Nuveen Exchange-Traded Funds
Providing tax-free income to help you live your dreams.
PREMIUM INCOME (NPI)
PREMIUM INCOME 2 (NPM)
PREMIUM INCOME 4 (NPT)
SEMIANNUAL REPORT/APRIL 30, 1996
Photographic image of man seated at breakfast table with wife standing behind
him.
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
10 Fund performance
12 Commonly used terms
14 Portfolio of investments
43 Statement of net assets
44 Statement of operations
45 Statement of changes in net assets
47 Notes to financial statements
54 Financial highlights
<PAGE>
Dear shareholder
Photographic image of Richard Franke, Chairman of Nuveen.
"Over time, municipal bonds have proven to be a valuable and dependable
component of successful investment programs."
The past 12 months provided a welcome rebound for investors in municipal
bonds, reversing the declines of a year earlier. As long-term interest rates
fell in the last half of 1995, the Nuveen funds continued to provide
attractive levels of dividend income.
Currently, we are experiencing a certain degree of uncertainty in the
markets, as the economy continues to send mixed signals about the pace of
growth and the potential for increased inflation. Although there is no solid
evidence that inflation will reappear, the mere specter has been enough to
keep some investors on the sidelines. The good news is that the Federal
Reserve remains committed to a policy of low inflation and modest economic
growth, which should bode well for the bond markets and bond investors.
During the first part of 1996, investors found opportunities to purchase
higher yielding bonds with strong credit quality. Tax-free securities--and the
taxable-equivalent yields they offer--are bringing investors back to the bond
market. Diminished concerns about a flat tax and other tax reform proposals
that had potential implications for tax-free investments have also bolstered
interest in municipal bonds and bond funds.
Municipal bond funds continue to be a prudent way to invest for the long
term, offering investors quality and an attractive source of tax-free income.
As of April 30, 1996, the current annualized yield on share price for the
exchange-traded funds covered in this report ranged from 6.66% to 6.88%. To
match these yields, an investor in the 36% federal income tax bracket would
have had to earn at least 10.41% on taxable alternatives. Without question,
taxable yields at this level on investments of comparable quality can be
difficult to achieve in today's markets.
<PAGE>
With the strength of the bond market last year, some of these funds enjoyed
a recovery in share prices over the levels of April 30, 1995, as well as
attractive total returns. The 12-month total returns on net asset value ranged
from 6.64% to 10.33%, equivalent to taxable investments returning 10.60% to
14.06%.
As you may know, on June 30, 1996, I will be retiring as chairman and chief
executive officer of John Nuveen & Co. Incorporated and as chairman of the
board of the Nuveen exchange-traded funds. As I look back over the 41 years I
have spent at Nuveen, I'm proud to have been associated with a firm that holds
integrity, honesty, and value as the cornerstones of its business. I'm
confident that these traditions will continue to be the hallmarks of Nuveen.
Over the past few years, I have been working closely with other Nuveen
managers to ensure that the company and the funds continue to be guided by
strong and talented management. Timothy R. Schwertfeger, who has been with
Nuveen since 1977, will succeed me as chief executive officer and chairman of
Nuveen. He currently serves as executive vice president of Nuveen and
president of the board of directors for the Nuveen exchange-traded funds. I am
very confident in his abilities and those of the entire Nuveen management
team.
The management transition has been well planned, and it will have no effect
on portfolio management or the way dividends are set.
Our focus will continue to be on building shareholder value, providing
research-oriented management, and maintaining our leader ship role in the
municipal bond market. With this focus, we anticipate many more years of
progress and accomplishment for our shareholders and our firm.
As this will be the last letter for these funds in which I have the
opportunity to address you, I'd like to take this occasion to thank you for
selecting Nuveen exchange-traded funds. We appreciate your investment in
Nuveen, and we look forward to reports of continued success in the months
ahead.
Sincerely,
Richard J. Franke
Chairman of the Board
June 17, 1996
<PAGE>
Answering your questions
Tom Spalding, head of Nuveen's portfolio management team, discusses investment
performance and recent factors affecting the municipal market.
What are the best measures of fund performance?
There are many ways to gauge fund performance, each of which provides certain
insights. Total return is generally recognized as one comprehensive measure of
performance. We use the term "total return" to refer to a share's appreciation
plus reinvested dividend income and capital gain distributions, if applicable.
In 1994, total returns for municipal bond funds--and the entire bond
market--declined, in one of the most difficult periods for bonds in decades.
This was immediately followed by 1995's exceptional market recovery, which
resulted in a rebound in total returns. During the first part of 1996,
municipal bond funds have continued to provide solid total returns, although
at a slightly lower level than during 1995's bull market. The events of these
past few years illustrate the importance of considering risk, or variability
of returns, when comparing total returns. Nuveen's prudent approach to
management protected investors from wide swings in performance by maintaining
a higher level of value than peer group funds during 1994's bear market and
participating only slightly less in 1995's recovery.
Another important measure of fund performance involves assessing whether a
fund has met its stated investment goals. At Nuveen, we continue to emphasize
our funds' goals of providing dependable tax-free dividends and adhering to a
value investing approach. In this regard, the steadiness of dividends over the
long term is a good practical measure of success.
<PAGE>
Photographic image of Tom Spalding, Portfolio Manager of Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market.
Some funds' discounts seem to have narrowed over the past few months. What
caused this improvement?
To understand the reasons for this improvement, it may be helpful to
remember that each share has two prices: the net asset value (NAV), which
represents the underlying value of the bonds, and the share price, which is
the fund's price on the stock exchange. As with other securities, share prices
for municipal bond funds change frequently, driven by investors' demand for
shares. When a fund's NAV per share is higher than its share price, we say
that the shares can be purchased at a discount.
In 1995, the recovery of the bond market meant that the net asset values for
some funds appreciated more quickly than their share prices, widening
discounts for a while. This is not unusual, as the market often takes time to
recognize underlying value balanced against the various factors that affect
investor decisions, such as sentiment regarding future interest rates,
inflation forecasts, the relative strength of the stock market, and
legislative and tax outlooks. Over the past few months, investor worries about
tax reform--and the potential effect of a flat tax proposal on tax-free
investments--have waned somewhat. The combination of higher yields, concerns
about the vulnerability of the stock market, and broker recommendations has
prompted a greater demand for municipal bonds and bond funds. With increased
demand, share prices have risen, resulting in narrower discounts. In fact,
some exchange-traded funds are now trading at a premium, that is, their share
prices are higher than their NAVs.
<PAGE>
What caused the dividends of some funds to decline recently?
All Nuveen exchange-traded funds are structured to provide an attractive
stream of tax-free income. Some of our funds, including the ones covered in
this report, use leverage as an additional way to enhance that income stream.
To achieve this, a leveraged fund issues preferred as well as common shares;
the pre ferred shares pay lower short-term rates to investors looking for
short-term liquidity. Proceeds from the sale of preferred shares are used to
buy additional bonds, and common shareholders earn extra income from the
difference between the long-term rates earned on the bonds in the portfolio
and the short-term rates paid to preferred shareholders. As long as short-term
rates are lower than those of the bonds in the portfolio, common shareholders
receive more income than they would from an unleveraged fund.
It is important to remember that leverage can increase NAV volatility as
well as investment potential. Also, a sudden rise in interest rates, such as
we experienced in 1994, can affect dividends. On average, short-term rates
have been higher over the past two years than they were in the early 1990s.
This has resulted in higher rates for the preferred shareholders and less
income available for common share dividends.
As we have seen recently, bond calls can also act to lower dividends. As the
Federal Reserve Board made a succession of rate cuts between July 1995 and
January 1996, long-term municipal bond yields reacted by declining almost 130
basis points from their position at the beginning of 1995. This lower
long-term rate environment caused the call, or early redemption, of many bonds
with higher yields. These older bonds have been replaced in some portfolios
with the bonds available in the market today, most of which have lower yields.
<PAGE>
What has been Nuveen's investment approach during this period?
Because we believe that a value approach offers investors greater price
stability in uncertain markets, Nuveen continues to pursue value investing as
the optimal way to meet our investors' objectives. We define value investing
as a disciplined approach to security selection and portfolio construction
designed to deliver above-market performance by identifying individual bonds
with current yields, prices, credit quality, and future prospects that are
exceptionally attractive in relation to other bonds in the market. This
approach was rewarded over the past year, as we saw many of our portfolio
holdings upgraded by the national rating agencies, indicating that our
Research Department's judgments about credit quality were on target.
As opportunity allowed, we moved to protect current income by investing a
larger percentage of our portfolios in non-callable bonds. These bonds cannot
be redeemed before maturity, so their yield is assured for the long term even
if interest rates continue to decline. As another measure of income
protection, we also purchased an increased number of bonds at discounts from
their par value. Because these bonds have coupon rates slightly below
market levels, they are less likely to be called from our portfolios,
assuring more stable yields for our investors.
<PAGE>
<TABLE>
NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC.
NPI
Dividends of NPI have been consistently at an attractive level despite modest
reductions over the year, reflecting the effects of bond calls. Shareholders
also received a capital gains distribution in December.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
5/09/95 $0.0880
6/13/95 $0.0880
7/12/95 $0.0880
8/11/95 $0.0850
9/13/95 $0.0850
10/11/95 $0.0850
11/13/95 $0.0830
12/13/95 $0.0830 $0.0495
1/10/96 $0.0830
2/13/96 $0.0795
3/13/96 $0.0795
4/11/96 $0.0795
<CAPTION>
FUND HIGHLIGHTS 4/30/96
<S> <C>
Yield 6.88%
Taxable-equivalent yield 10.75%
Annual total return on NAV 6.64%
Taxable-equivalent total return 10.60%
Share price $13.875
NAV $14.67
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC.
NPM
Common shareholders enjoyed a modest dividend increase in February as the
difference between the short-term rates paid to preferred shareholders accrued
to the benefit of long-term common shareholders.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
5/09/95 $0.0765
6/13/95 $0.0765
7/12/95 $0.0765
8/11/95 $0.0765
9/13/95 $0.0765
10/11/95 $0.0765
11/13/95 $0.0765
12/13/95 $0.0765
1/10/96 $0.0765
2/13/96 $0.0775
3/13/96 $0.0775
4/11/96 $0.0775
<CAPTION>
FUND HIGHLIGHTS 4/30/96
<S> <C>
Yield 6.70%
Taxable-equivalent yield 10.47%
Annual total return on NAV 10.28%
Taxable-equivalent total return 14.06%
Share price $13.875
NAV $14.63
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC.
NPT
In line with the Fund's objective of providing attractive, dependable tax-free
income, shareholders enjoyed 12 months of steady dividends.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
5/09/95 $0.0680
6/13/95 $0.0680
7/12/95 $0.0680
8/11/95 $0.0680
9/13/95 $0.0680
10/11/95 $0.0680
11/13/95 $0.0680
12/13/95 $0.0680
1/10/96 $0.0680
2/13/96 $0.0680
3/13/96 $0.0680
4/11/96 $0.0680
<CAPTION>
FUND HIGHLIGHTS 4/30/96
<S> <C>
Yield 6.66%
Taxable-equivalent yield 10.41%
Annual total return on NAV 10.33%
Taxable-equivalent total return 13.92%
Share price $12.25
NAV $13.65
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
Commonly used terms
Yield
An exchange-traded fund's annualized monthly dividend on a given date (in the
case of this report, April 30, 1996) divided by its closing price per share on
that date.
Taxable equivalent yield
The return an investor subject to a given federal income tax rate would need
to obtain from a fully taxable investment to equal the fund's stated
annualized yield on share price. In this report, this tax rate is assumed to
be 36% for shareholders, based on incomes of $121,300-$263,750 for investors
filing singly, and $147,700-$263,750 for those filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by an exchange-traded
fund, minus any liabili ties. The NAV per share is the fund's net assets, less
the value of its preferred shares, divided by its total number of common
shares outstanding.
Total return on NAV
The percentage change in a fund's NAV per common share for a given period,
assuming reinvestment of all dividends and capital gains distributions, if
any.
Taxable equivalent total return
The total return an investor subject to a given federal income tax rate would
need to obtain from a fully taxable investment to equal the Fund's stated
total return on NAV.
Leverage
A fund structure that enhances the income produced for common shareholders by
a long-term municipal bond fund through the issuance of short-term preferred
shares. Preferred shareholders receive short-term tax-free income, while the
proceeds can be used to purchase additional long-term bonds, thus increasing
the portfolio's income for common shareholders.
