ANNUAL REPORT July 31, 2002
Nuveen
Municipal Closed-End
Exchange-Traded
Funds
ARIZONA
NAZ
NFZ
NKR
MICHIGAN
NUM
NMP
NZW
OHIO
NUO
NXI
NBJ
NVJ
TEXAS
NTX
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photo: horse, man & elder man
Dependable,
tax-free income
because
it's not what you earn,
it's what you keep.(R)
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The Nuveen Investor
See page 17
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Dear
Shareholder
photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
sidebar:
" I urge you to consider receiving future Fund reports and other information
electronically ...see the inside front cover of this report for detailed
instructions."
end sidebar
I am pleased to report that during the period covered by this report, your Fund
continued to meet its primary objective of providing attractive tax-free monthly
income, while at the same time offering opportunities to reduce overall
portfolio volatility. Detailed information on your Fund's performance can be
found in the Portfolio Managers' Comments and Performance Overview sections of
this report. I urge you to take the time to read them.
I also urge you to consider receiving future Fund reports and other information
electronically via the Internet and e-mail rather than in hard copy. Not only
will you be able to receive the information faster, but this also may help lower
Fund expenses. Sign up is quick and easy - see the inside front cover of this
report for detailed instructions.
In addition to providing you with tax-free income, your Nuveen Fund also
features several characteristics that can help make it an essential part of your
overall investment strategy. These include careful research, constant
surveillance and judicious trading by Nuveen's seasoned portfolio management
team, with every action designed to supplement income, improve portfolio
structure, better adapt to current market conditions or increase
diversification. In uncertain markets like these, prudent investors understand
the importance of diversification, balance, and risk management, all attributes
your Nuveen Fund can bring to your portfolio.
For more than 100 years, Nuveen has specialized in offering quality investments
such as these Nuveen Funds to those seeking to accumulate and preserve wealth.
Our mission continues to be to assist you and your financial advisor by offering
the investment services and products that can help you meet your financial
objectives. We thank you for continuing to choose Nuveen Investments as a
partner as you work toward that goal.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
September 16, 2002
1
Nuveen Municipal Closed-End Exchange-Traded Funds
(NAZ, NFZ, NKR, NUM, NMP, NZW, NUO, NXI, NBJ, NVJ, NTX)
Portfolio Managers'
Comments
Portfolio managers Tom Futrell and Rick Huber discuss economic and market
conditions, key strategies, and recent Fund performance. With 19 years of
investment experience, Tom assumed investment management responsibility for the
Nuveen Arizona, Michigan and Texas Funds in March 2002. Rick, who has 17 years
of investment experience, has managed NUO and NXI since March 2001 and added NBJ
and NVJ upon their inceptions in September 2001 and March 2002, respectively.
WHAT WERE THE MAJOR DRIVERS OF THE U.S. ECONOMY AND THE MUNICIPAL MARKET DURING
THIS REPORTING PERIOD?
The two major forces at work during the twelve months ended July 31, 2002, were
slow economic growth and the Federal Reserve's efforts to address this situation
by aggressively easing short-term interest rates. The events of September 11,
2001, and the uncertain geopolitical climate that has followed also have
impacted the economy and the markets.
In the municipal market, the general economic environment of the past twelve
months, including a sluggish recovery and lack of inflationary pressures, helped
many bonds perform well. The first seven months of 2002 also saw a continuation
of the trend toward increased municipal issuance at the national level, with
$189.9 billion in new supply, up 21% over January-July 2001. On the demand side,
municipal bonds continued to be highly sought after by individual investors
looking for diversification, tax-free income, and an alternative to a volatile
stock market. Institutional investors, especially traditional purchasers such as
property/casualty insurance companies, have also been active buyers in the
municipal market.
TOM, HOW WAS THE ECONOMIC AND MUNICIPAL ENVIRONMENT IN ARIZONA, MICHIGAN AND
TEXAS?
During the first seven months of 2002, Arizona issued $5.6 billion in new bonds,
up 107% over the same period in 2001. This increase can be attributed to the
state's rapid growth, the concurrent rise in need for essential services, and
low interest rates. However, both Michigan and Texas experienced declines in
issuance from 2001 levels. Michigan was affected by a slowdown in the
manufacturing sector, and its $4 billion in new issuance over the first seven
months of 2002 represented a decrease of 24% from 2001. Supply in Texas was off
slightly, with $13.2 billion of issuance, down 4%.
Over the past decade, Arizona had one of the fastest growing state economies in
the nation, driven primarily by rapid development in the high-tech sector and
growth of the state's tourism industry. However, weakness in the national
economy, contraction in the high-tech sector, and deterioration of tourism
following September 11 have all had an impact. State revenues for 2002 and 2003
are expected to be 11% and 16%, respectively, lower than original estimates. The
projected budget gap is being addressed through a combination of expense
reductions, fund transfers, federal revenue adjustments, and use of
stabilization funds and lease-purchase financing. In addition, the Arizona
economy is also expected to benefit from an increase in the national defense
budget. As of July 31, 2002, Arizona appropriation bonds were rated A1 with a
stable outlook by Moody's, and AA- with a negative outlook by Standard & Poor's,
which revised its evaluation from stable in June 2002.
In contrast to Arizona, Michigan experienced a more significant slowdown in
economic activity over the past few years, as the state's job market weakened
and unemployment trended higher, particularly in manufacturing and construction.
As of July 31, 2002, Michigan's jobless rate was 6.6%, compared with the
national average of 5.9%. Permanent job cuts and productivity gains are expected
to keep employment in the state's manufacturing sector from returning to the
high
2
levels seen during the 1990s. In addition, Michigan continues to face fiscal
pressure from a weaker economy, with the latest state revenue forecast
projecting a $1.2 billion budget shortfall. Michigan has responded with
expenditure reductions and the deployment of surpluses carried forward from
prior years. Overall, the state's debt position remains low and well managed,
and its pension system remains fully funded. Michigan's debt is rated
Aaa/AAA/AA+, with S&P and Fitch maintaining stable credit outlooks and Moody's
revising its outlook to negative from stable in December 2001.
While Texas also experienced a slowdown in line with the national economy, the
state's economic fundamentals remained stable, as growth in construction,
services, and manufacturing, especially high-tech and computer manufacturing,
helped the state continue to diversify away from its reliance on the oil and gas
industries. Although the state lost a number of high-paying jobs, the Texas
economy has already shown signs of recovery, with job growth in the services and
retail trade sectors over the past few months. Since Texas does not levy
personal or corporate income taxes, the state has managed to avoid the budget
shortfalls faced by many other states following a decline in these revenue
sources.
RICK, WHAT ABOUT OHIO?
Ohio saw a sharp drop in new municipal issuance in the first half of 2002,
primarily as a result of the recession in manufacturing and resultant budgetary
pressures. For January-July 2002, the state issued $3.6 billion in new bonds,
down 39% from 2001. Although the manufacturing sector has stabilized somewhat in
recent months, Ohio's recovery has been constrained by weak employment growth,
including continued job losses in the trade and services industries, and by its
demographic profile, particularly the state's difficulty in keeping university
graduates. Following significant shortfalls in tax collections and a downward
revision in revenue projections for 2003 and 2004, Ohio is facing a substantial
budget gap. Adding to concerns about Ohio's ability to achieve a balanced budget
for fiscal 2003 and 2004 is the state's reliance on one-time revenue resources
to balance operations. While the credit ratings for state-issued debt remained
intact at Aa1/AA+/AA+, Moody's and S&P revised their credit outlooks for Ohio to
negative from stable in December 2001 and June 2002, respectively.
HOW DID THESE NUVEEN FUNDS PERFORM OVER THE PAST TWELVE MONTHS?
Fund performance for the twelve months ended July 31, 2002, is summarized in the
following table:
LEHMAN
TOTAL RETURN TOTAL LIPPER
MARKET YIELD ON NAV RETURN1 AVERAGE2
--------------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
7/31/02 EQUIVALENT3 7/31/02 7/31/02 7/31/02
--------------------------------------------------------------------------------
NAZ 5.43% 8.17% 2.88% 6.71% 7.75%
--------------------------------------------------------------------------------
NFZ 5.33% 8.02% 9.32% 6.71% 7.75%
--------------------------------------------------------------------------------
NKR 5.47% 8.23% NA - -
--------------------------------------------------------------------------------
NUM 5.63% 8.40% 7.68% 6.71% 7.49%
--------------------------------------------------------------------------------
NMP 5.75% 8.58% 7.40% 6.71% 7.49%
--------------------------------------------------------------------------------
NZW 5.69% 8.49% NA - -
--------------------------------------------------------------------------------
NUO 5.12% 7.88% 7.63% 6.71% 7.75%
--------------------------------------------------------------------------------
NXI 5.78% 8.89% 8.02% 6.71% 7.75%
--------------------------------------------------------------------------------
NBJ 5.65% 8.69% NA - -
--------------------------------------------------------------------------------
NVJ 5.73% 8.82% NA - -
--------------------------------------------------------------------------------
NTX 6.29% 8.99% 6.61% 6.71% 7.75%
--------------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
In a market characterized by rising bond values, funds with longer durations4
typically would be expected to outperform funds or indexes with shorter
durations. As of July 31, 2002, the durations of the Nuveen Funds having at
least one year of history ranged from 7.75 to 11.91, compared with 8.01 for the
unleveraged Lehman Brothers Municipal Bond Index. These generally longer
durations were one reason that most of these funds outperformed the Lehman
benchmark.
sidebar:
1 The Funds' total annual returns on common share net asset value are compared
with the total annual return of the Lehman Brothers Municipal Bond Index, an
unleveraged index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman index do not reflect any expenses.
2 The total returns of the Arizona, Ohio, and Texas Funds are compared with the
average annualized return of the 26 funds in the Lipper Other States
Closed-End Municipal Debt Funds category, while the Michigan Funds are
compared with the average annualized return of the 5 funds in the Lipper
Michigan Closed-End Municipal Debt Funds category. Fund and Lipper returns
assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment in order to equal the yield of the Nuveen Fund on an
after-tax basis. The taxable-equivalent yield is based on the Fund's market
yield on the indicated date and a federal income tax rate of 30% plus the
applicable state income tax rate. The combined federal and state tax rates
used in this report are as follows: Arizona 33.5%, Michigan 33%, and Ohio 35%.
Because Texas has no state income tax, NTX's taxable-equivalent yield is based
on the federal income tax rate of 30%.
4 Duration is a measure of a Fund's NAV volatility in reaction to interest rate
movements. Fund duration, also known as leverage-adjusted duration, takes into
account the leveraging process for a Fund and therefore is generally longer
than the duration of the actual portfolio of individual bonds that make up the
Fund. Unless otherwise noted, references to duration in this commentary are
intended to indicate Fund duration.
3
In addition to duration, the relative total return performance of these Funds
also was influenced by market activity, portfolio structure, call exposure and
individual holdings. NAZ's underperformance, for example, reflects this
portfolio's holding of bonds issued by the Gila County Industrial Development
Authority for the ASARCO Incorporated project. While credit deterioration
affecting this company has negatively impacted the value of these bonds, the
bonds continue to pay interest on a timely basis. We are working to bring about
a resolution to this situation that we believe will serve the best interests of
shareholders.
WHAT ABOUT THE FUNDS' DIVIDENDS AND SHARE PRICES?
As the Fed continued to keep short-term interest rates relatively low, the
dividend-payment capabilities of all these Funds benefited from the use of
leverage, a strategy that can potentially enhance the dividends paid to common
shareholders. This is because of the relatively low rates that were paid to the
Funds' MuniPreferred(R) shareholders. Low short-term rates, such as those
currently in effect, can enable the Funds to reduce the amount of income they
pay preferred shareholders, which can leave more earnings to support common
share dividends.
During the fiscal year ended July 31, 2002, low short-term interest rates
enabled us to implement four dividend increases in NMP, NUO and NTX, three in
NAZ, two in NUM, and one in NXI. Among the newer Funds, NFZ, NZW, and NBJ
maintained steady, attractive dividends during this period, while NKR and NVJ,
which were introduced in March 2002, paid their first monthly dividends in June.
Over the past year, the share prices of these Nuveen Funds remained relatively
stable (see the charts on individual Performance Overview pages). Steady demand
helped to substantially narrow the discounts (share prices below NAV) on NMP and
NTX during the past twelve months, while the remaining nine Funds were trading
at a premium to their common share net asset values as of July 31, 2002.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE NUVEEN FUNDS DURING THE FISCAL
YEAR ENDED JULY 31, 2002?
During the twelve months ended July 31, 2002, we focused on purchasing
attractive bonds with the potential to enhance the Funds' long-term
dividend-payment capabilities and add diversification. Specifically in the
Arizona, Michigan, and Texas Funds, we found value in the essential services
sectors (e.g., water and sewer, utilities) and--on a case-by-case basis--in
healthcare, education, and airport issues. In contrast, we remained cautious
about industrial development bonds and other issues that rely on private sector
revenues to meet their obligations.
Because of current spread relationships and the potential for state and county
budget pressures if the current economic weakness persists, we also emphasized
strong credit quality, with many of the bonds added to our portfolios rated
AAA/insured, AA, or A. In addition, we focused on yield curve positioning,
finding the most attractive yields in the 15- to 20-year maturity range. In
general, as a result of this positioning, the Funds' durations have shortened
somewhat over the past six months. We believe this will help make our portfolios
less sensitive to potential interest rate changes while still providing yields
and returns that are competitive with longer duration funds.
Although tighter supply in the Ohio market during 2002 limited our ability to
execute some of our targeted strategies, we looked to optimize yield curve
positioning and lengthen the effective duration of the Ohio Funds, moving
quickly as favorable situations developed. In light of NUO's duration, however,
which at 6.61 as of July 31, 2001, was significantly shorter than its benchmark,
we took a slightly different path with this Fund. Over the past year, in an
effort to bring NUO's duration more closely in line with the other Funds, we
reinvested bond call proceeds further out on the yield curve and successfully
extended NUO's duration to 8.66.
4
As mentioned earlier, in the current geopolitical and economic climate, we
believed that maintaining strong credit quality remained a key requirement for
all of the Nuveen Funds. As of July 31, 2002, each of these Funds continued to
offer excellent credit quality, with allocations of bonds rated AAA/U.S.
guaranteed and AA ranging from 68% to 89%.
In March 2002, we introduced the Nuveen Arizona Dividend Advantage Municipal
Fund 2 (NKR) and the Nuveen Ohio Dividend Advantage Municipal Fund 3 (NVJ).
These Funds are now fully invested and, in our opinion, performing well for
shareholders. As mentioned earlier, both Funds paid their first dividends in
June 2002, and we believe the Funds' holdings place them in an excellent
position to pay attractive, dependable dividends on a monthly basis going
forward. Because of the strong supply of high-quality bonds in the Arizona
market at the time we were assembling NKR, this Fund offers extremely high
credit quality, with 89% of its assets invested in AAA/U.S. guaranteed and AA
issues. Availability also affected our sector allocation decisions in NVJ, as
the Ohio market provided a heavier supply of healthcare and general obligation
bonds early in 2002. Over time, we plan to bring NVJ's and NBJ's weightings in
these two sectors more closely in line with established targets.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN GENERAL AND THESE NUVEEN FUNDS
IN PARTICULAR?
In general, our outlook for the fixed-income markets over the next twelve months
remains positive. We believe the U.S. economy is headed for an eventual
recovery, but one that could be slower to arrive and offer a slower rate of
growth than some are currently predicting. We also expect inflation and interest
rates to remain relatively low over the near term, while new municipal supply
should continue to be strong. Demand for tax-exempt municipal bonds should
remain solid, as investors look for ways to rebalance their portfolios and
reduce risk. One item that will bear watching, however, is any increase in
budgetary pressures at the state and county levels that could potentially result
in a credit rating downgrade.
Most of these Funds continued to offer excellent levels of call protection
through 2002 and 2003. However, NAZ and NMP, which reach their ten-year
anniversaries in late 2002, face a slightly higher level of potential calls (22%
and 34%, respectively) during this period, as the Funds work their way through
the phase of the bond market cycle normally associated with increased call
exposure. The number of actual calls will depend largely on market interest
rates over this time. In general, we believe the call exposure of these Funds is
very manageable, and we foresee no problems in working through it. Given current
market interest rates, our general approach has been to hold higher-yielding
bonds as long as possible to support the Funds' current dividends while we look
for attractive replacement opportunities that can enhance credit quality,
diversification, and future dividend-payment capabilities.
In coming months, we plan to remain focused on strategies that add value for our
shareholders, provide support for the Funds' dividends, and fully utilize
Nuveen's experience and research expertise. Specific areas of concentration will
include managing interest rate volatility through the purchase of bonds in the
15- to 20-year part of the yield curve, and watching changes in credit spreads
for specific investment opportunities. Overall, we believe these Nuveen Funds
are well positioned for the market environment ahead. In our opinion, they
continue to represent an important element of investors' long-range financial
programs, providing dependable tax-free income, diversification, and balance in
uncertain times.
5
NAZ
Nuveen Arizona Premium Income Municipal Fund, Inc.
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 64%
AA 16%
A 5%
BBB 11%
NR 1%
Other 3%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.071
Sep 0.0725
Oct 0.0725
Nov 0.0725
Dec 0.0725
Jan 0.0725
Feb 0.0725
Mar 0.0745
Apr 0.0745
May 0.0745
Jun 0.0765
Jul 0.0765
SHARE PRICE PERFORMANCE
8/1/01 16.35
16.36
16.46
16.66
16.53
16.4
16.42
16.25
16.12
16.15
16.23
16.1
16.15
16.28
16.54
16.45
16.44
16.15
16.1
15.87
15.98
16
16.17
16.09
16.2
16.12
16.15
16.15
16.07
16.25
16.37
16.49
16.1
15.89
16.08
16.3
16.29
16.35
16.4
16.55
16.58
16.58
16.45
16.45
16.43
16.72
17
17.18
17.45
17.1
16.65
7/31/02 16.91
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $16.90
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.25
--------------------------------------------------------------------------------
Market Yield 5.43%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.76%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.17%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $62,876
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 15.54
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.23
--------------------------------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 11/92)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 9.63% 2.88%
--------------------------------------------------------------------------------
5-Year 7.50% 4.41%
--------------------------------------------------------------------------------
Since Inception 6.93% 5.94%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 26%
--------------------------------------------------------------------------------
Tax Obligation/Limited 17%
--------------------------------------------------------------------------------
Healthcare 14%
--------------------------------------------------------------------------------
Tax Obligation/General 11%
--------------------------------------------------------------------------------
Utilities 9%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 33.5%.
2 The Fund also paid shareholders a capital gains distribution in December 2001
of $0.0416 per share.
6
NFZ
Nuveen Arizona Dividend Advantage Municipal Fund
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 51%
AA 19%
A 14%
BBB 14%
Other 2%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.07
Sep 0.07
Oct 0.07
Nov 0.07
Dec 0.07
Jan 0.07
Feb 0.07
Mar 0.07
Apr 0.07
May 0.07
Jun 0.07
Jul 0.07
SHARE PRICE PERFORMANCE
8/1/01 15.7
15.76
15.91
15.95
15.73
15.64
15.82
15.35
15.23
15.34
15.32
15.36
15.44
15.32
15.88
15.71
15.71
15.79
15.64
15.25
15.05
15.11
15.17
15.33
15.36
15.27
15.27
15.3
15.1
15.2
15.01
15.1
15.18
14.97
14.66
14.79
15.03
15.18
15.28
15.73
15.61
15.74
15.75
15.45
15.43
15.57
15.55
16
16.1
15.9
15.87
7/31/02 15.71
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $15.75
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.81
--------------------------------------------------------------------------------
Market Yield 5.33%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.61%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.02%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $22,791
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 20.51
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 11.91
--------------------------------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 1/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 6.38% 9.32%
--------------------------------------------------------------------------------
Since Inception 8.89% 8.13%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Utilities 20%
--------------------------------------------------------------------------------
Tax Obligation/Limited 15%
--------------------------------------------------------------------------------
Tax Obligation/General 15%
--------------------------------------------------------------------------------
Housing/Multifamily 14%
--------------------------------------------------------------------------------
Healthcare 10%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 33.5%.
2 The Fund also paid shareholders a capital gains distribution in December 2001
of $0.0138 per share.
7
NKR
Nuveen Arizona Dividend Advantage Municipal Fund 2
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 74%
AA 15%
A 4%
BBB 7%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
May 0.072
Jun 0.072
Jul 0.072
SHARE PRICE PERFORMANCE
3/28/02 15.55
15.3
15.17
15.14
15.26
15.22
15.27
15.15
15.02
15.29
15.27
15.31
15.01
15.9
15.6
15.8
15.8
7/31/02 15.51
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $15.80
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.88
--------------------------------------------------------------------------------
Market Yield 5.47%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.81%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.23%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $35,913
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 19.28
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 12.14
--------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 3/02)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
Since Inception 6.81% 5.38%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 30%
--------------------------------------------------------------------------------
Tax Obligation/Limited 24%
--------------------------------------------------------------------------------
Education and Civic Organizations 10%
--------------------------------------------------------------------------------
Utilities 9%
--------------------------------------------------------------------------------
Healthcare 8%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 33.5%.
8
NUM
Nuveen Michigan Quality Income Municipal Fund, Inc.
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 81%
AA 4%
A 8%
BBB 6%
NR 1%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.0735
Sep 0.0735
Oct 0.0735
Nov 0.0735
Dec 0.0745
Jan 0.0745
Feb 0.0745
Mar 0.0755
Apr 0.0755
May 0.0755
Jun 0.0755
Jul 0.0755
SHARE PRICE PERFORMANCE
8/1/01 15.38
15.43
15.5
15.45
15.6
15.45
15.47
14.61
14.82
15.2
15.04
15.1
15
15
15.33
15.22
15.11
15.3
15
14.9
14.95
15.14
15.35
15.45
15.47
15.5
15.54
15.75
15.75
15.68
15.89
15.82
15.7
15.3
15.19
15.24
15.2
15.3
15.3
15.68
15.85
15.69
15.86
16.05
16.15
16.3
16.21
16.25
16.15
16.09
16.2
7/31/02 16.05
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $16.10
--------------------------------------------------------------------------------
Common Share Net Asset Value $15.48
--------------------------------------------------------------------------------
Market Yield 5.63%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.04%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.40%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $179,630
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 18.27
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 11.15
--------------------------------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 10/91)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 11.18% 7.68%
--------------------------------------------------------------------------------
5-Year 5.73% 5.87%
--------------------------------------------------------------------------------
10-Year 6.99% 6.86%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 23%
--------------------------------------------------------------------------------
Healthcare 14%
--------------------------------------------------------------------------------
Utilities 13%
--------------------------------------------------------------------------------
U.S. Guaranteed 11%
--------------------------------------------------------------------------------
Water and Sewer 9%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 33%.
2 The Fund also paid shareholders a capital gains distribution in December 2001
of $0.0748 per share.
9
NMP
Nuveen Michigan Premium Income Municipal Fund, Inc.
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 68%
AA 13%
A 13%
BBB 6%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Aug 0.0675
Sep 0.069
Oct 0.069
Nov 0.069
Dec 0.071
Jan 0.071
Feb 0.071
Mar 0.072
Apr 0.072
May 0.072
Jun 0.0735
Jul 0.0735
SHARE PRICE PERFORMANCE
8/1/01 14.8
14.73
14.85
14.7
14.75
14.79
14.76
14.2
14.31
14.53
14.33
14.37
14.36
14.53
14.58
14.46
14.38
14.48
14.25
14.25
14.17
14.28
14.44
14.4
14.5
14.6
14.66
14.6
14.79
14.7
14.82
14.82
14.8
14.59
14.45
14.4
14.45
14.4
14.31
14.98
15.1
15.03
15.01
15.4
15.1
15.28
15.4
15.55
15.49
15.46
15.23
7/31/02 15.17
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $15.35
--------------------------------------------------------------------------------
Common Share Net Asset Value $15.56
--------------------------------------------------------------------------------
Market Yield 5.75%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.21%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.58%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $119,820
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 16.86
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 7.75
--------------------------------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 12/92)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 10.52% 7.40%
--------------------------------------------------------------------------------
5-Year 8.04% 6.28%
--------------------------------------------------------------------------------
Since Inception 6.25% 6.80%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Healthcare 19%
--------------------------------------------------------------------------------
Tax Obligation/Limited 19%
--------------------------------------------------------------------------------
Utilities 18%
--------------------------------------------------------------------------------
U.S. Guaranteed 14%
--------------------------------------------------------------------------------
Tax Obligation/General 8%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 33%.
10
NZW
Nuveen Michigan Dividend Advantage Municipal Fund
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 79%
AA 5%
A 11%
BBB 5%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.0695
Dec 0.0695
Jan 0.0695
Feb 0.0695
Mar 0.0695
Apr 0.0695
May 0.0695
Jun 0.0695
Jul 0.0695
SHARE PRICE PERFORMANCE
9/28/01 15.05
15.2
15.2
15.2
15.06
15.15
15.02
14.8
14.87
14.93
15.04
14.56
14.13
14
13.81
14
14.07
14.01
14.22
14.43
14.54
14.66
14.53
14.75
14.63
14.5
14.53
14.2
14.08
14.16
14.15
14.35
14.39
14.45
14.32
14.51
14.82
15
14.85
15
14.85
14.93
14.68
7/31/02 14.86
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $14.65
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.42
--------------------------------------------------------------------------------
Market Yield 5.69%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.13%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.49%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $29,679
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 24.01
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 16.13
--------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 9/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
Since Inception 2.00% 5.21%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 36%
--------------------------------------------------------------------------------
Tax Obligation/Limited 23%
--------------------------------------------------------------------------------
Healthcare 12%
--------------------------------------------------------------------------------
Utilities 8%
--------------------------------------------------------------------------------
Water and Sewer 7%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 33%.
11
NUO
Nuveen Ohio Quality Income Municipal Fund, Inc.
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 70%
AA 16%
A 6%
BBB 4%
NR 3%
Other 1%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Aug 0.075
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.077
Jan 0.077
Feb 0.077
Mar 0.0785
Apr 0.0785
May 0.0785
Jun 0.0795
Jul 0.0795
SHARE PRICE PERFORMANCE
8/1/01 16.93
16.99
17.13
17.06
17.06
16.84
16.88
15.67
15.96
16.51
16.5
16.92
16.7
17
17.03
17.06
17
17.39
17.13
17.12
16.87
17.02
17.12
17.5
17.7
17.6
17.5
17.4
17.4
17.25
17.45
17.31
16.55
16.69
16.34
16.43
16.49
16.84
17.05
17.38
17.25
17.15
17.32
17.45
17.63
17.6
17.7
18.6
18.65
18.45
18.6
7/31/02 18.4
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $18.62
--------------------------------------------------------------------------------
Common Share Net Asset Value $16.36
--------------------------------------------------------------------------------
Market Yield 5.12%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.31%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 7.88%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $156,351
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 17.24
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 8.66
--------------------------------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 10/91)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 17.00% 7.63%
--------------------------------------------------------------------------------
5-Year 7.28% 5.81%
--------------------------------------------------------------------------------
10-Year 8.23% 7.22%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 21%
--------------------------------------------------------------------------------
U.S. Guaranteed 16%
--------------------------------------------------------------------------------
Healthcare 14%
--------------------------------------------------------------------------------
Housing/Multifamily 9%
--------------------------------------------------------------------------------
Water and Sewer 9%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 35%.
12
NXI
Nuveen Ohio Dividend Advantage Municipal Fund
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 46%
AA 22%
A 16%
BBB 12%
NR 2%
Other 2%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Aug 0.072
Sep 0.072
Oct 0.072
Nov 0.072
Dec 0.072
Jan 0.072
Feb 0.072
Mar 0.073
Apr 0.073
May 0.073
Jun 0.073
Jul 0.073
SHARE PRICE PERFORMANCE
8/1/01 15.38
15.76
15.74
15.88
15.59
15.21
15.19
14.45
15.1
15.61
15.42
15.44
15.48
15.71
15.6
15.4
15.41
15.39
15.2
15.25
15.04
15.1
15.43
14.84
15
15.09
15.1
15
14.82
14.98
15.03
15.19
15.32
15.3
14.92
15.11
14.89
14.85
15.11
15.1
15.17
15.29
15.45
15.4
15.38
15.81
15.39
15.2
15.59
15.36
15.27
7/31/02 15.15
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $15.15
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.83
--------------------------------------------------------------------------------
Market Yield 5.78%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.26%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.89%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $62,548
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 20.03
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 10.83
--------------------------------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 3/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 4.48% 8.02%
--------------------------------------------------------------------------------
Since Inception 6.20% 8.43%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 26%
--------------------------------------------------------------------------------
Education and Civic Organizations 15%
--------------------------------------------------------------------------------
Healthcare 14%
--------------------------------------------------------------------------------
Utilities 13%
--------------------------------------------------------------------------------
Housing/Single Family 9%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 35%.
13
NBJ
Nuveen Ohio Dividend Advantage Municipal Fund 2
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 60%
AA 10%
A 17%
BBB 10%
NR 3%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.069
Dec 0.069
Jan 0.069
Feb 0.069
Mar 0.069
Apr 0.069
May 0.069
Jun 0.069
Jul 0.069
SHARE PRICE PERFORMANCE
9/28/01 15.25
15.5
15.35
15.45
15.32
15.1
15.06
15.05
15.2
15.29
15.17
14.87
14.72
13.85
14.49
14.49
15
14.69
15
14.82
14.78
14.8
14.67
14.74
14.43
14.3
14.1
13.76
14.2
14.24
14.25
14.4
14.47
14.3
14.34
14.35
14.45
14.4
14.56
14.58
14.8
14.9
14.75
7/31/02 14.75
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $14.65
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.48
--------------------------------------------------------------------------------
Market Yield 5.65%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.07%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.69%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $45,073
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 21.62
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 13.04
--------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 9/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
Since Inception 1.91% 5.58%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 33%
--------------------------------------------------------------------------------
Healthcare 19%
--------------------------------------------------------------------------------
Utilities 9%
--------------------------------------------------------------------------------
Transportation 9%
--------------------------------------------------------------------------------
Tax Obligation/Limited 7%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 35%.
14
NVJ
Nuveen Ohio Dividend Advantage Municipal Fund 3
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 65%
AA 20%
A 10%
BBB 5%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
May 0.073
Jun 0.073
Jul 0.073
SHARE PRICE PERFORMANCE
3/28/02 15.05
15.03
15.02
15
15.05
15.05
15
15.1
15.23
15.13
15.4
15.45
15.58
15.15
15.33
15.4
15.36
7/31/02 15.36
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $15.30
--------------------------------------------------------------------------------
Common Share Net Asset Value $14.83
--------------------------------------------------------------------------------
Market Yield 5.73%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.19%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.82%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $31,995
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 19.84
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 11.81
--------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 3/02)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
Since Inception 3.47% 5.05%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 36%
--------------------------------------------------------------------------------
Healthcare 18%
--------------------------------------------------------------------------------
Education and Civic Organizations 13%
--------------------------------------------------------------------------------
Housing/Single Family 10%
--------------------------------------------------------------------------------
Tax Obligation/Limited 7%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 35%.
