Nuveen Exchange-Traded Funds
Providing tax-free income
to help you live your dreams
NUVEEN PENNSYLVANIA INVESTMENT
QUALITY MUNICIPAL FUND
NUVEEN PENNSYLVANIA QUALITY
INCOME MUNICIPAL FUND
NUVEEN PENNSYLVANIA PREMIUM
INCOME MUNICIPAL FUND
NUVEEN PENNSYLVANIA PREMIUM
INCOME MUNICIPAL FUND 2
NUVEEN PENNSYLVANIA PREMIUM
INCOME MUNICIPAL FUND 3
SEMIANNUAL REPORT/DECEMBER 31, 1994
Photo of man reading statement on porch.
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<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
9 Fund performance
12 Getting to know your fund
14 Portfolio of investments
32 Statement of net assets
34 Statement of operations
36 Statement of changes in net assets
39 Notes to financial statements
50 Financial highlights
PAGE
<PAGE>
Dear shareholder
"Providing secure income remains our top priority"
Photo of Richard J. Franke, Chairman of the Board
1994 was one of the most difficult periods the bond markets have experienced
in decades. As the Federal Reserve Board pushed interest rates steadily higher
to fend off future inflation, the prices of all bonds and bond funds declined.
The unusually high volatility of the past 12 months has caused uncertainty
and has brought home the basic fact of fixed-income securities: Interest rates
are subject to change, and sometimes the changes can have marked effects on
net asset values.
At Nuveen, we believe that the best approach to tax-free investing in such
tumultuous markets is to focus on quality and income dependability. By this
standard, in one of the most challenging periods the municipal market has seen
in years, your Fund continued to meet its objectives relatively well,
providing an attractive level of tax-free income while holding portfolio
values in line with or better than the market as a whole.
Looking first at income, current yields on share prices for the Pennsylvania
funds covered in this report ranged from 7.24% to 7.71%. To equal these
yields, investors in the combined 38% federal and state income tax bracket
would need to earn at least 11.68% on taxable alternatives. This taxable yield
is extremely difficult to achieve on investments of comparable quality.
The fact that your Fund is leveraged means that it will be more sensitive to
interest rate changes, both upward and downward, than unleveraged funds.
Nonetheless, for the one-year period ended December 31, our two most seasoned
Pennsylvania funds-Investment Quality Municipal Fund and Quality Income
Municipal Fund-ranked number one and number two, respectively, among 11
closed-end Pennsylvania municipal funds tracked by Lipper Analytical Services
on total return.
<PAGE>
The newer Pennsylvania funds, holding bonds issued when interest rates were
moving lower and bond prices were correspondingly higher, were more affected
by changing interest rates and could be expected to rebound more quickly if
interest rates decline.
When we take a long-range view of the municipal market, we believe the
outlook for your Fund is positively supported by several considerations.
As we have noted in past reports, the municipal market's supply and demand
fundamentals continue to be sound. To put these trends in perspective, in
1994, the supply of new municipal bonds declined by approximately 40% from
1993, a trend expected to continue in 1995. At the same time, demand for
tax-free bonds, which has been subdued over the past 12 months due to the
market's extraordinary volatility, is likely to resume its long-term upward
trend as investors recognize the exceptional yields tax-free bonds offer at
current price levels.
This combination of lower supply-which may be reduced further by the high
volume of bond calls expected in 1995-and the likelihood of rising demand
should help support municipal bond prices in the long term.
At Nuveen we are taking steps to increase the value our funds provide to
shareholders-steps reflected in the merger of Nuveen Pennsylvania Quality
Income Municipal Fund (NUP) into Nuveen Pennsylvania Investment Quality
Municipal Fund (NQP) and of Nuveen Pennsylvania Premium Income Municipal Fund
and Nuveen Pennsylvania Premium Income Municipal Fund 3 (NPA and NAP) into
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY). Through the merger
of these funds, we will achieve significant portfolio-management efficiencies
and improve liquidity for our shareholders.
All of us at Nuveen appreciate your confidence in our family of municipal
bond funds, and we look forward to helping you reach your tax-free investment
objectives in the future.
Sincerely,
Richard J. Franke
Chairman of the Board
February 15, 1995
PAGE
<PAGE>
Answering your questions
In February, we spoke with Tom Spalding, head of Nuveen's portfolio management
team, and asked him about recent developments in the municipal market and the
outlook for Nuveen funds.
Why did my Fund's net asset value decline over the past year?
These have been difficult times for all fixed-income investors. The Bond Buyer
40 index-a measure of municipal market performance-declined by 18% in 1994.
Even 30-year Treasury bonds declined by 17.5% during the year.
Viewed in that context, the Nuveen Pennsylvania funds held their value
relatively well for the year ended December 31, 1994. Still, a few of the
funds were more affected by changing interest rates, for two reasons.
First, some of our Pennsylvania funds are relatively new, and their
portfolios hold bonds issued when interest rates were lower than they are
today. As a result, their net asset values were more sensitive to rising
interest rates.
The fact that these funds are leveraged also increases the impact of
interest rate changes on the funds' net asset values per common share. Keep in
mind that leverage also has enabled these funds to generate a higher level of
tax-free income than unleveraged funds.
Since my Fund is leveraged, will rising short-term interest rates affect my
dividends?
With long-term bonds in these funds yielding around 7% and the current average
7-day rate on short-term preferred shares under 3.8%, leverage has provided an
important income benefit to our shareholders over the past year.
Although the funds' core dividends are set to provide relatively stable
income, steady increases in short-term interest rates will affect these
dividends over time.
In general, leveraged funds' dividends continue to be attractive compared
with both unleveraged and taxable alternatives. All things considered, prudent
leverage can provide highly attractive returns in a variety of market
conditions to investors who understand its uses, benefits, and
characteristics, and are willing to accept somewhat higher short-term NAV
fluctuations in anticipation of greater long-range returns.
<PAGE>
Will bond calls affect my income or the stability of the net asset value of my
shares?
In general, bond calls can mean some reduction in income for investors in both
individual bonds and bond funds, because bonds issued when interest rates were
higher need to be replaced with today's lower-yielding bonds. The effect of
bond calls, however, depends to some extent on the age of a fund and the
characteristics of the bonds in its portfolio.
For example, some of the Pennsylvania funds are relatively new, and
primarily hold bonds that can't be called for several years. As a result,
calls shouldn't significantly affect their income in the near future.
Older funds hold bonds which may be subject to calls, but these bonds often
are priced at premiums to their par values. This premium is a "cushion" that
can soften the effect of rising interest rates. Yet, as these bonds approach
their call dates the premiums gradually approach the bonds' par values,
reducing net asset values. Newer funds, on the other hand, primarily hold
bonds priced at discounts to their par values. As a result, these funds are
more sensitive to interest rate changes, both up and down, but they are
unaffected by the declining premium values related to called bonds.
Of course, we're continuing to manage all of our portfolios with calls in
mind. As part of our basic management process, we continually evaluate
opportunities to sell bonds approaching their call dates and to reinvest the
proceeds in bonds we think have high potential to provide above-market
returns.
What's the outlook for Pennsylvania tax-free bonds?
Our outlook is optimistic for reasons related both to municipal markets in
general and to the Pennsylvania economy specifically.
Looking first at the municipal market overall, inflation remains under
control, the financial condition of issuers across the country is generally
strengthening, and the market's supply and demand characteristics are
positive. That is all good news for tax-free investors.
As for Pennsylvania itself, the outlook is, if anything, even more positive.
The state has recovered from the recession very well. Its finances are in good
shape, and with their successful diversification away from reliance on heavy
manufacturing, the finances of the state's two major cities-Pittsburgh and
Philadelphia-have improved significantly. At the same time, the supply of
investment grade Pennsylvania state paper is limited. This combination of
factors should help support Pennsylvania municipal bond prices over time.
PAGE
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<TABLE>
NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND
NQP
In line with the Fund's objective of providing attractive, dependable tax-free
income, shareholders enjoyed 12 months of steady dividends, as well as
supplemental dividends totaling 5.2 cents per common share.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
1/94 $0.0880
2/94 $0.0880 $0.0270
3/94 $0.0880
4/94 $0.0880
5/94 $0.0880 $0.0150
6/94 $0.0880
7/94 $0.0880
8/94 $0.0880 $0.0100
9/94 $0.0880
10/94 $0.0880
11/94 $0.0880
12/94 $0.0880
<CAPTION>
FUND HIGHLIGHTS 12/31/94
<S> <C>
Yield 7.68%
Taxable-equivalent yield 12.39%
Annual total return on NAV -5.50%
Taxable-equivalent total return -1.33%
Share price $13.75
NAV $14.83
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
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<TABLE>
NUVEEN PENNSYLVANIA QUALITY INCOME MUNICIPAL FUND
NUP
In line with the Fund's objective of providing attractive, dependable tax-free
income, shareholders enjoyed 11 months of steady dividends, as well as
supplemental dividends totaling 3 cents per common share.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
1/94 $0.0785
2/94 $0.0815 $0.0100
3/94 $0.0815
4/94 $0.0815
5/94 $0.0815 $0.0100
6/94 $0.0815
7/94 $0.0815
8/94 $0.0815 $0.0100
9/94 $0.0815
10/94 $0.0815
11/94 $0.0815
12/94 $0.0815
<CAPTION>
FUND HIGHLIGHTS 12/31/94
<S> <C>
Yield 7.24%
Taxable-equivalent yield 11.68%
Annual total return on NAV -6.14%
Taxable-equivalent total return -2.28%
Share price $13.50
NAV $14.43
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
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<TABLE>
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND
NPA
In line with the Fund's objective of providing attractive, dependable tax-free
income, shareholders enjoyed 12 months of steady dividends, along with a
supplemental dividend of 1 cent per common share.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
1/94 $0.0715
2/94 $0.0715
3/94 $0.0715
4/94 $0.0715
5/94 $0.0715
6/94 $0.0715
7/94 $0.0715
8/94 $0.0715 $0.0100
9/94 $0.0715
10/94 $0.0715
11/94 $0.0715
12/94 $0.0715
<CAPTION>
FUND HIGHLIGHTS 12/31/94
<S> <C>
Yield 7.71%
Taxable-equivalent yield 12.44%
Annual total return on NAV -12.32%
Taxable-equivalent total return -8.69%
Share price $11.125
NAV $12.36
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
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<TABLE>
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2
NPY
In line with the Fund's objective of providing attractive, dependable tax-free
income, shareholders enjoyed a dividend increase in November to 6.6 cents per
common share, along with supplemental dividends totaling 2 cents per common
share.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
1/94 $0.0650
2/94 $0.0650
3/94 $0.0650
4/94 $0.0650
5/94 $0.0650 $0.0100
6/94 $0.0650
7/94 $0.0650
8/94 $0.0650 $0.0100
9/94 $0.0650
10/94 $0.0650
11/94 $0.0660
12/93 $0.0660
<CAPTION>
FUND HIGHLIGHTS 12/31/94
<S> <C>
Yield 7.45%
Taxable-equivalent yield 12.02%
Annual total return on NAV -15.16%
Taxable-equivalent total return -11.71%
Share price $10.625
NAV $11.65
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
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<TABLE>
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 3
NAP
In line with the Fund's objective of providing attractive, dependable tax-free
income, shareholders enjoyed 12 months of steady dividends.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
1/94 $0.0630
2/94 $0.0630
3/94 $0.0630
4/94 $0.0630
5/94 $0.0630
6/94 $0.0630
7/94 $0.0630
8/94 $0.0630
9/94 $0.0630
10/94 $0.0630
11/94 $0.0630
12/94 $0.0630
<CAPTION>
FUND HIGHLIGHTS 12/31/94
<S> <C>
Yield 7.66%
Taxable-equivalent yield 12.35%
Annual total return on NAV -16.16%
Taxable-equivalent total return -12.79%
Share price $9.875
NAV $11.13
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
Amendment to Dividend Reinvestment Plan
Effective June 1, 1995, your Fund's Dividend Reinvestment Plan will be amended
in order to enhance the ability of the Plan Agent to obtain the best execution
when making open-market purchases of Fund shares in connection with the Plan.
