Annual Report May 31, 2002
Nuveen
Municipal Closed-End
Exchange-Traded
Funds
MARYLAND
NMY
NFM
NZR
NORTH CAROLINA
NNC
NRB
NNO
VIRGINIA
NPV
NGB
NNB
DEPENDABLE,
TAX-FREE INCOME
BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
THE NUVEEN
INVESTOR
SEE PAGE 13
Logo: NUVEEN Investments
RECEIVE YOUR
NUVEEN
FUND
UPDATES
FASTER
THAN EVER!
By registering for online access, you can view and save on your computer the
Fund information you currently receive in the mail. This information then can be
retrieved any time, and you can select only the specific pages you want to view
or print.
Once you sign up, you'll receive an e-mail notice the moment Fund reports are
ready. This notice will contain a link to the report - all you have to do is
click on the internet address provided. You'll be saving time, as well as saving
printing and distribution expenses for your Fund.
Registering for electronic access is easy and only takes a few minutes. (see
instructions at right)
Your e-mail address is strictly confidential and will not be used for anything
other than notifications of shareholder information.
And if you decide you don't like receiving your reports electronically, it's a
simple process to go back to regular mail delivery.
SIGN UP TODAY--Here's all you need to do...
IF YOUR NUVEEN FUND
DIVIDENDS AND STATEMENTS
COME FROM YOUR
FINANCIAL ADVISOR OR
BROKERAGE ACCOUNT,
FOLLOW THE STEPS
OUTLINED BELOW:
1 G0 to WWW.INVESTORDELIVERY.COM
2 Look at the address sheet that accompanied this report. Enter the personal
13-CHARACTER ENROLLMENT NUMBER imprinted near your name on the address
sheet.
3 You'll be taken to a page with several options. Select the NEW
ENROLLMENT-CREATE screen. Once there, enter your e-mail address (e.g.
yourID@providerID.com), and a personal, 4-digit PIN of your choice. (Pick a
number that's easy to remember.)
4 Click Submit. Confirm the information you just entered is correct, then
click Submit again.
5 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
6 Use this same process if you need to change your registration information
or cancel internet viewing.
IF YOUR NUVEEN FUND
DIVIDENDS AND STATEMENTS
COME DIRECTLY TO
YOU FROM NUVEEN,
FOLLOW THE STEPS
OUTLINED BELOW:
1 Go to WWW.NUVEEN.COM
2 Select the Access Account tab. Select the E-REPORT ENROLLMENT section.
Click on Enrollment Page.
3 You'll be taken to a screen that asks for your Social Security number and
e-mail address. Fill in this information, then click Enroll.
4 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
Logo: NUVEEN Investments
Dear
SHAREHOLDER
Photo of:
Timothy R. Schwertfeger
Chairman of the Board
Sidebar text:
"I urge you to consider receiving future Fund reports and other information
electronically ...see the inside front cover of this report for detailed
instructions."
I am pleased to report that during the period covered by this report, your Fund
continued to meet its primary objective of providing attractive 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 steady 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 Fund 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
July 15, 2002
1
Nuveen Municipal Closed-End Exchange-Traded Funds
(NMY, NFM, NZR, NNC, NRB, NNO, NPV, NGB, NNB )
Portfolio Managers'
COMMENTS
Portfolio managers Paul Brennan and Tom O'Shaughnessy review economic and market
conditions, key strategies, and recent Fund performance. Paul assumed portfolio
management responsibility for NMY and NPV in 1999, and for NFM, NZR, NGB and NNB
at their respective inceptions in 2001. Tom has managed NNC since 1998, and NRB
and NNO since 2001.
WHAT FACTORS HAD THE GREATEST INFLUENCE ON THE U.S. ECONOMY AND THE MUNICIPAL
MARKET DURING THIS REPORTING PERIOD?
The two major forces at work during the twelve months ended May 31, 2002, were
the general slowdown in economic growth and the Federal Reserve's aggressive
easing of short-term interest rates. In addition, the events of September 11,
2001, and the uncertain geopolitical climate that followed also impacted the
economy and the markets.
In the municipal markets, the generally sluggish economic environment of the
past twelve months helped many securities perform well. In addition, the trend
toward increased issuance remained strong. Looking at the first five months of
2002, Maryland and Virginia saw significant increases in municipal issuance when
compared with the same period in 2001. North Carolina's issuance this year was
less than the unusually heavy calendar in the first five months of 2001, but
still strong by historical standards. 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, also have been active buyers.
Maryland, North Carolina and Virginia all remain in a relatively strong economic
condition. The business climate in all three states stayed positive over the
course of the past year, with a diversified mix of private and public sector
opportunities helping to create relatively low levels of unemployment.
HOW DID THESE NUVEEN FUNDS PERFORM OVER THE PAST TWELVE MONTHS?
For the fiscal year ended May 31, 2002, the Funds covered in this report
produced total annual returns on net asset value (NAV) as shown in the
accompanying table. The annual returns for the Lehman Brothers Municipal Bond
Index1 and relevant Lipper Peer Group2 are also presented.
TOTAL RETURN LEHMAN LIPPER
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
-----------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
5/31/02 EQUIVALENT3 5/31/02 5/31/02 5/31/02
-----------------------------------------------------------------------------
NMY 5.45% 8.20% 7.71% 6.15% 8.17%
-----------------------------------------------------------------------------
NFM 5.44% 8.18% 8.21% 6.15% 8.17%
-----------------------------------------------------------------------------
NZR 5.34% 8.03% - - -
-----------------------------------------------------------------------------
NNC 5.14% 7.97% 7.62% 6.15% 8.17%
-----------------------------------------------------------------------------
NRB 5.36% 8.31% 9.58% 6.15% 8.17%
-----------------------------------------------------------------------------
NNO 5.52% 8.56% - - -
-----------------------------------------------------------------------------
NPV 5.38% 8.15% 6.71% 6.15% 8.17%
-----------------------------------------------------------------------------
NGB 5.61% 8.50% 8.89% 6.15% 8.17%
-----------------------------------------------------------------------------
NNB 5.56% 8.42% - - -
-----------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
Over the past twelve months, the Fed's policy to keep short-term interest rates
relatively low, combined with generally favorable market conditions, created a
positive total return environment for municipal bonds. The Funds' participation
in the market's gains is reflected, in part, in the total returns on NAV listed
in the above table. 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 May 31, 2002, the durations of the Nuveen Funds
with at least one-year of history ranged from 9.36 to 16.92 compared with 7.82
for the unleveraged Lehman Brothers Municipal Bond Index.
Among the newer Funds, the durations of NZR, NNO and NNB, which were introduced
within the past year, ranged from 14.91 to 16.74. Relatively high durations are
typical of newer Nuveen funds, and over time, we expect these durations will
tend to get shorter to come more closely into line with the older Nuveen Funds.
1 The Funds' performances are compared with that of the Lehman Brothers
Municipal Bond Index, a national unleveraged index comprising a broad range
of investment-grade municipal bonds. Results for the Lehman index do not
reflect any expenses.
2 The Funds' total returns are compared with the average annualized return of
the 26 funds in the Lipper Other States 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: Maryland 33.5%, North Carolina 35.5%,
and Virginia 34%.
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 lever-aging 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.
2
HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With the Fed keeping short-term interest rates relatively low, the
dividend-payment capabilities of these Funds benefited from the use of leverage,
a strategy that can potentially enhance the dividends paid to common
shareholders. This benefit is tied in part to the short-term rates the leveraged
Funds pay their MuniPreferred(R) shareholders. For example, low short-term rates
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 year ended May 31, 2002, relatively low short-term interest rates
enabled us to implement dividend increases in NMY, NNC, NRB and NPV. The other
Funds maintained steady dividends during this period, with NZR declaring its
first dividend in November 2001 and NNO and NNB paying their first dividends in
January 2002.
Over the past year, the share prices of these Nuveen Funds tended to remain
relatively stable (see the charts on the individual Performance Overview pages).
This steady performance helped keep all of the Funds' share prices at premiums
to their net asset values.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE NUVEEN FUNDS DURING THE FISCAL
YEAR ENDED MAY 31, 2002?
Two areas of emphasis during this reporting period were enhancing the
dividend-paying capabilities of the Funds and improving their diversification
and call protection. New issuance in these states tends to be irregular, with
periods of relatively strong issuance followed by periods of relatively light
new issue supply. As a result, our approach has been to look for opportunities
as they occur and to respond quickly as favorable situations develop. Over the
past year, we often focused on essential services (such as water and sewer
systems), some selected airport and utility issues, and certain general
obligation bonds. When we were able to obtain attractive prices, we selectively
sold some healthcare and multifamily housing bonds from the portfolios.
We also were trying to modestly shorten each of the Funds' duration, which would
help to better position them in the event that interest rates start to creep
higher in the coming months. By shortening durations, we believe we can help
make the portfolios less sensitive to possible interest rate changes while still
providing yields and returns that are competitive with longer duration funds.
In the current geopolitical climate, we believe that maintaining strong credit
quality is a key requirement for all the Funds. As of May 31, 2002, each of
these Nuveen Funds continued to offer excellent credit quality, with allocations
of bonds rated AAA/U.S. guaranteed and AA ranging from 71% to 92%. All of the
Funds also had a portion of their assets invested in BBB bonds, which serve to
enhance the Funds' income streams.
All of these Funds also offer good levels of call protection through 2002 and
2003, with no scheduled calls in NFM, NZR, NRB and NNB, and 3% and 9% in NGB and
NNO, respectively, over this two-year period. The three older Funds, which mark
the 10-year anniversary of their inceptions in 2003, may begin to see the
increased call exposure normally associated with this part of a Fund's life
cycle. Over the next two years, calls could affect up to 17% of both NMY's and
NNC's portfolios and 19% of NPV's portfolio. The number of actual calls
experienced by these Funds will depend largely on market interest rates over
this time. In general, we believe this call exposure is very manageable. Given
the current level of rates, our general approach has been to hold
higher-yielding bonds as long as possible to help support the Funds' dividends,
while we look for attractive replacement opportunities.
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 recovery, but one
that may take longer and see a slower pace of growth than some are now
predicting. We believe inflation and interest rates should remain relatively low
over the near term, and that new municipal issuance should continue to be
strong. We anticipate the demand for tax-exempt municipal bonds will remain firm
as investors look for ways to rebalance their portfolios and reduce risk.
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. As noted, shareholders may see these Funds' durations
shorten.
Overall, we believe these Funds can continue to play an important role in
investors' long-range financial programs, providing balance and diversification,
dependable tax-free income, and a measure of security in uncertain times. We
believe the Funds currently are well positioned for the market environment
ahead, and we will continue to closely monitor and respond to events as
appropriate.
3
Nuveen Maryland Premium Income Municipal Fund
Performance
OVERVIEW As of May 31, 2002
NMY
pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 58%
AA 17%
A 13%
BBB 7%
NR 2%
Other 3%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.73
--------------------------------------------------
Common Share Net Asset Value $14.04
--------------------------------------------------
Market Yield 5.45%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.79%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.20%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $147,795
--------------------------------------------------
Average Effective Maturity (Years) 17.88
--------------------------------------------------
Leverage-Adjusted Duration 9.36
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 3/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 4.77% 7.71%
--------------------------------------------------
5-Year 8.57% 6.22%
--------------------------------------------------
Since Inception 6.08% 5.64%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Utilities 18%
--------------------------------------------------
Housing/Multifamily 18%
--------------------------------------------------
Healthcare 11%
--------------------------------------------------
Education and Civic Organizations 11%
--------------------------------------------------
Tax Obligation/Limited 10%
--------------------------------------------------
Bar chart:
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.0675
Jul 0.0675
Aug 0.0675
Sep 0.0685
Oct 0.0685
Nov 0.0685
Dec 0.0695
Jan 0.0695
Feb 0.0695
Mar 0.0715
Apr 0.0715
May 0.0715
Line chart:
SHARE PRICE PERFORMANCE
6/1/01 15.8
15.65
15.45
15.3
15.42
15.4
15.12
15.32
15.49
15.65
15.81
16.02
15.81
15.86
15.87
16
15
15.2
15.5
15.2
15.32
15.66
15.85
15.89
15.51
15.4
15.55
15.38
15.66
15.77
15.6
15.7
15.78
15.9
15.67
15.71
15.89
15.77
15.7
15.92
15.4
15.69
14.63
14.6
15.01
14.73
14.8
14.88
15.59
15.57
15.34
15.47
5/31/02 15.73
Weekly Closing Price
Past performance is not predictive of future results.
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 net ordinary income distribution in
December 2001 of $0.0024 per share.
4
Nuveen Maryland Dividend Advantage Municipal Fund
Performance
OVERVIEW As of May 31, 2002
NFM
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 43%
AA 28%
A 14%
BBB 9%
NR 6%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.44
--------------------------------------------------
Common Share Net Asset Value $14.18
--------------------------------------------------
Market Yield 5.44%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.77%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.18%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $58,925
--------------------------------------------------
Average Effective Maturity (Years) 23.41
--------------------------------------------------
Leverage-Adjusted Duration 14.30
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 1/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 1.98% 8.21%
--------------------------------------------------
Since Inception 7.46% 4.84%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Housing/Single Family 18%
--------------------------------------------------
Tax Obligation/General 15%
--------------------------------------------------
Healthcare 13%
--------------------------------------------------
Housing/Multifamily 11%
--------------------------------------------------
Tax Obligation/Limited 10%
--------------------------------------------------
Bar chart:
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0700
Jul 0.0700
Aug 0.0700
Sep 0.0700
Oct 0.0700
Nov 0.0700
Dec 0.0700
Jan 0.0700
Feb 0.0700
Mar 0.0700
Apr 0.0700
May 0.0700
Line chart:
SHARE PRICE PERFORMANCE
6/1/01 16.25
15.86
15.7
15.26
15.3
15.85
15.7
15.75
15.9
15.92
16.18
16.14
16.1
16
15.77
15.89
15.1
15.18
15.79
15.44
15.4
15.35
16.15
15.36
15.2
15.2
15.24
14.95
15.16
15.25
15.2
15.4
15.52
15.55
16.05
16.1
16
15.57
15.57
15.7
15.85
15.71
15.3
15.4
15.2
14.79
15.01
15
15.4
15.43
15.15
15.4
5/31/02 15.44
Weekly Closing Price
Past performance is not predictive of future results.
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%.
5
Nuveen Maryland Dividend Advantage Municipal Fund 2
Performance
OVERVIEW As of May 31, 2002
NZR
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 48%
AA 33%
A 12%
BBB 6%
NR 1%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.61
--------------------------------------------------
Common Share Net Asset Value $14.01
--------------------------------------------------
Market Yield 5.34%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.63%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.03%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $58,370
--------------------------------------------------
Average Effective Maturity (Years) 23.74
--------------------------------------------------
Leverage-Adjusted Duration 16.74
--------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 9/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
Since Inception 0.52% 1.01%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 27%
--------------------------------------------------
Healthcare 16%
--------------------------------------------------
Education and Civic Organizations 12%
--------------------------------------------------
Housing/Multifamily 12%
--------------------------------------------------
Tax Obligation/Limited 11%
--------------------------------------------------
bar chart:
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov 0.065
Dec 0.065
Jan 0.065
Feb 0.065
Mar 0.065
Apr 0.065
May 0.065
line chart:
SHARE PRICE PERFORMANCE
9/28/01 15
15.05
15.01
15.18
15.11
15.7
15.4
15.5
15.08
15.06
15
14.29
13.77
13.8
13.48
13.95
14.08
14.42
14.61
14.74
14.59
14.68
14.76
15
14.79
14.37
14.15
14.13
13.99
14.16
14.46
14.25
14.56
14.35
14.44
5/31/02 14.61
Weekly Closing Price
Past performance is not predictive of future results.
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%.
6
Nuveen North Carolina Premium Income Municipal Fund
Performance
OVERVIEW As of May 31, 2002
NNC
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 48%
AA 32%
A 10%
BBB 10%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $16.21
--------------------------------------------------
Common Share Net Asset Value $14.18
--------------------------------------------------
Market Yield 5.14%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.34%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 7.97%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $89,286
--------------------------------------------------
Average Effective Maturity (Years) 20.09
--------------------------------------------------
Leverage-Adjusted Duration 11.46
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 5/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 15.44% 7.62%
--------------------------------------------------
5-Year 7.61% 6.86%
--------------------------------------------------
Since Inception 6.38% 5.81%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Healthcare 21%
--------------------------------------------------
Tax Obligation/Limited 13%
--------------------------------------------------
Housing/Single Family 12%
--------------------------------------------------
Utilities 9%
--------------------------------------------------
U.S. Guaranteed 9%
--------------------------------------------------
Bar chart:
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0645
Jul 0.0645
Aug 0.0645
Sep 0.066
Oct 0.066
Nov 0.066
Dec 0.0675
Jan 0.0675
Feb 0.0675
Mar 0.0695
Apr 0.0695
May 0.0695
Line chart:
SHARE PRICE PERFORMANCE
6/1/01 14.85
14.95
14.95
15.08
15.21
15.44
15.45
15.51
15.52
15.44
15.46
15.5
15.52
15.76
15.65
15.7
14.85
14.73
15.35
15.36
15.36
15.42
15.67
15.53
14.95
14.88
15.09
15.13
15.03
14.76
14.27
14.69
14.76
15.04
14.99
15.22
15.49
15.45
15.55
15.7
15.76
15.8
15.72
15.62
15.6
15.54
15.6
15.56
15.45
15.75
16
16.07
5/31/02 16.21
Weekly Closing Price
Past performance is not predictive of future results.
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 35.5%.
7
Nuveen North Carolina Dividend Advantage Municipal Fund
PERFORMANCE
OVERVIEW As of May 31, 2002
NRB
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 48%
AA 38%
A 4%
BBB 8%
NR 4%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.44
--------------------------------------------------
Common Share Net Asset Value $14.39
--------------------------------------------------
Market Yield 5.36%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.66%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.31%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $32,148
--------------------------------------------------
Average Effective Maturity (Years) 23.88
--------------------------------------------------
Leverage-Adjusted Duration 16.92
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 1/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 7.54% 9.58%
--------------------------------------------------
Since Inception 7.55% 5.85%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Water and Sewer 19%
--------------------------------------------------
Healthcare 18%
--------------------------------------------------
Education and Civic Organizations 15%
--------------------------------------------------
Utilities 11%
--------------------------------------------------
Housing/Multifamily 10%
--------------------------------------------------
Bar chart:
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.068
Jul 0.068
Aug 0.068
Sep 0.068
Oct 0.068
Nov 0.068
Dec 0.068
Jan 0.068
Feb 0.068
Mar 0.069
Apr 0.069
May 0.069
Line chart:
SHARE PRICE PERFORMANCE
6/1/01 15.15
15.5
15.4
15.3
15.46
15.7
15.8
15.54
15.55
15.48
15.65
15.74
15.75
16.16
15.6
15.59
15.1
15.01
15.5
15.35
15.68
15.24
15.3
15.27
15.12
15.13
15.04
15.21
15.03
15.09
15.14
14.99
15.12
15.23
15.2
15.25
15.25
15.19
15.3
15.2
15.38
15.19
14.1
14.5
15.03
15.04
15.17
15
15
15
14.95
15.14
5/31/02 15.44
Weekly Closing Price
Past performance is not predictive of future results.
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 35.5%.
8
Nuveen North Carolina Dividend Advantage Municipal Fund 2
Performance
OVERVIEW As of May 31, 2002
NNO
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 57%
AA 29%
A 5%
BBB 9%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.90
--------------------------------------------------
Common Share Net Asset Value $14.30
--------------------------------------------------
Market Yield 5.52%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.89%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.56%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $53,383
--------------------------------------------------
Average Effective Maturity (Years) 18.99
--------------------------------------------------
Leverage-Adjusted Duration 14.91
--------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 11/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
Since Inception 1.64% 2.22%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Water and Sewer 19%
--------------------------------------------------
Utilities 16%
--------------------------------------------------
Healthcare 15%
--------------------------------------------------
Education and Civic Organizations 13%
--------------------------------------------------
Tax Obligation/General 10%
--------------------------------------------------
Bar chart:
2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jan 0.0685
Feb 0.0685
Mar 0.0685
Apr 0.0685
May 0.0685
line chart:
SHARE PRICE PERFORMANCE
11/16/01 15
15
15.05
15.02
15
14.8
14.51
14.5
14.73
14.61
14.84
14.88
14.99
14.99
14.75
15
15.13
14.99
14.85
14.75
14.36
14.5
14.4
14.9
15
14.75
14.84
14.88
5/31/02 14.9
Weekly Closing Price
Past performance is not predictive of future results.
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 35.5%.
9
Nuveen Virginia Premium Income Municipal Fund
Performance
OVERVIEW As of May 31, 2002
NPV
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 52%
AA 22%
A 17%
BBB 2%
NR 5%
Other 2%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $16.17
--------------------------------------------------
Common Share Net Asset Value $14.69
--------------------------------------------------
Market Yield 5.38%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.69%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.15%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $128,655
--------------------------------------------------
Average Effective Maturity (Years) 17.99
--------------------------------------------------
Leverage-Adjusted Duration 9.45
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 3/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 6.64% 6.71%
--------------------------------------------------
5-Year 7.85% 6.84%
--------------------------------------------------
Since Inception 6.47% 6.35%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 14%
--------------------------------------------------
U.S. Guaranteed 13%
--------------------------------------------------
Water and Sewer 13%
--------------------------------------------------
Healthcare 11%
--------------------------------------------------
Education and Civic Organizations 10%
--------------------------------------------------
Bar chart:
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0695
Jul 0.0695
Aug 0.0695
Sep 0.0715
Oct 0.0715
Nov 0.0715
Dec 0.0725
Jan 0.0725
Feb 0.0725
Mar 0.0725
Apr 0.0725
May 0.0725
Line chart:
SHARE PRICE PERFORMANCE
6/1/01 16.04
16.15
16.07
16.16
16.11
16.16
16.41
16.46
16.79
17.1
17.1
16.89
16.96
16.95
16.82
16.85
16.18
15.84
16.15
16.2
16.36
16.17
16.19
16.3
15.65
15.78
15.89
16.05
15.75
15.65
15.7
15.83
16.07
16.19
16.31
16.06
16.56
16.65
16.57
16.74
16.58
16.31
15.92
15.69
15.4
15.68
15.19
15.33
15.89
15.85
15.97
16.14
5/31/02 16.17
Weekly Closing Price
Past performance is not predictive of future results.
