<PAGE>
Nuveen Tax-Free
Mutual Funds
Dependable tax-free
income for generations
ARIZONA
FLORIDA
MARYLAND
MICHIGAN
NEW JERSEY
PENNSYLVANIA
VIRGINIA
[PHOTO OF COUPLE APPEARS HERE]
ANNUAL REPORT/JANUARY 31, 1996
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
9 Fund performance
16 Portfolio of investments
39 Statement of net assets
41 Statement of operations
43 Statement of changes in net assets
47 Notes to financial statements
62 Financial highlights
<PAGE>
Dear
shareholder
[PHOTO OF RICHARD J. FRANKE APPEARS HERE]
"Over time,
municipal bonds
have proven to
be a valuable
and dependable
component of
successful invest-
ment programs."
During 1995, we enjoyed a welcome rebound in the bond markets--a sharp contrast
to 1994, which was one of the most volatile periods in bond market history. In
fact, 1995 unfolded as one of the best years for bonds in a decade, as the bond
market responded to a climate of slowing economic growth and diminished
inflationary pressure.
The changing profile of the bond market over the past two years serves to
remind us that weathering the ups and downs of the markets is a normal part of
the investment process. By maintaining a long-term perspective on your
investments, you can minimize the impact of short-term fluctuations and keep the
focus on achieving your goals. Municipal bond funds continue to play an integral
role in helping investors reach those goals, offering the attractive tax-free
income and solid total returns that they seek.
Throughout the past year, we have kept our sights focused on successfully
meeting your fund's objectives. As of January 31, 1996, the current annual SEC
yield on offering price for R Shares for the mutual funds covered in this report
ranged from 4.44% to 4.96%. To match these yields, an investor in the 36%
federal income tax bracket would have had to earn at least 6.94% on taxable
alternatives. The effect of state taxes further enhances the after-tax yield
advantage provided by municipal bonds.
3
<PAGE>
Reflecting the rebound in the bond market, each of these funds reported gains
in portfolio value since January 31, 1995. The 12-month total returns on net
asset value, reflecting portfolio gains plus reinvested dividend income, ranged
from 12.88% to 14.93%, which translate to 16.80% to 18.68% on a taxable-
equivalent basis. This strong performance rewarded investors who had weathered
the volatility of 1994, and reminds us again of the importance of municipal
bonds to a well-rounded, long-term investment plan.
As some of you may know, on June 30, 1996, I will be retiring as the chairman
and chief executive officer of John Nuveen & Co. Incorporated, and as chairman
of the board of the Nuveen 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 following my retirement. Timothy Schwertfeger has
been named as my successor as Chief Executive Officer and Chairman of Nuveen,
and Chairman of the Funds. He is currently Executive Vice President of Nuveen
and President of the Nuveen Funds. I am very confident in his abilities and the
abilities of the entire Nuveen management team.
The transition in management has been well planned and it will have no effect
on portfolio management, or the way dividends are set. Our management team is
committed to continuing Nuveen's successful tradition of value investing and
prudent management, helping our shareholders meet their needs for tax-free
investment income with a full range of investment choices.
Our focus will continue to be on building shareholder value, providing
research-oriented management, and maintaining our leadership role in the
municipal bond market. With this focus, we anticipate many more years of
progress and accomplishment for our shareholders and our firm.
I'd like to take this occasion to thank you for selecting Nuveen mutual fund
investments.
Sincerely,
/s/ Richard J. Franke
Richard J. Franke
Chairman of the Board
March 15, 1996
4
<PAGE>
Answering your questions
Tom Spalding, head of Nuveen's portfolio management team, discusses factors
affecting the municipal market and efforts made to provide value for
shareholders.
How did the investment climate over the past year affect municipal bonds?
In 1995, the combination of slow economic growth and low inflation created the
ideal environment for bond markets, which responded with a sustained rally.
Citing the lack of significant inflation, the Federal Reserve Board moved to cut
interest rates in July and December 1995 and again at the end of January 1996.
This succession of rate cuts helped to bring down long-term municipal bond
yields by almost 150 basis points over the year and increase net asset values.
The municipal bond rebound was somewhat less than that of taxable bonds due to
the high-profile discussion of major tax reform legislation--and concern about
the potential impact of this legislation on tax-free investments. Yet in 1995,
most Nuveen mutual funds enjoyed taxable-equivalent total returns of 17% or
better.
5
<PAGE>
[PHOTO OF TOM SPALDING APPEARS HERE]
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market.
What was Nuveen's approach to investing during this period?
During 1995, we continued to pursue our philosophy of value investing, a
disciplined approach designed to deliver above-market performance by emphasizing
securities that offer good intrinsic value but that are underpriced or
undervalued by the market. This approach was rewarded over the past year, as we
saw many of our portfolio holdings upgraded by the rating agencies, confirming
that our Research Department's judgments about credit quality were on target. We
also moved to protect current income by investing more of our portfolio in non-
callable bonds when possible. These bonds are cannot be redeemed before maturity
so that their yield is assured for the long term in the event of falling
interest rates. As is our policy, we continue to invest only in investment-grade
quality securities.
Has Nuveen made any major investment changes over the past year?
No. In the search for income and total return, our value investing approach
continues to concentrate on individual bonds with current yields, prices, credit
quality, and future prospects that are exceptionally attractive relative to
other bonds in the market. Because attractive issues may appear any time over
the course of the year, we are constantly vigilant for new opportunities, with
the goal of ensuring that the funds are always positioned to meet their
objectives: as high a level of current tax-free income as is consistent with
preservation of capital. This means
6
<PAGE>
that our analysts continuously assess investment possibilities across the entire
spectrum of geographical and sector opportunities nationwide. Currently, we
favor revenue bonds for essential services (such as those issued by water and
sewer facilities and utilities, especially public power authorities providing
electricity at competitive rates). We have reduced our positions in general
obligation bonds issued by counties and cities, which have suffered strained
financial backing as the result of spending cuts at the state and federal
levels.
What does Nuveen see as the impact of the flat tax proposals on the municipal
market?
Because of the implications for tax-free investments such as municipal bonds and
bond funds, we have been closely monitoring the various flat tax proposals
currently being debated in Congress. While election-year politics have focused a
spotlight on the debate, it is important to note that none of the proposals
currently under discussion has gained a strong consensus. In addition,
implementation of any measure that manages to pass both houses is almost
certainly two years--or more--away.
Given the uncertainty surrounding this issue, Nuveen has taken the position
that it is inadvisable to manage our funds toward one specific outcome. Instead,
we continue to believe that pursuing our value investing philosophy is the
optimal way to meet our investors' objectives. We believe that this
7
<PAGE>
approach offers investors greater price stability during volatile markets. Once
the tax issue is resolved, we're confident that municipal bonds--because of
their high credit quality and attractive yields--will continue to hold a
strategic place in the prudent investor's portfolio. We will continue to monitor
developments in the tax debate as well as changes in other economic and
political conditions while keeping our focus on achieving the objectives of your
fund.
What is Nuveen's market outlook for 1996?
Although inflation currently remains low and economic growth is moderating, we
continue to watch these factors for potential changes and impact on the bond
market. During this election year, we're also closely monitoring any changes in
economic and tax policy that may impact the municipal market. The fundamentals
in the long term are sound with the supply of municipal bonds down from past
years, and a growing number of individual investors seeking to diversify their
portfolios, and to increase their tax-free income.
8
<PAGE>
NUVEEN ARIZONA TAX-FREE
VALUE FUND
Arizona
INDEX COMPARISON
Comparison of Change in Value of a $10,000 Investment in Nuveen Arizona Tax-Free
Value Fund R Shares* and Lehman Brothers Municipal Bond Index
[GRAPH APPEARS HERE]
Tax-Adjusted
Lehman Brothers Lehman Brothers Nuveen AZ Tax-Free
Municipal Bond Index Municipal Bond Index Value Fund
1.92 10,000 10,000 9,525
7.92 10,698 10,698 10,321
1.93 10,983 10,959 10,545
7.93 11,643 11,618 11,222
1.94 12,328 12,277 12,029
7.94 11,861 11,811 11,400
1.95 11,890 11,815 11,502
7.95 12,796 12,716 12,316
1.96 13,681 13,574 13,123
___ Lehman Brothers Municipal Bond Index - Total $13,681
- - - Tax-Adjusted Lehman Brothers Municipal Bond Index
(reduced by state tax effects) - Total $13,574
___ Nuveen AZ Tax-Free Value Fund - Total $13,123
($13,777 if purchased at NAV)
Past performance is not predictive of future performance
- -------------------------------------------------------------------
ANNUALIZED TOTAL RETURN
- -------------------------------------------------------------------
1 year 3 years Since inception
- -------------------------------------------------------------------
R Shares on NAV 14.09% 7.57% 8.51%
A Shares on NAV 13.68% N/A 10.55%+
A Shares on offering price** 8.56% N/A 6.97%+
C Shares on NAV 12.90% N/A 10.07%+
The fund's current dividend of 4.35 cents per share for Class R Shares
translated into a distribution yield of 4.89% as of January 31, 1996. The annual
distribution yield is calculated by multiplying the dividend by 12, and dividing
this number by the current offering price. Investors in the 39.5% combined state
and federal income tax bracket would have to earn 8.08% on a taxable investment
to match this tax-free yield.
During the fiscal year, your fund's net asset value (for Class R Shares)
increased by 8.32% from a year ago. The average annual total return on NAV for
this class was 14.09%, which translates into a taxable-equivalent total return
of 17.76%.
* One-year, 3-year and life of fund total return figures for Class R Shares are
not representative for Class A Shares or Class C Shares because they do not take
into account (1) the difference between the maximum front-end sales charge
applicable to Class R Shares (none), Class A Shares (4.50%) and Class C Shares
(none); (2) the .25% annual 12b-1 service fee applicable to Class A and Class C
Shares; (3) the .75% annual 12b-1 distribution fee to be deducted from income
with respect to Class C Shares; and (4) other class-level expenses applicable to
Class A Shares and Class C Shares.
** Maximum public offering price, which includes sales charges, which are
reduced for purchases over $50,000 and waived for reinvestment of dividends.
+ Life of class; Class A Shares and Class C Shares were first issued at
different times after September 6, 1994.
The Lehman Municipal Bond Index is comprised of a broad range of investment-
grade municipal bonds, and does not reflect any initial or ongoing expenses. The
Nuveen fund return depicted in the chart reflects the initial maximum sales
charge applicable to R Shares at the time (4.75%) and all ongoing fund expenses.
9
<PAGE>
NUVEEN FLORIDA TAX-FREE
VALUE FUND
Florida
INDEX COMPARISON
Comparison of Change in Value of a $10,000 Investment in Nuveen Florida Tax-Free
Value Fund R Shares* and Lehman Brothers Municipal Bond Index
[GRAPH APPEARS HERE]
Lehman Brothers
Municipal Bond Nuveen FL Tax-Free
Index Value Fund
1.92 10,000 9,525
7.92 10,698 10,167
1.93 10,983 10,414
7.93 11,643 11,064
1.94 12,328 11,791
7.94 11,861 11,162
1.95 11,890 11,281
7.95 12,796 12,012
1.96 13,681 12,867
___ Lehman Brothers Municipal Bond Index - Total $13,681
___ Nuveen FL Tax-Free Value Fund - Total $12,867
($13,509 if purchased at NAV)
Past performance is not predictive of future performance
- -------------------------------------------------------------------
ANNUALIZED TOTAL RETURN
- -------------------------------------------------------------------
1 year 3 years Since inception
- -------------------------------------------------------------------
R Shares on NAV 14.05% 7.31% 7.97%
A Shares on NAV 13.92% N/A 10.15%+
A Shares on offering price** 8.79% N/A 6.59%+
C Shares on NAV 12.54% N/A 10.43%+
- -------------------------------------------------------------------
The fund's current dividend of 4.30 cents per share for Class R Shares
translated into a distribution yield of 4.88% as of January 31, 1996. The annual
distribution yield is calculated by multiplying the dividend by 12, and dividing
this number by the current offering price. Investors in the 36% federal income
tax bracket would have to earn 7.63% on a taxable investment to match this tax-
free yield.
During the fiscal year, your fund's net asset value (for Class R Shares)
increased by 8.41% from a year ago. The average annual total return on NAV for
this class was 14.05%, which translates into a taxable-equivalent total return
of 17.13%.
* One-year, 3-year and life of fund total return figures for Class R Shares are
not representative for Class A Shares or Class C Shares because they do not take
into account (1) the difference between the maximum front-end sales charge
applicable to Class R Shares (none), Class A Shares (4.50%) and Class C Shares
(none); (2) the .25% annual 12b-1 service fee applicable to Class A and Class C
Shares; (3) the .75% annual 12b-1 distribution fee to be deducted from income
with respect to Class C Shares; and (4) other class-level expenses applicable to
Class A Shares and Class C Shares.
** Maximum public offering price, which includes sales charges, which are
reduced for purchases over $50,000 and waived for reinvestment of dividends.
+ Life of class; Class A Shares and Class C Shares were first issued at
different times after September 6, 1994.
The Lehman Municipal Bond Index is comprised of a broad range of investment-
grade municipal bonds, and does not reflect any initial or ongoing expenses. The
Nuveen fund return depicted in the chart reflects the initial maximum sales
charge applicable to R Shares at the time (4.75%) and all ongoing fund expenses.
10
<PAGE>
NUVEEN MARYLAND TAX-FREE
VALUE FUND
Maryland
INDEX COMPARISON
Comparison of Change in Value of a $10,000 Investment in Nuveen Maryland Tax-
Free Value Fund R Shares* and Lehman Brothers Municipal Bond Index
[GRAPH APPEARS HERE]
Lehman Brothers Tax-Adjusted
Municipal Bond Lehman Brothers Nuveen MD Tax-Free
Index Municipal Bond Index Value Fund
1.92 10,000 10,000 9,525
7.92 10,698 10,698 10,173
1.93 10,983 10,960 10,379
7.93 11,643 11,619 11,101
1.94 12,328 12,279 11,698
7.94 11,861 11,814 11,142
1.95 11,890 11,818 11,163
7.95 12,796 12,718 12,055
1.96 13,681 13,573 12,762
___ Lehman Brothers Municipal Bond Index - Total $13,681
- - - Tax-Adjusted Lehman Brothers Municipal Bond Index
(reduced by state tax effects) - Total $13,573
___ Nuveen MD Tax-Free Value Fund - Total $12,762
($13,398 if purchased at NAV)
Past performance is not predictive of future performance
- -------------------------------------------------------------------
ANNUALIZED TOTAL RETURN
1 year 3 years Since inception
- -------------------------------------------------------------------
R Shares on NAV 14.33% 7.14% 7.74%
A Shares on NAV 14.07% N/A 9.64%+
A Shares on offering price** 8.94% N/A 6.10%+
C Shares on NAV 13.24% N/A 9.55%+
- -------------------------------------------------------------------
The fund's current dividend of 4.25 cents per share for Class R Shares
translated into a distribution yield of 4.89% as of January 31, 1996. The annual
distribution yield is calculated by multiplying the dividend by 12, and dividing
this number by the current offering price. Investors in the 39% combined state
and federal income tax bracket would have to earn 8.02% on a taxable investment
to match this tax-free yield.
During the fiscal year, your fund's net asset value (for Class R Shares)
increased by 8.64% from a year ago. The average annual total return on NAV for
this class was 14.33%, which translates into a taxable-equivalent total return
of 17.87%.
* One-year, 3-year and life of fund total return figures for Class R Shares are
not representative for Class A Shares or Class C Shares because they do not take
into account (1) the difference between the maximum front-end sales charge
applicable to Class R Shares (none), Class A Shares (4.50%) and Class C Shares
(none); (2) the .25% annual 12b-1 service fee applicable to Class A and Class C
Shares; (3) the .75% annual 12b-1 distribution fee to be deducted from income
with respect to Class C Shares; and (4) other class-level expenses applicable to
Class A Shares and Class C Shares.
** Maximum public offering price, which includes sales charges, which are
reduced for purchases over $50,000 and waived for reinvestment of dividends.