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 six months ended April 30, 1996. Any future repur
chases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC. (NPI)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ALASKA - 1.3%
$ 1,820,000 Alaska Housing Finance Corporation, Collateralized
Home Mortgage, 8.750%, 12/01/16 6/98 at 102 Aaa $ 1,906,577
1,950,000 Alaska Housing Finance Corporation, Insured
Mortgage Program, 7.800%, 12/01/30 12/00 at 102 Aa 2,004,171
6,000,000 North Slope Borough General Obligation,
8.350%, 6/30/98 No Opt. Call A- 6,458,340
7,000,000 Valdez Marine Terminal (BP Pipelines, Inc.),
5.500%, 10/01/28 10/03 at 102 Aa3 6,393,660
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ARIZONA - 0.6%
3,415,000 Phoenix Industrial Development Authority, Home
Purchase Mortgage (GNMA), Alternative Minimum
Tax, 8.200%, 4/01/22 10/98 at 102 AAA 3,592,648
4,260,000 Pima Industrial Development Authority, Single
Family Mortgage (GNMA), Alternative Minimum
Tax, 8.125%, 9/01/20 3/99 at 102 AAA 4,472,105
- ------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 15.7%
15,975,000 California Department of Transportation, Certificates
of Participation, 6.500%, 3/01/16 3/01 at 102 AA- 16,393,385
13,000,000 California General Obligation, 5.150%, 10/01/19 10/03 at 102 A1 11,536,850
17,000,000 California Health Facilities Financing Authority
(Kaiser Permanente), 5.550%, 8/15/25 2/02 at 101 Aa3 15,524,740
14,650,000 California Health Facilities Financing Authority
(Children's Hospital of Los Angeles),
7.125%, 6/01/21 (Pre-refunded to 6/01/01) 6/01 at 102 Aaa 16,510,257
26,725,000 California Public Works Board (Regents of the
University of California), 5.500%, 6/01/21 6/03 at 102 Con(A1) 24,342,466
11,395,000 California Public Works Board (California State
Prison-Madera County), 5.500%, 6/01/15 No Opt. Call A 10,845,191
15,285,000 Los Angeles Convention and Exhibition Center
Authority, 5.375%, 8/15/18 8/03 at 102 Aaa 14,073,664
12,250,000 Los Angeles County Transportation Commission,
Sales Tax, 5.750%, 7/01/18 7/01 at 100 AA- 11,610,550
1,285,000 Martinez Home Mortgage, 10.750%, 2/01/16 No Opt. Call Aaa 1,960,961
4,125,000 Moorpark Redevelopment Agency, Tax Allocation,
6.125%, 10/01/18 10/03 at 102 A- 3,969,323
20,000,000 Pomona Single Family Mortgage (GNMA and
FNMA), 7.600%, 5/01/23 No Opt. Call Aaa 23,556,000
5,955,000 Redlands (Loma Linda University Medical Center),
5.000%, 12/01/22 12/03 at 102 Aaa 5,087,773
5,000,000 Sacramento Municipal Utility District,
5.250%, 11/15/20 11/03 at 102 Aaa 4,500,650
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
San Bernardino Joint Powers Finance Authority,
Tax Allocation:
$ 6,675,000 5.750%, 10/01/15 10/05 at 102 Aaa $ 6,563,594
12,500,000 5.750%, 10/01/25 10/05 at 102 Aaa 12,078,250
3,000,000 San Francisco City and County Redevelopment Agency,
GNMA (South Beach Marina), 5.700%, 3/01/29 3/04 at 102 Aaa 2,826,300
University of California:
6,455,000 5.000%, 9/01/11 9/03 at 102 Aaa 5,968,616
17,540,000 4.750%, 9/01/21 9/03 at 102 Aaa 14,494,004
- ------------------------------------------------------------------------------------------------------------------------------
COLORADO - 2.9%
City and County of Denver Airport System,
Alternative Minimum Tax:
9,325,000 7.750%, 11/15/13 No Opt. Call Baa 10,796,765
8,250,000 7.750%, 11/15/21 11/01 at 102 Baa 9,050,993
8,700,000 6.750%, 11/15/22 11/02 at 102 Baa 8,820,582
3,500,000 7.250%, 11/15/23 11/02 at 102 Baa 3,685,080
3,835,000 Colorado Local Single Family Mortgage (GNMA),
Alternative Minimum Tax, 8.125%, 12/01/20 12/98 at 102 AAA 4,012,982
1,248,248 El Paso County, Single Family Mortgage (FNMA),
8.750%, 6/01/11 No Opt. Call Aaa 1,335,051
DISTRICT OF COLUMBIA - 2.1%
11,040,000 District of Columbia Hospital (Daughters of Charity),
7.875%, 12/01/15 12/98 at 102 Aa 11,892,619
14,800,000 District of Columbia Housing Finance Agency,
Single Family Mortgage (GNMA), Alternative
Minimum Tax, 6.375%, 6/01/26 12/04 at 103 AAA 14,865,120
- ------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.0%
11,300,000 Florida Housing Finance Agency, Home Mortgage
(GNMA), Alternative Minimum Tax,
8.300%, 6/01/20 12/98 at 103 Aaa 11,736,971
13,530,000 Greater Orlando Aviation Authority, Alternative
Minimum Tax, 8.375%, 10/01/16 10/98 at 102 A1 14,734,576
1,470,000 Greater Orlando Aviation Authority, Alternative
Minimum Tax, 8.375%, 10/01/16 (Pre-refunded
to 10/01/98) 10/98 at 102 A1 1,633,964
Pensacola Health Facilities Authority (Daughters
of Charity):
11,655,000 7.875%, 1/01/08 (Pre-refunded to 1/01/98) 1/98 at 101 1/2 Aaa 12,555,349
9,435,000 7.875%, 1/01/11 (Pre-refunded to 1/01/98) 1/98 at 101 1/2 Aaa 10,163,854
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
GEORGIA - 4.2%
Georgia Municipal Electric Authority:
$ 7,700,000 8.375%, 1/01/16 1/98 at 102 A $ 8,283,814
5,850,000 8.125%, 1/01/17 1/98 at 102 A 6,257,687
2,580,000 Atlanta Urban Residential Finance Authority, Single
Family (GNMA), Alternative Minimum Tax,
8.250%, 10/01/21 10/98 at 103 AAA 2,691,353
13,500,000 Burke County Development Authority, Pollution
Control (Georgia Power Company), 5.750%, 9/01/23 9/98 at 102 A1 12,860,235
23,420,000 Monroe County Development Authority, Pollution
Control (Georgia Power Company),
6.750%, 10/01/24 10/99 at 102 A1 24,278,811
- ------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 5.3%
8,230,000 Illinois Development Finance Authority, Pollution
Control (Illinois Power Company), 5.700%, 2/01/24 2/04 at 102 Aaa 7,785,992
8,500,000 Illinois Educational Facilities Authority (The
University of Chicago), 5.600%, 7/01/24 7/03 at 102 Aa1 7,936,110
5,000,000 Illinois Health Facilities Authority (Highland Park
Hospital), 6.200%, 10/01/22 10/02 at 102 Aaa 5,027,350
13,400,000 Illinois Health Facilities Authority (Evangelical
Hospitals Corporation), 8.100%, 1/01/08
(Pre-refunded to 1/01/99) 1/99 at 102 Aaa 14,260,548
6,690,000 Illinois Housing Development Authority, Alternative
Minimum Tax, 8.100%, 2/01/22 8/98 at 102 Aa 6,962,885
8,105,000 Illinois Housing Development Authority,
8.100%, 8/01/17 8/98 at 103 Aa 8,580,520
5,900,000 Chicago O'Hare International Airport,
5.000%, 1/01/18 1/04 at 102 Aaa 5,160,199
5,000,000 Chicago Single Family Mortgage, Alternative
Minimum Tax, 7.000%, 9/01/27 3/06 at 105 Aaa 5,432,600
5,710,000 Regional Transportation Authority, 9.000%, 6/01/06 No Opt. Call Aaa 7,414,321
- ------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.8%
2,550,000 Indiana State Office Building Commission,
5.500%, 7/01/20 7/05 at 102 Aaa 2,383,562
30,000,000 Indianapolis Redevelopment District, Local
Improvement Bond Bank, 8.500%, 2/01/18
(Pre-refunded to 2/01/98) 2/98 at 102 A+ 32,815,800
8,000,000 Steuben County Middle School Building Corporation,
6.375%, 7/15/16 7/05 at 102 Aaa 8,384,480
5,300,000 Whitley County Middle School Building Corporation,
6.250%, 7/15/15 1/04 at 102 Aaa 5,433,083
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
IOWA - 0.8%
$ 3,000,000 Iowa Finance Authority (Drake University),
5.400%, 12/01/16 12/05 at 102 Aaa $ 2,851,530
5,885,000 Iowa Finance Authority (Urbandale Hotel
Corporation), Alternative Minimum Tax,
8.500%, 8/01/16 (Pre-refunded to 7/15/14) 7/14 at 100 AAA 7,538,214
- ------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.9%
10,610,000 Sedgwick County and Shawnee County Mortgage
(GNMA), Alternative Minimum Tax,
8.250%, 11/01/20 11/98 at 103 AAA 11,210,738
- ------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 0.9%
7,660,000 Louisiana Public Facilities Authority Extended Care
(Comm-Care Corporation), 11.000%, 2/01/14 No Opt. Call BBB 10,109,515
1,650,000 East Baton Rouge Mortgage Finance Authority
(GNMA and FNMA), 5.300%, 10/01/14 10/03 at 102 Aaa 1,523,940
- ------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.9%
3,000,000 Massachusetts Industrial Finance Agency, Resource
Recovery (SEMASS Project), Alternative Minimum
Tax), 9.250%, 7/01/15 7/01 at 103 N/R 3,267,660
8,800,000 Massachusetts Water Resources Authority,
5.500%, 7/15/22 7/02 at 100 A 8,085,880
- ------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.6%
4,000,000 Detroit City School District, General Obligation,
5.400%, 5/01/13 5/03 at 102 AA 3,797,400
8,870,000 Detroit Sewer Disposal System, 5.000%, 7/01/25 (DD) 7/05 at 100 Aaa 7,725,681
9,625,000 Livonia Public School District, General Obligation,
5.500%, 5/01/21 5/03 at 102 Aaa 9,083,016
- ------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 5.4%
14,575,000 Minnesota Housing Finance Agency, Alternative
Minimum Tax, 8.500%, 7/01/19 7/98 at 102 Aa 15,360,010
15,500,000 Minneapolis/St. Paul Housing Finance Board (FNMA
and GNMA), Alternative Minimum Tax,
7.500%, 11/01/27 11/04 at 102 AAA 16,012,585
23,000,000 St. Paul Housing and Redevelopment Authority
(Civic Center Project), 7.100%, 11/01/23 11/15 at 103 Aaa 25,938,480
2,900,000 St. Paul Housing and Redevelopment Authority,
Single Family Mortgage, 7.250%, 9/01/11 No Opt. Call A 3,019,596
8,635,000 St. Paul Port Authority, 8.000%, 12/01/07
(Pre-refunded to 12/01/98) 12/98 at 102 AAA 9,303,953
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
MISSOURI - 1.1%
$ 11,120,000 St. Charles County, Francis Howell School District,
General Obligation, 7.800%, 3/01/08 No Opt. Call Aaa $ 13,700,618
- ------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.8%
10,000,000 Clark County School District, General Obligation,
8.000%, 3/01/08 (Pre-refunded to 3/01/98) 3/98 at 102 N/R 10,868,200
- ------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.5%
10,000,000 New Hampshire Business Finance Authority,
Pollution Control (United Illuminating Company),
5.875%, 10/01/33 10/03 at 102 Baa3 9,045,900
11,000,000 New Hampshire Housing Finance Authority, Single
Family Mortgage, 6.050%, 7/01/25 7/03 at 102 Aa 10,865,250
- ------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.5%
5,935,000 New Mexico Mortgage Finance Authority, Single
Family Mortgage, 6.900%, 7/01/24 7/02 at 102 Aa 6,143,675
- ------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 8.3%
12,365,000 New York State Energy Research and Development
Authority (Consolidated Edison Company),
Alternative Minimum Tax, 6.000%, 3/15/28 3/03 at 102 A1 11,960,417
17,290,000 New York State Medical Care Facilities Finance
Agency, Hospital and Nursing Home, FHA-Insured
Mortgage, 5.500%, 2/15/22 2/04 at 102 AAA 16,043,737
18,000,000 Metropolitan Transportation Authority,
8.000%, 7/01/18 (Pre-refunded to 7/01/98) 7/98 at 102 Aaa 19,761,120
New York City Municipal Assistance Corporation:
11,540,000 7.000%, 7/01/06 7/97 at 102 Aa 12,067,609
7,060,000 6.875%, 7/01/07 7/97 at 102 Aa 7,398,527
New York City General Obligation:
7,500,000 9.500%, 6/01/03 No Opt. Call Baa1 9,146,775
10,000,000 5.750%, 2/01/07 2/06 at 101 1/2 Baa1 9,772,000
New York City Municipal Water Finance Authority,
Water and Sewer System:
12,930,000 5.500%, 6/15/20 6/02 at 100 A 11,856,551
7,955,000 6.500%, 6/15/21 6/97 at 101 1/2 Aaa 8,220,617
- ------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.6%
North Carolina Eastern Municipal Power Agency:
16,415,000 8.000%, 1/01/21 (Pre-refunded to 1/01/98) 1/98 at 102 Aaa 17,790,085
395,000 7.250%, 11/01/21 (Pre-refunded to 1/01/97) 1/97 at 102 Aaa 412,080