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 34%.
2 The Fund also paid shareholders a net ordinary income distribution in
December 2001 of $0.0028 per share.
10
Nuveen Virginia Dividend Advantage Municipal Fund
Performance
OVERVIEW As of May 31, 2002
NGB
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 47%
AA 30%
A 14%
BBB 4%
NR 5%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.09
--------------------------------------------------
Common Share Net Asset Value $14.23
--------------------------------------------------
Market Yield 5.61%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.01%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.50%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $44,308
--------------------------------------------------
Average Effective Maturity (Years) 20.92
--------------------------------------------------
Leverage-Adjusted Duration 12.84
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 1/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 5.10% 8.89%
--------------------------------------------------
Since Inception 5.78% 5.17%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Transportation 19%
--------------------------------------------------
Tax Obligation/General 19%
--------------------------------------------------
Healthcare 12%
--------------------------------------------------
Water and Sewer 9%
--------------------------------------------------
Education and Civic Organizations 8%
--------------------------------------------------
Bar chart:
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0705
Jul 0.0705
Aug 0.0705
Sep 0.0705
Oct 0.0705
Nov 0.0705
Dec 0.0705
Jan 0.0705
Feb 0.0705
Mar 0.0705
Apr 0.0705
May 0.0705
line chart:
SHARE PRICE PERFORMANCE
6/1/01 15.25
15
14.98
15.05
15.05
15.21
15.28
15.14
15.45
15.55
16
15.94
16.16
16
15.97
15.8
15.28
15.3
15.74
15.8
15.78
15.7
15.41
15.4
15.35
15.5
15.41
15.5
15.33
15
14.65
15.11
15.31
15.35
15.5
15.9
15.85
15.57
15.6
15.7
15.47
15.3
14.9
14.8
14.25
14.36
14.05
14.18
14.6
14.75
14.69
14.86
5/31/02 15.09
Weekly Closing Price
Past performance is not predictive of future results.
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 34%.
11
Nuveen Virginia Dividend Advantage Municipal Fund 2
Performance
OVERVIEW As of May 31, 2002
NNB
Pie chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 59%
AA 33%
A 3%
BBB 5%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.90
--------------------------------------------------
Common Share Net Asset Value $14.31
--------------------------------------------------
Market Yield 5.56%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.94%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.42%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $81,325
--------------------------------------------------
Average Effective Maturity (Years) 23.01
--------------------------------------------------
Leverage-Adjusted Duration 15.63
--------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 11/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
Since Inception 1.71% 2.30%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 27%
--------------------------------------------------
Tax Obligation/General 20%
--------------------------------------------------
Water and Sewer 19%
--------------------------------------------------
Healthcare 8%
--------------------------------------------------
Housing/Single Family 7%
--------------------------------------------------
Bar chart:
2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jan 0.069
Feb 0.069
Mar 0.069
Apr 0.069
May 0.069
Line chart:
SHARE PRICE PERFORMANCE
11/16/01 15
15
15.02
15.07
15.05
14.6
15
14.8
14.85
14.85
14.85
14.9
14.95
14.88
14.9
14.99
14.9
14.75
14.6
14
14.5
13.7
14.3
14.25
14.55
14.6
14.4
14.72
5/31/02 14.9
Weekly Closing Price
Past performance is not predictive of future results.
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 34%.
12
V1
THE NUVEEN
INVESTOR
PHOTO OF: 2 boys
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 15)
Volume one 2002
INSIDE
13 Bond Surveillance -
A High Priority at Nuveen
14 Is it Time to Rethink
Your Bond Strategy?
15 Many Investors Continue
to Find Solutions with
Professional Advice
16 Fund Reports
Available Online
16 ETFConnect:
The Source for All
Exchange-Traded Funds
(C)2002 Nuveen Investments.
All rights reserved.
LOGO: NUVEEN Investments
13
V1
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 of: lighthouse
Photo of: 2 children
THE NUVEEN INVESTOR VOL 02.1
LOGO: NUVEEN Investments
14
MANY INVESTORS CONTINUE TO FIND SOLUTIONS WITH PROFESSIONAL ADVICE
Photo of: clouds
Photo of: woman and girl
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 13)
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
15
LOOK AHEAD...
FUND REPORTS AVAILABLE ONLINE
photo of 2 web pages
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
not, repeat these steps to ensure all information is accurate. You can use this
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.
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 of: ETF Connect web page.
The Nuveen Investor Vol 02.1
Logo: NUVEEN Investments
16
Report of
INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN NORTH CAROLINA PREMIUM INCOME MUNICIPAL FUND
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Maryland Premium Income Municipal Fund,
Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland Dividend
Advantage Municipal Fund 2, Nuveen North Carolina Premium Income Municipal Fund,
Nuveen North Carolina Dividend Advantage Municipal Fund, Nuveen North Carolina
Dividend Advantage Municipal Fund 2, Nuveen Virginia Premium Income Municipal
Fund, Nuveen Virginia Dividend Advantage Municipal Fund and Nuveen Virginia
Dividend Advantage Municipal Fund 2 as of May 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. Our procedures included confirmation of securities
owned as of May 31, 2002, by correspondence with the custodian and brokers or by
other appropriate alternative auditing procedures where 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 position of Nuveen
Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend Advantage
Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2, Nuveen
North Carolina Premium Income Municipal Fund, Nuveen North Carolina Dividend
Advantage Municipal Fund, Nuveen North Carolina Dividend Advantage Municipal
Fund 2, Nuveen Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend
Advantage Municipal Fund and Nuveen Virginia Dividend Advantage Municipal Fund 2
at May 31, 2002, and the results of their operations, changes in their net
assets and their financial highlights for the periods indicated therein in
conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
CHICAGO, ILLINOIS
JULY 12, 2002
17
Nuveen Maryland Premium Income Municipal Fund (NMY)
Portfolio of
INVESTMENTS May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 0.8%
$ 1,130 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 $ 1,154,453
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 16.6%
1,000 Maryland Economic Development Corporation, Student Housing Revenue 6/09 at 102.00 Baa3 1,014,400
Bonds (Collegiate Housing Foundation, Salisbury Project),
Series 1999A, 6.000%, 6/01/19
2,250 Maryland Economic Development Corporation, Student Housing Revenue 6/09 at 102.00 Baa3 2,252,340
Bonds (Collegiate Housing Foundation, University Courtyard Project),
Series 1999A, 5.750%, 6/01/24
910 Maryland Economic Development Corporation, Utility Infrastructure 7/11 at 100.00 AAA 964,964
Revenue Bonds (University of Maryland, College Park Project),
Series 2001, 5.375%, 7/01/16
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Bullis School Issue, Series 2000:
750 5.250%, 7/01/25 1/11 at 101.00 AAA 757,553
500 5.250%, 7/01/30 1/11 at 101.00 AAA 503,005
Maryland Health and Higher Educational Facilities Authority,
Refunding Revenue Bonds, Johns Hopkins University Issue, Series
1997:
1,000 5.625%, 7/01/17 7/07 at 102.00 AA 1,062,880
1,500 5.625%, 7/01/27 7/07 at 102.00 AA 1,554,195
1,400 Maryland Health and Higher Educational Facilities Authority, Revenue 6/11 at 100.00 Baa1 1,398,740
Bonds, Maryland Institute College of Art, Series 2001, 5.625%, 6/01/36
9,445 Morgan State University, Maryland, Academic Fees and Auxiliary No Opt. Call AAA 10,923,898
Facilities Fees, Revenue Refunding Bonds, Series 1993, 6.100%, 7/01/20
4,000 University of Puerto Rico, University System Revenue Bonds, Series O, 6/05 at 101.00 AAA 4,041,520
5.375%, 6/01/30
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 17.1%
City of Gaithersburg, Maryland, Hospital Facilities Refunding
and Improvement Revenue Bonds (Shady Grove Adventist Hospital),
Series 1995:
2,550 6.500%, 9/01/12 No Opt. Call AAA 3,007,394
3,015 5.500%, 9/01/15 9/05 at 102.00 AAA 3,123,691
2,000 Maryland Health and Higher Educational Facilities Authority, Revenue 6/09 at 101.00 A 2,042,920
Bonds, Kaiser Permanente, Series 1998A, 5.375%, 7/01/15
750 Maryland Health and Higher Educational Facilities Authority, Revenue 7/10 at 101.00 Baa1 810,465
Bonds, University of Maryland Medical System Issue, Series 2000,
6.750%, 7/01/30
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Johns Hopkins Medicine, Howard County General
Hospital Acquisition Issue, Series 1998:
1,000 5.000%, 7/01/19 7/08 at 101.00 AAA 1,009,160
1,250 5.000%, 7/01/29 7/08 at 101.00 AAA 1,220,050
1,500 Maryland Health and Higher Educational Facilities Authority, Revenue 1/08 at 101.00 Aaa 1,463,970
Bonds, Upper Chesapeake Hospitals Issue, Series 1998A, 5.125%, 1/01/38
1,500 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 A+ 1,423,140
Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34
1,500 Maryland Health and Higher Educational Facilities Authority, Revenue 7/12 at 100.00 A 1,549,755
Bonds, University of Maryland Medical System, Series 2002,
6.000%, 7/01/22
18
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Carroll County General Hospital, Series 2002:
$ 1,500 5.800%, 7/01/32 (WI, settling 6/13/02) 7/12 at 100.00 Baa1 $ 1,481,610
3,000 6.000%, 7/01/37 (WI, settling 6/13/02) 7/12 at 100.00 Baa1 3,007,680
Prince George's County, Maryland, Project and Refunding Revenue
Bonds (Dimensions Health Corporation Issue), Series 1994:
825 5.000%, 7/01/05 7/04 at 102.00 B3 554,507
3,080 5.375%, 7/01/14 7/04 at 102.00 B3 1,588,387
6,000 5.300%, 7/01/24 7/04 at 102.00 B3 3,015,840
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 26.8%
4,000 Anne Arundel County, Maryland, Multifamily Housing Revenue Bonds No Opt. Call BBB- 4,123,040
(Woodside Apartments Project), Series 1994, 7.450%, 12/01/24
(Alternative Minimum Tax) (Mandatory put 12/01/03)
1,795 County Commissioners of Charles County, Maryland, Mortgage Revenue 5/05 at 102.00 AAA 1,879,186
Refunding Bonds (Holly Station IV Townhouses Project - FHA-Insured
Mortgage Loan), Series 1995A, 6.450%, 5/01/26
Howard County, Maryland, Mortgage Revenue Refunding Bonds
(Normandy Woods III Apartments Project - FHA-Insured Mortgage
Loan), Series 1996A:
700 6.000%, 7/01/17 7/06 at 102.00 AAA 718,942
2,000 6.100%, 7/01/25 7/06 at 102.00 AAA 2,040,520
1,130 Community Development Administration, Department of Housing and 5/03 at 102.00 Aa2 1,165,019
Community Development, Maryland, Multifamily Housing Revenue Bonds
(Insured Mortgage Loans), 1993 Series B, 6.625%, 5/15/23
2,500 Community Development Administration, Department of Housing and 1/09 at 101.00 Aa2 2,455,650
Community Development, Maryland, Housing Revenue Bonds,
1999 Series A, 5.350%, 7/01/41 (Alternative Minimum Tax)
880 Community Development Administration, Department of Housing and 1/10 at 100.00 Aa2 912,701
Community Development, Maryland, Housing Revenue Bonds,
1999 Series B, 6.250%, 7/01/32 (Alternative Minimum Tax)
1,450 Community Development Administration, Department of Housing and 2/11 at 101.00 Aaa 1,506,217
Community Development, Maryland, Multifamily Development Revenue
Bonds, Edgewater Village Apartments Project, 2000
Series B, 5.800%, 8/01/20 (Alternative Minimum Tax)
3,075 Community Development Administration, Department of Housing and 5/03 at 102.00 Aa3 3,108,794
Community Development, Maryland, Multifamily Housing Revenue
Bonds (Insured Mortgage Loans), 1993 Series D, 6.050%, 5/15/24
2,000 Housing Opportunities Commission of Montgomery County, Maryland, 7/05 at 102.00 Aa2 2,095,240
Multifamily Housing Revenue Bonds, 1995 Series A, 5.900%, 7/01/15
1,500 Housing Opportunities Commission of Montgomery County, Maryland, 7/06 at 102.00 Aaa 1,550,535
Multifamily Housing Revenue Bonds, 1996 Series B, 5.900%, 7/01/26
3,830 Housing Opportunities Commission of Montgomery County, Maryland, 7/08 at 101.00 Aaa 3,765,924
Multifamily Housing Development Bonds, 1998 Series A, 5.200%, 7/01/30
2,000 Housing Opportunities Commission of Montgomery County, Maryland, 7/10 at 100.00 Aaa 2,106,000
Multifamily Housing Development Bonds, 2000 Series A, 6.100%, 7/01/30
1,000 Housing Authority of Prince George's County, Maryland, Mortgage 1/03 at 102.00 AAA 1,026,960
Revenue Refunding Bonds (Stevenson Apartments Project -
GNMA Collateralized), Series 1993A, 6.350%, 7/20/20
Housing Authority of Prince George's County, Maryland, Mortgage
Revenue Refunding Bonds (Cherry Hill Apartments Project),
Series 1993A:
1,090 5.900%, 9/20/10 9/03 at 102.00 AAA 1,129,011
1,930 6.000%, 9/20/15 9/03 at 102.00 AAA 1,993,922
1,500 Housing Authority of Prince George's County, Maryland, Mortgage 12/04 at 102.00 AAA 1,577,745
Revenue Refunding Bonds (Riverview Terrace Apartments Project -
GNMA Collateralized), Series 1995A, 6.700%, 6/20/20
Housing Authority of Prince George's County, Maryland, Mortgage
Revenue Refunding Bonds (Overlook Apartments Project at Langley
Apartments Project - GNMA Collateralized), Series 1995A:
2,000 5.700%, 12/20/15 12/05 at 102.00 AAA 2,086,660
1,670 5.750%, 12/20/19 12/05 at 102.00 AAA 1,722,271
1,000 Housing Authority of Prince George's County, Maryland, Mortgage 11/02 at 100.00 AAA 1,000,340
Revenue Refunding Bonds (Foxglenn Apartments Project -
GNMA Collateralized), Series 1998A, 5.450%, 11/20/14
(Alternative Minimum Tax)
19
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 540 Housing Authority of Prince George's County, Maryland, Mortgage 9/09 at 102.00 AAA $ 558,133
Revenue Bonds (University Landing at Langley Apartments Project -
GNMA Collateralized), Series 1999, 6.100%, 3/20/41 (Alternative
Minimum Tax)
1,000 City of Salisbury, Maryland, Mortgage Revenue Refunding Bonds 12/04 at 102.00 AAA 1,036,890
(College Lane Apartments Project - FHA-Insured Mortgage Loan),
Series 1995A, 6.600%, 12/01/26
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.9%
370 Community Development Administration, Department of Housing and 4/04 at 102.00 Aa2 372,216
Community Development, Maryland, Single Family Program Bonds,
1994 First Series, 5.900%, 4/01/11
1,000 Community Development Administration, Department of Housing and 4/04 at 102.00 Aa2 1,025,750
Community Development, Maryland, Single Family Program Bonds,
1994 Fourth Series, 6.450%, 4/01/14
2,230 Community Development Administration, Department of Housing and 4/04 at 102.00 Aa2 2,283,988
Community Development, Maryland, Single Family Program Bonds,
1994 Fifth Series, 6.750%, 4/01/26 (Alternative Minimum Tax)
1,190 Community Development Administration, Department of Housing and 9/09 at 100.00 Aa2 1,246,263
Community Development, Maryland, Residential Revenue Bonds,
1999 Series H, 6.250%, 3/01/31 (Alternative Minimum Tax)
1,925 Community Development Administration, Department of Housing and 9/09 at 100.00 Aa2 1,994,127
Community Development, Maryland, Residential Revenue Bonds,
2000 Series B, 6.150%, 9/01/32 (Alternative Minimum Tax)
1,865 Community Development Administration, Department of Housing and 3/10 at 100.00 Aa2 1,956,907
Community Development, Maryland, Residential Revenue Bonds,
2000 Series D, 6.250%, 9/01/32 (Alternative Minimum Tax)
1,000 Community Development Administration, Department of Housing and 4/06 at 102.00 Aa2 1,043,550
Community Development, Maryland, Single Family Program Bonds,
1996 Sixth Series, 6.200%, 4/01/22 (Alternative Minimum Tax)
1,675 Housing Opportunities Commission of Montgomery County, Maryland, 7/04 at 102.00 Aa2 1,763,574
Single Family Mortgage Revenue Bonds, 1994 Series A, 6.600%, 7/01/14
700 Housing Authority of Prince George's County, Maryland, GNMA/FNMA 6/04 at 102.00 AAA 715,568
Collateralized Single Family Mortgage Revenue Bonds, Series 1994A,
6.350%, 6/01/11 (Alternative Minimum Tax)
1,665 Housing Authority of Prince George's County, Maryland, 8/07 at 102.00 AAA 1,716,798
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1997, 5.625%, 8/01/17 (Alternative Minimum Tax)
515 Housing Authority of Prince George's County, Maryland, 8/10 at 100.00 AAA 540,467
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 2000A, 6.150%, 8/01/19
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.9%
1,000 Carroll County, Maryland, Refunding Revenue Bonds, EMA Obligated 1/09 at 101.00 AA 1,025,250
Group Issue (Fairhaven and Copper Ridge), Series 1999A, 5.625%, 1/01/25
1,830 Maryland Economic Development Corporation Revenue Bonds (Health and 4/11 at 102.00 N/R 1,854,595
Mental Hygiene Providers Facilities Acquisition Program),
Series 1996A, 7.625%, 4/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 13.7%
Baltimore County Metropolitan District, Maryland, General Obligation
Bonds, 67th Issue:
2,500 5.000%, 6/01/25 6/11 at 101.00 AAA 2,474,725
2,000 5.000%, 6/01/26 6/11 at 101.00 AAA 1,976,580
1,000 Mayor and City Council of Baltimore, Maryland, General Obligation Serial No Opt. Call A+ 1,186,400
Consolidated Public Improvement Bonds, 1989 Series B, 7.150%, 10/15/08
Mayor and City Council of Baltimore, Maryland, General
Obligation Consolidated Public Improvement Refunding Bonds, 1995
Series A:
1,200 7.375%, 10/15/03 No Opt. Call AAA 1,289,544
3,000 7.250%, 10/15/04 No Opt. Call AAA 3,345,030
1,000 Mayor and City Council of Baltimore, Maryland, General Obligation Serial No Opt. Call AAA 1,150,150
Consolidated Public Improvement Bonds, 1991 Series C, 6.375%, 10/15/07
3,000 Frederick County, Maryland, General Obligation Public Facilities Bonds, 7/09 at 101.00 AA 3,118,980
Series 1999, 5.250%, 7/01/18
500 Frederick County, Maryland, Special Obligation Bonds, Villages of Lake 7/10 at 102.00 AA 509,380
Linganore Community Development Authority, Series 2001A, 5.700%, 7/01/29
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 575 Howard County, Maryland, General Obligation Public Improvement and 2/12 at 100.00 AAA $ 598,696
Refunding Bonds, 2002 Series A, 5.250%, 8/15/18
2,000 Montgomery County, Maryland, General Obligation Consolidated Public 10/11 at 101.00 AAA 2,094,400
Improvement Refunding Bonds, Series 2001, 5.250%, 10/01/18
925 Northern Mariana Islands Commonwealth, General Obligation Bonds, 6/10 at 100.00 A 950,697
Series 2000A, 6.000%, 6/01/20
1,000 Prince George's County, Maryland, General Obligation Consolidated 12/11 at 101.00 AAA 1,033,610
Public Improvement Bonds, Series 2001, 5.250%, 12/01/20
460 Wicomico County, Maryland, General Obligation Public Improvement 12/09 at 101.00 AAA 496,050
Bonds, Series 1999, 5.750%, 12/01/19
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.0%
1,870 Howard County, Maryland, Metropolitan District General Obligation and 2/12 at 100.00 AAA 1,947,063
Refunding Bonds, 2002 Series A, 5.250%, 8/15/18
1,465 Community Development Administration, Department of Housing and 6/08 at 101.00 Aaa 1,471,094
Community Development, Maryland, Infrastructure Financing Bonds
(MBIA Insured), 1998 Series B, 5.200%, 6/01/28
4,000 Maryland Department of Transportation, County Transportation Revenue No Opt. Call AA 4,389,720
Bonds, Series 2002, 5.500%, 2/01/16
Maryland Department of Transportation, Certificates of Participation,
Series 2000:
950 5.500%, 10/15/19 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 973,351
1,005 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 1,025,211
4,455 Maryland Stadium Authority, Sports Facilities Lease Revenue Bonds, 3/06 at 101.00 AAA 4,667,637
Series 1996, 5.750%, 3/01/18
675 Montgomery County, Maryland, Special Obligation Bonds, West 7/12 at 101.00 AA 678,989
Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27
635 New Baltimore City Board of School Commissioners, Maryland, School 11/10 at 100.00 AA+ 661,441
System Revenue Bonds, Series 2000, 5.125%, 11/01/15
1,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/16 at 100.00 A 1,023,420
Bonds, Series 1996Y, 5.500%, 7/01/36
2,200 Puerto Rico Public Building Authority, Public Education and Health 7/03 at 101.50 A- 2,259,994
Facilities Refunding Bonds, Guaranteed by the Commonwealth of
Puerto Rico, Series M, 5.750%, 7/01/15
2,000 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin 10/10 at 101.00 BBB- 2,156,620
Islands Gross Receipts Taxes Loan Note), Series 1999A,
6.500%, 10/01/24
Washington Suburban Sanitary District, Maryland (Montgomery and
Prince George's Counties), General Construction Bonds, Series
2000:
1,085 5.250%, 6/01/20 6/10 at 100.00 AAA 1,111,691
1,205 5.250%, 6/01/21 6/10 at 100.00 AAA 1,230,642
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 7.4%
1,060 Mayor and City Council of Baltimore, Maryland, Refunding Revenue No Opt. Call AAA 1,132,515
Bonds (Baltimore City Parking System Facilities), Series 1998A,
5.250%, 7/01/17
5,500 Maryland Transportation Authority, Qualified Airport Special Obligation 7/04 at 102.00 AAA 5,902,875
Revenue Bonds, Baltimore/Washington International Airport Projects,
Series 1994A, 6.250%, 7/01/14 (Alternative Minimum Tax)
2,075 Puerto Rico Port Authority, Special Facilities Revenue Bonds (American 6/06 at 102.00 BB 1,710,070
Airlines, Inc. Project), 1996 Series A, 6.250%, 6/01/26 (Alternative
Minimum Tax)
2,000 Washington Metropolitan Area Transit Authority, District of Columbia, No Opt. Call AAA 2,247,260
Gross Revenue Transit Refunding Bonds, Series 1993, 6.000%, 7/01/07
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 12.1%
1,000 Mayor and City Council of Baltimore, Maryland, Project and Refunding 7/12 at 100.00 AAA 1,108,970
Revenue Bonds (Water Projects), Series 1996A, 5.500%, 7/01/26
(Pre-refunded to 7/01/12)
Mayor and City Council of Baltimore, Maryland, Project and
Refunding Revenue Bonds (Water Projects), Series 2000A:
590 6.000%, 7/01/15 (Pre-refunded to 7/01/10) 7/10 at 100.00 AAA 672,323
500 6.000%, 7/01/17 (Pre-refunded to 7/01/10) 7/10 at 100.00 AAA 569,765
21
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (continued)
$ 1,500 City of Baltimore, Maryland, Project and Refunding Revenue Bonds 7/10 at 100.00 AAA $ 1,670,715
(Wastewater Projects), Series 2000A, 5.625%, 7/01/30 (Pre-refunded
to 7/01/10)
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/09 at 101.00 AA*** 1,144,130
Bonds, The Johns Hopkins University Issue, Series 1999,
6.000%, 7/01/39 (Pre-refunded to 7/01/09)
1,875 Maryland Health and Higher Educational Facilities Authority, Revenue 7/03 at 102.00 AAA 1,991,250
Bonds, Good Samaritan Hospital Issue, Series 1993, 5.750%, 7/01/19
3,125 Maryland Health and Higher Educational Facilities Authority, Revenue 7/03 at 102.00 Aaa 3,168,531
Bonds, Howard County General Hospital Issue, Series 1993,
5.500%, 7/01/25
2,500 Maryland Health and Higher Educational Facilities Authority, Revenue No Opt. Call AAA 2,487,500
Bonds, Helix Health Issue, Series 1997, 5.000%, 7/01/27
3,000 Montgomery County, Maryland, General Obligation Bonds, Consolidated 1/10 at 101.00 AAA 3,376,230
Public Improvement Bonds, Series 2000A, 5.750%, 1/01/19
(Pre-refunded to 1/01/10)
500 Commonwealth of Puerto Rico, General Obligation Public Improvement 7/10 at 100.00 AAA 561,930
Bonds, Series 2000, 5.750%, 7/01/26 (Pre-refunded to 7/01/10)
1,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,060,200
Bonds, 2000 Series A, 5.500%, 10/01/20
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 26.8%
6,000 Anne Arundel County, Maryland, Pollution Control Revenue Refunding 4/04 at 102.00 A2 6,161,220
Bonds (Baltimore Gas and Electric Company Project), Series 1994,
6.000%, 4/01/24
6,500 Calvert County, Maryland, Pollution Control Revenue Refunding Bonds 7/04 at 102.00 A2 6,709,170
(Baltimore Gas and Electric Company Project), Series 1993,
5.550%, 7/15/14
3,000 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 3,090,150
Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995,
7.400%, 9/01/19 (Alternative Minimum Tax)
9,600 Montgomery County, Maryland, Solid Waste System Revenue Bonds, 6/03 at 102.00 AAA 9,908,928
1993 Series A, 5.875%, 6/01/13 (Alternative Minimum Tax)
1,675 Northeast Maryland Waste Disposal Authority, Resource Recovery Revenue 1/04 at 102.00 AAA 1,821,376
Refunding Bonds (Southwest Resource Recovery Facility), Series 1993,
7.200%, 1/01/05
5,000 Prince George's County, Maryland, Pollution Control Revenue Refunding 1/03 at 102.00 A1 5,143,450
Bonds (Potomac Electric Project), Series 1993, 6.375%, 1/15/23
5,750 Prince George's County, Maryland, Solid Waste Management System 6/03 at 102.00 AAA 5,904,790
Revenue Bonds, Series 1993, 5.250%, 6/15/13
1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/04 at 100.00 A- 1,011,210
Series T, 5.500%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 3.4%
3,000 City of Baltimore, Maryland, Water Projects and Refunding Revenue Bonds, No Opt. Call AAA 3,013,860
Series 1994A, 5.000%, 7/01/24
2,000 City of Baltimore, Maryland, Water Projects and Refunding Revenue 7/08 at 101.00 AAA 1,978,360
Bonds, Series 1998A, 5.000%, 7/01/28
------------------------------------------------------------------------------------------------------------------------------------
$ 221,365 Total Investments (cost $220,269,832) - 152.5% 225,393,163
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 1,502,103
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.5)% (79,100,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $147,795,266
====================================================================================================================
* 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.
