance.

Which holdings made the greatest contributions to relative performance?

The stock of the pharmaceutical company Actavis rose as the dynamics of industry consolidation defined the company as both a potential acquirer and a potential acquisition target. Covidien, a global health-care products company based in Ireland, soared in mid-June on news that it would be acquired by Medtronic. We subsequently sold our stake in Covidien to lock in profits.

While the energy sector did well in the first half of the year amid expectations of more robust global growth, prospects dimmed in the second half, as slower-than-expected global growth —particularly in economies such as China’s — tempered demand. As supply began to outstrip demand, and the Organization of Petroleum Exporting Countries didn’t reduce production, an oil surplus developed. Thus, not holding stocks of oil producers, such as Exxon Mobil and Chevron, was positive for the portfolio.

Which stocks had more disappointing results for the period?

Although the portfolio was underweight in its allocation to the energy sector relative to the index, the positive effects of that positioning were overshadowed by the weak performance of some holdings in the services-related segments of the energy sector. Within the energy sector, companies that provide oil-field services and offshore drilling services were hit especially hard. Talisman Energy is a stock that the portfolio acquired because of its potential as a turnaround story, in our view. This Canadian enterprise is a global oil and gas exploration and production company that, under new management, is trying to sell some of its noncore assets in order to pay down debt and rationalize its operations. When energy prices plummeted, however, the company not only saw its revenues decline, but its prospects for selling assets also dimmed, taking a toll on the company’s share price. We sold our position in Talisman Energy during the reporting period.

The portfolio was significantly underweight in large-cap financials, which compose a large weighting of the benchmark. Our decision not to own certain financial companies, as well as our positions in others, including Genworth Financial and The Bancorp, contributed to the portfolio’s relative underperformance. Our position in Bancorp was sold during the reporting period.

What is your outlook for U.S stocks in 2015?

We believe U.S. economic growth should continue to expand, helped in part by lower oil prices that should begin to flow through to the consumer and help support other sectors of the economy. Equity valuations, in our opinion, have been high, but are not overly stretched given the current pace of economic expansion in the United States. We think there remains some concern about how the equity markets will react once the Fed begins to raise interest rates. That said, however, we believe the Fed will err on the side of moderation until growth in the U.S. economy is a good deal stronger.

The views expressed in this report are exclusively those of Putnam Management and are subject to change. They are not meant as investment advice. Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future.

Consider these risks before investing: Investments in small and/ or midsize companies increase the risk of greater price fluctuations. Value stocks may fail to rebound, and the market may not favor value-style investing. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific issuer or industry. You can lose money by investing in the fund.

Your fund’s manager

Portfolio Manager James A. Polk, CFA, joined Putnam in 1998 and has been in the investment industry since 1994.

Your fund’s manager may also manage other accounts advised by Putnam Management or an affiliate, including retail mutual fund counterparts to the funds in Putnam Variable Trust.

2   Putnam VT Multi-Cap Value Fund 

Understanding your fund’s expenses

As an investor in a variable annuity product that invests in a registered investment company, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, which are not shown in this section and would result in higher total expenses. Charges and expenses at the insurance company separate account level are not reflected. For more information, see your fund’s prospectus or talk to your financial representative.

Review your fund’s expenses

The two left-hand columns of the Expense per $1,000 table show the expenses you would have paid on a $1,000 investment in your fund from July 1, 2014, to December 31, 2014. They also show how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses. To estimate the ongoing expenses you paid over the period, divide your account value by $1,000, then multiply the result by the number in the first line for the class of shares you own.

Compare your fund’s expenses with those of other funds

The two right-hand columns of the Expense per $1,000 table show your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All shareholder reports of mutual funds and funds serving as variable annuity vehicles will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expense ratios
	Class IA	Class IB
Total annual operating expenses for the
fiscal year ended 12/31/13*	0.81%	1.06%
Annualized expense ratio for the
six-month period ended 12/31/14†	0.79%	1.04%

*Fiscal-year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report.

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

Expense per $1,000
	Expenses and value for a		Expenses and value for a
	$1,000 investment, assuming		$1,000 investment, assuming a
	actual returns for the 6 months		hypothetical 5% annualized return
	ended 12/31/14		for the 6 months ended 12/31/14
	Class IA	Class IB	Class IA	Class IB
Expenses paid
per $1,000*†	$4.04	$5.31	$4.02	$5.30
Ending value
(after expenses)	$1,028.20	$1,026.90	$1,021.22	$1,019.96

*Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 12/31/14. The expense ratio may differ for each share class.

†Expenses based on actual returns are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year. Expenses based on a hypothetical 5% return are calculated by multiplying the expense ratio by the average account value for the six-month period; then multiplying the result by the number of days in the six-month period; and then dividing that result by the number of days in the year.