15
NTX
Nuveen Texas Quality Income Municipal Fund
Performance
Overview As of July 31, 2002
Charts: first pie, then bar, then line
CREDIT QUALITY
AAA/US Guaranteed 60%
AA 14%
A 11%
BBB 13%
Other 2%
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.0725
Sep 0.074
Oct 0.074
Nov 0.074
Dec 0.0765
Jan 0.0765
Feb 0.0765
Mar 0.078
Apr 0.078
May 0.078
Jun 0.079
Jul 0.079
SHARE PRICE PERFORMANCE
8/1/01 14.82
14.87
14.89
14.95
15.07
15.1
15.04
13.9
14.52
14.85
14.84
14.54
14.5
14.7
14.85
14.83
14.76
14.44
14.18
14.25
14.24
14.44
14.58
14.85
14.81
14.95
14.84
15.1
15.04
15.08
15.2
14.82
14.86
14.85
14.55
14.76
14.6
14.75
14.74
15.09
15
15.05
15.05
15.1
15.2
15.2
15.35
15.4
15.56
15.42
15.34
7/31/02 15.06
Weekly Closing Price
Past performance is not predictive of future results.
PORTFOLIO STATISTICS
--------------------------------------------------------------------------------
Share Price $15.07
--------------------------------------------------------------------------------
Common Share Net Asset Value $15.14
--------------------------------------------------------------------------------
Market Yield 6.29%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.99%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $143,305
--------------------------------------------------------------------------------
Average Effective Maturity (Years) 21.56
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 11.05
--------------------------------------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 10/91)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 9.29% 6.61%
--------------------------------------------------------------------------------
5-Year 5.97% 5.51%
--------------------------------------------------------------------------------
10-Year 6.63% 6.71%
--------------------------------------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 20%
--------------------------------------------------------------------------------
Healthcare 14%
--------------------------------------------------------------------------------
Water and Sewer 9%
--------------------------------------------------------------------------------
Tax Obligation/Limited 7%
--------------------------------------------------------------------------------
Transportation 6%
--------------------------------------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
30%.
2 The Fund also paid shareholders a capital gains distribution in December 2001
of $0.0672 per share.
16
photo: pond with ripples
2 boys with gloves, bat
VI
THE NUVEEN INVESTOR
BOND SURVEILLANCE -
A HIGH PRIORITY AT NUVEEN
The Enron scandal has raised numerous questions about the real value of American
securities. Investors want to know what safeguards are in place to inspire their
trust and ensure their holdings are dependable. The Nuveen Investor recently
spoke with David Blair, Assistant Vice President and Senior Analyst at Nuveen,
about the research and surveillance processes used for Nuveen funds.
HOW DO NUVEEN'S RESEARCH ANALYSTS EVALUATE BONDS PRIOR TO PURCHASE?
We evaluate factors impacting market sectors, issuers and specific bonds and
assign credit ratings to bonds we consider for purchase. We seek to purchase
bonds with stable and improving credit characteristics, which have attractive
prices and yields relative to other bonds in their sectors.
HOW DO YOU CONDUCT YOUR RESEARCH?
We conduct detailed analyses that often involve site visits and discussions with
managers of the projects being financed. Since Nuveen is a major investor with
large buying power, issuers and project managers are willing to listen to us and
respond to our concerns.
IS THE RESEARCH AND ANALYSIS PROCESS ANY DIFFERENT WHEN CONSIDERING HIGH-YIELD
BONDS?
Up to 20 percent of some funds can be invested in below investment grade bonds
to help the fund attain a higher yield. This underscores the need for research.
If one of our 16 analysts believes a high-yield bond should be purchased, a
second analyst reviews the issue as well.
HOW DO YOU MONITOR THE VARIOUS BONDS ONCE THEY'VE BEEN PURCHASED?
We have a proprietary database with information and analysis on the bonds Nuveen
holds in its funds. Among other things, we are able to evaluate risk exposure to
sectors, issuers and specific bonds on an on-going basis.
HOW DOES THE RESEARCH DEPARTMENT COMMUNICATE THE INFORMATION GATHERED?
We conduct biweekly meetings within the research department and weekly meetings
with portfolio managers. We also write-up our findings and distribute them with
"buy," "hold" or "sell" recommendations to portfolio managers.
(continued on page 19)
Volume one 2002
INSIDE
17 Bond Surveillance -
A High Priority at Nuveen
18 Is it Time to Rethink
Your Bond Strategy?
19 Many Investors Continue
to Find Solutions with Professional Advice
20 Fund Reports
Available Online
20 ETFConnect:
The Source for All Exchange-Traded Funds
(C)2002 Nuveen Investments.
All rights reserved.
logo: Nuveen Investments
17
VI
IS IT TIME TO RETHINK YOUR BOND STRATEGY?
Significant stock market losses in recent history have sent many investors
toward bonds as a way to potentially cut their losses and balance equity-
dominated portfolios. While many consider bonds a set-and-forget investment,
there are several circumstances that might prompt you to reassess -- and perhaps
revamp -- your bond holdings.
TAX BRACKET CHANGES
The Economic Growth and Tax Relief Reconciliation Act of 2001 has dropped tax
brackets a percentage point this year, but a higher salary, large bonus, sale of
assets or retirement may push you into a higher tax bracket for 2002.
If you are in a higher tax bracket and want to generate an income stream without
raising your tax burden, tax-free municipal bonds may be a prudent option. Even
if you are in a lower tax bracket, municipal bonds could make sense. The
question is whether municipal or taxable bonds will deliver a better taxable
yield.
RETIREMENT PLANS CHANGE
Whether you are near retirement or are currently enjoying it, you may want to
consider rebalancing your retirement accounts with less stock and more bonds, to
potentially reduce risk and try to preserve the assets that you have
accumulated. If you are just entering retirement you may want to make tax-free
municipal bonds a part of your portfolio to emphasize income generation and
protection from taxation.
RISK TOLERANCE CHANGES
The recent market volatility and market downturn may have caused many investors
to reevaluate their tolerance for risk. On the other hand, your portfolio might
have performed well over the last few years and you may not need to take on
extra risk to meet your long-term goals. In either situation you could take a
look at your bond portfolio and determine whether you need to make changes to
correspond with your tolerance for risk.
PORTFOLIO CHANGES
If you make significant changes to one or more of your investments, you'll want
to look at your portfolio as a whole, particularly with regard to overall asset
allocation. You may need to do some rebalancing to stay on track with your
investment strategy.
Your financial advisor can help. Regardless of how your circumstances change, he
or she can provide up-to-date information on the bond market and various funds
to help you decide how to maximize your returns consistent with your short- and
long-term financial goals.
No investment is risk free and some investments carry more risk than others. It
is important to know what the risks are, to evaluate them against any potential
rewards, and to determine your tolerance for risk when selecting an investment.
photo: lighthouse
photo: 2 children
The Nuveen Investor Vol 02.1
logo:Nuveen Investments
18
V1
photo: clouds
photo: woman & girl
MANY INVESTORS CONTINUE
TO FIND SOLUTIONS WITH
PROFESSIONAL ADVICE
For many investors, current financial markets are confusing and frustrating.
According to research conducted for the Forum for Investor Advice*, that's the
number one reason many turn to a financial advisor. They want someone to suggest
ideas and provide consultation, dialogue and professional advice.
Investors say their advisors are helpful in other key ways, including...
o Saving time. After consultation, investors note that the second most
important reason for using an advisor is to have someone else monitor their
portfolio, reducing the amount of time they spend on investing.
o Help in sorting through information. Investors in the 21st century have more
products from which to choose than in the past. For example, there are
approximately 8,000 mutual funds today, up from 3,000 in 1990.
o Assistance in setting financial goals. According to investors who use a
financial advisor, they are more likely to have a plan for a specific
financial goal than do-it-yourself investors.
o Staying focused. Advisor-assisted investors are more likely than
do-it-yourself investors to have developed a comprehensive investment
program.
o Peace of mind. Investors say their comfort level in all types of markets is
higher when using an advisor for a "second opinion" on an investment
decision.
*The survey of 324 investors was conducted in December of 2000 by Market Facts
and analyzed by New York based Neuwirth Research. Of the 324, 166 said they had
an ongoing relationship with a financial advisor, while 157 described themselves
as do-it-yourselfers.
--------------------------------------------------------------------------------
(continued from page 17)
HOW ARE PROBLEM BONDS IDENTIFIED AND HANDLED?
We conduct surveillance on our bonds on a regular basis to ensure, among other
things, that deteriorating bonds are identified early. We then discuss any
emerging problems and potential courses of action with the portfolio manager.
HOW MANY ISSUES DOES THE RESEARCH DEPARTMENT FOLLOW?
We follow 12 sectors and 1,500 uninsured bonds, worth about $18 billion of
Nuveen's $45 billion in total municipal assets. The remaining $27 billion in
municipal assets are insured or escrowed (backed by Treasury bonds). For the
insured bonds, we monitor closely on a regular basis the insurers guaranteeing
the bonds.
WILL RESEARCH AND SURVEILLANCE CHANGE IN LIGHT OF PROBLEMS WITH ENRON
SECURITIES?
Overall, our investment process and surveillance have worked well and been
effective. However, we meet as a group on a regular basis and are constantly
evaluating ways to improve the process to respond to issues and the market
environment.
The Nuveen Investor Vol. 02.1
logo:Nuveen Investments
19
V1
LOOK AHEAD...
FUND REPORTS
AVAILABLE
ONLINE
Nuveen Fund information is now available online. Once you register, you'll
receive an e-mail notice with a link to your Fund's reports and other
information just as soon as it is ready. Registering takes only a few minutes.
If you receive statements from a brokerage firm or financial advisor, go to
WWW.INVESTORDELIVERY.COM. Enter your personal 13-character enrollment number
imprinted on the address sheet of this report near your name. From the options
on the follow-up page, select the New Enrollment-Create screen. Once there,
enter your e-mail address and a personal, four-digit PIN. Hit the Submit button.
Confirm the information you entered is correct, then hit Submit again.
If you receive statements directly from Nuveen, go to WWW.NUVEEN.COM. Select the
Access Your Account tab, then select E-Report Enrollment. Finally, click on the
Enrollment Page. Once there, you'll need to provide your social security number
and e-mail address. Click on Enroll.
After registering, you should receive a confirming e-mail within 24 hours. If
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same process if you need to change your registration information or want to
cancel Internet viewing. The e-mail address you provide is strictly confidential
and will only be used to notify you of shareholder information.
photos: website
The information in this newsletter should not be construed as specific tax or
investment advice. Contact your advisor for information about your particular
situation.
ETFCONNECT:
THE SOURCE FOR ALL
EXCHANGE-TRADED FUNDS
Last fall, Nuveen launched ETFConnect, the industry's first website
featuring all-encompassing information on exchanged-traded funds. Whatever
you're looking for in the world of Index ETFs or Closed-End Exchange-Traded
Funds - prices, NAVs, dividend information, performance histories, new
developments - this is the place. Highlights include Quick Facts sheets for more
than 500 funds, a multi-fund search capability, website links, a list of fund
sponsors, tools for portfolio tracking, and a continually updated education
center. Check out www.etfconnect.com.
photo: website
The Nuveen Investor Vol. 02.1
logo:Nuveen Investments
20
Report of
Independent Auditors
THE BOARDS OF DIRECTORS, TRUSTEES AND SHAREHOLDERS
NUVEEN ARIZONA PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC.
NUVEEN MICHIGAN PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN MICHIGAN DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC.
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NUVEEN TEXAS QUALITY INCOME MUNICIPAL FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Arizona Premium Income Municipal Fund,
Inc., Nuveen Arizona Dividend Advantage Municipal Fund, Nuveen Arizona Dividend
Advantage Municipal Fund 2, Nuveen Michigan Quality Income Municipal Fund, Inc.,
Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen Michigan Dividend
Advantage Municipal Fund, Nuveen Ohio Quality Income Municipal Fund, Inc.,
Nuveen Ohio Dividend Advantage Municipal Fund, Nuveen Ohio Dividend Advantage
Municipal Fund 2, Nuveen Ohio Dividend Advantage Municipal Fund 3 and Nuveen
Texas Quality Income Municipal Fund as of July 31, 2002, and the related
statements of operations, changes in net assets and the financial highlights for
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Funds' 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of July 31, 2002, by correspondence with
the custodian and brokers or by other appropriate auditing procedures when
replies from brokers were not received. 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 positions of
Nuveen Arizona Premium Income Municipal Fund, Inc., Nuveen Arizona Dividend
Advantage Municipal Fund, Nuveen Arizona Dividend Advantage Municipal Fund 2,
Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Michigan Premium
Income Municipal Fund, Inc., Nuveen Michigan Dividend Advantage Municipal Fund,
Nuveen Ohio Quality Income Municipal Fund, Inc., Nuveen Ohio Dividend Advantage
Municipal Fund, Nuveen Ohio Dividend Advantage Municipal Fund 2, Nuveen Ohio
Dividend Advantage Municipal Fund 3 and Nuveen Texas Quality Income Municipal
Fund at July 31, 2002, and the results of their operations, changes in their net
assets and the financial highlights for the periods indicated therein in
conformity with accounting principles generally accepted in the United States.
/s/Ernst & Young LLP
Chicago, Illinois
September 9, 2002
21
Nuveen Arizona Premium Income Municipal Fund, Inc. (NAZ)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 1.8%
$ 4,000 Industrial Development Authority of the County of Gila, Arizona, 1/08 at 102.00 CCC $1,101,000
Environmental Revenue Refunding Bonds (ASARCO Incorporated
Project), Series 1998, 5.550%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.0%
635 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 649,745
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.0%
1,000 Arizona State University, Certificates of Participation, Series 2002, 7/12 at 100.00 AAA 1,063,160
5.375%, 7/01/19
1,750 Student Loan Acquisition Authority of Arizona, Subordinated Fixed 5/04 at 102.00 Aa1 1,899,835
Rate Student Loan Revenue Bonds, Series 1994B, 6.600%, 5/01/10
(Alternative Minimum Tax)
1,250 Industrial Development Authority of the City of Glendale, Arizona, 5/11 at 101.00 BBB+ 1,269,388
Revenue Bonds (Midwestern University), Series 2001A,
5.875%, 5/15/31
1,400 Southern Arizona Capital Facilities Financing Corporation, Student 9/12 at 100.00 AAA 1,407,098
Housing Revenue Bonds (La Aldea Project at the University
of Arizona), Series 2002, 5.000%, 9/01/23
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 21.1%
2,000 Arizona Health Facilities Authority, Hospital Revenue Bonds (Phoenix 11/09 at 100.00 A3 2,055,920
Children's Hospital), Series 1999A, 6.125%, 11/15/22
2,125 Arizona Health Facilities Authority, Hospital System Revenue Bonds 12/10 at 102.00 BBB 2,237,306
(John C. Lincoln Health Network), Series 2000, 7.000%, 12/01/25
2,000 Arizona Health Facilities Authority, Revenue Bonds (Catholic 7/10 at 101.00 BBB 2,114,200
Healthcare West), 1999 Series A, 6.625%, 7/01/20
3,000 Industrial Development Authority of the City of Mesa, Arizona, 1/10 at 101.00 AAA 3,187,830
Revenue Bonds (Discovery Health System), Series 1999A,
5.750%, 1/01/25
515 Puerto Rico Industrial, Tourist, Educational, Medical and 11/10 at 101.00 AA 589,134
Environmental Control Facilities Financing Authority, Hospital
Revenue Bonds (Hospital de la Concepcion Project), 2000 Series A,
6.375%, 11/15/15
250 Industrial Development Authority of the City of Scottsdale, Arizona, 12/11 at 101.00 A3 253,430
Hospital Revenue Bonds (Scottsdale Healthcare), Series 2001,
5.800%, 12/01/31
2,000 University Medical Center Corporation, Tucson, Arizona, Hospital 1/03 at 102.00 AAA 2,047,300
Revenue Refunding Bonds, Series 1992, 6.250%, 7/01/16
1,055 Industrial Development Authority of the City of Winslow, Arizona, 6/08 at 101.00 N/R 804,174
Hospital Revenue Bonds (Winslow Memorial Hospital Project),
Series 1998, 5.500%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 11.9%
2,011 Industrial Development Authority of the City of Glendale, Arizona, 10/10 at 105.00 Aaa 2,336,762
Multifamily Housing Revenue Bonds (GNMA Collateralized
Mortgage Loan - Maridale Apartments Project), Series 2000A,
7.500%, 10/20/35
1,275 Industrial Development Authority of the County of Maricopa, Arizona, 10/10 at 105.00 Aaa 1,386,677
Multifamily Housing Revenue Bonds (GNMA Collateralized - Villas
at Augusta Project), Series 2000, 6.400%, 10/20/20
400 Industrial Development Authority of the City of Phoenix, Arizona, 6/11 at 102.00 Aaa 414,420
Multifamily Housing Revenue Bonds (GNMA Collateralized -
Campaigne Place on Jackson Project), Series 2001, 5.700%, 6/20/31
(Alternative Minimum Tax)
3,215 Industrial Development Authority of the County of Tucson, Arizona, 7/10 at 101.00 AA 3,363,404
Senior Living Facilities Revenue Bonds (The Christian Care Project),
Series 2000A, 5.625%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.9%
200 Industrial Development Authority of the City of Phoenix, Arizona, 6/05 at 102.00 AAA 214,526
Statewide Single Family Mortgage Revenue Bonds, Series 1995,
6.150%, 6/01/08 (Alternative Minimum Tax)
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY (continued)
$ 930 Industrial Development Authority of the City of Phoenix, Arizona, 6/10 at 105.00 AAA $1,034,904
Single Family Mortgage Revenue Bonds, Series 2000-1B, 7.350%,
6/01/31 (Alternative Minimum Tax)
530 Industrial Development Authority of the County of Pima, Arizona, 5/07 at 102.00 AAA 549,085
Single Family Mortgage Revenue Bonds, Series 1997A,
6.250%, 11/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.5%
500 Arizona Health Facilities Authority, Revenue Bonds (Bethesda 8/07 at 102.00 N/R 489,390
Foundation - Bethesda Gardens Project), Series 1997A,
6.375%, 8/15/15
1,000 Industrial Development Authority of the County of Mohave, Arizona, 5/06 at 103.00 AAA 1,061,740
Healthcare Revenue Refunding Bonds (GNMA Collateralized - Chris
Ridge and Silver Ridge Village Projects), Series 1996,
6.375%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 16.6%
City of Glendale, Arizona, General Obligation Bonds, Series 2002
Refunding:
1,875 5.000%, 7/01/15 7/11 at 100.00 AA 1,979,119
500 5.000%, 7/01/18 7/11 at 100.00 AA 516,505
1,000 Washington Elementary School District No. 6 of Maricopa County, No Opt. Call AAA 1,118,830
Arizona, General Obligation Bonds, Series 2002A Refunding,
5.375%, 7/01/15
1,400 Chandler Unified School District No. 80 of Maricopa County, Arizona, 7/03 at 101.00 AAA 1,468,712
General Obligation Refunding Bonds, Series 1993, 5.950%, 7/01/10
3,000 City of Mesa, Arizona, General Obligation Bonds, Series 1999, 7/09 at 100.00 AAA 3,089,100
5.000%, 7/01/18
Commonwealth of Puerto Rico, Public Improvement General
Obligation Bonds, Series 2002A,
1,000 5.500%, 7/01/19 (WI, settling 8/08/02) No Opt. Call AAA 1,120,670
500 5.375%, 7/01/28 7/11 at 100.00 A- 511,095
585 Tempe Union High School District No. 213 of Maricopa County, 7/04 at 101.00 AAA 632,900
Arizona, General Obligation Bonds, Series 1994, 6.000%, 7/01/12
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 25.0%
City of Bullhead, Arizona, Parkway District Improvement Bonds,
Series 1993:
910 6.100%, 1/01/08 1/03 at 103.00 Baa2 944,817
970 6.100%, 1/01/09 1/03 at 103.00 Baa2 1,006,365
1,500 Industrial Development Authority of the County of Maricopa, Education 7/10 at 102.00 Baa3 1,522,065
Revenue Bonds (Arizona Charter Schools Project I), Series
2000A, 6.750%, 7/01/29
3,400 Maricopa County, Arizona, Stadium District Revenue Refunding 6/12 at 100.00 Aaa 3,627,120
Bonds, Series 2002, 5.375%, 6/01/18
Industrial Development Authority of the City of Phoenix,
Arizona, Government Office Lease Revenue Bonds (Capitol Mall LLC
Project), Series 2000:
1,000 5.375%, 9/15/22 9/10 at 100.00 AAA 1,033,150
2,000 5.500%, 9/15/27 9/10 at 100.00 AAA 2,077,460
2,150 Phoenix Civic Plaza Building Corporation, Arizona, Senior Lien Excise 7/05 at 101.00 AA+ 2,348,187
Tax Revenue Bonds, Series 1994, 6.000%, 7/01/14
1,000 Puerto Rico Public Buildings Authority, Government Facilities Revenue 7/12 at 100.00 A- 1,001,570
Refunding Bonds, Series D, Guaranteed by the Commonwealth
of Puerto Rico, 5.125%, 7/01/24
500 Surprise Municipal Property Corporation, Arizona, Excise Tax Revenue 7/09 at 101.00 AAA 538,330
Bonds, Series 2000, 5.700%, 7/01/20
500 City of Tucson, Arizona, Certificates of Participation, Series 2000, 7/08 at 100.00 AAA 530,285
5.700%, 7/01/20
1,100 City of Tucson, Arizona, Junior Lien Street and Highway User Revenue , 7/10 at 100.00 AAA 1,133,660
Bonds, Series 1994-E 5.000%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 38.8%
3,500 Industrial Development Authority of the County of Maricopa, Arizona, No Opt. Call AAA 4,422,635
Hospital System Revenue Refunding Bonds (Samaritan Health
Services), Series 1990A, 7.000%, 12/01/16
Industrial Development Authority of the County of Mohave, Arizona,
Hospital System Revenue Refunding Bonds (Medical Environments,
Inc. and Phoenix Baptist Hospital and Medical Center, Inc.),
Series 1993:
5,000 6.750%, 7/01/08 (Pre-refunded to 7/01/03) 7/03 at 102.00 Aaa 5,337,850
1,000 7.000%, 7/01/16 (Pre-refunded to 7/01/03) 7/03 at 102.00 Aaa 1,069,740
23
Nuveen Arizona Premium Income Municipal Fund, Inc. (NAZ) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (continued)
$ 2,700 City of Phoenix Civic Improvement Corporation, Arizona, Wastewater 7/03 at 102.00 AAA $2,867,643
System Lease Revenue Bonds, Series 1993, 6.125%, 7/01/23
(Pre-refunded to 7/01/03)
2,000 City of Phoenix Civic Improvement Corporation, Arizona, Junior Lien 7/10 at 101.00 AAA 2,345,380
Wastewater System Revenue Bonds, Series 2000, 6.000%, 7/01/24
(Pre-refunded to 7/01/10)
1,510 Metropolitan Domestic Water Improvement District of Pima County, 1/03 at 101.00 AAA 1,555,406
Arizona, Special Assessment and Water Revenue Bonds, Series 1992,
6.200%, 1/01/12 (Pre-refunded to 1/01/03)
1,000 Puerto Rico Highway and Transportation Authority, Transportation 7/10 at 101.00 A*** 1,216,150
Revenue Bonds, Series B, 6.500%, 7/01/27 (Pre-refunded
to 7/01/10)
1,415 Tempe Union High School District No. 213 of Maricopa County, 7/04 at 101.00 AAA 1,543,072
Arizona, General Obligation Bonds, Series 1994, 6.000%, 7/01/12
(Pre-refunded to 7/01/04)
3,000 City of Tucson, Arizona, General Obligation Bonds, Series 1984-G, 7/04 at 101.00 AAA 3,285,630
6.250%, 7/01/18 (Pre-refunded to 7/01/04)
725 City of Tucson, Arizona, Certificates of Participation, Series 1994, 7/04 at 100.00 AA*** 788,706
6.375%, 7/01/09 (Pre-refunded to 7/01/04)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.7%
1,000 Arizona Power Authority, Power Resource Revenue Bonds (Hoover No Opt. Call AA 1,103,710
Uprating Project), Special Obligation Crossover Refunding Series
2001, 5.250%, 10/01/15
2,615 Coconino County Pollution Control Corporation, Arizona, Pollution 10/06 at 102.00 B- 1,974,587
Control Revenue Bonds (Nevada Power Company Project),
Series 1996, 6.375%, 10/01/36 (Alternative Minimum Tax)
2,000 Industrial Development Authority of the County of Mohave, Arizona, 11/03 at 101.00 BBB 1,919,880
Industrial Development Revenue Bonds (Citizen Utilities Company
Projects), 1994 Series, 6.600%, 5/01/29 (Alternative Minimum Tax)
500 Navajo County Pollution Control Corporation, Arizona, Pollution 8/03 at 102.00 AAA 519,740
Control Revenue Refunding Bonds (Arizona Public Service Company),
1993 Series A, 5.875%, 8/15/28
1,325 Industrial Development Authority of the County of Pima, Arizona, 1/03 at 102.50 AAA 1,390,720
Industrial Development Lease Obligation Refunding Revenue Bonds
(Irvington Project), 1988 Series A, 7.250%, 7/15/10
500 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 AA 501,795
Arizona, Salt River Project Electric System Refunding Revenue Bonds,
2002 Series A, 5.000%, 1/01/31
1,450 Industrial Development Authority of the County of Yavapai, Arizona, 6/07 at 101.00 BBB 1,193,828
Industrial Development Revenue Bonds (Citizens Utilities Company
Project), 1998 Series, 5.450%, 6/01/33 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.4%
1,500 City of Phoenix Civic Improvement Corporation, Arizona, Junior Lien 7/12 at 100.00 AAA 1,504,004
Water System Revenue Bonds, Series 2002, 5.000%, 7/01/26
------------------------------------------------------------------------------------------------------------------------------------
$ 90,671 Total Investments (cost $90,874,228) - 146.7% 92,270,844
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 605,080
-------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (47.7)% (30,000,000)
-------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $62,875,924
===================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
24
Nuveen Arizona Dividend Advantage Municipal Fund (NFZ)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.2%
$ 1,020 Industrial Development Authority of the City of Mesa, Arizona, 7/11 at 101.00 BBB- $1,027,895
Student Housing Revenue Bonds (ASU East/Maricopa County
Community College District Williams Campus Project),
Series 2001A, 6.000%, 7/01/26
1,000 Puerto Rico Industrial, Tourist, Educational, Medical and 2/09 at 101.00 BBB 986,100
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds (Ana G. Mendez University System
Project), Series 1999, 5.375%, 2/01/29
300 Puerto Rico Industrial, Educational, Medical and Environmental 9/11 at 100.00 BBB 300,954
Control Facilities Financing Authority, Higher Education Revenue
Bonds (University of the Sacred Heart Project), Series 2001,
5.250%, 9/01/21
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 14.7%
1,050 Arizona Health Facilities Authority, Hospital System Revenue Bonds 12/10 at 102.00 BBB 1,106,732
(John C. Lincoln Health Network), Series 2000, 6.875%, 12/01/20
1,170 Arizona Health Facilities Authority, Revenue Bonds (Catholic 7/10 at 101.00 BBB 1,236,807
Healthcare West), 1999 Series A, 6.625%, 7/01/20
1,000 Industrial Development Authority of the City of Scottsdale, Arizona, 12/11 at 101.00 A3 1,013,720
Hospital Revenue Bonds (Scottsdale Healthcare), Series 2001,
5.800%, 12/01/31
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 20.6%
1,000 Industrial Development Authority of the County of Maricopa, Arizona, 7/09 at 102.00 Aaa 1,060,740
Multifamily Housing Revenue Bonds (Whispering Palms Apartments
Project), Series 1999A, 5.900%, 7/01/29
1,000 Industrial Development Authority of the County of Maricopa, Arizona, 5/10 at 102.00 A3 1,077,210
Multifamily Housing Revenue Bonds (Sun King Apartments
Project), Series 2000A, 6.750%, 5/01/31
1,125 Industrial Development Authority of the County of Maricopa, Arizona, 10/11 at 103.00 Aaa 1,167,784
Multifamily Housing Revenue Bonds (Syl-Mar Apartments Project),
Series 2001, 5.650%, 4/20/21 (Alternative Minimum Tax)
275 Industrial Development Authority of the City of Phoenix, Arizona, 6/11 at 102.00 Aaa 284,914
Multifamily Housing Revenue Bonds (GNMA Collateralized -
Campaigne Place on Jackson Project), Series 2001, 5.700%, 6/20/31
(Alternative Minimum Tax)
1,000 Industrial Development Authority of the City of Phoenix, Arizona, 11/11 at 105.00 AAA 1,097,010
Multifamily Housing Revenue Bonds (GNMA Collateralized - Bay
Club Apartments Project), Series 2001, 5.900%, 11/20/31
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.5%
1,000 Industrial Development Authority of the County of Pima, Arizona, 11/10 at 101.00 AAA 1,034,300
Single Family Mortgage Revenue Bonds, Series 2001-A4,
5.050%, 5/01/17
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.4%
1,000 Mesa County, Colorado, Residential Care Facilities Mortgage Revenue 12/11 at 101.00 AA 1,000,790
Bonds (Hilltop Community Resources, Inc. Obligated Group
Projects), Series 2001A, 5.375%, 12/01/28
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 23.2%
1,500 Washington Elementary School District No. 6 of Maricopa County, No Opt. Call AAA 1,678,245
Arizona, General Obligation Bonds, Series 2002A Refunding,
5.375%, 7/01/15
1,000 City of Mesa, Arizona, General Obligation Bonds, Series 1999, 7/09 at 100.00 AAA 1,035,710
5.000%, 7/01/17
1,000 City of Phoenix, Arizona, General Obligation Refunding Bonds, 7/05 at 101.00 AA+ 1,013,250
Series 1995A, 5.000%, 7/01/19
500 Commonwealth of Puerto Rico, Public Improvement General No Opt. Call A- 532,510
Obligation Bonds, Series 2002A, 5.500%, 7/01/29
1,020 City of Tucson, Arizona, General Obligation Refunding Bonds, 7/07 at 100.00 AA 1,035,718
Series 1997, 5.000%, 7/01/19
25
Nuveen Arizona Dividend Advantage Municipal Fund (NFZ) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 23.4%
$ 700 Arizona School Facilities Board, State School Improvement Revenue 7/11 at 100.00 AAA $ 757,064
Bonds, Series 2001, 5.500%, 7/01/18
1,415 State of Arizona, Certificates of Participation, Series 2002A, 5/12 at 100.00 AAA 1,474,784
4.800%, 11/01/15
2,000 Industrial Development Authority of the County of Maricopa, Arizona, 6/07 at 102.00 A 2,104,980
Education Revenue Bonds (Horizon Community Learning Center
Project), Series 2000, 6.350%, 6/01/26
900 Industrial Development Authority of the City of Phoenix, Arizona, 3/12 at 100.00 AAA 966,384
Government Office Lease Revenue Bonds (Capitol Mall LLC II Project),
Series 2001, 5.250%, 9/15/16
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 8.6%
500 Industrial Development Authority of the County of Maricopa, Arizona, 9/05 at 101.00 AAA 554,145
Baptist Hospital System Revenue Refunding Bonds, Series 1995,
5.500%, 9/01/16 (Pre-refunded to 9/01/05)
1,350 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,416,771
Bonds, 2000 Series A, 5.500%, 10/01/40
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 29.7%
1,500 Arizona Power Authority, Power Resource Revenue Bonds (Hoover No Opt. Call AA 1,637,310
Uprating Project), Special Obligation Crossover Refunding
Series 2001, 5.250%, 10/01/17
1,000 Coconino County Pollution Control Corporation, Arizona, Pollution 11/02 at 102.00 B- 755,270
Control Revenue Bonds (Nevada Power Company Project),
Series 1997B, 5.800%, 11/01/32 (Alternative Minimum Tax)
1,000 City of Mesa, Arizona, Utility System Revenue Bonds, Series 2000, 7/09 at 100.00 AAA 1,029,390
5.125%, 7/01/19
1,000 City of Mesa, Arizona, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,097,390
Series 2002, 5.250%, 7/01/17
350 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/12 at 101.00 AAA 355,310
2002 Series II, 5.125%, 7/01/26
805 Salt River Project Agricultural Improvement and Power District, 1/08 at 101.00 AA 818,685
Arizona, Salt River Project Electric System Refunding Revenue
Bonds, 1997 Series A, 5.000%, 1/01/20
1,000 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 AA 1,062,210
Arizona, Salt River Project Electric System Refunding Revenue
Bonds, 2002 Series A, 5.250%, 1/01/18
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.0%
1,025 City of Chandler, Arizona, Water and Sewer Revenue Bonds, 7/10 at 101.00 AAA 1,014,052
Series 2001, 4.500%, 7/01/18
1,500 City of Phoenix Civic Improvement Corporation, Arizona, Junior Lien 7/12 at 100.00 AAA 1,504,004
Water System Revenue Bonds, Series 2002, 5.000%, 7/01/26
------------------------------------------------------------------------------------------------------------------------------------
$ 33,005 Total Investments (cost $33,382,601) - 150.3% 34,238,138
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 552,499
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.7)% (12,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $22,790,637
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
See accompanying notes to financial statements.