+ Life of class; Class A Shares and Class C Shares were first issued at
different times after September 6, 1994.
The Lehman Municipal Bond Index is comprised of a broad range of investment-
grade municipal bonds, and does not reflect any initial or ongoing expenses. The
Nuveen fund return depicted in the chart reflects the initial maximum sales
charge applicable to R Shares at the time (4.75%) and all ongoing fund expenses.
11
<PAGE>
NUVEEN MICHIGAN TAX-FREE
VALUE FUND
Michigan
INDEX COMPARISON
Comparison of Change in Value of a $10,000 Investment in Nuveen Michigan Tax-
Free Value Fund R Shares* and Lehman Brothers Municipal Bond Index
[GRAPH APPEARS HERE]
Tax-Adjusted
Lehman Brothers Lehman Brothers Nuveen MI
Municipal Municipal Tax-Free
Bond Index Bond Index Value Fund
1.92 10,000 10,000 9,525
7.92 10,698 10,698 10,346
1.93 10,983 10,946 10,554
7.93 11,643 11,604 11,297
1.94 12,328 12,249 11,987
7.94 11,861 11,785 11,479
1.95 11,890 11,778 11,511
7.95 12,796 12,676 12,355
1.96 13,681 13,517 13,230
___ Lehman Brothers Municipal Bond Index - Total $13,681
- - - Tax-Adjusted Lehman Brothers Municipal Bond Index
(reduced by state tax effects) - Total $13,517
___ Nuveen MI Tax-Free Value Fund - Total $13,230
($13,890 if purchased at NAV)
Past performance is not predictive of future performance
- -------------------------------------------------------------------
ANNUALIZED TOTAL RETURN
1 year 3 years Since inception
- -------------------------------------------------------------------
R Shares on NAV 14.93% 7.83% 8.74%
A Shares on NAV 14.68% N/A 10.28%+
A Shares on offering price** 9.52% N/A 6.72%+
C Shares on NAV 13.96% N/A 10.92%+
- -------------------------------------------------------------------
The fund's current dividend of 4.45 cents per share for Class R Shares
translated into a distribution yield of 4.97% as of January 31, 1996. The annual
distribution yield is calculated by multiplying the dividend by 12, and dividing
this number by the current offering price. Investors in the 40% combined state
and federal income tax bracket would have to earn 8.28% on a taxable investment
to match this tax-free yield.
During the fiscal year, your fund's net asset value (for Class R Shares)
increased by 8.81% from a year ago. The average annual total return on NAV for
this class was 14.93%, which translates into a taxable-equivalent total return
of 18.68%.
* One-year, 3-year and life of fund total return figures for Class R Shares are
not representative for Class A Shares or Class C Shares because they do not take
into account (1) the difference between the maximum front-end sales charge
applicable to Class R Shares (none), Class A Shares (4.50%) and Class C Shares
(none); (2) the .25% annual 12b-1 service fee applicable to Class A and Class C
Shares; (3) the .75% annual 12b-1 distribution fee to be deducted from income
with respect to Class C Shares; and (4) other class-level expenses applicable to
Class A Shares and Class C Shares.
** Maximum public offering price, which includes sales charges, which are
reduced for purchases over $50,000 and waived for reinvestment of dividends.
+ Life of class; Class A Shares and Class C Shares were first issued at
different times after September 6, 1994.
The Lehman Municipal Bond Index is comprised of a broad range of investment-
grade municipal bonds, and does not reflect any initial or ongoing expenses. The
Nuveen fund return depicted in the chart reflects the initial maximum sales
charge applicable to R Shares at the time (4.75%) and all ongoing fund expenses.
12
<PAGE>
NUVEEN NEW JERSEY TAX-FREE
VALUE FUND
New Jersey
INDEX COMPARISON
Comparison of Change in Value of a $10,000 Investment in Nuveen New Jersey Tax-
Free Value Fund R Shares* and Lehman Brothers Municipal Bond Index
[GRAPH APPEARS HERE]
Lehman Brothers Tax-Adjusted
Municipal Bond Lehman Brothers Nuveen NJ Tax-Free
Index Municipal Bond Index Value Fund
1.92 10,000 10,000 9,525
7.92 10,698 10,698 10,234
1.93 10,983 10,953 10,416
7.93 11,643 11,612 11,064
1.94 12,328 12,265 11,833
7.94 11,861 11,800 11,370
1.95 11,890 11,798 11,447
7.95 12,796 12,697 12,175
1.96 13,681 13,545 12,922
___ Lehman Brothers Municipal Bond Index - Total $13,681
- - - Tax-Adjusted Lehman Brothers Municipal Bond Index
(reduced by state tax effects) - Total $13,545
___ Nuveen NJ Tax-Free Value Fund - Total $12,922
($13,566 if purchased at NAV)
Past performance is not predictive of future performance
- -------------------------------------------------------------------
ANNUALIZED TOTAL RETURN
- -------------------------------------------------------------------
1 year 3 years Since inception
- -------------------------------------------------------------------
R Shares on NAV 12.88% 7.45% 8.08%
A Shares on NAV 12.63% N/A 8.87%+
A Shares on offering price** 7.56% N/A 5.35%+
C Shares on NAV 11.80% N/A 9.46%+
- -------------------------------------------------------------------
The fund's current dividend of 4.60 cents per share for Class R Shares
translated into a distribution yield of 5.30% as of January 31, 1996. The annual
distribution yield is calculated by multiplying the dividend by 12, and dividing
this number by the current offering price. Investors in the 40% combined state
and federal income tax bracket would have to earn 8.83% on a taxable investment
to match this tax-free yield.
During the fiscal year, your fund's net asset value (for Class R Shares)
increased by 6.88% from a year ago. The average annual total return on NAV for
this class was 12.88%, which translates into a taxable-equivalent total return
of 16.80%.
* One-year, 3-year and life of fund total return figures for Class R Shares are
not representative for Class A Shares or Class C Shares because they do not take
into account (1) the difference between the maximum front-end sales charge
applicable to Class R Shares (none), Class A Shares (4.50%) and Class C Shares
(none); (2) the .25% annual 12b-1 service fee applicable to Class A and Class C
Shares; (3) the .75% annual 12b-1 distribution fee to be deducted from income
with respect to Class C Shares; and (4) other class-level expenses applicable to
Class A Shares and Class C Shares.
** Maximum public offering price, which includes sales charges, which are
reduced for purchases over $50,000 and waived for reinvestment of dividends.
+ Life of class; Class A Shares and Class C Shares were first issued at
different times after September 6, 1994.
The Lehman Municipal Bond Index is comprised of a broad range of investment-
grade municipal bonds, and does not reflect any initial or ongoing expenses. The
Nuveen fund return depicted in the chart reflects the initial maximum sales
charge applicable to R Shares at the time (4.75%) and all ongoing fund expenses.
13
<PAGE>
NUVEEN PENNSYLVANIA TAX-FREE
VALUE FUND
Pennsylvania
INDEX COMPARISON
Comparison of Change in Value of a $10,000 Investment in Nuveen Pennsylvania
Tax-Free Value Fund R Shares* and Lehman Brothers Municipal Bond Index
[GRAPH APPEARS HERE]
Lehman Brothers Tax-Adjusted
Municipal Bond Lehman Brothers Nuveen PA Tax-Free
Index Municipal Bond Index Value Fund
1.92 10,000 10,000 9,525
7.92 10,698 10,698 10,255
1.93 10,983 10,969 10,475
7.93 11,643 11,629 11,199
1.94 12,328 12,300 11,906
7.94 11,861 11,834 11,246
1.95 11,890 11,849 11,319
7.95 12,796 12,752 12,173
1.96 13,681 13,620 12,949
___ Lehman Brothers Municipal Bond Index - Total $13,681
- - - Tax-Adjusted Lehman Brothers Municipal Bond Index
(reduced by state tax effects) - Total $13,620
___ Nuveen PA Tax-Free Value Fund - Total $12,949
($13,595 if purchased at NAV)
Past performance is not predictive of future performance
- -------------------------------------------------------------------
ANNUALIZED TOTAL RETURN
- -------------------------------------------------------------------
1 year 3 years Since inception
- -------------------------------------------------------------------
R Shares 14.40% 7.33% 8.14%
A Shares 14.22% N/A 10.33%+
A Shares on offering price** 9.08% N/A 6.76%+
C Shares 13.27% N/A 8.88%+
- -------------------------------------------------------------------
The fund's current dividend of 4.30 cents per share for Class R Shares
translated into a distribution yield of 4.88% as of January 31, 1996. The annual
distribution yield is calculated by multiplying the dividend by 12, and dividing
this number by the current offering price. Investors in the 38% combined state
and federal income tax bracket would have to earn 7.87% on a taxable investment
to match this tax-free yield.
During the fiscal year, your fund's net asset value (for Class R Shares)
increased by 8.63% from a year ago. The average annual total return on NAV for
this class was 14.40%, which translates into a taxable-equivalent total return
of 17.84%.
* One-year, 3-year and life of fund total return figures for Class R Shares are
not representative for Class A Shares or Class C Shares because they do not take
into account (1) the difference between the maximum front-end sales charge
applicable to Class R Shares (none), Class A Shares (4.50%) and Class C Shares
(none); (2) the .25% annual 12b-1 service fee applicable to Class A and Class C
Shares; (3) the .75% annual 12b-1 distribution fee to be deducted from income
with respect to Class C Shares; and (4) other class-level expenses applicable to
Class A Shares and Class C Shares.
** Maximum public offering price, which includes sales charges, which are
reduced for purchases over $50,000 and waived for reinvestment of dividends.
+ Life of class; Class A Shares and Class C Shares were first issued on or after
September 6, 1994.
The Lehman Municipal Bond Index is comprised of a broad range of investment-
grade municipal bonds, and does not reflect any initial or ongoing expenses. The
Nuveen fund return depicted in the chart reflects the initial maximum sales
charge applicable to R Shares at the time (4.75%) and all ongoing fund expenses.
14
<PAGE>
NUVEEN VIRGINIA TAX-FREE VALUE FUND
Virginia
INDEX COMPARISON
Comparison of Change in Value of a $10,000 Investment in Nuveen Virginia Tax-
Free Value Fund R Shares* and Lehman Brothers Municipal Bond Index
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers Tax-Adjusted Nuveen VA
Municipal Bond Lehman Brothers Tax-Free
Index Municipal Bond Index Value Fund
--------------- -------------------- ----------
<S> <C> <C> <C>
1/92 10,000 10,000 9,525
7/92 10,698 10,698 10,264
1/93 10,983 10,957 10,481
7/93 11,643 11,615 11,157
1/94 12,328 12,272 11,820
7/94 11,861 11,807 11,281
1/95 11,890 11,807 11,357
7/95 12,796 12,707 12,149
1/96 13,681 13,557 13,021
</TABLE>
Lehman Brothers Municipal Bond Index -- Total $13,681
Tax-Adjusted Lehman Brothers Municipal Bond Index (reduced by state tax
effects)-- Total $13,557
Nuveen VA Tax-Free Value Fund -- Total $13,021 ($13,670 if purchased at
NAV)
Past performance is not predictive of future performance
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURN
1 year 3 years Since inception
<S> <C> <C> <C>
R Shares on NAV 14.65% 7.51% 8.29%
A Shares on NAV 14.50% N/A 10.14%+
A Shares on offering price** 9.35% N/A 6.58%+
C Shares on NAV 13.58% N/A 9.63%+
</TABLE>
The fund's current dividend of 4.50 cents per share for Class R Shares
translated into a distribution yield of 5.09% as of January 31, 1996. The annual
distribution yield is calculated by multiplying the dividend by 12, and dividing
this number by the current offering price. Investors in the 39.5% combined state
and federal income tax bracket would have to earn 8.41% on a taxable investment
to match this tax-free yield.
During the fiscal year, your fund's net asset value (for Class R Shares)
increased by 8.50% from a year ago. The average annual total return on NAV for
this class was 14.65%, which translates into a taxable-equivalent total return
of 18.30%.
* One-year, 3-year and life of fund total return figures for Class R Shares are
not representative for Class A Shares or Class C Shares because they do not take
into account (1) the difference between the maximum front-end sales charge
applicable to Class R Shares (none), Class A Shares (4.50%) and Class C Shares
(none); (2) the .25% annual 12b-1 service fee applicable to Class A and Class C
Shares; (3) the .75% annual 12b-1 distribution fee to be deducted from income
with respect to Class C Shares; and (4) other class-level expenses applicable to
Class A Shares and Class C Shares.
** Maximum public offering price, which includes sales charges, which are
reduced for purchases over $50,000 and waived for reinvestment of dividends.
+ Life of class; Class A Shares and Class C Shares were first issued at
different times after September 6, 1994.
The Lehman Municipal Bond Index is comprised of a broad range of investment-
grade municipal bonds, and does not reflect any initial or ongoing expenses. The
Nuveen fund return depicted in the chart reflects the initial maximum sales
charge applicable to R Shares at the time (4.75%) and all ongoing fund expenses.