2,605,000 7.250%, 1/01/21 1/97 at 102 A 2,686,537
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
OHIO - 1.5%
$ 8,330,000 Ohio Housing Finance Agency, Single Family
(GNMA), Alternative Minimum Tax,
8.250%, 12/15/19 12/98 at 102 AAA $ 8,764,993
11,300,000 Ohio Turnpike Commission, 5.750%, 2/15/24 2/04 at 102 AA- 10,926,422
- ------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.7%
13,490,000 Oklahoma Housing Finance Agency, Single Family
(GNMA), Alternative Minimum Tax,
8.250%, 12/01/20 12/98 at 102 AAA 14,113,643
6,750,000 Washington County Medical Authority (Jane Philips
Episcopal Hospital), 8.500%, 11/01/10 5/99 at 102 BBB 7,337,925
- ------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.9%
10,000,000 Pennsylvania Housing Finance Agency, Single Family
Mortgage, 5.450%, 10/01/17 10/03 at 102 AA+ 9,341,200
14,500,000 Allegheny County, Greater Pittsburgh International
Airport, Alternative Minimum Tax,
8.250%, 1/01/16 1/98 at 102 Aaa 15,485,855
12,875,000 Allegheny County Hospital Development Authority
(Presbyterian University Health System),
6.250%, 11/01/23 11/02 at 100 Aaa 13,077,266
10,180,000 Philadelphia Water and Sewer, 7.500%, 8/01/10
(Pre-refunded to 8/01/01) 8/01 at 102 AAA 11,649,076
- ------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.2%
17,250,000 South Carolina Jobs-Economic Development
Authority (Anderson Area Medical Center),
5.250%, 2/01/26 2/06 at 102 Aaa 15,387,173
- ------------------------------------------------------------------------------------------------------------------------------
TEXAS - 8.6%
10,305,000 Alliance Airport Authority (American Airlines),
Alternative Minimum Tax, 7.500%, 12/01/29 12/00 at 102 Baa2 10,959,161
10,000,000 Brazos River Authority (Houston Light and Power
Company), 8.250%, 5/01/19 5/98 at 102 A3 10,753,100
5,000,000 Brownsville Utilities System, 8.000%, 9/01/06
(Pre-refunded to 9/01/96) 9/96 at 102 N/R 5,170,800
5,565,000 Dallas-Fort Worth International Airport (American
Airlines, Inc.), Alternative Minimum Tax,
7.500%, 11/01/25 11/00 at 102 Baa2 5,914,872
40,000,000 Harris County Health Facilities Development
Corporation, 7.375%, 12/01/25 (Mandatory
put 12/01/98) 11/96 at 100 1/2 Aa2 40,554,400
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEXAS (CONTINUED)
Harris County Toll Road, Senior Lien:
$ 3,385,000 8.700%, 8/15/17 (Pre-refunded to 8/15/97) 8/97 at 103 AAA $ 3,689,312
12,700,000 8.300%, 8/15/17 (Pre-refunded to 8/15/98) 8/98 at 103 AAA 14,178,915
15,000,000 Harris County Toll Road, 5.300%, 8/15/13 8/04 at 102 Aaa 14,326,800
4,500,000 Tyler Health Facilities Development Corporation
(East Texas Hospital), 8.250%, 11/01/06
(Pre-refunded to 11/01/98) 11/98 at 102 AA 5,001,255
- ------------------------------------------------------------------------------------------------------------------------------
UTAH - 3.0% Intermountain Power Agency:
7,500,000 7.875%, 7/01/14 7/96 at 102 Aa 7,691,325
20,000,000 7.200%, 7/01/19 7/97 at 102 Aa 20,870,600
3,000,000 8.625%, 7/01/21 (Pre-refunded to7/01/97) 7/97 at 102 Aaa 3,223,770
6,550,000 8.625%, 7/01/21 7/97 at 102 Aa 6,955,969
- ------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8%
Virginia Hosing Development Authority, Alternative
Minimum Tax:
2,445,000 5.600%, 7/01/21 1/02 at 102 Aa1 2,253,214
7,605,000 5.650%, 1/01/27 1/02 at 102 Aa1 6,965,495
1,000,000 8.375%, 1/01/28 1/99 at 102 Aa1 1,036,390
- ------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.6%
5,000,000 Washington Health Care Facilities Authority
(Virginia Mason Medical Center), 8.000%, 7/01/15 7/97 at 102 Aaa 5,286,000
Washington Public Power Supply System, Nuclear
Project No. 1:
4,060,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 4,493,202
11,900,000 7.500%, 7/01/15 7/99 at 102 Aa 12,845,931
4,300,000 7.250%, 7/01/15 (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 4,760,057
13,650,000 5.600%, 7/01/15 7/03 at 102 Aaa 13,009,406
4,695,000 15.000%, 7/01/17 (Pre-refunded to 7/01/96) 7/96 at 103 Aaa 4,923,693
12,900,000 5.700%, 7/01/17 7/03 at 102 Aaa 12,415,863
Washington Public Power Supply System, Nuclear
Project No. 2:
7,500,000 6.000%, 7/01/12 7/01 at 100 Aa 7,388,775
14,440,000 5.750%, 7/01/12 7/03 at 102 Aa 13,859,223
6,770,000 5.625%, 7/01/12 7/03 at 102 Aa 6,411,799
Washington Public Power Supply System, Nuclear
Project No. 3:
13,500,000 7.250%, 7/01/15 (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 14,944,365
21,200,000 5.375%, 7/01/15 7/03 at 102 Aa 19,043,960
17,050,000 Seattle Metropolitan Municipality Sewer System,
5.500%, 1/01/33 1/03 at 102 Aaa 15,637,748
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 6,360,000 Snohomish County Public Utility District No. 1,
5.500%, 1/01/14 1/03 at 100 Aaa $ 6,119,656
7,000,000 Spokane Solid Waste System, Alternative Minimum
Tax, 7.750%, 1/01/11 1/99 at 102 Aaa 7,580,090
- ------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.2%
15,000,000 West Virginia Housing Development Fund,
7.050%, 11/01/24 5/02 at 102 Aa1 15,727,500
- ------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0,4%
5,250,000 Puerto Rico Electric Power Authority,
5.500%, 7/01/25 7/05 at 100 A- 4,825,957
$1,236,408,248 Total Investments - (cost $1,232,315,699) - 98.1% 1,261,373,383
================
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.2%
$ 2,000,000 California Pollution Control Finance Authority
================
(Shell Oil Company), Variable Rate Demand
Bonds, 3.500%, 10/01/11+ VMIG-1 2,000,000
Other Assets Less Liabilities - 1.7% 22,134,653
Net Assets - 100% $1,285,508,036
==============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 65 $ 606,417,491 48%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 31 329,804,569 26
PORTFOLIO OF A+ A1 8 134,163,119 11
INVESTMENTS A, A- A, A2, A3 11 77,041,976 6
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 11 94,639,568 8
TEMPORARY Non-rated Non-rated 3 19,306,660 1
INVESTMENTS):
TOTAL 129 $1,261,373,383 100%
<FN>
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or Moody's rating.
Con. Rating is conditional. Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings by projects under
construction, (b) earnings of projects unseasoned in operation experience, (c)
rentals which begin when facilities are completed, or (d) payments to which
some other limiting condition attaches. Parenthetical rating denotes probable
credit stature upon completion of construction or elimination of basis of
condition.
N/R - Investment is not rated.
(DD) Security purchased on a delayed delivery basis (note 1).
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC. (NPM)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ALASKA - 0.6%
$ 3,500,000 Anchorage Parking Authority (5th Avenue Garage
Project), 6.750%, 12/01/08 12/02 at 102 Baa1 $ 3,634,680
1,320,000 Valdez Home Mortgage, 7.900%, 2/01/10 8/02 at 102 A1 1,430,642
- ------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 4.2%
Mohave County Industrial Development Authority
(Medical Environments Inc. and Phoenix Baptist
Hospital):
5,705,000 6.250%, 7/01/03 No Opt. Call Aaa 6,074,969
3,000,000 6.750%, 7/01/08 (Pre-refunded to 7/01/03) 7/03 at 102 Aaa 3,383,040
4,090,000 Navajo County Pollution Control Corporation
(Arizona Public Service Company),
5.875%, 8/15/28 8/03 at 102 Baa1 3,831,144
Phoenix Civic Improvement Corporation Wastewater
System:
9,000,000 6.125%, 7/01/14 (Pre-refunded to 7/01/03) 7/03 at 102 AAA 9,811,980
9,380,000 4.750%, 7/01/23 7/04 at 102 A1 7,789,902
6,510,000 Pima County Industrial Development Authority
(Tucson Electric), 7.250%, 7/15/10 1/02 at 103 Aaa 7,138,410
- ------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 16.6%
California Public Works Board (California State
University):
15,480,000 6.625%, 10/01/10 10/02 at 102 A 16,452,608
10,500,000 6.700%, 10/01/17 10/02 at 102 A 10,997,280
7,150,000 6.375%, 10/01/19 10/04 at 102 A 7,385,807
17,500,000 California State Public Works Board (California State
Prison of Monterey County), 6.875%, 11/01/14 11/04 at 102 A 18,928,525
30,000,000 Foothill/Eastern Transportation Corridor Agency,
0.000%, 1/01/21 No Opt. Call BBB- 5,681,700
5,000,000 Loma Linda (Loma Linda University Medical Center),
6.500%, 12/01/18 12/03 at 102 BBB 4,844,550
12,980,000 Los Angeles Community College District,
Certificates of Participation, 6.000%, 8/15/20 2/02 at 102 Aaa 12,839,556
3,815,000 Los Angeles Community Redevelopment Agency
(Crenshaw Redevelopment Project),
7.000%, 9/01/14 9/02 at 102 Ba1 3,902,592
7,000,000 Los Angeles State Building Authority (California
Department of General Services), 5.625%, 5/01/11 No Opt. Call A 6,902,490
5,000,000 Los Angeles County Public Works Finance Authority
(Los Angeles County Regional Park and Open
Space), 6.125%, 10/01/10 10/04 at 102 Aa 5,164,950
10,000,000 Los Angeles County Transportation Commission,
6.750%, 7/01/19 (Pre-refunded to 7/01/02) 7/02 at 102 Aaa 11,239,100
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 13,850,000 Metropolitan Water District of Southern California,
5.500%, 7/01/19 7/02 at 102 Aa $ 12,946,980
2,035,000 Parlier Redevelopment Agency, Tax Allocation,
6.750%, 8/01/22 8/02 at 102 BBB 2,077,715
San Francisco City and County Redevelopment
Agency:
2,390,000 6.750%, 7/01/15 7/04 at 102 Aaa 2,599,245
6,865,000 6.750%, 7/01/25 7/04 at 102 Aaa 7,442,415
5,605,000 San Joaquin County, Certificates of Participation,
6.600%, 4/01/19 4/04 at 102 A 5,618,732
Santa Clara County, Certificates of Participation
(American Baptist Homes of the West):
6,000,000 6.125%, 3/01/11 3/02 at 102 A 6,036,420
7,760,000 6.125%, 3/01/18 3/02 at 102 A 7,576,786
- ------------------------------------------------------------------------------------------------------------------------------
COLORADO - 9.1%
9,870,000 Colorado Health Facilities Authority (PSL Healthcare
System), 6.250%, 2/15/21 (Pre-refunded to 2/15/01) 2/01 at 102 Aaa 10,701,153
2,640,000 Colorado Housing Finance Authority Single Family
Mortgage, Alternative Minimum Tax,
8.125%, 12/01/24 12/04 at 105 Aa 2,931,403
Colorado Housing Finance Authority:
6,215,000 6.850%, 8/01/24 8/02 at 102 A 6,395,359
2,455,000 6.875%, 8/01/30 8/02 at 102 A 2,530,123
5,000,000 Colorado Housing Finance Authority Single Family,
7.375%, 6/01/26 12/05 at 105 Aa 5,409,550
City and County of Denver, Airport System,
Alternative Minimum Tax:
18,245,000 6.750%, 11/15/13 11/02 at 102 Baa 18,557,537
15,270,000 7.750%, 11/15/21 11/01 at 102 Baa 16,752,564
7,080,000 7.250%, 11/15/23 11/02 at 102 Baa 7,454,390
7,240,000 8.000%, 11/15/25 11/01 at 100 Baa 8,063,260
2,510,000 7.500%, 11/15/25 11/97 at 102 Baa 2,652,869
- ------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.7%
6,300,000 Connecticut Health and Educational Facilities
Authority (University of Hartford),
6.750%, 7/01/12 7/02 at 102 Baa 6,312,915
- ------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.4%
2,000,000 Florida State Board of Education, General Obligation,
5.500%, 6/01/21 6/05 at 101 Aa 1,897,080
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 1,750,000 Alachua County Health Facilities Authority and
Bradford County Health Facilities Authority
(Santa Fe Healthcare), 7.600%, 11/15/13
(Pre-refunded to 11/15/00) 11/00 at 102 Baa1 $ 1,998,605