22
Nuveen Maryland Dividend Advantage Municipal Fund (NFM)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL GOODS - 1.6%
$ 1,000 Northeast Maryland Waste Disposal Authority, Resource Recovery 1/09 at 101.00 BBB $ 928,450
Revenue Bonds, Baltimore RESCO Retrofit Project, Series 1998, 4.750%,
1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.9%
2,825 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 2,886,133
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 12.8%
Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount
Saint Mary's College, Series 2001A:
465 5.700%, 9/01/20 3/10 at 101.00 BBB 465,939
1,000 5.750%, 9/01/25 3/10 at 101.00 BBB 994,190
500 5.800%, 9/01/30 3/10 at 101.00 BBB 496,855
1,800 Maryland Economic Development Corporation, Student Housing Revenue 7/11 at 101.00 A 1,831,230
Bonds, University Village at Sheppard Pratt, Series 2001,
6.000%, 7/01/33
1,000 Maryland Economic Development Corporation, Utility Infrastructure 7/11 at 100.00 AAA 1,011,240
Revenue Bonds, University of Maryland College Park Project,
Series 2001, 5.000%, 7/01/19
1,500 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 1,504,095
Educational Facilities Leasehold Mortgage Revenue Bonds, McLean
School Issue, 6.000%, 7/01/31
625 Maryland Health and Higher Educational Facilities Authority, Revenue 6/11 at 100.00 Baa1 614,631
Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental
Control Facilities Financing Authority, Higher Education Revenue Bonds
(Ana G. Mendez University System Project), Series 1999:
215 5.375%, 2/01/19 2/09 at 101.00 BBB 214,280
410 5.375%, 2/01/29 2/09 at 101.00 BBB 396,445
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 19.3%
2,725 Maryland Health and Higher Educational Facilities Authority, Revenue 6/09 at 101.00 A 2,783,479
Bonds, Kaiser Permanente, Series 1998A, 5.375%, 7/01/15
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/08 at 102.00 A2 946,610
Bonds, Calvert Memorial Hospital Issue, Series 1998, 5.000%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/08 at 101.00 AAA 995,390
Bonds, Anne Arundel Medical Center Issue, Series 1998, 5.125%, 7/01/28
570 Maryland Health and Higher Educational Facilities Authority, Revenue 7/08 at 101.00 A3 548,152
Refunding Bonds, Union Hospital of Cecil County, Series 1998,
5.100%, 7/01/22
1,250 Maryland Health and Higher Educational Facilities Authority, Revenue 5/11 at 100.00 AA- 1,223,750
Bonds, The Johns Hopkins Hospital Issue, Series 2001, 5.000%, 5/15/21
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 A- 986,560
Bonds, Mercy Medical Center, Series 2001, 5.625%, 7/01/31
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 A+ 948,760
Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34
2,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 A 1,905,820
Bonds, University of Maryland Medical System, Series 2001,
5.250%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/12 at 100.00 Baa1 1,011,620
Bonds, Carroll County General Hospital, Series 2002, 6.000%, 7/01/26
(WI, settling 6/13/02)
20 Prince George's County, Maryland, Project and Refunding Revenue Bonds 7/04 at 102.00 B3 10,053
(Dimensions Health Corporation Issue), Series 1994, 5.300%, 7/01/24
23
Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 16.2%
$ 750 Baltimore County, Maryland, Mortgage Revenue Refunding Bonds (Cross 10/08 at 102.00 AAA $ 732,480
Creek Apartments Project - GNMA Collateralized), Series 1998A,
5.250%, 10/20/33
2,000 Community Development Administration, Department of Housing and 7/08 at 101.00 Aa2 2,009,820
Community Development, Maryland, Housing Revenue Bonds, Series 1998A,
5.625%, 1/01/40 (Alternative Minimum Tax)
1,000 Community Development Administration, Department of Housing and 5/11 at 100.00 Aa3 991,120
Community Development, Maryland, Multifamily Housing Revenue Bonds,
Insured Mortgage Loan, Series 2001B, 5.350%, 5/15/32
(Alternative Minimum Tax)
1,000 Community Development Administration, Department of Housing and 12/11 at 100.00 Aaa 983,700
Community Development, Maryland, Multifamily Housing Revenue Bonds,
Princess Anne Apartments Project, Series 2001D,
5.450%, 12/15/33 (Alternative Minimum Tax)
750 Housing Opportunities Commission of Montgomery County, Maryland, 7/08 at 101.00 Aaa 725,768
Multifamily Housing Development Bonds, Series 1998A, 5.250%,
7/01/29 (Alternative Minimum Tax)
2,000 Housing Opportunities Commission of Montgomery County, Maryland, 7/10 at 100.00 Aaa 2,095,580
Multifamily Housing Development Bonds, Series 2000B, 6.200%,
7/01/30 (Alternative Minimum Tax)
2,000 Housing Opportunities Commission of Montgomery County, Maryland, 7/11 at 100.00 Aaa 2,000,740
Multifamily Housing Development Bonds, Series 2001A, 5.600%, 7/01/42
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 26.8%
210 Community Development Administration, Department of Housing and 9/09 at 100.00 Aa2 218,816
Community Development, Maryland, Residential Housing Revenue Bonds,
Series 1997E, 5.700%, 9/01/17
3,000 Community Development Administration, Department of Housing and 9/09 at 100.00 Aa2 3,080,970
Community Development, Maryland, Residential Revenue Bonds,
Series 2000G, 5.950%, 9/01/29 (Alternative Minimum Tax)
1,880 Community Development Administration, Department of Housing and 9/10 at 100.00 Aa2 1,913,332
Community Development, Maryland, Residential Revenue Bonds, Series H,
5.800%, 9/01/32 (Alternative Minimum Tax)
3,770 Community Development Administration, Department of Housing and 10/10 at 100.00 Aa2 3,804,269
Community Development, Maryland, Single Family Program Bonds,
First Series 2001, 5.000%, 4/01/17
1,000 Community Development Administration, Department of Housing and 9/10 at 100.00 Aa2 992,580
Community Development, Maryland, Residential Revenue Bonds,
Series 2001B, 5.450%, 9/01/32 (Alternative Minimum Tax)
1,000 Community Development Administration, Department of Housing and 3/11 at 100.00 Aa2 1,001,690
Community Development, Maryland, Residential Revenue Bonds,
Series 2001F, 5.600%, 9/01/28 (Alternative Minimum Tax)
3,045 Housing Opportunities Commission of Montgomery County, Maryland, 7/07 at 102.00 Aa2 3,251,025
Single Family Mortgage Revenue Bonds, Series 1997A, 5.750%, 7/01/13
1,500 Housing Authority of Prince George's County, Maryland, 8/07 at 102.00 AAA 1,526,280
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage Revenue
Bonds, Series 1997, 5.750%, 8/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.7%
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 4/11 at 101.00 N/R 1,003,910
Bonds, Collington Episcopal Life, Series 2001A, 6.750%, 4/01/23
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 23.5%
Anne Arundel County, Maryland, General Obligation Bonds, Various Purpose,
Series 2001:
580 4.800%, 2/15/18 2/11 at 101.00 AA+ 582,129
900 5.000%, 2/15/28 2/11 at 101.00 AA+ 884,340
Baltimore County Metropolitan District, Maryland, General Obligation
Bonds, 67th Issue:
1,500 5.000%, 6/01/26 6/11 at 101.00 AAA 1,482,435
3,500 5.000%, 6/01/27 6/11 at 101.00 AAA 3,455,235
Howard County, Maryland, Consolidated Public Improvement Bonds,
Series 2001A:
1,210 4.750%, 2/15/19 2/09 at 101.00 AAA 1,203,708
1,220 4.750%, 2/15/20 2/09 at 101.00 AAA 1,198,979
1,360 4.750%, 2/15/21 2/09 at 101.00 AAA 1,328,108
430 Northern Mariana Islands Commonwealth, General Obligation Bonds, 6/10 at 100.00 A 441,945
Series 2000A, 6.000%, 6/01/20
740 Mayor and City Council of Ocean City, Maryland, General Obligation 3/11 at 101.00 AAA 741,791
Municipal Purpose Bonds, Series 2001, 4.875%, 3/01/19
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,500 Prince George's County, Maryland, General Obligation Consolidated 12/11 at 101.00 AAA $ 1,550,415
Public Improvement Bonds, Series 2001, 5.250%, 12/01/20
1,000 Commonwealth of Puerto Rico, Public Improvement Refunding General 7/11 at 100.00 AAA 1,002,840
Obligation Bonds, Series 2001, 5.125%, 7/01/30
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 15.6%
500 Mayor and City Council of Baltimore, Maryland, Convention Center 9/08 at 102.00 AAA 504,505
Refunding Revenue Bonds, Series 1998, 5.000%, 9/01/19
2,000 Department of Transportation, Maryland, County Transportation Revenue No Opt. Call AA 2,194,860
Bonds, Series 2002, 5.500%, 2/01/16
1,290 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin Islands 10/10 at 101.00 BBB- 1,390,672
Gross Receipts Taxes Loan Note), Series 1999A, 6.375%, 10/01/19
Washington Suburban Sanitary District, Montgomery and Prince
George's Counties, Maryland, General Construction Bonds, Series
2001:
895 5.000%, 6/01/22 6/11 at 100.00 AAA 896,611
935 5.000%, 6/01/23 6/11 at 100.00 AAA 933,195
985 5.000%, 6/01/24 6/11 at 100.00 AAA 979,149
1,035 5.000%, 6/01/25 6/11 at 100.00 AAA 1,024,536
1,290 Washington Suburban Sanitary District, Montgomery and Prince George's 6/11 at 100.00 AAA 1,274,017
Counties, Maryland, Water Supply Bonds, Series 2001, 4.750%, 6/01/20
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.2%
Maryland Health and Higher Educational Facilities Authority,
Parking Revenue Bonds, The Johns Hopkins Medical Institutions
Issue, Series 2001:
650 5.000%, 7/01/27 7/11 at 100.00 AAA 635,525
1,500 5.000%, 7/01/34 7/11 at 100.00 AAA 1,450,635
1,750 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 4/11 at 101.00 N/R 1,586,918
Special Facilities Revenue Bonds, Northwest Airlines, Inc. Project,
Series 2001A, 7.000%, 4/01/25 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 9.6%
1,000 Maryland Transportation Authority, Transportation Facilities Project No Opt. Call AAA 1,170,590
Revenue Refunding Bonds, First Series, 6.800%, 7/01/16
Puerto Rico Infrastructure Financing Authority, Special Obligation Bonds,
2000 Series A:
2,300 5.500%, 10/01/32 10/10 at 101.00 AAA 2,393,127
2,000 5.500%, 10/01/40 10/10 at 101.00 AAA 2,077,340
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.6%
Guam Power Authority, Revenue Bonds, 1999 Series A:
890 5.125%, 10/01/29 10/09 at 101.00 AAA 888,638
1,000 5.125%, 10/01/29 10/09 at 101.00 AAA 992,660
2,500 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 2,575,125
Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995,
7.400%, 9/01/19 (Alternative Minimum Tax)
1,800 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, 7/05 at 100.00 A- 1,808,298
Series Z, 5.250%, 7/01/21
25
Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 3.4%
$ 1,000 City of Baltimore, Maryland, Water Projects and Refunding Revenue Bonds, No Opt. Call AAA $ 1,004,620
Series 1994A, 5.000%, 7/01/24
1,015 City of Baltimore, Maryland, Water Projects and Refunding Revenue 7/08 at 101.00 AAA 1,004,017
Bonds, Series 1998A, 5.000%, 7/01/28
------------------------------------------------------------------------------------------------------------------------------------
$ 89,085 Total Investments (cost $89,669,928) - 152.2% 89,692,725
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.1% 1,232,152
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (54.3)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $58,924,877
====================================================================================================================
* 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.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
26
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL GOODS - 3.6%
$ 2,250 Northeast Maryland Waste Disposal Authority, Resource Recovery Revenue 1/09 at 101.00 BBB $ 2,089,013
Bonds, Baltimore RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.1%
1,000 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 Aa3 1,042,480
Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26
800 Tobacco Settlement Financing Corporation of the Virgin Islands, 5/11 at 100.00 A3 742,912
Asset-Backed Bonds, Series 2001, 5.000%, 5/15/31
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 18.5%
1,100 Anne Arundel County, Maryland, Economic Development Revenue Bonds, 9/12 at 102.00 A3 1,080,871
Community College Project, Series 2002, 5.125%, 9/01/22
250 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 250,683
Educational Facilities Leasehold Mortgage Revenue Bonds, McLean
School Issue, 6.000%, 7/01/31
415 Maryland Health and Higher Educational Facilities Authority, Revenue 1/11 at 101.00 AAA 417,494
Bonds, Bullis School Issue, Series 2000, 5.250%, 7/01/30
1,000 Maryland Health and Higher Educational Facilities Authority, Refunding 7/08 at 102.00 AA 1,062,460
Revenue Bonds, The Johns Hopkins University Issue, Series 1998,
5.125%, 7/01/12
1,400 Maryland Health and Higher Educational Facilities Authority, Revenue 10/08 at 101.00 AAA 1,309,070
Bonds, College of Notre Dame of Maryland Issue, Series 1998,
4.650%, 10/01/23
2,500 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 AA 2,378,675
Bonds, Johns Hopkins University, Series 2001B, 5.000%, 7/01/41
1,250 Maryland Health and Higher Educational Facilities Authority, Revenue 6/11 at 100.00 Baa1 1,229,262
Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32
500 Morgan State University, Maryland, Academic and Auxiliary Fees Revenue 7/12 at 100.00 AAA 501,440
Bonds, Series 2001, 4.900%, 7/01/21
University of Maryland, System Auxiliary Facility and Tuition
Revenue Bonds, 2001 Series B:
1,580 4.375%, 4/01/17 4/11 at 100.00 AA+ 1,496,055
1,140 4.500%, 4/01/19 4/11 at 100.00 AA+ 1,073,344
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 25.3%
3,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/08 at 101.00 AAA 2,967,660
Bonds, Anne Arundel Medical Center Issue, Series 1998, 5.125%, 7/01/33
2,000 Maryland Health and Higher Educational Facilities Authority, Revenue 1/08 at 101.00 Aaa 1,951,960
Bonds, Upper Chesapeake Hospitals Issue, Series 1998A, 5.125%, 1/01/38
1,470 Maryland Health and Higher Educational Facilities Authority, Revenue 5/11 at 100.00 AA- 1,399,131
Bonds, The Johns Hopkins Hospital Issue, Series 2001, 5.000%, 5/15/34
2,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 A- 1,973,120
Bonds, Mercy Medical Center, Series 2001, 5.625%, 7/01/31
1,500 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 A+ 1,423,140
Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34
2,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/11 at 100.00 A 1,905,820
Bonds, University of Maryland Medical System, Series 2001,
5.250%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, Revenue 7/12 at 100.00 Baa1 1,011,620
Bonds, Carroll County General Hospital, Series 2002, 6.000%, 7/01/26
(WI, settling 6/13/02)
2,160 Montgomery County, Maryland, Economic Development Revenue Bonds, 12/11 at 100.00 AA- 2,151,857
Trinity Health Care Group, Series 2001, 5.125%, 12/01/22
27
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 17.9%
$ 280 Community Development Administration, Department of Housing and 5/11 at 100.00 Aa3 $ 274,271
Community Development, Maryland, Multifamily Housing Insured
Mortgage Loans, Series 2001A, 5.100%, 5/15/28
5,000 Community Development Administration, Department of Housing and 5/11 at 100.00 Aa3 4,955,600
Community Development, Maryland, Multifamily Housing Revenue
Bonds, Insured Mortgage Loan, Series 2001B, 5.350%,
5/15/32 (Alternative Minimum Tax)
1,110 Community Development Administration, Department of Housing and 12/11 at 100.00 Aaa 1,091,907
Community Development, Maryland, Multifamily Housing Revenue Bonds,
Princess Anne Apartments Project, Series 2001D,
5.450%, 12/15/33 (Alternative Minimum Tax)
3,145 Community Development Administration, Department of Housing and 12/11 at 100.00 Aaa 3,093,737
Community Development, Maryland, Multifamily Development Revenue
Bonds, Waters Tower Senior Apartments, Series 2001F,
5.450%, 12/15/33 (Alternative Minimum Tax)
1,000 Community Development Administration, Department of Housing and 5/12 at 100.00 Aa3 1,014,270
Community Development, Maryland, Multifamily Housing Insured
Mortgage Revenue Bonds, Series 2002A, 5.300%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.6%
500 Community Development Administration, Department of Housing and 3/07 at 101.50 Aa2 513,095
Community Development, Maryland, Residential Revenue Bonds,
Series 1997B, 5.875%, 9/01/25 (Alternative Minimum Tax)
1,000 Community Development Administration, Department of Housing and 9/10 at 100.00 Aa2 989,560
Community Development, Maryland, Residential Revenue Bonds,
Series 2001H, 5.350%, 9/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 41.4%
755 Anne Arundel County, Maryland, General Obligation Bonds, Series 2002, 3/12 at 100.00 AA+ 741,939
5.000%, 3/01/31
500 Carroll County, Maryland, General Obligation Consolidated Public 10/08 at 101.00 AA 509,235
Improvement Bonds, County Commissioners of Carroll County, Series 1998,
4.400%, 10/01/12
Cecil County, Maryland, General Obligation Consolidated Public Improvement
Bonds, Series 2001B:
975 4.600%, 8/01/18 8/11 at 101.00 A+ 942,854
1,020 4.600%, 8/01/19 8/11 at 101.00 A+ 975,212
300 4.625%, 8/01/20 8/11 at 101.00 A+ 286,725
335 4.750%, 8/01/21 8/11 at 101.00 A+ 325,412
3,000 Frederick County, Maryland, General Obligation Public Facilities 12/10 at 101.00 AA 3,100,830
Bonds, Series 2000, 5.200%, 12/01/19
510 City of Frederick, Maryland, General Obligation Improvements 12/11 at 101.00 AA- 507,302
Refunding Bonds, Series 2001, 4.750%, 12/01/19
State of Maryland, General Obligation Bonds, State and Local
Facilities Loan, 2001 First Series:
2,445 5.500%, 3/01/11 No Opt. Call AAA 2,706,713
1,500 5.500%, 3/01/12 No Opt. Call AAA 1,661,550
4,730 Montgomery County, Maryland, General Obligation Consolidated Public 10/11 at 101.00 AAA 4,953,256
Improvement Refunding Bonds, Series 2001, 5.250%, 10/01/18
Prince George's County, Maryland, General Obligation Consolidated Public
Improvement Bonds, Series 2001:
1,000 5.250%, 12/01/20 12/11 at 101.00 AAA 1,033,610
2,820 5.250%, 12/01/21 12/11 at 101.00 AAA 2,904,741
2,000 Commonwealth of Puerto Rico, General Obligation Public Improvement 7/11 at 100.00 AAA 2,002,080
Refunding Bonds, Series 2001, 5.000%, 7/01/24
1,500 Commonwealth of Puerto Rico, Public Improvement General Obligation No Opt. Call A- 1,566,030
Bonds of 2002, Series A, 5.500%, 7/01/29
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.0%
750 Anne Arundel County, Maryland, General Obligation Consolidated Water 8/09 at 101.00 AA+ 714,983
and Sewer Bonds, Series 1999, 4.500%, 8/01/19
County of Baltimore, Maryland, Certificates of Participation,
Health and Social Services Building Project, Series 2001:
1,580 5.000%, 8/01/20 8/11 at 101.00 AA+ 1,587,284
1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,661,992
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,000 Maryland Department of Transportation, County Transportation Revenue No Opt. Call AA $ 1,097,430
Bonds, Series 2002, 5.500%, 2/01/16
1,000 Montgomery County, Maryland, Special Obligation Bonds, West 7/12 at 101.00 AA 1,005,910
Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27
1,250 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 AAA 1,234,613
Revenue Bonds, Series D, 5.000%, 7/01/32
1,100 Puerto Rico Infrastructure Financing Authority, Special Tax Revenue 1/08 at 101.00 AAA 1,108,580
Bonds, Series 1997A, 5.000%, 7/01/21
800 Puerto Rico Public Finance Corporation, Commonwealth Appropriation 8/11 at 100.00 AAA 807,272
Bonds, Series 2001A, 5.000%, 8/01/21
700 Puerto Rico Public Finance Corporation, Commonwealth Appropriation 2/12 at 100.00 A- 711,753
Bonds, Series 2002E, 5.500%, 8/01/29
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.1%
Maryland Health and Higher Educational Facilities Authority,
Parking Revenue Bonds, The Johns Hopkins Medical Institutions
Issue, Series 2001:
650 5.000%, 7/01/27 7/11 at 100.00 AAA 635,525
3,025 5.000%, 7/01/34 7/11 at 100.00 AAA 2,925,447
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 12.1%
1,250 Maryland Health and Higher Educational Facilities Authority, Revenue No Opt. Call AAA 1,304,600
Bonds, Helix Health Issue, Series 1997, 5.000%, 7/01/17
1,365 Maryland Transportation Authority, Transportation Facilities Project No Opt. Call AAA 1,597,855
Revenue Refunding Bonds, First Series, 6.800%, 7/01/16
4,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 4,154,680
Bonds, 2000 Series A, 5.500%, 10/01/40
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.5%
Guam Power Authority, Revenue Bonds, 1999 Series A:
740 5.125%, 10/01/29 10/09 at 101.00 AAA 738,866
1,000 5.250%, 10/01/34 10/09 at 101.00 AAA 1,004,140
1,000 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 1,030,050
Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995,
7.400%, 9/01/19 (Alternative Minimum Tax)
1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series HH,
5.250%, 7/01/29 7/10 at 101.00 AAA 1,011,110
------------------------------------------------------------------------------------------------------------------------------------
$ 89,610 Total Investments (cost $90,618,407) - 154.1% 89,940,086
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 429,660
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (54.8)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $58,369,746
====================================================================================================================
* 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.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
29
Nuveen North Carolina Premium Income Municipal Fund (NNC)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 6.0%
$ 3,500 Haywood County Industrial Facilities and Pollution Control Financing 12/05 at 102.00 BBB $ 3,364,970
Authority, North Carolina, Environmental Improvement Revenue Bonds,
Champion International Corporation Project, Series 1995A,