15
<PAGE>
PORTFOLIO OF INVESTMENTS
ARIZONA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 250,000 Arizona Certificates of Participation,
6.250%, 9/01/10 9/02 at 102 Aaa $ 272,493
Arizona Educational Loan Marketing Corporation,
Alternative Minimum Tax:
200,000 7.000%, 3/01/05 3/02 at 101 A 210,860
100,000 6.375%, 9/01/05 9/02 at 101 Aa 105,202
300,000 Arizona Health Facilities Authority (Phoenix Baptist
Hospital and Medical Center), 6.250%, 9/01/11 9/03 at 100 Aaa 324,888
200,000 Arizona Municipal Financing Program, Certificates
of Participation, 7.700%, 8/01/10 No Opt. Call Aaa 248,448
200,000 Arizona State Transportation Board,
6.500%, 7/01/11 (Pre-refunded to 7/01/02) 7/02 at 101 1/2 Aaa 228,050
700,000 Arizona State University Research Park,
5.000%, 7/01/21 7/06 at 100 Aaa 673,190
Arizona State University:
500,000 5.750%, 7/01/12 7/02 at 101 AA 514,705
500,000 5.500%, 7/01/19 7/02 at 101 AA 500,730
500,000 Arizona Student Loan Acquisition Authority,
Alternative Minimum Tax, 6.600%, 5/01/10 5/04 at 102 Aa 518,205
Arizona Wastewater Management Authority:
175,000 5.950%, 7/01/12 7/02 at 102 Aaa 185,719
250,000 5.750%, 7/01/15 7/05 at 102 Aaa 261,385
700,000 Apache County Public Finance Corporation,
Certificates of Participation, 5.500%, 5/01/10 5/00 at 102 A 714,119
195,000 Central Arizona Water Conservation District,
6.500%, 11/01/11 (Pre-refunded to 5/01/01) 5/01 at 102 AA- 219,646
300,000 Cochise County Unified School District No. 68,
General Obligation, 7.500%, 7/01/10 No Opt. Call Aaa 382,296
250,000 Coconino and Yavapai Counties, Joint Unified School
District No. 9, 6.750%, 7/01/07 7/01 at 101 A- 273,245
550,000 Douglas Municipal Property Corporation,
5.750%, 7/01/15 7/05 at 101 Aaa 574,294
280,000 Eloy Municipal Property Corporation,
7.000%, 7/01/11 7/02 at 101 BBB 301,034
375,000 Maricopa Rural Road Improvement District,
6.900%, 7/01/05 7/99 at 101 N/R 396,461
300,000 Maricopa County Hospital District No. 1,
6.250%, 6/01/10 6/04 at 101 Aaa 328,662
500,000 Maricopa County Industrial Development Authority
(Samaritan Health Services), 7.000%, 12/01/16 No Opt. Call Aaa 622,100
600,000 Maricopa County Industrial Development Authority
(Baptist Hospital), 5.500%, 9/01/16 9/05 at 101 Aaa 603,804
Maricopa County School District No. 28,
General Obligation:
265,000 6.000%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 100 Aaa 291,733
50,000 6.000%, 7/01/12 7/02 at 100 Aaa 52,784
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 200,000 Maricopa County Unified School District No. 41,
6.500%, 7/01/08 (Pre-refunded to 7/01/02) 7/02 at 100 Aaa $ 225,750
250,000 Maricopa County Unified School District No. 69
(Paradise Valley), 6.500%, 7/01/09
(Pre-refunded to 7/01/01) 7/01 at 100 Aaa 278,998
500,000 Mohave County Industrial Development Authority
(Citizens Utilities Company), Alternative
Minimum Tax, 6.600%, 5/01/29 11/03 at 101 AAA 528,845
Navajo County Pollution Control Corporation
(Arizona Public Service Company):
1,000,000 5.875%, 8/15/28 8/03 at 102 Baa1 993,510
750,000 5.500%, 8/15/28 8/03 at 102 Aaa 747,165
425,000 Peoria Improvement District (North Valley Power
Center), 7.300%, 1/01/12 1/03 at 101 BBB 461,835
200,000 Phoenix General Obligation, 6.500%, 7/01/11
(Pre-refunded to 7/01/99) 7/99 at 102 AA+ 220,116
250,000 Phoenix Civic Improvement Corporation, Airport
Terminal Excise Tax, Alternative Minimum Tax,
7.800%, 7/01/11 7/97 at 102 AA+ 266,505
295,000 Phoenix Housing Finance Corporation FHA-Insured,
6.500%, 7/01/24 7/02 at 101 Aaa 305,310
Phoenix Civic Improvement Corporation, Wastewater
System:
1,000,000 5.000%, 7/01/18 7/04 at 102 A1 950,180
400,000 6.125%, 7/01/23 (Pre-refunded to 7/01/03) 7/03 at 102 AAA 452,028
200,000 Phoenix Industrial Development Authority,
FHA-Insured (Chris Ridge Village Project),
6.750%, 11/01/12 11/02 at 101 AAA 212,054
300,000 Phoenix Junior Lien Street and Highway,
6.250%, 7/01/11 7/02 at 102 A+ 320,919
500,000 Phoenix Industrial Development Authority, GNMA
(Meadow Glen Apartments), 5.800%, 8/20/28 2/03 at 102 Aaa 498,530
485,000 Phoenix Industrial Development Authority, Single
Family Mortgage, Alternative Minimum Tax,
6.150%, 12/01/08 6/05 at 102 AAA 489,641
Phoenix Industrial Development Authority
(John C. Lincoln Hospital and Health Center):
500,000 6.000%, 12/01/10 12/03 at 102 BBB+ 517,530
500,000 6.000%, 12/01/14 12/03 at 102 BBB+ 497,495
290,000 Pima County Industrial Development Authority
(Tucson Electric), 7.250%, 7/15/10 1/02 at 103 Aaa 328,999
300,000 Pima County Unified School District No. 1,
General Obligation, 6.100%, 7/01/12 7/02 at 102 Aaa 321,852
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
ARIZONA-CONTINUED
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 500,000 Pima County, Single Family Mortgage,
6.500%, 2/01/17 8/05 at 102 A $ 515,525
Pinal County, Certificates of Participation:
300,000 6.375%, 6/01/06 6/02 at 100 AA 329,895
200,000 6.500%, 6/01/09 6/02 at 100 AA 215,810
Salt River Project Agricultural Improvement and
Power District:
300,000 5.750%, 1/01/19 1/02 at 100 Aa 302,748
280,000 5.750%, 1/01/20 3/96 at 100 Aa 279,997
225,000 Tempe General Obligation, 6.000%, 7/01/08 7/02 at 101 AA+ 242,118
500,000 Tempe Industrial Development Authority,
Multi-Family Housing, FHA-Insured
(Quadrangles Village Apartments),
6.250%, 6/01/26 6/03 at 102 AAA 513,815
600,000 Tempe Union High School District No. 213,
General Obligation, 6.000%, 7/01/12 7/04 at 101 Aaa 643,674
500,000 Tucson General Obligation, 6.250%, 7/01/18 7/04 at 101 Aaa 544,885
575,000 Tucson Airport Authority, 5.700%, 6/01/13 6/03 at 102 Aaa 591,376
250,000 Tucson Local Business Development Finance
Corporation, 6.250%, 7/01/12 7/02 at 102 Aaa 272,115
300,000 University of Arizona, 6.250%, 6/01/11 6/02 at 102 AA 323,064
335,000 Yavapai County Community College,
6.000%, 7/01/12 7/03 at 101 A- 349,076
675,000 Yuma County Union High School District No. 70,
General Obligation, 5.700%, 7/01/06 7/02 at 101 Aaa 720,285
- -----------------------------------------------------------------------------------------------------------------------------------
$22,125,000 Total Investments--(Cost $21,884,694)--97.9% 23,265,698
===========------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities--2.1% 490,183
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets--100% $23,755,881
===================================================================================================================================
</TABLE>
18
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 31 $12,725,168 55%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 13 4,038,741 17
PORTFOLIO OF A+ A1 2 1,271,099 5
INVESTMENTS: A, A- A, A2, A3 5 2,062,825 9
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 5 2,771,404 12
Non-rated Non-rated 1 396,461 2
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 57 $23,265,698 100%
===================================================================================================================================
</TABLE>
* Optional call provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
See accompanying notes to financial statements.
19
<PAGE>
PORTFOLIO OF INVESTMENTS
FLORIDA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 300,000 Florida Department of General Services, General
Obligation, 6.600%, 7/01/17 7/02 at 101 Aa $ 332,154
2,500,000 Florida Housing Finance Agency, Alternative
Minimum Tax, 6.875%, 8/01/26 2/05 at 102 Aaa 2,672,225
750,000 Florida Housing Finance Agency, 6.400%, 6/01/24 6/02 at 103 AAA 776,003
30,000 Florida Housing Finance Agency, Home Ownership
(GNMA), Alternative Minimum Tax,
8.595%, 11/01/18 No Opt. Call AAA 31,802
Florida Municipal Power Agency:
1,000,000 6.250%, 10/01/21 (Pre-refunded to 10/01/02) 10/02 at 102 Aaa 1,135,100
1,145,000 6.000%, 10/01/27 (Pre-refunded to 10/01/02) 10/02 at 102 Aaa 1,283,179
1,000,000 Florida Municipal Power Agency, St. Lucie Project,
5.500%, 10/01/12 10/02 at 102 Aaa 1,022,390
Florida State Board of Education:
1,160,000 7.100%, 6/01/07 No Opt. Call Aaa 1,276,766
2,250,000 5.875%, 6/01/20 6/05 at 101 Aa 2,338,110
460,000 7.250%, 6/01/23 (Pre-refunded to 6/01/00) 6/00 at 102 Aaa 527,450
2,680,000 7.250%, 6/01/23 6/00 at 102 Aa 3,007,255
1,650,000 Florida Turnpike Authority,
6.350%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 101 Aaa 1,863,279
300,000 Brevard County Educational Facilities Authority
(Florida Institute of Technology),
6.875%, 11/01/22 11/02 at 102 BBB 308,484
600,000 Broward County Housing Finance Authority
(Lakeside Apartments), 7.000%, 2/01/25 2/05 at 102 AAA 647,310
190,000 Cape Coral Health Facilities Authority
(Cape Coral Medical Center), 8.125%, 11/01/08 No Opt. Call Aaa 212,589
1,000,000 Dade County (Miami International Airport),
Alternative Minimum Tax, 6.550%, 10/01/13 10/02 at 102 Aaa 1,096,780
115,000 Dade County Housing Finance Authority, Single
Family Mortgage,
Alternative Minimum Tax, 7.250%, 9/01/23 3/01 at 102 Aaa 121,089
2,480,000 Dade County (Jackson Memorial Hospital),
4.875%, 6/01/15 6/03 at 102 Aaa 2,348,982
470,000 Dade County Special Housing (City of Miami
Developments), 12.000%, 7/01/12 3/96 at 102 A 482,220
255,000 Dade County (Courthouse Center), 6.300%, 4/01/14 4/04 at 102 A 274,717
250,000 Dade County Health Facilities Authority
(South Miami Hospital),
7.000%, 10/01/18 (Pre-refunded to 10/01/99) 10/99 at 102 Aaa 281,388
300,000 Dade County Health Facilities Authority (North
Shore Medical Center), 6.500%, 8/15/15 8/02 at 102 Aaa 326,976
1,000,000 Davie Water and Sewer System, 6.250%, 10/01/17 10/02 at 102 Aaa 1,073,510
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 600,000 Daytona Beach Water and Sewer System,
6.000%, 11/15/14 11/02 at 102 Aaa $ 636,288
1,600,000 Dunedin (Mease Health Care), 5.375%, 11/15/13 11/03 at 101 Aaa 1,615,632
Escambia County Housing Finance Authority,
Single Family Mortgage,
Alternative Minimum Tax:
325,000 6.900%, 4/01/20 10/02 at 102 Aaa 340,727
2,000,000 6.950%, 10/01/27 4/05 at 102 Aaa 2,098,140
500,000 Escambia County School Board, Certificates of
Participation, 6.375%, 2/01/12 2/02 at 100 Aaa 536,735
500,000 Gainesville Utility System, 6.500%, 10/01/22 10/02 at 102 Aa 549,080
1,200,000 Hillsborough County Industrial Development
Authority, Pollution
Control (Tampa Electric), 8.000%, 5/01/22 5/02 at 103 Aa2 1,439,112
250,000 Hillsborough County, Capital Improvement (Museum
of Science and Industry),
6.400%, 1/01/12 (Pre-refunded to 1/01/00) 1/00 at 102 A 275,633
250,000 Hollywood Water and Sewer System,
6.875%, 10/01/21 (Pre-refunded to 10/01/01) 10/01 at 102 Aaa 288,305
Jacksonville Electric Authority:
470,000 7.500%, 10/01/02 10/97 at 101-1/2 Aa1 503,224
500,000 5.500%, 10/01/14 10/02 at 101 Aa1 501,975
790,000 5.250%, 10/01/21 10/02 at 101 Aa1 766,648
1,000,000 5.250%, 10/01/28 10/02 at 101 Aa1 967,340
250,000 Jacksonville Excise Taxes, 6.500%, 10/01/13 10/02 at 102 Aaa 276,795
605,000 Jacksonville Health Facilities Authority
(Daughters of Charity Health System--St. Vincent),
7.500%, 11/01/15 (Pre-refunded to 11/01/00) 11/00 at 102 Aaa 706,900
375,000 Jacksonville Water and Sewer (Jacksonville Suburban
Utilities Corporation), Alternative Minimum Tax,
6.750%, 6/01/22 6/02 at 102 A2 409,174
250,000 Jupiter Water System, 6.250%, 10/01/18 10/01 at 102 Aaa 266,320
1,300,000 Kissimmee Utility Authority, Electric System,
5.375%, 10/01/12 10/03 at 102 Aaa 1,322,451
1,000,000 Manatee County Housing Finance Authority,
Single Family Mortgage, Alternative Minimum Tax,
7.600%, 11/01/26 11/05 at 105 Aaa 1,104,650
2,550,000 Miami Beach Water and Sewer System,
5.375%, 9/01/15 9/05 at 102 Aaa 2,549,873
250,000 North Broward Hospital District, 6.250%, 1/01/12 1/02 at 102 Aaa 268,555
Orange County Sales Tax:
145,000 6.125%, 1/01/19 No Opt. Call Aaa 158,768
1,500,000 5.375%, 1/01/24 1/03 at 102 Aaa 1,489,200
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
PORTFOLIO OF INVESTMENTS
FLORIDA--CONTINUED
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 500,000 Orange County Water Utilities System,
6.250%, 10/01/17 4/02 at 102 Aaa $ 535,045
1,000,000 Orange County Housing Finance Authority
(Ashley Point Apartments), Alternative Minimum
Tax, 7.100%, 10/01/24 10/01 at 101 BBB+ 1,037,930
Orlando Utilities Commission:
1,250,000 6.000%, 10/01/20 10/02 at 102 Aa 1,291,213
1,000,000 5.500%, 10/01/20 10/99 at 100 Aa 999,250
Orlando and Orange County Expressway Authority:
1,000,000 5.500%, 7/01/18 7/03 at 102 Aaa 1,007,620
1,000,000 5.125%, 7/01/20 7/03 at 102 Aaa 968,820
Palm Beach County Criminal Justice Facilities:
1,000,000 5.300%, 6/01/05 No Opt. Call Aaa 1,063,100
1,000,000 5.375%, 6/01/10 No Opt. Call Aaa 1,045,810
2,000,000 Pensacola Health Facilities Authority (Daughters of
Charity-Sacred Heart), 5.250%, 1/01/11 1/03 at 102 Aa 1,966,420
2,000,000 Pinellas County Health Facilities Authority
(Morton Plant Health System), 5.500%, 11/15/18 11/03 at 102 Aaa 2,005,080
565,000 St. Lucie County Solid Waste System,
6.000%, 9/01/15 (Pre-refunded to 9/01/99) 9/99 at 100 Aaa 606,059
500,000 St. Petersburg Health Facilities Authority
(St. Joseph's Hospital Inc.), 7.000%, 12/01/15 12/01 at 102 Aaa 567,450
1,000,000 Sarasota Water and Sewer System,
7.625%, 10/01/08 (Pre-refunded to 10/01/96) 10/96 at 102 Aaa 1,045,910
500,000 Tampa Water and Sewer System,
6.000%, 10/01/17 (Pre-refunded to 10/01/02) 10/02 at 101 Aaa 554,690
1,000,000 Turtle Run Community Development District,
6.400%, 5/01/11 5/03 at 100 A1 1,061,390
2,000,000 West Palm Beach Utility System, 5.400%, 10/01/23 10/02 at 101 Aaa 1,978,580
- -----------------------------------------------------------------------------------------------------------------------------------
$57,410,000 Total Investments--(Cost $56,821,593)--98.3% 60,245,650
===========------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities--1.7% 1,062,980
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets--100% $61,308,630
===================================================================================================================================
</TABLE>
22
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 43 $41,734,321 69%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 12 14,661,781 24
PORTFOLIO OF A+ A1 1 1,061,390 2
INVESTMENTS: A, A- A, A2, A3 4 1,441,744 3
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 2 1,346,414 2
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 62 $60,245,650 100%
===================================================================================================================================
</TABLE>
* Optional Call Provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
23
<PAGE>
PORTFOLIO OF INVESTMENTS
MARYLAND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 500,000 Maryland Community Development Administration,
Single Family Mortgage, 7.000%, 4/01/14 4/97 at 103 Aa $ 521,810
1,500,000 Maryland Community Development Administration,
Department of Housing and Community
Development, Alternative Minimum Tax,
7.450%, 4/01/32 4/01 at 102 Aa 1,577,790
Maryland Community Development Administration,
Multi-Family Housing:
700,000 6.700%, 5/15/27 5/02 at 102 Aa 732,018
500,000 6.750%, 5/15/33 5/02 at 102 Aa 524,485
2,000,000 Maryland General Obligation, 4.600%, 7/15/06 7/03 at 101 Aaa 2,011,080
500,000 Maryland Health and Higher Educational Facilities
Authority (Sinai Hospital of Baltimore),
7.000%, 7/01/19 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 568,115
Maryland Health and Higher Educational Facilities
Authority (Doctor's Community Hospital):
1,000,000 5.750%, 7/01/13 7/03 at 102 Baa 942,270
1,005,000 8.750%, 7/01/22 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 1,212,422
Maryland Health and Higher Educational Facilities
Authority (Francis Scott Key Medical Center):
1,800,000 5.000%, 7/01/13 7/03 at 102 Aaa 1,741,986
500,000 6.750%, 7/01/23 (Pre-refunded to 7/01/00) 7/00 at 102 Aaa 563,100
700,000 Maryland National Capital Park and Planning
Commission, 6.125%, 7/01/10
(Pre-refunded to 7/01/02) 7/02 at 102 Aa 784,539
1,760,000 Maryland Stadium Authority, 5.875%, 12/15/12 12/04 at 102 Aaa 1,859,845
Maryland Stadium Authority, Sports Facility,
Alternative Minimum Tax:
500,000 7.375%, 12/15/04 12/99 at 102 Aa 561,605
500,000 7.500%, 12/15/10 12/99 at 102 Aa 556,130
3,415,000 Maryland Transportation Authority (Baltimore/
Washington International Airport),
Alternative Minimum Tax, 6.400%, 7/01/19 7/04 at 102 Aaa 3,600,639
1,000,000 Maryland Transportation Authority, 5.750%, 7/01/15 7/02 at 100 A1 1,014,660
2,000,000 Baltimore County General Obligation,
6.700%, 7/01/11 7/98 at 102 Aaa 2,143,380
Baltimore General Obligation:
2,295,000 7.375%, 10/15/03 No Opt. Call Aaa 2,751,177
600,000 6.500%, 10/15/12 (Pre-refunded to 10/15/02) 10/02 at 100 Aaa 678,750