5,000,000 Dade County Aviation, 5.750%, 10/01/18 10/06 at 102 Aaa 4,885,850
12,500,000 Tampa (The Florida Aquarium Project),
7.750%, 5/01/27 5/02 at 102 N/R 12,713,875
- ------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.2%
Georgia Housing and Finance Authority, Single
Family Mortgage, Alternative Minimum Tax:
5,485,000 6.650%, 12/01/20 9/04 at 102 AA+ 5,570,347
5,500,000 6.700%, 12/01/25 9/04 at 102 AA+ 5,606,095
7,000,000 Burke County Development Authority, Pollution
Control (Oglethorpe Power Corporation),
8.000%, 1/01/15 1/03 at 103 Aaa 8,199,800
- ------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 9.2%
3,000,000 Illinois Health Facilities Authority (Lutheran General
Health System), 6.000%, 4/01/18 No Opt. Call A+ 2,874,750
6,900,000 Illinois Health Facilities Authority (Illinois Masonic
Medical Center), 5.500%, 10/01/19 10/03 at 102 A 6,147,348
11,510,000 Illinois Toll Highway Authority, Toll Highway
Priority, 6.375%, 1/01/15 1/03 at 102 A1 11,723,280
Chicago General Obligation:
17,000,000 6.250%, 1/01/12 1/02 at 102 Aaa 17,514,250
5,000,000 5.625%, 1/01/23 1/03 at 102 Aaa 4,710,500
8,270,000 Chicago, FHA-Insured (Lakeview Towers Project),
6.650%, 12/01/33 6/02 at 102 AAA 8,434,904
5,500,000 Chicago Park District, General Obligation,
6.700%, 1/01/11 1/02 at 102 AA- 5,879,995
20,900,000 Chicago Public Building Commission (Board of
Education), 5.750%, 12/01/18 12/03 at 102 Aaa 19,971,204
2,850,000 East St. Louis, FHA Insured (Dawson Manor),
6.500%, 7/01/24 7/03 at 102 Aaa 2,918,799
1,770,000 Wheeling, Single Family Mortgage,
6.850%, 11/01/09 11/02 at 102 Aaa 1,861,721
- ------------------------------------------------------------------------------------------------------------------------------
INDIANA - 6.8%
5,200,000 Indiana Bond Bank, 6.250%, 2/01/09 2/03 at 102 A 5,476,744
2,875,000 Indiana Bond Bank State Revolving Fund,
6.750%, 2/01/17 2/05 at 102 A 3,099,279
5,250,000 Indiana Transportation Finance Authority (Aviation
Technology Center), 6.500%, 3/01/18 3/03 at 102 A 5,353,583
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
INDIANA (CONTINUED)
$ 8,000,000 East Chicago Elementary School Building
Corporation, 7.000%, 1/15/16 (Pre-refunded
to 1/15/03) 1/03 at 102 A $ 9,058,160
13,630,000 Fort Wayne Hospital Authority (Parkview Memorial
Hospital), 6.400%, 11/15/22 11/02 at 102 A1 13,633,953
6,031,000 Greenfield Multi-Family Housing (Pedcor
Investments LP), Alternative Minimum Tax,
6.200%, 12/01/28 12/05 at 105 Aaa 5,931,127
10,675,000 Highland School Building Corporation,
6.750%, 1/15/20 (Pre-refunded to 1/15/02) 1/02 at 102 AAA 11,896,754
5,905,000 Muncie School Building Corporation,
6.625%, 7/15/14 (Pre-refunded to 7/15/01) 7/01 at 101 N/R 6,518,411
- ------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.7%
3,000,000 Johnson County, Single Family Mortgage,
7.100%, 5/01/12 5/04 at 103 A 3,215,520
2,575,000 Sedgwick and Shawnee Counties, Single Family
Mortgage, Alternative Minimum Tax,
7.900%, 5/01/24 No Opt. Call Aaa 2,867,108
- ------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.5%
5,100,000 Kentucky Housing Corporation, Alternative
Minimum Tax, 5.850%, 7/01/27 1/06 at 102 Aaa 4,888,350
- ------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 5.9%
Louisiana Public Facilities Authority (Pendleton
Memorial Methodist Hospital):
5,500,000 6.750%, 6/01/10 6/02 at 102 Baa 5,521,615
3,130,000 6.750%, 6/01/22 6/02 at 102 Baa 3,036,538
12,000,000 Louisiana Public Facilities Authority (General Health),
6.000%, 11/01/22 11/02 at 102 Aaa 11,929,080
4,000,000 Bossier Public Trust Financing Authority, Single
Family Mortgage, 6.125%, 8/01/28 8/05 at 102 AAA 3,980,000
12,750,000 East Baton Rouge Mortgage Finance Authority,
Single Family Mortgage (GNMA and FNMA),
Alternative Minimum Tax, 6.350%, 10/01/28 10/05 at 102 Aaa 12,731,768
3,000,000 Mississippi River Bridge Authority,
6.750%, 11/01/12 11/02 at 102 A 3,233,730
5,000,000 New Orleans Home Mortgage Authority, Single
Family Mortgage (GNMA and FNMA),
Alternative Minimum Tax, 6.300%, 6/01/28 6/05 at 102 Aaa 4,972,350
8,000,000 Orleans Levee District, Public Improvement,
5.950%, 11/01/15 12/05 at 103 Aaa 7,886,640
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
MAINE - 0.9%
$ 7,925,000 Maine State Housing Authority, Alternative
Minimum Tax, 6.400%, 11/15/24 8/02 at 102 AA- $ 7,974,928
- ------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.3%
2,560,000 Maryland Community Development Administration,
Multi-Family Housing, 6.625%, 5/15/23 5/03 at 102 Aa 2,634,342
- ------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.0%
6,900,000 Massachusetts Water Resources Authority,
5.250%, 12/01/20 12/04 at 102 Aaa 6,292,317
3,000,000 Boston City Hospital, 5.750%, 2/15/23 8/00 at 102 Aa 2,841,180
- ------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.7%
Michigan Housing Development Authority, Rental
Housing:
9,200,000 6.600%, 4/01/12 10/02 at 102 A+ 9,462,200
6,750,000 6.650%, 4/01/23 10/02 at 102 A+ 6,906,533
8,000,000 Michigan State Hospital Finance Authority
(Oakwood Hospital), 5.625%, 11/01/18 11/03 at 102 Aaa 7,570,880
- ------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.5%
3,560,000 Minneapolis/St Paul Housing and Redevelopment
Authority (Group Health Plan Project),
6.900%, 10/15/22 12/02 at 102 A 3,786,772
4,000,000 Washington County Housing and Redevelopment
Authority, 7.200%, 1/01/22 1/03 at 102 BBB 4,145,320
5,170,000 Washington County Housing and Redevelopment
Authority (South Washington County Schools
Project), 7.400%, 12/01/14 12/02 at 100 Baa1 5,425,553
- ------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.8%
Mississippi Hospital Equipment and Facilities
Authority (Wesley Health Systems):
4,000,000 6.050%, 4/01/12 10/02 at 102 AAA 4,035,160
3,000,000 6.100%, 4/01/22 10/02 at 102 AAA 2,974,740
- ------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.8%
5,500,000 St. Louis County Industrial Development Authority
(Kiel Center Multipurpose Arena), Alternative
Minimum Tax, 7.625%, 12/01/09 12/02 at 102 N/R 5,707,790
11,000,000 St. Louis Municipal Finance Corporation (Cervantes
Center and NFL Stadium), 6.000%, 7/15/13 7/03 at 102 Aa3 10,807,940
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
NEVADA - 1.1%
$ 10,000,000 Clark County (Las Vegas - McCarran International
Airport), Passenger Facility, 6.000%, 7/01/22 7/02 at 102 Aaa $ 9,824,200
- ------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 1.4%
4,500,000 New Jersey Economic Development Authority
Educational Testing Service), 6.000%, 5/15/25 5/05 at 102 Aaa 4,496,760
7,425,000 New Jersey Housing and Mortgage Finance Agency,
6.700%, 11/01/28 11/02 at 102 A+ 7,623,099
- ------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.4%
4,000,000 New Mexico Mortgage Finance Authority, Single
Family, Alternative Minimum Tax, 6.300%, 7/01/17 7/05 at 102 AAA 4,034,680
- ------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.7%
2,000,000 New York State Energy Research and Development
Authority (The Brooklyn Union Gas Company),
5.500%, 1/01/21 1/06 at 102 Aaa 1,895,300
16,200,000 New York State Energy Research and Development
Authority, Electric Facilities (Consolidated Edison
Company of New York), Alternative Minimum Tax,
6.375%, 12/01/27 12/01 at 101 Aaa 16,451,586
7,635,000 New York State Medical Care Facilities Finance
Agency (Mercy Medical Center), 5.875%, 11/01/15 5/05 at 102 AA- 7,377,319
4,000,000 New York State Urban Development Corporation,
Correctional Facilities Revenue, 5.250%, 1/01/21 1/04 at 102 Aaa 3,604,080
New York City General Obligation:
10,750,000 6.600%, 2/01/03 No Opt. Call Baa1 11,327,813
7,695,000 6.600%, 8/01/03 No Opt. Call Baa1 8,133,615
17,365,000 7.000%, 2/01/06 No Opt. Call Baa1 18,710,614
10,000,000 6.375%, 8/01/08 8/02 at 101 1/2 Baa1 10,062,400
15,000,000 6.500%, 8/01/11 8/02 at 101 1/2 Baa1 15,069,300
4,000,000 5.750%, 2/01/15 2/06 at 101 1/2 Baa1 3,691,320
- ------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.5%
5,000,000 Pitt County (Pitt County Memorial Hospital),
5.500%, 12/01/15 12/05 at 102 Aa 4,766,500
- ------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.5%
4,240,000 Mercer County Pollution Control (Basin Electric
Power Co-op), 7.000%, 1/01/19 1/99 at 103 A2 4,483,503
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
OKLAHOMA - 0.5%
$ 1,000,000 Tulsa County Industrial Authority, Recreational
Facilities, 6.600%, 9/01/08 9/02 at 102 A- $ 1,056,920
2,990,000 Tulsa County Public Facilities Authority, Recreational
Facilities, 6.600%, 11/01/08 11/02 at 102 A- 3,139,560
- ------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.4% Oregon General Obligation:
13,350,000 6.375%, 8/01/24 8/02 at 102 Aa 13,990,667
7,500,000 6.000%, 4/01/27 10/05 at 102 Aa 7,442,175
500,000 Oregon State Housing and Community Services
Department, Single Family, Alternative Minimum
Tax, 6.000%, 7/01/27 7/05 at 102 Aa 483,550
- ------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 0.1%
1,000,000 Delaware River Port Authority, 5.500%, 1/01/26 1/06 at 102 Aaa 946,190
- ------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.4%
1,700,000 South Carolina Public Service Authority,
5.500%, 7/01/21 1/03 at 102 Aaa 1,593,308
2,135,000 Lexington County School District No. 4, Certificates
of Participation, 7.000%, 7/01/12 7/04 at 102 Baa 2,290,492
- ------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 1.3%
10,370,000 South Dakota Building Authority, 6.700%, 9/01/17 9/02 at 102 Aaa 11,403,163
- ------------------------------------------------------------------------------------------------------------------------------
TEXAS - 3.2%
10,765,000 Texas Veterans Housing, General Obligation,
Alternative Minimum Tax, 6.800%, 12/01/23 12/03 at 102 Aa 11,007,320
6,000,000 Texas Veterans Land Board, General Obligation,
6.500%, 12/01/21 12/01 at 102 Aa 6,245,100
2,170,000 Baytown Housing Finance Corporation, Single Family
Mortgage, 8.500%, 9/01/11 9/02 at 103 A1 2,368,577
3,500,000 Harris County Toll Road, Unlimited Tax and
Subordinate Lien, 6.500%, 8/15/15 8/02 at 102 AA+ 3,667,300
1,595,000 Hidalgo County Housing Finance Corporation,
Single Family Mortgage (GNMA and FNMA),
Alternative Minimum Tax, 7.000%, 10/01/27 4/04 at 102 Aaa 1,617,617
3,210,000 Port Arthur Housing Finance Corporation, Single
Family Mortgage, 8.700%, 3/01/12 9/02 at 103 A 3,487,986
- ------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.8%
3,000,000 Utah Associated Municipal Power Systems,
5.375%, 12/01/19 12/03 at 101 Aaa 2,777,280
3,905,000 Utah Housing Finance Agency, 6.450%, 7/01/14 7/04 at 102 Aa 4,012,973
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
UTAH (CONTINUED)
$ 6,000,000 Salt Lake City Redevelopment Agency (Central
Business District), 5.800%, 3/01/15 3/02 at 102 A $ 5,580,720
3,000,000 Weber County Municipal Building Authority,
7.500%, 12/15/19 12/04 at 102 AA 3,355,800
- ------------------------------------------------------------------------------------------------------------------------------
VERMONT - 0.7%
6,620,000 Vermont Housing Finance Agency, 6.400%, 11/01/25 5/02 at 102 A1 6,663,030
- ------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 1.5%