26
Nuveen Arizona Dividend Advantage Municipal Fund 2 (NKR)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.6%
$ 1,215 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 $1,309,709
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/12
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 14.5%
510 Arizona State University, Certificates of Participation, Series 2002, 7/12 at 100.00 AAA 514,361
5.125%, 7/01/26
Arizona Board of Regents, Arizona State University System Revenue
Bonds, Series 2002:
1,000 5.000%, 7/01/25 7/12 at 100.00 AAA 1,003,450
715 5.750%, 7/01/27 7/12 at 100.00 AAA 773,816
1,250 Industrial Development Authority of the City of Glendale, Arizona, 5/11 at 101.00 BBB+ 1,269,388
Revenue Bonds (Midwestern University), Series 2001A,
5.875%, 5/15/31
320 Puerto Rico Industrial, Tourist, Educational, Medical and 2/09 at 101.00 BBB 324,355
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds (Ana G. Mendez University System
Project), Series 1999, 5.375%, 2/01/19
Arizona Board of Regents, Certificates of Participation (University
of Arizona Project), Series 2002A:
750 5.500%, 6/01/18 6/12 at 100.00 AAA 814,920
500 5.125%, 6/01/22 6/12 at 100.00 AAA 508,115
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.8%
735 Arizona Health Facilities Authority, Hospital System Revenue Bonds 2/12 at 101.00 A3 769,641
(Phoenix Children's Hospital), Series 2002A, 6.250%, 2/15/21
1,000 Arizona Health Facilities Authority, Revenue Bonds (Catholic 7/10 at 101.00 BBB 1,057,100
Healthcare West), 1999 Series A, 6.625%, 7/01/20
1,000 Industrial Development Authority of the County of Maricopa, Arizona, 7/08 at 101.00 BBB 872,920
Health Facility Revenue Bonds (Catholic Healthcare West Project),
1998 Series A, 5.000%, 7/01/21
500 Industrial Development Authority of the County of Maricopa, Arizona, 5/08 at 101.00 AA 503,295
Hospital Revenue Bonds (Mayo Clinic Hospital), Series 1998,
5.250%, 11/15/37
1,000 Industrial Development Authority of the City of Mesa, Arizona, 1/10 at 101.00 AAA 1,046,310
Revenue Bonds (Discovery Health System), Series 1999A,
5.625%, 1/01/29
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.6%
1,000 Industrial Development Authority of the County of Maricopa, Arizona, 10/11 at 105.00 AAA 1,111,070
Multifamily Housing Revenue Bonds (GNMA Collateralized - Pine
Ridge, Cambridge Court, Cove on 44th and Fountain Place
Apartments Projects), Series 2001-A1 Refunding, 6.000%, 10/20/31
1,425 Industrial Development Authority of the City of Phoenix, Arizona, 7/12 at 105.00 AAA 1,615,651
Multifamily Housing Revenue Bonds (GNMA Collateralized - Summit
Apartments Project), Series 2002, 6.450%, 7/20/32
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.3%
470 Industrial Development Authority of the County of Pima, Arizona, 11/10 at 101.00 AAA 476,646
Single Family Mortgage Revenue Bonds, Series 2001-A1,
5.350%, 11/01/24 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 44.6%
1,725 City of Chandler, Arizona, General Obligation Bonds, Series 2002, 7/12 at 100.00 AA 1,805,264
5.000%, 7/01/17
1,000 Town of Gilbert, Arizona, General Obligation Bonds, Series 2002A, 7/11 at 100.00 AAA 1,033,760
5.000%, 7/01/18
Washington Elementary School District No. 6 of Maricopa
County, Arizona, General Obligation Bonds, Series 2002A Refunding:
1,000 5.375%, 7/01/15 No Opt. Call AAA 1,118,830
2,000 5.375%, 7/01/16 No Opt. Call AAA 2,231,120
27
Nuveen Arizona Dividend Advantage Municipal Fund 2 (NKR) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 2,165 Paradise Valley Unified School District No. 69 of Maricopa County, No Opt. Call AAA $2,398,863
Arizona, General Obligation Bonds, Series 2002A Refunding,
5.250%, 7/01/14
1,000 City of Mesa, Arizona, General Obligation Bonds, Series 2000, No Opt. Call AAA 1,208,020
6.500%, 7/01/11
1,405 City of Mesa, Arizona, General Obligation Bonds, Series 2002, No Opt. Call AAA 1,574,949
5.375%, 7/01/15
City of Phoenix, Arizona, Various Purpose General Obligation Bonds,
Series 2002B:
1,700 5.000%, 7/01/22 7/12 at 100.00 AA+ 1,712,495
250 5.000%, 7/01/27 7/12 at 100.00 AA+ 249,635
1,000 Apache Junction Unified School District No. 43 of Pinal County, No Opt. Call AAA 1,153,810
Arizona, General Obligation Refunding Bonds, Series 2001,
5.750%, 7/01/15
1,500 City of Scottsdale, Arizona, General Obligation Bonds, Series 2002, 7/11 at 100.00 AAA 1,506,900
5.000%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 36.1%
State of Arizona, Certificates of Participation, Series 2002A:
750 5.000%, 11/01/17 5/12 at 100.00 AAA 782,595
1,000 5.000%, 11/01/18 5/12 at 100.00 AAA 1,035,450
500 5.000%, 11/01/20 5/12 at 100.00 AAA 510,605
1,000 Maricopa County Public Finance Authority, Arizona, Lease Revenue 7/11 at 100.00 Aaa 1,099,330
Bonds, Series 2001, 5.500%, 7/01/15
Maricopa County, Arizona, Stadium District Revenue Refunding
Bonds, Series 2002:
840 5.375%, 6/01/18 6/12 at 100.00 Aaa 896,112
2,645 5.375%, 6/01/19 6/12 at 100.00 Aaa 2,800,129
1,500 Industrial Development Authority of the City of Phoenix, Arizona, 3/12 at 100.00 AAA 1,610,640
Government Office Lease Revenue Bonds (Capitol Mall LLC II Project),
Series 2001, 5.250%, 9/15/16
500 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/16 at 100.00 A 527,815
Bonds, Series 1996Y, 5.500%, 7/01/36
1,000 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 AAA 1,000,730
Revenue Bonds, Series D, 5.000%, 7/01/32
1,000 Puerto Rico Public Buildings Authority, Government Facilities Revenue 7/12 at 100.00 A- 1,001,570
Refunding Bonds, Series D, Guaranteed by the Commonwealth of
Puerto Rico, 5.125%, 7/01/24
1,000 City of Tucson, Arizona, Junior Lien Street and Highway User 7/10 at 100.00 AAA 1,030,600
Revenue Bonds, Series 1994-E, 5.000%, 7/01/18
640 City of Yuma Municipal Property Corporation, Arizona, Municipal 7/10 at 100.00 AAA 648,954
Facilities Revenue Bonds, Series 2001, 5.000%, 7/01/21
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.6%
1,000 City of Phoenix Civic Improvement Corporation, Arizona, Senior Lien 7/08 at 101.00 AAA 1,004,180
Airport Revenue Bonds, Series 1998A, 5.000%, 7/01/25
1,000 City of Phoenix Civic Improvement Corporation, Arizona, Senior Lien 7/12 at 100.00 AAA 1,011,520
Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 4.4%
1,500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,574,190
Bonds, 2000 Series A, 5.500%, 10/01/40
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.5%
1,115 Arizona Power Authority, Power Resource Revenue Bonds (Hoover No Opt. Call AA 1,230,637
Uprating Project), Special Obligation Crossover Refunding
Series 2001, 5.250%, 10/01/15
1,000 City of Mesa, Arizona, Utility System Revenue Bonds, Series 2002, 7/11 at 100.00 AAA 1,019,780
5.000%, 7/01/20
1,000 City of Mesa, Arizona, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,097,390
Series 2002, 5.250%, 7/01/17
1,500 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 AA 1,505,385
Arizona, Salt River Project Electric System Refunding Revenue
Bonds, 2002 Series A, 5.000%, 1/01/31
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 7.5%
$ 500 Industrial Development Authority of the County of Maricopa, Arizona, 12/07 at 102.00 AAA $ 510,975
Water System Improvement Revenue Bonds (Chaparral City Water
Company Project), Series 1997A, 5.400%, 12/01/22 (Alternative
Minimum Tax)
1,000 City of Phoenix Civic Improvement Corporation, Arizona, Water No Opt. Call AAA 1,089,759
System Junior Lien Revenue Refunding Bonds, Series 2001,
5.500%, 7/01/22
1,000 City of Tucson, Arizona, Water System Revenue Refunding Bonds, 7/12 at 102.00 AAA 1,100,159
Series 2001, 5.500%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
$ 51,125 Total Investments (cost $52,359,201) - 150.5% 54,052,898
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 360,284
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.5)% (18,500,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $35,913,182
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
See accompanying notes to financial statements.
29
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
Capital Goods - 0.6%
$ 1,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (WMX 12/03 at 102.00 BBB $1,006,490
Technologies, Inc. Project), Series 1993, 6.000%, 12/01/13
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 0.2%
330 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 337,663
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.4%
1,720 Board of Trustees of Ferris State University, Michigan, General 4/08 at 100.00 AAA 1,707,668
Revenue Bonds, Series 1998, 5.000%, 10/01/23
1,685 Michigan Higher Education Facilities Authority, Limited Obligation 9/11 at 100.00 Aaa 1,827,079
Revenue Bonds (Kettering University), Refunding Series 2001,
5.500%, 9/01/17
1,500 Michigan Higher Education Student Loan Authority, Revenue Bonds, No Opt. Call AAA 1,604,625
2000 Series XII-T, 5.300%, 9/01/10 (Alternative Minimum Tax)
1,000 Michigan Higher Education Student Loan Authority, Revenue Bonds, 9/12 at 100.00 AAA 1,006,190
2002 Series XVII-G, 5.200%, 9/01/20 (Alternative Minimum Tax)
1,000 Board of Trustees of Oakland University, Michigan, General Revenue 5/05 at 102.00 AAA 1,060,720
Bonds, Series 1995, 5.750%, 5/15/15
Board of Governors of Wayne State University, Michigan, General
Revenue Bonds, Series 1999:
3,430 5.250%, 11/15/19 11/09 at 101.00 AAA 3,566,377
1,000 5.125%, 11/15/29 11/09 at 101.00 AAA 1,000,660
1,450 Board of Trustees of Western Michigan University, General Revenue 7/03 at 102.00 AAA 1,453,712
Bonds, Series 1993A, 5.000%, 7/15/21
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 20.9%
2,900 Economic Development Corporation of the City of Dearborn, Michigan, 11/05 at 102.00 AAA 3,095,837
Hospital Revenue Bonds (Oakwood Obligated Group),
Series 1995A, 5.875%, 11/15/25
1,235 City of Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 1,248,906
Mortgage Hospital Revenue Bonds (Portage Health System, Inc.),
Series 1998, 5.450%, 8/01/47
3,500 Kent Hospital Finance Authority, Michigan, Revenue Bonds (Spectrum 7/11 at 101.00 AA 3,485,580
Health), Series 2001A, 5.250%, 1/15/21
3,306 Michigan State Hospital Finance Authority, Detroit Medical Center No Opt. Call Baa2 3,350,138
Collateralized Loan, Series 2001, 7.360%, 4/01/07
1,000 Michigan State Hospital Finance Authority, Revenue Refunding 11/09 at 101.00 A 1,051,990
Bonds (OSF Healthcare System), Series 1999, 6.125%, 11/15/19
Michigan State Hospital Finance Authority, Revenue Bonds
(Ascension Health Credit Group), Series 1999A:
1,000 6.125%, 11/15/23 11/09 at 101.00 AAA 1,070,160
2,500 6.125%, 11/15/26 11/09 at 101.00 AA 2,640,950
1,700 Michigan State Hospital Finance Authority, Revenue and Refunding 8/09 at 101.00 AAA 1,808,375
Bonds (Mercy Health Services Obligated Group), 1999 Series X,
5.750%, 8/15/19
Michigan State Hospital Finance Authority, Hospital Revenue and
Refunding Bonds (Mercy Mount Clemens Corporation Obligated
Group), Series 1999A:
3,385 5.750%, 5/15/17 5/09 at 101.00 AAA 3,637,453
500 5.750%, 5/15/29 5/09 at 101.00 AAA 522,430
3,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101.00 BBB- 2,454,120
(Detroit Medical Center Obligated Group), Series 1998A,
5.250%, 8/15/28
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 1,000 Michigan State Hospital Finance Authority, Revenue and Refunding 11/09 at 101.00 BBB $ 959,930
Bonds (Memorial Healthcare Center Obligated Group),
Series 1999, 5.875%, 11/15/21
5,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 11/09 at 101.00 A1 5,198,450
(Henry Ford Health System), Series 1999A, 6.000%, 11/15/24
5,500 City of Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 5,513,585
Revenue Bonds (William Beaumont Hospital), Series 2001M,
5.250%, 11/15/31
2,195 Regents of the University of Michigan, Medical Service Plan Revenue No Opt. Call AA 1,561,304
Bonds, Series 1991, 0.000%, 12/01/10
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 11.2%
2,675 Michigan State Housing Development Authority, Limited Obligation 12/20 at 101.00 AAA 2,748,536
Multifamily Housing Revenue Bonds (Parkview Place Apartments),
Series 2002A, 5.550%, 12/01/34 (Alternative Minimum Tax)
5,250 Michigan State Housing Development Authority, Limited Obligation 10/02 at 103.00 AAA 5,439,578
Revenue Bonds (Parkway Meadows Project), Series 1991,
6.850%, 10/15/18
5,000 Michigan State Housing Development Authority, Rental Housing 6/05 at 102.00 AAA 5,280,650
Revenue Bonds, 1995 Series B, 6.150%, 10/01/15
6,795 Michigan State Housing Development Authority, Rental Housing 4/09 at 101.00 AAA 6,721,750
Revenue Bonds, 1999 Series A, 5.300%, 10/01/37 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.6%
1,000 Michigan State Housing Development Authority, Single Family 1/11 at 100.00 AAA 1,035,500
Mortgage Revenue Bonds, Series 2001, 5.300%, 12/01/16
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 6.6%
2,000 Economic Development Corporation of the Charter Township of Grand 7/09 at 101.00 A 1,967,460
Rapids, Michigan, Limited Obligation Revenue Bonds (Porter Hills
Obligated Group - Cook Valley Estate Project), Series 1999,
5.450%, 7/01/29
3,300 Michigan State Hospital Finance Authority, Revenue Bonds 1/07 at 102.00 N/R 3,245,715
(Presbyterian Villages of Michigan Obligated Group), Series 1997,
6.375%, 1/01/25
1,300 Michigan Strategic Fund, Limited Obligation Revenue Bonds 7/08 at 101.00 A 1,256,736
(Porter Hills Presbyterian Village), Series 1998 Refunding,
5.375%, 7/01/28
5,280 Economic Development Corporation of the City of Warren, Michigan, 8/02 at 101.00 Aaa 5,348,112
Nursing Home Revenue Refunding Bonds (GNMA Mortgage-Backed
Security - Autumn Woods Project), Series 1992,
6.900%, 12/20/22 (Pre-refunded to 8/20/02)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 35.2%
Allegan Public Schools, County of Allegan, Michigan, 2000 General
Obligation Bonds:
1,850 5.600%, 5/01/20 5/10 at 100.00 AAA 1,962,258
1,150 5.750%, 5/01/30 5/10 at 100.00 AAA 1,216,482
4,200 Anchor Bay School District, Counties of Macomb and St. Clair, 5/11 at 100.00 AAA 4,141,746
Michigan, 2001 Refunding General Obligation Unlimited Tax
Bonds, 5.000%, 5/01/29
1,000 Anchor Bay School District, Counties of Macomb and St. Clair, 5/12 at 100.00 AAA 991,200
Michigan, Refunding General Obligation Bonds, Series 2002,
5.000%, 5/01/25
1,000 Belding Area Schools, Counties of Ionia, Kent and Montcalm, 5/08 at 100.00 AAA 988,280
Michigan, 1998 Refunding General Obligation Unlimited Tax
Bonds, 5.000%, 5/01/26
1,320 Bridgeport Spaulding Community School District, County of Saginaw, 5/12 at 100.00 AAA 1,444,423
Michigan, General Obligation Bonds, Series 2002, 5.500%, 5/01/16
1,000 Charlotte Public Schools, County of Easton, Michigan, 1999 School 5/09 at 100.00 AAA 1,010,380
Building and Site General Obligation Unlimited Tax Bonds,
5.250%, 5/01/25
1,000 Chippewa Valley Schools, County of Macomb, Michigan, General 5/03 at 102.00 AAA 1,002,340
Obligation Bonds, Series 1993, 5.000%, 5/01/21
2,000 Clarkston Community Schools, Michigan, General Obligation Bonds, 5/07 at 100.00 AAA 2,018,640
5.250%, 5/01/23
1,000 East China School District, County of St. Clair, Michigan, General 11/11 at 100.00 AAA 1,062,080
Obligation Bonds, Series 2001, 5.500%, 5/01/20
31
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General (continued)
$ 1,085 Freeland Community School District, Counties of Saginaw, Midland 5/10 at 100.00 AAA $1,125,807
and Bay, Michigan, 2000 School Building and Site General
Obligation Unlimited Tax Bonds, 5.250%, 5/01/19
3,300 Grand Ledge Public Schools, Counties of Eaton, Clinton and Ionia, 5/05 at 102.00 AAA 3,354,978
Michigan, 1995 Refunding Bonds, 5.375%, 5/01/24
3,000 Grand Rapids and Kent Counties Joint Building Authority, Michigan, No Opt. Call AAA 780,600
Limited Tax General Obligation Bonds (Devos Place Project),
Series 2001, 0.000%, 12/01/26
1,500 Huron Valley School District, Counties of Oakland and Livingston, 11/11 at 100.00 AAA 1,628,325
Michigan, General Obligation Bonds, Series 2001, 5.500%, 5/01/17
2,000 Lake Fenton Community Schools, County of Genesee, Michigan, 5/12 at 100.00 AAA 1,985,440
General Obligation Bonds, Series 2002, 5.000%, 5/01/24
725 Lake Orion Community School District, County of Oakland, Michigan, 5/05 at 101.00 AAA 746,054
1995 Refunding General Obligation Unlimited Tax Bonds,
5.500%, 5/01/20
1,000 Mancelona Public School District, Counties of Antrim and Kalkaska, 5/06 at 100.00 AAA 1,025,610
Michigan, General Obligation Bonds, Series 1997, 5.200%, 5/01/17
2,875 Milan Area Schools, Counties of Washtenaw and Monroe, Michigan, 5/10 at 100.00 AAA 3,054,573
2000 School Building and Site General Obligation Unlimited Tax
Bonds, Series A, 5.750%, 5/01/24
4,300 Montcalm County Building Authority, Michigan, Correctional Facility 5/10 at 100.00 AAA 4,350,138
Improvement General Obligation Bonds, Series 2000,
5.250%, 5/01/25
2,500 Montrose Township School District, Michigan, School Building and No Opt. Call AAA 2,860,750
Site Bonds, Series 1997, 6.000%, 5/01/22
1,000 Muskegon Heights Public Schools, County of Muskegon, Michigan, 5/09 at 100.00 AAA 986,130
1999 School Building and Site General Obligation Unlimited
Tax Bonds, 5.000%, 5/01/29
1,045 Nice Community School District, Counties of Marquette and Baraga, 5/04 at 101.00 AAA 1,062,138
Michigan, 1995 School Building and Site General Obligation
Unlimited Tax Bonds, 5.250%, 5/01/20
1,225 North Branch Area Schools, County of Lapeer, Michigan, 1993 General 5/03 at 101.50 AAA 1,241,427
Obligation Unlimited Tax Refunding Bonds, 5.375%, 5/01/21
1,625 Northville Public Schools, County of Wayne, Michigan, General 11/11 at 100.00 AAA 1,727,066
Obligation Bonds, Series 2001, 5.375%, 5/01/18
1,000 Oakland County Building Authority, Michigan, General Obligation 9/11 at 100.00 AAA 1,016,810
Bonds, Series 2002, 5.125%, 9/01/22
1,225 Paw Paw Public Schools, County of Van Buren, Michigan, General No Opt. Call AAA 1,255,735
Obligation Refunding Bonds, Series 1998, 5.000%, 5/01/21
4,000 Pinckney Community Schools, Counties of Livingston and Washtenaw, 5/07 at 100.00 AAA 4,098,240
Michigan, 1997 School Building and Site General Obligation
Unlimited Tax Bonds, 5.500%, 5/01/27
4,200 Commonwealth of Puerto Rico, Public Improvement Refunding General No Opt. Call AAA 4,676,868
Obligation Bonds, 2002 Series A, 5.500%, 7/01/20
685 Reeths-Puffer Schools, County of Muskegon, Michigan, 1995 School 5/05 at 101.00 AAA 736,217
Building and Site Refunding Bonds, 5.750%, 5/01/15
1,000 Rochester Community School District, Counties of Oakland and 5/10 at 100.00 AAA 1,086,060
Macomb, Michigan, 2000 School Building, Site and Refunding
General Obligation Unlimited Tax Bonds, Series I, 5.750%, 5/01/19
2,500 City of Taylor Building Authority, County of Wayne, Michigan, 3/10 at 100.00 AAA 2,606,700
Limited Tax General Obligation Bonds, Series 2000, 5.125%, 3/01/17
1,050 Warren Consolidated Schools, Counties of Macomb and Oakland, 11/11 at 100.00 AAA 1,107,834
Michigan, General Obligation Bonds, Series 2001, 5.375%, 5/01/19
1,980 Washtenaw County Building Authority, Michigan, General Obligation 9/07 at 100.00 AAA 2,067,318
Limited Tax Bonds, Series 1999, 5.400%, 9/01/17
1,125 Whitehall District Schools, County of Muskegon, Michigan, General 11/11 at 100.00 AAA 1,221,244
Obligation Bonds, Series 2001, 5.500%, 5/01/17
1,725 Williamston Community School District, Michigan, General Obligation No Opt. Call AAA 1,852,288
Unlimited Tax Bonds, Series 1996, 5.500%, 5/01/25
32
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 13.8%
$ 1,800 Tax Increment Finance Authority of the City of Dearborn Heights, 10/10 at 100.00 AAA $1,778,724
County of Wayne, Michigan, Tax Increment Limited Tax General
Obligation Bonds (Police and Courthouse
Facility), Series 2001-A, 5.000%, 10/01/26
1,000 City of Grand Rapids Building Authority, County of Kent, Michigan, No Opt. Call AA 1,069,040
General Obligation Limited Tax Bonds, Series 1998,
5.000%, 4/01/16
1,145 City of Grand Rapids Building Authority, County of Kent, Michigan, 10/11 at 100.00 AAA 1,146,660
General Obligation Limited Tax Bonds, Series 2001,
5.125%, 10/01/26
255 Michigan Municipal Bond Authority, Local Government Loan Program 11/02 at 102.00 A 260,595
Revenue Bonds, Series 1992D, 6.650%, 5/01/12
750 Michigan State Building Authority, 1998 Revenue Refunding Bonds 10/09 at 100.00 AA+ 734,678
(Facilities Program), Series I, 4.750%, 10/15/21
State of Michigan, Certificates of Participation (525 Redevco Inc):
2,000 5.500%, 6/01/19 6/10 at 100.00 AAA 2,113,760
2,000 5.500%, 6/01/27 6/10 at 100.00 AAA 2,059,180
1,000 State of Michigan, Certificates of Participation (New Center 9/11 at 100.00 AAA 1,034,070
Development, Inc.), Series 2001, 5.375%, 9/01/21
1,000 State of Michigan, State Trunk Line Fund Bonds, Series 2001A, 11/11 at 100.00 AAA 991,100
5.000%, 11/01/25
1,100 Muskegon County, Michigan, General Obligation Limited Tax 7/11 at 100.00 AAA 1,087,097
Wastewater Management System No. 2 Revenue Bonds,
Series 2002, 5.000%, 7/01/26
Puerto Rico Highway and Transportation Authority, Highway
Revenue Bonds, Series 1996Y:
4,100 5.500%, 7/01/36 7/16 at 100.00 A 4,328,083
2,000 5.000%, 7/01/36 7/16 at 100.00 A 1,967,160
1,000 Puerto Rico Public Finance Corporation, Commonwealth Appropriation No Opt. Call BBB+ 1,132,040
Bonds, 2002 Series E, 6.000%, 8/01/26
5,000 Charter County of Wayne, Michigan, Limited Tax General Obligation 12/11 at 101.00 AAA 5,021,700
Airport Hotel Revenue Bonds (Detroit Metropolitan Wayne County
Airport), Series 2001A, 5.000%, 12/01/21
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.3%
1,000 Capital Region Airport Authority, Michigan, Revenue Refunding Bonds, 7/12 at 100.00 AAA 1,014,240
Series 2002 Refunding, 5.250%, 7/01/21 (Alternative Minimum Tax)
2,505 Charter County of Wayne, Michigan, Subordinate Lien Airport Revenue 8/02 at 102.00 AAA 2,566,097
Bonds (Detroit Metropolitan Wayne County Airport), Series 1991B,
6.750%, 12/01/21 (Alternative Minimum Tax) (Pre-refunded
to 8/29/02)
3,000 Charter County of Wayne, Michigan, Airport Revenue Bonds (Detroit 12/08 at 101.00 AAA 2,904,240
Metropolitan Wayne County Airport), Series 1998A,
5.000%, 12/01/28 (Alternative Minimum Tax)
1,195 Charter County of Wayne, Michigan, Airport Revenue Bonds (Detroit 12/08 at 101.00 AAA 1,153,426
Metropolitan Wayne County Airport), Series 1998B,
4.875%, 12/01/23
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 16.2%
2,190 Anchor Bay School District, Counties of Macomb and St. Clair, 5/09 at 100.00 AAA 2,531,443
Michigan, 1999 School Building and Site General Obligation
Unlimited Tax Bonds, Series I, 6.000%, 5/01/29 (Pre-refunded
to 5/01/09)
1,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, 1/10 at 101.00 AAA 1,154,220
Series 1999-A, 5.875%, 7/01/27 (Pre-refunded to 1/01/10)
2,000 City of Detroit, Michigan, Water Supply System Revenue Senior Lien 1/10 at 101.00 AAA 2,289,480
Bonds, Series 1999-A, 5.750%, 7/01/26 (Pre-refunded to 1/01/10)
2,000 East Grand Rapids Public Schools, County of Kent, Michigan, 5/09 at 100.00 AAA 2,311,820
2000 School Building and Site General Obligation Unlimited
Tax Bonds, 6.000%, 5/01/29 (Pre-refunded to 5/01/09)
1,000 Grosse Ile Township School District, Michigan, General Obligation 5/07 at 100.00 AAA 1,139,680
School Improvement Refunding Bonds, Series 1996,
6.000%, 5/01/22 (Pre-refunded to 5/01/07)
33
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (continued)
$ 2,000 Lincoln Park School District, Michigan, General Obligation Bonds, 5/06 at 101.00 AAA $2,257,420
Series 1996, 5.900%, 5/01/26 (Pre-refunded to 5/01/06)
2,100 Michigan Municipal Bond Authority, State Revolving Fund Revenue 10/02 at 102.00 AAA 2,160,270
Bonds, Series 1992A, 6.600%, 10/01/18 (Pre-refunded to 10/01/02)
3,035 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 12/02 at 102.00 AAA 3,151,362
(MidMichigan Obligated Group), Series 1992, 6.900%, 12/01/24
(Pre-refunded to 12/01/02)
1,125 Puerto Rico Highway and Transportation Authority, Transportation 7/10 at 101.00 A*** 1,329,514
Revenue Bonds, Series B, 6.000%, 7/01/39 (Pre-refunded
to 7/01/10)
2,100 Romulus Community Schools, County of Wayne, Michigan, 1999 5/09 at 100.00 AAA 2,395,974
School Building and Site General Obligation Unlimited Tax Bonds,
5.750%, 5/01/25 (Pre-refunded to 5/01/09)
4,845 Saginaw-Midland Municipal Water Supply Corporation, Michigan, 9/04 at 102.00 A2*** 5,439,142
Limited Tax General Obligation Water Supply Revenue Bonds,
Series 1992, 6.875%, 9/01/16 (Pre-refunded to 9/01/04)