1,000,000 Baltimore, GMNA (Tindeco Wharf Apartments
Project), 6.700%, 12/20/28 12/02 at 102 AAA 1,048,290
1,500,000 Baltimore Port Facilities (Consolidated Coal Sales
Company), 6.500%, 10/01/11 4/02 at 103 Aa3 1,654,575
625,000 Baltimore Water System, 6.500%, 7/01/20
(Pre-refunded to 7/01/00) 7/00 at 100 Aaa 687,131
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,165,000 Gaithersburg (Shady Grove Adventist Nursing and
Rehabilitation Center), 6.500%, 9/01/12 No Opt. Call Aaa $ 2,489,490
1,000,000 Howard County (Howard Hills Townhouse Project-
FHA Insured) 6.400%, 7/01/24 7/02 at 102 Aaa 1,045,020
2,000,000 Howard County Multi-Family Mortgage (Chase
Glen Project), 7.000%, 7/01/24 (Mandatory
put 7/01/04) 7/02 at 104 N/R 2,206,920
1,000,000 Montgomery County Housing Opportunities
Commission, Multi-Family Housing,
6.000%, 7/01/20 7/05 at 102 Aa 1,016,470
Montgomery County Housing Opportunities
Commission, Single Family Housing:
450,000 7.250%, 7/01/13 7/96 at 103 Aa 467,474
1,615,000 6.600%, 7/01/14 7/04 at 102 Aa 1,695,524
1,000,000 Montgomery County Solid Waste Resource
Recovery Project, 5.875%, 6/01/13 6/03 at 102 Aaa 1,045,190
1,500,000 Morgan State University, 6.100%, 7/01/20 No Opt. Call Aaa 1,688,775
1,000,000 Northeast Maryland Waste Disposal Authority,
Resource Recovery, 6.900%, 1/01/00 No Opt. Call Aaa 1,098,040
600,000 Prince George's County (Dimensions Health
Corporation), 6.700%, 7/01/97 No Opt. Call A 622,992
1,550,000 Prince George's County Housing Authority,
(New Keystone Apartments-FHA Insured),
6.800%, 7/01/25 1/02 at 102 Aaa 1,638,118
1,500,000 Prince George's County Pollution Control
(Potomac Electric Project), 6.375%, 1/15/23 1/03 at 102 A+ 1,601,625
1,000,000 University of Maryland, 5.000%, 10/01/11 10/03 at 101 AA+ 995,100
1,500,000 Washington D.C. Metro Area Transit Authority,
Transit Refunding Bonds, 5.250%, 7/01/14 1/04 at 102 Aaa 1,485,090
1,170,000 Washington Suburban Sanitary District,
8.000%, 1/01/02 No Opt. Call Aa1 1,399,706
500,000 Commonwealth of Puerto Rico, General Obligation,
6.600%, 7/01/13 (Pre-refunded to 7/01/02) 7/02 at 101-1/2 Aaa 574,435
1,750,000 Puerto Rico Aqueduct and Sewer Authority,
7.875%, 7/01/17 (Pre-refunded to 7/01/98) 7/98 at 102 A 1,952,405
2,000,000 Puerto Rico Highway and Transportation Authority,
5.250%, 7/01/21 7/03 at 101-1/2 A 1,906,900
Puerto Rico Electric Power Authority:
630,000 7.000%, 7/01/07 (Pre-refunded to 7/01/99) 7/99 at 101-1/2 A- 701,448
315,000 7.125%, 7/01/14 (Pre-refunded to 7/01/99) 7/99 at 101-1/2 AAA 352,620
185,000 7.125%, 7/01/14 7/99 at 101-1/2 A- 201,704
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
PORTFOLIO OF INVESTMENTS
MARYLAND-CONTINUED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Puerto Rico Industrial Medical and
Environmental Authority, 6.250%, 7/01/16 1/05 at 102 Aaa $ 1,089,390
- ------------------------------------------------------------------------------------------------------------------------------------
$51,330,000 Total Investments--(cost $51,884,039)-98.8% 55,010,233
===========-------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities--1.2% 677,041
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets--100% $ 55,687,274
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 22 $31,372,083 57%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 13 12,487,226 22
PORTFOLIO OF A+ A1 2 2,616,285 5
INVESTMENTS: A, A- A, A2, A3 5 5,385,449 10
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 1 942,270 2
Non-rated Non-rated 1 2,206,920 4
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 44 $55,010,233 100%
===================================================================================================================================
</TABLE>
* Optional call provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional
call or redemption. There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R-Investment is not rated.
See accompanying notes to financial statements.
26
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
MICHIGAN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Michigan Building Authority, 6.250%, 10/01/20 10/01 at 102 AA- $ 1,060,740
1,740,000 Michigan Hospital Finance Authority (Daughters of
Charity), 5.500%,11/01/05 No Opt. Call Aa 1,839,371
1,000,000 Michigan Hospital Finance Authority (Otsego
Memorial Hospital Gaylord), 6.125%, 1/01/15 1/05 at 102 AA 1,041,980
1,190,000 Michigan Housing Development Authority
(Parc Pointe Apartments), 6.500%, 10/01/15 10/05 at 102 Aaa 1,248,667
1,000,000 Michigan Housing Development Authority, Single
Family Mortgage, 6.800%, 12/01/16 6/05 at 102 AA+ 1,048,130
Michigan Housing Development Authority,
Rental Housing:
500,000 6.400%, 4/01/05 10/02 at 102 A+ 531,000
500,000 6.650%, 4/01/23 10/02 at 102 A+ 517,225
Michigan Municipal Bond Authority:
250,000 4.750%, 12/01/09 12/01 at 100 Aaa 244,650
555,000 6.600%, 10/01/18 10/02 at 102 Aa 600,738
950,000 Michigan Municipal Bond Authority, State
Revolving Fund, 7.000%,10/01/04 No Opt. Call Aa 1,116,944
1,000,000 Michigan Public Power Agency (Belle River Project),
5.250% 1/01/18 1/03 at 102 AA- 968,950
Michigan State Hospital Finance Authority
(Detroit Medical Center):
860,000 5.000%, 8/15/02 No Opt. Call A 851,959
460,000 8.125%, 8/15/08 (Pre-refunded to 8/15/98) 8/98 at 102 Aaa 515,232
40,000 8.125%, 8/15/08 8/98 at 102 A 43,786
1,000,000 Michigan State Hospital Finance Authority
(Daughters of Charity Health System),
7.000%, 11/01/21 11/01 at 102 Aa 1,091,500
500,000 Michigan State Hospital Finance Authority
(Mid-Michigan Obligated
Group), 6.900%, 12/01/24 12/02 at 102 A 532,390
1,145,000 Michigan State University, 6.250%, 8/15/15 8/02 at 101 AA- 1,206,394
1,055,000 Michigan Strategic Fund (WMX Technologies),
Alternative Minimum Tax, 6.000%, 12/01/13 12/03 at 102 A1 1,080,689
400,000 Bay County General Obligation, West Side Regional
Sewage Disposal System, 6.400%, 5/01/02 5/96 at 102 A 408,000
250,000 Capital Region Airport Authority, Alternative
Minimum Tax, 6.700%, 7/01/21 7/02 at 102 Aaa 273,175
1,000,000 Dearborn School District, General Obligation,
6.000%, 5/01/14 5/01 at 102 AA 1,043,140
1,500,000 Detroit Convention Facility (Cobo Hall),
5.250%, 9/30/12 9/03 at 102 A 1,452,945
1,000,000 Detroit Water Supply System, 4.750%, 7/01/19 7/04 at 102 Aaa 926,040
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
PORTFOLIO OF INVESTMENTS
MICHIGAN-CONTINUED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 Dexter Community Schools, General Obligation,
5.000%, 5/01/17 5/03 at 102 AA $ 945,490
445,000 Grand Rapids Housing Corporation, Multi-Family
Mortgage, 7.375%, 7/15/41 1/04 at 104 AAA 492,050
500,000 Grand Traverse County Hospital Finance Authority
(Munson Healthcare), 6.250%, 7/01/22 7/02 at 102 Aaa 531,715
1,150,000 Greenville Public Schools, General Obligation,
5.750%, 5/01/19 (DD) 5/04 at 101 Aaa 1,178,980
1,250,000 Lansing Sewage Disposal System, 5.850%, 5/01/14 5/04 at 102 Aaa 1,309,263
1,000,000 Monroe County Pollution Control (Detroit Edison
Company), Alternative Minimum Tax,
6.350%, 12/01/04 No Opt. Call Aaa 1,127,330
Muskegon Water Supply System:
450,000 4.500%, 5/01/12 5/01 at 101 Baa1 399,587
450,000 4.500%, 5/01/13 5/01 at 101 Baa1 394,533
1,000,000 Reeths-Puffer Schools, General Obligation,
5.750%, 5/01/15 5/05 at 101 Aaa 1,029,550
180,000 Saginaw-Midland Municipal Water Supply
Corporation, 6.875%, 9/01/06 9/04 at 102 A 199,723
200,000 St. Joseph Hospital Finance Authority (Mercy
Memorial Medical Center), 7.300%, 10/01/00
(Pre-refunded to 10/01/96) 10/96 at 102 AAA 209,174
1,000,000 University of Michigan Hospital, 6.375%, 12/01/24 12/00 at 100 Aa 1,031,690
1,000,000 University of Michigan Student Fee, 5.500%, 4/01/12 4/03 at 102 AA+ 1,023,410
250,000 Warren Economic Development Corporation, GNMA
(Autumn Woods Project), 6.900%, 12/20/22 3/02 at 101 Aaa 264,705
1,000,000 Wayne County (Detroit Metropolitan Wayne County
Airport), 5.250%, 12/01/13 12/03 at 102 Aaa 984,010
1,000,000 Western Township Utilities Authority, Sewage
Disposal System, 6.500%, 1/01/10 1/02 at 100 AAA 1,083,670
1,000,000 Puerto Rico Aqueduct and Sewer Authority,
7.875%, 7/01/17 (Pre-refunded to 7/01/98) 7/98 at 102 A 1,115,660
250,000 Puerto Rico Public Buildings Authority,
6.875%, 7/01/21 (Pre-refunded to 7/01/02) 7/02 at 101-1/2 Aaa 291,057
- ------------------------------------------------------------------------------------------------------------------------------------
$32,020,000 Total Investments-(cost $31,410,104)--96.7% 33,255,242
===========-------------------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES--1.8%
$ 600,000 University of Michigan Hospital, Adjustable Rate
=========== Demand Bonds, 3.500%, 12/01/27+ VMIG-1 600,000
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities--1.5% 529,188
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets--100% $ 34,384,430
====================================================================================================================================
</TABLE>
28
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 16 $11,709,268 35%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 13 14,018,477 42
PORTFOLIO OF A+ A1 3 2,128,914 7
INVESTMENTS A, A- A, A2, A3 7 4,604,463 14
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 2 794,120 2
TEMPORARY
INVESTMENTS):
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 41 $33,255,242 100%
===================================================================================================================================
</TABLE>
* Optional call provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
(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.
29
<PAGE>
PORTFOLIO OF INVESTMENTS
NEW JERSEY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000,000 New Jersey Economic Development Authority
(Elizabethtown Gas Company), Alternative
Minimum Tax, 6.750%, 10/01/21 10/96 at 102 A3 $ 1,031,330
200,000 New Jersey Economic Development Authority
(Liberty State Park Project), 6.800%, 3/15/22 3/02 at 102 A1 218,124
1,000,000 New Jersey Economic Development Authority
(Yeshiva K'tana of Passaic), 8.000%, 9/15/18 No Opt. Call N/R 1,191,120
2,965,000 New Jersey Economic Development Authority
(Bridgewater Resources, Inc.), Alternative
Minimum Tax, 8.375%, 11/01/04 No Opt. Call N/R 3,148,237
250,000 New Jersey Economic Development Authority, Solid
Waste Disposal Facility (Garden State Paper
Company), 7.125%, 4/01/22 4/02 at 102 Aa1 274,143
1,285,000 New Jersey Economic Development Authority,
Alternative Minimum Tax, 5.300%, 12/01/07 12/03 at 102 Aa1 1,291,849
1,025,000 New Jersey Economic Development Authority
(Educational Testing Service), 6.500%, 5/15/05 No Opt. Call Aaa 1,138,601
650,000 New Jersey Economic Development Authority,
5.875%, 7/01/11 7/04 at 102 Aaa 690,554
975,000 New Jersey Educational Facilities Authority
(Trenton State College), 6.750%, 7/01/08 7/96 at 100 A+ 981,962
835,000 New Jersey Educational Facilities Authority
(Princeton University), 5.875%, 7/01/11 7/04 at 100 Aaa 889,375
1,500,000 New Jersey Educational Facilities Authority
(Higher Education Facilities Trust Fund),
5.125%, 9/01/02 No Opt. Call Aaa 1,576,830
1,000,000 New Jersey General Obligation, 5.800%, 2/15/07 No Opt. Call Aa1 1,108,150
1,215,000 New Jersey Health Care Facilities Financing
Authority (Hackensack Hospital),
8.750%, 7/01/09 No Opt. Call Aaa 1,479,323
700,000 New Jersey Health Care Facilities Financing
Authority (Community Medical Center/Kensington
Manor Care Center), 7.000%, 7/01/20 7/00 at 102 Aaa 777,427
480,000 New Jersey Health Care Facilities Authority
(Community Memorial Hospital), 8.000%, 7/01/14 7/98 at 102 A 523,474
400,000 New Jersey Health Care Facilities Financing
Authority (Atlantic City Medical Center),
6.800%, 7/01/05 7/02 at 102 A 436,828
850,000 New Jersey Health Care Facilities Financing
Authority (Palisades Medical Center),
7.500%, 7/01/06 7/02 at 102 Ba 879,011
1,750,000 New Jersey Housing Finance Agency,
9.000%, 11/01/18 11/99 at 100 A1 1,827,245
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,000,000 New Jersey Housing and Mortgage Finance Agency,
Multi-Family Housing, 6.000%, 11/01/14 5/05 at 102 Aaa $ 2,059,160
700,000 New Jersey Housing and Mortgage Finance Agency,
6.950%, 11/01/13 5/02 at 102 A+ 745,500
New Jersey Turnpike Authority:
375,000 10.375%, 1/01/03 No Opt. Call AAA 466,973
1,750,000 6.500%, 1/01/08 No Opt. Call A 2,025,293
1,415,000 Delaware River and Bay Authority, 5.000%, 1/01/17 1/04 at 102 Aaa 1,372,975
1,000,000 Delaware River Port Authority, 5.500%, 1/01/26 1/06 at 102 Aaa 1,004,720
1,000,000 Camden County Pollution Control Finance Authority,
Solid Waste Disposal and Resource
Recovery, Alternative Minimum Tax,
7.125%, 12/01/01 No Opt. Call BBB+ 1,034,220
2,645,000 Camden County Pollution Control Finance Authority,
Solid Waste Disposal and Resource Recovery
System, 7.250%, 12/01/10 12/01 at 102 BBB+ 2,803,197
500,000 Essex County Improvement Authority,
6.500%, 12/01/12 12/02 at 102 Baa1 536,010
500,000 Hillsborough Township School District,
5.875%, 8/01/11 No Opt. Call AA 545,105
400,000 Hudson County Improvement Authority
Multi-Family Housing (Observer Park Project),
Alternative Minimum Tax, 6.900%, 6/01/22 6/04 at 100 AAA 421,688
1,605,000 Little Ferry Board of Education, Certificates of
Participation, 6.300%, 1/15/08 No Opt. Call N/R 1,664,337
Monroe Township Board of Education, General
Obligation:
725,000 5.200%, 8/01/11 No Opt. Call Aaa 738,550
825,000 5.200%, 8/01/14 No Opt. Call Aaa 840,263
600,000 Morris County General Obligation, 5.000%, 7/15/09 7/05 at 100 Aaa 606,972
500,000 North Bergen Housing Development Corporation,
FHA-Insured, 7.400%, 9/01/20 8/96 at 102/1/\\2\\ N/R 512,850
300,000 North Bergen Township General Obligation,
6.500%, 8/15/12 8/02 at 102 Aaa 332,100
2,350,000 Ocean County Utilities Authority, 5.000%, 1/01/14 1/97 at 100 Aaa 2,210,692
2,215,000 Passaic County General Obligation, 5.125%, 9/01/12 No Opt. Call Aaa 2,234,647
775,000 Rutgers State University, 8.000%, 5/01/18
(Pre-refunded to 5/01/98) 5/98 at 102 Aaa 860,514
Union County Utilities Authority, Solid Waste
System, Alternative Minimum Tax:
195,000 7.100%, 6/15/06 6/02 at 102 A- 209,307
1,100,000 7.200%, 6/15/14 6/02 at 102 A- 1,176,076
270,000 6.850%, 6/15/14 6/02 at 102 Aaa 289,697
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
PORTFOLIO OF INVESTMENTS
NEW JERSEY--CONTINUED
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 100,000 University of Medicine and Dentistry of New Jersey,
6.500%, 12/01/18 (Pre-refunded to 12/01/01) 12/01 at 102 AA $ 113,743
300,000 Wanaque Borough Sewerage Authority,
7.000%, 12/01/21 12/02 at 102 Baa1 323,658
1,175,000 Virgin Islands Housing Finance Authority,
Alternative Minimum Tax, 6.450%, 3/01/16 3/05 at 102 AAA 1,211,519
2,000,000 Puerto Rico Commonwealth General Obligation,
5.750%, 7/01/24 7/05 at 101 1/2 Aaa 2,075,380
1,000,000 Puerto Rico Aqueduct and Sewer Authority,
7.875%, 7/01/17 (Pre-refunded to 7/01/98) 7/98 at 102 A 1,115,660
60,000 Puerto Rico Highway Transportation Authority,
6.625%, 7/01/18 (Pre-refunded to 7/01/02) 7/02 at 101 1/2 A 69,015
Puerto Rico Electric Power Authority:
790,000 7.000%, 7/01/07 No Opt. Call A- 928,778
1,875,000 7.000%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 A- 2,172,693
1,000,000 Puerto Rico Industrial Medical and Environmental
Authority, 6.250%, 7/01/16 1/05 at 102 Aaa 1,089,389
- -----------------------------------------------------------------------------------------------------------------------------------
$50,125,000 Total Investments--(Cost $50,801,410)--96.8% 53,254,264
===========------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities--3.2% 1,775,636
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets--100% $55,029,900
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 22 $24,367,349 46%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 5 3,332,990 6
PORTFOLIO OF A+ A1 4 3,772,831 7
INVESTMENTS: A, A- A, A2, A3 10 9,688,454 18
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 4 4,697,085 9
BB+, BB, BB- Ba1, Ba, Ba2, Ba3 1 879,011 2
Non-rated Non-rated 4 6,516,544 12
- -----------------------------------------------------------------------------------------------------------------------------------
Total 50 $53,254,264 100%
===================================================================================================================================
</TABLE>
* Optional Call Provisions (not covered by report of independent public
accountants): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent accountants): Using the
higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
See accompanying notes to financial statements.