As of the effective date, the Plan Agent, United States Trust Company of New
York, may make Plan purchases in advance of the payment date of the applicable
Fund distribution, provided that settlement for such purchases shall occur no
earlier than the payment date for such distribution.
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Getting to know your fund
Yield
An exchange-traded fund's annualized monthly dividend on a given date (in the
case of this report, December 31, 1994) divided by its closing price per share
on that date.
Taxable equivalent yield
The return an investor who is subject to a given income tax rate would need to
obtain from a fully taxable investment to equal the fund's stated annualized
yield on share price. For shareholders in this report, the combined state and
federal rate is assumed to be 38%, based on incomes of $115,000-$250,000 for
investors filing singly, $140,000-$250,000 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 liabilities. 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.
Annual total return on NAV
The percentage change in a fund's NAV per share over the previous 12 months,
assuming reinvestment of all dividends and capital gains distributions, if
any.
Taxable equivalent total return
The total return an investor, who is subject to a given 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. Changes in net asset value per
common share, both up and down, are also magnified.
Each fund intends to repurchase shares of its common or preferred stock in the
future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the 6-month period ended December 31, 1994. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
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<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND (NQP)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 1,000,000 Pennsylvania General Obligation, 5.375%, 4/15/11 4/03 at 101 1/2 AA- $ 875,120
4,970,000 Pennsylvania Higher Education Assistance Agency,
Student Loan, 6.800%, 12/01/00 No Opt. Call Aaa 5,177,746
4,000,000 Pennsylvania Higher Education Assistance Agency,
Student Loan, Alternative Minimum Tax,
7.150%, 9/01/21 9/01 at 102 Aaa 4,095,240
2,000,000 Pennsylvania Higher Educational Facilities Authority
(Lycoming College), 8.375%, 10/01/18
(Pre-refunded to 10/01/98) 10/98 at 102 N/R 2,228,420
3,000,000 Pennsylvania Higher Educational Facilities Authority
(University of Pennsylvania), 6.625%, 1/01/17 1/97 at 100 AA 2,943,870
5,000,000 Pennsylvania Higher Educational Facilities Authority
(Thomas Jefferson University), 6.000%, 7/01/19 7/99 at 102 Aa 4,598,350
Pennsylvania Housing Finance Agency, Single Family
Mortgage, Alternative Minimum Tax:
5,000,000 7.625%, 10/01/10 10/99 at 102 AA 5,138,000
1,000,000 7.000%, 4/01/24 4/02 at 102 AA 992,460
4,500,000 Pennsylvania Turnpike Commission, 7.200%, 12/01/17
(Pre-refunded to 12/01/01) 12/01 at 102 Aaa 4,917,735
8,000,000 Allegheny County (Greater Pittsburgh International
Airport), Alternative Minimum Tax,
8.200%, 1/01/08 1/98 at 102 Aaa 8,672,640
10,000,000 Allegheny County Residential Finance Authority,
Single Family Mortgage (GNMA), Alternative
Minimum Tax, 0.000%, 5/01/27 No Opt. Call Aaa 1,015,600
5,000,000 Beaver County Industrial Development Authority,
Pollution Control (Ohio Edison Project),
7.750%, 9/01/24 9/99 at 102 Baa3 5,035,250
1,800,000 Berks County Municipal Authority, Pennsylvania
Higher Education Pooled Financing Program
(University of Pennsylvania Project), 6.700%, 9/01/07 9/97 at 100 AA 1,823,796
2,190,000 Berks County Redevelopment Authority, Senior
Single Family Mortgage, Alternative Minimum
Tax, 8.000%, 12/01/17 No Opt. Call A 2,495,571
8,250,000 Blair County Hospital Authority (Mercy Hospital),
8.125%, 2/01/14 2/99 at 102 BBB+ 8,325,488
3,300,000 Chester County Hospital Authority (Paoli Memorial
Hospital), 7.625%, 10/01/13
(Pre-refunded to 10/01/96) 10/96 at 102 N/R 3,488,727
4,500,000 Delaware County Authority (Villanova University),
6.900%, 8/01/16 8/01 at 100 Aaa 4,561,200
3,400,000 Erie County Hospital Authority (Hamot Medical
Center), 7.100%, 2/15/10 2/01 at 102 Aaa 3,513,832
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<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 400,000 Greater Lebanon Refuse Authority, Solid Waste,
7.000%, 11/15/04 11/02 at 100 A- $ 398,648
2,000,000 Hampton Township School District, General
Obligation, 6.750%, 11/15/21 (WI) 11/04 at 100 Aaa 2,005,480
2,500,000 Lawrence County General Obligation, 5.000%, 8/01/18 8/04 at 100 Aaa 1,982,175
1,400,000 Lehigh County Industrial Development Authority,
Pollution Control (Pennsylvania Power and Light
Company), 6.400%, 9/01/29 9/04 at 102 Aaa 1,343,524
Luzerne County Industrial Development Authority
(Pennsylvania Gas and Water Company Project),
Alternative Minimum Tax:
2,500,000 7.000%, 12/01/17 12/04 at 102 Aaa 2,538,125
2,950,000 7.125%, 12/01/22 12/02 at 102 Baa3 2,831,056
5,000,000 Montgomery County Industrial Development
(Philadelphia Electric Co. Project), 8.875%, 6/01/16 6/96 at 102 BBB+ 5,289,550
5,500,000 Montgomery County Industrial Development
Authority, Resource Recovery, 7.500%, 1/01/12 1/99 at 100 AA 5,609,010
2,300,000 Penn Hills General Obligation, 5.875%, 12/01/15 12/02 at 100 Aaa 2,117,035
4,885,000 Philadelphia Authority for Industrial Development,
Convertible Project Revenue Bonds,
7.125%, 7/01/17 (Pre-refunded to 7/01/99) 7/99 at 102 AA 5,255,918
Philadelphia Gas Works:
3,345,000 7.875%, 7/01/17 (Pre-refunded to 7/01/97) 7/97 at 102 Aaa 3,601,260
2,500,000 7.700%, 6/15/21 (Pre-refunded to 6/15/01) 6/01 at 102 Aaa 2,784,350
8,530,000 Philadelphia Hospital and Higher Educational
Facilities Authority (St. Agnes Medical Center),
7.250%, 8/15/31 8/01 at 102 Aa 8,583,142
3,250,000 Philadelphia School District, General Obligation,
7.000%, 7/01/05 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 3,461,153
Philadelphia Water and Sewer:
1,500,000 7.900%, 7/01/05 (Pre-refunded to 7/01/96) 7/96 at 102 AAA 1,590,210
2,275,000 7.000%, 8/01/18 8/01 at 100 BBB 2,269,586
Philadelphia Hospitals and Higher Educational Facilities
Authority (Children's Hospital of Philadelphia):
1,000,000 5.375%, 2/15/14 2/03 at 102 AA 846,800
1,410,000 7.000%, 7/01/15 (Pre-refunded to 7/01/97) 7/97 at 100 Aaa 1,464,764
1,000,000 5.000%, 2/15/21 2/03 at 102 AA 773,350
3,500,000 Philadelphia Hospital and Higher Educational
Facilities Authority (Presbyterian Medical Center),
7.250%, 12/01/21 (Pre-refunded to 12/01/01) 12/01 at 102 A- 3,805,480
3,520,000 Philadelphia Hospitals and Higher Educational
Facilities Authority (Magee Rehabilitation
Hospital), 7.000%, 12/01/10 12/01 at 102 Aaa 3,634,998
PAGE
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<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 630,000 Philadelphia Hospital and Higher Educational
Facilities Authority (Children's Seashore House),
7.000%, 8/15/03 8/02 at 102 A- $ 640,508
Philadelphia Municipal Authority, Justice Lease Revenue:
1,500,000 7.100%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 1,628,445
5,900,000 7.125%, 11/15/18 (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 6,413,477
3,000,000 Pittsburgh Water and Sewer Authority, Water and
Sewer System, 7.625%, 9/01/04 No Opt. Call Aaa 3,336,990
3,250,000 Pittsburgh Water and Sewer Authority,
6.500%, 9/01/14 (Pre-refunded to 9/01/01) 9/01 at 102 Aaa 3,422,055
5,500,000 Sayre Health Care Facilities Authority (Guthrie
Healthcare System), 7.200%, 12/01/20 12/01 at 103 Aaa 5,689,310
3,730,000 Scranton-Lackawanna Health and Welfare Authority
(University of Scranton), 7.400%, 6/15/10
(Pre-refunded to 6/15/00) 6/00 at 102 Aaa 4,063,798
8,475,000 Somerset County General Authority, Commonwealth
Lease, 7.000%, 10/15/13 (Pre-refunded to 10/15/01) 10/01 at 100 Aaa 9,072,318
5,000,000 State Public School Building Authority (Hazleton
Area School District), 6.500%, 3/01/08 3/01 at 100 Aaa 5,037,200
2,545,000 Temple University of the Commonwealth, System of
Higher Education, FHA-Insured, 7.250%, 8/01/11
(Pre-refunded to 8/01/98) 8/98 at 100 Aaa 2,689,581
3,500,000 Upper Merion Area School District, General Obligation,
6.900%, 9/01/16 (Pre-refunded to 9/01/01) 9/01 at 100 Aa 3,694,145
3,000,000 Warrington Township Municipal Authority, Water
and Sewer, 7.100%, 12/01/21 12/99 at 100 Aaa 3,048,060
Wilkes-Barre General Municipal Authority (College
Misericordia), Alternative Minimum Tax:
645,000 7.750%, 12/01/12 12/00 at 100 N/R 664,253
705,000 7.750%, 12/01/12 12/02 at 102 N/R 726,044
$185,555,000 Total Investments - (cost $175,223,811) - 97.8% 182,210,843
============
Other Assets Less Liabilities - 2.2% 4,180,147
Net Assets - 100% $186,390,990
============
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<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 28 $102,878,301 56%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 12 41,133,961 23%
PORTFOLIO OF A, A- A, A2, A3 4 7,340,207 4%
INVESTMENTS: BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 5 23,750,930 13%
Non-rated Non-rated 4 7,107,444 4%
TOTAL 53 $182,210,843 100%
<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.