2,600 West Bloomfield School District, County of Oakland, Michigan, 5/10 at 100.00 AAA 3,000,166
2000 School Building and Site Unlimited Tax General Obligation
Bonds, 5.900%, 5/01/18 (Pre-refunded to 5/01/10)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 19.9%
3,000 Michigan Public Power Agency, Combustion Turbine No. 1 Project 1/12 at 100.00 AAA 3,036,540
Revenue Bonds, 2001 Series A, 5.250%, 1/01/27
2,390 Michigan South Central Power Agency, Power Supply System Revenue 11/02 at 101.00 Baa1 2,446,667
Refunding Bonds, 1991 Series, 6.750%, 11/01/10
4,475 Michigan South Central Power Agency, Power Supply System No Opt. Call Baa1 4,825,572
Revenue Bonds, 2000 Series, 6.000%, 5/01/12
3,630 Michigan Strategic Fund, Limited Obligation Refunding Revenue No Opt. Call AAA 4,580,987
Bonds (Detroit Edison Company), Series 1991BB, 7.000%, 5/01/21
2,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue No Opt. Call Aaa 2,100,340
Bonds (Detroit Edison Company), Series 1995CC Remarketed,
4.850%, 9/01/30 (Mandatory put 9/01/11)
4,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/11 at 100.00 A- 3,963,440
Bonds (Detroit Edison Company Pollution Control Project),
Collateralized Series 2001C, 5.450%, 9/01/29
1,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/09 at 102.00 AAA 1,028,320
Bonds (Detroit Edison Company Pollution Control Project),
Collateralized Series 1999A, 5.550%, 9/01/29 (Alternative
Minimum Tax)
7,000 County of Monroe, Michigan, Pollution Control Revenue Bonds (Detroit 9/02 at 102.00 AAA 7,170,450
Edison Company Monroe and Fermi Plants Project), Collateralized
1992 Series I, 6.875%, 9/01/22 (Alternative Minimum Tax)
400 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 409,272
Series HH, 5.250%, 7/01/29
1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series X, 7/05 at 100.00 A- 1,014,040
5.500%, 7/01/25
5,000 Wyandotte, Michigan, Electric Revenue Bonds, Series 1992 Refunding, 10/02 at 102.00 AAA 5,140,500
6.250%, 10/01/17 (Pre-refunded to 10/01/02)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 14.0%
5,250 City of Detroit, Michigan, Sewage Disposal System Revenue 7/05 at 100.00 AAA 5,203,800
Refunding Bonds, Series 1995-B, 5.000%, 7/01/25
City of Detroit, Michigan, Sewage Disposal System Revenue Bonds,
Series 1997-A:
3,000 5.500%, 7/01/20 7/07 at 101.00 AAA 3,132,720
1,730 5.000%, 7/01/22 7/07 at 101.00 AAA 1,728,841
1,500 City of Detroit, Michigan, Sewage System Disposal Revenue Second No Opt. Call AAA 1,625,430
Lien Bonds, Series 2001B, 5.500%, 7/01/29
6,000 City of Detroit, Michigan, Water Supply System Revenue and Revenue 7/04 at 102.00 AAA 5,934,540
Refunding Bonds, Series 1993, 5.000%, 7/01/23
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
City of Detroit, Michigan, Water Supply System Revenue Senior
Lien Bonds, Series 2001A:
$ 3,400 5.750%, 7/01/28 7/11 at 101.00 AAA $3,640,890
1,500 5.250%, 7/01/33 7/11 at 100.00 AAA 1,513,214
City of Muskegon Heights, County of Muskegon, Michigan, Water
Supply System Revenue Bonds, Series 2000A:
1,040 5.625%, 11/01/25 11/10 at 100.00 Aaa 1,090,221
1,160 5.625%, 11/01/30 11/10 at 100.00 Aaa 1,212,814
------------------------------------------------------------------------------------------------------------------------------------
$ 263,946 Total Investments (cost $255,797,520) - 150.9% 271,027,587
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 2,602,899
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.3)% (94,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $179,630,486
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
35
Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL GOODS - 3.8%
$ 3,050 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Waste 12/02 at 102.00 BBB $3,118,534
Management, Inc. Project), Series 1992, 6.625%, 12/01/12
(Alternative Minimum Tax)
1,370 Michigan Strategic Fund, Limited Obligation Revenue Bonds (WMX 12/03 at 102.00 BBB 1,378,891
Technologies, Inc. Project), Series 1993, 6.000%, 12/01/13
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 0.4%
475 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 486,030
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.4%
1,100 Michigan Higher Education Student Loan Authority, Revenue Bonds, 10/02 at 102.00 A1 1,126,906
1992 Series XIV-A Refunding, 6.700%, 10/01/05 (Alternative
Minimum Tax)
2,000 Michigan Higher Education Student Loan Authority, Revenue Bonds, 9/12 at 100.00 AAA 2,012,380
2002 Series XVII-G, 5.200%, 9/01/20 (Alternative Minimum Tax)
1,000 Board of Control of Saginaw Valley State University, Michigan, 7/09 at 100.00 Aaa 1,039,970
General Revenue Bonds, Series 1999, 5.625%, 7/01/29
3,500 Board of Governors of Wayne State University, Michigan, General 11/09 at 101.00 AAA 3,502,310
Revenue Bonds, Series 1999, 5.125%, 11/15/29
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 27.6%
2,050 The Economic Development Corporation of the City of Dearborn, 11/05 at 102.00 AAA 2,188,437
Michigan, Hospital Revenue Bonds (Oakwood Obligated Group),
Series 1995A, 5.875%, 11/15/25
2,200 City of Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 2,224,772
Mortgage Hospital Revenue Bonds (Portage Health System, Inc.),
Series 1998, 5.450%, 8/01/47
2,500 City of Kalamazoo Hospital Finance Authority, Michigan, Hospital 5/06 at 102.00 AAA 2,650,250
Revenue Refunding and Improvement Bonds (Bronson Methodist
Hospital), Series 1996, 5.750%, 5/15/16
Michigan State Hospital Finance Authority, Revenue and Refunding
Bonds (The Detroit Medical Center Obligated Group), Series
1993A:
2,000 6.250%, 8/15/13 8/03 at 102.00 BBB- 2,007,040
3,200 6.500%, 8/15/18 8/03 at 102.00 BBB- 3,177,568
4,000 Michigan State Hospital Finance Authority, Hospital Revenue and 9/02 at 102.00 A1 4,076,280
Refunding Bonds (Henry Ford Health System), Series 1992A,
5.750%, 9/01/17
2,000 Michigan State Hospital Finance Authority, Hospital Revenue and 1/05 at 102.00 A+ 2,065,500
Refunding Bonds (Otsego Memorial Hospital - Gaylord, Michigan),
Series 1995, 6.250%, 1/01/20
2,500 Michigan State Hospital Finance Authority, Revenue Bonds (Ascension 11/09 at 101.00 AA 2,640,950
Health Credit Group), Series 1999A, 6.125%, 11/15/26
4,000 Michigan State Hospital Finance Authority, Hospital Revenue and 5/09 at 101.00 AAA 4,179,440
Refunding Bonds (Mercy Mount Clemens Corporation Obligated
Group), Series 1999A, 5.750%, 5/15/29
500 Michigan State Hospital Finance Authority, Hospital Revenue 11/11 at 101.00 A1 497,820
Refunding Bonds (Sparrow Obligated Group), Series 2001,
5.625%, 11/15/31
4,300 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 11/09 at 101.00 A1 4,470,667
(Henry Ford Health System), Series 1999A, 6.000%, 11/15/24
3,000 Regents of the University of Michigan, Hospital Revenue Refunding 12/02 at 102.00 AA 3,026,190
Bonds, Series 1993A, 5.500%, 12/01/21
36
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 8.2%
$ 1,335 Michigan State Housing Development Authority, Multifamily Revenue 12/10 at 100.00 AAA $1,372,460
Bonds, Landings Project, Senior Lien Series 2001A,
5.950%, 12/01/33 (Alternative Minimum Tax)
1,000 Michigan State Housing Development Authority, Limited Obligation 4/12 at 102.00 Aaa 1,011,520
Multifamily Housing Revenue Bonds, Burkshire Pointe Apartments,
GNMA Collateralized Program, Series 2002A, 5.400%,
10/20/32 (Alternative Minimum Tax)
2,400 Michigan State Housing Development Authority, Limited Obligation 4/04 at 103.00 AAA 2,505,960
Revenue Bonds, Walled Lake Villa Project, Series 1993,
6.000%, 4/15/18
1,500 Michigan State Housing Development Authority, Limited Obligation 10/03 at 103.00 AAA 1,539,900
Revenue Bonds, Brenton Village Green Project, Series 1993,
5.625%, 10/15/18
790 Michigan State Housing Development Authority, Rental Housing 4/03 at 102.00 AAA 809,963
Revenue Bonds, Series 1993A, 5.875%, 10/01/17
Mount Clemens Housing Corporation, Michigan, Multifamily Housing
Refunding Revenue Bonds, Series 1992A (FHA-Insured Mortgage
Loan - Section 8 Assisted Project):
1,000 6.600%, 6/01/13 6/03 at 102.00 AAA 1,031,920
1,500 6.600%, 6/01/22 6/03 at 102.00 AAA 1,546,140
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 12.2%
1,000 Central Montcalm Public Schools, Counties of Montcalm and Ionia, 5/09 at 100.00 AAA 1,055,610
State of Michigan, 1999 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.750%, 5/01/24
730 Clarkston Community Schools, County of Oakland, State of Michigan, 5/03 at 102.00 AAA 765,069
1993 School Building and Site and Refunding Bonds,
5.900%, 5/01/16
1,500 School District of the City of Detroit, Wayne County, Michigan, 5/09 at 101.00 AAA 1,404,285
School Building and Site Improvement Bonds (General Obligation -
Unlimited Tax), Series 1998B, 4.750%, 5/01/28
500 School District of the City of Detroit, Wayne County, Michigan, 5/12 at 100.00 AAA 528,755
School Building and Site Improvement Bonds (General Obligation -
Unlimited Tax), Series 2001A, 5.500%, 5/01/21
3,000 Dexter Community Schools, Counties of Washtenaw and Livingston, 5/03 at 102.00 AAA 3,036,240
State of Michigan, 1993 School Building and Site and Refunding
Bonds (General Obligation - Unlimited Tax), 5.000%, 5/01/17
1,000 Durand Area Schools, Shiawasee County, Michigan, General Obligation 5/07 at 100.00 AAA 1,017,080
Bonds, Series 1997, 5.375%, 5/01/23
3,815 City of East Lansing Building Authority, Counties of Ingham and 4/11 at 100.00 AA 3,912,473
Clinton, State of Michigan, 2000 Building Authority Bonds (General
Obligation - Unlimited Tax), 5.375%, 4/01/25
1,240 Milan Area Schools, Counties of Washtenaw and Monroe, State of 5/10 at 100.00 AAA 1,353,634
Michigan, 2000 School Building and Site Bonds (General
Obligation - Unlimited Tax), Series A, 5.625%, 5/01/16
380 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 5/05 at 101.00 AAA 408,413
1995 School Building and Site and Refunding Bonds,
5.750%, 5/01/15
1,000 Rochester Community School District, Counties of Oakland and 5/10 at 100.00 AAA 1,086,060
Macomb, State of Michigan, 2000 School Building and Site
and Refunding Bonds, Series I (General Obligation - Unlimited
Tax), 5.750%, 5/01/19
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 27.3%
5,750 City of Detroit, Michigan, Limited Tax Convention Facility Revenue 9/03 at 102.00 AAA 6,090,113
Refunding Bonds (Cobo Hall Expansion Project), Series 1993,
5.250%, 9/30/12
1,000 City of Detroit, Michigan, Downtown Development Authority, Tax 7/08 at 100.00 AAA 943,300
Increment Refunding Bonds (Development Area No. 1 Projects),
Series 1998A, 4.750%, 7/01/25
7,000 Detroit/Wayne County Stadium Authority, State of Michigan, Building 2/07 at 102.00 AAA 7,063,280
Authority Stadium Bonds, Series 1997 (General Obligation -
Limited Tax), 5.250%, 2/01/27
5,000 Michigan Municipal Bond Authority, Drinking Water Revolving Fund 10/09 at 101.00 AAA 5,273,550
Revenue Bonds, Series 1999, 5.500%, 10/01/21
1,500 State Building Authority, Michigan, 2000 Revenue Bonds, Series I, 10/10 at 100.00 AA+ 1,567,650
Facilities Program, 5.375%, 10/15/20
37
Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
State Building Authority, Michigan, 2001 Revenue Refunding Bonds,
Series I, Facilities Program:
$ 2,570 5.500%, 10/15/19 10/11 at 100.00 AA+ $2,748,769
3,500 5.000%, 10/15/24 10/11 at 100.00 AA+ 3,474,240
1,000 State of Michigan, Certificates of Participation, New Center 9/11 at 100.00 AAA 1,034,070
Development, Inc., Series 2001, 5.375%, 9/01/21
1,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/16 at 100.00 A 983,580
Bonds, Series Y of 1996, 5.000%, 7/01/36
3,615 Saginaw-Midland Municipal Water Supply Corporation, State of 9/02 at 101.50 A2 3,671,322
Michigan, Water Supply System Revenue Bonds (General Obligation -
Limited Tax), Series 1993, 5.250%, 9/01/16
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.1%
1,000 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 6/03 at 102.00 BB- 789,160
1993 Series A (American Airlines, Inc. Project), 6.300%, 6/01/23
(Alternative Minimum Tax)
2,000 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne 12/08 at 101.00 AAA 1,936,160
County Airport, Airport Revenue Bonds, Series 1998A,
5.000%, 12/01/28 (Alternative Minimum Tax)
1,000 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne 12/08 at 101.00 AAA 965,210
County Airport, Airport Revenue Bonds, Series 1998B,
4.875%, 12/01/23
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 20.2%
2,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, 1/10 at 101.00 AAA 2,308,440
Series 1999-A, 5.875%, 7/01/27 (Pre-refunded to 1/01/10)
4,000 City of Detroit, Michigan, Senior Lien Water Supply System Revenue 1/10 at 101.00 AAA 4,578,960
Bonds, Series 1999-A, 5.750%, 7/01/26 (Pre-refunded to 1/01/10)
3,000 Board of Regents of Eastern Michigan University, General Revenue 12/06 at 101.00 AAA 3,384,090
Bonds, Series 1997, 5.500%, 6/01/27 (Pre-refunded to 12/01/06)
2,000 Board of Control of Ferris State University, Michigan, General 10/03 at 102.00 AAA 2,149,640
Revenue Bonds, Series 1993, 6.250%, 10/01/19 (Pre-refunded
to 10/01/03)
1,950 Michigan Municipal Bond Authority, State Revolving Fund Revenue No Opt. Call AAA 2,074,176
Bonds, Series 1994, 7.000%, 10/01/03
3,000 Michigan State Hospital Finance Authority, Hospital Revenue 5/03 at 102.00 AAA 3,154,590
Refunding Bonds, St. John Hospital, Series 1993A,
6.000%, 5/15/13
1,100 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds, 7/07 at 101.50 A-*** 1,270,423
Series 1997 (General Obligation Bonds), 5.750%, 7/01/17
(Pre-refunded to 7/01/07)
620 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 5/05 at 101.00 AAA 684,499
1995 School Building and Site and Refunding Bonds,
5.750%, 5/01/15 (Pre-refunded to 5/01/05)
1,500 Romulus Community Schools, County of Wayne, State of Michigan, 5/09 at 100.00 AAA 1,711,410
1999 School Building and Site Bonds (General Obligation -
Unlimited Tax), 5.750%, 5/01/25 (Pre-refunded to 5/01/09)
2,500 West Bloomfield School District, County of Oakland, State of Michigan, 5/10 at 100.00 AAA 2,868,000
2000 School Building and Site Bonds (General Obligation -
Unlimited Tax), 5.800%, 5/01/17 (Pre-refunded to 5/01/10)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 26.2%
4,020 Michigan Public Power Agency, Belle River Project Refunding Revenue 1/03 at 102.00 AA- 4,070,250
Bonds, 1993 Series A, 5.250%, 1/01/18
1,000 Michigan Public Power Agency, Combustion Turbine No. 1 Project 1/12 at 100.00 AAA 1,012,180
Revenue Bonds, 2001 Series A, 5.250%, 1/01/27
1,000 Michigan South Central Power Agency, Power Supply System No Opt. Call Baa1 1,078,340
Revenue Bonds, Series 2000, 6.000%, 5/01/12
3,500 Michigan Strategic Fund, Limited Obligation Refunding Revenue 6/03 at 102.00 AAA 3,690,855
Bonds (Consumers Power Company Project), Collateralized
Series 1993B, 5.800%, 6/15/10
3,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue No Opt. Call Aaa 3,150,510
Bonds (The Detroit Edison Company), Series 1995CC Remarketing,
4.850%, 9/01/30 (Mandatory put 9/01/11)
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 5,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds 9/11 at 100.00 A- $4,954,300
(The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 2001C, 5.450%, 9/01/29
1,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/09 at 102.00 AAA 1,028,320
Bonds (The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1999A, 5.550%, 9/01/29 (Alternative
Minimum Tax)
County of Monroe, Michigan, Pollution Control Revenue Bonds (The
Detroit Edison Company Project), Series CC-1992:
2,500 6.550%, 6/01/24 (Alternative Minimum Tax) 6/03 at 102.00 AAA 2,636,600
1,500 6.550%, 9/01/24 (Alternative Minimum Tax) 9/03 at 102.00 AAA 1,596,255
6,000 County of Monroe, Michigan, Pollution Control Revenue Bonds (The No Opt. Call AAA 6,565,680
Detroit Edison Company Project), 1994 Series A, 6.350%, 12/01/04
(Alternative Minimum Tax)
1,500 Wyandotte, Michigan, Electric Revenue Bonds, Series 2002 Refunding, 10/08 at 101.00 AAA 1,582,545
5.375%, 10/01/17
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.5%
2,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, 7/07 at 101.00 AAA 2,088,480
Series 1997-A, 5.500%, 7/01/20
3,755 City of Detroit, Michigan, Sewage Disposal System Revenue and 7/03 at 102.00 AAA 3,949,471
Revenue Refunding Bonds, Series 1993-A, 5.700%, 7/01/13
1,500 City of Detroit, Michigan, Sewage System Disposal Revenue Bonds, No Opt. Call AAA 1,625,430
Second Lien Series 20001B, 5.500%, 7/01/29
2,700 City of Detroit, Michigan, Senior Lien Water Supply System Revenue 7/11 at 100.00 AAA 2,723,786
Bonds, 2001 Series A, 5.250%, 7/01/33
1,000 City of Grand Rapids, Michigan, Sanitary Sewer System Improvement 7/08 at 101.00 AAA 936,889
and Refunding Revenue Bonds, Series 1998A, 4.750%, 1/01/28
------------------------------------------------------------------------------------------------------------------------------------
$ 167,015 Total Investments (cost $162,456,413) - 144.9% 173,669,940
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 2,149,747
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (46.7)% (56,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $119,819,687
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
See accompanying notes to financial statements.
39
Nuveen Michigan Dividend Advantage Municipal Fund (NZW)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 3.8%
$ 1,150 Michigan Higher Education Facilities Authority, Limited Obligation 9/11 at 100.00 Aaa $1,136,464
Revenue Bonds, Kettering University Refunding, Series 2001,
5.000%, 9/01/26
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 18.9%
1,000 Kent Hospital Finance Authority, Michigan, Revenue Bonds, Spectrum 7/11 at 101.00 AA 995,880
Health, Series 2001A, 5.250%, 1/15/21
1,200 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 1/06 at 102.00 Baa3 1,209,660
(Sinai Hospital Refunding), Series 1995, 6.625%, 1/01/16
600 Michigan State Hospital Finance Authority, Hospital Revenue and 5/06 at 102.00 A1 590,598
Refunding Bonds (Henry Ford Health System), Series 1995A,
5.250%, 11/15/20
1,000 Michigan State Hospital Finance Authority, Hospital Revenue 11/11 at 101.00 A1 995,640
Refunding Bonds (Sparrow Obligated Group), Series 2001,
5.625%, 11/15/31
1,800 City of Royal Oak, Michigan, Hospital Finance Authority, Hospital 11/11 at 100.00 AAA 1,804,446
Revenue Bonds, William Beaumont Hospital, Series 2001M,
5.250%, 11/15/31
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 5.8%
1,700 Michigan State Housing Development Authority, Limited Obligation 8/12 at 102.00 Aaa 1,708,024
Multifamily Housing Revenue Bonds, GNMA Collateralized Program -
Cranbrook Apartments, Series 2001A, 5.400%, 2/20/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.4%
1,250 Michigan State Housing Development Authority, Single Family 1/11 at 100.00 AAA 1,294,375
Mortgage Revenue Bonds, Series 2001, 5.300%, 12/01/16
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 54.7%
1,000 School District of the City of Detroit, Wayne County, Michigan, School 5/09 at 101.00 AAA 936,190
Building and Site Improvement Bonds (General Obligation -
Unlimited Tax), Series 1998B, 4.750%, 5/01/28
1,000 School District of the City of Detroit, Wayne County, Michigan, School 5/12 at 100.00 AAA 1,057,510
Building and Site Improvement Bonds (General Obligation -
Unlimited Tax), Series 2001A, 5.500%, 5/01/21
1,000 School District of the City of Garden, Wayne County, Michigan, 5/11 at 100.00 AAA 988,280
General Obligation Bonds, Series 2001 Refunding,
5.000%, 5/01/26
1,300 Harper Creek Community School District, County of Calhoun, State of 5/11 at 100.00 AAA 1,298,141
Michigan, General Obligation Bonds, Series 2001,
5.125%, 5/01/31
2,200 Huron School District, Counties of Wayne and Monroe, State of 5/11 at 100.00 AAA 2,255,352
Michigan, General Obligation Bonds, Series 2001,
5.375%, 5/01/26
1,500 Huron Valley School District, Counties of Oakland and Livingston, 11/11 at 100.00 AAA 1,481,625
State of Michigan, General Obligation Bonds, Series 2001,
5.000%, 5/01/27
1,050 Lawton Community Schools, County of Van Buren, State of Michigan, 11/11 at 100.00 AAA 1,107,908
General Obligation Bonds, Series 2001, 5.500%, 5/01/21
1,000 Manchester Community Schools, State of Michigan, General 5/11 at 100.00 AAA 982,700
Obligation Bonds, Series 2001, 5.000%, 5/01/31
1,000 Portland Public Schools, County of Ionia, State of Michigan, 11/11 at 100.00 AAA 986,130
General Obligation Bonds, Series 2001, 5.000%, 5/01/29
1,000 Commonwealth of Puerto Rico, Public Improvement General Obligation 7/11 at 100.00 A- 997,110
Bonds of 2002, Series A, 5.125%, 7/01/31
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,000 Rochester Community School District, Counties of Oakland and 11/11 at 100.00 AAA $1,049,050
Macomb, State of Michigan, General Obligation Bonds, 2001
Series II, 5.500%, 5/01/22
500 Warren, Michigan, Building Authority Bonds (General Obligation - 11/10 at 100.00 AAA 505,655
Limited Tax), Series 2001, 5.150%, 11/01/22
Washtenaw County, Michigan, General Obligation Limited Tax
Bonds, Sylvan Township Water and Wastewater System, Series 2001:
500 5.000%, 5/01/19 5/09 at 100.50 AAA 510,525
800 5.000%, 5/01/20 5/09 at 100.50 AAA 811,288
1,300 Willow Run Community Schools, County of Washtenaw, State of 5/11 at 100.00 AAA 1,308,606
Michigan, General Obligation Bonds, Series 2001, 5.000%, 5/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 34.6%
400 Tax Increment Finance Authority of the City of Dearborn Heights, 10/10 at 100.00 AAA 393,732
County of Wayne, State of Michigan, Tax Increment Bonds
(General Obligation - Limited Tax), Police and
Courthouse Facility, Series 2001-A, 5.000%, 10/01/30
1,300 City of Grand Rapids Building Authority, County of Kent, State of 10/11 at 100.00 AAA 1,301,885
Michigan, General Obligation Limited Tax Bonds, Series 2001,
5.125%, 10/01/26
1,000 Michigan Municipal Bond Authority, State Drinking Water Revolving 10/10 at 101.00 AAA 1,123,690
Fund Revenue Bonds, Series 2000, 5.875%, 10/01/17
1,205 State Building Authority, State of Michigan, 2001 Revenue Refunding 10/11 at 100.00 AA+ 1,196,131
Bonds, Facilities Program, Series I, 5.000%, 10/15/24
2,000 State of Michigan, State Trunk Line Fund Bonds, Series 2001A, 11/11 at 100.00 AAA 1,982,200
5.000%, 11/01/25
1,450 Muskegon County, Michigan, General Obligation Limited Tax 7/11 at 100.00 AAA 1,432,992
Wastewater Management System No. 2 Revenue Bonds,
Series 2002, 5.000%, 7/01/26
1,000 Puerto Rico Public Finance Corporation, Commonwealth Appropriation No Opt. Call BBB+ 1,132,040
Bonds, 2002 Series E, 6.000%, 8/01/26
1,750 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne 12/11 at 101.00 AAA 1,712,253
County Airport, Airport Hotel Revenue Bonds (General
Obligation - Limited Tax), Series 2001A, 5.000%, 12/01/30
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.7%
1,750 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne 12/08 at 101.00 AAA 1,694,140
County Airport, Airport Revenue Bonds, Series 1998A,
5.000%, 12/01/28 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 1.8%
500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 524,730
Bonds, 2000 Series A, 5.500%, 10/01/40
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.7%
1,235 Michigan Public Power Agency, Combustion Turbine No. 1 Project 1/12 at 100.00 AAA 1,252,809
Revenue Bonds, 2001 Series A, 5.250%, 1/01/24
2,215 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/11 at 100.00 A- 2,230,992
Bonds (The Detroit Edison Company Pollution Control Bonds
Project), Collateralized Series 1999C (Fixed-Rate Conversion),
5.650%, 9/01/29 (Alternative Minimum Tax)
41
Nuveen Michigan Dividend Advantage Municipal Fund (NZW) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 10.4%
$ 1,000 City of Detroit, Michigan, Sewage System Disposal Revenue Bonds, No Opt. Call AAA $1,083,620
Second Lien Series 2001B, 5.500%, 7/01/29
City of Detroit, Michigan, Senior Lien Water Supply System
Revenue Bonds, 2001 Series A:
1,000 5.000%, 7/01/30 7/11 at 100.00 AAA 984,420
1,000 5.250%, 7/01/33 7/11 at 100.00 AAA 1,008,809
------------------------------------------------------------------------------------------------------------------------------------
$ 44,655 Total Investments (cost $44,444,890) - 151.8% 45,065,600
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.1% 613,833
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.9)% (16,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $29,679,433
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
See accompanying notes to financial statements.