7,000,000 Washington General Obligation, 5.800%, 7/01/20 7/05 at 100 Aa 6,791,540
Washington Public Power Supply System, Nuclear
Project No. 3:
3,000,000 7.375%, 7/01/04 7/00 at 102 Aa 3,273,360
3,000,000 6.000%, 7/01/18 7/99 at 100 Aaa 3,000,990
- ------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8%
7,000,000 Harrison County Commission, Solid Waste (Potomac
Edison Company), Alternative Minimum Tax,
6.250%, 5/01/23 5/03 at 102 Aaa 7,064,680
- ------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.1%
18,500,000 Wisconsin Housing and Economic Development
Authority, Alternative Minimum Tax,
7.100%, 9/01/15 1/05 at 102 Aa 19,198,190
- ------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.6%
Puerto Rico Electric Power Authority:
4,000,000 5.500%, 7/01/14 7/05 at 102 A- 3,761,200
1,375,000 5.500%, 7/01/25 7/05 at 100 A- 1,263,942
$882,376,000 Total Investments - (cost $848,422,831) - 97.9% 877,233,828
================
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.2%
$ 1,200,000 Massachusetts Dedicated Income Tax, Variable Rate
Demand Bonds, 3.900%, 12/01/97+ VMIG-1 1,200,000
300,000 Massachusetts Industrial Finance Agency (Showa
Women's Institute Boston), Variable Rate Demand
Bonds, 4.150%, 3/15/04+ VMIG-1 300,000
700,000 Port Authority of New York and New Jersey Versatile
Structure Obligations, Variable Rate Demand
Bonds, 3.850%, 5/01/19+ A-1+ 700,000
$ 2,200,000 Total Temporary Investments - 0.2% 2,200,000
================
Other Assets Less Liabilities - 1.9% 16,657,663
Net Assets - 100% $896,091,491
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 43 $296,393,004 34%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 25 161,276,584 18
PORTFOLIO OF A+ A1 10 70,475,966 8
INVESTMENTS A, A- A, A2, A3 25 150,969,097 17
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 23 169,276,509 19
TEMPORARY BB+, BB, BB- Ba1, Ba, Ba2, Ba3 1 3,902,592 1
INVESTMENTS): Non-rated Non-rated 3 24,940,076 3
TOTAL 130 $877,233,828 100%
<FN>
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 3.0%
$ 7,500,000 Alabama General Obligation, 5.900%, 3/01/99 No Opt. Call Aa $ 7,817,325
8,000,000 Alabama Higher Education Loan Corporation,
Student Loan, Alternative Minimum Tax,
5.850%, 9/01/04 No Opt. Call Aaa 8,233,040
11,000,000 DCH Health Care Authority, 5.750%, 6/01/23 12/02 at 102 A1 10,117,910
- ------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.8%
6,700,000 Maricopa County School District No. 28, General
Obligation, 5.200%, 7/01/13 (Pre-refunded to
7/01/03) 7/03 at 100 Aaa 6,838,087
- ------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.3%
920,000 Arkansas Development Finance Authority, Single
Family Mortgage, 8.000%, 8/15/11 8/01 at 103 Aa 990,766
649,828 Jacksonville Resident Housing Facilities Board,
Single Family Mortgage, 7.900%, 1/01/11 7/03 at 103 Aaa 707,103
1,069,048 Lonoke County Residential Housing Facilities Board,
7.900%, 4/01/11 4/05 at 103 Aaa 1,149,750
- ------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 4.9%
3,105,000 California Educational Facilities Authority (Loyola
Marymount University), 5.750%, 10/01/24 4/04 at 102 A1 2,948,943
5,000,000 California Health Facilities Financing Authority
(Kaiser Permanente Medical Care Program),
6.500%, 12/01/20 12/00 at 102 Aa3 5,135,400
3,965,000 California Housing Finance Agency, Home Mortgage,
5.650%, 8/01/14 2/04 at 102 Aa 3,807,669
4,780,000 Foothill/Eastern Transportation Corridor Agency,
0.000%, 1/01/14 No Opt. Call BBB- 1,471,523
500,000 Los Angeles Community Redevelopment Agency,
Multi-Family Housing, Alternative Minimum Tax,
5.750%, 12/01/13 6/03 at 102 Baa1 467,455
3,900,000 Los Angeles Community Redevelopment Agency,
Alternative Minimum Tax, 5.900%, 12/01/26 6/96 at 100 A 3,564,210
3,135,000 Los Angeles Department of Water and Power,
9.000%, 5/15/00 No Opt. Call Aa 3,644,030
4,500,000 Los Angeles County Transportation Commission,
6.750%, 7/01/19 7/02 at 102 Aaa 5,057,595
3,000,000 Mountain View Shoreline Regional Park Community,
Tax Allocation, 5.750%, 8/01/18 8/02 at 102 A 2,801,940
2,500,000 Northern California Transmission Agency,
6.500%, 5/01/16 5/02 at 102 Aaa 2,650,975
5,000,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.300%, 5/01/25 5/04 at 101 Aaa 5,052,950
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 3,545,000 San Leandro Redevelopment Agency, Tax Allocation,
6.125%, 6/01/23 6/03 at 102 A- $ 3,431,135
1,945,000 South Gate Public Finance Authority,
6.000%, 10/01/12 No Opt. Call Aaa 2,033,050
- ------------------------------------------------------------------------------------------------------------------------------
COLORADO - 3.3%
City and County of Denver Airport System,
Alternative Minimum Tax:
6,000,000 7.500%, 11/15/02 11/01 at 102 Baa 6,674,280
3,040,000 7.750%, 11/15/13 No Opt.Call Baa 3,519,803
4,145,000 7.750%, 11/15/21 11/01 at 102 Baa 4,547,438
5,240,000 6.750%, 11/15/22 11/02 at 102 Baa 5,312,626
1,200,000 8.750%, 11/15/23 11/01 at 102 Baa 1,428,216
4,100,000 8.500%, 11/15/23 11/00 at 102 Baa 4,726,603
1,305,000 8.000%, 11/15/25 11/00 at 102 Baa 1,452,948
1,000,000 7.000%, 11/15/25 11/01 at 100 Baa 1,016,650
- ------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 1.3%
2,400,000 Connecticut Development Authority, Water
Facilities, 6.650%, 12/15/20 12/03 at 102 Aaa 2,630,712
6,500,000 Connecticut Health and Educational Facilities
Authority (Yale-New Haven Hospital),
7.100%, 7/01/25 7/00 at 102 Aaa 7,017,400
1,395,000 Connecticut Housing Finance Authority,
7.550%, 11/15/08 11/00 at 102 Aa 1,418,813
- ------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 4.5% District of Columbia General
Obligation:
3,890,000 5.500%, 6/01/06 No Opt. Call Aaa 3,883,854
9,500,000 6.000%, 6/01/07 No Opt. Call Aaa 9,833,925
5,000,000 6.000%, 6/01/09 6/03 at 102 Aaa 5,076,600
6,000,000 5.500%, 6/01/10 No Opt. Call Aaa 5,967,720
District of Columbia (Medlantic Health Care Group):
3,240,000 6.750%, 8/15/07 8/02 at 102 Baa1 3,276,418
4,250,000 5.750%, 8/15/14 8/06 at 102 Aaa 4,121,055
2,000,000 District of Columbia (American College of
Obstetricians and Gynecologists), 6.500%, 8/15/18 8/01 at 102 Aaa 2,092,340
4,500,000 District of Columbia (The Howard University),
6.750%, 10/01/12 10/02 at 102 A+ 4,654,440
- ------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.0%
2,500,000 Florida Division of Bond Finance (Hillsborough
County Expressway), 5.500%, 10/01/08 4/05 at 100 Aa 2,534,325
2,000,000 Jacksonville Health Facilities Authority (New Children's
Hospital at Baptist Medical Center), 7.000%, 6/01/21 6/01 at 102 Aaa 2,177,100
3,530,000 Lee County Capital Refunding, 7.300%, 10/01/07 10/99 at 102 Aaa 3,852,819
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
GEORGIA - 2.1%
Georgia Municipal Electric Authority:
$ 2,480,000 8.250%, 1/01/11 No Opt. Call A $ 3,067,413
5,500,000 5.700%, 1/01/19 No Opt. Call Aaa 5,434,055
4,185,000 7.250%, 1/01/24 No Opt. Call Aaa 5,038,824
3,000,000 Burke County Development Authority, Pollution
Control (Oglethorpe Power Corporation),
7.500%, 1/01/03 No Opt. Call Aaa 3,320,130
1,000,000 Monroe County Development Authority, Pollution
Control (Oglethorpe Power), 6.450%, 1/01/05 No Opt. Call A+ 1,072,550
- ------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.7%
1,500,000 Hawaii Department of Transportation Airports
System, Alternative Minimum Tax, 7.300%, 7/01/20 7/00 at 102 Aaa 1,629,300
5,000,000 Honolulu General Obligation, 5.000%, 10/01/13 No Opt. Call Aa 4,624,200
- ------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 17.1%
6,500,000 Illinois Development Finance Authority, Pollution
Control (Commonwealth Edison Company),
5.300%, 1/15/04 No Opt. Call Baa2 6,265,675
4,325,000 Illinois Development Finance Authority (Child Care
Facility), 7.400%, 9/01/04 9/02 at 102 N/R 4,468,071
2,240,000 Illinois Educational Facilities Authority (Chicago
College of Osteopathic Medicine), 8.750%, 7/01/05 No Opt. Call Aaa 2,570,198
Illinois Educational Facilities Authority (Loyola
University):
6,190,000 7.125%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 A+ 6,948,894
10,360,000 7.125%, 7/01/21 7/01 at 102 A1 11,082,610
Illinois Health Facilities Authority (Lutheran
General Health):
5,705,000 7.000%, 4/01/08 No Opt. Call A+ 6,269,795
4,075,000 7.000%, 4/10/14 No Opt. Call A+ 4,478,140
2,500,000 Illinois Health Facilities Authority (Delnor-
Community Hospital), 5.500%, 5/15/13 5/03 at 102 Aaa 2,380,450
3,000,000 Illinois Health Facilities Authority (Illinois
Masonic Medical Center), 5.500%, 10/01/19 10/03 at 102 A 2,672,760
2,000,000 Illinois Health Facilities Authority, 7.000%, 7/01/12 7/02 at 102 Baa 1,987,120
5,000,000 Illinois Health Facilities Authority (Riverside Senior
Living Center Project), 7.500%, 11/01/20 11/00 at 102 Baa1 5,160,350
12,490,000 Illinois Health Facilities Authority (Hinsdale
Hospital), 9.000%, 11/15/15 11/00 at 102 Baa1 14,188,265
Illinois Housing Development Authority,
Multi-Family Housing:
8,190,000 6.650%, 9/01/14 9/04 at 102 A1 8,292,785
11,145,000 5.900%, 7/01/15 7/05 at 102 Aaa 11,030,429
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 3,410,000 Illinois Housing Development Authority, Section 8
(Skyline Towers), 6.875%, 11/01/17 11/02 at 102 A $ 3,508,208
3,920,000 Illinois Housing Development Authority, Section 8
Elderly Housing (Morningside North),
6.600%, 1/01/07 1/03 at 102 A 4,100,947
9,700,000 Chicago Tax Increment (Stockyards Industrial
Redevelopment), 9.250%, 1/01/12 No Opt. Call N/R 10,657,293
7,850,000 Cook County High School District No. 205
(Thornton Township), General Obligation,
6.750%, 12/01/01 No Opt. Call Aaa 8,622,048
2,025,000 Long Creek Township Waterworks, 7.250%, 5/01/23 5/03 at 100 N/R 1,924,236
3,050,000 Regional Transportation Authority, General
Obligation, 7.200%, 11/01/20 No Opt. Call Aaa 3,562,553
3,400,000 Vermilion County Community Consolidated School
District No. 118 (Danville), 5.500%, 12/01/11 12/07 at 100 Aaa 3,338,800
14,375,000 Wheeling Multi-Family Housing (Arlington Club),
6.400%, 2/01/40 2/03 at 100 AAA 14,331,156
Wood River Township Hospital, General Obligation:
5,000,000 6.625%, 2/01/14 2/04 at 102 BBB 5,103,650
4,765,000 6.500%, 2/01/14 2/04 at 102 BBB 4,820,941
- ------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.4%
2,250,000 Indiana Bond Bank, 6.750%, 8/01/12 2/03 at 102 A 2,401,988
3,200,000 Indiana Health Facilities Financing Authority
(Methodist Hospitals), 6.750%, 9/15/09 9/02 at 102 A 3,344,128
2,100,000 Indianapolis Economic Development (The Meadows-
Section 8 Project), 6.000%, 7/01/23 7/03 at 103 A 1,904,385
2,000,000 Kokomo Hospital Authority (Saint Joseph Hospital
and Health Center), 6.250%, 8/15/05 No Opt. Call Baa 2,053,620
3,615,000 Mooresville School Building Corporation,
6.200%, 7/15/15 1/04 at 101 A 3,656,970
5,900,000 Muncie School Building Corporation,
6.625%, 7/15/14 (Pre-refunded to 7/15/01) 7/01 at 102 N/R 6,512,892
9,500,000 Petersburg Pollution Control (Indianapolis Power
and Light Company), 6.100%, 1/01/16 1/03 at 102 Aa2 9,561,275
- ------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.6%
3,810,000 Iowa Finance Authority (Trinity Hospital),
7.000%, 7/01/12 7/00 at 100 BBB+ 3,857,854
1,000,000 Davenport Home Ownership, 7.900%, 3/01/10 9/04 at 102 A1 1,060,600