5.750%, 12/01/25 (Alternative Minimum Tax)
2,000 Haywood County Industrial Facilities and Pollution Control Financing 3/06 at 102.00 Baa2 2,013,360
Authority, North Carolina, Pollution Control Revenue Refunding Bonds,
Champion International Corporation Project, Series 1995, 6.000%, 3/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.9%
State of North Carolina, State Education Assistance Authority,
Guaranteed Student Loan Revenue Bonds, 1995 Series A
(Subordinate Lien):
1,000 6.050%, 7/01/10 (Alternative Minimum Tax) 7/05 at 102.00 A2 1,049,720
2,400 6.300%, 7/01/15 (Alternative Minimum Tax) 7/05 at 102.00 A2 2,501,256
5,875 State of North Carolina, State Education Assistance Authority 7/06 at 102.00 A2 6,151,536
(A Political Subdivision of the State of North Carolina), Guaranteed
Student Loan Revenue Bonds, 1996 Series C (Subordinate Lien),
6.350%, 7/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 31.6%
5,630 The Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/11 at 101.00 AA 5,418,368
Healthcare System Revenue Bonds, DBA Carolinas Healthcare System,
Series 2001A, 5.000%, 1/15/31
2,000 North Carolina Medical Care Commission, Healthcare Facilities Revenue 10/09 at 101.00 A 2,110,480
Bonds, Stanly Memorial Hospital Project, Series 1999, 6.375%, 10/01/29
4,500 North Carolina Medical Care Commission, Healthcare Facilities Revenue 10/11 at 101.00 AAA 4,315,410
Bonds, WakeMed Project, Series 2001, 5.000%, 10/01/32
3,000 North Carolina Medical Care Commission, Hospital Revenue Refunding 11/02 at 102.00 AA- 3,033,240
Bonds, Carolina Medicorp Project, Series 1992, 5.500%, 5/01/15
5,615 North Carolina Medical Care Commission, Hospital Revenue Bonds, 10/08 at 101.00 AA 5,091,794
FirstHealth of the Carolinas Project, Series 1998, 4.750%, 10/01/26
5,000 North Carolina Medical Care Commission, Health System Revenue Bonds, 10/11 at 101.00 AA 4,966,300
Mission-Saint Joseph Health System, Series 2001, 5.250%, 10/01/31
3,340 Board of Governors of the University of North Carolina Revenue Bonds, 2/06 at 102.00 AA 3,306,199
University of North Carolina Hospitals at Chapel Hill, Series 1996,
5.250%, 2/15/26
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.5%
1,000 Housing Authority of the City of Asheville, North Carolina, 11/07 at 102.00 AAA 1,002,320
Multifamily Housing Revenue Bonds (GNMA Collateralized - Woodridge
Apartments), Series 1997, 5.800%, 11/20/39 (Alternative Minimum Tax)
1,000 City of Charlotte, North Carolina, Mortgage Revenue Refunding Bonds 1/03 at 105.00 AAA 1,023,790
(FHA-Insured Mortgage Loan - Tryon Hills Apartments Project),
Series 1993A, 5.875%, 1/01/25
3,000 County of Mecklenburg, North Carolina, Multifamily Housing Revenue 1/12 at 102.00 AAA 2,988,810
Bonds, Sycamore Green Apartments, Series 2001, 5.500%, 1/15/35
(Alternative Minimum Tax)
North Carolina Housing Finance Agency, Multifamily Revenue Bonds
(FHA-Insured Mortgage Loan Resolution), Series 1993:
650 5.800%, 7/01/14 1/03 at 102.00 AA 655,376
1,000 5.900%, 7/01/26 1/03 at 102.00 AA 1,012,210
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 18.6%
$ 3,595 North Carolina Housing Finance Agency, Single Family Revenue Bonds 3/04 at 102.00 AA $ 3,723,449
(1985 Resolution), Series X, 6.700%, 9/01/26 (Alternative Minimum Tax)
775 North Carolina Housing Finance Agency, Single Family Revenue Bonds 9/02 at 102.00 AA 792,608
(1985 Resolution), Series V, 6.800%, 9/01/25 (Alternative Minimum Tax)
6,460 North Carolina Housing Finance Agency, Home Ownership Revenue Bonds, 7/09 at 100.00 AA 6,706,643
1998 Trust Agreement, Series 6A, 6.200%, 1/01/29
3,675 North Carolina Housing Finance Agency, Single Family Revenue Bonds 3/06 at 102.00 AA 3,774,887
(1985 Resolution), Series HH, 6.300%, 3/01/26 (Alternative Minimum Tax)
1,640 North Carolina Housing Finance Agency, Home Ownership Program Bonds, 7/10 at 100.00 AAA 1,620,681
1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 12.3%
1,890 County of Craven, North Carolina, General Obligation Bonds, 15/12 at 101.00 AAA 1,901,775
Series 2002, 5.000%, 5/01/2
4,285 County of Durham, North Carolina, General Obligation Public 4/12 at 100.00 AAA 4,413,979
Improvement Bonds, Series 2002B, 5.000%, 4/01/16
4,500 State of North Carolina, General Obligation Bonds, Series 2000A, 9/10 at 102.00 AAA 4,706,640
5.100%, 9/01/16
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 19.2%
6,000 City of Charlotte, North Carolina, Refunding Certificates of 12/03 at 102.00 AAA 6,046,680
Participation (Convention Facility Project), Series 1993C,
5.250%, 12/01/20
City of Charlotte, North Carolina, Storm Water Fee Revenue Bonds,
Series 2002:
1,050 5.250%, 6/01/20 6/12 at 101.00 AA+ 1,079,610
1,750 5.000%, 6/01/25 6/12 at 101.00 AA+ 1,722,963
2,180 City of Concord, North Carolina, Certificates of Participation, 6/06 at 102.00 AAA 2,349,430
Series 1996A, 6.125%, 6/01/21
750 Johnston County Finance Corporation, North Carolina, Installment 8/09 at 101.00 AAA 761,138
Payment Revenue Bonds, School and Museum Projects, Series 1999,
5.250%, 8/01/21
5,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/06 at 101.50 AAA 5,138,750
Bonds, Series 1996Y, 5.500%, 7/01/26
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.8%
4,450 Raleigh Durham Airport Authority, North Carolina, Airport Revenue 5/11 at 101.00 Aaa 4,242,408
Bonds, Series 2001A, 5.000%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 13.1%
2,000 City of Charlotte, North Carolina, Storm Water Fee Revenue Bonds, 6/10 at 101.00 AA+*** 2,289,820
Series 2000, 6.000%, 6/01/25 (Pre-refunded to 6/01/10)
3,970 Durham, North Carolina, Certificates of Participation, Water Utility 7/02 at 102.00 AA+*** 4,072,783
Improvement Bonds, 6.375%, 7/15/12 (Pre-refunded to 7/15/02)
2,475 North Carolina Municipal Power Agency Number 1, Catawba Electric No Opt. Call AAA 3,151,814
Revenue Bonds, Series 1980, 10.500%, 1/01/10
2,000 Orange County, North Carolina, General Obligation School Bonds, 2/04 at 102.00 AA+*** 2,145,760
Series 1994, 5.500%, 2/01/11 (Pre-refunded to 2/01/04)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.7%
2,900 City of Fayetteville, North Carolina, Public Works Commission, Revenue 3/07 at 101.00 AAA 2,901,392
Bonds, Series 1997, 5.125%, 3/01/24
2,600 North Carolina Eastern Municipal Power Agency, Power System Revenue 1/03 at 102.00 BBB 2,601,092
Bonds, Series 1993-D, 5.600%, 1/01/16
1,500 North Carolina Eastern Municipal Power Agency, Power System Revenue 9/03 at 102.50 BBB 1,513,155
Bonds, Series 1985-G, 5.750%, 12/01/16
4,000 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/10 at 101.00 BBB+ 4,193,840
Revenue Bonds, Series 1999B, 6.500%, 1/01/20
1,000 The Wake County Industrial Facilities and Pollution Control Financing 2/12 at 101.00 A3 1,019,030
Authority, North Carolina, Revenue Refunding Bonds, Carolina Power and
Light Company Project, Series 2002, 5.375%, 2/01/17
31
Nuveen North Carolina Premium Income Municipal Fund (NNC) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.9%
$ 4,000 City of Charlotte, North Carolina, Water and Sewer System Revenue 6/10 at 101.00 AAA $ 4,027,080
Bonds, Series 2000, 5.250%, 6/01/25
2,350 Orange Water and Sewer Authority, North Carolina, Water and Sewer 7/03 at 102.00 Aa1 2,384,804
System Revenue and Revenue Refunding Bonds, Series 1993,
5.200%, 7/01/16
Thomasville, North Carolina, Combined Enterprise System Revenue Bonds,
Series 2002:
370 5.000%, 5/01/20 5/12 at 101.00 AAA 371,066
390 5.000%, 5/01/21 5/12 at 101.00 AAA 388,803
1,250 5.125%, 5/01/27 5/12 at 101.00 AAA 1,243,850
2,180 County of Union, North Carolina, Enterprise Systems Revenue Bonds, 6/06 at 102.00 AAA 2,241,014
Series 1996, 5.500%, 6/01/21
------------------------------------------------------------------------------------------------------------------------------------
$ 131,495 Total Investments (cost $128,891,576) - 149.6% 133,532,083
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.1%
$ 1,000 North Carolina Capital Facilities Financing Agency, Exempt Facilities VMIG-1 1,000,000
============= Revenue Bonds, Republic Services Inc. Project, Series 2001, Variable
Rate Demand Obligations, 1.750%, 12/01/21+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.7% 1,553,665
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.4)% (46,800,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $89,285,748
====================================================================================================================
* 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.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
32
Nuveen North Carolina Dividend Advantage Municipal Fund (NRB)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 4.7%
$ 750 Columbus County Industrial Facilities and Pollution Control Financing 4/07 at 102.00 BBB $ 757,830
Authority, North Carolina, Environmental Improvement Revenue Bonds,
Series 1997A, International Paper Company Project,
6.150%, 4/01/21 (Alternative Minimum Tax)
750 Columbus County Industrial Facilities and Pollution Control Financing 12/07 at 102.00 BBB 748,980
Authority, North Carolina, Solid Waste Disposal Revenue Refunding
Bonds, International Paper Company Project, Series 1996A,
5.800%, 12/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 22.3%
500 North Carolina Capital Facilities Finance Agency, Educational 9/11 at 101.00 A3 492,915
Facilities Revenue Bonds, High Point University Project, Series 2001,
5.125%, 9/01/18
3,000 North Carolina Capital Facilities Financing Agency, Revenue Bonds, 10/11 at 100.00 AA+ 2,979,150
Duke University Project, Series 2001A, 5.125%, 10/01/26
1,750 The University of North Carolina at Chapel Hill, General Revenue Bonds, 6/11 at 100.00 AA+ 1,713,285
Series 2001A, 5.000%, 12/01/25
1,845 The University of North Carolina at Chapel Hill, General Revenue Bonds, No Opt. Call AA+ 1,970,829
Series 2002B, 5.000%, 12/01/11
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 27.8%
2,500 The Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/11 at 101.00 AA 2,406,025
Healthcare System Revenue Bonds, DBA Carolinas Healthcare System,
Series 2001A, 5.000%, 1/15/31
2,500 North Carolina Medical Care Commission, Healthcare Revenue Bonds, 5/07 at 100.00 AA- 2,458,100
Carolina Medicorp Project, Series 1996, 5.250%, 5/01/26
1,000 North Carolina Medical Care Commission, Healthcare Facilities Revenue 10/11 at 101.00 AAA 958,980
Bonds, WakeMed Project, Series 2001, 5.000%, 10/01/32
1,250 North Carolina Medical Care Commission Hospital Revenue Bonds, 10/08 at 101.00 AA 1,133,525
FirstHealth of the Carolinas Project, Series 1998, 4.750%, 10/01/26
2,000 North Carolina Medical Care Commission, Health System Revenue 10/11 at 101.00 AA 1,986,520
Bonds, Mission-Saint Joseph Health System, Series 2001, 5.250%, 10/01/31
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 14.7%
2,250 Housing Authority of the City of Durham, North Carolina, Multifamily 6/11 at 100.00 AAA 2,247,390
Housing Revenue Bonds, Naples Terrace Apartments Project, FNMA
Guaranteed, Series 2001, 5.700%, 6/01/33 (Alternative Minimum Tax)
2,500 County of Mecklenburg, North Carolina, Multifamily Housing Revenue 1/12 at 102.00 AAA 2,490,675
Bonds, Sycamore Green Apartments, Series 2001, 5.500%, 1/15/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 12.9%
2,980 North Carolina Housing Finance Agency, Home Ownership Revenue 7/09 at 100.00 AA 3,002,320
Bonds, 1998 Trust Agreement, Series 5A, 5.625%, 7/01/30 (Alternative
Minimum Tax)
1,155 North Carolina Housing Finance Agency, Home Ownership Program 7/10 at 100.00 AAA 1,141,394
Bonds, 1998 TrustAgreement, Series 10A, 5.400%, 7/01/32 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 6.3%
2,000 North Carolina Medical Care Commission, Healthcare Facilities Revenue 4/11 at 101.00 N/R 2,033,700
Bonds, First Mortgage, Salemtowne Project, Series 2001, 6.625%, 4/01/31
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 1.3%
400 Raleigh, North Carolina, General Obligation Bonds, Series 2002, 6/12 at 100.00 AAA 402,348
5.000%, 6/01/21 (WI, settling 6/11/02)
33
Nuveen North Carolina Dividend Advantage Municipal Fund (NRB) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 4.7%
$ 1,500 Centennial Authority, North Carolina, Hotel Tax Revenue Bonds (Arena 9/07 at 102.00 AAA $ 1,517,985
Project), Series 1997, 5.125%, 9/01/19
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.8%
Raleigh Durham Airport Authority, North Carolina, Airport Revenue Bonds,
Series 2001A:
1,530 5.250%, 11/01/18 5/11 at 101.00 Aaa 1,572,197
2,000 5.000%, 11/01/31 5/11 at 101.00 Aaa 1,906,700
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 17.2%
City of Greenville, North Carolina, Greenville Utilities
Commission, Combined Enterprise System Revenue Bonds, Series
2001:
1,000 5.250%, 9/01/20 9/11 at 101.00 AAA 1,020,990
500 5.250%, 9/01/21 9/11 at 101.00 AAA 507,285
North Carolina Eastern Municipal Power Agency, Power System Revenue
Refunding Bonds, Series 1999B:
1,000 5.650%, 1/01/16 1/09 at 102.00 BBB 1,004,670
1,500 5.750%, 1/01/24 1/09 at 102.00 BBB 1,467,285
1,500 The Wake County Industrial Facilities and Pollution Control Financing 2/12 at 101.00 A3 1,528,545
Authority, North Carolina, Revenue Refunding Bonds, Carolina Power and
Light Company Project, Series 2002, 5.375%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 29.7%
3,040 Broad River Water Authority, North Carolina, Water System Revenue 6/10 at 101.00 Aaa 3,086,999
Bonds, Series 2000, 5.375%, 6/01/26
3,000 City of Charlotte, North Carolina, Water and Sewer System Revenue 6/11 at 101.00 AAA 2,995,890
Bonds, Series 2001, 5.125%, 6/01/26
City of Greensboro, North Carolina, Combined Enterprise System Revenue
Bonds, Series 2001A:
500 5.125%, 6/01/20 6/11 at 101.00 AA- 505,460
500 5.125%, 6/01/21 6/11 at 101.00 AA- 502,720
2,500 City of Kannapolis, North Carolina, Water and Sewer Revenue Bonds, 2/12 at 101.00 AAA 2,445,150
Series 2001B, 5.250%, 2/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 49,200 Total Investments (cost $48,642,730) - 152.4% 48,985,842
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.5% 162,181
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.9)% (17,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $32,148,023
====================================================================================================================
* 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.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
34
Nuveen North Carolina Dividend Advantage Municipal Fund 2 (NNO)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 6.4%
$ 2,400 Haywood County Industrial Facilities and Pollution Control Financing 10/03 at 102.00 BBB $ 2,297,592
Authority, North Carolina, Solid Waste Disposal Revenue Bonds, Champion
International Corporation Project, Series 1993, 5.500%, 10/01/18
(Alternative Minimum Tax)
1,100 The Industrial Facilities and Pollution Control Financing Authority 2/11 at 101.00 BBB 1,111,858
of the County of Northampton, North Carolina, Environmental Improvement
Revenue Bonds, International Paper Company Project,
Series 2001A, 6.200%, 2/01/25 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 20.7%
Appalachian State University, North Carolina, Housing and
Student Center System Revenue Refunding Bonds, Series 2001:
600 5.125%, 7/15/24 1/11 at 101.00 Aaa 600,414
200 5.125%, 7/15/27 1/11 at 101.00 Aaa 198,368
Appalachian State University, North Carolina, Housing and
Student Center System Revenue Refunding Bonds, Series 2002:
1,000 5.000%, 7/15/13 7/12 at 100.00 Aaa 1,050,620
1,040 5.000%, 7/15/14 7/12 at 100.00 Aaa 1,082,286
1,000 5.000%, 7/15/15 7/12 at 100.00 Aaa 1,032,440
4,750 North Carolina Capital Facilities Financing Agency, Revenue Bonds, 10/11 at 100.00 AA+ 4,716,988
Duke University Project, Series 2001A, 5.125%, 10/01/26
1,840 The University of North Carolina at Chapel Hill, General Revenue Bonds, No Opt. Call AA+ 1,965,488
Series 2002B, 5.000%, 12/01/11
400 Board of Governors of the University of North Carolina, University of 4/11 at 101.00 AAA 421,200
North Carolina at Greensboro, General Revenue and Revenue Refunding
Bonds, Series 2002B, 5.375%, 4/01/17
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 23.3%
4,250 The Charlotte-Mecklenburg Hospital Authority, North Carolina, 1/11 at 101.00 AA 4,090,243
Healthcare System Revenue Bonds, DBA Carolinas Healthcare System,
Series 2001A, 5.000%, 1/15/31
2,725 County of New Hanover, North Carolina, Hospital Revenue Bonds (New 10/03 at 102.00 AAA 2,559,511
Hanover Regional Medical Center Project), Series 1993,
4.750%, 10/01/23
2,675 North Carolina Medical Care Commission, Healthcare Facilities Revenue 6/08 at 101.00 AA 2,415,632
Bonds, Duke University Health System, Series 1998A, 4.750%, 6/01/28
2,500 North Carolina Medical Care Commission, Healthcare Facilities Revenue 10/11 at 101.00 AAA 2,397,450
Bonds, WakeMed Project, Series 2001, 5.000%, 10/01/32
1,000 North Carolina Medical Care Commission, Health System Revenue Bonds, 10/11 at 101.00 AA 993,260
Mission-Saint Joseph Health System, Series 2001, 5.250%, 10/01/31
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.5%
3,500 County of Mecklenburg, North Carolina, Multifamily Housing Revenue 1/12 at 102.00 AAA 3,486,945
Bonds, Sycamore Green Apartments, Series 2001, 5.500%, 1/15/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.8%
555 North Carolina Housing Finance Agency, Home Ownership Program Bonds, 7/10 at 100.00 AAA 548,462
1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 (Alternative
Minimum Tax)
North Carolina Housing Finance Agency, Home Ownership Program Bonds,
Series 13A:
1,000 4.700%, 7/01/12 (Alternative Minimum Tax) 7/11 at 100.00 AA 1,004,070
1,000 4.850%, 7/01/13 (Alternative Minimum Tax) 7/11 at 100.00 AA 1,006,100
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 14.9%
250 County of Durham, North Carolina, General Obligation Bonds, Series 5/10 at 102.00 AAA 273,423
2000, 5.600%, 5/01/15
4,000 State of North Carolina, General Obligation Bonds, Series 2000A, 9/10 at 102.00 AAA 4,183,680
5.100%, 9/01/16
3,200 County of Wake, North Carolina, General Obligation School Bonds, 2/10 at 101.50 AAA 3,486,240
Series 2000, 5.400%, 2/01/13
35
Nuveen North Carolina Dividend Advantage Municipal Fund 2 (NNO) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 11.2%
$ 1,850 City of Charlotte, North Carolina, Storm Water Fee Revenue Bonds, 6/12 at 101.00 AA+ $ 1,924,518
Series 2002, 5.250%, 6/01/18
County of Hartnett, North Carolina, Certificates of Participation,
Series 2002:
1,000 5.250%, 12/01/15 12/12 at 101.00 AAA 1,063,530
2,025 5.375%, 12/01/16 12/12 at 101.00 AAA 2,161,141
825 5.000%, 12/01/18 12/12 at 101.00 AAA 836,905
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 12.9%
Raleigh Durham Airport Authority, North Carolina, Airport Revenue Bonds,
Series 2001A:
1,000 5.250%, 11/01/15 5/11 at 101.00 Aaa 1,050,030
2,320 5.250%, 11/01/16 5/11 at 101.00 Aaa 2,417,324
2,230 5.250%, 11/01/17 5/11 at 101.00 Aaa 2,307,470
The University of North Carolina at Charlotte, Parking System Revenue
Bonds, Series 2002:
360 5.000%, 1/01/17 1/12 at 101.00 Aaa 366,653
270 5.000%, 1/01/20 1/12 at 101.00 Aaa 269,833
500 5.125%, 1/01/27 1/12 at 101.00 Aaa 496,520
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 24.3%
3,000 City of Fayetteville, North Carolina, Public Works Commission, Revenue 3/07 at 101.00 AAA 3,001,440
Bonds, Series 1997, 5.125%, 3/01/24
2,400 North Carolina Eastern Municipal Power Agency, Power System Revenue 1/03 at 102.00 BBB 2,401,008
Bonds, Series 1993D, 5.600%, 1/01/16
1,500 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/10 at 101.00 BBB+ 1,572,690
Revenue Bonds, Series 1999B, 6.500%, 1/01/20
1,775 Puerto Rico Electric Power Authority, Power Revenue Bonds, 2002 7/12 at 101.00 AAA 1,872,022
Series II, 5.375%, 7/01/19
4,000 The Wake County Industrial Facilities and Pollution Control Financing 2/12 at 101.00 A3 4,076,120
Authority, North Carolina, Revenue Refunding Bonds, Carolina Power and
Light Company Project, Series 2002, 5.375%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 29.5%
600 Metropolitan Sewerage District of Buncombe County, North Carolina, 7/11 at 100.00 AAA 580,770
Sewerage System Revenue Bonds, Series 2001, 5.000%, 7/01/31
2,710 Town of Cary, North Carolina, Combined Enterprise System Revenue 12/11 at 100.00 AA 2,644,581
Bonds, Series 2001, 5.000%, 12/01/26
1,780 City of Charlotte, North Carolina, Water and Sewer System Revenue 6/11 at 101.00 AAA 1,781,388
Bonds, Series 2001, 5.125%, 6/01/26
4,520 City of Charlotte, North Carolina, Water and Sewer System Revenue No Opt. Call AAA 4,909,805
Bonds, Series 2002, 5.250%, 7/01/13
Orange Water and Sewer Authority, North Carolina, Water and
Sewer System Revenue Bonds, Series 2001:
1,465 5.000%, 7/01/20 7/11 at 101.00 Aa1 1,466,655
2,000 5.000%, 7/01/26 7/11 at 101.00 Aa1 1,952,040
2,500 City of Raleigh, North Carolina, Combined Enterprise System Revenue 3/09 at 101.00 AAA 2,380,873
Bonds, Series 1999, 4.750%, 3/01/24
------------------------------------------------------------------------------------------------------------------------------------
$ 81,615 Total Investments (cost $81,953,878) - 154.5% 82,455,586
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (2.0)% (1,072,265)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.5)% (28,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $53,383,321
====================================================================================================================
* 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.