32
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
PENNSYLVANIA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,500,000 Pennsylvania Economic Development Financing
Authority (Sun Co--R&M Project), Alternative
Minimum Tax, 7.600%, 12/01/24 12/04 at 102 Baa1 $ 2,822,650
Pennsylvania General Obligation:
2,000,000 6.400%, 1/01/99 No Opt. Call AA- 2,136,220
1,290,000 5.000%, 5/01/03 No Opt. Call AA- 1,338,736
2,000,000 5.300%, 5/01/05 No Opt. Call AA 2,106,680
2,500,000 Pennsylvania Higher Education Assistance Agency,
Student Loan, 4.625%, 12/01/00 No Opt. Call AAA 2,508,975
750,000 Pennsylvania Higher Educational Facilities Authority
(Thomas Jefferson University), 6.000%, 7/01/19 7/99 at 102 Aa 768,555
600,000 Pennsylvania Housing Finance Agency, Single
Family Mortgage, 7.150%, 4/01/15 10/01 at 102 Aa 646,956
1,795,000 Pennsylvania Industrial Development Authority,
7.000%, 1/01/06 No Opt. Call Aaa 2,127,775
1,390,000 Pennsylvania Intergovernmental Cooperative
Authority (City of Philadelphia Funding
Program), 7.000%, 6/15/05 No Opt. Call Aaa 1,640,992
2,300,000 Pennsylvania Turnpike Commission,
5.500%, 12/01/17 12/02 at 102 Aaa 2,305,382
1,000,000 Allegheny County (Greater Pittsburgh International
Airport), Alternative Minimum Tax,
7.000%, 1/01/18 1/00 at 102 Aaa 1,061,710
1,375,000 Allegheny County Hospital Development Authority
(Allegheny Valley Hospital), 7.000%, 8/01/15 No Opt. Call A 1,597,709
1,500,000 Allegheny County Hospital Development Authority
(Rehabilitation Institute of Pittsburgh),
7.000%, 6/01/22 6/02 at 102 BBB 1,548,465
3,000,000 Allegheny County Residential Financing Authority
(Ladies Grand Army of the Republic Health),
6.350%, 10/01/36 10/05 at 100 AAA 3,052,770
2,000,000 Allegheny County Residential Finance Authority,
Single Family Mortgage, (GNMA), Alternative
Minimum Tax, 0.000%, 5/01/27 No Opt. Call Aaa 232,940
2,000,000 Armstrong County Hospital Authority (Canterbury
Place Project), 6.500%, 12/01/21 12/01 at 100 Aaa 2,140,100
1,000,000 Bucks County Community College Authority,
6.250%, 6/15/14 6/02 at 100 Aa 1,045,510
2,850,000 Deer Lakes School District, General Obligation,
6.350%, 1/15/14 1/04 at 100 Aaa 3,067,968
800,000 Greater Lebanon Refuse Authority, Solid Waste,
7.000%, 11/15/04 11/02 at 100 A- 860,104
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
PORTFOLIO OF INVESTMENTS
PENNSYLVANIA--CONTINUED
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,500,000 Indiana County Industrial Development Authority,
Pollution Control (New York State Electric and
Gas Corporation), 6.000%, 6/01/06 No Opt. Call Aaa $ 3,873,345
3,000,000 Indiana County Industrial Development Authority,
Pollution Control (Pennsylvania Electric
Company), 5.350%, 11/01/10 No Opt. Call Aaa 3,121,440
Luzerne County Industrial Development Authority
(Pennsylvania Gas and Water Company),
Alternative Minimum Tax:
1,500,000 7.000%, 12/01/17 12/04 at 102 Aaa 1,706,490
950,000 7.125%, 12/01/22 12/02 at 102 Baa1 1,018,315
3,000,000 Montgomery County Higher Educational and Health
Authority (Waverly Heights), 6.375%,
1/01/26 (DD) 1/06 at 101 BBB 2,999,790
1,800,000 Northampton County Higher Education Authority
(Lehigh University), 6.900%, 10/15/06 10/01 at 102 Aaa 2,041,560
1,000,000 Northumberland County Industrial Development
Authority (Roaring Creek Water Company),
Alternative Minimum Tax, 6.375%, 10/15/23 10/03 at 102 N/R 965,270
2,000,000 Philadelphia Gas Works, 6.375%, 7/01/14 7/03 at 102 Aaa 2,177,420
1,000,000 Philadelphia Municipal Authority, 5.625%, 11/15/14 11/03 at 102 Aaa 1,005,890
Pittsburgh Urban Redevelopment Authority,
Alternative Minimum Tax:
3,280,000 6.375%, 8/01/18 8/05 at 102 A 3,318,638
1,100,000 6.625%, 4/01/22 4/04 at 102 A1 1,132,241
500,000 St. Mary's Hospital Authority (Franciscan Health
System/St. Mary of Langhorne), 6.500%, 7/01/12 7/02 at 102 Aaa 543,820
230,000 Sayre Health Care Facilities Authority (Guthrie
Healthcare System), 7.100%, 3/01/17 3/01 at 102 Aaa 258,713
Southeastern Pennsylvania Transportation
Authority:
1,500,000 6.500%, 3/01/04 No Opt. Call Aaa 1,702,980
1,000,000 6.500%, 3/01/05 No Opt. Call Aaa 1,140,920
2,250,000 University of Pittsburgh, 6.125%, 6/01/21 6/02 at 102 Aaa 2,375,865
350,000 Washington County Hospital Authority
(Monongahela Valley Hospital), 6.750%, 12/01/08 4/02 at 102 A 370,832
935,000 West View Municipal Authority, 9.500%, 11/15/14 No Opt. Call Aaa 1,324,718
600,000 Wilkes-Barre General Municipal Authority
(College Misericordia), Alternative Minimum
Tax, 7.750%, 12/01/12 12/00 at 100 N/R 661,650
- ------------------------------------------------------------------------------------------------------------------------------------
$62,145,000 Total Investments-(cost $60,924,413)-100.8% 64,750,094
===========-------------------------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES-3.1%
$ 2,000,000 Geisinger Authority (Montaur Co.), Variable Rate
Demand Bonds, 3.600%, 7/01/22+ A-1+ $ 2,000,000
===========-------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities-(3.9)% (2,487,424)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets-100% 64,262,670
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 21 $39,411,773 61%
RATINGS** AA+,AA,AA- Aa1,Aa,Aa2,Aa3 6 8,042,657 12
PORTFOLIO OF A+ A1 1 1,132,241 2
INVESTMENTS A,A- A,A2,A3 4 6,147,283 9
(EXCLUDING BBB+,BBB,BBB- Baa1,Baa,Baa2,Baa3 4 8,389,220 13
TEMPORARY Non-rated Non-rated 2 1,626,920 3
INVESTMENTS):
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL 38 $64,750,094 100%
====================================================================================================================================
</TABLE>
* Optional call provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
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.
35
<PAGE>
PORTFOLIO OF INVESTMENTS
VIRGINIA
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 800,000 Virginia College Building Authority
(Randolph-Macon College), 6.625%, 5/01/13 5/02 at 102 A- $ 856,392
Virginia College Building Authority
(The Washington and Lee University):
1,250,000 5.750% 1/01/14 1/04 at 102 Aa 1,287,538
1,000,000 5.800%, 1/01/24 1/04 at 102 Aa 1,027,640
Virginia Housing Development Authority:
800,000 6.800%, 11/01/09 5/02 at 102 AA+ 854,472
650,000 6.850%, 7/01/17 1/00 at 102 AA+ 675,168
4,000,000 7.150%, 1/01/33 1/02 at 102 AA+ 4,242,320
Virginia Public Building Authority:
1,090,000 6.500%, 8/01/11 8/01 at 102 Aa 1,229,040
750,000 6.250%, 8/01/14 8/04 at 101 Aa 814,050
800,000 Virginia Resource Authority, Water System,
6.450%, 4/01/13 4/02 at 102 AA 853,448
1,000,000 Virginia Resource Authority, Sewer System,
Alternative Minimum Tax, 6.000%, 10/01/25 10/05 at 102 AA 1,033,400
4,425,000 Virginia Transportation Board, 6.000%, 5/15/19 5/98 at 102 Aa 4,542,041
1,000,000 Abingdon General Obligation, 6.250%, 8/01/12 8/02 at 102 A 1,071,050
1,410,000 Albemarle County Industrial Development Authority
(Martha Jefferson Hospital), 5.800%, 10/01/09 10/03 at 102 A 1,449,790
1,500,000 Capital Region Airport Commission (Richmond
International Airport), 5.625%, 7/01/20 7/05 at 102 Aaa 1,518,840
750,000 Charlottesville-Albemarle Airport Authority,
Alternative Minimum Tax, 6.125%, 12/01/13 12/05 at 102 BBB 765,285
2,500,000 Chesapeake Bay Bridge and Tunnel Commission,
6.375%, 7/01/22 7/01 at 102 Aaa 2,671,800
1,000,000 Covington-Alleghany County Industrial Development
Authority (Alleghany Regional Hospital),
6.625%, 4/01/12 (Pre-refunded to 4/01/02) 4/02 at 102 A- 1,138,330
1,700,000 Cumberland County Certificate of Participation,
5.480%, 7/15/97 No Opt. Call N/R 1,700,000
2,500,000 Fairfax County Economic Development Authority
(Ogden Martin Systems Project), Alternative
Minimum Tax, 7.750%, 2/01/11 2/99 at 103 A1 2,747,375
1,460,000 Fairfax County Industrial Development Authority
(Inova Health System) 5.000%, 8/15/13 No Opt. Call Aaa 1,439,020
1,500,000 Giles County Industrial Development Authority
(Hoechst Celanese Corporation), Alternative
Minimum Tax, 6.625%, 12/01/22 12/02 at 102 AA- 1,571,775
500,000 Hampton Industrial Development Authority
(Sentara Hampton General Hospital),
6.500%, 11/01/12 11/04 at 102 A 533,215
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 2,500,000 Henrico County Water and Sewer System,
6.250%, 5/01/13 5/02 at 100 A1 $ 2,615,925
1,000,000 Loudoun County Sanitation Authority, Water and
Sewer System, 6.250%, 1/01/16 1/03 at 102 Aaa 1,073,740
2,000,000 Loudoun County Industrial Development Authority
(The George Washington University),
6.250%, 5/15/22 5/02 at 102 A1 2,104,700
1,500,000 Lynchburg Industrial Development Authority
(Randolph-Macon Women's College),
5.875%, 9/01/13 9/03 at 102 A 1,531,860
750,000 Nelson County Service Authority, Water and Sewer
System, 5.500%, 7/01/18 7/03 at 102 Aaa 748,523
1,580,000 Peninsula Ports Authority of Virginia (Riverside
Health System), 6.625%, 7/01/18 7/02 at 102 Aa 1,697,678
2,500,000 Prince William County Park Authority,
6.875%, 10/15/16 10/04 at 102 A- 2,767,100
1,000,000 Prince William County Service Authority, Water and
Sewer System, 6.000%, 7/01/29 7/01 at 100 Aaa 1,033,250
3,005,000 Richmond General Obligation, 5.500%, 7/15/23 7/03 at 102 AA 3,012,603
1,155,000 Roanoke Industrial Development Authority
(Roanoke Memorial Hospitals), 6.500%, 7/01/25
(Pre-refunded to 7/01/00) 7/00 at 100 Aaa 1,269,818
Rockingham County Industrial Development
Authority (Bridgewater College):
400,000 5.600%, 10/01/06 10/03 at 102 Baa1 433,244
400,000 5.700%, 10/01/07 10/03 at 102 Baa1 425,168
2,750,000 Southeastern Public Service Authority (Regional Solid
Waste System), Alternative Minimum Tax,
6.000%, 7/01/13 7/03 at 102 A- 2,782,368
4,000,000 Upper Occoquan Sewer Authority, 5.000%, 7/01/21 1/04 at 102 Aaa 3,836,000
2,260,000 Virginia Beach Development Authority (Sentara
Bayside Hospital), 6.300%, 11/01/21 11/01 at 102 Aa 2,368,977
Metropolitan Washington D. C. Airports Authority,
Alternative Minimum Tax:
1,000,000 5.750%, 10/1/20 10/04 at 102 AAA 1,017,060
1,500,000 6.250%, 10/1/21 10/02 at 102 AAA 1,587,720
800,000 Puerto Rico Highway Transportation Authority,
6.625%, 7/01/18 7/02 at 101 1/2 A 863,064
- ------------------------------------------------------------------------------------------------------------------------------------
$62,485,000 Total Investments-(cost $61,036,092)--98.7% 65,190,787
===========-------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities--1.3% 877,240
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets--100% $66,068,027
====================================================================================================================================
</TABLE>
37
<PAGE>
PORTFOLIO OF INVESTMENTS
VIRGINIA-CONTINUED
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 10 $16,195,771 25%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 14 25,210,150 39
PORTFOLIO A+ A1 3 7,468,000 11
INVESTMENTS: A, A- A, A2, A3 9 12,993,169 20
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 3 1,623,697 2
Non-rated Non-rated 1 1,700,000 3
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 40 $65,190,787 100%
===================================================================================================================================
</TABLE>
* Optional call provisions (not covered by the report of independent public
accountants): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent public accountants): Using
the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
See accompanying notes to financial statements.
