-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QJFqNBT5X/6Fvz79Xlr90uTjOC09p/2Intchz/9Ltf5ZhFG6U+Fd9aGLGSM8z3PO O4Z0TckOde9z3zJ7BvnZxw== /in/edgar/work/20000804/0000891804-00-001491/0000891804-00-001491.txt : 20000921 0000891804-00-001491.hdr.sgml : 20000921 ACCESSION NUMBER: 0000891804-00-001491 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000531 FILED AS OF DATE: 20000804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND CENTRAL INDEX KEY: 0000897421 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 367032571 STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07490 FILM NUMBER: 685864 BUSINESS ADDRESS: STREET 1: 333 WEST WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 MAIL ADDRESS: STREET 1: 333 WEST WACKER DRIVE STREET 2: 333 WEST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 N-30D 1 0001.txt NUVEEN VIRGINIA PREMIUM INCOME MUNI FUND(NPV) LOGO: NUVEEN NUVEEN Investment ANNUAL REPORT May 31, 2000 EXCHANGE-TRADED Funds Dependable, tax-free income to help you keep more of what you earn. GEORGIA NPG MARYLAND NMY NORTH CAROLINA NNC VIRGINIA NPV INVEST WELL. LOOK AHEAD. LEAVE YOUR MARK.sm PHOTO: WATER PHOTO: MAN SITTING ON DOCK WITH CHILDREN Credit Quality HIGHLIGHTS As of May 31, 2000 NUVEEN GEORGIA PREMIUM INCOME MUNICIPAL FUND (NPG) pie chart: AAA/U.S. Guaranteed 64% AA 18% A 18% NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND (NMY) pie chart: AAA/U.S. Guaranteed 60% AA 17% A 13% BBB/NR 10% NUVEEN NORTH CAROLINA PREMIUM INCOME MUNICIPAL FUND (NNC) pie chart: AAA/U.S. Guaranteed 35% AA 39% A 14% BBB/NR 12% NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND (NPV) pie chart: AAA/U.S. Guaranteed 49% AA 23% A 16% BBB/NR 12% CONTENTS 1 Dear Shareholder 3 NPG Portfolio Manager's Comments 6 NPG Performance Overview 7 NMY Portfolio Manager's Comments 10 NMY Performance Overview 11 NNC Portfolio Manager's Comments 14 NNC Performance Overview 15 NPV Portfolio Manager's Comments 18 NPV Performance Overview 19 Shareholder Meeting Report 21 Report of Independent Auditors 22 Portfolio of Investments 37 Statement of Net Assets 38 Statement of Operations 39 Statement of Changes in Net Assets 41 Notes to Financial Statements 45 Financial Highlights 48 Build Your Wealth Automatically 49 Fund Information Photo of: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board sidebar text: "BUILDING AND SUSTAINING WEALTH REQUIRES SOUND, ONGOING ADVICE." Dear SHAREHOLDER The primary objective of your Nuveen Municipal Exchange-Traded Fund is to provide dependable, attractive tax-free dividends. I am very happy to report that your Fund continued to achieve this goal during the period covered by this report. For more specifics on this performance, I encourage you to read the Portfolio Manager's Comments and Performance Overview pages for your Fund that follow this letter. We believe that your Nuveen Exchange-Traded Fund, as an income-oriented investment, is well positioned to be a core element of your long-term investment program. With the help of your financial advisor, all of us at Nuveen Investments are dedicated to providing the services, products, perspectives, and solutions that you need to help you meet your personal and family goals. NEW WAYS TO THINK ABOUT WEALTH Over the past few years, much attention has been directed toward the ways investors are accumulating wealth. At Nuveen, we believe it is equally important for investors to focus on preserving that wealth, on the responsibilities that accompany wealth, and on the legacies we will leave for future generations. This long-term perspective is key to understanding our portfolio management strategies, our insistence on quality, and our determination to provide investments that can withstand the test of time. It is a philosophy that we think is well encapsulated in our brand theme: Invest Well. Look Ahead. Leave Your Mark. INVEST WELL Building and sustaining the wealth that can result in lasting legacies requires a well-developed plan, sound ongoing advice, and the discipline to remain focused on long-term results. With today's abundance of investment products and offers, it also increasingly requires an experienced and trusted advisor who can guide you through the opportunities and the pitfalls. With so much potentially at stake, Nuveen Investments is dedicated to delivering quality products like your Nuveen Fund through the financial advisors who assist you in making wise investment choices and help you manage your most important financial assets. sidebar text: "WE BELIEVE YOUR NUVEEN EXCHANGE- TRADED FUND IS WELL POSITIONED TO BE A CORE ELEMENT OF YOUR LONG-TERM INVESTMENT PROGRAM." LOOK AHEAD We urge all our investors to look ahead, not only toward their own goals and futures, but those of future generations as well. We now stand on the threshold of a new century, anticipating a time of change, discovery, and potential that may one day make the year 2000 seem as archaic as the year 1900. While we cannot know all that the future will bring, we do know that a well-diversified, care fully monitored investment program that combines elements of growth, income, and capital preservation forms a solid foundation that can help us meet whatever opportunities and challenges the new century has to offer. LEAVE YOUR MARK With the enormous wealth creation of the past decade and the considerable intergenerational transfer of wealth that is expected to occur over the next 20 years, investors today have a significant opportunity to shape the financial future for themselves and their families. These opportunities may include establishing trusts, endowments, or legacies that can directly affect our families and communities for generations to come. We at Nuveen Investments are committed to facilitating and raising the level of dialogue between investors and their financial advisors in ways that help meet goals that extend far beyond the boundaries of a single life span. Since 1898, the name Nuveen has been synonymous with quality investments, careful research and prudent management. Today, more than ever, the investments and services we offer through financial advisors are designed to be well suited to those who recognize and embrace the need for building and managing wealth. We encourage you to speak with your financial advisor about how you can enhance your investment program in ways that can help you Invest Well, Look Ahead, and Leave Your Mark. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board July 17, 2000 Nuveen Georgia Premium Income Municipal Fund (NPG) Portfolio Manager's COMMENTS Portfolio manager Tom O'Shaughnessy reviews the economy, its impact on the municipal market and fund performance, and the key strategies used to manage the Nuveen Georgia Premium Income Municipal Fund (NPG). Tom, who has more than 16 years of experience as an investment professional at Nuveen, has managed NPG since 1998. WHAT FACTORS AFFECTED THE ECONOMY VER THE PAST 12 MONTHS? First, let's take a look at the national economy to gain some perspective on what's been happening in Georgia. The U.S. economy is now in its tenth year of uninterrupted expansion, the longest continuous economic expansion in the nation's history. Over the past 12 months, the rapid pace of this expansion has been of immense concern to the Federal Reserve, which watched carefully for any signs that the booming economy was about to trigger a resurgence of inflation. To pre-empt this threat, the Fed in June 1999 began a series of six short-term interest rate increases that eventually raised the federal funds rate by 1.75% to 6.50%, the highest level in almost a decade. As the Fed acted and then signaled its willingness to continue tightening, investor uncertainty grew, the equity markets became increasingly volatile, and bond prices declined as yields pushed higher. While many of the growth trends and the relatively benign inflation that have been the hallmarks of this expansion remain in place, we have recently seen some preliminary indications that the Fed's tightening strategy may be having the desired effect of slowing the economy. Investors continue to hope that the Fed proves to be right, successfully engineering a soft landing for the U.S. economy. Georgia's robust economy, while projected to slow somewhat in the near term, is still expected to outpace the national economy, due to the growth of the Atlanta metropolitan area and the state's expanding export markets. As of the period covered by this report, Atlanta and the surrounding area accounted for almost 70% of the job creation and population growth in the state. Employment statewide has been growing at more than twice the national rate, with gains in the construction, financial services, and high-tech sectors. As of May 2000, the unemployment rate in Georgia was 3.5%, down from 3.7% in May 1999 and below the national average of 4.1%. In one of the largest transactions to date in 2000, Hartsfield International Airport issued $1 billion in bonds, with proceeds to be used to fund construction of a new international terminal, new runway, and consolidated rental car facilities. In addition, the state's investment in port facilities in Savannah has enabled Georgia to compete with ports in Louisiana and Florida. Overall, Georgia has excellent debt policies, sound fiscal operations, and promising potential. This assessment is reflected in the Aaa/AAA/AAA credit ratings from the three major rating agencies. HOW HAVE THESE EVENTS IMPACTED THE MUNICIPAL MARKET? The cumulative effects of the economic events of the past 12 months were negative for the fixed-income markets, including municipal bonds. Once the Fed began its series of interest rate hikes, the rise in municipal yields accelerated. Over the 12 months ended May 2000, long-term municipal yields rose nationally almost 75 basis points, compared with a gain of about 20 points in 30-year Treasury yields. The Treasury market was affected during the period by the announcement that the U.S. Treasury would be buying back a substantial amount of U.S. Government debt and reduce additional new issuance of certain maturities. The possibility of decreased supply helped support Treasury bond prices. Municipals were unaffected by this repurchase policy and therefore were subject to the full effect of market forces. As a result, by the end of May 2000, long-term municipal yields nationally were 103% of 30-year Treasury yields, compared with the historical average of 86% for the period 1986-1999. During the first five months of 2000, new municipal issuance nationwide declined 24% from the level of the same period in 1999. New issuance in Georgia during this period totaled $1.82 billion, down 25% from 1999, in line with national figures. This decline continued the trend begun last year, as the rising interest rate environ ment deterred municipalities from issuing new bonds or refinancing old debt. Overall, the decline in supply helped to offset some of the negative impact that higher interest rates and equity market activity had on the demand for municipal bonds and, ultimately, on bond prices. Over the past 12 months, demand from individual investors provided some support for a municipal market experiencing a decline in demand from institutional investors, particularly mutual and money market funds. WAS NPG'S DIVIDEND AFFECTED BY THIS ENVIRONMENT? As of May 31, 2000, NPG had provided shareholders with 64 consecutive months of steady or increasing dividends. Good call protection within NPG's portfolio helped to maintain the dividend of this Fund by reducing some of the forced turnover that bond calls can generate. We will continue to actively manage the Fund in an effort to mitigate the longer-term effects of the bond call process, and we believe NPG's portfolio is well positioned to continue generating attractive income in the months ahead. NPG is a leveraged Fund. Leverage can enhance the dividends paid to common shareholders, but the extent of the benefit is tied to some degree to the short-term rates the Fund pays its MuniPreferred(R) shareholders. As short-term rates rise, the income available for common shareholder dividends decreases. As noted, the Federal Reserve has raised short-term rates six times between June 1999 and May 2000, and these actions have had a corresponding effect on short-term municipal rates. This may begin to exert an influence on the Fund's common share dividends if short-rates remain at high recent levels. OVERALL, HOW DID NPG PERFORM OVER THE PAST YEAR? For the 12 months ended May 31, 2000, NPG produced a total return on net asset value (NAV) as shown in the accompanying table. For comparison purposes, the annual returns for the Lehman Brothers Municipal Bond Index1 and appropriate Lipper Peer Group2 are also presented. LEHMAN TOTAL LIPPER MARKET YIELD TOTAL RETURN ON NAV RETURN1 AVERAGE2 ================================================================================ 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED TAXABLE- ENDED ENDED 5/31/00 EQUIVALENT3 5/31/00 EQUIVALENT3 5/31/00 5/31/00 ================================================================================ NPG 6.46% 9.94% -5.87% -2.79% -0.86% -6.34% ================================================================================ Past performance is not predictive of future results. For additional information, see the individual Performance Overview for NPG in this report. The relative underperformance of NPG's total return on NAV compared with the Lehman Brothers Municipal Bond Index can be attributed largely to the Fund's duration4, which measures the Fund's NAV volatility in reaction to interest rate movements. This is a leveraged Fund, and while leverage can enhance the dividends paid to common shareholders, it also has the effect of lengthening a Fund's duration. In addition, durations often are lengthened as we look to maintain call protection within a portfolio. As of May 31, 2000, NPG's duration was 14.39, compared with the unleveraged Lehman index's 7.46. We believe that NPG's longer duration and good call protection should help to strengthen the relative stability of the Fund's common share dividends over the long term and also position the Fund to benefit from any market recovery in the future. 1 NPG's performance is compared with that of the national Lehman Brothers Municipal Bond Index, an unleveraged index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 2 NPG's total return is compared with the average annualized return of the 19 funds in the Lipper Other States Municipal Debt Funds category. Fund and Lipper returns assume reinvest ment of dividends. 3 The taxable-equivalent yield/total return represents the yield/total return that must be earned on a taxable investment in order to equal the yield/total return 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 combined federal and state income tax rate of 35%, while the taxable-equivalent total return is based on the annualized total return as of the indicated date and the combined 35% federal and state income tax rate. 4 Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for the Fund and there fore 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. WHAT ABOUT NPG'S SHARE PRICE PERFORMANCE? Over the past 12 months, the uncertainty of the economic environment, coupled with investors' focus on equity market performance, tended to dampen interest in most fixed-income products. This lack of demand put pressure on the prices of many municipal bond investments, including NPG. As shown in the chart on the Performance Overview page for NPG, the Fund's share price declined over the past year. Since the decline in share price was greater than the decline in the Fund's NAV, NPG saw its premium (share price above NAV) move to a discount (share price below NAV) over the past 12 months. With the market price of this Fund now lower than the actual value of the bonds in the portfolio, shareholders may want to consider taking advantage of this opportunity to add to their holdings of NPG. WHAT KEY STRATEGIES WERE USED TO MANAGE NPG DURING THE 12 MONTHS ENDED MAY 31, 2000? The past 12 months represented a challenging period for all fixed-income investments. In addition, we believe the Fund's portfolio currently is well positioned. This, plus the tight supply of new issuance in the Georgia municipal market, meant that trading over the past six months was kept to a minimum. However, we did take advantage of several selected opportunities to provide additional diversification, to strengthen NPG's long-term dividend-paying capabilities, and to enhance tax efficiency by offsetting potential capital gains with capital losses. We sold several bonds in demand by individual investors at attractive prices, including prerefunded bonds and bonds with short call dates, in order to reinvest in other issues with higher coupons or better call protection. We also continued to carefully watch the healthcare sector, which as been under considerable pressure from deregulation. In our opinion, this situation generated several opportunities to purchase bonds that carried very attractive prices relative to our estimation of their underlying value. This is an area where we rely on Nuveen Research for expert assessments, both on an industry and individual issuer level. As of May 31, 2000, NPG offered excellent credit quality, with 82% of its assets invested in bonds rated AAA/U.S. guaranteed or AA. The remainder of the Fund was invested in bonds with an A rating. Although we continue to look for lower-rated securities as a way of adding higher yields to the portfolio, especially in light of the wider credit spreads of recent months, BBB and non-rated bonds are found infrequently in the Georgia market. WHAT IS YOUR OUTLOOK FOR NPG? Going forward, we plan to continue to look for opportunities to add incremental income to the portfolio by purchasing non-rated and lower-rated securities as they become available in the Georgia market. We will also continue to track the healthcare sector and - to some degree - the multifamily housing market. Many federally sponsored housing programs are currently undergoing changes, and we believe this is creating opportunities