Putnam VT Multi-Cap Value Fund   3 

Report of Independent Registered Public Accounting Firm

To the Trustees of Putnam Variable Trust and Shareholders of
Putnam VT Multi-Cap Value Fund:

In our opinion, the accompanying statement of assets and liabilities, including the portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Putnam VT Multi-Cap Value Fund (the “fund”) at December 31, 2014, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments owned at December 31, 2014 by correspondence with the custodian, brokers, and transfer agent, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
February 11, 2015

4   Putnam VT Multi-Cap Value Fund 

The fund’s portfolio 12/31/14

COMMON STOCKS (98.3%)*	Shares	Value
Aerospace and defense (7.5%)
Alliant Techsystems, Inc.	2,380	$276,675
General Dynamics Corp.	4,230	582,133
Honeywell International, Inc.	7,230	722,422
L-3 Communications Holdings, Inc.	6,520	822,889
Northrop Grumman Corp.	4,870	717,789
		3,121,908
Airlines (1.1%)
American Airlines Group, Inc.	8,430	452,101
		452,101
Banks (6.0%)
City National Corp.	5,400	436,374
Fifth Third Bancorp	14,610	297,679
First Republic Bank	15,370	801,084
Old National Bancorp S	9,250	137,640
PacWest Bancorp S	9,920	450,963
Regions Financial Corp.	35,100	370,656
		2,494,396
Beverages (3.3%)
Coca-Cola Enterprises, Inc.	30,980	1,369,936
		1,369,936
Capital markets (4.3%)
Ameriprise Financial, Inc.	4,788	633,213
Charles Schwab Corp. (The)	15,260	460,699
E*Trade Financial Corp. †	11,090	268,988
KKR & Co. LP	18,520	429,849
		1,792,749
Chemicals (2.0%)
Axalta Coating Systems, Ltd. †	15,210	395,764
Quaker Chemical Corp.	1,590	146,344
Sherwin-Williams Co. (The)	1,180	310,387
		852,495
Commercial services and supplies (1.7%)
Tyco International PLC	16,690	732,023
		732,023
Containers and packaging (6.9%)
Crown Holdings, Inc. †	4,310	219,379
MeadWestvaco Corp.	5,140	228,165
Packaging Corp. of America	5,690	444,105
Sealed Air Corp.	16,620	705,187
Silgan Holdings, Inc.	24,328	1,303,981
		2,900,817
Diversified consumer services (0.7%)
ITT Educational Services, Inc. † S	11,849	113,869
Weight Watchers International, Inc. † S	8,200	203,688
		317,557
Electric utilities (2.1%)
Edison International	6,970	456,396
Entergy Corp.	5,090	445,273
		901,669
Electrical equipment (1.8%)
AMETEK, Inc.	14,642	770,608
		770,608
Electronic equipment, instruments, and components (0.8%)
Anixter International, Inc.	2,350	207,881
SYNNEX Corp. S	1,920	150,067
		357,948
Food products (1.4%)
Kellogg Co.	5,720	374,317
Pinnacle Foods, Inc.	5,491	193,832
		568,149

COMMON STOCKS (98.3%)* cont.	Shares	Value
Health-care equipment and supplies (7.7%)
Alere, Inc. †	16,070	$610,660
Becton Dickinson and Co.	3,200	445,312
Boston Scientific Corp. †	32,460	430,095
Medtronic, Inc.	9,290	670,738
Merit Medical Systems, Inc. †	30,509	528,721
OraSure Technologies, Inc. †	17,570	178,160
Zimmer Holdings, Inc.	2,960	335,723
		3,199,409
Health-care providers and services (1.2%)
Mednax, Inc. †	7,720	510,369
		510,369
Hotels, restaurants, and leisure (0.4%)
Penn National Gaming, Inc. † S	10,990	150,893
		150,893
Household durables (5.0%)
Garmin, Ltd.	2,760	145,811
Harman International Industries, Inc.	5,340	569,831
Jarden Corp. †	15,150	725,382
Whirlpool Corp.	3,270	633,530
		2,074,554
Independent power and renewable electricity producers (0.4%)
NRG Energy, Inc.	6,170	166,282
		166,282
Insurance (5.4%)
American International Group, Inc.	17,010	952,730
Genworth Financial, Inc. Class A †	24,150	205,275
Hartford Financial Services Group, Inc. (The)	14,416	601,003
Prudential PLC (United Kingdom)	10,610	244,159
XL Group PLC	7,080	243,340
		2,246,507
IT Services (2.1%)
Computer Sciences Corp.	7,680	484,224
Fidelity National Information Services, Inc.	6,510	404,922
		889,146
Leisure products (0.4%)
Brunswick Corp.	3,650	187,099
		187,099
Machinery (3.5%)
Pall Corp.	3,890	393,707
Snap-On, Inc.	5,720	782,153
Wabtec Corp.	3,330	289,344
		1,465,204
Media (1.1%)
Live Nation Entertainment, Inc. †	8,420	219,846
Regal Entertainment Group Class A S	10,290	219,794
		439,640
Multi-utilities (1.9%)
Ameren Corp.	9,230	425,780
PG&E Corp.	6,620	352,449
		778,229
Oil, gas, and consumable fuels (3.1%)
EOG Resources, Inc.	5,520	508,226
EP Energy Corp. Class A † S	23,680	247,219
Gulfport Energy Corp. †	3,540	147,760
QEP Resources, Inc.	10,410	210,490
Scorpio Tankers, Inc. S	19,040	165,458
		1,279,153
Personal products (2.9%)
Avon Products, Inc. S	9,070	85,167
Coty, Inc. Class A † S	38,920	804,087
Estee Lauder Cos., Inc. (The) Class A	4,220	321,564
		1,210,818