38
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
AZ FL MD MI
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in municipal securities, at market value (note 1) $23,265,698 $60,245,650 $55,010,233 $33,255,242
Temporary investments in short-term municipal securities,
at amortized cost (note 1) - - - 600,000
Cash 242,662 280,875 293,584 76,087
Receivables:
Interest 262,440 935,255 472,689 475,195
Shares sold 86,335 51,425 132,184 350,928
Investments sold - 5,000 - 938,132
Deferred organization costs (note 1) 6,998 6,998 7,828 8,424
Other assets 501 4,519 1,029 15,413
----------- ----------- ----------- -----------
Total assets 23,864,634 61,529,722 55,917,547 35,719,421
----------- ----------- ----------- -----------
LIABILITIES
Payables:
Investments purchased - - - 1,184,207
Shares reacquired - 13,223 - -
Cash overdraft - - - -
Accrued expenses:
Management fees (note 7) 10,895 28,402 25,779 15,849
Other 46,078 47,287 67,118 44,646
Dividends payable 51,780 132,180 137,376 90,289
----------- ----------- ----------- -----------
Total liabilities 108,753 221,092 230,273 1,334,991
----------- ----------- ----------- -----------
Net assets (note 8) $23,755,881 $61,308,630 $55,687,274 $34,384,430
=========== =========== =========== ===========
Class A Shares (note 1)
Net assets $ 3,894,689 $ 5,823,021 $ 6,860,436 $ 4,027,268
=========== =========== =========== ===========
Shares outstanding 362,624 551,681 657,949 374,859
=========== =========== =========== ===========
Net asset value and redemption price per share $ 10.74 $ 10.56 $ 10.43 $ 10.74
=========== =========== =========== ===========
Offering price per share (net asset value per share plus
maximum sales charge of 4.50% of offering price) $ 11.25 $ 11.06 $ 10.92 $ 11.25
=========== =========== =========== ===========
Class C Shares (note 1)
Net assets $ 327,826 $ 167,925 $ 1,437,861 $ 231,328
=========== =========== =========== ===========
Shares outstanding 30,775 15,971 138,032 21,564
=========== =========== =========== ===========
Net asset value, offering and redemption price per share $ 10.65 $ 10.51 $ 10.42 $ 10.73
=========== =========== =========== ===========
Class R Shares (note 1)
Net assets $19,533,366 $55,317,684 $47,388,977 $30,125,834
=========== =========== =========== ===========
Shares outstanding 1,830,754 5,235,606 4,540,303 2,802,718
=========== =========== =========== ===========
Net asset value and redemption price per share $ 10.67 $ 10.57 $ 10.44 $ 10.75
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
39
<PAGE>
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
NJ PA VA
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in municipal securities, at market value (note 1) $53,254,264 $64,750,094 $65,190,787
Temporary investments in short-term municipal securities,
at amortized cost (note 1) - 2,000,000 -
Cash 1,227,903 - 270,963
Receivables:
Interest 664,668 761,603 837,425
Shares sold 103,874 28,669 -
Investments sold - - -
Deferred organization costs (note 1) 7,390 7,984 5,824
Other assets 14,133 35,893 13,090
----------- ----------- -----------
Total assets 55,272,232 67,584,243 66,318,089
----------- ----------- -----------
LIABILITIES
Payables:
Investments purchased - 3,015,938 -
Shares reacquired 12,384 55,248 -
Cash overdraft - 1,615 -
Accrued expenses:
Management fees (note 7) 25,346 29,831 30,744
Other 43,227 54,749 54,585
Dividends payable 161,375 164,192 164,733
----------- ----------- -----------
Total liabilities 242,332 3,321,573 250,062
----------- ----------- -----------
Net assets (note 8) $55,029,900 $64,262,670 $66,068,027
=========== =========== ===========
Class A Shares (note 1)
Net assets $10,660,701 $ 5,816,905 $ 5,874,288
=========== =========== ===========
Shares outstanding 1,024,727 548,766 554,008
=========== =========== ===========
Net asset value and redemption price per share $ 10.40 $ 10.60 $ 10.60
=========== =========== ===========
Offering price per share (net asset value per share plus
maximum sales charge of 4.50% of offering price) $ 10.89 $ 11.10 $ 11.10
=========== =========== ===========
Class C Shares (note 1)
Net assets $ 1,065,019 $ 1,101,179 $ 788,903
=========== =========== ===========
Shares outstanding 102,569 105,115 74,618
=========== =========== ===========
Net asset value, offering and redemption price per share $ 10.38 $ 10.48 $ 10.57
=========== =========== ===========
Class R Shares (note 1)
Net assets $43,304,180 $57,344,586 $59,404,836
=========== =========== ===========
Shares outstanding 4,158,146 5,424,007 5,603,960
=========== =========== ===========
Net asset value and redemption price per share $ 10.41 $ 10.57 $ 10.60
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
40
<PAGE>
STATEMENT OF OPERATIONS NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
Year Ended January 31, 1996 JANUARY 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
AZ FL MD MI
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $ 1,189,234 $ 3,304,797 $ 2,957,714 $ 1,827,408
------------ ------------ ------------ ------------
Expenses (note 2):
Management fees (note 7) 111,599 313,075 280,013 169,780
12b-1 distribution and service fees (note 1) 6,771 9,232 22,018 7,144
Shareholders' servicing agent fees and expenses 22,979 47,824 69,638 43,765
Custodian's fees and expenses 40,994 50,179 72,294 47,593
Trustees' fees and expenses (note 7) 506 617 1,976 1,006
Professional fees 20,251 23,172 32,726 16,969
Shareholders' reports--printing and mailing expenses 21,551 51,528 54,329 29,592
Federal and state registration fees 3,910 5,074 7,109 6,098
Amortization of deferred organization costs (note 1) 6,785 7,610 6,077 5,585
Other expenses 2,534 6,349 6,210 4,266
------------ ------------ ------------ ------------
Total expenses before expense reimbursement 237,880 514,660 552,390 331,798
Expense reimbursement from investment adviser (note 7) (78,929) (78,507) (148,537) (93,136)
------------ ------------ ------------ ------------
Net expenses 158,951 436,153 403,853 238,662
------------ ------------ ------------ ------------
Net investment income 1,030,283 2,868,644 2,553,861 1,588,746
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 5) (27,336) (140,189) 138,640 414,083
Net change in unrealized appreciation or depreciation
of investments 1,629,699 4,780,693 3,998,568 2,255,770
------------ ------------ ------------ ------------
Net gain from investments 1,602,363 4,640,504 4,137,208 2,669,853
------------ ------------ ------------ ------------
Net increase in net assets from operations $ 2,632,646 $ 7,509,148 $ 6,691,069 $ 4,258,599
============ ============ ============ ============
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
41
<PAGE>
STATEMENT OF OPERATIONS
Year Ended January 31, 1996
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
NJ PA VA
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $ 3,006,443 $ 3,464,924 $ 3,701,411
------------ ------------ ------------
Expenses (note 2):
Management fees (note 7) 268,050 323,825 340,698
12b-1 distribution and service fees (note 1) 23,280 16,190 15,510
Shareholders' servicing agent fees and expenses 61,463 82,103 78,664
Custodian's fees and expenses 43,166 45,385 51,430
Trustees' fees and expenses (note 7) 1,276 1,268 1,628
Professional fees 23,290 21,640 19,516
Shareholders' reports--printing and mailing expenses 66,799 73,091 72,151
Federal and state registration fees 2,991 7,801 3,614
Amortization of deferred organization costs (note 1) 6,895 7,391 7,375
Other expenses 6,701 7,087 7,190
------------ ------------ ------------
Total expenses before expense reimbursement 503,911 585,781 597,776
Expense reimbursement from investment adviser (note 7) (115,121) (128,011) (117,673)
------------ ------------ ------------
Net expenses 388,790 457,770 480,103
------------ ------------ ------------
Net investment income 2,617,653 3,007,154 3,221,308
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 5) (30,019) (36,684) 334,528
Net change in unrealized appreciation or depreciation
of investments 3,249,789 4,855,692 4,882,314
------------ ------------ ------------
Net gain from investments 3,219,770 4,819,008 5,216,842
------------ ------------ ------------
Net increase in net assets from operations $ 5,837,423 $ 7,826,162 $ 8,438,150
============ ============ ============
- ----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
42
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
AZ FL
- ------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
1/31/96 1/31/95 1/31/96 1/31/95
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 1,030,283 $ 874,402 $ 2,868,644 $ 2,567,258
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (27,336) (127,639) (140,189) (88,470)
Net change in unrealized appreciation or depreciation
of investments 1,629,699 (1,415,009) 4,780,693 (4,454,622)
----------- ----------- ------------ -----------
Net increase (decrease) in net assets from operations 2,632,646 (668,246) 7,509,148 (1,975,834)
----------- ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Class A (101,157) (11,579) (148,024) (12,861)
Class C (6,237) (786) (5,956) (807)
Class R (937,616) (863,461) (2,730,462) (2,538,376)
From accumulated net realized gains from investment
transactions:
Class A - - - (11)
Class C - - - -
Class R - - - (13,228)
----------- ----------- ------------ -----------
Decrease in net assets from distributions to
shareholders (1,045,010) (875,826) (2,884,442) (2,565,283)
----------- ----------- ------------ -----------
FUND SHARE TRANSACTIONS (note 3)
Net proceeds from sale of shares:
Class A 2,882,755 1,124,442 4,315,210 1,665,651
Class C 273,019 51,694 77,334 73,100
Class R 2,473,853 4,004,198 8,465,473 13,751,923
Net asset value of shares issued to shareholders due to
reinvestment of distributions from net investment
income and from net realized gains from investment
transactions:
Class A 38,250 2,269 52,678 4,072
Class C 5,264 509 3,575 230
Class R 529,462 464,469 1,500,287 1,376,114
----------- ----------- ------------ -----------
6,202,603 5,647,581 14,414,557 16,871,090
----------- ----------- ------------ -----------
Cost of shares redeemed:
Class A (303,388) (30,002) (173,983) (314,814)
Class C (3,168) (9,346) - -
Class R (1,449,215) (2,482,522) (11,564,633) (6,261,459)
----------- ----------- ------------ -----------
(1,755,771) (2,521,870) (11,738,616) (6,576,273)
----------- ----------- ------------ -----------
Net increase in net assets derived from Fund shares
transactions 4,446,832 3,125,711 2,675,941 10,294,817
----------- ----------- ------------ -----------
Net increase (decrease) in net assets 6,034,468 1,581,639 7,300,647 5,753,700
Net assets at the beginning of year 17,721,413 16,139,774 54,007,983 48,254,283
----------- ----------- ------------ -----------
Net assets at the end of year $23,755,881 $17,721,413 $ 61,308,630 $54,007,983
=========== =========== ============ ===========
Balance of undistributed net investment income at
end of year $ 1,809 $ 16,536 $ 20,796 $ 36,594
=========== =========== ============ ===========
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
43
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
MD MI
- ------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
1/31/96 1/31/95 1/31/96 1/31/95
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 2,553,861 $ 2,439,904 $ 1,588,746 $ 1,402,059
Net realized gain (loss) from investment transactions,
net of taxes, if applicable 138,640 (720,598) 414,083 (138,495)
Net change in unrealized appreciation or depreciation
of investments 3,998,568 (4,017,204) 2,255,770 (2,255,350)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets from operations 6,691,069 (2,297,898) 4,258,599 (991,786)
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Class A (198,145) (14,257) (110,174) (7,070)
Class C (47,180) (9,717) (5,812) (582)
Class R (2,335,847) (2,417,246) (1,479,047) (1,399,025)
From accumulated net realized gains from investment
transactions:
Class A - (5) (9,042) (1)
Class C - - (536) -
Class R - (10,234) (88,511) (7,967)
----------- ----------- ----------- -----------
Decrease in net assets from distributions to
shareholders (2,581,172) (2,451,459) (1,693,122) (1,414,645)
----------- ----------- ----------- -----------
FUND SHARE TRANSACTIONS (note 3)
Net proceeds from sale of shares:
Class A 5,206,011 1,562,186 3,071,799 881,646
Class C 645,990 818,595 146,180 73,345
Class R 4,099,669 9,116,010 3,061,856 6,369,706
Net asset value of shares issued to shareholders due to
reinvestment of distributions from net investment
income and from net realized gains from investment
transactions:
Class A 112,734 5,306 58,075 2,560
Class C 39,318 5,892 5,428 338
Class R 1,461,612 1,385,256 1,044,771 872,246
----------- ----------- ----------- -----------
11,565,334 12,893,245 7,388,109 8,199,841
----------- ----------- ----------- -----------
Cost of shares redeemed:
Class A (350,679) (2,267) (171,433) (9,411)
Class C (195,323) (226) (4,206) -
Class R (4,647,731) (10,757,200) (3,009,162) (3,253,109)
----------- ----------- ----------- -----------
(5,193,733) (10,759,693) (3,184,801) (3,262,520)
----------- ----------- ----------- -----------
Net increase in net assets derived from Fund share
transactions 6,371,601 2,133,552 4,203,308 4,937,321
----------- ----------- ----------- -----------
Net increase (decrease) in net assets 10,481,498 (2,615,805) 6,768,785 2,530,890
Net assets at the beginning of year 45,205,776 47,821,581 27,615,645 25,084,755
----------- ----------- ----------- -----------
Net assets at the end of year $55,687,274 $45,205,776 $34,384,430 $27,615,645
=========== =========== =========== ===========
Balance of undistributed net investment income at
end of year $ 936 $ 28,247 $ 10,893 $ 17,180
=========== =========== =========== ===========
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
44
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
NJ PA
- ------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
1/31/96 1/31/95 1/31/96 1/31/95
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 2,617,653 $ 2,037,788 $ 3,007,154 $ 2,714,124
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (30,019) (452,878) (36,684) (835,288)
Net change in unrealized appreciation or depreciation
of investments 3,249,789 (2,665,300) 4,855,692 (4,232,526)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets from operations 5,837,423 (1,080,390) 7,826,162 (2,353,690)
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Class A (329,633) (35,663) (173,805) (17,517)
Class C (32,025) (5,043) (28,974) (5,177)
Class R (2,282,656) (1,973,703) (2,830,558) (2,690,297)
From accumulated net realized gains from investment
transactions:
Class A - (773) - -
Class C - - - -
Class R - (341,737) - -
----------- ----------- ----------- -----------
Decrease in net assets from distributions to
shareholders (2,644,314) (2,356,919) (3,033,337) (2,712,991)
----------- ----------- ----------- -----------
FUND SHARE TRANSACTIONS (note 3)
Net proceeds from sale of shares:
Class A 7,757,684 2,826,031 4,222,635 1,465,445
Class C 573,759 458,588 633,225 480,657
Class R 4,461,592 10,783,764 6,005,478 12,882,787
Net asset value of shares issued to shareholders due to
reinvestment of distributions from net investment
income and from net realized gains from investment
transactions:
Class A 181,529 18,788 126,885 9,834
Class C 16,615 2,567 24,758 3,155
Class R 1,567,807 1,592,197 1,786,453 1,624,542
----------- ----------- ----------- -----------
14,558,986 15,681,935 12,799,434 16,466,420
----------- ----------- ----------- -----------
Cost of shares redeemed:
Class A (406,168) (122,722) (281,318) (27,047)
Class C (32,865) (1,205) (105,804) -
Class R (5,070,204) (5,795,917) (6,418,284) (6,616,545)
----------- ----------- ----------- -----------
(5,509,237) (5,919,844) (6,805,406) (6,643,592)
----------- ----------- ----------- -----------
Net increase in net assets derived from Fund share
transactions 9,049,749 9,762,091 5,994,028 9,822,828
----------- ----------- ----------- -----------
Net increase (decrease) in net assets 12,242,858 6,324,782 10,786,853 4,756,147
Net assets at the beginning of year 42,787,042 36,462,260 53,475,817 48,719,670
----------- ----------- ----------- -----------
Net assets at the end of year $55,029,900 $42,787,042 $64,262,670 $53,475,817
=========== =========== =========== ===========
Balance of undistributed net investment income at
end of year $ 8,128 $ 34,789 $ 5,651 $ 31,834
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
45
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
VA
- ----------------------------------------------------------------------------------
Year ended Year ended
1/31/96 1/31/95
- ----------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 3,221,308 $ 2,965,312
Net realized gain (loss) from investment transactions,
net of taxes, if applicable 334,528 (110,113)
Net change in unrealized appreciation or depreciation
of investments 4,882,314 (5,022,831)
----------- -----------
Net increase (decrease) in net assets from operations 8,438,150 (2,167,632)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Class A (191,806) (20,902)
Class C (23,926) (4,516)
Class R (2,997,681) (2,960,225)
From accumulated net realized gains from investment
transactions:
Class A (15,706) -
Class C (2,511) -
Class R (193,671) -
----------- -----------
Decrease in net assets from distributions to
shareholders (3,425,301) (2,985,643)
----------- -----------
FUND SHARE TRANSACTIONS (note 3)
Net proceeds from sale of shares:
Class A 3,799,529 2,169,078
Class C 402,084 359,962
Class R 3,456,619 9,464,055
Net asset value of shares issued to shareholders due to
reinvestment of distributions from net investment
income and from net realized gains from investment
transactions:
Class A 109,800 6,496
Class C 21,313 2,776
Class R 1,928,344 1,626,894
----------- -----------
9,717,689 13,629,261
----------- -----------
Cost of shares redeemed:
Class A (543,599) (10,247)
Class C (54,845) -
Class R (5,446,943) (6,855,537)
----------- -----------
(6,045,387) (6,865,784)
----------- -----------
Net increase in net assets derived from Fund share
transactions 3,672,302 6,763,477
----------- -----------
Net increase (decrease) in net assets 8,685,151 1,610,202
Net assets at the beginning of year 57,382,876 55,772,674
----------- -----------
Net assets at the end of year $66,068,027 $57,382,876
=========== ===========
Balance of undistributed net investment income at
end of year $ 29,706 $ 21,811
=========== ===========
</TABLE>
See accompanying notes to financial statements.