(WI) Security purchased on a when-issued basis (note 1).
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PENNSYLVANIA QUALITY INCOME MUNICIPAL FUND (NUP)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 6,000,000 Pennsylvania General Obligation, 6.375%, 9/15/11 3/02 at 101 1/2 AA- $ 5,917,500
1,250,000 Pennsylvania Higher Educational Facilities Authority
(University of Pennsylvania), 6.625%, 1/01/17 1/97 at 100 AA 1,226,613
5,580,000 Pennsylvania Higher Educational Facilities Authority
(Thomas Jefferson University), 6.000%, 7/01/19 7/99 at 102 Aa 5,131,759
6,780,000 Pennsylvania Housing Finance Agency, Single Family
Mortgage, 6.900%, 4/01/17 4/02 at 102 AA 6,811,120
1,300,000 Pennsylvania Industrial Development Authority,
5.500%, 1/01/14 1/04 at 102 Aaa 1,148,979
Pennsylvania State Turnpike Commission:
1,650,000 6.500%, 12/01/13 12/01 at 102 A1 1,642,773
1,865,000 5.500%, 12/01/17 12/02 at 102 Aaa 1,604,609
3,825,000 Pennsylvania State University, 6.250%, 3/01/11 3/01 at 102 A 3,786,253
Allegheny County (Greater Pittsburgh International
Airport), Alternative Minimum Tax:
5,785,000 7.750%, 1/01/19 1/98 at 100 Aaa 6,047,928
1,500,000 6.625%, 1/01/22 1/02 at 102 Aaa 1,454,235
6,300,000 Allegheny County Hospital Development Authority
(St. Margaret Memorial Hospital), 7.125%, 10/01/21 10/01 at 100 A- 6,235,866
4,180,000 Allegheny County Residential Finance Authority,
Single Family (GNMA), Alternative Minimum
Tax, 0.000%, 5/01/27 No Opt. Call Aaa 424,521
395,000 Altoona Redevelopment Authority, Home
Improvement, Alternative Minimum Tax,
7.150%, 12/01/09 12/01 at 102 A 400,672
Bethlehem Authority Water System:
3,045,000 6.250%, 11/15/11 (Pre-refunded to 11/15/01) 11/01 at 100 Aaa 3,121,490
4,000,000 6.250%, 11/15/21 (Pre-refunded to 11/15/01) 11/01 at 100 Aaa 4,100,480
5,000,000 Butler County Hospital Authority (North Hills
Passavant Hospital), 7.000%, 6/01/22 6/01 at 102 Aaa 5,059,700
1,500,000 Chambersburg Area School District, General
Obligation, 6.625%, 4/01/09 10/99 at 100 Aaa 1,517,715
3,750,000 Delaware County Industrial Development Authority
(Philadelphia Electric Project), 7.375%, 4/01/21 4/01 at 102 Baa1 3,766,575
4,390,000 Fairview Township Authority, Sewer System,
6.700%, 11/01/21 11/01 at 100 Aaa 4,425,252
2,635,000 Fayette County Hospital Authority (The Uniontown
Hospital), 9.750%, 7/01/15 7/95 at 102 BBB 2,753,232
2,875,000 Franklin County Industrial Development Authority
(Chambersburg Hospital), 6.700%, 7/01/08 7/99 at 102 Aaa 2,909,615
3,400,000 Lehigh County General Purpose Authority (Allentown
College of St. Francis de Sales), 6.750%, 12/15/12 6/02 at 100 AAA 3,405,746
1,000,000 Lehigh County Industrial Development Authority,
Pollution Control (Pennsylvania Power and Light
Company), 6.400%, 9/01/29 9/04 at 102 Aaa 959,660
PAGE
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 4,000,000 Lower Pottsgrove Township Authority, Sewer System,
6.700%, 11/01/16 11/99 at 100 Aaa $ 4,019,080
Luzerne County Industrial Development Authority
(Pennsylvania Gas and Water Company), Alternative
Minimum Tax:
3,000,000 7.200%, 10/01/17 10/02 at 102 Baa3 2,930,730
2,500,000 7.000%, 12/01/17 12/04 at 102 Aaa 2,538,125
600,000 7.125%, 12/01/22 12/02 at 102 Baa3 575,808
3,130,000 McKean County Solid Waste Authority,
6.650%, 1/01/12 1/02 at 100 Aaa 3,159,547
1,000,000 Philadelphia Authority for Industrial Development
(PGH Development Corporation), 7.000%, 7/01/17
(Pre-refunded to 7/01/99) 7/99 at 102 Aaa 1,071,430
1,250,000 Philadelphia Authority for Industrial Development
(National Board of Medical Examiners),
6.750%, 5/01/12 5/02 at 102 A+ 1,260,163
1,770,000 Philadelphia Gas Works, 7.700%, 6/15/21
(Pre-refunded to 6/15/01) 6/01 at 102 Aaa 1,971,320
Philadelphia School District General Obligation:
850,000 6.500%, 5/15/05 (Pre-refunded to 5/15/02) 5/02 at 100 3/4 Aaa 888,871
1,520,000 6.500%, 5/15/06 (Pre-refunded to 5/15/02) 5/02 at 101 Aaa 1,592,002
Philadelphia Water and Sewer:
5,750,000 7.250%, 7/01/14 (Pre-refunded to 7/01/96) 7/96 at 102 AAA 5,989,315
8,350,000 7.000%, 8/01/18 8/01 at 100 BBB 8,330,127
5,300,000 Philadelphia Hospital and Higher Educational
Facilities Authority (Presbyterian Medical Center),
7.250%, 12/01/21 (Pre-refunded to 12/01/01) 12/01 at 102 A- 5,762,584
Philadelphia Hospital and Higher Educational Facilities
Authority (The Children's Hospital of Philadelphia):
750,000 5.375%, 2/15/14 2/03 at 102 AA 635,100
4,100,000 6.500%, 2/15/21 (Pre-refunded to 2/15/02) 2/02 at 102 Aaa 4,312,339
1,500,000 5.000%, 2/15/21 2/03 at 102 AA 1,160,025
4,000,000 Philadelphia Municipal Authority, Justice Lease,
7.125%, 11/15/18 (Pre-refunded to 11/15/01) 11/01 at 102 Aaa 4,348,120
2,885,000 Pittsburgh Urban Redevelopment Authority,
Alternative Minimum Tax, 7.050%, 4/01/23 10/01 at 102 A1 2,818,962
1,000,000 Pittsburgh Urban Redevelopment Authority,
FHA-Insured Project, Alternative Minimum Tax,
7.125%, 8/01/13 8/02 at 102 A 1,002,890
2,750,000 St. Mary's Hospital Authority (Franciscan Health
System/St. Mary of Langhorne), 6.500%, 7/01/12 7/02 at 102 Aaa 2,732,950
2,900,000 Scranton-Lackawanna Health and Welfare Authority
(University of Scranton), 6.500%, 3/01/13 3/02 at 102 A- 2,842,203
PAGE
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 5,000,000 West Chester Area School District, General Obligation,
6.700%, 1/15/11 (Pre-refunded to 1/15/01) 1/01 at 100 Aa $ 5,207,000
5,450,000 West View Municipal Authority, 9.500%, 11/15/14 No Opt. Call Aaa 7,003,250
5,000,000 Westmoreland County General Obligation,
6.700%, 8/01/09 (Pre-refunded to 8/01/01) 8/01 at 100 Aaa 5,234,649
$152,360,000 Total Investments - (cost $147,839,905) - 98.8% 151,238,883
============
Other Assets Less Liabilities - 1.2% 1,808,718
Net Assets - 100% $153,047,601
============
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 26 $ 81,040,928 54%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 7 26,089,117 17%
PORTFOLIO OF A+ A1 3 5,721,898 4%
INVESTMENTS: A, A- A, A2, A3 6 20,030,468 13%
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 5 18,356,472 12%
TOTAL 47 $151,238,883 100%
<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.