Putnam VT Multi-Cap Value Fund   5 

COMMON STOCKS (98.3%)* cont.	Shares	Value
Pharmaceuticals (7.3%)
Actavis PLC †	5,480	$1,410,607
Endo International PLC †	6,600	475,992
Impax Laboratories, Inc. †	10,040	318,067
Jazz Pharmaceuticals PLC † S	1,900	311,087
Mylan, Inc. †	4,200	236,754
Teva Pharmaceutical Industries, Ltd. ADR (Israel)	5,190	298,477
		3,050,984
Real estate investment trusts (REITs) (3.0%)
American Capital Agency Corp.	10,400	227,032
Boston Properties, Inc.	2,690	346,176
NorthStar Realty Finance Corp.	37,630	661,535
		1,234,743
Real estate management and development (0.7%)
RE/MAX Holdings, Inc. Class A	8,427	288,625
		288,625
Road and rail (1.7%)
Genesee & Wyoming, Inc. Class A †	4,060	365,075
Union Pacific Corp.	2,950	351,434
		716,509
Semiconductors and semiconductor equipment (2.1%)
Maxim Integrated Products, Inc.	4,240	135,129
Micron Technology, Inc. †	21,820	763,918
		899,047
Software (0.3%)
Symantec Corp.	5,080	130,327
		130,327
Specialty retail (5.9%)
Best Buy Co., Inc.	22,300	869,254
Express, Inc. †	12,960	190,382
Gap, Inc. (The)	4,960	208,866
GNC Holdings, Inc. Class A	2,030	95,329
Michaels Cos., Inc. (The) † S	11,660	288,352
TJX Cos., Inc. (The)	11,850	812,673
		2,464,856
Technology hardware, storage, and peripherals (2.1%)
Hewlett-Packard Co.	4,590	184,197
NetApp, Inc.	5,448	225,820
QLogic Corp. †	10,370	138,128
SanDisk Corp.	3,570	349,789
		897,934

COMMON STOCKS (98.3%)* cont.	Shares	Value
Textiles, apparel, and luxury goods (0.3%)
Hanesbrands, Inc.	1,100	$122,782
		122,782
Trading companies and distributors (0.2%)
DXP Enterprises, Inc. †	1,650	83,372
		83,372
Total common stocks (cost $30,619,886)		$41,118,838
SHORT-TERM INVESTMENTS (9.2%)*	Shares	Value
Putnam Cash Collateral Pool, LLC 0.20% d	2,925,350	$2,925,350
Putnam Short Term Investment Fund 0.10% L	904,547	904,547
Total short-term investments (cost $3,829,897)		$3,829,897
Total investments (cost $34,449,783)		$44,948,735

Key to holding’s abbreviations

ADR American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank

Notes to the fund’s portfolio

Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from January 1, 2014 through December 31, 2014 (the reporting period). Within the following notes to the portfolio, references to “ASC  820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures and references to “OTC”, if any, represent over-the-counter.

* Percentages indicated are based on net assets of $41,817,453.

† Non-income-producing security.

d Affiliated company. See Note 1 to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

L Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

S Security on loan, in part or in entirety, at the close of the reporting period (Note 1).

6   Putnam VT Multi-Cap Value Fund 

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

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

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

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

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:

		Valuation inputs
Investments in securities:	Level 1	Level 2	Level 3
Common stocks*:
Consumer discretionary	$5,757,381	$—	$—
Consumer staples	3,148,903	—	—
Energy	1,279,153	—	—
Financials	7,812,861	244,159	—
Health care	6,760,762	—	—
Industrials	7,341,725	—	—
Information technology	3,174,402	—	—
Materials	3,753,312	—	—
Utilities	1,846,180	—	—
Total common stocks	40,874,679	244,159	—
Short-term investments	904,547	2,925,350	—
Totals by level	$41,779,226	$3,169,509	$—

* Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.

During the reporting period, transfers within the fair value hierarchy, if any, (other than certain transfers involving non-U.S. equity securities as described in Note 1) did not represent, in the aggregate, more than 1% of the fund’s net assets measured as of the end of the period.