that the market has not yet recognized. In terms of bond calls, NPG currently offers excellent levels of call protection, with only 5% of its portfolio subject to calls between now and the end of 2001. We will continue to monitor bond call activity in an effort to take advantage of opportunities to add bonds that extend call protection. Overall, we plan to focus on the same strategies that we have emphasized over the past year, including strengthening dividend-payment capabilities. We expect the market to continue to work its way through a period of uncertainty that may last beyond the fall elections. Opportunities do arise in these types of markets, and we believe we are ready to take advantage of developing situations. We believe NPG continues to be well positioned to provide attractive income and a measure of portfolio diversification that can be a valuable benefit to investors now and in the years ahead. NPG Nuveen Georgia Premium Income Municipal Fund Performance OVERVIEW As of May 31, 2000 PORTFOLIO STATISTICS =================================================== Inception Date 5/93 - --------------------------------------------------- Share Price $12 7/16 - --------------------------------------------------- Net Asset Value $12.80 - --------------------------------------------------- Market Yield 6.46% - --------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.36% - --------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 9.94% - --------------------------------------------------- Fund Net Assets ($000) $75,791 - --------------------------------------------------- Average Effective Maturity (Years) 19.80 - --------------------------------------------------- Leverage-Adjusted Duration 14.39 =================================================== ANNUALIZED TOTAL RETURN =================================================== ON SHARE PRICE ON NAV =================================================== 1-Year -18.84% -5.87% - --------------------------------------------------- 5-Year 7.39% 4.90% - --------------------------------------------------- Since Inception 2.85% 4.40% =================================================== TAXABLE-EQUIVALENT TOTAL RETURN2 =================================================== ON SHARE PRICE ON NAV =================================================== 1-Year -16.11% -2.79% - --------------------------------------------------- 5-Year 10.54% 8.01% - --------------------------------------------------- Since Inception 5.87% 7.43% - --------------------------------------------------- TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS) =================================================== Tax Obligation/Limited 18% - --------------------------------------------------- Utilities 14% - --------------------------------------------------- Housing/Multifamily 13% - --------------------------------------------------- U.S. Guaranteed 12% - --------------------------------------------------- Education and Civic Organizations 10% =================================================== bar chart: 1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE3 6/99 0.67 7/99 0.67 8/99 0.67 9/99 0.67 10/99 0.67 11/99 0.67 12/99 0.67 1/00 0.67 2/00 0.67 3/00 0.67 4/00 0.67 5/00 0.67 line chart: SHARE PRICE PERFORMANCE 6/4/99 16.13 16.13 16.19 16.06 16.19 16.25 16.25 16.19 16 15.94 15.31 15.13 15.31 15.38 14.88 14.63 14.56 14.56 14.19 14.06 14 13.94 13.63 13.75 13.63 13.5 13.38 12.63 12.69 12.75 12.56 12.63 12.81 13.31 13.19 13 13.06 12.69 12.38 12.25 12.25 12.44 12.56 12.5 12.5 12.56 12.63 12.5 12.5 12.44 5/31/00 12.4375 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 31%. 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%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 35%. It represents the return on a taxable investment necessary to equal the return of the Nuveen Fund on an after-tax basis. Nuveen Maryland Premium Income Municipal Fund (NMY) Portfolio Manager's COMMENTS Portfolio manager Paul Brennan discusses the impact of the national and Maryland economy on the municipal market, recent fund performance, and the outlook for the Nuveen Maryland Premium Income Municipal Fund (NMY). Paul began his career as an investment professional at Flagship in 1991, joining Nuveen in 1997 following Nuveen's acquisition of Flagship. He has managed NMY since August 1999. WHAT FACTORS AFFECTED THE ECONOMY OVER THE PAST 12 MONTHS? To understand what's happening in the Maryland economy, we first need to take a look at the economy at the national level. While the growth trends and relatively benign inflation that have been the hallmarks of this country's decade-long economic expansion remain largely in place, robust consumer spending, tight labor markets, and rising commodity prices have kept the Federal Reserve on watch for the possibility that the pace of growth could eventually trigger a resurgence of inflation. In June 1999, all of this prompted the Fed to begin a series of six short-term interest rate increases that eventually pushed the fed funds rate up by 1.75% to 6.50%, the highest level in more than nine years. As the Fed continued to leave the door open for additional tightenings, investor uncertainty grew, the equity markets became increasingly volatile, and bond prices declined as yields moved higher. Recently, however, we have begun to see some preliminary signs that the Fed's tightenings are having the desired effect of slowing the economy. Investors continue to hope that the Fed is successful in counterbalancing some of the current pressures in the economy without jeopardizing the expansion, engineering a soft landing for the economy. The Maryland economy continued to perform well, bolstered by the growing number of high-tech firms that are locating in the suburbs surrounding Washington, D.C., despite the high cost of doing business in the state. Maryland's well-educated workforce is a major factor in the state's employment growth, which continued to exceed the national average. In May 2000, unemploy ment in the state was 3.2%, down from 3.8% in May 1999 and below the national average of 4.1%. In the near term, a slowdown in federal cutbacks and increased government spending on defense and health sciences research, as well as developments in the aero space and distribution sectors, are expected to provide opportunities for continued economic growth. From a sector perspective, healthcare providers in the state continue to face financial pressures. For example, Medstar Health, Inc., a leading provider in the Baltimore/Washington area, was downgraded by Fitch due to ongoing operating deficits and a proposed merger with a local medical center, which was expected to further strain Medstar's financial position. The state as a whole, however, continues to have an excellent credit rating, with Aaa/AAA/AAA ratings from the three major agencies. HOW HAVE THESE EVENTS IMPACTED THE MUNICIPAL MARKET? The cumulative effects of the economic events of the past 12 months were negative for the fixed-income markets, including municipal bonds. Once the Fed began its series of interest rate hikes, the rise in municipal yields accelerated. Over the 12 months ended May 2000, long-term municipal yields nationally rose almost 75 basis points, compared with a gain of about 20 points in 30-year Treasury yields. The Treasury market was affected during the period by the announcement that the U.S. Treasury would be buying back a substantial amount of U.S. Government debt and reduce additional new issuance of certain maturities. The possibility of decreased supply helped support Treasury bond prices. Municipals were unaffected by this repurchase policy and therefore were subject to the full effect of market forces. As a result, by the end of May 2000, long-term municipal yields nationally were 103% of 30-year Treasury yields, compared with the historical average of 86% for the period 1986-1999. During the first five months of 2000, new municipal issuance nationwide declined 24% from the January-May level of 1999. The decline in Maryland year-to-date was even sharper, with a total issuance of $670.6 million, down 33% from the same period in 1999. The problem of limited issuance in the state was amplified by the lack of breadth. A geographically small state, Maryland has relatively fewer political subdivisions and, therefore, relatively fewer borrowers. Most issuance is concentrated in a few large borrowers, including the state and state agencies such as the housing authority. This new issuance decline continued the trend begun last year, as the rising interest rate environment deterred municipalities from issuing new bonds or refinancing old debt. In addition, robust tax revenue collections have enabled many issuing entities to use more pay-as-you-go financing rather than use bonds to fund projects. Overall, the decline in supply helped to offset some of the negative impact that higher interest rates and equity market activity had on the demand for municipal bonds and, ultimately, on bond prices. Over the past 12 months, demand from individual investors provided some support for a municipal market experiencing a decline in demand from institutional investors, particularly mutual and money market funds. WAS NMY'S DIVIDEND AFFECTED BY THIS ENVIRONMENT? As of May 31, 2000, NMY had provided shareholders with 76 consecutive months of steady or increasing dividends.Good call protection within NMY's portfolio helped to maintain the dividend of this Fund by reducing some of the forced turnover that bond calls can generate. We continue to actively manage the Fund with an eye toward minimizing the long-term effects of the bond call process, and we believe NMY's portfolio is well positioned to continue generating attractive income in the months ahead. NMY is a leveraged Fund. Leverage can enhance the dividends paid to common shareholders, but the extent of the benefit is tied to some degree to the short-term rates the Fund pays its MuniPreferred(R) shareholders. As short-term rates rise, the income available for common shareholder dividends decreases. As noted, the Federal Reserve has raised short-term rates six times between June 1999 and May 2000, and these actions have had a corresponding effect on short-term municipal rates. This may begin to exert an influence on the Fund's common share dividends if short-term rates remain at recent high levels. OVERALL, HOW DID NMY PERFORM OVER THE PAST YEAR? For the 12 months ended May 31, 2000, NMY produced a total return on net asset value (NAV) as shown in the accompanying table. For comparison purposes, the annual returns for the Lehman Brothers Municipal Bond Index1 and appropriate Lipper Peer Group2 are also presented. LEHMAN TOTAL LIPPER MARKET YIELD TOTAL RETURN ON NAV RETURN1 AVERAGE2 ================================================================================ 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED TAXABLE- ENDED ENDED 5/31/00 EQUIVALENT3 5/31/00 EQUIVALENT3 5/31/00 5/31/00 ================================================================================ NMY 5.89% 8.99% -5.57% -2.64% -0.86% -6.34% ================================================================================ Past performance is not predictive of future results. For additional information, see the individual Performance Overview for NMY in this report. The relative underperformance of NMY's total return on NAV compared with the national Lehman Brothers Municipal Bond Index can be attributed largely to the Fund's duration4, which is a measure of a fund's NAV volatility in reaction to interest rate movements. This is a leveraged Fund, and while leverage can enhance the dividends paid to common shareholders, it also has the effect of lengthening a Fund's duration. In addition, durations often are lengthened as we look to maintain call protection within a portfolio. As of May 31, 2000, NMY's duration was 14.21, compared with the unleveraged Lehman index's 7.46. We continue to believe that NMY's longer duration and good call protection should help to strengthen the relative stability of the Fund's common share dividends over the long term and also position the Fund to benefit from any market recovery in the future. WHAT ABOUT NMY'S SHARE PRICE PERFORMANCE? Over the past 12 months, the uncertainty of the economic environment, coupled with investors' focus on equity market performance, tended to dampen interest in most fixed-income products. This lack of demand put pressure on the prices of many municipal bond investments, including NMY. As shown in the chart on NMY's Performance Overview page, the Fund's share price declined over the past year. Because this decline was greater than the decline in the Fund's NAV, the premium 1 NMY's performance is compared with that of the Lehman Brothers Municipal Bond Index, an unleveraged index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 2 NMY's total return is compared with the average annualized return of the 19 funds in the Lipper Other States Municipal Debt Funds category. Fund and Lipper returns assume reinvest ment of dividends. 3 The taxable-equivalent yield/total return represents the yield/total return that must be earned on a taxable investment in order to equal the yield/total return 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 combined federal and state income tax rate of 34.5%, while the taxable-equivalent total return is based on the annualized total return as of the indicated date and the combined 34.5% federal and state income tax rate. 4 Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for the Fund and there fore 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. (share price above NAV) on NMY narrowed over the past 12 months. In our opinion, the fact that NMY continued to trade at a premium despite the negative fixed-income environment illustrates the market's perception of the value of an investment in this Fund. WHAT KEY STRATEGIES WERE USED TO MANAGE NMY DURING THE 12 MONTHS ENDED MAY 31, 2000? The past 12 months represented a challenging period for all fixed-income investments. However, it also offered opportunities to provide additional diversification, strengthen NMY's long-term dividend-paying capabilities, and enhance tax efficiency by offsetting potential capital gains with capital losses. During the past year, we focused on taking advantage of these opportunities while continuing to manage the Fund toward its primary objective of providing dependable tax-free dividends over the long term. Although the Maryland municipal market traditionally has limited supply, the relatively robust issuance seen during the fourth quarter of 1999 in advance of the Y2K transition enabled us to trade more actively, and we took advantage of this anomaly. We added bonds issued at county level from throughout the state, which enabled us to add diversification to the Fund. The higher interest rate environment of the past year also afforded us an opportunity to execute a series of trades that added bonds with high current yields to the portfolio while selling lower-yielding bonds that we had purchased in 1998 and early 1999. These recent purchases should help us maintain the income generated by NMY's port folio over time in order to support the Fund's dividend. We also have been selling bonds in demand by individual investors at attractive prices, including bonds with short call dates, and buying issues with longer maturities and/or extended call protection. On the sector front, we continued to closely watch the healthcare sector, which has been under considerable pressure as hospitals adjust to deregulation and tighter federal reimbursement guidelines. Overall during the past 12 months, we lightened our exposure to this sector from 19% to 17%. However, we believe the healthcare situation can generate select opportunities to purchase bonds that carry what we consider to be very attractive prices relative to their underlying value. For example, we purchased Baa1 bonds issued by the University of Maryland Medical System, which has strong state support, both politically and financially. In addition to a financial commitment to operating and maintaining this hospital system, the state also contributed substantial funds toward the expansion of the hospital's facilities. We think this bodes well for this issue, despite the general problems in the sector. In fact, since our purchase, these bonds have increased in value. This is another example of the value that can be added by an active bond manager with an established market presence. Nuveen's pre-issuance participation in meetings with the borrower and underwriters ensured that we would have access to purchasing the University of Maryland Medical System bonds, which were in great demand in the market. Our experienced Research team provided an additional advantage by supplying the background we needed to understand all important issues. As of May 31, 2000, NMY offered excellent credit quality, with 77% of its assets invested in bonds rated AAA/U.S. guaranteed or AA. This was balanced by a 10% allocation of BBB/non-rated bonds that generally provided higher yields, especially as credit spreads widened in recent months. WHAT IS YOUR OUTLOOK FOR NMY? We believe the bonds we added to our portfolio during the fourth quarter of 1999 helped increase diversification and have the potential to further enhance the Fund's dividend-paying capabilities. NMY currently offers excellent levels of call protection, with only 2% of its portfolio subject to calls between now and the end of 2001. We will continue to monitor bond call activity in an effort to take advantage of opportunities to add bonds that extend call protection. Going forward, we plan to focus on the same strategies that we have emphasized over the past year, namely, improving diver sification, enhancing call protection, and strengthening dividend-payment capabilities. The market should continue to work its way through a period of uncertainty that may last beyond the fall elections. Opportunities do arise in these types of markets, and we believe the Fund is well positioned to take advantage of any developing situations. NMY Nuveen Maryland Premium Income Municipal Fund Performance OVERVIEW As of May 31, 2000 PORTFOLIO STATISTICS =================================================== Inception Date 3/93 - --------------------------------------------------- Share Price $13 1/4 - --------------------------------------------------- Net Asset Value $12.83 - --------------------------------------------------- Market Yield 5.89% - --------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.54% - --------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.99% - --------------------------------------------------- Fund Net Assets ($000) $213,399 - --------------------------------------------------- Average Effective Maturity (Years) 18.14 - --------------------------------------------------- Leverage-Adjusted Duration 14.21 =================================================== ANNUALIZED TOTAL RETURN =================================================== ON SHARE PRICE ON NAV =================================================== 1-Year -7.22% -5.57% - --------------------------------------------------- 5-Year 7.28% 4.79% - --------------------------------------------------- Since Inception 3.73% 4.22% =================================================== TAXABLE-EQUIVALENT TOTAL RETURN2 =================================================== ON SHARE PRICE ON NAV =================================================== 1-Year -4.44% -2.64% - --------------------------------------------------- 5-Year 10.29% 7.77% - --------------------------------------------------- Since Inception 6.63% 7.12% - --------------------------------------------------- TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS) =================================================== Utilities 20% - --------------------------------------------------- Housing/Multifamily 17% - --------------------------------------------------- Healthcare 17% - --------------------------------------------------- Tax Obligation/Limited 9% - --------------------------------------------------- Tax Obligation/General 8% =================================================== Bar Chart: 1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE3 6/99 0.065 7/99 0.065 8/99 0.065 9/99 0.065 10/99 0.065 11/99 0.065 12/99 0.065 1/00 0.065 2/00 0.065 3/00 0.065 4/00 0.065 5/00 0.065 Line Chart: SHARE PRICE PERFORMANCE 6/4/99 15.06 15.06 15.25 15 15 15.31 15.38 15.69 15.69 15.31 14.69 15 14.88 14.75 14.25 14.13 14.19 14.13 13.94 13.94 14.13 14.06 13.63 13.25 13.06 12.63 11.88 12.25 12.13 12.5 12.25 12.5 12.75 13.13 13.25 13.06 12.88 12.5 12.25 12.38 12.44 12.88 12.88 13.13 12.88 13.38 13.5 13.5 13.25 13.31 5/31/00 13.25 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 31%. 