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND (NPA)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 2,000,000 Pennsylvania Finance Authority (Beaver County
Municipal Capital Improvement), 6.600%, 11/01/09 11/03 at 102 A $ 1,959,080
6,250,000 Pennsylvania Higher Education Assistance Agency,
Student Loan, Alternative Minimum Tax,
6.050%, 1/01/19 1/03 at 102 Aaa 5,712,875
2,075,000 Pennsylvania Higher Educational Facilities Authority
(University of Pennsylvania), 6.625%, 1/01/17 1/97 at 100 AA 2,036,177
1,250,000 Pennsylvania Higher Educational Facilities Authority
(Allegheny College), 6.000%, 11/01/22 11/03 at 102 BBB+ 1,092,113
4,065,000 Pennsylvania Higher Educational Facilities Authority
(Thomas Jefferson University), 6.000%, 7/01/19 7/99 at 102 Aa 3,738,459
4,000,000 Pennsylvania Higher Educational Facilities Authority,
5.700%, 6/15/15 6/03 at 100 Aaa 3,557,880
Pennsylvania Housing Finance Agency:
3,000,000 6.400%, 7/01/12 7/02 at 102 Aaa 2,905,050
4,225,000 5.800%, 7/01/18 7/03 at 102 Aaa 3,732,745
2,000,000 Pennsylvania Housing Finance Agency, Single Family
Mortgage, 5.450%, 10/01/17 10/03 at 102 AA 1,671,280
1,000,000 Pennsylvania Industrial Development Authority,
7.000%, 7/01/07 No Opt. Call Aaa 1,071,580
2,500,000 Pennsylvania State University, 5.500%, 8/15/16 8/02 at 102 AA- 2,172,010
4,000,000 Pennsylvania Turnpike Commission, 5.500%, 12/01/17 12/02 at 102 Aaa 3,441,520
2,500,000 Allegheny County (Pittsburgh International Airport),
Alternative Minimum Tax, 5.625%, 1/01/23 1/03 at 102 Aaa 2,085,750
750,000 Allegheny County Hospital Development Authority
(Rehabilitation Institute of Pittsburgh),
7.000%, 6/01/22 6/02 at 102 BBB 673,163
Allegheny County Hospital Development Authority
(Presbyterian University Health System):
2,000,000 6.250%, 11/01/23 11/02 at 100 Aaa 1,880,680
2,000,000 6.000%, 11/01/23 11/02 at 102 Aaa 1,817,360
1,070,000 Allegheny Composite Housing Development
Corporation, FHA-Insured (Grayson Court Project),
6.100%, 2/01/24 8/03 at 100 Aa 937,844
5,065,000 Bethlehem Area School District, General Obligation,
5.600%, 9/01/12 3/01 at 100 Aaa 4,579,824
3,785,000 Bethlehem Authority Water System,
6.100%, 11/15/18 (Pre-refunded to 11/15/02) 11/02 at 100 Aaa 3,853,244
1,250,000 Center Township Sewer Authority, 5.500%, 4/15/16 4/02 at 102 Aaa 1,081,025
2,250,000 Delaware County Authority (Haverford College),
5.500%, 11/15/23 11/03 at 102 Aaa 1,891,935
1,500,000 Delaware County Authority (Crozer-Chester Medical
Center), 5.300%, 12/15/20 12/03 at 102 Aaa 1,222,710
PAGE
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 1,975,000 Delaware County Industrial Development Authority
(Philadelphia Suburban Water Company),
6.500%, 6/01/10 6/02 at 102 Aaa $ 1,981,735
1,500,000 Fort LeBoeuf School District, General Obligation,
5.800%, 1/01/16 1/03 at 100 Aaa 1,360,725
3,500,000 Hollidaysburg Sewer Authority, 6.100%, 1/01/23 1/03 at 100 Aaa 3,267,355
Lehigh County General Purpose Authority (Saint
Luke's Hospital of Bethlehem):
1,335,000 5.300%, 11/15/05 No Opt. Call Aaa 1,231,938
500,000 5.300%, 11/15/06 No Opt. Call Aaa 457,030
500,000 5.300%, 11/15/07 No Opt. Call Aaa 450,995
Luzerne County Industrial Development Authority
(Pennsylvania Gas and Water Company), Alternative
Minimum Tax:
2,750,000 7.200%, 10/01/17 10/02 at 102 Baa3 2,686,503
4,500,000 7.125%, 12/01/22 12/02 at 102 Baa3 4,318,560
2,500,000 Montgomery County Higher Educational and Health
Authority (Abington Memorial Hospital),
6.000%, 6/01/22 6/03 at 102 Aaa 2,261,300
3,675,000 Montgomery County Industrial Development
Authority, Pollution Control (Philadelphia Electric
Company), 6.700%, 12/01/21 12/01 at 102 Aaa 3,682,019
1,000,000 Montoursville Area School District, General
Obligation, 5.750%, 5/01/13 5/98 at 100 Aaa 913,240
1,250,000 Moon Township Municipal Authority, 5.650%, 12/01/09 6/03 at 100 Aaa 1,169,850
1,500,000 Northumberland County Industrial Development
Authority (Roaring Creek Water Company),
Alternative Minimum Tax, 6.375%, 10/15/23 10/03 at 102 N/R 1,248,630
2,000,000 Philadelphia Authority for Industrial Development
(PGH Development Corporation), 5.250%, 7/01/17 7/03 at 102 AA 1,553,900
2,000,000 Philadelphia Hospital and Higher Educational
Facilities Authority (Philadelphia MR Project),
5.625%, 8/01/04 8/03 at 102 BBB+ 1,853,600
1,500,000 Philadelphia School District, General Obligation,
5.200%, 7/01/03 No Opt. Call Aaa 1,407,690
1,000,000 Philadelphia Water and Sewer, 7.500%, 8/01/10 8/01 at 102 BBB 1,036,320
1,300,000 Philadelphia Water and Wastewater System,
5.500%, 6/15/14 6/03 at 102 Aaa 1,126,632
Philadelphia Hospital and Higher Educational
Facilities Authority (Presbyterian Medical Center
of Philadelphia):
1,000,000 6.500%, 12/01/11 12/03 at 102 A- 952,690
3,690,000 6.650%, 12/01/19 12/03 at 102 A- 3,392,512
PAGE
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 5,200,000 Philadelphia Hospital and Higher Education
Facilities Authority (Temple University Hospital),
6.625%, 11/15/23 11/03 at 102 Baa1 $ 4,631,744
1,750,000 Pine-Richland School District, General Obligation,
6.100%, 9/01/18 9/03 at 100 Aaa 1,640,782
1,750,000 Pittsburgh Urban Redevelopment Authority,
Alternative Minimum Tax, 6.800%, 10/01/25 4/03 at 102 A1 1,655,308
1,375,000 Pittsburgh Urban Redevelopment Authority,
6.500%, 4/01/17 4/03 at 102 A1 1,297,835
3,660,000 Rose Tree Media School District, General Obligation,
6.700%, 3/15/12 (Pre-refunded to 9/15/01) 9/01 at 100 Aaa 3,854,931
2,000,000 University of Pittsburgh, 6.125%, 6/01/21 6/02 at 102 Aaa 1,865,320
1,150,000 Washington County Authority, 5.625%, 6/01/22 6/03 at 100 Aaa 988,033
2,000,000 Washington County Hospital Authority (The
Washington Hospital), 5.625%, 7/01/23 7/03 at 102 Aaa 1,710,220
1,650,000 West View Municipal Authority, 9.500%, 11/15/14 No Opt. Call Aaa 2,120,250
1,840,000 Wilkes-Barre General Municipal Authority (College
Misericordia), Alternative Minimum Tax,
7.750%, 12/01/12 12/02 at 102 N/R 1,894,923
$119,885,000 Total Investments - (cost $119,690,920) - 95.2% 111,126,874
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 2.6%
$ 2,200,000 Allegheny County Hospital Development Authority
(Presbyterian University Health System), Variable
Rate Demand Bonds, 5.350%, 3/01/20t VMIG-1 2,200,000
800,000 Delaware County Industrial Development Authority,
Airport Facility (UPS), Variable Rate Demand
Bonds, 5.850%, 12/01/15t A-1+ 800,000
$ 3,000,000 Total Temporary Investments - 2.6% 3,000,000
=============
Other Assets Less Liabilities - 2.2% 2,624,914
Net Assets - 100% $116,751,788
============
PAGE
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 32 $ 70,324,223 63%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 6 12,109,670 11%
PORTFOLIO OF A+ A1 2 2,953,143 2%
INVESTMENTS A, A- A, A2, A3 3 6,304,282 6%
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 7 16,292,003 15%
TEMPORARY Non-rated Non-rated 2 3,143,553 3%
INVESTMENTS):
TOTAL 52 $111,126,874 100%
<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.