42
Nuveen Ohio Quality Income Municipal Fund, Inc. (NUO)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL GOODS - 1.4%
$ 2,210 Ohio Water Development Authority, Revenue Bonds, USA Waste 9/02 at 102.00 N/R $2,258,664
Services, Series 1992, 7.750%, 9/01/07 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.0%
3,065 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 3,136,169
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.3%
825 Bowling Green State University, Ohio, General Receipts Bonds, 12/02 at 101.00 A 846,541
Series 1991, 6.700%, 6/01/07
3,665 State of Ohio, Education Loan Revenue Bonds, Series 1997A1 6/07 at 102.00 AAA 3,813,066
(Supplemental Student Loan Program), 5.850%, 12/01/19
(Alternative Minimum Tax)
1,000 Ohio Higher Educational Facility Commission, Higher Educational 12/04 at 102.00 AAA 1,085,220
Facility Revenue Bonds (University of Dayton 1994 Project),
5.800%, 12/01/14
1,200 Ohio Higher Educational Facility Commission, Higher Educational 9/06 at 101.00 N/R 1,254,132
Facility Revenue Bonds (University of Findlay 1996 Project),
6.125%, 9/01/16
1,200 Ohio State University, General Receipts Bonds, Series 2002, 12/12 at 100.00 AA 1,202,880
5.125%, 12/01/31
1,575 Ohio State University, General Receipts Bonds, Series 1992A1, 12/02 at 102.00 AA 1,628,030
5.875%, 12/01/12
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 20.1%
2,675 County of Clermont, Ohio, Hospital Facilities Revenue Refunding 1/03 at 102.00 AAA 2,752,896
Bonds, Series 1993A (Mercy Health System), 5.875%, 1/01/15
1,000 County of Cuyahoga, Ohio, Hospital Improvement and Refunding 2/07 at 102.00 AAA 1,067,790
Revenue Bonds, Series 1997 (The MetroHealth System Project),
5.625%, 2/15/17
1,170 County of Cuyahoga, Ohio, Hospital Facilities Revenue Bonds, 2/03 at 102.00 Aa3 1,204,304
Series 1993 (Health Cleveland, Inc.) (Fairview General Hospital
Project), 6.300%, 8/15/15
2,500 County of Erie, Ohio, Hospital Facilities Revenue Bonds, 8/12 at 101.00 A 2,518,325
Series 2002A (Firelands Regional Medical Center),
5.625%, 8/15/32
County of Franklin, Ohio, Hospital Refunding and Improvement
Revenue Bonds, 1996 Series A (The Children's Hospital Project):
1,000 5.750%, 11/01/20 11/06 at 101.00 Aa2 1,029,750
1,500 5.875%, 11/01/25 11/06 at 101.00 Aa2 1,541,355
1,500 County of Franklin, Ohio, Hospital Revenue Refunding and 11/02 at 102.00 Aa2 1,548,510
Improvement Bonds, 1992 Series A (The Children's Hospital
Project), 6.600%, 5/01/13
2,500 County of Marion, Ohio, Hospital Refunding and Improvement 5/06 at 102.00 BBB+ 2,624,600
Revenue Bonds, Series 1996 (The Community Hospital),
6.375%, 5/15/11
2,405 County of Miami, Ohio, Hospital Facilities Revenue Refunding and 5/06 at 102.00 BBB+ 2,476,958
Improvement Bonds, Series 1996A (Upper Valley Medical
Center), 6.250%, 5/15/16
1,500 County of Montgomery, Ohio, Hospital Facilities Revenue Refunding 4/06 at 102.00 AAA 1,593,120
and Improvement Bonds, Series 1996 (Kettering Medical
Center), 5.625%, 4/01/16
3,000 County of Montgomery, Ohio, Hospital Facilities Revenue Bonds, 4/10 at 101.00 BBB+ 3,212,640
Series 1999 (Kettering Medical Center Network Obligated
Group), 6.750%, 4/01/18
4,000 City of Parma, Ohio, Hospital Improvement and Refunding Revenue 11/08 at 101.00 A- 3,815,560
Bonds, Series 1998 (The Parma Community Hospital
Association), 5.375%, 11/01/29
2,500 County of Richland, Ohio, Hospital Facilities Revenue Improvement 11/10 at 101.00 A- 2,619,750
Bonds, Series 2000B (MedCentral Health System Obligated
Group), 6.375%, 11/15/30
1,500 City of Steubenville, Ohio, Hospital Facilities Revenue Refunding 10/10 at 100.00 A3 1,591,050
and Improvement Bonds, Series 2000, Trinity Health System,
6.375%, 10/01/20
43
Nuveen Ohio Quality Income Municipal Fund, Inc. (NUO) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 1,705 County of Tuscarawas, Ohio, Hospital Facilities Revenue Bonds, 10/11 at 101.00 AA $1,806,891
Union Hospital Project, Series 2001, 5.750%, 10/01/21
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 14.0%
1,385 County of Clermont, Ohio, Mortgage Revenue Bonds, Series 1994 8/03 at 103.00 Aaa 1,407,312
(GNMA Collateralized - S.E.M. Villa II Project), Series 1994-A,
5.950%, 2/20/30
1,435 County of Cuyahoga, Ohio, Multifamily Housing Revenue Bonds 6/08 at 105.00 Aaa 1,522,621
(Water Street Associates Project), Series 1997, 6.150%, 12/20/26
(Alternative Minimum Tax)
County of Cuyahoga, Ohio, Multifamily Housing Mortgage Revenue
Bonds, 2001 Series A, GNMA Collateralized - Longwood Phase
One Associates L.P. Project:
2,475 5.350%, 1/20/21 (Alternative Minimum Tax) 7/11 at 102.00 Aaa 2,518,337
2,250 5.450%, 1/20/31 (Alternative Minimum Tax) 7/11 at 102.00 Aaa 2,271,983
1,000 County of Cuyahoga, Ohio, Multifamily Revenue Bonds, 9/12 at 102.00 Aaa 1,007,390
Livingston Park (GNMA Collateralized), Series 2002A,
5.350%, 9/20/27
985 County of Franklin, Ohio, Multifamily Housing Mortgage Revenue 1/05 at 103.00 Aa 992,269
Bonds, Series 1994A (FHA-Insured Mortgage Loan - Hamilton
Creek Apartments Project), 5.550%, 7/01/24 (Alternative
Minimum Tax)
4,060 Lucas Northgate Housing Development Corporation, Ohio, Mortgage 1/04 at 102.00 Aaa 4,162,190
Revenue Refunding Bonds, Series 1999A (FHA-Insured Mortgage
Loan - Northgate Apartments Section 8 Assisted Project),
6.000%, 7/01/24
3,265 Ohio Housing Finance Agency, Multifamily Housing Revenue Bonds 12/09 at 100.00 AAA 3,437,621
(Timber Lake Apartments Project), Series 1999C, 6.150%, 12/01/24
(Alternative Minimum Tax)
4,315 Ohio Capital Corporation for Housing Mortgage, Revenue Refunding 2/09 at 102.00 Aa2 4,539,596
Bonds, Series 1999G (FHA-Insured Mortgage Loans - Section 8
Assisted Projects), 5.950%, 2/01/24
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 11.8%
2,915 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 9/09 at 100.00 Aaa 3,091,532
2000 Series A1 (Mortgage-Backed Securities Program),
6.350%, 9/01/31 (Alternative Minimum Tax)
3,075 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 9/07 at 102.00 Aaa 3,159,317
1996 Series B-3 (Mortgage-Backed Securities Program),
5.750%, 9/01/28 (Alternative Minimum Tax)
5,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 3/08 at 101.50 AAA 5,086,550
1998 Series A1, 5.300%, 9/01/19 (Alternative Minimum Tax)
4,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 9/08 at 102.00 Aaa 4,034,720
1997 Series B (Mortgage-Backed Securities Program),
5.400%, 9/01/29 (Alternative Minimum Tax)
3,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 3/12 at 100.00 Aaa 3,029,790
2002 Series D (GNMA Mortgage-Backed Securities Program),
5.400%, 9/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.4%
1,365 County of Franklin, Ohio, Healthcare Facilities Revenue Bonds, 7/03 at 102.00 N/R 1,274,937
Series 1993 (Ohio Presbyterian Retirement Services),
6.500%, 7/01/23
1,000 County of Marion, Ohio, Healthcare Facilities Refunding and 11/03 at 102.00 BBB- 983,130
Improvement Revenue Bonds, Series 1993 (United Church
Homes, Inc. Project), 6.300%, 11/15/15
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 31.0%
1,000 Ansonia Local School District, Darke County, Ohio, General Obligation 12/10 at 102.00 Aaa 1,063,560
Bonds, Series 2000, 5.500%, 12/01/22
Berea City School District, Ohio, School Improvement Bonds,
Series 1993 (General Obligation - Unlimited Tax):
650 7.500%, 12/15/06 12/03 at 102.00 AAA 714,337
680 7.450%, 12/15/07 12/03 at 102.00 AAA 746,851
1,750 Brecksville-Broadview Heights City School District, Ohio, School 12/06 at 102.00 AAA 2,025,888
Improvement Bonds, Series 1996 (General Obligation -
Unlimited Tax), 6.500%, 12/01/16
1,000 City School District of Cincinnati, Hamilton County, Ohio, School 12/11 at 100.00 AAA 1,089,490
Improvement Bonds, Series 2001 (General Obligation -
Limited Tax), 5.375%, 12/01/15
1,000 City of Dublin, Ohio, Unlimited Tax Various Purpose Improvement 12/10 at 100.00 Aa1 1,015,940
Bonds, Series 2000A, 5.000%, 12/01/20
44
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,300 County of Franklin, Ohio, Refunding Bonds, Series 1993 (General 12/08 at 102.00 AAA $1,362,127
Obligation - Limited Tax), 5.375%, 12/01/20
2,000 Garfield Heights City School District, Cuyahoga County, Ohio, 12/11 at 100.00 Aaa 1,992,900
General Obligation School Improvement Bonds, Series 2001,
5.000%, 12/15/26
1,000 Hilliard City School District, Ohio, General Obligation School 12/10 at 101.00 AAA 1,075,790
Improvement Bonds, Series 2000, 5.750%, 12/01/24
2,000 Lakota Local School District, County of Butler, Ohio, School 6/11 at 100.00 Aaa 2,015,540
Improvement and Refunding Bonds (General Obligation -
Unlimited Tax), Series 2001, 5.125%, 12/01/26
1,750 London City School District, Ohio, General Obligation School 12/11 at 100.00 Aaa 1,735,703
Facilities Construction and Improvement Bonds, Series 2001,
5.000%, 12/01/29
2,500 Louisville City School District, Ohio, General Obligation Bonds, 12/11 at 100.00 Aaa 2,479,575
Series 2001, 5.000%, 12/01/29
2,335 Milford Exempted Village School District, Ohio, General Obligation 12/11 at 100.00 Aaa 2,347,049
Bonds, Series 2001, 5.125%, 12/01/30
1,260 Morgan Local School District, Counties of Morgan, Muskingum and 12/10 at 101.00 AA- 1,359,275
Washington, Ohio, School Improvement Bonds (General Obligation -
Unlimited Tax), Series 2000, 5.750%, 12/01/22
North Canton City School District, Ohio, School Improvement
Bonds, Series 1994 (General Obligation - Unlimited Tax):
650 9.750%, 12/01/03 No Opt. Call AAA 719,583
715 9.700%, 12/01/04 No Opt. Call AAA 841,176
2,720 Pickerington Local School District, Fairfield and Franklin Counties, 12/11 at 100.00 AAA 2,698,566
Ohio, General Obligation School Facilities Construction and
Improvement Bonds, Series 2001, 5.000%, 12/01/28
1,500 Plain Local School District, Franklin and Licking Counties, Ohio, 12/10 at 100.00 Aaa 1,717,095
Various Purpose Bonds, Series 2000, 6.000%, 12/01/20
1,100 Plain Local School District, Franklin and Licking Counties, Ohio, 6/12 at 100.00 Aaa 1,201,640
Various Purpose Bonds, Series 2002 (General Obligation - Unlimited
Tax), 5.500%, 12/01/17
1,445 Portage County, Ohio, General Obligation Bonds, Series 2001, 12/11 at 100.00 AAA 1,436,894
5.000%, 12/01/27
2,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1996 7/06 at 101.50 A- 2,037,680
(General Obligation), 5.400%, 7/01/25
1,000 Revere Local School District, Ohio, School Improvement Bonds, 12/03 at 102.00 AAA 1,069,510
Series 1993 (General Obligation - Unlimited Tax), 6.000%, 12/01/16
2,830 Springfield Township, Hamilton County, Ohio, Various Purpose Bonds 12/11 at 100.00 Aa3 2,871,516
(General Obligation - Limited Tax), Series 2002, 5.250%, 12/01/27
2,000 City of Strongsville, Ohio, General Obligation Bonds, Series 2001, 12/11 at 100.00 Aaa 2,021,420
5.000%, 12/01/21
70 City of Strongsville, Ohio, Various Purpose Improvement Bonds, 12/06 at 102.00 Aa2 76,966
Series 1996 (General Obligation - Limited Tax), 5.950%, 12/01/21
1,135 City of Toledo, Ohio, Various Purpose Improvement Bonds (General No Opt. Call AAA 1,216,675
Obligation - Limited Tax), Series 1994, 7.000%, 12/01/03
1,000 Upper Arlington City School District, Ohio, General Obligation 12/06 at 101.00 AAA 1,016,420
Improvement Bonds, Series 1996, 5.250%, 12/01/22
2,000 Board of Education, Wayne Local School District, County of Warren, 12/06 at 101.00 AAA 2,132,520
Ohio, School Improvement Bonds, Series 1996 (General
Obligation - Unlimited Tax), 6.100%, 12/01/24
3,000 Board of Education, West Clermont Local School District, Ohio, 12/05 at 100.00 AAA 3,277,830
School Improvement Bonds, Series 1995 (General
Obligation - Unlimited Tax), 6.000%, 12/01/18
2,000 Westerville City School District, Franklin and Delaware Counties, 6/11 at 100.00 AAA 1,988,780
Ohio, General Obligation Various Purpose Bonds,
Series 2001, 5.000%, 12/01/27
1,000 City of Westlake, Ohio, Various Purpose Improvement and Refunding 12/08 at 101.00 Aaa 1,077,210
Bonds (General Obligation), Series 1997, 5.550%, 12/01/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 3.7%
1,250 City of Columbus, Ohio, Tax Increment Financing Bonds, Series 1999 6/09 at 101.00 AAA 1,233,175
(Easton Project), 4.875%, 12/01/24
7,000 County of Hamilton, Ohio, Sales Tax Bonds, Subordinate Series B, No Opt. Call Aaa 1,708,490
0.000%, 12/01/28
45
Nuveen Ohio Quality Income Municipal Fund, Inc. (NUO) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
New Albany Community Authority, Ohio, Community Facilities
Revenue Bonds, Series 2001B Refunding:
$ 1,000 5.500%, 10/01/15 4/12 at 100.00 AAA $1,104,440
1,000 5.500%, 10/01/17 4/12 at 100.00 AAA 1,089,490
680 State of Ohio, Department of Transportation, Certificates of 10/02 at 100.00 AA 681,863
Participation (Rickenbacker Port Authority Improvements),
6.125%, 4/15/15 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY - 0.3%
500 County of Franklin, Ohio, Revenue Bonds, Series 1993 (Online 4/03 at 100.00 N/R 504,090
Computer Library Center, Inc. Project), 6.000%, 4/15/13
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.8%
City of Cleveland, Ohio, Airport System Revenue Bonds,
Series 2000A:
1,780 5.250%, 1/01/16 1/10 at 101.00 AAA 1,884,753
3,000 5.000%, 1/01/31 1/10 at 101.00 AAA 2,966,220
3,430 City of Cleveland, Ohio, Parking Facilities Refunding Revenue Bonds, 9/06 at 102.00 AAA 3,543,910
Series 1996, 5.500%, 9/15/22
Columbus Municipal Airport Authority, Ohio, Airport Improvement
Revenue Bonds, Series 1994A (Port Columbus International Airport
Project):
830 5.950%, 1/01/08 (Alternative Minimum Tax) 1/04 at 102.00 AAA 871,500
1,000 6.000%, 1/01/14 (Alternative Minimum Tax) 1/04 at 102.00 AAA 1,043,960
1,500 City of Dayton, Ohio, Special Facilities Revenue Refunding Bonds, 2/08 at 102.00 BB+ 1,164,510
Series 1998A (Emery Air Freight Corporation and Emery Worldwide
Airlines, Inc. - Guarantors), 5.625%, 2/01/18
2,000 State of Ohio, Turnpike Revenue Bonds, Issued by the Ohio Turnpike No Opt. Call AAA 2,227,760
Commission, 1998 Series A, 5.500%, 2/15/18
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 23.1%
2,000 City of Cleveland, Ohio, Public Power System First Mortgage Revenue 11/04 at 102.00 AAA 2,272,360
Bonds, Series 1994A, 7.000%, 11/15/24 (Pre-refunded to 11/15/04)
3,960 City of Cleveland, Ohio, Waterworks Improvement and Refunding 1/06 at 102.00 AAA 4,453,733
Revenue Bonds, 1st Mortgage Series 1996-H, 5.750%, 1/01/26
(Pre-refunded to 1/01/06)
1,950 City School District of Columbus, Franklin County, Ohio, School 12/02 at 102.00 AAA 2,023,262
Building Renovation and Improvement Bonds, Series 1992
(General Obligation - Unlimited Tax), 6.650%, 12/01/12
(Pre-refunded to 12/01/02)
1,000 Dublin City School District, Franklin, Delaware and Union Counties, 12/02 at 102.00 AAA 1,036,080
Ohio, Various Purpose School Building Construction and
Improvement Bonds (General Obligation - Unlimited Tax),
6.200%, 12/01/19 (Pre-refunded to 12/01/02)
2,240 County of Franklin, Ohio, First Mortgage Revenue Bonds, Series 1979 12/02 at 103.00 AAA 2,591,994
(Online Computer Library Center, Inc. Project), 7.500%, 6/01/09
3,250 City of Garfield Heights, Ohio, Hospital Improvement and Refunding 11/02 at 102.00 Aa3*** 3,363,880
Revenue Bonds, Series 1992B (Marymount Hospital Project),
6.650%, 11/15/11 (Pre-refunded to 11/15/02)
1,505 Greater Cleveland Regional Transit Authority, Ohio, General 12/06 at 101.00 Aaa 1,706,896
Obligation Capital Improvement Bonds, Series 1996,
5.650%, 12/01/16 (Pre-refunded to 12/01/06)
2,100 Lakota Local School District, County of Butler, Ohio, School 12/05 at 100.00 AAA 2,371,110
Improvement Bonds (General Obligation - Unlimited Tax),
Series 1994, 6.250%, 12/01/14 (Pre-refunded to 12/01/05)
1,000 City of Newark, Ohio, Water System Improvement Bonds (General 12/03 at 102.00 AAA 1,079,070
Obligation - Limited Tax), 6.000%, 12/01/18 (Pre-refunded
to 12/01/03)
1,000 Ohio Building Authority, State Facilities Bonds (Juvenile 10/02 at 102.00 AA*** 1,027,690
Correctional Building Fund Projects), 1992 Series B,
6.000%, 10/01/12 (Pre-refunded to 10/01/02)
3,000 Ohio Building Authority, State Facilities Bonds (Adult Correctional 10/03 at 102.00 AA*** 3,219,420
Building Fund Projects), 1993 Series A, 6.125%, 10/01/12
(Pre-refunded to 10/01/03)
2,400 Ohio Higher Educational Facility Commission, Higher Educational 12/03 at 102.00 AAA 2,608,704
Facility Mortgage Revenue Bonds (University of Dayton 1992
Project), 6.600%, 12/01/17 (Pre-refunded to 12/01/03)
1,000 Ohio Water Development Authority, Water Development Revenue 6/05 at 102.00 AAA 1,120,300
Bonds, 1995 Fresh Water Series, 5.900%, 12/01/21
(Pre-refunded to 6/01/05)
1,300 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds, 7/07 at 101.50 A-*** 1,501,409
Series 1997 (General Obligation), 5.750%, 7/01/17 (Pre-refunded
to 7/01/07)
46
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (continued)
$ 1,400 Reynoldsburg City School District, Ohio, General Obligation School 12/02 at 102.00 AAA $1,452,136
Building Construction and Improvement Bonds,
6.550%, 12/01/17 (Pre-refunded to 12/01/02)
2,800 City of Strongsville, Ohio, Various Purpose Improvement Bonds, 12/06 at 102.00 Aa2*** 3,232,376
Series 1996 (General Obligation - Limited Tax),
5.950%, 12/01/21 (Pre-refunded to 12/01/06)
1,000 Sylvania City School District, Ohio, General Obligation Unlimited 12/05 at 101.00 AAA 1,124,010
Tax Bonds, Series 1995, 5.800%, 12/01/15 (Pre-refunded to 12/01/05)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.7%
4,000 American Municipal Power Ohio, Inc., City of Wadsworth Project, 2/12 at 100.00 Aaa 4,028,600
Electric System Improvement Revenue Bonds, Series 2002,
5.000%, 2/15/22
1,250 City of Hamilton, Ohio, Electric System Mortgage Revenue Bonds, 10/02 at 102.00 AAA 1,286,763
1992 Series B, 6.300%, 10/15/25
Ohio Air Quality Development Authority, Air Quality Development
Revenue Refunding Bonds (JMG Funding Limited Partnership
Project), Series 1994:
2,000 6.375%, 1/01/29 (Alternative Minimum Tax) 10/04 at 102.00 AAA 2,187,440
4,000 6.375%, 4/01/29 (Alternative Minimum Tax) 10/04 at 102.00 AAA 4,374,880
3,000 Ohio Air Quality Development Authority, Air Quality Development 4/07 at 102.00 AAA 3,092,100
Revenue Bonds (JMG Funding Limited Partnership Project),
Series 1997, 5.625%, 1/01/23 (Alternative Minimum Tax)
2,000 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102.00 N/R 1,837,200
Bonds (Bay Shore Power Project), Convertible Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 13.7%
City of Cincinnati, Ohio, Water System Revenue Bonds, Series 2001:
1,000 5.500%, 12/01/17 6/11 at 100.00 AA+ 1,084,680
6,010 5.000%, 12/01/18 6/11 at 100.00 AA+ 6,189,098
3,000 5.000%, 12/01/19 6/11 at 100.00 AA+ 3,065,340
1,000 5.000%, 12/01/20 6/11 at 100.00 AA+ 1,016,720
1,000 City of Cleveland, Ohio, Waterworks Improvement First Mortgage No Opt. Call AAA 1,094,570
Refunding Revenue Bonds, 1993 Series G, 5.500%, 1/01/21
1,000 City of Cleveland, Ohio, Waterworks Improvement and Refunding 1/08 at 101.00 AAA 992,840
Revenue Bonds, 1998 Series I, 5.000%, 1/01/28
40 City of Cleveland, Ohio, Waterworks Improvement and Refunding 1/06 at 102.00 AAA 42,194
Revenue Bonds, 1st Mortgage Series 1996-H, 5.750%, 1/01/26
2,110 Hamilton County, Ohio, Sewer System Improvement Revenue Bonds, 6/10 at 101.00 AAA 2,261,413
The Metropolitan Sewer District of Greater Cincinnati,
Series 2000A, 5.750%, 12/01/25
2,000 Northeast Ohio Regional Sewer District, Wastewater Improvement 11/05 at 101.00 AAA 2,152,899
Revenue Refunding Bonds, Series 1995, 5.600%, 11/15/16
1,250 City of Oxford, Ohio, Water Supply System Mortgage Revenue 12/02 at 102.00 AAA 1,291,362
Refunding Bonds, Series 1992, 6.000%, 12/01/14
2,000 Southwest Regional Water District, Ohio, Waterworks System 12/05 at 101.00 AAA 2,203,299
Revenue Bonds, Series 1995, 6.000%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
$ 227,645 Total Investments (cost $220,780,839) - 148.3% 231,982,991
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 1,368,363
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.2)% (77,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $156,351,354
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
47
Nuveen Ohio Dividend Advantage Municipal Fund (NXI)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 22.3%
$ 1,000 State of Ohio, Higher Educational Facilities Revenue Bonds 12/10 at 101.00 AAA $1,045,580
(University of Dayton 2000 Project), 5.500%, 12/01/25
2,000 Ohio Higher Educational Facilities Commission, Higher Educational 11/11 at 101.00 AA 2,015,180
Facility Revenue Bonds, Denison University 2001 Project,
5.200%, 11/01/26
2,650 Ohio Higher Educational Facilities Commission, Ohio Northern 5/12 at 100.00 A2 2,615,417
University Revenue Bonds, Series 2002, 5.000%, 5/01/22
3,150 The Student Loan Funding Corporation, Cincinnati, Ohio, Student 1/03 at 100.00 A 3,155,670
Loan Subordinated Revenue Refunding Bonds, Series 1992D,
6.600%, 7/01/05 (Alternative Minimum Tax)
2,000 The University of Cincinnati, Ohio, General Receipts Bonds, 6/11 at 101.00 AAA 2,228,780
Series 2001A, 5.750%, 6/01/17
2,735 The University of Cincinnati, Ohio, General Receipts Bonds, 6/12 at 100.00 AA 2,902,081
Series 2002F, 5.375%, 6/01/19
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 20.2%
1,300 Akron, Bath and Copley Joint Township Hospital District, Ohio, 11/03 at 102.00 Baa1 1,294,046
Hospital Facilities Revenue Bonds, Series 1993A (Summa
Health System Project), 5.500%, 11/15/13
1,950 County of Lucas, Ohio, Hospital Revenue Bonds, Series 1999 11/09 at 101.00 AAA 1,995,650
(ProMedica Healthcare Obligated Group), 5.375%, 11/15/29
2,500 County of Miami, Ohio, Hospital Facilities Revenue Refunding and 5/06 at 102.00 BBB+ 2,528,575
Improvement Bonds, Series 1996A (Upper Valley Medical
Center), 6.375%, 5/15/26
City of Parma, Ohio, Hospital Improvement and Refunding Revenue
Bonds, Series 1998 (The Parma Community Hospital Association):
2,250 5.250%, 11/01/13 11/08 at 101.00 A- 2,302,267
2,000 5.375%, 11/01/29 11/08 at 101.00 A- 1,907,780
1,000 County of Richland, Ohio, Hospital Facilities Revenue Improvement 11/10 at 101.00 A- 1,047,900
Bonds, Series 2000B (MedCentral Health System Obligated
Group), 6.375%, 11/15/30
1,500 County of Tuscarawas, Ohio, Hospital Facilities Revenue Bonds, 10/03 at 102.00 Baa1 1,540,500
Series 1993A (Union Hospital Project), 6.500%, 10/01/21
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.6%
1,790 Lucas Northgate Housing Development Corporation, Ohio, Mortgage 1/04 at 102.00 Aaa 1,840,961
Revenue Refunding Bonds, Series 1999A (FHA-Insured Mortgage
Loan - Northgate Apartments Section 8 Assisted Project),
5.950%, 7/01/19
2,885 Ohio Housing Finance Agency, FHA-Insured Mortgage, Asbury Woods 4/11 at 102.00 Aa2 2,943,017
Project, Series 2001A, 5.450%, 4/01/26
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 13.2%
2,065 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 8/10 at 100.00 Aaa 2,163,562
2000 Series C, Mortgage-Backed Securities Program,
6.050%, 3/01/32 (Alternative Minimum Tax)
2,495 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 8/10 at 100.00 Aaa 2,669,725
2000 Series D, Mortgage-Backed Securities Program,
5.450%, 9/01/31 (Alternative Minimum Tax)
2,050 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 8/10 at 100.00 Aaa 2,185,075
2000 Series F, Mortgage-Backed Securities Program,
5.625%, 9/01/16
1,215 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 3/12 at 100.00 Aaa 1,227,065
GNMA Mortgage-Backed Securities Program, 2002 Series D,
5.400%, 9/01/34 (Alternative Minimum Tax)
48
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.7%
$ 1,000 County of Franklin, Ohio, Healthcare Facilities Revenue Bonds, 7/11 at 101.00 N/R $1,005,560
Series 2001A, Ohio Presbyterian Retirement Services,
7.125%, 7/01/29
1,970 County of Hamilton, Ohio, Healthcare Facilities Improvement Revenue 10/08 at 102.00 BBB+ 1,961,962
Bonds, Series 1999A (Twin Towers), 5.750%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 38.2%
2,440 Bay Village City School District, Ohio, School Improvement Bonds 12/10 at 100.00 Aa2 2,428,190
(General Obligation - Unlimited Tax), Series 2001,
5.000%, 12/01/25
1,000 City of Centerville, Ohio, Capital Facilities Improvement Bonds 12/11 at 100.00 Aa3 1,008,120
(General Obligation - Limited Tax), Series 2001, 5.125%, 12/01/26
Jackson City School District, County of Jackson, Ohio, School
Improvement Bonds (General Obligation - Unlimited Tax), Series
2001:
880 5.500%, 12/01/22 6/11 at 100.00 Aaa 929,377
935 5.500%, 12/01/23 6/11 at 100.00 Aaa 983,321
2,000 Lakota Local School District, County of Butler, Ohio, School 6/11 at 100.00 Aaa 2,015,540
Improvement and Refunding Bonds (General Obligation -
Unlimited Tax), Series 2001, 5.125%, 12/01/26
2,000 Medina City School District, Medina County, Ohio, School Building 12/09 at 100.00 AAA 2,027,300
Construction Bonds (General Obligation - Unlimited Tax),
Series 1999, 5.250%, 12/01/28
1,000 Nordonia Hills City School District, Ohio, School Improvement Bonds, 12/10 at 101.00 AAA 1,042,820
Series 2000, 5.450%, 12/01/25
1,850 Swanton Local School District, Fulton County, Ohio, General 12/11 at 101.00 AAA 1,889,091
Obligation Bonds, Series 2001, 5.250%, 12/01/25
1,275 Sycamore Community School District, County of Hamilton, Ohio, 12/09 at 101.00 AAA 1,275,344
School Improvement Bonds (General Obligation - Unlimited Tax),
Series 1999, 5.000%, 12/01/23
2,000 Tipp City Exempted Village School District, Ohio, School Facilities 6/11 at 100.00 Aaa 1,998,520
Construction and Improvement Bonds, Series 2001,
5.000%, 12/01/24
1,485 West Chester Township, Butler County, Ohio, Various Purpose 11/11 at 101.00 Aaa 1,625,570
Refunding Bonds (General Obligation - Limited Tax), Series 2001,
5.500%, 12/01/17
1,000 West Holmes Local School District, Ohio, School Improvement Bonds, 6/07 at 101.00 AAA 1,026,350
Series 1997, 5.375%, 12/01/23
2,500 Westerville City School District, Franklin and Delaware Counties, 6/11 at 100.00 AAA 2,485,975
Ohio, General Obligation Various Purpose Bonds, Series 2001,
5.000%, 12/01/27
2,965 City of Worthington, Franklin County, Ohio, Various Purpose Bonds 12/11 at 100.00 AA+ 3,099,789
(General Obligation - Unlimited Tax), Series 2001,
5.375%, 12/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 13.0%
2,000 State of Ohio, Higher Education Capital Facilities Bonds, 2/11 at 100.00 AA+ 2,033,940
Series II-2001A, 5.000%, 2/01/20
4,000 Puerto Rico Municipal Finance Agency, 1999 Series A Bonds, 8/09 at 101.00 AAA 4,550,000
6.000%, 8/01/16
1,400 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin 10/10 at 101.00 BBB- 1,546,426
Islands Gross Receipts Tax Loan Note), Series 1999A,
6.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 7.4%
2,000 City of Cleveland, Ohio, Airport Special Revenue Bonds, Continental 12/09 at 101.00 B+ 1,500,960
Airlines, Inc. Refunding, Series 1999, 5.700%, 12/01/19
(Alternative Minimum Tax)
2,000 State of Ohio, Turnpike Revenue Bonds, Issued by Ohio Turnpike 2/11 at 100.00 AA 2,077,920
Commission, Series 2001A, 5.500%, 2/15/26
1,000 Toledo-Lucas County Port Authority, Ohio, Revenue Refunding Bonds, No Opt. Call Baa2 1,075,570
Series 1992, CSX Transportation Inc. Project, 6.450%, 12/15/21
49
Nuveen Ohio Dividend Advantage Municipal Fund (NXI) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 18.7%
$ 1,440 American Municipal Power Ohio, Inc., Electric System Improvement 2/12 at 100.00 Aaa $1,535,069
Revenue Bonds (City of Wadsworth Project), Series 2002,
5.250%, 2/15/17
City of Lebanon, Ohio, Electric System Mortgage Revenue Bonds,
Series 2001:
565 5.500%, 12/01/17 12/10 at 101.00 AAA 614,545
910 5.500%, 12/01/18 12/10 at 101.00 AAA 983,164
2,000 Ohio Air Quality Development Authority, Revenue Bonds, 6/03 at 102.00 A3 2,035,260
1985 Series A (Columbus Southern Power Company Project),
6.250%, 12/01/20
2,000 Ohio Air Quality Development Authority, Air Quality Development 9/05 at 102.00 A3 2,038,720
Revenue Refunding Bonds, 1995 Series (The Dayton Power and
Light Company Project), 6.100%, 9/01/30
2,000 Ohio Air Quality Development Authority, Air Quality Development 5/09 at 101.00 AAA 2,008,220
Revenue Refunding Bonds, Series C (Ohio Power Company
Project), 5.150%, 5/01/26
1,500 Ohio Air Quality Development Authority, Pollution Control Revenue 12/04 at 100.00 Baa2 1,546,650
Refunding Bonds, Series 1999-C (Ohio Edison Company Project),
5.800%, 6/01/16 (Mandatory put 12/01/04)
1,000 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102.00 N/R 918,600
Bonds, Bay Shore Power Project, Convertible Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.8%
1,700 City of Cincinnati, Ohio, Water System Revenue Bonds, 6/11 at 100.00 AA+ 1,736,211
Series 2001, 5.125%, 12/01/21
------------------------------------------------------------------------------------------------------------------------------------
$ 90,350 Total Investments (cost $90,260,616) - 148.1% 92,612,915
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 935,018
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.6)% (31,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $62,547,933
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
50
Nuveen Ohio Dividend Advantage Municipal Fund 2 (NBJ)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.7%
$ 3,000 State of Ohio, Sewage and Solid Waste Disposal Facilities Revenue 11/11 at 100.00 A+ $3,013,980
Bonds, Anheuser-Busch Project, Series 2001, 5.500%, 11/01/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.9%
2,050 Ohio Higher Educational Facilities Commission, Higher Education 12/11 at 100.00 A3 2,211,991
Facility Revenue Bonds, Wittenberg University Project,
Series 2001, 5.500%, 12/01/15
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 28.3%
2,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, No Opt. Call Baa1 2,019,720
Hospital Facilities Revenue Bonds, Series 1998A (Summa
Health System Project), 5.000%, 11/15/08
1,000 Erie County, Ohio, Hospital Facilities Revenue Bonds, Firelands 8/12 at 101.00 A 1,006,970
Regional Medical Center, Series 2002A, 5.500%, 8/15/22
1,850 Lorain County, Ohio, Hospital Improvement and Refunding Revenue 10/11 at 101.00 AA- 1,867,945
Bonds, Catholic Healthcare Partners, Series 2001A,
5.400%, 10/01/21
2,000 City of Parma, Ohio, Hospital Improvement and Refunding Revenue 11/08 at 101.00 A- 1,907,780
Bonds, Series 1998 (The Parma Community Hospital
Association), 5.375%, 11/01/29
2,000 County of Richland, Ohio, Hospital Facilities Revenue Improvement 11/10 at 101.00 A- 2,095,800
Bonds, Series 2000B, MedCentral Health System Obligated
Group, 6.375%, 11/15/30
3,670 County of Tuscarawas, Ohio, Hospital Facilities Revenue Bonds, 10/11 at 101.00 AA 3,867,152
Union Hospital Project, Series 2001, 5.750%, 10/01/26
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.3%
1,000 County of Franklin, Ohio, Multifamily Housing Mortgage Revenue 5/12 at 102.00 Aaa 1,030,500
Bonds, Agler Project, GNMA Collateralized Series 2002A,
5.550%, 5/20/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.6%
2,850 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 9/10 at 100.00 Aaa 2,879,469
Mortgage-Backed Securities Program, Series 2001A,
5.500%, 9/01/34 (Alternative Minimum Tax)
1,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 3/12 at 100.00 Aaa 1,009,930
GNMA Mortgage-Backed Securities Program, Series 2002D,
5.400%, 9/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.3%
2,000 County of Hamilton, Ohio, Healthcare Facilities Improvement Revenue 10/08 at 102.00 BBB+ 1,957,140