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 34.5%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 34.5%. It represents the return on a taxable investment necessary to equal the return of the Nuveen Fund on an after-tax basis. Nuveen North Carolina Premium Income Municipal Fund (NNC) Portfolio Manager's COMMENTS Portfolio manager Tom O'Shaughnessy talks about the economy and its impact on the municipal market and the performance of the Nuveen North Carolina Premium Income Municipal Fund (NNC). Tom, who has more than 16 years of experience as an investment professional at Nuveen, has managed NNC since 1998. WHAT FACTORS AFFECTED THE ECONOMY OVER THE PAST 12 MONTHS? First, let's take a look at the national economy to gain some perspective on what's been happening in North Carolina. The U.S. economy is now in its tenth year of uninterrupted expansion, the longest continuous economic expansion in the nation's history. Over the past 12 months, the rapid pace of this expansion has been of immense concern to the Federal Reserve, which watched carefully for any signs that the booming economy was about to trigger a resurgence of inflation. To pre-empt this threat, the Fed in June 1999 began a series of six short-term interest rate increases that eventually raised the federal funds rate by 1.75% to 6.50%, the highest level in almost a decade. As the Fed acted and then signaled its willingness to continue tightening, investor uncertainty grew, the equity markets became increasingly volatile, and bond prices declined as yields pushed higher. While many of the growth trends and the relatively benign inflation that have been the hallmarks of this expansion remain in place, we have recently seen some preliminary indications that the Fed's tightening strategy may be having the desired effect of slowing the economy. Investors continue to hope that the Fed proves to be right, successfully engineering a soft landing for the U.S. economy. In the North Carolina economy, we have also seen some moderation in recent months, due mainly to job losses in the manufacturing and textile sectors and the continued expenditures associated with the clean-up from Hurricane Floyd. Overall, however, the job market in North Carolina continued to tighten, with a state unemployment level of 3.0% as of May 2000, down from 3.1% in May 1999 and below the national average of 4.1%. Recent gains in high-tech, financial services, retail, and construction jobs have contributed to the scarcity of skilled workers. Despite strong growth, however, per capita income levels in the state remained below national averages. The North Carolina economy is expected to remain among the fastest growing in the nation, and the state continued to enjoy excellent credit ratings (Aaa/AAA/AAA) from all three major rating agencies. One important aspect of the credit situation in North Carolina is the unresolved debt load of North Carolina Eastern Municipal Power Agency and North Carolina Municipal Power Agency #1 (Catawba). The state's two major investor-owned utilities - Duke Energy and Carolina Power & Light - have agreed to assess their customers a statewide stranded cost charge, with the proceeds used to pay down the agencies' excessive debt. In return, however, the two utilities would expect the right to take over the agencies' assets. A commission established to study electricity deregulation options in the state is expected to reach a decision regarding this issue in the next few months. HOW HAVE THESE EVENTS IMPACTED THE MUNICIPAL MARKET? The cumulative effects of the economic events of the past 12 months were negative for the fixed-income markets, including municipal bonds. Once the Fed began its series of interest rate hikes, the rise in municipal yields accelerated. Over the 12 months ended May 2000, long-term municipal yields nationally rose almost 75 basis points, compared with a gain of about 20 points in 30-year Treasury yields. The Treasury market was affected during the period by the announcement that the U.S. Treasury would be buying back a substantial amount of U.S. Government debt and reduce additional new issuance of certain maturities. The possibility of decreased supply helped support Treasury bond prices. Municipals were unaffected by this repurchase policy and therefore were subject to the full effect of market forces. As a result, by the end of May 2000, long-term municipal yields nationally were 103% of 30-year Treasury yields, compared with the historical average of 86% for the period 1986-1999. During the first five months of 2000, new municipal issuance nationwide declined 24% from the same period of 1999. The decline in North Carolina issuance was even more severe, with a drop of 38% for this period. This continued the trend begun last year, as the rising interest rate environment deterred municipalities from issuing new bonds or refinancing old debt. Overall, the decline in supply helped to offset some of the negative impact that higher interest rates and equity market activity had on the demand for municipal bonds and, ultimately, on bond prices. Over the past 12 months, demand from individual investors provided some support for a municipal market experiencing a decline in demand from institutional investors, particularly mutual and money market funds. WAS NNC'S DIVIDEND AFFECTED BY THIS ENVIRONMENT? NNC announced a dividend increase in August 1999, and maintained that dividend through May 31, 2000, the ending date for the period covered by this report. However, on June 1, the Fund announced a dividend reduction, in large part because of rising short-term interest rates. NNC is a leveraged fund. Leverage can enhance the dividends paid to common shareholders, but the extent of the benefit is tied to some degree to the short-term rates the Fund pays its MuniPreferred(R) shareholders. As short-term rates rise, the income available for common shareholder dividends decreases. As noted, the Federal Reserve has raised short-term rates six times between June 1999 and May 2000, and these actions have had a corresponding effect on short-term municipal rates. This may continue to exert an influence on the Fund's common share dividends in the future if short-rates remain at high recent levels. OVERALL, HOW DID NNC PERFORM OVER THE PAST YEAR? For the 12 months ended May 31, 2000, NNC produced a total return on net asset value (NAV) as shown in the accompanying table. For comparison purposes, the annual returns for the Lehman Brothers Municipal Bond Index1 and appropriate Lipper Peer Group2 are also presented. LEHMAN TOTAL LIPPER MARKET YIELD TOTAL RETURN ON NAV RETURN1 AVERAGE2 ================================================================================ 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED TAXABLE- ENDED ENDED 5/31/00 EQUIVALENT3 5/31/00 EQUIVALENT3 5/31/00 5/31/00 ================================================================================ NNC 5.92% 9.32% -5.98% -2.64% -0.86% -6.34% ================================================================================ Past performance is not predictive of future results. For additional information, see the individual Performance Overview for NNC in this report. The relative underperformance of NNC's total return on NAV compared with the Lehman Brothers Municipal Bond Index can be attributed largely to the Fund's duration4, which is a measure of a fund's NAV volatility in reaction to interest rate movements. This is a lever aged Fund, and while leverage can enhance the divi dends paid to common shareholders, it also has the effect of lengthening a Fund's duration. In addition, durations often are lengthened as we look to maintain call protection within a portfolio. As of May 31, 2000, NNC's duration was 14.81, compared with the unlever aged Lehman index's 7.46. We believe that NNC's longer duration and good call protection should help to strengthen the relative stability of the Fund's common share dividends over the long term and also position the Fund to benefit from any market recovery. WHAT ABOUT NNC'S SHARE PRICE PERFORMANCE? Over the past 12 months, the uncertainty of the economic environment, coupled with investors' focus on equity 1 NNC's performance is compared with that of the Lehman Brothers Municipal Bond Index, an unleveraged index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 2 NNC's total return is compared with the average annualized return of the 19 funds in the Lipper Other States Municipal Debt Funds category. Fund and Lipper returns assume reinvest ment of dividends. 3 The taxable-equivalent yield/total return represents the yield/total return that must be earned on a taxable investment in order to equal the yield/total return of the Nuveen Fund on an after-tax basis. The taxable-equivalent yield is based on the Fund's mar ket yield on the indicated date and a combined federal and state income tax rate of 36.5%, while the taxable-equivalent total return is based on the annu alized total return as of the indicated date and the combined 36.5% federal and state income tax rate. 4 Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for the Fund and there fore 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. market performance, tended to dampen interest in most fixed-income products. This lack of demand put pressure on the prices of many municipal bond investments, including NNC. As shown in the chart on the Fund's Performance Overview page, NNC's share price declined over the past year. Because the decline in share price was greater than the decline in the Fund's NAV, the pre mium (share price above NAV) on NNC narrowed over the past 12 months. In our opinion, the fact that NNC continued to trade at a premium despite the negative fixed-income environment illustrates the market's per ception of the value of an investment in this Fund. WHAT KEY STRATEGIES WERE USED TO MANAGE NNC DURING THE 12 MONTHS ENDED MAY 31, 2000? We believe the Fund's portfolio is well positioned. This, plus the extremely tight supply of new issuance in the North Carolina municipal market, meant that trading over the past six months was kept to a minimum. However, we did take advantage of selected opportuni ties to provide additional diversification, to strengthen NNC's long-term dividend-paying capabilities, and to enhance tax efficiency by offsetting potential capital gains with capital losses. We sold several bonds in demand by individual investors at attractive prices, including prerefunded bonds and bonds with short call dates, in order to rein vest in bonds with higher coupons or more call protec tion. We also increased our allocation of BBB/non-rated bonds from 9% to 12% over the past year. These lower-rated bonds generally provided higher yields, especially as credit spreads widened in recent months. We believe our experienced Research team provided an advantage in the area of credit analysis, helping us identify attrac tive situations and supplying the background we needed to understand issuers. As of May 31, 2000, NNC still offered excellent credit quality, with 74% of its assets invested in bonds rated AAA/U.S. guaranteed or AA. We continued to watch the healthcare and public power sectors of the North Carolina market very carefully. These areas have been under considerable pressure from deregulation, plus the specific problems of North Carolina Eastern Municipal Power Agency and North Carolina Municipal Power Agency #1 (Catawba) previously noted. In our opinion, these situations generated selected opportunities to purchase bonds that carried what we considered to be very attractive prices relative to their underlying value. This was another area where we rely on Nuveen Research for expert assessments, both on an industry and individual issuer level. Over the past year, we decreased our healthcare exposure from 19% to 15%, while increasing our allocation to utilities from 9% to 14%. WHAT IS YOUR OUTLOOK FOR NNC? Going forward, we plan to continue to look for opportunities to add incremental income to the portfolio by purchasing non-rated and lower-rated securities. We will also continue to closely track the healthcare and public power sectors. NNC currently offers good levels of call protection, with only 2% of its portfolio subject to calls between now and the end of 2001. We will continue to monitor bond call activity in an effort to take advantage of opportunities to add bonds that extend call protection. Overall, we plan to focus on the same strategies that we have emphasized over the past year, including strengthening dividend-payment capabilities. We expect the market to continue to work its way through a period of uncertainty that may last beyond the fall elections. Opportunities do arise in these types of markets, and we believe we are ready to take advantage of developing situations. We believe NNC continues to be well positioned to provide attractive income and a measure of portfolio diversification that can be a valuable benefit to investors now and in the years ahead. NNC Nuveen North Carolina Premium Income Municipal Fund Performance OVERVIEW As of May 31, 2000 PORTFOLIO STATISTICS =================================================== Inception Date 5/93 - --------------------------------------------------- Share Price $13 11/16 - --------------------------------------------------- Net Asset Value $12.62 - --------------------------------------------------- Market Yield 5.92% - --------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.58% - --------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 9.32% - --------------------------------------------------- Fund Net Assets ($000) $125,967 - --------------------------------------------------- Average Effective Maturity (Years) 19.83 - --------------------------------------------------- Leverage-Adjusted Duration 14.81 =================================================== ANNUALIZED TOTAL RETURN =================================================== On Share Price On NAV =================================================== 1-Year -7.76% -5.98% - --------------------------------------------------- 5-Year 8.16% 4.88% - --------------------------------------------------- Since Inception 4.11% 4.09% =================================================== TAXABLE-EQUIVALENT TOTAL RETURN2 =================================================== ON SHARE PRICE ON NAV =================================================== 1-Year -4.73% -2.64% - --------------------------------------------------- 5-Year 11.42% 8.23% - --------------------------------------------------- Since Inception 7.25% 7.32% =================================================== TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS) =================================================== Housing/Single-Family 17% - --------------------------------------------------- Tax Obligation/Limited 16% - --------------------------------------------------- Healthcare 15% - --------------------------------------------------- Utilities 14% - --------------------------------------------------- U.S. Guaranteed 10% =================================================== Bar Chart: 1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE3 6/99 0.066 7/99 0.066 8/99 0.0675 9/99 0.0675 10/99 0.0675 11/99 0.0675 12/99 0.0675 1/00 0.0675 2/00 0.0675 3/00 0.0675 4/00 0.0675 5/00 0.0675 Line chart: SHARE PRICE PERFORMANCE 6/4/99 15.75 15.5 15.63 15.69 15.75 15.81 15.75 15.63 15.69 15.88 15.44 15.5 15.81 15.69 15.38 15.06 15.19 15.06 14.63 14.5 14.5 14.56 14.31 14.25 14.19 14 13.69 13.44 13.5 13.56 13.5 13.44 13.88 14.31 14.31 14.19 14.31 14.38 14.13 13.69 13.81 14.06 14.13 14.06 14 14.13 14 14.06 13.69 13.75 5/31/00 13.6875 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 31%. 