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

Putnam VT Multi-Cap Value Fund   7 

Statement of assets and liabilities
12/31/14

Assets
Investment in securities, at value, including $2,839,339 of securities on loan (Note 1):
Unaffiliated issuers (identified cost $30,619,886)	$41,118,838
Affiliated issuers (identified cost $3,829,897) (Notes 1 and 5)	3,829,897
Dividends, interest and other receivables	57,922
Total assets	45,006,657
Liabilities
Payable to custodian	7,394
Payable for investments purchased	59,457
Payable for shares of the fund repurchased	98,121
Payable for compensation of Manager (Note 2)	19,348
Payable for custodian fees (Note 2)	3,577
Payable for investor servicing fees (Note 2)	1,594
Payable for Trustee compensation and expenses (Note 2)	39,199
Payable for administrative services (Note 2)	283
Payable for distribution fees (Note 2)	2,513
Collateral on securities loaned, at value (Note 1)	2,925,350
Other accrued expenses	32,368
Total liabilities	3,189,204
Net assets	$41,817,453
Represented by
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$25,276,686
Undistributed net investment income (Note 1)	394,949
Accumulated net realized gain on investments and foreign currency transactions (Note 1)	5,646,866
Net unrealized appreciation of investments	10,498,952
Total — Representing net assets applicable to capital shares outstanding	$41,817,453
Computation of net asset value Class IA
Net assets	$29,925,021
Number of shares outstanding	1,368,378
Net asset value, offering price and redemption price per share (net assets divided by number of shares outstanding)	$21.87
Computation of net asset value Class IB
Net assets	$11,892,432
Number of shares outstanding	545,712
Net asset value, offering price and redemption price per share (net assets divided by number of shares outstanding)	$21.79

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

8 Putnam VT Multi-Cap Value Fund 

Statement of operations
Year ended 12/31/14

Investment income
Dividends (net of foreign tax of $5,526)	$811,209
Interest (including interest income of $624 from investments in affiliated issuers) (Note 5)	630
Securities lending (Note 1)	15,512
Total investment income	827,351
Expenses
Compensation of Manager (Note 2)	236,582
Investor servicing fees (Note 2)	43,001
Custodian fees (Note 2)	13,804
Trustee compensation and expenses (Note 2)	1,794
Distribution fees (Note 2)	31,622
Administrative services (Note 2)	1,077
Auditing and tax fees	26,268
Other	17,413
Total expenses	371,561
Expense reduction (Note 2)	(5,623)
Net expenses	365,938
Net investment income	461,413
Net realized gain on investments (Notes 1 and 3)	6,061,229
Net realized gain on foreign currency transactions (Note 1)	108
Net realized gain on written options (Notes 1 and 3)	69,396
Net unrealized depreciation of investments and written options during the year	(2,142,399)
Net gain on investments	3,988,334
Net increase in net assets resulting from operations	$4,449,747

Statement of changes in net assets

	Year ended	Year ended
	12/31/14	12/31/13
Increase (decrease) in net assets:
Operations
Net investment income	$461,413	$367,146
Net realized gain on investments and foreign currency transactions	6,130,733	5,262,792
Net unrealized appreciation (depreciation) of investments and assets and liabilities in foreign currencies	(2,142,399)	8,035,562
Net increase in net assets resulting from operations	4,449,747	13,665,500
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class IA	(283,104)	(374,274)
Class IB	(89,313)	(147,498)
Decrease from capital share transactions (Note 4)	(6,681,339)	(2,997,830)
Total increase (decrease) in net assets	(2,604,009)	10,145,898
Net assets:
Beginning of year	44,421,462	34,275,564
End of year (including undistributed net investment income of $394,949 and $319,623, respectively)	$41,817,453	$44,421,462