- ------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5%
2,225,000 Johnson County Single Family Mortgage,
7.100%, 5/01/12 5/04 at 103 A 2,384,844
2,130,000 Labette County Single Family Mortgage,
8.400%, 12/01/11 6/03 at 103 A1 2,271,496
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
KENTUCKY - 0.1%
$ 1,000,000 Dayton Elderly Housing Corporation,
6.000%, 9/01/24 9/03 at 102 AAA $ 973,360
- ------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.0%
3,500,000 Clover Dale Housing Corporation, 6.550%, 2/01/22 4/01 at 100 AA 3,526,635
6,000,000 New Orleans General Obligation, 6.500%, 10/01/02 No Opt. Call Aaa 6,566,160
7,150,000 Orleans Levee District Public Improvement,
5.950%, 11/01/14 12/05 at 102 Aaa 6,993,272
- ------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.0%
8,000,000 Maine Educational Loan Marketing Corporation,
Alternative Minimum Tax, 6.250%, 11/01/06 No Opt. Call A 8,337,680
- ------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.9%
2,000,000 Maryland Health and Higher Educational Facilities
Authority (Doctor's Community Hospital),
5.750%, 7/01/13 7/03 at 102 Baa 1,871,460
4,885,000 Maryland Transportation Authority (Baltimore/
Washington International Airport), Alternative
Minimum Tax, 6.400%, 7/01/19 7/04 at 102 Aaa 5,076,883
1,000,000 Prince George's County (Dimensions Health
Corporation), 5.375%, 7/01/14 7/04 at 102 A 915,300
- ------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.5%
4,195,000 Massachusetts Health and Educational Facilities
Authority (Youville Hospital), 6.000%, 2/15/34 2/04 at 102 Aa 4,102,584
2,000,000 Massachusetts Housing Finance Agency,
6.300%, 10/01/13 4/03 at 102 A1 2,020,240
3,300,000 Massachusetts Industrial Finance Agency, Resource
Recovery (SEMASS Project), Alternative Minimum
Tax, 9.250%, 7/01/15 7/01 at 103 N/R 3,594,426
3,000,000 Massachusetts Water Resources Authority,
5.500%, 3/01/17 3/03 at 102 Aaa 2,838,000
- ------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.1%
1,500,000 Michigan Hospital Finance Authority (St. John
Hospital and Medical Center), 5.250%, 5/15/26 5/06 at 102 Aaa 1,341,345
2,000,000 Michigan State Hospital Finance Authority (The
Detroit Medical Center), 5.000%, 8/15/03 No Opt. Call A 1,984,200
3,750,000 Michigan Strategic Fund (Consumers Power),
5.800%, 6/15/10 6/03 at 102 Aaa 3,814,800
14,000,000 Michigan Strategic Fund (WMX Technologies),
Alternative Minimum Tax, 6.000%, 12/01/13 12/03 at 102 A1 13,906,060
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
MICHIGAN (CONTINUED)
$ 5,000,000 Detroit Convention Facility (Cobo Hall),
5.250%, 9/30/12 9/03 at 102 A $ 4,558,000
1,000,000 Kalamazoo Hospital Finance Authority (Bronson
Methodist Hospital), 5.750%, 5/15/16 5/06 at 102 Aaa 971,610
6,000,000 Monroe County Pollution Control (Detroit Edison),
Alternative Minimum Tax, 6.550%, 9/01/24 9/03 at 103 Aaa 6,204,480
2,750,000 Royal Oak Hospital Finance Authority (William
Beaumont Hospital), 6.750%, 1/01/20 1/01 at 102 Aaa 2,938,733
- ------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.8%
4,000,000 Minneapolis Community Development Agency,
7.375%, 12/01/12 12/02 at 102 BBB+ 4,385,040
2,720,000 Minnetonka Multi-Family Housing (Brier Creek
Project), 6.450%, 6/20/24 6/04 at 102 AAA 2,763,656
- ------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.3%
1,920,000 Mississippi Educational Facilities Authority
(Tougaloo College), 6.500%, 6/01/18 6/03 at 102 Baa 1,903,200
2,000,000 Mississippi Higher Education Assistance
Corporation, Student Loan, Alternative Minimum
Tax, 5.800%, 9/01/06 9/02 at 102 Aaa 2,020,220
3,000,000 Mississippi Home Corporation, Single Family
Mortgage (GNMA), Alternative Minimum Tax,
6.550%, 4/01/21 4/05 at 102 Aaa 3,056,010
2,170,000 Mississippi Housing Finance Corporation, Single
Family Mortgage (GNMA), Alternative Minimum
Tax, 8.250%, 10/15/18 10/99 at 102 Aaa 2,280,475
1,695,000 Mississippi Regional Housing Authority No. 5
(FHA Insured), 7.050%, 7/01/21 7/00 at 105 AAA 1,775,106
- ------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 2.1%
9,000,000 Nebraska Higher Education Loan Program,
Alternative Minimum Tax, 6.250%, 6/01/18 No Opt. Call Aa 8,856,540
1,415,000 Nebraska Investment Finance Authority, Single
Family Mortgage, Alternative Minimum Tax,
8.125%, 8/15/38 8/98 at 102 Aaa 1,476,043
Omaha Airport Authority:
1,665,000 8.375%, 1/01/14 (Pre-refunded to 1/01/02) 1/02 at 102 A 1,980,384
5,075,000 8.375%, 1/01/14 1/02 at 102 A 5,866,243
- ------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.8%
1,725,000 Nevada Housing Division, Single Family Mortgage,
6.200%, 10/01/15 4/04 at 102 Aa 1,735,040
4,500,000 Clark County School District, General Obligation,
7.000%, 6/01/10 No Opt. Call Aaa 5,177,025
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
NEW HAMPSHIRE - 0.5%
$ 4,185,000 New Hampshire Housing Finance Authority,
Alternative Minimum Tax, 7.950%, 7/01/22 7/00 at 102 Aa $ 4,403,206
- ------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.5%
860,000 New Mexico Educational Assistance Foundation,
Student Loan, Alternative Minimum Tax,
6.850%, 12/01/05 12/02 at 101 A 877,974
2,985,000 New Mexico Mortgage Finance Authority, Single
Family Mortgage, 6.900%, 7/01/24 7/02 at 102 Aa 3,089,953
- ------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 7.6%
10,500,000 New York State Medical Care Facilities Finance
Agency, Hospital and Nursing Home
(FHA-Insured), 6.200%, 8/15/22 8/02 at 102 AAA 10,535,910
8,240,000 New York State Medical Care Facilities Finance
Agency, Hospital and Nursing Home,
FHA-Insured (St. Vincent's Medical Center),
6.200%, 2/15/21 2/04 at 102 AAA 8,272,054
13,500,000 New York State Thruway Authority, 6.000%, 1/01/15 1/05 at 102 Aaa 13,641,750
New York City General Obligation:
4,400,000 9.500%, 8/01/02 8/01 at 101 1/2 Baa1 5,189,448
8,000,000 6.750%, 8/15/03 No Opt. Call Baa1 8,528,960
1,000,000 7.000%, 8/01/04 No Opt. Call Baa1 1,083,150
14,310,000 6.500%, 2/01/05 No Opt. Call Baa1 14,928,478
4,000,000 New York City Housing Development Corporation,
Multi-Family Housing, 5.700%, 11/01/13 5/03 at 102 Aa 3,930,520
- ------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.3%
2,500,000 North Carolina Municipal Power Agency,
4.100%, 1/01/05 No Opt. Call Aaa 2,275,100
- ------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 1.2%
8,330,000 Mercer County Pollution Control (Basin Electric
Power Co-op), 7.000%, 1/01/19 1/99 at 103 A2 8,808,392
1,525,000 Minot Single Family Mortgage, 7.700%, 8/01/10 8/03 at 102 Aa 1,634,861
- ------------------------------------------------------------------------------------------------------------------------------
OHIO - 5.6%
3,960,000 Ohio Housing Finance Agency (GNMA),
6.300%, 9/01/17 3/05 at 102 AAA 4,040,586
15,825,000 Ohio Housing Finance Agency, Single Family
Mortgage (GNMA), Alternative Minimum Tax,
7.650%, 3/01/29 9/99 at 102 AAA 16,616,567
10,000,000 Ohio Water Development Authority, Pollution
Control (Phillip Morris Project), 7.250%, 12/01/08 12/97 at 103 A 10,564,900
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
OHIO (CONTINUED)
$ 4,500,000 Akron Bath and Copley Joint Township Hospital
District (Summa Health System Project),
6.250%, 11/15/07 11/02 at 102 A $ 4,596,795
1,995,000 Franklin County Multi-Family Housing (Hamilton
Creek Apartments), Alternative Minimum Tax,
5.550%, 7/01/24 1/05 at 103 Aa 1,825,585
6,600,000 Cincinnati Student Loan Funding Corporation,
Alternative Minimum Tax, 5.500%, 12/01/01 No Opt. Call A1 6,675,504
4,370,000 Toledo General Obligation, Limited Tax,
5.750%, 12/01/09 12/04 at 102 Aaa 4,468,893
- ------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.3%
Columbia River People's Utility District, General
Obligation:
1,200,000 5.000%, 6/01/05 No Opt. Call Aaa 1,196,052
1,215,000 5.000%, 6/01/06 No Opt. Call Aaa 1,200,274
- ------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.2%
5,000,000 Harrisburg Authority Water System,
7.000%, 7/15/10 (Pre-refunded to 7/15/01) 7/01 at 100 Aaa 5,529,000
Philadelphia Water and Wastewater System:
5,400,000 5.300%, 8/01/06 No Opt. Call Aaa 5,451,894
3,000,000 5.500%, 6/15/14 6/03 at 102 Aaa 2,868,900
5,600,000 Philadelphia Municipal Authority, 5.625%, 11/15/18 11/03 at 102 Aaa 5,352,144
- ------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.1%
5,500,000 Rhode Island Health and Educational Building
Corporation (Johnson and Wales University),
8.375%, 4/01/20 (Pre-refunded to 4/01/00) 4/00 at 102 AAA 6,342,545
3,950,000 Rhode Island Health and Educational Building
Corporation (Providence College), 5.600%, 11/01/22 11/03 at 102 Aaa 3,631,512
- ------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.7%
5,615,000 South Carolina Public Service Authority,
7.300%, 7/01/21 7/96 at 102 A1 5,760,822
- ------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 1.1%
9,005,000 South Dakota Student Loan Assistance Corporation,
Alternative Minimum Tax, 7.400%, 8/01/99 No Opt. Call A 9,365,920
- ------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.3%
2,400,000 Tennessee Housing Development Agency, Alternative
Minimum Tax, 6.900%, 7/01/25 7/04 at 102 A1 2,470,320
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEXAS - 5.8%
$ 4,891,379 Texas General Services Commission, 7.500%, 9/01/22 9/97 at 102 A $ 4,767,481
8,500,000 Texas Turnpike Authority, 7.250%, 1/01/10
(Pre-refunded to 1/01/99) 1/99 at 102 Aaa 9,255,650
1,000,000 Alliance Airport Authority (American Airlines),
Alternative Minimum Tax, 7.500%, 12/01/29 12/00 at 102 Baa2 1,063,480
6,000,000 Dallas-Fort Worth International Airport (American
Airlines, Inc.), Alternative Minimum Tax,
7.500%, 11/01/25 11/00 at 102 Baa2 6,377,220
2,850,000 Dallas Waterworks and Sewer System,
5.000%, 4/01/09 4/03 at 100 Aa 2,687,864
Houston Airport System Subordinate Lien,
Alternative Minimum Tax:
2,500,000 6.750%, 7/01/08 7/01 at 102 Aaa 2,693,475
2,500,000 6.750%, 7/01/21 7/01 at 102 Aaa 2,611,375
3,445,000 Houston Housing Finance Corporation, Single Family
Mortgage, 5.950%, 12/01/10 6/03 at 102 Aaa 3,488,166
3,500,000 Houston Water and Sewer System, 5.750%, 12/01/15 12/02 at 102 Aaa 3,417,470
2,486,711 Midland Housing Finance Corporation, Single Family
Mortgage, 8.450%, 12/01/11 11/05 at 103 Aaa 2,710,416
2,215,000 North Texas Higher Educational Authority, Student
Loan, Alternative Minimum Tax, 6.300%, 4/01/09 4/03 at 102 A 2,226,097
6,500,000 Travis County Health Facilities Development
Corporation (Daughters of Charity Health System),
6.000%, 11/15/22 11/03 at 102 Aa 6,118,645
1,690,000 University of Texas, 7.000%, 8/15/07 8/01 at 102 Aa1 1,858,442
810,000 University of Texas Financing System,
7.000%, 8/15/07 (Pre-refunded to 8/15/01) 8/01 at 102 Aa1 909,590
- ------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.2%
1,500,000 Intermountain Power Agency, 7.750%, 7/01/20 7/98 at 102 Aa 1,613,985
- ------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.3%
2,645,000 Suffolk Redevelopment Authority, Multi-Family
Housing (Chase Heritage Project), 7.000%, 7/01/24
(Mandatory put 7/01/04) 7/02 at 104 Baa3 2,771,828
- ------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 10.1%
5,750,000 Washington Health Care Facilities Authority
(Franciscan Health System, St. Joseph Hospital and