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 36.5%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 36.5%. It represents the return on a taxable investment necessary to equal the return of the Nuveen Fund on an after-tax basis. Nuveen Virginia Premium Income Municipal Fund (NPV) Portfolio Manager's COMMENTS Portfolio manager Paul Brennan looks at the economy, municipal market and fund performance, and the key strategies used to manage the Nuveen Virginia Premium Income Municipal Fund (NPV). Paul began his career as an investment professional at Flagship in 1991, and joined Nuveen in 1997 following Nuveen's acquisition of Flagship. He has managed NPV since August 1999. WHAT FACTORS AFFECTED THE ECONOMY OVER THE PAST 12 MONTHS? To understand what's happening in the Virginia economy, we first need to take a look at the economy at the national level. While the growth trends and relatively benign inflation that have been the hallmarks of this country's decade-long economic expansion remain largely in place, robust consumer spending, tight labor markets, and rising commodity prices have kept the Federal Reserve on guard for the possibility that the pace of growth could eventually trigger a resurgence of inflation. In June 1999, all of this prompted the Fed to begin a series of six short-term interest rate increases that eventually pushed the fed funds rate up by 1.75% to 6.50%, the highest level in more than nine years. As the Fed continued to leave the door open for additional tightenings, investor uncertainty grew, the equity markets became increasingly volatile, and bond prices declined as yields moved higher. Recently, however, we have begun to see some preliminary signs that the Fed's tightenings are having the desired effect of slowing the economy. Investors continue to hope that the Fed is successful in counter balancing some of the current pressures in the economy without jeopardizing the expansion, engineering a soft landing for the economy. Virginia's economy continued to perform well, fueled by increases in federal defense spending and strong growth in the high-tech sector. These have served to offset the weakening of Virginia's textile and apparel sector, which has been hurt by low-cost foreign competition. In May 2000, unemployment in the common-wealth was 2.7%, down from 3.0% in May 1999 and below the national average of 4.1%. According to a study conducted by PricewaterhouseCoopers, the majority of Virginia's $740 million in venture capital funding in 1999 flowed into cities in northern Virginia. This resulted in a push to redistribute additional venture capital funds in the remainder of the commonwealth, specifically Roanoke, Hampton Roads, and Richmond. In the near term, the Virginia economy is expected to continue to benefit from increased federal spending as well as strong job growth in high-tech manufacturing and defense-related industries. All three of the major rating agencies have maintained Virginia's rating at Aaa/AAA/AAA. HOW HAVE THESE EVENTS IMPACTED THE MUNICIPAL MARKET? he cumulative effects of the economic events of the past 12 months were negative for the fixed-income markets, including municipal bonds. Once the Fed began its series of interest rate hikes, the rise in municipal yields accelerated. Over the 12 months ended May 2000, long-term municipal yields nationally rose almost 75 basis points, compared with a gain of about 20 points in 30-year Treasury yields. The Treasury market was affected during the period by the announcement that the U.S. Treasury would be buying back a substantial amount of U.S. Government debt and reduce additional new issuance of certain maturities. The possibility of decreased supply helped support Treasury bond prices. Municipals were unaffected by this repurchase policy and therefore were subject to the full effect of market forces. As a result, by the end of May 2000, long-term municipal yields nationally were 103% of 30-year Treasury yields, compared with the historical average of 86% for the period 1986-1999. During the first five months of 2000, new municipal issuance nationwide declined 24% from the level of the first five months of 1999. Issuance in Virginia for this period dropped 15%, with $1.26 billion in new municipal supply. This decline continued the trend begun last year, as the rising interest rate environment deterred municipalities from issuing new bonds or refinancing old debt. In addition, robust tax revenue collections have enabled many issuing entities to use more pay-as-you-go financing rather than use bonds to fund projects. Overall, the decline in supply helped to offset some of the negative impact that higher interest rates and equity market activity had on the demand for municipal bonds and, ultimately, on bond prices. Over the past 12 months, demand from individual investors provided some support for a municipal market experiencing a decline in demand from institutional investors, particularly mutual and money market funds. WAS NPV'S DIVIDEND AFFECTED BY THIS ENVIRONMENT? NPV raised its dividend in May 1999, and maintained that dividend through May 31, 2000, the ending date for the period covered by this report. However, on June 1 the Fund announced a dividend reduction, in large part because of rising short-term interest rates. NPV is a leveraged fund. Leverage can enhance the dividends paid to common shareholders, but the extent of the benefit is tied to some degree to the short-term rates the Fund pays its MuniPreferred(R) shareholders. As short-term rates rise, the income available for common shareholder dividends decreases. As noted, the Federal Reserve has raised short-term rates six times between June 1999 and May 2000, and these actions have had a corresponding effect on short-term municipal rates. This may continue to exert an influence on the Fund's common share dividends in the future if short-rates remain at high recent levels. OVERALL, HOW DID NPV PERFORM OVER THE PAST YEAR? For the 12 months ended May 31, 2000, NPV produced a total return on net asset value (NAV) as shown in the accompanying table. For comparison purposes, the annual returns for the Lehman Brothers Municipal Bond Index1 and appropriate Lipper Peer Group2 are also presented. LEHMAN TOTAL LIPPER MARKET YIELD TOTAL RETURN ON NAV RETURN1 AVERAGE2 ================================================================================ 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED TAXABLE- ENDED ENDED 5/31/00 EQUIVALENT3 5/31/00 EQUIVALENT3 5/31/00 5/31/00 ================================================================================ NPV 5.89% 9.06% -4.64% -1.52% -0.86% -6.34% ================================================================================ Past performance is not predictive of future results. For additional information, see the individual Performance Overview for NPV in this report. The relative underperformance of NPV's total return on NAV compared with the Lehman Brothers Municipal Bond Index can be attributed largely to the Fund's duration4, which is a measure of a fund's NAV volatility in reaction to interest rate movements. This is a leveraged Fund, and while leverage can enhance the dividends paid to common shareholders, it also has the effect of lengthening a Fund's duration. In addition, durations often are lengthened as we look to maintain call protection within a portfolio. As of May 31, 2000, NPV's duration was 12.46, compared with the unleveraged Lehman index's 7.46. We continue to believe that NPV's longer duration and increased call protection should help to strengthen the relative stability of the Fund's common share dividends over the long term and also position the Fund to benefit from any market recovery. WHAT ABOUT NPV'S SHARE PRICE PERFORMANCE? Over the past 12 months, the uncertainty of the economic environment, coupled with investors' focus on equity market performance, tended to dampen interest in most fixed-income products. The lack of demand put pressure on the prices of many municipal bond investments, including NPV. As shown in the chart on NPV's Performance Overview page, NPV's share price declined over the past year. Because this decline was greater than the decline in the Fund's NAV, the premium (share 1 NPV's performance is compared with that of the Lehman Brothers Municipal Bond Index, an unleveraged index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 2 NPV's total return is compared with the average annualized return of the 19 funds in the Lipper Other States Municipal Debt Funds category. Fund and Lipper returns assume reinvest ment of dividends. 3 The taxable-equivalent yield/total return represents the yield/total return that must be earned on a taxable investment in order to equal the yield/total return of the Nuveen Fund on an after-tax basis. The taxable-equivalent yield is based on the Fund's mar ket yield on the indicated date and a combined federal and state income tax rate of 35%, while the taxable-equivalent total return is based on the annualized total return as of the indi cated date and the combined 35% federal and state income tax rate. 4 Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for the Fund and there fore 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. price above NAV) on NPV narrowed over the past 12 months. In our opinion, the fact that NPV continued to trade at a premium despite the negative fixed-income environment illustrates the market's perception of the value of an investment in this Fund. WHAT KEY STRATEGIES WERE USED TO MANAGE NPV DURING THE 12 MONTHS ENDED MAY 31, 2000? The past 12 months represented a challenging period for all fixed-income investments. However, it also offered opportunities to provide additional diversification, extend call protection, strengthen NPV's long-term dividend-paying capabilities, and enhance tax efficiency by offsetting potential capital gains with capital losses. During the past year, we focused on taking advantage of these opportunities while continuing to manage the Fund toward its primary objective of providing dependable tax-free dividends over the long term. The robust issuance seen in the Virginia municipal market during the fourth quarter of 1999 in advance of the Y2K transition enabled us to trade more actively, and we took advantage of this opportunity to add diversification to the Fund. One of the additions was a non-rated issue that is providing financing for the construction of an on-campus student dormitory at one of the state's private colleges. The situation is unique in that the bonds will be repaid from the operation of the dorm, rather than by the college itself. Because of our relationship with the underwriters and local dealers, Nuveen was involved in this issue from the beginning, helping to structure the deal with attractive yields, excellent call protection, and terms that should be beneficial to our shareholders. Other new additions to the portfolio include bonds issued by the Richmond convention center and by the city of Hampton. The higher interest rate environment of the past year also afforded us an opportunity to execute a series of trades that added bonds with high current yields to the portfolio while selling lower-yielding bonds that we had purchased in 1998 and early 1999. These recent purchases should help us increase the income generated by NPV's portfolio to support the Fund's dividend. We also sold several bonds in demand by individual investors at attractive prices, including bonds with short call dates, and bought issues with longer maturities and/or extended call protection. On the sector front, we continued to closely watch the healthcare sector, which has been under considerable pressure as hospitals adjust to deregulation and tighter federal reimbursement guidelines. Over the past 12 months, we lightened our exposure to this sector from 14% to 10%. As of May 31, 2000, NPV offered excellent credit quality, with 72% of its assets invested in bonds rated AAA/U.S. guaranteed or AA. This was balanced by a 12% allocation of BBB/non-rated bonds that generally provided higher yields, especially as credit spreads widened in recent months. WHAT IS YOUR OUTLOOK FOR NPV? We believe the bonds we added to our portfolio during the fourth quarter of 1999 added diversification and have the potential to strengthen the Fund's dividend-paying capabilities over time. NPV currently offers excellent levels of call protection, with only 8% of its portfolio subject to calls between now and the end of 2001. We will continue to monitor bond call activity in an effort to take advantage of opportunities to add bonds that extend call protection. Going forward, we plan to focus on the same strategies that we have emphasized over the past year, namely, improving diver sification, enhancing call protection, and strengthening dividend-payment capabilities. The market should continue to work its way through a period of uncertainty that may last beyond the fall elections. Opportunities do arise in these types of markets, and we believe the Fund is well positioned to take advantage of any developing situations. NPV Nuveen Virginia Premium Income Municipal Fund Performance OVERVIEW As of May 31, 2000 PORTFOLIO STATISTICS =================================================== Inception Date 3/93 - --------------------------------------------------- Share Price $14 1/4 - --------------------------------------------------- Net Asset Value $13.36 - --------------------------------------------------- Market Yield 5.89% - --------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.54% - --------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 9.06% - --------------------------------------------------- Fund Net Assets ($000) $179,560 - --------------------------------------------------- Average Effective Maturity (Years) 17.15 - --------------------------------------------------- Leverage-Adjusted Duration 12.46 =================================================== ANNUALIZED TOTAL RETURN =================================================== ON SHARE PRICE ON NAV =================================================== 1-Year -6.02% -4.64% - --------------------------------------------------- 5-Year 7.86% 5.51% - --------------------------------------------------- Since Inception 4.88% 5.09% =================================================== TAXABLE-EQUIVALENT TOTAL RETURN2 =================================================== ON SHARE PRICE ON NAV =================================================== 1-Year -3.13% -1.52% - --------------------------------------------------- 5-Year 10.96% 8.70% - --------------------------------------------------- Since Inception 7.90% 8.21% =================================================== TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS) =================================================== U.S. Guaranteed 23% - --------------------------------------------------- Water and Sewer 10% - --------------------------------------------------- Healthcare 10% - --------------------------------------------------- Utilities 10% - --------------------------------------------------- Tax Obligation/Limited 8% =================================================== Bar Chart: 1999-2000 MONTHLY TAX-FREE DIVIDENDS PER SHARE3 6/99 0.07 7/99 0.07 8/99 0.07 9/99 0.07 10/99 0.07 11/99 0.07 12/99 0.07 1/00 0.07 2/00 0.07 3/00 0.07 4/00 0.07 5/00 0.07 Line Chart: SHARE PRICE PERFORMANCE 6/4/99 16 15.94 15.88 15.56 15.75 16.19 16.69 17 16.69 16.31 16.13 16.13 16.31 16.31 15.94 15.5 15.25 15.38 15.25 15 14.88 14.94 14.63 14.56 14.38 14.13 13.19 12.88 12.63 13 13 12.94 13.31 13.44 14.19 14.38 14.13 14.06 13.81 13.88 13.63 13.88 14.06 14.19 14 14.06 14.06 13.88 13.88 14.19 14.25 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 31%. 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%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 35%. It represents the return on a taxable investment necessary to equal the return of the Nuveen Fund on an after-tax basis. Shareholder MEETING REPORT The Shareholder Meeting was held November 18, 1999 in Chicago at Nuveen's headquarters.
NPG NMY - -------------------------------------------------------------------------------------------------------------------------- APPROVAL OF THE TRUSTEES WAS REACHED AS FOLLOWS: Preferred Preferred Preferred Common Shares Common Shares Shares Shares Series-TH Shares Series-W Series-TH ========================================================================================================================== Robert P. Bremner For 3,499,377 1,047 9,578,953 1,396 1,760 Withhold 53,136 16 114,207 7 -- - -------------------------------------------------------------------------------------------------------------------------- Total 3,552,513 1,063 9,693,160 1,403 1,760 ========================================================================================================================== Lawrence H. Brown For 3,499,377 1,047 9,587,554 1,396 1,760 Withhold 53,136 16 105,606 7 -- - -------------------------------------------------------------------------------------------------------------------------- Total 3,552,513 1,063 9,693,160 1,403 1,760 ========================================================================================================================== Anne E. Impellizzeri For 3,499,377 1,047 9,584,144 1,396 1,760 Withhold 53,136 16 109,016 7 -- - -------------------------------------------------------------------------------------------------------------------------- Total 3,552,513 1,063 9,693,160 1,403 1,760 ========================================================================================================================== Peter R. Sawers For 3,499,377 1,047 9,590,378 1,396 1,760 Withhold 53,136 16 102,782 7 -- - -------------------------------------------------------------------------------------------------------------------------- Total 3,552,513 1,063 9,693,160 1,403 1,760 ========================================================================================================================== Judith M. Stockdale For 3,495,077 1,047 9,585,465 1,396 1,760 Withhold 57,436 16 107,695 7 -- - -------------------------------------------------------------------------------------------------------------------------- Total 3,552,513 1,063 9,693,160 1,403 1,760 ========================================================================================================================== William J. Schneider For -- 1,047 -- 1,396 1,760 Withhold -- 16 -- 7 -- - -------------------------------------------------------------------------------------------------------------------------- Total -- 1,063 -- 1,403 1,760 ========================================================================================================================== Timothy R. Schwertfeger For -- 1,047 -- 1,396 1,760 Withhold -- 16 -- 7 -- - -------------------------------------------------------------------------------------------------------------------------- Total -- 1,063 -- 1,403 1,760 ========================================================================================================================== RATIFICATION OF AUDITORS WAS REACHED AS FOLLOWS: For 3,501,245 1,058 9,584,721 1,403 1,760 Against 9,628 -- 48,594 -- -- Abstain 41,640 5 59,845 -- -- - -------------------------------------------------------------------------------------------------------------------------- Total 3,552,513 1,063 9,693,160 1,403 1,760 ==========================================================================================================================