Bonds, Series 1999A (Twin Towers), 5.800%, 10/01/23
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 49.4%
1,860 Fairfield City School District, Ohio, General Obligation Bonds, 12/11 at 100.00 AAA 1,966,094
Series 2001 Refunding, 5.375%, 12/01/19
1,000 Greater Cleveland Regional Transit Authority, Ohio, General 12/11 at 100.00 Aaa 1,021,510
Obligation Capital Improvement Bonds, Series 2001A,
5.125%, 12/01/21
2,000 Hamilton Local School District, Franklin County, Ohio, School 12/11 at 100.00 AAA 1,984,240
Facilities Construction and Improvement Bonds (General
Obligation - Unlimited Tax), 5.000%, 12/01/28
Lebanon City School District, Warren County, Ohio, General
Obligation Bonds, Series 2001:
4,000 5.500%, 12/01/21 12/11 at 100.00 AAA 4,228,400
2,000 5.000%, 12/01/29 12/11 at 100.00 AAA 1,983,660
2,420 Lorain County, Ohio, Justice Center Bonds (General Obligation - 12/12 at 100.00 Aaa 2,555,544
Limited Tax), Series 2002, 5.500%, 12/01/22
1,000 Medina City School District, Medina County, Ohio, School Building 12/09 at 100.00 AAA 1,013,650
Construction Bonds, Series 1999 (General Obligation - Unlimited
Tax), 5.250%, 12/01/28
51
Nuveen Ohio Dividend Advantage Municipal Fund 2 (NBJ) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 3,000 Milford Exempted Village School District, Ohio, General Obligation 12/11 at 100.00 Aaa $3,015,480
Bonds, Series 2001, 5.125%, 12/01/30
1,000 State of Ohio, Full Faith and Credit Common School Capital Facilities 9/11 at 100.00 AA+ 1,011,260
General Obligation Bonds, Series 2001B, 5.000%, 9/15/21
1,960 Portage County, Ohio, General Obligation Bonds, Series 2001,
5.000%, 12/01/25 12/11 at 100.00 AAA 1,955,845
1,500 City of Strongsville, Ohio, General Obligation Bonds, Series 2001, 12/11 at 100.00 Aaa 1,516,065
5.000%, 12/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 10.9%
1,700 City of Hamilton, Butler County, Ohio, One Renaissance Center 11/11 at 101.00 Aaa 1,693,948
Acquisition Bonds (General Obligation - Limited Tax), Series 2001,
5.000%, 11/01/26
1,000 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 A 1,078,720
Revenue Bonds, Series E Refunding, 5.750%, 7/01/24
1,000 Summit County Port Authority, Ohio, Revenue Bonds, Civic Theatre 12/11 at 100.00 AAA 1,044,820
Project, Series 2001, 5.500%, 12/01/26
1,000 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin 10/10 at 101.00 BBB- 1,104,590
Islands Gross Receipts Tax Loan Note), Series 1999A,
6.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 13.0%
3,495 City of Cleveland, Ohio, Airport System Revenue Bonds, Series 2000A, 1/10 at 101.00 AAA 3,648,186
5.250%, 1/01/18
2,000 State of Ohio, Turnpike Revenue Bonds, Issued by the Ohio Turnpike No Opt. Call AAA 2,227,760
Commission, 1998 Series A, 5.500%, 2/15/18
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.1%
2,500 Ohio Air Quality Development Authority, Air Quality Development 5/09 at 101.00 AAA 2,510,275
Revenue Refunding Bonds (Ohio Power Company Project),
Series C, 5.150%, 5/01/26
1,500 Ohio Air Quality Development Authority, Pollution Control Revenue 12/04 at 100.00 Baa2 1,546,650
Refunding Bonds (Ohio Edison Company Project), Series 1999-C,
5.800%, 6/01/16 (Mandatory put 12/01/04)
2,000 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102.00 N/R 1,837,200
Bonds, Bay Shore Power Project, Convertible Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 10.0%
3,000 City of Cleveland, Ohio, Waterworks Improvement and Refunding 1/08 at 101.00 AAA 2,997,960
Revenue Bonds, 1998 Series I, 5.000%, 1/01/23
1,500 Ohio Water Development Authority, Water Development Revenue 12/11 at 100.00 AAA 1,516,066
Bonds, Fresh Water Series 2001A, 5.000%, 12/01/21
------------------------------------------------------------------------------------------------------------------------------------
$ 66,855 Total Investments (cost $67,167,728) - 151.5% 68,326,300
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.7% 746,809
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.2)% (24,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $45,073,109
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
52
Nuveen Ohio Dividend Advantage Municipal Fund 3 (NVJ)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 20.0%
$ 1,125 Ohio Higher Educational Facilities Commission, Northern University 5/12 at 100.00 A2 $1,239,120
Revenue Bonds, Series 2002, 5.750%, 5/01/16
2,000 Ohio Higher Educational Facilities Commission, Case Western 10/12 at 100.00 AA 2,110,620
Reserve University, Revenue Bonds, Series 2002B,
5.500%, 10/01/22
1,000 Ohio State University, General Receipts Bonds, Series 1999A, 12/09 at 101.00 AA 1,069,920
5.800%, 12/01/29
1,000 Ohio State University, General Receipts Bonds, Series 2002, 12/12 at 100.00 AA 1,002,400
5.125%, 12/01/31
1,000 University of Cincinnati, Ohio, General Receipts Bonds, Series 2001A, 6/11 at 101.00 AAA 990,130
5.000%, 6/01/31
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 26.3%
1,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, No Opt. Call Baa1 1,009,860
Hospital Facilities Revenue Bonds, Series 1998A (Summa Health
System Project), 5.000%, 11/15/08
1,000 County of Cuyahoga, Ohio, Hospital Facilities Revenue Bonds, Health 2/03 at 102.00 Aa3 1,029,320
Cleveland, Inc. (Fairview General Hospital Project), Series 1993,
6.300%, 8/15/15
1,750 County of Erie, Ohio, Hospital Facilities Revenue Bonds, Firelands 8/12 at 101.00 A 1,762,198
Regional Medical Center, Series 2002A, 5.500%, 8/15/22
1,425 County of Montgomery, Ohio, Hospital Facilities Revenue Bonds, 4/10 at 101.00 BBB+ 1,526,004
Series 1999 (Kettering Medical Center Network Obligated
Group), 6.750%, 4/01/18
1,000 Montgomery County, Ohio, Revenue Bonds, Catholic Health 9/11 at 100.00 AA- 1,087,450
Initiatives, Series 2001, 5.500%, 9/01/12
1,000 City of Parma, Ohio, Hospital Improvement and Refunding Revenue 11/08 at 101.00 A- 953,890
Bonds, Series 1998 (The Parma Community Hospital Association),
5.375%, 11/01/29
1,000 County of Richland, Ohio, Hospital Facilities Revenue Improvement 11/10 at 101.00 A- 1,047,900
Bonds, Series 2000B, MedCentral Health System Obligated
Group, 6.375%, 11/15/30
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 15.0%
1,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 8/10 at 100.00 Aaa 1,047,730
2000 Series C, Mortgage-Backed Securities Program,
6.050%, 3/01/32 (Alternative Minimum Tax)
1,530 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 8/10 at 100.00 Aaa 1,637,146
2000 Series D, Mortgage-Backed Securities Program,
5.450%, 9/01/31 (Alternative Minimum Tax)
1,985 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 8/10 at 100.00 Aaa 2,115,792
2000 Series F, Mortgage-Backed Securities Program,
5.625%, 9/01/16
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 53.5%
320 Bedford, Ohio, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 320,131
5.000%, 12/01/27
2,000 Canal Winchester Local School District, Franklin and Fairfield 12/08 at 102.00 AAA 2,044,580
Counties, Ohio, School Improvement Bonds (General Obligation -
Unlimited Tax), Series 1998, 5.300%, 12/01/25
1,300 Crawford County, Ohio, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 1,325,922
5.200%, 12/01/26
1,475 Eaton City School District, Preble County, Ohio, General Obligation 12/12 at 101.00 Aaa 1,623,016
Bonds, Series 2002, 5.750%, 12/01/21
2,000 Granville Exempt Village School District, Ohio, General Obligation 12/11 at 100.00 Aa3 2,074,460
Bonds, Series 2001, 5.500%, 12/01/28
1,000 Hamilton Local School District, Franklin County, Ohio, School 12/11 at 100.00 AAA 992,120
Facilities Construction and Improvement Bonds (General
Obligation - Unlimited Tax), 5.000%, 12/01/28
1,000 Hilliard, Ohio, General Obligation Bonds, Series 2002, 12/12 at 100.00 AA- 1,041,790
5.375%, 12/01/22
1,270 Lorain, Ohio, General Obligation Bonds, Series 2002, 12/12 at 100.00 Aaa 1,276,083
5.125%, 12/01/26
1,190 Miami East Local School District, Miami County, Ohio, General 12/12 at 100.00 AAA 1,198,461
Obligation Bonds, Series 2002, 5.125%, 12/01/29
53
Nuveen Ohio Dividend Advantage Municipal Fund 3 (NVJ) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,265 Monroe Local School District, Butler County, Ohio, General No Opt. Call Aaa $1,436,167
Obligation Bonds, Series 2002, 5.750%, 12/01/20
1,000 State of Ohio, Full Faith and Credit Common School Capital Facilities 9/11 at 100.00 AA+ 1,017,910
General Obligation Bonds, Series 2001B, 5.000%, 9/15/20
1,535 Pickerington Local School District, Fairfield and Franklin Counties, 12/11 at 100.00 AAA 1,596,323
Ohio, General Obligation School Facilities Construction and
Improvement Bonds, Series 2001, 5.250%, 12/01/20
1,130 Solon, Ohio, General Obligation Bonds, Series 2002 Refunding and 12/12 at 100.00 AA+ 1,171,957
Improvement, 5.000%, 12/01/18
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 11.2%
1,250 Ohio Building Authority, State Facilities Bonds, Administration 4/12 at 100.00 AAA 1,353,650
Building Fund Projects, 2002 Series A, 5.500%, 4/01/18
2,000 Puerto Rico Public Building Authority, Revenue Refunding Bonds, No Opt. Call AAA 2,216,280
Guaranteed by the Commonwealth of Puerto Rico, Series L,
5.500%, 7/01/21
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.4%
1,550 State of Ohio, Turnpike Revenue Bonds, Issued by the Ohio Turnpike No Opt. Call AAA 1,726,514
Commission, 1998 Series A, 5.500%, 2/15/18
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 3.3%
1,000 County of Hamilton, Ohio, Hospital Facilities Revenue Refunding 1/03 at 102.00 A*** 1,039,970
Bonds, Series 1992A (Bethesda Hospital, Inc.), 6.250%, 1/01/12
(Pre-refunded to 1/01/03)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.0%
1,500 American Municipal Power Ohio, Inc., City of Wadsworth Project, 2/12 at 100.00 Aaa 1,599,030
Electric System Improvement Revenue Bonds, Series 2002,
5.250%, 2/15/17
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.7%
1,500 Hamilton County, Ohio, Sewer System Improvement and Refunding 12/11 at 100.00 AAA 1,579,620
Revenue Bonds, The Metropolitan Sewer District of Greater
Cincinnati, 2001 Series A, 5.250%, 12/01/18
1,500 Ohio Water Development Authority, Water Development Revenue 12/11 at 100.00 AAA 1,516,065
Bonds, Fresh Water Series 2001A, 5.000%, 12/01/21
------------------------------------------------------------------------------------------------------------------------------------
$ 45,600 Total Investments (cost $46,369,861) - 149.4% 47,779,529
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.2% 715,403
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.6)% (16,500,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $31,994,932
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
See accompanying notes to financial statements.
54
Nuveen Texas Quality Income Municipal Fund (NTX)
Portfolio of
Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 5.5%
$ 4,500 Cass County Industrial Development Corporation, Texas, Environmental 3/10 at 101.00 BBB $4,711,185
Improvement Revenue Bonds, 2000 Series A (International Paper
Company Project), 6.600%, 3/15/24 (Alternative Minimum Tax)
3,000 Guadalupe-Blanco River Authority, Texas, Sewage and Solid Waste 4/06 at 102.00 AA- 3,193,620
Disposal Facility Bonds (E.I. du Pont de Nemours and Company
Project), Series 1996, 6.400%, 4/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 0.5%
690 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 706,022
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.2%
205 Brazos Higher Education Authority, Inc., Texas, Student Loan No Opt. Call Aa2 221,431
Revenue Refunding Bonds, Subordinate Series 1993A-2,
6.800%, 12/01/04 (Alternative Minimum Tax)
1,000 City of Georgetown, Texas, Higher Education Finance Corporation, 2/04 at 100.00 Aa3 1,028,540
Higher Education Revenue Bonds, Series 1994 (Southwestern
University Project), 6.300%, 2/15/14
1,000 Raven Hills Higher Education Corporation, Texas, Student Housing 8/11 at 100.00 Aaa 1,008,920
Revenue Bonds, Cardinal Village LLC - Lamar University Project,
Series 2001A, 5.250%, 8/01/24
1,445 Tyler Junior College District, Smith and Van Zanlt Counties, Texas, 8/04 at 100.00 AAA 1,539,821
Combined Fee Improvement Revenue and Refunding Bonds,
Series 1994, 5.900%, 8/15/13
2,330 Universal City, Texas, Education Facilities Corporation, Revenue 3/11 at 102.00 A- 2,361,362
Bonds, Wayland Baptist University Project, Series 2001,
5.625%, 3/01/26
2,000 Board of Regents of The University of Houston System, Texas, 2/05 at 100.00 AAA 2,142,800
Consolidated Revenue Bonds, Series 1995, 6.000%, 2/15/17
5,000 University of North Texas Board of Regents, Financing System 4/12 at 100.00 AAA 4,918,300
Revenue Bonds, Series 2001, 5.000%, 4/15/24
------------------------------------------------------------------------------------------------------------------------------------
ENERGY - 8.5%
5,000 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal 4/08 at 102.00 BBB 4,757,100
Revenue Bonds, Valero Refining and Marketing Company Project,
Series 1998, 5.600%, 4/01/32 (Alternative Minimum Tax)
5,000 Gulf Coast Industrial Development Authority, Texas, Waste Disposal 6/08 at 102.00 Baa2 4,758,100
Revenue Bonds (Valero Refining and Marketing Company Project),
Series 1997, 5.600%, 12/01/31 (Alternative Minimum Tax)
2,800 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal Revenue 4/09 at 101.00 BBB 2,702,756
Bonds (Valero Energy Corporation Project), Series 1999,
5.700%, 4/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 19.8%
3,500 Abilene Health Facilities Development Corporation, Texas, Hospital 9/05 at 102.00 AAA 3,734,290
Revenue Refunding and Improvement Bonds (Hendrick Medical
Center Project), Series 1995C, 6.150%, 9/01/25
Gregg County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Good Shepherd Medical Center Project),
Series 2000:
2,000 6.875%, 10/01/20 10/10 at 101.00 AA 2,290,340
3,250 6.375%, 10/01/25 10/10 at 101.00 AA 3,582,995
1,500 Harris County, Texas, Health Facilities Development Corporation, 8/11 at 100.00 AA 1,528,305
Revenue Bonds, St. Luke's Episcopal Hospital, Series 2001A,
5.500%, 2/15/21
2,000 Harris County, Texas, Health Facilities Development Corporation, 6/11 at 101.00 A- 2,107,280
Hospital Revenue Bonds, Memorial Hermann Healthcare System,
Series 2001A, 6.375%, 6/01/29
5,750 Midland County Hospital District, Texas, Hospital Revenue Bonds, No Opt. Call A- 3,631,413
Series 1992, 0.000%, 6/01/11
2,000 North Central Texas Health Facilities Development Corporation, 5/11 at 100.00 AA- 1,923,780
Hospital Revenue Bonds, Baylor Healthcare System Project,
Series 2001A, 5.125%, 5/15/29
55
Nuveen Texas Quality Income Municipal Fund (NTX) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 1,760 Parker County Hospital District, Texas, Hospital Revenue Bonds 8/09 at 102.00 BBB $1,783,690
(Campbell Health System), Series 1999, 6.250%, 8/15/19
1,050 Tarrant County Health Facilities Development Corporation, Texas, 11/08 at 101.00 A- 1,017,366
Hospital Revenue Bonds, Series 1998, Adventist Health System/
Sunbelt Obligated Group, 5.375%, 11/15/20
3,500 Tarrant County, Texas, Health Facilities Development Corporation, 11/10 at 101.00 A- 3,764,530
Hospital Revenue Bonds, Series 2000, Adventist Health System/
Sunbelt Obligated Group, 6.625%, 11/15/20
2,000 Tom Green County, Texas, Health Facilities Development Corporation, 5/11 at 101.00 Baa3 2,019,560
Hospital Revenue Bonds, Series 2001, Shannon Health System
Project, 6.750%, 5/15/21
1,000 Tyler Health Facilities Development Corporation, Texas, Hospital 7/12 at 100.00 Baa1 1,002,160
Revenue Bonds, Series 2001, Mother Frances Hospital Regional
Health Center, 6.000%, 7/01/31
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 8.7%
Bexar County Housing Finance Corporation, Texas, Multifamily
Housing Revenue Bonds, The Waters at Northern Hills Apartments
Project, Series 2001A:
2,000 6.000%, 8/01/31 8/11 at 102.00 Aaa 2,147,500
750 6.050%, 8/01/36 8/11 at 102.00 Aaa 806,213
Grand Prairie, Texas, Housing Finance Corporation, Multifamily
Housing Revenue Bonds, Landings at Carrier Project, GNMA Series
2000A:
1,000 6.650%, 9/20/22 9/10 at 105.00 AAA 1,112,550
2,030 6.750%, 9/20/28 9/10 at 105.00 AAA 2,250,458
5,668 Houston Housing Finance Corporation, Texas, Multifamily Housing 9/11 at 105.00 Aaa 6,219,270
Revenue Bonds, RRG Apartments Project, GNMA
Collateralized Mortgage, Series 2001, 6.250%, 9/20/35
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.5%
580 Baytown Housing Finance Corporation, Texas, Single Family 9/02 at 103.00 Aa2 583,381
Mortgage Revenue Refunding Bonds, Series 1992-A,
8.500%, 9/01/11 (Pre-refunded to 9/01/02)
2,800 El Paso Housing Finance Corporation, Texas, Single Family Mortgage 4/11 at 106.75 AAA 3,058,104
Revenue Bonds, Series 2001A-3, 6.180%, 4/01/33
415 City of Galveston Property Finance Authority, Inc., Texas, Single 9/02 at 102.00 A3 428,616
Family Mortgage Revenue Bonds, Series 1991A, 8.500%, 9/01/11
1,070 The Harrison County Finance Corporation, Texas, Single Family 12/02 at 102.00 A1 1,097,499
Mortgage Revenue Refunding Bonds, Series 1991,
8.875%, 12/01/11
730 Houston Housing Finance Corporation, Texas, Single Family 6/03 at 102.00 AAA 743,425
Mortgage Revenue Refunding Bonds, Series 1993A,
5.950%, 12/01/10
450 Port Arthur Housing Finance Corporation, Texas, Single Family 9/02 at 103.00 A2 465,710
Mortgage Revenue Refunding Bonds, Series 1992,
8.700%, 3/01/12
2,215 Texas Department of Housing and Community Affairs, Single Family 9/06 at 102.00 AAA 2,350,159
Mortgage Revenue Bonds, 1996 Series E, 6.000%, 9/01/17
3,000 Texas Department of Housing and Community Affairs, Single Family 3/12 at 100.00 AAA 3,030,930
Mortgage Bonds, 2002 Series B, 5.550%, 3/01/34
(Alternative Minimum Tax)
460 Victoria Housing Finance Corporation, Texas, Single Family Mortgage No Opt. Call Aaa 470,644
Revenue Refunding Bonds, Series 1995, 8.125%, 1/01/11
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 7.0%
Bell County Health Facilities Development Corporation, Texas,
Retirement Facility Revenue Bonds (Buckner Retirement Services,
Inc. Obligated Group Project), Series 1998:
3,400 5.250%, 11/15/19 11/08 at 101.00 A- 3,294,226
5,000 5.250%, 11/15/28 11/08 at 101.00 A- 4,646,750
2,000 Tarrant County Health Facilities Development Corporation, Texas, 1/08 at 105.00 AAA 2,153,180
Tax-Exempt Mortgage Revenue Bonds (South Central Nursing
Homes, Inc. Project), Series 1997A, 6.000%, 1/01/37
56
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 29.5%
$ 4,130 Coppell Independent School District, Dallas County, Texas, 8/09 at 75.34 AAA $2,256,095
Unlimited Tax School Building and Refunding Bonds,
Series 1992, 0.000%, 8/15/14
1,450 Donna Independent School District, Hidalgo County, Texas, 2/11 at 100.00 AAA 1,627,335
Unlimited Tax School Building Bonds, Series 2000,
6.000%, 2/15/17
1,750 El Paso County, Texas, Certificates of Obligation, Series 2001, 2/12 at 100.00 AAA 1,751,943
5.000%, 2/15/21
2,000 Harlingen Consolidated Independent School District, Cameron County, 8/09 at 100.00 AAA 2,079,300
Texas, Unlimited Tax School Building Bonds, Series 1999,
5.650%, 8/15/29
2,000 Harris County, Texas, Tax and Revenue Certificates of Obligation, 8/11 at 100.00 AA+ 1,965,200
Series 2001, 5.000%, 8/15/27
2,600 Klein Independent School District, Harris County, Texas, Unlimited 8/09 at 100.00 AAA 2,654,626
Tax Schoolhouse Bonds, Series 1999A, 5.000%, 8/01/18
1,500 Lake Dallas Independent School District, Denton County, Texas, 8/11 at 100.00 Aaa 1,463,520
General Obligation Building Bonds, Series 2001, 5.000%, 8/15/30
5,220 Leander Independent School District, Williamson and Travis Counties, 8/09 at 46.74 AAA 1,751,362
Texas, Unlimited Tax School Building and Refunding Bonds,
Series 2000, 0.000%, 8/15/21
1,545 Montgomery County (a political subdivision of the state of Texas), 9/07 at 72.39 AAA 878,348
Refunding Bonds, Series 1997, 0.000%, 3/01/14
2,000 Northside Independent School District, Bexar County, Texas, 8/10 at 100.00 AAA 2,138,520
Unlimited Tax School Building and Refunding Bonds,
Series 2000, 5.875%, 8/15/25
500 Commonwealth of Puerto Rico, Public Improvement General No Opt. Call A- 532,510
Obligation Bonds of 2002, Series A, 5.500%, 7/01/29
1,825 Socorro Independent School District, El Paso County, Texas, 2/06 at 100.00 Aaa 1,921,689
General Obligation Bonds, Series 1996, 5.750%, 2/15/21
1,440 South Texas Community College District, General Obligation Bonds, 8/12 at 100.00 AAA 1,561,925
Series 2002, 5.500%, 8/15/17
2,000 State of Texas, General Obligation Bonds, Veterans Land Board, 12/04 at 100.00 Aa1 2,132,320
Series 1994, 6.400%, 12/01/24 (Alternative Minimum Tax)
3,490 State of Texas, General Obligation Bonds, Veterans Housing 12/03 at 102.00 Aa1 3,666,629
Assistance Program Fund, Series 1993, 6.800%, 12/01/23
(Alternative Minimum Tax)
2,000 State of Texas, General Obligation Bonds, Water Financial 8/11 at 100.00 Aa1 2,027,920
Assistance and Refunding Bonds, Series 2001, 5.250%, 8/01/23
1,500 State of Texas, General Obligation Bonds, Public Finance Authority, 10/12 at 100.00 Aa1 1,541,445
Series 2002 Refunding, 5.000%, 10/01/18
1,795 United Independent School District, Webb County, Texas, Unlimited 8/12 at 100.00 AAA 1,902,108
Tax School Building Bonds, Series 2000, 5.375%, 8/15/18
5,290 Weslaco Independent School District, Hidalgo County, Texas, General 2/10 at 100.00 Aaa 5,449,282
School Building Obligation Bonds, Series 2000, 5.500%, 2/15/25
West Independent School District, McLennan and Hill Counties,
Texas, Unlimited Tax School Building and Refunding Bonds, Series
1998:
1,000 0.000%, 8/15/22 8/13 at 61.20 AAA 326,790
1,000 0.000%, 8/15/23 8/13 at 57.95 AAA 305,280
1,000 0.000%, 8/15/24 8/13 at 54.88 AAA 284,240
1,800 Williamson County, Texas, General Obligation Road Bonds, 2/12 at 100.00 AAA 1,960,902
Series 2002, 5.500%, 2/15/16
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 10.1%
4,500 City of Austin, Texas, Hotel Occupancy Tax Subordinate Lien Revenue 11/09 at 100.00 AAA 4,751,280
Refunding Bonds, Series 1999, 5.800%, 11/15/29
2,250 Harris County-Houston Sports Authority, Texas, Senior Lien Revenue 11/11 at 100.00 AAA 2,283,683
Bonds, Series 2001G, 5.250%, 11/15/22
1,575 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien 8/02 at 102.00 AA+ 1,612,580
Revenue Refunding Bonds, Series 1992A, 6.500%, 8/15/15
1,000 City of Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, 3/09 at 100.00 AAA 1,009,660
Series 2001, 5.300%, 3/15/26
4,580 City of San Antonio, Texas, Hotel Occupancy Tax Revenue Bonds 8/06 at 102.00 AAA 4,752,254
(Henry B. Gonzalez Convention Center Project), 5.700%, 8/15/26
57
Nuveen Texas Quality Income Municipal Fund (NTX) (continued)
Portfolio of Investments July 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 9.3%
$ 3,005 Alliance Airport Authority, Inc., Texas, Special Facilities Revenue 12/02 at 100.00 BB- $2,478,855
Bonds, Series 1990 (American Airlines, Inc. Project),
7.500%, 12/01/29 (Alternative Minimum Tax)
5,020 Dallas-Fort Worth International Airport Facility Improvement 11/02 at 102.00 AAA 5,141,082
Corporation, Texas, United Parcel Service, Inc. Revenue Bonds,
Series 1992, 6.600%, 5/01/32 (Alternative Minimum Tax)
3,000 Dallas-Fort Worth International Airport Facility Improvement 11/09 at 101.00 BB- 2,088,330
Corporation, Texas, American Airlines, Inc. Revenue Bonds,
Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax)
1,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding 8/04 at 102.00 AAA 1,018,110
Bonds, Series 1994, 5.375%, 8/15/20
220 Harris County, Texas, Toll Road Senior Lien Revenue Refunding 8/02 at 102.00 AAA 225,298
Bonds, Series 1992A, 6.500%, 8/15/17
320 Harris County, Texas, Toll Road Senior Lien Revenue Refunding 8/02 at 100.00 AAA 321,376
Bonds, Series 1992B, 6.625%, 8/15/17
2,000 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/10 at 100.00 AAA 2,048,620
Bonds, Series 2000A, 5.625%, 7/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 8.6%
230 Abilene Housing Development Corporation, Texas, First Lien Revenue No Opt. Call N/R*** 258,653
Bonds, Series 1978, 7.000%, 7/01/08
1,000 Caddo Mills Independent School District, Hunt County, Texas, 2/05 at 100.00 N/R*** 1,103,840
Unlimited Tax School Building and Refunding Bonds, Series 1995,
6.375%, 8/15/25 (Pre-refunded to 2/15/05)
1,185 Fort Bend County Levee Improvement District No. 11 (a political 9/04 at 100.00 AAA 1,309,863
subdivision of the state of Texas), Unlimited Tax Levee Improvement
Bonds, Series 1994, 6.900%, 9/01/17 (Pre-refunded to 9/01/04)
1,450 Industrial Development Corporation of the City of Galveston, Texas, 9/05 at 100.00 AAA 1,602,845
Sales Tax Revenue Bonds, Series 1995, 5.750%, 9/01/15
(Pre-refunded to 9/01/05)
800 City of Laredo, Webb County, Texas, Combination Tax and Waterworks 8/04 at 100.00 AAA 862,040
System, Revenue Certificates of Obligation, Series 1994, 5.625%,
8/15/11 (Pre-refunded to 8/15/04)
1,000 North Central Texas Health Facilities Development Corporation, No Opt. Call AAA 1,101,030
Hospital Revenue Bonds (Presbyterian Healthcare System Project),
Series 1996B, 5.750%, 6/01/26
2,500 Retama Development Corporation, Texas, Special Facilities Revenue No Opt. Call AAA 3,703,625
Bonds (Retama Park Racetrack Project), Series 1993,
8.750%, 12/15/17
665 City of San Antonio, Texas, Water System Revenue Refunding No Opt. Call AAA 777,644
Bonds, Series 1992, 6.500%, 5/15/10
1,500 Texas Health Facilities Development Corporation, Hospital Revenue 8/03 at 102.00 AAA 1,603,485
Bonds (All Saints Episcopal Hospitals of Fort Worth Project),
Series 1993B, 6.250%, 8/15/22 (Pre-refunded to 8/15/03)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.5%
2,500 Brazos River Authority, Texas, Revenue Refunding Bonds (Reliant 4/09 at 101.00 BBB 2,052,375
Energy, Inc. Project), Series 1999A, 5.375%, 4/01/19
2,000 Harris County, Texas, Health Facilities Development Corporation, 2/10 at 100.00 AAA 2,152,340
Thermal Utility Revenue Bonds (TECO Project), Series 2000,
5.750%, 2/15/15 (Alternative Minimum Tax)
1,500 Matagorda County Navigation District Number One, Texas, Pollution 7/03 at 102.00 AAA 1,574,745
Control Revenue Refunding Bonds (Central Power and Light
Company Project), Series 1993, 6.000%, 7/01/28
2,000 Sabine River Authority of Texas, Pollution Control Revenue No Opt. Call BBB+ 2,060,320
Refunding Bonds, TXU Electric Company Project, Series 2001A,
5.500%, 5/01/22 (Mandatory put 11/01/11)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 13.0%
3,500 City of Houston, Texas, Water and Sewer System, Junior Lien 12/12 at 100.00 AAA 3,414,320
Revenue Refunding Bonds, Series 2002A, 5.000%, 12/01/30
7,000 City of Houston, Texas, Water and Sewer System, Junior Lien , No Opt. Call AAA 1,678,110
Revenue Refunding Bonds, Series 1998A 0.000%, 12/01/27
1,000 City of Houston, Texas, Water and Sewer System, Prior Lien 12/02 at 102.00 Aaa 1,035,720
Revenue Refunding Bonds, Series 1992B, 6.375%, 12/01/14
5,275 City of Houston, Texas, Water and Sewer System, Junior Lien 12/10 at 100.00 AAA 5,304,645
Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30
58
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 800 City of Houston, Texas, Water and Sewer System, Junior Lien 12/07 at 101.00 AAA $ 813,263
Revenue Bonds, Series 1997A, 5.375%, 12/01/27
3,500 City of Houston, Texas, Water and Sewer System, Junior Lien 12/11 at 100.00 AAA 3,779,334
Revenue Bonds, Series 2001A Refunding, 5.500%, 12/01/17
1,000 City of San Antonio, Texas, Water System Refunding Bonds, Senior 5/12 at 100.00 AAA 978,369
Lien Series 2002 Refunding, 5.000%, 5/15/28
1,500 Texas Water Development Board, State Revolving Fund, Revenue 7/09 at 100.00 AAA 1,559,189
Bonds, Senior Lien Series 1999A, 5.500%, 7/15/21
------------------------------------------------------------------------------------------------------------------------------------
$ 216,058 Total Investments (cost $197,725,025) - 143.7% 205,930,453
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.4% 6,374,217
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.1)% (69,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $143,304,670
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
59
Statement of
Assets and Liabilities July 31, 2002
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR) (NUM) (NMP) (NZW)
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in municipal securities,
at market value $92,270,844 $34,238,138 $54,052,898 $271,027,587 $173,669,940 $45,065,600
Cash 1,381,152 360,115 229,362 275,955 565,926 297,008
Receivables:
Interest 797,093 359,793 496,968 3,442,351 2,342,879 561,726
Investments sold 5,051 -- -- -- -- --
Other assets 12,243 4,765 8,684 16,641 9,873 4,271
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 94,466,383 34,962,811 54,787,912 274,762,534 176,588,618 45,928,605
-----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 1,123,740 -- -- -- -- --
Accrued expenses:
Management fees 51,166 10,290 16,108 148,808 96,262 13,529
Organization and offering costs -- 7,713 77,448 -- -- 3,709
Other 73,146 46,126 102,643 88,211 97,501 85,799
Preferred share dividends payable 4,926 301 4,788 18,972 9,266 3,066
Common share dividends payable 337,481 107,744 173,743 876,057 565,902 143,069
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,590,459 172,174 374,730 1,132,048 768,931 249,172
-----------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at
liquidation value $30,000,000 $12,000,000 $18,500,000 $ 94,000,000 $ 56,000,000 $16,000,000
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $62,875,924 $22,790,637 $35,913,182 $179,630,486 $119,819,687 $29,679,433
===================================================================================================================================
Common shares outstanding 4,411,525 1,539,195 2,413,100 11,603,427 7,699,352 2,058,543
===================================================================================================================================
Net asset value per Common
share outstanding (net assets
applicable to Common
shares, divided by
Common shares outstanding) $ 14.25 $ 14.81 $ 14.88 $ 15.48 $ 15.56 $ 14.42
===================================================================================================================================
Net assets applicable to Common shares consist of:
-----------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value
per share $ 44,115 $ 15,392 $ 24,131 $ 116,034 $ 76,994 $ 20,585
Paid-in surplus 61,241,318 21,724,930 34,181,189 162,125,563 107,561,906 29,080,493
Undistributed net investment
income 656,041 135,959 169 1,500,913 1,187,234 136,663
Accumulated net realized gain (loss)
from investments (462,166) 58,819 13,996 657,909 (219,974) (179,018)
Net unrealized appreciation of
investments 1,396,616 855,537 1,693,697 15,230,067 11,213,527 620,710
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares $62,875,924 $22,790,637 $35,913,182 $179,630,486 $119,819,687 $29,679,433
===================================================================================================================================
Authorized shares:
Common 200,000,000 Unlimited Unlimited 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 Unlimited Unlimited 1,000,000 1,000,000 Unlimited
===================================================================================================================================
See accompanying notes to financial statements.