36
Nuveen Virginia Premium Income Municipal Fund (NPV)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 3.7%
$ 500 Industrial Development Authority of the County of Bedford, Virginia, 2/08 at 102.00 Ba1 $ 419,350
Industrial DevelopmentRefunding Revenue Bonds (Nekoosa Packaging
Corporation), Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax)
1,900 Industrial Development Authority of the County of Bedford, Virginia, 12/09 at 101.00 Ba1 1,800,022
Industrial Development Refunding Revenue Bonds (Nekoosa Packaging
Corporation), Series 1999A, 6.550%, 12/01/25 (Alternative Minimum Tax)
1,000 Industrial Development Authority of Goochland County, Virginia, 12/08 at 101.00 Ba1 839,390
Industrial Development Refunding Revenue Bonds (Nekoosa Packaging
Corporation Project), Series 1998, 5.650%, 12/01/25 (Alternative
Minimum Tax)
2,000 Virginia Small Business Financing Authority, Industrial Development 1/03 at 102.00 N/R 1,650,000
Revenue Bonds (Albion Enterprises, L.L.C. Project), Series 1998A,
6.400%, 1/01/14 (Alternative Minimum Tax)#
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL GOODS - 1.5%
2,000 Industrial Development Authority of the County of Charles City, No Opt. Call BBB 1,912,060
Virginia, Solid Waste Disposal Facility Revenue Refunding Bonds
(USA Waste of Virginia, Inc. Project), Series 1999, 4.875%, 2/01/09
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.5%
1,840 The Children's Trust Fund, Puerto Rico, Tobacco Settlement Asset-Backed 7/10 at 100.00 Aa3 1,879,818
Bonds, Series 2000, 5.750%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 15.1%
3,500 Industrial Development Authority of the City of Alexandria, Virginia, 10/10 at 101.00 AAA 3,753,995
Fixed Rate Revenue Bonds (Institute for Defense Analyses), Series 2000A,
5.900%, 10/01/30
Industrial Development Authority of Danville, Virginia, Student
Housing Revenue Bonds (Collegiate Housing Foundation - Averett
College Project), Series 1999A:
500 6.875%, 6/01/20 6/09 at 102.00 N/R 479,620
1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,432,065
Industrial Development Authority of the City of Lynchburg,
Virginia, Educational Facilities Revenue Bonds (Randolph-Macon
Women's College), Series 1993:
2,940 5.875%, 9/01/13 9/03 at 102.00 A- 3,027,112
2,500 5.875%, 9/01/23 9/03 at 102.00 A- 2,534,350
500 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 518,635
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
500 Industrial Development Authority of Rockbridge County, Virginia, 7/11 at 100.00 Baa3 500,615
Virginia Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21
2,000 Virginia College Building Authority, Educational Facilities Revenue 9/11 at 100.00 AA+ 1,959,920
Bonds, Public Higher Education Financing Program, Series 2001A,
5.000%, 9/01/26
3,000 Virginia College Building Authority, Educational Facilities Revenue 11/04 at 100.00 Aa1 3,180,570
Bonds, University of Richmond Project, Series 1994, 5.550%, 11/01/19
(Optional put 11/01/04)
1,000 Virginia College Building Authority, Educational Facilities Revenue No Opt. Call AAA 1,026,210
Bonds, Washington and Lee University Project, Series 1998,
5.250%, 1/01/31
1,000 Virginia College Building Authority, Educational Facilities Revenue 4/10 at 101.00 A+ 1,074,570
Bonds, Hampton University Project, Series 2000, 6.000%, 4/01/20
37
Nuveen Virginia Premium Income Municipal Fund (NPV) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 16.9%
$ 4,850 Industrial Development Authority of Fairfax County, Virginia, Hospital No Opt. Call AA $ 4,777,929
Revenue Refunding Bonds (Inova Health System Hospitals Project),
Series 1993A, 5.000%, 8/15/23
4,650 Bon Secours Health System Obligated Group Revenue Bonds, Industrial 8/05 at 102.00 AAA 4,700,918
Development Authority of the County of Hanover, Virginia, Hospital
Revenue Bonds (Bon Secours Health System Projects), Series 1995,
5.500%, 8/15/25
1,500 Industrial Development Authority of the County of Henrico, Virginia, No Opt. Call AAA 1,738,965
Healthcare Revenue Bonds (Bon Secours Health), Series 1996,
6.250%, 8/15/20
4,750 Medical College of Virginia Hospitals Authority, General Revenue Bonds, 7/08 at 102.00 AAA 4,713,520
Series 1998, 5.125%, 7/01/23
2,500 Industrial Development Authority of the City of Norfolk, Virginia, 11/04 at 102.00 AA 2,735,700
Hospital Revenue Refunding Bonds (Sentara Hospitals), Series 1994A,
6.500%, 11/01/13
3,000 Industrial Development Authority of the County of Roanoke, Virginia, 7/12 at 100.00 AAA 3,118,740
Hospital Revenue Bonds, Carilion Health System, Series 2002A,
5.500%, 7/01/19
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.2%
680 Industrial Development Authority of Arlington County, Virginia, 7/05 at 102.00 A 724,635
Multifamily Housing Mortgage Revenue Bonds (Arlington Housing
Corporation), Series 1995, 5.700%, 7/01/07
1,515 Industrial Development Authority of Arlington County, Virginia, 5/10 at 100.00 Aaa 1,577,176
Multifamily Housing Revenue Bonds (Patrick Henry Apartments Project),
Series 2000, 6.050%, 11/01/32 (Alternative Minimum Tax)
(Mandatory put 11/01/20)
4,445 Hampton Redevelopment and Housing Authority, Virginia, Multifamily 7/02 at 104.00 AA- 4,635,290
Housing Revenue Refunding Bonds (Chase Hampton II Apartments),
Series 1994, 7.000%, 7/01/24 (Mandatory put 7/01/04)
1,495 Economic Development Authority of Henrico County, Virginia, Beth Sholom 7/09 at 102.00 AAA 1,556,445
Assisted Living Revenue Bonds, GNMA Mortgage-Backed Securities
Financing, Series 1999A, 5.900%, 7/20/29
1,000 Lynchburg Redevelopment and Housing Authority, Virginia, Vistas Revenue 4/10 at 102.00 AAA 1,028,180
Bonds, GNMA Mortgage-Backed Securities Financing, Series 2000A,
6.200%, 1/20/40 (Alternative Minimum Tax)
2,355 Suffolk Redevelopment and Housing Authority, Virginia, Mortgage 7/02 at 100.00 AAA 2,356,248
Revenue Refunding Bonds (FHA-Insured Mortgage Loan - Wilson Pines
Apartments Section 8 Assisted Project), Series 1993, 6.125%, 1/01/23
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.3%
2,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1/08 at 102.00 AA+ 1,985,940
Series 1996G, Subseries G-1, 5.300%, 1/01/22 (Alternative Minimum Tax)
1,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 7/11 at 100.00 AAA 1,002,450
Series 2001H, Subseries H-1, 5.350%, 7/01/31
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.7%
Industrial Development Authority of the City of Winchester,
Virginia, Residential Care Facility First Mortgage Revenue Bonds
(Westminster- Canterbury of Winchester Inc.), Series 1998:
1,350 5.750%, 1/01/18 1/03 at 102.00 N/R 1,283,310
1,000 5.750%, 1/01/27 1/03 at 102.00 N/R 910,770
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.7%
The City of Hampton, Virginia, General Obligation Public Improvement
Bonds, Series 2000:
890 5.750%, 2/01/17 2/10 at 102.00 AA 974,968
2,000 6.000%, 2/01/20 2/10 at 102.00 AA 2,205,200
1,400 Northern Mariana Islands Commonwealth, General Obligation Bonds, 6/10 at 100.00 A 1,438,892
Series 2000A, 6.000%, 6/01/20
4,200 Commonwealth of Puerto Rico, General Obligation Public Improvement 7/06 at 101.50 A- 4,237,254
Bonds, Series 1996, 5.400%, 7/01/25
1,205 City of Richmond, Virginia, General Obligation Public Improvement 7/03 at 102.00 AA 1,221,966
Bonds, Series 1993B, 5.500%, 7/15/23
1,430 City of Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AA 1,466,637
Bonds, Series 2002A, 5.000%, 10/01/17
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,425 City of Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ $ 1,431,584
Bonds, Series 2001, 5.000%, 6/01/20
2,000 City of Winchester, Virginia, General Obligation Public Improvement and 1/04 at 102.00 AA 2,102,980
Refunding Bonds, Series 1994, 5.500%, 1/15/14
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 20.6%
County of Cumberland, Virginia, Certificates of Participation, Series 1997:
1,075 6.200%, 7/15/12 No Opt. Call N/R 1,135,383
1,350 6.375%, 7/15/17 No Opt. Call N/R 1,428,746
500 Industrial Development Authority of Dinwiddie County, Virginia, Lease 2/07 at 102.00 N/R 509,980
Revenue Bonds (Dinwiddie County School Facilities Project), Series 1997A,
6.000%, 2/01/18
1,000 Fairfax County Economic Development Authority, Virginia, Parking 9/09 at 102.00 AA 1,105,340
Revenue Bonds (Vienna II Metrorail Station Project), 1999 First
Series, 6.000%, 9/01/18
Greater Richmond Convention Center Authority, Virginia, Hotel
Tax Revenue Bonds (Convention Center Expansion Project), Series
2000:
600 6.125%, 6/15/25 6/10 at 101.00 A- 641,880
2,000 6.125%, 6/15/29 6/10 at 101.00 A- 2,134,160
3,000 Hampton Roads Regional Jail Authority, Virginia, Regional Jail Facility 7/06 at 102.00 AAA 3,072,180
Revenue Bonds, Series 1996A, 5.500%, 7/01/24
1,230 Middlesex County Industrial Development Authority, Virginia, Lease 8/09 at 102.00 AAA 1,329,396
Revenue Bonds, School Facilities Project, Series 1999, 6.000%, 8/01/24
2,000 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 AAA 1,975,380
Revenue Bonds, Series D, 5.000%, 7/01/32
Puerto Rico Public Buildings Authority, Government Facilities
Revenue Refunding Bonds, Guaranteed by the Commonwealth of
Puerto Rico, Series D:
1,000 5.250%, 7/01/27 7/12 at 100.00 A- 1,000,340
1,200 5.250%, 7/01/36 7/12 at 100.00 A- 1,186,416
2,000 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin Islands 10/10 at 101.00 BBB- 2,156,620
Gross Receipts Taxes Loan Note), Series 1999A, 6.500%, 10/01/24
2,250 Virginia College Building Authority, Educational Facilities Revenue 2/09 at 101.00 AA+ 2,427,390
Bonds (21st Century College Program), Series 2000, 6.000%, 2/01/20
2,000 Virginia College Building Authority, Educational Facilities Revenue 2/12 at 100.00 AA+ 1,988,720
Bonds (21st Century College and Equipment Program), Series 2002A,
5.000%, 2/01/22
Virginia Resources Authority, Infrastructure Revenue Bonds, Pooled Loan
Bond Program, Series 2000B:
1,120 5.500%, 5/01/20 5/10 at 101.00 AAA 1,169,258
3,060 5.500%, 5/01/30 5/10 at 101.00 AAA 3,145,588
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 12.0%
1,900 Metropolitan Washington Airports Authority, Virginia, Airport System 10/02 at 102.00 AAA 1,962,434
Revenue Bonds, Series 1992A, 6.625%, 10/01/19 (Alternative Minimum Tax)
1,400 Metropolitan Washington Airports Authority, Virginia, Airport System 10/07 at 101.00 Aa3 1,389,360
Revenue Bonds, Series 1997A, 5.375%, 10/01/23
4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 3,952,120
Series 2001A, 5.125%, 7/01/31
6,065 Virginia Port Authority, Port Facilities Revenue Bonds, Series 1997, 7/07 at 101.00 AAA 6,190,727
5.600%, 7/01/27 (Alternative Minimum Tax)
2,000 Virginia Resources Authority, Airport Revolving Fund Revenue Bonds, 2/11 at 100.00 Aa2 2,003,300
Series 2001A, 5.250%, 8/01/23
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 19.3%
3,000 Prince William County Park Authority, Virginia, Revenue Bonds, 10/04 at 102.00 N/R*** 3,369,660
Series 1994, 6.875%, 10/15/16 (Pre-refunded to 10/15/04)
2,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,077,340
Bonds, Series 2000A, 5.500%, 10/01/40
5,800 Valley Resource Authority of the City of Roanoke, Virginia, Solid Waste 9/02 at 102.00 A+*** 5,975,972
System Revenue Bonds, Series 1992, 5.750%, 9/01/12 (Pre-refunded
to 9/01/02)
39
Nuveen Virginia Premium Income Municipal Fund (NPV) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (continued)
$ 1,250 Virginia College Building Authority, Educational Facilities Revenue 1/04 at 102.00 AAA $ 1,343,875
Bonds, Washington and Lee University Project, Series 1994,
5.800%, 1/01/24 (Pre-refunded to 1/01/04)
3,955 Virginia Resources Authority, Water and Sewer System Revenue Bonds 10/07 at 100.00 AA*** 4,388,152
(Sussex County Project), Series 1995A, 5.600%, 10/01/25 (Pre-refunded
to 10/01/07)
7,035 Commonwealth Transportation Board, Commonwealth of Virginia, 5/04 at 101.00 AA+*** 7,642,613
Transportation Revenue Bonds (Northern Virginia Transportation
District Program), Series 1995A, 6.250%, 5/15/17 (Pre-refunded
to 5/15/04)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.3%
5,060 Halifax County Industrial Development Authority, Virginia, Revenue 12/02 at 102.00 A+ 5,216,759
Bonds (Old Dominion Electric Cooperative), 6.350%, 12/01/07
(Alternative Minimum Tax)
2,250 Industrial Development Authority of the Town of Louisa, Virginia, 1/04 at 102.00 A 2,181,893
Pollution Control Revenue Bonds (Virginia Electric and Power
Company Project), Series 1994, 5.450%, 1/01/24
3,500 City of Richmond, Virginia, Utility Revenue Refunding Bonds, 1/08 at 101.00 AAA 3,481,975
Series 1998A, 5.125%, 1/15/28
6,150 Southeastern Public Service Authority of Virginia, Senior Revenue 7/03 at 102.00 A- 6,203,751
Bonds (Regional Solid Waste System), Series 1993, 6.000%, 7/01/17
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 18.8%
2,000 Fairfax County, Virginia, Sewer Revenue Bonds, Series 1996, 7/06 at 102.00 AAA 2,100,000
5.875%, 7/15/28
2,000 Fairfax County Water Authority, Virginia, Water Revenue Bonds, 4/10 at 101.00 AAA 2,096,940
Series 2000, 5.625%, 4/01/25
Fairfax County Water Authority, Virginia, Water Refunding Revenue Bonds,
Series 2002:
2,030 5.375%, 4/01/19 4/12 at 100.00 AAA 2,119,685
1,000 5.000%, 4/01/27 4/12 at 100.00 AAA 984,690
1,650 Henrico County, Virginia, Water and Sewer System Revenue Refunding 5/09 at 102.00 AA+ 1,611,275
Bonds, Series 1999, 5.000%, 5/01/28
6,200 City of Norfolk, Virginia, Water Revenue Bonds, Series 1995, 11/05 at 102.00 AAA 6,623,398
5.875%, 11/01/20
City of Norfolk, Virginia, Water Revenue and Refunding Bonds, Series 2001:
1,310 5.000%, 11/01/21 11/11 at 100.00 AAA 1,311,402
1,380 5.000%, 11/01/22 11/11 at 100.00 AAA 1,373,818
1,955 Rivanna Water and Sewer Authority, Virginia, Regional Water and Sewer 10/09 at 101.00 Aa3 2,026,651
System Revenue Bonds, Series 1999, 5.625%, 10/01/29
1,000 Upper Occoquan Sewage Authority, Virginia, Regional Sewerage System 1/04 at 102.00 AAA 1,000,440
Revenue Refunding Bonds, Series 1993, 5.000%, 7/01/21
2,250 City of Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa3 2,443,163
Series 2000, 6.000%, 9/01/24
500 Virginia Resources Authority, Clean Water State Revolving Fund Revenue 10/10 at 100.00 AAA 525,391
Bonds, Series 1999, 5.625%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
$ 184,845 Total Investments (cost $182,461,047) - 147.6% 189,917,560
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 2,537,020
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.6)% (63,800,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $128,654,580
====================================================================================================================
* 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.