Tacoma Health Care, 5.625%, 1/01/13 1/03 at 102 Aaa 5,553,580
Washington Public Power Supply System, Nuclear
Project No. 1:
4,500,000 5.750%, 7/01/13 7/03 at 102 Aa 4,266,945
4,845,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) 7/99 at 102 Aaa 5,361,962
23,000,000 5.375%, 7/01/15 7/03 at 102 Aa 20,708,280
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
Washington Public Power Supply System, Nuclear
Project No. 2:
$ 6,475,000 7.250%, 7/01/06 No Opt. Call Aa $ 7,337,146
3,580,000 7.625%, 7/01/10 (Pre-refunded to 1/01/01) 1/01 at 102 AAA 4,079,052
7,250,000 6.250%, 7/01/12 7/02 at 102 Aa 7,279,073
Washington Public Power Supply System, Nuclear
Project No. 3:
10,000,000 7.000%, 7/01/09 No Opt. Call Aa 11,083,700
2,380,000 5.500%, 7/01/17 1/00 at 100 Aa 2,160,135
3,850,000 Port of Seattle General Obligation, Alternative
Minimum Tax, 5.750%, 5/01/14 5/04 at 102 Aa1 3,673,670
5,000,000 Snohomish County Public Utility District No. 1,
5.500%, 1/01/14 1/03 at 100 Aaa 4,811,050
4,705,000 Tacoma Department of Public Utilities, Sewer
System, 8.000%, 12/01/08 No Opt. Call Aaa 5,853,301
5,595,000 Vancouver Housing Authority (Fishers Mill Project),
6.000%, 3/01/23 3/03 at 100 Aa 5,441,865
- ------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.5%
3,580,000 West Virginia Housing Development Fund,
Alternative Minimum Tax, 7.950%, 5/01/17 11/00 at 102 Aa1 3,757,316
1,000,000 Parkersburg Water System, 6.375%, 9/01/19 9/04 at 102 Aaa 1,000,140
- ------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.3%
1,400,000 Wisconsin Health and Educational Facilities
Authority (Wheaton Franciscan Services),
5.750%, 8/15/22 8/03 at 102 Aaa 1,326,442
970,000 Wisconsin Housing and Economic Development
Authority, Alternative Minimum Tax,
7.000%, 5/01/10 5/02 at 102 A1 1,008,896
- ------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.5%
2,500,000 Puerto Rico Commonwealth General Obligation,
5.375%, 7/01/22 7/05 at 101 1/2 Aaa 2,352,825
2,500,000 Puerto Rico Highway and Transportation Authority,
5.500%, 7/01/19 7/03 at 101 1/2 A 2,296,149
- ------------------------------------------------------------------------------------------------------------------------------
$819,356,966 Total Investments - (cost $828,986,522) - 97.2% 840,989,729
================
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 1.0%
$ 2,500,000 Chicago O'Hare International Airport (American
Airlines), Variable Rate Demand Bonds,
4.100%, 12/01/17+ P-1 $ 2,500,000
5,000,000 Harris County Health Facilities Development
Corporation (The Methodist Hospital), Variable
Rate Demand Bonds, 4.100%, 12/01/25+ A-1+ 5,000,000
800,000 New York City General Obligation, Variable Rate
Demand Bonds, 4.000%, 8/15/22+ VMIG-1 800,000
$ 8,300,000 Total Temporary Investments - 1.0% 8,300,000
================
Other Assets Less Liabilities - 1.8% 16,055,174
Net Assets - 100% $865,344,903
============
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 75 $341,839,281 41%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 32 151,535,383 18
PORTFOLIO OF A+ A1 17 91,040,005 11
INVESTMENTS A, A- A, A2, A3 26 103,984,443 12
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 29 125,433,699 15
TEMPORARY Non-rated Non-rated 5 27,156,918 3
INVESTMENTS):
TOTAL 184 $840,989,729 100%
<FN>
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
(Unaudited)
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $1,261,373,383 $ 877,233,828 $ 840,989,729
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 2,000,000 2,200,000 8,300,000
Cash 687,857 3,772,785 --
Receivables:
Interest 26,456,608 17,887,333 17,316,735
Investments sold 8,860,627 2,209,031 2,319,369
Other assets 559,091 98,543 70,980
-------------- -------------- --------------
Total assets 1,299,937,566 903,401,520 868,996,813
-------------- -------------- --------------
LIABILITIES
Payable for investments purchased 7,879,014 3,346,285 --
Accrued expenses:
Management fees (note 6) 651,769 459,322 443,822
Other 333,591 208,910 296,937
Preferred share dividends payable 494,214 138,850 136,175
Common share dividends payable 5,070,942 3,156,662 2,774,976
-------------- -------------- --------------
Total liabilities 14,429,530 7,310,029 3,651,910
-------------- -------------- --------------
Net assets (note 7) $1,285,508,036 $ 896,091,491 $ 865,344,903
============== ============== ==============
Preferred shares, at liquidation value $ 350,000,000 $ 300,000,000 $ 308,400,000
============== ============== ==============
Preferred shares outstanding 14,000 12,000 12,336
============== ============== ==============
Common shares outstanding 63,785,431 40,731,119 40,808,465
============== ============== ==============
Net asset value per Common share outstanding
(net assets less Preferred shares at liquidation
value, divided by Common shares outstanding) $ 14.67 $ 14.63 $ 13.65
============== ============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended April 30, 1996
(Unaudited)
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $ 42,077,398 $ 27,895,647 $ 25,957,789
------------ ------------ ------------
Expenses:
Management fees (note 6) 4,037,286 2,843,310 2,742,441
Preferred shares--remarketing/auction fees 408,330 375,289 385,500
Preferred shares--dividend disbursing agent fees 37,500 37,361 52,500
Shareholders' servicing agent fees and expenses 127,381 40,615 62,887
Custodian's fees and expenses 81,731 62,514 59,719
Directors' fees and expenses (note 6) 23,795 1,760 1,982
Professional fees 26,449 12,997 6,498
Shareholders' reports--printing and mailing expenses 91,815 57,482 63,438
Stock exchange listing fees 15,933 17,705 19,141
Investor relations expense 47,686 27,930 29,642
Other expenses 10,784 13,458 3,160
------------ ------------ ------------
Total expenses 4,908,690 3,490,421 3,426,908
------------ ------------ ------------
Net investment income 37,168,708 24,405,226 22,530,881
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain from investment transactions,
net of taxes, if applicable (notes 1 and 3) 1,891,183 3,913,875 4,002,080
Net change in unrealized appreciation or depreciation
of investments (26,624,012) (14,524,103) (13,364,523)
------------ ------------ ------------
Net gain (loss) from investments (24,732,829) (10,610,228) (9,362,443)
------------ ------------ ------------
Net increase in net assets from operations $ 12,435,879 $ 13,794,998 $ 13,168,438
============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NPI NPM
6 months ended Year ended 6 months ended Year ended
4/30/96 10/31/95 4/30/96 10/31/95
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 37,168,708 $ 78,793,817 $ 24,405,226 $ 48,688,900
Net realized gain (loss) from investment transactions,
net of taxes, if applicable 1,891,183 4,129,049 3,913,875 (2,588,592)
Net change in unrealized appreciation or depreciation
of investments (26,624,012) 59,644,723 (14,524,103) 79,286,649
--------------- --------------- --------------- ---------------
Net increase in net assets from operations 12,435,879 142,567,589 13,794,998 125,386,957
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (31,095,411) (67,357,422) (18,817,786) (37,391,184)
Preferred shareholders (6,347,816) (13,745,101) (5,432,732) (12,048,841)
From accumulated net realized gains from investment
transactions:
Common shareholders (3,157,384) -- -- --
Preferred shareholders -- -- -- --
--------------- --------------- --------------- ---------------
Decrease in net assets from distributions to
shareholders (40,600,611) (81,102,523) (24,250,518) (49,440,025)
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from Common shares issued to
shareholders due to reinvestment of distributions -- -- -- --
--------------- --------------- --------------- ---------------
Net increase in net assets derived from capital
share transactions -- -- -- --
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets (28,164,732) 61,465,066 (10,455,520) 75,946,932
Net assets at beginning of period 1,313,672,768 1,252,207,702 906,547,011 830,600,079
--------------- --------------- --------------- ---------------
Net assets at end of period $ 1,285,508,036 $ 1,313,672,768 $ 896,091,491 $ 906,547,011
=============== =============== =============== ===============
Balance of undistributed net investment income at
end of period $ 573,480 $ 847,999 $ 2,318,189 $ 2,163,480
=============== =============== =============== ===============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NPT
6 months ended Year ended
4/30/96 10/31/95
<S> <C> <C>
OPERATIONS
Net investment income $ 22,530,881 $ 44,910,619
Net realized gain (loss) from investment transactions,
net of taxes, if applicable 4,002,080 (6,194,923)
Net change in unrealized appreciation or depreciation
of investments (13,364,523) 80,130,266
------------- -------------
Net increase in net assets from operations 13,168,438 118,845,962
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (16,649,852) (34,279,102)
Preferred shareholders (5,542,609) (11,846,699)
From accumulated net realized gains from investment
transactions:
Common shareholders -- --
Preferred shareholders -- --
------------- -------------
Decrease in net assets from distributions to
shareholders (22,192,461) (46,125,801)
------------- -------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from Common shares issued to
shareholders due to reinvestment of distributions 32,044 --
------------- -------------
Net increase in net assets derived from capital
share transactions 32,044 --
------------- -------------
Net increase (decrease) in net assets (8,991,979) 72,720,161
Net assets at beginning of period 874,336,882 801,616,721
------------- -------------
Net assets at end of period $ 865,344,903 $ 874,336,882
============= =============
Balance of undistributed net investment income at
end of period $ 1,360,502 $ 1,022,082
============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At April 30, 1996, the National Funds (the "Funds") covered in this report and
their corresponding New York Stock Exchange symbols are Nuveen Premium Income
Municipal Fund, Inc. (NPI), Nuveen Premium Income Municipal Fund 2, Inc. (NPM)
and Nuveen Premium Income Municipal Fund 4, Inc. (NPT). 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
generally accepted accounting principles.
Securities Valuation
Portfolio securities for which market quotations are readily available are
valued at the mean between the quoted bid and asked prices or the yield
equivalent. Portfolio securi ties for which market quotations are not readily
available are valued at fair value by consistent application of methods
determined in good faith by the Board of Directors. Temporary investments in
securities that have variable rate and demand features qualifying them as
short-term securities are traded and valued at amortized cost.
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 be settled a month or more after the transaction date. 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 their purchase
commitments. At April 30, 1996, NPI had outstanding purchase commit ments of
$7,879,014. There were no such purchase commitments in NPM or NPT.
Interest 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.