60
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ) (NVJ) (NTX)
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in municipal securities,
at market value $231,982,991 $92,612,915 $68,326,300 $47,779,529 $205,930,453
Cash 576,659 100,632 225,618 101,171 1,028,991
Receivables:
Interest 2,833,661 1,239,509 832,394 654,453 3,507,569
Investments sold -- -- -- 286,560 2,800,000
Other assets 20,741 9,069 4,076 8,347 18,466
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 235,414,052 93,962,125 69,388,388 48,830,060 213,285,479
-----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 1,004,310 -- -- -- --
Accrued expenses:
Management fees 127,296 27,731 20,453 14,367 116,178
Organization and offering costs -- 2,237 3,709 69,800 --
Other 161,132 68,707 74,336 93,092 104,967
Preferred share dividends payable 10,032 7,725 1,971 405 12,117
Common share dividends payable 759,928 307,792 214,810 157,464 747,547
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,062,698 414,192 315,279 335,128 980,809
-----------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value $ 77,000,000 $31,000,000 $24,000,000 $16,500,000 $ 69,000,000
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares $156,351,354 $62,547,933 $45,073,109 $31,994,932 $143,304,670
===================================================================================================================================
Common shares outstanding 9,558,840 4,216,333 3,113,188 2,157,035 9,462,622
===================================================================================================================================
Net asset value per Common share
outstanding (net assets
applicable to Common
shares, divided by
Common shares outstanding) $ 16.36 $ 14.83 $ 14.48 $ 14.83 $ 15.14
===================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
-----------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 95,588 $ 42,163 $ 31,132 $ 21,570 $ 94,626
Paid-in surplus 144,524,428 59,773,648 44,064,338 30,543,573 134,097,525
Undistributed net investment income 1,162,184 410,424 244,181 31,471 1,424,229
Accumulated net realized gain (loss)
from investments (632,998) (30,601) (425,114) (11,350) (517,138)
Net unrealized appreciation of
investments 11,202,152 2,352,299 1,158,572 1,409,668 8,205,428
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares $156,351,354 $62,547,933 $45,073,109 $31,994,932 $143,304,670
===================================================================================================================================
Authorized shares:
Common 200,000,000 Unlimited Unlimited Unlimited Unlimited
Preferred 1,000,000 Unlimited Unlimited Unlimited Unlimited
===================================================================================================================================
See accompanying notes to financial statements.
61
Statement of
Operations Year Ended July 31, 2002
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR)* (NUM) (NMP) (NZW)**
-----------------------------------------------------------------------------------------------------------------------------------
Investment Income $ 5,524,613 $1,803,947 $663,637 $15,085,775 $9,529,327 $1,781,072
-----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees 606,648 222,245 101,287 1,735,102 1,125,400 231,098
Preferred shares - auction fees 75,000 30,000 9,630 235,000 140,000 28,274
Preferred shares - dividend
disbursing agent fees 10,000 10,000 2,082 20,000 20,000 7,069
Shareholders' servicing agent
fees and expenses 9,378 863 454 42,969 33,397 1,093
Custodian's fees and expenses 35,672 24,693 13,512 77,921 44,462 25,831
Directors'/Trustees' fees
and expenses 1,560 410 372 3,121 2,244 795
Professional fees 10,675 7,649 7,152 13,169 11,240 13,291
Shareholders' reports - printing
and mailing expenses 15,633 7,178 5,522 38,689 34,883 15,997
Stock exchange listing fees 16,480 130 -- 18,140 16,457 175
Investor relations expense 13,495 5,639 -- 43,248 27,814 1,431
Other expenses 12,844 4,878 933 26,369 15,402 1,461
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
credit and expense reimbursement 807,385 313,685 140,944 2,253,728 1,471,299 326,515
Custodian fee credit (9,136) (4,165) (2,918) (10,200) (11,825) (2,820)
Expense reimbursement -- (102,574) (46,748) -- -- (106,195)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 798,249 206,946 91,278 2,243,528 1,459,474 217,500
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 4,726,364 1,597,001 572,359 12,842,247 8,069,853 1,563,572
-----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss)
from investments (462,165) 148,987 13,996 1,255,918 509,493 (179,018)
Change in net unrealized
appreciation (depreciation)
of investments (2,058,272) 425,309 1,693,697 580,210 764,121 620,710
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (2,520,437) 574,296 1,707,693 1,836,128 1,273,614 441,692
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (414,197) (175,122) (51,112) (1,264,782) (820,275) (139,482)
From accumulated net realized
gains from investments (51,989) (4,730) -- (279,535) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable
to Common shares from distributions
to Preferred shareholders (466,186) (179,852) (51,112) (1,544,317) (820,275) (139,482)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations $ 1,739,741 $1,991,445 $2,228,940 $13,134,058 $8,523,192 $1,865,782
===================================================================================================================================
* For the period March 26, 2002 (commencement of operations) through July 31,
2002.
** For the period September 25, 2001 (commencement of operations) through July
31, 2002.
See accompanying notes to financial statements
62
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ)* (NVJ)** (NTX)
-----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $12,818,107 $4,927,791 $2,709,697 $ 629,248 $12,246,049
-----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,484,180 600,324 349,235 90,703 1,360,131
Preferred shares - auction fees 192,500 77,500 42,410 8,589 172,500
Preferred shares - dividend
disbursing agent fees 30,000 10,000 7,069 2,082 20,000
Shareholders' servicing agent
fees and expenses 45,503 2,222 1,303 1,070 20,957
Custodian's fees and expenses 56,622 33,744 29,069 13,673 62,495
Directors'/Trustees' fees and expenses 2,851 1,388 977 415 2,567
Professional fees 12,319 9,421 13,417 7,139 14,959
Shareholders' reports - printing
and mailing expenses 42,730 13,666 12,573 4,414 29,305
Stock exchange listing fees 11,705 358 298 -- 16,456
Investor relations expense 36,200 5,044 2,283 -- 28,327
Other expenses 17,769 9,755 1,592 1,269 15,415
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
credit and expense reimbursement 1,932,379 763,422 460,226 129,354 1,743,112
Custodian fee credit (28,276) (6,889) (4,609) (3,142) (18,559)
Expense reimbursement -- (277,072) (160,478) (41,863) --
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,904,103 479,461 295,139 84,349 1,724,553
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 10,914,004 4,448,330 2,414,558 544,899 10,521,496
-----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investments 1,127,600 (10,990) (425,114) (11,350) (267,356)
Change in net unrealized appreciation
(depreciation) of investments 387,460 836,808 1,158,572 1,409,668 1,647
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments 1,515,060 825,818 733,458 1,398,318 (265,709)
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,205,443) (508,862) (237,497) (41,042) (919,736)
From accumulated net realized
gains from investments -- -- -- -- (197,372)
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable
to Common shares from distributions
to Preferred shareholders (1,205,443) (508,862) (237,497) (41,042) (1,117,108)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from operations $11,223,621 $4,765,286 $2,910,519 $1,902,175 $ 9,138,679
===================================================================================================================================
* For the period September 26, 2001 (commencement of operations) through July
31, 2002.
** For the period March 27, 2002 (commencement of operations) through July 31,
2002.
See accompanying notes to financial statements.
63
Statement of
Changes in Net Assets
ARIZONA ARIZONA ARIZONA
PREMIUM INCOME (NAZ) DIVIDEND ADVANTAGE (NFZ) DIVIDEND ADVANTAGE 2 (NKR)
--------------------------- ---------------------------- --------------------------
FOR THE FOR THE
PERIOD 1/31/01 PERIOD 3/26/02
(COMMENCEMENT (COMMENCEMENT
YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) OF OPERATIONS)
7/31/02 7/31/01 7/31/02 THROUGH 7/31/01 THROUGH 7/31/02
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,726,364 $ 4,754,581 $ 1,597,001 $ 668,042 $ 572,359
Net realized gain (loss)
from investments (462,165) 574,900 148,987 (64,221) 13,996
Change in net unrealized appreciation
(depreciation) of investments (2,058,272) 1,610,292 425,309 432,476 1,693,697
Distributions to Preferred Shareholders:
From net investment income (414,197) (1,026,132) (175,122) (126,749) (51,112)
From accumulated net realized gains
from investments (51,989) (7,956) (4,730) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to
Common shares from operations 1,739,741 5,905,685 1,991,445 909,548 2,228,940
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (3,884,716) (3,620,798) (1,291,796) (537,665) (521,078)
From accumulated net realized gains
from investments (182,992) (26,704) (21,217) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (4,067,708) (3,647,502) (1,313,013) (537,665) (521,078)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- 21,858,485 34,379,475
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 344,887 314,009 39,766 4,296 16,872
Preferred shares offering costs -- -- -- (262,500) (291,302)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 344,887 314,009 39,766 21,600,281 34,105,045
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (1,983,080) 2,572,192 718,198 21,972,164 35,812,907
Net assets applicable to Common
shares at the beginning
of period 64,859,004 62,286,812 22,072,439 100,275 100,275
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $62,875,924 $64,859,004 $22,790,637 $22,072,439 $35,913,182
===================================================================================================================================
Undistributed net investment
income at the end of period $ 656,041 $ 228,590 $ 135,959 $ 3,628 $ 169
===================================================================================================================================
See accompanying notes to financial statements.
64
MICHIGAN MICHIGAN MICHIGAN
QUALITY INCOME (NUM) PREMIUM INCOME (NMP) DIVIDEND ADVANTAGE (NZW)
--------------------------- ---------------------------- -----------------------
FOR THE
PERIOD 9/25/01
(COMMENCEMENT
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS)
7/31/02 7/31/01 7/31/02 7/31/01 THROUGH 7/31/02
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 12,842,247 $ 13,395,664 $ 8,069,853 $ 8,237,452 $ 1,563,572
Net realized gain (loss)
from investments 1,255,918 722,430 509,493 1,000,973 (179,018)
Change in net unrealized appreciation
(depreciation) of investments 580,210 8,535,587 764,121 7,232,198 620,710
Distributions to Preferred Shareholders:
From net investment income (1,264,782) (3,290,957) (820,275) (1,952,915) (139,482)
From accumulated net realized gains
from investments (279,535) (73,780) -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to
Common shares from operations 13,134,058 19,288,944 8,523,192 14,517,708 1,865,782
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (10,352,127) (10,158,506) (6,545,391) (6,298,850) (1,287,427)
From accumulated net realized gains
from investments (863,646) (222,220) -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (11,215,773) (10,380,726) (6,545,391) (6,298,850) (1,287,427)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- -- 29,319,045
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 1,048,301 326,968 57,829 -- 7,758
Preferred shares offering costs -- -- -- -- (326,000)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 1,048,301 326,968 57,829 -- 29,000,803
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 2,966,586 9,235,186 2,035,630 8,218,858 29,579,158
Net assets applicable to Common
shares at the beginning
of period 176,663,900 167,428,714 117,784,057 109,565,199 100,275
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $179,630,486 $176,663,900 $119,819,687 $117,784,057 $29,679,433
===================================================================================================================================
Undistributed net investment
income at the end of period $ 1,500,913 $ 116,948 $ 1,187,234 $ 213,121 $ 136,663
===================================================================================================================================
See accompanying notes to financial statements.
65
Statement of
Changes in Net Assets (continued)
OHIO OHIO OHIO
QUALITY INCOME (NUO) DIVIDEND ADVANTAGE (NXI) DIVIDEND ADVANTAGE 2 (NBJ)
--------------------------- ---------------------------- --------------------------
FOR THE FOR THE
PERIOD 3/28/01 PERIOD 9/26/01
(COMMENCEMENT (COMMENCEMENT
YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) OF OPERATIONS)
7/31/02 7/31/01 7/31/02 THROUGH 7/31/01 THROUGH 7/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 10,914,004 $ 11,399,510 $ 4,448,330 $ 1,209,414 $ 2,414,558
Net realized gain (loss)
from investments 1,127,600 319,530 (10,990) (25,604) (425,114)
Change in net unrealized appreciation
(depreciation) of investments 387,460 5,042,976 836,808 1,528,249 1,158,572
Distributions to Preferred Shareholders:
From net investment income (1,205,443) (2,592,880) (508,862) (177,887) (237,497)
From accumulated net realized gains
from investments -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to
Common shares from operations 11,223,621 14,169,136 4,765,286 2,534,172 2,910,519
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (8,853,521) (8,621,168) (3,662,910) (910,419) (1,932,880)
From accumulated net realized gains
from investments -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (8,853,521) (8,621,168) (3,662,910) (910,419) (1,932,880)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- 60,151,930 44,385,975
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 817,099 571,647 21,725 124 17,220
Preferred shares offering costs -- -- -- (452,250) (408,000)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 817,099 571,647 21,725 59,699,804 43,995,195
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 3,187,199 6,119,615 1,124,101 61,323,557 44,972,834
Net assets applicable to Common
shares at the beginning
of period 153,164,155 147,044,540 61,423,832 100,275 100,275
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $156,351,354 $153,164,155 $62,547,933 $61,423,832 $45,073,109
===================================================================================================================================
Undistributed net investment
income at the end of period $ 1,162,184 $ 270,766 $ 410,424 $ 121,108 $ 244,181
===================================================================================================================================
See accompanying notes to financial statements.
66
OHIO TEXAS
DIVIDEND ADVANTAGE 3 (NVJ) QUALITY INCOME (NTX)
-------------------------------- ------------------------------
FOR THE
PERIOD 3/27/02
(COMMENCEMENT
OF OPERATIONS) YEAR ENDED YEAR ENDED
THROUGH 7/31/02 7/31/02 7/31/01
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 544,899 $ 10,521,496 $ 10,923,284
Net realized gain (loss) from investments (11,350) (267,356) 1,598,134
Change in net unrealized appreciation
(depreciation) of investments 1,409,668 1,647 6,666,684
Distributions to Preferred Shareholders:
From net investment income (41,042) (919,736) (2,522,800)
From accumulated net realized gains
from investments -- (197,372) --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to
Common shares from operations 1,902,175 9,138,679 16,665,302
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (472,386) (8,653,941) (8,175,738)
From accumulated net realized gains
from investments -- (634,401) --
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (472,386) (9,288,342) (8,175,738)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares 30,734,250 -- --
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 536 327,339 --
Preferred shares offering costs (269,918) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 30,464,868 327,339 --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 31,894,657 177,676 8,489,564
Net assets applicable to Common
shares at the beginning of period 100,275 143,126,994 134,637,430
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $31,994,932 $143,304,670 $143,126,994
===================================================================================================================================
Undistributed net investment
income at the end of period $ 31,471 $ 1,424,229 $ 425,080
===================================================================================================================================
See accompanying notes to financial statements.
67
Notes to
Financial Statements
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The state funds (the "Funds") covered in this report and their corresponding
exchange symbols are Nuveen Arizona Premium Income Municipal Fund, Inc. (NAZ),
Nuveen Arizona Dividend Advantage Municipal Fund (NFZ), Nuveen Arizona Dividend
Advantage Municipal Fund 2 (NKR), Nuveen Michigan Quality Income Municipal Fund,
Inc. (NUM), Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP), Nuveen
Michigan Dividend Advantage Municipal Fund (NZW), Nuveen Ohio Quality Income
Municipal Fund, Inc. (NUO), Nuveen Ohio Dividend Advantage Municipal Fund (NXI),
Nuveen Ohio Dividend Advantage Municipal Fund 2 (NBJ), Nuveen Ohio Dividend
Advantage Municipal Fund 3 (NVJ) and Nuveen Texas Quality Income Municipal Fund
(NTX). Arizona Premium Income (NAZ), Michigan Quality Income (NUM), Michigan
Premium Income (NMP), Ohio Quality Income (NUO) and Texas Quality Income (NTX)
are traded on the New York Stock Exchange while Arizona Dividend Advantage
(NFZ), Arizona Dividend Advantage 2 (NKR), Michigan Dividend Advantage (NZW),
Ohio Dividend Advantage (NXI), Ohio Dividend Advantage 2 (NBJ) and Ohio Dividend
Advantage 3 (NVJ) are traded on the American Stock Exchange. Prior to the
commencement of operations of Arizona Dividend Advantage (NFZ), Arizona Dividend
Advantage 2 (NKR), Michigan Dividend Advantage (NZW), Ohio Dividend Advantage
(NXI), Ohio Dividend Advantage 2 (NBJ) and Ohio Dividend Advantage 3 (NVJ), each
Fund had no operations other than those related to organizational matters, the
initial capital contribution of $100,275 by Nuveen Advisory Corp. (the
"Adviser"), a wholly owned subsidiary of The John Nuveen Company, and the
recording of the organization expenses ($15,000, $11,500, $11,500, $15,000,
$11,500 and $11,500, respectively) and their reimbursement by Nuveen
Investments, also a wholly owned subsidiary of The John Nuveen Company.
Each Fund seeks to provide current income exempt from both regular federal and
designated state income taxes, where applicable, by investing primarily in a
diversified portfolio of municipal obligations issued by state and local
government authorities within a single state. The Funds are registered under the
Investment Company Act of 1940 as closed-end management investment companies.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. If it is determined that market prices for a security are
unavailable or inappropriate, the Board of Directors/Trustees of the Funds may
establish a fair value for the security. Temporary investments in securities
that have variable rate and demand features qualifying them as short-term
securities are valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At July
31, 2002, Arizona Premium Income (NAZ) had an outstanding when-issued purchase
commitment of $1,123,740. There were no such outstanding purchase commitments in
any of the other Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
68
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its net investment
income to its share holders. Therefore, no federal income tax provision is
required. Furthermore, each Fund intends to satisfy conditions which will enable
interest from municipal securities, which is exempt from regular federal and
designated state income taxes, where applicable, to retain such tax-exempt
status when distributed to shareholders of the Funds. All monthly tax-exempt
income dividends paid during the period ended July 31, 2002, have been
designated Exempt Interest Dividends.
Dividends and Distributions to Common Shareholders
Tax-exempt net investment income is declared monthly as a dividend. Generally,
payment is made or reinvestment is credited to shareholder accounts after
month-end. Net realized capital gains and/or market discount from investment
transactions, if any, are distributed to shareholders not less frequently than
annually. Furthermore, capital gains are distributed only to the extent they
exceed available capital loss carryforwards.
Distributions to Common Shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States. Accordingly, temporary
over-distributions as a result of these differences may occur and will be
classified as either distributions in excess of net investment income,
distributions in excess of net realized gains and/or distributions in excess of
net ordinary taxable income from investment transactions, where applicable.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more Series. The dividend rate
on each Series may change every seven days, as set pursuant to a dutch auction
process by the auction agent, and is payable at or near the end of each rate
period. The number of shares outstanding, by Series and in total, for each Fund
is as follows:
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR) (NUM) (NMP) (NZW)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- -- -- -- 840 --
Series T -- 480 -- -- -- --
Series W -- -- 740 -- -- 640
Series TH 1,200 -- -- 3,200 1,400 --
Series TH2 -- -- -- -- -- --
Series F -- -- -- 560 -- --
---------------------------------------------------------------------------------------------------------
Total 1,200 480 740 3,760 2,240 640
=========================================================================================================
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ) (NVJ) (NTX)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M 680 -- -- -- 760
Series T -- -- -- 660 --
Series W -- 1,240 -- -- --
Series TH 1,400 -- -- -- 2,000
Series TH2 1,000 -- -- -- --
Series F -- -- 960 -- --
---------------------------------------------------------------------------------------------------------
Total 3,080 1,240 960 660 2,760
=========================================================================================================
Effective November 16, 2001, Michigan Dividend Advantage (NZW) and Ohio Dividend
Advantage 2 (NBJ) issued 640 Series W and 960 Series F, respectively, $25,000
stated value Preferred shares.
Effective May 17, 2002, Arizona Dividend Advantage 2 (NKR) and Ohio Dividend
Advantage 3 (NVJ) issued 740 Series W and 660 Series T, respectively, $25,000
stated value Preferred shares.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap, and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the period ended July 31, 2002.
69
Notes to
Financial Statements (continued)
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Offering Costs
Nuveen Investments has agreed to pay all offering costs (other than the sales
load) that exceed $.03 per Common share for Arizona Dividend Advantage (NFZ),
Arizona Dividend Advantage 2 (NKR), Michigan Dividend Advantage (NZW), Ohio
Dividend Advantage (NXI), Ohio Dividend Advantage 2 (NBJ) and Ohio Dividend
Advantage 3 (NVJ). Arizona Dividend Advantage's (NFZ), Arizona Dividend
Advantage 2's (NKR), Michigan Dividend Advantage's (NZW), Ohio Dividend
Advantage's (NXI), Ohio Dividend Advantage 2's (NBJ) and Ohio Dividend Advantage
3's (NVJ) share of offering costs ($45,873, $72,150, $61,530, $126,237, $93,150
and $64,500, respectively) were recorded as a reduction of the proceeds from the
sale of the common shares.
Costs incurred by Arizona Dividend Advantage (NFZ), Arizona Dividend Advantage 2
(NKR), Michigan Dividend Advantage (NZW), Ohio Dividend Advantage (NXI), Ohio
Dividend Advantage 2 (NBJ) and Ohio Dividend Advantage 3 (NVJ) in connection
with their offering of Preferred shares ($262,500, $291,302, $326,000, $452,250,
$408,000 and $269,918, respectively) were recorded as a reduction to paid-in
surplus.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
Change in Accounting Policy
As required, effective August 1, 2001, the following Funds have adopted the
provisions of the new AICPA Audit and Accounting Guide for Investment Companies
and began accreting taxable market discount on debt securities. Prior to August
1, 2001, the Funds did not accrete taxable market discount on debt securities
until they were sold. The cumulative effect of this accounting change had no
impact on the total net assets applicable to Common shares or the Common share
net asset values of the Funds, but resulted in an increase in the cost of
securities and a corresponding decrease in net unrealized appreciation based on
securities held by the Funds on August 1, 2001, as follows:
ARIZONA ARIZONA MICHIGAN MICHIGAN OHIO OHIO TEXAS
PREMIUM DIVIDEND QUALITY PREMIUM QUALITY DIVIDEND QUALITY
INCOME ADVANTAGE INCOME INCOME INCOME ADVANTAGE INCOME
(NAZ) (NFZ) (NUM) (NMP) (NUO) (NXI) (NTX)
---------------------------------------------------------------------------------------------------------
$-- $2,248 $158,627 $269,926 $36,378 $12,758 $51,330
=========================================================================================================
The Statement of Changes in Net Assets and Financial Highlights for the prior
periods have not been restated to reflect this change in presentation.
The net effect of this change for the fiscal year ended July 31, 2002, is as
follows:
ARIZONA ARIZONA MICHIGAN MICHIGAN OHIO OHIO TEXAS
PREMIUM DIVIDEND QUALITY PREMIUM QUALITY DIVIDEND QUALITY
INCOME ADVANTAGE INCOME INCOME INCOME ADVANTAGE INCOME
(NAZ) (NFZ) (NUM) (NMP) (NUO) (NXI) (NTX)
---------------------------------------------------------------------------------------------------------
Investment income $-- $ 4,792 $ 32,842 $ 50,019 $ 10,798 $ 44,512 $ 26,297
Net increase (decrease) in
unrealized appreciation -- (4,792) (32,842) (50,019) (10,798) (38,520) (26,297)
Net realized gain (loss) -- -- -- -- -- (5,992) --
=========================================================================================================
70
Classification and Measurement of Redeemable Securities
The Funds have adopted the classification requirement of EITF D-98,
Classification and Measurement of Redeemable Securities. EITF D-98 requires that
Preferred shares, at liquidation value, be presented separately in the Statement
of Assets and Liabilities. Accordingly, certain reclassifications have been made
to the financial statements and financial highlights for all prior periods
presented. The adoption of EITF D-98 had no impact on the Funds' Common share
net asset values.
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
ARIZONA
DIVIDEND
ARIZONA PREMIUM ARIZONA DIVIDEND ADVANTAGE 2
INCOME (NAZ) ADVANTAGE (NFZ) (NKR)
------------------------- ----------------------- --------------
FOR THE FOR THE
PERIOD 1/31/01 PERIOD 3/26/02
(COMMENCE- (COMMENCE-
MENT OF MENT OF
OPERATIONS) OPERATIONS)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH THROUGH
7/31/02 7/31/01 7/31/02 7/31/01 7/31/02
------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 1,529,100 2,405,000
Shares issued to shareholders
due to reinvestment of
distributions 21,407 20,422 2,811 284 1,100
------------------------------------------------------------------------------------------------------------
21,407 20,422 2,811 1,529,384 2,406,100
============================================================================================================
Preferred shares sold -- -- -- 480 740
============================================================================================================
MICHIGAN
DIVIDEND
MICHIGAN QUALITY MICHIGAN PREMIUM ADVANTAGE
INCOME (NUM) INCOME (NMP) (NZW)
------------------------- ---------------------- ------------
FOR THE
PERIOD 9/25/01
(COMMENCE-
MENT OF
OPERATIONS)
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
7/31/02 7/31/01 7/31/02 7/31/01 7/31/02
---------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- -- 2,051,000
Shares issued to shareholders
due to reinvestment of
distributions 68,086 21,344 3,743 -- 543
---------------------------------------------------------------------------------------------------------
68,086 21,344 3,743 -- 2,051,543
=========================================================================================================
Preferred shares sold -- -- -- -- 640
=========================================================================================================
71
Notes to
Financial Statements (continued)
OHIO
DIVIDEND
OHIO QUALITY OHIO DIVIDEND ADVANTAGE 2
INCOME (NUO) ADVANTAGE (NXI) (NBJ)
-------------------------- ------------------------ --------------
FOR THE FOR THE
PERIOD 3/28/01 PERIOD 9/26/01
(COMMENCE- (COMMENCE-
MENT OF MENT OF
OPERATIONS) OPERATIONS)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH THROUGH
7/31/02 7/31/01 7/31/02 7/31/01 7/31/02
---------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 4,207,900 3,105,000
Shares issued to shareholders
due to reinvestment of
distributions 47,904 34,578 1,425 8 1,188
---------------------------------------------------------------------------------------------------------
47,904 34,578 1,425 4,207,908 3,106,188
=========================================================================================================
Preferred shares sold -- -- -- 1,240 960
=========================================================================================================
OHIO
DIVIDEND
ADVANTAGE 3 TEXAS QUALITY
(NVJ) INCOME (NTX)
-------------- -----------------------
FOR THE
PERIOD 3/27/02
(COMMENCE-
MENT OF
OPERATIONS)
THROUGH YEAR ENDED YEAR ENDED
7/31/02 7/31/02 7/31/01
--------------------------------------------------------------------------------------------------------
Common shares:
Shares sold 2,150,000 -- --
Shares issued to shareholders
due to reinvestment of
distributions 35 21,816 --
--------------------------------------------------------------------------------------------------------
2,150,035 21,816 --
========================================================================================================
Preferred shares sold 660 -- --
========================================================================================================
72
3. SUBSEQUENT EVENT-DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid September 3, 2002, to shareholders of record
on August 15, 2002, as follows:
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR) (NUM) (NMP) (NZW)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0765 $.0700 $.0720 $.0755 $.0735 $.0695
=========================================================================================================
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ) (NVJ) (NTX)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0795 $.0730 $.0690 $.0730 $.0790
=========================================================================================================
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term securities during the fiscal year ended July 31, 2002,
were as follows:
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR)* (NUM) (NMP) (NZW)**
---------------------------------------------------------------------------------------------------------
Purchases:
Long-term municipal
securities $18,986,824 $13,693,753 $52,863,052 $52,699,797 $15,648,473 $52,988,323
Short-term securities 3,600,000 -- 2,100,000 11,900,000 7,100,000 6,000,000
Sales and maturities:
Long-term municipal
securities 17,765,871 13,863,784 498,750 51,232,629 15,195,522 8,352,824
Short-term securities 3,600,000 -- 2,100,000 11,900,000 7,100,000 6,000,000
=========================================================================================================
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ)*** (NVJ)**** (NTX)
---------------------------------------------------------------------------------------------------------
Purchases:
Long-term municipal securities $64,807,091 $16,898,282 $90,991,812 $48,912,937 $45,965,278
Short-term securities 7,500,000 7,700,000 29,550,000 29,225,000 3,000,000
Sales and maturities:
Long-term municipal securities 58,210,697 16,305,693 23,362,318 2,503,049 50,282,614
Short-term securities 7,500,000 7,700,000 29,550,000 29,225,000 3,000,000
=========================================================================================================
* For the period March 26, 2002 (commencement of operations) through July 31,
2002.
** For the period September 25, 2001 (commencement of operations) through July
31, 2002.
*** For the period September 26, 2001 (commencement of operations) through July
31, 2002.
**** For the period March 27, 2002 (commencement of operations) through July 31,
2002.
73
Notes to
Financial Statements (continued)
5. INCOME TAX INFORMATION
The following information is presented on an income tax basis as of July 31,
2002. Differences between amounts for financial statement and federal income tax
purposes are primarily due to timing differences in recognizing income on
taxable market discount securities and timing differences in recognizing certain
gains and losses on security transactions.