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

Putnam VT Multi-Cap Value Fund   9 

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

INVESTMENT OPERATIONS:					LESSDISTRIBUTIONS:					RATIOS AND SUPPLEMENTAL DATA:
Period ended	Net asset value, beginning of period	Net investment income (loss)a	Net realized and unrealized gain (loss) on investments	Total from investment operations	From net investment income	Total distributions	Non-recurring reimbursements	Net asset value, end of period	Total return at net asset value (%)b,c	Net assets, end of period (in thousands)	Ratio of expenses to average net assets (%)b,d	Ratio of net investment income (loss) to average net assets (%)	Portfolio turnover (%)
Class IA
12/31/14	$19.87	.24	1.95	2.19	(.19)	(.19)	—	$21.87	11.08	$29,925	.79	1.15	78
12/31/13	14.16	.17	5.78	5.95	(.24)	(.24)	—	19.87	42.43	31,051	.81	1.01	85
12/31/12	12.23	.17	1.85	2.02	(.09)	(.09)	—	14.16	16.50	23,414	.85	1.30	81
12/31/11	12.92	.06	(.68)	(.62)	(.07)	(.07)	— e,f	12.23	(4.87)	23,338	.84	.50	82
12/31/10	10.44	.04	2.49	2.53	(.05)	(.05)	—	12.92	24.32	30,052	.86	.39	111
Class IB
12/31/14	$19.81	.18	1.94	2.12	(.14)	(.14)	—	$21.79	10.76	$11,892	1.04	.90	78
12/31/13	14.12	.13	5.76	5.89	(.20)	(.20)	—	19.81	42.07	13,370	1.06	.77	85
12/31/12	12.19	.14	1.84	1.98	(.05)	(.05)	—	14.12	16.26	10,861	1.10	1.06	81
12/31/11	12.88	.03	(.69)	(.66)	(.03)	(.03)	—e,f	12.19	(5.12)	10,648	1.09	.25	82
12/31/10	10.41	.02	2.48	2.50	(.03)	(.03)	—	12.88	24.06	14,125	1.11	.14	111

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

b The charges and expenses at the insurance company separate account level are not reflected.

c Total return assumes dividend reinvestment.

d Includes amounts paid through expense offset and brokerage/service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

e Amount represents less than $0.01 per share.

f Reflects a non-recurring reimbursement related to restitution amounts in connection with a distribution plan approved by the Securities and Exchange Commission (the SEC) which amounted to less $0.01 per share outstanding on July 21, 2011. Also reflects a non-recurring reimbursement related to short-term trading related lawsuits, which amounted to less than $0.01 per share outstanding on May 11, 2011.

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

10  Putnam VT Multi-Cap Value Fund 

Notes to financial statements 12/31/14

Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from January 1, 2014 through December 31, 2014.

Putnam VT Multi-Cap Value Fund (the fund) is a diversified series of Putnam Variable Trust (the Trust), a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The goal of the fund is to seek capital appreciation by investing mainly in common stocks of U.S. companies of any size, with a focus on value stocks. Value stocks are issued by companies that Putnam Management believes are currently undervalued by the market. If Putnam Management is correct and other investors recognize the value of the company, the price of its stock may rise. Putnam Management may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell investments. The fund seeks current income as a secondary objective.

The fund offers class IA and class IB shares of beneficial interest. Class IA shares are offered at net asset value and are not subject to a distribution fee. Class IB shares are offered at net asset value and pay an ongoing distribution fee, which is identified in Note 2.

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

Note 1 — Significant accounting policies

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. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and has delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.

Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Investments in open-end investment companies (excluding exchange traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value and are classified as Level 2 securities.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

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

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies, currency gains and losses

Putnam VT Multi-Cap Value Fund   11 

realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.

 Options contracts The fund uses options contracts to manage downside risks. The potential risk to the fund is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. 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 a reduction to the cost of investments.

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. OTC traded options are valued using prices supplied by dealers.

Options on swaps are similar to options on securities except that the premium paid or received is to buy or grant the right to enter into a previously agreed upon interest rate or credit default contract. Forward premium swap option contracts include premiums that have extended settlement dates. The delayed settlement of the premiums is factored into the daily valuation of the option contracts. In the case of interest rate cap and floor contracts, in return for a premium, ongoing payments between two parties are based on interest rates exceeding a specified rate, in the case of a cap contract, or falling below a specified rate in the case of a floor contract.

Written option contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, is presented in the fund’s portfolio.

Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.

Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.

At the close of the reporting period, the fund did not have a net liability position on open derivative contracts subject to the Master Agreements.

Securities lending The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending is included in investment income on the Statement of operations. Cash collateral is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged to Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the fund received cash collateral of $2,925,350 and the value of securities loaned amounted to $2,839,339.

Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

Lines of credit The fund participates, along with other Putnam funds, in a $392.5 million unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to the Federal Funds rate plus 1.25% for the committed line of credit and the Federal Funds rate plus 1.30% for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.11% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies.

The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. 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. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences include temporary and/or permanent differences from losses on wash sale transactions, nontaxable dividends, and from partnership income. 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. At the close of the reporting period, the fund reclassified $13,670 to decrease undistributed net investment income, $5 to decrease paid-in-capital and $13,675 to increase accumulated net realized gain.

The tax basis components of distributable earnings and the federal tax cost as of the close of the reporting period were as follows:

Unrealized appreciation	$10,907,153
Unrealized depreciation	(587,627)
Net unrealized appreciation	10,319,526
Undistributed ordinary income	394,949
Undistributed long-term gain	5,682,532
Undistributed short-term gain	143,760
Cost for federal income tax purposes	$34,629,209

12   Putnam VT Multi-Cap Value Fund 

Expenses of the Trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the Trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund.