<PAGE>
Federal Income Taxes
The Funds intend to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies by distributing to shareholders
all of the Funds' tax-exempt net investment income, in addition to any
significant amounts of net realized capital gains from investments and/or
market discount realized upon the sale of securities. 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 income tax, to retain such tax-exempt status
when distributed to shareholders of the Funds.
Dividends and Distributions to Shareholders
Net investment income is declared as a dividend monthly and payment is made or
reinvestment is credited to shareholder accounts after month-end. Net realized
capitalgains from securities transactions are distributed to shareholders not
less frequently than annually only to the extent they exceed available capital
loss carryovers.
Distributions to shareholders of net investment income and net realized
capital gains are recorded on the ex-dividend date. The amount and timing of
such distributions are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
Accordingly, temporary over-distributions as a result of these differences may
result and will be classified as either distributions in excess of net
investment income or distributions in excess of net realized gains from
investment transactions, if applicable.
Preferred Shares
The Board of Directors of NPI approved a 4 for 1 split of the Fund's Preferred
shares effective as of the close of business on August 9, 1995, which lowered
the stated value from $100,000 to $25,000 per share.
NPI has issued and outstanding 2,800 shares of each Series A, B, C, D and E
$25,000 stated value Preferred shares. The dividend rate on each Series may
change every 28 days as set by the auction agent, except for series E which
may change every seven days.
<PAGE>
<TABLE>
NPM and NPT have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in more than one 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:
<CAPTION>
NPM NPT
<S> <C> <C>
Number of shares:
Series M 2,000 2,200
Series T 3,000 2,000
Series T2 -- 1,328
Series W 2,000 1,680
Series Th 3,000 2,000
Series F 2,000 1,800
Series F2 -- 1,328
------ ------
Total 12,000 12,336
====== ======
Derivative Financial Instruments
In October 1994, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 119 Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments which
prescribes disclosure requirements for transactions in certain derivative
financial instruments including future, 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 six months ended
April 30, 1996.
2. FUND SHARES
There were no share transactions during the six months ended April 30, 1996 or
the year ended October 31, 1995, in any of the Funds.
</TABLE>
<PAGE>
<TABLE>
3. SECURITIES TRANSACTIONS
Purchase and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the six months ended
April 30, 1996, were as follows:
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
PURCHASES
Investments in municipal securities $167,878,288 $125,119,295 $105,982,384
Temporary municipal investments 119,350,000 50,900,000 35,450,000
SALES AND MATURITIES
Investments in municipal securities 144,936,659 125,155,208 109,773,186
Temporary municipal investments 120,850,000 54,200,000 30,050,000
============ ============ ============
At April 30, 1996, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for
each Fund.
At October 31, 1995, the Funds' last fiscal year end, the following Funds had
unused capital loss carryovers available for federal income tax purposes to be
applied against future capital gains, if any. If not applied, the carryovers
will expire as follows:
<CAPTION>
NPM NPT
<S> <C> <C>
Expiration year:
2000 $ -- $ 12,020
2001 -- 7,278,447
2002 2,198,448 12,137,697
2003 2,588,592 5,211,676
---------- -----------
Total $4,787,040 $24,639,840
========== ===========
4. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On May 1, 1996, the Funds declared Common share dividend distributions from
their ordinary income which were paid June 3, 1996, to shareholders of record
on May 15, 1996, as follows:
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
Dividend per share $.0795 $.0775 $.0680
====== ====== ======
</TABLE>
<PAGE>
<TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments at April 30, 1996, were as follows:
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
Gross unrealized:
Appreciation $ 45,154,191 $ 31,175,576 $ 18,318,702
Depreciation (16,096,507) (2,364,579) (6,315,495)
------------ ------------ ------------
Net unrealized appreciation $ 29,057,684 $ 28,810,997 $ 12,003,207
============ ============ ============
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 to the Adviser an annual management fee, payable monthly, at the
rates set forth below, which are based upon the average daily net asset value
of each Fund:
<CAPTION>
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
<S> <C>
For the first $125,000,000 .65 of 1%
For the next $125,000,000 .6375 of 1
For the next $250,000,000 .625 of 1
For the next $500,000,000 .6125 of 1
For the next $1,000,000,000 .6 of 1
For net assets over $2,000,000,000 .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 directors who are affiliated with the Adviser
or to their officers, all of whom receive remuneration for their services to
the Funds from the Adviser.
</TABLE>
<PAGE>
<TABLE>
7. COMPOSITION OF NET ASSETS
At April 30, 1996, net assets consisted of:
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 350,000,000 $ 300,000,000 $ 308,400,000
Common shares, $.01 par value per share 637,854 407,311 408,085
Paid-in surplus 903,352,772 565,415,503 563,800,904
Balance of undistributed net investment income 573,480 2,318,189 1,360,502
Accumulated net realized gain (loss) from investment
transactions 1,886,246 (860,509) (20,627,795)
Net unrealized appreciation or depreciation
of investments 29,057,684 28,810,997 12,003,207
-------------- -------------- --------------
Net assets $1,285,508,036 $ 896,091,491 $ 865,344,903
============== ============== ==============
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
============== ============== ==============
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At April 30, 1996, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
Revenue Bonds:
Housing Facilities 17% 19% 18%
Health Care Facilities 10 10 13
Electric Utilities 12 2 10
Transportation 7 10 8
Lease Rental Facilities 4 10 2
Pollution Control Facilities 8 6 9
Educational Facilities 4 5 9
Water / Sewer Facilities 4 3 4
Other 8 7 5
General Obligation Bonds 6 20 15
Escrowed Bonds 20 8 7
--- --- ---
100% 100% 100%
=== === ===
</TABLE>
<PAGE>
Certain long-term and intermediate-term investments owned by the Funds are
either covered by insurance issued by several private insurers or are backed
by an escrow or trust containing U.S. Government or U.S. Government agency
securities, both of which ensure the timely payment of principal and interest
in the event of default (42% for NPI, 30% for NPM and 33% for NPT). Such
insurance or escrow, however, does not guarantee the market value of the
municipal securities or the value of any of the Funds' shares.
All of the temporary investments in short-term municipal securities have
credit enhancements (letters of credit, guarantees or insurance) issued by
third party domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
9. OTHER MATTERS
In connection with the NPI's 1993 Rights Offering, certain legal actions have
been filed by Fund shareholders in federal district court in Chicago against
(1) John Nuveen & Co. Incorporated, Nuveen Advisory Corp., and the directors
of the Fund, alleging that the defendants violated federal and state laws and
the Fund's articles of incorporation in connection with the Rights Offering
and (2) the Fund's former outside legal counsel and in-house counsel to John
Nuveen & Co. Incorporated alleging, among other things, negligence and
professional malpractice. Certain of the claims in these actions are asserted
on behalf of the Fund shareholders and certain are asserted on behalf of the
Fund. The defendants have denied the allegations and are defending the suits
which seek unspecified damages. The Court in the Chicago case recently denied
in large part various motions to dismiss. The Fund's Board of Directors has
created a Committee, comprised of outside directors who are not defendants in
the suits, to investigate the claims being pursued in the Fund's name. The
Committee has completed its investigation. Based on the Committee's
investigation, the Fund, in May, 1996, filed a motion to be substituted as the
actual plaintiff and to terminate the litigation, except as to certain claims
against the Fund's adviser and outside counsel. The motion is currently
pending before the Court. While there can be no assurance as to the outcome of
these suits, based on their current status, Fund management believes that they
will not have a material adverse effect on the Fund.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(Unaudited)
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
<CAPTION>
Operating performance Dividends from net investment income
Net
realized &
Net asset unrealized
value Net gain (loss) To To
beginning investment from invest- Common Preferred
of period income ments++ shareholders shareholders+
NPI
<S> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 $15.110 $ .584 $ (.386) $ (.488) $(.100)
Year ended 10/31,
1995 14.140 1.235 1.006 (1.056) (.215)
1994 16.300 1.256 (2.016)+++ (1.172) (.156)
1993 15.790 1.431 .612 (1.364) (.169)
5 mos. ended
10/31/92 15.760 .602 .023 (.516) (.079)
Year ended 5/31,
1992 15.180 1.492 .492 (1.135) (.269)
1991 14.600 1.504 .532 (1.080) (.376)
1990 14.720 1.508 (.115) (1.080) (.433)
7/18/88 to
5/31/89 14.050 1.101 .741 (.747) (.268)
<CAPTION>
NPM
<S> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 14.890 .599 (.264) (.462) (.133)
Year ended 10/31,
1995 13.030 1.196 1.878 (.918) (.296)
1994 15.600 1.179 (2.528) (.940) (.239)
1993 13.570 1.143 2.182 (.907) (.250)
7/23/92 to
10/31/92 14.050 .162 (.545) (.076) --
<CAPTION>
NPT
<S> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 13.870 .552 (.228) (.408) (.136)
Year ended 10/31,
1995 12.090 1.100 1.810 (.840) (.290)
1994 14.870 1.069 (2.770) (.835) (.201)
2/19/93 to
10/31/93 14.050 .510 .972 (.416) (.073)
<PAGE>
<CAPTION>
Distributions from capital gains
Per
Organization Common
and offering share
costs and market
To To Preferred share Net asset value
Common Preferred underwriting value end end of
shareholders shareholders+ discounts of period period
NPI
<S> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 $(.050) $ -- $ -- $14.670 $13.875
Year ended 10/31,
1995 -- -- -- 15.110 14.375
1994 (.072) -- -- 14.140 13.250
1993 -- -- -- 16.300 17.750
5 mos. ended
10/31/92 -- -- -- 15.790 15.875
Year ended 5/31,
1992 -- -- -- 15.760 16.250
1991 -- -- -- 15.180 15.375
1990 -- -- -- 14.600 15.000
7/18/88 to
5/31/89 -- -- (.157) 14.720 14.875
<CAPTION>
NPM
<S> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 -- -- -- 14.630 13.875
Year ended 10/31,
1995 -- -- -- 14.890 13.125
1994 (.032) (.010) -- 13.030 11.375
1993 -- -- (.138) 15.600 14.875
7/23/92 to
10/31/92 -- -- (.021) 13.570 13.375
<CAPTION>
NPT
<S> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 -- -- -- 13.650 12.250
Year ended 10/31,
1995 -- -- -- 13.870 12.125
1994 (.031) (.005) (.007) 12.090 10.750
2/19/93 to
10/31/93 -- -- (.173) 14.870 14.250
<PAGE>
<CAPTION>
Ratios/Supplemental data
Per
Common Total Ratio of
share investment net
market return Total Net assets Ratio of investment
value on return on end of expenses income Portfolio
end of market net asset period (in to average to average turnover
period value** value** thousands) net assets*** net assets*** rate
NPI
<S> <C> <C> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 $13.875 .18% .58% $1,285,508 .75%* 5.69%* 11%
Year ended 10/31,
1995 14.375 16.88 14.84 1,313,673 .76 6.13 12
1994 13.250 (19.13) (5.88) 1,252,208 .77 6.08 15
1993 17.750 20.96 12.33 1,213,064 .79 6.28 11
5 mos. ended
10/31/92 15.875 .73 3.46 1,173,329 .78* 6.33* 2
Year ended 5/31,
1992 16.250 13.32 11.72 1,167,042 .66 6.71 2
1991 15.375 10.14 11.88 1,127,103 .65 6.97 1
1990 15.000 8.39 6.74 1,090,365 .65 6.98 4
7/18/88 to
5/31/89 14.875 4.38 10.44 1,089,152 .62* 6.92* 7
<CAPTION>
NPM
<S> <C> <C> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 13.875 9.24 1.29 896,091 .77* 5.36* 14
Year ended 10/31,
1995 13.125 24.22 22.06 906,547 .77 5.60 27
1994 11.375 (17.76) (10.64) 830,600 .76 5.41 26
1993 14.875 18.47 22.31 935,582 .73 5.19 20
7/23/92 to
10/31/92 13.375 (10.38) (2.89) 552,570 .73* 4.77* 12
<CAPTION>
NPT
<S> <C> <C> <C> <C> <C> <C> <C>
6 mos. ended
4/30/96 12.250 4.33 1.29 865,345 .78* 5.13* 12
Year ended 10/31,
1995 12.125 21.32 22.41 874,337 .80 5.35 32
1994 10.750 (19.12) (13.29) 801,617 .88 5.15 47
2/19/93 to
10/31/93 14.250 (2.13) 8.94 431,437 .82* 4.04* 10
<FN>
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and changes
in stock price per share. Total Return on Net Asset Value is the combination
of reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share.
*** Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
+ The amounts shown are based on Common share equivalents.
++ Net of taxes, if applicable.
+++ Includes ($.187) effect of the Fund's Rights Offering of shares at a
price below NAV and costs of the offering.
</TABLE>
<PAGE>
Your investment partner
Photographic image of John Nuveen, Sr., founder of Nuveen.
For nearly 100 years, Nuveen has earned its reputation as a tax-free income
specialist by focusing on municipal bonds
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
ETF5-JUN 96