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR) (NUM) (NMP) (NZW)
------------------------------------------------------------------------------------------------------------
Cost of Investments $90,874,228 $33,383,217 $52,357,637 $255,782,971 $162,136,468 $44,444,890
============================================================================================================
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ) (NVJ) (NTX)
-----------------------------------------------------------------------------------------------------------
Cost of Investments $220,733,663 $90,209,338 $67,162,379 $46,369,861 $197,654,777
===========================================================================================================
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR) (NUM) (NMP) (NZW)
---------------------------------------------------------------------------------------------------------
Gross unrealized:
appreciation $ 5,405,155 $ 995,787 $1,695,645 $16,027,668 $11,930,123 $631,506
depreciation (4,008,539) (140,866) (384) (783,052) (396,651) (10,796)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation
on investments $ 1,396,616 $ 854,921 $1,695,261 $15,244,616 $11,533,472 $620,710
=========================================================================================================
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ) (NVJ) (NTX)
-----------------------------------------------------------------------------------------------------------
Gross unrealized:
appreciation $11,716,212 $2,682,531 $1,265,475 $1,409,668 $10,811,138
depreciation (466,884) (278,954) (101,554) -- (2,535,462)
-----------------------------------------------------------------------------------------------------------
Net unrealized appreciation
on investments $11,249,328 $2,403,577 $1,163,921 $1,409,668 $ 8,275,676
===========================================================================================================
74
The tax components of undistributed net investment income and realized gains at
July 31, 2002, were as follows:
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR) (NUM) (NMP) (NZW)
-----------------------------------------------------------------------------------------------------------------------
Undistributed tax-exempt income $984,047 $237,288 $177,136 $2,203,902 $1,306,533 $282,798
Undistributed ordinary income * -- 2,154 13,996 -- -- --
Undistributed long-term capital gains -- 63,997 -- 834,829 -- --
=======================================================================================================================
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ) (NVJ) (NTX)
-----------------------------------------------------------------------------------------------------------------------
Undistributed tax-exempt income $1,718,741 $668,671 $455,613 $189,341 $1,971,279
Undistributed ordinary income * -- -- -- -- 21,034
Undistributed long-term capital gains -- -- -- -- 93,585
=======================================================================================================================
The tax character of distributions paid during the period ended July 31, 2002,
were designated for purposes of the dividends paid deduction as follows:
ARIZONA ARIZONA ARIZONA MICHIGAN MICHIGAN MICHIGAN
PREMIUM DIVIDEND DIVIDEND QUALITY PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME INCOME ADVANTAGE
(NAZ) (NFZ) (NKR) (NUM) (NMP) (NZW)
-----------------------------------------------------------------------------------------------------------------------
Distributions from tax-exempt income $4,276,629 $1,469,871 $393,659 $11,598,566 $7,324,052 $1,280,774
Distributions from ordinary income * -- 25,947 -- -- -- --
Distributions from long-term capital gains 234,981 -- -- 1,143,181 -- --
=======================================================================================================================
OHIO OHIO OHIO OHIO TEXAS
QUALITY DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NUO) (NXI) (NBJ) (NVJ) (NTX)
-----------------------------------------------------------------------------------------------------------------------
Distributions from tax-exempt income $10,020,828 $4,172,472 $1,953,596 $355,558 $9,516,981
Distributions from ordinary income * -- -- -- -- --
Distributions from long-term capital gains -- -- -- -- 831,773
=======================================================================================================================
* Ordinary income consists of taxable market discount income and short-term
capital gains, if any.
75
Notes to
Financial Statements (continued):
At July 31, 2002, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
ARIZONA MICHIGAN OHIO OHIO
PREMIUM PREMIUM QUALITY DIVIDEND
INCOME INCOME INCOME ADVANTAGE
(NAZ) (NMP) (NUO) (NXI)
--------------------------------------------------------------------------------
Expiration year:
2004 $ -- $136,711 $291,693 $--
2005 -- -- -- --
2006 -- -- -- --
2007 -- -- -- --
2008 -- -- 279,929 --
2009 -- -- 61,376 --
2010 2,164 -- -- 836
--------------------------------------------------------------------------------
Total $2,164 $136,711 $632,998 $836
================================================================================
The following Funds have elected to defer net realized losses from investments
incurred from November 1, 2001 through July 31, 2002 ("post-October losses") in
accordance with Federal income tax regulations. The following post-October
losses are treated as having arisen in the following year:
ARIZONA MICHIGAN MICHIGAN OHIO OHIO OHIO TEXAS
PREMIUM PREMIUM DIVIDEND DIVIDEND DIVIDEND DIVIDEND QUALITY
INCOME INCOME ADVANTAGE ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME
(NAZ) (NMP) (NZW) (NXI) (NBJ) (NVJ) (NTX)
---------------------------------------------------------------------------------------------------------
$460,002 $83,263 $179,018 $29,765 $425,114 $11,350 $625,349
=========================================================================================================
76
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under Arizona Premium Income's (NAZ), Michigan Quality Income's (NUM), Michigan
Premium Income's (NMP), Ohio Quality Income's (NUO) and Texas Quality Income's
(NTX) investment management agreements with the Adviser, each Fund pays an
annual management fee, payable monthly, at the rates set forth below, which are
based upon the average daily net assets (including net assets attributable to
Preferred shares) of each Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TOPREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For the next $3 billion .5875 of 1
For net assets over $5 billion .5750 of 1
===============================================================================
Under Arizona Dividend Advantage's (NFZ), Arizona Dividend Advantage 2's (NKR),
Michigan Dividend Advantage's (NZW), Ohio Dividend Advantage's (NXI), Ohio
Dividend Advantage 2's (NBJ) and Ohio Dividend Advantage 3's (NVJ) investment
management agreements with the Adviser, each Fund pays an annual management fee,
payable monthly, at the rates set forth below, which are based upon the average
daily net assets (including net assets attributable to Preferred shares) of each
Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TOPREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5750 of 1
================================================================================
For the first ten years of Arizona Dividend Advantage's (NFZ) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JANUARY 31, JANUARY 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Arizona Dividend Advantage (NFZ) for any
portion of its fees and expenses beyond January 31, 2011.
For the first ten years of Ohio Dividend Advantage's (NXI) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Ohio Dividend Advantage (NXI) for any
portion of its fees and expenses beyond March 31, 2011.
77
Notes to
Financial Statements (continued)
For the first ten years of Michigan Dividend Advantage's (NZW) and Ohio Dividend
Advantage 2's (NBJ) operations, the Adviser has agreed to reimburse the Funds,
as a percentage of average daily net assets (including net assets attributable
to Preferred shares), for fees and expenses in the amounts, and for the time
periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Michigan Dividend Advantage (NZW) and
Ohio Dividend Advantage 2 (NBJ) for any portion of its fees and expenses beyond
September 30, 2011.
For the first ten years of Arizona Dividend Advantage 2's (NKR) and Ohio
Dividend Advantage 3's (NVJ) operations, the Adviser has agreed to reimburse the
Funds, as a percentage of average daily net assets (including net assets
attributable to Preferred shares), for fees and expenses in the amounts, and for
the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Arizona Dividend Advantage 2 (NKR) and
Ohio Dividend Advantage 3 (NVJ) for any portion of its fees and expenses beyond
March 31, 2012.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
78
Financial
Highlights
79
Financial
Highlights
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
ARIZONA
PREMIUM
INCOME (NAZ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) $14.77 $1.07 $ (.57) $(.09) $(.01) $ .40 $(.88) $(.04) $ (.92)
2001 14.25 1.09 .50 (.23) -- 1.36 (.83) (.01) (.84)
2000 14.90 1.06 (.61) (.25) -- .20 (.85) -- (.85)
1999 15.43 1.07 (.55) (.21) -- .31 (.84) -- (.84)
1998 15.34 1.05 .10 (.23) -- .92 (.83) -- (.83)
ARIZONA
DIVIDEND
ADVANTAGE (NFZ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) 14.37 1.04 .36 (.11) -- 1.29 (.84) (.01) (.85)
2001(a) 14.33 .44 .23 (.08) -- .59 (.35) -- (.35)
ARIZONA DIVIDEND
ADVANTAGE 2 (NKR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(b) 14.33 .24 .71 (.02) -- .93 (.22) -- (.22)
MICHIGAN QUALITY
INCOME (NUM)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) 15.32 1.11 .15 (.11) (.02) 1.13 (.90) (.07) (.97)
2001 14.54 1.16 .82 (.29) (.01) 1.68 (.88) (.02) (.90)
2000 15.20 1.19 (.53) (.30) (.02) .34 (.92) (.08) (1.00)
1999 15.91 1.15 (.63) (.21) (.02) .29 (.92) (.06) (.98)
1998 15.95 1.17 (.01) (.24) -- .92 (.95) (.01) (.96)
MICHIGAN PREMIUM
INCOME (NMP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) 15.31 1.05 .16 (.11) -- 1.10 (.85) -- (.85)
2001 14.24 1.07 1.07 (.25) -- 1.89 (.82) -- (.82)
2000 14.68 1.07 (.41) (.27) -- .39 (.83) -- (.83)
1999 15.30 1.05 (.64) (.21) -- .20 (.82) -- (.82)
1998 15.14 1.04 .19 (.25) -- .98 (.82) -- (.82)
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(c) 14.33 .76 .22 (.07) -- .91 (.63) -- (.63)
====================================================================================================================================
Total Returns
-----------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
==============================================================================================
ARIZONA
PREMIUM
INCOME (NAZ)
----------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) $-- $14.25 $16.9000 9.63 % 2.88%
2001 -- 14.77 16.3200 17.77 9.74
2000 -- 14.25 14.6250 (8.80) 1.61
1999 -- 14.90 17.0000 8.67 1.92
1998 -- 15.43 16.4375 12.18 6.14
ARIZONA
DIVIDEND
ADVANTAGE (NFZ)
--------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) -- 14.81 15.7500 6.38 9.32
2001(a) (.20) 14.37 15.6500 6.76 2.81
ARIZONA DIVIDEND
ADVANTAGE 2 (NKR)
--------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(b) (.16) 14.88 15.8000 6.81 5.38
MICHIGAN QUALITY
INCOME (NUM)
--------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) -- 15.48 16.1000 11.18 7.68
2001 -- 15.32 15.4200 17.11 11.90
2000 -- 14.54 14.0000 (9.92) 2.51
1999 (.02) 15.20 16.6875 2.18 1.62
1998 -- 15.91 17.3125 10.27 5.97
MICHIGAN PREMIUM
INCOME (NMP)
--------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) -- 15.56 15.3500 10.52 7.40
2001 -- 15.31 14.7100 17.81 13.61
2000 -- 14.24 13.2500 (6.16) 2.95
1999 -- 14.68 15.0625 5.95 1.23
1998 -- 15.30 15.0000 13.74 6.62
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
--------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(c) (.19) 14.42 14.6500 2.00 5.21
============================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
--------------------------- -----------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
=============================================================================================================
ARIZONA
PREMIUM
INCOME (NAZ)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) $ 62,876 1.28% 7.45% 1.26% 7.47% 19%
2001 64,859 1.28 7.47 1.27 7.48 18
2000 62,287 1.26 7.58 1.25 7.59 33
1999 64,775 1.29 6.88 1.29 6.88 6
1998 66,546 1.28 6.85 1.28 6.85 17
ARIZONA
DIVIDEND
ADVANTAGE (NFZ)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) 22,791 1.41 6.72 .93 7.20 40
2001(a) 22,072 1.43* 5.80* .95* 6.28* 21
ARIZONA DIVIDEND
ADVANTAGE 2 (NKR)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(b) 35,913 1.19* 4.43* .77* 4.85* 1
MICHIGAN QUALITY
INCOME (NUM)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) 179,630 1.28 7.29 1.27 7.29 19
2001 176,664 1.30 7.79 1.29 7.80 20
2000 167,429 1.29 8.29 1.27 8.31 25
1999 174,591 1.19 7.28 1.19 7.28 21
1998 181,259 1.19 7.35 1.19 7.35 8
MICHIGAN PREMIUM
INCOME (NMP)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(d) 119,820 1.25 6.82 1.24 6.83 9
2001 117,784 1.24 7.24 1.23 7.25 15
2000 109,565 1.29 7.73 1.28 7.74 34
1999 112,851 1.29 6.82 1.28 6.83 9
1998 117,451 1.29 6.87 1.29 6.87 6
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(c) 29,679 1.35* 6.00* .90* 6.45* 21
=============================================================================================================
Municipal Auction Rate Cumulative
Preferred Stock at End of Period
----------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
==================================================================
ARIZONA
PREMIUM
INCOME (NAZ)
------------------------------------------------------------------
Year Ended 7/31:
2002(d) $30,000 $25,000 $77,397
2001 30,000 25,000 79,049
2000 30,000 25,000 76,906
1999 30,000 25,000 78,979
1998 30,000 25,000 80,455
ARIZONA
DIVIDEND
ADVANTAGE (NFZ)
------------------------------------------------------------------
Year Ended 7/31:
2002(d) 12,000 25,000 72,480
2001(a) 12,000 25,000 70,984
ARIZONA DIVIDEND
ADVANTAGE 2 (NKR)
------------------------------------------------------------------
Year Ended 7/31:
2002(b) 18,500 25,000 73,531
MICHIGAN QUALITY
INCOME (NUM)
------------------------------------------------------------------
Year Ended 7/31:
2002(d) 94,000 25,000 72,774
2001 94,000 25,000 71,985
2000 94,000 25,000 69,529
1999 94,000 25,000 71,434
1998 80,000 25,000 81,644
MICHIGAN PREMIUM
INCOME (NMP)
------------------------------------------------------------------
Year Ended 7/31:
2002(d) 56,000 25,000 78,491
2001 56,000 25,000 77,582
2000 56,000 25,000 73,913
1999 56,000 25,000 75,380
1998 56,000 25,000 77,433
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
------------------------------------------------------------------
Year Ended 7/31:
2002(c) 16,000 25,000 71,374
==================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income, reinvested capital
gains distributions, if any, and changes in Common share net asset value
per share. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period January 31, 2001 (commencement of operations) through July
31, 2001.
(b) For the period March 26, 2002 (commencement of operations) through July 31,
2002.
(c) For the period September 25, 2001 (commencement of operations) through July
31, 2002.
(d) As required, effective August 1, 2001, the Funds have adopted the
provisions of the new AICPA Audit and Accounting Guide for Investment
Companies and began accreting taxable market discount on debt securities.
The effect of this change for the fiscal year ended July 31, 2002, was to
increase net investment income per share with a corresponding decrease in
net realized/unrealized investment gain (loss) per share and increase each
ratio of net investment income to average net assets applicable to Common
Shares as follows:
ARIZONA ARIZONA MICHIGAN MICHIGAN
PREMIUM DIVIDEND QUALITY PREMIUM
INCOME ADVANTAGE INCOME INCOME
(NAZ) (NFZ) (NUM) (NMP)
----------------------------------------------------
2002 per share impact ($) -- -- -- .01
2002 income ratio impact (%) -- .02 .02 .04
The Financial Highlights for the prior periods have not been restated to reflect
this change in presentation.
See accompanying notes to financial statements.
80-81 SPREAD
Financial Highlights (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
OHIO QUALITY
INCOME (NUO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 $16.10 $1.14 $ .18 $(.13) $-- $1.19 $(.93) $-- $ (.93)
2001 15.52 1.20 .56 (.27) -- 1.49 (.91) -- (.91)
2000 16.13 1.21 (.56) (.29) -- .36 (.97) -- (.97)
1999 16.65 1.21 (.51) (.24) -- .46 (.98) -- (.98)
1998 16.57 1.22 .09 (.26) -- 1.05 .97) -- (.97)
OHIO DIVIDEND
ADVANTAGE (NXI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 14.57 1.06 .19 (.12) -- 1.13 (.87) -- (.87)
2001(a) 14.33 .29 .35 (.04) -- .60 (.22) -- (.22)
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(b) 14.33 .78 .23 (.08) -- .93 (.62) -- (.62)
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(c) 14.33 .25 .65 (.02) -- .88 (.22) -- (.22)
TEXAS QUALITY
INCOME (NTX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 15.16 1.11 (.02) (.10) (.02) .97 (.92) (.07) (.99)
2001 14.26 1.16 .88 (.27) -- 1.77 (.87) -- (.87)
2000 15.13 1.16 (.74) (.27) (.02) .13 (.91) (.09) (1.00)
1999 15.90 1.16 (.72) (.22) (.02) .20 (.90) (.07) (.97)
1998 15.86 1.17 .07 (.27) -- .97 (.93) -- (.93)
====================================================================================================================================
Total Returns
-----------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
==============================================================================================
OHIO QUALITY
INCOME (NUO)
----------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 $-- $16.36 $18.6200 17.00% 7.63%
2001 -- 16.10 16.8000 6.86 9.85
2000 -- 15.52 16.6250 (1.80) 2.50
1999 -- 16.13 18.0000 5.09 2.74
1998 -- 16.65 18.0625 10.14 6.53
OHIO DIVIDEND
ADVANTAGE (NXI)
----------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 -- 14.83 15.1500 4.48 8.02
2001(a) (.14) 14.57 15.3500 3.77 3.21
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
----------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(b) (.16) 14.48 14.6500 1.91 5.58
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
----------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(c) (.16) 14.83 15.3000 3.47 5.05
TEXAS QUALITY
INCOME (NTX)
----------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 -- 15.14 15.0700 9.29 6.61
2001 -- 15.16 14.7300 21.16 12.74
2000 -- 14.26 12.9375 (7.93) 1.15
1999 -- 15.13 15.1875 2.97 1.21
1998 -- 15.90 15.6875 6.45 6.27
==============================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
--------------------------- -----------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
=============================================================================================================
OHIO QUALITY
INCOME (NUO)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 $156,351 1.26% 7.10% 1.24% 7.12% 26%
2001 153,164 1.32 7.58 1.30 7.60 15
2000 147,045 1.31 7.88 1.29 7.89 11
1999 151,961 1.26 7.26 1.25 7.27 3
1998 155,940 1.29 7.37 1.29 7.37 9
OHIO DIVIDEND
ADVANTAGE (NXI)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 62,548 1.24 6.79 .78 7.25 18
2001(a) 61,424 1.15* 5.58* .71* 6.02* 4
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(b) 45,073 1.25* 6.12* .80* 6.57* 39
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002(c) 31,995 1.22* 4.72* .80* 5.15* 7
TEXAS QUALITY
INCOME (NTX)
-------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2002 143,305 1.23 7.40 1.22 7.42 22
2001 143,127 1.21 7.87 1.19 7.88 24
2000 134,637 1.27 8.18 1.26 8.19 32
1999 142,784 1.23 7.31 1.23 7.32 19
1998 149,669 1.22 7.40 1.22 7.40 17
=============================================================================================================
Municipal Auction Rate Cumulative
Preferred Stock at End of Period
----------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
==================================================================
OHIO QUALITY
INCOME (NUO)
------------------------------------------------------------------
Year Ended 7/31:
2002 $77,000 $25,000 $75,763
2001 77,000 25,000 74,729
2000 77,000 25,000 72,742
1999 77,000 25,000 74,338
1998 77,000 25,000 75,630
OHIO DIVIDEND
ADVANTAGE (NXI)
------------------------------------------------------------------
Year Ended 7/31:
2002 31,000 25,000 75,442
2001(a) 31,000 25,000 74,535
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
------------------------------------------------------------------
Year Ended 7/31:
2002(b) 24,000 25,000 71,951
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
------------------------------------------------------------------
Year Ended 7/31:
2002(c) 16,500 25,000 73,477
TEXAS QUALITY
INCOME (NTX)
------------------------------------------------------------------
Year Ended 7/31:
2002 69,000 25,000 76,922
2001 69,000 25,000 76,858
2000 69,000 25,000 73,782
1999 69,000 25,000 76,733
1998 69,000 25,000 79,228
==================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income, reinvested capital
gains distributions, if any, and changes in Common share net asset value
per share. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period March 28, 2001 (commencement of operations) through July 31,
2001.
(b) For the period September 26, 2001 (commencement of operations) through July
31, 2002.
(c) For the period March 27, 2002 (commencement of operations) through July 31,
2002.
(d) As required, effective August 1, 2001, the Funds have adopted the
provisions of the new AICPA Audit and Accounting Guide for Investment
Companies and began accreting taxable market discount on debt securities.
The effect of this change for the fiscal year ended July 31, 2002, was to
increase net investment income per share with a corresponding decrease in
net realized/unrealized investment gain (loss) per share and increase each
ratio of net investment income to average net assets applicable to Common
Shares as follows:
OHIO OHIO TEXAS
QUALITY DIVIDEND QUALITY
INCOME ADVANTAGE INCOME
(NUO) (NXI) (NTX)
-----------------------------------
2002 per share impact ($) -- .01 --
2002 income ratio impact (%) .01 .07 .02
The Financial Highlights for the prior periods have not been restated to reflect
this change in presentation.
See accompanying notes to financial statements.
82-83 SPREAD
Directors/Trustees
and Officers
The management of the Funds, including general supervision of the duties
performed for the Funds under the Management Agreement, is the responsibility of
the Board of Directors/Trustees of the Funds. The number of directors/trustees
of the Funds is currently set at seven, one of whom is an "interested person"
(as the term is defined in the Investment Company Act of 1940) and six of whom
are not interested persons. None of the directors/trustees who are not
interested persons of the Funds have ever been a director or employee of, or
consultant to, Nuveen or its affiliates. The names and business addresses of the
directors/trustees and officers of the Funds, their principal occupations and
other affiliations during the past five years, the number of portfolios each
oversees and other directorships they hold are set forth below.
NUMBER OF FUNDS
YEAR FIRST PRINCIPAL OCCUPATION(S) IN NUVEEN COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR APPOINTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND AND TERM OF OFFICE (a) DURING PAST 5 YEARS DIRECTOR/TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
DIRECTOR/TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
TIMOTHY R. SCHWERTFEGER (1) Chairman of the 1994 Chairman and Director (since 1996) of The 130
3/28/1949 Board, President Term: Nuveen Company, Nuveen Investments, Nuveen
333 W. Wacker Drive and Director/ one year (2) John Advisory Corp. and Nuveen Institutional
Chicago, IL 60606 Trustee Advisory Corp.; Chairman and Director
(since 1997) of Nuveen Asset Management
Inc.; Director (since 1996) of Institutional
Capital Corporation; Chairman and Director
(since 1999) of Rittenhouse Financial
Services Inc.; Chief Executive Officer
(since 1999) of Nuveen Senior Loan Asset
Management Inc.
DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
ROBERT P. BREMNER Director/Trustee 1997 Private Investor and Management Consultant. 112
8/22/1940 Term:
333 W. Wacker Drive one year (2)
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
LAWRENCE H. BROWN Director/Trustee 1993 Retired (1989) as Senior Vice President of The 112
7/29/1934 Term: Northern Trust Company.
333 W. Wacker Drive one year (2)
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
ANNE E. IMPELLIZZERI Director/Trustee 1994 Retired (2002); formerly, Executive Director 112
1/26/1933 Term: (since 1998) of Manitoga (Center for Russel
333 W. Wacker Drive one year (2) Wright's Design with Nature); prior thereto,
Chicago, IL 60606 President and Chief Executive Officer of
Blanton-Peale Institutes of Religion and
Health; prior thereto, Vice President,
Metropolitan Life Insurance Co.
------------------------------------------------------------------------------------------------------------------------------------
PETER R. SAWERS Director/Trustee 1991 Adjunct Professor of Business and Economics, 112
4/3/1933 Term: University of Dubuque, Iowa; Director,
333 W. Wacker Drive one year (2) Executive Service Corps of Chicago
Chicago, IL 60606 (not-for-profit); Director, Hadley School for
the Blind (not-for-profit); formerly
(1991-2000) Adjunct Professor, Lake Forest
Graduate School of Management, Lake Forest,
Illinois; prior thereto, Executive Director,
Towers Perrin Australia, a management
consulting firm; Chartered Financial Analyst;
Certified Management Consultant.
84
NUMBER OF FUNDS
YEAR FIRST PRINCIPAL OCCUPATION(S) IN NUVEEN COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR APPOINTED INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS WITH THE FUND AND TERM OF OFFICE (a) DURING PAST 5 YEARS DIRECTOR/TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM J. SCHNEIDER Director/Trustee 1997 Senior Partner and Chief Operating Officer, 112
9/24/1944 Term: Miller-Valentine Group, Vice President,
333 W. Wacker Drive one year (2) Miller-Valentine Realty, a development and
Chicago, IL 60606 contract company; Chair, Miami Valley
Hospital; Vice Chair, Miami Valley Economic
Development Coalition; formerly, Member,
Community Advisory Board, National City
Bank, Dayton, Ohio; and Business Advisory
Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
JUDITH M. STOCKDALE Director/Trustee 1997 Executive Director, Gaylord and Dorothy 112
12/29/1947 Term: Donnelley Foundation (since 1994); prior
333 W. Wacker Drive one year (2) thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
PRINCIPAL OCCUPATION(S) NUMBER OF FUNDS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS IN NUVEEN COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED (b) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
MICHAEL T. ATKINSON Vice President 2002 Vice President (since January 2002), formerly, 130
2/3/1966 Assistant Vice President (since 2000), previously,
333 W. Wacker Drive Associate of Nuveen Investments.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
PAUL L. BRENNAN Vice President 2002 Vice President (since January 2002), formerly, 126
11/10/1966 Assistant Vice President of Nuveen
333 W. Wacker Drive Advisory Corp.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
PETER H. D'ARRIGO Vice President 1999 Vice President of Nuveen Investments (since 130
11/28/1967 and Treasurer 1999), prior thereto, Assistant Vice President
333 W. Wacker Drive (from 1997); Vice President and Treasurer (since
Chicago, IL 60606 1999) of Nuveen Senior Loan Asset Management
Inc.; Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
SUSAN M. DESANTO Vice President 2001 Vice President of Nuveen Advisory Corp. (since 130
9/8/1954 2001); previously, Vice President of Van Kampen
333 W. Wacker Drive Investment Advisory Corp. (since 1998); prior
Chicago, IL 60606 thereto, Assistant Vice President of Van Kampen
Investment Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
JESSICA R. DROEGER Vice President 2002 Vice President (since January 2002), Assistant 130
9/24/1964 General Counsel and Assistant Secretary (since
333 W. Wacker Drive 1998), formerly Assistant Vice President of Nuveen
Chicago, IL 60606 Investments; Vice President (since January 2002)
and Assistant Secretary (since 1998), formerly
Assistant Vice President of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp.; prior thereto,
Associate at the law firm D'Ancona Partners LLC.
85
Directors/Trustees
and Officers (continued)
PRINCIPAL OCCUPATION(S) NUMBER OF FUNDS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS IN NUVEEN COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED (b) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
LORNA C. FERGUSON Vice President 1998 Vice President of Nuveen Investments; Vice 130
10/24/1945 President (since 1998) of Nuveen Advisory Corp.
333 W. Wacker Drive and Nuveen Institutional Advisory Corp.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM M. FITZGERALD Vice President 1995 Managing Director (since January 2002) of 130
3/2/1964 Nuveen Investments; Managing Director of
333 W. Wacker Drive Nuveen Advisory Corp. and Nuveen Institutional
Chicago, IL 60606 Advisory Corp. (since 2001); prior thereto,
Vice President of Nuveen Advisory Corp.;
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
STEPHEN D. FOY Vice President 1998 Vice President of Nuveen Investments and 130
5/31/1954 and Controller (since 1998) The John Nuveen Company; Vice
333 W. Wacker Drive President (since 1999) of Nuveen Senior Loan
Chicago, IL 60606 Asset Management Inc.; Certified Public
Accountant.
------------------------------------------------------------------------------------------------------------------------------------
J. THOMAS FUTRELL Vice President 1992 Vice President of Nuveen Advisory Corp.; 126
7/5/1955 Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
RICHARD A. HUBER Vice President 1997 Vice President of Nuveen Institutional Advisory 126
3/26/1963 Corp. (since 1998) and Nuveen Advisory Corp.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
STEVEN J. KRUPA Vice President 1990 Vice President of Nuveen Advisory Corp. 126
8/21/1957
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
DAVID J. LAMB Vice President 2000 Vice President (since 2000) of Nuveen 130
3/22/1963 Investments, previously Assistant Vice
333 W. Wacker Drive President (since 1999); prior thereto,
Chicago, IL 60606 Associate of Nuveen Investments; Certified
Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
TINA M. LAZAR Vice President 2002 Vice President (since 1999), previously, 130
8/27/1961 Assistant Vice President (since 1993) of
333 W. Wacker Drive Nuveen Investments.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
LARRY W. MARTIN Vice President 1992 Vice President, Assistant Secretary and 130
7/27/1951 and Assistant Assistant General Counsel of Nuveen
333 W. Wacker Drive Secretary Investments; Vice President and Assistant
Chicago, IL 60606 Secretary of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.; Vice President and
Assistant Secretary of The John Nuveen
Company and Nuveen Asset Management, Inc.;
Vice President and Assistant Secretary (since 1999)
of Nuveen Senior Loan Asset Management Inc.
86
PRINCIPAL OCCUPATION(S) NUMBER OF FUNDS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS IN NUVEEN COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED (b) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
EDWARD F. NEILD, IV Vice President 1996 Managing Director (since January 2002) of 130
7/7/1965 Nuveen Investments; Managing Director
333 W. Wacker Drive (since 1997) of Nuveen Advisory Corp.
Chicago, IL 60606 and Nuveen Institutional Advisory Corp.;
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
THOMAS J. O'SHAUGHNESSY Vice President 2002 Vice President (since January 2002), formerly, 126
9/4/1960 Assistant Vice President (since 1998) of Nuveen
333 W. Wacker Drive Advisory Corp.; prior thereto, Portfolio Manager.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
THOMAS C. SPALDING Vice President 1982 Vice President of Nuveen Advisory Corp. and 126
7/31/1951 Nuveen Institutional Advisory Corp.; Chartered
333 W. Wacker Drive Financial Analyst.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
GIFFORD R. ZIMMERMAN Vice President 1992 Managing Director (since January 2002, 130
9/9/1956 and Secretary formerly Vice President), Assistant Secretary
333 W. Wacker Drive and Associate General Counsel (formerly
Chicago, IL 60606 Assistant General Counsel) of Nuveen Investments;
Managing Director (since January 2002, formerly
Vice President) and Assistant Secretary of Nuveen
Advisory Corp. and Nuveen Institutional Advisory
Corp.; Vice President and Assistant Secretary of
The John Nuveen Company; Managing Director
(since January 2002, formerly Vice President)
and Assistant Secretary (since 1999) of Nuveen
Senior Loan Asset Management Inc.; Chartered
Financial Analyst.
(a) Year First Elected or Appointed is the year presented or each Fund's
respective inception date if later.
(b) Year First Elected or Appointed is the year presented or each Fund's
respective inception date if later. Officers serve one year terms through
July of each year.
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and director of
Nuveen Advisory Corp.
(2) Directors/Trustees are elected each year by shareholders and serve a one
year term until his/her successor is elected.
87
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NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
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Fund
Information
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
Nuveen Investments
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Morgan, Lewis &
Bockius LLP
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the period ended July 31, 2002. Any future repurchases
will be reported to shareholders in the next annual or semiannual report.
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Serving Investors
for Generations
PHOTO OF: John Nuveen, Sr.
John Nuveen, Sr.
For over a century, generations of Americans have relied on Nuveen Investments
to help them grow and keep the money they've earned. Financial advisors,
investors and their families have associated Nuveen Investments with quality,
expertise and dependability since 1898. That is why financial advisors have
entrusted the assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisors and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
To find out more about how Nuveen Investments' products and services can help
you preserve your financial security, talk with your financial advisor, or call
us at (800) 257-8787 for more information, including a prospectus where
applicable. Please read that information carefully before you invest.
Logo: NUVEEN Investments
Nuveen Investments 333 West Wacker Drive
Chicago, IL 60606 www.nuveen.com EAN-A-0702