# Non-income producing security, in the case of a bond,
generally denotes that issuer has defaulted on the
payment of principal or interest or has filed for
bankruptcy.
See accompanying notes to financial statements.
40
Nuveen Virginia Dividend Advantage Municipal Fund (NGB)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 7.3%
$ 730 The Children's Trust Fund, Puerto Rico, Tobacco Settlement Asset-Backed 7/10 at 100.00 Aa3 $ 745,797
Bonds, Series 2000, 5.750%, 7/01/20
Guam Economic Development Authority, Asset-Backed Bonds, Series 2001A:
250 5.000%, 5/15/22 5/11 at 100.00 A2 253,473
850 5.400%, 5/15/31 5/11 at 100.00 A2 873,970
1,400 Guam Economic Development Authority, Asset-Backed Bonds, 5/11 at 100.00 A2 1,376,774
Series 2001B, 5.500%, 5/15/41
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 11.7%
500 The Industrial Development Authority of the City of Danville, Virginia, 3/11 at 102.00 N/R 478,485
Educational Facilities Revenue Bonds, Averett University Project,
Series 2001, 6.000%, 3/15/22
850 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 881,680
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental
Control Facilities Financing Authority, Higher Education Revenue Bonds
(Ana G. Mendez University System Project), Series 1999:
160 5.375%, 2/01/19 2/09 at 101.00 BBB 159,464
320 5.375%, 2/01/29 2/09 at 101.00 BBB 309,421
500 Industrial Development Authority of Rockbridge County, Virginia, Virginia No Opt. Call Baa3 500,995
Horse Center Revenue Refunding Bonds, Series 2001B, 6.125%, 7/15/11
1,000 Industrial Development Authority of Rockbridge County, Virginia, 7/11 at 100.00 Baa3 1,001,230
Virginia Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21
1,325 Virginia College Building Authority, Educational Facilities 9/10 at 100.00 AA+ 1,351,381
Revenue Bonds, Public Higher Education Financing Program,
Series 2000A, 5.000%, 9/01/17
500 Virginia College Building Authority, Educational Facilities Revenue 7/08 at 101.00 AA 503,105
Refunding Bonds (Marymount University Project), Series 1998,
5.100%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 17.8%
Industrial Development Authority of Albemarle County, Virginia,
Hospital Revenue Refunding Bonds (Martha Jefferson Hospital),
Series 1993:
1,000 5.500%, 10/01/15 10/03 at 102.00 A2 1,015,260
1,000 5.500%, 10/01/20 10/03 at 102.00 A2 1,001,880
1,000 Industrial Development Authority of Fauquier County, Virginia, 10/12 at 102.00 AA 988,650
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25
2,000 Industrial Development Authority of the City of Fredericksburg, 6/07 at 102.00 AAA 2,051,380
Virginia, Hospital Facilities Revenue Refunding Bonds (MediCorp
Health System Obligated Group), Series 1996, 5.250%, 6/15/16
1,000 Industrial Development Authority of the City of Lynchburg, Virginia, 1/08 at 101.00 A+ 993,830
Healthcare Facilities Revenue Refunding Bonds (Centra Health),
Series 1998, 5.200%, 1/01/23
1,000 Industrial Development Authority of the City of Norfolk, Virginia, 8/07 at 102.00 AAA 1,000,810
Healthcare Revenue Bonds (Bon Secours Health System), Series 1997,
5.250%, 8/15/26
800 Industrial Development Authority of the City of Norton, Virginia, 12/11 at 101.00 A 826,520
Hospital Revenue Refunding and Improvement Bonds, Norton Community
Hospital, Series 2001, 6.000%, 12/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.5%
1,000 Industrial Development Authority of Arlington County, Virginia, 11/11 at 102.00 AAA 979,690
Multifamily Housing Mortgage Revenue Bonds, Arlington View Terrace
Apartments, Series 2001, 5.150%, 11/01/31 (Alternative Minimum Tax)
(Mandatory put 11/01/19)
1,000 Virginia Housing Development Authority, Rental Housing Bonds, 10/10 at 100.00 AA+ 1,022,940
Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax)
41
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.4%
$ 1,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 7/11 at 100.00 AAA $ 1,002,450
Series 2001H, Subseries H-1, 5.350%, 7/01/31
3,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 7/10 at 100.00 AA+ 3,177,750
Series 2000B, Subseries B-2, 5.875%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.5%
2,000 Industrial Development Authority of Albemarle County, Virginia, 1/12 at 100.00 N/R 1,993,760
Residential Care Facility Revenue Bonds, Westminster Canterbury
of the Blue Ridge First Mortgage, Series 2001, 6.200%, 1/01/31
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 27.3%
2,000 County of Chesterfield, Virginia, General Obligation Public Improvement 1/11 at 100.00 AAA 2,008,920
Bonds, Series 2001, 5.000%, 1/15/21
3,310 Town of Leesburg, Virginia, General Obligation Public Improvement 1/11 at 101.00 AAA 3,352,467
Bonds, Series 2000, 5.125%, 1/15/21
1,540 Loudoun County, Virginia, General Obligation Public Improvement Bonds, 1/11 at 101.00 AA+ 1,578,993
Series 2001B, 5.250%, 1/01/20
1,000 City of Newport News, Virginia, General Obligation Public Improvement 5/10 at 102.00 AA 1,089,300
Bonds, Series 2000A, 5.625%, 5/01/16
320 Northern Mariana Islands Commonwealth, General Obligation Bonds, 6/10 at 100.00 A 328,890
Series 2000A, 6.000%, 6/01/20
1,300 City of Richmond, Virginia, General Obligation Public Improvement and 1/10 at 101.00 AAA 1,301,807
Refunding Bonds, Series 1999A, 5.125%, 1/15/24
2,425 City of Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 2,428,056
Bonds, Series 2001, 5.000%, 6/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 9.0%
960 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin Islands 10/10 at 101.00 BBB- 1,034,918
Gross Receipts Taxes Loan Note), Series 1999A, 6.375%, 10/01/19
500 Virginia College Building Authority, Educational Facilities Revenue 2/12 at 100.00 AA+ 497,180
Bonds, 21st Century College and Equipments Program, Series 2002A,
5.000%, 2/01/22
430 Commonwealth Transportation Board, Commonwealth of Virginia 5/07 at 101.00 AA+ 437,026
Transportation Revenue Refunding Bonds (Northern Virginia
Transportation District Program), Series 1997B, 5.125%, 5/15/19
2,000 Virginia Public School Authority, School Financing Bonds, 1997 8/11 at 101.00 AA+ 2,022,920
Resolution, Series 2001A, 5.000%, 8/01/19
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 28.7%
1,750 Capital Region Airport Commission, Richmond, Virginia, International 7/05 at 102.00 AAA 1,805,213
Airport Projects, Airport Revenue Bonds, Series 1995A, 5.625%, 7/01/20
1,000 Chesapeake Bay and Bridge Tunnel Commission, Virginia, District Revenue No Opt. Call AAA 1,064,420
Bonds, General Resolution Refunding, Series 1998, 5.500%, 7/01/25
3,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AAA 3,037,020
Revenue Bonds, Series 2001A, 5.500%, 10/01/27 (Alternative Minimum Tax)
250 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AAA 244,678
Revenue Bonds, Series 2001B, 5.000%, 10/01/21
1,250 Minneapolis-St. Paul Metropolitan Airports Commission, Minnesota, 4/11 at 101.00 N/R 1,133,513
Special Facilities Revenue Bonds, Northwest Airlines, Inc. Project,
Series 2001A, 7.000%, 4/01/25 (Alternative Minimum Tax)
3,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, Series 7/11 at 100.00 AAA 2,964,090
2001A, 5.125%, 7/01/31
1,225 Virginia Resources Authority, Airport Revolving Fund Revenue Bonds, 2/11 at 100.00 Aa2 1,227,021
Series 2001A, 5.250%, 8/01/23
1,250 Virginia Resources Authority, Airport Revolving Fund Revenue Bonds, 2/11 at 100.00 Aa2 1,192,813
Series 2001B, 5.125%, 8/01/27 (Alternative Minimum Tax)
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 9.6%
$ 1,000 Industrial Development Authority of Henry County, Virginia, Hospital 1/07 at 101.00 A+*** $ 1,120,060
Revenue Bonds (Memorial Hospital of Martinsville and Henry Counties),
Series 1997, 6.000%, 1/01/27 (Pre-refunded to 1/01/07)
Puerto Rico Infrastructure Financing Authority, Special Obligation Bonds,
Series 2000A:
1,500 5.500%, 10/01/32 10/10 at 101.00 AAA 1,560,735
1,500 5.500%, 10/01/40 10/10 at 101.00 AAA 1,558,005
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.2%
1,000 City of Bristol, Virginia, Utility System Revenue Refunding Bonds, 7/11 at 102.00 AAA 1,000,370
Series 2001, 5.000%, 7/15/21
1,725 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, 7/05 at 100.00 A- 1,732,952
Series Z, 5.250%, 7/01/21
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 14.2%
2,000 Fairfax County Water Authority, Virginia, Water Refunding Revenue Bonds, No Opt. Call AAA 2,025,520
Series 1997, 5.000%, 4/01/21
2,000 Henrico County, Virginia, Water and Sewer System Revenue Refunding 5/09 at 102.00 AA+ 1,991,180
Revenue Bonds, Series 1999, 5.000%, 5/01/22
520 Prince William County Service Authority, Virginia, Water and Sewer 7/09 at 101.00 AAA 546,452
System Revenue Bonds, Series 1999, 5.500%, 7/01/19
1,680 Virginia Resources Authority, Clean Water State Revolving Fund Revenue 10/10 at 100.00 AAA 1,743,653
Bonds, Series 2000, 5.400%, 10/01/20
------------------------------------------------------------------------------------------------------------------------------------
$ 65,620 Total Investments (cost $66,122,008) - 150.2% 66,518,867
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.1%
$ 500 Puerto Rico Government Development Bank, Adjustable Refunding Bonds, VMIG-1 500,000
============= Series 1985, Variable Rate Demand Bonds, 1.000%, 12/01/15+
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 1,289,290
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (54.2)% (24,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $44,308,157
====================================================================================================================
* 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.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
43
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB)
Portfolio of
Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.3%
$ 1,000 Fairfax County Economic Development Authority, Virginia, Revenue Bonds 9/09 at 101.00 Aaa $ 1,014,550
(National Wildlife Federation Project), Series 1999, 5.375%, 9/01/29
3,000 Puerto Rico Industrial, Tourist, Educational, Medical, and 12/12 at 101.00 BBB 2,953,740
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System Project, Series 2002, 5.375%, 12/01/21
2,000 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 1,959,920
Revenue Bonds, Public Higher Education Financing Program,
Series 2001A, 5.000%, 9/01/26
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.4%
3,000 Industrial Development Authority of Fauquier County, Virginia, 10/12 at 102.00 AA 2,965,950
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25
1,200 Industrial Development Authority of the City of Norton, Virginia, 12/11 at 101.00 A 1,239,780
Hospital Refunding and Improvement Revenue Bonds, Norton Community
Hospital, Series 2001, 6.000%, 12/01/22
1,000 Industrial Development Authority of the County of Prince William, 10/08 at 102.00 Aaa 1,002,160
Virginia, Hospital Facility Refunding Revenue Bonds (Potomac Hospital
Corporation of Prince William), Series 1998, 5.000%,10/01/18
3,915 Industrial Development Authority of the County of Roanoke, Virginia, 7/12 at 100.00 AAA 4,044,861
Hospital Revenue Bonds, Carilion Health System, Series 2002A,
5.500%, 7/01/20
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.9%
500 Virginia Housing Development Authority, Commonwealth Mortgage 1/08 at 102.00 AA+ 510,560
Bonds, 1996 Series H, Subseries H-2, 5.200%, 7/01/17
7,485 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 7,503,338
Bonds, 2001 Series H, Subseries H-1, 5.350%, 7/01/31
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 29.6%
1,750 City of Chesapeake, Virginia, General Obligation Public Improvement 12/11 at 100.00 AA 1,879,168
Refunding Bonds, Series 2001, 5.500%, 12/01/16
1,730 Loudoun County, Virginia, General Obligation Public Improvement 11/11 at 101.00 AA+ 1,693,220
Bonds, Series 2001C, 4.500%, 11/01/17
525 City of Portsmouth, Virginia, General Obligation Public Utility 6/08 at 100.00 AAA 525,137
Refunding Bonds, Series 2001B, 5.000%, 6/01/21
Powhatan County, Virginia, General Obligation Bonds, Series 2001:
660 5.000%, 1/15/23 1/11 at 101.00 AAA 652,846
2,000 5.000%, 1/15/27 1/11 at 101.00 AAA 1,959,380
3,250 Commonwealth of Puerto Rico, General Obligation Public Improvement 7/11 at 100.00 AAA 3,259,230
Refunding Bonds, Series 2001, 5.125%, 7/01/30
City of Roanoke, Virginia, General Obligation Public Improvement Bonds,
Series 2002A:
2,400 5.000%, 10/01/18 10/12 at 101.00 AA 2,444,592
2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,465,340
1,280 City of Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AAA 1,304,896
Bonds, Series 2002B, 5.000%, 10/01/15 (Alternative Minimum Tax)
City of Salem, Virginia, General Obligation Public Improvement Bonds,
Series 2002:
1,145 5.375%, 1/01/21 1/12 at 100.00 Aa3 1,182,167
1,200 5.375%, 1/01/22 1/12 at 100.00 Aa3 1,233,420
1,260 5.375%, 1/01/23 1/12 at 100.00 Aa3 1,290,265
1,325 5.375%, 1/01/24 1/12 at 100.00 Aa3 1,353,806
44
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,500 City of Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ $ 1,518,375
Bonds, Series 2001, 5.000%, 6/01/19
1,420 City of Virginia Beach, Virginia, General Obligation Public Improvement 3/12 at 100.00 AA+ 1,421,519
Refunding Bonds, Series 2002, 5.000%, 3/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 40.1%
1,000 City of Bristol, Virginia, General Obligation Utility System Revenue 11/12 at 102.00 AAA 986,030
Bonds, Series 2002, 5.000%, 11/01/24
5,350 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 AAA 5,284,142
Revenue Bonds, Series D, 5.000%, 7/01/32
3,000 Puerto Rico Infrastructure Financing Authority, Special Tax Revenue 1/08 at 101.00 AAA 2,975,250
Bonds, Series 1997A, 5.000%, 7/01/28
1,150 Puerto Rico Public Building Authority, Government Facilities Revenue 7/07 at 101.50 AAA 1,143,123
Bonds, Series B, Guaranteed by the Commonwealth of Puerto Rico,
5.000%, 7/01/27
Puerto Rico Public Buildings Authority, Government Facilities
Revenue Refunding Bonds, Guaranteed by the Commonwealth of
Puerto Rico, Series D:
1,500 5.250%, 7/01/27 7/12 at 100.00 A- 1,500,510
500 5.250%, 7/01/36 7/12 at 100.00 A- 494,340
2,800 Puerto Rico Public Finance Corporation, Commonwealth Appropriation 2/12 at 100.00 A- 2,847,012
Bonds, Series 2002E, 5.500%, 8/01/29
1,790 Virginia College Building Authority, Educational Facilities Revenue 2/12 at 100.00 AA+ 1,779,904
Bonds, 21st Century College and Equipment Program, Series 2002A,
5.000%, 2/01/22
2,710 Commonwealth Transportation Board, Commonwealth of Virginia, 5/11 at 100.00 AA+ 2,656,179
Transportation Revenue Bonds Northern Virginia Transportation District,
Series 2001A, 5.000%, 5/15/26
Commonwealth Transportation Board, Commonwealth of Virginia,
Transportation Revenue Bonds, U.S. Route 58 Corridor Development
Program, Series 2001B:
1,705 5.000%, 5/15/22 5/11 at 100.00 AA+ 1,697,498
1,665 5.000%, 5/15/23 5/11 at 100.00 AA+ 1,646,852
1,710 Virginia Public Building Authority, Public Facilities Revenue Bonds, 8/08 at 100.00 AAA 1,722,056
Series 1999A, 5.000%, 8/01/19
2,540 Virginia Public School Authority, School Financing Bonds, 1997 8/11 at 101.00 AA+ 2,569,108
Resolution, Series 2001A, 5.000%, 8/01/19
Virginia Resources Authority, Infrastructure Revenue Bonds, Pooled
Loan Bond Program, Series 2001D:
1,265 5.000%, 5/01/26 5/10 at 101.00 AA 1,229,694
4,330 5.000%, 5/01/31 5/10 at 101.00 AA 4,166,586
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.4%
2,500 Chesapeake Bay Bridge and Tunnel Commission, Virginia, District No Opt. Call AAA 2,688,725
Revenue Refunding Bonds, General Resolution Junior Lien, Series 2001B,
5.000%, 7/01/09
1,000 Metropolitan Washington D.C. Airport Authority, Airport System Revenue 10/12 at 100.00 AAA 974,150
Bonds, Series 2002A, 5.125%, 10/01/26 (Alternative Minimum Tax)
(WI, settling 6/04/02)
Richmond Metropolitan Authority, Virginia, Expressway Revenue and
Refunding Bonds, Series 1998:
1,000 5.250%, 7/15/12 No Opt. Call AAA 1,083,660
1,980 5.250%, 7/15/22 No Opt. Call AAA 2,056,309
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 8.0%
6,250 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 6,491,688
Bonds, Series 2000A, 5.500%, 10/01/40
45
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued)
Portfolio of Investments May 31, 2002
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.5%
$ 3,125 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series HH, 7/10 at 101.00 AAA $ 3,159,719
5.250%, 7/01/29
1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/12 at 101.00 AAA 1,001,630
2002 Series II, 5.125%, 7/01/26
1,110 Industrial Development Authority of Russell County, Virginia, 11/08 at 101.00 AAA 1,109,267
Pollution Control Revenue Bonds (Appalachian Power Company Project),
Series H, 5.000%, 11/01/21
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 28.9%
3,800 Fairfax County Water Authority, Virginia, Water Revenue Refunding Bonds, No Opt. Call AAA 3,848,488
Series 1997, 5.000%, 4/01/21
1,500 Fairfax County Water Authority, Virginia, Water Revenue Refunding 4/12 at 100.00 AAA 1,477,035
Bonds, Series 2002, 5.000%, 4/01/27
Henry County Public Service Authority, Virginia, Water and Sewer
Revenue Refunding Bonds, Series 2001:
1,000 5.500%, 11/15/17 No Opt. Call AAA 1,094,680
3,000 5.500%, 11/15/19 No Opt. Call AAA 3,259,260
City of Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,130 5.000%, 11/01/18 11/11 at 100.00 AAA 1,149,052
1,190 5.000%, 11/01/19 11/11 at 100.00 AAA 1,203,768
1,450 5.000%, 11/01/23 11/11 at 100.00 AAA 1,433,963
1,525 5.000%, 11/01/24 11/11 at 100.00 AAA 1,503,696
1,750 5.000%, 11/01/31 11/11 at 100.00 AAA 1,701,333
2,610 County of Spotsylvania, Virginia, Water and Sewer System Revenue Bonds, 6/11 at 100.00 AAA 2,533,083
Series 2001, 5.000%, 6/01/30
2,000 Upper Occoquan Sewage Authority, Virginia, Regional Sewerage System No Opt. Call AAA 2,077,740
Revenue Bonds, Series 1995A, 5.150%, 7/01/20
2,250 Virginia Resources Authority, Water and Sewer System Revenue Bonds, 5/11 at 101.00 AA 2,185,985
Caroline County Public Improvements Project, Series 2001,
5.000%, 5/01/32
------------------------------------------------------------------------------------------------------------------------------------
$ 121,165 Total Investments (cost $121,483,882) - 150.1% 122,109,735
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 1,215,210
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.6)% (42,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares -100% $81,324,945
====================================================================================================================
* 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.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
46
Statement of
Assets and Liabilities May 31, 2002
MARYLAND MARYLAND MARYLAND NORTH CAROLINA NORTH CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR) (NNC) (NRB)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in municipal
securities, at market value $225,393,163 $89,692,725 $89,940,086 $133,532,083 $48,985,842
Temporary investments in
short-term securities,
at amortized cost, which
approximates market value -- -- -- 1,000,000 --
Cash 731,890 867,891 222,296 -- --
Receivables:
Interest 4,601,128 1,676,809 1,605,752 2,476,998 825,257
Investments sold 1,590,966 91,071 -- -- --
Other assets 25,269 11,445 6,505 12,196 10,789
------------------------------------------------------------------------------------------------------------------------------------
Total assets 232,342,416 92,339,941 91,774,639 137,021,277 49,821,888
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- -- 380,772 35,347
Payable for investments purchased 4,499,917 1,014,387 1,014,387 -- 400,556
Accrued expenses:
Management fees 123,748 26,891 26,687 74,718 14,521
Other 68,007 78,510 89,566 41,128 67,703
Preferred share
dividends payable 2,826 4,381 3,507 1,345 1,536
Common share
dividends payable 752,652 290,895 270,746 437,566 154,202
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,447,150 1,415,064 1,404,893 935,529 673,865
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares,
at liquidation value 79,100,000 32,000,000 32,000,000 46,800,000 17,000,000
====================================================================================================================================
Net assets applicable
to Common shares $147,795,266 $58,924,877 $58,369,746 $ 89,285,748 $32,148,023
====================================================================================================================================
Common shares outstanding 10,526,612 4,155,642 4,165,320 6,295,916 2,234,805
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common
shares, divided by Common
shares outstanding) $ 14.04 $ 14.18 $ 14.01 $ 14.18 $ 14.39
====================================================================================================================================
NET ASSETS APPLICABLE TO
COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value
per share $ 105,266 $ 41,556 % 41,653 $ 62,959 $ 22,348
Paid-in surplus 146,004,694 58,898,674 59,011,780 87,186,897 31,612,862
Balance of undistributed net
investment income 1,467,113 78,110 199,001 685,795 229,468
Accumulated net realized gain
(loss) from investment
transactions (4,905,138) (116,260) (204,367) (3,290,410) (59,767)
Net unrealized appreciation
(depreciation) of investments 5,123,331 22,797 (678,321) 4,640,507 343,112
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $147,795,266 $58,924,877 $58,369,746 $89,285,748 $32,148,023
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
47
Statement of
Assets and Liabilities May 31, 2002 (continued)
NORTH CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO) (NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in municipal
securities, at
market value $82,455,586 $189,917,560 $66,518,867 $122,109,735
Temporary investments
in short-term securities,
at amortized cost, which
approximates market value -- -- 500,000 --
Cash -- 114,453 515,677 795,090
Receivables:
Interest 1,209,636 3,215,323 1,074,547 1,873,363
Investments sold -- -- -- --
Other assets 8,093 13,644 10,448 8,631
------------------------------------------------------------------------------------------------------------------------------------
Total assets 83,673,315 193,260,980 68,619,539 124,786,819
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 1,947,166 -- -- --
Payable for investments
purchased -- -- -- 966,870
Accrued expenses:
Management fees 24,022 105,242 20,175 36,448
Other 58,497 62,928 69,594 59,127
Preferred share
dividends payable 4,667 3,175 2,038 7,363
Common share
dividends payable 255,642 635,055 219,575 392,066
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,289,994 806,400 311,382 1,461,874
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares,
at liquidation value 28,000,000 63,800,000 24,000,000 42,000,000
====================================================================================================================================
Net assets applicable
to Common shares $53,383,321 $128,654,580 $44,308,157 $ 81,324,945
====================================================================================================================================
Common shares outstanding 3,732,000 8,759,405 3,114,539 5,682,113
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common
shares, divided by Common
shares outstanding) $ 14.30 $ 14.69 $ 14.23 $ 14.31
====================================================================================================================================
NET ASSETS APPLICABLE TO
COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01
par value per share $ 37,320 $ 87,594 $ 31,145 $ 56,821
Paid-in surplus 52,890,438 123,504,539 44,107,587 80,598,855
Balance of undistributed
net investment income 723 1,119,659 83,355 146,793
Accumulated net realized
gain (loss) from
investment transactions (46,868) (3,513,725) (310,789) (103,377)
Net unrealized appreciation
(depreciation) of investments 501,708 7,456,513 396,859 625,853
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares $53,383,321 $128,654,580 $44,308,157 $ 81,324,945
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
48
Statement of
Operations Year Ended May 31, 2002
MARYLAND MARYLAND MARYLAND NORTH CAROLINA NORTH CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR)* (NNC) (NRB)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $12,738,645 $4,807,087 $2,659,757 $7,577,218 $2,652,606
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,459,174 591,029 366,376 882,232 318,346
Preferred shares - auction fees 197,750 80,000 43,178 117,000 42,500
Preferred shares - dividend disbursing
agent fees 20,000 10,000 5,397 10,000 10,000
Shareholders' servicing agent
fees and expenses 46,013 3,409 1,436 19,222 1,326
Custodian's fees and expenses 68,775 61,171 31,048 59,112 49,717
Trustees' fees and expenses 2,091 1,245 723 1,690 772
Professional fees 12,071 10,675 11,592 12,055 8,957
Shareholders' reports -
printing and mailing expenses 48,550 18,064 14,105 31,792 13,779
Stock exchange listing fees 28,253 133 463 18,219 71
Investor relations expense 39,254 10,266 862 21,603 6,555
Other expenses 19,335 8,672 4,928 14,671 7,825
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 1,941,266 794,664 480,108 1,187,596 459,848
Custodian fee credit (9,809) (36,634) (3,766) (14,185) (24,968)
Expense reimbursement -- (272,782) (168,140) -- (146,929)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,931,457 485,248 308,202 1,173,411 287,951
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 10,807,188 4,321,839 2,351,555 6,403,807 2,364,655
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from
investment transactions 1,246,503 (51,148) (204,367) 1,171,228 94,213
Change in net unrealized
appreciation (depreciation)
of investments 145,991 941,869 (678,321) (237,275) 744,160
------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments 1,392,494 890,721 (882,688) 933,953 838,373
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,325,949) (577,614) (257,677) (795,822) (292,515)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $10,873,733 $4,634,946 $1,211,190 $6,541,938 $2,910,513
====================================================================================================================================
* For the period September 25, 2001 (commencement of operations) through May
31, 2002.