46
<PAGE>
NOTES TO FINANCIAL STATEMENTS NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
1. GENERAL INFORMATION AND SIGNIFICANT
ACCOUNTING POLICIES
The Nuveen Multistate Tax-Free Trust (the "Trust") is an open-end diversified
management series investment company registered under the Investment Company Act
of 1940. The Trust comprises seven single-state tax-free mutual funds (the
Nuveen Tax-Free Value Funds--the "Funds"). Each Fund constitutes a separate
series of the Trust and is itself an open-end diversified management investment
company, commonly referred to as a mutual fund. The Trust was organized as a
Massachusetts Business Trust on July 26, 1991.
The Trust currently has seven authorized state tax-free Funds: the Nuveen
Arizona Tax-Free Value Fund, the Nuveen Florida Tax-Free Value Fund, the Nuveen
Maryland Tax-Free Value Fund, the Nuveen Michigan Tax-Free Value Fund, the
Nuveen New Jersey Tax-Free Value Fund, the Nuveen Pennsylvania Tax-Free Value
Fund and the Nuveen Virginia Tax-Free Value Fund. Additional state Funds may be
established in the future. Sale of Fund shares first commenced on February 28,
1992. Each Fund invests primarily in municipal obligations issued within its
respective state.
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 Board of Trustees. Temporary investments in
securities that have variable rate and demand features qualifying them as short-
term securities are traded and valued at amortized cost.
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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. Any securities so
purchased are subject to market fluctuation during this period. The Trust has
instructed the custodian to segregate assets in a separate account with a
current value at least equal to the amount of its purchase commitments. At
January 31, 1996, the Nuveen Michigan Tax-Free Value Fund and the Nuveen
Pennsylvania Tax-Free Value Fund had purchase commitments of $1,184,207 and
$3,015,938, respectively. There were no such purchase commitments in any of the
other Funds.
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.
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 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 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.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes and intends to
comply with the requirements of the Internal Revenue Code applicable to
regulated investment companies by distributing all of its 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 $.001 per share. Furthermore, each Fund intends to satisfy
conditions which will enable interest from municipal securities, which is exempt
from regular federal and designated state income taxes, to retain such tax-
exempt status when distributed to the shareholders of the respective Funds. All
income dividends paid during the year ended January 31, 1996, have been
designated Exempt Interest Dividends.
48
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
Deferred
Organization Costs
Costs incurred by the Trust in connection with its organization and initial
registration of shares were deferred and are being amortized over a 60-month
period beginning February 28, 1992. If any of the initial shares of each Fund
are redeemed during this period, the proceeds of the redemption will be reduced
by the pro-rata share of the unamortized organization costs as of the date of
redemption.
Flexible Sales Charge
Program
Effective September 6, 1994, each Fund commenced offering Class "A" Shares and
Class "C" Shares. Class "A" Shares incur a front-end sales charge and an annual
12b-1 service fee. Class "C" Shares are sold without a sales charge but incur
annual 12b-1 distribution and service fees. Effective June 13, 1995, an investor
purchasing Class "C" Shares agrees to pay a contingent deferred sales charge
("CDSC") of 1% if Class "C" Shares are redeemed within 12 months of purchase.
Prior to the offering of Class "A" and Class "C" shares, the shares outstanding
were renamed Class "R" and are not subject to any 12b-1 distribution or service
fees. Effective with the offering of the new classes, Class "R" Shares are
generally available only for reinvestment of dividends by current "R"
shareholders and for already established Nuveen Unit Investment Trust
reinvestment accounts.
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 year ended January 31, 1996.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS
2. EXPENSE ALLOCATION
Expenses of the Funds that are not directly attributable to any class of shares
are prorated among the classes based on the relative net assets of each class.
Expenses directly attributable to a class of shares are recorded to the specific
class. Effective August 1, 1995, the Funds adopted a multiple class plan
pursuant to Rule 18f-3 under the Investment Company Act of 1940 and now
designate class specific expenses to include Rule 12b-1 distribution and service
fees, and other expenses incurred for services received by a class that differ
in either amount or kind. A breakdown of the class specific expenses is as
follows:
<TABLE>
<CAPTION>
AZ FL MD MI
<S> <C> <C> <C> <C>
12b-1 distribution and service fees (for the year ended
January 31, 1996):
Class A $ 5,232 $ 7,876 $10,477 $ 5,692
Class C 1,539 1,356 11,541 1,452
Shareholders' servicing agent fees and expenses (for the
six month period ended July 31, 1995):
Class A 1,219 2,388 2,357 1,704
Class C 103 57 401 90
Class R 9,209 17,836 29,394 18,320
Shareholders' reports-printing and mailing expenses
(for the six month period ended July 31, 1995):
Class A 574 1,437 1,691 757
Class C 88 57 324 51
Class R 17,565 32,346 26,895 11,718
Federal and state registration fees (for the six month
period ended July 31, 1995):
Class A 237 786 1,101 199
Class C 9 379 734 13
Class R 1,870 715 756 2,324
</TABLE>
50
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
NJ PA VA
<S> <C> <C> <C>
12b-1 distribution and service fees (for the year ended
January 31, 1996):
Class A $16,159 $ 9,108 $ 9,870
Class C 7,121 7,082 5,640
Shareholders' servicing agent fees and expenses (for the
six month period ended July 31, 1995):
Class A 3,208 2,563 2,427
Class C 185 360 265
Class R 15,598 32,785 36,716
Shareholders' reports-printing and mailing expenses
(for the six month period ended July 31, 1995):
Class A 1,760 1,336 1,588
Class C 205 76 220
Class R 36,338 31,233 40,281
Federal and state registration fees (for the six month
period ended July 31, 1995):
Class A 886 1,858 744
Class C 69 1,378 40
Class R 749 1,519 1,185
</TABLE>
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. FUND SHARES
Transactions in shares were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
AZ FL
- ---------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
1/31/96 1/31/95 1/31/96 1/31/95
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 274,843 116,098 420,409 175,913
Class C 26,227 5,260 7,638 7,959
Class R 239,176 401,984 824,725 1,397,272
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions:
Class A 3,655 237 5,125 435
Class C 505 54 350 24
Class R 51,292 48,864 147,052 139,011
-------- --------- ---------- ----------
595,698 572,497 1,405,299 1,720,614
-------- --------- ---------- ----------
Shares redeemed:
Class A (29,122) (3,087) (16,925) (33,276)
Class C (313) (958) - -
Class R (139,521) (254,213) (1,126,197) (639,360)
-------- --------- ---------- ----------
(168,956) (258,258) (1,143,122) (672,636)
-------- --------- ---------- ----------
Net increase 426,742 314,239 262,177 1,047,978
======== ========= ========== ==========
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
52
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
MD MI
- -----------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
1/31/96 1/31/95 1/31/96 1/31/95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 514,083 166,832 294,831 91,636
Class C 63,846 89,009 13,867 7,542
Class R 406,673 921,445 293,923 631,960
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions:
Class A 11,066 570 5,538 269
Class C 3,894 635 521 35
Class R 144,632 142,445 99,905 87,694
--------- ---------- -------- --------
1,144,194 1,320,936 708,585 819,136
--------- ---------- -------- --------
Shares redeemed:
Class A (34,362) (240) (16,428) (987)
Class C (19,328) (24) (401) -
Class R (459,618) (1,119,703) (288,460) (332,766)
--------- ---------- -------- --------
(513,308) (1,119,967) (305,289) (333,753)
--------- ---------- -------- --------
Net increase 630,886 200,969 403,296 485,383
========= ========== ======== ========
- -----------------------------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
NJ PA
- -----------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended
1/31/96 1/31/95 1/31/96 1/31/95
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold:
Class A 765,342 292,386 411,858 153,866
Class C 56,488 47,588 62,079 50,810
Class R 440,121 1,077,289 585,804 1,297,150
Shares issued to shareholders due to reinvestment of
distributions from net investment income and
from net realized gains from investment transactions:
Class A 17,820 1,978 12,297 1,047
Class C 1,638 270 2,439 329
Class R 154,754 161,549 174,784 165,879
---------- --------- --------- ---------
1,436,163 1,581,060 1,249,261 1,669,081
---------- --------- --------- ---------
Shares redeemed:
Class A (40,094) (12,705) (27,436) (2,866)
Class C (3,290) (125) (10,542) --
Class R (500,152) (581,386) (628,872) (676,175)
---------- --------- --------- ---------
(543,536) (594,216) (666,850) (679,041)
---------- --------- --------- ---------
Net increase 892,627 986,844 582,411 990,040
========== ========= ========= ========
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
54
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
VA
- ------------------------------------------------------------------------------------
Year ended Year ended
1/31/96 1/31/95
- ------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold:
Class A 369,049 227,287
Class C 39,142 38,465
Class R 336,826 931,986
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions:
Class A 10,624 690
Class C 2,074 296
Class R 186,098 165,173
-------- ---------
943,813 1,363,897
-------- ---------
Shares redeemed:
Class A (52,547) (1,095)
Class C (5,359) --
Class R (529,723) (680,380)
-------- ---------
(587,629) (681,475)
-------- ---------
Net increase 356,184 682,422
======== =========
- ------------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS
4. DISTRIBUTIONS TO SHAREHOLDERS
On February 9, 1996, the Funds declared dividend distributions from their
ordinary income which were paid on March 1, 1996, to shareholders of record on
February 9, 1996, as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
AZ FL MD MI
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend per share:
Class A $ .0420 $ .0410 $ .0405 $ .0425
Class C .0350 .0345 .0340 .0355
Class R .0435 .0430 .0425 .0445
=========== =========== =========== ===========
- ------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NJ PA VA
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend per share:
Class A $ .0440 $ .0410 $ .0430
Class C .0375 .0340 .0365
Class R .0460 .0430 .0450
=========== =========== ===========
- --------------------------------------------------------------------------------------
</TABLE>
5. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments for the year ended January 31,
1996, were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
AZ FL MD MI
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PURCHASES
Investments in municipal securities $ 5,373,232 $14,977,473 $15,605,953 $13,336,382
Temporary municipal investments 7,000,000 11,900,000 9,500,000 7,900,000
SALES
Investments in municipal securities 938,787 11,397,779 8,399,990 9,860,816
Temporary municipal investments 7,200,000 11,900,000 10,500,000 7,900,000
=========== =========== =========== ===========
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
56
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
NJ PA VA
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PURCHASES
Investments in municipal securities $27,941,714 $41,972,985 $29,255,837
Temporary municipal investments 19,400,000 20,880,000 13,000,000
SALES
Investments in municipal securities 17,713,121 29,645,304 25,325,007
Temporary municipal investments 21,000,000 19,880,000 14,300,000
=========== =========== ===========
- -----------------------------------------------------------------------------------------------------
</TABLE>
At January 31, 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 January 31, 1996, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryovers will expire as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
AZ FL MD
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expiration year:
2003 $127,444 $ 87,166 $ 65,355
2004 17,690 141,494 516,603
-------- -------- --------
Total $145,134 $228,660 $581,958
======== ======== ========
- -----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
NJ PA
- ------------------------------------------------------------------------------------
<S> <C> <C>
Expiration year:
2003 $ 35,921 $377,256
2004 419,632 468,676
-------- --------
Total $455,553 $845,932
======== ========
- ------------------------------------------------------------------------------------
</TABLE>
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS
6. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at January 31, 1996, were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AZ FL MD MI
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized:
Appreciation $1,382,474 $3,438,260 $3,207,733 $1,847,996
Depreciation (1,470) (14,203) (81,539) (2,858)
---------- ---------- ---------- ----------
Net unrealized appreciation $1,381,004 $3,424,057 $3,126,194 $1,845,138
========== ========== ========== ==========
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
NJ PA VA
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized:
Appreciation $2,520,888 $3,860,621 $4,243,525
Depreciation (68,034) (34,940) (88,830)
---------- ---------- ----------
Net unrealized appreciation $2,452,854 $3,825,681 $4,154,695
========== ========== ==========
</TABLE>
7. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Trust's investment management agreement 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:
<TABLE>
<CAPTION>
- -------------------------------------------------------
Average daily net asset value Management fee
- -------------------------------------------------------
<S> <C>
For the first $125,000,000 .55 of 1%
For the next $125,000,000 .5375 of 1
For the next $250,000,000 .525 of 1
For the next $500,000,000 .5125 of 1
For the next $1,000,000,000 .5 of 1
For net assets over $2,000,000,000 .475 of 1
- -------------------------------------------------------
</TABLE>
From inception of the Trusts on December 13, 1991 through January 31, 1996, the
Adviser waived part of its management fees or reimbursed certain expenses of
each Fund in order to limit total expenses to .75 of 1% of the average daily net
asset value of each Fund, excluding any 12b-1 fees applicable to Class A and
Class C. The Adviser has currently agreed to continue its fee waivers and
expense reimbursements through July 31, 1996.