t 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
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2 (NPY)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 4,750,000 Pennsylvania Certificates of Participation,
5.250%, 7/01/10 7/03 at 102 Aaa $ 4,121,053
4,750,000 Pennsylvania Higher Education Assistance Agency,
Student Loan, Alternative Minimum Tax,
6.050%, 1/01/19 1/03 at 102 Aaa 4,341,785
Pennsylvania Higher Educational Facilities Authority:
3,000,000 5.700%, 6/15/15 6/03 at 100 Aaa 2,668,410
1,845,000 7.625%, 7/01/15 No Opt. Call Aaa 2,009,851
1,250,000 5.375%, 6/15/18 6/03 at 100 Aaa 1,050,263
4,640,000 Pennsylvania Higher Educational Facilities Authority
(Duquesne University), 5.500%, 9/01/20 9/03 at 102 Aaa 3,946,552
1,000,000 Pennsylvania Higher Educational Facilities Authority
(Thomas Jefferson University), 6.000%, 7/01/19 7/99 at 102 Aa 919,670
1,450,000 Pennsylvania Higher Educational Facilities Authority
(Drexel University), 6.375%, 5/01/17 5/03 at 102 BBB+ 1,348,196
1,615,000 Pennsylvania Higher Educational Facilities Authority
(Widener University), 5.250%, 7/15/11 7/03 at 102 AAA 1,368,632
7,000,000 Pennsylvania Housing Finance Agency, Single Family
Mortgage, Alternative Minimum Tax,
5.600%, 10/01/25 10/03 at 102 AA 5,708,080
Pennsylvania Housing Finance Agency, Multi-Family
Mortgage (FNMA):
2,000,000 6.400%, 7/01/12 7/02 at 102 Aaa 1,936,700
5,400,000 5.800%, 7/01/18 7/03 at 102 Aaa 4,770,846
2,000,000 Pennsylvania Industrial Development Authority,
7.000%, 7/01/06 No Opt. Call Aaa 2,150,640
Pennsylvania Intergovernmental Cooperative
Authority (City of Philadelphia Funding Program):
1,000,000 5.600%, 6/15/16 6/03 at 100 Aaa 869,570
5,000,000 5.625%, 6/15/23 6/03 at 100 Aaa 4,264,700
4,600,000 Pennsylvania State University, 5.500%, 8/15/16 8/02 at 102 AA- 3,992,708
4,000,000 Pennsylvania Turnpike Commission, 5.500%, 12/01/17 12/02 at 102 Aaa 3,441,520
2,000,000 Allegheny County (Pittsburgh International Airport),
Alternative Minimum Tax, 5.625%, 1/01/23 1/03 at 102 Aaa 1,668,600
3,000,000 Allegheny County Hospital Development Authority
(Presbyterian University Health System),
6.000%, 11/01/23 11/02 at 102 Aaa 2,726,040
1,650,000 Allegheny County Residential Finance Authority,
Single Family Mortgage, Alternative Minimum
Tax, 5.625%, 11/01/23 11/03 at 102 Aaa 1,366,778
1,070,000 Berks County General Obligation, 7.800%, 11/15/05
(Pre-refunded to 11/15/98) 11/98 at 100 Aaa 1,155,450
4,000,000 Bethlehem Area School District, General Obligation,
5.600%, 9/01/12 3/01 at 100 Aaa 3,616,840
PAGE
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,100,000 Bethlehem Authority, Water System,
6.100%, 11/15/21 (Pre-refunded to 11/15/02) 11/02 at 100 Aaa $ 3,155,893
3,070,000 Bucks County Redevelopment Authority (Country
Commons Apartments), Alternative Minimum Tax,
6.200%, 8/01/14 8/03 at 100 A 2,822,312
Bucks County Water and Sewer Authority:
3,000,000 5.400%, 12/01/12 12/03 at 100 Aaa 2,610,540
1,235,000 5.375%, 12/01/19 12/03 at 100 Aaa 1,027,582
2,500,000 Delaware County General Obligation,
6.000%, 11/15/22 11/02 at 100 AA 2,288,975
Delaware County Authority (Crozer-Chester
Medical Center):
1,000,000 6.000%, 12/15/09 12/03 at 102 Baa1 873,760
2,100,000 5.300%, 12/15/11 12/03 at 102 Aaa 1,812,300
3,000,000 6.000%, 12/15/20 12/03 at 102 Baa1 2,381,760
1,000,000 5.300%, 12/15/20 12/03 at 102 Aaa 815,140
1,350,000 Lancaster Higher Education Authority (Franklin and
Marshall College), 5.700%, 4/15/13 4/03 at 100 Aaa 1,224,545
1,830,000 Luzerne County Housing Corporation, 6.125%, 7/15/23 7/03 at 100 Aaa 1,641,528
4,600,000 Luzerne County Industrial Development Authority
(Pennsylvania Gas and Water Company), Alternative
Minimum Tax, 7.200%, 10/01/17 10/02 at 102 Baa3 4,493,786
1,085,000 Montgomery County Industrial Development
Authority (ECRI Project), 6.850%, 6/01/13 6/03 at 102 N/R 1,003,929
1,500,000 Northumberland County Industrial Development
Authority (Roaring Creek Water Company),
Alternative Minimum Tax, 6.375%, 10/15/23 10/03 at 102 N/R 1,248,630
2,830,000 Philadelphia Authority for Industrial Development
(PGH Development Corporation), 5.250%, 7/01/17 7/03 at 102 AA 2,198,769
2,000,000 Philadelphia Hospital and Higher Educational
Facilities Authority (Philadelphia MR Project),
5.625%, 8/01/04 8/03 at 102 BBB+ 1,853,600
4,000,000 Philadelphia School District General Obligation,
5.200%, 7/01/03 No Opt. Call Aaa 3,753,840
7,300,000 Philadelphia Water and Wastewater System,
5.000%, 6/15/16 6/03 at 100 Aaa 5,827,590
5,200,000 Philadelphia Hospital and Higher Education
Facilities Authority (Temple University Hospital),
6.625%, 11/15/23 11/03 at 102 Baa1 4,631,744
Philadelphia Hospital and Higher Educational
Facilities Authority (The Children's Hospital
of Philadelphia):
5,500,000 5.375%, 2/15/14 2/03 at 102 AA 4,657,400
1,500,000 5.000%, 2/15/21 2/03 at 102 AA 1,160,025
PAGE
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
Philadelphia Municipal Authority:
$ 2,125,000 5.250%, 4/01/18 4/03 at 102 Aaa $ 1,738,441
2,940,000 5.625%, 11/15/18 11/03 at 102 Aaa 2,547,069
750,000 Pittsburgh Urban Redevelopment Authority,
Alternative Minimum Tax, 6.950%, 10/01/10 4/04 at 102 A1 749,175
2,500,000 Schuylkill Valley School District, General Obligation,
5.850%, 4/15/13 4/03 at 100 Aaa 2,324,775
3,000,000 South Fork Municipal Authority (Lee Hospital),
5.500%, 7/01/23 7/03 at 102 A 2,321,040
3,340,000 State Public School Building Authority (Northampton
County Area Community College), 5.850%, 3/15/15 3/03 at 100 Aaa 3,062,245
2,345,000 Swissvale Housing Development Corporation,
6.100%, 7/01/22 7/03 at 100 Aa 2,088,948
1,360,000 University of Pittsburgh, 6.125%, 6/01/21 6/02 at 102 Aaa 1,268,417
3,000,000 Wallenpaupack Area School District, General
Obligation, 5.500%, 4/01/11 4/01 at 100 Aaa 2,701,350
1,000,000 Washington County Hospital Authority (The
Washington Hospital), 5.625%, 7/01/23 7/03 at 102 Aaa 855,110
$148,080,000 Total Investments - (cost $145,776,458) - 98.2% 130,583,102
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.5%
$ 600,000 Philadelphia Hospital and Higher Educational
============
Facilities Authority (The Children's Hospital of
Philadelphia), Variable Rate Demand Bonds,
5.750%, 3/01/27t VMIG-1 600,000
Other Assets Less Liabilities - 1.3% 1,790,679
Net Assets - 100% $132,973,781
============
PAGE
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 34 $ 83,840,595 64%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 8 23,014,575 17%
PORTFOLIO OF A+ A1 1 749,175 1%
INVESTMENTS A, A- A, A2, A3 2 5,143,352 4%
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 6 15,582,846 12%
TEMPORARY Non-rated Non-rated 2 2,252,559 2%
INVESTMENTS):
TOTAL 53 $130,583,102 100%
<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.
t 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
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 3 (NAP)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 1,750,000 Pennsylvania Certificates of Participation,
5.250%, 7/01/10 7/03 at 102 Aaa $ 1,518,283
1,000,000 Pennsylvania General Obligation, 5.300%, 5/01/04 No Opt. Call AA- 941,910
Pennsylvania Higher Educational Facilities Authority
(Thomas Jefferson University):
1,000,000 5.300%, 11/01/15 11/03 at 102 Aa 844,870
1,300,000 6.000% 7/01/19 7/99 at 102 Aa 1,195,571
3,000,000 Pennsylvania Higher Educational Facilities Authority
(Widener University), 5.250%, 7/15/11 7/03 at 102 AAA 2,542,350
4,000,000 Pennsylvania Housing Finance Agency, Single
Family Mortgage, Alternative Minimum Tax,
5.600%, 10/01/25 10/03 at 102 AA 3,261,760
1,500,000 Pennsylvania Housing Finance Agency, Rental
Housing (FNMA), 5.750%, 7/01/14 7/03 at 102 Aaa 1,353,675
1,240,000 Pennsylvania Industrial Development Authority,
7.000%, 1/01/07 No Opt. Call Aaa 1,326,354
1,000,000 Pennsylvania Intergovernmental Cooperative
Authority (City of Philadelphia Funding Program),
5.600%, 6/15/15 6/03 at 100 Aaa 878,420
Pennsylvania State Turnpike Commission:
1,000,000 7.000%, 12/01/06 (Pre-refunded to 12/01/01) 12/01 at 102 Aaa 1,081,570
1,000,000 5.500%, 12/01/17 12/01 at 100 Aaa 866,670
2,500,000 Pennsylvania State University, 5.500%, 8/15/16 8/02 at 102 AA- 2,169,950
1,000,000 Allegheny County (Pittsburgh International Airport),
Alternative Minimum Tax, 5.625%, 1/01/16 1/03 at 102 Aaa 855,740
1,000,000 Allegheny County Hospital Development Authority
(Presbyterian University Health System),
6.250%, 11/01/23 11/02 at 100 Aaa 940,340
2,000,000 Boyertown Area School District, General Obligation,
5.250%, 2/01/17 2/04 at 100 Aaa 1,656,040
1,500,000 Bucks County Redevelopment Authority (Country
Commons Apartments), Alternative Minimum Tax,
6.200%, 8/01/14 8/03 at 100 A 1,378,980
1,000,000 Central Bucks School District, General Obligation,
5.400%, 5/15/14 5/04 at 100 Aaa 870,760
1,085,000 Delaware County Authority (Crozer-Chester Medical
Center), 6.000%, 12/15/20 12/03 at 102 Baa1 861,403
2,000,000 Falls Township General Obligation, 5.200%, 12/15/11 12/01 at 100 Aaa 1,704,040
2,000,000 Governor Mifflin School District, General Obligation,
5.400%, 9/15/12 9/03 at 100 Aaa 1,751,320
1,500,000 Ligonier Valley School District, General Obligation,
6.000%, 3/01/23 3/04 at 100 Aaa 1,380,885
1,080,000 Montgomery County Industrial Development
Authority (ECRI Project), 6.850%, 6/01/13 6/03 at 102 N/R 999,302
PAGE
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 2,000,000 New Morgan Industrial Development Authority,
Solid Waste Disposal, Alternative Minimum Tax,
6.500%, 4/01/19 4/04 at 102 A2 $ 1,785,900
2,500,000 Northumberland County Industrial Development
Authority (Roaring Creek Water Company),
Alternative Minimum Tax, 6.375%, 10/15/23 10/03 at 102 N/R 2,081,050
1,750,000 Philadelphia Hospital and Higher Educational
Facilities Authority (Graduate Health System),
6.250%, 7/01/13 7/03 at 102 Baa1 1,508,045
1,005,000 Philadelphia Hospital and Higher Educational
Facilities Authority (Community College of
Philadelphia), 6.100%, 5/01/10 5/04 at 102 Aaa 972,850
Philadelphia Water and Wastewater System:
1,000,000 5.500%, 6/15/14 6/03 at 102 Aaa 866,640
1,500,000 5.000%, 6/15/19 6/03 at 100 Aaa 1,177,290
Philadelphia Hospitals and Higher Educational
Facilities Authority (Children's Hospital
of Philadelphia):
1,750,000 5.375%, 2/15/14 2/03 at 102 AA 1,481,900
1,750,000 6.500%, 2/15/21 (Pre-refunded to 2/15/02) 2/02 at 102 Aaa 1,840,633
1,000,000 5.000%, 2/15/21 2/03 at 102 AA 773,350
1,500,000 Pittsburgh School District, General Obligation,
5.500%, 9/01/16 9/01 at 101 Aaa 1,298,685
2,420,000 Pittsburgh Urban Redevelopment Authority,
5.650%, 10/01/24 10/03 at 102 A1 1,952,287
1,590,000 Pleasant Valley School District, General Obligation,
5.300%, 3/15/13 9/03 at 100 Aaa 1,368,894
1,850,000 South Fork Municipal Authority (Lee Hospital),
5.500%, 7/01/11 7/03 at 102 A 1,569,724
2,000,000 University of Pittsburgh, 6.125%, 6/01/21 6/02 at 102 Aaa 1,865,320
1,000,000 Wallenpaupack Area School District, General
Obligation, 5.500%, 4/01/11 4/01 at 100 Aaa 900,450
$59,070,000 Total Investments - (cost $58,540,892) - 98.7% 51,823,211
===========
Other Assets Less Liabilities - 1.3% 672,746
Net Assets - 100% $52,495,957
===========
PAGE
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 22 $29,017,209 56%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 7 10,669,311 21%
PORTFOLIO OF A+ A1 1 1,952,287 4%
INVESTMENTS: A, A- A, A2, A3 3 4,734,604 9%
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 2 2,369,448 4%
Non-rated Non-rated 2 3,080,352 6%
TOTAL 37 $51,823,211 100%
<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.