Beneficial interest At the close of the reporting period, insurance companies or their separate accounts were record owners of all but a de minimis number of the shares of the fund. Approximately 42.4% of the fund is owned by accounts of one insurance company.

Note 2 — Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of most open-end funds, as defined in the fund’s management contract, sponsored by Putnam Management. Such annual rates may vary as follows:

0.710%	of the first $5 billion,
0.660%	of the next $5 billion,
0.610%	of the next $10 billion,
0.560%	of the next $10 billion,
0.510%	of the next $50 billion,
0.490%	of the next $50 billion,
0.480%	of the next $100 billion and
0.475%	of any excess thereafter.

The fund’s shareholders approved the fund’s current management contract with Putnam Management effective February 27, 2014. Shareholders were asked to approve the fund’s management contract following the death on October 8, 2013 of The Honourable Paul G. Desmarais, who had controlled directly and indirectly a majority of the voting shares of Power Corporation of Canada, the ultimate parent company of Putnam Management. The substantive terms of the management contract, including terms relating to fees, are identical to the terms of the fund’s previous management contract and reflect the rates provided in the table above.

Putnam Management has contractually agreed, through June 30, 2015, to waive fees or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were not reduced as a result of this limit.

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

The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.

Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. was paid a monthly fee for investor servicing at an annual rate of 0.10% of the fund’s average net assets. During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:

Class IA	$30,349
Class IB	12,652
Total	$43,001

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. The fund also reduced expenses through brokerage/service arrangements. For the reporting period, the fund’s expenses were not reduced under the expense offset arrangements and were reduced by $5,623 under the brokerage/ service arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $23, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted a distribution plan (the Plan) with respect to its class IB shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plan is to compensate Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Putnam Investments, LLC, for services provided and expenses incurred in distributing shares of the fund. The Plan provides for payment by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to 0.35% of the average net assets attributable to the fund’s class IB shares. The Trustees have approved payment by the fund at an annual rate of 0.25% of the average net assets attributable to the fund’s class IB shares. During the reporting period, the class specific expenses related to distribution fees were as follows:

Class IB  $31,622 

Note 3 — Purchases and sales of securities

During the reporting period, cost of purchases and proceeds from sales, excluding short-term investments were as follows:

	Cost of purchases	Proceeds from sales
Investments in securities (Long-term)	$32,793,885	$39,888,259
U.S. government securities (Long-term)	—	—
Total	$32,793,885	$39,888,259

Written option transactions during the reporting period are summarized as follows:

	Written option	Written option
	contract amounts	premiums
Written options outstanding at the
beginning of the reporting period	$—	$—
Options opened	113,764	69,396
Options exercised	—	—
Options expired	(113,764)	(69,396)
Options closed	—	—
Written options outstanding at the
end of the reporting period	$—	$—

Putnam VT Multi-Cap Value Fund   13 

Note 4 — Capital shares

At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Subscriptions and redemptions are presented at the omnibus level. Transactions in capital shares were as follows:

		Class IA shares				Class IB shares
	Year ended 12/31/14		Year ended 12/31/13		Year ended 12/31/14		Year ended 12/31/13
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount
Shares sold	118,843	$2,403,639	162,297	$2,795,819	42,453	$852,890	98,652	$1,688,896
Shares issued in connection with
reinvestment of distributions	14,155	283,104	23,854	374,274	4,472	89,313	9,413	147,498
	132,998	2,686,743	186,151	3,170,093	46,925	942,203	108,065	1,836,394
Shares repurchased	(327,027)	(6,694,047)	(276,861)	(4,635,674)	(176,193)	(3,616,238)	(202,345)	(3,368,643)
Net decrease	(194,029)	$(4,007,304)	(90,710)	$(1,465,581)	(129,268)	$(2,674,035)	(94,280)	$(1,532,249)

Note 5 — Affiliated transactions

Transactions during the reporting period with Putnam Short Term Investment Fund, which is under common ownership and control, were as follows:

	Fair value at the beginning of				Fair value at the end of the
Name of affiliate	the reporting period	Purchase cost	Sale proceeds	Investment income	reporting period
Putnam Short Term Investment Fund*	$408,314	$17,668,402	$17,172,169	$624	$904,547
Total	$408,314	$17,668,402	$17,172,169	$624	$904,547

* Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management.

Note 6 — Market, credit and other risks

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations.

Note 7 — Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was as follows based on an average of the holdings at the end of each fiscal quarter:

Purchased equity option contracts (contract amount)	$—*
Written equity option contracts (contract amount) (Note 3)	$—*

* For the reporting period there were no holdings at the end of each fiscal quarter and the transactions were considered minimal. As of the close of the reporting period, the fund did not hold any derivative instruments.