Shareholder MEETING REPORT (continued) The Shareholder Meeting was held November 18, 1999 in Chicago at Nuveen's headquarters.
NNC NPV - -------------------------------------------------------------------------------------------------------------------------- APPROVAL OF THE TRUSTEES WAS REACHED AS FOLLOWS: Preferred Preferred Preferred Common Shares Common Shares Shares Shares Series-TH Shares Series-T Series-TH ========================================================================================================================== Robert P. Bremner For 5,855,742 1,762 7,861,921 817 1,678 Withhold 57,368 27 73,171 11 2 - -------------------------------------------------------------------------------------------------------------------------- Total 5,913,110 1,789 7,935,092 828 1,680 ========================================================================================================================== Lawrence H. Brown For 5,851,972 1,762 7,861,281 817 1,678 Withhold 61,138 27 73,811 11 2 - -------------------------------------------------------------------------------------------------------------------------- Total 5,913,110 1,789 7,935,092 828 1,680 ========================================================================================================================== Anne E. Impellizzeri For 5,851,972 1,762 7,857,921 817 1,678 Withhold 61,138 27 77,171 11 2 - -------------------------------------------------------------------------------------------------------------------------- Total 5,913,110 1,789 7,935,092 828 1,680 ========================================================================================================================== Peter R. Sawers For 5,855,742 1,762 7,861,101 817 1,678 Withhold 57,368 27 73,991 11 2 - -------------------------------------------------------------------------------------------------------------------------- Total 5,913,110 1,789 7,935,092 828 1,680 ========================================================================================================================== Judith M. Stockdale For 5,850,472 1,762 7,861,654 817 1,678 Withhold 62,638 27 73,438 11 2 - -------------------------------------------------------------------------------------------------------------------------- Total 5,913,110 1,789 7,935,092 828 1,680 ========================================================================================================================== William J. Schneider For -- 1,762 -- 817 1,678 Withhold -- 27 -- 11 2 - -------------------------------------------------------------------------------------------------------------------------- Total -- 1,789 -- 828 1,680 ========================================================================================================================== Timothy R. Schwertfeger For -- 1,762 -- 817 1,678 Withhold -- 27 -- 11 2 - -------------------------------------------------------------------------------------------------------------------------- Total -- 1,789 -- 828 1,680 ========================================================================================================================== RATIFICATION OF AUDITORS WAS REACHED AS FOLLOWS: For 5,859,025 1,761 7,835,801 814 1,673 Against 19,935 2 37,861 14 6 Abstain 34,150 26 61,430 -- 1 - -------------------------------------------------------------------------------------------------------------------------- Total 5,913,110 1,789 7,935,092 828 1,680 ==========================================================================================================================
Report of INDEPENDENT AUDITORS THE BOARD OF TRUSTEES AND SHAREHOLDERS NUVEEN GEORGIA PREMIUM INCOME MUNICIPAL FUND NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND NUVEEN NORTH CAROLINA PREMIUM INCOME MUNICIPAL FUND NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND We have audited the accompanying statements of net assets, including the portfolios of investments, of Nuveen Georgia Premium Income Municipal Fund, Nuveen Maryland Premium Income Municipal Fund, Nuveen North Carolina Premium Income Municipal Fund and Nuveen Virginia Premium Income Municipal Fund as of May 31, 2000, 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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of May 31, 2000, by correspondence with the custodian and brokers. 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 Georgia Premium Income Municipal Fund, Nuveen Maryland Premium Income Municipal Fund, Nuveen North Carolina Premium Income Municipal Fund and Nuveen Virginia Premium Income Municipal Fund at May 31, 2000, and the results of their operations, changes in their net assets and financial highlights for the periods indicated therein in conformity with generally accepted accounting principles. /S/ Ernst & Young LLP Chicago, Illinois July 20, 2000 Nuveen Georgia Premium Income Municipal Fund (NPG) Portfolio of INVESTMENTS May 31, 2000
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 5.9% $ 3,000 Albany Dougherty Payroll Development Authority, Solid Waste 5/08 at 101 AA $ 2,542,410 Disposal Revenue Bonds (The Procter & Gamble Paper Products Company Project), 1998 Series, 5.300%, 5/15/26 (Alternative Minimum Tax) 2,000 Development Authority of Cartersville, Sewage Facilities Refunding 5/07 at 101 A+ 1,956,040 Revenue Bonds (Anheuser-Busch Project), Series 1997, 6.125%, 5/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 10.3% Urban Residential Finance Authority of the City of Atlanta, Dormitory Facility Refunding Revenue Bonds (Morehouse College Project), Series 1995: 1,210 5.750%, 12/01/20 12/05 at 102 AAA 1,186,466 1,375 5.750%, 12/01/25 12/05 at 102 AAA 1,331,261 1,555 Development Authority of DeKalb County, Revenue Bonds 10/04 at 102 Aa1 1,581,435 (Emory University Project), Series 1994-A, 6.000%, 10/01/14 2,650 Private Colleges and Universities Authority, Student Housing 6/09 at 102 A 2,217,494 Revenue Bonds (Mercer Housing Corporation Project), Tax-Exempt Series 1999A, 5.375%, 6/01/31 1,550 Private Colleges and Universities Authority, Revenue Bonds 6/03 at 102 AA 1,475,213 (Agnes Scott College Project), Series 1993, 5.625%, 6/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 10.2% 3,000 Hospital Authority of Albany-Dougherty County, Revenue Bonds 9/03 at 102 AAA 2,966,760 (Phoebe Putney Memorial Hospital), Series 1993, 5.700%, 9/01/13 1,965 The Hospital Authority of Hall County and the City of Gaines- 10/05 at 102 AAA 1,928,451 ville, Revenue Anticipation Certificates (Northeast Georgia Healthcare Project), Series 1995, 6.000%, 10/01/25 3,000 The Glynn-Brunswick Memorial Hospital Authority, Revenue Antici- 8/06 at 102 AAA 2,866,560 pation Certificates (Southeast Georgia Health Systems Project), Series 1996, 5.250%, 8/01/13 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 13.0% 1,145 Housing Authority of Clayton County, Multifamily Housing Revenue 12/05 at 102 AAA 1,094,815 Bonds, Series 1995 (The Advantages Project), 5.800%, 12/01/20 3,400 Housing Authority of the County of DeKalb, Multifamily Housing 1/05 at 102 AAA 3,549,804 Revenue Bonds (The Lakes at Indian Creek Apartments Project), Series 1994, 7.150%, 1/01/25 (Alternative Minimum Tax) 970 Housing Authority of the City of Decatur, Mortgage Revenue 7/02 at 102 AAA 984,492 Refunding Bonds, Series 1992A (FHA- Insured Mortgage Loan - Park Trace Apartments, Section 8 Assisted Project), 6.450%, 7/01/25 3,000 Macon-Bibb County Urban Development Authority, Multifamily Housing 1/04 at 103 AAA 2,752,890 Refunding Revenue Bonds, Series 1997A, 5.550%, 1/01/24 1,500 Housing Authority of the City of Marietta, Multifamily Housing 10/06 at 102 AAA 1,469,220 Revenue Bonds (GNMA Collateralized - Country Oaks Apartments), Series 1996, 6.150%, 10/20/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 5.0% 345 Housing Authority of Fulton County, Single Family Mortgage 3/05 at 102 AAA 348,885 Revenue Bonds (GNMA Mortgage-Backed Securities Program), Series 1995A, 6.550%, 3/01/18 (Alternative Minimum Tax) 2,995 Georgia Housing and Finance Authority, Single Family Mortgage 6/04 at 102 AAA 3,034,983 Bonds, 1994 Series A (FHA-Insured or VA Guaranteed Mortgage Loans), 6.500%, 12/01/17 (Alternative Minimum Tax) 420 Georgia Housing and Finance Authority, Single Family Mortgage 6/06 at 102 AAA 422,344 Bonds, 1996 Series A, Subseries A-2, 6.450%, 12/01/27 (Alternative Minimum Tax) PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 7.5% $ 2,500 Forsyth County School District, General Obligation Bonds, 2/10 at 102 Aa2 $ 2,456,300 Series 1999, 5.750%, 2/01/19 3,500 Commonwealth of Puerto Rico, Public Improvement Bonds of 1996, 7/06 at 101 1/2 A 3,200,960 5.400%, 7/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 17.8% 1,000 Downtown Development Authority of the City of Atlanta, 10/02 at 102 AA 1,032,560 Refunding Revenue Bonds (Underground Atlanta Project), Series 1992, 6.250%, 10/01/12 3,000 Solid Waste Management Authority of the City of Atlanta, Revenue 12/06 at 100 AA 2,711,760 Bonds (Landfill Closure Project), Series 1996, 5.250%, 12/01/21 4,000 The Hospital Authority of Clarke County, Hospital Revenue Certif- 1/09 at 101 AAA 3,477,120 icates (Athens Regional Medical Center Project), Series 1999, 5.250%, 1/01/29 3,000 Cobb-Marietta Coliseum and Exhibit Hall Authority, Revenue 10/19 at 100 AAA 2,899,860 Refunding Bonds, Series 1993, 5.625%, 10/01/26 2,000 The Fulton-DeKalb Hospital Authority, Revenue Refunding Certifi- 7/03 at 102 AAA 1,873,560 cates, Series 1993, 5.500%, 1/01/20 1,000 Metropolitan Atlanta Rapid Transit Authority, Sales Tax Revenue No Opt. Call AAA 1,047,440 Bonds, Refunding Series P, 6.250%, 7/01/20 500 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/03 at 101 1/2 A 454,100 Bonds (Series W), 5.250%, 7/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 3.5% 1,500 City of Atlanta, Airport Facilities Revenue Bonds, Series 1990, 1/01 at 102 AAA 1,543,185 6.250%, 1/01/21 (Alternative Minimum Tax) 1,000 City of Atlanta, Airport Facilities Revenue Refunding Bonds, No Opt. Call AAA 1,072,930 Series 1994A, 6.500%, 1/01/09 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 12.4% 3,115 City of Albany, Sewerage System Revenue Bonds, Series 1992, 7/02 at 102 AAA 3,274,145 6.625%, 7/01/17 (Pre-refunded to 7/01/02) 500 City of Atlanta, General Obligation Public Improvement Bonds, 12/04 at 102 AA*** 527,130 Series 1994A, 6.100%, 12/01/19 (Pre-refunded to 12/01/04) 3,450 City of Atlanta, Water and Sewerage Revenue Bonds, Series 1993, 1/04 at 100 AAA 3,499,127 5.000%, 1/01/15 (Pre-refunded to 1/01/04) 2,000 Fulco Hospital Authority, Revenue Anticipation Certificates 9/02 at 102 Baa1*** 2,088,420 (Georgia Baptist Health Care System Project), Series 1992A, 6.375%, 9/01/22 (Pre-refunded to 9/01/02) - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 13.8% 4,500 Development Authority of Burke County, Pollution Control Revenue 5/04 at 102 A 3,824,100 Bonds (Georgia Power Company - Vogtle Plant Project), Third Series 1999, 5.450%, 5/01/34 (Alternative Minimum Tax) 1,900 Municipal Electric Authority of Georgia, General Power Revenue 1/03 at 100 AAA 1,798,540 Bonds, Series 1992B, 5.500%, 1/01/18 1,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, No Opt. Call AAA 965,670 Series Z, 5.500%, 1/01/20 1,750 Municipal Electric Authority of Georgia, Project One Special No Opt. Call A 1,837,587 Obligation Bonds, Fifth Crossover Series, 6.400%, 1/01/09 2,000 Development Authority of Monroe County, Pollution Control 9/00 at 101 AA- 2,002,720 Revenue Bonds (Gulf Power Company - Plant Scherer Project), First Series 1994, 6.300%, 9/01/24 Nuveen Georgia Premium Income Municipal Fund (NPG) (continued) Portfolio of INVESTMENTS May 31, 2000 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 1.3% $ 1,000 City of Milledgeville, Water and Sewerage Revenue and Refunding No Opt. Call AAA $ 1,015,150 Bonds, Series 1996, 6.000%, 12/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ $ 79,295 Total Investments (cost $76,923,675) - 100.7% 76,311,887 ================-------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - (0.7)% (521,000) -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 75,790,887 ==================================================================================================================== * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Securities are normally considered to be equivalent to AAA rated securities. See accompanying notes to financial statements. Nuveen Maryland Premium Income Municipal Fund (NMY) Portfolio of INVESTMENTS May 31, 2000 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 7.8% $ 1,000 Maryland Economic Development Corporation, Student Housing 6/09 at 102 Baa3 $ 933,010 Revenue Bonds (Collegiate Housing Foundation - Salisbury Project), Series 1999A, 6.000%, 6/01/19 1,500 Maryland Economic Development Corporation, Student Housing Revenue 6/09 at 102 Baa3 1,322,145 Bonds (Collegiate Housing Foundation - University Courtyard Project), Series 1999A, 5.750%, 6/01/24 1,500 Maryland Health and Higher Educational Facilities Authority, 10/09 at 101 A 1,240,545 Revenue Bonds, Loyola College Issue, Series 1999, 5.000%, 10/01/39 1,000 Maryland Health and Higher Educational Facilities Authority, 7/09 at 101 AA 988,780 Revenue Bonds, The Johns Hopkins University Issue, Series 1999, 6.000%, 7/01/39 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 AA 977,430 1,500 5.625%, 7/01/27 7/07 at 102 AA 1,421,235 9,445 Morgan State University, Academic Fees and Auxiliary Facilities No Opt. Call AAA 9,806,555 Fees, Revenue Refunding Bonds, 1993 Series, 6.100%, 7/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 16.2% City of Gaithersburg, Hospital Facilities Refunding and Improvement Revenue Bonds (Shady Grove Adventist Hospital), Series 1995: 2,550 6.500%, 9/01/12 No Opt. Call AAA 2,764,175 3,765 5.500%, 9/01/15 9/05 at 102 AAA 3,631,041 1,900 Maryland Economic Development Corporation (Health and Mental 4/11 at 102 N/R 1,692,254 Hygiene Providers Facilities Acquisition Program), Revenue Bonds, Series 1996A, 7.625%, 4/01/21 2,000 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101 A 1,780,340 Kaiser Permanente Revenue Bonds, 1998 Series A, 5.375%, 7/01/15 750 Maryland Health and Higher Educational Facilities Authority, 7/10 at 101 Baa1 737,618 Revenue Bonds, University of Maryland Medical System Issue, Series 2000, 6.750%, 7/01/30 1,855 Maryland Health and Higher Educational Facilities Authority, 7/03 at 102 AAA 1,727,395 Refunding Revenue Bonds, Francis Scott Key Medical Center Issue, Series 1993, 5.000%, 7/01/13 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 AAA 882,560 1,250 5.000%, 7/01/29 7/08 at 101 AAA 1,064,538 2,350 Maryland Health and Higher Educational Facilities Authority, 7/03 at 102 AAA 2,320,790 Project and Refunding Revenue Bonds, Sinai Hospital of Baltimore Issue, Series 1993, 5.500%, 7/01/13 6,500 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101 AAA 5,669,365 Revenue Bonds, Anne Arundel Medical Center Issue, Series 1998, 5.125%, 7/01/28 4,000 Maryland Health and Higher Educational Facilities Authority, 1/08 at 101 Aaa 3,420,040 Revenue Bonds Upper Chesapeake Hospitals Issue, Series 1998A, 5.125%, 1/01/38 1,670 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101 A3 1,331,157 Hospital Refunding and Revenue Bonds, Union Hospital of Cecil County Issue, Series 1998, 5.100%, 7/01/22 Prince Georges County, Project and Refunding Revenue Bonds (Dimensions Health Corporation Issue), Series 1994: 825 5.000%, 7/01/05 7/04 at 102 Baa1 716,166 3,080 5.375%, 7/01/14 7/04 at 102 Baa1 2,419,094 6,000 5.300%, 7/01/24 7/04 at 102 Baa1 4,280,760 Nuveen Maryland Premium Income Municipal Fund (NMY) (continued) Portfolio of INVESTMENTS May 31, 2000 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 16.4% $ 4,000 Anne Arundel County, Multifamily Housing Revenue Bonds No Opt. Call BBB $ 4,173,000 (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, Mortgage Revenue 5/05 at 102 AAA 1,807,296 Refunding Bonds, Series 1995A (Holly Station IV Townhouses Project - FHA-Insured Mortgage Loan), 6.450%, 5/01/26 Howard County, Mortgage Revenue Refunding Bonds, Series 1996A (FHA-Insured Mortgage Loan - Normandy Woods III Apartments Project): 700 6.000%, 7/01/17 7/06 at 102 AAA 691,859 2,000 6.100%, 7/01/25 7/06 at 102 AAA 1,957,160 620 Community Development Administration, Maryland Department of 5/02 at 102 Aa2 632,834 Housing and Community Development, Multifamily Housing Revenue Bonds (Insured Mortgage Loans), 1992 Series A, 6.850%, 5/15/33 (Alternative Minimum Tax) 1,150 Community Development Administration, Maryland