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
(Unaudited)
<CAPTION>
NQP NUP NPA NPY
<S> <C> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $182,210,843 $151,238,883 $111,126,874 $130,583,102
Temporary investments in short-term municipal
securities, at market value which equals cost (note 1) -- -- 3,000,000 600,000
Cash 74,861 67,061 89,731 28,692
Receivables:
Interest 3,798,894 3,012,862 1,965,907 2,368,777
Investments sold 3,244,500 -- 1,133,000 15,000
Other assets 20,136 -- 8,687 14,471
------------ ------------ ------------ ------------
Total assets 189,349,234 154,318,806 117,324,199 133,610,042
------------ ------------ ------------ ------------
LIABILITIES
Payable for investments purchased 1,988,070 487,300 -- --
Cash overdraft -- -- -- --
Accrued expenses:
Management fees (note 6) 101,816 83,682 63,922 72,620
Other 88,933 101,430 57,303 87,964
Preferred share dividends payable 29,592 16,686 36,219 17,101
Common share dividends payable 749,833 582,107 414,967 458,576
------------ ------------ ------------ ------------
Total liabilities 2,958,244 1,271,205 572,411 636,261
------------ ------------ ------------ ------------
Net assets (note 7) $186,390,990 $153,047,601 $116,751,788 $132,973,781
============ ============ ============ ============
Preferred shares, at liquidation value $ 60,000,000 $ 50,000,000 $ 45,000,000 $ 52,000,000
============ ============ ============ ============
Preferred shares outstanding 2,400 2,000 1,800 2,080
============ ============ ============ ============
Common shares outstanding 8,520,828 7,142,414 5,803,736 6,948,117
============ ============ ============ ============
Net asset value per Common share outstanding
(net assets less Preferred shares at liquidation value,
divided by Common shares outstanding) $ 14.83 $ 14.43 $ 12.36 $ 11.65
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
(Unaudited)
<CAPTION>
NAP
<S> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $51,823,211
Temporary investments in short-term municipal
securities, at market value which equals cost (note 1) --
Cash --
Receivables:
Interest 981,579
Investments sold --
Other assets 5,577
-----------
Total assets 52,810,367
-----------
LIABILITIES
Payable for investments purchased --
Cash overdraft 54,820
Accrued expenses:
Management fees (note 6) 28,779
Other 37,936
Preferred share dividends payable 15,174
Common share dividends payable 177,701
-----------
Total liabilities 314,410
-----------
Net assets (note 7) $52,495,957
===========
Preferred shares, at liquidation value $21,100,000
===========
Preferred shares outstanding 844
===========
Common shares outstanding 2,820,654
===========
Net asset value per Common share outstanding
(net assets less Preferred shares at liquidation value,
divided by Common shares outstanding) $ 11.13
===========
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended December 31, 1994
(Unaudited)
<CAPTION>
NQP NUP NPA NPY
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income (note 1) $ 6,327,879 $ 4,987,759 $ 3,770,662 $ 4,291,607
----------- ----------- ----------- -----------
Expenses:
Management fees (note 6) 615,487 505,833 390,098 444,207
Preferred shares-auction fees 75,616 63,014 56,712 65,534
Preferred shares-dividend disbursing agent fees 7,562 7,562 7,562 7,562
Shareholders' servicing agent fees and expenses 21,589 16,650 12,273 12,947
Custodian's fees and expenses 25,870 25,624 24,369 25,173
Trustees' fees and expenses (note 6) 1,582 1,411 997 1,047
Professional fees 10,276 10,684 10,588 10,121
Shareholders' reports-printing and mailing expenses 25,536 25,504 21,381 22,658
Stock exchange listing fees 9,707 9,230 8,994 9,405
Investor relations expense 5,532 4,615 4,389 4,424
Other expenses 1,684 9,771 9,024 4,788
----------- ----------- ----------- -----------
Total expenses 800,441 679,898 546,387 607,866
----------- ----------- ----------- -----------
Net investment income 5,527,438 4,307,861 3,224,275 3,683,741
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 113,834 44,572 (393,081) (107,065)
Net change in unrealized appreciation or depreciation
of investments (5,702,088) (4,430,870) (4,339,365) (6,022,071)
----------- ----------- ----------- -----------
Net gain (loss) from investments (5,588,254) (4,386,298) (4,732,446) (6,129,136)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets from operations $ (60,816) $ (78,437) $(1,508,171) $(2,445,395)
=========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended December 31, 1994
(Unaudited)
<CAPTION>
NAP
<S> <C>
INVESTMENT INCOME
Interest income (note 1) $ 1,672,669
-----------
Expenses:
Management fees (note 6) 175,829
Preferred shares-auction fees 26,592
Preferred shares-dividend disbursing agent fees 7,562
Shareholders' servicing agent fees and expenses 7,593
Custodian's fees and expenses 22,315
Trustees' fees and expenses (note 6) 805
Professional fees 10,072
Shareholders' reports-printing and mailing expenses 13,199
Stock exchange listing fees 4,133
Investor relations expense 4,193
Other expenses 6,207
-----------
Total expenses 278,500
-----------
Net investment income 1,394,169
-----------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) (117,317)
Net change in unrealized appreciation or depreciation
of investments (2,447,680)
-----------
Net gain (loss) from investments (2,564,997)
-----------
Net increase (decrease) in net assets from operations $(1,170,828)
===========
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NQP NUP
6 months ended Year ended 6 months ended Year ended
12/31/94 6/30/94 12/31/94 6/30/94
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 5,527,438 $ 10,982,602 $ 4,307,861 $ 8,563,825
Net realized gain (loss) from investment transactions,
net of taxes, if applicable 113,834 (95,453) 44,572 27,530
Net change in unrealized appreciation or depreciation
of investments (5,702,088) (7,307,262) (4,430,870) (6,890,798)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from operations (60,816) 3,579,887 (78,437) 1,700,557
------------ ------------ ------------ ------------
Distributions to Shareholders (note 1)
From net investment income:
Common shareholders (4,583,420) (9,780,088) (3,563,412) (7,133,314)
Preferred shareholders (967,558) (1,369,672) (846,446) (1,464,380)
From net realized gains from investment transactions:
Common shareholders -- (341,075) -- (195,019)
Preferred shareholders -- (50,664) -- (35,420)
------------ ------------ ------------ ------------
Decrease in net assets from distributions
to shareholders (5,550,978) (11,541,499) (4,409,858) (8,828,133)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (note 2)
Common shares:
Net proceeds from sale of Common shares -- -- -- --
Net proceeds from Common shares issued to
shareholders due to reinvestment of distributions
from net investment income and from net
realized gains from investment transactions 284,693 1,759,538 245,174 354,928
Preferred shares-net proceeds from sale of shares -- -- -- --
------------ ------------ ------------ ------------
Net increase in net assets derived from capital
share transactions 284,693 1,759,538 245,174 354,928
------------ ------------ ------------ ------------
Net increase (decrease) in net assets (5,327,101) (6,202,074) (4,243,121) (6,772,648)
Net assets at beginning of period 191,718,091 197,920,165 157,290,722 164,063,370
------------ ------------ ------------ ------------
Net assets at end of period $186,390,990 $191,718,091 $153,047,601 $157,290,722
============ ============ ============ ============
Balance of undistributed net investment income at
end of period $ 763,255 $ 786,795 $ 520,092 $ 622,089
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NPA NPY
6 months ended Year ended 6 months ended Year ended
12/31/94 6/30/94 12/31/94 6/30/94
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 3,224,275 $ 6,381,931 $ 3,683,741 $ 6,905,880
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (393,081) (82,276) (107,065) (581,956)
Net change in unrealized appreciation or depreciation
of investments (4,339,365) (8,907,299) (6,022,071) (11,315,458)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from operations (1,508,171) (2,607,644) (2,445,395) (4,991,534)
------------ ------------ ------------ ------------
Distributions to Shareholders (note 1)
From net investment income:
Common shareholders (2,547,845) (4,960,933) (2,793,146) (5,485,252)
Preferred shareholders (742,854) (1,073,752) (881,255) (1,240,297)
From net realized gains from investment transactions:
Common shareholders -- -- -- --
Preferred shareholders -- -- -- --
------------ ------------ ------------ ------------
Decrease in net assets from distributions
to shareholders (3,290,699) (6,034,685) (3,674,401) (6,725,549)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (note 2)
Common shares:
Net proceeds from sale of Common shares -- -- -- --
Net proceeds from Common shares issued to
shareholders due to reinvestment of distributions
from net investment income and from net
realized gains from investment transactions 107,948 725,026 40,955 166,329
Preferred shares-net proceeds from sale of shares -- -- -- 51,042,325
------------ ------------ ------------ ------------
Net increase in net assets derived from capital
share transactions 107,948 725,026 40,955 51,208,654
------------ ------------ ------------ ------------
Net increase (decrease) in net assets (4,690,922) (7,917,303) (6,078,841) 39,491,571
Net assets at beginning of period 121,442,710 129,360,013 139,052,622 99,561,051
------------ ------------ ------------ ------------
Net assets at end of period $116,751,788 $121,442,710 $132,973,781 $139,052,622
============ ============ ============ ============
Balance of undistributed net investment income at
end of period $ 372,948 $ 439,372 $ 510,041 $ 500,701
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NAP
6 months ended Year ended
12/31/94 6/30/94
<S> <C> <C>
OPERATIONS
Net investment income $ 1,394,169 $ 2,303,520
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (117,317) (810,007)
Net change in unrealized appreciation or depreciation
of investments (2,447,680) (4,396,753)
----------- -----------
Net increase (decrease) in net assets from operations (1,170,828) (2,903,240)
----------- -----------
Distributions to Shareholders (note 1)
From net investment income:
Common shareholders (1,066,208) (1,773,464)
Preferred shareholders (338,137) (387,411)
From net realized gains from investment transactions:
Common shareholders -- --
Preferred shareholders -- --
----------- -----------
Decrease in net assets from distributions
to shareholders (1,404,345) (2,160,875)
----------- -----------
CAPITAL SHARE TRANSACTIONS (note 2)
Common shares:
Net proceeds from sale of Common shares -- 3,652,110
Net proceeds from Common shares issued to
shareholders due to reinvestment of distributions
from net investment income and from net
realized gains from investment transactions 22,782 88,619
Preferred shares-net proceeds from sale of shares -- 20,624,865
----------- -----------
Net increase in net assets derived from capital
share transactions 22,782 24,365,594
----------- -----------
Net increase (decrease) in net assets (2,552,391) 19,301,479
Net assets at beginning of period 55,048,348 35,746,869
----------- -----------
Net assets at end of period $52,495,957 $55,048,348
=========== ===========
Balance of undistributed net investment income at
end of period $ 135,077 $ 145,253
=========== ===========
See accompanying notes to financial statements.