58
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
The management fee compensates the Adviser for overall investment advisory and
administrative services, and general office facilities. The Trust pays no
compensation directly to its Trustees who are affiliated with the Adviser or to
its officers, all of whom receive remuneration for their services to the Trust
from the Adviser.
8. COMPOSITION OF NET ASSETS
At January 31, 1996, there were an unlimited number of $.01 par value shares
authorized. Net assets consisted of:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
AZ FL MD MI
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital paid-in $22,527,848 $58,092,437 $53,142,102 $32,351,135
Balance of undistributed net investment income 1,809 20,796 936 10,893
Accumulated net realized gain (loss) from investment
transactions (154,780) (228,660) (581,958) 177,264
Net unrealized appreciation of investments 1,381,004 3,424,057 3,126,194 1,845,138
----------- ----------- ----------- -----------
Net assets $23,755,881 $61,308,630 $55,687,274 $34,384,430
=========== =========== =========== ===========
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
NJ PA VA
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital paid-in $53,051,830 $61,303,237 $61,873,371
Balance of undistributed net investment income 8,128 5,651 29,706
Accumulated net realized gain (loss) from investment
transactions (482,912) (871,899) 10,255
Net unrealized appreciation of investments 2,452,854 3,825,681 4,154,695
----------- ----------- -----------
Net assets $55,029,900 $64,262,670 $66,068,027
=========== =========== ===========
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
59
<PAGE>
NOTES TO FINANCIAL STATEMENTS
9. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At January 31, 1996, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
AZ FL MD MI
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue Bonds:
Pollution Control 11% 2% 6% 7%
Housing Facilities 11 16 23 12
Health Care Facilities 11 15 12 21
Water/Sewer Facilities 6 9 -- 15
Electric Utilities 2 16 1 3
Educational Facilities 14 1 5 7
Transportation 3 5 11 4
Lease Rental Facilities 8 1 5 3
Other 8 9 7 5
General Obligation Bonds 17 9 15 17
Escrowed Bonds 9 17 15 6
-- -- -- --
100% 100% 100% 100%
=== === === ===
-------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------
NJ PA VA
- -------------------------------------------------------------
<S> <C> <C> <C>
Revenue Bonds:
Pollution Control 13% 24% --%
Housing Facilities 10 8 9
Health Care Facilities 7 17 11
Water/Sewer Facilities 5 -- 17
Electric Utilities 2 3 --
Educational Facilities 9 13 12
Transportation 8 5 12
Lease Rental Facilities 3 2 6
Other 12 11 23
General Obligation Bonds 19 15 6
Escrowed Bonds 12 2 4
-- -- --
100% 100% 100%
=== === ===
- -------------------------------------------------------------
</TABLE>
60
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
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 (51% for Arizona, 61% for Florida, 54% for Maryland, 30% for
Michigan, 47% for New Jersey, 47% for Pennsylvania, and 24% for Virginia). Such
insurance or escrow, however, does not guarantee the market value of the
municipal securities or the value 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.
61
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Income from investment
operations Less distributions
------------------------------------------------------
Net
realized and Dividends
Net asset Net unrealized gain from net Distributions Net asset
value beginning investment (loss) from investment from value end of
of period income++ investments** income capital gains period
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ARIZONA
- ------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 1/31,
1996 $ 9.930 $.503 $ .829 $(.522) $ - $10.740
9/6/94 to
1/31/95 10.030 .203 (.086) (.217) - 9.930
CLASS C
Year ended 1/31,
1996 9.840 .419 .830 (.439) - 10.650
9/9/94 to
1/31/95 9.940 .169 (.052) (.217) - 9.840
CLASS R
Year ended 1/31,
1996 9.850 .529 .831 (.540) - 10.670
1995 10.880 .536 (1.026) (.540) - 9.850
1994 10.050 .531 .853 (.522) (.032) 10.880
1993 9.525 .438 .563 (.435) (.041) 10.050
12/13/91 to
1/31/92 9.525 - - - - 9.525
- ------------------------------------------------------------------------------------------------------------------
FLORIDA
- ------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 1/31,
1996 9.730 .488 .840 (.498) - 10.560
9/6/94 to
1/31/95 9.890 .193 (.148) (.202) (.003) 9.730
CLASS C
Year ended 1/31,
1996 9.730 .413 .789 (.422) - 10.510
9/16/94 to
1/31/95 9.720 .152 .021 (.163) - 9.730
CLASS R
Year ended 1/31,
1996 9.750 .518 .824 (.522) - 10.570
1995 10.740 .508 (.985) (.510) (.003) 9.750
1994 9.960 .511 .779 (.510) - 10.740
1993 9.525 .440 .431 (.436) - 9.960
12/13/91 to
1/31/92 9.525 - - - - 9.525
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes on page 68.
62
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental data
---------------------------------------------------------------------------------------------------
Ratio of Ratio of Ratio of Ratio of
expenses to net investment expenses net investment
Total return Net assets average income to average to average net income to average Portfolio
on net asset end of period net assets before net assets before assets after net assets after turnover
value+ (in thousands) reimbursement reimbursement reimbursement++ reimbursement++ rate
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
13.68% $ 3,895 1.31% 4.49% 1.00% 4.80% 5%
1.24 1,124 1.60* 4.68* 1.00* 5.28* 29
12.90 328 2.11 3.66 1.75 4.02 5
1.25 43 3.51* 2.79* 1.75* 4.55* 29
14.09 19,533 1.15 4.72 .75 5.12 5
(4.39) 16,554 1.06 5.12 .75 5.43 29
14.07 16,140 1.25 4.48 .75 4.98 11
10.71 8,026 1.75* 3.94* .75* 4.94* 43
- 15 - - - - -
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
13.92 5,823 1.21 4.53 1.00 4.74 21
.52 1,392 1.56* 4.52* 1.00* 5.08* 4
12.54 168 2.16 3.62 1.75 4.03 21
1.84 78 2.84* 3.26* 1.75* 4.35* 4
14.05 55,318 .88 4.93 .75 5.06 21
(4.33) 52,538 .84 5.12 .75 5.21 4
13.22 48,254 .89 4.69 .75 4.83 3
9.33 23,727 1.24* 4.35* .75* 4.84* 1
- 15 - - - - -
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
63
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations Less distributions
--------------------------------- ------------------------------
Net
realized and Dividends
Net asset Net unrealized gain from net Distributions Net asset
value beginning investment (loss) from investment from value end of
of period income++ investments** income capital gains period
- -----------------------------------------------------------------------------------------------------------------------------------
MARYLAND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Year ended 1/31,
1996 $ 9.600 $.483 $ .844 $(.497) $ - $10.430
9/6/94 to
1/31/95 9.840 .198 (.229) (.207) (.002) 9.600
CLASS C
Year ended 1/31,
1996 9.590 .409 .842 (.421) - 10.420
9/15/94 to
1/31/95 9.750 .160 (.153) (.167) - 9.590
CLASS R
Year ended 1/31,
1996 9.610 .513 .838 (.521) - 10.440
1995 10.620 .513 (1.008) (.513) (.002) 9.610
1994 9.910 .509 .727 (.503) (.023) 10.620
1993 9.525 .442 .395 (.442) (.010) 9.910
12/13/91 to
1/31/92 9.525 - - - - 9.525
- -----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 1/31,
1996 9.870 .510 .911 (.519) (.032) 10.740
9/6/94 to
1/31/95 10.090 .204 (.209) (.212) (.003) 9.870
CLASS C
Year ended 1/31,
1996 9.850 .430 .922 (.440) (.032) 10.730
9/16/94 to
1/31/95 9.910 .161 (.050) (.171) - 9.850
CLASS R
Year ended 1/31,
1996 9.880 .539 .906 (.543) (.032) 10.750
1995 10.860 .529 (.972) (.534) (.003) 9.880
1994 10.060 .531 .808 (.528) (.011) 10.860
1993 9.525 .456 .554 (.449) (.026) 10.060
12/13/91 to
1/31/92 9.525 - - - - 9.525
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes on page 68.
64
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental data
------------------------------------------------------------------------------------------------------------------
Ratio of Ratio of Ratio of Ratio of
expenses to net investment expenses net investment
Total return Net assets average income to average to average net income to average Portfolio
on net asset end of period net assets before net assets before assets after net assets after turnover
value+ (in thousands) reimbursement reimbursement reimbursement++ reimbursement++ rate
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
14.07% $ 6,860 1.33% 4.41% 1.00% 4.74% 17%
(.26) 1,605 1.59* 4.67* 1.00* 5.26* 35
13.24 1,438 2.06 3.73 1.75 4.04 17
.12 860 1.86* 4.44* 1.75* 4.55* 35
14.33 47,389 1.04 4.78 .75 5.07 17
(4.58) 42,741 .89 5.14 .75 5.28 35
12.71 47,822 .86 4.74 .75 4.85 4
8.96 28,283 1.02* 4.69* .75* 4.96* 20
- 15 - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
14.68 4,027 1.35 4.52 1.00 4.87 33
.02 897 2.62* 3.68* 1.00* 5.30* 35
13.96 231 2.08 3.79 1.75 4.12 33
1.18 75 3.52* 2.76* 1.75* 4.53* 35
14.93 30,126 1.05 4.87 .75 5.17 33
(3.98) 26,644 .96 5.12 .75 5.33 35
13.58 25,085 1.07 4.67 .75 4.99 3
10.80 14,684 1.62* 4.19* .75* 5.06* 32
- 15 - - - - -
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
65
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations Less distributions
--------------------------------- ------------------------------
Net
realized and Dividends
Net asset Net unrealized gain from net Distributions Net asset
value beginning investment (loss) from investment from value end of
of period income++ investments** income capital gains period
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
Year ended 1/31,
1996 $ 9.730 $.519 $ .685 $(.534) $ - $10.400
9/6/94 to
1/31/95 10.030 .205 (.209) (.210) (.086) 9.730
CLASS C
Year ended 1/31,
1996 9.710 .443 .683 (.456) - 10.380
9/21/94 to
1/31/95 9.770 .159 (.050) (.169) - 9.710
CLASS R
Year ended 1/31,
1996 9.740 .551 .677 (.558) - 10.410
1995 10.710 .524 (.886) (.522) (.086) 9.740
1994 9.960 .513 .810 (.513) (.060) 10.710
1993 9.525 .445 .431 (.441) - 9.960
12/13/91 to
1/31/92 9.525 - - - - 9.525
PENNSYLVANIA
CLASS A
Year ended 1/31,
1996 9.750 .498 .862 (.510) - 10.600
9/6/94 to
1/31/95 9.920 .206 (.164) (.212) - 9.750
CLASS C
Year ended 1/31,
1996 9.650 .417 .843 (.430) - 10.480
9/6/94 to
1/31/95 9.920 .176 (.235) (.211) - 9.650
CLASS R
Year ended 1/31,
1996 9.730 .527 .846 (.533) - 10.570
1995 10.810 .531 (1.077) (.534) - 9.730
1994 10.010 .533 .807 (.534) (.006) 10.810
1993 9.525 .451 .481 (.443) (.004) 10.010
12/13/91 to
1/31/92 9.525 - - - - 9.525
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes on page 68.
66
<PAGE>
NUVEEN TAX-FREE MUTUAL ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental data
-------------------------------------------------------------------------------------------------------------------
Ratio of Ratio of Ratio of Ratio of
expenses to net investment expenses net investment
Total return Net assets average income to average to average net income to average Portfolio
on net asset end of period net assets before net assets before assets after net assets after turnover
value (in thousands) reimbursement reimbursement reimbursement++ reimbursement++ rate
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
12.63% $10,661 1.25% 4.85% 1.00% 5.10% 39%
.02 2,741 1.31* 5.03* 1.00* 5.34* 32
11.80 1,065 1.96 4.16 1.75 4.37 39
1.16 464 2.00* 4.37* 1.75* 4.62* 32
12.88 43,304 .98 5.20 .75 5.43 39
(3.27) 39,582 .89 5.18 .75 5.32 32
13.60 36,462 .98 4.61 .75 4.84 52
9.36 16,208 1.43* 4.28* .75* 4.96* 9
- 15 - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
14.22 5,817 1.30 4.52 1.00 4.82 52
.49 1,483 1.87* 4.56* 1.00* 5.43* 74
13.27 1,101 2.14 3.70 1.75 4.09 52
(.53) 494 2.52* 3.90* 1.75* 4.67* 74
14.40 57,345 .96 4.93 .75 5.14 52
(4.94) 51,499 .91 5.27 .75 5.43 74
13.67 48,720 .94 4.82 .75 5.01 5
9.97 23,680 1.25* 4.53* .75* 5.03* 15
- 15 - - - - -
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
67
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Income from investment
operations Less distributions
--------------------------- -------------------------
Net
realized and Dividends
Net asset Net unrealized gain from net Distributions Net asset
value beginning investment (loss) from investment from value end of
of period income++ investments** income capital gains period
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VIRGINIA
- -------------------------------------------------------------------------------------------------------
CLASS A
Year ended 1/31,
1996 $ 9.760 $.509 $ .878 $(.509) $(.038) $10.600
9/6/94 to
1/31/95 9.980 .201 (.207) (.214) - 9.760
CLASS C
Year ended 1/31,
1996 9.740 .432 .868 (.432) (.038) 10.570
9/8/94 to
1/31/95 9.950 .171 (.167) (.214) - 9.740
CLASS R
Year ended 1/31,
1996 9.770 .537 .864 (.533) (.038) 10.600
1995 10.740 .531 (.964) (.537) - 9.770
1994 10.030 .529 .726 (.527) (.018) 10.740
1993 9.525 .439 .499 (.433) - 10.030
12/13/91 to
1/31/92 9.525 - - - - 9.525
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized. For the year ended 1/31/93, the information is based on the period
beginning 2/28/92, commencement of operations.
** Net of taxes, if applicable (note 1).
+ Total Return on Net Asset Value is the combination of reinvested dividend
income, reinvested capital gains distributions, if any, and changes in stock
price per share.
++ Reflects the waiver of certain management fees and reimbursement of certain
other expenses by the Adviser (note 7).
68
<PAGE>
NUVEEN TAX-FREE MUTUAL FUNDS ANNUAL REPORT
JANUARY 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental data
------------------------------------------------------------------------------------------------------
Ratio of Ratio of Ratio of Ratio of
expenses to net investment expenses to net investment
Total return Net assets average income to average average net assets income to average Portfolio
on net asset end of period net assets before net assets before after reimburse- net assets after turnover
value+ (in thousands) reimbursement reimbursement ment++ reimbursement++ rate
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
14.50% $ 5,874 1.20% 4.73% 1.00% 4.93% 42%
.01 2,215 1.57* 4.70* 1.00* 5.27* 40
13.58 789 1.92 4.04 1.75 4.21 42
.10 378 2.20* 4.12* 1.75* 4.57* 40
14.65 59,405 .94 5.04 .75 5.23 42
(3.92) 54,791 .82 5.33 .75 5.40 40
12.78 55,773 .84 4.94 .75 5.03 7
10.04 37,196 .96* 4.71* .75* 4.92* 12
- 15 - - - - -
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
69
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees and Shareholders of
Nuveen Multistate Tax-Free Trust:
We have audited the accompanying statements of net assets of Nuveen Multistate
Tax-Free Trust (a Massachusetts business trust comprising the Arizona, Florida,
Maryland, Michigan, New Jersey, Pennsylvania and Virginia Nuveen Tax-Free Value
Funds), including the portfolios of investments, as of January 31, 1996, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
January 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the net assets of each of the
respective funds constituting the Nuveen Multistate Tax-Free Trust as of January
31, 1996, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and the
financial highlights for the periods indicated in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 1, 1996
70
<PAGE>
[PHOTO APPEARS HERE]
For nearly 100 years,
Nuveen has earned its
reputation as a tax-free income
specialist by focusing on
municipal bonds
Your
investment
partners
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 within 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.
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