Department of 5/03 at 102 Aa2 1,176,922 Housing and Community Development, Multifamily Housing Revenue Bonds (Insured Mortgage Loans), 1993 Series B, 6.625%, 5/15/23 2,500 Community Development Administration, Maryland Department of 1/09 at 101 Aa2 2,131,575 Housing and Community Development, Housing Revenue Bonds, 1999 Series A, 5.350%, 7/01/41 (Alternative Minimum Tax) 880 Community Development Administration, Maryland Department of 1/10 at 100 Aa2 879,938 Housing and Community Development, Housing Revenue Bonds, 1999 Series B, 6.250%, 7/01/32 (Alternative Minimum Tax) 3,075 Community Development Administration, Maryland Department of 5/03 at 102 Aa 3,032,811 Housing and Community Development, Multifamily Housing Revenue Bonds (Insured Mortgage Loans), 1993 Series D, 6.050%, 5/15/24 2,000 Housing Opportunities Commission of Montgomery County, Multifamily 7/05 at 102 Aa2 1,955,020 Housing Revenue Bonds, 1995 Series A, 5.900%, 7/01/15 1,500 Housing Opportunities Commission of Montgomery County, Multifamily 7/06 at 102 Aaa 1,427,235 Housing Revenue Bonds, 1996 Series B, 5.900%, 7/01/26 3,830 Housing Opportunities Commission of Montgomery County, Multifamily 7/08 at 101 Aaa 3,329,113 Housing Development Bonds, 1998 Series A, 5.200%, 7/01/30 1,000 Housing Authority of Prince Georges County, Mortgage Revenue 1/03 at 102 AAA 1,012,280 Refunding Bonds, Series 1993A (GNMA Collateralized - Stevenson Apartments Project), 6.350%, 7/20/20 Housing Authority of Prince Georges County, Mortgage Revenue Refunding Bonds, Series 1993A (Cherry Hill Apartments Project): 1,090 5.900%, 9/20/10 9/03 at 102 AAA 1,095,788 1,930 6.000%, 9/20/15 9/03 at 102 AAA 1,905,103 1,500 Housing Authority of Prince Georges County, Mortgage Revenue 12/04 at 102 AAA 1,552,035 Refunding Bonds, Series 1995A (GNMA Collateralized - Riverview Terrace Apartments Project), 6.700%, 6/20/20 Housing Authority of Prince Georges County, Mortgage Revenue Refunding Bonds, Series 1995A (GNMA Collateralized - Overlook Apartments Project): 2,000 5.700%, 12/20/15 12/05 at 102 AAA 1,914,480 1,670 5.750%, 12/20/19 12/05 at 102 AAA 1,574,643 1,000 Housing Authority of Prince Georges County, Mortgage Revenue 11/00 at 100 AAA 967,920 Refunding Bonds (Collateralized Foxglenn Apartments Project), Series 1998A, 5.450%, 11/20/14 (Alternative Minimum Tax) 540 Housing Authority of Prince Georges County, Mortgage Revenue 9/09 at 102 AAA 518,821 Bonds, Series 1999 (GNMA Collateralized - University Landing at Langley Apartments Project), 6.100%, 3/20/41 (Alternative Minimum Tax) 1,000 City of Salisbury, Mortgage Revenue Refunding Bonds, Series 1995A 12/04 at 102 AAA 1,025,430 (FHA-Insured Mortgage Loan - College Lane Apartments Project), 6.600%, 12/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 6.8% 595 Community Development Administration, Maryland Department of 4/04 at 102 Aa2 596,398 Housing and Community Development, Single Family Program Bonds, 1994 First Series, 5.900%, 4/01/11 1,000 Community Development Administration, Maryland Department of 4/04 at 102 Aa 1,013,920 Housing and Community Development, Single Family Program Bonds, 1994 Fourth Series, 6.450%, 4/01/14 2,635 Community Development Administration, Maryland Department of 4/04 at 102 Aa 2,664,986 Housing and Community Development, Single Family Program Bonds, 1994 Fifth Series, 6.750%, 4/01/26 (Alternative Minimum Tax) PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY (continued) $ 660 Community Development Administration, Maryland Department of 4/03 at 102 Aa2 $ 673,490 Housing and Community Development, Single Family Program Bonds, 1992 Fourth Series, 6.800%, 4/01/22 (Alternative Minimum Tax) 1,750 Community Development Administration, Maryland Department of 4/04 at 102 Aa 1,714,843 Housing and Community Development, Single Family Program Bonds, 1993 Third Series, 4.950%, 4/01/06 1,500 Community Development Administration, Maryland Department of 9/09 at 100 Aa2 1,498,590 Housing and Community Development, Residential Revenue Bonds, 1999 Series H, 6.250%, 3/01/31 (Alternative Minimum Tax) 1,000 Community Development Administration, Maryland Department of 9/09 at 100 Aa2 973,250 Housing and Community Development, Infrastructure Financing Bonds (MBIA Insured), 2000 Series A, 6.150%, 9/01/32 (Alternative Minimum Tax) 1,000 Community Development Administration, Maryland Department of 4/06 at 102 Aa2 998,710 Housing and Community Development, Single Family Program Bonds, 1996 Sixth Series, 6.200%, 4/01/22 (Alternative Minimum Tax) 1,955 Housing Opportunities Commission of Montgomery County, Single 7/04 at 102 Aa2 2,009,310 Family Mortgage Revenue Bonds, 1994 Series A, 6.600%, 7/01/14 905 Housing Authority of Prince Georges County, GNMA/FNMA Collater- 6/04 at 102 AAA 912,620 alized Single Family Mortgage Revenue Bonds, Series 1994A, 6.350%, 6/01/11 (Alternative Minimum Tax) 1,665 Housing Authority of Prince Georges County, FHLMC/FNMA/GNMA 8/07 at 102 AAA 1,552,912 Collateralized, Single Family Mortgage Revenue Bonds, Series 1997, 5.625%, 8/01/17 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 0.4% 1,000 Carroll County, Revenue Bonds, EMA Obligated Group Issue (Fair- 1/09 at 101 AA 933,230 haven and Copper Ridge), Refunding Revenue Bonds, Series 1999A, 5.625%, 1/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 8.2% 1,000 Baltimore County, General Obligation Bonds, Baltimore County 8/03 at 102 AAA 951,400 Metropolitan District Bonds (64th Issue), 4.900%, 8/01/11 1,000 Mayor and City Council of Baltimore, General Obligation Serial No Opt. Call A1 1,110,000 Bonds, Consolidated Public Improvement Bonds of 1989, Series B, 7.150%, 10/15/08 Mayor and City Council of Baltimore, General Obligation Consolidated Public Improvement Refunding Bonds of 1995, Series A: 1,200 7.375%, 10/15/03 No Opt. Call AAA 1,283,268 5,000 7.250%, 10/15/04 No Opt. Call AAA 5,409,050 1,000 Mayor and City Council of Baltimore, General Obligation Serial No Opt. Call AAA 1,068,910 Bonds, Consolidated Public Improvement Bonds of 1991, Series C, 6.375%, 10/15/07 3,000 Frederick County, Maryland, General Obligation Public Facilities 7/09 at 101 AA 2,802,210 Bonds of 1999, 5.250%, 7/01/18 3,000 Montgomery County, Maryland, Consolidated Public Improvement Bonds, 1/10 at 101 AAA 2,994,750 General Obligation Bonds, Series 2000A, 5.750%, 1/01/19 1,000 Prince Georges County, Maryland, Consolidated Public Improvement 3/03 at 102 AAA 1,018,930 Bonds, General Obligation Bonds, Series 1993, 5.750%, 3/15/09 500 Commonwealth of Puerto Rico, Public Improvement Bonds of 2000, 7/10 at 100 AAA 491,680 5.750%, 7/01/26 460 Wicomico County, Maryland, General Obligation Public Improvement 12/09 at 101 AAA 459,200 Bonds of 1999, 5.750%, 12/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 8.3% 2,730 Anne Arundel County, General Obligation Bonds, Consolidated Water 4/03 at 102 AA+ 2,676,710 and Sewer, 1993 Refunding Series, 5.250%, 4/15/12 1,000 Mayor and City Council of Baltimore, Certificates of Participation 10/07 at 102 AAA 911,660 (Emergency Telecommunications Facilities), Series 1997A, 5.000%, 10/01/17 1,465 Maryland Department of Housing and Community Development, Community 6/08 at 101 Aaa 1,291,354 Development Administration, Infrastructure Financing Bonds (MBIA Insured), 1998 Series B, 5.200%, 6/01/28 4,455 Maryland Stadium Authority, Sports Facilities Lease Revenue Bonds, 3/06 at 101 AAA 4,408,178 Series 1996, 5.750%, 3/01/18 1,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/16 at 100 A 915,130 Bonds, Series Y of 1996, 5.500%, 7/01/36 2,200 Puerto Rico Public Buildings Authority, Public Education and 7/03 at 101 1/2 A 2,200,352 Health Facilities Refunding Bonds, Series M, Guaranteed by the Commonwealth of Puerto Rico, 5.750%, 7/01/15 Nuveen Maryland Premium Income Municipal Fund (NMY) (continued) Portfolio of INVESTMENTS May 31, 2000 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 2,000 Virgin Islands Public Finance Authority, Revenue Bonds (Virgin 10/10 at 101 BBB- $ 1,998,560 Islands Gross Receipts Taxes Loan Note), Series 1999A, 6.500%, 10/01/24 1,250 Washington Suburban Sanitary District (Montgomery and Prince 1/02 at 102 Aa1 1,293,600 Georges Counties), General Construction Refunding Bonds of 1991 (Second Series), 6.100%, 1/01/04 Washington Suburban Sanitary District (Montgomery and Prince Georges Counties), General Construction Bonds of 2000: 1,085 5.250%, 6/01/20 6/10 at 100 Aa1 1,002,225 1,205 5.250%, 6/01/21 6/10 at 100 Aa1 1,107,998 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 5.2% 5,500 Maryland Transportation Authority, Special Obligation Revenue 7/04 at 102 AAA 5,637,720 Bonds, Baltimore/Washington International Airport Projects, Series 1994-A (Qualified Airport Bonds), 6.250%, 7/01/14 (Alternative Minimum Tax) 1,500 Maryland Transportation Authority, Transportation Facilities 7/02 at 100 A+ 1,504,140 Project Revenue Bonds, Series 1992, 5.750%, 7/01/15 2,075 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 6/06 at 102 Baa2 1,970,524 1996 Series A (American Airlines, Inc. Project), 6.250%, 6/01/26 (Alternative Minimum Tax) 2,000 Washington Metropolitan Area Transit Authority (District of No Opt. Call AAA 2,084,680 Columbia), Gross Revenue Transit Refunding Bonds, Series 1993, 6.000%, 7/01/07 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 5.8% 1,875 Maryland Health and Higher Educational Facilities Authority, 7/03 at 102 AAA 1,869,506 Revenue Bonds, Good Samaritan Hospital Issue, Series 1993, 5.750%, 7/01/19 3,125 Maryland Health and Higher Educational Facilities Authority, 7/03 at 102 Aaa 2,975,969 Revenue Bonds, Howard County General Hospital Issue, Series 1993, 5.500%, 7/01/25 2,500 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 2,194,425 Revenue Bonds, Helix Health Issue, Series 1997, 5.000%, 7/01/27 3,000 Maryland Transportation Authority, Transportation Facilities 7/01 at 102 A+*** 3,112,800 Project Revenue Bonds, Series 1991, 6.500%, 7/01/06 (Pre-refunded to 7/01/01) 1,010 Puerto Rico Telephone Authority, Revenue Bonds, Series N, 5.500%, 1/03 at 101 1/2 AAA 1,042,956 1/01/22 (Pre-refunded to 1/01/03) 1,115 Washington Suburban Sanitary District (Montgomery and Prince 6/02 at 102 Aa1*** 1,162,064 Georges Counties), Water Supply Bonds of 1992, 6.200%, 6/01/09 (Pre-refunded to 6/01/02) - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 19.6% 6,000 Anne Arundel County, Pollution Control Revenue Refunding Bonds 4/04 at 102 A 5,861,940 (Baltimore Gas and Electric Company Project), Series 1994, 6.000%, 4/01/24 6,500 Calvert County, Pollution Control Revenue Refunding Bonds 7/04 at 102 A 6,402,760 (Baltimore Gas and Electric Company Project), Series 1993, 5.550%, 7/15/14 9,600 Montgomery County, Solid Waste System Revenue Bonds (1993 Series 6/03 at 102 AAA 9,641,184 A), 5.875%, 6/01/13 (Alternative Minimum Tax) Northeast Maryland Waste Disposal Authority, Resource Recovery Revenue Refunding Bonds (Southwest Resource Recovery Facility), Series 1993: 3,000 7.150%, 1/01/04 No Opt. Call AAA 3,193,260 4,675 7.200%, 1/01/05 1/04 at 102 AAA 5,049,887 5,000 Prince Georges County, Pollution Control Revenue Refunding Bonds 1/03 at 102 A1 5,066,250 (Potomac Electric Project), 1993 Series, 6.375%, 1/15/23 5,750 Prince Georges County, Solid Waste Management System Revenue 6/03 at 102 AAA 5,521,724 Bonds, Series 1993, 5.250% 6/15/13 1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/04 at 100 BBB+ 944,820 Series T, 5.500%, 7/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 2.6% 3,000 Mayor and City Council of Baltimore, Project and Refunding No Opt. Call AAA 2,625,420 Revenue Bonds (Water Projects), Series 1994-A, 5.000%, 7/01/24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 2,250 Mayor and City Council of Baltimore, Project and Refunding 7/08 at 101 AAA $ 1,932,614 Revenue Bonds (Water Projects), Series 1998-A, 5.000%, 7/01/28 1,000 Mayor and City Council of Baltimore, Project and Refunding 7/06 at 101 AAA 935,060 Revenue Bonds (Water Projects), Series 1996-A, 5.500%, 7/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ $ 214,910 Total Investments (cost $212,953,464) - 97.3% 207,555,383 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.7% 5,843,862 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 213,399,245 ====================================================================================================================
* Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. See accompanying notes to financial statements. Nuveen North Carolina Premium Income Municipal Fund (NNC) Portfolio of INVESTMENTS May 31, 2000
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ BASIC MATERIALS - 3.9% $ 3,500 The Haywood County Industrial Facilities and Pollution Control 12/05 at 102 Baa1 $ 3,050,180 Financing Authority, Environmental Improvement Revenue Bonds (Champion International Corporation Project), Series 1995A, 5.750%, 12/01/25 (Alternative Minimum Tax) 2,000 The Haywood County Industrial Facilities and Pollution Control 3/06 at 102 Baa1 1,849,720 Financing Authority, Pollution Control Refunding Revenue Bonds (Champion International Corporation Project), Series 1995, 6.000%, 3/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 9.0% 2,300 Appalachian State University, Utilities System Revenue Refunding 5/08 at 102 AAA 2,059,696 Bonds, Series 1998 of The Board of Governors of the University of North Carolina, 5.000%, 5/15/18 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 A 1,003,420 2,400 6.300%, 7/01/15 (Alternative Minimum Tax) 7/05 at 102 A 2,414,112 5,875 North Carolina State Education Assistance Authority (A Political 7/06 at 102 A 5,913,305 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 - 14.8% The Charlotte-Mecklenburg Hospital Authority, Health Care System Revenue Bonds, Series 1992: 1,500 5.750%, 1/01/12 1/02 at 102 AA 1,499,280 2,150 6.250%, 1/01/20 1/02 at 102 AA 2,159,761 2,725 County of New Hanover, Hospital Revenue Bonds (New Hanover 10/03 at 102 AAA 2,230,685 Regional Medical Center Project), Series 1993, 4.750%, 10/01/23 2,000 North Carolina Medical Care Commission, Hospital Revenue Bonds 10/09 at 101 A 1,929,200 (Southeastern Regional Medical Center), Series 1999, 6.375%, 10/01/29 3,000 North Carolina Medical Care Commission, Hospital Revenue 5/02 at 102 AA 2,854,740 Refunding 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 AA- 4,433,492 (FirstHealth of the Carolinas Project), Series 1998, 4.750%, 10/01/26 4,090 Board of Governors of the University of North Carolina, 2/06 at 102 AA 3,586,235 University of North Carolina Hospitals at Chapel Hill, Revenue Bonds, Series 1996, 5.250%, 2/15/26 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 2.8% 1,000 Housing Authority of the City of Asheville, Multifamily Housing 11/07 at 102 AAA 920,710 Revenue Bonds (GNMA Collateralized - Woodridge Apartments), Series 1997, 5.800%, 11/20/39 (Alternative Minimum Tax) 1,000 City of Charlotte, Mortgage Revenue Refunding Bonds (FHA-Insured 1/03 at 105 AAA 967,770 Mortgage Loan - Tryon Hills Apartments Project), Series 1993A, 5.875%, 1/01/25 North Carolina Housing Finance Agency, Multifamily Revenue Bonds (1993 FHA-Insured Mortgage Loan Resolution), Series 1993: 650 5.800%, 7/01/14 1/03 at 102 AA 643,806 1,000 5.900%, 7/01/26 1/03 at 102 AA 961,390 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 16.9% 4,945 North Carolina Housing Finance Agency, Single Family Revenue Bonds, 3/04 at 102 AA 5,019,521 Series X (1985 Resolution), 6.700%, 9/01/26 (Alternative Minimum Tax) Principal Optional Call Market Amount (000) Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY (continued) $ 2,710 North Carolina Housing Finance Agency, Single Family Revenue Bonds, 9/02 at 102 AA $ 2,755,447 Series V (1985 Resolution), 6.800%, 9/01/25 (Alternative Minimum Tax) 3,000 North Carolina Housing Finance Agency, Home Ownership Revenue 7/09 at 100 AA 2,741,640 Bonds, Series 5-A (1998 Trust Agreement), 5.625%, 7/01/30 (Alternative Minimum Tax) 6,600 North Carolina Housing Finance Agency, Home Ownership Revenue Bonds, 7/09 at 100 AA 6,573,270 Series 6-A (1998 Trust Agreement), 6.200%, 1/01/29 4,125 North Carolina Housing Finance Agency, Single Family Revenue Bonds, 3/06 at 102 AA 4,119,266 Series HH (1985 Resolution), 6.300%, 3/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 6.1% 2,000 Orange County, General Obligation School Bonds, Series 1994, 2/04 at 102 AA+ 2,019,940 5.500%, 2/01/11 6,250 Commonwealth of Puerto Rico, Public Improvement Bonds of 1996, 7/06 at 101 1/2 A 5,716,000 5.400%, 7/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 15.4% 2,500 Centennial Authority, Hotel Tax Revenue Bonds (Arena Project), 9/07 at 102 AAA 2,238,350 Series 1997, 5.125%, 9/01/19 6,000 City of Charlotte, Refunding Certificates of Participation 12/03 at 102 AAA 5,456,760 (Convention Facility Project), Series 1993C, 5.250%, 12/01/20 2,180 The City of Concord, Certificates of Participation, Series 1996A, 6/06 at 102 AAA 2,196,437 6.125%, 6/01/21 3,970 Durham, North Carolina, Certificates of Participation, 7/02 at 102 AA 4,152,699 Water Utility Improvements, 6.375%, 7/15/12 750 Johnson County Finance Corporation, Installment Payment 8/09 at 101 AAA 684,263 Revenue Bonds (School and Museum Projects), Series 1999, 5.250%, 8/01/21 5,000 Puerto Rico Highway and Transportation Authority, 7/06 at 101 1/2 AAA 4,719,300 Highway Revenue Bonds, Series Y of 1996, 5.500%, 7/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 9.9% The Charlotte-Mecklenburg Hospital Authority, Health Care System Revenue Bonds, Series 1992: 1,000 5.750%, 1/01/12 (Pre-refunded to 1/01/02) 1/02 at 102 AA*** 1,030,730 2,940 6.250%, 1/01/20 (Pre-refunded to 1/01/02) 1/02 at 102 AA*** 3,052,484 2,855 North Carolina Municipal Power Agency Number 1, No Opt. Call AAA 3,566,894 Catawba Electric Revenue Bonds, Series 1980, 10.500%, 1/01/10 2,400 Puerto Rico Commonwealth Highway Authority, 7/00 at 100 A*** 2,403,192 Highway Revenue Bonds, Series 1990-Q, 6.000%, 7/01/20 (Pre-refunded to 7/01/00) 2,280 Board of Governors of the University of North Carolina, 2/02 at 102 AA*** 2,360,644 University of North Carolina Hospitals at Chapel Hill Revenue Bonds, Series 1992, 6.000%, 2/15/24 (Pre-refunded to 2/15/02) - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 13.6% 1,000 City of Fayetteville, Public Works Commission 3/03 at 100 AAA 893,930 Revenue Refunding Bonds, Series 1993, 4.750%, 3/01/14 5,900 City of Fayetteville, Public Works Commission Revenue Bonds, 3/07 at 101 AAA 5,206,927 Series 1997, 5.125%, 3/01/24 1,500 City of Gastonia, Combined Utilities System Revenue Bonds, 5/08 at 102 AAA 1,320,180 Series 1998, 4.750%, 5/01/15 5,000 North Carolina Eastern Municipal Power Agency, Power System 1/03 at 102 BBB 4,455,900 Revenue Bonds, Series 1993-D, 5.600%, 1/01/16 1,500 North Carolina Eastern Municipal Power Agency, Power System 9/03 at 102 1/2 BBB 1,361,790 Revenue Bonds, Series 1985-G, 5.750%, 12/01/16 4,000 North Carolina Municipal Power Agency Number 1, Catawba Electric 1/10 at 101 BBB+ 3,887,680 Revenue Bonds, Series 1999B, 6.500%, 1/01/20 Nuveen North Carolina Premium Income Municipal Fund (NNC) (continued) Portfolio of INVESTMENTS May 31, 2000 Principal Optional Call Market Amount (000) Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 5.8% $ 2,000 City of Charlotte, Storm Water Fee Revenue Bonds, Series 2000, 6/10 at 101 AA+ $ 2,003,980 6.000%, 6/01/25 (WI) 3,400 Orange Water and Sewer Authority, Water and Sewer System 7/03 at 102 AA 3,177,198 Revenue and Revenue Refunding Bonds, Series 1993, 5.200%, 7/01/16 2,180 County of Union, Enterprise Systems Revenue Bonds, Series 1996, 6/06 at 102 AAA 2,074,531 5.500%, 6/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ $ 129,790 Total Investments (cost $126,505,203) - 98.2% 123,666,455 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities -1.8% 2,300,646 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 125,967,101 ==================================================================================================================== * 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. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. Nuveen Virginia Premium Income Municipal Fund (NPV) Portfolio of INVESTMENTS May 31, 2000 Principal Optional Call Market Amount (000) Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ BASIC MATERIALS - 2.7% $ 500 Industrial Development Authority of the County of Bedford, 2/08 at 102 Baa2 $ 422,500 Industrial Development Refunding 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, 12/09 at 101 Baa2 1,838,383 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, 12/08 at 101 Baa2 850,960 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 N/R 1,788,580 Revenue Bonds (Albion Enterprises, L.L.C. Project), Series 1998A, 6.400%, 1/01/14 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL GOODS - 0.9% 2,000 Industrial Development Authority of the County of Charles, No Opt. Call BBB 1,694,500 Solid Waste Disposal Facility Revenue Refunding Bonds (USA Waste of Virginia, Inc. Project), Series 1999, 4.875%, 2/01/09 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 7.8% Industrial Development Authority of Danville, Student Housing Revenue Bonds (Collegiate Housing Foundation - Averett College Project), Series 1999A: 500 6.875%, 6/01/20 6/09 at 102 N/R 477,425 1,500 7.000%, 6/01/30 6/09 at 102 N/R 1,426,710 Industrial Development Authority of the City of Lynchburg, Educational Facilities Revenue Bonds (Randolph-Macon Womens College), Series 1993: 2,940 5.875%, 9/01/13 9/03 at 102 A- 2,921,008 2,500 5.875%, 9/01/23 9/03 at 102 A- 2,384,100 725 City of Portsmouth, Golf Course System Revenue Bonds, Series 1998, 5/07 at 102 AA 606,470 5.000%, 5/01/23 500 Prince William County Park Authority, Park Facilities 10/09 at 101 A3 479,350 Revenue Refunding and Improvement Bonds, Series 1999, 6.000%, 10/15/28 3,000 Virginia College Building Authority, Educational Facilities 11/04 at 100 AA 2,994,030 Revenue Bonds (University of Richmond Project), Series of 1994, 5.550%, 11/01/19 (Optional put 11/01/04) 2,000 Virginia College Building Authority, Educational Facilities No Opt. Call AAA 1,802,460 Revenue Bonds (The Washington and Lee University Project), Series 1998, 5.250%, 1/01/31 1,000 Virginia College Building Authority, Educational Facilities 4/10 at 101 Aa1 999,330 Revenue Bonds (Hampton University Project), Series 2000, 6.000%, 4/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 9.7% 4,850 Industrial Development Authority of Fairfax County, No Opt. Call AA 4,167,702 Hospital Revenue Refunding Bonds (Inova Health System Hospitals Project), Series 1993A, 5.000%, 8/15/23 4,650 Bon Secours Health System Obligated Group, Industrial Development 8/05 at 102 AAA 4,273,164 Authority of the County of Hanover, Hospital Revenue Bonds, Series 1995 (Bon Secours Health System Projects), 5.500%, 8/15/25 1,500 Industrial Development Authority of the County of Henrico, No Opt. Call AAA 1,564,050 Health Care Revenue Bonds (Bon Secours Health), Series 1996, 6.250%, 8/15/20 5,500 Medical College of Virginia Hospitals Authority, 7/08 at 102 AAA 4,745,840 General Revenue Bonds, Series 1998, 5.125%, 7/01/23 2,500 Industrial Development Authority of the City of Norfolk, 11/04 at 102 AA 2,613,575 Hospital Revenue and Refunding Bonds (Sentara Hospitals - Norfolk), Series 1994A, 6.500%, 11/01/13 Nuveen Virginia Premium Income Municipal Fund (NPV) (continued) Portfolio of INVESTMENTS May 31, 2000 Principal Optional Call Market Amount (000) Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 6.5% $ 840 Industrial Development Authority of Arlington County, 7/05 at 102 A $ 842,864 Multifamily Housing Mortgage Revenue Bonds (Arlington Housing Corporation), 1995 Series, 5.700%, 7/01/07 1,515 Industrial Development Authority of Arlington County, 5/10 at 100 Aaa 1,485,351 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, Multifamily Housing 7/02 at 104 Baa2 4,634,535 Revenue Refunding Bonds, Series 1994 (Chase Hampton II Apartments), 7.000%, 7/01/24 (Mandatory put 7/01/04) 1,495 Economic Development Authority of Henrico County, Beth Sholom 7/09 at 102 AAA 1,427,964 Assisted Living Revenue Bonds, GNMA Mortgage-Backed Securities Financing, Series 1999A, 5.900%, 7/20/29 1,000 Lynchburg Redevelopment and Housing Authority, Vistas Revenue Bonds, 4/10 at 102 AAA 975,440 GNMA Mortgage Backed Securities, Series 2000A, 6.200%, 1/20/40 (Alternative Minimum Tax) 2,355 Suffolk Redevelopment and Housing Authority, Mortgage Revenue 1/01 at 100 AAA 2,357,897 Refunding Bonds, Series 1993 (FHA-Insured Mortgage Loan - Wilson Pines Apartments, Section 8 Assisted Project), 6.125%, 1/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 6.7% 3,240 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1/02 at 102 AA+ 3,254,159 1992 Series B, Subseries B-5, 6.300%, 1/01/27 (Alternative Minimum Tax) Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1992 Series B, Subseries B-6: 4,000 6.200%, 7/01/21 (Alternative Minimum Tax) 1/02 at 102 AA+ 4,012,440 2,945 6.250%, 1/01/27 (Alternative Minimum Tax) 1/02 at 102 AA+ 2,953,217 2,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1/08 at 102 AA+ 1,770,820 1996 Series G, Subseries G-1, 5.300%, 1/01/22 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.5% Industrial Development Authority of the City of Winchester, 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 N/R 1,138,617 2,000 5.750%, 1/01/27 1/03 at 102 N/R 1,618,540 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 6.3% 2,000 The City of Hampton, Public Improvement Bonds of 2000, 2/10 at 102 AA 2,019,020 6.000%, 2/01/20 6,200 Commonwealth of Puerto Rico, Public Improvement Bonds of 1996, 7/06 at 101 1/2 A 5,670,272 5.400%, 7/01/25 1,700 City of Richmond, General Obligation Public Improvement Bonds, 7/03 at 102 AA 1,593,308 Series 1993B, 5.500%, 7/15/23 2,000 City of Winchester, General Obligation Public Improvement 1/04 at 102 AA 1,968,820 and Refunding Bonds, Series of 1994, 5.500%, 1/15/14 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 8.2% County of Cumberland, Certificates of Participation, Series 1997: 1,075 6.200%, 7/15/12 No Opt. Call N/R 1,048,222 1,350 6.375%, 7/15/17 No Opt. Call N/R 1,316,966 500 Industrial Development Authority of Dinwiddie County, 2/07 at 102 N/R 473,660 Lease Revenue Bonds (Dinwiddie County School Facilities Project), Series 1997A, 6.000%, 2/01/18 1,000 Fairfax County Economic Development Authority, Parking Revenue 9/09 at 102 AA 1,009,260 Bonds (Vienna II Metrorail Station Project), 1999 First Series, 6.000%, 9/01/18 Greater Richmond Convention Center Authority, Hotel Tax Revenue Bonds (Convention Center Expansion Project), Series 2000: 500 6.125%, 6/15/25 6/10 at 101 A- 498,080 2,000 6.125%, 6/15/29 6/10 at 101 A- 1,989,180 3,000 Hampton Roads Regional Jail Authority, Regional Jail 7/06 at 102 AAA 2,804,610 Facility Revenue Bonds, Series 1996A, 5.500%, 7/01/24 1,230 Middlesex County Industrial Development Authority, 8/09 at 102 AAA 1,232,755 Lease Revenue Bonds, School Facilities Project, Series 1999, 6.000%, 8/01/24 Principal Optional Call Market Amount (000) Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 2,000 Virgin Islands Public Finance Authority, Revenue Bonds 10/10 at 101 BBB- $ 1,998,560 (Virgin Islands Gross Receipts Taxes Loan Note), Series 1999A, 6.500%, 10/01/24 2,250 Virginia College Building Authority, Educational Facilities 2/09 at 101 AA+ 2,266,515 Revenue Bonds (21st Century College Program), Series 2000, 6.000%, 2/01/20 (WI) - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 5.0% 1,900 Metropolitan Washington Airports Authority, Airport System 10/02 at 102 AAA 1,945,752 Revenue Bonds, Series 1992A, 6.625%, 10/01/19 (Alternative Minimum Tax) 1,400 Metropolitan Washington D.C. Airports Authority, 10/07 at 101 AA- 1,283,366 Airport System Revenue Bonds, Series 1997A, 5.375%, 10/01/23 6,315 Virginia Port Authority, Port Facilities Revenue Bonds, 7/07 at 101 AAA 5,824,325 Series 1997, 5.600%, 7/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 22.0% 4,250 Chesapeake Bay Bridge and Tunnel District, General Resolution 7/01 at 102 AAA 4,406,570 Revenue Bonds, Refunding Series 1991, 6.375%, 7/01/22 (Pre-refunded to 7/01/01) 3,085 Fairfax County Water Authority, Water Refunding Revenue Bonds, 4/02 at 100 AAA 3,128,869 Series 1992, 5.750%, 4/01/29 (Pre-refunded to 4/01/02) 3,000 Prince William County Park Authority, Revenue Bonds, 10/04 at 102 BBB+*** 3,240,750 Series 1994, 6.875%, 10/15/16 (Pre-refunded to 10/15/04) 3,500 Puerto Rico Highway and Transportation Authority, Highway 7/02 at 101 1/2 AAA 3,677,905 Revenue Bonds (Series T), 6.500%, 7/01/22 (Pre-refunded to 7/01/02) 6,800 Valley Resource Authority of the City of Roanoke, 9/02 at 102 A+*** 7,026,168 Solid Waste System Revenue Bonds, Series 1992, 5.750%, 9/01/12 (Pre-refunded to 9/01/02) 5,000 City of Virginia Beach Development Authority, Hospital 11/01 at 102 AA*** 5,194,650 Revenue Bonds (Sentara Bayside Hospital), Series 1991, 6.300%, 11/01/21 (Pre-refunded to 11/01/01) 1,250 Virginia College Building Authority, Educational Facilities 1/04 at 102 AAA 1,301,013 Revenue Bonds (The Washington and Lee University Project), Series of 1994, 5.800%, 1/01/24 (Pre-refunded to 1/01/04) 3,955 Virginia Resources Authority, Water and Sewer System Revenue 10/07 at 100 AA*** 4,036,829 Bonds, 1995 Series A (Sussex County Project), 5.600%, 10/01/25 (Pre-refunded to 10/01/07) 7,035 Commonwealth Transportation Board, Transportation Revenue Bonds, Series 5/04 at 101 Aa1*** 7,376,338 1995A (Northern Virginia Transportation District Program), 6.250%, 5/15/17(Pre-refunded to 5/15/04) - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 9.6% 5,060 Halifax County Industrial Development Authority 12/02 at 102 A+ 5,175,064 (Old Dominion Electric Cooperative), 6.350%, 12/01/07 (Alternative Minimum Tax) 2,250 Industrial Development Authority of the Town of Louisa, 1/04 at 102 A 1,940,198 Pollution Control Revenue Bonds (Virginia Electric and Power Company Project), Series 1994, 5.450%, 1/01/24 5,000 City of Richmond, Public Utility Revenue and Refunding Bonds, 1/08 at 101 AAA 4,355,450 Series 1998A, 5.125%, 1/15/28 6,150 Southeastern Public Service Authority of Virginia, Senior Revenue 7/03 at 102 A- 5,739,119 Bonds, Series 1993 (Regional Solid Waste System), 6.000%, 7/01/17 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 10.1% 2,000 Fairfax County, Sewer Revenue Bonds, Series 1996, 5.875%, 7/15/28 7/06 at 102 AAA 1,963,420 2,400 Henrico County, Water and Sewer System Revenue and Refunding 5/09 at 102 Aa2 2,045,688 Revenue Bonds, Series 1999, 5.000%, 5/01/28 1,500 Henry County Public Service Authority, Water and Sewer Refunding 11/01 at 101 AAA 1,511,280 Revenue Bonds, Series 1991, 6.250%, 11/15/19 6,200 City of Norfolk, Water Revenue Bonds, Series 1995, 5.875%, 11/01/20 11/05 at 102 AAA 6,163,171 1,955 Rivanna Water and Sewer Authority, Regional Water and Sewer 10/09 at 101 Aa3 1,840,104 System Revenue Bonds, Series of 1999, 5.625%, 10/01/29 2,095 Upper Occoquan Sewage Authority, Regional Sewerage System 1/04 at 102 AAA 1,822,420 Revenue Refunding Bonds, Series of 1993, 5.000%, 7/01/21 Nuveen Virginia Premium Income Municipal Fund (NPV) (continued) Portfolio of INVESTMENTS May 31, 2000 Principal Optional Call Market Amount (000) Description Provisions* Ratings** Value - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 2,250 City of Virginia Beach, Storm Water Utility Revenue Bonds, 9/10 at 101 Aa3 $ 2,252,654 Series 2000, 6.000%, 9/01/24 500 Virginia Resources Authority, Clean Water State Revolving Fund 10/10 at 100 AAA 483,914 Revenue Bonds, Series 1999, 5.625%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ $ 179,905 Total Investments (cost $176,367,085) - 97.0% 174,146,226 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.0% 5,413,826 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 179,560,052 ==================================================================================================================== * 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.
Statement of NET ASSETS May 31, 2000 GEORGIA MARYLAND NORTH CAROLINA VIRGINIA - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments in municipal securities, at market value $76,311,887 $207,555,383 $123,666,455 $174,146,226 Cash -- 1,966,132 2,133,807 5,206,775 Receivables: Interest 1,610,242 4,471,052 2,733,746 3,253,500 Investments sold -- 305,000 -- 50,000 Other assets 4,924 24,383 17,943 1,608 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 77,927,053 214,321,950 128,551,951 182,658,109 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 1,792,718 -- -- -- Payable for investments purchased -- -- 1,989,747 2,244,308 Accrued expenses: Management fees 41,488 116,108 69,000 97,882 Other 34,777 86,541 67,645 116,636 Preferred share dividends payable 15,994 39,975 35,011 32,635 Common share dividends payable 251,189 680,081 423,447 606,596 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 2,136,166 922,705 2,584,850 3,098,057 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets $75,790,887 $213,399,245 $125,967,101 $179,560,052 ==================================================================================================================================== Preferred shares, at liquidation value $27,800,000 $ 79,100,000 $ 46,800,000 $ 63,800,000 ==================================================================================================================================== Preferred shares outstanding 1,112 3,164 1,872 2,552 ==================================================================================================================================== Common shares outstanding 3,749,849 10,463,666 6,274,499 8,666,160 ==================================================================================================================================== Net asset value per Common share outstanding (net assets less Preferred shares at liquidation value, divided by Common shares outstanding) $ 12.80 $ 12.83 $ 12.62 $ 13.36 ==================================================================================================================================== See accompanying notes to financial statements.
Statement of OPERATIONS Year Ended May 31, 2000 GEORGIA MARYLAND NORTH CAROLINA VIRGINIA - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME $ 4,545,384 $ 12,479,397 $ 7,518,546 $ 10,749,909 - ----------------------------------------------------------------------------------------------------------------------------------- EXPENSES Management fees 503,436 1,405,631 836,102 1,183,322 Preferred shares - auction fees 69,690 198,291 117,321 159,938 Preferred shares - dividend disbursing agent fees 10,028 20,053 10,028 20,053 Shareholders' servicing agent fees and expenses 4,680 27,899 12,466 26,297 Custodian's fees and expenses 76,934 61,189 78,960 51,518 Trustees' fees and expenses 1,704 4,063 2,442 3,225 Professional fees 11,536 12,946 14,963 15,975 Shareholders' reports - printing and mailing expenses 7,700 6,937 10,094 25,453 Stock exchange listing fees 8,532 19,887 13,293 14,799 Investor relations expense 6,009 22,125 12,797 20,512 Other expenses 7,428 16,659 11,855 14,516 - ----------------------------------------------------------------------------------------------------------------------------------- Total expenses before custodian fee credit 707,677 1,795,680 1,120,321 1,535,608 Custodian fee credit (13,867) (10,648) (15,561) (13,412) - ----------------------------------------------------------------------------------------------------------------------------------- Net expenses 693,810 1,785,032 1,104,760 1,522,196 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 3,851,574 10,694,365 6,413,786 9,227,713 - ----------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investment transactions (106,618) (403,771) (1,361,080) (243,931) Change in net unrealized appreciation (depreciation) of investments (6,042,044) (16,122,049) (8,771,990) (12,928,878) - ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) from investments (6,148,662) (16,525,820) (10,133,070) (13,172,809) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations $(2,297,088) $ (5,831,455) $ (3,719,284) $ (3,945,096) =================================================================================================================================== See accompanying notes to financial statements.