</TABLE>
PAGE
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At December 31, 1994, the state Funds (the "Funds") covered in this report and
their corresponding stock exchange symbols are Nuveen Pennsylvania Investment
Quality Municipal Fund (NQP), Nuveen Pennsylvania Quality Income Municipal
Fund (NUP), Nuveen Pennsylvania Premium Income Municipal Fund (NPA), Nuveen
Pennsylvania Premium Income Municipal Fund 2 (NPY) and Nuveen Pennsylvania
Premium Income Municipal Fund 3 (NAP). All of the above mentioned funds are
traded on the New York Stock Exchange except for NAP which is traded on the
American Stock Exchange.
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 securities for which market quotations are not readily
available are valued at fair value by consistent application of methods
determined in good faith by the Trustees. Temporary investments in securities
that have variable rate and demand features qualifying them as short-term
securities are traded and valued at principal amount.
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 December 31, 1994, NQP had outstanding purchase commitments
that amounted to $1,988,070. There were no such purchase commitments in any
other Funds.
PAGE
<PAGE>
Interest Income
Interest income is determined on the basis of interest accrued and discount
earned, adjusted for amortization of premiums or discounts on long-term debt
securities when required for federal income tax purposes.
Income Taxes
The Funds intend to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies by distributing all of their net
investment income, in addition to any significant amounts of net realized
gains from investments, to shareholders. The Funds currently consider
significant net realized gains 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, Pennsylvania Personal Income Tax, and Philadelphia School District
Investment Income Tax, to retain such tax exempt status when distributed to
shareholders of the respective Funds. Capital gain distributions are subject
to federal taxation. However, capital gain distributions are exempt from the
Pennsylvania Personal Income Tax and the Philadelphia School District
Investment Income Tax.
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
gains from investment 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 gains
from investment transactions 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.
PAGE
<PAGE>
<TABLE>
Preferred Shares
The following Funds have issued and outstanding $25,000 stated value Preferred
shares. Each Fund's Preferred shares are issued in one Series. The dividend
rate on each Series may change every 7 days, as set by the Auction Agent. The
number of shares outstanding by Series at December 31, 1994, for each Fund is
as follows:
<CAPTION>
NQP NUP NPA NPY
<S> <C> <C> <C> <C>
Number of Shares:
Series M -- -- -- --
Series W 2,400 -- -- --
Series Th -- 2,000 -- 2,080
Series F -- -- 1,800 --
===== ===== ===== =====
<CAPTION>
NAP
<S> <C>
Number of Shares:
Series M 844
Series W -
Series Th -
Series F -
====
Proposed Reorganization
As approved by shareholders on December 22, 1994, NQP will acquire
substantially all of the assets of NUP in exchange for newly issued shares of
NQP and the assumption by NQP of substantially all of the liabilities of NUP.
Following receipt of the NQP shares, NUP will be liquidated and the NQP shares
will be distributed to the shareholders of NUP. As a result of this
reorganization, the assets and liabilities of both Funds will be combined and
the shareholders of NUP will thus become shareholders in NQP. This
reorganization is expected to be completed on January 9, 1995. The investment
objectives and policies of the larger combined Fund would be virtually
identical to that of each of the separate Funds.
As approved by shareholders on January 13, 1995, NPY will acquire
substantially all of the assets of NPA and NAP in exchange for newly issued
shares of NPY and the assumption by NPY of substantially all of the
liabilities of NPA and NAP. Following receipt of the NPY shares, NPA and NAP
will be liquidated and the NPY shares will be distributed to the shareholders
of NPA and NAP. As a result of this reorganization, the assets and liabilities
of the Funds will be combined and the shareholders of NPA and NAP will thus
become shareholders in NPY. This reorganization is expected to be completed on
February 7, 1995. The investment objectives and policies of the larger
combined Fund would be virtually identical to that of each of the separate
Funds.
</TABLE>
PAGE
<PAGE>
<TABLE>
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
<CAPTION>
NQP NUP
6 months ended Year ended 6 months ended Year ended
12/31/94 6/30/94 12/31/94 6/30/94
<S> <C> <C> <C> <C>
Common shares:
Shares sold -- -- -- --
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions 17,863 103,077 16,077 22,132
------ ------- ------ ------
Net increase 17,863 103,077 16,077 22,132
====== ======= ====== ======
Preferred shares sold -- -- -- --
====== ======= ====== ======
<CAPTION>
NPA NPY
6 months ended Year ended 6 months ended Year ended
12/31/94 6/30/94 12/31/94 6/30/94
<S> <C> <C> <C> <C>
Common shares:
Shares sold -- -- -- --
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions 8,147 46,007 3,244 7,755
----- ------- ----- -----
Net increase 8,147 46,007 3,244 7,755
===== ======= ===== =====
Preferred shares sold -- -- -- 2,080
===== ======= ===== =====
<CAPTION>
NAP
6 months ended Year ended
12/31/94 6/30/94
<S> <C> <C>
Common shares:
Shares sold -- 255,000*
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions 1,841 6,695
----- -------
Net increase 1,841 261,695
===== =======
Preferred shares sold -- 844
===== =======
<FN>
*Amount shown reflects overallotment for shares sold in the initial public
offering, which occurred during the Fund's initial period ended June 30, 1993.
</TABLE>
PAGE
<PAGE>
<TABLE>
3. SECURITIES TRANSACTIONS
Purchase and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the six months ended
December 31, 1994, were as follows:
<CAPTION>
NQP NUP NPA NPY
<S> <C> <C> <C> <C>
PURCHASES
Investments in municipal securities $10,657,784 $ 5,499,701 $ 3,787,720 $1,421,126
Temporary municipal investments 10,100,000 14,300,000 12,300,000 5,500,000
SALES AND MATURITIES
Investments in municipal securities 8,127,915 3,412,780 6,397,595 1,587,481
Temporary municipal investments 13,400,000 15,700,000 10,300,000 4,900,000
=========== =========== =========== ==========
<CAPTION>
NAP
<S> <C>
PURCHASES
Investments in municipal securities $2,398,774
Temporary municipal investments 1,100,000
SALES AND MATURITIES
Investments in municipal securities 1,356,769
Temporary municipal investments 1,880,000
==========
At December 31, 1994, 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 June 30, 1994, 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 security gains, if any. If not applied, the carryovers
will expire as follows:
<CAPTION>
NQP NPA NPY NAP
<S> <C> <C> <C> <C>
Expiration Year:
2002 $95,453 $82,276 $581,956 $810,007
======= ======= ======== ========
</TABLE>
PAGE
<PAGE>
<TABLE>
4. Distributions to COMMON Shareholders
On December 30, 1994, the following Funds declared Common share dividend
distributions from their ordinary income and supplemental dividend
distributions from their undistributed net investment income which were paid
February 1, 1995, to shareholders of record on January 9, 1995, as follows:
<CAPTION>
NQP NUP
<S> <C> <C>
Dividend per share $.0880 $.0815
====== ======
Supplemental dividend per share $ -- $.0117
====== ======
On January 3, 1995, the following Funds declared Common share dividend
distributions from their ordinary income which were paid February 1, 1995, to
shareholders of record on January 15, 1995, as follows:
<CAPTION>
NPA NPY NAP
<S> <C> <C> <C>
Dividend per share $.0715 $.0660 $.0630
====== ====== ======
</TABLE>
PAGE
<PAGE>
<TABLE>
5. Unrealized Appreciation (Depreciation)
Gross unrealized appreciation and gross unrealized depreciation of investments
at December 31, 1994, were as follows:
<CAPTION>
NQP NUP NPA NPY
<S> <C> <C> <C> <C>
Gross unrealized:
Appreciation $7,877,798 $4,092,374 $ 204,213 $ --
Depreciation (890,766) (693,396) (8,768,259) (15,193,356)
----------- ----------- ----------- ------------
Net unrealized appreciation (depreciation) $6,987,032 $3,398,978 $(8,564,046) $(15,193,356)
========== ========== ============ =============
<CAPTION>
NAP
<S> <C>
Gross unrealized:
Appreciation $ 11,839
Depreciation (6,729,520)
-----------
Net unrealized appreciation (depreciation) $(6,717,681)
===========
</TABLE>
PAGE
<PAGE>
<TABLE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
("the Adviser"), 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 Trustees who are affiliated with the Adviser or
to their officers, all of whom receive remuneration for their services to the
Funds from the Adviser.