See accompanying notes to financial statements.
49
Statement of
Operations Year Ended May 31, 2002 (continued)
NORTH CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO)** (NPV) (NGB) (NNB)***
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $1,640,085 $10,689,731 $3,543,287 $2,642,877
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 251,070 1,244,041 442,102 384,924
Preferred shares - auction fees 27,041 159,500 60,000 40,561
Preferred shares - dividend disbursing agent fees 3,863 20,000 10,000 3,863
Shareholders' servicing agent fees and expenses 837 41,681 2,866 1,133
Custodian's fees and expenses 24,066 59,059 50,930 33,904
Trustees' fees and expenses 731 2,226 1,000 781
Professional fees 8,829 10,922 11,277 8,875
Shareholders' reports - printing and mailing expenses 10,327 37,626 10,702 11,744
Stock exchange listing fees 268 21,026 689 336
Investor relations expense 1,021 32,892 7,368 1,559
Other expenses 2,911 24,391 7,894 3,140
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 330,964 1,653,364 604,828 490,820
Custodian fee credit (10,315) (14,739) (29,620) (12,185)
Expense reimbursement (115,878) -- (204,047) (177,657)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 204,771 1,638,625 371,161 300,978
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 1,435,314 9,051,106 3,172,126 2,341,899
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions (46,868) 727,999 (124,637) (103,377)
Change in net unrealized appreciation (depreciation)
of investments 501,708 (499,466) 1,095,723 625,853
------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments 454,840 228,533 971,086 522,476
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (156,382) (952,624) (394,239) (234,802)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $1,733,772 $ 8,327,015 $3,748,973 $2,629,573
====================================================================================================================================
** For the period November 16, 2001 (commencement of operations) through May
31, 2002.
*** For the period November 15, 2001 (commencement of operations) through May
31, 2002.
See accompanying notes to financial statements.
50
Statement of
Changes in Net Assets
MARYLAND
DIVIDEND
MARYLAND DIVIDEND ADVANTAGE 2
MARYLAND PREMIUM INCOME (NMY) ADVANTAGE (NFM) (NZR)
----------------------------- ---------------------------- ---------------
FOR THE FOR THE
PERIOD 1/25/01 PERIOD 9/25/01
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH THROUGH
5/31/02 5/31/01 5/31/02 5/31/01 5/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 10,807,188 $ 10,812,322 $ 4,321,839 $ 919,478 $ 2,351,555
Net realized gain (loss) from
investment transactions 1,246,503 (245,348) (51,148) (65,112) (204,367)
Change in net unrealized appreciation
(depreciation) of investments 145,991 10,719,939 941,869 (918,987) (678,321)
Distributions to Preferred
Shareholders from
and in excess of net
investment income (1,325,949) (2,591,214) (577,614) (224,117) (257,677)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable
to Common shares
from operations 10,873,733 18,695,699 4,634,946 (288,738) 1,211,190
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From and in excess of net investment income (8,760,619) (8,247,709) (3,489,426) (872,135) (1,894,877)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from
sale of shares -- -- -- 59,267,070 59,424,315
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 481,491 453,426 39,474 911 18,843
Preferred shares offering costs -- -- -- (467,500) (490,000)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from capital share transactions 481,491 453,426 39,474 58,800,481 58,953,158
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares 2,594,605 10,901,416 1,184,994 57,639,608 58,269,471
Net assets applicable to
Common shares at the
beginning of period 145,200,661 134,299,245 57,739,883 100,275 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares at the end
of period $147,795,266 $145,200,661 $58,924,877 $57,739,883 $58,369,746
====================================================================================================================================
Undistributed (Over-distribution
of) net investment
income at the end of period $ 1,467,113 $ 401,975 $ 78,110 $ (176,774) $ 199,001
====================================================================================================================================
See accompanying notes to financial statements.
51
Statement of
Changes in Net Assets (continued)
NORTH
CAROLINA
DIVIDEND
NORTH CAROLINA NORTH CAROLINA ADVANTAGE 2
PREMIUM INCOME (NNC) DIVIDEND ADVANTAGE (NRB) (NNO)
----------------------------- ---------------------------- ---------------
FOR THE FOR THE
PERIOD 1/31/01 PERIOD 11/16/01
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH THROUGH
5/31/02 5/31/01 5/31/02 THROUGH 5/31/01 THROUGH 5/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 6,403,807 $ 6,447,182 $ 2,364,655 $ 556,639 $ 1,435,314
Net realized gain (loss) from
investment transactions 1,171,228 512,400 94,213 (153,980) (46,868)
Change in net unrealized appreciation
(depreciation) of investments (237,275) 7,770,352 744,160 (401,048) 501,708
Distributions to Preferred
Shareholders from
and in excess of net
investment income (795,822) (1,708,813) (292,515) (115,729) (156,382)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable
to Common shares
from operations 6,541,938 13,021,121 2,910,513 (114,118) 1,733,772
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From and in excess of
net investment income (5,047,923) (4,709,937) (1,828,376) (455,206) (1,278,209)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from
sale of shares -- -- -- 31,797,798 53,248,875
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 177,785 135,663 50,844 43 --
Preferred shares offering costs -- -- -- (313,750) (421,392)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common
shares from capital
share transactions 177,785 135,663 50,844 31,484,091 52,827,483
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares 1,671,800 8,446,847 1,132,981 30,914,767 53,283,046
Net assets applicable to
Common shares at the
beginning of period 87,613,948 79,167,101 31,015,042 100,275 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Common shares at
the end of period $89,285,748 $87,613,948 $32,148,023 $31,015,042 $53,383,321
====================================================================================================================================
Undistributed (Over-distribution of) net investment
income at the end of period $ 685,795 $ 71,911 $ 229,468 $ (14,296) $ 723
====================================================================================================================================
See accompanying notes to financial statements.
52
VIRGINIA
DIVIDEND
ADVANTAGE 2
VIRGINIA PREMIUM INCOME (NPV) VIRGINIA DIVIDEND ADVANTAGE (NGB) (NNB)
------------------------------- -------------------------------- ---------------
FOR THE FOR THE
PERIOD 1/26/01 PERIOD 11/15/01
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS)
YEAR ENDED YEAR ENDED YEAR ENDED THROUGH THROUGH
5/31/02 5/31/01 5/31/02 5/31/01 5/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 9,051,106 $ 9,351,167 $ 3,172,126 $ 757,333 $ 2,341,899
Net realized gain (loss) from
investment transactions 727,999 222,253 (124,637) (186,152) (103,377)
Change in net unrealized appreciation
(depreciation) of investments (499,466) 10,269,356 1,095,723 (698,864) 625,853
Distributions to Preferred
Shareholders from
and in excess of net
investment income (952,624) (2,161,028) (394,239) (160,202) (234,802)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets applicable
to Common shares
from operations 8,327,015 17,681,748 3,748,973 (287,885) 2,629,573
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From and in excess of net
investment income (7,522,358) (7,028,943) (2,633,474) (658,189) (1,960,304)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from
sale of shares -- -- -- 44,385,975 81,124,125
Net proceeds from shares
issued to shareholders due to
reinvestment of distributions 704,912 732,154 37,832 150 1,614
Preferred shares offering costs -- -- -- (385,500) (570,338)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from capital share transactions 704,912 732,154 37,832 44,000,625 80,555,401
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares 1,509,569 11,384,959 1,153,331 43,054,551 81,224,670
Net assets applicable to
Common shares at the
beginning of period 127,145,011 115,760,052 43,154,826 100,275 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares
at the end of period $128,654,580 $127,145,011 $44,308,157 $43,154,826 $81,324,945
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the end of period $ 1,119,659 $ 451,017 $ 83,355 $ (61,058) $ 146,793
====================================================================================================================================
See accompanying notes to financial statements.
53
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The state Funds (the "Funds") covered in this report and their corresponding
stock exchange symbols are Nuveen Maryland Premium Income Municipal Fund (NMY),
Nuveen Maryland Dividend Advantage Municipal Fund (NFM), Nuveen Maryland
Dividend Advantage Municipal Fund 2 (NZR), Nuveen North Carolina Premium Income
Municipal Fund (NNC), Nuveen North Carolina Dividend Advantage Municipal Fund
(NRB), Nuveen North Carolina Dividend Advantage Municipal Fund 2 (NNO), Nuveen
Virginia Premium Income Municipal Fund (NPV), Nuveen Virginia Dividend Advantage
Municipal Fund (NGB) and Nuveen Virginia Dividend Advantage Municipal Fund 2
(NNB). Maryland Premium Income (NMY), North Carolina Premium Income (NNC) and
Virginia Premium Income (NPV) are traded on the New York Stock Exchange while
Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR), North
Carolina Dividend Advantage (NRB), North Carolina Dividend Advantage 2 (NNO),
Virginia Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) are
traded on the American Stock Exchange. Prior to the commencement of operations
of Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR), North
Carolina Dividend Advantage (NRB), North Carolina Dividend Advantage 2 (NNO),
Virginia Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB), 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 organizational expenses ($15,000, $11,500, $15,000, $11,500,
$15,000 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 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 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 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 May
31, 2002, Maryland Premium Income (NMY), Maryland Dividend Advantage (NFM),
Maryland Dividend Advantage 2 (NZR), North Carolina Dividend Advantage (NRB) and
Virginia Dividend Advantage 2 (NNB) had outstanding when-issued purchase
commitments of $4,499,917, $1,014,387, $1,014,387, $400,556 and $966,870,
respectively.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
for financial reporting purposes.
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 shareholders. 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, to retain such tax-exempt status when distributed
to shareholders of the Funds. All monthly tax-exempt income dividends paid
during the period ended May 31, 2002, have been designated Exempt Interest
Dividends.
54
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend. Generally,
payment is made or reinvestment is credited to shareholder accounts on the first
business day 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 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 by the auction agent. The
number of shares outstanding, by Series and in total, for each of the Funds is
as follows:
NORTH NORTH
MARYLAND MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR) (NNC) (NRB)
----------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- 1,280 -- -- --
Series T -- -- -- -- 680
Series W 1,404 -- -- -- --
Series TH 1,760 -- -- 1,872 --
Series F -- -- 1,280 -- --
----------------------------------------------------------------------------------------------------------
Total 3,164 1,280 1,280 1,872 680
==========================================================================================================
NORTH
CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO) (NPV) (NGB) (NNB)
----------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- -- -- 1,680
Series T -- 832 -- --
Series W -- -- 960 --
Series TH -- 1,720 -- --
Series F 1,120 -- -- --
----------------------------------------------------------------------------------------------------------
Total 1,120 2,552 960 1,680
==========================================================================================================
Effective November 16, 2001, Maryland Dividend Advantage 2 (NZR) issued 1,280
Series F $25,000 stated value Preferred shares.
Effective January 11, 2002, North Carolina Dividend Advantage 2 (NNO) and
Virginia Dividend Advantage 2 (NNB) issued 1,120 Series F and 1,680 Series M,
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 May 31, 2002.
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.
55
Notes to
FINANCIAL STATEMENTS (continued)
Offering Costs
Nuveen Investments has agreed to pay all offering costs (other than the sales
load) that exceed $.03 per Common share for Maryland Dividend Advantage (NFM),
Maryland Dividend Advantage 2 (NZR), North Carolina Dividend Advantage (NRB),
North Carolina Dividend Advantage 2 (NNO), Virginia Dividend Advantage (NGB) and
Virginia Dividend Advantage 2 (NNB). Maryland Dividend Advantage's (NFM),
Maryland Dividend Advantage 2's (NZR), North Carolina Dividend Advantage's
(NRB), North Carolina Dividend Advantage 2's (NNO), Virginia Dividend
Advantage's (NGB) and Virginia Dividend Advantage 2's (NNB) share of offering
costs ($124,380, $124,710, $66,732, $111,750, $93,150 and $170,250,
respectively) were recorded as a reduction of the proceeds from the sale of
common shares.
Costs incurred by Maryland Dividend Advantage (NFM), Maryland Dividend Advantage
2 (NZR), North Carolina Dividend Advantage (NRB), North Carolina Dividend
Advantage 2 (NNO), Virginia Dividend Advantage (NGB) and Virginia Dividend
Advantage 2 (NNB) in connection with their offering of Preferred shares
($467,500, $490,000, $313,750, $421,392, $385,500 and $570,338, 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 June 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 June 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 or increase in net
unrealized depreciation based on securities held by the following Funds on June
1, 2001, as follows:
NORTH NORTH
MARYLAND MARYLAND CAROLINA CAROLINA VIRGINIA VIRGINIA
PREMIUM DIVIDEND PREMIUM DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE INCOME ADVANTAGE INCOME ADVANTAGE
(NMY) (NFM) (NNC) (NRB) (NPV) (NGB)
----------------------------------------------------------------------------------------------------------
$344,518 $85 $53,822 $-- $92,518 $--
==========================================================================================================
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 effect of this change for the fiscal year ended May 31, 2002, was to
increase investment income with a corresponding decrease in net unrealized
appreciation as follows:
NORTH NORTH
MARYLAND MARYLAND CAROLINA CAROLINA VIRGINIA VIRGINIA
PREMIUM DIVIDEND PREMIUM DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE INCOME ADVANTAGE INCOME ADVANTAGE
(NMY) (NFM) (NNC) (NRB) (NPV) (NGB)
----------------------------------------------------------------------------------------------------------
$75,529 $2,678 $17,222 $-- $47,712 $--
==========================================================================================================
Classification and Measurement of Redeemable Securities
The Funds have adopted the classification requirement of EITF D-98,
Classification and Measurement of Redeemable Securities. EITFD-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.
56
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
MARYLAND MARYLAND DIVIDEND MARYLAND DIVIDEND
PREMIUM INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
---------------------- -------------------------------------- ----------------------------
FOR THE PERIOD 1/25/01 FOR THE PERIOD 9/25/01
YEAR ENDED YEAR ENDED YEAR ENDED (COMMENCEMENT OF (COMMENCEMENT OF
5/31/02 5/31/01 5/31/02 OPERATIONS) THROUGH 5/31/01 OPERATIONS) THROUGH 5/31/02
-------------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 4,146,000 4,157,000
Shares issued to shareholders
due to reinvestment of
distributions 31,382 31,564 2,584 58 1,320
-------------------------------------------------------------------------------------------------------------------
31,382 31,564 2,584 4,146,058 4,158,320
===================================================================================================================
Preferred shares sold -- -- -- 1,280 1,280
===================================================================================================================
NORTH CAROLINA NORTH CAROLINA DIVIDEND NORTH CAROLINA DIVIDEND
PREMIUM INCOME (NNC) ADVANTAGE (NRB) ADVANTAGE 2 (NNO)
---------------------- -------------------------------------- ----------------------------
FOR THE PERIOD 1/31/01 FOR THE PERIOD 11/16/01
YEAR ENDED YEAR ENDED YEAR ENDED (COMMENCEMENT OF (COMMENCEMENT OF
5/31/02 5/31/01 5/31/02 OPERATIONS) THROUGH 5/31/01 OPERATIONS) THROUGH 5/31/02
-------------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 2,224,400 3,725,000
Shares issued to shareholders
due to reinvestment of
distributions 11,774 9,643 3,402 3 --
-------------------------------------------------------------------------------------------------------------------
11,774 9,643 3,402 2,224,403 3,725,000
===================================================================================================================
Preferred shares sold -- -- -- 680 1,120
===================================================================================================================
VIRGINIA VIRGINIA DIVIDEND VIRGINIA DIVIDEND
PREMIUM INCOME (NPV) ADVANTAGE (NGB) ADVANTAGE 2 (NNB)
---------------------- -------------------------------------- ----------------------------
FOR THE PERIOD 1/26/01 FOR THE PERIOD 11/15/01
YEAR ENDED YEAR ENDED YEAR ENDED (COMMENCEMENT OF (COMMENCEMENT OF
5/31/02 5/31/01 5/31/02 OPERATIONS) THROUGH 5/31/01 OPERATIONS) THROUGH 5/31/02
-------------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 3,105,000 5,675,000
Shares issued to shareholders
due to reinvestment of
distributions 44,124 49,121 2,529 10 113
-------------------------------------------------------------------------------------------------------------------
44,124 49,121 2,529 3,105,010 5,675,113
===================================================================================================================
Preferred shares sold -- -- -- 960 1,680
===================================================================================================================
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on July 1, 2002, to shareholders of record on
June 15, 2002, as follows:
NORTH NORTH
MARYLAND MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR) (NNC) (NRB)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0725 $.0700 $.0650 $.0705 $.0700
=========================================================================================================
NORTH
CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO) (NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0685 $.0735 $.0705 $.0690
=========================================================================================================
57
Notes to
FINANCIAL STATEMENTS (continued)
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term securities for the fiscal year ended May 31, 2002,
were as follows:
NORTH NORTH
MARYLAND MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR)* (NNC) (NRB)
-----------------------------------------------------------------------------------------------------------
Purchases:
Long-term municipal securities $31,599,408 $32,772,870 $101,770,579 $29,886,884 $18,426,937
Short-term securities -- 1,000,000 27,200,000 1,000,000 --
Sales and maturities:
Long-term municipal securities 28,506,422 36,232,343 10,891,704 31,786,457 22,763,056
Short-term securities -- 1,000,000 27,200,000 -- --
===========================================================================================================
NORTH
CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO)** (NPV) (NGB) (NNB)***
------------------------------------------------------------------------------------------------------------
Purchases:
Long-term municipal securities $96,865,384 $26,753,483 $14,204,641 $128,102,055
Short-term securities 3,100,000 3,600,000 500,000 52,255,000
Sales and maturities:
Long-term municipal securities 14,841,960 26,068,597 18,782,468 6,485,379
Short-term securities 3,100,000 3,600,000 -- 52,255,000
============================================================================================================
* For the period September 25, 2001 (commencement of operations) through May
31, 2002.
** For the period November 16, 2001 (commencement of operations) through May
31, 2002.
*** For the period November 15, 2001 (commencement of operations) through May
31, 2002.
58
5. INCOME TAX INFORMATION
The following information is presented on an income tax basis as of May 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.