Statement of CHANGES IN NET ASSETS
GEORGIA MARYLAND ------------------------------------------------------------------------ YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/00 5/31/99 5/31/00 5/31/99 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 3,851,574 $ 3,779,380 $ 10,694,365 $ 10,401,146 Net realized gain (loss) from investment transactions (106,618) (19,285) (403,771) 793,902 Change in net unrealized appreciation (depreciation) of investments (6,042,044) (519,051) (16,122,049) (2,181,086) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations (2,297,088) 3,241,044 (5,831,455) 9,013,962 - ----------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From undistributed net investment income: Common shareholders (3,011,682) (2,994,577) (8,155,190) (8,043,917) Preferred shareholders (870,722) (781,355) (2,494,481) (2,336,752) - ----------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets from distributions to shareholders (3,882,404) (3,775,932) (10,649,671) (10,380,669) - ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 148,714 204,645 360,812 698,387 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets (6,030,778) (330,243) (16,120,314) (668,320) Net assets at the beginning of year 81,821,665 82,151,908 229,519,559 230,187,879 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets at the end of year $75,790,887 $81,821,665 $213,399,245 $229,519,559 =================================================================================================================================== Balance of undistributed net investment income at the end of year $ 153,665 $ 184,495 $ 428,576 $ 383,882 =================================================================================================================================== See accompanying notes to financial statements.
Statement of CHANGES IN NET ASSETS May 31, 2000 (continued)
NORTH CAROLINA VIRGINIA ----------------------------------------------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/00 5/31/99 5/31/00 5/31/99 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 6,413,786 $ 6,363,441 $ 9,227,713 $ 9,028,147 Net realized gain (loss) from investment transactions (1,361,080) 39,751 (243,931) 292,180 Change in net unrealized appreciation (depreciation) of investments (8,771,990) (1,441,296) (12,928,878) (1,006,799) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations (3,719,284) 4,961,896 (3,945,096) 8,313,528 - ----------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS From undistributed net investment income: Common shareholders (5,058,398) (4,954,259) (7,263,013) (7,077,141) Preferred shareholders (1,629,151) (1,310,119) (2,103,936) (1,918,811) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets from distributions to shareholders (6,687,549) (6,264,378) (9,366,949) (8,995,952) - ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 197,308 208,763 704,255 927,907 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets (10,209,525) (1,093,719) (12,607,790) 245,483 Net assets at the beginning of year 136,176,626 137,270,345 192,167,842 191,922,359 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets at the end of year $125,967,101 $136,176,626 $179,560,052 $192,167,842 =================================================================================================================================== Balance of undistributed net investment income at the end of year $ 43,479 $ 317,242 $ 289,821 $ 429,057 ===================================================================================================================================
See accompanying notes to financial statements. 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 Georgia Premium Income Municipal Fund (NPG), Nuveen Maryland Premium Income Municipal Fund (NMY), Nuveen North Carolina Premium Income Municipal Fund (NNC) and Nuveen Virginia Premium Income Municipal Fund (NPV). Maryland, North Carolina and Virginia are traded on the New York Stock Exchange while Georgia is traded on the American Stock Exchange. Each Fund invests 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, diversified 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. 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, 2000, North Carolina and Virginia had outstanding when-issued purchase commitments of $1,989,747 and $2,244,308, respectively. There were no such outstanding purchase commitments in either of the other funds. 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 when required for federal income tax 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 tax-exempt net investment income, in addition to any significant amounts of net realized capital gains and/or market discount realized from investment transactions. The Funds currently consider significant net realized capital gains and/or market discount as amounts in excess of $.01 per Common share. 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 income dividends paid during the fiscal year ended May 31, 2000, have been designated Exempt Interest Dividends. Net realized capital gain and market discount distributions are subject to federal taxation. Dividends and Distributions to Shareholders Tax-exempt net investment income is declared monthly as a dividend and 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 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. Notes to FINANCIAL STATEMENTS (continued) 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 GEORGIA MARYLAND CAROLINA VIRGINIA - -------------------------------------------------------------------------- Number of shares: Series T -- -- -- 832 Series W -- 1,404 -- -- Series TH 1,112 1,760 1,872 1,720 - -------------------------------------------------------------------------- Total 1,112 3,164 1,872 2,552 ========================================================================== Derivative Financial Instruments The Funds may invest in transactions 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 fiscal year ended May 31, 2000. Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby the 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. 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 from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common shares were as follows:
GEORGIA MARYLAND ------------------------- ------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/00 5/31/99 5/31/00 5/31/99 - ---------------------------------------------------------------------------------------- Shares issued to shareholders due to reinvestment of distributions 10,347 12,929 25,200 44,630 ======================================================================================== NORTH CAROLINA VIRGINIA ------------------------- ------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/00 5/31/99 5/31/00 5/31/99 - ---------------------------------------------------------------------------------------- Shares issued to shareholders due to reinvestment of distributions 13,495 13,084 47,012 56,927 ========================================================================================
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on July 3, 2000, to shareholders of record on June 15, 2000, as follows: NORTH GEORGIA MARYLAND CAROLINA VIRGINIA - -------------------------------------------------------------------------- Dividend per share $.0670 $.0650 $.0625 $.0670 ========================================================================== 4. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities and short-term municipal securities for the fiscal year ended May 31, 2000, were as follows:
NORTH GEORGIA MARYLAND CAROLINA VIRGINIA - ------------------------------------------------------------------------------------------ Purchases: Long-term municipal securities $12,755,610 $28,004,746 $32,394,280 $36,990,682 Short-term municipal securities -- 8,000,000 -- 3,500,000 Sales and maturities: Long-term municipal securities 12,811,676 29,422,431 32,624,353 39,020,567 Short-term municipal securities -- 8,000,000 -- 4,100,000 ==========================================================================================
At May 31, 2000, the identified cost of investments owned for federal income tax purposes were as follows: NORTH GEORGIA MARYLAND CAROLINA VIRGINIA - -------------------------------------------------------------------------------- $76,942,479 $213,146,481 $127,758,152 $176,367,085 ================================================================================ At May 31, 2000, the 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 GEORGIA MARYLAND CAROLINA VIRGINIA - --------------------------------------------------------------------------- Expiration year: 2002 $ -- $2,202,413 $ -- $ 917,970 2003 1,088,659 1,019,929 2,344,091 1,577,464 2004 1,842,885 2,660,424 1,137,399 1,579,895 2005 340,685 454,351 131,993 140,749 2006 -- -- -- -- 2007 -- -- -- -- 2008 129,908 332,069 108,131 250,767 - --------------------------------------------------------------------------- Total $3,402,137 $6,669,186 $3,721,614 $4,466,845 =========================================================================== 5. UNREALIZED APPRECIATION (DEPRECIATION) Gross unrealized appreciation and gross unrealized depreciation of investments for federal income tax purposes at May 31, 2000, were as follows:
NORTH GEORGIA MARYLAND CAROLINA VIRGINIA - --------------------------------------------------------------------------------------------------------- Gross unrealized: appreciation $ 1,838,127 $ 1,646,105 $ 609,455 $ 2,620,935 depreciation (2,468,719) (7,237,203) (4,701,152) (4,841,794) - --------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) $ (630,592) $(5,591,098) $(4,091,697) $(2,220,859) =========================================================================================================
Notes to FINANCIAL STATEMENTS (continued) 6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Under the Funds' investment management agreements with Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets of each Fund as follows: Average Daily Net Assets 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 .5875 of 1 ================================================================================ The 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. 7. COMPOSITION OF NET ASSETS At May 31, 2000, net assets consisted of:
North Georgia Maryland Carolina Virginia - --------------------------------------------------------------------------------------------------------- Preferred shares, $25,000 stated value per share, at liquidation value $27,800,000 $ 79,100,000 $ 46,800,000 $ 63,800,000 Common shares, $.01 par value per share 37,498 104,637 62,745 86,662 Paid-in surplus 51,832,451 146,026,317 86,874,188 122,071,273 Balance of undistributed net investment income 153,665 428,576 43,479 289,821 Accumulated net realized gain (loss) from investment transactions (3,420,939) (6,862,204) (4,974,563) (4,466,845 Net unrealized appreciation (depreciation) of investments (611,788) (5,398,081) (2,838,748) (2,220,859 - --------------------------------------------------------------------------------------------------------- Net assets $75,790,887 $213,399,245 $125,967,101 $179,560,052 ========================================================================================================= Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited =========================================================================================================
Financial HIGHLIGHTS Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each year:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS ----------------------------- --------------------------------------------------------- NET NET NET REALIZED/ INVESTMENT INVESTMENT CAPITAL CAPITAL ENDING BEGINNING NET UNREALIZED INCOME INCOME GAINS GAINS NET ENDING NET ASSET INVESTMENT INVESTMENT TO COMMON TO PREFERRED TO COMMON TO PREFERRED ASSET MARKET VALUE INCOME GAIN (LOSS) TOTAL SHAREHOLDERS SHAREHOLDERS+ SHAREHOLDERS SHAREHOLDERS+ TOTAL VALUE VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA Year Ended 5/31: 2000 $14.45 $1.03 $(1.65) $ (.62) $(.80) $(.23) $-- $-- $(1.03) $12.80 $12.4375 1999 14.58 1.01 (.13) .88 (.80) (.21) -- -- (1.01) 14.45 16.2500 1998 13.70 1.01 .90 1.91 (.79) (.24) -- -- (1.03) 14.58 15.0625 1997 13.00 1.01 .69 1.70 (.77) (.23) -- -- (1.00) 13.70 13.8750 1996 13.35 1.00 (.38) .62 (.73) (.24) -- -- (.97) 13.00 12.2500 GEORGIA Year Ended 5/31: 2000 14.41 1.02 (1.58) (.56) (.78) (.24) -- -- (1.02) 12.83 13.2500 1999 14.54 1.00 (.14) .86 (.77) (.22) -- -- (.99) 14.41 15.1250 1998 13.76 .99 .80 1.79 (.77) (.24) -- -- (1.01) 14.54 15.0625 1997 13.21 1.00 .55 1.55 (.76) (.24) -- -- (1.00) 13.76 13.6250 1996 13.36 .99 (.14) .85 (.74) (.26) -- -- (1.00) 13.21 12.7500 NORTH CAROLINA Year Ended 5/31: 2000 14.28 1.02 (1.61) (.59) (.81) (.26) -- -- (1.07) 12.62 13.6875 1999 14.48 1.02 (.22) .80 (.79) (.21) -- -- (1.00) 14.28 15.6875 1998 13.50 1.02 1.00 2.02 (.79) (.25) -- -- (1.04) 14.48 15.0000 1997 12.77 1.02 .72 1.74 (.77) (.24) -- -- (1.01) 13.50 14.6250 1996 13.19 .98 (.44) .54 (.70) (.26) -- -- (.96) 12.77 12.6250 VIRGINIA Year Ended 5/31: 2000 14.89 1.07 (1.52) (.45) (.84) (.24) -- -- (1.08) 13.36 14.2500 1999 14.96 1.05 (.08) .97 (.82) (.22) -- -- (1.04) 14.89 16.0625 1998 14.04 1.06 .92 1.98 (.82) (.24) -- -- (1.06) 14.96 16.1250 1997 13.35 1.06 .68 1.74 (.81) (.24) -- -- (1.05) 14.04 14.5000 1996 13.61 1.04 (.26) .78 (.79) (.25) -- -- (1.04) 13.35 13.5000 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURNS RATIOS/SUPPLEMENTAL DATA - ---------------- ------------------------------------------------------------------------------------------------------------------- BEFORE CREDIT AFTER CREDIT** ------------------------------------------------- ---------------------------------------------------------- RATIO OF NET RATIO OF NET RATIO OF NET RATIO OF NET RATIO OF INVESTMENT RATIO OF INVESTMENT RATIO OF INVESTMENT RATIO OF INVESTMENT EXPENSES INCOME TO EXPENSES INCOME TO EXPENSES INCOME TO EXPENSES INCOME TO BASED TO AVERAGE AVERAGE TO AVERAGE AVERAGE TO AVERAGE AVERAGE TO AVERAGE AVERAGE BASED ON ENDING NET ASSETS NET ASSETS TOTAL TOTAL NET ASSETS NET ASSETS TOTAL TOTAL ON NET NET APPLICABLE APPLICABLE NET ASSETS NET ASSETS APPLICABLE APPLICABLE NET ASSETS NET ASSETS PORTFOLIO MARKET ASSET ASSETS TO COMMON TO COMMON INCLUDING INCLUDING TO COMMON TO COMMON INCLUDING INCLUDING TURNOVER VALUE* VALUE* (000) SHARES++ SHARES++ PREFERRED++ PREFERRED++ SHARES++ SHARES++ PREFERRED++ PREFERRED++ RATE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA Year Ended 5/31: (18.84)%(5.87)% $ 75,791 1.43% 7.73% .91% 4.95% 1.40% 7.76% .90% 4.97% 17% 13.42 4.64 81,822 1.34 6.87 .89 4.57 1.33 6.88 .89 4.57 14 14.56 12.43 82,152 1.33 7.10 .87 4.66 1.33 7.10 .87 4.66 17 19.95 11.53 78,697 1.40 7.52 .90 4.83 1.40 7.52 .90 4.83 30 12.88 2.81 76,026 1.42 7.53 .91 4.82 1.42 7.53 .91 4.82 14 MARYLAND Year Ended 5/31: (7.22) (5.57) 213,399 1.29 7.69 .82 4.90 1.28 7.70 .82 4.90 13 5.47 4.44 229,520 1.29 6.78 .85 4.47 1.28 6.79 .84 4.48 16 16.54 11.47 230,188 1.29 6.93 .84 4.52 1.29 6.93 .84 4.52 6 13.07 10.08 221,478 1.32 7.28 .85 4.72 1.32 7.28 .85 4.72 6 10.22 4.41 215,690 1.36 7.33 .87 4.68 1.36 7.33 .87 4.68 18 NORTH CAROLINA Year Ended 5/31: (7.76) (5.98) 125,967 1.37 7.81 .87 4.97 1.35 7.83 .86 4.98 25 9.87 4.11 136,177 1.30 6.97 .86 4.61 1.30 6.97 .86 4.61 8 8.17 13.38 137,270 1.30 7.17 .85 4.70 1.30 7.17 .85 4.70 9 22.60 12.01 130,929 1.37 7.72 .87 4.92 1.37 7.72 .87 4.92 19 10.13 2.11 126,196 1.38 7.49 .88 4.75 1.38 7.49 .88 4.75 39 VIRGINIA Year Ended 5/31: (6.02) (4.64) 179,560 1.29 7.72 .84 5.03 1.28 7.73 .83 5.04 20 4.77 5.09 192,168 1.26 6.94 .85 4.65 1.26 6.95 .84 4.66 8 17.30 12.66 191,922 1.27 7.20 .84 4.77 1.27 7.20 .84 4.77 19 13.81 11.49 183,097 1.33 7.65 .86 4.95 1.33 7.65 .86 4.95 16 11.04 3.86 176,649 1.35 7.64 .87 4.92 1.35 7.64 .87 4.92 27 - ------------------------------------------------------------------------------------------------------------------------------------
* Total 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 Net Asset Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in net asset value per share. Total returns are not annualized. ** After custodian fee credit, 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. sidebar: NUVEEN OFFERS A NUMBER OF CONVENIENT WAYS TO ADD TO YOUR PORTFOLIO AND EARN THE TAX-FREE INCOME YOU NEED TO ACHIEVE YOUR FINANCIAL GOALS. sidebar: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. Build Your Wealth AUTOMATICALLY NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Exchange-Traded Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. If you do not elect to reinvest distributions, all distributions are paid by check or can be deposited directly into your bank or brokerage account. 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. You'll also potentially benefit from dollar-cost averaging, a technique of investing at regular intervals, which allows you to build a high-quality, tax-free portfolio conveniently and cost effectively over time. Dollar-cost averaging does not ensure a profit, nor does it protect you against loss in a declining market. Because such a plan involves continuous investment regardless of fluctuating prices, investors should consider their financial ability to continue purchases through periods of low price levels. 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. Income or capital gains taxes may be payable on dividends or distributions that are reinvested. 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, of course, change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you with draw, 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 also reinvest if your shares are registered in the name of a brokerage firm, bank, or other nominee. Just ask your investment adviser if the firm will participate on your behalf. If not, it's easy to have the shares registered in your name and to apply for a reinvestment account directly. 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 adviser or call us at (800) 257-8787. 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 The Chase Manhattan Bank 4 New York Plaza New York, NY 10004-2413 (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 12-month period ended May 31, 2000. Any future repurchases will be reported to shareholders in the next annual or semiannual report. Serving Investors FOR GENERATIONS Photo: 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 services can help you preserve your financial security, and 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 NUVEEN Investments Invest well. Look ahead. LEAVE YOUR MARK.sm John Nuveen & Co. Incorporated o 333 West Wacker Drive Chicago, IL 60606 o www.nuveen.com FAN-2-5-00 -----END PRIVACY-ENHANCED MESSAGE-----