</TABLE>
PAGE
<PAGE>
<TABLE>
7. Composition of Net Assets
At December 31, 1994, net assets consisted of:
<CAPTION>
NQP NUP NPA NPY
<S> <C> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 60,000,000 $ 50,000,000 $ 45,000,000 $ 52,000,000
Common shares, $.01 par value per share 85,208 71,424 58,037 69,481
Paid-in surplus 118,615,704 99,021,620 80,360,206 96,276,636
Undistributed net investment income 763,255 520,092 372,948 510,041
Accumulated net realized gain (loss) from
investment transactions, net of taxes, if applicable (60,209) 35,487 (475,357) (689,021)
Net unrealized appreciation or depreciation
of investments 6,987,032 3,398,978 (8,564,046) (15,193,356)
------------ ------------ ------------ ------------
Net assets $186,390,990 $153,047,601 $116,751,788 $132,973,781
============ ============ ============ ============
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
============ ============ ============ ============
<CAPTION>
NAP
<S> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $21,100,000
Common shares, $.01 par value per share 28,207
Paid-in surplus 38,877,678
Undistributed net investment income 135,077
Accumulated net realized gain (loss) from
investment transactions, net of taxes, if applicable (927,324)
Net unrealized appreciation or depreciation
of investments (6,717,681)
-----------
Net assets $52,495,957
===========
Authorized shares:
Common Unlimited
Preferred Unlimited
===========
</TABLE>
PAGE
<PAGE>
<TABLE>
8. Investment Composition
Each Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At December 31, 1994, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<CAPTION>
NQP NUP NPA NPY
<S> <C> <C> <C> <C>
Revenue Bonds:
Educational Facilities 13% 11% 21% 19%
Health Care Facilities 13 12 20 19
Housing Facilities 10 8 11 16
Pollution Control Facilities 9 9 12 7
Water / Sewer Facilities 3 8 5 7
Lease Rental Facilities 0 0 4 8
Transportation 5 7 5 4
Other 3 4 1 4
General Obligation Bonds 7 8 12 11
Escrowed Bonds 37 33 9 5
----- ----- ----- -----
100% 100% 100% 100%
===== ===== ===== =====
<CAPTION>
NAP
<S> <C>
Revenue Bonds:
Educational Facilities 16%
Health Care Facilities 14
Housing Facilities 15
Pollution Control Facilities 12
Water / Sewer Facilities 4
Lease Rental Facilities 3
Transportation 3
Other 2
General Obligation Bonds 25
Escrowed Bonds 6
-----
100%
=====
Certain long-term and intermediate-term investments owned by the Funds are
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, either of which ensure the timely payment of principal and
interest in the event of default (66% for NQP, 46% for NUP, 57% for NPA, 54%
for NPY, and 53% for NAP) 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.
</TABLE>
PAGE
<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 Net unrealized
value invest- gain (loss) To To
beginning ment from invest- Common Preferred
of period income mentstt shareholders shareholderst
NQP
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 $15.490 $ .648 $ (.656) $ (.538) $(.114)
Year ended 6/30,
1994 16.420 1.298 (.863) (1.157) (.162)
1993 15.140 1.309 1.276 (1.124) (.181)
8 Mos. ended
6/30/92 14.600 .882 .492 (.664) (.170)
2/21/91 to
10/31/91 14.050 .682 .706 (.498) (.123)
<CAPTION>
NUP
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 15.060 .603 (.615) (.499) (.119)
Year ended 6/30,
1994 16.060 1.203 (.962) (1.003) (.206)
1993 14.660 1.209 1.449 (1.024) (.206)
6/30/92 14.050 .657 .708 (.459) (.085)
<CAPTION>
NPA
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 13.190 .556 (.819) (.439) (.128)
Year ended
6/30/94 14.670 1.104 (1.540) (.858) (.186)
12/17/92 to
6/30/93 14.050 .342 .821 (.286) (.040)
PAGE
<PAGE>
<CAPTION>
Distributions from capital gains
Per
Common
share
market
To To Organiza- Net asset value
Common Preferred tion and value end end of
shareholders shareholderst offering costs of period period
NQP
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 $ -- $ -- $ -- $14.830 $13.750
Year ended 6/30,
1994 (.040) (.006) -- 15.490 16.250
1993 -- -- -- 16.420 17.500
8 Mos. ended
6/30/92 -- -- -- 15.140 15.750
2/21/91 to
10/31/91 -- -- (.217) 14.600 15.500
<CAPTION>
NUP
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 -- -- -- 14.430 13.500
Year ended 6/30,
1994 (.027) (.005) -- 15.060 15.250
1993 (.023) (.005) -- 16.060 16.000
10/17/91 to
6/30/92 -- -- (.211) 14.660 14.875
<CAPTION>
NPA
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 -- -- -- 12.360 11.125
Year ended
6/30/94 -- -- -- 13.190 13.250
12/17/92 to
6/30/93 -- -- (.217) 14.670 15.000
PAGE
<PAGE>
<CAPTION>
Ratios/Supplemental data
Total
invest- Ratio of
ment net
return Total Net assets Ratio of investment
on return on end of expenses income Portfolio
market net asset period (in) to average to average turnover
value** value** thousands) net assets net assets rate
NQP
<S> <C> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 (12.28)% (.79)% $186,391 .84*% 5.80*% 4%
Year ended 6/30,
1994 (.39) 1.23 191,718 .84 5.54 3
1993 18.83 16.50 197,920 .86 5.73 2
8 Mos. ended
6/30/92 5.97 8.48 185,576 .78* 6.04* --
2/21/91 to
10/31/91 6.71 7.61 180,203 .81* 5.50* --
<CAPTION>
NUP
<S> <C> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 (8.28) (.86) 153,048 .87* 5.52* 2
Year ended 6/30,
1994 1.69 .02 157,291 .90 5.23 2
1993 14.98 17.37 164,063 .93 5.44 7
10/17/91 to
6/30/92 2.24 7.75 152,825 .87* 5.42* 6
<CAPTION>
NPA
<S> <C> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 (12.94) (2.98) 116,752 .91* 5.37* 3
Year ended
6/30/94 (6.30) (4.59) 121,443 .90 4.96 9
12/17/92 to
6/30/93 1.87 6.51 129,360 .91* 3.88* --
See notes on page 52.
PAGE
<PAGE>
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 Net unrealized
value invest- gain (loss) To To
beginning ment from invest- Common Preferred
of period income mentstt shareholders shareholderst
NPY
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 $12.530 $.530 $ (.881) $(.402) $(.127)
Year ended
6/30/94 14.350 .995 (1.708) (.790) (.179)
3/18/93 to
6/30/93 14.050 .111 .308 (.065) --
<CAPTION>
NAP
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 12.040 .494 (.906) (.378) (.120)
Year ended
6/30/94 13.980 .820 (1.819) (.630) (.140)
6/18/93 to
6/30/93 14.050 .001 .050 -- --
PAGE
<PAGE>
<CAPTION>
Distributions from capital gains
Per
Common
share
market
To To Organiza- Net asset value
Common Preferred tion and value end end of
shareholders shareholderst offering costs of period period
NPY
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 $ -- $ -- $ -- $11.650 $10.625
Year ended
6/30/94 -- -- (.138) 12.530 12.375
3/18/93 to
6/30/93 -- -- (.054) 14.350 14.625
<CAPTION>
NAP
<S> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 -- -- -- 11.130 9.875
Year ended
6/30/94 -- -- (.171) 12.040 12.250
6/18/93 to
6/30/93 -- -- (.121) 13.980 15.125
PAGE
<PAGE>
<CAPTION>
Ratios/Supplemental data
Total
invest- Ratio of
ment net
return Total Net assets Ratio of investment
on return on end of expenses income Portfolio
market net asset period (in) to average to average turnover
value** value** thousands) net assets net assets rate
NPY
<S> <C> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 (11.01)% (3.84)% $132,974 .89*% 5.38*% 1%
Year ended
6/30/94 (10.29) (7.60) 139,053 .90 4.70 11
3/18/93 to
6/30/93 (2.08) 2.60 99,561 .92* 2.99* --
<CAPTION>
NAP
<S> <C> <C> <C> <C> <C> <C>
6 Mos. ended
12/31/94 (16.54) (4.45) 52,496 1.03* 5.16* 3
Year ended
6/30/94 (15.04) (9.72) 55,048 1.03 4.27 27
6/18/93 to
6/30/93 .83 (.50) 35,747 1.14* .89* --
<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.
t The amounts shown are based on Common share equivalents.
tt Net of taxes, if applicable.
</TABLE>
PAGE
<PAGE>
The human bond
Photo of John Nuveen
At John Nuveen & Co. Incorporated, where our tax-free municipal bonds have
helped people live their
dreams for nearly 100 years, we still believe our strongest bond is human.TM
For almost a century, John Nuveen & Company has concentrated its resources and
expertise in one area: municipal bonds. We are one of the oldest and largest
investment banking firms specializing exclusively in municipal securities, and
we strive to be the best.
Our approach to managing our shareholders' investments endures. We maintain
a sharp focus on the needs of prudent investors and their families, offer
investments of quality, and then work to make them better by seeking out
opportunity. We hold to a dedicated belief in the importance of research. And
we sustain a commitment to sound financial management through value investing.
Our hope is that by providing quality investments we may foster opportunity
for our investors. Through careful research, attention to detail, and our
philosophy of managing for long-term value, we strive to provide our
shareholders with the attractive level of income they need to achieve their
personal goals and aspirations.
These are the things that matter most, and it's why we say that, at Nuveen,
our strongest bond
is human.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
ETF3-FEB 95