The following is a summary of realized gains or losses of derivative instruments on the Statement of operations for the reporting period (see Note 1) (there were no unrealized gains or losses on derivative instruments):

Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments

Derivatives not accounted for as hedging instruments
under ASC 815	Options	Total
Equity contracts	$(21,615)	$(21,615)
Total	$(21,615)	$(21,615)

14   Putnam VT Multi-Cap Value Fund 

Federal tax information (Unaudited)

Pursuant to §852 of the Internal Revenue Code, as amended, the fund hereby designates $6,250,785 as a capital gain dividend with respect to the taxable year ended December 31, 2014, or, if subsequently determined to be different, the net capital gain of such year.

The fund designated 66.19% of ordinary income distributions as qualifying for the dividends received deduction for corporations.

Putnam VT Multi-Cap Value Fund   15 

Shareholder meeting results (Unaudited)

February 27, 2014 special meeting

At the meeting, each of the nominees for Trustees was elected, with all funds of the Trust voting together as a single class, as follows:

	Votes for	Votes withheld
Liaquat Ahamed	545,333,593	24,865,496
Ravi Akhoury	545,906,178	24,292,911
Barbara M. Baumann	549,255,821	20,943,268
Jameson A. Baxter	548,878,213	21,320,877
Charles B. Curtis	548,266,326	21,932,764
Robert J. Darretta	548,954,413	21,244,676
Katinka Domotorffy	547,720,210	22,478,879
John A. Hill	548,926,132	21,272,957
Paul L. Joskow	548,318,739	21,880,351
Kenneth R. Leibler	549,128,017	21,071,073
Robert E. Patterson	548,989,554	21,209,535
George Putnam, III	548,805,405	21,393,685
Robert L. Reynolds	549,170,754	21,028,335
W. Thomas Stephens	548,523,544	21,675,546

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

Votes for	Votes against	Abstentions	Broker non-votes
1,947,845	102,971	216,875	—

A proposal to adopt an Amended and Restated Declaration of Trust was approved with all funds of the Trust voting together as a single class, as follows:

Votes for	Votes against	Abstentions	Broker non-votes
507,595,281	19,452,349	43,151,459	—

All tabulations are rounded to the nearest whole number.

16   Putnam VT Multi-Cap Value Fund 

About the Trustees

Putnam VT Multi-Cap Value Fund   17 

*Mr. Reynolds is an “interested person” (as defined in the Investment Company Act of 1940) of the fund and Putnam Investments. He is President and Chief Executive Officer of Putnam Investments, as well as the President of your fund and each of the other Putnam funds.

The address of each Trustee is One Post Office Square, Boston, MA 02109.

As of December 31, 2014, there were 116 Putnam funds. All Trustees serve as Trustees of all Putnam funds.

Each Trustee serves for an indefinite term, until his or her resignation, retirement at age 75, removal, or death.

Officers
In addition to Robert L. Reynolds, the other officers of the fund are shown below:

Jonathan S. Horwitz (Born 1955)	Michael J. Higgins (Born 1976)	James P. Pappas (Born 1953)
Executive Vice President, Principal Executive	Vice President, Treasurer, and Clerk	Vice President
Officer, and Compliance Liaison	Since 2010	Since 2004
Since 2004	Manager of Finance, Dunkin’ Brands	Director of Trustee Relations,
	(2008–2010); Senior Financial Analyst, Old	Putnam Investments and
Steven D. Krichmar (Born 1958)	Mutual Asset Management (2007–2008);	Putnam Management
Vice President and Principal Financial Officer	Senior Financial Analyst, Putnam Investments
Since 2002	(1999–2007)	Mark C. Trenchard (Born 1962)
Chief of Operations, Putnam Investments and		Vice President and BSA Compliance Officer
Putnam Management	Janet C. Smith (Born 1965)	Since 2002
	Vice President, Principal Accounting Officer,	Director of Operational Compliance,
Robert T. Burns (Born 1961)	and Assistant Treasurer	Putnam Investments and
Vice President and Chief Legal Officer	Since 2007	Putnam Retail Management
Since 2011	Director of Fund Administration Services,
General Counsel, Putnam Investments,	Putnam Investments and	Nancy E. Florek (Born 1957)
Putnam Management, and	Putnam Management	Vice President, Director of Proxy Voting and
Putnam Retail Management		Corporate Governance, Assistant Clerk, and
	Susan G. Malloy (Born 1957)	Associate Treasurer
Robert R. Leveille (Born 1969)	Vice President and Assistant Treasurer	Since 2000
Vice President and Chief Compliance Officer	Since 2007
Since 2007	Director of Accounting & Control
Chief Compliance Officer,	Services, Putnam Investments and
Putnam Investments, Putnam Management,	Putnam Management
and Putnam Retail Management

The principal occupations of the officers for the past five years have been with the employers as shown above, although in some cases they have held different positions with such employers. The address of each officer is One Post Office Square, Boston, MA 02109.