NORTH NORTH
MARYLAND MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR) (NNC) (NRB)
------------------------------------------------------------------------------------------------------------
Cost of Investments $220,013,574 $89,681,154 $90,820,450 $129,855,522 $48,642,730
============================================================================================================
NORTH
CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO) (NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------
Cost of Investments $82,000,746 $182,330,316 $66,642,448 $121,583,992
============================================================================================================
NORTH NORTH
MARYLAND MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR) (NNC) (NRB)
------------------------------------------------------------------------------------------------------------
Gross unrealized:
appreciation $ 9,429,686 $ 505,242 $ 326,737 $4,940,320 $ 468,884
depreciation (4,050,097) (493,671) (1,207,101) (263,759) (125,772)
------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 5,379,589 $ 11,571 $ (880,364) $4,676,561 $ 343,112
============================================================================================================
NORTH
CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO) (NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------
Gross unrealized:
appreciation $ 650,897 $ 8,602,067 $ 664,080 $1,027,157
depreciation (196,057) (1,014,823) (287,661) (501,414)
------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 454,840 $ 7,587,244 $ 376,419 $ 525,743
============================================================================================================
The tax components of undistributed net investment income and realized gains at
May 31, 2002, are as follows:
NORTH NORTH
MARYLAND MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR) (NNC) (NRB)
------------------------------------------------------------------------------------------------------------
Undistributed tax-exempt income $1,840,297 $370,622 $470,930 $1,057,462 $385,206
Undistributed ordinary income * 3,157 -- -- 22,036 --
Undistributed long-term capital gains -- -- -- -- --
============================================================================================================
NORTH
CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO) (NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------
Undistributed tax-exempt income $261,031 $1,612,447 $304,968 $542,955
Undistributed ordinary income * -- 3,675 -- --
Undistributed long-term capital gains -- -- -- --
============================================================================================================
* Ordinary income consists of taxable market discount income and short-term
capital gains, if any.
59
Notes to
FINANCIAL STATEMENTS (continued)
The tax character of distributions paid during the period ended May 31, 2002,
are as follows:
NORTH NORTH
MARYLAND MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE
(NMY) (NFM) (NZR) (NNC) (NRB)
---------------------------------------------------------------------------------------------------------
Distributions from tax-exempt income $10,022,067 $4,070,762 $1,878,301 $5,824,960 $2,119,636
Distributions from ordinary income * 33,073 -- -- -- --
Distributions from long-term capital gains -- -- -- -- --
=========================================================================================================
NORTH
CAROLINA VIRGINIA VIRGINIA VIRGINIA
DIVIDEND PREMIUM DIVIDEND DIVIDEND
ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2
(NNO) (NPV) (NGB) (NNB)
----------------------------------------------------------------------------------------------------------
Distributions from tax-exempt income $1,174,283 $8,429,395 $3,027,568 $1,795,677
Distributions from ordinary income * -- 32,064 -- --
Distributions from long-term capital gains -- -- -- --
==========================================================================================================
* Ordinary income consists of taxable market discount income and short-term
capital gains, if any.
At May 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:
NORTH NORTH
MARYLAND MARYLAND CAROLINA CAROLINA VIRGINIA VIRGINIA
PREMIUM DIVIDEND PREMIUM DIVIDEND PREMIUM DIVIDEND
INCOME ADVANTAGE INCOME ADVANTAGE INCOME ADVANTAGE
(NMY) (NFM) (NNC) (NRB) (NPV) (NGB)
----------------------------------------------------------------------------------------------------------
Expiration year:
2003 $1,019,930 $ -- $1,172,338 $ -- $1,542,314 $ --
2004 2,660,424 -- 1,137,399 -- 1,579,895 --
2005 454,351 -- 131,993 -- 140,749 --
2006 -- -- -- -- -- --
2007 -- -- -- -- -- --
2008 332,069 -- 108,131 -- 250,767 --
2009 317,048 65,111 731,398 59,767 -- 186,152
2010 -- 37,159 -- -- -- 104,197
----------------------------------------------------------------------------------------------------------
Total $4,783,822 $102,270 $3,281,259 $59,767 $3,513,725 $290,349
==========================================================================================================
60
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under Maryland Premium Income's (NMY), North Carolina Premium Income's (NNC) and
Virginia Premium Income's (NPV) 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 TO PREFERRED 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 Maryland Dividend Advantage's (NFM), Maryland Dividend Advantage 2's
(NZR), North Carolina Dividend Advantage's (NRB), North Carolina Dividend
Advantage 2's (NNO), Virginia Dividend Advantage's (NGB) and Virginia Dividend
Advantage 2's (NNB) 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 TO PREFERRED 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 Maryland Dividend Advantage's (NFM), North Carolina
Dividend Advantage's (NRB) and Virginia Dividend Advantage's (NGB) 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
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 Maryland Dividend Advantage (NFM), North
Carolina Dividend Advantage (NRB) and Virginia Dividend Advantage (NGB) for any
portion of its fees and expenses beyond January 31, 2011.
For the first ten years of Maryland Dividend Advantage 2's (NZR) 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
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 Maryland Dividend Advantage 2 (NZR) for
any portion of its fees and expenses beyond September 30, 2011.
61
Notes to
FINANCIAL STATEMENTS (continued)
For the first ten years of North Carolina Dividend Advantage 2's (NNO) and
Virginia Dividend Advantage 2's (NNB) 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
NOVEMBER 30, NOVEMBER 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 North Carolina Dividend Advantage 2
(NNO) and Virginia Dividend Advantage 2 (NNB) for any portion of its fees and
expenses beyond November 30, 2011.
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 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.
62
Financial
Highlights
63
Financial
Highlights
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
---------------------------------------------------------- -------------------------------
Distributions From and
from and in Distributions in Excess
Excess of Net from of 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
==============================================================================================================================
MARYLAND PREMIUM INCOME (NMY)
Year Ended 5/31:
------------------------------------------------------------------------------------------------------------------------------
2002(d) $13.83 $1.03 $ .14 $(.13) $-- $1.04 $(.83) $-- $(.83)
2001 12.83 1.03 1.01 (.25) -- 1.79 (.79) -- (.79)
2000 14.41 1.02 (1.58) (.24) -- (.80) (.78) -- (.78)
1999 14.54 1.00 (.14) (.22) -- .64 (.77) -- (.77)
1998 13.76 .99 .80 (.24) -- 1.55 (.77) -- (.77)
MARYLAND DIVIDEND ADVANTAGE (NFM)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 13.90 1.04 .22 (.14) -- 1.12 (.84) -- (.84)
2001(a) 14.33 .22 (.25) (.05) -- (.08) (.21) -- (.21)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(c) 14.33 .57 (.22) (.06) -- .29 (.46) -- (.46)
NORTH CAROLINA PREMIUM INCOME (NNC)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 13.94 1.02 .15 (.13) -- 1.04 (.80) -- (.80)
2001 12.62 1.03 1.31 (.27) -- 2.07 (.75) -- (.75)
2000 14.28 1.02 (1.61) (.26) -- (.85) (.81) -- (.81)
1999 14.48 1.02 (.22) (.21) -- .59 (.79) -- (.79)
1998 13.50 1.02 1.00 (.25) -- 1.77 (.79) -- (.79)
NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 13.90 1.06 .38 (.13) -- 1.31 (.82) -- (.82)
2001(b) 14.33 .25 (.26) (.05) -- (.06) (.20) -- (.20)
==============================================================================================================================
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**
================================================================================
MARYLAND PREMIUM INCOME (NMY)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) $-- $14.04 $15.7300 4.77% 7.71%
2001 -- 13.83 15.8500 26.24 14.18
2000 -- 12.83 13.2500 (7.22) (5.57)
1999 -- 14.41 15.1250 5.47 4.44
1998 -- 14.54 15.0625 16.54 11.47
MARYLAND DIVIDEND ADVANTAGE (NFM)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) -- 14.18 15.4400 1.98 8.21
2001(a) (.14) 13.90 15.9900 8.02 (1.53)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(c) (.15) 14.01 14.6100 .52 1.01
NORTH CAROLINA PREMIUM INCOME (NNC)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) -- 14.18 16.2100 15.44 7.62
2001 -- 13.94 14.8000 14.03 16.65
2000 -- 12.62 13.6875 (7.76) (5.98)
1999 -- 14.28 15.6875 9.87 4.11
1998 -- 14.48 15.0000 8.17 13.38
NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) -- 14.39 15.4400 7.54 9.58
2001(b) (.17) 13.90 15.1500 2.42 (1.57)
================================================================================
Ratios/Supplemental Data
-------------------------------------------------------------------------
Before Credit/ After Credit/
Reimbursement Reimbursement*** Municipal Auction Rate Cumulative
---------------------- ------------------------- Preferred Stock at End of Period
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 Aggregate Liquidation
Applicable Applicable Applicable Applicable Applicable Portfolio Amount and Market Asset
to Common to Common to Common to Common to Common Turnover Outstanding Value Coverage
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate (000) Per Share Per Share
===============================================================================================================================
MARYLAND PREMIUM INCOME (NMY)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) $147,795 1.32% 7.33% 1.31% 7.34% 13% $79,100 $25,000 $71,712
2001 145,201 1.31 7.58 1.31 7.58 8 79,100 25,000 70,891
2000 134,299 1.29 7.69 1.28 7.70 13 79,100 25,000 67,446
1999 150,420 1.29 6.78 1.28 6.79 16 79,100 25,000 72,541
1998 151,088 1.29 6.93 1.29 6.93 6 79,100 25,000 72,752
MARYLAND DIVIDEND ADVANTAGE (NFM)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 58,925 1.35 6.81 .82 7.34 36 32,000 25,000 71,035
2001(a) 57,740 1.17* 4.33* .75* 4.75* 10 32,000 25,000 70,109
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(c) 58,370 1.22* 5.55* .79* 5.99* 21 32,000 25,000 70,601
NORTH CAROLINA PREMIUM INCOME (NNC)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 89,286 1.33 7.17 1.32 7.18 22 46,800 25,000 72,695
2001 87,614 1.34 7.47 1.30 7.51 19 46,800 25,000 71,802
2000 79,167 1.37 7.81 1.35 7.83 25 46,800 25,000 67,290
1999 89,377 1.30 6.97 1.30 6.97 8 46,800 25,000 72,744
1998 90,470 1.30 7.17 1.30 7.17 9 46,800 25,000 73,328
NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 32,148 1.44 6.86 .90 7.40 37 17,000 25,000 72,277
2001(b) 31,015 1.31* 5.02* .85* 5.48* 29 17,000 25,000 70,610
===============================================================================================================================
* 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 25, 2001 (commencement of operations) through May
31, 2001.
(b) For the period January 31, 2001 (commencement of operations) through May
31, 2001.
(c) For the period September 25, 2001 (commencement of operations) through May
31, 2002.
(d) As required, effective June 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 May 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 as follows:
NORTH NORTH
MARYLAND MARYLAND CAROLINA CAROLINA
PREMIUM DIVIDEND PREMIUM DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) INCOME (NNC) ADVANTAGE (NRB)
-----------------------------------------------------------
2002 per share impact ($) .01 -- -- --
2002 income ratio impact (%) .05 -- .02 --
The Financial Highlights for the prior periods have not been restated to reflect
this change in presentation.
See accompanying notes to financial statements.
end spread 64-65
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
Investment Operations Less Distributions
---------------------------------------------------------- -------------------------------
Distributions From and
from and in Distributions in Excess
Excess of Net from of 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
==============================================================================================================================
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 5/31:
2002(b) $14.33 $ .38 $ .11 $(.04) $-- $ .45 $(.34) $-- $(.34)
VIRGINIA PREMIUM INCOME (NPV)
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 5/31:
2002(d) 14.59 1.04 .03 (.11) -- .96 (.86) -- (.86)
2001 13.36 1.08 1.21 (.25) -- 2.04 (.81) -- (.81)
2000 14.89 1.07 (1.52) (.24) -- (.69) (.84) -- (.84)
1999 14.96 1.05 (.08) (.22) -- .75 (.82) -- (.82)
1998 14.04 1.06 .92 (.24) -- 1.74 (.82) -- (.82)
VIRGINIA DIVIDEND ADVANTAGE (NGB)
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 5/31:
2002(d) 13.87 1.02 .32 (.13) -- 1.21 (.85) -- (.85)
2001(a) 14.33 .24 (.28) (.05) -- (.09) (.21) -- (.21)
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED 5/31:
2002(c) 14.33 .41 .09 (.04) -- .46 (.35) -- (.35)
==============================================================================================================================
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**
================================================================================
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(b) $(.14) $14.30 $14.9000 1.64% 2.22%
VIRGINIA PREMIUM INCOME (NPV)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) -- 14.69 16.1700 6.64 6.71
2001 -- 14.59 16.0000 18.45 15.53
2000 -- 13.36 14.2500 (6.02) (4.64)
1999 -- 14.89 16.0625 4.77 5.09
1998 -- 14.96 16.1250 17.30 12.66
VIRGINIA DIVIDEND ADVANTAGE (NGB)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) -- 14.23 15.0900 5.10 8.89
2001(a) (.16) 13.87 15.1800 2.61 (1.73)
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
--------------------------------------------------------------------------------
Year Ended 5/31:
2002(c) (.13) 14.31 14.9000 1.71 2.30
================================================================================
Ratios/Supplemental Data
-------------------------------------------------------------------------
Before Credit/ After Credit/
Reimbursement Reimbursement*** Municipal Auction Rate Cumulative
---------------------- ------------------------- Preferred Stock at End of Period
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 Aggregate Liquidation
Applicable Applicable Applicable Applicable Applicable Portfolio Amount and Market Asset
to Common to Common to Common to Common to Common Turnover Outstanding Value Coverage
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate (000) Per Share Per Share
===============================================================================================================================
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(b) $ 53,383 1.19%* 4.70%* .74%* 5.15%* 43% $28,000 $25,000 $72,664
VIRGINIA PREMIUM INCOME (NPV)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 128,655 1.28 7.01 1.27 7.02 14 63,800 25,000 75,413
2001 127,145 1.23 7.51 1.21 7.53 7 63,800 25,000 74,822
2000 115,760 1.29 7.72 1.28 7.73 20 63,800 25,000 70,361
1999 128,368 1.26 6.94 1.26 6.95 8 63,800 25,000 75,301
1998 128,122 1.27 7.20 1.27 7.20 19 63,800 25,000 75,205
VIRGINIA DIVIDEND ADVANTAGE (NGB)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(d) 44,308 1.37 6.68 .84 7.21 21 24,000 25,000 71,154
2001(a) 43,155 1.27* 4.76* .80* 5.23* 20 24,000 25,000 69,953
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2002(c) 81,325 1.14* 5.00* .70* 5.44* 12 42,000 25,000 73,408
===============================================================================================================================
* 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 26, 2001 (commencement of operations) through May
31, 2001.
(b) For the period November 16, 2001 (commencement of operations) through May
31, 2002.
(c) For the period November 15, 2001 (commencement of operations) through May
31, 2002.
(d) As required, effective June 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 May 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 as follows:
Virginia Virginia
Premium Dividend
Income (NPV) Advantage (NGB)
---------------------------------
2002 per share impact ($) .01 --
2002 income ratio impact (%) .04 --
The Financial Highlights for the prior periods have not been restated to reflect
this change in presentation.
See accompanying notes to financial statements.
end spread 66-67
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 Trustees of the Funds. The number of 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 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 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.
The Funds' Statement of Additional Information ("SAI") includes more information
about the Trustees. To request a free copy, call Nuveen Investments at (800)
257-8787.
YEAR FIRST PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR APPOINTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND AND TERM OF OFFICE DURING PAST 5 YEARS OVERSEEN BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger Chairman of the 1994 Chairman and Director (since July 1996) 130
(1) Board, President Term of The John Nuveen Company, Nuveen
3/28/1949 and Trustee Indefinite (2) Investments, Nuveen Advisory Corp. and
333 West Wacker Drive Nuveen Institutional Advisory Corp.;
Chicago, IL 60606 prior thereto, Executive Vice President
and Director of The John Nuveen Company
and Nuveen Investments; Director (since
1992) and Chairman (since 1996) of Nuveen
Advisory Corp. and Nuveen Institutional
Advisory Corp.; Chairman and Director (since
January 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 September 1999) of
Nuveen Senior Loan Asset Management Inc.
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
ROBERT P. BREMNER Trustee 1997 Private Investor and Management Consultant. 112
8/22/1940 Term
333 W. Wacker Drive Indefinite (2)
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
LAWRENCE H. BROWN Trustee 1993 Retired (August 1989) as Senior Vice President 112
7/29/1934 Term of The Northern Trust Company.
333 W. Wacker Drive Indefinite (2)
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
ANNE E. IMPELLIZZERI Trustee 1994 Retired (2002); formerly, Executive Director 112
1/26/1933 Term (since 1998) of Manitoga (Center for Russel
333 W. Wacker Drive Indefinite (2) Wright's Design with Nature); prior thereto,
Chicago, IL 60606 President and Chief Executive Officer of
Blanton-Peale Institutes of Religion and
Health (since December 1990); prior thereto,
Vice President, Metropolitan Life Insurance Co.
------------------------------------------------------------------------------------------------------------------------------------
PETER R. SAWERS Trustee 1991 Adjunct Professor of Business and Economics, 112
4/3/1933 Term University of Dubuque, Iowa; Director, Executive
333 W. Wacker Drive Indefinite (2) Service Corps of Chicago (not-for-profit); Director,
Chicago, IL 60606 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.
68
YEAR FIRST PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR APPOINTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND AND TERM OF OFFICE DURING PAST 5 YEARS OVERSEEN BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM J. SCHNEIDER Trustee 1997 Senior Partner and Chief Operating Officer, 112
9/24/1944 Term Miller-Valentine Group, Vice President,
333 W. Wacker Drive Indefinite (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 Trustee 1997 Executive Director, Gaylord and Dorothy 112
12/29/1947 Term Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Indefinite (2) thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED (3) 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 January 1999), prior thereto, Assistant Vice
333 W. Wacker Drive President (from January 1997); formerly,
Chicago, IL 60606 Associate of Nuveen Investments; Vice President
and Treasurer (since September 1999) of Nuveen
Senior Loan Asset Management Inc.; Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
MICHAEL S. DAVERN Vice President 1997 Vice President of Nuveen Advisory Corp. 126
6/26/1957
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
SUSAN M. DESANTO Vice President 2001 Vice President of Nuveen Advisory Corp. (since 130
9/8/1954 August 2001); previously, Vice President of
333 W. Wacker Drive Van Kampen Investment Advisory Corp.
Chicago, IL 60606 (since 1998); prior thereto, Assistant Vice
President of Van Kampen Investment
Advisory Corp.
69
Trustees
AND OFFICERS (continued)
PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED (3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
JESSICA R. DROEGER Vice President 2002 Vice President (since January 2002) and Assistant 130
9/24/1964 General Counsel (since May 1998), formerly
333 W. Wacker Drive Assistant Vice President of Nuveen Investments;
Chicago, IL 60606 Assistant Vice President and Assistant Secretary
(since 1998) of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.; prior thereto,
Associate at the law firm D'Ancona Partners LLC
------------------------------------------------------------------------------------------------------------------------------------
LORNA C. FERGUSON Vice President 1998 Vice President of Nuveen Investments; Vice 130
10/24/1945 President (since January 1998) of Nuveen
333 W. Wacker Drive Advisory Corp. and Nuveen Institutional
Chicago, IL 60606 Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
WILLIAM M. FITZGERALD Vice President 1995 Managing Director of Nuveen Advisory Corp. and 130
3/2/1964 Nuveen Institutional Advisory Corp. (since February
333 W. Wacker Drive 2001); prior thereto, Vice President of Nuveen
Chicago, IL 60606 Advisory Corp.; Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
STEPHEN D. FOY Vice President 1998 Vice President of Nuveen Investments and 130
5/31/1954 and Controller (since May 1998) The John Nuveen Company; Vice
333 W. Wacker Drive President (since September 1999) of Nuveen
Chicago, IL 60606 Senior Loan 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 March 1998) and Nuveen
333 W. Wacker Drive Advisory Corp.
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 March 2000) of Nuveen 130
3/22/1963 Investments, previously Assistant Vice
333 W. Wacker Drive President (since January 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
70
PRINCIPAL OCCUPATION(S) NUMBER OF PORTFOLIOS
NAME, BIRTHDATE POSITION(S) HELD YEAR FIRST ELECTED INCLUDING OTHER DIRECTORSHIPS IN FUND COMPLEX
AND ADDRESS WITH THE FUND OR APPOINTED (3) DURING PAST 5 YEARS OVERSEEN BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
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
September 1999) of Nuveen Senior Loan Asset
Management Inc.
------------------------------------------------------------------------------------------------------------------------------------
EDWARD F. NEILD, IV Vice President 1996 Managing Director (since September 1997), previously 130
7/7/1965 Vice President of Nuveen Advisory Corp. and
333 W. Wacker Drive Nuveen Institutional Advisory Corp.; Chartered
Chicago, IL 60606 Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
THOMAS J. O'SHAUGHNESSY Vice President 2002 Vice President (since January 2002), formerly, 126
9/4/1960 Assistant Vice President (1998), of Nuveen
333 W. Wacker Drive Advisory Corp.; prior thereto, Portfolio Manager.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
THOMAS C. SPALDING, JR. 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 Assistant Secretary and Associate General
333 W. Wacker Drive Counsel, formerly Assistant General Counsel
Chicago, IL 60606 and Vice President of Nuveen Investments;
Managing Director (since January 2002), General
Counsel and Assistant Secretary, formerly Vice
President of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.; Vice President and
Assistant Secretary of The John Nuveen Company;
Managing Director (since January 2002), and
Assistant Secretary (since September 1999),
formerly Vice President of Nuveen Senior
Loan Asset Management Inc.; Managing Director
(since January 2002), Assistant Secretary and
Associate General Counsel, formerly Vice President
(since 2000), of Nuveen Asset Management Inc.;
Chartered Financial Analyst.
(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) Trustees serve an indefinite term until his/her successor is elected.
(3) Officers serve one year terms through July of each year.
71
Build Your Wealth
AUTOMATICALLY
Sidebar text: Nuveen makes reinvesting easy. A phone call is all it takes to set
up your reinvestment account.
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 distrib utions
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.
72
Fund
INFORMATION
BOARD OF 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, TRANSFER AGENT
AND SHAREHOLDER SERVICES
JPMorgan Chase Bank
P.O. Box 660086
Dallas, TX 75266-0086
(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 May 31, 2002. Any future repurchases
will be reported to shareholders in the next annual or semiannual report.
73
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 o 333 West Wacker Drive
Chicago, IL 60606 o www.nuveen.com FAN-B-0502