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Other important information

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, 2014, are available in the Individual Investors section of putnam.com and on the Securities and Exchange Commission’s (SEC) website, www.sec.gov. If you have questions about finding forms on the SEC’s website, 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

Each Putnam VT 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 Form N-Q on the SEC’s website at www.sec.gov. In addition, the fund’s Form 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 website or the operation of the Public Reference Room.

Fund information
Investment Manager	Investor Servicing Agent	Trustees
Putnam Investment Management, LLC	Putnam Investor Services, Inc.	Jameson A. Baxter, Chair
One Post Office Square	Mailing address:	Liaquat Ahamed
Boston, MA 02109	P.O. Box 8383	Ravi Akhoury
	Boston, MA 02266-8383	Barbara M. Baumann
Investment Sub-Manager	1-800-225-1581	Charles B. Curtis
Putnam Investments Limited		Robert J. Darretta
57–59 St James’s Street	Custodian	Katinka Domotorffy
London, England SW1A 1LD	State Street Bank and Trust Company	John A. Hill
		Paul L. Joskow
Marketing Services	Legal Counsel	Kenneth R. Leibler
Putnam Retail Management	Ropes & Gray LLP	Robert E. Patterson
One Post Office Square		George Putnam, III
Boston, MA 02109	Independent Registered	Robert L. Reynolds
	Public Accounting Firm	W. Thomas Stephens
	PricewaterhouseCoopers LLP

The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.

Putnam VT Multi-Cap Value Fund   21 

This report has been prepared for the shareholders		H519
of Putnam VT Multi-Cap Value Fund.	VTAN075 292446 2/15

Item 2. Code of Ethics:

(a) The fund’s 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.

(c) In July 2013, the Code of Ethics of Putnam Investment Management, LLC was amended. The changes to the Code of Ethics were as follows: (i) eliminating the requirement for employees to hold their shares of Putnam mutual funds for specified periods of time, (ii) removing the requirement to preclear transactions in certain kinds of exchange-traded funds and exchange-traded notes, although reporting of all such instruments remains required; (iii) eliminating the excessive trading rule related to employee transactions in securities requiring preclearance under the Code; (iv) adding provisions related to monitoring of employee trading; (v) changing from a set number of shares to a set dollar value of stock of mid- and large-cap companies on the Restricted List that can be purchased or sold; (vi) adding a requirement starting in March 2014 for employees to generally use certain approved brokers that provide Putnam with an electronic feed of transactions and statements for their personal brokerage accounts; and (vii) certain other changes.

Item 3. Audit Committee Financial Expert:

The Funds’ Audit and Compliance 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 Compliance 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 each of Mr. Leibler, Mr. Hill, Mr. Darretta, and Ms. Baumann qualifies as an “audit committee financial expert” (as such term has been defined by the Regulations) based on their review of his or her pertinent experience and education. The SEC has stated, and the funds’ amended and restated agreement and Declaration of Trust provides, 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 Compliance 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 auditor:

Fiscal year ended	Audit Fees	Audit-Related Fees	Tax Fees	All Other Fees
December 31, 2014	$23,044	$ —	$3,238	$ —
December 31, 2013	$23,975	$ —	$2,122	$ —

For the fiscal years ended December 31, 2014 and December 31, 2013, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $565,303 and $152,122 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 represent fees billed for the fund’s last two fiscal years relating to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees represent 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.

Pre-Approval Policies of the Audit and Compliance Committee. The Audit and Compliance 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 itself and thus will generally not be subject to pre-approval procedures.

The Audit and Compliance Committee also has adopted a policy to pre-approve the engagement by Putnam Management and certain of its affiliates of the funds’ independent auditors, even in circumstances where pre-approval is not required by applicable law. Any such requests by Putnam Management or certain of its affiliates are typically submitted in writing to the Committee and explain, among other things, the nature of the proposed engagement, the estimated fees, and why this work should be performed by that particular audit firm as opposed to another one. In reviewing such requests, the Committee considers, among other things, whether the provision of such services by the audit firm are compatible with the independence of the audit firm.

The following table presents fees billed by the fund’s independent auditor for services required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

Fiscal year ended	Audit-Related Fees	Tax Fees	All Other Fees	Total Non-Audit Fees
December 31, 2014	$ —	$562,065	$ —	$ —
December 31, 2013	$ —	$150,000	$ —	$ —

Item 5. Audit Committee of Listed Registrants

Not applicable

Item 6. Schedule of Investments:

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

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

Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies

Not Applicable

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

Not applicable

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

Not applicable

Item 11. Controls and Procedures:

(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 12. Exhibits:

(a)(1) The Code of Ethics of The Putnam Funds, which incorporates the Code of Ethics of Putnam Investments, is filed herewith.

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

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and 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.

Putnam Variable Trust

By (Signature and Title):

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

Date: February 27, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

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

Date: February 27, 2015

By (Signature and Title):

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

Date: February 27, 2015